Supreme Court of India

SANJAY KUMAR AGARWALversusSTATE TAX OFFICER (1) & ANR.

Citation: 2023 INSC 963
Decided: 31 October 2023
Disposal: Dismissed
Bench: A S BOPANNA

Holding

The Court held that the review petitions disclose no error apparent on the face of the record and, being filed by a coordinate bench against another coordinate bench, are not maintainable; the impugned judgment is not reviewable.

Summary

A batch of five review petitions was filed challenging the Supreme Court's common judgment and order dated 06‑09‑2022 in Civil Appeals No. 1661 of 2020 and No. 2568 of 2020, which interpreted the interplay between Section 48 of the Gujarat Value‑Added Tax Act, 2003 and Section 53 of the Insolvency and Bankruptcy Code, 2016. The petitioners, none of whom were parties to the original appeals, claimed they were aggrieved because the Court allegedly failed to consider the IBC’s waterfall mechanism and other provisions. The Court held that a coordinate bench cannot review the judgment of another coordinate bench, that the impugned judgment had, in fact, examined Section 53 and related IBC provisions, and that no error apparent on the face of the record existed. Consequently, the review petitions were dismissed as they fell outside the scope of Order XLVII of the Supreme Court Rules and Order XLVII of the CPC.

Issues considered

The review petitions fall within the ambit of Order XLVII of the Supreme Court Rules/Order XLVII of the CPC for review.
Whether there is an error apparent on the face of the record in the impugned judgment.
Whether a coordinate bench can review the judgment of another coordinate bench of equal strength.
Whether the impugned judgment failed to consider the waterfall mechanism under Section 53 of the IBC and other IBC provisions.

Legislation cited

Code of Civil Procedure, 1908s. Order XLVII
Gujarat Value Added Tax Act, 2003s. 48
Insolvency and Bankruptcy Code, 2016s. 30, s. 31, s. 3(30), s. 53
Supreme Court Rules, 2013s. Order XLVII

Subjects

review petitionOrder XLVIISupreme Court RulesCode of Civil ProcedureInsolvency and Bankruptcy CodeSection 53waterfall mechanismcoordinate bencherror apparent on the face of recordGVAT Actsecured creditor

Judgment

[2023] 15 S.C.R. 225 : 2023 INSC 963

CASE DETAILS

SANJAY KUMAR AGARWAL
v.
STATE TAX OFFICER (1) & ANR.
(Review Petition (Civil) No.1620 of 2023)
In
(Civil Appeal No. 1661 of 2020)
OCTOBER 31, 2023
[A. S. BOPANNA AND BELA M. TRIVEDI, JJ.]
HEADNOTES
Issue for consideration: A Batch of ﬁve Review Petitions was ﬁled
by the Review Petitioners, aggrieved by the common judgment and order
dated 06.09.2022 passed by the Supreme Court in Civil Appeal No. 1661 of
2020 and Civil Appeal No. 2568 of 2020. Whether the Review Petitioners
were able to make out any case within the ambit of Order XLVII of Supreme
Court Rules, read with Order XLVII of CPC, for reviewing the impugned
judgment.
Supreme Court Rules, 2013 – Or. XLVII – Code of Civil Procedure,
1908 – Or. XLVII – Review Petitioners placed heavy reliance on the
observations made by a two Judge Bench of the Supreme Court in
C.A. No. 7976 of 2019 (Paschim Anchal Vidyut Vitran Nigam Limited
vs. Raman Ispat Private Limited and Others) and submitted that the
court in the impugned judgment had failed to consider the waterfall
mechanism contained in Section 53, as also failed to consider other
provisions of the IBC – Propriety:
Held: The said submission of the review petitioners was outrightly
rejected for the simple reason that any passing reference of the impugned
judgment made by the Bench of the equal strength could not be a ground
for review – It is well settled proposition of law that a co-ordinate Bench
cannot comment upon the discretion exercised or judgment rendered by
another co-ordinate Bench of the same strength – If a Bench does not
accept as correct the decision on a question of law of another Bench of
225
226 SUPREME COURT REPORTS [2023] 15 S.C.R.

