ODISHA STATE FINANCIAL CORPORATION v. VIGYAN CHEMICAL INDUSTRIES AND OTHERS

Citation: 2025 INSC 928, [2025] 9 S.C.R. 1

Court: Supreme Court of India

Bench: J.B. Pardiwala and R. Mahadevan, JJ.

Judgment text

SUPREME COURT OF INDIA Odisha State Financial Corporation v. Vigyan Chemical Industries and Others Civil Appeal No. 10047 of 2025 [2025] 9 S. C. R. 1 : 2025 INSC 928 Odisha State Financial Corporation v. Vigyan Chemical Industries and Others (Civil Appeal No. 10047 of 2025) 05 August 2025 [J. B. Pardiwala and R. Mahadevan,* JJ. ] Issue for Consideration The High Court dismissed the writ petition filed by the appellant u/Art. 227 of the Constitution of India, challenging the civil proceedings and the orders passed by the Courts below regarding the computation of interest on the decretal amount and the consequential execution proceedings.

Headnotes† Doctrines/Principles - Doctrine of Sub silentio - When earlier judgment only adjudicated upon issue of limitation - Other critical issues were not adjudicated - Earlier judgment cannot be held to be a binding precedent on those undecided issues: Held: It is a settled principle that a judgment is an authority only for what it decides - When a judgment fails to address other issues raised, it is said to be 'sub silentio', and cannot be held as a binding precedent on those undecided issues - In the instant case, from the records, it is very clear that in the earlier judgment of this Court challenging the original decree, only the issue of limitation was adjudicated - Critical issues such as (i) the jurisdiction of the trial Court to entertain the suit against the appellant in the absence of a notice u/s. 80 CPC, (ii) the maintainability of the suit, (iii) the power of the Court to modify the decree by entertaining an application u/s.

21 of the Limitation Act, 1963, and (iv) the applicability of the Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993, were not adjudicated - This is where the concept of 'sub silentio' assumes significance - Therefore, it can safely be concluded that the judgment of this Court in Civil Appeal No. 2073/2010 is silent on the issues now under consideration - When the judgment of a Court is silent on questions of law either raised earlier but not decided, or raised in the * Author 2 subsequent proceedings, it is settled law that constitutional courts are empowered to decide such questions of law independently and the earlier judgment cannot be cited as a binding precedent or conclusive. [Para 13] Code of Civil Procedure, 1908 - s. 47 - Whether the issues that go to the root of jurisdiction and maintainablity can still be raised at the stage of execution u/s.

47 of CPC: Held: It is settled legal position, applying the doctrine of sub silentio, that a decision is not an authority on a point that has not been argued or decided - In the instant case, the trial Court had not framed any issues regarding the maintainability of the suit filed by respondent no. 1 against the appellant, for the alleged default committed by respondent no. 2, despite a plea in the written statement - Without any issue having been framed on maintainability, the matter reached up to this Court, and the decision was rendered solely on the issue of limitation - Therefore, the issues that remained undecided, but go to the root of jurisdiction and maintainability, can still be raised at the stage of execution u/s. 47 CPC. [Para 14] Code of Civil Procedure, 1908 - s. 47 - Scope of - Discussed: Held: As per s.

47, the Executing Court is empowered to examine the questions relating to execution, discharge, or satisfaction of the decree - It cannot go beyond the decree; but at the same time, when a plea is raised that the decree is a nullity and hence, unenforceable, the executing court is bound to examine and decide such an application on its merits - The court must execute the decree according to its tenor, and cannot entertain objections on the ground that the decree is erroneous in law or on facts - Until it is set aside by an appropriate proceeding in appeal or revision, a decree, even if erroneous, remains binding on the parties - A decree may, however, be challenged in execution proceedings, if it is a nullity-for instance, if it is passed without bringing on record the legal representative of a person who was dead at the time the decree was passed, or where the cause of action was not maintainable, or if it was passed against a ruling prince without a certificate - Similarly, when the decree is made by a court that has no inherent jurisdiction to pass it, an objection as to its validity may be raised in an execution proceeding if the objection appears on the face of the record.

[Paras 15, 16] Odisha State Financial Corporation v.

Vigyan Chemical Industries and Others Jurisdiction - Scope of: Held: A decree passed without jurisdiction is null and void - A court is said to lack jurisdiction if it has no territorial jurisdiction, or if it has no pecuniary jurisdiction, or if its jurisdiction over the subject matter is circumscribed by any law - Such laws may be either substantive or procedural and may, by express provision or necessary implication, take away the jurisdiction of a court to deal with a matter, leaving no room for any judicial discretion - These provisions may either impose a total bar on the court from dealing with certain subject matters or impose any pre-conditions, non-compliance with which may prevent the court from entertaining the suit, even if it otherwise has jurisdiction over the subject matter - A plea questioning the jurisdiction of the court can be raised at any stage, including before the High Court or this Court, particularly when it involves a pure question of law.

[Para 20] Code of Civil Procedure, 1908 - s. 2(9) and Or. XX Rule 4 (2) - Judgment to satisfy requirement u/Or. XX, Rule 4(2): Held: A "Judgment", as defined u/s. 2(9) CPC, to be valid, must satisfy the requirements u/Or. XX Rule 4(2) CPC - It should not only trace, record, consider and decide all the points of disputes but should also reflect the same - The decision must be based on reasons reflected in the judgment - Once the issue of maintainability is raised, or if the facts as pleaded by themselves create a cloud over the jurisdiction of the court or the maintainability of the proceedings, the same will have to be addressed, failing which the judgment will be unsustainable and a nullity. [Para 21] Code of Civil Procedure, 1908 - s. 80 - When State, which was not a party originally, was impleaded - Whether, in such cases also, the plaintiff is duty bound to issue a notice as contemplated u/s. 80(1) CPC or obtain leave u/s.

80(2) CPC before an application for impleadment is taken out: Held: In cases such as the one under consideration, the State, which was not originally a party, could be impleaded and the plaint could be amended by inclusion of pleadings, cause of action and relief against the State - In such cases also, the plaintiff, immediately upon becoming aware of the necessity to implead the State, is duty bound to either issue a notice as contemplated u/s. 80(1) CPC or obtain leave u/s.

80(2) CPC before an application for impleadment 4 is taken out - Failure to do so will bar the civil court from exercising jurisdiction against the State, and the court will have no option but to dismiss the suit - This is so because when a state government or its instrumentality is impleaded in a pending suit, a new or fresh cause of action is introduced - Similarly, if the amendment sought by the plaintiff introduces a new cause of action within the period of limitation and with the court's leave, a fresh notice u/s. 80(1) CPC must still be issued. [Para 26] Code of Civil Procedure, 1908 - s. 80 - Micro, Small And Medium Enterprises Development Act, 2006 s. 18 - Commercial Courts Act, 2015 - s. 12-A - Appellant/4th defendant is a "State" within the meaning of Art. 12 of the Constitution - Failure of issuing notice u/s. 80 of CPC - Effect of: Held: The appellant/4th defendant is a "State" within the meaning of Art. 12 of the Constitution, the mandatory requirement of notice u/s.

