Supreme Court of India

UNION OF INDIA AND ORS. ETC. ETC.versusM/S. KUNDAN RICE MILLS LTD.

Citation: 2008 INSC 1230
Decided: 3 November 2008
Disposal: Disposed off
Bench: ARIJIT PASAYAT

Holding

A High Court cannot decide the merits of a case in an interim order of a writ petition; such categorical findings are beyond its jurisdiction.

Summary

The Union of India and others filed a writ petition challenging the seizure of goods belonging to M/s Kundan Rice Mills Ltd., and the High Court, while hearing the interim application, passed a categorical finding that the goods were not liable to confiscation. The High Court also imposed conditions of furnishing an indemnity bond equal to the seizure value and a bank guarantee of 10% of the goods' value, without providing reasons. The appellants contended that the High Court had exceeded its jurisdiction by deciding the merits of the case in an interim proceeding, which is beyond the scope of a writ petition under Article 226. The Supreme Court examined whether a High Court may pass a final merits determination in an interim order and held that it is impermissible. It observed that the High Court failed to justify the conditions imposed and therefore set aside its orders. The Supreme Court directed the High Court to rehear the matters afresh, without further notice, and to allocate them to an appropriate bench. The appeals were disposed of, effectively allowing the appeal and remanding the case for fresh consideration.

Issues considered

Whether a High Court can pass a categorical finding on the merits of a case while adjudicating an interim application in a writ petition under Article 226.
Whether imposing conditions such as an indemnity bond and bank guarantee without justification is within the scope of interim relief.

Legislation cited

Constitution of Indias. Article 226

Subjects

interim reliefwrit petitionArticle 226merits determinationHigh Court jurisdictionSupreme Courtindemnity bondbank guaranteeprocedural law

Judgment

                                    [2008] 15 S.C.R. 133


         "'"             UNION OF INDIA AND ORS. ETC. ETC.                       A
                                              v.
                             M/S. KUNDAN RICE MILLS LTD.
                           (Civil Appeal Nos. 6457-58 of 2008)
                                   NOVEMBER 03, 2008
                                                                                 B
                    [DR. ARIJIT PASAYAT AND DR. MUKUNDAKAM
          --<                      SHARMA, JJ.]
                     Practice and procedure - Interim matters - Adjudication
                of - Categorical finding on merits by High Court - Propriety
                of - Held: Not proper - It was not the stage of doing so and     c
                was beyond the scope of adjudication of writ petition - Thus,
                order of High Court set aside - High Court to hear the matters
                afresh - Constitution of India, Article 226.

                    CIVIL APPELLATE JURISDICTION : Civil Appeal Nos.             D
        )..
                6457-6458 of 2008.

                     From the Judgment and Order dated 5.9.2008 and
                4.10.2008 of the High Court of Punjab and Haryana at
                Chandigarh in CWP No. 13914 of 2008 and COCP No. 1536
                of 2008 in CWP No. 13914 of 2008.                                E

                    Gopal Subrama.nium, A.S.G., Harish Chandra, Rahul
                Kaushik, Ameet Chander and Anil Katiyar for the Appellants.
-~ '                Mukul Rohtagi, S. Ganesh, Reetesh Singh. Janvi Wora,         F
                Pranav Vyas and Surya Kant for the Respondents .
....-
.,.                 The Judgment of the Court was delivered by

                    DR. ARIJIT PASAYAT, J.1. Heard.
                                                                                 G
                     2. Though these matters were listed for admission,
                learned counsel for the parties requested the matters to be
                taken up for final disposal.

•                   3. Leave granted.
                                              133                                H
    134                   [2008] 15 S.C.R. 134


A         4. We find that while adjudicating an interim m~atter, the
    High Court has given a categorical finding on merits holding
    inter-alia that there is nothing to show that even prima facie,
    goods are liable to confiscation. The High Court appears to
    have decided the matter on merits finally even though that was
B not the stage for doing so and was beyond the scope of
    adjudication of the writ petition. This is not the way the High
    Court should have dealt with the matter. Apart from that, the
  · High Court has not indicated any reason as to why the condition
    of execution of indemnity bond equivalent to seizure value of
c   goods and/or furnishing of bank guarantee equal to 10% of
    value of goods, as was stipulated by the authorities, was not
    justified. This also adds to the vulnerability of the order. We set
    aside the impugned orders of the High Court. Let the High
    Court hear the matters afresh. To avoid unnecessary delay, let
    the pqrties appear before the High Court, without further notice,
0
    on 1i11.2008.                                                         J,

         5. The Hon'ble Chief Justice of the High Court is requested
    to allot the matters, i.e. CWP No.13914/2008 and COCP
    No.1536/2008 to an appropriate Bench.
E
           6. The appeals are disposed of accordingly.

    N.J.                                      Appeals disposed of.

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