Document Fragment View

Matching Fragments

30. Learned senior counsels submit that the Apex Court in Dwarikesh Sugar Industries Ltd. Vs. Prem Heavy Engineering Works (P) Ltd. and Anr, (1997) 6 SCC 450 has deprecated the practice of the High Courts, granting injunctions against encashment of unconditional BGs and not following the law laid down by the Apex Court. When a position in law is well settled by various pronouncement of the Apex Court, it would be a judicial impropriety for the High Courts to ignore the said decisions and pass a contrary order. In about 25 reported judgments of the Apex Court on the issue of Bank Guarantees, only in three cases injunctions were granted and that too on their own peculiar facts.

52. Learned senior counsels for the petitioner have relied on the judgments in the case of Canara Bank (supra), Makhija Construction & Engg Pvt Ltd v. Indore Development Authority (2005) 6 SCC 304 and Fuerst Day Lawson v. Jindal Exports (2001) 6 SCC 356 to argue that the earlier judgment of this Court is not per incuriam. In fact, the doctrine of per incuriam is inapplicable where the earlier judgment of a co-ordinate bench is between the same parties and would have more value than being a mere legal precedent. Reliance is also placed on the judgment of Mamleshwar Prasad and Ors. v. Kanhaiya Lal (dead) through L. Rs. (1975) 2 SCC 232 for the proposition that certainty of law, consistency of rulings and conity of courts converge to the conclusion that a decision once rendered must later bind like cases. Further reliance is placed on the judgment in S.Nagraj (Dead) By LRS v. BR Vasudeva (2010) 3 SCC 353 where the Apex Court has held that principle of per incuriam has relevance to the doctrine of precedents and has no application to the doctrine of res-judicata. Attention is drawn to a paragraph from the judgment of the Calcutta High Court in Tarini Charan Bhattacharjee v. Kedar Nath Haldar AIR 1928 Cal 777 where the Court held that the doctrine of res-judicata clearly connotes that in certain circumstances the Court shall deal with the matter on the footing that it is a matter no longer open to contest by reason of a previous decision. To say that the previous decision was wrong on a point of law or otherwise and could be disregarded is an indefensible form of reasoning. Petitioner has also placed reliance on the judgment of the Apex Court in Sub-Inspector Rooplal & Anr. v. Lt Governor through Chief Secretary, Delhi & Ors. (2000) 1 SCC 644 to emphasise that once a matter is decided by a Co- ordinate Bench, it would be judicial impropriety for second Bench to disagree with the decision of the Co-ordinate Bench. In case, the second Bench was to disagree, the only option would be to refer the matter to a larger Bench.

63. In Dwarikesh Sugar Industries Ltd. (supra), the Apex Court has deprecated the practice of the High Courts in granting injunctions restraining the encashment of unconditional BGs and held that this would mean not complying with the law laid down by the Apex Court and would amount of judicial impropriety. The Apex Court held that the High Court was not justified in invoking the principle of unjust enrichment and denying the appellant the right to encash the BG. It was further observed that if the High Court had taken the trouble to see the law on the point, it would have been clear that in encashment of BG, principle of undue enrichment has no application. Relevant para of judgment reads as under:

32. When a position, in law, is well settled as a result of judicial pronouncement of this Court, it would amount to judicial impropriety to say the least, for the subordinate courts including the High Courts to ignore the settled decisions and then to pass a judicial order which is clearly contrary to the settled legal position. Such judicial adventurism cannot be permitted and we strongly deprecate the tendency of the subordinate courts in not applying the settled principles and in passing whimsical orders which necessarily has the effect of granting wrongful and unwarranted relief to one of the parties. It is time that this tendency stops."