# DIRECTOR OF SETTLEMENTS A.P. AND ORS v. M.R. APPARAO AND ANR

- **Citation:** [2002] 2 S.C.R. 661
- **Court:** Supreme Court of India
- **Decided:** 2002-03-20
- **Case number:** Civil Appeal No. 2517 of 1999
- **Bench:** G.B. Pattanaik, S.N. Phukan, S.N. Variava
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/director-of-settlements-a-p-and-ors-v-m-r-apparao-and-anr-18579
- **Pages:** 24

## Headnote

Andhra Pradesh Estates (Abolition and Conversion into Ryotwari) Act,
1948: Sections 39, 41, 44, 50 and 54 and Amended Act 3 of 1971.
A
B
Estates-Abolition of-Payment of Compensation-Interim payment C
payable to the estate holder-Restricted by-Ordinance-Subsequent
amendment in the Act-Validity of-On challenge High Court held, amendment
to the extent it extinguished the vested right of the estate holder to receive
interim compensation till the promulgation of Ordinance was ultravires of
Article 31(2) of the Constitution-Validity of-Held, Amendments made to the D
Act are constitutionally valid.
Article 141
Scope and ambit of-Law declared-Principle underlying a decisionWhen it is not based on. concession alone but based on an independent E
application of mind, Decision based on concession whether law declared--
Held, it shall be binding on all Courts/parties within the territory of IndiaExtent of-To all observations of points raised and decided by the Court.
-
Plea of per incurium on the ground that certain aspects were not
'
considered or relevant provisions were not brought to the notice of the CourtF
Held, such plea cannot be accepted
Law declared-Duty of the High Court to follow the decision-Refusal
to follow----Consequences-Judgment of High Court which refuses to follow
the declaration or seeks to revive a decision which had been set aside by
Supreme Court, is a nullity.
G
Article 226--Writ Jurisdiction-Exercise of-Held, is discretionary and
must be exercised on recognised lines and subject to self-imposed restrictions.
Issuance of Mandamus-Conditions-Discussed
661
H
662
SUPREME COURT REPORTS
[2002] 2 S.C.R.
A
Appellant-State took over two estates under the provisions of the Estates
Abolition Act, 1948 and issued notifications on 28.5.66 indicating the
procedure determining the final compensation. Subsequently, Ordinance 6
of 197~ ras promulgated to restrict the interim payments to the estate holder
till its/fin'al determination by the. concerned authority. The ordinance was
B replaced by Act 3 of 1971, amending Sections 41, 44, 50 and·54 of the Act,
with retrospective effect. Under the amended provision, the expression "as
finally determined under Section 39" was substituted by the expression
"determined by the Director under Section 39". Raja of Venkatagiri challenged
the said Ordinance as well as amended Act by filing a Writ Petition. High
Court declared the amended provisions of the Act as ultra vires of Article 31(2)
C to the extent it extinguished the vested right of the estate holders to receive
interim compensation till the commencement of the amended Act.
D
Respondents and others filed Writ Petitions for payment of interim
·compensation. Single Judge disposed qfthe Writ Petitions by ordering interim
.payments in accordance with the law laid down in Venkatagiri's case. State
Government preferred an appeal which was dismissed by the High Court but
State did not approach this Court. However, the Order for payment of interim
compensation was not complied with. Aggrieved, respondents filed a Writ
Petition for issuing a Writ of Mandamus for implementation of the order of
payment of interim compensation. High Court issued order for compliance
E of the said order within a stipulated time period.
In the meanwhile, Judgment in Venkatagiri's case has been challenged
before this Court. The Court reversed the Order passed by the High Court
thus holding the amendments to the Act constitutionally valid.
Respondents filed a Writ Petition for interim payment for
F implementation of the earlier order passed by the High Court in their favour.
Single Judge dismissed it on the ground that in view of the Judgment in
Venkatagiri 's case having been set aside by this Court, the earlier decision by
the High Court in favour of the respondents would not constitute an
enforceable right and as such a Writ of mandamus cannot be issued.
G Respondents challenged the Judgment by filing a Writ Appeal, which was
allowed. Hence the present appeal by t

## Text

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DIRECTOR OF SETTLEMENTS A.P. AND ORS.
v.
M.R. APPARAO AND ANR.
MARCH 20, 2002
[G.B. PATTANAIK, S.N. PHUKAN AND S.N. VARIAVA, JJ.]
Andhra Pradesh Estates (Abolition and Conversion into Ryotwari) Act,
1948: Sections 39, 41, 44, 50 and 54 and Amended Act 3 of 1971.
A
B
Estates-Abolition of-Payment of Compensation-Interim payment C
payable to the estate holder-Restricted by-Ordinance-Subsequent
amendment in the Act-Validity of-On challenge High Court held, amendment
to the extent it extinguished the vested right of the estate holder to receive
interim compensation till the promulgation of Ordinance was ultravires of
Article 31(2) of the Constitution-Validity of-Held, Amendments made to the D
Act are constitutionally valid.
