Observations By Coordinate Bench No Ground To Review A Judgment : Supreme Court Lays Down 8 Principles On Scope Of Review

Observations made by a coordinate bench about a judgment cannot be a ground to review it, said the Supreme Court while dismissing review petitions filed against the 2022 judgment  in State Tax Officer v. Rainbow Papers Ltd 2022 LiveLaw (SC) 743.

In Rainbow Papers, a bench comprising Justices Indira Banerjee (since retired) and AS Bopanna held that a resolution plan under the Insolvency and Bankruptcy Code 2016 cannot be sustained if it ignored statutory dues to the Government.

The petitioners who sought review of Rainbow Papers relied on the observations made by a coordinate bench in Paschim Anchal Vidyut Vitran Nigam Limited vs. Raman Ispat Private Limited and Others 2023 LiveLaw (SC) 534 to the effect that Rainbow Papers did not notice the 'waterfall mechanism' in Section 53 of IBC.

Refusing to accept this argument, a bench comprising Justices AS Bopanna and Bela Trivedi held that the observations of a coordinate bench cannot be a ground to review the judgment.

"Any passing reference of the impugned judgment made by the Bench of the equal strength could not be a ground for review," the bench stated.

The bench observed “It is a 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 conflicting decisions.”

Moreover, the Court held that the petitioners had failed to demonstrate any mistake or error apparent on the face of the record in the impugned judgment, and they had not met the parameters laid down by the Court in various decisions for reviewing judgments.

Referring to various precedent, the Court summarised the several key principles to prevent review petitions from becoming "appeals in disguise”-

1. Error Apparent on the Face of the Record: A judgment is open to review inter alia if there is a mistake or an error apparent on the face of the record
2. Only when there's substantial and compelling circumstances- A judgment pronounced by the Court is final, and departure from that principle is justified only when circumstances of a substantial and compelling character make it necessary to do
3. Errors must be self evident- 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
4. No Rehearing and Correction: In exercise of the jurisdiction under Order 47 Rule 1 CPC, it is not permissible for an erroneous decision to be “reheard and corrected
5. Review not an appeal in disguise- A Review Petition has a limited purpose and cannot be allowed to be “an appeal in disguise.
6. No agitation or reargument of issues settled- Under the guise of review, the petitioner cannot be permitted to reagitate and reargue the questions which have already been addressed and decided
7. Error to be recognizable by merely looking at it- 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.
8. Changes in law or subsequent decisions not a ground- 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

Case title: Sanjay Agarwal v. State Tax Officer

Citation: 2023 LiveLaw (SC) 939

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