80 has come into operation - A plain reading of s. 80 along with the settled position of law clearly enunciates that it is a duty of the trial court to deal with that aspect of satisfaction of the notice u/s. 80 - Such preconditions to be satisfied before initiation of a suit are recognized as mandatory in civil disputes where a statute prescribes the same - A reference may be made to s. 18 of the MSME Act, which provides for conciliation, or to s. 12-A of the Commercial Courts Act, 2015, which mandates pre-institution mediation-failure of which would render the suit unsustainable and liable to be rejected - The trial Court, in the present case, failed to do so, thereby rendering the decree a nullity. [Para 30] Small Scale and Ancillary Industrial Undertakings Act, 1993 - Applicability of the interest on delayed payments to Small Scale and Ancillary Industrial Undertakings Act, 1993: Held: The Act, 1993 came into force with effect from 23. 09.

1992 and remained in effect until it was repealed by the Micro, Small and Medium Enterprises Development Act, 2006 - The Act, 1993 is clearly prospective in nature and governs the incidents of supply and rendering service which happens after its enforcement, i. e. , 23. 09. 1992 - Further, it is the buyer who is liable to make the payment after the supply of goods or rendering any service - Thus, by virtue of s. 3, both the incidents-i. e. , the supply of goods or services on the one hand, and the payment or default on the Odisha State Financial Corporation v.

Vigyan Chemical Industries and Others other-must occur after the Act has come into force - The trial Court committed a serious error in applying the provisions of the repealed Act, 1993, to the present case, where the supply was effected in 1985, and more particularly, a grave error in fastening liability for interest and compound interest on the appellant, which was not even a buyer in the transaction - Accordingly, the judgment of the trial Court, to the extent of applying the repealed Act, 1993 and imposing liability on the appellant, is patently without authority and is a nullity on that count - The High Court, in exercise of its supervisory jurisdiction, also failed to examine and address these vital aspects. [Paras 32, 32. 2, 34] State Financial Corporation Act, 1951 - Code of Civil Procedure, 1908 - s. 80 - The appellant, State-owned Corporation, jointly financed along with respondent no. 3-IPICOL, to respondent no. 2, for the establishment of a bleaching powder unit - On 29.

07. 1985, respondent no. 1 allegedly supplied raw materials worth Rs. 66,454. 65 to respondent no. 2 - Owing to the non-repayment of dues arising out of the financial assistance provided by the appellant and respondent no. 3, the appellant took over possession of industrial unit of respondent no. 2 - On 29. 02. 1988, respondent no. 1, alleging that it had supplied hydrated lime to respondent no. 2 in 1985, filed a recovery suit in Civil Suit No. 103 of 1988 before the Court of Civil Judge (Sr. Division) - On 11. 02. 1993, respondent no. 1 made an application to implead the appellant as defendant no. 4, which was allowed - Whether the suit filed was maintainable: Held: The appellant had filed a written statement denying liability on multiple grounds, including: (i) U/s. 29, no liability of respondent no. 2 to third parties could be imposed on the appellant, (ii) There was no privity of contract between the appellant and respondent no.

1 as the appellant was not a party to the underlying transaction, (iii) the suit against the appellant, was barred by limitation, (iv) the suit was not maintainable, and (v) the trial Court lacked territorial jurisdiction to entertain the suit - Without properly considering the same, the trial Court decreed the suit in favour of respondent no. 1 - Upon a perusal of the pleadings and the judgment, this Court finds that the trial Court failed to frame any issues with respect to maintainability, jurisdiction and limitation, nor did it render any finding on the maintainability of the suit against the appellant herein, there being a specific plea to that effect - The trial 6 Court without analysing the scope and applicability of the S. F. C. Act, 1951, the requirement of mandatory notice u/s.

80 CPC, the relevance of the repealed Act, 1993, and the specifically contested issue of maintainability, proceeded to render findings only on the limited issues - The judgment was passed without considering or rendering any finding on the core legal issues in the case, thereby vitiating the trial Court's judgment on fundamental jurisdictional grounds. [Paras 36, 37, 38] State Financial Corporation Act, 1951 - s. 29 - Code of Civil Procedure, 1908 - Whether there was privity of contract between the appellant and respondent no. 1: Held: Admittedly, there was no contract between the appellant and respondent no. 1 - The appellant has been impleaded solely on the ground that it took possession of the defaulting industrial concern and exercised its rights under the S. F. C. Act, 1951 to realize its dues - In the absence of any privity of contract, the liability of the appellant is limited strictly to the extent contemplated under Section 29 of the S. F. C.

Act, 1951 - The appellant therefore, cannot be saddled with the entire liability arising from a transaction to which it was not a party. It is necessary to understand the object behind Section 29 - The liability of the appellant is restricted to the defaulting concern's funds in its hands, and under no stretch of law, can be extended to its personal or corporate properties - In such a situation, this Court fails to comprehend how the entire liability has been fastened upon the appellant and how its properties and bank accounts have been attached - This is clearly beyond the jurisdiction of the trial Court or, for that matter, even the Executing Court, which cannot proceed against the personal assets of the appellant in such circumstances. [Paras 39, 40] Small Scale and Ancillary Industrial Undertakings Act, 1993 - State Financial Corporation Act, 1951 - Whether the appellant is liable to pay any amount to respondent no. 1 for alleged default committed by respondent no.

2, under decree: Held: This Court is of the considered opinion that the suit itself was not maintainable against the appellant and the provisions of the repealed Act, 1993 were inapplicable to the present case - Consequently, the execution proceedings to realize the principal with exorbitant interest calculated under the repealed Act, 1993 Odisha State Financial Corporation v. Vigyan Chemical Industries and Others are unsustainable, and the decree cannot be enforced against the appellant - The trial Court, having already passed the decree, could not have entertained an application u/s. 21 of the Limitation Act, 1963, and the post-decree application filed by respondent no.

1 was, therefore, not maintainable - Nearly four decades have elapsed in protracted litigation - Article 142 of the Constitution empowers this Court to pass any order necessary for doing complete justice in any cause or matter pending before it - Accordingly, it is held that the appellant (OSFC) is not liable to pay any amount to respondent no. 1 for the alleged default committed by respondent no. 2, under the decree - In view of the same, the impugned judgment and orders passed by the Courts below are hereby set aside.

[Para 45] Litigation - Failure to raise appropriate legal objections at the appropriate stages - Absence of timely and effective representation - Non-disclosure of material facts - Strong disapproval of the manner in which the present litigation has been conducted by the appellant Corporation and its counsel before the lower courts: Held: Public Institutions-particularly those entrusted with the stewardship of public funds-are expected to conduct themselves in legal proceedings with the highest standards of diligence, responsibility, and accountability - The failure to raise appropriate legal objections at the appropriate stages, coupled with the absence of timely and effective representation, has not only burdened the judicial system but has also exposed the corporation to unwarranted and protracted liability - The present case is a stark example of how a State-owned corporation has been unjustly and unsustainably saddled with financial liability - Courts are duty bound to ensure that public resources are not unjustly depleted due to judicial oversight or misapplication of law - This responsibility extends equally to Government counsel and officials involved in litigation - It is incumbent upon them to ensure that all material facts are disclosed, all legal defences are properly pleaded, and all relevant documents are placed on record - Government counsel, as officers of the Court, bear a dual responsibility: to protect the interest of the State, and to assist the Court in achieving outcomes that are just, lawful and equitable - It is also imperative for the State to establish and maintain robust internal mechanisms for regular monitoring and effective follow-up of pending litigation, ensuring it is pursued to its logical conclusion.

