SANJAY KUMAR AGARWAL versus STATE TAX OFFICER (1) & ANR.
[2023] 15 S.C.R. 225, Supreme Court of India, 2023
Outcome: Dismissed (Dismissed)
Segment: Issues
[2023] 15 S.C.R. 225 : 2023 INSC 963
225
CASE DETAILS
SANJAY KUMAR AGARWAL
v.
STATE TAX OFFICER (1) & ANR.
(Review Petition (Civil) No.1620 of 2023)
In
(Civil Appeal No. 1661 of 2020)
OCTOBER 31, 2023
[A. S. BOPANNA AND BELA M. TRIVEDI, JJ.]
HEADNOTES
Issue for consideration: A Batch of ﬁ ve Review Petitions was ﬁ led 
by the Review Petitioners, aggrieved by the common judgment and order 
dated 06.09.2022 passed by the Supreme Court in Civil Appeal No. 1661 of 
2020 and Civil Appeal No. 2568 of 2020. Whether the Review Petitioners 
were able to make out any case within the ambit of Order XLVII of Supreme 
Court Rules, read with Order XLVII of CPC, for reviewing the impugned 
judgment. 
Supreme Court Rules, 2013 – Or. XLVII – Code of Civil Procedure, 
1908 – Or. XLVII – Review Petitioners placed heavy reliance on the 
observations made by a two Judge Bench of the Supreme Court in 
C.A. No. 7976 of 2019 (Paschim Anchal Vidyut Vitran Nigam Limited 
vs. Raman Ispat Private Limited and Others) and submitted that the 
court in the impugned judgment had failed to consider the waterfall 
mechanism contained in Section 53, as also failed to consider other 
provisions of the IBC – Propriety: 
Held: The said submission of the review petitioners was outrightly 
rejected for the simple reason that any passing reference of the impugned 
judgment made by the Bench of the equal strength could not be a ground 
for review – It is well settled proposition of law that a co-ordinate Bench
cannot comment upon the discretion exercised or judgment rendered by 
another co-ordinate Bench of the same strength – If a Bench does not 
accept as correct the decision on a question of law of another Bench of
226 
SUPREME COURT REPORTS 
[2023] 15 S.C.R.
equal strength, the only proper course to adopt would be to refer the matter 
to the larger Bench, for authoritative decision, otherwise the law would be 
thrown into the state of uncertainty by reason of conﬂ icting decisions – The 
submissions made by the Review Petitioners that the court in the impugned 
decision had failed to consider the waterfall mechanism as contained in 
s.53 and failed to consider other provisions of IBC, are factually incorrect 
– As evident from the bare reading of the impugned judgment, the Court 
had considered not only the Waterfall mechanism u/s. 53 of IBC but also 
the other provisions of the IBC for deciding the priority for the purpose of 
distributing the proceeds from the sale as liquidation assets – Therefore, 
the well-considered judgment sought to be reviewed does not fall within 
the scope and ambit of Review. [Paras 20, 24, 27]
Review – Grounds of Review:
Held: (i) A judgment is open to review inter alia if there is a mistake 
or an error apparent on the face of the record; (ii) A judgment pronounced 
by the Court is ﬁ nal, and departure from that principle is justiﬁ ed only 
when circumstances of a substantial and compelling character make it 
necessary to do so; (iii) An error which is not self-evident and has to 
be detected by a process of reasoning, can hardly be said to be an error 
apparent on the face of record justifying the court to exercise its power of 
review; (iv) In exercise
of the jurisdiction under Order 47 Rule 1 CPC, it 
is not permissible for an erroneous decision to be “reheard and corrected”; 
(v) A Review Petition has a limited purpose and cannot be allowed to be 
“an appeal in disguise”; (vi) Under the guise of review, the petitioner 
cannot be permitted to reagitate and reargue the questions which have 
already been addressed and decided; (vii) An error on the face of record 
must be such an error which, mere looking at the record should strike and 
it should not require any long-drawn process of reasoning on the points 
where there may conceivably be two opinions; (viii) Even the change in 
law or subsequent decision/ judgment of a co-ordinate or larger Bench by 
itself cannot be regarded as a ground for review. [Para 16]
LIST OF CITATIONS AND OTHER REFERENCES
Beghar Foundation vs. Justice K.S. Puttaswamy (Retired) and Others 
[2021] 1 SCR 681 : (2021) 3 SCC 1 – followed.
