Source: https://www.lawweb.in/2017/09/leading-judgment-on-law-of-case-doctrine.html
Timestamp: 2019-04-20 02:20:47+00:00

Document:
17. The doctrine of the Law of the Case, according to the Black's Law Dictionary1, holds that a decision rendered in a former appeal of a case is binding in a later appeal [of the same case.] It is different from law of the trial, res judicata, or stare decisis. On the other hand, “Law of the Trial” is a legal theory or court ruling that is not objected to and is used or relied on in a trial. Black's Law Dictionary provides this example: neither party objected to the court's jury instruction, so it became the law of the trial2.
18. Garner's Dictionary of Legal Usage3 elaborates on the doctrine of the law of the case: If a case is appealed a second time [say, on remand] to a panel of Court of Appeals, and a panel with a different makeup from the first panel hears the case the second time, the second panel will generally hold itself bound by the writings of the first panel whether or not its members agree with those earlier writings.
19. In Messenger v. Anderson4 Justice Holmes, as quoted by Garner, observes that absent statute, the phrase, “law of the case,” as applied to “the effect of previous orders on the later action of the court rendering them in the same case,” merely expresses the practice of courts generally refusing to reopen what has been decided. It is not a limit to their power, though.
20. In a recent commentary on stare decisis--The Law of Judicial Precedent5Bryan A. Garner, et al., have elaborately treated this principle.
21. The law-of-the-case doctrine is said to come in at least two forms. One form, also called the mandate rule, forestalls “relitigation in the trial court of matters that were explicitly or implicitly decided by an early appellate decision in the same case. Once an appellate court decides an issue, then it is settled in further proceedings in the trial court and controls the case. The other form generally binds a court to its own earlier ruling in the same case-- in the absence of an intervening ruling by a higher court on the same issue6. This doctrine wants the courts to “display disciplined self-consistency” throughout the case. It distinguishes itself from res judicata (for instance, Section 11 of CPC) and ‘issue estoppal’ (as seen in Order 2, Rule 2 of CPC), both of which are much more rigid and offer no much leverage.
23. To put this doctrine in perspective, we may observe that the interpretative intricacies in understanding a precedent differ from those involved in understanding a law of the case. A precedent binds to the extent the holding accords with the facts on hand. The law of the case, on the other hand, fetters a later Bench in the same case from taking a contrary stand to that taken earlier by the previous Bench. Of course, this constraint flows down to the lower judicial echelons or applies to coordinate Benches, but not appellate or higher fora.
1. The petitioner, a contractor, was awarded some civil works in 1982 by the Government, the respondent. In course of time, about the execution of the work, there arose certain differences between the contracting parties. Under the terms of the contract, the dispute was referred to an arbitrator. As the dispute involved two civil works, the arbitrator eventually passed two awards, in the contractor's favour.
2. Aggrieved, the Government filed two petitions under Section 30 of the Arbitration Act, 1940: O.P. (Arb.) No. 82 of 1993 and O.P.(Arb.) No. 94 of 1993. On merits, the Court of the Principal Sub-Judge, Thiruvananthapuram, upheld the awards through judgment, dt.17.01.1994.
3. Further aggrieved, the Government filed these appeals: M.F.A. Nos. 648 of 1996 and 1220 of 1997. Much water has flowed under the judicial bridges thereafter.
4. This Court, per a Division Bench, allowed M.F.A No. 648 of 1996 in part by judgment, dt. 17.12.2002; it set aside the award regarding Claim A. On 11.12.2002 the Court allowed M.F.A No. 1240 of 1997, too: it set aside the award as regards claims A & B. So, in both the cases, there was a partial modification.
These appeals have been filed against the impugned judgment of the Kerala High Court dated 17.12.2002. Heard counsel for the parties. Learned counsel for the appellant submitted that the High Court has proceeded on a wrong basis. We agree with this submission. Hence while we set aside the impugned judgment we give liberty to the appellant to file Review Petitions in the High Court. All questions of law will remain open in the Review provided they come within the scope of the review. The Civil Appeals are disposed of accordingly.