Article 141
Scope and ambit of-Law declared-Principle underlying a decisionWhen it is not based on. concession alone but based on an independent E
application of mind, Decision based on concession whether law declared--
Held, it shall be binding on all Courts/parties within the territory of IndiaExtent of-To all observations of points raised and decided by the Court.
-
Plea of per incurium on the ground that certain aspects were not
'
considered or relevant provisions were not brought to the notice of the CourtF
Held, such plea cannot be accepted
Law declared-Duty of the High Court to follow the decision-Refusal
to follow----Consequences-Judgment of High Court which refuses to follow
the declaration or seeks to revive a decision which had been set aside by
Supreme Court, is a nullity.
G
Article 226--Writ Jurisdiction-Exercise of-Held, is discretionary and
must be exercised on recognised lines and subject to self-imposed restrictions.
Issuance of Mandamus-Conditions-Discussed
661
H
662
SUPREME COURT REPORTS
[2002] 2 S.C.R.
A
Appellant-State took over two estates under the provisions of the Estates
Abolition Act, 1948 and issued notifications on 28.5.66 indicating the
procedure determining the final compensation. Subsequently, Ordinance 6
of 197~ ras promulgated to restrict the interim payments to the estate holder
till its/fin'al determination by the. concerned authority. The ordinance was
B replaced by Act 3 of 1971, amending Sections 41, 44, 50 and·54 of the Act,
with retrospective effect. Under the amended provision, the expression "as
finally determined under Section 39" was substituted by the expression
"determined by the Director under Section 39". Raja of Venkatagiri challenged
the said Ordinance as well as amended Act by filing a Writ Petition. High
Court declared the amended provisions of the Act as ultra vires of Article 31(2)
C to the extent it extinguished the vested right of the estate holders to receive
interim compensation till the commencement of the amended Act.
D
Respondents and others filed Writ Petitions for payment of interim
·compensation. Single Judge disposed qfthe Writ Petitions by ordering interim
.payments in accordance with the law laid down in Venkatagiri's case. State
Government preferred an appeal which was dismissed by the High Court but
State did not approach this Court. However, the Order for payment of interim
compensation was not complied with. Aggrieved, respondents filed a Writ
Petition for issuing a Writ of Mandamus for implementation of the order of
payment of interim compensation. High Court issued order for compliance
E of the said order within a stipulated time period.
In the meanwhile, Judgment in Venkatagiri's case has been challenged
before this Court. The Court reversed the Order passed by the High Court
thus holding the amendments to the Act constitutionally valid.
Respondents filed a Writ Petition for interim payment for
F implementation of the earlier order passed by the High Court in their favour.
Single Judge dismissed it on the ground that in view of the Judgment in
Venkatagiri 's case having been set aside by this Court, the earlier decision by
the High Court in favour of the respondents would not constitute an
enforceable right and as such a Writ of mandamus cannot be issued.
G Respondents challenged the Judgment by filing a Writ Appeal, which was
allowed. Hence the present appeal by the State Government.
Appellant State relied upon the decision of this Court in Mis. Shenoy &
Co. and Ors. v. Commercial Tax Officer, Bangalore and Ors., and respondents
relied upon the decision in Authorised Officer (Land Reforrris) v. MM
H Krishnamurthy Chetty, [1998] 9 sec 138. These two decisions run counter to
:.
....
-
-
,
'
DIRECTOR OF SETTLEMENTS, A.P. v. M.R. APPARAO
663
each other and therefore in order to resolve the conflict the appeal was A
referred to the present Bench of three Judges.
It was contended for the appellant that the law declared by this Court
in the appeal in the case of State of Andhra Pradesh and Ors. v. Venkatagiri
and Ors. is the law of the land and binding not only on parties in that appeal
but also those in whose favour a mamdamus has been issued, in view of Article B
141 of the Constitution; that High Court committed error in issuing a
mandamus contrary to the law declared by this Court; that the law declared
by the High Court in Venkatagiri 's case having been reversed by this Court
and holding the amended Act to be constitutionally valid the mandamus issued
by the High Court on the ground of finding of Judgment in favour of C
respondents become ineffective and unenforceable; and that issuing of
mandamus would go against the provisions of Articles 141 of the Constitution.
It was contended for the respondents that in the Judgment in
Venkatagiri's case, the Supreme Court neither examined the different
contentions nor adjudicated upon the same, as such and as it cannot be held D
to be a law under Article 141 of the Constitution; and that the observation of
this Court in Venkatagiri 's case are per incurium in as such as the Judgment
of the High Court in Writ Petition was not under appeal before this Court
and the Court did not advert to the reasons given by the High Court; that
this Court did not consider the relevant provisions of the Act wherein the
expression 'final determination' had been used by the legislature in contrast E
to the word "determination" used in Section 39(1). The term 'determination'
and 'final determination' connotes two distinct meanings and hence applicable
to two different situations; and that the right accrued to the respondents in
terms of the earlier judgments are not affected by the other Judgment of this
Court in Venkatagiri's case as this Court reversed the Judgment of the High F
Court on the basis of concession given by the party, and as such the High
Court was fully justified in issuing the impugned order.
