IN THE HIGH COURT OF GUJARAT AT AHMEDABAD FIRST APPEAL No. 3740 of 2006 For Approval and Signature:
HONOURABLE MR.JUSTICE J.B.PARDIWALA ========================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy of the judgment ?
4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ?
5 Whether it is to be circulated to the civil judge ?
========================================================= DLF UNIVERSAL LIMITED - Appellant(s) Versus STATE BANK OF INDIA & 2 - Defendant(s) ========================================================= Appearance :
MR MIHIR THAKORE, SR.COUNSEL with MR ABHISHEK MEHTA for M/S TRIVEDI & GUPTA for Appellant(s) : 1, MR VIMAL M PATEL for Defendant(s) : 1, RULE SERVED for Defendant(s) : 2, PARTY-IN-PERSON for Defendant(s) : 2, DELETED for Defendant(s) : 3, ========================================================= CORAM : HONOURABLE MR.JUSTICE J.B.PARDIWALA Date : 10/02/2012 CAV JUDGMENT This Appeal has been placed before me by an order of the Hon'ble Chief Justice as there was a difference of opinion between Hon'ble Mr.Justice Jayant Patel and Hon'ble Ms.Justice B.M.Trivedi when they heard the First Appeal in the first instance.
The Hon'ble Judges comprising the Division Bench, while delivering the judgment dated 14th June 2011, have taken different views in respect of the issues that have arisen in the subject appeal and have stated the following :
“In view of the aforesaid two separate views expressed, the matter shall be placed before the Hon'ble the Chief Justice for appropriate orders.”
I may state that the First Appeal is against the judgment and order dated 29th September 2006 passed in Misc. Civil (Arbitratrion) Application No.26 of 2005 by the Court of Additional District Judge, Valsad, thereby the Additional District Judge, Valsad rejected the petition preferred by the appellant herein under Section 34 of the Arbitration and Conciliation Act, 1996 and confirmed the award passed by the arbitrators. The First Appeal was heard by the Division Bench (Coram: Mr.Justice Jayant Patel and Ms.Justice B.M.Trivedi).
The gist of the judgment dated 14th June 2001 upholding counter claims of the respondent no.2 and part of the claims of the appellant is as under :
Prima facie, it is evident that the difference of views between the two Hon'ble Judges was on counter claim nos.2 and 3 of respondent no.2. Hon'ble Mr.Justice Jayant Patel rejected the counter claim nos.2 and 3 on the ground of limitation as they arose post- termination of contract and post-invocation of arbitration clause. Hon'ble Ms.Justice B.M.Trivedi upheld the counter claim nos.2 and 3 as Her Ladyship was of the opinion that the counter claims were not barred by limitation.
During the course of hearing of the First Appeal, learned senior counsel Mr.Mihir Thakore raised preliminary objection with regard to the competency and legality of the reference. Counsel submitted that this Court cannot decide this reference as the reference is incompetent and is in violation of the Gujarat High Court Rules, 1993, Section 98 of the Code of Civil Procedure, 1908, and Clause 36 of the Letters Patent Appeal. He submitted that when the Judges are equally divided, they must state in clear terms the point on which they differ, instead of leaving to the third judge to search the point of difference, pose the same and then express opinion.
He submitted that this issue is no longer res integra and he placed reliance on the following case-law in support of his preliminary objection:
(1) Reliance Industries Ltd. v/s. Pravinbhai Jashbhai Patel and others, reported in (1997)7 SCC 300;
(2) Kishore Kanji Patel v/s. State of Gujarat, reported in 1998(3) GCD 2311;
(3) Judgment rendered in the case of State of Gujarat through Chief Secretary v/s. H.E. The Governor of Gujarat through Principal Secretary and others in Special Civil Application No.12632 of 2011 decided on 24th November 2011;
(4) Colourtex v/s. Union of India, reported in 2010 (257) ELT 14(Guj).
On the other hand, Mr.Lalit Patni appearing on behalf of respondent no.2 who is the General Manager (Legal and Secretarial) of the Company submitted that there is no substance in the preliminary objection raised by the learned counsel for the appellant and the same deserves to be rejected.
