Whether merged entity will be liable for criminal prosecution for pre-merger crimes?

Provided that where a contravention of any of the provision of any statute or of any rule, Regulation, direction or order made thereunder has been committed by or any proceeding for a criminal offence has been instituted against, a director or secretary, manager, officer or other employee of the transferor bank before the appointed date, such director, secretary, manager, officer or other employee shall, without prejudice to the application of Section 6 of the General Clauses Act, 1897 (10 of 1897), be liable to be proceeded against under such law and punished accordingly, as if the transferor bank, being a banking company had not been dissolved.

32. Every scheme of amalgamation is statutory and sanctioned under the Banking Act. Such amalgamation is to ensure that the interests of the depositors, the creditors and others who had invested, or given credit to in the erstwhile bank, before its sickness, and that the general public are protected. It aims at securing larger public interest and health of the banking industry. Late intervention into the affairs of a bank can result in a "run" on it, resulting in serious loss of confidence in the intricately woven banking and financial system. If one sees this and the overall objective of the scheme, it is to ensure recovery of what are the bank's dues and ensuring protection of the creditors. Clause 3 (3) of the scheme, therefore, has to be considered from this backdrop. In this context, the express mention of directors and such other individuals in the proviso means that it is to that extent only that prosecutions or other criminal proceedings can continue; in the ordinary sense, criminal liability can neither be attributed to DBS nor its directors, brought in after the amalgamation, whose appointments were approved by the RBI.

34. It is, therefore, clear that the criminal liability of the individuals now attributed to DBS are actions of (1) Anjani Kumar Verma, (2) S. Venkatesh, (3) Pradeep Kumar and (4) Parthsarathi Mukherjee. They were all officials of LVB. Their individual responsibility and accountability in criminal law, is and remains unaffected by the amalgamation. Therefore, there is in fact, no involvement of DBS Bank, revealed in the charge sheet filed by the Delhi Police. In completely ignoring these aspects and proceeding on a rather superficial basis, the High Court, in our considered opinion fell into error.

35. There is no gainsaying that the power to quash a criminal investigation or proceedings should not be lightly exercised. Yet, to refuse recourse to that power, in cases that require or may demand it, is being blind to justice, which the courts can scant afford to be. In the present context, the public's confidence in the banking industry was at stake, when RBI stepped in, imposed the moratorium and asked DBS to take over the entire functioning, management assets and liabilities of the erstwhile LVB. To permit prosecution of DBS for the acts of LVB officials (who are in fact, facing criminal charges) would result in travesty of justice. Therefore, the pending criminal proceedings (arising out of FIR - 189/2019 registered at P.S. Economic Affairs Wing, New Delhi), to the extent it involves DBS, which was the subject matter of the impugned judgment and all consequent proceedings arising therefrom (to the extent of involvement of DBS), are hereby quashed.

 IN THE SUPREME COURT OF INDIA

Criminal Appeal Nos. 2242 of 2023 and 2243 of 2023

Decided On: 11.09.2023

Religare Finvest Limited Vs. State of NCT of Delhi and Ors.

Hon'ble Judges/Coram:

S. Ravindra Bhat and Aravind Kumar, JJ.

Author: S. Ravindra Bhat, J.

Citation: MANU/SC/1004/2023,2023/INSC/819

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When tenancy will not extinguish by Merger?

Buchi Devi had willingly joined with Bhagabandei in filing the suit. During the continuity of litigation she parted with her share in the property. One out of the two tenants purchased her share. It seems that the tenancy is in the name of a partnership firm and some of the partners have purchased the share of Bhagabandei. It is not clear if all the partners or only a few out of all the partners are the buyers. The fact remains that they have purchased only a share in the property and not the entire property. The applicability of doctrine of merger within the meaning of Clause (d) of Section 111 of the Transfer of Property Act, 1882 is not attracted. In order to bring the tenancy to an end the merger should be complete, i.e. the interest of the landlord in its entirety must come to vest and merge into the interest of tenant in its entirely. When part of the interest of the landlord or the interest of one out of many co-landlords-cum-owners comes to vest in the tenant, there is no merger and the tenancy is not extinguished. 

IN THE SUPREME COURT OF INDIA

Civil Appeal Nos. 5357 and 5358 of 1996

Decided On: 05.01.2004

India Umbrella Manufacturing Co. Vs. Bhagabandei Agarwalla (Dead) 

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Whether landlord who are purchaser pendente lite can take stand contrary to one taken by his predecessor in interest?

