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PETITIONER: VIRUDHUNAGAR STEEL ROLLING MILLS LIMITED

       Vs.

RESPONDENT: THE GOVERNMENT OF MADRAS

DATE OF JUDGMENT: 10/01/1968

BENCH: WANCHOO, K.N. (CJ) BENCH: WANCHOO, K.N. (CJ) BACHAWAT, R.S. SHELAT, J.M. MITTER, G.K. VAIDYIALINGAM, C.A.

CITATION:  1968 AIR 1196            1968 SCR  (2) 740  CITATOR INFO :  R          1975 SC 202  (16)  F          1979 SC1328  (10)

ACT: Constitution  of India, Art. 32-Petition under Art.  226  no notice  to  respondent-dismissed by single  Judge-Appeal  to division  bench also dismissed by speaking  order-Petitioner not  filing  appeal  but a petition  under  Art.  32-Whether petition barred by res judicata. Madras  Electricity (Taxation on Consumption) Act, 1962,  s. 12-If violative of Art. 14.

HEADNOTE: The  petitioner,  a  public  limited  company  manufacturing various  steel and iron products, requested  the  respondent Madras  Government for an exemption from tax under s. 12  of the  Madras  Electricity Act No. IV of 1962  which  provided that  where energy of a specified type was consumed  in  the process  of  manufacture  or  production  in  an  industrial undertaking  licensed under the Industries (Development  and Regulation)  Act  65 of 1951, no electricity  tax  shall  be payable  on  the energy so consumed for a  period  of  three years from the date of the commencement of production.   The petitioner’s  case  was  that though it did  not  require  a licence  under  s.  11  of the later  Act  in  view  of  the notification  issued by the Central Govt. under s.  29-B  by which  industrial  undertakings  having  fixed  assets   not exceeding  Rs.  10  lakhs  were not  required  to  obtain  a licence,  it  was still governed by Act 65 of 1951  for  the purposes  of  s.  12  of Madras Act No.  IV  of  1962.   The respondent Government rejected the claim on the ground  that no exemption could be granted under s. 12 of the Madras  Act to  undertakings which were not licensed under  the  Central Act. Thereupon  the petitioner filed a writ petition in the  High Court attacking s. 12 of the Madras Act under Art. 14 of the Constitution  and contending that it should also  have  been granted  the exemption claimed.  The petition was  dismissed by  a Single Judge without issue of notice by a short  order

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to  the effect that the petitioner was not entitled  to  the benefit  of s. 12 of the Madras Act and the validity of  the Section could not be attacked as the exemption provided  was based  on sohnd principles.  An appeal to a  Division  Bench was  also dismissed.  The petitioner did not file an  appeal from  the order of the Division Bench but chose to file  the present petition under Art. 32 claiming the same reliefs  as in  his earlier petition to the High Court.  The  respondent raised  a  preliminary objection that the petition  was  not maintainable  in view of the petitioners failure to file  an appeal  from the order of the Division Bench.  It  was  also contended on the merits that s. 12 of the Madras Act was not hit by Art. 14. HELD : dismissing the petition : (i) The preliminary objection must be upheld. The petitioner did not appeal from the order of the Division Bench.   The High Court made a speaking order  dealing  with the  merits  of  the case and the fact that  no  notice  was issued to the other side before such an order was passed was immaterial in the circumstances.  The present petition under Art. 32 on the same facts for the same relief based on the same article of the Constitution was  therefore barred, L744 D] Where  a  writ petition is dismissed without notice  to  the other side but the order of dismissal is speaking order  and the  petition  is disposed of on merits,  that  would  still amount  to res judicata and would bar a petition under  Art. 32.   The  petitioner’s only proper remedy in  such  a  case would he to come in appeal from such a speaking order passed on the merits. [743 E-F] Daryao v. The State of U.P., [1962] 1 S.C.R. 574;  explained and applied. (ii) Section 12 of the Madras as Act was not hit by Art.  14 of the Constitution.

