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PETITIONER: NORTHERN INDIA CATERERS (INDIA) LTD.

       Vs.

RESPONDENT: LT. GOVERNOR OF DELHI

DATE OF JUDGMENT21/12/1979

BENCH: PATHAK, R.S. BENCH: PATHAK, R.S. KRISHNAIYER, V.R. TULZAPURKAR, V.D.

CITATION:  1980 AIR  674            1980 SCR  (2) 650  1980 SCC  (2) 167  CITATOR INFO :  R          1981 SC1751  (1,2)  R          1983 SC1125  (7)

ACT:      Review of judgments of the Court-When undertaken.

HEADNOTE:      HELD : (per Tulzapurakar and Pathak, JJ.) (Krishna Iyer J. concurring)      It is well-settled that a party is not entitled to seek a review  of a  judgment delivered  by this Court merely for the purpose of a rehearing and a fresh decision in the case. Normally the  principle is that a judgment pronounced by the Court  is   final  and  departure  from  that  principle  is justified only  when  circumstances  of  a  substantial  and compelling character  make it  necessary to  do so.  If  the attention of  the Court is not drawn to a material statutory provision during  the original hearing the Court will review its judgment.  The Court  may also  reopen its judgment if a manifest wrong  has been done and it is necessary to pass an order to do full and effective justice. [656H]      Sajjan Singh v. State of Rajasthan [1965] 1 S.C.R. 933, 948; G. L. Gupta v. D. N. Mehta [1971] 3 S.C.R. 748, 760; O. N. Mahindroo  v. Distt.  Judge Delhi  & Anr. [1971] 2 S.C.R. 11, 27 referred to.      Power to  review its judgment has been conferred on the Supreme Court  by Article  137 of the Constitution read with the provisions of a law made by Parliament or the rules made under Article  145. In a civil proceeding an application for review is  entertained only  on a  ground  mentioned  in  O. XLVII, Rule  1 of  the Code  of Civil  Procedure  and  in  a criminal proceeding  on the  ground of  an error apparent on the face  of the  record (Order XL r. 1, Supreme Court Rules 1966). Whatever  be the  nature of  the proceedings a review proceeding cannot  be equated with the original hearing of a case and the finality of the judgment delivered by the Court will not be reconsidered except "where a glaring omission or patent mistake  or like  grave error has crept in earlier by judicial fallibility." [657C-D]      Chandra  Kanta  v.  Sheikh  Habib,  [1975]  3  SCR  933 referred to.

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    Apart from the fact that the material placed before the Court in the review petition was never brought to its notice when the  appeals were  heard, the  judgment does not suffer from an  error apparent  on the  face of the record. Such an error exists  if of two or more views canvassed on the point it is possible to hold that the controversy could be said to admit of  only one of them. If the view adopted by the Court in the original judgment is a possible view having regard to what the  record states,  it is difficult to hold that there is an error apparent on the face of the record. [657E-F]      In the  instant case  the appellant prepared and served food both to residents in its hotel as well as to the casual customers who  came to  eat in the restaurant. In both cases it remained  a supply and service of food not amounting to a sale. The facts alleged by the appellant were never disputed at any stage. No attempt 651 was made  by the taxing authorites to enquire into the truth of the  facts so  accepted. It  was in  that factual context that this  Court examined the question whether any liability to sales  tax was  attracted. The earlier judgment rested on that factual  foundation and  must  be  understood  in  that light. [658H] Krishna Iyer, J. (concurring)      A case  is decided  on  its  particular  conspectus  of facts. When  the facts  materially vary  the law selectively shifts its  focus. The factual setting in which the decision in the  judgment was  founded becomes  critical. The  appeal proceeded on  the admitted  footing that  the visitor to the restaurant who sat at the table and was served the dishes he desired, had  no right  to carry  home what  he wanted.  The basic assumption was that victuals as such were not sold and the consideration  was for  the complex  of activities which included eating  and drinking. On these facts the conclusion arrived at was impeccable. [652G]      If  circumstances  differ  the  decision  too  will  be different. But  no alternative situations were presented. If counsel defaults in the submission he cannot find fault with the Court for the decision. [653A]

