Ram Jethmalani and Ors. Vs Union of India and Ors

1

REPORTABLE

IN THE SUPREME COURT OF INDIA ORIGINAL CIVIL JURISDICTION

I.A. NO.8 OF 2011 IN

WRIT PETITION (CIVIL) NO.176 OF 2009

Ram Jethmalani & Ors. … Petitioners Vs.

Union of India & Ors. … Respondents

O R D E R

1. Writ Petition (Civil) No.176 of 2009 was filed by Shri

Ram Jethmalani and five others against the Union of India,

the Reserve Bank of India, the Securities Exchange Board of

India, the Director, Directorate of Enforcement and the

Chairman, Central Board of Direct Taxes, Department of

2

Revenue, Ministry of Finance, Government of India, against

the purported inaction of the Government to arrange for

recovery of large sums of money deposited by Indian citizens

in foreign banks and, in particular, in Swiss Banks. In

that context the Petitioners, inter alia, prayed for the

following reliefs :-

“(a)that this Hon’ble Court may be pleased to issue notice to all the Respondents calling upon them to disclose all the facts which have come to their knowledge so far pertaining to the aforementioned issues and the steps taken by them in this regard;

(b) to make orders from time to time to ensure that the outcome of the investigations are not suppressed or even unduly delayed;

(c) the suitable directions be issued to the Respondent No.1 to apply to the Foreign Banks, more particularly the UBS Bank for freezing the amounts in the said foreign banks, particularly, the UBS Bank which as stated above is holding, inter alia, the Khan and Tapurias’ assets.”

2. On 4th July, 2011, on I.A. No.1 of 2009 in the Writ

Petition several directions were given. In fact, the said

order was divided into three parts. The first part of the

order dealt with the alleged failure of the Central

3

Government to recover the large sums of money kept in such

foreign banks and in tax havens having strong secrecy laws

with regard to deposits made by individuals. The second

part dealt with the unlawful activities allegedly funded out

of such deposits and accounts which were a threat to the

security and integrity of India. The amounts deposited in

such tax havens in respect of one Shri Hassan Ali Khan and

Shri Kashinath Tapuria and his wife Chandrika Tapuria were

alleged to be in billions of dollars in UBS Bank in Zurich

alone. Income Tax demands were made to Shri Hassan Ali Khan

for Rs.40,000 crores and a similar demand was served on the

Tapurias amounting to Rs.20,580 crores. On being convinced

that, in the absence of any known source of income, the

large sums of money involved in the various transactions by

Hassan Ali Khan and the Tapurias were the proceeds of crime,

which required a thorough investigation, this Court felt the

necessity of appointing a Special Investigation Team to act

on behalf and at the behest of the directions of this Court.

It was noted by this Court that the issues involved were

complex and would require expertise and knowledge of

4

different departments and the coordination of efforts

between various agencies and departments. It was also

recorded that on behalf of the Union of India, it had been

submitted that a High Level Committee had recently been

formed under the initiative of the Department of Revenue in

the Ministry of Finance, composed of :

(i) Secretary, Department of Revenue, as the Chairman; (ii) Deputy Governor, Reserve Bank of India;

(iii) Director (IB);

(iv) Director, Enforcement;

(v) Director, CBI;

(vi) Chairman, CBDT;

(vii) DG, Narcotics Control Bureau;

(viii) DG, Revenue Intelligence;

(ix) Director, Financial Intelligence Unit; and

(x) JS(FT & TR-I), CBDT.

with powers to co-pt, as necessary, representatives not

below the rank of Joint Secretary such as the Home

Secretary, Foreign Secretary, Defence Secretary and the

5

Secretary, Cabinet Secretariat. It was further recorded

that the Union of India had claimed that such a multi-

disciplinary group and committee would enable the conducting

of an efficient and a systematic investigation into the

matters concerning allegations against Hassan Ali Khan and

the Tapurias and would also be able to take appropriate

steps to bring back the monies deposited in foreign banks.

In the light of such submission made on behalf of Union of

India and citing the judgments of this Court in (1) Vineet

Narain Vs. Union of India [(1996) 2 SCC 199],(2) NHRC Vs.

State of Gujarat [(2004) 8 SCC 610], (3) Sanjiv Kumar Vs.

State of Haryana [(2005) 5 SCC 517] and (4) Centre for PIL

Vs. Union of India [(2011) 1 SCC 560], this Court completed

the second part of the order by directing as follows :-

49. In light of the above we herewith order:

(i) That the High Level Committee constituted by the Union of India, comprising of (i) Secretary, Department of Revenue; (ii) Deputy Governor, Reserve Bank of India; (iii) Director (IB); (iv) Director, Enforcement; (v) Director, CBI; (vi) Chairman, CBDT; (vii)DG, Narcotics Control Bureau; (vii) DG, Revenue Intelligence; (ix) Director,

6

Financial Intelligence Unit; and (x) JS (FT & TR-I), CBDT be forthwith appointed with immediate effect as a special Investigation Team;

(ii) That the Special Investigation Team, so constituted, also include Director, Research and Analysis Wing;

(iii) That the above Special Investigation Team, so constituted, be headed by and include the following former eminent judges of this Court: (a) Hon'ble Mr. Justice B.P. Jeevan Reddy as Chairman; and (b) Hon'ble Mr. Justice M.B. Shah as Vice-Chairman; and that the Special Investigation Team function under their guidance and direction;

(iv) That the Special Investigation Team, so constituted, shall be charged with the responsibilities and duties of investigation, initiation of proceedings, and prosecution, whether in the context of appropriate criminal or civil proceedings of: (a) all issues relating to the matters concerning and arising from unaccounted monies of Hassan Ali Khan and the Tapurias; (b) all other investigations already commenced and are pending, or awaiting to be initiated, with respect to any other known instances of the stashing of unaccounted monies in foreign bank accounts by Indians or other entities operating in India; and (c) all other matters with respect to unaccounted monies being stashed in foreign banks by Indians or other entities operating in India that may arise in the course of such investigations and proceedings. It is clarified here that within the ambit of

7

responsibilities described above, also lie the responsibilities to ensure that the matters are also investigated, proceedings initiated and prosecutions conducted with regard to criminality and/or unlawfulness of activities that may have been the source for such monies, as well as the criminal and/or unlawful means that are used to take such unaccounted monies out of and/or bring such monies back into the country, and use of such monies in India or abroad. The Special Investigation Team shall also be charged with the responsibility of preparing a comprehensive action plan, including the creation of necessary institutional structures that can enable and strengthen the country's battle against generation of unaccounted monies, and their stashing away in foreign banks or in various forms domestically.

