ORDER
Dipak Misra, J.
1. Questioning the defensibility and the legal substantiality of the order dated 15-11-2006 passed by the learned Single Judge in W.P. No. 4641/06, the present writ appeal was filed with a prayer to set aside the same. That apart, it was also mentioned in the memorandum of appeal that the writ appeal has been filed to refer the matter to a Larger Bench for consideration under Rule 12, Chapter I of the M.P. High Court Rules & Orders in respect of the following questions:
(1) Whether in view of the definition of 'manufacture' in Section 2 (14) of the M.P. Excise Act, 1950 and the license issued to manufacturer in Form CS-1 for supply of country liquor in sealed bottles is to be awarded only to the distilleries who are producers of rectified spirit under the provisions of M.P. Country Spirit Rules, 1995 and the distillers are given the license to manufacture country spirit by colouring and flavouring at the manufacturing warehouse and the manufacturing warehouse has been defined as a bonded liquor warehouse wherein rectified spirit for manufacturing of country liquor is received, stored, blended, reduced, bottled at issue strength, sealed and issued to retailers license or storage warehouse, the bottling activity is not a separate activity, but part of manufacturing activity and is not covered by 'packaging activity' as defined in Section 65 (76 g) of the Finance Act, 2005 read with definition of 'taxable service' in Section 65 (105) (zzzf) of the Service Tax Act.
(2) Whether the decision in the case of Som Distilleries (supra), in Para 11, that bottling is a part of manufacturing process. No liquor can be supplied without bottling and, therefore, it was held that in fact, bottling is a part of manufacturing process. 'Bottle' has been defined under Section 2 (2) of the Act of 1915, while another Division Bench in the case of Vindhyachal Distilleries (supra), has held that bottling and sealing charges are not included in manufacturing process and therefore, they arc covered by the definition of 'packaging activity' in Finance Act, 2005. Which of the two decision is correct?
(3) Whether there is a service provider and service receiver are different persons, no service tax is leviable under Section 65 (105) (zzzf) of the Service Tax Act. Here in this case, it is the distiller who undertakes the activity of bottling and this activity is done under the control of distiller. There may be two different departments of distillation and bottling, but the person undertaking both activities is one, i.e., the distiller. In such circumstances, the decision in the case of Vindhyachal Distilleries Ltd. (supra), does not lay down correct law.
Be it noted, the appeal was presented on 23-8-07.
2. The appeal was listed for admission on 21-9-07 and it was admitted for hearing. On 22-11-07, a Division Bench of this Court, on the basis of an application filed forming the subject- matter of I. A. No. 13536/07, impleaded the appellant Nos. 2 and 3 in the writ appeal.
3. After such impleadment, the Division Bench proceeded to state as follows:
The question that has to be decided in this appeal is whether bottling of liquor amounts to manufacture or only amounts to packaging activity.
In a judgment delivered in Som Distilleries & Breweries Pvt. Ltd. v. State of M.P. and Anr. (1997) 1 JLJ 319, a Division Bench of this Court while upholding a notification issued by the State Government of Madhya Pradesh under the M.P. Excise Act, 1995, held that the State is competent to legislate because bottling is a part of manufacturing process.
But we also find that in M/s. Vindhyachal Distilleries Pvt. Ltd. v. State of M.P. and Ors. another Division Bench of this Court has delivered the judgment on 29-4-2006, holding that bottling of liquor is a packaging activity as defined in Section 65 (76-b) of the Finance Act, 2005, on which service tax is payable.
On a reading of judgment dated 29-4-06 of the Division Bench in Vindhyachal Distilleries Pvt. Ltd. v. State of M.P. and Ors. we find that the Division Bench has elaborately discussed the provisions of the Central Excise Act, 1944 and the provisions of the Finance Act, 2005, but has not discussed the entries. List I and List II of Seventh Schedule of the Constitution of India under which the excise duty and service tax are levied by the Union Legislature and the State Legislature.
Under Entry 84 of List I of Seventh Schedule of the Constitution, duties of excise can be levied by Parliament on goods manufactured or produced in India but not on alcoholic liquors for human consumption. This is because under Entry 51 of List II of Seventh Schedule of the Constitution, duties of excise on manufacture or production of alcoholic liquors for human consumption in the State can be levied only by the State Legislature of that State. There is no specific Entry in List I of Seventh Schedule providing for levy of service tax by the Parliament. But Entry 97 of List I of Seventh Schedule is clear that power of Parliament to levy tax extends the matters which are not mentioned either List II or List III and it is under this Entry that Parliament has power to levy service tax. Since the manufacture or production of alcohol for human consumption is a matter which has been mentioned in Entry 51 of List II of Seventh Schedule in respect of which the State Legislature has got power to levy excise, Parliament cannot levy service tax on manufacture or production of alcohol for human consumption.