227
Parsion Devi and Others vs. Sumitri Devi and Others [1997] 4 Suppl. 
SCR 470 : (1997) 8 SCC 715; Shanti Conductors Private Limited vs. Assam 
State Electricity Board and Others  [2019] 16 SCR 252 : (2020) 2 SCC 
677; Shri Ram Sahu (Dead) Through Legal Representatives and Others vs. 
Vinod Kumar Rawat and Others (2021) 13 SCC 1; Arun Dev Upadhyaya 
vs. Integrated Sales Service Limited & Another R.P. (C) Nos. 1273-1274 of 
2021 in Civil Appeal Nos. 8345- 8346 of 2018; Jai Sri Sahu vs. Rajdewan 
Dubey and Others [1962] SCR 558 : AIR 1962 SC 83; Mamleshwar Prasad 
and Another vs. Kanhaiya Lal (Dead) Through L.Rs. [1975] 3 SCR 834 : 
(1975) 2 SCC 232; Sant Lal Gupta and Others vs. Modern Cooperative 
Group Housing Society Limited and Others [2010] 13 SCR 621 : (2010) 
13 SCC 336 – relied on.
Union of India vs. Nareshkumar Badrikumar Jagad & Others (2019) 
18 SCC 586; M/s. Northern India Caterers (India) Ltd. vs. Lt. Governor 
of Delhi [1980] 2 SCR 650 : (1980) 2 SCC 167; Sajjan Singh and Ors. vs. 
State of Rajasthan and Ors. [1965] SCR 933 : AIR 1965 SC 845; Paschim 
Anchal Vidyut Vitran Nigam Limited vs. Raman Ispat Private Limited 
and Others C.A. No. 7976 of 2019; Ghanashyam Mishra and Sons Private 
Limited through the authorized signatory vs. Edelweiss Asset Reconstruction 
Company Limited through the Director and Others (2021) 9 SCC 657; 
Singapore Private Limited vs. Committee of Creditors of Educomp Solutions 
Limited and Another (2022) 2 SCC 401 – referred to.
OTHER
CASE DETAILS INCLUDING IMPUGNED 
ORDER AND APPEARANCES
INHERENT JURISDICTION: Review Petition (Civil) No.1620 of 
2023 in Civil Appeal No.1661 of 2020.
From the Judgment and Order dated 06.09.2022 in C. A. No.1661 of 
2020 of the Supreme Court of India.
With
Rev. Pet (C) No.1621 of 2023 in C.A. No.1661 of 2020, Rev. Pet (C) 
No. 1622 of 2023 in C.A. No.1661 of 2020 and Rev. Pet (C) No.236 of 
2023 in C.A. No.2568 of 2020 and Rev. Pet (C) No.1623 of 2023 in C.A. 
No.1661 of 2020.
SANJAY KUMAR AGARWAL v. STATE TAX OFFICER (1) & 
ANR.
228 
SUPREME COURT REPORTS 
[2023] 15 S.C.R.
Appearances:
Naveen Pahwa, Dhruv Mehta, Harish N Salve, Ramji Srinivasan, 
Maninder Singh, Sumesh Dhawan, Jaideep Gupta, Siddharth Bhatnagar, 
Sr. Advs., M/s. Lawﬁ c, M.s Vishnu Sankar, Atul Sharma, Sriram Parakkat, 
Vikram Choudhary, Aditi Sharma, Aditya Santosh, Ankur Kashyap, 
Ayush Agarwala, Ms. Megharanjani Chandu, Rishab Agarwal, Ajith S 
Ranganathan, Rohit Rajershi, Aman Bajaj, Ms. Preety Choudhary, Shyam R 
Agarwal, Arnav Narain, Rajesh Srivastava, Gaurav Verma, Neeraj Dutt Gaur, 
Sanjay Singh, Sanjay Kapur, Ms. Megha Karnwal, Surya Prakash, Devesh 
Dubey, Arjun Bhatia, Ms. Mayuri Raghuvanshi, Vyom Raghuvanshi, Ms. 
Akanksha Rathore, Dhruv Sharma, Ms. Namrata Saraogi, Karthik Pandey, 
Ms. Aastha Mehta, Ms. Deepanwita Priyanka, Ms. Prerna Mohapatra, Ms. 