He submitted that this Court should proceed further with the hearing of the First Appeal. He submitted that the appellant in essence has challenged the judgment of the Division Bench and also the order (administrative side) passed by the Hon'ble Chief Justice. He submitted that such course is not permissible in law.
He also submitted that from the bare reading of the judgment and order passed by the Division Bench, the point of difference is glaring and it is not necessary to refer the matter to the Division Bench for framing the points of difference. He submitted that the only difference of opinion is as to whether counter claim nos.2 and 3 of respondent no.2 – Atul Limited are barred by limitation or not. He submitted that raising of technical objection is with an intent to delay the proceeding and is an abuse of process of court. He submitted that past 14 years the appellant is in several round of litigation with respondent no.2, where even earlier the matter reached upto the Apex Court for two times. Even after passing of the arbitration award in favour of respondent no.2 more than six years have elapsed but respondent no.2 has not been able to reap the fruits of the award. Lastly, he submitted that the judgments which have been relied upon by the learned counsel for the appellant are not applicable in the facts of the present case. He submitted that in all the judgments which have been relied upon by the learned counsel for the appellant it was not clear as to what was the difference of opinion between the two Hon'ble Judges of the Division Bench and, resultantly, the matters were remitted for the purpose of framing the points of difference. He submitted that the judgment dated 24th November 2011 passed by the Hon'ble Court (Coram: Mr Justice V.M.Sahai) in Special Civil Application No.12362 of 2011, it is evident that parties consented to remit the matter to the concerned Division Bench for the purpose of framing the points of difference.
I have heard learned counsel for the respective parties and I have also perused the materials on record. The question which falls for my determination at this stage is as to whether I should proceed further with the hearing of the Appeal, rejecting the preliminary objection raised by the learned counsel for the appellant as regards the competence of the reference taking it for granted that the only difference of opinion as apparent on plain reading of the judgment is as to whether counter claim nos.2 and 3 of respondent no.2 are barred by limitation or not.
I have also considered one another impediment which may arise in the present case and that is with regard to the fact that one of the Hon'ble Judges Ms.Justice B.M.Trivedi is now transferred to the High Court of Rajasthan.
Before taking any final decision in this regard, it would be expedient to look into certain legal provisions governing the issue in question.
THE GUJARAT HIGH COURT RULES
"186. Procedure in case of difference of opinion between Judges:- In case of difference of opinion between the Judges composing the Division Bench, the point of difference shall be decided in accordance with the procedure referred to in Section 98 of the Civil Procedure Code.”
CODE OF CIVIL PROCEDURE, 1908
“98. Decision where appeal heard by two or more Judges:-
(1) Where an appeal is heard by a Bench of two or more Judges, the appeal shall be decided in accordance with the opinion of such Judges or of the majority (if any)of such Judges.
(2) Where there is no such majority which concurs in a judgment varying or reversing the decree appealed from, such decree shall be confirmed:
Provided that where the Bench hearing the appeal is (composed of two or other even number of Judges belonging to a Court consisting of more Judges than those constituting the Bench) and the Judges composing the Bench differ in opinion or a point of law, they may state the point of law upon which they differ and the appeal shall then be heard upon that point only by one or more of the other Judges, the such point shall be decided according to the opinion of the majority (if any) of the Judges who have heard the appeal including those who first heard it.
(3) Nothing in this section shall be deemed to alter or otherwise affect any provision of the letters patent of any High Court."
LETTERS PATENT APPEAL
“36. Single Judges and Divisional Courts – And we do hereby declare that any function, which is hereby directed to be performed by the said High Court of Judicature at Bombay in the exercise of its original or appellate jurisdiction, may be performed by any Judge or any Division Court thereof, appointed or constituted for such purpose, in pursuance of section One hundred and eight of the Government of India Act, 1915, and if such Division Court is composed of two or more Judges, and the Judges are divided in opinion as to the decision to be given on any point, such point shall be decided according to the opinion of the majority of the Judges, if there shall be a majority, but if the Judges should be equally divided
they shall state the point upon which they differ and the case shall then be heard upon that point by one or more of the other Judges and the point shall be decided according to the opinion of the majority of the Judges, who have heard the case including those first heard it".
