Just before the country stepped into the grasp of COVID-19 Pandemic, the Supreme Court of India delivered a verdict in Indore Development Authority v. Manoharlal hereinafter “Indore Development Authority (5-Judge Bench)”, which gave a new interpretation to Section 24 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (hereinafter “2013 Act”).
Subsequently, the Court overruled the three-Judge Bench decision in Pune Municipal Corpn. v. Harakchand Misirimal Solanki (hereinafter “Pune Municipal Corporation”) and even the decisions which were decided on the basis of Pune Municipal Corpn. case, which rose a wall of conflict because and leads to the question as to whether a case that has attained finality be “reopened” merely because there’s a change in interpretation of law?
In this piece we analyse whether overruling of a precedent on the basis of change in interpretation of Section 24 of the Land Acquisition Act, 2013 by a bigger Bench could lead to reopening of the cases which are already decided and have attained finality.
In 2013, the government brought the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, which replaced the Land Acquisition Act of 1894 (hereinafter “1894 Act”).
The 2013 Act was a ray of hope which was blocked since decades in terms of fair compensation and rehabilitation across the country. The Act was said to correct the historical wrongs in the process of land acquisition by the state for development projects and insisted on fair compensation for landowners, past and present.
The Controversy Around “Section 24” of Land Acquisition Act, 2013
Section 24 of the 2013 Act provides for retrospective operation of the 2013 Act qua pending acquisition proceedings under the 1894 Act. Section 24(1) says that in case of a pending land acquisition proceeding, where a compensation award has not been passed under the 1894 Act, then the landowners would be entitled to compensation prescribed under the 2013 Act.
On the other hand, Section 24(2) says that in case the compensation award has been made under the Land Acquisition Act, 1894, then the land acquisition proceedings under the 1894 Act would be deemed to have lapsed.
- Land acquisition process under Act No. 1 of 1894 shall be deemed to have lapsed in certain cases.—(1) Notwithstanding anything contained in this Act, in any case of land acquisition proceedings initiated under the Land Acquisition Act, 1894,—
(a) where no award under Section 11 of the said Land Acquisition Act has been made, then, all provisions of this Act relating to the determination of compensation shall apply; or
(b) where an award under said Section 11 has been made, then such proceedings shall continue under the provisions of the said Land Acquisition Act, as if the said Act has not been repealed.
- Notwithstanding anything contained in sub-section (1), in case of land acquisition proceedings initiated under the Land Acquisition Act, 1894 (1 of 1894), where an award under the said Section 11 has been made five years or more prior to the commencement of this Act but the physical possession of the land has not been taken or the compensation has not been paid the said proceedings shall be deemed to have lapsed and the appropriate Government, if it so chooses, shall initiate the proceedings of such land acquisition afresh in accordance with the provisions of this Act:
Provided that where an award has been made and compensation in respect of a majority of land holdings has not been deposited in the account of the beneficiaries, then, all beneficiaries specified in the notification for acquisition under Section 4 of the said Land Acquisition Act, shall be entitled to compensation in accordance with the provisions of this Act.
Pune Municipal Corpn. v. Harakchand Solanki (three-Judge Bench)
In 2014, a three-Judge Bench comprising of Justice Lokur, Justice Joseph and Justice Lodha in Pune Municipal Corpn. case held that deposit of compensation amount in the government treasury is of no avail and cannot be held to be equivalent to compensation paid to the landowners/persons interested. The court remarkably said that if such compensation is not paid to the landowner then “the subject land acquisition proceedings shall be deemed to have lapsed under Section 24(2) of the 2013 Act”.
Indore Development Authority v. Shailendra (Three-Judge Bench)
The precedent laid down in Pune Municipal Corpn. case was overruled by another three-Judge Bench comprising of Justice Arun Mishra, Justice A.K. Goel and Justice Shantanagoudar in Indore Development Authority v. Shailendra [hereinafter “Indore Development Authority (3-Judge Bench)”]. The Court opined that the compensation under Section 24 of the Act was deemed to have been paid if the money were deposited in the government treasury and the same need not be deposited in court.
- We unanimously agree to the answers given to all the questions except to the aspect decided by majority whether Pune Municipal Corpn. Harakchand Misirimal Solanki, is per incuriam or not. As the majority has taken the view that it is per incuriam, it is declared to be per incuriam. The questions referred stand answered in terms of the majority judgment. Hence, ordered accordingly.
The court remarked that the provision has been sought to be blatantly misused and the law never envisages such absurd results as is being sought to be achieved.