Allowing the appea~ the Court
HELD : 1.1. Article 141 of the Constitution unequivocally indicates that
the law declared by the Supreme Court shall be binding on all Courts within G
the territory oflndia. The statements of the Court on matters other than law
like facts may have no binding force. But what-is binding is the ratio of the
decision and not any finding of facts. To determine whether a decision has
'declared law' it cannot be said so when a point is disposed of on concession
and what is binding is the principle underlying a decision. A Judgment of the H
664
SUPREME COURT REPORTS
[2002] 2 S.C.R.
A Court has to be read in the context of questions which arose for consideration
in the case in which the judgment was delivered. An obiter may not have a
binding effect as a precedent, but it cannot be denied that it is of considerable
weight The law which will be binding under Article 141 would, therefore,
extend to all observations of points raised and decided by the Court in a given
B case. The decision in a judgment of the Supreme Court cannot be assailed on
the ground that certain aspects were not considered or the relevant provisions
were not brought to the notice of the Court (673-G-H; 674-A-B-C]
c
D
Ballabhdas Mathurdas Lakhani and Ors. v. Municipal Committee,
Malkapur, AIR (1970) SC 1002, relied on.
1.2. When Supreme Court decides a principle it would be the duty of
High Courts or subordinate courts to follow the decision. A judgment of the
High Court which refuses to follow the decision and directions of the Supreme
Court or seeks to revive a decisions of the High Court which had been set
aside by the Supreme Court is a nullity. (674-D]
Narinder Singh v. Surjit Singh, (1984] 2 SCC 402 and Smt. Kausalya Devi
Bogra and Ors. v. Land Acquisition Officer, Aurangabad and Anr., [1984) 2 SCC
324, relied on.
1.3. The conclusion of the Supreme Court in Venkatagiri's case that the
E amendments in the Andhra Pradesh Estates (Abolition and Conversion into
Ryotwari) Act were constitutionally valid and the view expressed by the
Andhra Pradesh High Court is erroneous, is a conscious decision of the Court
itself on application of mind to the provisions of the Act It is no doubt true
that the counsel for the respondent had indicated that the respondent will
have no objection to the judgments and orders of the High Court under
F appeal, being set aside. But that by itself would not tantamount to hold that
the judgment is a judgment on concession. Venkatagiri's case, it cannot be
dubbed as a conclusion without application of mind, particularly when the
very constitutionality of the Amendment Act was the core question before
the Court [678-D-E-F]
G
Pandit MS.M Sharma v. Shri Sri Krishna Sinha and Ors., [1959) Suppl.
1 SCR 806; Supdt. and Legal Rememberancer, State of West Bengal v.
Corporation of Calcutta, [1967) 2 SCR 170; Krishena Kumar and Anr. etc. etc.
v. Union of India and Ors., (1990) 3 SCR 352; State ofU.P. andAnr. v~ Synthetics
and Chemicals Ltd. and Anr., [1991) 4 SCC 139; Arnit Das v. State of Bihar,
H · [2000] 5 SCC 488; A-One Granites v. State of U.P. and Ors., (2001) 2 SCC 537;
-
-
/
DIRECTOR OF SETTLEMENTS, A.P. v. M.R. APPARAO
665
~
Ku/want Kaur and Ors. v. Furdial Singh Mann (dead) by Lrs., [2001) 4 SCC A
-
262; Lakshmi Shanker Srivastava v. State (Delhi Administration), [1979) l SCC
229; Raval and Co. v. KC. Ramachandran and Ors. and Municipal Corporation
of Delhi v. Gurnam Kaur, [1989) l SCC 101, held inapplicable.
1.4. The decision of this Court in Vendatagiri's case must be held to be B
a 'law declared' within the ambit of Article 141 of the Constitution and the
constitutional validity of the Amendment Act 1971 is not open to be reagitated. [679-AJ
...
2.1. When the law declared invalid by the High Court is held
constitutionally valid, effective and binding by the Supreme Court, then the c
-
mandamus forbearing the authorities from enforcing its provisions would
become ineffective and the authorities cannot be compelled to perform a
negative duty. The declaration of the law is binding on everyone and it would,
.therefore, be futile to contend that the mandamus would still survive in favour
of those parties against whom appeals were not filed. The ratio in Mis. Shenoy D
and Company case fully applies to the case in hand, particularly, when the
Court is examining the question whether while issuing a mandamus, the earlier
Judgment notwithstanding having been held to be invalid, can still be held to
r
be operative. [681-D-E-FJ
2.2. Notwithstanding the enunciation of the principle of res judicata E
and its applicability to the litigation between the parties at different stages,
it is difficult to sustain the argument that an indefeasible right has accrued
to the respondents on the basis of the Judgment in their favour which has
not been challenged and that right could be enforced by issuance of a fresh
mandamus. [682-C-DJ
F
2.3. When the Court is examining the question of any right having
emanated from a Judgment of the High Court and tlie said Judgment squarely
having emanated, on following an earlier Judgment of the said Court, without
any further reasoning advanced and no question of facts involved but purely
-·
a question of constitutionality of an Act, the moment the earlier Judgment of G
the High Court if reversed by the Supreme Court, it becomes the law of the
'
land, binding on all parties. In the instant case, the Judgment of the Andhra
Pradesh High Court in Venkatagiri 's case, holding the amendment Act to be
-·
constitutionally invalid, on being reversed by the Supreme Court on a
..
conclusion that the said amendment is constitutionally valid, the said dictum
would be valid throughout the country and for all pe..Sons, including the H
666
SUPREME COURT REPORTS
[2002] 2 S.C.R.