[Para 47] 8 Limitation Act, 1963 - s.

21 - Impleadment of a party in a pending suit, when to take effect - Discussed: Held: The impleadment of a party in a pending suit takes effect only from the date on which such an application is allowed - However, the proviso enables the court to direct that such impleadment shall relate back to an earlier date, provided that the omission was due to a mistake made in good faith - A mistake in good faith would be applicable if the person claiming shelter under such plea is able to prove that he has exercised all possible diligence and believed an existing fact or law to be true or applicable, which is probable but not correct - Essentially, such a mistake in good faith can only denote an error in judgment, but cannot include a plea that he was not aware of the law, as per the maxim "Iqnorantia facti doth excusat; Ignorantia juris non excusat" which means, ignorance of fact is an excuse, but ignorance of law is not excused - Further, Section 21 is applicable only in pending proceedings and the provision is to be pressed into service when the application for impleading is decided and not later - The trial Court, while passing an order for impleadment has to consider the proviso to Section 21, the facts pleaded, and the evidence both documentary or oral, and then decide, whether the legal requirement is satisfied to hold that the suit is deemed to have been instituted against the impleaded party with effect from an earlier date - It is also open to the Court to consider the facts and upon satisfaction, to apply the proviso - However, such an exercise must be done while deciding the application and a further order is to be passed to that effect immediately and not after the suit is decreed.

[Para 41. 1] Case Law Cited Synthetics and Chemicals Ltd and Others v. State of U. P. and Others [1989] Supp. 1 SCR 623 : (1990) 1 SCC 109; Ajay Hasia and Others v. Khalid Mujib Sehravardi and Others [1981] 2 SCR 79 : (1981) 1 SCC 722 : MANU/SC/0498/1980 - followed. Municipal Corpn. of Delhi v. Gurnam Kaur [1988] Supp. 2 SCR 929 : (1989) 1 SCC 101; The State of U. P. v. Synthetics and Chemicals Ltd. [1991] 3 SCR 64 : (1991) 4 SCC 139 : (1992) 87 STC 289 : 1991 SCC OnLine SC 17; In Most Rev. P. M. A. Metropolitan v. Moran Mar Marthoma [1995] Supp. 1 SCR 542 : (1995) Supp. 4 SCC 286; Arnit Das v. State of Bihar [2000] Supp. 1 SCR 69 : (2000) 5 SCC 488 : 2000 SCC (Cri) 962 : 2000 SCC OnLine SC 936; State of W. B. v. Kesoram Industries Ltd. [2004] 1 Odisha State Financial Corporation v. Vigyan Chemical Industries and Others SCR 564 : (2004) 10 SCC 201 : (2004) 266 ITR 721 : 2004 SCC OnLine SC 70; (5-Judge Bench); Zee Telefilms Ltd. v.

Union of India [2005] 1 SCR 913 : (2005) 4 SCC 649 : 2005 SCC OnLine SC 213; Delhi Airtech Services (P) Ltd v. State of U. P. [2011] 12 SCR 191 : (2011) 9 SCC 354 : (2011) 4 SCC (Civ) 673 : 2011 SCC OnLine SC 1115; NBCC (India) Ltd v. The State of West Bengal and Ors. [2025] 1 SCR 610 : MANU/SC/0061/2025 : (2025) 3 SCC 440; Brakewel Automotive Components (India) (P) Ltd. v. P. R. Selvam Alagappan [2017] 3 SCR 681 : (2017) 5 SCC 371 : (2017) 3 SCC (Civ) 152 : 2017 SCC OnLine SC 265; Harshad Chiman Lal Modi v. DLF Universal and Ors. [2005] Supp. 3 SCR 495 : (2005) 7 SCC 791 : MANU/SC/0710/2005; Jagmittar Sain Bhagat v. Dir. Health Services, Haryana and Others [2013] 8 SCR 77 : MANU/SC/0703/2013 : (2013) 10 SCC 136; Shri Saurav Jain and Another v. M/s A. B. P Design & Another [2021] 8 SCR 1020 : MANU/SC/0509/2021 : (2022) 18 SCC 633; Masalti v. State of Uttar Pradesh [1964] 8 SCR 133 : MANU/SC/0074/1964 : AIR 1965 SC 202; Bihari Chaudhari v.

State of Bihar [1984] 3 SCR 309 : AIR 1984 SC 1043 : (1984) 2 SCC 627; Gangappa Gurupadappa Gugwad Gulbarga v. Rachawwa and Ors. [1971] 2 SCR 691 : AIR 1971 SC 442 : MANU/SC/0351/1970; Bishandayal and Sons v. State of Orissa and Ors. , AIR 2001 SC 544 : MANU/SC/0773/2000; Shanti Conductors (P) Ltd v. Assam State Electricity Board and Others [2019] 1 SCR 489 : MANU/SC/0068/2019 : (2019) 19 SCC 529 - relied on. Celir LLP v. Mr. Sumati Prasad Bafna and Others [2024] 18 SCR 1618 : 2024 LiveLaw (SC) 991; R. Nagaraj (dead) through legal heirs and Another v. Rajamani and Others, 2025 Livelaw SC 416; Shaki Tubes Ltd v. State of Bihar [2009] 10 SCR 739 : (2009) 7 SCC 673; Fertilizer Corporation of India Ltd and Others v. M/s Coromandel Sacks Pvt. Ltd. [2024] 5 SCR 321; Hira Lal Patni v. Kali Nath [1962] 2 SCR 147 : 1961 SCC OnLine SC 42 : AIR 1962 SC 199 : (1961) 2 SCJ 592; Midnapore Peoples Co-operative Bank Ltd and Others v. Chunilal Nanda and Others [2006] Supp.

2 SCR 986 : (2006) 5 SCC 399 - referred to. List of Acts Micro, Small and Medium Enterprises Development Act, 2006; Constitution of India; Code of Civil Procedure, 1908; Limitation Act, 1963; State Financial Corporation Act, 1951; Commercial Courts Act, 2015; Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993. 10 List of Keywords Doctrine of Sub silentio; Computation of interest on the decretal amount; Execution proceedings; Jurisdiction of the trial Court; Notice u/s. 80 CPC; Maintainability of the suit; Power of the Court to modify the decree; Section 21 of the Limitation Act; Applicability of the Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993; Stage of execution u/s.

47 of CPC; Execution, discharge, or satisfaction of the decree; Judgment to satisfy requirement u/Order XX, Rule 4(2); State; Article 12; Privity of contract; Iqnorantia facti doth excusat; Ignorantia juris non excusat; Impleadment of a party in a pending suit; Litigation. Case Arising From CIVIL APPELLATE JURISDICTION: Civil Appeal No. 10047 of 2025 From the Judgment and Order dated 22. 11. 2022 of the High Court of Uttarakhand at Nainital in WPMS No. 2314 of 2022 Appearances for Parties Advs. for the Appellant: Ravi Prakash Mehrotra, Sr. Adv. , Jogy Scaria, Ms. Aparna Mehrotra, Apoorv Srivastava. Advs. for the Respondents: Gopal Sankaranarayanan, Sr. Adv. , Jasbir Singh Malik, Ms. Rhythm Bharadwaj, Shourya Das Gupta, Ms. Aditi Gupta, Varun Punia, Shubhranshu Padhi, Jay Nirupama, D. grish Kumar, Pranav Giri, Ekansh Sisodia. Judgment / Order of the Supreme Court Judgment R. Mahadevan, J. 1. Leave granted. 2.