(v) That the Special Investigation Team so constituted report and be responsible to this Court, and that it shall be charged with the duty to keep this Court informed of all major developments by the filing of periodic status reports, and following of any special orders that this Court may issue from time to time;

(vi) That all organs, agencies, departments and agents of the State, whether at the level of the Union of India, or the State Government, including but not limited to all statutorily formed individual bodies, and other constitutional bodies, extend all the cooperation necessary for the Special Investigation Team so constituted and functioning;

8

(vii) That the Union of India, and where needed even the State Governments, are directed to facilitate the conduct of the investigations, in their fullest measure, by the Special Investigation Team so constituted and functioning, by extending all the necessary financial, material, legal, diplomatic and intelligence resources, whether such investigations or portions of such investigations occur inside the country or abroad.

(viii) That the Special Investigation Team also be empowered to further investigate even where charge-sheets have been previously filed; and that the Special Investigation Team may register further cases, and conduct appropriate investigations and initiate proceedings, for the purpose of bringing back unaccounted monies unlawfully kept in bank accounts abroad.

3. The third part of the order deals with the disclosure of

various documents referred to by the Union of India in

relation to the names and particulars of various bank

accounts of Indian citizens in the Principality of

Liechtenstein, a small landlocked sovereign nation-state in

Europe, which is generally acknowledged as a tax haven.

4. The third part of the order is not of relevance at this

stage, since an application, being IA No.8 of 2011, has been

9

filed by the Union of India in the Writ Petition, purporting

to be an application under Article 142 of the Constitution

read with Order 47 Rule 6 of the Supreme Court Rules, 1966,

seeking modification of the aforesaid order dated 4th July,

2011.

5. Before the Application could be moved by the learned

Attorney General, Mr. Anil B. Divan, learned Senior Advocate

appearing for the Writ Petitioners, took a preliminary

objection that the interlocutory application was not

maintainable on several counts. It was firstly urged that

in effect, in the guise of an application for modification,

the Respondents/Applicants were wanting either a re-hearing

and/or review of the order passed on 4th July, 2011,

disposing of I.A.No.1 of 2009. Mr. Divan pointed out that

it was the Government itself which had set up a High Level

Committee consisting of senior officers of different

departments to take steps for retrieving the black money

which had been deposited in banks in tax havens all over the

world and, in particular, in Swiss Banks and it did not,

10

therefore, lie in the mouth of the Government to take a

different stand when the same Committee had been converted

into a Special Investigation Team with two former Judges of

the Supreme Court to monitor the progress of the recovery

proceedings.

6. Mr. Divan also contended that the formation of a Special

Investigation Team to monitor the investigation is not a new

concept and has been resorted to on different occasions in

order that justice is done between the parties and the rule

of law is not obstructed either by the investigating agency

or otherwise. Mr. Divan urged that once the matter had been

decided on merits and a direction had been given for the

formation of a Special Investigation Team composed of the

very officers who had been appointed as members of the High

Level Committee for the very same purpose, the Government is

not justified in objecting to the investigation being

monitored by such Committee headed by two retired Judges of

the Supreme Court with impeccable credentials. Mr. Divan

submitted that the contention of the Respondents in I.A.

11

No.8 of 2011 was as if by appointing a Special Investigation

Team, the Supreme Court had taken over the executive powers

of the Union. It was submitted that although a case

against the accused was pending since 2007, no attempt had

been made to interrogate the accused in regard to the

allegations made against them.

7. Mr. Divan submitted that possibly other fora were

available to the Respondents, but the present I.A. would not

provide any remedy to the Respondents. Mr. Divan urged that

it was on account of the complete inertia of the

investigating authority that in spite of huge sums of

unaccounted money deposited in tax havens abroad, little or

no action was taken to proceed with the investigation or

even to interrogate the persons accused of having been

involved in money laundering and acting against the

interests of the country and its citizens. Mr. Divan

submitted that the remedy available to the Respondents lay

in a review petition under the provisions of Order 47 of the

12

Supreme Court Rules, 1966, and not by an interlocutory

application and that too in a disposed of matter.

8. Mr. Shekhar Naphade, learned Senior Advocate who

appeared for the Petitioner in Writ Petition (Civil) No.136

of 2011, supported the submissions made by Mr. Anil Divan

with regard to the maintainability of the Interlocutory

Application No.8 of 2011 filed by the Union of India. It

was contended that neither the provisions of Article 142 of

the Constitution nor Order 47 Rule 6 of the Supreme Court

Rules were attracted in the facts of this case, inasmuch as,

the said provisions conferred power and not jurisdiction on

this Court in respect of a matter which was pending before

it. Mr. Naphade submitted that Article 142 very clearly

vested the Supreme Court with jurisdiction to pass such

decree or make such order as is necessary for doing complete

justice in any case or matter pending before it. Mr.