Yasha Goyal, Vatsala Kak, Mahesh Agarwal, Raghav Dembla, Shaurya 
Shyam, Ms. Geetika Sharma, E. C. Agrawala, Vikas Mehta, Ms. Rashi 
Rampal, Arvind Thapliyal, Dhruv Devan, Surya Kapoor, Ms. Saravana 
Vasanta, Siddhant Grover, Siddharth Pandey, Ms. Pracheta Kar, Aditya 
Sidhra, Nadeem Afroz, Kunal Chatterji, Advs. for the appearing parties.
JUDGMENT / ORDER OF THE SUPREME COURT
JUDGMENT
BELA M. TRIVEDI, J.
1. This batch of ﬁ ve Review Petitions seeks to review the common 
Judgment and Order dated 06.09.2022 passed by this Court in Civil Appeal 
No. 1661 of 2020 and Civil Appeal No. 2568 of 2020. Both the said appeals 
were preferred by the State Tax Oﬃ  cer-appellant.
2.
Civil Appeal No. 1661 of 2020 was preferred by the Appellant-State 
Tax Oﬃ  cer against the Respondent-Rainbow Papers Limited (Corporate 
Debtor), being aggrieved by the Judgment and Order dated 19.12.2019 
passed by the National Company Law Appellate Tribunal (hereinafter 
referred to as the ‘NCLAT’), dismissing the Company Appeal (At) (INs) 
No. 404 of 2019 ﬁ led by the appellant. The said company Appeal was ﬁ led 
against the order dated 27.02.2019 passed by the Adjudicating Authority, 
rejecting the Application being I.A. No. 224/271/272/337 of 2018 and 
P-01/2019 in CP No. (IB) 88/9/NCLT/AHM/2017 ﬁ led by the appellants,
229
in which it was held that the appellant cannot claim ﬁ rst charge over the 
property of the Corporate Debtor, as Section 48 of the Gujarat Value Added 
Tax 2003 (hereinafter referred to as the ‘GVAT Act’) cannot prevail over 
Section 53 of the Insolvency and Bankruptcy Code 2016 (hereinafter referred 
to as the IBC).
3. Civil Appeal No. 2568 of 2020 was preferred by the appellant- State 
Tax Oﬃ  cer against the Respondents- Mr. Chandra Prakash Jain and M/s. 
Mekaster Engineering Ltd., being aggrieved by the Order dated 23.01.2020 
passed by the NCLAT in Company Appeal (At) (Ins) No. 1193 of 2019. 
The NCALT by the said judgment and order had dismissed the said Appeal 
of the appellant on the basis of the judgment and order dated 19.12.2019 
passed in Company Appeal (At) (Insolvency No. 404 of 2019) (which was 
the order under challenge in Civil Appeal No.1661 of 2020).
4. This Court while allowing the said Appeals vide the impugned order 
dated 06.09.2022 held as under:
“56. Section 48 of the GVAT Act is not contrary to or inconsistent with 
Section 53 or any other provisions of the IBC. Under Section 53(l)
(b)(ii), the debts owed to a secured creditor, which would include the 
State under the GVAT Act. are to rank equally with other speciﬁ ed 
debts including debts on account of workman’s dues for a period of 
24 months preceding the liquidation commencement date. 
57. As observed above, the State is a secured creditor under the GVAT 
Act. Section 3(30) of the IBC deﬁ
nes secured creditor to mean a 
creditor in favour of whom security interest is credited. Such security 
interest could be created by operation of law. The deﬁ nition of secured 
creditor in the IBC does not exclude any Government or Governmental 
Authority.
58. We are constrained to hold that the Appellate Authority (NCLAT) 
and the Adjudicating Authority erred in law in rejecting the application/
appeal of the appellant. As observed above, delay in ﬁ ling a claim 
cannot be the sole ground for rejecting the claim. 
59. The appeals are allowed. The impugned orders are set aside. The 
Resolution plan approved by the CoC is also set aside. The Resolution 
Professional may consider a fresh Resolution Plan in the light of the 
SANJAY KUMAR AGARWAL v. STATE TAX OFFICER (1) & 
ANR. [BELA M. TRIVEDI, J.]
230 
SUPREME COURT REPORTS 
[2023] 15 S.C.R.
observations made above. However, this judgment and order will not, 
prevent the Resolution Applicant from submitting a plan in the light 
of the observations made above, making provisions for the dues of 
the statutory creditors like the appellant. 