 The decree, in so far as the other tenant and sub-tenants i.e. the appellants in C.A. No. 5358/1996 are concerned, has to be sustained. The partners of the other tenant firm i.e. M/s. India Umbrella Manufacturing Co. (appellant in C.A. No. 5357/1996) have purchased the property pendente lite and therefore they cannot be allowed to take a stand contrary to the one taken by their predecessor in interest and to the prejudice of the other plaintiff whose rights they have not purchased. Their filing an application that they were not interested in securing eviction of the other tenant is in the facts and circumstances of the case immaterial and irrelevant.

IN THE SUPREME COURT OF INDIA

Civil Appeal Nos. 5357 and 5358 of 1996

Decided On: 05.01.2004

India Umbrella Manufacturing Co. Vs. Bhagabandei Agarwalla (Dead) 

Hon'ble Judges/Coram:

R.C. Lahoti and Ashok Bhan, JJ.

Citation: AIR 2004 SC 1321

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Whether tenancy will extinguish by merger if tenant has acquired rights of some of co-owners?

A plain and grammatical interpretation of Section 111(d) of the Transfer of Property Act leaves no room for doubt that unless the interests of the lessee and that of the lessor in the whole of the property leased, become vested at the same time in one person in the same right, a determination of the lease cannot take place. On taking an assignment from some of the co-owner landlords, the interests of the lessee and the lessor in the whole of the property do not become vested at the same time in one person in the same right. Therefore, a lessee who has taken assignment of the rights of a co-owner lessor, cannot successfully raise the plea of determination of tenancy on the ground of merger of his lessee's estate in that of the estate of the landlord. It is, thus, clear that there is no substance in the contention of the learned counsel for the appellants that in the case on hand, it should have been held that the tenancy stood determined and the application of the landlord for a direction to the tenant to deposit the rent in arrears should have been dismissed. The position of the appellants as tenants continue and they are bound to comply with the requirements of the Rent Control Act under which the order for deposit has been passed against them. The High Court has rightly dismissed the revision.

IN THE SUPREME COURT OF INDIA

Civil Appeal No. 336 of 2004

Decided On: 03.05.2005

Pramod Kumar Jaiswal and Ors. Vs. Bibi Husn Bano and Ors.

Hon'ble Judges/Coram:

R.C. Lahoti, C.J., G.P. Mathur and P.K. Balasubramanyan, JJ.

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Whether order of court dismissing tenant's revision affects landlord's right of revision?

Doctrine of Merger - Explained--Doctrine of Merger is neither a doctrine of constitutional law nor a statutorily recognized doctrine--It is a common law doctrine founded on the principles of propriety, in the hierarchy of justice delivery system--The doctrine of merger would not take away the right of appeal conferred on a party to a proceedings from challenging an order, merely for the reason that the appeal preferred by another party was dismissed.

Coming to the contention based on the doctrine of merger, it must be remembered that the doctrine of merger is neither a doctrine of constitutional law nor a doctrine statutorily recognised. It is a common law doctrine founded on principles of propriety in the hierarchy of justice delivery system. The logic underlying the doctrine of merger is that there cannot be more than one decree or operative orders governing the same subject-matter at a given point of time. In State of Madras v. Madurai Mills Co. Ltd. (A.I.R. 1967 S.C. 681) the Apex Court held that the doctrine of merger is not a doctrine of rigid and universal application and it cannot be said that wherever there are two orders, one by the inferior authority and the other by a superior authority, passed in an appeal or revision there is a fusion or merger of two orders, irrespective of the subject-matter of the appellate or revisional order and the scope of the appeal or revision contemplated by the particular statute. It has also been held by the Apex Court that the application of the doctrine depends on the nature of the appellate or revisional order in each case and the scope of the statutory provisions conferring the appellate or revisional jurisdiction. We have perused the records in R.C.R. No. 418 of 2012 and R.C.R. No. 80 of 2013. The records of R.C.R. No. 418 of 2012 indicate that urgent notice before admission was ordered and the Revision Petition was dismissed later at the admission stage itself. Likewise, R.C.R. No. 80 of 2013 was also dismissed at the admission stage itself, after hearing one of the landlords appeared through caveat also. Under Section 20 of the Act, a right of revision is provided for both the landlord and the tenant. In a case of instant nature, if the doctrine of merger is applied, this Court may not be able to exercise its revisional jurisdiction at the admission stage itself, in a case where the order impugned is partly against the respondent in the revision, without issuing notice to him and ascertaining from him as to whether he intends to challenge the decision, as otherwise act of court would prejudice him. In Commissioner of Sales Tax, U.P., Lucknow v. Vijai Int. Udyog, G.T. Road, Sikandrarao, Hathras [(1984) 4 S.C.C. 543], the Apex Court has held that the doctrine of merger would not take away the right of appeal conferred on a party to a proceeding to challenge an order merely for the reason that the appeal preferred by the other was dismissed.