“Having carefully gone through Annexure A order passed by the Honourable Supreme Court of India and having heard the submissions of Smt. S. Karthika, learned counsel appearing for the review petitioners and Sri. V.T.K. Mohanan, learned Senior Government Pleader, we are convinced that under Annexure A order, the judgment dated 11.12.2002 in M.F.A.120/1997 and the judgment dated 17.12.2002 in M.F.A No. 648/1996 passed by this Court have been set aside. According to us it can be construed that both these M.F.As have been relegated by the Apex Court for fresh consideration by this Court. In that view of the matter, we find that these review petitions are unnecessary and accordingly, we close these Review Petitions.
7. From the above common order, we gather that the learned Division Bench has concluded-rightly, in our respectful opinion --that the Supreme Court set aside the judgment dated 11.12.2002 in M.F.A. No. 1220 of 1997 and the judgment dated 17.12.2002 in M.F.A. No. 648 of 1996. But the Division Bench went further and “construed that both these M.F.As have been relegated by the Apex Court for fresh consideration by this Court.” So the Division Bench found the review petitions to be “unnecessary”; accordingly, it closed them. It has directed the Registry to post both the appeals-M.F.A. Nos. 648 of 1996 and 1220 of 1997 for fresh hearing.
8. The appeals thus listed before us, we took them up for hearing. But we felt the matter presented processual problems and interpretational intricacies that need some elaborate hearing and careful consideration. So we requested advocate Sri. P. B. Krishnan to assist us along with the counsel on record and, on his consent, we appointed him amicus curiae.
9. Sri. Sohan, the learned State Attorney, has submitted that the previous Division Bench has understood the Supreme Court's directions correctly and ordered a de novo hearing of the appeals. According to him, this Bench, a coordinate one, cannot deviate from that directive.
10. Smt. S. Karthika, the learned counsel for the respondent, has submitted that the respondent, first, filed the reviews to comply with the Supreme Court's directive in its judgment. She has further submitted that the respondent, now, is compelled to argue the matter afresh because of another Division Bench's direction to that effect, though the judgments, entirely in the contractor's favour, have never been challenged by the Government.
11. Sri. P. B. Krishnan, the learned amicus curiae, has taken us through many decisions of this Court and the Supreme Court, which we will refer to by and by. He has contended that the arbitration awards, to begin with, were in the contractor's favour. The Civil Court affirmed them. This Court's adverse findings against the contractor now stand set aside by the Supreme Court. So, the contractor's seeking a review of a judgment already in his favour is incongruent. On the other hand, the Government's getting the appeals restored to file for fresh hearing without their ever challenging them is, according to him, unconscionable and impermissible.
12. Heard Sri. Sohan, the learned State Attorney, for the appellants; Smt. S. Karthika, the learned counsel for the respondent; and Sri. P. B. Krishnan, the learned amicus curiae; besides perusing the record.
13. Against two Civil Court Judgments, the Government, aggrieved, filed appeals before this Court. This Court allowed the appeals in part. The contractor approached the Supreme Court impugning only the adverse parts of the judgments. The Supreme Court, first, “set aside the impugned judgment” and, then, gave “liberty to the appellant to file Review Petitions” before this Court. The appeals thus resurfacing, a Division Bench felt the reviews to be unnecessary and ordered fresh hearing of the appeals.
(1) Can this Court ignore the Supreme Court's express direction or observation on the supposed ground that it is either ambiguous or incongruent and decide a different course of adjudication?
(2) Does not propriety demand this Court to advise either party to approach the Supreme Court and seek clarification if this Court has perceived any ambiguity in the direction, or if it has felt the order to be inherently contradictory?
(3) Can this Bench ignore a judicial directive-procedural though-of a coordinate Bench and take a different view ignoring the law-of-the-case principle?
What Was Impugned Before the Supreme Court?