In the case of Reliance Industries Ltd. vs. Pravinbhai Jashbhai Patel and others, reported in (1997) 7 SCC 300, the Hon’ble Supreme Court has held as below:
“13. Rule 186 is found in Chapter XVII of the Gujarat High Court Rules which deals with "Applications under Articles 226, 227 and 228 of the Constitution and rules for issue of writs and orders under the said articles". So far as proceedings under Article 226 of the Constitution of India are concerned they are original in nature. As we have seen earlier qua them Section 98(2) CPC would on its own language get out of the picture as there would be no occasion for the High Court exercising jurisdiction under Article 226, being required to confirm the decree under challenge if there is no majority which concurs in the judgment sought to be challenged before the High Court. For applicability of Section 98(2) the basic requirement is that the Division Bench of the High consisting of two or more learned Judges must be dealing with a case where there is a decision of the lower court which is placed for consideration of the Division Bench of the High Court. Consequently Rule 186 which is of general nature cannot get attracted so far as original proceedings under Article 226 are concerned but this would not render the said rule otiose as it would still require Section 98(3) CPC to be followed in such a case and that in its turn would attract clause 36 of the Letters Patent. Thus for petitioners under Article 226 of the Constitution of India Section 98(1) and Section 98(3) CPC can be pressed into service in given contingencies. That apart, Rule 186 will operate in its own vigour so far as decisions of Division Benches of the High Courts dealing with petitions under Articles 227 and 228 are concerned..."
"...Section 98(3) CPC, as seen earlier clearly indicates that Section 98 will not affect the substantive provisions of the Letters Patent. Clause 36 of the Letters Patent is a substantive provision laying down the procedure to be followed in contingencies contemplated by the said clause. That being the paramount clause will necessarily apply to all the proceedings decided by the High Court..."
“14. Consequently it is not possible to agree with the conclusion to which the High Court reached that because the two learned Judges of the High Court deciding the review petition did not agree and gave contradictory opinions regarding the merits of the review petition the decision of the review petition had to be as laid down by O. XLVII R.6, CPC. Consequently, the said decision of the High Court dismissing the Miscellaneous Civil Application No. 1939 of 1995, rendered on 25th October, 1996 cannot be sustained and will have to be set aside. As a logical corollary to this decision of ours Miscellaneous Civil Application No. 1939 of 1995 is directed to be restored to the file of the High Court of Gujarat with a direction that in view of the conflicting opinions expressed by the Bench of the High Court consisting of H. L. Gokhale and M. S. Shah, JJ., who earlier heard the review petition, the questions arising for decision in the review proceedings on which the aforesaid two learned Judges either differed in their opinions or did not concur will have 10 be referred for opinion of the third learned Judge of the High Court as per Clause 36 of the Letters Patent. For that purpose the remanded review petition will have to be placed before the Bench of H. L. Gokhale and M. S. Shah, JJ. to enable them to state the points of their difference as per Clause 36 of the Letters Patent for being placed for consideration of the third learned Judge. The Hon'ble Chief Justice of the High Court is requested to assign the review petition to the appropriate Bench and thereafter to the third learned Single Judge for deciding these remanded proceedings as per Clause 36 of the Letters Patent at the earliest. It is obvious that the third learned Judge will be entitled to consider all the aforesaid questions arising out of the difference of opinion between the two learned Judges, whether they are questions of fact or questions of law, and the review petition ultimately will be decided in the light of the decision of the third learned Judge, as per the procedure laid down by Clause 36 of the Letters Patent. It is obvious that if the ultimate decision in the review proceedings, as remanded as per this order of ours, goes against the appellant it will be open to the appellant to challenge the said final decision in accordance with law.”
