Res judicata gets applied even to decisions in writ jurisdiction: SC

The Supreme Court has said that the principle of res judicata gets applied even to petitions arising for decision in the writ jurisdiction under Article 226 of the Constitution. 

A bench of Justices Dipankar Datta and Sandeep Mehta said, for the principle of res judicata to be applied in the subsequent proceeding, it must be between the same parties and the cause of action of the subsequent proceeding must be the same as in the previous proceeding. 

The bench pointed out that the Supreme Court in the case of Satyadhyan Ghosal Vs Deorajin Debi (1960) has succinctly noted that the principle of res judicata is essential in giving a finality to judicial decisions.

With regard to applicability of the principle on writ petition, the bench said, if any authority is required, one may profitably refer to the decision in T P Moideen Koya Vs State of Kerala (2004).

The court dismissed civil appeals filed by Puja Ferro Alloys P Ltd and others in the matter concerning rebates on electricity charges for running industrial units in the State of Goa.

"Applying the principles to the instant case, we have no doubt in our minds that the High Court was right in holding that the appellant companies before it are not entitled to the rebate and the impugned demand notices do not suffer from any vice including that of illegality," the bench said.  

It noted this was the third round of litigation before the court regarding the issue of grant of relief of rebate, but not between the same parties.   

By a notification of June 27, 1988, the first respondent-State of Goa determined tariff applicable to electricity bills issued from July 01, 1988. ii. By a notification of September 30, 1991 issued under Section 23 read with Section 51-A of the Indian Electricity Act, 1910 , the state determined tariff whereby industrial units which applied for availing High-Tension or Low-Tension power supply for bona fide industrial activities were held entitled to a rebate of 25% on the tariff chargeable under the notification of June 27, 1988 for a period of five years from the date on which the electricity supply was made available.  

By a demand notice of February 21, 2011, the respondents sought recovery from Puja Ferro, the lead appellant-company, under Section 3 of the 2002 Act, an amount of Rs 1,36,30,072. Aggrieved by the impugned demand notice, the appellant-company preferred a writ petition before the high court. Similar demand notices were served on the other appellant-companies leading them too to file their respective writ petitions before the high court.

The division bench of the high court dismissed the batch of writ petitions filed by the appellant-companies and thereby upheld the demand notices. Review applications filed against the impugned judgment and order were also dismissed by the high court holding that no error apparent on the face of the record was shown to exist.   

In these appeals, the court considered whether the appellant-companies were covered by the notification of September 30, 1991 for the purpose of availing 25% rebate on the tariff chargeable for availing power supply.   

In 2002, the State of Goa enacted the Goa (Prohibition of Further Payments and Recovery of Rebate Benefits) Act, 2002. In GR Ispat Ltd Vs Chief Electrical Engineer, (1999), the high court noted that many of the companies did not complete their respective period of five years to get the rebate on July 27, 1998; therefore, they will have to forgo their claim of rebate for the unexpired period in view of the overriding public interest arising due to financial crunch. 

The high court also clearly laid down the period of entitlement of rebate up to July 27, 1998, for the respective appellant-companies. When challenged before the apex court, it was dismissed on the ground that the high court had taken a balanced view of the matter. Therefore, the judgment attained finality.

Having examined the instant matter, the bench held, "We do not have any doubt that the division bench is correct in holding that the challenge is without any legal basis as the question is squarely covered by the previous decision of the High Court in GR Ispat".

The court also said it was convinced that the writ petitions before the high court were hit by res judicata in view of its previous decision in GR Ispat which, when challenged before the top court, was upheld with the further observation that a balanced view of the matter had been taken and no interference was called for. The appellant-companies were all parties and are bound by the decision in GR Ispat.

"Having failed up to this Court, the appellant-companies could not have adopted a stand different from the one taken in the first round of litigation. They sought to challenge the demand notices by re-opening the litigation and arguing that they are entitled to the benefit for five years, which they would have been entitled to had they availed the supply of power within the time that the notification dated 30.09.1991 was in force," the bench said.

The court also dealt with the final contention that since the appellant-companies had invested in the State of Goa on the basis of the rebate granted to them, the State was now estopped from resiling and withdrawing this benefit, which had crystallised.

"In our opinion, public interest is what turns the tide against the appellant-companies. The State of Goa before the High Court in GR Ispat had specifically taken the stand that the policy of rebate was unviable resulting from financial crunch and was overriding public interest. This, the High Court accepted, unlike in the case of Pawan Alloys. This too would apply as res judicata against the appellant-companies," the bench said.

Turning to the challenge laid to the common order dismissing the review applications, the bench held that bearing in mind Order XLVII Rule 7 of the Code of Civil Procedure that no appeal lies against an order of rejection of a petition for review, "the Civil Appeals in this behalf were misconceived".

Case Title: Puja Ferro Alloys P Ltd Vs State of Goa & Ors