Open letter to hon’ble the Chief Justice of India - Ratio Decidendi reg

Narendra Sharma

M.A. LL.B.

Consultant (Business Laws), Expert (Arbitration, Guarantee, Mortgage)

(M): 9229574214/8982321310/9424858767; Land line: (07272) 421309

E-mail (1): nkdewas@yahoo.co.in, E-mail (2): nkdewas@gmail.com

Off-cum-Res: 199, Alkapuri, Dewas-455001(MP)

________________________________________________

(sent by Regd L. No. A RI059563307IN dated 27.08.2013)

Dewas

26.08.2013

Open letter to hon’ble the Chief Justice of India

• Ratio Decidendi reg

Hon’ble the Chief Justice of India,

Supreme Court of India,

Tilak Marg,

New Delhi - 110001

Respected Sir,

Sub: ‘Ratio Decidendi’ has now been caused to be impenetrable, thus rendered a ‘top secret’ for all concerned

1. Ratio Decidendi: It is settled law that broadly, every judgment of a superior court has three segments, viz. (i) the facts and the point at issue; (ii) the reasons for the decision; and (iii) the final order containing the decision. The principle on the basis whereof a legal issue is answered forms the ‘ratio decidendi’ of a judgment. It is the ratio decidendi of a judgment and not the conclusion that operates as a precedent. Unfortunately, now a days ratio decidendi has been caused to be impenetrable, thus rendered a ‘top secret’ for all concerned. As detailed below, it is submitted that regarding the ratio decidendi of Harman Electronics Private Limited Vs. National Panasonic India Private Limited {2009 (1) SCC 720; Decided on 12.12.2008} in contradistinction to K. Bhaskaran Vs. Sankaran Vaidhyan Balan & Another {(1999) 7 SCC 510; Decided on 29.09.1999}, (1) High Court of Delhi, (2) the author of this letter and (3) the Supreme Court in Nishant Aggarwal vs Kailash Kumar Sharma {Criminal Appeal No. 808 of 2013; Decided on 1 July, 2013}, all three have their own different versions, which are contrary to each other. Consequently, a chaos is prevalent in legal field among the litigants, the lower courts and the higher courts of the Country, which is not desirable. Further, it is pertinent to note here that the position regarding finding ratio decidendi of a judgment is more or less similar in the lower courts and High Courts even in cases other than related to the Negotiable Instruments Act, 1881.
2. Recently, relying on two decisions of hon'ble Supreme Court in the case of ‘Harman Electronics’ (supra) and in the case of Shri Ishar Alloy Steels Ltd. Vs. Jayaswals Neco Ltd {(2001) 3 SCC 609; Decided on 22.02.2001}, hon’ble High Court of Delhi in Surjeet Singh Vs M/s G.E. Capital Transport Financial Services & Anr (CRL.M.C.No.2876/2009; Decided on 22.01.2010) has held as follows.

• 9. Since sending of notice from Delhi to Raipur does not confer jurisdiction on Delhi Court in view of the decision of the Hon'ble Supreme Court in the case of Harman Electronics Private Limited (supra) and the deposit of cheque with the banker of respondent No. 2 in Delhi also does not confer jurisdiction of Delhi court when the cheque is presented to a bank outside Delhi, and there is no other ground which would confer jurisdiction on Delhi Court, it cannot be said that the Delhi Court has the jurisdiction to try this complaint.” (emphasis supplied)

It is with great respect and humbly submitted that hon'ble Delhi High Court has grossly misplaced reliance on these Supreme Court judgments to draw its conclusion that the Delhi court had no territorial jurisdiction to try the complaint u/s 138 of the Negotiable Instruments Act, 1881 due to following reasons.

1. A two judge bench of hon'ble Supreme Court in ‘Harman Electronics’ (supra) clearly disagreed with the ratio of two judge bench of Supreme Court in ‘K. Bhaskaran’ (supra).
2. Recently, Hon'ble Supreme Court in Union of India & Others Vs S.K. Kapoor {(2011) 4 SCC 589; Decided on 16.03.2011} held as follows (SCC Pp 591, para 9):

• 9…It is well settled that if a subsequent co-ordinate bench of equal strength wants to take a different view, it can only refer the matter to a larger bench, otherwise the prior decision of a co-ordinate bench is binding on the subsequent bench of equal strength. Since, the decision in S.N. Narula's case (S.N. Narula vs. Union of India & Others, Civil Appeal No.642 of 2004 decided on 30th January, 2004 {Order Cited now vide (2011) 4 SCC 591} was not noticed in T.V. Patel's case {(2007) 4 SCC 785}, the latter decision is a judgment per incuriam. The decision in S.N. Narula's case (supra) was binding on the subsequent bench of equal strength and hence, it could not take a contrary view, as is settled by a series of judgments of this Court.” (emphasis supplied)