A respondents, even though the Judgment in their favour had not been assailed.
(681-G-H; 682-A-B]
B
2.4. To have uniformity of the law and to have universal application of
the law laid down by this Court in Venkatagiri's case, it would be reasonable
to hold that the so-called direction in favour of the respondents became futile
inasmuch as the direction was on the basis that the amendment Act is
constitutionally invalid, the moment this Court holds the Act to be
constitutionally valid, the indefeasible right on the respondents could not be
said to have accrued on account of the earlier Judgment in their favour
notwithstanding the reversal of the Judgment of the High Court in
C Venkatagiri's case. [6~2-E-F]
3.1. The powers of the High Courts under Article 226 though are
discretionary and no limits can be placed upon their discretion, it must be
exercised along recognised lines and subject to certain self-imposed limitations.
The expression 'for any other purpose' in Article 226; makes the jurisdiction
D of the High Courts more extensive but yet the Court must exercise the same
with certain restraints and within some parameters. One of the conditions
for· exercising power under Article 226 for issuance of a mandamus is that
the Court must come to the conclusion that the aggrieved person has a legal
right, which entities him to any of the rights and that such right has been
E infringed. [682-G-H; 683-A-B]
·
3.2. A mandamus is ·available against any public authority including
administrative and local bodies, and could be issued to any person who is
under a duty imposed by statute or by common law to do a particular act. In
order to obtain a writ or order in the nature of mandamus, the applicant has
F to satisfy that he has a legal right to the performance of legal duty by the
party against whom the mandamus is sought and such right must be subsisting
on the date of the petiti01[. (683-D)
3.3. The duty that may be enjoined by mandamus may be one imposed
by the Constitution, a statute, common law or by rules or orders having the
G force of law. When the aforesaid principles are applied to the present case,
the right of the respondents, depending upon the conclusion that the
amendment Act is constitutionally invalid and, the right to get interim
payment will continue till the final decision of the Board of Revenue is not
sustained ·when this Court itself has upheld the constitutional validity of the
H amendment Act in Venkatagiri's case. (683-E-F)
DIRECTOR OF SETTLEMENTS, A.P. v. M.R, APPARAO [PATTANAIK, J.] 667
3.4. The impugned mandamus issued by the Division Bench of the A
Andhra Pradesh High Court in the teeth of the declaration made by this Court
as to the constitutionally of the amendment Act would be an exercise of power
and jurisdiction when the respondents did not have the subsisting legally
enforceable right under the very Act itself. In the aforesaid circumstances,
High Court committed an error in issuing the mandamus in question for B
enforcement of the right which never subsisted on the date the Court issued
the mandamus, in view of the decision of this court in Venkatagiri's case.
[683-G-H; 684-A]
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2517 of
1999.
From the Judgment and Order dated 4, 11.98 of the Andhra Pradesh
High Court in W.A. No. 511 of 1993.
Guntur Prabhakar and Ms. T. Anamika for the Appellants.
P,P. Rao, C.K. Sucharita and Ashok Kumar Pandey for the Respondents.
The Judgment of the Court was delivered by
c
D
PATTANAIK, J. This appeal by the State of Andhra Pradesh is directed
against the impugned Judgment of the Division Ben~h of the Andhra Pradesh E
High Court dated 4.11.93 in Writ Appeal No. 511 of 1993. The Division
Bench of the Andhra Pradesh High Court has come to the conclusion that the
rights accrued in favour of the respondents to receive interim payments under
~
Section 39 of the Andhra Pradesh Estates (Abolition and Conversion into
Ryotwari) Act, 1948, which has already become final, the earlier Judgments
of the High Court, not being assailed, the decision of the Supreme Court in F
the Venkatagiri's case, would not take away that right and, therefore, the
respondents would be entitled to receive interim payments in accordance
with the judgments in their favour.
A brief facts are that the two estates called Vuyyur and Meduru, were G
notified under the provisions of the Estates Abolition Act, 1948 and the State
Government took over the two estates. The compensation due for the estates
was notified on 20.6.1961. The State Government realising its mistake in
notifying the two estates together, issued two separate notifications under the
Estates Abolition Act, on I.I 0.1963 and compensation for the two estates
were determined separately, one on 21.11.64 for Meduru and another on H
668
SUPREME COURT REPORTS
[2002) 2 S.C.R.