The present appeal has been filed by the Odisha State Financial Corporation, a government corporation in the State of Odisha, against the final judgment and order dated 22. 11. 2022 passed by the High Odisha State Financial Corporation v. Vigyan Chemical Industries and Others Court of Uttarakhand at Nainital1 in Writ Petition (M/S) No. 2314 of 2022, whereby the High Court dismissed the writ petition filed by the appellant under Article 227 of the Constitution of India, challenging the civil proceedings and the orders passed by the Courts below regarding the computation of interest on the decretal amount and the consequential execution proceedings. BRIEF FACTS 3. The appellant, which is a State Financial Corporation, along with Industrial Promotion & Investment Corporation of Odisha2 jointly financed an industrial unit, namely, M/s. Manorama Chemicals Works Ltd. , (Respondent No. 2 herein) on 22. 11. 1984 for setting up a bleaching powder unit at Ganjam, Odisha. M/s.

Vigyan Chemical Industries Limited Dehradun (Respondent No. 1 herein) supplied raw materials worth Rs. 66,454. 65 to Respondent No. 2 on 29. 07. 1985. Since Respondent No. 2 defaulted in repaying the financial assistance received from the appellant and IPICOL, possession of the industry of Respondent No. 2 was taken over by the appellant on 18. 08. 1987 under Section 29 of the State Financial Corporation Act, 19513. 3. 1. Thereafter, Respondent No. 1 filed Recovery Suit No. 103 of 1988 against Respondent Nos. 2, 3, and 4 in the Court of Second Additional Civil Judge (Senior Division), Dehradun4, claiming Rs. 90,400/- with interest as the outstanding amount. Respondent No. 1/Plaintiff also claimed pendente lite and future interest at the rate of 24% per annum till realization of the amount. The appellant was sought to be impleaded in the suit on 11. 02. 1993, which was allowed by the trial Court on 06. 12. 1994, and the appellant was added as Defendant No. 4.

The appellant objected to its impleadment by filing a Miscellaneous Appeal and thereafter, a Writ Petition, both of which ended in dismissal. The trial Court was directed to adjudicate the suit expeditiously, within one year, with the appellant as a party. 1 Hereinafter referred to as "the High Court" 2 For short, "IPICOL" 3 For short, "S. F. C. Act, 1951" 4 For short, "the trial Court" 12 3. 2. Respondent No. 1 / plaintiff also sought leave to amend and add certain paragraphs, contending that under Section 29(5) of the S. F. C. Act, 1951, the appellant / Defendant No. 4 is liable for the claimed amount, as it had taken possession of Respondent No. 2, and the said industrial concern was now to be sued through Defendant No. 4. The amendment application was allowed, and the appellant / Defendant No. 4 filed a written statement, stating that due to default in repayment of the loan, it had taken possession of industry of Respondent No. 2 on 18. 08. 1987 under Section 29 of the S. F. C.

Act, 1951 for the purpose of realization of its dues and thereafter sold the unit to one Shri T. R. K. Rao. 3. 3. During the pendency of the suit, the appellant opened a bank guarantee on 27. 11. 1998 for a sum of Rs. 6,36,243/- with Union Bank of India, Cuttack, undertaking to pay the said amount to the trial Court, on demand. Similarly, another bank guarantee was opened on 16. 10. 1999 for a sum of Rs. 3,50,000/- with Union Bank of India, Cuttack to be deposited with the trial Court on demand with respect to Suit No. 103/1988. The trial Court was accordingly informed by the Union Bank of India regarding the issuance of the bank guarantee for Rs. 3,50,000/- to the credit of the suit. The appellant also instructed its lawyer vide letter dated 22. 10. 1999, to submit the said bank guarantee to the trial Court. 3. 4. The suit filed by Respondent No. 1/Plaintiff was partly decreed on 20. 08. 2001 for an amount of Rs.

84,170/- with pendente lite and future interest to be calculated at 24% per annum from 01. 03. 1988 to 23. 09. 1992 and at 2% compounded monthly from 23. 09. 1992 till payment. Challenging the same, the appellant preferred Civil Appeal No. 182 of 2001. Respondent No. 1 filed cross objection challenging the partial dismissal of the suit. Meanwhile, Respondent No. 1 also filed an application under the Limitation Act, 1963, on 11. 04. 2005 to treat the suit against the appellant as having been filed from 29. 02. 1988. By order dated 05. 11. 2005, the appellant was added as a defendant in the suit from 29. 02. 1988, and by order dated 22. 03. 2006, the trial Court held that the suit had been filed within limitation against the appellant. Thereafter, the appeal filed by the appellant was dismissed, and the cross-objection filed by Respondent Odisha State Financial Corporation v. Vigyan Chemical Industries and Others No.

1 was allowed, and consequently, the suit was decreed in its entirety, by the Additional District Judge, Fast Track Court No. VI, Dehradun5, by judgment dated 08. 08. 2006. 3. 5. Aggrieved by the judgment dated 08. 08. 2006 in First Appeal No. 182 of 2001, concurring with the trial Court's order dated 22. 03. 2006 with the decision that the suit was filed within limitation against the appellant, and the decree dated 20. 08. 2001 in Suit No. 103/88, the appellant preferred Second Appeal No. 78 of 2006 before the High Court. By order dated 30. 11. 2006, the High Court stayed the judgment and decree, subject to the condition that the appellant deposit the decretal amount within 45 days. As stated earlier, two bank guarantees for Rs. 6,36,243/- and Rs. 3,50,000/- had been opened by the appellant on 27. 11. 1998 and 16. 10. 1999 respectively and were offered as deposit. 3. 6. Thereafter, by judgment, dated 07. 05. 2007 in Second Appeal No.

78 of 2006, the High Court dismissed the appeal, holding that the suit was not barred by limitation. Aggrieved, the appellant preferred SLP (Civil) CC No. 10278/2007 (later Civil Appeal No. 2073/2010) before this Court. By order dated 10. 03. 2014, this Court noted that the required bank guarantees, which exceeded the decretal amount, had already been furnished and accordingly, no further deposit was deemed necessary. Ultimately, by judgment dated 23. 11. 2017, this Court dismissed Civil Appeal No. 2073/2010, thereby upholding the High Court's judgment on limitation. 3. 7. On 01. 08. 2018, Respondent No. 1 filed Execution Case No. 107 of 2018 in the Court of the Civil Judge (Senior Division) Dehradun6 for recovery of the decretal amount, stated to be Rs. 8,88,33,416. 30 from the appellant's bank accounts and assets. Vide order dated 12. 03. 2020, the Execution Court directed Union Bank of India, Cuttack, to remit the principal amount along with interest accrued on TDR No.