JUDGMENT: ORIGINAL JURISDICTION : Writ Petition No. 38 of 1967. Petition under Art. 32 of the Constitution of India for  the enforcement of fundamental rights. R.   Gopalakrishnan, for the petitioner. A.   V. Rangam, for the respondent. The Judgment of the Court was delivered by Wanchoo,  C.J.  The petitioner is a Public  Limited  Company manufacturing bars, rods and agricultural implements out  of scrap  iron  and steel and consumes energy of  High  Tension Supply for the purpose.  Its case is that it is governed  by the  Industries (Development and Regulation) Act, No. 65  of 1951,  (hereinafter  referred to as the Central  Act),  even though  it did not require a licence under S. 11 thereof  in view  of the notification issued by the  Central  Government under S. 29-B by which industrial undertakings having  fixed assets  not exceeding rupees ten lakhs were not required  to obtain  a licence thereunder irrespective of the  number  of persons  employed  in  such  undertakings.   The  petitioner commenced  functioning  from  February,  1963.   The  Madras Legislature  passed  the  Madras  Electricity  (Taxation  on consumption)  Act, No. IV of 1962, (hereinafter referred  to as  the  Madras  Act)  by  which  tax  was  imposed  on  the consumption  of energy both of high tension and low  tension electricity for various purposes at varying rates.   Section 12  of  the Madras Act however provided  that  where  energy under  High  Tension Supply is consumed in  the  process  of manufacturing  or  producing the principal  product  in  any

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industrial  undertaking licensed under the Central  Act,  no electricity  tax shall be payable on the energy so  consumed for   a  period  of  three  years  from  the  date  of   the commencement  of  the  manufacture  or  production  of   the principal product in such undertaking. The  petitioner requested the Government of Madras  for  ex- emption from tax on the ground that even though it was not 742 licensed under s. II of the Central Act, it was governed  by that Act.  The Madras Government rejected its prayer on  the ground  that no exemption could be granted  to  undertakings which were not licensed under the Central Act as provided in s.  12 of the Madras Act.  Thereupon the petitioner filed  a writ petition in the High Court of Madras attacking s. 12 of the  Madras  Act  under  Art. 14  of  the  Constitution  and claiming  that it should also have been  granted  exemption. The petition was dismissed by a learned Single Judge of  the High  Court without issue of notice by a short order to  the effect that the petitioner was not ,entitled to the  benefit of  s. 12 of the Madras Act and the validity of the  section could not be attacked as the exemption provided was based on sound principles. The  petitioner then went in Letters Patent Appeal  and  the appeal was heard by a Division Bench of the High Court.  The Division Bench held that the exemption was a concession  and could not be claimed as a matter of right and that as s.  12 did not provide for exemption in favour of undertakings like the petitioner’s it could not claim exemption.  The Division Bench also rejected the argument that Art. 14 was applicable in this case.  In consequence, the appeal was dismissed. The present petition was filed by the petitioner soon  after the  appeal  had been dismissed by the High  Court  and  its contention  before us is that it should have been given  the exemption  under s. 12 of the Madras Act in view of Art.  14 of  the Constitution.  The petitioner however did  not  file any appeal from the order of the Division Bench of the  High Court.   The  petition has been ,opposed on  behalf  of  the State  of Madras and a preliminary objection has been  taken that as the petitioner did not file an appeal from the order of  the  Division Bench, it is not open to it to  file  this petition in view    of the decision of this Court in  Daryao v. The State of U.P.(1)  It is further contended that s.  12 of the Madras Act is not hit by    Art. 14. We  are  of  opinion that  the  preliminary  objection  must prevail.   It is urged on behalf of the petitioner that  the decision  in the case ’of Daryao(l) shows that it  was  only when  notice  had been issued on a writ petition and  it  is decided on contest that the principle of res judicata  would apply  and a petitioner losing on such contest in  the  High Court would not be entitled to come to this Court under Art. 32  of the Constitution.  In this connection  reference  has been  made  to the observation at p. 592  where  this  Court observed  that  "if a writ petition filed by a  party  under Art.  226 is considered on the merits as a contested  matter and  :is  dismissed  the  decision  thus  pronounced   would continue to bind (1)  [1962] 1 S.C.R. 574. 743 the  parties unless it is otherwise modified or reversed  by appeal  or other appropriate proceedings  permissible  under the  Constitution".  But it was later observed on that  very page  that  "if the petition filed in the High  Court  under Art.  226 is dismissed not on the merits but because of  the laches  of the party applying for the writ or because it  is held  that the party had an alternative remedy available  to