- 75. … The beneficial provisions of the 2013 Act are put to misuse that tantamounts to grossest abuse of the provisions of law to reopen such acquisitions and the court has to thwart all such attempts at the threshold and not to receive such cases even for consideration for a moment. We see development has taken place in the area that has been acquired….
Conflict between the two Benches
In 2020, there was a conflict whether a three-Judge Bench can overrule another three-Judge Bench judgment which we saw in Indore Development Authority (3-Judge Bench). Accordingly, the same was referred to a larger Bench, which also turned out to be controversial as Justice Arun Mishra was part of the larger Bench.
In this regard, an application was filed before the court for the recusal of Justice Arun Mishra from the larger Bench, as he had decided the issue in the three-Judge Bench. Senior Advocate Shyam Divan, in the course of his submissions, referred to the phrase “no man can be a Judge in his own cause”.
Later, Justice Mishra refused to rescue from the larger Bench and said:
- (…) The previous judgment cannot constitute bias or a predisposition nor can it seem to be such, so as to raise a reasonable apprehension of bias…. Accepting the plea of recusal would sound a death knell to the independent system of justice delivery where litigants would dictate participation of Judges of their liking in particular cases or causes.
Indore Development Authority v. Manoharlal (Constitution Bench) 
In March 2020, a five-Judge Constitution Bench led by Justice Arun Mishra in Indore Development Authority (5-Judge Bench), held that proceedings under Section 24 of the 2013 Act will not lapse if compensation has been deposited in the treasury, not requiring the payment to the landowner or court concerned. In doing so, the Court upheld an earlier judgment in Indore Development Authority (3-Judge Bench) which was also headed by Justice Arun Mishra.
The Court further held that landowners cannot say in court that proceedings have lapsed if the Government has rendered the amount of treasury and there was no need to actually deposit the amount with landowners or court.
- Resultantly, the decision rendered in Pune Municipal Corpn. is hereby overruled and all other decisions in which Pune Municipal Corpn. has been followed, are also overruled. The decision in Sree Balaji Nagar Residential Assn. v. State of T.N. cannot be said to be laying down good law, is overruled and other decisions following the same are also overruled. In Indore Development Authority v. Shailendra, the aspect with respect to the proviso to Section 24(2) and whether ‘or’ has to be read as ‘nor’ or as ‘and’ was not placed for consideration. Therefore, that decision too cannot prevail, in the light of the discussion in the present judgment. Held the Court in Indore Development Authority,  (5-Judge Bench).
In September 2020, Former Chief Justice of India, Sharad A. Bobde also questioned the infallibility of the Constitution Bench judgment in Indore Development Authority (5-Judge Bench) delivered by Justice Arun Mishra.
Justice Bobde said the order gifted the Government “laxity” in several aspects, which even Parliament did not bother to provide under the 2013 Act.
“The judgment has given the Government laxity, which Parliament did not want the Government to have. Parliament had said the Government cannot do this, the law said the compensation should not be kept pending … the Government cannot just take over land and not pay compensation.” Chief Justice Bobde said:
The judgment in Indore Development Authority (5-Judge Bench) also missed a chance to apply to the doctrine of prospective overruling and rather the Court held that other decisions which were finalised/decided on the base of Pune Municipal Corpn. would also be overruled. This was not only problematic but bad in law also, because once the matter/suit has been concluded between the parties then it cannot be reopened due to a subsequent change in position of law.
There have been many instance where the courts have clarified that if matter has been concluded between parties, the same parties cannot be reopen the case due to a subsequent change in position of law which is not expressly retrospective.
Prospective and Retrospective Overruling
The doctrine of prospective overruling has been borrowed from the American judicial system. It states that when a decision made in a particular case would have operation only in the future and will not carry any retrospective effect on any past decisions.
The concept of prospective overruling was not into the picture before C. Golak Nath v. State of Punjab, as it was in C. Golak Nath case that the said doctrine was firmly established by then Chief Justice Kokka Subba Rao. It was a judgment rendered by an eleven-Judge Bench in the C. Golak Nath. Before C. Golak Nath, the prospective overruling was mostly used by American Courts and hence Indian law borrowed the concept from there.
Retrospective overruling accords with the declaratory theory of common law that the Judges do not make or change the law but merely declare it. The retrospective overruling doctrine allows old transactions to be reopened.
Clarifying the position on retrospective operation in Rangarao v. Kamlakant, the Supreme Court in clearly stated that no judgment of any court can have any retrospective operation because that is the plenary power of Parliament (legislature as well).