Naphade also contended that, as had been held by this Court,

in Saurav Chaudhary Vs. Union of India [(2004) 5 SCC 618],

this Court could exercise its jurisdiction under Article 142

13

of the Constitution at the time of rendition of the judgment

and not thereafter. It was further observed that once

judgment had been delivered by the Court, it could not

recall the same and could only exercise its power of review

in case it intended to take a different view from the one

rendered in the main judgment. Mr. Naphade also urged that

even the provisions of Order 47 Rule 6 of the Supreme Court

Rules were of no assistance to the Union of India. It was

submitted that the Rules framed under Article 145(1) of the

Constitution only empowered the Supreme Court to frame Rules

to regulate its practice and procedure and does not take in

its sweep the power to create a new jurisdiction to

entertain a cause or matter.

9. Reference was also made to the decision of this Court in

Raja Soap Factory & Ors. Vs. S.P. Shantharaj & Ors.[(1965) 2

SCR 800], wherein it was observed that by jurisdiction what

is meant is the extent of power which is conferred upon a

Court by its Constitution to try a matter or a cause. Such

14

power is not capable of being enlarged because an

extraordinary situation requires the Court to exercise it.

10. Mr. Naphade submitted that by virtue of this

application, the Union of India was seeking to review a

final order passed by this Court, treating the same to be an

application for recalling the order. Mr. Naphade repeated

and reiterated his submissions that the application filed on

behalf of the Union of India and its authorities was not

maintainable and could only be dismissed.

11. Replying to the submissions made by Mr. Divan and Mr.

Naphade, the learned Attorney General submitted that in

earlier cases also this question had been raised and

considered by this Court. Referring to the decision of a

Bench of Seven Judges in the case of A.R. Antulay Vs. R.S.

Nayak & Anr. [(1988) 2 SCC 602], the learned Attorney

General submitted that by a majority judgment this Court

held that directions, if given in violation of the

principles of natural justice, if subsequently questioned in

another appeal instead of by way of a Review Petition under

15

Article 137, the same could be set aside by another Bench of

the Court ex debito justitiae in exercise of its inherent

powers. The majority amongst the Judges held that the want

of jurisdiction could be addressed solely by a superior

Court and, in practice, no decision could be reviewed

collaterally by any inferior Court, but the superior Court

could always correct its error either by way of a petition

or ex debito justitiae. In fact, it was also observed that

in certain situations, the Supreme Court could always invoke

its power of review in exercise of its inherent jurisdiction

in any proceeding pending before it, without insisting on

the formalities of a review application. The learned

Attorney General submitted that by appointing two retired

Judges of the Supreme Court, Justice B.P. Jeevan Reddy as

the Chairman and Justice M.B. Shah as the Vice-Chairman, and

directing that the Special Investigation Team would function

under their guidance and directions, would amount to

interference with the executive authority of the different

officials representing different sections of the

administration which would lead to a chaotic situation. The

16

direction given to include the Director, Research & Analysis

Wing, was also improper, since the said authority functioned

under strict rules of secrecy, which could be jeopardized if

its Director were to be included in the Special

Investigation Team.

12. The learned Attorney General submitted that, in the

event there was any doubt as to whether the powers of the

Supreme Court under Article 142 of the Constitution could be

invoked for doing complete justice in a matter which was not

pending before it, the present application could always be

treated as a Review Petition under Article 137 of the

Constitution read with Order 47 Rule 6 of the Supreme Court

Rules, 1966. The learned Attorney General submitted that in

view of the magnitude of the transactions involved and that

too without any accounting of the monies used, this Court

should cut across technicalities and consider the matter

pragmatically. The learned Attorney General submitted that

the present application may, therefore, be treated as a

Review Petition under Article 137 of the Constitution read

17

with Order 47 Rule 6 of the Supreme Court Rules, 1966 and be

proceeded with accordingly, notwithstanding the objection

taken on behalf of the Petitioners in regard to the

different procedure to be adopted in respect of a review

application. It was also submitted that as indicated in

A.R. Antulay’s case (supra), the Supreme Court can grant

relief in exercise of its inherent powers as the guardian of

the Constitution.

13. Reference was also made by the learned Attorney General

to the decision of this Court in S. Nagaraj & Ors. Vs. State

of Karnataka & Anr. [(1993) Supp. (4) SCC 595], which was

heard along with several other cases by a Bench of three

Judges. In the said cases an order had been passed on oral

mentioning which ultimately resulted in several contempt

petitions being filed. Two of the Hon’ble Judges, after

considering the anomalous circumstances which had resulted

from the passing of the order on oral mentioning, held that

justice is a virtue which transcends all barriers and

neither the rules of procedure nor technicalities of law can

18

stand in its way. It was further observed that the order of

the Court should not be prejudicial to anyone and if the

Court found that the order was passed under a mistake and it

would not have exercised the jurisdiction, but for the

erroneous assumption which in fact did not exist, and its

perpetration would result in miscarriage of justice, then it

would not on any principle be precluded from rectifying the

order. Mistake is accepted as a valid reason to recall an

order. Their Lordships emphasized the fact that

rectification of an order stems from the fundamental

principles that justice is above all. It is exercised to

remove the error and not for disturbing finality. In the

judgment it was also observed that the Supreme Court has the

inherent power to make such orders as may be necessary for

the interest of justice or to prevent the abuse of process

of Court. The Court is, therefore, not precluded from

recalling or reviewing its own order, if it is satisfied

that it is necessary to do so for the sake of justice. It

was pointed out that even the learned third Judge held that

while the Government was mainly responsible for the

19

unfortunate state of affairs that should not desist the

Supreme Court from revising or reviewing the said orders

which had serious consequences. The learned third Judge

also observed that it is the duty of the Court to rectify,

revise and recall its orders as and when it is brought to

its notice that certain of its orders were passed on a wrong

or mistaken assumption of facts and that implementation of

those orders will have serious consequences.

14. On a careful consideration of the submissions made on

behalf of the respective parties in regard to the

maintainability of I.A. No.8 of 2011 filed on behalf of the

Union of India, wherein, inter alia, a prayer has been made

to modify the order dated 4th July, 2011 and to delete the

directions relating to the Special Investigation Team in

paragraphs 49 and 50 of the said order, it appears that the

I.A. is maintainable. In view of the preliminary objection

relating to the maintainability of the interlocutory

application filed on behalf of the Union of India, the said

20

issue regarding the maintainability of I.A. No.8 of 2011 has

been taken up first.