equal strength, the only proper course to adopt would be to refer the matter
to the larger Bench, for authoritative decision, otherwise the law would be
thrown into the state of uncertainty by reason of conﬂicting decisions – The
submissions made by the Review Petitioners that the court in the impugned
decision had failed to consider the waterfall mechanism as contained in
s.53 and failed to consider other provisions of IBC, are factually incorrect
– As evident from the bare reading of the impugned judgment, the Court
had considered not only the Waterfall mechanism u/s. 53 of IBC but also
the other provisions of the IBC for deciding the priority for the purpose of
distributing the proceeds from the sale as liquidation assets – Therefore,
the well-considered judgment sought to be reviewed does not fall within
the scope and ambit of Review. [Paras 20, 24, 27]
Review – Grounds of Review:
Held: (i) A judgment is open to review inter alia if there is a mistake
or an error apparent on the face of the record; (ii) A judgment pronounced
by the Court is ﬁnal, and departure from that principle is justiﬁed only
when circumstances of a substantial and compelling character make it
necessary to do so; (iii) An error which is not self-evident and has to
be detected by a process of reasoning, can hardly be said to be an error
apparent on the face of record justifying the court to exercise its power of
review; (iv) In exercise of the jurisdiction under Order 47 Rule 1 CPC, it
is not permissible for an erroneous decision to be “reheard and corrected”;
(v) A Review Petition has a limited purpose and cannot be allowed to be
“an appeal in disguise”; (vi) Under the guise of review, the petitioner
cannot be permitted to reagitate and reargue the questions which have
already been addressed and decided; (vii) An error on the face of record
must be such an error which, mere looking at the record should strike and
it should not require any long-drawn process of reasoning on the points
where there may conceivably be two opinions; (viii) Even the change in
law or subsequent decision/ judgment of a co-ordinate or larger Bench by
itself cannot be regarded as a ground for review. [Para 16]
LIST OF CITATIONS AND OTHER REFERENCES
Beghar Foundation vs. Justice K.S. Puttaswamy (Retired) and Others
[2021] 1 SCR 681 : (2021) 3 SCC 1 – followed.
SANJAY KUMAR AGARWAL v. STATE TAX OFFICER (1) & 227
ANR.

Parsion Devi and Others vs. Sumitri Devi and Others [1997] 4 Suppl.
SCR 470 : (1997) 8 SCC 715; Shanti Conductors Private Limited vs. Assam
State Electricity Board and Others [2019] 16 SCR 252 : (2020) 2 SCC
677; Shri Ram Sahu (Dead) Through Legal Representatives and Others vs.
Vinod Kumar Rawat and Others (2021) 13 SCC 1; Arun Dev Upadhyaya
vs. Integrated Sales Service Limited & Another R.P. (C) Nos. 1273-1274 of
2021 in Civil Appeal Nos. 8345- 8346 of 2018; Jai Sri Sahu vs. Rajdewan
Dubey and Others [1962] SCR 558 : AIR 1962 SC 83; Mamleshwar Prasad
and Another vs. Kanhaiya Lal (Dead) Through L.Rs. [1975] 3 SCR 834 :
(1975) 2 SCC 232; Sant Lal Gupta and Others vs. Modern Cooperative
Group Housing Society Limited and Others [2010] 13 SCR 621 : (2010)
13 SCC 336 – relied on.
Union of India vs. Nareshkumar Badrikumar Jagad & Others (2019)
18 SCC 586; M/s. Northern India Caterers (India) Ltd. vs. Lt. Governor
of Delhi [1980] 2 SCR 650 : (1980) 2 SCC 167; Sajjan Singh and Ors. vs.
State of Rajasthan and Ors. [1965] SCR 933 : AIR 1965 SC 845; Paschim
Anchal Vidyut Vitran Nigam Limited vs. Raman Ispat Private Limited
and Others C.A. No. 7976 of 2019; Ghanashyam Mishra and Sons Private
Limited through the authorized signatory vs. Edelweiss Asset Reconstruction
Company Limited through the Director and Others (2021) 9 SCC 657;
Singapore Private Limited vs. Committee of Creditors of Educomp Solutions
Limited and Another (2022) 2 SCC 401 – referred to.
OTHER CASE DETAILS INCLUDING IMPUGNED
ORDER AND APPEARANCES
INHERENT JURISDICTION: Review Petition (Civil) No.1620 of
2023 in Civil Appeal No.1661 of 2020.
From the Judgment and Order dated 06.09.2022 in C. A. No.1661 of
2020 of the Supreme Court of India.
With
Rev. Pet (C) No.1621 of 2023 in C.A. No.1661 of 2020, Rev. Pet (C)
No. 1622 of 2023 in C.A. No.1661 of 2020 and Rev. Pet (C) No.236 of
2023 in C.A. No.2568 of 2020 and Rev. Pet (C) No.1623 of 2023 in C.A.
No.1661 of 2020.
228 SUPREME COURT REPORTS [2023] 15 S.C.R.