303/284391 and TDR No. 303/284615 for payment to the decree holder. 5 For short, "the First Appellate Court" 6 For short, "the Execution Court" 14 3. 8. Pursuant to the order dated 12. 03. 2020 passed by the Execution Court, Union Bank of India released the proceeds of the two TDRs opened by the appellant in 1998 and 1999 - Rs. 40,16,606/- and Rs. 18,00,299/-, respectively - totaling Rs. 58,16,905/- to the Execution Court towards satisfaction of the decree amount of Rs. 90,400/- with accrued interest. Thereafter, by orders dated 01. 09. 2021, the Execution Court attached the appellant's fixed and flexi deposits in Union Bank of India, Axis Bank Limited and Odisha State Cooperative Bank in Cuttack, amounting to approximately Rs. 22 Crores. Aggrieved by the said orders of attachment dated 01. 09. 2021, the appellant filed Writ Petition (Civil) No. 28301/2021 before the High Court of Orissa, which by order dated 16. 09.

2021, disposed of the writ petition with liberty to the appellant to approach the appropriate forum. 3. 9. Subsequently, on 07. 10. 2021, the Execution Court passed two orders directing the appellant's banks, Axis Bank Ltd. , and Odisha State Cooperative Bank at Cuttack to remit the total value of the attached fixed deposits, along with interest, to the Court of the Additional Civil Judge VI (Senior Division) Dehradun. Aggrieved, the appellant filed Writ Petition (C) No. 1226/2021 before this Court, wherein vide order dated 18. 11. 2021, it was observed that the appellant is at liberty to pursue any other remedy available under law. 3. 10. Thereafter, the appellant filed Misc. Petition No. 156/21 under Section 47 of the Code of Civil Procedure, 19087, seeking a stay of execution proceedings of Execution Case No. 107/2018. The said petition was dismissed on 18. 04. 2022. Aggrieved, the appellant preferred Civil Revision No.

40/2022 before the District Judge, Dehradun, along with an application for stay of further proceedings in Execution Case No. 107/2018. During its pendency, the Execution Court, by order dated 05. 08. 2022, directed the Odisha State Co-operative Bank to deposit the decretal amount by 30. 08. 2022, failing which, coercive steps would be taken against the appellant. 3. 11. Aggrieved by the order dated 05. 08. 2022 passed in Execution Case No. 107/2018, the appellant preferred Writ Petition (C) 7 For short, "CPC" Odisha State Financial Corporation v. Vigyan Chemical Industries and Others No. 2069/2022 before the High Court. By order dated 30. 08. 2022, the High Court disposed of the writ petition with a direction to the Revisional Court to consider the stay application on 02. 09. 2022. However, on 02. 09. 2022, the Revisional Court dismissed Civil Revision No. 40/2022. 3. 12. Consequently, the appellant approached the High Court by filing Writ Petition No.

2314/22 (M/S) for setting aside the order dated 02. 09. 2022 passed by the Revisional Court in Civil Revision No. 40/2022 and the order dated 18. 04. 2022 passed by the Execution Court in Execution Case No. 107/2018. However, by the impugned judgment dated 22. 11. 2022, the High Court dismissed the writ petition. Aggrieved thereby, the appellant has approached this Court by way of the present appeal. CONTENTIONS OF THE PARTIES 4. Mr.

Ravi Prakash Mehrotra, learned Senior Counsel for the appellant Corporation submitted that the High Court, in the facts and circumstances of the present case, was not justified in declining to exercise its supervisory jurisdiction under Article 227 of the Constitution of India, even in the face of a manifest miscarriage of justice and irretrievable harm caused to the appellant, on account of the proceedings and orders passed by the Courts below in relation to the decree and the consequent execution case, which constitute a flagrant violation of the fundamental principles of law and have resulted in grave injustice to the appellant. 4. 1. Learned Senior Counsel further submitted that the Courts below erred in computation of interest on the decretal amount, particularly, in light of the fact that the appellant is facing coercive measures at the instance of Respondent No. l, arising out of the execution of a money decree of Rs. 90,400/- passed on 20. 08.

2001, in respect of which the appellant had opened bank guarantees prior to the decree, and the proceeds amounting to Rs. 58,16,905/- were released to Respondent No. 1 on 05. 10. 2020. However, based on an erroneous computation of interest at 24% per annum, compounded monthly, the amount sought is a staggering Rs. 8. 89 Crores. The appellant, a government corporation, is thus facing unwarranted attachment proceedings, which gravely and adversely affect public interest. 16 4. 2. Learned Senior Counsel also contended that the High Court was not justified in dismissing the writ petition on the ground that the appellant had not furnished the bank guarantee to secure the decretal amount. In reality, the proceeds of the bank guarantees were released to the decree holder / Respondent No. 1 - not out of his own volition, but under Court's direction. Thus, it cannot be held that the bank guarantee was not a deposit under Order XXIV Rule 1 CPC.

The High Court erred in holding that such a deposit must be voluntary and not under compulsion. Despite furnishing bank guarantee in excess of the decretal amount, the High Court adopted an unduly narrow view of Section 47 CPC, while exercising jurisdiction under Article 227 of the Constitution. 4. 3. Learned Senior Counsel further submitted that the execution application filed by Respondent No. 1 was not maintainable before the civil Court in view of Section 15(2) of the Commercial Courts Act, 2015. Although this point may not have been specifically pleaded before the lower courts, it was raised before the High Court and hence, the same ought to have been considered by the High Court. 4. 4. Learned Senior Counsel emphasized that the High Court failed to appreciate that the computation of interest on the decretal amount was not only erroneous but also exorbitant. Interest at the rate of 24% was impermissible under Section 34 CPC. Furthermore, the appellant / Defendant No.

4 did not place any orders for purchase; in fact, it had clearly pleaded in its written statement that it had no connection with the underlying transaction and hence, no liability can be fastened on them. It was also contended that a specific plea regarding the excessive interest was also taken. The High Court ought to have considered in the petition under Article 227 that the appellant Corporation is now facing unprecedented and unjustified attachment proceedings and is saddled with a liability of Rs. 8. 89 Crores - arising from a decree of merely Rs. 90,400/- - based on a suit instituted in 1988. The bank guarantees furnished in 1998 and 1999 (prior to the decree), amounting to Rs. 58,16,905/were encashed and improperly released to the decree holder. Hence, further recovery, attachment, and coercive steps against the appellant are unwarranted. Moreover, the continued accrual of interest is Odisha State Financial Corporation v.

Vigyan Chemical Industries and Others wholly unjustified. In these circumstances, intervention by this Court is warranted in the interest of justice to bring finality to a matter that is prejudicial to the appellant and against public interest. 4. 5. Learned Senior Counsel placed reliance on the judgment of this Court in Shaki Tubes Ltd v. State of Bihar8, to contend that if the purchase / supply order predates the enactment of the interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993, then interest is governed by Section 34 CPC and not the Delayed Payments Act, which operates prospectively. In the present case, the supply order - i. e. , the sale of raw materials to Respondent No. 2 by Respondent No. 1 - was made in 1985 long before the Act came into force i. e. , on 23. 09. 1992. Therefore, the trial Court's decree dated 20. 08. 2001 awarding compound interest at 2% per month from 23. 09. 1992 onward under the Delayed Payments Act, was erroneous.