15. The subject of the Appeals before the Supreme Court of India in the two Civil Appeals was only a part of the judgment that went against the contractor. The Supreme Court's order setting aside this Court's judgments would, in our respectful view, affect only that part of the judgment. For the contractor appealed against the High Court's judgments to the extent they went against him. So we need to conclude that those portions of the judgments adverse to the State have become final.
24. In Arjun Singh v. Mohindra Kumar10, Supreme Court elaborately discussed how interlocutory orders attain finality and, consequently, how the principle of res judicata applies to them. Arjun Singh classifies the interlocutory orders into three types: (a) orders like staying proceedings, injuncting parties, appointing receivers; (b) orders like restoring proceedings, as under Order 9, Rule 7 of CPC; (c) orders like those that cannot be reopened or reconsidered unless fresh facts emerge.
25. Type (a) orders preserve the status quo pending the litigation and ensure that the parties are not prejudiced by the procedural delays. They do not, in that sense, decide the merits of the controversy in issue. On the other hand, the dismissal of petitions resulting in type (b) orders does not preclude the aggrieved person to challenge them in the appeal taken against the final decree and judgment. In that sense, the trial court's refusal “to permit the defendant to ‘set the clock back’ does not attain finality. Indeed, Section 105 of CPC statutorily acknowledges this position.
27. Here Arjun Singh felicitously distinguishes between estoppel and rejection for lacking new material: if the principle of res judicata is applicable to the decision on a particular issue of fact, even if fresh facts were placed before the Court, the bar would continue to operate and preclude a fresh investigation of the issue; whereas in the other case, on proof of fresh facts, the court would be competent, and may be bound, to take those into account and order conformably with the facts freshly brought before the court.
28. In Prahlad Singh v. Col. Sukhdev Singh11 the tenant suffered an ex parte decree of eviction. In the proceedings to set aside the ex parte decree, the trial court expressly found that the landlord had agreed to withdraw the suit and receive rent from the tenant. The suit was restored.
29. On merits the Trial Court once again ordered eviction. The appellate court affirmed this finding, as did the High Court. The tenant contended that the eviction petition could not have been allowed to continue and should have been dismissed because of the earlier finding when the suit had been restored. The High Court brushed aside that objection: the trial court made those findings while setting aside the ex parte order and not while deciding the main petition.
30. In appeal, the Supreme Court, impliedly applying the law-of-the-case doctrine, held that a decision given by a court at an earlier stage of a case binds at a later stage, as is well settled, though interlocutory judgments are open for adjudication by an appellate authority in an appeal against the final judgment.
31. The Supreme Court has quoted with approval its earlier judgment inSatyadhyan Ghosal v. Deorajin Debi12. The proposition is that the principle of res judicata also applies between two stages in the same proceedings if a party to the proceedings wants to reagitate the matter at a later stage, despite a court deciding the matter in one way at an earlier stage.
32. The Supreme Court has however entered a precedential caveat: just because at an earlier stage of the litigation a court decided an interlocutory matter in one way, and no appeal was either available or taken, it would not follow that a higher court cannot at a later stage of the same litigation reconsider the matter. The Court has further observed that this proposition-that the findings at the interlocutory stage, too, bind-would not affect the interlocutory orders such as orders granting temporary injunction, appointing receiver, and so forth, which do not purport to decide the rights of the parties finally.
33. On how this Court should construe the Supreme Court's order in SLP cited above, the learned amicus curiae made meticulous submissions and cited many a precedent. It behoves well for us to refer to them and appreciate their precedential application.
34. In Commissioner of Sales Tax, U.P. V Vijai International Udyog13 an appellate authority's decision under the Income Tax Act was challenged before the Tribunal, both by the assessee and the Department. The Tribunal first took up the assessee's appeal and dismissed it. It became final. Later, the Tribunal took up the Department's appeal and allowed it partly.
