Doctrine of Merger and the Effect of Dismissal of SLP

The judgment or decree passed by the Court of first instance is often challenged in appeal in accordance with Appellate remedy provided under law. When the Appellate Court hears the parties on merits and passes an order, which may be in the nature of merely affirming the Judgment passed by the lower court, or modification of judgment or reversing the judgment passed by the lower Court, a merger takes place merging the judgment passed by the lower Court with that of the Appellate Court and it is the Appellate Court’s Judgment/Decree which is final, binding, authoritative and executable and the judgment passed by the lower Court sinks into insignificance and oblivion.

Rationale behind Doctrine of Merger

In Kunhayammed and Ors. vs State of Kerala and Ors.¹, a three-judge bench of the Supreme Court explicated that the logic underlying the doctrine of merger is that there cannot be more than one decree or operative orders governing the same subject matter at a given point of time. When a decree or order passed by inferior Court, Tribunal, Authority is subjected to a remedy available under law before a superior forum, then, though decree or order under challenge continues to be effective and binding, nevertheless its finality is put in jeopardy. Once the superior has disposed of the lis before it either way-whether the decree or order under appeal is set aside or modified or simply confirmed, it is the decree or order of the superior Court, Tribunal or Authority which is the final, binding and operative decree or order wherein merges the decree or order passed by the Court, Tribunal or Authority below. The doctrine of merger is neither a doctrine of constitutional law nor statutorily recognized. It is a common law doctrine founded on principles of propriety in the hierarchy of justice delivery system².

It is pertinent to note that without the application of doctrine of merger, an anomalous situation would arise, viz. if the court of first instance passes a judgment and the same is challenged before Appellate Court which after a due hearing confirms the same, the judgment passed by the Lower Court merges with the Judgment passed by the Appellate Court. In such a case the aggrieved party cannot challenge the judgment passed by the Court of First instance by seeking resort to other remedies viz. a Writ Petition under Article 226/227 of the Constitution, for the Judgment passed by the lower court is non-existent when the same is challenged and confirmed in Appeal by the Appellate Court on the principle of merger. The doctrine of merger addresses the aforesaid factual scenario and prevents an abuse of process of law and forum shopping.

In Shankar Ramchandra Abhyankar vs Krishnaji Dattatraya Bapat³ a three judge bench of Supreme Court laid down three pre-conditions for applicability of doctrine of merger viz.–

The jurisdiction exercised should be appellate or revisional.
The jurisdiction should have been exercised after issue of notice.
Judgment is pronounced after a full hearing in presence of both the parties

Then the appellate or revisional order would replace the judgment of the lower court and constitute the only final judgment. This was later followed and affirmed by the three-judge bench in Kunhayammed (supra). In Sushil Kumar sen vs State of Bihar⁴ a three judgment bench of the Supreme Court held that the doctrine of merger also applies to order passed in exercise of review jurisdiction.

In Balbir Singh vs Baldev Singh (D) Through Lrs⁵, the Trial Court passed a decree of Specific Performance of the Agreement to Sell and the Plaintiff/decree holder was directed to deposit the balance sale consideration in the Court within a period of 20 days. The Defendants challenged the judgment before the First Appellate Court which reversed the Trial Court’s judgment. The Plaintiffs then approached the High Court in Regular Second Appeal which was allowed vide order dated 24.05.2018 and the judgment of the Trail Court was restored, decreeing the Suit for Specific Performance of the Agreement subject to the Plaintiff depositing the balance sale consideration in Court. The High Court, however, did not prescribe any time limit for depositing the sale consideration unlike the Trial Court which gave 20 days’ time limit. This was followed by filing of execution petition before the Executing Court by the Plaintiff for execution of the Decree passed by the High Court, along with an application for depositing the balance consideration which was deposited by the Plaintiff on 07.09.2018. The Defendant/Judgment Debtor filed an application under Section 28 of the Specific Relief Act, 1963 for recession of Contract for non-payment of balance sale consideration by the Plaintiff within a period of 20 days as was directed by the Trial Court in its Decree. The aforesaid application was dismissed by the Executing Court which led to the Defendants/Judgment Debtors filing Revision Petition before the High Court which also came to be dismissed affirming the order of the Executing Court. The Defendants then approached the Supreme Court by way of filing Special Leave Petition.