A 5.4.1966 for Vuyyur. The State Government issued an administrative
-._
instruction in G.O.Ms. No. 645 dated 28.5.66, indicating the procedure for
determining the final compensation. Section 39 of the Act indicates the manner
in which the compensation is to be determined. The scheme of the aforesaid
provision is that the Director shall determine the compensation under subB section (I) of Section 39 and a person aggrieved could put-forth his grievances
to the Director, in the matter of proposed determination of the basic annual
sum and also the total compensation payable. The Director is required to
determine the compensation payable under sub-section (I) of Section 39,
after giving the applicant an opportunity of making his representation, either
in writing or orally. The order passed under sub-section (I) of Section 39 on
C being communicated to the concerned land-holder as well as to any other
applicant, the person aggrieved within three months could approach the Board
of Revenue by filing an appeal, as provided under sub-section (5) of Section
39. Sub-section (6) of Section 39 confers suo motu powers on the Board,
who in its discretion at any time call for and examine the record of any order
passed by the Director. The Board of Revenue is thus entitled to modify or
D cancel the order passed by the Director under sub-section (1). Sub-section (2)
of Section 50, casts an obligation. on the Government to make interim payments
every fasli year to the principal landholder and to other persons referred to
in Section 44, sub-section (i) for the period, after the notification issued for
vesting the estate and before the compensation is determined under Section
E 39 and deposited under Section 41. On 6.11.1970, Ordinance 6 of 1970 was
promulgated to restrict the interim payments payable to the estate-holder till
the determination by the Director of Settlement. The aforesaid Ordinance was
replaced by Act 3 of 1971 on 16.1.1971, amending Sections 41, 44, 50 and
54 of the Estates Abolition Act, with retrospective effect. It may be stated
that Section 41, prior to its amendment by Act 3/1971 read thus:
F
G
"41(1). The Government shall deposit in the office of the Tribunal,
the compensation in respect of each estate as finally determined under
Section 39, in such form and manner, and at such time or times and
in one or more instalments, as may be prescribed by rules made
under Section 40."
Under the amended provision, the expression "as finally determined under
Section 39" was substituted by the expression "determined by the Director
under Section 39". A writ petition was filed in the Andhra Pradesh High
Court by Raja of Venkatagiri, questioning the validity of the ordinance as
well as the amendment Act and by Judgment _dated 22.9.1971, the High
H Court declared that Act 3/1971 to the extent it extinguished the vested right
+--
(
DIRECTOR OF SETTLEMENTS, A.P. v. M.R. APPARAO [PATTANAIK, J.] 669
_,.
of the estate holders to receive interim compensation till the date of A
•
commencement of the Act was ultra vires of Article 31 (2) and not protected
by Article 3 IA or 318. It further held that interim payments were payable
upto the date of the ordinance but not thereafter. Thus the amended Act was
held to be valid prospectively. The present respondents along with several
others filed writ petitions before the Andhra Pradesh High Court, seeking B
interim payments, which were registered as Writ Petition Nos. 3293 and 3294
of 1975. A learned Single Judge of the High Court disposed of the two writ
petitions by Judgment dated 17.6.1977 and following the earlier Judgment in
Venkatagiri's case, issued a writ of mandamus to make interim payments to
the respondents herein in accordance with law laid down in Venkatagiri's
case. Against this direction of the learned Single Judge, the State Government c
·filed an application for leave to appeal under Article 133(a) and (b) of the
Constitution, but the same on being dismissed, the State Government did not
approach the Supreme Court and allowed the matter to rest therein.
Notwithstanding the finality attached to the order of the learned Single Judge
in favour of the respondents, the same not being complied with, a fresh writ D
petition was filed, which was registered as Writ Petition No. 730 of 1978,
praying therein that the earlier order be commanded to be implemented by
a writ of mandamus. That application was disposed of on 28.3 .1978 and the
Court issued the direction to implement the e.arlier order dated 7 .6.1977
within one month from the date of the order. The Judgment of the Andhra
Pradesh High Court in Venkatagiri's case had been assailed in. the Supreme E
Court in Civil Appeal Nos. 398 and 1385 of 1972. Those two appeals were
disposed of by order dated 6.2.1986. In this Court the counsel appearing for
the respondents, who were the original writ petitioners before the High Court
.......
consented to the Judgments and orders of the High Court under appeal being
set aside, leaving it open to the land-holders and others to get the compensation
F
and interim payments in accordance with the amended provisions of the
Andhra Pradesh (Andhra Area) Estates (Abolition and Conversion into
Ryotwari) Act, 1948. The Court also itself expressed its opinion and held that
the amendments made to the Act are constitutionally valid and the view
expressed in the writ petition No. 496 of 1965 is erroneous. The Court,
'
therefore, set aside the judgments and orders passed by the Andhra Pradesh G
High Court, leaving the question of computation of interim payments payable
to the respondents therein open, to be decided by the authorities concerned
in accordance with law and the orders passed by the Director. The Court
hastened to add that the interim payments payable under the Act ends with
the date of the original determination made by the Director under Section
39(1) thereof before the filing of the appeal, if any, and of the deposit of the H
670
SUPREME COURT REPORTS
[2002] 2 S.C.R.