35. The High Court of Allahabad, in this context, has observed that once the Tribunal decided the appeal filed by the assessee, the doctrine of merger applied. And the impugned judgment stood merged in the Tribunal's judgment. Later, when the appeal filed by the Department was allowed, the Tribunal was interfering in effect with its own previous order. The Tribunal is incompetent to do that, held the High Court.
36. The matter taken in appeal, the Supreme Court agreed with High Court's view that the Tribunal should have taken up both the appeals together. But on the facts, the Court has held that the doctrine of merger did not apply. Both the assessee and the Department had a statutory right of appeal to the Tribunal against the decision of the Assistant Commissioner, and in exercise of that right both parties had filed two separate appeals. Because of the Tribunal's mistake in not clubbing the two appeals, the Supreme Court held, a party's right to statutory appeal could not be denied. For no party should suffer because of the Court's or the Tribunal's mistake.
37. Let us consider another decision. In a tenancy dispute, both the parties were aggrieved by the appellate authority's judgment. Both the tenant and the landlord filed revisions. The revisional court, first, dismissed the tenant's revision. The question in Mohammed Abdullah v. M. P. Ashique14 is whether the order of the court dismissing the tenant's revision affects the landlord's right of revision. So a Division Bench of this Court has examined the doctrine of merger. Guided by Commissioner of Sales Tax U.P., Lucknow v. Vijai International Udyog G.T. Road Sikandrarao Hathras15, this Court has held that the doctrine of merger, a common law concept, would not take away a party's appeal merely because the court dismissed another party's appeal against the same judgment.
38. In Mathura Prasad Sarjoo Jaiswal v. Dossibai N.B. Jeejeebhoy16, the appellant constructed a building on a leased land. He applied to the Court of Civil Judge to have the ‘standard rent’ determined. The Court, instead, dismissed the petition holding that the Act relied on did not apply to open lands let for constructing buildings. The revisional court, too, affirmed it. Later, because of a favourable decision rendered by the Bombay High Court in another case, the appellant again applied for the same relief-this time before the Small Causes Court having jurisdiction. The respondent raised the plea: the case is barred by res judicata.
(a) The decision of a competent Court on a matter in issue may be res judicata in another proceeding between the same parties: the “matter in issue” may be an issue of fact, an issue of law, or one of mixed law and fact.
(b) An issue of fact or an issue of mixed law and fact decided by a competent Court and finally determined between the parties cannot be reopened between them in another proceeding.
(c) The previous decision on a matter in issue alone is res judicata: the reasons for the decision are not res judicata.
(d) Matter in issue between the parties is the right claimed by one party and denied by the other, and the claim of right from its very nature depends upon proof of facts and application of the relevant law to it.
(e) A pure question of law unrelated to facts which give rise to a right cannot be treated as a matter in issue.
(f) If a previous decision is res judicata, it is meant that the right claimed has been adjudicated upon and cannot again be placed in contest between the same parties.
(g) A previous decision of a competent Court on facts which give rise to the right and on the relevant law applicable to the transaction is res judicata.
(h) If a previous decision on a matter in issue is a composite decision: the decision on law cannot be dissociated from the decision on facts on which the right is founded.
(i) A decision on an issue of law applies as res judicata in a later proceeding between the same parties if the cause of action of the later proceeding be the same as in the previous proceeding, but not when the cause of action is different.
(j) Even between the same parties, a decision will not be res judicata when the law stands altered after the earlier decision, or when the decision relates to the jurisdiction of the Court to try the earlier proceeding, or when the earlier decision declares valid a transaction prohibited by law.
(k) A question of jurisdiction of the Court, or of procedure, or a pure question of law unrelated to the right of the parties to a previous suit is not res judicata in the later suit.
(l) If by an erroneous interpretation of the statute, the Court holds that it has no jurisdiction, the question would not operate as res judicata.
(m) By an erroneous decision, if the Court assumes jurisdiction, which it does not possess under the statute, the question cannot operate as res judicata between the same parties, whether the cause of action in the later litigation is the same or otherwise.