Thus, if bottling of liquor is held to be manufacture of liquor, excise duty is payable on such bottling of liquor under the State Excise Act but if bottling of liquor is held to be not manufacture of liquor but only a packaging activity, then the service tax is payable under the Finance Act, 2005.
These aspects have not been considered by the Division Bench in the judgment delivered on 29-3-06 in M/s. Vindhyachal Distilleries Pvt. Ltd. v. State of M.P. and Ors. and, therefore, we direct that the matter be placed before the Chief Justice for referring the following question to a Larger Bench.Whether bottling of liquor amounts to manufacture of liquor or only packaging so as to attract the service tax?
On the basis of the aforesaid order, the matter has been placed before us.
4. When the matter was taken up for hearing, Mr. Shekhar Sharma, learned Standing Counsel for the Union of India raised a preliminary objection that regard being had to the factual matrix, the Full Bench need not dwell upon the reference made by order dated 22-11-07. He has filed an objection with regard to the maintainability of the writ appeal and making the same as edifice and foundation propounded that the reference need not be answered as the writ appeal deserves to be dismissed.
5. Mr. A.M. Mathur, learned Senior Counsel, being assisted by Mr. Ashutosh Upadhyay and Mr. Sanjay Agrawal, learned Counsel for the appellants filed, a synopsis on behalf of the appellants to show that it is incumbent on the part of the Full Bench to answer the reference without adverting to the maintainability of the appeal inasmuch as that has to be dealt with by the Division Bench. The learned Counsel for the parties have commended us to a host of decisions in support of their respect rivalised contentions. Keeping in view the preliminary objection raised by Mr. Shekhar Sharma and the resistance put forth by Mr. A.M. Mathur, learned Senior Counsel, it was thought apposite to advert to the preliminary objection, the same being a vital one, in the first instance. Hence, we proceed to delineate on that aspect.
6. The present appellants, who are engaged in the manufacture and sale of different kinds of liquor, preferred W.P. No. 4641/06 under Articles 226 and 227 of the Constitution of India assailing the show-cause notices dated 23-2-06 issued by the Excise Commissioner, Motimahal Gwalior and the order dated 2- 9-05 passed by the Commissioner, Customs and Excise. The said notices and the orders were challenged as service tax was imposed pursuant to the provisions contained in the Finance Act, 2005.
7. The learned Single Judge took note of the fact that identical show-cause notices and the orders imposing service tax were issued to similarly situate persons in W.P. No. 2346/06 [M/s. Vindhyachal Distilleries Pvt. Ltd. v. State of M.P. and Ors.] and a Division Bench of this Court by order dated 29-4-2006 had expressed the opinion that the said service tax is recoverable from the service provider under Section 65 (76-b) the provisions of the Finance Act on the packaging activities as inserted by Finance Act, 2005 and further service provider can pass on the liability to the retail contractors and accordingly dismissed the writ petition in limine.
8. Being dissatisfied with the order passed in the writ petition, M/s. Associated Alcohols & Breweries Ltd., Indore and two others, filed W.A. No. 718/06. When the said appeal was pending, I.A. No. 3540/07 was filed seeking permission for withdrawal of the appellant No. 3, namely, Gwalior Distilleries Ltd., from this appeal. It is imperative and necessitous to reproduce the contents of the said application:
01. That, the appellant No. 3 (Gwalior Distilleries Ltd.) has filed this writ appeal along with appellant Nos. 1 and 2 against the imposition of service tax and the recovery thereof by the respondent No. 1.
02. That, during the pendency of the writ appeal, the appellant No. 3 has deposited the service tax recoverable along with the penalty and interest vide Form TR-6 on 20-3-07. The copy of Form TR-6 is appended herewith the application.
03. That, as the amount has already been deposited, no cause of action remains to be adjudicated by this Hon'ble Court vis-a-vis this appellant No. 3 in this writ appeal. The writ appeal in respect of appellant No. 3 has thus become infructuous.
04. That, the appellant No. 3 seeks kind permission of this Hon'ble Court to withdraw from the present writ appeal and may further be permitted to pursue any appropriate remedy available to the appellant No. 3 before the Competent Authority.
05. That the appellant No. 3 is submitting an affidavit in support of this application.
PRAYER
It is, therefore, humbly prayed that this application may kindly be allowed and this Hon'ble Court may graciously be pleased to order and permit appellant No. 3 to withdraw from this writ appeal, in the interest of justice.
(Emphasis supplied)
8. The W.A. No. 718/06 was listed on 18-7-07. The Division Bench, upon hearing the learned Counsel for the parties, passed the following order:
18-7-07
Shri S.C. Bagadia, Senior Advocate with Shri D.K. Chhabra, Advocate for the appellants.