60. There shall be no order as to costs”.
5. The following ﬁ ve Review Petitions have been ﬁ led by the Review 
Petitioners being aggrieved by the said common judgment and order dated 
06.09.2022 passed by this Court.
(i) 
The Review Petition (Civil) No. 1620 of 2023 in Civil Appeal 
No. 1661 of 2020 has been ﬁ led by the petitioner – Sanjay Kumar 
Agarwal, who happened to be the Liquidator of Biotor Industries 
Limited (previously known as Jayant Oils and Derivatives Private 
Limited) (‘Corporate Debtor’) a registered dealer under the 
Gujarat Value Added Tax 2003 Act (hereinafter referred to as the 
‘GVAT Act’) and the Central Sales Tax Act, 1956 (hereinafter 
referred to as the ‘Sales Tax Act’). The Review Petitioner was 
not a party to the proceedings of Civil Appeal No. 1661 of 
2020, however, has ﬁ led the Review Petition claiming to be 
an “aggrieved person” on the ground that the impugned order 
dated 06.09.2022 passed by this Court would have direct eﬀ ect 
on the proceedings pending between the Review Petitioner and 
the Gujarat Sales Tax Authority before the Gujarat High Court 
in Special Civil Application No. 23256 of 2019.
(ii) The Review Petition No. 1621 of 2023 in
Civil Appeal No. 1661 
of 2020 has been ﬁ led by the Review Petitioner – Ramchandra 
Dallaram Choudhary, who happened to be the Resolution 
Professional (hereinafter referred to as the RP) of the Corporate 
Debtor, “Rainbow Papers Limited” – and was the respondent 
in the proceedings before the National Company Law Tribunal 
(hereinafter referred to as the ‘NCLT’) in Intervention Application 
No. P-01 of 2019 in CP No. 88/9/NCLT/AHM/2017 and was 
respondent no. 2 before the NCLAT in Company Appeal (At) 
(Ins) No. 404 of 2019). According to the Review Petitioner, he 
was not made party in the Civil Appeal No. 1661 of 2020 ﬁ led 
before this Court and therefore was aggrieved by the said order.
231
(iii) The Review Petition (Civil) No. 1622 of 2023 in Civil Appeal 
No. 1661 of 2020 has been ﬁ led by the Review Petitioner State 
Bank of India, on behalf of the Consortium of lenders of the 
Biotor Industries Limited, a company under liquidation. The 
Review petitioner was not a party to the proceedings of Civil 
Appeal No. 1661 of 2020, however, claims to be an “aggrieved 
person” as according to the Review Petitioner, the impugned 
judgment had an eﬀ ect over the proceedings pending between 
the Review Petitioner and the Sales Tax authorities, Vadodara in 
Writ Petition being SCA No. 23256 of 2019 before the Gujarat 
High Court.
(iv) The Review Petition (Civil) No. 236 of 2023 in Civil Appeal No. 
2568 of 2020 has been ﬁ led by the Review Petitioners – Chandra 
Prakash Jain and Anr., Resolution Professional of M/s. Mekaster 
Engineering Ltd., and M/s. Mekaster Engineering Ltd (Corporate 
Debtor), who were the respondents in Civil Appeal No. 2568 of 
2020 ﬁ led by the Appellant – State Tax Oﬃ  cer. According to the 
petitioners, they are aggrieved by the common impugned order 
dated 06.09.2022 passed by this Court as the same was passed 
without taking into consideration the law laid down by this Court 
and the provisions of IBC.
(v) The Review Petition (Civil) No. 1623 of 2023 in Civil Appeal 
No. 1661 of 2020 has been ﬁ led by the Review Petitioner-Indian 
Overseas Bank, which was one of the members of the Committee 
of creditors constituted subsequent to the
commencement of 
Corporate Insolvency Resolution Process (CIRP) of the M/s. 
Rainbow Papers Limited (Corporate Debtor). The Review 
Petitioner was not a party to the proceedings in Civil Appeal 
No. 1661 of 2020, however, is seeking review being aggrieved 
by the impugned judgment dated 06.09.2022. 
6. This Court vide the order dated 13th November, 2022, had allowed the 
Applications seeking permission to ﬁ le Review Petitions and also allowed 
the applications seeking Intervention/ Impleadment. 
SANJAY KUMAR AGARWAL v. STATE TAX OFFICER (1) & 
ANR. [BELA M. TRIVEDI, J.]