JUDGMENT:      CIVIL APPELLATE  JURISDICTION :  Review  Petition  Nos. 111-112 of 1978.      (Application for  Review of this Court’s Judgment dated 7-9-1978) In the matter of :-      Civil Appeal Nos. 1768-69 of 1972.      Soli J.  Sorabjee, Addl.  Sol. Genl.  and P. A. Francis and B.  B. Ahuja,  M. N.  Shroff, R.  S. Chauhan  and R.  N. Sachthey for the Petitioners.      F. S.  Nariman, Lalit  Bhasin, M. N. Karkhanis, Mrs. S. Bhandare and Miss Malini Poduval for the Opposite side. FOR INTERVENERS :      S. T. Desai and M. N. Shroff for the State of Gujarat.      Soli J.  Sorabjee Addl.  Sol. General  and M. N. Shroff for the State of Maharashtra.      Badridas Sharma for the State of Rajasthan.      T. V.  S. N.  Chari and  M. S.  Ganesh for the State of Andhra Pradesh.      Soli J.  Sorabjee Addl. Sol. Genl. and G. S. Chatterjee for the State of West Bengal.      N. Nettar for the State of Karnataka.      A. V. Rangam for the State of Tamil Nadu.      S. C. Manchanda and O. P. Rana for the State of U.P.

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    V. J. Francis for the State of Kerala. 652      M.  C.   Bhandare  for  the  Federation  of  Hotel  and Restaurant Associations, of India.      Y. S. Chitale for Hotel Restaurant Association Calcutta and Eastern Region.      Lalit Bhasin,  Vinay Bhasin  and Vineet Kumar for South Region Fariya Hotel.      Mrs. Shyamala Pappu and A. Minocha for Zonth Club.      A. K.  Rao and  A. T.  M. Sampath  for Tamil Nadu Hotel Association.      N. Sudhakaran  for Hotel  and  Restaurant  Association, Ernakulam.      Anil Diwan,  Ravinder Narain and Sri Narain from Walcom Hotels and Indovilles Hotel Division.      S. K. Gambhir for State of Madhya Pradesh.      The Judgment of V. D. Tulzapurkar and R. S. Pathak, JJ. was delivered by Pathak, J. Krishna Iyer, J. gave a separate Opinion.      KRISHNA IYER,  J.-A plea  for review,  unless the first judicial view  is manifestly  distorted, is  like asking for the  moon.  A  forensic  defeat  cannot  be  avenged  by  an invitation to  have a  second look,  hopeful of discovery of flaws and  reversal of  result.  I  agree  with  my  learned brother  Pathak   J,  both   on   the   restrictive   review jurisdiction and  the rejection  of the prayer in this case- subject to the qualifications made below.      Indeed, a  reading of  the last paragraph of my learned brother, with  which I  concur, makes it clear that Sri Soli Sorabjee has  more or  less won  the war,  although  he  has rightly lost  this battle  because of factual constraints. A case is  decided on its particular conspectus of facts. When the facts  materially vary,  the law  selectively shifts its focus. Here,  the factual  setting in  which the decision is founded becomes  critical. My  learned brother  has made  it perfectly plain  that the  appeal proceeded  on the admitted footing that  the visitor  to the  restaurant who sat at the table and  was served  the dishes  he desired  had, in  that case, no  right to  carry home  what he wanted, after eating what he wanted, and to pay for the eatables as distinguished from the  total blend  of services,  including  supply  (not sale) of  what he  chose to eat. The basic, indeed decisive, assumption was that victuals, as such, were not sold and the consideration  was  for  the  complex  of  activities  which included eating  and drinking.  This sophisticated situation being granted, the conclusion is impeccable. 653 But if  circumstances  differ,  the  decision  too  will  be different. But  no alternative situations were presented. If counsel defaults  in the  submission, he  cannot find  fault with the  court for the decision. This is the long and short of it.      It sometimes  happens that  high-style  restaurants  or residential hotels  render a bungle of special services like ball dance, rare music, hot drinks, ‘viands of high regale’, glittering crockery, regal attention or ‘bikini’ service and even sight-seeing  transport or round-the-city visits, shoe- shining, air-conditioning,  masage in  the room  etc., on  a consolidated sum. You cannot dissect the items or decode the bill to  discover separately  the component  of goods  sold. This situation  may obtain  even in India with the throng of foreign tourists  who want  to be taken care of and pay all- inclusively. This may happen in some fashionable restaurants where you cannot, as of right, remove from the table what is left over. In these cases the decision under review squarely