IN THE HIGH COURT OF KERALA

R.C.R. Nos. 296, 306 and 330 of 2013

Decided On: 06.06.2014

 Mohammed Abdullah Vs. M.P. Ashique

Hon'ble Judges/Coram:

T.B. Radhakrishnan and P.B. Suresh Kumar, JJ.

Citation:2014 (2) KLT 1069

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When doctrine of merger is not applicable to landlord tenant relationship?

The argument that since the revision petitioner is also a co-owner, the petition for eviction is unsustainable, cannot be accepted. The learned counsel for the revision petitioner would submit that when a lesser estate (here the tenancy) and a greater estate (the ownership) coincide and meet in one and the same person without any intermediate estate, the lesser is immediately annihilated and merged. In other words, the lesser estate is sunk or drowned in the greater so that the greater estate is accelerated so as to become at once an estate in possession. Where a lesser and a greater estate in the same property come together and vest, without any intermediary estate in the same person and in the same right, the lesser is immediately annihilated by operation of law. To apply the principle of merger, the estates shall unite in the same person without any intervening estate and the person in whom they unite shall hold them both in the same right. The merger is the consequence of the tenant retaining the lease and acquiring the reversion. As stated earlier, for merger to be effective, the lease and the reversion must be vested in the same person in the same right with no intermediary estate. If a landlord transfers his rights in the leased property to his tenant, there would be a merger of the rights of the tenant in his higher rights as owner, in which case the tenancy would come to an end under Section 111(d) of the Transfer of Property Act. But, Section 111(d) itself makes it clear that the lease is determined only in a case where, by such assignment the interest of the lessee and the lessor in the whole of the property becomes vested. In other words, the emphasis in the Section is on the coalescing of the entire rights of the lessor and the lessee in the whole of the property in the hands of the lessee. But the learned counsel for the respondent rightly points out that the principle of merger has no application to the facts of this case, since the whole of the property did not vest in the hands of the revision petitioner.

7. In this connection, the Supreme Court decision in Pramod Kumar Jaiswal v. Bibi Husn Bano MANU/SC/0346/2005 : 2005 (5) SCC 492 has been relied upon by the learned counsel for the landlord where it was held that a lessee who took assignment of the rights of a co-owner lessor cannot successfully raise the plea of determination of tenancy on the ground of merger of his lessee estate in that of the estate of the landlord. It was held in the same decision:

On taking an assignment from some of the co-owner landlords, the interest of the lessee and the lessor in the whole property do not become vested at the same time in one person in the same right. Therefore, a lessee who has taken assignment of the rights of a co-owner lessor cannot successfully raise the plea of determination of tenancy on the ground of merger of his lessee's estate in that of the estate of the landlord. It is, thus, clear that there is no substance in the contention of the learned counsel for the appellants that in the case on hand, it should have been held that the tenancy stood determined and the application of the landlord for a direction to the tenant to deposit the rent in arrears should have been dismissed. The position of the appellants as tenants continues and they are bound to comply with the requirements of the Rent Control Act under which the order for deposit has been passed against them.

Since the revision petitioner has not obtained assignment of the entire rights of the lessor, there could be no merger or determination of the lease under Section 111(d) of the Transfer of Property Act. In the light of what has been stated above, we have no hesitation to hold that there was no determination of the lease since the whole of the estate did not vest in the revision petitioner herein.

IN THE HIGH COURT OF KERALA

R.C.R. No. 287 of 2010

Decided On: 12.07.2011

 Poolakandy Malayil Vijayan Vs. Sakeena

Hon'ble Judges/Coram:

Mr. Justice Pius C. Kuriakose and Mr. Justice N.K. Balakrishnan

Citation:2011 (3) KLT 657 : 2011 (3) KLJ 600 : 2011 (3) KHC 587 : 

ILR 2011 (3) Ker. 737

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When order passed in review merges with main order?

 Needless to state that when the prayer for review is dismissed, there can be no merger. If the order passed in review recalls the main order and a different order is passed, definitely the main order does not exist. In that event, there is no need to challenge the main order, for it is the order in review that affects the aggrieved party.