4. 6. Learned Senior Counsel further pointed out that the amount being claimed from the appellant is grossly exaggerated and irregularly calculated. As a result, the appellant Corporation is now facing attachment of all its bank accounts and assets, plunging it into administrative disarray and financial chaos, including difficulty in disbursing salaries. It is neither fair, just, nor legally sustainable to subject a public sector corporation to such coercive measures. Therefore, the Execution Court's insistence on recovering nearly Rs. 9 crores is neither warranted nor justified. 4. 7. Learned Senior Counsel further submitted that the appellant corporation had continuously contested the decree before the appellate forums from 2001 to 2017. In contrast, Respondent No. 1, the decree holder, neither invoked the bank guarantee nor initiated execution proceedings for nearly 17 years, after the decree was passed. According to the learned Senior Counsel, the decree holder received Rs.

58,16,905/- on 05. 10. 2020 and Rs. 2,34,40,654/- on 07. 01. 2022, thereby totaling Rs. 2,92,57,559/- out of attachment and encashment of two bank guarantees and one fixed deposit of the appellant corporation. 8 (2009) 7 SCC 673 18 4. 8. Furthermore, reliance was placed on the decision of this Court in Fertilizer Corporation of India Ltd and others v. M/s. Coromandel Sacks Pvt. Ltd9, wherein this Court applied the principle of harmonious construction to balance competing interests and safeguard the rights of judgment debtors. In that case, the Court emphasized the benefit available to the judgment debtor under Order XXIV CPC, particularly, when the bank guarantee was furnished before the decree was passed. This principle contrasts with the interest calculation under the Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993 which resulted in the mounting of compound interest from 23. 09. 1992 onwards.

The learned Senior Counsel further contended that though a plea regarding maintainability was raised, no finding was given and hence, the decree is a nullity. 4. 9. Accordingly, learned Senior Counsel prayed for setting aside the judgment of the High Court and for allowing the present appeal. 5. Per contra, Mr. Gopal Sankaranarayanan, learned Senior Counsel for the Respondent No. 1, while denying the claim of the appellant Corporation and reiterating the stand taken in the counter affidavit filed by them, inter alia, contended as under: a) The present Petition for Special Leave to Appeal, invoking the extraordinary jurisdiction of this Court under Article 136 of the Constitution of India, is liable to be dismissed at the threshold itself on ground of suppression of material information. b) The High Court has declined to grant any relief to the appellant by dismissing Writ Petition (M/S) No. 2314 of 2022.

The appellant Odisha State Financial Corporation has not approached this Court with clean hands, having knowingly and repeatedly made false and misleading statements and even filed a false affidavit in earlier proceedings before this Court. c) The present Special Leave Petition raises no question of law, much less any substantial question of law, warranting consideration by this Court. The so-called substantial questions 9 [2024] 5 SCR 321, (rendered on 26. 04. 2024) Odisha State Financial Corporation v. Vigyan Chemical Industries and Others of law framed by the appellant - Odisha State Financial Corporation cannot be entertained by this Court. d) Initially, the Original Suit was filed in the year 1988 and was decreed in 2001.

However, the Execution Application could be filed only in 2018, due to the repeated challenges raised by the appellant before various forums including the trial Court, Appellate Courts at Dehradun, and the High Courts of Allahabad and Uttarakhand, culminating in Civil Appeal No. 2073 of 2010 before this Court, which was finally dismissed by Judgment dated 23. 11. 2017. In effect, 35 years have passed since the filing of the original suit and 22 years since the date of decree. It is deeply unfortunate that despite more than three decades having elapsed, the decree holder has not been able to enjoy the fruits of a decree passed in 2001. e) The allegation of the appellant Corporation that it had furnished a bank guarantee of Rs. 3,50,000/- in 1999, (prior to decree) and that the proceeds thereof along with another bank guarantee for Rs. 6,36,243/-, were released to Respondent No. 1 on 05. 10.

2020, and further, that the interest has been erroneously calculated at 24% per annum compounded monthly, is wholly incorrect, false, unsubstantiated, and specifically denied. f) The bank guarantee furnished by the appellant Corporation was not voluntary, but given under compulsion and only pursuant to repeated directions of the Court. Moreover, the said bank guarantee had already expired in the year 2000. The amount was not paid to the Respondent on 05. 10. 2020, but only on 23. 02. 2021 - twenty years after the decree and twenty-two years after furnishing the bank guarantee. In fact, the first actual payment came through attachment proceedings pursuant to the orders of the Execution Court in 2020. The amount was deposited by the bank directly into the Court through a demand draft, which was then transferred to the Respondent. But the appellant had made all efforts to avoid payment.

Furthermore, the rate of interest at 24% per annum compounded monthly was awarded by the trial Court in its judgment dated 20. 08. 2001 and was rightly upheld by the Appellate Court in its judgment dated 08. 08. 2006. However, the appellant has failed to submit any calculation or interest sheet to establish its claim that 20 the computation is erroneous and has merely raised vague, baseless, and misleading allegations before this Court. g) The High Court of Uttarakhand granted ample opportunity to the appellant Corporation to establish its case and after due deliberation and application of law, passed the well-reasoned judgment on 22. 11. 2022, which is self-explanatory, and the High Court rightly dismissed the writ petition. h) Order XX1 Rule 1 CPC mandates that payment or deposit made by the judgment debtor in satisfaction of the decree must be voluntary.

The bank guarantee deposited by the appellant, as security under an attachment order passed under Order XXXVIII Rule 5 CPC, was conditional and would have been available to the decree holder only if the suit was decreed. Such a deposit cannot be construed as one under Order XXIV Rule 1 CPC. The High Court, after properly applying its mind and considering the facts and law applicable to the case, rightly rejected the appellant's plea on this issue. i) The appellant has attempted to mislead this Court by selectively stating that it had filed I. A. No. 141994/2021 in M. A. No. 1832/ 2021 in Civil Appeal No. 2073/2010, but the same was dismissed as withdrawn with costs, upon the appellant's request. j) As far as the order dated 10. 03. 2014 passed in Civil Appeal No. 2073/2010 is concerned, it was merely an interim order passed by this Court in Civil Appeal No.

2073/2010 and is deceptively being misused and misrepresented by the appellant, without even stating that the said order clearly stood overruled by the subsequent judgment passed in the said civil appeal, which has been deviously concealed by the appellant. The order dated 10. 03. 2014 was passed by this Court in I. A. No. 6 in Civil Appeal No. 2073 of 2010 which was filed by Respondent No. 1 requesting this Court to direct the appellant to deposit the decretal amount. k) The appellant's objections under Section 47 CPC and the accompanying stay application were rightly dismissed by the Executing Court at Dehradun through a reasoned order dated 18. 04. 2022 in Execution Case No. 107/2018. Subsequent legal remedies were also dismissed - by the High Court on Odisha State Financial Corporation v. Vigyan Chemical Industries and Others 30. 08. 2022 in WP (Civil) No. 2069/2022, by the Revisional Court on 02. 09. 2022 in Civil Revision No.

