15/03/2024
MSME CASE
BRIEF ARGUMENT NOTE BY ADV. NEDUMPARA
1. This Hon’ble Court during the course of hearing of the of the above Review Petition has been pleased to make it expressly clear that its judgment dated 11.01.2024 holding that the benefit of the notification dated 29.05.2015 can only be extended to those MSMEs which have applied for the benefit of the ‘Framework for Resolution of Stress’ supported by an affidavit and not otherwise, is erroneous. This Court was further pleased to express the view that it happened to commit the said error of law because the Notification dated 17.03.2016 of the Reserve Bank of India was not brought to its notice by any of the parties.
2. The Respondent Bank did not at all contradict the said view of this Hon’ble Court, much less utter even a word in support of the judgment under review that it lays down the correct exposition of law. There was no dispute at all on the merits, namely that the judgment dated 11.01.2024 is a nullity, contrary to the law and is liable to be set side. The Banks also did not dispute the fact that the Banks grossly violated the law and did not constitute even a single committee as mandated by the notification, neither on its own nor at least at the instance of the borrowers. The banks/RBI also did not contradict the view expressed by the court that the RBI absolutely abdicated its duty to enforce the notification.
3. The only contention of the Banks/NBFCs is that the judgment under review was challenged before the Supreme Court by one of the Review Petitioners, and the Supreme Court its order dated 25.01.2024 was pleased to deny leave to appeal and therefore, no review will lie, not only by the said Petitioner but even by those Petitioners who were not before the Supreme Court. According to the Bank, the fact that the Supreme Court, did not at all, in the course of the hearing discuss the legal issues involved but only dealt with the facts of a particular case, is irrelevant. Two manifestly absurd contentions.
4. The plea of the Petitioners is that even if it has to be assumed for arguments sake that the Supreme Court had granted leave and a civil appeal came to be registered and the Supreme Court finally heard and affirmed the judgment of the Bombay High Court, the judgment under review is still amendable to challenge even by the very same Petitioner, for there cannot be an estoppel against law. Because the judgment under appeal did not at all involve any element of adjudication on facts. To make it abundantly clear, had there been an element of adjudication on facts, no review will lie.
5. An erroneous judgment, one which is contrary to the statute, even if it is that of a 7-judge constitution bench of Supreme Court, on a pure question of law, is null and void, still born and non est, and it can be challenged directly as well as in collateral proceedings. This is the ratio in Antulay’s case . No judgment can be read as a statue, and if a judgment is in conflict with the letter, spirit and purpose of a statute, it is the statute which will prevail and not the judgement. Such a judgment is one rendered per incuriam.
6. The judgment of the 7-judge constitution bench in Antulay’s case is a celebrated one. It a mini constitution in itself, a treatise on jurisprudence. Unfortunately, the Courts in actual practice, as the author of this note can testify from his own personal experience, pay little heed to it. On the contrary, obscure judgements, even those contrary to fundamentals, rendered more recently are worshipped.
7. A 9-judge constitution bench of the Supreme Court has reaffirmed the doctrine that there is no estoppel against law and that questions of law are amenable for review eternally, in the Judges-2 case . A 7-judge constitution bench in S.P Gupta’s case held that the word consultation does not mean concurrence or primacy and that the power of appointment is vested in the executive. The correctness of the same was doubted and a petition under Article 32 came to be instituted even before the ink dried and the Supreme Court reviewed its judgment in S.P Gupta’s case. These principles squarely apply in the instant case, with equal force.
8. The court is a servant of justice and it is duty bound to act in accordance with law. It has no power to act contrary to law. No judge is free to err on law. In contrast, a judge is free to err on facts. A judge is free even to hold an innocent man guilty of murder and sentence him to death. Such an error on facts is within its jurisdiction. The instant review is not sought on the ground of a factual error.