Shri V.K. Zelawat, Assistant Solicitor General for the respondent No. 1.
Shri A.S. Kutumbale, Additional Advocate General with Ms. Mamta Shandilya, Advocate for the respondent No. 2.
Learned Senior Counsel for the appellants submits that though I.A. No. 3540/07 had been filed for seeking permission for withdrawal of appellant No. 3 from this appeal, he has instructions from all the appellants for withdrawal of this appeal.
Accordingly, the appeal is dismissed as withdrawn. It is however, made clear that the appellants shall be at liberty to approach such other Forum or seek remedy as permissible in law.
(Underlining is ours)
10. Thereafter, the present appeal was filed for setting aside the order dated 15-11-2006 and seeking reference to a Larger Bench.
11. At this juncture, it is requisite to state certain other facts as they are absolutely essential for proper appreciation of the preliminary objection. While the writ petition, i.e., W.P. No. 4641/06 was pending, a reply to the show cause was filed before the Commissioner, Central Excise on 27-10-06 and thereafter, the Commissioner, Customs and Central Excise, Indore passed an order dated 28-11-06 confirming the recovery of service tax and the penalty. Being dissatisfied with the said order, the appellants preferred an appeal on 22-2-07 before the Customs & Excise Appellate Tribunal, New Delhi (for short the 'CEAT'). Along with the appeal, an application under Section 35-F of the Central Excise Act was filed for dispensing with the pre-deposit. The Tribunal dismissed the said application on 19-6-07. How the said facts have been projected is revealable from Paragraphs 28 and 29 of the memorandum of the present appeal. They read as under:
28. That, the appellant wanted to challenge the order dated dismissing the stay application under Section 35-F of the Act passed by the Tribunal before this Hon'ble Court. As in the writ petition No. 718/06, the appellant had challenged both letter dated 9-9-05 issued by the Commissioner, Central Excise as well as the show-cause notice dated 23-2-06 issued by the Commissioner, Central Excise, the appellant could not challenge the order dated 19-6-07 before the learned Single Judge because the show-cause notice dated 23-2-06 had been challenged along with order/letter dated 9-9-06 in W.A. No. 718/06, therefore, the appellant withdrew the W.A. No. 718/06 on 18-7-07 with liberty. A copy of the said order is filed and marked as Annexure A-6.
29. That, the appellant challenged order of the Tribunal dated 17-5-07 before the learned Single Judge of this Court by W.P. No. 4160/07 and W.P. No. 4467/07. The said petition was disposed of by the learned Single Judge of this Court on 1-8-07, a copy of which is filed and marked as Annexure A-7. Learned Single Judge permitted the appellants to deposit 50% of the demanded tax up to 31-8-07. Another part of the demanded amount was also dismissed by order dated 19-6-07 (same order and it was challenged in W.P. No. 4467/07 which was also disposed of by order dated 10-8-07, Annexure A-8).
(Underlining is ours)
12. At this juncture, it is apposite to mention what was exactly challenged in W.P. No. 4160/07. The particulars of the order against which the petition was made read as under:
By this petition, petitioner is challenging the order dated 19-6-07 (Annexure P-8) passed by the respondent No. 1, Customs, Excise & Service Tax Appellate Tribunal, New Delhi in Application No. ST/STAY/491/2007 in Service Tax Appeal No. ST/98/07.
13. The learned Single Judge has also referred to the order dated 19-6-07 passed by the Customs, Excise & Service Tax Appellate Tribunal (CESTAT). In the said case, the learned Single Judge passed the following order:
Shri A.M. Mathur, learned Senior Counsel, appearing for the petitioner-Company states that as a matter of fact the petitioner-Company is a sick company and the proceedings are already pending for its restructure/rehabilitation before the BIFR. The learned Senior Counsel states that at this stage petitioner company is ready to make a deposit of 50% of the demanded tax amount, which is Rs. 82,00,000/-. Shri Mathur, further states that out of Rs. 82,00,000/- approximately Rs. 9,00,000/- has already been deposited by the petitioner-company.
The offer made by Shri A.M. Mathur, under the facts and circumstances of the case, and also keeping in view the fact that the petitioner-Company is a sick company is very fair.
After hearing learned Counsel for the parties and taking into consideration the offer made by the learned Senior Counsel, I deem it appropriate to direct that if the petitioner company makes a total deposit of Rs. 41,00,000/- (including the amount already deposited) then the Tribunal should be directed to hear the appeal filed by the petitioner-Company.
