The Precedential Value of the Split Verdict in Rathi Steels

Introduction

On 17-3-2023, a Bench of the Supreme Court comprising of M.R. Shah and B.V. Nagarathna, JJ. in Govt. of NCT of Delhi v. K.L. Rathi Steels Ltd.¹ (Rathi Steels) delivered divergent opinions on an important question of law concerning powers of the Court to entertain a batch of review applications/petitions under Article 137² of the Constitution of India (the Constitution) and Order 47³ of the Code of Civil Procedure, 1908 (CPC).

Nagarathna, J. while relying on the Explanation to Order 47 Rule 1 as well as several authorities of the Supreme Court was of the view that merely because a judgment is “subsequently overruled by a subsequent decision of a superior court in any other case”, it shall not be a ground for review. Shah, J. on the other hand opined that in light of the peculiar facts of the case before the Court, the review applications/petitions should be allowed in “larger public interest”.

Considering the “divergence of opinion” between both the Judges, the Bench directed the matter to be placed before the Chief Justice of India for “appropriate orders”.⁴ The question that now arises is that till this conflict is resolved by an appropriate Bench, what is the precedential value of both these opinions? Are the views expressed by both Judges binding? Could both these opinions be judgment of the Supreme Court or not?

Status of precedential value of the abovementioned opinions, till the conflict is resolved by appropriate Bench

The answer to the aforesaid question can be found in a decision rendered by the Full Bench of the Allahabad High Court in Shriram Industrial Enterprises Ltd. v. Union of India⁵ (Shriram). In Shriram case⁶, a Full Bench of the Allahabad High Court was constituted to resolve a difference of opinion, between two Judges of the High Court on the “question of competence of the State Legislature to enact U.P. Sheera Niyantran Adhiniyam, 1964⁷”.⁸

The issue before the Court was whether by virtue of Section 18-G⁹ of the Industrial (Development and Regulation) Act, 1951, the power to legislate regulating supply, distribution and price of molasses was taken away from the hands of the State Legislature.¹⁰ The concurring opinion delivered by Mathur, J. succulently deals with this particular issue of precedential value of divergent views. After a detailed analysis of the relevant statutory provisions, rules, and authorities, Mathur, J. opined,

117. A careful examination of the stand and texts and authorities referred to above shows that even according to the wider view, leaving aside the stricter or narrower view, an adjudication, in order to constitute a judgment, must decide any question or issue in the case or any of the rights of the parties. Further the form of the adjudication or the language used is not material, what is to be seen is its effect on the suitor proceeding in which it is made.

118. If that be the real meaning of the word judgment, it follows as a corollary that there can be only one judgment in a case. Two contradictory judgments or judgments at variance with each other will not have the effect of deciding any question or issue in the case or of deciding any of the rights of the parties. It is also plain that such judgments can neither be enforced nor be given effect to. Therefore, if two Judges constituting a Division Bench give contradictory decisions or decisions at variance with each other, in law, such decisions cannot be called as judgments as they do not decide any question or issue in the case or proceeding nor do they decide any of the rights of the parties, the real test being what is the effect of the two decisions on the case or proceedings in which it is made, the language or phraseology used being wholly immaterial having no bearing. In such a situation, the decision so rendered will only amount to the opinions of the respective Judges. This principle will, however, not apply where on account of some statutory provisions like Section 98¹¹ CPC contradictory decisions by their own force lead to a decision of any question or issue in the case for any of the rights of the parties.¹²

(emphasis supplied)

Even though the opinion of Mathur, J. is a concurring opinion and does not constitute the majority view, it is a settled principle of law¹³ when the other Judges of a Bench do not dissent from or contravene the view of a particular Judge on the same Bench, then it is presumed that the other Judges who have not expressed contrary views have agreed with the view expressed by the said Judge.

The passages from the opinion of Mathur, J. have been referred to and followed by the Allahabad High Court in Prem Chandra v. Collector¹⁴ as well as other High Courts such as the Patna High Court in Amarendra Arya v. State of Bihar¹⁵ and the Bombay High Court in Raju Deganna Shetti v. Dinkar Nilay Shetti¹⁶ (Raju Shetti).

Are the views expressed by both the Judges binding

In Raju Shetti case¹⁷, the Bombay High Court was dealing with a challenge to an order passed by the trial court concerning a suit filed under Section 6¹⁸ of the Specific Relief Act, 1963 for dispossession. The applicant before the High Court relied on the view expressed by the Supreme Court in East India Hotels Ltd. v. Syndicate Bank¹⁹ (East India Hotels) to support its contention. Divergent views were expressed by a Division Bench in the matter before the Supreme Court. However, the said views so expressed by both the Judges “were not adjudicated upon” as the parties in the said matter had settled their dispute amicably.

The High Court after noting the divergent views expressed by the Supreme Court in East India Hotels case²⁰ observed that the High Court “is required to be sensitive to the effect of such findings recorded by the Supreme Court and whether such findings can be given colour of judgment being binding precedent”.²¹ According to the High Court, since in East India Hotels case²² the “pronouncement” was “referred to jointly by both the Judges to the Chief Justice for constitution of a larger Bench”, the “said pronouncement cannot be termed as a judgment and as such will lose its efficacy as precedent”.²³ To substantiate these observations, the High Court relied on the opinion of Mathur, J. in Shriram case²⁴ and went onto hold that East India Hotels case²⁵ does not lay down law which is binding on the High Court. Therefore, according to the High Court, since the Judges in East India Hotels case²⁶ referred the matter to the Chief Justice of India to constitute a larger Bench, the views of both the Judges are not binding.²⁷

Conclusion

It is however submitted that even if there was no reference made in East India Hotels case²⁸ to the Chief Justice of India by both the Judges, the divergent views in expressed by them would still not be a judgment as there was no conclusive decision of the issue before the Bench.

Therefore, the divergent views of Shah and Nagarathna, JJ. in Rathi Steels case²⁹ would not be of any precedential value and would not be binding.