15. From the arguments advanced on behalf of the respective

parties, it appears at first blush that Mr. Anil B. Divan is

technically correct in submitting that since there was no

matter pending before this Court, the provisions of Article

142 of the Constitution would not be attracted and that even

the inherent powers of this Court preserved under Order 47

Rule 6 of the Rules framed by the Supreme Court in exercise

of its powers under Article 145 of the Constitution would

not be applicable. However, this Court has preserved its

inherent powers to make such orders as may be necessary for

the ends of justice in Order 47 Rule 6 of the Supreme Court

Rules, 1966, framed under Article 145 of the Constitution.

As has been held in A.R. Antulay’s case (supra) and in S.

Nagaraj’s case (supra), such a power was not only inherent

in the Supreme Court, but the Supreme Court was also

entitled to and under an obligation to do justice to

exercise such powers as the guardian of the Constitution.

21

Justice transcends all barriers and neither rules of

procedure nor technicalities can stand in its way,

particularly if its implementation would result in

injustice. In addition to the decision rendered by this

Court in A.R. Antulay’s case (supra) and in S. Nagaraj’s

case (supra), reference may also be made to another equally

important pronouncement of this Court in Vineet Narain’s

case (supra), wherein the concept of continuing mandamus was

introduced in order to maintain the credibility of the

investigation being conducted.

16. Reference may also be made to the decision of this Court

in Manganese Ore (India) Ltd. Vs. Chandi Lal Saha [(1991)

Supp. 2 SCC 465], wherein this Court extended the benefit of

its judgment to persons who were not even in appeal before

it.

17. Even if the present application was to be dismissed as

being not maintainable under Article 142 of the Constitution

read with Order 47 Rule 6 of the Supreme Court Rules, 1966,

it would not preclude the Applicants from filing an

22

application for review under Article 137 of the

Constitution. As the very working of the Special

Investigation Team appointed under the order of 4th July,

2011, is in question, it is necessary to cut across the

technical tapes sought to be invoked on behalf of the

Petitioners and hold that in view of the inherent powers

vested in the Supreme Court of India, preserved in Order 47

Rule 6 of the Supreme Court Rules, 1966, and having regard

to the fact that the Supreme Court is the guardian of the

Constitution, I.A. No.8 of 2011, even in its present form is

maintainable in the facts and circumstances of the case,

which include threats to the security of the country.

18. The objections raised by Mr. Anil B. Divan and supported

by Mr. Shekhar Naphade, regarding the maintainability of

I.A. No.8 of 2011, are, therefore, rejected and the said

application may therefore be proceeded with for hearing.

……………………………………………………J. (ALTAMAS KABIR)

New Delhi, Dated: 23.09.2011.

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL ORIGINAL JURISDICTION

I.A. NO.8 OF 2011

IN

WRIT PETITION (CIVIL) NO.176 OF 2009

RAM JETHMALANI & ORS. ….PETITIONERS

VERSUS

UNION OF INDIA & ORS. .…RESPONDENTS

O R D E R

1. I have had the opportunity, and the benefit of reading, in draft, the

learned opinion of Hon’ble Mr. Justice Altamas Kabir. However, with

all humility and with due respect, I would not be able to concur with the

23

view taken by my Learned Brother. My Learned Brother has rejected

the preliminary objections raised by Mr. Anil Divan and Mr. Shekhar

Naphade, appearing for the writ petitioners and directed the application

to proceed for hearing. In my opinion, the application is not

maintainable for a number of reasons.

2. The application clearly states that the order passed by this Court in

I.A. No. 1 on 4th July, 2011 impinges upon the doctrine of separation of

powers. The application thereafter sets out the facts leading to the filing

of the writ petition invoking Article 32 of the Constitution of India. The

application sets out the prayers made in the writ petition. Thereafter, it is

stated that the writ petition, as originally filed, did not contain any prayer

for appointment of a Special Investigation Team. The application also

points out that in the counter affidavit filed on behalf of the Union of

India, it had been clearly stated that the Central Government had been

alive to the need to be able to retrieve information about the alleged

money lying deposited in the foreign accounts and highlighting steps

24

taken by it in his behalf. It further points out that it was on account of

such an initiative, tax haven countries, including countries like

Switzerland, made solemn attempts to enter into effective tax

information exchange agreements with various countries. The

application proceeds to delineate the steps taken and the strategy

formulated to eradicate the menace of “Black Money”. It states that the

Government had joined the global crusade against Black Money. It had

decided to create an appropriate legislative framework by incorporating

various tax evasion measures in existing Acts. Thereafter, the

application gives the details of the proposed new legislation for

unearthing Black Money. After enumerating all the efforts made by the

Government at national and international level, it is stated that above all

the Government has constituted a Committee on 27th May, 2011 under

the Chairman, C.B.D.T. to examine ways to strengthen laws to stop the

generation of Black Money in the country, its legal transfer abroad and

its recovery. The Committee also examined various other issues which

are enumerated in the application. The application further proceeds to

25

tabulate the efforts to create further legislative and administrative

framework to obtain information about illicit money of Indian citizens

already parked outside the country. Thereafter, the application sets out

the efforts already made and the results thereof. On the basis of that, it is

stated that the Government has achieved substantial success not only in

getting information on illicit money parked outside the country but also

in stopping the transfer of illicit money outside the country. Thereafter,

the details are given of the illicit money detected.

3. It is stated that in the order dated 4th July, 2011, these efforts have

neither been adverted to nor evaluated before rendering the finding in

Paragraph 46 of the judgment.