40/2022 and finally by the High Court of Uttarakhand on 22. 11. 2022 in WP (M/S) 2314/2022 - the Judgment now impugned in this Special Leave Petition. All these judicial forums have rightly rejected the appellant's objections, and hence, no interference is warranted by this Court. 5. 1 Thus, the learned Senior Counsel submitted that the decree dated 20. 08. 2001 passed in the suit has attained finality in 2017, and Respondent No. 1 is entitled to the interest awarded in terms of the Interest on Delayed Payments to Small scale and Ancillary Industrial Undertakings Act, 1993, which comes to Rs. 35,94,02,420. 75 as on 10. 02. 2025. However, the appellant has acted without bona fides and has attempted to obstruct execution of the decree by initiating and pursuing frivolous proceedings. Therefore, this appeal deserves to be dismissed. 6. Mr. Shubhranshu Padhi, learned Counsel for Respondent No.

3 - IPICOL, while adopting and supporting the arguments advanced by the learned Senior Counsel for the appellant, inter alia, contended as under: 6. 1. Both the appellant (OSFC) and Respondent No. 3 (IPICOL) are Public Sector Undertakings that extended financial assistance to the original borrower, Respondent No. 2 and hence the suit itself is not maintainable. 6. 2. Respondent No. 1 filed Civil Suit No. 103/88 before the trial Court, alleging that it had supplied raw materials (Hydrated Lime worth Rs. 66,454/-) to Respondent No. 2. At that time, Respondent No. 1 sought to proceed against the appellant and Respondent No. 3, instead of pursuing the Directors/Promoters of the original borrower, to whom the supplies were actually made. There exists no privity of contract or any commercial dealings between Respondent No. 1 and either the appellant or Respondent No. 3. The appellant and Respondent No.

3 being State Financial Corporations, cannot be burdened with such unjust and excessive liability, as it would result in gross injustice and impose a significant financial strain on the public Exchequer. 6. 3. Respondent No. 1 filed Execution Case No. 107/2018 before the Civil Judge (Senior Division), Dehradun, 17 years after the 22 decree was passed. Despite the passage of time, Respondent No. 1 is now claiming exorbitant interest, inflating the original decretal amount of Rs. 90,400/- to an unreasonable sum of Rs. 35,94,02,420. 75 as on 10. 02. 2025, as per the calculation chart provided by Respondent No. 1. As elucidated by the appellant, although the original claimed debt was Rs. 90,400/-, Respondent No. 1 has already received the following payments: Rs. 58,16,905/- on 05. 10. 2020 and Rs. 2,34,40,654/- on 07. 01. 2022, thereby totaling Rs. 2,92,57,559/-. Furthermore, Respondent No. 3 (IPICOL) had not even taken over Respondent No. 2 under Section 29 of the S. F.

C Act, 1951, yet it is being wrongfully saddled with excessive liabilities claimed by Respondent No. 1. 6. 4. Therefore, this is a fit case for this Court to pass appropriate orders to deliver substantial justice to the concerned parties. The impugned judgment deserves to be set aside, and the present appeal filed by the appellant ought to be allowed. Consequently, both the appellant (OSFC) and Respondent No. 3 (IPICOL) ought to be fully discharged from liability as claimed by Respondent No. 1. DISCUSSION & FINDINGS 7. We have heard the learned Senior Counsel appearing for the parties and perused the materials available on record. 8. It is not in dispute that the appellant is a State Financial Corporation having its office at Cuttack, Odisha, and had extended financial assistance to Respondent No. 2, for the purpose of setting up a bleaching powder unit. Respondent No. 1 had, in the course of business, supplied raw materials worth Rs. 66,454. 65 to the said unit.

Due to persistent default in repayment of the loan by Respondent No. 2, the appellant in exercise of its statutory powers under section 29 of the S. F. C. Act, 1951, took over possession of the industrial unit of Respondent No. 2 in the year 1987 for realization of its dues. Subsequently, on 29. 02. 1988, Respondent No. 1 filed Civil Suit No. 103/1988 before the trial Court seeking recovery of Rs. 90,400/- with interest from the said unit. Initially, the appellant was not made a party to the suit, nor was any relief claimed against it. 8. 1. Thereafter, the appellant was impleaded as a defendant in the said suit on 06. 02. 1994 by Respondent No. 1, nearly, six years Odisha State Financial Corporation v. Vigyan Chemical Industries and Others after the date of institution of the suit. Despite the objections raised by the appellant regarding its impleadment, liability and maintainability, the suit was decreed against the appellant on 20. 08. 2001 for an amount of Rs.

90,400/- with simple interest at 24% per annum from 01. 03. 1988 to 23. 09. 1992, and 2% monthly compound interest from 23. 09. 1992 until payment, in light of the enforcement of the Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993. The appellant challenged the said decree by filing Civil Appeal No. 182/2001 both on merits and on the ground of limitation regarding its impleadment, however, the said appeal was dismissed by the First Appellate Court, on 08. 08. 2006. 8. 2. Challenging the dismissal of the appeal, the appellant filed Second Appeal No. 78/2006 before the High Court. The original decree dated 20. 08. 2001 and the judgment dated 08. 08. 2006 in the First Appeal were stayed by the High Court on 30. 11. 2006, and the stay remained in force until the dismissal of the Second Appeal on 07. 05. 2007. Thereafter, the appellant preferred Civil Appeal No. 2073/2010 before this Court, which came to be dismissed by judgment dated 23. 11.

2017, with the decision limited to the question of limitation. 8. 3. After a period of 17 years from the date of the decree, Respondent No. 1 / Decree Holder filed Execution Case No. 107/18 claiming an amount of Rs. 8,88,33,416. 30, before the Civil Judge, Dehradun (Uttarakhand). The appellant filed objections under Section 47 CPC, which were dismissed on 18. 04. 2022. The Civil Revision filed by the appellant before the Additional District Judge, was dismissed on 02. 09. 2022 and Writ Petition No. 2314/22 preferred by the appellant was also dismissed by the impugned judgment dated 22. 11. 2022. Aggrieved thereby, the appellant has filed the instant appeal. 9. On 01. 02. 2023, when the matter was taken up for consideration, the counsel appearing for the respondents stated that no further steps shall be taken in the execution proceedings till the disposal of this appeal, which was recorded by this Court in its proceedings. 10.

It is the case of the appellant that it had opened a bank guarantee on 16. 10. 1999 with Union Bank of India, Cuttack, as directed by the court, for Rs. 3. 5 lakhs payable to the trial Court, on demand. This was 24 within the knowledge of Respondent No. 1. The said bank guarantee was extended from time to time, and was eventually attached and encashed on 16. 12. 2020 along with another bank guarantee furnished by the appellant for Rs. 6,36,243/-, thereby totaling Rs. 58,16,905/- received by Respondent No. 1. According to the appellant, the opening of the said bank guarantee on 16. 10. 1999 - prior to the passing of the decree - was intended to cover the decretal amount and is squarely covered by the provisions of Order XXIV Rules 1 - 3 CPC, which aim to ensure that interest stops accruing once a deposit has been made. Therefore, the appellant contends that due to the opening and subsequent encashment of the bank guarantee, the claim for accrual of interest itself is bad in law. 11.