In the case of Kishore Kanji Patel vs. State of Gujarat reported in 1998 (3) GCD 2311, the Hon’ble Gujarat High Court has held as below:
“6. Let me first locate and fix as to what exactly, I am required to do. As a third Judge, I understand, I have been asked to express opinion on the point or points on which both the learned Judges have differed. This takes me to a moot procedural question, as to whether the present reference is competent in absence of point of difference formulated by the differing Judges. At the outset, it must be pointed out that Section 392 of the Cr.P.C. as referred by the Joint Registrar is not attracted in the present case. Provisions of section 392 is attracted in cases of criminal appeal heard by a Division Bench. The present application is a Special Criminal Application under Article 226 of the constitution. The relevant provision, therefore, is Rule 186 of the Gujarat High Court Rules, 1993 which provides that in the case of difference of opinion between the Judges composing the Division Bench, the point of difference shall be decided in accordance with the procedure referred under section 98 of the Civil Procedure Code. Sub-clause (iii) of section 98 of the Rules reads as follows:
"Nothing in this section shall be deemed to be altered or otherwise affect any provision of the Letters Patent of any High Court."
7. The High Court of Gujarat is governed by letters patent which also applies to parent High Court of Bombay and on bifurcation on 1.5.1960, the said Letters Patent continued to apply to the Gujarat High Court as successor High Court to the erst-while High Court of Bombay. The Letters Patent are, therefore, the charter which would govern proceedings of the High Court and the procedures to be followed by it for deciding the matters falling within its jurisdiction. Clause 36 of the Letters Patent provides procedure of reference in the event of two Judges consntituting the Bench have differed in opinion as to the decision to be given on any point. The Apex Court in RELIANCE INDIA LTD. vs. PRAVINBHAI J PATEL, reported in 1997 (7) SCC 300, has held thus -
"Charter High Courts governed by the Letters Patent which were original Charter High Courts which were the successor High Courts like, Gujarat High court, would be governed by the special procedure laid down by clause 36 of Letters Patent".
Now to understand the procedure clause 36 deserves to be noticed, which reads as follows:
"36. Single Judges and Divisional Courts – And we do hereby declare that any function, which is hereby directed to be performed by the said High Court of Judicature at Bombay in the exercise of its original or appellate jurisdiction, may be performed by any Judge or any Division Court thereof, appointed or constituted for such purpose, in pursuance of section One hundred and eight of the Government of India Act, 1915, and if such Division Court is composed of two or more Judges, and the Judges are divided in opinion as to the decision to be given on any point, such point shall be decided according to the opinion of the majority of the Judges, if there shall be a majority, but if the Judges should be equally divided they shall state the point upon which they differ and the case shall then be heard upon that point by one or more of the other Judges and the point shall be decided according to the opinion of the majority of the Judges, who have heard the case including those first heard it"
On analysis of clause 36, it emerges that when the Judges constituting the Division Bench are equally divided in opinion on any point then
(i) they shall state the point upon which they differ;
(ii) the case shall then be heard upon that point by one or more of the other Judges;
(iii) the point shall be decided according to the opinion of the majority of the Judges who have heard the case including those first heard it.
Thus, the scheme of clause 36 is that, when the Judges are equally divided, they must state in clear terms the point on which they differ, instead of leaving to third Judge to search the point of difference, pose the same and then express opinion. If the learned differing Judges sit together for formulating the point of difference, it will also give opportunity to narrow down the point of difference. After the point of difference is formulated, the matter shall be assigned to another or third Judge by the Chief Justice. The third Judge shall then hear the case on that point i.e. the point stated by the differing Judges and express his opinion on that point. For convenience, "that point" can be referred as point of reference. The case, thereafter again be placed before the same Bench which heard the matter first, i.e. the Bench which differed. The Bench shall decide the case according to the opinion of the majority. Thus, the first requirement is the formulation of point of difference by the differing Judges. The third Judge can hear the case only on the point stated or formulated by the learned differing Judges. In case, the point is not stated by the differing Judges, there is no reference, as the third Judge has not been asked to hear the case on a specific point and express his opinion. Thus, in my view such a reference would be incompetent.
……….Admittedly, no points have been stated by the differing Judges. In absence of points formulated on which both the learned Judges have equally divided, in my view, the Reference is incompetent. The question that whether such question can now be formulated is to be considered by the concerned Division Bench. Since one of the Hon'ble Judges K J Vaidya, J. has retired, whether the entire matter requires re- hearing is also a matter which requires to be considered by the Division Bench to which this matter is assigned by the Hon'ble Acting Chief Justice. The Reference is accordingly returned being incompetent.