4. The application thereafter sets out various efforts made in the

matter of investigation of the case of Hasan Ali Khan and Kashinath

Tapuriah. The application thereafter reproduces the directions sought in

I.A. No.1 of 2009, which was filed on 8th September, 2009. Thereafter, it

is submitted that even in this application, no prayer was made for

26

appointment of a Special Investigation Team [SIT]. It is further

submitted that such a prayer ought not to have been granted on the basis

of written submissions of the learned counsel for the petitioners in the

absence of requisite pleadings in the writ petition or in the absence of a

formal prayer. The application further proceeds to state that it is filed

invoking the inherent power of this Court under Article 142(1) of the

Constitution of India for doing complete justice in any case or matter

pending before it.

5. In the grounds of the application, it is stated that this Court while

exercising its jurisdiction would not be pleased to attain to itself, the task

entrusted to the executive. It is emphatically submitted in the application

that the order is without jurisdiction since the constitution of the High

Level Committee is within the realm of a decision on policy matters. It is

also submitted that formation of a SIT headed by two former Judges of

this Court not only impinges on the policy decision of the Government

but also impinges upon the doctrine of separation of powers. This,

27

according to the application, would be beyond the jurisdiction conferred

on this Court under Article 32 of the Constitution of India, which can

be exercised for the enforcement of the rights conferred by Part III and

for no other purpose. It is further submitted that the judgment proceeds

on admissions, concessions, submissions and acknowledgments

attributed to the counsel appearing for the Union of India. It is pointed

out that such concessions and admissions do not appear to have been

made. On the basis of the facts pleaded, the prayer is made for

modification of the order dated 4th July, 2011 and deletion of the

directions relating to SIT in Paragraphs 49 and 50. Since the directions

given in these paragraphs have been reproduced verbatim by His

Lordship, Justice Kabir, the same are not necessary to be reproduced

herein again.

6. The aforesaid facts have been stated merely to indicate that the

application would not be maintainable, in its present form, as in

substance, it is more in the nature of a Memorandum of Appeal. In my

28

opinion, the application seeks to reopen the whole matter on merits

which would not be permissible in an application for modification.

Therefore, in my opinion, the application deserves to be dismissed at the

threshold.

7. As the submissions made by the learned counsel for the parties

have been succinctly noticed by my Learned Brother Altamas Kabir, J.

in His Lordship’s order, the same need not be repeated herein.

8. In my opinion, an application for clarification/modification

touching the merits of the matter is not maintainable. The Court can

consider the matter, if at all, only upon a review application on limited

grounds. In considering the application for review, the procedure laid

down under Order XL of the Supreme Court Rules, 1966 read with

Article 137 would have to be followed. Review of a judgment is a

serious matter and is, therefore, governed by constitutional and statutory

provisions. This view of mine will find support from a number of earlier

29

decisions of this Court. It would, at this stage, be appropriate to make a

reference to some of the observations made.

9. In the case of Ram Chandra Singh Vs. Savitri Devi & Ors. 1 this

Court considered the issue as to whether an application for

clarification/modification would be maintainable in the face of the

provisions contained in Article 137 and Order XL Rule 1 of Supreme

Court Rules. Upon consideration of the entire issue, it was observed as

follows:-

“It is now well settled that an application for clarification or modification touching the merit of the matter would not be maintainable. A Court can rehear the matter upon review of its judgment but, therefore, the procedure laid down in Order 40 Rules 3 and 5 of the Supreme Court Rules, 1966 as also Article 137 of the Constitution are required to be complied with as review of a judgment is governed by the constitutional as well as statutory provisions.

………………………………………………………………… ………………………………………………... “ The prayer of the applicant is that apart from the corrections which are required to be made in the judgment, as noticed hereinbefore, the merit of the matter may also be considered, inter alia, with reference to the pleadings of

1 2004 (12) SCC 713

30

the parties. Such a course of action, in our opinion, is not contemplated in law. If there exist errors apparent on the face of the record, an application for review would be maintainable but an application for clarification and/or modification cannot be entertained unless it is shown that the same is necessary in the interest of justice. An application which is in effect and substance an application for review cannot be entertained dehors the statutory embargo contained in Order 40 Rules 3 and 5 of the Supreme Court Rules, 1966.”

10. I am of the considered opinion that the present application would

be an abuse of the process of the Court as it seeks to camouflage an

application for Review as an application for modification. In my

opinion, such a course ought not to be encouraged. It would be relevant

to notice the observations made by this Court in paragraph 16 of the

judgment in the case of Delhi Administration Vs. Gurdip Singh Uban

& Ors. 2 .

“16. At the outset, we have to refer to the practice of filing review applications in large numbers in undeserving cases without properly examining whether the cases strictly come within the narrow confines of Rule XL of the Supreme Court Rules. In several cases, it has become almost everyday experience that review applications are filed mechanically as a matter of routine and the grounds for review are a mere reproduction of the grounds of

2 2000 (7) SCC 296

31

special leave and there is no indication as to which ground strictly falls within the narrow limits of Rule XL of the Rules. We seriously deprecate this practice. If parties file review petitions indiscriminately, the time of the Court is unnecessarily wasted, even it be in chambers where the review petitions are listed. Greater care, seriousness and restraint is needed in filing review applications.”

11. In my opinion, ten years down the line, the situation is even worst

than what is depicted by the aforesaid observations. Now we are facing

an almost daily practice of having to consider applications for

“modification and clarification”.

12. In the aforesaid judgment, this Court also considered the nature

and scope of the jurisdiction to review its own order/judgment. Since the

application herein has been described as an application for

“modification”, it would be necessary to notice the observations made by

this Court in Paragraph 17 and 18 of the judgment. The observations of

this Court are as under:-

“17. We next come to applications described as applications for “clarification”, “modification” or “recall” of judgments or orders finally passed. We may point out that under the relevant Rule XL of the Supreme

32

Court Rules, 1966 a review application has first to go before the learned Judges in circulation and it will be for the Court to consider whether the application is to be rejected without giving an oral hearing or whether notice is to be issued.