The Supreme Court expounded upon the doctrine of merger and held that once the High Court allowed the Second Appeal there was a merger of the judgment of trial court with the decision of the High Court. Once the High Court as an appellate court in second appeal renders its judgment, it is a decree of the second appellate court which becomes executable hence, the entitlement of the decree holder to execute the decree of the second appellate court cannot be defeated. The Court further added that since the High Court, in its Judgment/Decree did not specify any timeline for deposit of money, it was incorrect on the part of the Defendant to say that since the trial court had directed the balance consideration be paid in 20 days, the same direction would be applicable even after the judgment of the High Court in second appeal.

Application of Doctrine of Merger with respect to dismissal of Special Leave Petition

An aggrieved party can invoke the extra ordinary powers of the Supreme Court under Article 136 of the Constitution by filing a Special Leave Petition for challenging any order, judgment, or decree passed by any Court or Tribunal in India. However, the jurisdiction of the Supreme Court under Article 136 is extremely discretionary as the right to file SLP is not a statutory right conferred upon a party but a right conferred by the Constitution of India under Article 136. Under this extra ordinary jurisdiction, the Supreme Court only intervenes to address a substantial question of law, or when it is shown grave injustice would be caused if the Supreme Court does not intervene. Given the narrow scope, the Supreme Court more often than not dismisses the SLP without even hearing the Petitioner on merits by a non-speaking order. In such a scenario when a SLP is filed challenging a judgment of the High Court and the same is dismissed by a non-speaking order, does that stand to reason that the judgment of the High Court now stands merged with the Order of dismissal passed by the Supreme Court in the SLP, making the Judgment of the High Court sacrosanct and not amenable to any further challenge? Can the Petitioner still seek review of the Judgment passed by the High Court by filing a Review Petition before the High Court after dismissal of the SLP?

A three-judge bench of Supreme Court in Kunhayammed (supra) expounded upon the applicability of the doctrine of merger vis-à-vis dismissal of SLP and explicated in which kind of an Order of dismissal of SLP, the doctrine of merger shall apply. In this case some individuals filed a case before the Forest Tribunal against the State, pertaining to land dispute, which was allowed by the Tribunal, holding that the land did not vest in the Government. The State that then preferred an appeal before the High Court which was dismissed vide order dated 17.12.1982, which led the State to file an SLP before the Supreme Court which also came be dismissed by the following non-speaking order-

“Special Leave Petition is dismissed on merits”

Subsequently, the State filed a Review Petition before the High Court seeking review of the Order dated 17.12.1982 against which a challenge under the SLP had already been dismissed by the Supreme Court by the above order. The Respondents raised preliminary issue of maintainability which was dismissed by the High Court and the matter was posted for hearing on merits. Against this Order the Respondents filed SLP before Supreme Court on inter alia grounds that the Order dated 17.12.1982 passed by the High Court stood merged with the Order of dismissal of SLP and therefore, the said Order could not be subjected to a further challenge on the principle of merger.

Two Stages of Special Leave Petition

The Supreme Court in Kunhayammed (supra) explained that there are two stages of Special Leave Petition viz. –

Granting Special Leave to Appeal– This is the first stage at which the Supreme Court considers whether to grant leave to appeal or not. The Petitioner is still outside the gate of entry though aspiring to enter the appellate arena of Supreme Court. Whether he enters or not depends upon the fate of his petition for special leave. If the petition seeking grant of leave is dismissed, it is an expression of opinion by the court that a case for invoking appellate jurisdiction was not made out.
Hearing the Appeal- If leave to appeal is granted the appellate jurisdiction of the court stands invoked; the gate for entry in appellate arena is opened.

