Doctrine Of Merger Not Universal In Application, Article 142 Powers An Exception: Supreme Court

While ruling in favor of the Delhi government and its entities in a batch of land acquisition cases, the Supreme Court recently observed that the doctrine of merger is not of universal application and powers under Article 142 of the Constitution shall be deemed as an exception thereto as well as to the rule of stare decisis.

To quote the bench of Justices Surya Kant, Dipankar Datta and Ujjal Bhuyan, "We also take notice of the exception carved out by this Court in Kunhayammed (supra), to the effect that the doctrine of merger is not of universal or unlimited application and that the nature of jurisdiction exercised by the superior forum and the content or subject matter of challenge laid or which could have been laid shall have to be kept in view."

"The exception, in our considered opinion, that has been carved out in Kunhayammed (supra), will only be permissible in the rarest of rare cases and such a deviation can be invoked sparingly only. We, however, hasten to add that among such exceptions, the extraordinary constitutional powers vested in this Court under Article 142 of the Constitution of India, which is to be exercised with a view to do complete justice between the parties, remains unaffected and being an unfettered power, shall always be deemed to be preserved as an exception to the doctrine of merger and the rule of stare decisis."

The case pertained to land acquisition process initiated by Delhi government under the Land Acquisition Act, 1894 for planned development of Delhi. Between 1957-2006, various notifications were issued for acquiring lands and awards passed fixing compensation. In some cases, compensation amounts were deposited in treasury, as landowners did not come forward. In some others, possession could not be taken by the government entities, as landowners challenged the proceedings and obtained stay.

Subsequently, the 1894 Act was replaced by the 2013 Act, which brought various reforms. Section 24 of the new Act provided that land acquisition proceedings initiated under the earlier regime would be deemed to have lapsed in certain cases, including when compensation had not been paid or possession had not been taken.

Section 24 was interpreted in various Supreme Court decisions, such as Pune Municipal Corporation v. Harak Chand Mistrimal Solanki. Based on Pune Municipal Corporation (and other similar decisions), the Delhi High Court allowed writ petitions of certain affected landowners, including respondent-M/s BSK Realtors, and declared as lapsed land acquisition proceedings pertaining to them.

The High Court judgments were carried in appeal before the Supreme Court by Delhi government authorities (like DMRC, DDA, etc.). This "first round" of litigation resulted in different outcomes, including dismissal of some civil appeals.

Four years later, in 2020, the decision in Pune Municipal Corporation was overturned by the Constitution Bench decision in Indore Development Authority v. Manoharlal, where it was held that acquisition proceedings could be declared as lapsed only when both conditions ie, non-payment of compensation to the landowners and failure of the State to take physical possession of the acquired lands, were met.

As a consequence of this decision, Delhi government sought reconsideration of the Delhi High Court decisions, which declared acquisition proceedings as lapsed based on Pune Municipal Corporation. The SLPs/appeals/M.A.s moved at this stage constituted the "second round" of litigation, and impleaded authorities like DDA, DMRC, etc. (petitioners in the first round) as co-respondents.

Among the various issues raised regarding maintainability of the SLPs/appeals in the second round, one pertained to the applicability of doctrine of merger. 

The case of respondent-landowners (such as M/s BSK Realtors) was that the High Court orders (which declared land acquisition proceedings as lapsed) merged with the orders of the Supreme Court (which dismissed civil appeals against the High Court orders). According to the respondents, these Supreme Court orders were passed after grant of leave and by a speaking order upon hearing all parties involved; as such, doctrine of merger applied.

"The judgment and order of the High Court cannot thereafter be challenged by any party, as it has ceased to exist", the respondents urged.

They further argued that as GNCTD was party to the civil appeals filed by its entities (such as DDA) against the High Court orders, it could not be permitted to seek reversal of the Supreme Court orders on the ground that Manoharlal overturned Pune Municipal Corporation.

The appellant-authorities, on the other hand, pled that doctrine of merger was merely a common law doctrine, which did not have universal application. They further submitted that in the first round of litigation, they were impleaded as a formality and not adequately heard.

"Decisions rendered in the preceding round of litigation, solely relying on judgments that have since been invalidated and effaced, within a brief timeframe, should not be permitted to result in a miscarriage of justice under the pretext of the doctrine of merger. Each case possesses unique and distinct facts, even if they pertain to a common subject", the appellant-authorities added.

After hearing the parties and going through the decision in Kunhayammed and Others v. State of Kerala and Another, the Court noted that if doctrine of merger was applied mechanically to certain category of cases, it would lead to irreversible consequences. Taking into account public interest concerns, it said,

"...the concept of public interest need not be viewed narrowly only on the yardstick of loss to public exchequer and that these are the cases where public at large has acquired interest in the public infrastructures already complete or in process of completion...the element of disparity between Groups A and B.1 cases visà-vis cases falling in Group C is liable to be eliminated and this can only be done by invoking our extraordinary power under Article 142 of the Constitution of India so that we are able to do complete justice between the expropriated landowners, the State and its developing agencies and most importantly the public in general who has acquired a vested right in the public infrastructure projects."

In closing, most appeals filed by the Delhi government were allowed and directions passed. Separate orders were passed in other cases.

Case Title: Government of NCT of Delhi & Anr. v. M/s BSK Realtors LLP & Anr. (and connected matters)

Citation : 2024 LiveLaw (SC) 420

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