Reliance On Wrong Precedent Renders Decision 'Erroneous', Can't Be Corrected Under 'Review Jurisdiction': Allahabad High Court

While rejecting a review application, the Allahabad High Court has reiterated that review cannot be granted merely because the bench giving the decision relied on allegedly wrong precedence of the Apex Court. Review jurisdiction can only be exercised if there is an error apparent on the face of the record.

Relying on the decision of the Apex Court in S. Madhusudhan Reddy v. V Narayana Reddy and others (2022), the bench comprising Justices Sangeeta Chandra and Manish Kumar held,

“the scope of a review application is limited. The Court may correct an error apparent on the face of the record or interfere on any other ground analogous to such ground, but it cannot correct an erroneous decision for that is the scope of appellate jurisdiction.”

In 1991, Applicant was allotted land by Uttar Pradesh State Industrial Development Corporation Ltd. (UPSIDC) for the purpose of encouraging industrialization in the Hardoi district. Lease agreement was executed on 30.4.1992. Due to change in Government policies the industry which the applicant was going to set up became unviable.

Extensions were granted to Applicant to set up new industries. On failure of the Applicant to comply with the terms of the lease agreement, the lease was terminated. Applicant challenged the termination of lease before the Allahabad High Court.

The Writ Court, relying on the decision of the Supreme Court in ITC Limited v. State of UP (2011) dismissed the petition observing that UPSIDC had been created for encouraging industrialisation and to generate employment and for betterment of the economy. Since the petitioner had failed to comply with the conditions of the lease agreement despite repeated time extensions, industrial development had been affected. Thus, the termination was lease by UPSIDC was valid, it was held.

Counsel for the Applicant, in review jurisdiction, argued that UPSIDC was a company and not a statutory authority at the time of cancellation of lease, thus, reliance on ITC Limited was unsustainable. It was alleged that Court had overlooked Supreme Court’s decision in State of UP v. Maharaja Dharmender Prasad Singh (1989) whereby it was held that lessee cannot be dispossesed of a property by use of force by government.

Counsel for the Respondent placed reliance on S Madhusudhan to demonstrate that the Court, in review, could only deal with a glaring omission or patent mistake in its judgment. An erroneous decision of the Court by mistakenly placing reliance on a different decision of the Supreme Court cannot be rectified in review jurisdiction.

The Court held that an erroneous judgment of the High Court can be corrected by an Appellate Court. In review, the Court can only look at any ‘error apparent on the face of the record’. If the Court has mistakenly relied on a judgment of the Supreme Court to commit an error in the order, the same can be corrected in appellate jurisdiction and not by a bench sitting in review of its judgment.

Accordingly, the cancellation of allotment by UPSIDC was held to be valid as the applicant had kept the property for seventeen years without any construction or development or generating employment.

Case Title: M/S Vaid Organics And Chemical Industries Ltd. Lko. Thru. Its Director Swarn Singh v. State Of U.P. Thru. Secy. Deptt. Of Industries U.P. Civil Secrt. Lko. And Others [CIVIL MISC REVIEW APPLICATION No. - 41 of 2023]

Counsel for Applicant : Sandeep Dixit, Senior Advocate, Piyush Kumar Agarwal, Akhilesh Kumar Kalra

Counsel for Opposite Party : Sudeep Seth, Senior Advocate, Kartikey Dubey

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