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it,  then  the  dismissal of the  writ  petition  would  not constitute  a  bar to a subsequent petition  under  Art.  32 except  in  cases where and if the facts thus found  by  the High  Court may themselves be relevant even under  Art.  32. If  a writ petition is dismissed in limine and an  order  is pronounced  in  that behalf, whether or  not  the  dismissal would constitute a bar would ,depend upon the nature of  the order.  If the order is on the merits it would be a bar;  if the  petition  is  dismissed in  limine  without  passing  a speaking  order  then such dismissal cannot  be  treated  as creating a bar of res judicata." It is true that this Court said in that case that if a  writ petition under Art. 226 is dismissed on merits after contest it  would  bar a petition under Art. 32 on the  same  facts. But  the later observations at the same page show that  that was  not the only case in which there would be a bar of  res judicata.   Even where notice might not have been issued  by the,  High Court and the writ petition dismissed in  limine, the  question  whether such dismissal would bar  a  petition under  Art.  32 would depend upon the nature  of  the  order dismissing  it in limine.  This is perfectly clear from  the later  observations made at p. 592 in the same case.   Where therefore a writ petition is dismissed without notice to the other  side but the order of dismissal is a  speaking  order and the petition is disposed of on merits, that would  still amount  to res judicata and would bar a petition under  Art. 32.   The  petitioner’s only proper remedy in  such  a  case would be to come in appeal from such a speaking order passed on  the  merits,  even though the High Court  may  not  have issued  notice to the other side.  What has been decided  in Daryao’s case(1) is that the High Court should have  decided the, petition on the merits by a speaking order.  If that is done,  it  is immaterial whether notice was  issued  to  the other side or not before such a decision was given.  The bar arises not because there was a notice issued but because the High Court has dealt with the merits of the petition  before it  and  has passed a speaking order even though  no  notice might have been issued. In  the present case the petition is clearly barred in  view of  the  decision in Daryao’s case(1).  The  learned  Single Judge who first dealt with the petition passed a short order dealing with the merits and stating that the validity of  s. 12 of the Madras Act could not (1)  [1962] 1 S.C.R. 574. 744 be attacked as the exemption was based on sound  principles. He, therefore repelled the attack on S. 12 of the Madras Act based  on Art. 14 of the Constitution.  The petitioner  then went  in  appeal to the Division Bench.  The  order  of  the Division  Bench is more comprehensive than the order of  the learned  Single Judge and the Division Bench has dealt  with the  attack  under  Art. 14 of  the  Constitution.   It  has rejected  the  contention  that there  was  any  element  of hostile discrimination.  It has also held that there was  no arbitrary  or  unreasonable classification by S. 12  of  the Madras  Act.  It has finally held that it could not be  said that there was no nexus between the conditions specified  in the Madras Act and the Central Act which seeks, for  reasons of  national  development  and prosperity,  to  license  and supervise undertakings.  The order of the Division Bench  in appeal  is clearly a speaking order dealing with the  merits of  the  petition  where only one point under  Art.  14  was raised.   In our opinion it bars the making of  the  present petition under Art. 32 on the same facts for the same relief based  on  the  same  article  of  the  Constitution.    The

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petitioner  did  not appeal from the order of  the  Division Bench.   The High Court made a speaking order  dealing  with the  merits  of  the case and the fact that  no  notice  was issued to the other side before such an order was passed  is immaterial  in the circumstances.  We therefore  uphold  the preliminary objection. We may add that if we were to go into the merits of the case ourselves  we  would see no reason to differ from  the  view taken by the Division Bench as to the application of Article 14. The petition is dismissed with costs. R.K.P.S. Petition dismissed.. 745