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TMI Blog2014 (9) TMI 189X X X X Extracts X X X X X X X X Extracts X X X X ..... h November, 2013 passed by the CESTAT the same amount was directed to be deposited by the petitioner, which was assailed before this Court in W.P. 939 (W) of 2014. The attention of this Court was drawn to a judgement of the Apex Court in case of Sagarika Acoustronics Private Limited vs. Union of India reported in 2010 (256) ELT A61 (SC) for the proposition that once the company has been referred to BIFR, the Tribunal while considering an application for stay should record its findings on the net-worth of the company. After noticing the earlier judgement rendered by the Supreme Court in case of Metal Box India Limited vs. Collector of Central Excise, Mumbai reported in 2003 (155) ELT 13 (SC), wherein it is held that Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 (in short "SICA") does not put a fetter in taking an action for recovery of the customs duties or excise duties against the company, who has gone before the BIFR. Both the aforesaid judgements were noticed by this Court at the time of disposal of the writ petition, being W.P. 939 (W) of 2014, and the order was set aside with specific direction upon the CESTAT to consider the same afresh within th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ra), even after noticing the earlier judgement rendered in case of Metal Box India Limited (supra) directed the application to be heard afresh. The Tribunal relied upon the earlier order passed in case of Nicco Corporation Ltd. & Ors. vs. CCE, Kolkata-(III) wherein the judgement rendered in case of Sagarika Acoustronics Pvt. Ltd. (supra) was quoted in full and observed that the said judgement was rendered in the facts and circumstances involved therein and has no binding efficacy. What is tried to state is that there is no ratio laid down by the Supreme Court in case of Sagarika Acoustronics Pvt. Ltd. (supra) and, therefore, does not bind either the Co-ordinate Bench, High Courts or the Tribunals. The Tribunal considered various judgements rendered on the issue of ratio decidendi, but misconstrued the same while arriving at its own conclusion. It would be appropriate to quote the excerpts from the judgement, which deals the said aspect for addressing the issue raised before this Court in this writ petition, which runs with these words : "*** *** *** *** *** *** *** *** What is 'ratio decidendi' has been explained by the Hon'ble Supreme Court in the case of Dalbir Singh vs. State o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... process of reasoning involving the major premise consisting of a pre-existing rule of law, either statutory or judge-made, and a minor premise consisting of the material facts of the case unde immediate consideration. If it is not clear, it is not the duty of the Court to spell it out with difficulty in order to be bound by it. In the words of Halsbury, 4th Edn., Vol. 26, para 573 : 'The concrete decision alone is binding between the parties to it but it is the abstract ratio decidendi, as ascertained on a consideration of the judgment in relation to the subject-matter of the decision, which alone has the force of law and which when it is clear it is not part of a tribunal's duty to spell out with difficulty a ratio decidendi in order to be bound by it, and it is always dangerous to take one or two observations out of a long judgment and treat them as if they gave the ratio decidendi of the case. If more reasons than one are given by a Tribunal for its judgment, all are taken as forming the ratio decidendi.' " A judgement has three limbs. Firstly the facts involved therein are elaborately and elucidedly recorded which can be reasonably ascertained or inferred from a meaningful re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Application No. ..../2005. We also want the Tribunal to record its findings regarding the net worth of the company. If the net worth of the company is found to be negative, then the Tribunal will consider restoration of the appeal to its file and in which event the matter will have to be decided on merits. If, however, the net worth is found to be a positive figure, the Tribunal will say so, give its reasons and dispose of the modification application in accordance with law. The Civil Appeal is disposed of accordingly." It would be more appropriate to record the ratio decidendi laid down in case of Metal Box India Limited (supra). In the said report a plea was taken that in view of Section 22 of the SICA the appellant therein is not obliged to deposit because of the immunity provided therein. The Court held that Section 22 of the SICA provides relief in a proceeding, which relate to - (a) winding up of the industrial company; (b) execution, distress or the like against any of the properties of the industrial company; (c) the appointment of a receiver in respect thereof, and (d) proceeding in regard to suit for recovery of money or for the enforcement of any security against the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en the said two provisions. The point, which arose therein, was whether the sick industrial unit is entitled to collect tax from the customers after the scheme is sanctioned and the Revenue can proceed to collect the tax without any leave obtained from the BIFR. It is held that though there is no fetter on the part of the Revenue to recover the amounts of tax, but such course of action can be initiated with the prior sanction or consent of the BIFR in these words : "12. The Central Act is enacted under Entry 52 of List I of the Seventh Schedule. The said Entry 52 empowers Parliament to legislate in respect of 'industries, the control of which by the Union is declared by Parliament by law to be in the public interest'. The Central Act declares that it is 'for giving effect to the policy of the State towards securing the principles specified in clauses (b) and (c) of Article 39 of the Constitution', namely, 'that the ownership and control of the material resources of the community are so distributed as best to serve the common good' and 'that the operation of the economic system does not result in the concentation of the wealth and means of production to the common detriment'. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his behalf." Neither in case of Metal Box India Limited (supra) nor in Sagarika Acoustronics Pvt. Ltd. (supra) the judgement rendered in Tata Davy Ltd. was cited. There appears to be a conflict between Tata Davy Ltd.