Order XL Rule 3 states as follows: “3. Unless otherwise ordered by the Court, an application for review shall be disposed of by circulation without any oral arguments, but the petitioner may supplement his petition by additional written arguments. The Court may either dismiss the petition or direct notice to the opposite party....”

In case notice is issued, the review petition will be listed for hearing, after notice is served. This procedure is meant to save the time of the Court and to preclude frivolous review petitions being filed and heard in open court. However, with a view to avoid this procedure of “no hearing”, we find that sometimes applications are filed for “clarification”, “modification” or “recall” etc. not because any such clarification, modification is indeed necessary but because the applicant in reality wants a review and also wants a hearing, thus avoiding listing of the same in chambers by way of circulation. Such applications, if they are in substance review applications, deserve to be rejected straight away inasmuch as the attempt is obviously to bypass Order XL Rule 3 relating to circulation of the application in chambers for consideration without oral hearing. By describing an application as one for “clarification” or “modification”, — though it is really one of review — a party cannot be permitted to circumvent or bypass the circulation procedure and indirectly obtain a hearing in the open Court. What cannot be done directly cannot be permitted

33

to be done indirectly. (See in this connection a detailed order of the then Registrar of this Court in Sone Lal v. State of U.P deprecating a similar practice.)

18. We, therefore, agree with the learned Solicitor General that the Court should not permit hearing of such an application for “clarification”, “modification” or “recall” if the application is in substance one for review. In that event, the Court could either reject the application straight away with or without costs or permit withdrawal with leave to file a review application to be listed initially in chambers.”

13. These observations leave no manner of doubt that the Court should

not permit hearing of such an application for “clarification”,

“modification” or “recall” if the application is in substance one for

review. It is clearly indicated that in those circumstances the Court could

either reject the application straight away or permit withdrawal with

leave to file a review application to be listed initially in chambers.

14. Examined on the touch stone of the observations made above, I am

of the considered opinion that the application herein though described as

an application for modification is in substance more in the nature of a

34

Memorandum of Appeal. At best, it could be said to be in substance an

Application for Review. It certainly does not lie within the very narrow

limits within which this Court would entertain an application for

modification.

15. In yet another case of Zahira Habibullah Sheikh & Anr. Vs.

State of Gujarat & Ors. 3 this Court, faced with a similar situation, had

this to say :

“The petition is in essence and substance seeking for a review under the guise of making an application for direction and modification apparently being fully aware of the normal procedure that such applications for review are not, unless the Court directs, listed for open hearing in Court, at the initial stage at least, before ordering notice to the other side and could be summarily rejected, if found to be of no prima facie merit. The move adopted in itself is unjustified, and could not be countenanced also either by way of review or in the form of the present application as well. The nature of relief sought, and the reasons assigned are such that even under the pretext of filing a review such an exercise cannot be undertaken, virtually for rehearing and alteration of the judgment because it is not to the liking of the party, when there is no apparent error on record whatsoever to call for even a review. The said move is clearly misconceived and nothing but sheer abuse of process, which of late is found to be on the increase, more for selfish reasons than to further or strengthen the

3 (2004 (5) SCC 353)

35

cause of justice. The device thus adopted, being otherwise an impermissible move by mere change in nomenclature of the applications does not change the basic nature of the petition. Wishful thinking virtually based on surmises too, at any rate is no justification to adopt such undesirable practices. If at all, it should be for weighty and substantial reasons and not to exhibit the might or weight or even the affluence of the party concerned or those who represent such parties when they happen to be public authorities and institutions.

16. This Court approved the observations made in the case of Gurdip

Singh Uban (supra) and observed that what cannot be done directly

cannot be permitted to be done indirectly. The Court should not permit

hearing of such an application for “clarification”, “modification” or

“recall” if the application is in substance a clever move for review.

17. These observations were reiterated in the case of A.P. SRTC &

Ors. Vs. Abdul Kareem 4. This Court observed that the petition was in

essence and substance seeking for a review under the guise of making an

application for direction and modification apparently being fully aware

of the normal procedure that such applications for review are not, unless

4 2007 (2) SCC 466

36

the Court directs, listed for open hearing in Court, at the initial stage at

least, before ordering notice to the other side and could be summarily

rejected, if found to be of no prima facie merit. The Court further

observed that such a move ought not to be countenanced. The move was

clearly misconceived and nothing but sheer abuse of process, which of

late is found to be on the increase, more for selfish reasons than to

further or strengthen the cause of justice.

18. To be fair, it must be noticed that the learned Attorney General

appearing for the Union of India had relied on a number of judgments in

support of his submissions that the Court would have inherent powers to

modify its own order/judgment. The primary judgment relied upon by

the learned Attorney General is in the case of S. Nagaraj & Ors. Vs.

State of Karnataka & Anr.5. I am of the considered opinion that the

aforesaid judgment would be of no assistance to the submissions made

by the learned Attorney General. The aforesaid judgment was rendered

in the background of very peculiar facts. It would appear that this Court 5 1993 (Supp.4) SCC 595

37

had passed an order having far reaching consequences and pre-judicially

affecting the rights of other groups of employees under Articles 14

and 16 of the Constitution of India. The order had permitted backdoor

entry of thousands of stipendiary graduates because of the negligence of

the State in putting correct facts before the Court. The Government

seemed to have woken up after considerable damage had already been

done and moved an application for modification/clarification of the order

dated 30th October, 1991. The learned Attorney General placed strong

reliance on the observations made by this Court in Paragraph 18, 19 and

36 of the judgment in support of the submission that the Court should not

decline to review its orders when it is brought to the notice of the Court

that it would be in the interest of justice to modify the same. In order to

appreciate the submission of learned Attorney General, it would be

appropriate to notice the observations made by this Court in Paragraphs

18, 19 and 36 of the judgment, which are as under:-

“18. Justice is a virtue which transcends all barriers. Neither the rules of procedure nor technicalities of law can stand in its way. The order of the Court should not be prejudicial to anyone. Rule of stare decisis is adhered