The Supreme Court culled out the differences between the above two stages and clarified that there is a difference between an order of dismissal of Special Leave Petition and an order of dismissal of appeal, in the case of former, the doctrine of merger does not apply, even if the order of dismissal is non-speaking, however, in case of the latter, when after granting leave to appeal, the Court hears the appeal and then dismisses it, even though by a non-speaking order, the doctrine of merger applies. In that case the Supreme Court upholds the decision of the High Court or of the Tribunal.

When will order of Dismissal of SLP would operate as merger of the judgment of lower court with that of the Supreme Court

In what particular order of dismissal of SLP, the order of the lower court would stand merged with the order of dismissal of SLP, can be tabulated herein below, on the basis of the ratio laid down by the Supreme Court in Kunhayammed (supra)-

S.N.	Order of Dismissal Of SLP	Whether Doctrine of Merger will apply
1.	Special Leave Petition is dismissed by a non-speaking order.	Doctrine of Merger will not apply. In this case it is open to the aggrieved party to move High Court for filing Review. Mere rejection of special leave petition does not take away the jurisdiction of the court, tribunal, or forum whose order forms the subject matter of petition for special leave to review its own order if grounds for exercise of review jurisdiction are shown to exist.
2.	Special Leave Petition is dismissed, however, the order of Dismissal of SLP is supported by reasons.	Doctrine of Merger will not apply, however, the reasons stated by the court while dismissing the SLP would amount to declaration of law under Article 141 of Constitution. The reasons so stated by the Supreme Court would be binding on all courts and tribunals in India and also the parties to the SLP. In such a situation the Order against which the Special Leave was sought, still remains open for a further challenge, example review before High Court, however, the parties are precluded from raising any points or issues, which remains adjudicated by the reasons provided by the Supreme Court while dismissing the SLP.
3.	The Order of dismissal of SLP states “Dismissed in limine”	Doctrine of Merger will not apply. In our opinion, the order is final in the sense that once a special leave petition is dismissed, whether by a speaking or non- speaking order or whether in limine or on contest, second special leave petition would not lie. However, this statement cannot be stretched and applied to hold that such an order attracts applicability of doctrine of merger and excludes the jurisdiction of the Court or authority passing the order to review the same.
4.	The Order of dismissal of SLP states “Dismissed on merits”	Doctrine of Merger will not apply. The dismissal would remain a dismissal by a non-speaking order where no reasons have been assigned and no law has been declared by the Supreme Court. The dismissal is not of appeal but of the special leave petition. Even if merits have been gone into, they are the merits of the special leave petition only.
5.	After granting Special Leave to Appeal, the Supreme Court dismisses the Appeal, even though by a non-speaking order.	Doctrine of Merger will apply. In that event, it is not permissible to move the High Court by review because the judgment of the High Court merges with that of this Court. Any order passed after granting leave to appeal would be an appellate order and would attract the applicability of doctrine of merger. It would not make a difference whether the order is one of reversal or of modification or of dismissal affirming the order appealed against. It would also not make any difference if the order is a speaking or non-speaking one.

Applying the above ratio to the facts of Kunhayammed (supra), the Supreme Court held that the SLP filed by the Petitioners was dismissed by a non-speaking order and thus could not attract the applicability of doctrine of merger. In such circumstances the order of the High Court dated 17.12.1982 did not merge with the order of the dismissal of SLP, dated 18.07,1983. Therefore, the High Court could still review its order dated 17.12.1982, after the SLP was dismissed.

The ratio in Kunhayammed (supra) was called into question in Khoday Distilleries Ltd. vs Sri Mahadeshwara Sahakara⁶ wherein a three judge bench of the Supreme Court was called on to decide whether review petition is maintainable before the High Court seeking review of a judgment against which the special leave petition has already been dismissed by the Supreme Court. The Petitioner inter alia contended that the ratio in Kunhayammed (supra) is contrary to the ratio laid down Abbai Maligai Partnership Firm and Another v. K. Santhakumaran and Others⁷ wherein the Supreme Court inter alia held that when the judgment and decree passed by the High Court is affirmed by the Supreme Court with the dismissal of the SLP, there is no question of entertaining review petition by the High Court, thereafter.