Consequently, the present petition is disposed of with a direction that if the petitioner company deposits the total amount of Rs. 41,00,000/- (including the amount of approximately Rs. 9,00,000/- deposited by the petitioner Company) then Tribunal (CESTAT), shall hear the appeal filed by the petitioner-Company in accordance with law. The amount, as directed by this Court, shall be deposited by the petitioner-Company on or before August 31, 2007.
(Emphasis supplied)
14. In W.P. No. 4467/2007, the learned Single Judge has passed the following order:
The petitioner-Company is aggrieved against an order dated June 19, 2007 passed by Customs Excise & Service Tax Appellate Tribunal (CESTAT), whereby the petitioner-Company has been required to deposit the entire amount of service tax which is claimed to be due and recoverable from it, before adjudication of the appeal filed by the company before Tribunal.
Shri A.M. Mathur, learned Senior Counsel, appearing for the petitioner-Company states that as a matter of fact the petitioner-Company is a sick Company and the proceedings are already pending for its restructure/rehabilitation before BIFR. The learned Senior Counsel states that at this stage petitioner company is ready to make a deposit of 50% of the demanded tax amount, which is Rs. 29,00,000/-.
The offer made by Shri A.M. Mathur, under the facts and circumstances of the case, and also keeping in view the fact that the petitioner-Company is a sick Company, is very fair.
After hearing learned Counsel for the parties and taking into consideration the offer made by the learned Senior Counsel, I deem it appropriate to direct that if the petitioner Company makes a total deposit of Rs. 15,00,000/- then the Tribunal should be directed to hear the appeal filed by the petitioner Company.
Consequently, the present petition is disposed of with a direction that if the petitioner-Company deposits the total amount of Rs. 15,00,000/- then Tribunal (CESTAT), shall hear the appeal filed by the petitioner-Company in accordance with law. The amount, as directed by this Court, shall be deposited by the petitioner-Company on or before August 31,2007. The present petition is disposed of with the aforesaid liberty and directions.
(Emphasis supplied)
15. From the aforesaid, it is quite luminescent that the order dated 19-6-2007 was assailed before the Writ Court and there was modification of the order of the Tribunal as regards the pre-deposit. As is evincible from Paragraphs 28 and 29 of the memorandum of appeal, the said facts have not been correctly stated and, in fact, put forth equivocally as if determined to yoke a confusion.
16. Regard being had to the exposition of facts in the memorandum of appeal and the conduct of the appellants, it is to be determined whether this Court should answer the reference or put an end to the appeal at this stage being not tenable as the filament of the lis has really hung loose and everything has fallen as under. In this context, we think it apt to refer to certain authorities in the field.
17. In Halsbury's Laws of England, 4th Edn. Vol. 16 in Paragraph 1305, it has been stated thus:
1305. He who comes into equity must come with clean hands. A Court of equity refuses relief to a plaintiff whose conduct in regard to the subject-matter of the litigation has been improper. This was formerly expressed by the maxim 'he who has committed iniquity shall not have equity', and relief was refused where a transaction was based on the plaintiff's fraud or misrepresentation, or where the plaintiff sought to enforce a security improperly obtained, or where he claimed a remedy for a breach of trust which he had himself procured and whereby he had obtained money. Later it was said that the plaintiff in equity must come with perfect propriety of conduct, or with clean hands. In application of the principle, a person will not be allowed to assert his title to property which he has dealt with so as to defeat his creditors or evade tax, for he may not maintain an action by setting up his own fraudulent design.
18. In Story's Equity Jurisprudence, it has been expressed as follows:
It is one of the fundamental principles upon which equity jurisprudence is founded is that before a complainant can have a standing in Court, he must show that not only has he a good and meritorious cause of action, but also he must come to Court with clean hands. He must be frank and fair with the Court and nothing about the case under consideration should be guarded, but everything that tends to a full and fair determination of the matters in controversy should be placed before the Court.
19. In Pomeroy's Equity Jurisprudence, the learned author has stated thus:
The maxim of equity says that whenever a party, who, as actor, seeks to set the judicial machinery in motion and obtain some remedy, has violated conscience, or good faith, or other equitable principle, in his prior conduct, then the doors of the Court will be shut against him in limine, the Court will refuse to interfere on his behalf, to acknowledge his right, or to award him any remedy.
In the said book, it has been further observed:
While a Court of equity endeavours to promote and enforce justice, good faith, uprightness, fairness and conscientiousness on the part of the parties who occupy a defensive position in judicial controversies, it no less stringently demands the same from the litigant parties who come before it as plaintiffs or actors in such controversies. This fundamental principle is expressed in the maxim- 'he who comes into a Court of equity must come with clean hands', and although not the source of any distinctive doctrines, it furnished a most important and even universal rule affecting the entire administration of equity jurisprudence as a system of remedial rights.
