CONSISTENCY IN RENDERING JUDGMENT OR PASSING INTERIM ORDERS.

[Mr. M. GOVINDARAJAN]

                        The guiding principle in rendering judgements or passing interim orders is that there shall be consistency.  It is an element of legal propriety and judicial discipline.  Judicial discipline is of the basis of integrity of the Institution.   Even a stray aberration in such foundational values, will affect the image of the institution as fair and impartial inconsistent orders passed by a Judicial Officer in the same fact situation will undermine and shake the faith of the people in the judicial system and rule of law and leave an imprint in the mind of the litigant that he has been discriminated.   The whole purpose of the protector Institution is to prevent discrimination and arbitrariness.   Hence such institutions shall not give rise to even a remotest feeling or situation of being inconsistent in their orders lest they should be accused of being partial and unfair.

                        Passing interim order is at the discretion of the judicial forum.   But that discretion should not be an arbitrary discretion.  Discretion does not mean the arbitrary fiat of the person of the office passing the orders.   The decision has to be informed by reasons, objectivity and transparency.  Consistency in passing orders is a vitally relevant factor, while exercising discretion in passing judicial orders, lest it should be mis-understood as an exercise of arbitrary power and attribution of motives.   Consistency is one of the hallmarks of the judicial discipline, particularly in passing interlocutory orders.

                        The High Court of Kerala in ‘Joy V. Regional Transport Authority’ – 1998 (10) TMI 129 (HC) held that the judicial discipline demands consistency in rendering judgments.   A judicial officer may hold different views on various aspects.   A Judicial Officer may err and pass contradictory orders inadvertently.  But once it is brought to the knowledge of the Judicial Officer, he is duty bound to keep track of inconsistency.   Inconsistent orders passed by a judicial officer almost in the same fact situation and that too on the same day, would give rise to complaint of discriminatory treatment, which will undermine the people’s faith in judicial system and the rule of law.   It will cause resentment and anguish and make an imprint in the mind of the litigant that he has been discriminated.   A Judicial Officer may err and pass illegal orders, but he shall not err in consistency.   He should be consistent even in illegality.

                        The Supreme Court of India in ‘Birbal V. Ghaziabad Development Authority’ – (2006) 10 SCC 305 in the fact that situation of deposit at the appellate stage of land acquisition compensation held that there must be consistency in passing judicial orders.   A Division Bench of High Court in ‘Hindustan Petroleum Corporation Limited V. Union of India’ – 2010 (1) TMI 161 (HC) the High Court held that the Tribunal as a judicial body must follow principles of consistency when it decides cases.  The lack of consistency is clear on the face of the record.   Whim and caprice are alien to the judicial process.   Consistency, based on judicial precedents should be the norm.

                        In ‘Pearl Enterprises V. Union of India’- 2011 (12) TMI 190 (HC) the first petitioner was a partnership firm till December, 2009 whose unit at Baddi in Himachal Pradesh was engaged as a job worker for Colgate Palmolive India Limited.   Petitioner was also a registered service provider paying service tax under the category of ‘Business Auxiliary Services’.   The Central Excise has taken the view that the activities carried out by the petitioner amounted to manufacture, attracting excise duty.   The petitioners contested the same and claimed exemption from payment of excise duty on the ground that the unit is situated within the notified area and thus entitled to exemption from payment of central excise duty.  The contentions of the petitioner were rejected by the department and imposed duty.   This order was challenged before the Tribunal.   A stay application was also filed for waiver of pre deposit.  Adjournment was requested on the hearing but the same was rejected.  The Tribunal directed to deposit a sum of Rs.8 crores out of the demand of duty to the tune of Rs.15 crores and penalty for an equal amount. 

                        On the next day of the impugned order an identical case came up for consideration before the Tribunal.  The Tribunal by its order dispensed with the condition of pre deposit of duty and penalty and the stay petition was allowed unconditionally.   The duty involved in this case is Rs.37 crores.  The petitioner moved an application seeking recall of order passed against the petitioner.  That application was rejected holding that it was at the discretion of the Tribunal to pass interim orders depending on the facts and circumstances of each case.  It was also observed that it was not a fit case for exercise of power under Rule 41 of CESTAT (Procedure) Rules, 1982.  These two orders are under challenge before the High Court.

                        The High Court held that there is no doubt that the Tribunal should have invoked the power under Rule 41 once a petition producing also the order passed in another case was brought to the notice of the Tribunal, in the interest of justice and for securing the ends of justice, otherwise the inconsistent orders would share the faith of a citizen in the impartiality of the Tribunal or such other judicial functions.

                        The Court is of the opinion that they may, since the original order is also under attack, advert to some of the guiding principles with regard to passing of interim orders under Section 35F of the Act.   The principles are no more res integra in view of the detailed analysis of he provisions and guiding principles laid down by the Apex Court in ‘Benara Valves Limited V. Commissioner of Central Excise’ – 2006 (11) TMI 201 (SC)wherein it has been held that that it is true that on merely establishing a prima facie case, interim order of protection should not be passed.   But if on a cursory glance it appears that the demand raise has no leg to stand, it would be undesirable to require the assessee to pay full or substantive part of demand.   Petitions for stay should not be disposed of in a routine matter unmindful of the consequences flowing from the order requiring the assessee to deposit full or part of the demand.   There can be no rule of universal application in such matters and the order has to be passed keeping in view the factual scenario involved.   Merely because this Court has indicated the principles that does not give a licence to the forum/authority to pass an order which cannot be sustained on the touchstone of fairness, legality and public interest.   Where denial of interim relief may lead to public mischief, grave irreparable private injury or share a citizens’ faith in the impartiality of public administration, interim relief can be given.

                        The Court is of the view that the stand taken by the Tribunal while passing the impugned orders requires fresh consideration.  The Court sent aside the impugned orders with a direction to the Tribunal to consider the stay application, referring to all relevant factors and pass fresh orders after affording an opportunity of hearing to the petitioner.