232 
SUPREME COURT REPORTS 
[2023] 15 S.C.R.
Scope of Review:
7. At the outset, it may be stated that the power to review its judgments 
has been conferred on the Supreme Court by Article 137 of the Constitution 
of India. Of course, that power is subject to the provisions of any law made 
by the Parliament or the Rules made under Article 145.Supreme Court 
in exercise of the powers conferred under Article 145 of the Constitution 
of India has framed the Supreme Court Rules, 2013. The Order XLVII 
of Part IV thereof deals with the provisions of Review. Accordingly, in 
a Civil Proceeding, an application for review is entertained only on the 
grounds mentioned in Order XLVII Rule 1 of the Code of Civil Procedure 
and in a Criminal Proceeding on the ground of an error apparent on the 
face of record. However, it may be noted that neither Order XLVII CPC 
nor Order XLVII of Supreme Court Rules limits the remedy of review 
only to the parties to the judgment under review. Even a third party to the 
proceedings, if he considers himself to be an “aggrieved person,” may 
take recourse to the remedy of review petition. The quintessence is that 
the person should be aggrieved by the judgment and order passed by this 
Court in some respect.1 In view of the said legal position, the Review 
Petitioners who claimed to be the “aggrieved persons” by the impugned 
judgment dated 06.09.2022, were permitted to ﬁ le Review Petitions and 
were heard by the Court. 
8. Before adverting to the
contentions raised by the learned counsels 
for the parties, let us regurgitate the well settled law on the scope of review 
as contemplated in Order XLVII of the Supreme Court Rules read with 
Order XLVII of CPC.
9. In the words of Krishna Iyer J., (as His Lordship then was) “a plea 
of review, unless the ﬁ rst judicial view is manifestly distorted, is like asking 
for the Moon. A forensic defeat cannot be avenged by an invitation to have 
a second look, hopeful of discovery of ﬂ aws and reversal of result……… 
A review in the Counsel’s mentation cannot repair the verdict once given. 
So, the law laid down must rest in peace.”2
1 
(2019) 18 SCC 586, Union of India vs. Nareshkumar Badrikumar Jagad & Others
2 
(1980) 2 SCC 167, M/s. Northern India Caterers (India) Ltd. vs. Lt. Governor of Delhi
233
10. It is also well settled that a party is not entitled to seek a review of 
a judgment delivered by this Court merely for the purpose of a rehearing 
and a fresh decision of the case. The normal principle is that a judgment 
pronounced by the Court is ﬁ nal, and departure from that principle is justiﬁ ed 
only when circumstances of a substantial and compelling character make 
it necessary to do so.3
11. In  Parsion Devi and Others vs. Sumitri Devi and Others4, this 
Court made very pivotal observations: - 
“9. Under Order 47 Rule 1 CPC a judgment may be open to review 
inter alia if there is a mistake or an error apparent on the face of the 
record. An error which is not self-evident and has to be detected by 
a process of reasoning, can hardly be said to be an error apparent 
on the face of the record justifying the court to exercise its power of 
review under Order 47 Rule 1 CPC. In exercise of the jurisdiction 
under Order 47 Rule 1 CPC it is not permissible for an erroneous 
decision to be “reheard and corrected”. A review petition, it must 
be remembered has a limited purpose and cannot be allowed to be 
“an appeal in disguise.”
12. Again, in Shanti Conductors Private Limited vs. Assam State 
Electricity Board and Others5, a three Judge Bench of this Court following 
Parsion Devi and Others vs. Sumitri Devi and Others (supra) dismissed the 
review petitions holding that the scope of review is limited and under the 
guise of review, the petitioner cannot be
permitted to reagitate and reargue 
the questions which have already been addressed and decided. 
13. Recently, in Shri Ram Sahu (Dead) Through Legal Representatives 
and Others vs. Vinod Kumar Rawat and Others6, this Court restated the 
law with regard to the scope of review under Section 114 read with Order 
XLVII of CPC. 
3 
AIR 1965 SC 845, Sajjan Singh and Ors. vs. State of Rajasthan and Ors.
4 
(1997) 8 SCC 715
5 
(2020) 2 SCC 677
6 
(2021) 13 SCC 1
SANJAY KUMAR AGARWAL v. STATE TAX OFFICER (1) & 
ANR. [BELA M. TRIVEDI, J.]