20. In Daniel's Chancery Practice, 3rd Edn., 1218, the following principle has been laid down:
It is a general rule illustrated by an abundance of cases that wherever a party by fraud, accident, mistake or otherwise has obtained an advantage in proceedings in a Court of ordinary jurisdiction which must necessarily make that Court an instrument of injustice, a Court of Equity will interfere to prevent a manifest wrong by restraining the party whose conscience is thus bound from using the advantage he has gained.
21. In The King v. The General Commissioners for the Purpose of The Income Tax Acts for the District of Kensington, 1917 KB 486, the Bench found that the rule was granted upon an affidavit which was not candid and did not fairly state the facts but stated them in such a way as to mislead and deceive the Court. It was held by Their Lordships that there is power inherent in the Court, in order to protect itself and prevent an abuse of its process, to discharge the rule nisi and refuse to proceed further with the examination of the merits. Their Lordships, while dealing with the merits of the case, discharged the rule on the ground that the applicant had suppressed or misrepresented the facts material to the application.
22. In Namdeo Lokman Lodhi v. Narmadabai and Ors. : (1953) SCR 1009, it has been opined that it is axiomatic that the Courts must apply the principles of justice, equity and good conscience to a transaction even though the statutory provisions are not made applicable to these transactions. It is a maxim of equity that a person who comes in equity must do equity and must come with clean hands.
23. In Rajabhai Abdul Rehman Munshi v. Vasudev Dhanjibhai Mody : (1964) 3 SCR 480, Their Lordships observed that a party who approaches the Court invoking exercise of the jurisdiction of the Court under Article 136 of the Constitution must come with clean hands and when a deliberate attempt had been made in the petition for special leave to appeal withholding the facts and an erroneous impression has been created, the grant of special leave must be vacated.
24. In Welcome Hotel and Ors. v. State of Andhra Pradesh and Ors. AIR 1938 SC 1015, a two-Judge Bench of the Apex Court expressed the view that when a party obtains ex parte stay suppressing material fact, he is not entitled to any consideration at the hands of the Court.
25. In S.B. Noronah (Smt.) v. Union of India and Ors. : (1994) 1 SCC 372, it has been held as under:
4. Existence of constitutional right cannot be disputed. But one of the well-established principles of invoking extra-ordinary jurisdiction is to approach the Court with clean hands and honest conscience. One cannot abuse the process of Court and yet claim its protection. Since, the Bench revoking the leave, found that the petitioner had obtained interim order by suppression of facts, it would not be proper on our part to grant any indulgence to such a litigant.
(Emphasis supplied)
26. In J.H. Patel etc. v. Subhan Khan, etc. : (1996) 5 SCC 312, it has been opined by Their Lordships that it is not merely a question of equity but a question of principle that a person who deliberately and designedly fails to disclose information within his special knowledge and fails to produce material in that behalf thereby virtually engineering the rejection of his nomination cannot be permitted to raise a fresh ground which would adversely affect the opposite party. A party who does not come to Court with clean hands cannot seek such an indulgence.
27. In S.J.S. Business Enterprises (P) Ltd. v. State of Bihar and Ors. : (2004) 7 SCC 166, it has been held as under:
The suppression of a material fact by a litigant disqualifies such litigant from obtaining any relief. The rule has been evolved out of the need of the Courts to deter a litigant from abusing the process of Court by deceiving it. But the suppressed fact must be a material one in the sense that had it not been suppressed it would have had an effect on the merits of the case. It must be a matter which was material for the consideration of the Court, whatever view the Court may have taken.
28. The aforesaid principle has been reiterated in Mayor (H.K.) Ltd. and Ors. v. Owners & Parties, Vessel M.V. Fortune Express and Ors. : (2006) 3 SCC 100.
29. In Prestige Lights Ltd. v. State Bank of India : (2007) 8 SCC 449, it has been held as under:
33. ...The High Court is exercising discretionary and extra-ordinary jurisdiction under Article 226 of the Constitution. Over and above, a Court of law is also a Court of equity. It is, therefore, of utmost necessity that when a party approaches a High Court, he must place all the facts before the Court without any reservation. If there is suppression of material facts on the part of the applicant or twisted facts have been placed before the Court, the Writ Court may refuse to entertain the petition and dismiss it without entering into merits of the matter.
(Underlining is ours)
Thereafter, Their Lordships proceeded to state as follows:
35. It is well settled that a prerogative remedy is not a matter of course. In exercising extra-ordinary power, therefore, a Writ Court will indeed bear in mind the conduct of the party who is invoking such jurisdiction. If the applicant does not disclose full facts or suppress relevant materials or is otherwise guilty of misleading the Court, the Court may dismiss the action without adjudicating the matter. The rule has been evolved in larger public interest to deter unscrupulous litigants from abusing the process of Court by deceiving it. The very basis of the writ jurisdiction rests in disclosure of true, complete and correct facts. If the material facts are not candidly stated or are suppressed or are distorted, the very functioning of the Writ Courts would become impossible.