8. Let the matter be placed before the Acting Chief Justice for appropriate direction.”
That pursuant to the passing of the aforesaid order dated 15th June 1998 by the Single Judge (Coram: Hon’ble Mr.Justice N.N.Mathur) in the case of Kishor Kanji Patel vs. State of Gujarat, reported in 1998 (3) GCD 2311, the Division Bench comprising the Hon’ble the Chief Justice Mr.D.M.Dharmadhikari and Hon’ble Mr.Justice J.M.Panchal (since by then Hon’ble Mr.Justice K.J.Vaidya being one of the Hon’ble Judges comprising the earlier Division Bench had retired) passed the following order dated 3rd July 2000:
“1. In deciding this Special Criminal Application filed against the order dated 17.8.1992 passed by the Inspector General of Prisons refusing to grant parole to the applicant, the learned Judges constituting the Division Bench namely, Justice K.J. Vaidya (now retired) and one of us (Justice J.M.Panchal) agreed in the conclusion that the present application seeking parole be dismissed, but Justice Panchal did not agree with the remarks, strictures and observations, including directions made by Justice K.J.Vaidya (now retired) in his separate judgment. In view of the above difference of opinion between the two Judges the case was referred to a 3rd Judge, namely, Justice N.N.Mathur, who by his order dated 15.6.1998 has returned the reference to the Division Bench on the ground that as required under Clause 36 of the Letters Patent read with Rule 186 of the High Court Rules, the Judges who had differed in their opinion should have formulated the point of difference for the decision by the 3rd Judge.
2. It is on the basis of the above mentioned order made by the 3rd Judge Justice N.N. Mathur that this case has been relisted for hearing before our Division Bench.
3. After going through the opinions expressed by the two Judges constituting the Division Bench, the following point on which the Judges have differed, is being referred for decision by a 3rd Judge, to be nominated by the Chief Justice.
“Whether in deciding the application for grant of parole and dismissing the same there was any justification for the learned Judge (Justice K.J. Vaidya, now retired) to pass remarks, observations and directions as contained in his judgment?”
Let the matter be placed before the Chief Justice on administrative side for nominating the 3rd Judge.”
Subsequently in another identical situation before the Hon’ble Gujarat High Court, the third Judge nominated by the Hon’ble Acting Chief Justice to decide the difference of opinion which arose between Judges of the Division Bench in SCA No.12632 of 2011 in the case of State of Gujarat through Chief Secretary Vs. H.E. the Governor of Gujarat through Principal Secretary & Ors. and cognate matters, while following the judgments referred to in the preceding paras, passed an order dated 24th November 2011, extract of which is reproduced herein below:
“15. I am in agreement with the view taken by the learned Single Judge in Kishore Kanji Patel's case. Counsel for the parties also agree that the reference is contrary to clause 36 of the Letters Patent. I am of the considered opinion that since the differing Judges of the Division Bench have not stated the points on which they have differed nor they have framed or formulated the questions which are to be decided by the third Judge, the Reference made by the Division Bench on 11.10.2011 is in violation of Rule 186 of Gujarat High Court Rules, 1993 and clause 36 of the Letters Patent. I uphold the preliminary objection and hold that the reference is incompetent. The Reference is accordingly returned being incompetent.
16. Let the matter be placed before the Hon'ble Acting Chief Justice for appropriate orders.”
In the case of Colourtex vs. Union of India, reported in 2010 (257) ELT 14 (Guj.), the Hon’ble Gujarat High Court has held as below:
“8. Respondent No.4, one of the Members who originally constituted the Bench, has treated this order of the President as a direction, as can be seen from the opinion expressed on 7th March 2006 which is under challenge. Accordingly, respondent No.4 has formulated five points of difference stated to arise from two opinions. Pursuant thereto, it appears that the President has assigned the matter to respondent No.5 as Third Member and the appeal has, accordingly, been posted for hearing as per communication dated 28th March 2006.
9. On behalf of the petitioners, it is submitted that the President of the Tribunal has erred in making an order on the administrative side, directing the Respondent No.4, i.e. the Member who is still in service to formulate the point or points of difference of opinion on the basis of the two opinions expressed by Respondent No.4 and the Member who has already retired. It was submitted that a plain reading of Section 129C(5) of the Act indicates that there can be difference of opinion only between Members who constitute a Bench and in absence of a Bench, no such point or points could have been recorded by the remaining Member of the Bench originally constituted. It was submitted that a direction may not be issued to the Tribunal to hear the appeal afresh by a Division Bench and not only a Third Member.