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applies. My  learned brother  has clarified and confined the ratio to  the contours  so set  out. He has also pointed out that counsel,  at the  earlier hearing, did not contest this factual matrix.  A  review  in  counsel’s  mentation  cannot repair the  verdict once  given. So  the law  laid down must rest in peace.      The learned  Solicitor General  took us through English and American  legal literature  of vintage  value and  alien milieu. They  enlightened us  but did  not apply  fully,  as explained by  my learned  brother.  Had  they  been  earlier cited, had been seriously considered. But India is India. It lives in its one lakh villages, thousands of towns, millions of pavement  pedlars and  wayside victuallers, corner coffee shops and tea stalls, eating houses and restaurants and some top-notch parlours.  Habits vary, conventions differ and one rigid rule  cannot apply in diverse situations. If you go to a coffee house, order two dosas, eat one and carry the other home, you  buy the  dosas. You  may have the cake and eat it too, like a child which bites a part and tells daddy that he would eat  the rest  at home.  Myriad situations,  where the transaction is a sale of a meal, or item to eat or part of a package of  service plus  must not  be governed  by standard rule. In  mere restaurants  and non-residential hotels, many of  these  transactions  are  sales  and  taxable.  Nor  are additional services  invariably components  of what  you pay for. You  may go  to an air-conditioned cloth-shop or sweet- meat store  or handcrafts  emporium where cups of tea may be given, dainty  damsels may  serve or sensuous magazines kept for reading.  They are  devices to attract customers who buy the commodity  and the  price paid  is taxable  as sale. The substance of the transaction, the dominant object, the 654 life-style and  other telling factors must determine whether the apparent  vendor did  sell the  goods or  only supply  a package of  services. Was  there a  right to  take away  any eatable served,  whether it  be bad manners to do so or not? In the  case we  have, the  decision went on the ground that such right was absent. In cases where such a negative is not made out  by the  dealer-and in  India, by  and  large,  the practice does  not prohibit carrying home-exigibility is not repelled.      I agree  with my  learned brother  and dismiss the plea for review.      PATHAK, J.-These  Review Petitions are directed against the judgment of this Court dated September 7, 1978 disposing of Civil Appeals Nos. 1768 and 1769 of 1972.      Northern India  Caterers (India)  Ltd. run  a hotel  in which besides  providing lodging  and meals  to residents it also operates  a restaurant  where meals  are served to non- residents or  casual visitors.  In a  reference made  to the High Court  of Delhi  under s.  21(3) of  the Bengal Finance (Sales Tax)  Act, 1941 as extended to the Union Territory of Delhi, the High Court expressed the opinion that the service of meals to casual visitors in the restaurant was taxable as a sale.  On appeal, this Court took a contrary view and held that when  meals were  served  to  casual  visitors  in  the restaurant operated  by the  appellant the  service must  be regarded as providing for the satisfaction of human need and could not  be regarded  as constituting  a sale of food when all that  the visitors  were entitled  to do  was to eat the food served to them and were not entitled to remove or carry away uneaten  food. Supporting  considerations included  the circumstance that  the  furniture  and  furnishings,  linen, crockery and  cutlery were  provided,  and  there  was  also music, dancing and perhaps a floor show.

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    Mr. Soli  J. Sorabjee, the learned Additional Solicitor General, who has been briefed by the respondent to appear at this stage  in the case has, with his usual thoroughness and ability, succeeded  in putting  together  a  mass  of  legal material which  we greatly  wish had  been before  the Court when the appeals were originally heard. On the basis of that material, he  submits that  the judgment  delivered by  this Court ought  to be reviewed. We have no hesitation in saying that had this material been available earlier, it would have enabled the  Court to  consider still further aspects of the problem and  examine it  more  comprehensively.  But  having regard to  the basis  on which the appeals proceeded, we are unable to  say that  the result  would necessarily have been different. 655      The learned Additional Solicitor General contended that the judgment  of this  Court is amendable to review because, he says,  it proceeds  on the  erroneous assumption  that  a restaurant can, for the purposes of the point of law decided by us,  be likened  to an  inn. We  have  been  referred  to Halsbury’s Laws of England(1) and the Hotel Proprietors Act, 1956 mentioned  therein. Our attention has also been invited to a  statement in Benjamin’s "Sale of Goods"(2) that when a meal is served to a customer in a restaurant there is a sale of goods,  the  element  of  service  being  subsidiary.  As regards judicial  opinion  in  England,  reliance  has  been placed on  Rex v.  Wood Green  Profiteering Committee; Boots Cash Chemists  (Southern) Lim-Exparte, (3) Rex v. Birmingham Profiteering Committee;  Provincial Cinematograph  Theatres, Lim. Exparte(4)  and Lockett  v. A. & M. Charles, Ltd.(5) It appears, however,  that the  first and  third of these three cases cannot  be said  to bear directly on the point. It was also urged  that Merrill  v. Hodson(6)  and  Mary  Nisky  v. Childs Company,(7) on which this Court relied, represent the Connecticut-New Jersey  rule, but the opposite view embodied in the  Massachusetts-New York  rule and expressed in Friend v. Childs Dining Hall Co.(8) represents the true law. It was said that the subsequent enactment of the Uniform Commercial Code(9)   in   the   United   States   has   preferred   the Massachusetts-New York  rule  "by  providing  that  for  the purpose of  the implied  warranty  of  merchantibility,  the serving for  value of food or drink to be consumed either on the premises or elsewhere is a sale."(10) We were invited to consider Vishnu  Agencies  (Pvt.)  Ltd.  v.  Commercial  Tax Officer &  Ors.(11) for  the proposition that the concept of "sale of  goods" as  understood in  the legislative entry in List II  of  the  Seventh  Schedule  of  our  constitutional enactment should  be enlarged to take into account a meaning not intended  earlier but  necessitated by an environment of social control measures. Finally, reference has been made to certain observations in State of Punjab v. M/s. Associated 656 Hotels of  India Ltd.(1)  and Municipal Corporation of Delhi v. Laxmi Narain Tandon etc. etc.(2)      Learned counsel  for the  intervener  States  generally adopted the  submissions of the learned Additional Solicitor General.      The review  petitions have  been vigorously  opposed by Mr. F.  S. Nariman,  appearing for  the appellant,  who  has urged that  no ground for review has been made out and that, in any event the judgment of this Court does not suffer from error. He  pointed out  that  the  decisions  based  on  the Massachusetts-New York  rule holding  that  the  service  of meals to  customers in  a restaurant  constitutes a  sale of food turned  on  the  need  for  the  importing  an  implied