A amount so determined. On 3. 7 .1986, the State of Andhra Pradesh in the
•'-
Department of Revenue (J) issued a memorandum, Memo No. 609/J-2/81-27,
4'
~
stating therein that the land-holders of Vuyyur and Meduru estates cannot
contend that the decision of the Supreme Court in Venkatagiri's case, does
not bind them merely because appeals were not filed against the judgment in
B
their favour and the law declared by the Supreme Court is binding on the
land-holders whether they were parties to the Judgment or not. The authorities
concerned were directed to act in accordance with the judgment of the Supreme
Court in Venkatagiri's case. The respondents herein filed a writ petition,
which was registered as Writ Petition No. 1673 7 of 1990, claiming interim
payments from 1. 7.64 to 31.11.1970 and to implement the earlier order in
c their favour passed by the High Court. The learned Single Judge by Judgment
dated 30th of January, 1993, dismissed the writ petition on the ground that
the very basis namely the judgment in Venkatagiri's case, having been set
aside by the Supreme Court, the earlier decision in favour of the respondents
would not constitute an enforceable right and as such a writ of mandamus
D
cannot be issued. The respondents however assailed the aforesaid judgment
of the learned Single Judge in writ appeal No. 511 of 1993 and the said writ
appeal having been allowed, the present appeal has been preferred by the
State Government by grant of special leave.
'(
When this appeal had been listed before a Bench of two learned Judges
E of this Court on 7.2.2002, the Court felt that the decision of this Court in the
case of Mis Shenoy and Co. and Ors. v. Commercial Tax Officer Circle I/,
Bangalore and Ors., on which the counsel for the Stace relied upon and the
decision of this Court in the case of Authorised Officer (Land Reforms) v.
MM Krishnamurthy Chetty, [1998] 9 SCC 138, on which Mr. Rao for the
;:..--
F
respondents relied upon, perhaps run counter to each other and as such to
resolve the said conflict, the appeal should be decided by a Bench of three
learned Judges, and that is how the appeal has been placed before us.
Mr. Guntur Prabhakar, the learned counsel appearing for the State,
contended that the law declared by the. Supreme Court in the appeal in the
G case of State of Andhra Pradesh and Ors. v. Venkatagiri and Ors. is the law
of the land and binding on all persons throughout the country in view of
.;
Article 141 of the Constitution. By the said Judgment, this Court having held
that the amendment of 1971 Act is valid and it having further held that the
period during which the interim payment are payable under the Act ends with
the date of original determination made by the Director under Section 39(1)
H of the Act, the Division Bench of the High Court committed serious error in
DIRECTOROFSETILEMENTS, A.P. v. M.R. APPARAO [PATIANAIK,J.j 671
issuing a mandamus contrary to the aforesaid declaration of law on the basis A
_,
of finality attached to the Judgment in favour of the respondents. According
-
to Mr. Prabhakar, the very Judgment in favour of the respondents having
emanated, because of the Judgment of Andhra Pradesh High Court in
Venkatagiri's case and the judgment of Venkatagiri, having been set aside,
the respondents cannot make any claim on the basis of the earlier judgment B
in their favour. High Court, therefore, was in error in issuing the impugned
directions in the Judgment under challenge. Relying upon the Judgment of
this Court in Mis Shenoy and Co. v. Commercial Tax Officer, Circle If,
Bangalore, [1985] 2 SCC 512, Mr. Prabhakar contends that the effect of the
......
Judgment of this Court in C.A. No. 1743 of 1973 is that the said Judgment
would be a biilding law, not only for the parties in that appeal but also those, c
who had approached the High Court under Article 226 and in whose favour,
a mandamus had been issued, following the Judgment in Venkatagiri's case.
The law declared by the High Court in Venkatagiri' s case, having been set
aside and the amendment Act having been held to be constitutionally valid
and effective, the mandamus that had been issued in favour of the respondents, D
must be held to have been rendered ineffective and unenforceable and,
therefore, the High Court could not have issued the impugned directions.
According to Mr. Prabhakar, the three Judge Bench Judgment of this Court
in Shenoy's case referred to supra, apply with full force to the case in h;md
and in this view of the matter, the impugned judgment must be held to be
unsustainable in law. Mr. Prabhakar also relied upon the Judgment of this E
Court in UP. Pollution Control Board and Ors. v. Kanoria Industrial Ltd
and Anr., [2001] 2 sec 549, and urged that t~·apply the law laid down by
this Court in Venkatagiri's case only to the parties to the said appeal, would
tantamount to ignore the binding nature of a judgment of this Court under
Article 141 of the Constitution. According to him, such an interpretation
F
would make the mandate of Article 141 illusory and the High Court, therefore,
committed serious error in not examining the effect of Article 141 of the
Constitution in its true perspective. Mr. Prabhakar also relied upon the
Constitution Bench decision of this Court in E.S.P. Rajaram and Ors. v.