234 
SUPREME COURT REPORTS 
[2023] 15 S.C.R.
14. In R.P. (C) Nos. 1273-1274 of 2021 in Civil Appeal Nos. 8345-
8346 of 2018 (Arun Dev Upadhyaya vs. Integrated Sales Service Limited 
& Another), this Court reiterated the law and held that: -
“15. From the above, it is evident that a power to review cannot be 
exercised as an appellate power and has to be strictly conﬁ ned to the 
scope and ambit of Order XLVII Rule 1 CPC. An error on the face of 
record must be such an error which, mere looking at the record should 
strike and it should not require any long-drawn process of reasoning 
on the points where there may conceivably be two opinions.”
15. It is very pertinent to note that recently the Constitution Bench in 
Beghar Foundation vs. Justice K.S. Puttaswamy (Retired) and Others7, 
held that even the change in law or subsequent decision/ judgment of co-
ordinate Bench or larger Bench by itself cannot be regarded as a ground 
for review. 
16. The gist of the afore-stated decisions is that: -
(i) 
A judgment is open to review inter alia if there is a mistake 
or an error apparent on the face of the record. 
(ii) 
A judgment pronounced by the Court is ﬁ nal, and departure 
from that principle is justiﬁ ed only when circumstances of a 
substantial and compelling character make it necessary to do 
so.
(iii) 
An error which is not self-evident and has to be detected by a 
process of reasoning, can hardly be said to be an error apparent 
on the face of record justifying the court
to exercise its power 
of review. 
(iv) 
In exercise of the jurisdiction under Order 47 Rule 1 CPC, it 
is not permissible for an erroneous decision to be “reheard and 
corrected.”
(v) 
A Review Petition has a limited purpose and cannot be allowed 
to be “an appeal in disguise.”
7 
(2021) 3 SCC 1
235
(vi) 
Under the guise of review, the petitioner cannot be permitted 
to reagitate and reargue the questions which have already been 
addressed and decided.
(vii) 
An error on the face of record must be such an error which, 
mere looking at the record should strike and it should not 
require any long-drawn process of reasoning on the points 
where there may conceivably be two opinions.
(viii) 
Even the change in law or subsequent decision/ judgment of 
a co-ordinate or larger Bench by itself cannot be regarded as 
a ground for review. 
Analysis: 
17. Keeping in view the afore-stated legal position, let us examine 
whether the Review Petitioners have been able to make out any case within 
the ambit of Order XLVII of Supreme Court Rules, read with Order XLVII 
of CPC, for reviewing the impugned judgment. 
18. We have heard Mr. Harish N Salve, Mr. Naveen Pahwa, Mr. Dhruv 
Mehta, Mr. Ramji Srinivasan, Mr. Siddharth Bhatnagar, and Mr. Sumesh 
Dhawan, respective learned Senior Counsels and other learned counsels for 
the Review Petitioners/ Intervenors, as also Mr. Maninder Singh, learned 
Senior Counsel and Ms. Aastha Mehta, learned Counsel for the Respondents. 
19. The learned Senior Counsels and learned Counsels for the Review 
Petitioners/ Intervenors placing heavy reliance on the observations made 
by a two Judge Bench of this Court in C.A. No. 7976 of 2019 (Paschim 
Anchal Vidyut Vitran Nigam Limited vs. Raman Ispat Private Limited 
and Others), delivered on 17th July,
2023, submitted that the court in 
the impugned judgment had failed to consider the waterfall mechanism 
contained in Section 53, as also failed to consider other provisions of the 
IBC. They have relied upon the observations made by the co-ordinate Bench 
in the following paragraph: - 
“49. Rainbow Papers (supra) did not notice the ‘waterfall mechanism’ 
under Section 53 – the provision had not been adverted to or extracted 
in the judgment. Furthermore, Rainbow Papers (supra) was in the 
context of a resolution process and not during liquidation. Section 
SANJAY KUMAR AGARWAL v. STATE TAX OFFICER (1) & 
ANR. [BELA M. TRIVEDI, J.]
236 
SUPREME COURT REPORTS 
[2023] 15 S.C.R.