Appearances:
Naveen Pahwa, Dhruv Mehta, Harish N Salve, Ramji Srinivasan,
Maninder Singh, Sumesh Dhawan, Jaideep Gupta, Siddharth Bhatnagar,
Sr. Advs., M/s. Lawﬁc, M.s Vishnu Sankar, Atul Sharma, Sriram Parakkat,
Vikram Choudhary, Aditi Sharma, Aditya Santosh, Ankur Kashyap,
Ayush Agarwala, Ms. Megharanjani Chandu, Rishab Agarwal, Ajith S
Ranganathan, Rohit Rajershi, Aman Bajaj, Ms. Preety Choudhary, Shyam R
Agarwal, Arnav Narain, Rajesh Srivastava, Gaurav Verma, Neeraj Dutt Gaur,
Sanjay Singh, Sanjay Kapur, Ms. Megha Karnwal, Surya Prakash, Devesh
Dubey, Arjun Bhatia, Ms. Mayuri Raghuvanshi, Vyom Raghuvanshi, Ms.
Akanksha Rathore, Dhruv Sharma, Ms. Namrata Saraogi, Karthik Pandey,
Ms. Aastha Mehta, Ms. Deepanwita Priyanka, Ms. Prerna Mohapatra, Ms.
Yasha Goyal, Vatsala Kak, Mahesh Agarwal, Raghav Dembla, Shaurya
Shyam, Ms. Geetika Sharma, E. C. Agrawala, Vikas Mehta, Ms. Rashi
Rampal, Arvind Thapliyal, Dhruv Devan, Surya Kapoor, Ms. Saravana
Vasanta, Siddhant Grover, Siddharth Pandey, Ms. Pracheta Kar, Aditya
Sidhra, Nadeem Afroz, Kunal Chatterji, Advs. for the appearing parties.
JUDGMENT / ORDER OF THE SUPREME COURT

JUDGMENT

BELA M. TRIVEDI, J.
1. This batch of ﬁve Review Petitions seeks to review the common
Judgment and Order dated 06.09.2022 passed by this Court in Civil Appeal
No. 1661 of 2020 and Civil Appeal No. 2568 of 2020. Both the said appeals
were preferred by the State Tax Oﬃcer-appellant.
2. Civil Appeal No. 1661 of 2020 was preferred by the Appellant-State
Tax Oﬃcer against the Respondent-Rainbow Papers Limited (Corporate
Debtor), being aggrieved by the Judgment and Order dated 19.12.2019
passed by the National Company Law Appellate Tribunal (hereinafter
referred to as the ‘NCLAT’), dismissing the Company Appeal (At) (INs)
No. 404 of 2019 ﬁled by the appellant. The said company Appeal was ﬁled
against the order dated 27.02.2019 passed by the Adjudicating Authority,
rejecting the Application being I.A. No. 224/271/272/337 of 2018 and
P-01/2019 in CP No. (IB) 88/9/NCLT/AHM/2017 ﬁled by the appellants,
SANJAY KUMAR AGARWAL v. STATE TAX OFFICER (1) & 229
ANR. [BELA M. TRIVEDI, J.]