“To merge” means to sink or disappear in something else; to become absorbed or extinguished; to be combined or to be swallowed up. Merger in law is defined as the absorption of a thing of lesser importance by a greater, whereby the lesser ceases to exist, but the greater is not increased; an absorption or swallowing up so as to involve a loss of identity and individuality.
41. After observing thus, the Supreme Court has contextualized the merger theory: once a special leave petition has been granted, the doors of the Supreme Court to exercise its appellate jurisdiction have been let open. The order impugned before the Supreme Court becomes an order appealed against. Any order passed after that would be an appellate order; it would attract the doctrine of merger. It would not make a difference whether the order is one of reversal, or of modification, or of dismissal. It would also not make a difference if the order is a speaking or a non-speaking one.
42. Whenever the Supreme Court has felt inclined, Kunhayammed goes on to observe, to affirm the findings, it is customary for the Court to grant leave to appeal and thereafter dismiss the appeal itself (and not merely the petition for special leave). But, at times, the orders granting leave to appeal and dismissing the appeal are contained in the same order and, at times, the orders are quite brief. Still the order reflects the Court's applying its appellate jurisdiction and subjecting to judicial scrutiny the merits of the order impugned.
43. In Khoday Distilleries Ltd. v. Mahadeswara S.S.K. Ltd.18, the Supreme Court has surveyed much of the case law generated by itself on the principle of merger. After noticing decisional contradictions, it has referred the matter to a larger Bench. We may, now, briefly touch on those decisions discussed in Khoday Distilleries.
44. If a litigant files a review petition before his filing the special leave petition, and if the review petition remains pending till the Supreme Court dismisses the special leave petition, the High Court needs to consider the review petition. So holds the Supreme Court in Meghmala v. G. Narasimha Reddy19. On the other hand, if the party files the review petition after having the SLP dismissed, his filing the review petition, the Court observes, amounts to abuse of the court's process.
45. In Palani Roman Catholic Mission v. S. Bagirathi Ammal20 the Supreme Court has taken the view that a party can file a review petition before the High Court if the Supreme Court has not granted leave in the pending SLP by then, for until the Court grants leave, there is no appeal pending before the Supreme Court in the eye of law.
47. In K. Rajamouli v. A.V.K.N. Swamy22 the Supreme Court followed Kunhayammad and held that the Court's dismissing the special leave petition against the High Court's main judgment would not constitute res judicata if the party files the special leave petition against the order passed in the review petition. This is subject to one condition: The party must have filed the review petition before his filing the SLP against the High Court's main judgment.
48. As the Supreme Court has observed in Khoday Distilleries, Gangadhara Palo v.Revenue Divisional Officer23 struck a different note: it will make no difference whether the party filed the review petition in the High Court before the Supreme Court dismissed the SLP or after. The cardinal question is whether the High Court's judgment has merged into the Supreme Court's judgment given the doctrine of merger. Gangadhara Palo has further observed that when the Supreme Court dismisses a special leave petition by giving some cryptic reasoning-it can be just one line-there will be a merger of the High Court's judgment into the Supreme Court's. According to the doctrine of merger, it further holds, the lower court's judgment merges into the higher court's. So, while dismissing the SLP, if the Supreme Court gives some reasons, however meagre they may be, then by the doctrine of merger, the High Court's judgment merges into the Supreme Court's and, after the merger, there exists no High Court judgment.
49. Khoday Distilleries noticed the decisional cleavage: in K. Rajamouli (2001) the Court followed Kunhayammed (2000) and distinguished Abbai Maligai (1998). But in Gangadhara Palo (2011), the later Bench did not accept the view expressed in K. Rajamouli. To this extent, there is, noted Khoday Distilleries, some conflict between the judgments in Gangadhara Palo and K. Rajamouli. This cleavage called for definitive resolution by a larger Bench. Accordingly, Khoday Distilleries has referred the matter to a larger Bench. As of today, the referred matter, Khoday Distilleries, is pending.