10. … … …
11. In the judgment rendered on 12th January 2006 in the petitioner’s own case in Special Civil Application No. 24130 of 2005 [2006 (198) E.L.T. 169 (Guj.) = 2008 (9) S.T.R. 426 (Guj.)], the High Court has elaborately dealt with the provisions of Section 129C(5) of the Act as can be seen from paragraph Nos.15 to 20. Unfortunately, the direction issued in paragraph No.23 of the said judgment has not been understood either by the President or the Member who originally constituted the Bench, namely, Respondent No.4.
12. It is necessary once again to refer to the provisions of Section 129C(5) of the Act, which reads as under:
“129(5) : If the members of a Bench differ in opinion on any point, the point shall be decided according to the opinion of the majority, if there is a majority; but if the members are equally divided, they shall state the point or points on which they differ and make a reference to the President who shall either hear the point or points himself or refer the case for hearing on such point or points by one or more of the other members of the Appellate Tribunal and such point or points shall be decided according to the opinion of the majority of these members of the Appellate Tribunal who have heard the case, including those who first heard it.”
13. Before going to the said provision, it is necessary to briefly recapitulate that Section 129C of the Act deals with the procedure which the Appellate Tribunal may adopt. Under sub-section (1) of Section 129C of the Act, it is provided that the powers and functions of the Tribunal may be exercised and discharged by Benches constituted by the President from amongst the Members thereof. Sub-section (2) of Section 129C of the Act stipulates that a Bench shall consist of one Judicial Member and one Technical Member, subject to provisions contained in sub-section (4) which permits disposal of certain cases by Single Member upon fulfillment of the requisite conditions stipulated in the said sub-section.
14. Thereafter, sub-section (5) relates to the situation where Members of a Bench differ in opinion on any point or points. The legislative scheme therefore consisting of one Judicial and one Technical Member. It is only in a case where the issue involved is of lesser value, namely, lesser than the monetary limit set out in sub-section (4) of Section 129C of the Act that the matter is to be heard by a Single Member. In the facts of the present case, admittedly, the matter was originally placed before a Division Bench. In the circumstances, there would be no occasion for a Single Member to take up the appeal for hearing. Therefore, even without taking recourse to requirements of sub-section (5) of Section 129C of the Act, respondent No.4 could not have made an order in the guise of recording an opinion. The Bench which had originally heard the appeal was no longer in existence upon retirement of the Member (Technical) and therefore, it was incumbent upon the President to have assigned the appeal to Division Bench as required by sub-section (2) of Section 129C of the Act.
15. Even if one assumes that the said order, as reproduced by Respondent No.4 in the order dated 7th March 2006, was made by the President in compliance with direction issued by this Court in paragraph No.23 of the earlier judgment rendered on 12th January 2006, the President could not have ignored the statutory provision of Section 129C(2) of the Act once having originally assigned the appeal to a Division Bench. No direction of any Court could be read to mean that an action contrary to statutory provision is warranted by any authority.
16. In the case of Oil and Natural Gas Corporation Ltd. v.
O.L. of Ambica Mills Co. Ltd., 2005 (1) GCD (Gujarat), this High Court referred to the Apex Court decision in the case of Supreme Court Bar Association v. Union of India and Another, 1998 (4) SCC 409 and reproduced the following extracts from the said judgment:
“This power exists as a separate and independent basis of jurisdiction apart from the statutes.”
“This power cannot be used to ‘supplant’ substantive law applicable to the case or cause under consideration of the court. Article 142, even with the width of its amplitude, cannot be used to build a new edifice where none existed earlier, by ignoring express statutory provisions dealing with a subject and thereby to achieve something indirectly which cannot be achieved directly.”