in which it was held that the appellant cannot claim ﬁrst charge over the
property of the Corporate Debtor, as Section 48 of the Gujarat Value Added
Tax 2003 (hereinafter referred to as the ‘GVAT Act’) cannot prevail over
Section 53 of the Insolvency and Bankruptcy Code 2016 (hereinafter referred
to as the IBC).
3. Civil Appeal No. 2568 of 2020 was preferred by the appellant- State
Tax Oﬃcer against the Respondents- Mr. Chandra Prakash Jain and M/s.
Mekaster Engineering Ltd., being aggrieved by the Order dated 23.01.2020
passed by the NCLAT in Company Appeal (At) (Ins) No. 1193 of 2019.
The NCALT by the said judgment and order had dismissed the said Appeal
of the appellant on the basis of the judgment and order dated 19.12.2019
passed in Company Appeal (At) (Insolvency No. 404 of 2019) (which was
the order under challenge in Civil Appeal No.1661 of 2020).
4. This Court while allowing the said Appeals vide the impugned order
dated 06.09.2022 held as under:
“56. Section 48 of the GVAT Act is not contrary to or inconsistent with
Section 53 or any other provisions of the IBC. Under Section 53(l)
(b)(ii), the debts owed to a secured creditor, which would include the
State under the GVAT Act. are to rank equally with other speciﬁed
debts including debts on account of workman’s dues for a period of
24 months preceding the liquidation commencement date.
57. As observed above, the State is a secured creditor under the GVAT
Act. Section 3(30) of the IBC deﬁnes secured creditor to mean a
creditor in favour of whom security interest is credited. Such security
interest could be created by operation of law. The deﬁnition of secured
creditor in the IBC does not exclude any Government or Governmental
Authority.
58. We are constrained to hold that the Appellate Authority (NCLAT)
and the Adjudicating Authority erred in law in rejecting the application/
appeal of the appellant. As observed above, delay in ﬁling a claim
cannot be the sole ground for rejecting the claim.
59. The appeals are allowed. The impugned orders are set aside. The
Resolution plan approved by the CoC is also set aside. The Resolution
Professional may consider a fresh Resolution Plan in the light of the
230 SUPREME COURT REPORTS [2023] 15 S.C.R.

observations made above. However, this judgment and order will not,
prevent the Resolution Applicant from submitting a plan in the light
of the observations made above, making provisions for the dues of
the statutory creditors like the appellant.
60. There shall be no order as to costs”.
5. The following ﬁve Review Petitions have been ﬁled by the Review
Petitioners being aggrieved by the said common judgment and order dated
06.09.2022 passed by this Court.
(i) The Review Petition (Civil) No. 1620 of 2023 in Civil Appeal
No. 1661 of 2020 has been ﬁled by the petitioner – Sanjay Kumar
Agarwal, who happened to be the Liquidator of Biotor Industries
Limited (previously known as Jayant Oils and Derivatives Private
Limited) (‘Corporate Debtor’) a registered dealer under the
Gujarat Value Added Tax 2003 Act (hereinafter referred to as the
‘GVAT Act’) and the Central Sales Tax Act, 1956 (hereinafter
referred to as the ‘Sales Tax Act’). The Review Petitioner was
not a party to the proceedings of Civil Appeal No. 1661 of
2020, however, has ﬁled the Review Petition claiming to be
an “aggrieved person” on the ground that the impugned order
dated 06.09.2022 passed by this Court would have direct eﬀect
on the proceedings pending between the Review Petitioner and
the Gujarat Sales Tax Authority before the Gujarat High Court
in Special Civil Application No. 23256 of 2019.
(ii) The Review Petition No. 1621 of 2023 in Civil Appeal No. 1661
of 2020 has been ﬁled by the Review Petitioner – Ramchandra
Dallaram Choudhary, who happened to be the Resolution
Professional (hereinafter referred to as the RP) of the Corporate
Debtor, “Rainbow Papers Limited” – and was the respondent
in the proceedings before the National Company Law Tribunal
(hereinafter referred to as the ‘NCLT’) in Intervention Application
No. P-01 of 2019 in CP No. 88/9/NCLT/AHM/2017 and was
respondent no. 2 before the NCLAT in Company Appeal (At)
(Ins) No. 404 of 2019). According to the Review Petitioner, he
was not made party in the Civil Appeal No. 1661 of 2020 ﬁled
before this Court and therefore was aggrieved by the said order.
SANJAY KUMAR AGARWAL v. STATE TAX OFFICER (1) & 231
ANR. [BELA M. TRIVEDI, J.]