38

for consistency but it is not as inflexible in Administrative Law as in Public Law. Even the law bends before justice. Entire concept of writ jurisdiction exercised by the higher courts is founded on equity and fairness. If the Court finds that the order was passed under a mistake and it would not have exercised the jurisdiction but for the erroneous assumption which in fact did not exist and its perpetration shall result in miscarriage of justice then it cannot on any principle be precluded from rectifying the error. Mistake is accepted as valid reason to recall an order. Difference lies in the nature of mistake and scope of rectification, depending on if it is of fact or law. But the root from which the power flows is the anxiety to avoid injustice. It is either statutory or inherent. The latter is available where the mistake is of the Court. In Administrative Law the scope is still wider. Technicalities apart if the Court is satisfied of the injustice then it is its constitutional and legal obligation to set it right by recalling its order. Here as explained, the Bench of which one of us (Sahai, J.) was a member did commit an error in placing all the stipendiary graduates in the scale of First Division Assistants due to State's failure to bring correct facts on record. But that obviously cannot stand in the way of the Court correcting its mistake. Such inequitable consequences as have surfaced now due to vague affidavit filed by the State cannot be permitted to continue.

19. Review literally and even judicially means re- examination or re-consideration. Basic philosophy inherent in it is the universal acceptance of human fallibility. Yet in the realm of law the courts and even the statutes lean strongly in favour of finality of decision legally and properly made. Exceptions both statutorily and judicially have been carved out to correct accidental

39

mistakes or miscarriage of justice. Even when there was no statutory provision and no rules were framed by the highest court indicating the circumstances in which it could rectify its order the courts culled out such power to avoid abuse of process or miscarriage of justice. In Raja Prithwi Chand Lal Choudhury v. Sukhraj Rai the Court observed that even though no rules had been framed permitting the highest Court to review its order yet it was available on the limited and narrow ground developed by the Privy Council and the House of Lords. The Court approved the principle laid down by the Privy Council in Rajunder Narain Rae v. Bijai Govind Singh that an order made by the Court was final and could not be altered:

“... nevertheless, if by misprision in embodying the judgments, by errors have been introduced, these Courts possess, by Common law, the same power which the Courts of record and statute have of rectifying the mistakes which have crept in .... The House of Lords exercises a similar power of rectifying mistakes made in drawing up its own judgments, and this Court must possess the same authority. The Lords have however gone a step further, and have corrected mistakes introduced through inadvertence in the details of judgments; or have supplied manifest defects in order to enable the decrees to be enforced, or have added explanatory matter, or have reconciled inconsistencies.”

Basis for exercise of the power was stated in the same decision as under:

“It is impossible to doubt that the indulgence extended in such cases is mainly owing to the natural desire prevailing to prevent

40

irremediable injustice being done by a Court of last resort, where by some accident, without any blame, the party has not been heard and an order has been inadvertently made as if the party had been heard.”

Rectification of an order thus stems from the fundamental principle that justice is above all. It is exercised to remove the error and not for disturbing finality. When the Constitution was framed the substantive power to rectify or recall the order passed by this Court was specifically provided by Article 137 of the Constitution. Our Constitution-makers who had the practical wisdom to visualise the efficacy of such provision expressly conferred the substantive power to review any judgment or order by Article 137 of the Constitution. And clause (c) of Article 145 permitted this Court to frame rules as to the conditions subject to which any judgment or order may be reviewed. In exercise of this power Order XL had been framed empowering this Court to review an order in civil proceedings on grounds analogous to Order XLVII Rule 1 of the Civil Procedure Code. The expression, ‘for any other sufficient reason’ in the clause has been given an expanded meaning and a decree or order passed under misapprehension of true state of circumstances has been held to be sufficient ground to exercise the power. Apart from Order XL Rule 1 of the Supreme Court Rules this Court has the inherent power to make such orders as may be necessary in the interest of justice or to prevent the abuse of process of Court. The Court is thus not precluded from recalling or reviewing its own order if it is satisfied that it is necessary to do so for sake of justice.

36. There is yet another circumstance. The question is, whether this Court should enforce the 1982 Rules as

41

amended in 1987. The 1987 amendments have the effect of smuggling in thousands of persons into Government service by a back-door — without complying with the requirements of Articles 14 and 16. One can understand the rules as framed in 1982, but it is extremely difficult to appreciate or understand the reasons for which the 1987 amendment was brought in. The question, to repeat, is whether this Court should extend its arm — its discretionary power under Articles 136 and 32, as the case may be, to implement such unconstitutional rules and help these persons to gain a back-door entry into Government service — that too at the highest level in group ‘C’ services straightaway. It is true that no one has questioned the 1987 amendments. The petitioners do not question them because they are advantageous to them; they want them to be implemented. The Government cannot and does not question them because it has itself made them. The parties who are affected namely the persons awaiting employment under the Government probably do not even know what is happening. But where an unconstitutional provision of such vast impact is brought to the notice of this Court and it is asked to enforce it, it is the constitutional duty of this Court to refuse to do so. I am, therefore, of the firm opinion that this Court should refuse to make any orders directing implementation of the rules as amended in 1987. The proper direction would be to direct the absorption of the S.Gs. in accordance with the 1982 Rules as originally framed (i.e., without reference to the 1987 amendments) and to the extent provided therein. Of course those S.Gs. who have been absorbed already into group ‘C’ service in accordance with the said rules will remain unaffected since disturbing them, without notice to them and in view of all the circumstances of this case, may not be advisable. All those S.Gs. who have not so far been absorbed in group ‘C’ service shall

42

continue in the present status, drawing Rs 960 per month. They will be entitled for absorption in group ‘C’ posts only in accordance with the 1982 Rules, without reference to the 1987 amendments.”

Relying on these observations, learned Attorney General, submits that

the Court should regardless of any technical objections proceed to hear

the present application without insisting that the applicant should seek its

relief in an application for review.