50. Without conceptually conflating the doctrine of merger and that of the law of the case, we will explore the options available to us. From the Supreme Court's Order, dt.10.11.2009, two things emerge: (1) The judgment impugned was set aside; (2) the appellant before the Supreme Court was allowed to file a review. If we observe on facts, first, the contractor had the awards in his favour. Second, before the Civil Court, the Government failed-the awards stood confirmed. The Government appealed further to this Court. It was partly successful: the Civil Court's judgments were partly modified. To the extent the judgment went against him, the contractor filed two SLPs-not the entire High Court's judgment was challenged, though.
51. Further observed, the Supreme Court set aside the High Court's judgment, presumably, to the extent it went against the appellant before it. We could further presume that the favourable part remained undisturbed. Then, the resulting position is this: the High Court's judgmentstands restored. In other words, the Civil Court's decree remains undisturbed. There may remain nothing to be reviewed further. On the contrary, we are unable to hold that the appeals must be heard afresh, because that opinion may aid the indolent: the Government, in the first place, never challenged the High Court's judgment.
52. The learned amicus curiae submitted that the Supreme Court's setting aside the impugned judgment binds this Court under Article 141 of the Constitution. According to him, its further direction that the appellant before it may file a review petition could at best be a direction under Article 142 of the Constitution. Drawing our attention to Laxmidas Morarji v. Behrose Darab Madan24, he has further contended that there could be no directions under Article 142 contrary to the law of the land. He hammers home his proposition that once the lis stands disposed of (here, the judgment was set aside), the additional direction that the appellant could seek a review before the High Court becomes otiose.
53. The latter part of the Supreme Court's Order-enabling the contractor to seek review before the High Court-presupposes, according to the amicus curiae, that there is something on the High Court's record adverse to him. True, the Supreme Court has set aside the very judgment, instead of dismissing the SLP and permitting the appellant to seek review. To give effect to that latter part of the order, we need, however, to presume that the adverse portion of the High Court judgment remained undisturbed, and the contractor, being the respondent before the High Court, could seek its review.
54. We have before us two options. First, putting an indeterminate interpretative spin on the Supreme Court's Order; then, we should either hear the review petitions already closed by another coordinate Bench, or hear the appeals afresh as directed by the coordinate Bench. This, again, amounts to our ignoring the Supreme Court's Order. In our respectful view, neither is permissible, for it breaches Article 141 of the Constitution.
55. Second, we should disregard the coordinate Bench's direction issued on 24.11.2010, reopen the review petition, and proceed further. But this course contradicts the common-law doctrine: law of the case. Indeed, as we have already observed the law-of-the-case doctrine is not iron clad. Applying the doctrine and sustaining the order, dt.24.11.2010, we reckon, will amount to this Court's clarifyingthe Supreme Court's judgment. And it is inadvisable, nay impermissible.
56. After much cogitation, we felt it inadvisable to indulge in any judicial adventurism. Then, the course left open for us is this: directing either party to approach the Supreme Court and obtain the necessary clarification, for it is that court which passed the order has the means and eminence to clarify what it meant. So we do. The parties to these appeals may approach the Apex Court to have the Order, dt.10.11.2009 in Civil Appeal Nos. 6429 of 2003 and 6431 of 2003 clarified.
Ans: Yes, it can-to prevent miscarriage of justice.
57. So we have decided to shun adjudication on merits. Though not as an apologia, we may answer a curious question: why do we undertake this exercise of exegesis, when we are not adjudicating on merits? Powerful as a precedent a case may be, no case is respected without being inspected. A precedent ipso facto does not compel compliance or dictate the decision of a later case unless its holding is gathered and applied. Put another way, unless a previous case's underlying principle is unearthed, it does not attain its precedential value. And that ‘unearthing’ needs analysis-- which we did.
58. Before parting, we appreciate the meticulous preparation done and the painstaking presentation made by the amicus curiae in his assisting the Court.
59. No order on costs.

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