(iii) The Review Petition (Civil) No. 1622 of 2023 in Civil Appeal
No. 1661 of 2020 has been ﬁled by the Review Petitioner State
Bank of India, on behalf of the Consortium of lenders of the
Biotor Industries Limited, a company under liquidation. The
Review petitioner was not a party to the proceedings of Civil
Appeal No. 1661 of 2020, however, claims to be an “aggrieved
person” as according to the Review Petitioner, the impugned
judgment had an eﬀect over the proceedings pending between
the Review Petitioner and the Sales Tax authorities, Vadodara in
Writ Petition being SCA No. 23256 of 2019 before the Gujarat
High Court.
(iv) The Review Petition (Civil) No. 236 of 2023 in Civil Appeal No.
2568 of 2020 has been ﬁled by the Review Petitioners – Chandra
Prakash Jain and Anr., Resolution Professional of M/s. Mekaster
Engineering Ltd., and M/s. Mekaster Engineering Ltd (Corporate
Debtor), who were the respondents in Civil Appeal No. 2568 of
2020 ﬁled by the Appellant – State Tax Oﬃcer. According to the
petitioners, they are aggrieved by the common impugned order
dated 06.09.2022 passed by this Court as the same was passed
without taking into consideration the law laid down by this Court
and the provisions of IBC.
(v) The Review Petition (Civil) No. 1623 of 2023 in Civil Appeal
No. 1661 of 2020 has been ﬁled by the Review Petitioner-Indian
Overseas Bank, which was one of the members of the Committee
of creditors constituted subsequent to the commencement of
Corporate Insolvency Resolution Process (CIRP) of the M/s.
Rainbow Papers Limited (Corporate Debtor). The Review
Petitioner was not a party to the proceedings in Civil Appeal
No. 1661 of 2020, however, is seeking review being aggrieved
by the impugned judgment dated 06.09.2022.
6. This Court vide the order dated 13th November, 2022, had allowed the
Applications seeking permission to ﬁle Review Petitions and also allowed
the applications seeking Intervention/ Impleadment.
232 SUPREME COURT REPORTS [2023] 15 S.C.R.

Scope of Review:
7. At the outset, it may be stated that the power to review its judgments
has been conferred on the Supreme Court by Article 137 of the Constitution
of India. Of course, that power is subject to the provisions of any law made
by the Parliament or the Rules made under Article 145.Supreme Court
in exercise of the powers conferred under Article 145 of the Constitution
of India has framed the Supreme Court Rules, 2013. The Order XLVII
of Part IV thereof deals with the provisions of Review. Accordingly, in
a Civil Proceeding, an application for review is entertained only on the
grounds mentioned in Order XLVII Rule 1 of the Code of Civil Procedure
and in a Criminal Proceeding on the ground of an error apparent on the
face of record. However, it may be noted that neither Order XLVII CPC
nor Order XLVII of Supreme Court Rules limits the remedy of review
only to the parties to the judgment under review. Even a third party to the
proceedings, if he considers himself to be an “aggrieved person,” may
take recourse to the remedy of review petition. The quintessence is that
the person should be aggrieved by the judgment and order passed by this
Court in some respect.1 In view of the said legal position, the Review
Petitioners who claimed to be the “aggrieved persons” by the impugned
judgment dated 06.09.2022, were permitted to ﬁle Review Petitions and
were heard by the Court.
8. Before adverting to the contentions raised by the learned counsels
for the parties, let us regurgitate the well settled law on the scope of review
as contemplated in Order XLVII of the Supreme Court Rules read with
Order XLVII of CPC.
9. In the words of Krishna Iyer J., (as His Lordship then was) “a plea
of review, unless the ﬁrst judicial view is manifestly distorted, is like asking
for the Moon. A forensic defeat cannot be avenged by an invitation to have
a second look, hopeful of discovery of ﬂaws and reversal of result………
A review in the Counsel’s mentation cannot repair the verdict once given.
So, the law laid down must rest in peace.”2

1 (2019) 18 SCC 586, Union of India vs. Nareshkumar Badrikumar Jagad & Others
2 (1980) 2 SCC 167, M/s. Northern India Caterers (India) Ltd. vs. Lt. Governor of Delhi
SANJAY KUMAR AGARWAL v. STATE TAX OFFICER (1) & 233
ANR. [BELA M. TRIVEDI, J.]

10. It is also well settled that a party is not entitled to seek a review of
a judgment delivered by this Court merely for the purpose of a rehearing
and a fresh decision of the case. The normal principle is that a judgment
pronounced by the Court is ﬁnal, and departure from that principle is justiﬁed
only when circumstances of a substantial and compelling character make
it necessary to do so.3
11. In Parsion Devi and Others vs. Sumitri Devi and Others4, this
Court made very pivotal observations: -
“9. Under Order 47 Rule 1 CPC a judgment may be open to review
inter alia if there is a mistake or an error apparent on the face of the
record. An error which is not self-evident and has to be detected by
a process of reasoning, can hardly be said to be an error apparent
on the face of the record justifying the court to exercise its power of
review under Order 47 Rule 1 CPC. In exercise of the jurisdiction
under Order 47 Rule 1 CPC it is not permissible for an erroneous
decision to be “reheard and corrected”. A review petition, it must
be remembered has a limited purpose and cannot be allowed to be
“an appeal in disguise.”
12. Again, in Shanti Conductors Private Limited vs. Assam State
Electricity Board and Others5, a three Judge Bench of this Court following
Parsion Devi and Others vs. Sumitri Devi and Others (supra) dismissed the
review petitions holding that the scope of review is limited and under the
guise of review, the petitioner cannot be permitted to reagitate and reargue
the questions which have already been addressed and decided.
13. Recently, in Shri Ram Sahu (Dead) Through Legal Representatives
and Others vs. Vinod Kumar Rawat and Others6, this Court restated the
law with regard to the scope of review under Section 114 read with Order
XLVII of CPC.