53, as held earlier, enacts the waterfall mechanism providing for the 
hierarchy or priority of claims of various classes of creditors. The 
careful design of Section 53 locates amounts payable to secured 
creditors and workmen at the second place, after the costs and expenses 
of the liquidator payable during the liquidation proceedings. However, 
the dues payable to the government are placed much below those of 
secured creditors and even unsecured and operational creditors. This 
design was either not brought to the notice of the court in Rainbow 
Papers (supra) or was missed altogether. In any event, the judgment 
has not taken note of the provisions of the IBC which treat the dues 
payable to secured creditors at a higher footing than dues payable to 
Central or State Government.”
20. Taking recourse to the said observations made by the co-ordinate 
bench, the learned Counsels for the Review Petitioners have urged to review 
the impugned judgment. The said submission of the learned Counsels for 
the review petitioners deserves to be outrightly rejected for the simple 
reason that any passing reference of the impugned judgment made by the 
Bench of the equal strength could not be a ground for review. It is well 
settled proposition of law that a co-ordinate Bench cannot comment upon 
the discretion exercised or judgment rendered by another co-ordinate Bench 
of the same strength. If a Bench does not accept as correct the
decision on a 
question of law of another Bench of equal strength, the only proper course 
to adopt would be to refer the matter to the larger Bench, for authoritative 
decision, otherwise the law would be thrown into the state of uncertainty 
by reason of conﬂ icting decisions. 
21. In JaiSri Sahu vs. Rajdewan Dubey and Others8, a Bench of four 
Judges have made very pertinent observations in this regard: - 
“11. Law will be bereft of all its utility if it should be thrown into a state 
of uncertainty by reason of conﬂ icting decisions, and it is therefore 
desirable that in case of diﬀ erence of opinion, the question should be 
authoritatively settled.”
8 
AIR 1962 SC 83
237
22. In Mamleshwar Prasad and Another vs. Kanhaiya Lal (Dead) 
Through L.Rs.ৰ, it was observed that: -
“7. Certainty of the law, consistency of rulings and comity of courts – 
all ﬂ owering from the same principle – converge to the conclusion that 
a decision once rendered must later bind like cases. We do not intend to 
detract from the rule that, in exceptional instances, where by obvious 
inadvertence or oversight a judgment fails to notice a plain statutory 
provision or obligatory authority running counter to the reasoning 
and result reached, it may not have the sway of binding precedents. It 
should be a glaring case, an obtrusive omission.”
23. A precise observations made by a three Judge Bench in Sant Lal 
Gupta and Others vs. Modern Cooperative Group Housing Society Limited 
and Others10, are worth noting –
“17. A coordinate Bench cannot comment upon the discretion exercised 
or judgment rendered by another coordinate Bench of the same court. 
The rule of precedent is binding for the reason that there is a desire to 
secure uniformity and certainty in law. Thus, in judicial administration 
precedents which enunciate the rules of law form the foundation of the 
administration of justice under our system. Therefore, it has always 
been insisted that the decision of a coordinate Bench must be followed. 
(Vide Tribhovandas Purshottamdas Thakkar vs. Ratilal Motilal Patel, 
Sub-Committee of Judicial Accountability vs. Union of India, and 
State of Tripura vs. Tripura
Bar Association.)”
24. Apart from the well-settled legal position that a co-ordinate Bench 
cannot comment upon the judgment rendered by another co-ordinate 
Bench of equal strength and that subsequent decision or a judgment of a 
co-ordinate Bench or larger Bench by itself cannot be regarded as a ground 
for review, the submissions made by the learned Counsels for the Review 
Petitioners that the court in the impugned decision had failed to consider the 
waterfall mechanism as contained in Section 53 and failed to consider other 
provisions of IBC, are factually incorrect. As evident from the bare reading 
9 
(1975) 2 SCC 232
10 (2010) 13 SCC 336
SANJAY KUMAR AGARWAL v. STATE TAX OFFICER (1) & 
ANR. [BELA M. TRIVEDI, J.]
238 
SUPREME COURT REPORTS 
[2023] 15 S.C.R.
of the impugned judgment, the Court had considered not only the Waterfall 
mechanism under Section 53 of IBC but also the other provisions of the 
IBC for deciding the priority for the purpose of distributing the proceeds 
from the sale as liquidation assets. 