- On our careful consideration, we find that the appellant is entitled to succeed. It is undeniable that on the date when the compromise memo fruitioned into a decree on 3-1-1985, the civil court had every jurisdiction to pass such a decree. It is true the notification issued under Clause 30 of C.P. and Berar Letting of Houses and Rent Control Order, 1949 came to be struck down as violative of Article 14 of the Constitution. This was on 19-6-1985. The decision rendered thereunder cannot have any effect of rendering the decree passed on 3-1-1985 a nullity which decree has become final. No judgment of any court can have any retrospective operation because that is the plenary power of Parliament (legislature as well). The courts do not have such power. If that be so, the High Court had clearly gone wrong in holding that the decree on the date of execution is a nullity. As correctly contended by Mr Sanghi, learned counsel for the appellant, the jurisdiction will have to be decided on the date of the decree, namely, 3-1-1985. On that date undoubtedly it had every jurisdiction. Therefore, we hold that the High Court fell into an error in upsetting the concurrent findings of the courts below. Accordingly, we set aside the judgment of the High Court and allow the civil appeal.
In ECIL v. B. Karunakar, the court placed reliance on Supreme Court of United States and highlighted that while overruling previous law or laying a new principle, the US Supreme Court had made its operation prospective and given the relief to the party succeeding and in some cases given retrospectively and denied the relief in other cases.
- As a matter of constitutional law, retrospective operation of an overruling decision is neither required nor prohibited by the Constitution but is one of judicial attitude depending on the facts and circumstances in each case, the nature and purpose of the particular overruling decision seeks to serve. The court would look into the justifiable reliance on the overruled case by the administration; ability to effectuate the new rule adopted in the overruling case without doing injustice; the likelihood of its operation whether substantially burdens the administration of justice or retard the purpose. All these factors are to be taken into account while overruling the earlier decision or laying down a new principle. The benefit of the decision must be given to the parties before the court even though applied to future cases from that date prospectively would not be extended to the parties whose adjudication either had become final or matters are pending trial or in appeal. The Court held.
Doctrine of Finality of Judgment and Res Judicata
Section 11 of the Code of Civil Procedure envisages the doctrine of res judicata or the rule of inclusiveness of a judgment, as to the points decided either of facts, or of law, or of fact and law in every subsequent suit between the same parties.
The doctrine of res judicata is based on three Roman maxims:
(a) Nemo debet bis vaxari pro una et eadem causa (no man should be vexed twice for the same cause);
(b) interest reipublicae ut sit finis litium (it is in the interest of the State that there should be an end to a litigation);
(c) re judicata pro veritate occipitur (a judicial decision must be accepted as correct).
The doctrine of finality of judgments puts an end to the judicial process, prohibiting subsequent appeals, new proceedings and disputing clearly established facts. Hence, the decision in Indore Development Authority (5J Bench), where the Supreme Court had ordered the “reopening” of cases which have been already decides, goes against the aforementioned principle (doctrine of finality) and here are some of the decisions where the courts have taken a view about it.
In Chanchal Kumar Chatterjee v. State of W.B., the Calcutta High Court held that the principle of finality of litigation is based on a sound firm principle of public policy and in the absence of such a principle great oppression might result under the colour and pretence of law inasmuch as there will be no end to litigation.
In this regard, the Court held:
- In a country governed by the rule of law, the finality of a judgment is absolutely imperative and great sanctity is attached to the finality of the judgment and it is not permissible for the parties to reopen the concluded judgments of the court as it would not only tantamount to merely an abuse of the process of the court but would have far-reaching adverse effect on the administration of justice. It would also nullify the doctrine of stare decisis, a well-established valuable principle of precedent which cannot be departed from unless there are compelling circumstances to do so. The judgments of the court and particularly of the Supreme Court of a country cannot and should not be unsettled lightly.
Further, in Indu Bhusan Jana v. Union of India, the Calcutta High Court also stressed that the principle of finality or res judicata is a matter of public policy and is one of the pillars on which a judicial system is founded. In this regard, the Court held:
- … Once a judgment becomes conclusive, the matters in issue covered thereby cannot be reopened unless fraud or mistake or lack of jurisdiction is cited to challenge it directly at a later stage. The principle is rooted to the rationale that the issues decided may not be reopened, and has little to do with the merit of the decision. If it were to be otherwise, no dispute can be resolved or concluded. The principles of res judicata and constructive res judicata apply equally to proceedings under Article 226 of the Constitution.
Even, the Supreme Court in Union of India v. S.P. Sharma, held that the main object of the doctrine is to promote a fair administration of justice and to prevent abuse of process of the court.