9. The principle behind this is that no judge can assuredly ascertain the true facts, much less at all times assuredly exercise his discretion wisely. Injustice as a result of erroneous decision on facts is permitted because without the power to bind the parties before it even by an erroneous decision, the legal system cannot subsist. The concept of res judicata, the very foundation on which our justice delivery system is built, mandates that there shall be finality of litigation, that no man shall be vexed twice for the same cause if it was once finally adjudicated by a competent forum in accordance with law. In short, a judge can err on facts and not on law.
10. There is no estoppel against law. There is no concept of finality so far as law is concerned. And therefore, an error of law which a court has committed is open to correction/challenge infinitely, wherever and whenever it is sought to be enforced (Antulay, Kiran Singh , Mafatlal , Dulabhai , etc).
11. Actus Curae Neminem Gravabit
The Review Petitioners’ case is that the Court rendered the judgment date 11.01.2024 without taking into account Paragraphs 1, 2, 4 etc., of the Notification. It is the duty of the Court to correct it suo moto or at least when it is brought to its notice.
12. Ex Debito Justistae
The Courts exist to do justice and it is its bounden duty to correct its mistake and to do justice. Procedure cannot stand in its way when it comes to correcting an error of law.
RESPONDENTS’ CASE
13. The Respondents have said nothing on the merits of the case, namely, in support of the judgment dated 11.01.2024. They conceded that the judgment is wrong, but not too surprisingly insisted that the injustice be perpetuated. The Respondents’ only case is that the SLP filed by one of the Petitioners was dismissed in limine and that the same will be binding on others.
14. Res inter alios acta alteri nocere non debet
The said submission of the Respondents is in ignorance of law. It is contrary to the maxim res inter alios acta alteri nocere non debet, namely that nobody is bound by a judgment to which he was not a party. There is so much of so much of unfamiliarity of these fundamental principles among lawyers and judges that often litigants are made to suffer because of judgments of which they were not parties and are no way binding on them.
15. This plea was further countered on the twin premise that:
(a) even if the Supreme Court had admitted the SLP, heard the Civil Appeal and finally upheld the order of the High Court, a review will still lie (Explanation - Paras 5 to 9 above). The Review Petitioners are not required to canvas this proposition because the sole SLP filed by one among them was dismissed limine.
(b) The mere refusal to grant leave to appeal will not bar review (Kunhayammed’s Case ).
16. The Respondents by relying on Nivruti v. State of Maharashtra rendered by this Court contended that the rejection of the SLP as mentioned above will bar the instant review. This argument of the Bank is contrary to the principles laid down in Kunhayammed (para no. 44). The judgment in Nivruti is one rendered per incuriam and sub silentio, both. Even otherwise, the judgment in Nirvuti has no application to the facts of the instant case.
17. The judgment of this Court in Anupam Electricals , cited by the Respondents has no application to the facts of the instant case. It constitutes no binding precedent at all, for it is one rendered per incuriam and sub silentio being in conflict with A.R Antulay’s case, Mafatlal, Kunhayammed, etc.
18. The judgment of the Hon’ble Supreme Court in Abbai Maligai has no application to the facts of the instant case. What is applicable and binding as precedent to the facts of in the instant case are fundamental principles of law as reaffirmed in Kunhayammed v. State of Kerala. The obscure and contradictory judgements relied on by the Respondent will leave the exasperated common man with no option than to invoke the almighty to deliver them from the tyranny of precedents.
19. Ordinarily, in a case as the instant one where this Court has in the course of hearing been pleased to make abundantly clear that it had erred in its judgment and the error happened to occur because the Notification dated 16.03.2016 was not brought to its notice, there is really no need to file an argument note. However, it is done as a matter of caution. The author of this document earnestly believes, based on his own experience as a lawyer for over four decades, that judges cannot be expected to always assuredly do justice because they are too fallible beings called upon to exercise a divine function, namely to give deliverance to their fellow men.
20. The error judges commit universally for which mankind has so far not been able to find a remedy is that judges decide first, sometimes against reason, and then give reasons to justify the conclusions their non-conscious, sub-conscious nay unconscious mind has already arrived at, instead of arriving at conclusions based on reason. It is this very peril which the author fondly hopes to remedy.
Mathews J. Nedumpara