IN THE SUPREME COURT OF INDIA

Civil Appeal No. 2687 of 2006

Decided On: 22.01.2016

 Bussa Overseas and Properties (P) Ltd. and Ors.
Vs.
 Union of India (UOI) and Ors.

Coram:Dipak Misra and Shiva Kirti Singh, JJ.

Citation:(2016) 4 SCC 696,2016(6) MHLJ694

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When decree of trial court will not merge with decree of appellate court?

It is well settled that when a decree of the Trial
Court  is  either confirmed, modified or  reversed  but  the
Appellate  decree, except when the decree is passed  without
notice to the parties, the Trial Court decree gets merged in
the appellate decree. But when the decree is passed  without
notice to a party, that decree will not, in law, be a decree
to which he is a party. Equally so in the case of an  appel-
late decree. In this case these two persons were not  served
in  the  suit. A decree was passed  ex-parte  against them
without  giving them notice of the suit. In law,  therefore,
there  is  no decree against them. In the appeal  also they
were  not  served. If they had been served  in the  appeal,
things would have been different. They could have put for-
ward their case in appeal and got appropriate orders passed.
But  that is not the case here. That being so, there  is  no
bar for an application by them before the Trial Court  under
Order IX, Rule 13, to set aside the ex-parte decree  against
them. 
    There  is no error of law in allowing a joint decree  to
stand  against the person who contested  throughout  while
setting  aside the ex-parte decree  passed  against  others
without serving them personally on admitting the application
under Order IX Rule 13 C .P.C. [690C]

Supreme Court of India

Kewal Ram vs Smt. Ram Lubhai & Ors. And Vice ... on 26 March, 1987

Equivalent citations: 1987 AIR 1304, 1987 SCR (2) 685,(1987)2SCC344, 

BENCH:
KHALID, V. (J)
OZA, G.L. (J)

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When doctrine of merger is not applicable?

The logic underlying the doctrine of merger is that there cannot be more than one decree or operative orders governing the same subject-matter at a given point of time. When a decree or order passed by inferior court, tribunal or authority was subjected to a remedy available under the law before a superior forum then, though the decree or order under challenge continues to be effective and binding, nevertheless its finality is put in jeopardy. Once the superior court has disposed of the lis before it either way - whether the decree or order under appeal is set aside or modified or simply confirmed, it is the decree or order of the superior court, tribunal or authority which is the final, binding and operative decree or order wherein merges the decree or order passed by the court, tribunal or the authority below. However, the doctrine is not of universal or unlimited application. The nature of jurisdiction exercised by the superior forum and the content or subject-matter of challenge laid or which could have been laid shall have to be kept in view."

 Both the decisions in Gojer Brothers (supra) and Kunhayammed (supra) dealt with decrees or orders which were final in nature. This is not to say that the doctrine of merger has no application at an interlocutory stage. Even at an interlocutory stage if a higher forum entertains an appeal or revision against an interlocutory order and passes a judgment and order on merits either confirming or reversing or modifying the lower Court's order, the doctrine of merger will surely apply. However, if the higher forum passes an order without going into the merits of the case which has the effect of partially modifying the lower Court's order, in my opinion, the doctrine of merger will not apply. 

Kolkata High Court (Appellete Side)

Manoj Kumar Kedia vs Manisha Kedia on 24 February, 2015

Author: Arijit Banerjee

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Whether there is merger when special leave petition is dismissed with reasons?

 It is
well settled that when a special leave petition is dismissed
with reasons, there is a merger of the judgment of the High
Court in the order of the Supreme Court.
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOS. 2545-2546/2012
MAJ. GEN. KAPIL MEHRA & ORS.
..Appellants
Versus
UNION OF INDIA & ANR.
Citation;(2015) 2 SCC262

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Whether previous judgments are admissible in evidence?

