SC Order Dismissing An Appeal Without Any Reasons Cannot Be Treated As Precedent : Supreme Court

The Supreme Court observed that its order dismissing an appeal without any reasons being recorded cannot be treated as a binding precedent.

Precedents cannot decide questions of fact, the bench of Justices Sanjiv Khanna, Bela M. Trivedi and Ujjal Bhuyan observed in the judgment disposing appeal filed by M/s. Experion Developers Private Limited  against the National Consumer Disputes Redressal Commission judgment.

One of the contentions raised in this case was that the order passed by the Supreme Court in the case of Pawan Gupta v. Experion Developers Private Limited by applying the doctrine of merger, principle of res judicata and in view of the rule of precedential value, would foreclose the submissions raised by the appellant in the present case.

The court referred to the decisions in Kunhayammed  v. State of Kerala , Khoday Distilleries Limited v. Sri Mahadeshwara Sahakara Sakkare Karkhane Limited, Makhija Construction & Engg. (P) Ltd. v. Indore Development Authority and observed that there is a clear distinction between the binding law of precedents in terms of Article 141 of the Constitution of India and the doctrine of merger and res judicata. 

To merge, as held in Kunhayammed (supra), and Khoday Distilleries Ltd. (supra) means to sink or disappear in something else, to become absorbed or extinguished. The logic behind the doctrine of merger is that there cannot be more than one decree or operative orders governing the same subject matter at a given point of time. When a decree or order passed by an inferior court, tribunal or authority is subjected to a remedy available under law before a superior forum, then the decree or order under challenge continues to be effective and binding; nevertheless, its finality is put in jeopardy. Once the superior court disposes the dispute before it in any manner, either by affirming the decree or order, by setting aside or modifying the same, it is the decree of the superior court, tribunal or authority, which is the final binding and operative decree. The decree and order of the inferior court, tribunal or authority gets merged into the order passed by the superior forum. However, as has been clarified in both decisions, this doctrine is not of universal or unlimited application. The nature of jurisdiction exercised by the superior court and the content or subject matter of challenge laid or could have been laid will have to be kept in view

A precedent operates to bind in similar situations in a distinct case, whereas res judicata operates to bind parties to proceedings for no other reason, but that there should be end to litigation. Principle of res judicata should apply where the lis was inter-parties and has attained finality on the issues involved. The principle of res judicata will have no application in cases where the judgment or order has been passed by the Court having no jurisdiction thereof or involving a pure question of law. Law of binding precedents, in terms of Article 141 of the Constitution of India, has a larger connotation as it settles the principles of law which emanates from the judgment, which are then treated as binding precedents.

The court said that the order of this Court dismissing the appeal in the case of Pawan Gupta (supra) cannot be read as a precedent and applied to the cases in hand.  

Also Read - When Does An Order Become A Binding Precedent? Supreme Court Explains

Experion Developers Pvt Ltd vs Himanshu Dewan and Sonali Dewan | 2023 LiveLaw (SC) 674 | 2023 INSC 748

Law of Precedents - Doctrine of Merger - To merge means to sink or disappear in something else, to become absorbed or extinguished. The logic behind the doctrine of merger is that there cannot be more than one decree or operative orders governing the same subject matter at a given point of time. When a decree or order passed by an inferior court, tribunal or authority is subjected to a remedy available under law before a superior forum, then the decree or order under challenge continues to be effective and binding; nevertheless, its finality is put in jeopardy. Once the superior court disposes the dispute before it in any manner, either by affirming the decree or order, by setting aside or modifying the same, it is the decree of the superior court, tribunal or authority, which is the final binding and operative decree. The decree and order of the inferior court, tribunal or authority gets merged into the order passed by the superior forum. However, as has been clarified in both decisions, this doctrine is not of universal or unlimited application. The nature of jurisdiction exercised by the superior court and the content or subject matter of challenge laid or could have been laid will have to be kept in view. (Para 32)

Precedent and Res Judicata - A precedent operates to bind in similar situations in a distinct case, whereas res judicata operates to bind parties to proceedings for no other reason, but that there should be end to litigation. Principle of res judicata should apply where the lis was inter-parties and has attained finality on the issues involved. The principle of res judicata will have no application in cases where the judgment or order has been passed by the Court having no jurisdiction thereof or involving a pure question of law. Law of binding precedents, in terms of Article 141 of the Constitution of India, has a larger connotation as it settles the principles of law which emanates from the judgment, which are then treated as binding precedents. (Para 34)

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