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Judgements and Doctrine of Merger

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By Dhruva Vig

Introduction

The doctrine of merger can neither be clubbed as a doctrine of constitutional law, nor it can be categorised as a doctrine which has been statutorily recognised. It is more of a common law doctrine which has been founded on principles of propriety in the hierarchy of the justice delivery system in the Indian context.

On more occasions than one, the Courts across India have had various opportunities of dealing with the doctrine of merger.

In this article, we shall try and set out a record of various judicial pronouncements and opinions that have dealt with the issue of doctrine of merger, and it has progressed over time across the various courts of India.

The most notable of its explanation provided by the Supreme Court in the case of Gojer Bros. (P) Ltd. v. Ratan Lal Singh[1], which can be summarised as below-

The juristic justification of the doctrine of merger may be sought in the principle that there cannot be, at one and the same time, more than one operative order governing the same subject-matter. Therefore, the judgment of an inferior court, if subjected to an examination by the superior court, ceases to have existence in the eye of law and is treated as being superseded by the judgment of the superior court. In other words, the judgment of the inferior court loses its identity by its merger with the judgment of the superior Court.”

In the case of Kunhayammed v. State of Kerala[2], the Supreme Court spoke in great detail about the doctrine. The following conclusions were drawn by the apex court in its landmark judgement-

(i) The doctrine of merger is not a doctrine of universal or unlimited application. It will depend on the nature of jurisdiction exercised by the superior forum and the content or subject-matter of challenge laid or capable of being laid shall be determinative of the applicability of merger. The superior jurisdiction should be capable of reversing, modifying, or affirming the order put in issue before it. Under Article 136 of the Constitution the Supreme Court may reverse, modify or affirm the judgment-decree or order appealed against while exercising its appellate jurisdiction and not while exercising the discretionary jurisdiction disposing of petition for special leave to appeal. The doctrine of merger can therefore be applied to the former and not to the latter.

(ii) An order refusing special leave to appeal may be a non-speaking order or a speaking one. In either case it does not attract the doctrine of merger. An order refusing special leave to appeal does not stand substituted in place of the order under challenge. All that it means is that the Court was not inclined to exercise its discretion so as to allow the appeal being filed.

(iii) Once leave to appeal has been granted and appellate jurisdiction of Supreme Court has been invoked the order passed in appeal would attract the doctrine of merger; the order may be of reversal, modification or merely affirmation.

Recent judicial pronouncements

In more recent times, the Supreme Court has played an active role in explaining the doctrine in its finer and more elaborate sense regarding revision petitions filed before a tribunal.

DSR Steel (P) Ltd. v. State of Rajasthan[3]

Here, the Court was of the view that in situations where a revision petition has been filed before the Tribunal, but the said Tribunal refuses to interfere with the decree or order earlier made, and simply dismisses the review petition, the decree in such a case suffers neither any reversal nor an alteration or modification.

It is thus an order by which the review petition is dismissed thereby affirming the decree or order by such tribunal. The court was of the view that in such a contingency, there is no question of any merger and anyone aggrieved by the decree or order of the Tribunal or Court shall have to challenge, within the time that has been stipulated by law, the original decree and not the order itself dismissing such review petition.

Also, the time taken by a party in diligently pursing the remedy by way of review may, in appropriate cases, be excluded from consideration while condoning the delay in the filing of the appeal, but such exclusion or condonation would not denote the implication that there is a merger of the original decree and the order dismissing the review petition.

The above view was upheld to be applicable quite recently only by the Supreme Court in the case of T.K. David v. Kuruppampady Service Coop. Bank Ltd.[4], where the Court held the special leave petition to be not maintainable on similar grounds in this instant case.

Another recent example of such would be the case of Kapico Kerala Resorts (P) Ltd. v. State of Kerala[5], where the Court held that-

There is a distinction between the dismissal of a special leave petition by a non-speaking order where no reasons are recorded and the dismissal of a special leave petition by a speaking or reasoned order. In both cases, the doctrine of merger would not apply. But in cases falling under the latter category, the reasons stated by the Court would attract the applicability of Article 141 of the Constitution, if a point of law has been declared therein. If what is stated in the order of the Supreme Court (before the grant of leave) happen to be findings recorded by the Supreme Court, not amounting to a declaration of law, the findings so recorded would bind only the parties thereto.

Also, in the case of P. Singaravelan v. Collector, Tiruppur[6], it was held that-

It is evident that all the above orders were non-speaking orders, inasmuch as they were confined to a mere refusal to grant special leave to appeal to the petitioners therein. At this juncture, it is useful to recall that it is well-settled that the dismissal of an SLP against an order or judgment of a lower forum is not an affirmation of the same. If such an order of this Court is non-speaking, it does not constitute a declaration of law under Article 141 of the Constitution, or attract the doctrine of merger.”