(Emphasis supplied)
30. In Raj Kumar Soni and Anr. v. State of U.P. and Anr. : (2007) 10 SCC 635, it has been ruled thus:
11. ... It is a fundamental principle of law that a person invoking the extra-ordinary jurisdiction of the High Court under Article 226 of the Constitution of India must come with clean hands and must make a full and complete disclosure of facts to the Court. Parties are not entitled to choose their own facts to put forward before the Court. The foundational facts are required to be pleaded enabling the Court to scrutinise the nature and content of the right alleged to have been violated by the authority.
12. The appellants in this case failed to establish that they have lawfully secured allotment of land. It is the duty cast upon the appellants to plead and establish that the order of allotment/grant by the Sub-Divisional Officer in favour of their predecessor-in-title created any legal right and also further establish the transfer of land in their favour has been validly made by the Sub-Divisional Officer. In such view of the matter we are of the opinion, justice has been done in the matter and the High Court rightly refused to resurrect or resuscitate the order of the Sub-Divisional Officer which is unenforceable in law.
(Emphasis supplied)
31. In Food Corporation of India and Anr. v. Seil Ltd. and Ors. 2008 AIR SCW 932, the Apex Court has held that a Writ Court exercises its power of review under Article 226 of the Constitution of India itself. While exercising the said jurisdiction, it not only acts as a Court of law but also as a Court of equity.
We have referred to the aforesaid decision only to highlight the principle of equity can be applied in judicial review under Article 226 of the Constitution.
32. In Udyami Evam Khadi Gramodyog Welfare Sanstha and Anr. v. State of Uttar Pradesh and Ors. : (2008) 1 SCC 560, the Apex Court has expressed thus:
A writ remedy is an equitable one. A person approaching a Superior Court must come with a pair of clean hands. It not only should not suppress any material fact, but also should not take recourse to the legal proceedings over and over again which amounts to abuse of the process of law. In Advocate General, State of Bihar v. M.P. Khair Industries, this Court was of the opinion that such a repeated filing of writ petitions amounts to criminal contempt.
(Emphasis supplied)
33. In Indian Overseas Bank, Annasalai and Anr. v. P. Ganesan and Ors. (2008) 1 SCC 650, it has been held as follows:.the discretionary writ jurisdiction under Article 226 of the Constitution of India should be exercised keeping in view the conduct of the parties....
34. In Abhishek Malviya v. Addl. Welfare Commissioner and Anr. 2008 AIR SCW 1215, it has been held as under:
We find no merit in appellant's contention. The order dated 4-5-1999 of this Court specifically refers to the error in the order describing the appellant as 'deceased' and dismissed the SLP as withdrawn with the following observation :- 'He wants to apply to the Additional Welfare Commissioner for correction. We express no opinion in that behalf.' No liberty was reserved to file a fresh appeal or seek review of the order dated 13-3-1997 on merits. The order dated 13-3-1997 having attained finality, his efforts to reagitate the issue again and again is an exercise in futility. We are, therefore, of the view that appeal is liable to be dismissed.
35. We have referred to the aforesaid authorities which pertain to the manner in which a litigant should approach the Court and how his conduct is to be taken note of. In this regard, we have reproduced the application for withdrawal, the order of withdrawal, and the assertions and asseverations made in Paragraphs 28 and 29 of the memorandum of appeal. The submission of Mr. Mathur, learned Senior Counsel appearing for the appellants, is that this Court had granted liberty to approach the appropriate forum and, therefore, the second writ appeal could be filed as a reference was sought to a Larger Bench. In this regard, Mr. Shekhar Sharma has invited our attention to the decision rendered in Sarguja Transport Service v. STAT : (1987) 1 SCC 5, to bring home the point that no liberty was granted to file a fresh writ appeal and hence, the present writ appeal is not maintainable. The learned Senior Counsel appearing for the appellants has submitted that the said decision has been explained in a different manner in Sarva Shramik Sanghatana (KV), Mumbai v. State of Maharashtra and Ors. : (2008) 1 SCC 494. Their Lordships in Sarva Shramik Sanghatana (KV), Mumbai (supra), while dealing with the concept of precedent of Sarguja Transport Service (supra), referred to Paragraphs 8 and 9 of the said decision and expressed the view as under:
We are of the opinion that the decision in Sarguja Transport case has to be understood in the light of the observations in Paras 8 and 9 therein, which have been quoted above. The said decision was given on the basis of public policy that, if while hearing the first writ petition the Bench is inclined to dismiss it, and the learned Counsel withdraws the petition so that he could file a second writ petition before what he regards as a more suitable or convenient Bench, then if he withdraws it he should not be allowed to file a second writ petition unless liberty is given to do so. In other words, Bench-hunting should not be permitted.