3 AIR 1965 SC 845, Sajjan Singh and Ors. vs. State of Rajasthan and Ors.
4 (1997) 8 SCC 715
5 (2020) 2 SCC 677
6 (2021) 13 SCC 1
234 SUPREME COURT REPORTS [2023] 15 S.C.R.

14. In R.P. (C) Nos. 1273-1274 of 2021 in Civil Appeal Nos. 8345-
8346 of 2018 (Arun Dev Upadhyaya vs. Integrated Sales Service Limited
& Another), this Court reiterated the law and held that: -
“15. From the above, it is evident that a power to review cannot be
exercised as an appellate power and has to be strictly conﬁned to the
scope and ambit of Order XLVII Rule 1 CPC. An error on the face of
record must be such an error which, mere looking at the record should
strike and it should not require any long-drawn process of reasoning
on the points where there may conceivably be two opinions.”
15. It is very pertinent to note that recently the Constitution Bench in
Beghar Foundation vs. Justice K.S. Puttaswamy (Retired) and Others7,
held that even the change in law or subsequent decision/ judgment of co-
ordinate Bench or larger Bench by itself cannot be regarded as a ground
for review.
16. The gist of the afore-stated decisions is that: -
(i) A judgment is open to review inter alia if there is a mistake
or an error apparent on the face of the record.
(ii) A judgment pronounced by the Court is ﬁnal, and departure
from that principle is justiﬁed only when circumstances of a
substantial and compelling character make it necessary to do
so.
(iii) An error which is not self-evident and has to be detected by a
process of reasoning, can hardly be said to be an error apparent
on the face of record justifying the court to exercise its power
of review.
(iv) In exercise of the jurisdiction under Order 47 Rule 1 CPC, it
is not permissible for an erroneous decision to be “reheard and
corrected.”
(v) A Review Petition has a limited purpose and cannot be allowed
to be “an appeal in disguise.”

7 (2021) 3 SCC 1
SANJAY KUMAR AGARWAL v. STATE TAX OFFICER (1) & 235
ANR. [BELA M. TRIVEDI, J.]

(vi) Under the guise of review, the petitioner cannot be permitted
to reagitate and reargue the questions which have already been
addressed and decided.
(vii) An error on the face of record must be such an error which,
mere looking at the record should strike and it should not
require any long-drawn process of reasoning on the points
where there may conceivably be two opinions.
(viii) Even the change in law or subsequent decision/ judgment of
a co-ordinate or larger Bench by itself cannot be regarded as
a ground for review.
Analysis:
17. Keeping in view the afore-stated legal position, let us examine
whether the Review Petitioners have been able to make out any case within
the ambit of Order XLVII of Supreme Court Rules, read with Order XLVII
of CPC, for reviewing the impugned judgment.
18. We have heard Mr. Harish N Salve, Mr. Naveen Pahwa, Mr. Dhruv
Mehta, Mr. Ramji Srinivasan, Mr. Siddharth Bhatnagar, and Mr. Sumesh
Dhawan, respective learned Senior Counsels and other learned counsels for
the Review Petitioners/ Intervenors, as also Mr. Maninder Singh, learned
Senior Counsel and Ms. Aastha Mehta, learned Counsel for the Respondents.
19. The learned Senior Counsels and learned Counsels for the Review
Petitioners/ Intervenors placing heavy reliance on the observations made
by a two Judge Bench of this Court in C.A. No. 7976 of 2019 (Paschim
Anchal Vidyut Vitran Nigam Limited vs. Raman Ispat Private Limited
and Others), delivered on 17th July, 2023, submitted that the court in
the impugned judgment had failed to consider the waterfall mechanism
contained in Section 53, as also failed to consider other provisions of the
IBC. They have relied upon the observations made by the co-ordinate Bench
in the following paragraph: -
“49. Rainbow Papers (supra) did not notice the ‘waterfall mechanism’
under Section 53 – the provision had not been adverted to or extracted
in the judgment. Furthermore, Rainbow Papers (supra) was in the
context of a resolution process and not during liquidation. Section
236 SUPREME COURT REPORTS [2023] 15 S.C.R.