The Supreme Court clarified that there is no conflict in the above two judgments and the judgment rendered in Abbai Maligai Partnership Firm (supra) was decided on its particular facts, with no discussion of principle of law whereas Kunhayammed (supra) is an elaborate discourse based on well accepted propositions of law and lays down the correct law.

Whether Dismissal of SLP “as withdrawn” entitle the Petitioner to file SLP again impugning the same order of Court below?

The Dismissal of SLP by a speaking or a non-speaking order does not attract the applicability of doctrine of merger, thereby entitling the Petitioner to file review petition before the High Court seeking review of its judgment which was impugned in the SLP which was however, dismissed by a speaking/non-speaking order. This position of law is clear, emanating from Kunhayammed (supra) and recently affirmed in Khoday Distilleries (supra). However, is the Petitioner entitled to file a second SLP when the High Court dismisses the Review Petition? This issue fell for consideration in the matter of S.Narahari & Ors. vs S.R. Kumar & Ors.⁸ wherein the Petitioner had filed SLP impugning the order passed by the High Court, dismissing the First Appeal. However, Petitioner withdrew this SLP with liberty to file Review Petition before the High Court. Subsequently, the High Court dismissed the Review Petition as well which led to the Petitioner filing a second SLP before the Supreme Court challenging the original order passed by the High Court and the order of dismissal of Review Petition. The Supreme Court observed that in Khoday Distilleries (supra) the Court had upheld the position of law that when the SLP is dismissed by a non-speaking or a speaking order, it does not attract the applicability of doctrine of merger. In such a situation where the dismissal is by way of withdrawal of the SLP, the remedy of filing a fresh SLP would still persist and if the remedy of filing review in the High Court is allowed then the same reasoning cannot arbitrarily exclude the filing of a subsequent SLP. However, the Supreme Court observed that such a procedure if allowed, would open floodgates of litigation. Since the decision in Khoday Distilleries (supra) was rendered by a three judge bench, the Supreme Court referred the matter to a larger bench to put a quietus to the issue. The matter is still pending at the time of writing this article.

A similar situation arose in the matter of Satheesh V.K. vs The Federal Bank Ltd.⁹. However, there is one peculiarity in this matter, the Petitioner at the time of seeking withdrawal of the first SLP, did not seek permission to file review before the High Court as opposed to the factual position in S.Narahari (supra) wherein permission to file review before High Court was sought. In Satheesh V.K. (supra) the Petitioner, filed Review Petition before the High Court without seeking leave of the Supreme Court, which came to be dismissed, leading the Petitioner to file a second SLP before the Supreme Court impugning the original order passed by the High Court and the order of dismissal of Review Petition. In such circumstances, the court observed that there is stark dissimilarity between the facts of this case and the facts in S.Narahari (supra) vis-a-vis permission to file review before High Court. Therefore, the Supreme Court refused to take into consideration the judgment in S.Narahari (supra) and held that in such circumstances the Order XXIII Rule 1 of CPC would be applicable, a second special leave petition would not be maintainable at the instance of a party who elects not to proceed with the challenge laid by him in an earlier special leave petition and withdraws such petition without obtaining leave to file a fresh leave petition; if such party applies for a review before the court from who’s order the special leave petition was initially carried and the review fails, then he can neither challenge the order rejecting the review nor the order of which review was sought.