Thereafter, Their Lordships proceeded to state as follows:
It often happens that during the hearing of a petition the Court makes oral observations indicating that it is inclined to dismiss the petition. At this stage, the Counsel may seek withdrawal of his petition without getting a verdict on the merits, with the intention of filing a fresh petition before a more convenient Bench. It was this malpractice which was sought to be discouraged by the decision in Sarguja Transport case.
36. Thereafter, the Apex Court opined that the decision in Sarguja Transport Service (supra), cannot be treated as a Euclid's formula. Eventually, Their Lordships proceeded to opine thus:
Hence, Sarguja Transport case is clearly distinguishable, and will only apply where the first petition was withdrawn in order to do Bench-hunting or for some other malafide purpose.
37. It is noteworthy that Mr. Mathur has placed heavy reliance on the above quoted liens of the aforesaid decision. The submission of the learned Senior Counsel for the appellant is that the decision in Sarguja Transport Service (supra), would only apply if the first petition was withdrawn in order to do Bench-hunting or for some other malafide purpose. We clearly state with all the humility at our command that the first petition was not withdrawn in order to indulge in Bench-hunting. The question that still remains is whether the same was withdrawn for some other malafide purpose. It is urged by Mr. Mathur that no malafide purpose can be attributed to the appellants. The submission of Mr. Sharma, learned Standing Counsel for the Union of India, is that malafide purpose should not be present at the time of withdrawal but it can arise subsequently. In quintessentiality, the submission of the learned Counsel for the respondents is that when it was withdrawn for one purpose and the Bench was given a different impression but the same has been utilised for a different purpose altogether by stating certain facts in a manner which tantamounts to suppression, it would amount to malafide and would come in the compartment of abuse of the process of Court. It is worth mentioning that a picture was projected while filing the memorandum of withdrawal that as the amount had already been deposited, no cause of action remained to be adjudicated and the appeal had been rendered infructuous. It is a truism that initially the petition for withdrawal was filed on behalf of the appellant No. 3 but the learned Counsel for the appellant had instructions to withdraw the appeal on behalf of all the appellants. This Court granted liberty to approach such other forum or seek remedy as permissible in law. The liberty was not taken to file writ appeal. To approach other forum would not mean to file another writ appeal challenging the same order and seek reference to a Larger Bench by incorporation of such a prayer in the relief clause. That apart, as is evincible from Paragraphs 28 and 29 of the appeal, the appellants could not challenge the order dated 19-6-2007 before the learned Single Judge because the show-cause notice dated 23-2-2006 had been challenged along with the order/letter dated 9-9-2006 in Writ Appeal No. 718/2006. On a perusal of the subject-matter and delineation by the learned Single Judge, it is manifest that the order dated 19-6-2007 passed by the Customs & Excise Appellate Tribunal was challenged in W.P. No. 4160/2007. We have reproduced the order in extenso.
38. On a perusal of the pleadings and other orders, by refiling of the writ appeal, we are inclined to think, a deliberate, adroit and ingenious attempt has been made to create a different kind of impression. The appellants have chosen their own facts and put forth them before the Court. Once they had filed the writ appeal, they could have got it adjudicated. They chose not to do so and filed an application in writing and withdrew the same by stating that after the deposit of the amount due, the appeal had been rendered infructuous.
