BACKGROUND

Recently, factual scenarios have arisen wherein multiple writ petitions have been filed on the same aspect of a Central / All-India Statute / Notification in different State High Courts across the country. For instance, the retrospective applicability provided by Section 1(2) of the Payment of Bonus (Amendment) Act 2015 ('the Amendment Act') was recently challenged in different High Courts including Kerala High Court, Karnataka High Court and Allahabad High Court. On 27 January 2016, the Kerala High Court in the case of The United Planters' Association of South India & Ors. vs. Union of India[1] granted an interim stay on the retrospective applicability of the Amendment Act and clarified that the Amendment Act would come into effect only from the financial year 2015-16. On 5 February 2016, a similar stay order was passed by the Karnataka High Court in the case of Karnataka Employees Association & Anr vs. Union of India & Anr.[2]and on 12 February 2016 by the  Allahabad High Court in the case of Benara Udyog Ltd. vs. Union of India & Ors.[3]. More recently, on 10 March 2016, the Union Health and Family Welfare Ministry issued a Notification dated 10 March 2016 (under section 26 A of Drugs and Cosmetics Act 1940 and Drugs and Cosmetics Rules 1945) prohibiting the manufacture, distribution and sale of 344 fixed dose combinations (‘FDCS’) with immediate effect (‘FDCS issue’). The Notification dated 10 March 2016 was challenged in Delhi High Court and Madras High Court. On 14 March 2016, the Delhi High Court (Single Bench) in the case of Pfizer Ltd. & Anr. vs. Union of India & Anr.[4], stayed the effect of the impugned notifications. On 22 March 2016, the Madras High Court (Division Bench) in the case filed by the Federation of South Indian Pharmaceutical Manufacturers Association refused to grant a stay on the impugned Notification dated 10 March 2016[5]. Interestingly, in the context of the Payment of Bonus (Amendment) Act 2015 (Central Statute), the High Courts have adopted a uniform view following the order of the first approached High Court. However, in the context of the Union Health and Family Welfare Ministry’s Notification dated 10 March 2016 (Central Notification), the Madras High Court has differed from the view of the first approached High Court being the Delhi High Court. Hence, if in relation to a Central Statute or Notification, different State High Courts take different views then won’t the effect be discriminatory? Moreover, shouldn’t a Central Statute or Notification be applied uniformly across different States of the country?

Although, the aforesaid factual scenarios are currently at the stage of stay and no provision has been declared unconstitutional, the larger two-fold question which arises is: (1) Will one State High Court’s decision declaring an All-India Statute unconstitutional / ultra vires be in effect across the country and bind (a) other State High Courts as well as (b) Tribunals? (2) If yes, why are multiple writ petitions filed challenging the constitutionality of a provision of an All-India Statute across the country? The factual question in the context of the Amendment Act is whether the stay orders passed by the Kerala High Court, Karnataka High Court and Allahabad High Court are only binding in Kerala, Karnataka and Allahabad respectively, or will the three stay orders be binding in other states across the country. The factual question in the context of the Union Health and Family Welfare Ministry’s Notification dated 10 March 2016 is whether the stay order passed by the Delhi High Court is only binding in Delhi or will it be binding in other states across the country including Tamil Nadu.

ANALYZING THE JUDICIAL PRONOUNCEMENTS

There is no categorical provision of law which throws light on the issue whether an interim / final  order issued by one or several State High Courts will be applicable for any other State or not. Hence, it is pertinent to examine judicial pronouncements including obiter dicta of different High Courts and the Supreme Court in absence of a categorical holding on the same by the Supreme Court.

Bombay High Court’s View

The Bombay High Court in Commissioner of Income Tax Vidarbha vs. Godaveri Devi Saraf (‘Godaveri Devi Saraf case’),[6] has held that if a provision of an All- India Statute (penalty provision under the Income Tax Act) was already declared ultra vires by a competent High Court (Madras High Court) in the country and an authority like a Tribunal (Income Tax Tribunal) acting anywhere in the country has to respect the law laid down by the High Court, though of a different State, so long as there is no contrary decision of any other High Court (much less jurisdictional High Court) on that question. The Bombay High Court has reiterated the legal principle laid down in Godaveri Devi Saraf case in Commissioner of Central Excise vs.  Valson Dyeing Bleaching and Printing Works[7].