Earlier views by Supreme Court

In contrast to the earlier views of the Supreme Court, we can refer to the earliest decisions that were laid down with regard to the doctrine of merger, notably-

  • In the case of Badri Narain Jha v. Rameshwar Dayal Singh[7], the court was of the view that the doctrine of merger had no application to the facts of the case, and the plaintiffs’ case was bound to fail. The Court accordingly held that there was no substance in the appeal and dismissed it with costs.
  • In the case of Commissioner of Income-Tax v. Tejaji Farasram Kharawalla[8], it was held that it is a well-established principle of law, that when an appeal was provided from a decision of a Tribunal, and the appeal Court after hearing the appeal passes an order, the order of the original Court ceases to exist and is merged in the order of the appeal Court and although the appeal Court may merely confirm the order of the trial Court, the order that stands and is operative is not the order of the trial Court but the order of the appeal Court.
  • In the case of CIT v. Amritlal Bhogilal & Co.[9], the apex court said that “there can be no doubt that, if an appeal is provided against an order passed by a tribunal, the decision of the Appellate Authority is the operative decision in law. If the Appellate Authority modifies or reverses the decision of the Tribunal, it is obvious that it is the appellate decision that is effective and can be enforced. In law the position would be just the same even if the appellate decision merely confirms the decision of the Tribunal. As a result of the confirmation or affirmance of the decision of the Tribunal by the Appellate Authority, the original decision merges in the appellate decision and it is the appellate decision alone which subsists and is operative and capable of enforcement…
  • In the case of Badat and Co. v. East India Trading Co.[10], it was held that, “the recognition given to a foreign judgment by the English Courts is, as pointed out by Schmitthoff at p. 459 of the English Conflict of Laws not based upon the doctrine of merger. For, this doctrine does not apply to judgments of courts which are not courts of record in the English sense. It may be that founded as the American legal system is on the common law of England the New York Supreme Court would be a court of record in the English sense and, therefore, the doctrine of merger could be said to apply to a judgment recorded by it. However, as no contention was raised before us that the Supreme Court of New York was a court of record, we would leave the matter there.

Where Doctrine is not applicable

Under certain circumstances, the doctrine of merger shall fail to apply so as to meet the ends of justice in a more judicious manner. In situations where the scope of appeal/revision is relatively narrower than that of the original proceeding/suit before the Court, the doctrine of merger shall fail to be held as applicable.

Also, in situations where the power vested in the Court who is designated to hear such appeal/revision is limited or not of competent authority.

Furthermore, the doctrine of merger shall fail to apply where the order itself has been secured by means of fraud/deceitfully.

The same has been laid down in various judgements by the apex Court, most notably in the case of State of Madras v. Madurai Mills Co., Ltd.[11], where the Court was of the view-

“… the doctrine of merger is not a doctrine of rigid and universal application and it cannot be said that wherever there are two orders, one by the inferior Tribunal and the other by a superior Tribunal, passed in an appeal on revision, there is a fusion of merger of two orders irrespective of the subject-matter of the appellate or revisional order and the scope of the appeal or revision contemplated by the particular statute. In our opinion, the application of the doctrine depends on the nature of the appellate or revisional order in each case and the scope of the statutory provisions conferring the appellate or revisional jurisdiction.

In case of A.V. Papayya Sastry v. Govt. of A.P.[12], it was held that-

The above principle, however, is subject to exception of fraud. Once it is established that the order was obtained by a successful party by practising or playing fraud, it is vitiated. Such order cannot be held legal, valid or in consonance with law. It is non-existent and non est and cannot be allowed to stand. This is the fundamental principle of law and needs no further elaboration. Therefore, it has been said that a judgment, decree or order obtained by fraud has to be treated as a nullity, whether by the court of first instance or by the final court. And it has to be treated as non east by every court, superior or inferior.

Conclusion

The concept of ‘doctrine of merger’ originates from the mixture of an unfulfilled need and a gaping void in the law, where due to the shortfall of the Indian legal system which fails to provide an established regulation to determine which one of several successive/progressive orders should be considered as final and therefore prevail, and whose lack of would throw the whole litigation process in a disarray to say the least.

Thus, the doctrine of merger comes in as a saviour clause, to more than adequately make up for this shortfall, by specifying that it would be the order of the appellate/revisional Court which shall be held as conclusive.

References

  1. Gojer Bros. (P) Ltd. v. Ratan Lal Singh, (1974) 2 SCC 453
  2. Kunhayammed v. State of Kerala, (2000) 6 SCC 359
  3. DSR Steel (P) Ltd. v. State of Rajasthan, (2012) 6 SCC 782 : (2012) 3 SCC (Civ) 1034 : 2012 SCC OnLine SC 392
  4. T.K. David v. Kuruppampady Service Coop. Bank Ltd., (2020) 9 SCC 92 : 2020 SCC OnLine SC 800
  5. Kapico Kerala Resorts (P) Ltd. v. State of Kerala, (2020) 3 SCC 18 : 2020 SCC OnLine SC 23
  6. P. Singaravelan v. Collector, Tiruppur, (2020) 3 SCC 133 : (2020) 1 SCC (L&S) 453 : 2019 SCC OnLine SC 1641
  7. Badri Narain Jha v. Rameshwar Dayal Singh, 1951 SCR 153 : AIR 1951 SC 186
  8. Commissioner of Income-Tax v. Tejaji Farasram Kharawalla, 1953 SCC OnLine Bom 28 : ILR 1953 Bom 887 : (1953) 55 Bom LR 785 : AIR 1954 Bom 93 : (1953) 23 ITR 412
  9. CIT v. Amritlal Bhogilal & Co., 1959 SCR 713 : AIR 1958 SC 868 : (1958) 34 ITR 130
  10. Badat and Co. v. East India Trading Co., (1964) 4 SCR 19 : AIR 1964 SC 538 : (1963) BP 2511
  11. State of Madras v. Madurai Mills Co., Ltd., (1967) 1 SCR 732 : AIR 1967 SC 681 : (1967) 19 STC 144
  12. A.V. Papayya Sastry v. Govt. of A.P., (2007) 4 SCC 221