Thereafter, this Court summarized the position in the following words:
Thus, even if it is accepted that the bunch of orders made by the Apex Court are under Article 142 of the Constitution, the said orders cannot be read as having ignored any substantive statutory provisions dealing with the subject i.e. winding up of a Company in liquidation and hence also the claim made by ONGC is required to be tested in light of the provisions of the Act read with provisions of The Provincial Insolvency Act, 1920.”
16. As the aforesaid judgment principally relates to powers in exercise of jurisdiction under Article 142 of the Constitution of India, it is also necessary to consider the position when the Apex Court exercises powers of an Appellate Court. In the case of Commissioner of Income Tax v. Baroda Peoples Co- operative Bank Ltd., [2006] 280 ITR (Guj.), the High Court was called upon to decide the legal position. After referring to the Apex Court judgment in the case of Ravindra Singh v. Phool Singh [1985] 1 SCC 251, the Court extracted paragraph 7 of the said judgment and thereafter, summarized the legal position in the following words:
“The legal position thus is that an order of the Apex Court cannot be understood as laying down a proposition contrary to law. The order of the Apex Court cannot and should not be construed in a manner so as to be inconsistent with the provisions of the statute as the Apex Court could not have contemplated passing an order contrary to the provisions of the Act.”
17. If the Apex Court cannot make any direction contrary to a statutory provision, the same position in law would apply to the High Court with a greater rigour, as the High /Court does not have recourse to Article 142 of the Constitution of India.
18. Insofar as sub-section (5) of Section 129C of the Act is concerned, a plain reading indicates that the section would come into play only in a case where the Members of a Bench differ in opinion on any point. In such an eventuality, the point shall be decided according to the opinion of the majority, if there is a majority. However, in a case where the Members are equally divided, meaning thereby where the Bench is constituted of even number of Members, they shall state the point or points on which they differ and make a reference to the President (emphasis supplied). If such a reference is made to the President, the President may himself hear or assign the matter on such point or points to any other Member of the Appellate Tribunal. After the President or the Third Member renders an opinion on reference, the appeals have to be decided in accordance with the opinion of the majority, and the majority has to be from amongst the Members who have heard the case and includes the Members who first heard it.
19. Thus, by no stretch of imagination or legal ingenuity, can one read and interpret the provisions to mean that even in absence of a Bench, only one of the difference and make a reference to the President. It is only in peculiar facts of the present case that this situation has come up because of the litigation that ensued between the parties. To be more precise, between the petitioners and the Tribunal, that this situation has arisen. One would have expected the President to read the provision and act accordingly considering the plain language of the provision.
20. In the circumstances, the entire exercise commencing from the order made by the President directing respondent No.4 herein to formulate the points of difference, the order (opinion) dated 7th March 2006 and the communication dated 28th March 2006 are held to be bad in law being contrary to statutory provisions and are hereby quashed and set aside. The Tribunal is directed to hear the appeals afresh without being influenced by any of the preceding proceedings. The President shall ensure that the appeals are heard in consonance with the provisions of Section 129C(2) of the Act as per the original assignment of the appeals to a Division Bench by a division Bench having territorial jurisdiction as per the position prevalent today
21. The petition is allowed, accordingly, in the aforesaid terms. Rule made absolute with no order as to costs.”
(Special Leave Petition against the aforesaid judgment has been dismissed by the Hon’ble Supreme Court, reported in 269 ELT A1 147.)”
Taking into consideration Rule 186 of the Gujarat High Court Rules couple with Section 98 of the Code of Civil Procedure, 1908 and Clause 36 of the Letters Patent Appeal leaves no room for any doubt that in case of difference of opinion between the Hon'ble Judges composing the Division Bench, the point of difference shall be decided in accordance with the procedure referred to in Section 98 of the Code. That appears to be the mandate as per Clause 36 of the Letters Patent Appeal.
In light of the binding precedents which have been relied upon, I am left with no other option but to hold that the reference is incompetent. As one of the Hon'ble Judges Ms.Justice B.M.Trivedi has been transferred to the High Court of Rajasthan, whether the entire matter requires rehearing is also a matter which is required to be considered by the Hon'ble Acting Chief Justice. The reference is accordingly returned being incompetent.
Let the matter be placed before the Hon'ble Acting Chief Justice for appropriate directions.
(J.B.Pardiwala, J.)
/moin