In Commissioner of Income Tax vs. Thana Electricity Supply Ltd. (‘Thana Supply case’),[8] the Bombay High Court referring to Valliama Champaka Pillai vs. Sivathanu Pillai[9] and a catena of Apex Court judgments took the view that while interpreting an All-India Statute, the present High Court is not bound to follow the decision of any other High Court when its own view is contrary thereto. Further, it stated that any holding to the contrary will be inconsistent with the powers of reference as well as doctrine of binding precedent. The Bombay High Court further explained that any other construction of the casual observations (not ratio decendi) in the Godaveri Devi Saraf case will lead to an anomalous situation as it will have the effect of giving the decisions of other High Courts the status of law binding on all courts or Tribunals throughout the country - a status which the Constitution, by virtue of Article 141, has conferred only on the judgment of the Supreme Court. However, the Bombay High Court noted that in order to maintain uniformity (in an All-India Statute), it may be desirable but is not a legal principle that one High Court should follow the view of another High Court unless it is per incuriam. The Bombay High Court further noted that a bare perusal of Section 257 and Section 260 of the Income Tax Act, 1961[10] would reveal that the legislature envisaged a situation of conflict in the decisions of High Courts in respect of any particular question of law (even in relation to an All-India Statute). 

It is pertinent to note that the Bombay High Court has identified that the legislature envisaged a situation of conflict in the decisions of different High Courts in respect of any particular question of law (in relation to an All-India Statute).  In the context of the Amendment Act, the Bombay High Court’s view prima facie supports the act of multiple writ petitions being filed in spite of the stay / relief granted by the one State High Court.

Calcutta High Court’s View

The Calcutta High Court in Jai Kumar Karnani vs. Controller of Estate Duty (Jai Kumar Karnani case’),[11] (while interpreting the Bombay High Court’s Godaveri Devi Saraf case) stated that any High Court within the country striking down any Statute or part of a Statute shall be binding on a Tribunal even acting beyond the jurisdiction of that High Court provided that decision is the sole decision as regards the vires of the provision.

The Calcutta High Court seems to have followed the Godaveri Devi Saraf case and has added or concretized the element of a State High Court’s order being the ‘sole decision’ on the vires of a provision for it to be binding on a Tribunal beyond the jurisdiction of the said State High Court. The Calcutta High Court by adding the element of ‘sole decision’ has envisaged the possibility of more than one conflicting decisions on the vires of a provision by different State High Courts. This further supports the act of multiple writ petitions being filed in spite of the stay / relief granted by one State High Court.

Supreme Court’s View or Obiter

In Kusum Ingots and Alloys Ltd. vs. Union of India and Anr. (‘Kusum Ingots case’),[12] the Apex Court noted that:

“22. The court must have the requisite territorial jurisdiction. An order passed on writ petition questioning the constitutionality of a Parliamentary Act whether interim or final keeping in view the provisions contained in Clause (2) of Article 226[13] of the Constitution of India, will have effect throughout the territory of India subject of course to the applicability of the Act.”

It is pertinent to note that Kusum Ingots case seems to be the answer to the question what will be the effect of One State High Court’s decision / order on other State High Courts and across the country. However, it was given on the issue of cause of action and jurisdiction to entertain a writ petition. Hence, one may argue, due to a different context, the Supreme Court was not faced with the opportunity to give a finding on the issue at hand. Hence, the observation of the Supreme Court extracted may be construed to state that an interim / final order of one State High Court would have effect throughout India but arguably under limited circumstances.  The different limited circumstances may include: (a)  effect throughout India when it is the sole decision on the vires of a provision, (b) effect throughout India in absence of and until a contrary decision is passed by the jurisdictional High Court and (c) effect throughout India only qua the writ petitioner (as there would be no reason for writ petitions to be filed by different petitioners and entertained by the Karnataka and Allahabad High Courts if the Kerala High Court’s stay order had settled the issue across India in the Amendment Act context).  

Referring to Kusum Ingots case, the Karnataka High Court in Shiv Kumar vs. Union of India[14], the Madras High Court in Union of India vs. Textile Technical Tradesmen Association[15] have taken the view that the pronouncement on the constitutionality of a provision of an All-India Statute / Central Act by one State High Court would be applicable throughout the country which has been re-affirmed by the Gauhati High Court in Rehena Begum vs. State of Assan and Ors.[16]. In fact, the Karnataka High Court noted that once the Kerala High Court has read down the provision to save it from unconstitutionality then: “…this Writ Petition would not call for any specific orders with regard to holding constitutionality…”.[17]

The Bombay High Court[18] and the Calcutta High Court[19] have envisaged existence of conflicting decisions of different State High Courts on constitutionality of an All- India Statute which is incorrect in view of: (a) the interpretation of Kusum Ingots case by the aforesaid High Courts that the pronouncement on the constitutionality of a provision of an All-India Statute / Central Act by one State High Court would be applicable throughout the country, (b) the provision which is declared ultra vires becomes non-est  / void ab initio and cannot be adjudicated upon by another State High Court and most importantly, (c) the absurd situation of one State in the country relying upon a provision of a Central Statute and another State in the country treating the same provision as absent / void ab initio as the same would not only defeat the nature of a “Central” Statute but also create inequality in application of provisions of a Central Statute in different States.