- In M. Nagabhushana v. State of Karnataka this Court held that the doctrine of res judicata is not a technical doctrine but a fundamental principle which sustains the rule of law in ensuring finality in litigation. The main object of the doctrine is to promote a fair administration of justice and to prevent abuse of process of the court on the issues which have become final between the parties. The doctrine is based on two age-old principles, namely, interest reipublicae ut sit finis litium which means that it is in the interest of the State that there should be an end to litigation and the other principle is nemo debet bis vexari, si constat curiae quod sit pro una et eadem causa meaning thereby that no one ought to be vexed twice in a litigation if it appears to the court that it is for one and the same cause. The Court held.
Hence, the finality of judgments, particularly at the Supreme Court is an aspect of public policy and fundamentally linked to the doctrines or res judicata and stare decisis.
Significantly, the Court also held that finality of judgment is absolutely imperative and great sanctity is attached to the finality of the judgment and it is not permissible for the parties to reopen the concluded judgments of the court.
The Court held:
- In a country governed by the rule of law, finality of judgment is absolutely imperative and great sanctity is attached to the finality of the judgment and it is not permissible for the parties to reopen the concluded judgments of the court as it would not only tantamount to merely an abuse of the process of the court but would have far-reaching adverse affect on the administration of justice. It would also nullify the doctrine of stare decisis a well-established valuable principle of precedent which cannot be departed from unless there are compelling circumstances to do so. The judgments of the court and particularly the Supreme Court of a country cannot and should not be unsettled lightly.
With regard to endless litigation and reopening of cases, the court said that the principle of finality of litigation is based on a sound firm principle of public policy. In the absence of such a principle great oppression might result under the colour and pretence of law inasmuch as there will be no end to litigation.
“The doctrine of res judicata has been evolved to prevent such anarchy” the court remarked.
In Atam Prakash v. State of Haryana, the Court held that the suits which have been decreed and such decrees have become final since no appeals have been filed against the same, the said decrees are binding inter-parties and the declaration made by the Supreme Court is of no avail to the parties thereto.
The court was dealing with some suits which were pending in various courts, where decrees have been passed, appeals were pending in appellate courts.
In this regard, the Court opined that:
- (…) Such suits and appeals will now be disposed of in accordance with the declaration granted by us. We are told that there are a few cases where suits have been decreed and the decrees have become final, no appeals having been filed against those decrees. The decrees will be binding inter-partes and the declaration granted by us will be of no avail to the parties thereto.
- (…) As such the direction of this Court in Atam Prakash case that such decrees shall be binding inter-partes notwithstanding the declaration of this Court in the aforesaid judgment, was fully applicable in the present case. The High Court has rightly come to the conclusion that notwithstanding the judgment of the Constitution Bench in Atam Prakash the decree in the suit for pre-emption filed on behalf of the respondent was binding between the parties.
Notably, while affirming with High Court’s view the Supreme Court in Union of India v. Ranbir Singh Rathaur, held that review of the earlier orders passed by this court was “impermissible” and approach of the High Court of reopening the case was “erroneous” and the issue of maintainability of the petitions was of paramount importance.
It further said that to say that “justice stood at the higher pedestal” then the finality of litigation was not an answer enabling the court to reopen a finally decided case.
Furthermore, in Kalinga Mining Corpn. v. Union of India, the Supreme Court held that it is well settled that judicial review of the administrative action/quasi-judicial orders passed by the Government is limited only to correcting the errors of law or fundamental procedural requirements which may lead to manifest injustice.
- (…) When the conclusions of the authority are based on evidence, the same cannot be reappreciated by the court in exercise of its powers of judicial review. The court does not exercise the powers of an appellate court in exercise of its powers of judicial review. It is only in cases where either findings recorded by the administrative/quasi-judicial authority are based on no evidence or are so perverse that no reasonable person would have reached such a conclusion on the basis of the material available that the court would be justified to interfere in the decision. The scope of judicial review is limited to the decision-making process and not to the decision itself, even if the same appears to be erroneous.
To conclude, it is pertinent to refer to what Supreme Court remarked in Ambika Prasad Mishra v. State of U.P. ,
“6. It is wise to remember that fatal flaws silenced by earlier rulings cannot survive after death because a decision does not lose its authority ‘merely because it was badly argued, inadequately considered and fallaciously reasoned“.
The question that ultimately arises is whether Doctrine of Finality become a causality after Indore Development Authority: Can the cases where rights are already frozen be reopened? In my view, in case the cases decided are reopened, it will certainly lead to an anomaly in the settled principle of law.
†† Chinmay Dubey, Associate Satramdass B & Co., Delhi Email: firstname.lastname@example.org
 (2020) 8 SCC 129.
 1995 Supp (1) SCC 271, 273.