(supra) and the Metal Box India Limited (supra), as in case of former it is held that unless consent of the BIFR is obtained, the Revenue cannot take steps for realization of the tax; whereas in case of later, it is held that Section 22 has no bar to impose upon the Revenue in proceeding to recover the revenue from the defaulting persons. This Court does not intend to deal with intricacies, as the parties even in earlier round of litigation appear to be in variation with regard to the imposition of condition for maintaining the appeal before the CESTAT under Section 35F of the Central Excise Act; when the net-worth of the company is negative or when the company is declared sick, whether the CESTAT can direct such sick industrial unit or company to deposit the same as condition precedent to maintain the said appeal. In an appeal before the Supreme Court against an order of the High Court, which took note of the judgement rendered in case of Metal Box India Ltd. (supra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the learned judge has proceeded to delete the votes of the appellant from 8 polling stations, although the grievance was only about Ruhi and 7 Roing Polling Stations. By making these deductions, he came to the conclusion that respondent No. 1 had received 826 votes more. As can be seen from paragraph 28 of the judgment, rendered in Markio Tado v. Takam Sorang, that at best the case of the first respondent was that there were double entries of voters in 1304 names. The allegation was only with respect to two polling stations. In those polling stations, the appellant had received 1873 votes. Even if these 1304 votes were to be deleted, it would not affect the result materially since the appellant had won with a margin of 2713 votes. The learned judge, therefore, ignored that even if the ground of improper reception of votes under section 100(1)(d)(iii) was to be taken, respondent 1 had failed to establish that the result of the election of the appellant had been materially affected by such improper reception of votes. The decision of the learned judge was therefore clearly flawed and untenable. 29. Thus, the learned judge went into the counterfoils of the voters in spite of the fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dge whose judgment is overruled must submit to the judgment. He cannot, in the same proceedings or in collateral proceedings between the same parties, rewrite the overruled judgment.' " Even more than a decade ago the Three Bench of the Supreme Court in case of Dwarikesh Sugar Industries Ltd. vs. Prem Heavy Engineering Works (P) Ltd. & Anr. reported in (1997) 6 SCC 450 deprecated the tendency of the subordinate Courts or the Tribunals in not applying the settled principles of passing the whimsical orders in contrary to the law laid down by the Supreme Court in these words : "32. When a position, in law, is well settled as a result of judicial pronouncement of this Court, it would amount to judicial impropriety to say the least, for the subordinate courts including the High Courts to ignore the settled decisions and then to pass a judicial order which is clearly contrary to the settled legal position. Such judicial adventurism cannot be permitted and we strongly deprecate the tendency of the subordinate courts in not applying the settled principles and in passing whimsical orders which necessarily has the effect of granting wrongful and unwarranted relief to one of the parties. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s submission- both with respect to the order of the Division Bench and the purpose and scope of the writ of mandamus. The High Court had not issued a writ of mandamus. A writ of mandamus was the relief prayed for by the respondents in their writ petition. What the Division Bench did was to issue directions to the appellants in the exercise of its jurisdiction under Article 226 of the Constitution. Under Article 226 of the Constitution, every High Court has the power to issue to any person or authority, including in appropriate cases, any government, throughout the territories in relation to which it exercises jurisdiction, directions, orders, or writs including writs in the nature of habeas corpus, mandamus, quo warranto and certiorari or any of them, for the enforcement of the Fundamental Rights conferred by Part III of the Constitution or for any other purpose. In Dwarkanath v. ITO this Court pointed out that Article 226 is designedly couched in a wide language in order not to confine the power conferred by it only to the power to issue prerogative writs as understood in England, such wide language being used to enable the High Courts 'to reach injustice wherever it is found' and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ister of Agriculture, Fisheries and Food, to appoint a committee of investigation so that it could be used to promote the policy and objects of the Agricultural Marketing Act, 1958, which were to be determined by the constructioin of the Act which was a matter of law for the court and though there might be reasons which would justify the Minister in refusing to refer a complaint to a committee of investigation, the Minister's discretion was not unlimited and if it appeared that the effect of his refusal to appoint a committee of investigation was to frustrate the policy of the Act, the court was entitled to interfere by an order of mandamus. In Halsbury's Laws of England, 4th edn., Vol.I, para 89, it is stated that the purpose of an order of mandamus Is to remedy defects of justice; and accordingly it will issue, to the end that justice may be done, in all cases where there is a specific legal right and no specific legal remedy for enforcing that right; and it may issue in cases where, although there is an alternative legal remedy, yet that mode of redress is less convenient, beneficial and effectual. 20. There is thus no doubt that the High Courts in India exercising their juris ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of times and no one can dispute that power is always there. It is also settled that the High Court in case of breach of fundamental right of a private individual, constitutional right of private individual of public importance, violation of principles of natural justice and action taken without having any jurisdiction or total failure of exercise of jurisdiction entertains writ petition overlooking alternative remedy." The Division Bench did not lay down that the writ petition should not be allowed to remain in the docket of the Court because of the alternative remedy, but it is held that the power of judicial review is discretionary and depends upon the facts of each case. This Court, therefore, does not find that the present case is of such nature, where this Court should refuse to exercise its discretion in the facts and circumstances involved in this case. On the observations above, the order impugned is set aside. The CESTAT is directed to consider the application afresh in the light of the law laid down in case of Sagarika Acoustronics Pvt. Ltd. (supra) and the observations made in this order, and shall restrict its decision on the net-worth of the company on the basis of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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