Union of India and Ors., [2001] 2 SCC 186, and contended that the very
approach adopted by this Court in the aforesaid case to have a uniformity of G
law in respect of all concern leads to the only conclusion that the High Court
'
was not justified in issuing a mandamus on the ground of finality to the
earlier Judgment in favour of the respondents, as that would go against the
provisions of Article 141 of the Constitution.
Mr. P.P. Rao, the learned senior counsel, appearing for the respondents H
672
SUPREME COURT REPORTS
[2002] 2 S.C .. R.
A on the other hand contended that the judgment of this Court in C.A. Nos. 398
and 13 85 of 1972 (State of Andhra Pradesh and Ors. v. Venkatagiri) proceeded
on the basis of a concession of the counsel appearing for said Venkatagiri.
Neither the Court examined the different contentions or adjudicated upon the
same and as such, it cannot be held to be a law declared within the ambit of
B Article 141 of the Constitution. According to Mr. Rao, the so called observation
of this Court in Venkatgiri 's case in its judgment dated 6th February, 1986,
in the appeals preferred by the State of Andhra Pradesh are per incurium
inasmuch as the judgment of the High Court in Writ Petition No. 496 of 1965
was not under appeal before this Court and the Court did not advert to the
reasons given by the High Court. Further the Bench of this Court did not
C consider the relevant provisions of the Act wherein the expression 'final
determination' had been used by the legislature in contrast to the word
'determina!ion' used in Section 39(1). Even the Bench did not consider the
earlier decision of this Court in S.R. Y. Sivaram Prasad Bahadur. v.
Commissioner oflncome Tax, (1971] 3 SCC 726 wherein it was held that the
D
interim payment is different from the compensation payable. Mr. Rao contends
that the expression 'determination' and 'final detennination' connotes two
distinct meaning and cannot be one and the same. According to Mr. Rao
when the two expression of different import are used in a statute they convey
different meaning applicable to different situations. With reference to the
judgment of this Court in Mis. Shenoy and Co. v. Commercial Tax Officer,
E Circle II, Bangalore, (1985] 2 SCC 512, on which decision the learned counsel
for the State heavily relied upon, Mr. Rao contends that the aforesaid decision
requires re-consideration inasmuch as it has not taken into account the binding
precedents on the principle of res judicata in the realm of public law. Accord!ng
to Mr. Rao, the decision of this Court in the case of Authorised Officer (Land
Reforms) v. MM Krishnamurthy Chetty, (1998] 9 SCC 138·represents the
F correct position and the order of the Court which may not be strictly legal if
has become final, the same not being challenged before a superior Court, it
would have the binding effect as between the parties. In this view of the
matter the mandamus issued in favour of the respondents in Writ Petition
Nos. 3293 and 3294 of 1975 directing the State to make interim payments
G cannot be disobeyed or nullified merely because the judgment of the High
Court in Venkatgiri's case was reversed by the Supreme Court, and more
particularly, because the reversal of the judgment in the Supreme Court was
on the basis of the concession of the counsel appearing for Venkatgiri.
According to Mr. Rao, the rights accrued to the respondents in terms of the
earlier judgment are not affected by the order and judgment of the Supreme
H Court dated 6.2.1986 in Venkatgiri 's case and as such, the Division Bench of
[
DIRECTOR OF SETTLEMENTS, A.P. v. M.R. APPARAO [PATTANAIK, J.] 673
the High Court was fully justified in issuing the impugned order and direction. A
r
Jn view of the rival submissions following questions arise for our
consideration:
(a) Can the decision of this Court dated 6th February, 1986, upholding
the constitutional validity of the Amendment Act of 1971 reversing B
the judgment of Andhra Pradesh High Court in C.A. Nos. 39$
and 1385 of 1972 (State of Andhra Pradesh v. Venkatagiri and
batch), and further indicating that the period during which interim
payments are payable under the Act ends with the date of the
original determination made by the Director under Section 39(1) c
of the Act, be held to be a law declared by the Supreme Court
under Article 141 of the Constitution, or it can be said to be per
incurium, as contended by Mr. Rao, learned counsel appearing
for the respondents?
(b) The judgment of the Andhra Pradesh High Court in favour of the D
respondents passed in Writ Petition Nos. 3293 and 3294 of 1975
not being challenged by way of appeal to the Supreme Court
even though it merely followed the earlier decision of the High
Court in Venkatgiri's case, whether has conferred an indefeasible
right on the respondents notwithstanding the reversal of the
judgment of the High Court in Venkatgiri's case by the Supreme E
Court?
(c) Whether the High Court would be justified in issuing a mandamus
in the changed circumstances, namely, Supreme Court reversing
the judgment of the High Court in Venkatgiri's case inasmuch as
for issuance of a mandamus one of the condition precedent, which F
is required to be established is that the right subsisted on the date
of the petition?
(d) Whether the judgment of this Court in Shenoy's case - 1985 (2)
Supreme Court Cases 512 requires any re-consideration?