CONCLUSION

In view of the foregoing judicial pronouncements and analysis, the answer to the first question- ‘Will One State High Court’s decision declaring an All-India Statute unconstitutional / ultra vires be in effect across the country and bind (a) other State High Courts as well as (b) Tribunals?’ may be summarized as follows:

Effect of the Decision / Order of One Competent State High Court on Authorities (including Tribunals) in Other States

The decision (declaring a provision of an All-India Statute ultra vires) of one competent State High Court, even though not the corresponding State High Court, is binding on all authorities including a Tribunal acting anywhere in the country. The only exception to the rule is that there is no contrary decision of the Supreme Court. However, if an order is of an interim and not final nature, then the jurisdictional State High Court may be approached as a measure of abundant caution. The approached State High Court may await the final decision of the prior State High Court already seized with the question of constitutionality.

Hence, in the context of the Amendment Act, the interim stay order of the Kerala High Court on retrospective applicability of the Amendment Act (followed by the Karnataka and Allahabad High Courts) will have effect on all authorities including Tribunals across India, until there is a contrary decision of the Apex Court. Similarly, in the context of the FDCS issue, the interim stay order of the Delhi High Court would have ideally had effect throughout India, until there is a contrary decision of the Apex Court. However, as the Delhi High Court’s order dated 14 March 2016 clearly states that the same is “qua the Petitioner”, it will be binding and have effect only in relation to the petitioner therein and subsequent petitioners who have obtained the stay order.

Effect of the Decision / Order of One Competent State High Court on Other State High Courts

The decision (declaring a provision of an All-India Statute ultra vires) of one competent State High Court, even though not the corresponding State High Court, will have effect throughout the country. The only exception to the rule is that there is no contrary decision of the Supreme Court. However, if the corresponding jurisdictional State High Court is approached then: (a) in case of the prior State High Court’s order being of an interim nature, the approached State High Court may await the final decision of the prior State High Court already seized with the question of constitutionality and (b) in case the prior State High Court’s order is final in nature, the approached State High Court may simply state that there is no need to rule on constitutionality once another competent State High Court has already declared the provision to be ultra vires.

Hence, in the context of the Amendment Act, the interim stay order of the Kerala High Court on retrospective applicability of the Amendment Act (followed by the Karnataka and Allahabad High Courts) will have effect across all States, until there is a contrary decision of the Apex Court. However, a person may choose to approach the jurisdictional / State High Court as a measure of abundant caution for obtaining a declaratory relief or re-affirmation of the other State High Court’s decision / order. It is pertinent to mention that re-affirmation by one State High Court of another State High Court’s decision in the aforesaid context  (provision of an All-India Statute declared ultra vires) should not be misconstrued as dilution of the principle that one State High Court is not bound by the decision of another State High Court. Once a provision is declared ultra vires then the same becomes non-est and a nullity, hence, once one State High Court has done the same then the question of: (a) relying on the non-est provision or (b) another State High Court adjudicating upon the same, does not arise at all. However, in the context of the FDCS issue, the Madras High Court noted the interim stay order of the Delhi High Court and yet refused to grant stay. It is pertinent to mention that the Delhi High Court had clearly specified that the stay was only qua the Petitioner and hence strictly speaking the order did not have effect in rem throughout the country. Although, it is pertinent to note that the FDCS issue is in relation to a notification and not a statute. 

If the answer to the first question is in the affirmative, the answer to the second question- ‘Why are multiple writ petitions filed challenging the constitutionality of a provision of an All-India Statute?’ may be noted as follows: (a) there seems to be no requirement in law or any legal reasoning behind filing of multiple writ petitions for declaration of a provision as unconstitutional once the same has been done by one competent State High Court. However, the Bombay and Calcutta High Court’s view envisaging conflicting decisions of different State High Courts on constitutionality of an All-India Statute (which is incorrect in my view) may be the reason for confusion, (b) in case a State High Court has clearly stated that the relief is only qua the petitioner, then persons other than the petitioner may choose to file a writ petition on the same issue, and (c) a person may choose to approach the jurisdictional / State High Court as a measure of abundant caution for obtaining a declaratory relief or re-affirmation of the other State High Court’s decision / order declaring a provision to be unconstitutional. Hence, in the context of the Amendment Act, the comity has been maintained in views of the different High Courts in relation to a Central Statute, even though multiple writ petitions were filed. However, in the context of the FDCS issue, the differences in views has opened the door to confusion for the implementing authorities as well as pharmaceutical industry’s stake holders and may lead to filing of multiple writ petitions across the country.