In the case of “Kunhayammedand others v/s. State of Kerala and another” (supra), it has been held that in spite of a petition for special leave to appeal having been filed, the judgment, decree or order against which leave to appeal has been sought for, continues to be final, effective and binding as between the parties. Once leave to appeal has been granted, the finality of the judgment, decree or order appealed against is put in jeopardy though it continues to be binding and effective between the parties unless it is a nullity or unless the Court may pass a specific order staying or suspending the operation or execution of the judgment, decree or order under challenge. The expression “jeopardy” does not mean “not binding” or “not final” or “not effective”. That expression relates to danger of suffering harm or loss. As contended by Mr. Dessai, learned Senior Counsel, Judgment in jeopardy does not disturb its finality. Since no stay or suspension of the operation or execution of the judgment and award in L. A. Case No. 19/1989 or of the judgment in First Appeal No. 116/ 1997 and in LPA No. 15/ 2000 has been granted by the Apex Court, the same continues to be effective and binding as between the parties. The doctrine of merger is based on the principle that there cannot be more than one decree or operative order in respect of the same subject matter and at the same time. In so far as Sanyogita Rane group is concerned, they were parties to that L. A. Case No 19/89. In so far as Morajkar group is concerned, they had tried to intervene in the same proceedings when they were pending in the form of LPA No.15/2000, by filing an application for impleading them as parties. However, Morajkar group withdrew the said Civil Application No. 444/2006 on 09/06/2009. Under section 40 of the Evidence Act, previous judgments are admissible in support of a plea of res judicata in civil cases. If not res judicata, the principles analogous to that are applicable. In any case, the judgment in First Appeal No. 116/1997 was binding on the Reference Court wherein it was held that the land bearing survey no. 106 of Carapur village belongs to Manoramabai Rauji Rane Group. The Reference Court was therefore bound to rely upon the said findings and decide the subsequent case on the basis of the same findings and this is what has been done by the Reference Court. The judgment in the LPA No. 15/2000, being of Division Bench of this Court, is binding on me. In this judgment, it has been upheld that land bearing survey No. 106 of Carapur village belongs to Manoramabai Rauji Rane Group. It is not known as to how long the Special Leave Petition before the Hon'ble Apex Court would take for its final disposal. There is no point in keeping the present appeal pending till then. If the judgments are set aside in the said Special Leave Petition, Sanyogita Rane Group can take recourse to Section 144 of the Code of Civil Procedure.

BOMBAY HIGH COURT

Mrs. Sanyogita Rane and Others Vs. Mrs. Manoramabai Rauji Rane (Since deceased) and Others

Judge : U.V. BAKRE

Decided On : May-11-2012

Case Number : First Appeal No. 105 of 2010 Alongwith Cross-Objection No. 11 of 2010

Citation;2013(7) ALLMR 633,2013(2) ABR 816

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Supreme Court: Basic concept of Doctrine of Merger of judgment of lower court to judgement of superior court

 The juristic justification of the doctrine of merger may be sought in the principle that there cannot be, at one and the same time, more than one operative order governing the same subject-matter. Therefore the judgment of an inferior court, if subjected to an examination by the superior court, ceases to have existence in the eye of law and is treated as being superseded by the judgment of the superior court. In other words, the judgment of the inferior court loses its identity by its merger with the judgment of the superior court.

 This Court has approved this well settled principle that a judgment of the Supreme Court cannot be collaterally challenged on the ground that certain points had not been considered. This Court in Anil Kumar Neotia and Others vs. Union of India and Others, (1988) 2 SCC 587 held that it is not open to contend that certain points had not been urged or argued before the Supreme Court and thereby seek to reopen the issue. The relevant portion of the judgment is as follows: 

This Court further observed that to contend that the conclusion therein applied only to the parties before this Court was to destroy the efficacy and integrity of the judgment and to make the mandate of Article 141 illusory..... It is no longer open to the Petitioners to contend that certain portions had not been urged and the effect of the judgment cannot be collaterally challenged. It is well settled that the judgments of this Court are binding on all the authorities under Article 142 of the Constitution and it is not open to any authority to ignore a binding judgment of this Court on the ground that the full facts had not been placed before this Court and/or the judgment of this Court in the earlier proceedings had only collaterally or incidentally decided the issues ..

 In Hoystead vs. Commissioner of Taxation (1926) 1 Appeal Cases 155, the Privy Council observed: Parties are not permitted to bring fresh litigations because of new views that they may entertain of the law of the case, or new versions which they present as to what should be a proper apprehension by the Court of the legal result either of the construction of the documents or the weight of certain circumstances. If this were permitted, litigations would have no end except when legal ingenuity is exhausted. It is a principle of law that this cannot be permitted and there is abundant authority reiterating that principle. As rightly observed by the High Court, what is utmost relevant is the final judgment of the superior Court and not the reasons in support of that decision.

Supreme Court of India

Omprakash Verma & Ors. vs State Of A.P. & Ors. on 8 October, 2010

Bench: P. Sathasivam, B.S. Chauhan

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