1. Therefore, when a subsequent co-ordinate bench of equal strength in ‘Harman Electronics’ (supra) wanted to take a different view from that of ‘K. Bhaskaran’ (supra), it could have only referred the matter to a larger bench, otherwise the prior decision of a co-ordinate bench in ‘K. Bhaskaran’ is binding on the subsequent bench of equal strength in ‘Harman Electronics’. However, exercising its extra-ordinary jurisdiction under Article 142 of the Constitution of India, the co-ordinate bench of Supreme Court in ‘Harman Electronics’ issued directions that Complaint Case pending in the Court at New Delhi, be transferred to the Court at Chandigarh. In other words, ‘Harman Electronics’ does not, and cannot, overrule ‘K. Bhaskaran’ on this issue.
2. Directions issued by supreme court in exercise of its power under article 142 of the constitution do not constitute a binding precedent: This has been observed by hon’ble Supreme Court in several cases, to quote a few: (a) State of U.P. Vs Neeraj Awasthi &, (b) State of Kerala & Anr. Vs Mahesh Kumar & Ors. {(2009) 3 SCC 654; Decided on 23.02.2009} and recently in (c) Chowdhury Navin Hemabhai & Ors. Vs The State Of Gujarat & Ors. {(2011) 3 SCC 617; Decided on 18.02.2011}. Therefore, directions issued by Supreme Court in ‘Harman Electronics’ (supra) in exercise of its power under article 142 of the constitution do not constitute a binding precedent.
3. In ‘Shri Ishar Alloy’ (supra) it has been held that the essential requirement of Proviso (a) to Section 138 was not satisfied, hence the criminal court at Raipur had no inherent jurisdiction to issue the process against the appellant. There is not a whisper in the judgment that the court at Raipur had no territorial jurisdiction to issue the process against the appellant (and that the court at Indore only had the territorial jurisdiction). Hon’ble Delhi High Court wrongly appreciated the ratio of the judgment in ‘Shri Ishar Alloy’ as the said matter was confined to the issue that “the cheque must reach the drawer bank within six months”. It did not have any bearing on the issue of jurisdiction. Therefore, Delhi High Court has grossly misplaced reliance on this judgment to draw its conclusion that the Delhi court had no territorial jurisdiction to try the complaint.

Therefore, it is with great respect and humbly submitted that hon’ble Delhi High Court has grossly misplaced reliance on these two Supreme Court judgments to draw its erroneous conclusion that the Delhi court had no territorial jurisdiction to try the complaint in ‘Surjeet Singh’ (supra).

{Article written by me on 30.06.2011 titled ‘Beg to Differ-Delhi HC Judgment u/s 138 of N. I. Act’

can be read at http://www.lawyersclubindia.com/articles/Beg-to-Differ-Delhi-HC-Judgment-u-s-138-of-NI-Act-3825.asp}

8. Now, hon'ble Supreme Court in ‘Nishant Aggarwal’ (supra) has, inter alia, observed and held as follows.

• 12. …………..In such circumstances, we are of the view that Harman Electronics (supra) is only an authority on the question where a court will have jurisdiction because only notice is issued from the place which falls within its jurisdiction and it does not deviate from the other principles laid down in K. Bhaskaran (supra). This Court has accepted that the place where the cheque was presented and dishonoured has jurisdiction to try the complaint. In this way, this Court concluded that issuance of notice would not by itself give rise to a cause of action but communication of the notice would.” (emphasis supplied)

9. Earlier, a two judge bench of hon'ble Supreme Court in a landmark judgment in ‘K. Bhaskaran’ (supra) has, inter alia, observed and held as follows.

• The words in clause (b) of the proviso to Section 138 of the Act show that payee has the statutory obligation to `make a demand' by giving notice. The thrust in the clause is on the need to `make a-demand'. It is only the mode for making such demand which the legislature has prescribed. A payee can send the notice for doing his part for giving the notice. Once it is despatched his part is over and the next depends on what the sendee does.

Thus, when a notice is returned by the sendee as unclaimed such date would be the commencing date in reckoning the period of 15 days contemplated in clause (c) to the proviso of Section 138 of the Act. Of course such reckoning would be without prejudice to the right of the drawer of the cheque to show that he had no knowledge that the notice was brought to his address. In the present case the accused did not even attempt to discharge the burden to rebut the aforesaid presumption.” (emphasis supplied)

In view of aforesaid, K. Bhaskaran (supra) is an authority on the question that issuance of notice would by itself give rise to a cause of action. In such circumstances, the author is of the view that Harman Electronics (supra) is not an authority on the question where a court will have jurisdiction because only notice is received at the place which falls within its jurisdiction and it does deviate from the principles laid down in K. Bhaskaran (supra). It is submitted that the latter decision in ‘Harman Electronics’ is not a binding precedent being a judgment per incuriam, as well as in view of the directions issued by Supreme Court by invoking article 142 of the Constitution. The decision in K. Bhaskaran (supra) was binding on the subsequent bench of equal strength in Harman Electronics (supra) and hence, it could not take a contrary view, as is settled by a series of judgments of Supreme Court.