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warranty  that   the  food   was  fit   for   eating.   That consideration, it was said, need not influence the courts in India because  the lacuna had been filled by law such as the Food Adulteration  Act  aimed  at  ensuring  the  supply  of wholesome food  to consumers. The submission is that whether the service  of meals is or is not a sale must be determined by the  nature of  the transaction  and not  be the  need to import an implied warranty of fitness. In other words, it is said, the  factor of  implied warranty  must follow  on  the transaction being  a sale  and not that the transaction is a sale because  an implied  warranty is  a necessary guarantee for public  health. We  are reminded  that the true basis of our judgment  is that  no title  in the  food passes  to the consumer as  is  evidenced  by  the  circumstance  that  the unconsumed portion  of the  food cannot  be carried  away by him. It  is pointed  out that there never was any dispute by the respondent that customer in a restaurant who orders food for consumption  by him  on the  premises is not entitled to take away  the unconsumed portion of the food. The essential nature of  the transaction,  he reiterates,  is that it is a service afforded  for the satisfaction of a bodily need, and the service is provided by supplying food for eating. In the end, he  has emphasised  the limited  scope of  the power of review and the strict conditions in which it can be invoked. Dr. Y.  S. Chitale  and Mr.  Anil Dewan,  appearing for some intervenors, adopt the same line of argument.      The question  is whether  on the  facts of  the present case a review is justified.      It is well settled that a party is not entitled to seek a review  of a  judgment delivered  by this Court merely for the purpose of a rehearing and a fresh decision of the case. The normal principle is 657 that a  judgment pronounced  by  the  Court  is  final,  and departure  from   that  principle  is  justified  only  when circumstances of a substantial and compelling character make it  necessary   to  do   so.  Sajjan   Singh  v.   State  of Rajasthan.(1) For instance, if the attention of the Court is not drawn  to a  material  statutory  provision  during  the original hearing,  the Court will review its judgment. G. L. Gupta v.  D. N.  Mehta.(2) The  Court may  also  reopen  its judgment if  a manifest  wrong  has  been  done  and  it  is necessary to pass an order to do full and effective justice. O. N.  Mahindroo v.  Distt. Judge  Delhi &  Anr.(2) Power to review its judgments has been conferred on the Supreme Court by Art.  137 of  the Constitution, and that power is subject to the provisions of any law made by Parliament or the rules made under  Art. 145.  In a civil proceeding, an application for review  is entertained  only on  a ground  mentioned  in XLVII rule  1 of  the Code  of Civil  Procedure,  and  in  a criminal proceeding  on the  ground of  an error apparent on the face  of the  record. (Order  XL rule  1, Supreme  Court Rules, 1966).  But whatever the nature of the proceeding, it is beyond dispute that a review proceeding cannot be equated with the  original hearing  of the case, and the finality of the judgment delivered by the Court will not be reconsidered except "where  a glaring  omission or patent mistake or like grave error  has crept  in earlier by judicial fallibility." Chandra Kanta v. Sheikh Habib.(4)      Now, besides  the fact  that most of the legal material so assiduously collected and placed before us by the learned Additional Solicitor  General, who has now been entrusted to appear  for   the  respondent,  was  never  brought  to  our attention when  the appeals  were heard, we may also examine whether the  judgment suffers  from an error apparent on the

