Doctrine Of Merger Won't Apply If SLP Was Dismissed Without Granting Leave Whether By Reasoned Order Or Not : Supreme Court

The Supreme Court on Monday (July 15) explained that when a petition for special leave to appeal is allowed by the court, the impugned judgment gets merged with the decision of the Supreme Court in the appeal arising from the SLP.

“once leave has been granted in a Special Leave Petition, regardless of whether such appeal is subsequently dismissed with or without reasons, the doctrine of merger comes into play resulting in merger of the order under challenge with that of the appellate forum, and only the latter would hold the field. Consequently, it is the decision of the superior court which remains effective, enforceable, and binding in the eyes of the law, whether the appeal is dismissed by a speaking order or not.”

However, if the SLP is dismissed by the court without granting leave, the impugned Hight Court judgment in the SLP does not stand merged with the Supreme Court's decision, a bench of Justice Surya Kant and Justice KV Vishwanathan held, explaining the applicability of the doctrine of merger.

“if Special Leave was not granted and the petition was dismissed by a reasoned or unreasoned order, the order against which such Special Leave Petition is filed would not merge with the order of dismissal”, the court stated.

The doctrine of merger provides that once an appellate court disposes the dispute before it in any manner, either by affirming the lower court's judgement or by setting aside or modifying it, the judgment of the appellate court is the final binding and operative judgment. The decision of the lower court, tribunal or authority gets merged into the order passed by the superior forum.

The case originated from a Uttar Pradesh Government Order dated July 20, 2001, which increased the pay scales of state government teachers, including Headmasters, based on the Fifth Central Pay Commission's recommendations, effective from July 1, 2001.

The order increased the Headmasters' pay scale from 4625-125-7000 to 6500-200-10500, with further revision of their Selection Grade from 4800-150-7650 to 7500-250-12000.

However, this revision did not extend to the pay scales of Sub-Deputy Inspectors of Schools (SDI/ABSA) and Deputy Basic Shiksha Adhikaris (DBSA), leading to their pay becoming lower than that of the Headmasters.

First round of litigation

The Uttar Pradesh Vidhyalay Nirikshak Sangh, with other respondents, filed a writ petition before the Allahabad High Court, seeking the 7500-12000 pay scale for SDI/ABSA and a higher pay scale for DBSAs.

On May 6, 2002, the HC ruled that SDI/ABSA and DBSA should have had their pay scales revised simultaneously with the Headmasters' revision. The court directed the State to grant the 7500-12000 pay scale to SDI/ABSA and the 8000-13500 pay scale to DBSA from July 1, 2001.

The State appealed to the Supreme Court via a Special Leave Petition. The SC granted the leave to appeal, but dismissed the appeal arising out of the SLP on December 8, 2010, on grounds of a proposed policy by the State. The SC noted that the State itself had taken an appropriate decision to rectify the pay discrepancies and hence, no further cause survived requiring any further adjudication.

Second round of litigation

In 2011, the respondents filed a petition challenging a new Government Order date July 14, 2011 whereby 1031 posts of 'Block Education Officer' were created by merging 1360 posts of SDI/ABSA and 157 posts of DBSA, with the sanctioned pay scale of 7500-12000, to be given with effect from January 01, 2006 notionally, with actual benefits accruing from December 01, 2008. They sought a higher pay scale from January 1, 1996. On February 2, 2018, a Single Judge of the HC allowed the writ petition, quashing the 2011 Order and directing the State to act within three months.

On May 23, 2019, the State filed a delayed appeal. The state's subsequent appeal before the HC division bench was dismissed on April 6, 2023, on the grounds of delay. Thus, the state filed the present appeal.

Verdict

The Supreme Court held that the HC's assumption that its previous decision dated May 6, 2002, remained intact and enforceable was erroneous. The court highlighted that it had granted the state the leave to appeal against the HC order. Thus, even though the state's appeal was dismissed, the HC order stood merged with the SC order and could not be enforced on it own, the court observed.

The apex court clarified that its dismissal of the state's appeal on December 8, 2010, did not imply an endorsement of the HC's judgment but rather recognized the state's proposed policy as an adequate resolution.

The court said that the judgment by the Single Judge was misconceived on multiple parameters. The Single Judge made several observations, including a hypothetical reason suggesting that the Supreme Court Judges misunderstood the intricacies of the Hindi language in the proposed policy, which led to the 2011 Order.

In the Supreme Court's view, there is nothing in its December 8, 2010 order for the Single Judge to draw such inferences. The Supreme Court had found the proposed policy to rectify pay discrepancies fair enough to close the pending litigation, the court said.

The Supreme Court emphasized that the HC's decision of May 6, 2002 did not act as res judicata, as the final binding order between the parties was the one issued by the Supreme Court on December 8, 2010. Though the state cannot nullify a court decision through executive action, in this case, the 2011 Government Order was in compliance with the Supreme Court's directives, and not in defiance of the HC order, the court highlighted.

The Supreme Court emphasized that prescription of pay scales is a policy decision, and judicial interference is limited unless there is a clear violation of constitutional principles.

The Supreme Court set aside the judgments of the Single Judge and the Division Bench of the Allahabad High Court. It upheld the state's 2011 order, which provided for revised pay scales from January 1, 2006, with monetary benefits effective from December 1, 2008.

This order shall not be taken as a precedent by employees of other departments to claim revised or higher pay scales, the court added.

Case no. – Special Leave to Appeal (.) No. 7130/2024

Case Title – State of Uttar Pradesh and Anr. v. Virendra Bahadur Katheria and Ors.

Citation : 2024 LiveLaw (SC) 480