10. Hon’ble Supreme Court in Board Of Control For Cricket vs Netaji Cricket Club & Ors {AIR 2005 SC 592; Decided on 10 January, 2005} has, inter alia, observed that in Rajesh D. Darbar & Others Vs. Narasingrao Krishnaji Kulkarni & Ors. [JT 2003 (7) SC 209], this Court noticed:

"There is a well recognised maxim of equity, namely, actus curiae neminem gravabit which means an act of the Court shall prejudice no man. This maxim is founded upon justice and good sense which serves a safe and certain guide for the administration of law."

11. Analysis:

(a) Relying on ‘Harman Electronics’ and ‘Shri Ishar Alloy’ hon’ble High Court of Delhi in ‘Surjeet Singh’ has held that sending of notice from Delhi to Raipur does not confer jurisdiction on Delhi Court and the deposit of cheque with the banker of respondent No. 2 in Delhi also does not confer jurisdiction on Delhi court when the cheque is presented to a bank outside Delhi, and there is no other ground which would confer jurisdiction on Delhi Court, it cannot be said that the Delhi Court has the jurisdiction to try this complaint. (para 2 above)

(b) In author’s view, the latter decision in ‘Harman Electronics’ is not a binding precedent being a judgment per incuriam, as well as in view of the directions issued by Supreme Court by invoking article 142 of the Constitution. The decision in ‘K. Bhaskaran’ was binding on the subsequent bench of equal strength in ‘Harman Electronics’ and hence, it could not have taken a contrary view. (para 3,4,5,6 and 7 above)

(c) Now, hon'ble Supreme Court in ‘Nishant Aggarwal’ (supra) has, observed that ‘Harman Electronics’ is only an authority on the question where a court will have jurisdiction because only notice is issued from the place which falls within its jurisdiction and that issuance of notice would not by itself give rise to a cause of action but communication of the notice would. (para 8 above)

(d) Whereas, earlier hon'ble Supreme Court in ‘K. Bhaskaran’ has held that issuance of notice would by itself give rise to a cause of action. In such circumstances, the author is of the view that ‘Harman Electronics’ is not an authority on the question where a court will have jurisdiction because only notice is received at the place which falls within its jurisdiction and, accordingly, it does deviate from the principles laid down in ‘K. Bhaskaran’. (para 9 above)

(e) It is evident that regarding the ratio decidendi of ‘Harman Electronics’ (as well as of ‘Shri Ishar Alloy’) in contradistinction to ‘K. Bhaskaran’, (1) High Court of Delhi, (2) the author of this letter and (3) the Supreme Court in ‘Nishant Aggarwal’, all three have their own different versions, which are contrary to each other. Consequently, a chaos is prevalent in legal field among the litigants and the higher courts of the Country, which is not desirable. Further, it is pertinent to note here that the position regarding finding ratio decidendi of a judgment is more or less similar in the lower courts and Higher Courts even in cases other than related to the Negotiable Instruments Act, 1881.

(f) Further, hon’ble Supreme Court in ‘Board of Control for Cricket’ (supra) has observed that "There is a well recognised maxim of equity, namely, actus curiae neminem gravabit which means an act of the Court shall prejudice no man. This maxim is founded upon justice and good sense which serves a safe and certain guide for the administration of law." (para 11 above)

12. Prayer:

In view of aforesaid discussion, you are requested to kindly consider to henceforth making it compulsory for all the hon’ble judges of Supreme Court (as well as of all the High Courts) to invariably provide the principle on the basis whereof a legal issue is answered under the heading “ratio decidendi” in the concluding para of their every judgment to avoid unnecessary confusion, in absence of which every litigant and others concerned are incurring avoidable time, costs and expenses. Besides, such misconception is directly adding to the huge pendency at the lower courts, High Courts and the Supreme Court. For this purpose, the relevant rules of Supreme Court may be suitably amended, if necessary.

With Best Regards

(Narendra Sharma)

Narendra has around 26 years of rich experience in the domain of Companies Act, Arbitration and Conciliation Act, Consumer Protection Act, Sica, 1985, Recovery of Debts Due to Banks and Financial Institutions Act, 1993, Securitization Act, 2002 etc.