Supreme Court Establishes Eight Principles Regarding the Scope of Review, Stating that Observations by a Coordinate Bench are Inadequate Grounds for Revisiting a Judgment
The Supreme Court, in its dismissal of the review petitions filed against the 2022 judgment in the case of State Tax Officer v. Rainbow Papers Ltd, emphasized that observations made by a coordinate bench about a judgment cannot serve as a basis for reviewing it. The Rainbow Papers case, presided over by Justices Indira Banerjee and AS Bopanna, concluded that a resolution plan under the Insolvency and Bankruptcy Code 2016 must not overlook statutory dues to the Government.
The petitioners, in their request for a review of the Rainbow Papers judgment, relied on comments from another coordinate bench in the case of Paschim Anchal Vidyut Vitran Nigam Limited vs. Raman Ispat Private Limited and Others 2023. This bench had mentioned that Rainbow Papers had not taken into account the 'waterfall mechanism' in Section 53 of the IBC.
However, the bench, consisting of Justices AS Bopanna and Bela Trivedi, rejected this argument, emphasizing that observations made by a coordinate bench could not be the basis for reviewing the judgment. They noted that the well-established legal principle dictates that a coordinate bench cannot comment on or challenge the decisions of another bench of equal strength. Any disagreement with the legal position of another bench of equal strength should prompt a referral to a larger bench for a definitive decision to prevent conflicting judgments and maintain legal certainty.
Furthermore, the Court asserted that the petitioners had failed to demonstrate any mistake or clear error on the face of the record in the impugned judgment. They also failed to meet the Court's criteria for reviewing judgments, as outlined in various precedents. These criteria include the presence of a self-evident error on the face of the record, substantial and compelling circumstances justifying a departure from the finality of a judgment, and the prevention of review petitions from becoming disguised appeals. Under the guise of a review, rearguing settled issues is not permissible, and changes in law or subsequent decisions alone are not sufficient grounds for a review.
Case title: Sanjay Agarwal v. State Tax Officer