G
So far as the first question is concerned, Article 141 of the Constitution
unequivocally indicates that the law declared by the Supreme Court shall be
binding on all Courts within the territory of India. The aforesaid Article
empowers the Supreme Court to declare the law. It is, therefore, an essential
function of the Court to interpret a legislation. The statements of the Court
on matters other than law like facts may have no binding force as the facts H
674
SUPREME COURT REPORTS
[2002] 2 S.C.R.
A of two cases may not be similar. But what is binding is the ratio of the
decision and not any finding of facts. It is the principle found out upon a
reading of a judgment as a whole, in the light of the ·questions before the
Court that forms the ratio and not any particular word or sentence. To
determine whether a decision has 'declared law' it cannot be said to be a law
B when a point is disposed of on concession and what is binding is the principle
underlying a decision. A judgment of the Court has to be read in the con.text
of questions which arose for consideration in the case in which the judgment
was delivered. An 'obiter dictum' as distinguished from a ratio decid~ndi" is
an observation by Court on a legal question suggested in a case befor~ i! but
not arising in such manner as to require a decision. Such an obiter may not
C · have a binding precedent as the observation was unnecessary for the decision
pronounced, but even though an obiter may not have a bind effect as a
precedent, but it cannot be denied that it is of considerable weight. The law
which will be binding under Article 141 would, therefore, extend to all
observations of points raised and decided by the Court in a given case. So
far as constitutional matters are concerned, it is a practice of the Court not
D to make any pronouncement on points not directly raised for its decision. The
decision in a judgment of the Supreme Court cannot be assailed on the
ground that certain aspects were not considered or the relevant provisions
were not brought to the notice of the Court (see AIR_(l970) SC 1002 and
AIR (1973) SC 794). When Supreme Court decides a principle it would be
E the duty of the High Court or a subordinate Court to follow the decision of
the Supreme Court.- A judgment of the High Court which refuses to follow
the decision and directions of the Supreme Court or seeks to ~evive a decision
of the High Court which had been set aside by the Supreme Court is a nullity.
(See [1984)] 2 SCC 402 and [1984] 2 SCC 324). We have to answer the first
question bearing in mind the aforesaid guiding principles. We may refer to
F some of the decisions cited by Mr. Rao in elaborating his arguments contending
that the judgment of this Court dated 6th February, 1986 cannot be held to
be a law declared by the Court within the ambit of Article 141 of the
Constitution. Mr. Rao relied upon the judgment of this Court in the case of
Pandit MS.M Sharma v. Shri Sri Krishna Sinha and Ors., (1959) Suppl. 1
G Supreme Court Reports 806, wherein the power and privilege of the State
Legislature and the fundamental right of freedom of speech and expression
including the freedom of the press was the subject matter of consideration.
In the aforesaid judgment it has been observed by the Court that the decision ·
in Gunupati Keshavram Reddy v. Najisul Hasan, AIR (1954) SC 636, relied
upon by the counsel for the petitioner which entirely proceeded on a concession
H of the counsel cannot be regarded as a considered opinion on the subject.
DIRECTOR OF SETTLEMENTS, A.P. v. M.R. APP ARAO [PA TT ANAJK, J.] 675
•;There is no dispute with the aforesaid proposition of law. The next decision A
relied upon by Mr. Rao is the case of Supdt. and Legal Remembrancer, State
of West Bengal v. Corporation of Calcutta, (1967) 2 S"!Jreme Court Reports
170. The observation of Subba Rao, J. in the aforesaid case, in relation to the
decision of the Privy Council in the case of Province of Bombay v. Municipal
Corporation of the City of Bombay (73 Indian Appeals 271) which had been
pressed into service by the learned Advocate General of State of West Bengal, B
has been pressed into service by Mr. Rao. After quoting a passage from the
judgment of the Privy Council this Court held "the decision made on
concession made by the parties even though the principle consisted was
accepted by the Privy Council without discussion cannot be given the same
value as one given upon a careful consideration of the pros and cons of the C
question raised. The aforesaid observation indicates the care and caution
taken by the Court in the matter and therefore, merely because the pros and
cons of the question raised had not been discussed the judgment of this Court
cannot be held to be not a law declared, as contended by Mr. Rao.
The next decision relied upon by Mr. Rao is the case of Krishena D
KumarandAnr. etc. etc. v. UnionoflndiaandOrs., [1990] 3 Supreme Court
Reports 352. In the aforesaid case the Constitution Bench was considering
the ratio decidendi in Nakara's case 1983 (2) SCR 165, when the question
before the Court was whether the States' obligation is the same towards the
Pension retirees as well as the Provident Fund retirees and ultimately the E
Court came to the conclusion that the Pension Scheme and Provident Fund
Scheme are structurally different and, as such, the observation of the Court
in Nakara· may be a moral obligation of the State but cannot be construed a
ratio decidendi for being enforceable and applicable in all cases. It is in this
context, it was observed in Krishena Kumar that the enunciation of the reason
or principle upon which a question before a Court has been decided is alone F
binding as a precedent, and the ratio decidendi is the underlying principle,
namely, the general reasons or the general grounds upon which the decision
is based on the test or abstract the specific pecularities of the particular case
which gives rise to the decision.