25. To be precise, the Court in the impugned judgment had categorically 
reproduced Section 53 in Paragraph 20, other provisions of IBC along with 
the Regulations of 2016 in Paragraph 21, and the subsequent amendments 
in the Regulations of 2018, with regard to the submission of claims to be 
made by the creditors in Paragraphs 22 & 23 of the judgment. The Court 
in the impugned judgment has also considered the earlier decisions of this 
Court in case of Ghanashyam Mishra and Sons Private Limited through 
the authorized signatory vs. Edelweiss Asset Reconstruction Company 
Limited through the Director and Others11 in Paragraph 42. The decision 
in case of Ebix Singapore Private Limited vs. Committee of Creditors of 
Educomp Solutions Limited and Another12 in Paragraph 47, and thereafter 
observed as under: - 
“48. A resolution plan which does not meet the requirements of 
SubSection (2) of Section 30 of the IBC, would be invalid and not 
binding on the Central Government, any State Government, any 
statutory or other authority, any ﬁ nancial creditor, or other creditor 
to whom a debt in respect of dues arising under any law for the 
time being in force is owed. Such a
resolution plan would not bind 
the State when there are outstanding statutory dues of a Corporate 
Debtor.
49. Section 31(1) of the IBC which empowers the Adjudicating 
Authority to approve a Resolution Plan uses the expression “it shall by 
order approve the resolution plan which shall be binding ... “ subject 
to the condition that the Resolution Plan meets the requirements 
of subsection (2) of Section 30. If a Resolution Plan meets the 
requirements, the Adjudicating Authority is mandatorily required 
to approve the Resolution Plan. On the other hand, Sub-section (2) 
of Section 31, which enables the Adjudicating Authority to reject a 
11 (2021) 9 SCC 657 
12 (2022) 2 SCC 401
239
Resolution Plan which does not conform to the requirements referred 
to in sub-section (1) of Section 31, uses the expression “may”.
50. Ordinarily, the use of the word “shall” connotes a mandate/binding 
direction, while use of the expression “may” connotes discretion. If 
statute says, a person may do a thing, he may also not do that thing. 
Even if Section 31(2) is construed to confer discretionary power on 
the Adjudicating Authority to reject a Resolution Plan, it has to be 
kept in mind that discretionary power cannot be exercised arbitrarily, 
whimsically or without proper application of mind to the facts and 
circumstances which require discretion to be exercised one way or 
the other.” 
26. After considering the Waterfall mechanism as contemplated in 
Section 53 and other provisions of IBC for the purpose of deciding as to 
whether Section 53 IBC would override Section 48 of the GVAT Act, it was 
ﬁ nally concluded in the impugned order as under: - 
“55. In our considered view, the NCLAT clearly erred in its observation 
that Section 53 of the IBC over-rides Section 48 of the GVAT Act. 
Section 53 of the IBC begins with a non-obstante clause which reads: 
- “Notwithstanding anything to the contrary contained in any law 
enacted by the Parliament or any State Legislature for the time being 
in force, the proceeds from the sale of the liquidation assets shall be 
distributed in the following order of priority. ..........
56. Section 48 of the GVAT Act is not
contrary to or inconsistent with 
Section 53 or any other provisions of the IBC. Under Section 53(l)
(b)(ii), the debts owed to a secured creditor, which would include the 
State under the GVAT Act are to rank equally with other speciﬁ ed 
debts including debts on account of workman’s dues for a period of 
24 months preceding the liquidation commencement date.
57. As observed above, the State is a secured creditor under the GVAT 
Act. Section 3(30) of the IBC deﬁ nes secured creditor to mean a 
creditor in favour of whom security interest is credited. Such security 
interest could be created by operation of law. The deﬁ nition of secured 
creditor in the IBC does not exclude any Government or Governmental 
Authority.”
SANJAY KUMAR AGARWAL v. STATE TAX OFFICER (1) & 
ANR. [BELA M. TRIVEDI, J.]
240 
SUPREME COURT REPORTS 
[2023] 15 S.C.R.
27. In view of the above stated position, we are of the opinion that the 
well-considered judgment sought to be reviewed does not fall within the 
scope and ambit of Review. The learned Counsels for the Review Petitioners 
have failed to make out any mistake or error apparent on the face of record 
in the impugned judgment, and have failed to bring the case within the 
parameters laid down by this Court in various decision for reviewing the 
impugned judgment. Since we are not inclined to entertain these Review 
Petitions, we do not propose to deal with the other submissions made by 
the learned Counsels for the parties on merits. 
28. In that view of the matter, all the Review Petitions are dismissed. 
Headnotes prepared by:  
Review Petitions dismissed. 
Ankit Gyan