53, as held earlier, enacts the waterfall mechanism providing for the
hierarchy or priority of claims of various classes of creditors. The
careful design of Section 53 locates amounts payable to secured
creditors and workmen at the second place, after the costs and expenses
of the liquidator payable during the liquidation proceedings. However,
the dues payable to the government are placed much below those of
secured creditors and even unsecured and operational creditors. This
design was either not brought to the notice of the court in Rainbow
Papers (supra) or was missed altogether. In any event, the judgment
has not taken note of the provisions of the IBC which treat the dues
payable to secured creditors at a higher footing than dues payable to
Central or State Government.”
20. Taking recourse to the said observations made by the co-ordinate
bench, the learned Counsels for the Review Petitioners have urged to review
the impugned judgment. The said submission of the learned Counsels for
the review petitioners deserves to be outrightly rejected for the simple
reason that any passing reference of the impugned judgment made by the
Bench of the equal strength could not be a ground for review. It is well
settled proposition of law that a co-ordinate Bench cannot comment upon
the discretion exercised or judgment rendered by another co-ordinate Bench
of the same strength. If a Bench does not accept as correct the decision on a
question of law of another Bench of equal strength, the only proper course
to adopt would be to refer the matter to the larger Bench, for authoritative
decision, otherwise the law would be thrown into the state of uncertainty
by reason of conﬂicting decisions.
21. In JaiSri Sahu vs. Rajdewan Dubey and Others8, a Bench of four
Judges have made very pertinent observations in this regard: -
“11. Law will be bereft of all its utility if it should be thrown into a state
of uncertainty by reason of conﬂicting decisions, and it is therefore
desirable that in case of diﬀerence of opinion, the question should be
authoritatively settled.”

8 AIR 1962 SC 83
SANJAY KUMAR AGARWAL v. STATE TAX OFFICER (1) & 237
ANR. [BELA M. TRIVEDI, J.]

22. In Mamleshwar Prasad and Another vs. Kanhaiya Lal (Dead)
Through L.Rs.ৰ, it was observed that: -
“7. Certainty of the law, consistency of rulings and comity of courts –
all ﬂowering from the same principle – converge to the conclusion that
a decision once rendered must later bind like cases. We do not intend to
detract from the rule that, in exceptional instances, where by obvious
inadvertence or oversight a judgment fails to notice a plain statutory
provision or obligatory authority running counter to the reasoning
and result reached, it may not have the sway of binding precedents. It
should be a glaring case, an obtrusive omission.”
23. A precise observations made by a three Judge Bench in Sant Lal
Gupta and Others vs. Modern Cooperative Group Housing Society Limited
and Others10, are worth noting –
“17. A coordinate Bench cannot comment upon the discretion exercised
or judgment rendered by another coordinate Bench of the same court.
The rule of precedent is binding for the reason that there is a desire to
secure uniformity and certainty in law. Thus, in judicial administration
precedents which enunciate the rules of law form the foundation of the
administration of justice under our system. Therefore, it has always
been insisted that the decision of a coordinate Bench must be followed.
(Vide Tribhovandas Purshottamdas Thakkar vs. Ratilal Motilal Patel,
Sub-Committee of Judicial Accountability vs. Union of India, and
State of Tripura vs. Tripura Bar Association.)”
24. Apart from the well-settled legal position that a co-ordinate Bench
cannot comment upon the judgment rendered by another co-ordinate
Bench of equal strength and that subsequent decision or a judgment of a
co-ordinate Bench or larger Bench by itself cannot be regarded as a ground
for review, the submissions made by the learned Counsels for the Review
Petitioners that the court in the impugned decision had failed to consider the
waterfall mechanism as contained in Section 53 and failed to consider other
provisions of IBC, are factually incorrect. As evident from the bare reading

9 (1975) 2 SCC 232
10 (2010) 13 SCC 336
238 SUPREME COURT REPORTS [2023] 15 S.C.R.