39. In Sarva Shramik Sanghatana (KV), Mumbai (supra), Their Lordships were dealing with the situation where the application for withdrawal of the first petition under Section 25-O(1) was made bonafide because the respondent-Company had received a letter from the Deputy Labour Commissioner calling for a meeting of the parties so that an effort could be made for an amicable settlement. Their Lordships observed that the respondent-Company could have waited for sixty days on the expiry of which the application would have deemed to have been allowed under Section 25-O(3) of the Industrial Disputes Act, 1947. The fact that it did not do so and instead applied for withdrawal of its application under Section 25-O(1) shows it to be bonafide. Under these circumstances, Their Lordships distinguished the decision rendered in Sarguja Transport Service (supra), and observed which we have reproduced hereinbefore. The factual matrix of the present case is totally different. Before the Division Bench the petition was filed, under what foundation the appeal was sought to be withdrawn. The Division Bench dismissed the appeal as withdrawn and granted liberty to the appellants to approach other forum or seek remedy as permissible in law. The submission of Mr. Mathur is that the appeal was not withdrawn for some other malafide purpose. There may not be a malafide intention at the time of withdrawal. But, the pleadings and the conduct of the appellants would go a long way to reflect and project that in the present writ appeal, a prayer has been made to refer the matter to a Larger Bench and certain facts have been put forth in an equivocal manner to create a maze and the same, we are disposed to think, tantamounts to abuse of the process of the Court. The appellants were very well aware of the decision rendered by the Division Bench in M/s. Vindhyachal Distillery (P.) Ltd. (supra). It is within their special knowledge that the learned Single Judge in W.P. No. 4160/2007 had passed a conditional order and modified the order passed by the Tribunal as regards the deposit. Similar modification has been done in W.P. No. 4467/2007. Despite the same, the pleadings have been put forth in a quite different manner that the order dated 19-6-2007 was not assailed before the learned Single Judge. True, it has been mentioned in a different way in Paragraph 29 but that would not tantamount to complete pleading. Nothing has been stated whether the amount directed by the learned Single Judge has been deposited or not. Nothing has been brought to the notice of this Court whether the Tribunal has dismissed the statutory appeal or not. Under these circumstances, the order of withdrawal by which the appeal was dismissed with liberty to approach appropriate forum, in our humble view, would not include filing of another writ appeal. That was not the purpose of the application for withdrawal and that is not the import of the order of withdrawal. It can be said in a most indubitable and irrefragable manner that an effort has been made to reiterate the grievance in a different manner unknown to law and the same is nothing but abuse of the process of Court.
40. We would be failing in our duty if we do not take note of another submission of Mr. Mathur, learned Senior Counsel for the appellants. It is contended by him that this Court should answer the reference and directed the matter to be placed before the Division Bench. In this context, we may refer with profit to the decision rendered in Pabitra Mohan Das v. State of Orissa and Ors. : (2001) 2 SCC 480, wherein it has been held as under:
Having examined the rival contentions and on a thorough scrutiny of two earlier Full Bench decisions as well as the impugned judgment of the Special Bench we are of the considered opinion that the Special Bench rightly thought it appropriate to reconsider the entire matter afresh and re-determine the issues involved in the light of the relevant provisions of the Act, Rules and Regulations after hearing at length on all issues and there was no infirmity on that score even though the point of reference was of a limited nature. Courts exist to interpret the law and while examining the provisions of any Act, Rule or Regulation, if it is felt that the earlier decision on the question is not clear on any particular issue of has created confusion in resolving the disputes or has caused hardship to a group of people, it would be the duty of the Court to re-examine the matter after giving opportunity to all parties concerned and by such process question of taking away anybody's vested right does not arise. In the case in hand, it is not a particular writ or order that had been issued in favour of any individual is sought to be nullified by the subsequent Special Bench decision. On the other hand the erroneous conclusion of the relevant provisions of the Act, Regulation and Rules are sought to be corrected and we see no infirmity in this approach of the Special Bench. That apart, though point of reference may be of a limited nature but in answering the same if the Court feels that it would be in the interest of justice to constitute a Larger Bench and examine the correctness of any earlier conclusion which might have been made on an erroneous interpretation of any provision, then there would be no fetter for adopting that procedure.
41. We have referred to the aforesaid decision only to highlight that a Larger Bench has jurisdiction to reconsider the entire matter afresh and redetermine the issue involved in the light of the provisions of the Act, Rules and Regulations. Their Lordships have further held that no efforts should be made to annul a writ or order that has been issued in favour of any individual. We would have been under obligation to answer the reference had we been convinced that the writ appeal was maintainable and further that the reference at the instance of the appellants deserved to be answered but as the factual matrix would exposit, the writ appeal was dismissed as withdrawn. That apart, as is luminescent from Paragraphs 28 and 29 of the memorandum of writ appeal, the facts have been stated in a different manner as if to fresco a picture to create an imbroglio and confusion.
42. In view of the aforesaid analysis, we have no hesitation in our mind that the present writ appeal is not maintainable inasmuch as the order impugned was assailed in W.A. No. 718/2006, which was dismissed as withdrawn on the basis of an application filed by one of the appellants which was later on concurred by the learned Counsel for other appellants making a submission that it has been rendered infructuous inasmuch as the amount had already been deposited. That apart, we have referred to the nature of pleadings. Ergo, the inevitable result is the dismissal of the writ appeal which we direct. We cannot refrain ourselves from reiterating what we have said earlier that filing of the present writ appeal is an abuse of the process of Court and, therefore, we decline to entertain the writ appeal.
43. Consequently, the writ appeal is dismissed with costs which is assessed at Rs. 50,000/- (Rupees Fifty thousand only).