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face of  the record.  Such an error exists if of two or more views canvassed on the point it is possible to hold that the controversy can be said to admit of only one of them. If the view adopted  by the  Court in  the original  judgment is  a possible view having regard to what the record states, it is difficult to  hold that  there is  an error  apparent on the face of the record.      What were  the considerations  on which this Court held that the  transaction was  not a  sale? The  Court said, and this was  emphasised in no small degree, that the supply and service of  food to a customer to be eaten in the restaurant was not a sale for the reason that he was merely entitled to eat the food served to him and not to remove 658 and carry  away the unconsumed portion of the food. Had that amounted to  a  sale,  the  unconsumed  portion  would  have belonged to  the customer  to take away and dispose of as he pleased.  Besides,   the  Court   noted,  there  were  other amenities and  services of  considerable  materiality  which were also  provided.  That  was  the  case  set  up  by  the appellant before  the assessing,  appellate  and  revisional authorities, and  it was  apparently also  the case  pleaded before the  High  Court.  It  was  summarised  thus  in  the petition under  Article 136(1)  of the Constitution filed in this Court:           "(1) The  Hotelier  and  Catering  industry  is  a      service oriented  industry unlike  and as distinguished      from other  sale oriented  industries. The purpose of a      Hotelier and  Caterer is  not  to  sell  food,  but  to      service it  in proper  atmosphere so  as  to  make  the      service and  consumption  of  food  enjoyable  for  the      guests. In  the dining  hall, the  petitioner  provided      certain basic  facilities and  amenities, such as, air-      conditioning services,  music, facilities  for  dancing      (i.e.  dancing   floor)  specially  designed  crockery,      special lighting,  etc. The  petitioner had  built up a      reputation for  providing the  aforesaid  services  and      people patronise  the dining halls as a result of these      amenities.           (2) Though  the customer pays for the food, he can      enjoy only  that much of food as can be consumed by him      at one  particular time.  The guest  is not entitled to      carry away the unconsumed portion of his food. There is      thus no  passing of  property for  a  stipulated  money      consideration, which  would imply  the guests’ right to      carry away the unconsumed portion of his food.           (3) The  amount received  by the petitioner is not      the  price   of  any  goods.  On  the  other  hand,  it      represents the  petitioner’s charges  for looking after      the convenience and enjoyment of the customer including      his needs  for food  and rendering him various kinds of      other  services   and  providing   him   with   various      facilities and comforts."      The  appellant   prepared  and   served  food  both  to residents in  its hotel  as well  as to casual customers who came to  eat in its restaurant, and throughout it maintained that having  regard to  the nature  of the services rendered there was  no  real  difference  between  the  two  kind  of transactions. In both cases it remained a supply and service of food  not amounting  to a  sale. It  is important to note that the  facts alleged by the appellant were never disputed at any stage. and we 659 find no  attempt by  the taxing  authorities to enquire into the truth  of the  facts so  asserted. It is in that factual

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context that  this Court  examined the  question whether any liability to  sales tax was attracted. Our judgment rests on that factual  foundation, and  must be  understood  in  that light.      It appears  from the  submissions  now  made  that  the respondent as well as other States are apprehensive that the benefit of  the judgment  of this  Court will  be invoked by restaurant-owners in  those cases also where there is a sale of food  and title  passes to  the customers. It seems to us that having  regard to  the facts  upon which  our  judgment rests-undisputed  as   they  have  remained  throughout  the different stages  of the  litigation-and the  considerations which they  attract, no  such apprehension can be reasonably entertained. Indeed,  we have  no hesitation  in saying that where food is supplied in an eating-house or restaurant, and it is  established upon  the facts that the substance of the transaction, evidenced  by its dominant object, is a sale of food and  the rendering  of services  is merely incidential, the transaction  would undoubtedly be exigible to sales-tax. In every  case it  will  be  for  the  taxing  authority  to ascertain the  facts when  making an  assessment  under  the relevant sales  tax law  and to  determine upon  those facts whether a sale of the food supplied is intended.      We are  of the  view that  these review  petitions must fail. They are, accordingly, dismissed. There is no order as to costs. P.B.R.                           Review petitions dismissed. 660