of the impugned judgment, the Court had considered not only the Waterfall
mechanism under Section 53 of IBC but also the other provisions of the
IBC for deciding the priority for the purpose of distributing the proceeds
from the sale as liquidation assets.
25. To be precise, the Court in the impugned judgment had categorically
reproduced Section 53 in Paragraph 20, other provisions of IBC along with
the Regulations of 2016 in Paragraph 21, and the subsequent amendments
in the Regulations of 2018, with regard to the submission of claims to be
made by the creditors in Paragraphs 22 & 23 of the judgment. The Court
in the impugned judgment has also considered the earlier decisions of this
Court in case of Ghanashyam Mishra and Sons Private Limited through
the authorized signatory vs. Edelweiss Asset Reconstruction Company
Limited through the Director and Others11 in Paragraph 42. The decision
in case of Ebix Singapore Private Limited vs. Committee of Creditors of
Educomp Solutions Limited and Another12 in Paragraph 47, and thereafter
observed as under: -
“48. A resolution plan which does not meet the requirements of
SubSection (2) of Section 30 of the IBC, would be invalid and not
binding on the Central Government, any State Government, any
statutory or other authority, any ﬁnancial creditor, or other creditor
to whom a debt in respect of dues arising under any law for the
time being in force is owed. Such a resolution plan would not bind
the State when there are outstanding statutory dues of a Corporate
Debtor.
49. Section 31(1) of the IBC which empowers the Adjudicating
Authority to approve a Resolution Plan uses the expression “it shall by
order approve the resolution plan which shall be binding ... “ subject
to the condition that the Resolution Plan meets the requirements
of subsection (2) of Section 30. If a Resolution Plan meets the
requirements, the Adjudicating Authority is mandatorily required
to approve the Resolution Plan. On the other hand, Sub-section (2)
of Section 31, which enables the Adjudicating Authority to reject a

11 (2021) 9 SCC 657
12 (2022) 2 SCC 401
SANJAY KUMAR AGARWAL v. STATE TAX OFFICER (1) & 239
ANR. [BELA M. TRIVEDI, J.]

Resolution Plan which does not conform to the requirements referred
to in sub-section (1) of Section 31, uses the expression “may”.
50. Ordinarily, the use of the word “shall” connotes a mandate/binding
direction, while use of the expression “may” connotes discretion. If
statute says, a person may do a thing, he may also not do that thing.
Even if Section 31(2) is construed to confer discretionary power on
the Adjudicating Authority to reject a Resolution Plan, it has to be
kept in mind that discretionary power cannot be exercised arbitrarily,
whimsically or without proper application of mind to the facts and
circumstances which require discretion to be exercised one way or
the other.”
26. After considering the Waterfall mechanism as contemplated in
Section 53 and other provisions of IBC for the purpose of deciding as to
whether Section 53 IBC would override Section 48 of the GVAT Act, it was
ﬁnally concluded in the impugned order as under: -
“55. In our considered view, the NCLAT clearly erred in its observation
that Section 53 of the IBC over-rides Section 48 of the GVAT Act.
Section 53 of the IBC begins with a non-obstante clause which reads:
- “Notwithstanding anything to the contrary contained in any law
enacted by the Parliament or any State Legislature for the time being
in force, the proceeds from the sale of the liquidation assets shall be
distributed in the following order of priority. ..........
56. Section 48 of the GVAT Act is not contrary to or inconsistent with
Section 53 or any other provisions of the IBC. Under Section 53(l)
(b)(ii), the debts owed to a secured creditor, which would include the
State under the GVAT Act are to rank equally with other speciﬁed
debts including debts on account of workman’s dues for a period of
24 months preceding the liquidation commencement date.
57. As observed above, the State is a secured creditor under the GVAT
Act. Section 3(30) of the IBC deﬁnes secured creditor to mean a
creditor in favour of whom security interest is credited. Such security
interest could be created by operation of law. The deﬁnition of secured
creditor in the IBC does not exclude any Government or Governmental
Authority.”
240 SUPREME COURT REPORTS [2023] 15 S.C.R.

27. In view of the above stated position, we are of the opinion that the
well-considered judgment sought to be reviewed does not fall within the
scope and ambit of Review. The learned Counsels for the Review Petitioners
have failed to make out any mistake or error apparent on the face of record
in the impugned judgment, and have failed to bring the case within the
parameters laid down by this Court in various decision for reviewing the
impugned judgment. Since we are not inclined to entertain these Review
Petitions, we do not propose to deal with the other submissions made by
the learned Counsels for the parties on merits.
28. In that view of the matter, all the Review Petitions are dismissed.

Headnotes prepared by: Review Petitions dismissed.
Ankit Gyan

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