19. I am of the considered opinion that the facts and circumstances

highlighted in the present application would not enable the applicant to

satisfy the conditions under which this Court exercised its inherent

jurisdiction in the S. Nagaraj’s case (supra). A perusal of the judgment

would clearly show that the Court was anxious to “even the balance”.

On the one side, there were orders of the Court passed on vague and

incomplete affidavit, creating rights and hopes in favour of five thousand

stipendiary graduates to be absorbed as First Division Assistant, and on

the other hand, there were others, the likely injustice to whom had been

highlighted in the affidavit filed by the Government and in the writ

43

petition filed by different sections of the employees. The Court in fact

emphasised the principle of finality of orders and binding nature of

directions issued by the Court which could only be overridden, if there is

injustice inherent in the situation (see Page 615, Para 14 e & f). A little

later in the judgment, in Paragraph 16, the Court observed as follows:-

“16. “Mere eligibility was not sufficient unless availability of posts was also established. In absence of posts and due to equitable considerations arising in favour of other employees the practical difficulty in appointing all the five thousand stipendiary graduates as First Division Assistants appears to be insurmountable. Even so we have no hesitation in saying that we would have refused to modify our order dated October 30, 1991 at the instance of the Government but the Court cannot be unjust to other employees.” (emphasis supplied)

20. These observations make it abundantly clear that the Court was

dealing with a particularly unsavory situation created by the Government

which had led to insurmountable difficulties and possible injustice to

both the stipendiary Magistrates and other employees. The Court,

therefore, observed that but for this unique situation, it would have

refused to modify the order dated 30th October, 1991. In Paragraph 18,

44

the Court makes it clear that the order was passed under a mistake. The

Court would not have exercised its jurisdiction but for the erroneous

assumption, which in fact did not exist. In Paragraph 36, again, it is

reiterated by the Court that it would be the duty of the Court to rectify,

revise and recall its orders as and when it is brought to its notice and

certain of its orders were based on wrong or mistaken assumption of

facts and that implementation of those orders would have serious

consequences.

21. In my opinion, in the present case, there is no question of mistaken

facts, being presented by anyone to the Court. The application also fails

to indicate any miscarriage of justice or injustice which would be caused

to any particular class. The other authorities cited by the learned

Attorney General followed the judgment in S. Nagaraj’s case (supra)

and would not advance the cause of the applicant or Union of India any

further.

45

22. The judgment in Gurdip Singh Uban’s case (supra) rather

supports the writ petitioner as noticed in the earlier part of this order.

The learned Attorney General further submitted that this Court would be

fully justified in passing the orders in exercise of its inherent jurisdiction

under Article 142 of the Constitution of India. It can always correct its

non errors brought to its notice either by way of a review petition or ex

debito justitiae. In support of the submission, the learned Attorney

general has relied on judgment of this Court in the case of A.R. Antulay

Vs. R.S. Nayak & Anr. 6

23. In my opinion, the aforesaid judgment was also delivered in view

of the peculiar circumstances of the case. The Court therein set out the

circumstances in which this Court can pass the appropriate orders

unhindered by technical rules. The observations made in paragraph 48,

which are of relevance, are as under :

“48. According to Shri Jethmalani, the doctrine of per incuriam has no application in the same proceedings. We are unable to accept this contention. We are of the opinion

6 1988 (2) SCC 602

46

that this Court is not powerless to correct its error which has the effect of depriving a citizen of his fundamental rights and more so, the right to life and liberty. It can do so in exercise of its inherent jurisdiction in any proceeding pending before it without insisting on the formalities of a review application. Powers of review can be exercised in a petition filed under Article 136 or Article 32 or under any other provision of the Constitution if the court is satisfied that its directions have resulted in the deprivation of the fundamental rights of a citizen or any legal right of the petitioner. See the observations in Prem Chand Garg v. Excise Commissioner.”

24. In my opinion, the aforesaid observations would not be applicable

in the facts and circumstances of the present case. The application herein

is not moved by an individual, who had been deprived of his

fundamental rights by an order dated 4th July, 2011. The application is

filed by the Union of India challenging the order on various legal and

factual issues. In Antulay’s case (supra), one of the grounds taken was

that the directions have been issued by the Court without following the

principle of audi alteram partem. In the present case, the directions had

been issued after hearing the learned counsel for the parties at length and

on numerous dates. These directions, in my opinion, cannot be recalled

47

in an application seeking only modification of the order. At this stage, it

would also not be possible to treat the present application for

modification as an application for review.

25. In view of the above, with utmost respect, it would not be possible

to agree with the order passed by Hon’ble Mr. Justice Altamas Kabir. In

my opinion, the applicant Union of India has failed to make out a case to

enable this Court to treat the modification application as application for

review and proceed to hear the same in open Court. In my opinion, the

present application is wholly misconceived. It is, therefore, dismissed.

Union of India is, however, at liberty to take recourse to any other legal

remedy that may be available to it.

……………………………..J. [Surinder Singh Nijjar]

New Delhi; September 23, 2011.

48

49

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL ORIGINAL JURISDICTION

I.A. NO.8 OF 2011

IN

WRIT PETITION (CIVIL) NO.176 OF 2009

RAM JETHMALANI & ORS. Petitioner(s)

VERSUS

UNION OF INDIA & ORS. Respondent(s)

O R D E R

Since we have differed in our views regarding the

maintainability of I.A. No.8 of 2011 filed in W.P. No.176

of 2009, let the matter be placed before Hon'ble the Chief

Justice of India, for reference to a third Judge.

......................J.

(ALTAMAS KABIR)

......................J. (SURINDER SINGH NIJJAR)

New Delhi; September 23, 2011.

RAM JETHMALANI AND ORS. Vs UNION OF INDIA AND ORS

RAM JETHMALANI AND ORS. Vs UNION OF INDIA AND ORS