Exceptions to the Doctrine of Merger

Doctrine of merger aims at preventing an abuse of process of law by allowing only one Order of the Court to hold the field of law and disabling the aggrieved party from challenging the order/judgment passed by the lower court which stands merged with the order passed by the superior court. However, the courts must be cautious while applying the doctrine because if the doctrine is applied in a rigid and mechanical fashion, it could result in miscarriage of justice, prejudicing the rights of an aggrieved party. In Kunhayammed (supra), although the Supreme Court authoritatively laid down the ratio with respect to the applicability of the doctrine of merger, however, at the same time, the Apex Court cautioned that the doctrine of merger is not a doctrine of universal or unlimited application. It will depend on the nature of jurisdiction exercised by the superior forum and the content or subject matter of challenge laid down or capable of being laid, which shall be determinative of the applicability of merger.

In Vishnu Vardhan @ Vishnu Pradhan vs The State of Uttar Pradesh & Ors.¹⁰, the Respondent had filed a Writ Petition before the High Court by mischievously representing himself the sole owner of the property with respect to which he demanded compensation on account of land acquisition proceedings undertaken by the State against the said property. The High Court allowed the Writ by directing the State to provide compensation to the Respondent with a deduction of development charges. The Respondent challenged the said order in SLP which was partly allowed by the Supreme Court which set aside the direction of High Court w.r.t deduction of development charges. The Petitioner, however, who was the co-owner of the property, was left in the dark all this while by the Respondent who obtained the aforesaid orders by playing fraud upon the Courts i.e. by representing himself as the sole owner of the property for obtaining the compensation qua land acquisition proceedings. When the Petitioner came to know about the above fraud, he filed a SLP before the Supreme Court challenging the order passed by the High Court allowing the Writ filed by the Respondent for seeking compensation. The Respondent vehemently relied upon the ratio laid down in Kunhayammed (supra) and submitted that once the SLP filed by him was partly allowed, the order of the High Court which allowed the writ for compensation and the order in SLP, stood merged, not amenable to a further challenge.

The Supreme Court observed that if the ratio laid down in Kunhayammed (supra) is applied in this case, wherein the Respondent has obtained orders by playing fraud upon the court, it would lead to miscarriage of justice. Therefore, the Supreme Court carved out the following exceptions to the doctrine of merger and held that the said doctrine will not apply if the aggrieved party is able to demonstrate that-

His right of appeal should not be foreclosed because of the very rare or special circumstances(s) that is/are projected before the court;
His appeal raises an issue of seminal public importance, which was not available to be raised by the appellant who approached this court in its appellate jurisdiction in the earlier round of litigation, and also that such issue in the greater public interest requires a resolution by the Supreme Court;
Since an act of court ought to prejudice none, refusal to interfere by Court would invariably result in offending the principle of actus curiae neminem gravabit;
The earlier appellate decision is vitiated because of fraud having been practiced on Supreme Court by a party in whose favour the ruling had been made,
That public interest would be put to extreme jeopardy by reason of irretrievable consequences ensuing, if interference which is otherwise found to be warranted in law were declined solely based on the doctrine of merger.
The Supreme Court also observed that when an appeal is limited to a specific part of the judgment and order of the first-instance court, the merger occurs only to that extent, leaving the rest intact and available for future consideration. The extent of merger is determined by the subject matter of the appeal. The merger can only operate on issues which were the subject matter of the appellate court’s judgment and order and cannot have any application to issues which are not being taken on appeal by either party or which had not been touched by the appellate court.

After observing that fraud is an exception to the doctrine of merger, the Supreme Court in Vishnu Vardhan (supra) allowed the Appeal and set aside the order passed by the High Court.

Conclusion

Doctrine of Merger aims at preventing the abuse of process of law by allowing only one court order to hold the field of law and disallows the aggrieved party from exploring other avenues for challenging an order passed by a court of first instance, which already stands merged with the order of the superior court in appellate proceedings. However, the aforesaid doctrine ought not to be applied in a mechanical fashion and must be invoked on a case-to-case basis depending upon the subject matter of appeal, as observed by the Supreme Court in Vishnu Vardhan (supra). If the aggrieved party is able to show exceptional circumstances as observed by the Supreme Court in Vishnu Vardhan (supra), warranting an interference by the court, then the doctrine of merger has no applicability in those exceptional circumstances.

By Daksh Pandit