The appellant further contends that the decree holder, Respondent No. 1 did not make any attempt to encash the said bank guarantee immediately after the suit was decreed, or initiate execution proceedings for over 17 years, thereby allowing the interest to accumulate unduly. On the other hand, the appellant had pursued remedies in good faith under the belief that interest would freeze once a deposit was made under Order XXIV Rule 3 CPC. The respondent's delay in executing the decree unjustly enabled them to claim exorbitant interest, thereby facilitating unjust enrichment. Such delay should not impose an undue interest burden on the appellant. Notably, Respondent No. 1 has already received Rs. 58,16,905/- on 05. 10. 2020 and Rs. 2,34,40,654/- on 07. 01. 2022, thereby totaling Rs. 2,92,57,559/through bank guarantees and fixed deposits furnished by the appellant.

As such, it is unjust, unfair, and legally untenable to subject the appellant Corporation to coercive measures, which are inappropriate and gravely prejudicial to the public interest. 12. Undoubtedly, Respondent No. 1 instituted a money suit for recovery of dues from Respondent No. 2 on account of default in payment for the supply of goods. Initially, the appellant was not a party to the suit. Subsequently, Respondent No. 1 impleaded the appellant, a State Financial Corporation, which took action under Section 29 of the S. F. C Act, 1951 against Respondent No. 2. The suit was decreed on 20. 08. 2001. Thereafter, Respondent No. 1 filed an application under Section 21 of the Limitation Act, 1963 before the trial Court, pending appeal. The trial Court allowed the application holding that the suit against the appellant was deemed to be initiated from the Odisha State Financial Corporation v. Vigyan Chemical Industries and Others original date of filing the suit.

By a subsequent order, it was held by the trial Court that the suit was not barred by limitation as against the appellant. The finding of the appellate court and the High Court on limitation alone, was upheld by this Court on 23. 11. 2017 in Civil Appeal No. 2073/2010. It is pertinent to mention here that this Court confined its decision only to the issue of limitation and remained silent on all other material questions raised. Doctrine of 'Sub silentio' 13. It is a settled principle that a judgment is an authority only for what it decides. When a judgment fails to address other issues raised, it is said to be 'sub silentio', and cannot be held as a binding precedent on those undecided issues. From the records, it is very clear that in the earlier judgment of this Court challenging the original decree, only the issue of limitation was adjudicated.

Critical issues such as (i) the jurisdiction of the trial Court to entertain the suit against the appellant in the absence of a notice under Section 80 CPC, (ii) the maintainability of the suit, (iii) the power of the Court to modify the decree by entertaining an application under Section 21 of the Limitation Act, 1963, and (iv) the applicability of the Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993, were not adjudicated. This is where the concept of 'sub silentio' assumes significance. It refers to a situation, where a rule or principle on a particular point of law is applied or passed upon by a court silently, without any consideration of the applicable law or without argument, and the judgment is rendered on another question of law or fact. According to the Black's Law Dictionary, "the precedents that pass sub silentio are of little or no authority".

Literally, it means 'in silence' and is used to refer to something that is not expressly stated. Therefore, it can safely be concluded that the judgment of this Court in Civil Appeal No. 2073/2010 is silent on the issues now under consideration. When the judgment of a Court is silent on questions of law either raised earlier but not decided, or raised in the subsequent proceedings, it is settled law that constitutional courts are empowered to decide such questions of law independently and the earlier judgment cannot be cited as a binding precedent or conclusive. It will be useful to refer to the following judgments of this Court on this aspect. 13. 1. In Municipal Corpn. of Delhi v.

Gurnam Kaur10, while considering the exercise of power by the Commissioner of the Delhi Corporation to remove encroachments, this Court referred to an earlier decision relied upon by the High Court (in the matter of pavement dwellers) and observed that the earlier decision did not consciously deal with the legal issue of right to encroach upon public streets. Therefore, it lacked precedential value as that point was decided sub silentio. The following paragraphs are relevant in this regard: "11. Pronouncements of law, which are not part of the ratio decidendi are classed as obiter dicta and are not authoritative. With all respect to the learned Judge who passed the order in Jamna Das's case [ Writ Petitions Nos. 981-82 of 1984] and to the learned Judge who agreed with him, we cannot concede that this Court is bound to follow it.

It was delivered without argument, without reference to the relevant provisions of the Act conferring express power on the Municipal Corporation to direct removal of encroachments from any public place like pavements or public streets, and without any citation of authority. Accordingly, we do not propose to uphold the decision of the High Court because, it seems to us that it is wrong in principle and cannot be justified by the terms of the relevant provisions. A decision should be treated as given per incuriam when it is given in ignorance of the terms of a statute or of a rule having the force of a statute. So far as the order shows, no argument was addressed to the court on the question whether or not any direction could properly be made compelling the Municipal Corporation to construct a stall at the pitching site of a pavement squatter. Professor P. J. Fitzgerald, editor of the Salmond on Jurisprudence, 12th Edn. explains the concept of sub silentio at p.

153 in these words: A decision passes sub silentio, in the technical sense that has come to be attached to that phrase, when 10 (1989) 1 SCC 101 Odisha State Financial Corporation v. Vigyan Chemical Industries and Others the particular point of law involved in the decision is not perceived by the court or present to its mind. The court may consciously decide in favour of one party because of point A, which it considers and pronounces upon. It may be shown, however, that logically the court should not have decided in favour of the particular party unless it also decided point B in his favour; but point B was not argued or considered by the court. In such circumstances, although point B was logically involved in the facts and although the case had a specific outcome, the decision is not an authority on point B. Point B is said to pass sub silentio. 12. In Gerard v. Worth of Paris Ltd. (k).

[(1936) 2 All ER 905 (CA)], the only point argued was on the question of priority of the claimant's debt, and, on this argument being heard, the court granted the order. No consideration was given to the question whether a garnishee order could properly be made on an account standing in the name of the liquidator. When, therefore, this very point was argued in a subsequent case before the Court of Appeal in Lancaster Motor Co. (London) Ltd. v. Bremith Ltd. [(1941) 1 KB 675], the court held itself not bound by its previous decision. Sir Wilfrid Greene, M. R. , said that he could not help thinking that the point now raised had been deliberately passed sub silentio by counsel in order that the point of substance might be decided.

He went on to say that the point had to be decided by the earlier court before it could make the order which it did; nevertheless, since it was decided "without argument, without reference to the crucial words of the rule, and without any citation of authority", it was not binding and would not be followed. Precedents sub silentio and without argument are of no moment. This rule has ever since been followed. One of the chief reasons for the doctrine of precedent is that a matter that has once been fully argued and decided should not be allowed to be reopened. The weight 28 accorded to dicta varies with the type of dictum. Mere casual expressions carry no weight at all. Not every passing expression of a judge, however eminent, can be treated as an ex cathedra statement, having the weight of authority. " 13. 2. In the State of U. P. v. Synthetics and Chemicals Ltd.

11the challenge was to the amendment made to sub-section (1) of Section 3 of the United Provinces Sales of Motor Spirit, Diesel Oil and Alcohol Taxation Act, 1939 by the Uttar Pradesh Sales of Motor Spirit, Diesel Oil and Alcohol Taxation (Amendment) Act, 1976, for the purpose of levying purchase tax on industrial alcohol. Relying upon the decision of a Constitution Bench of this Court in Synthetics and Chemicals Ltd and others v. State of U. P. and others12, the respondents / opposite parties contended that the State Legislature was incompetent to levy tax on industrial alcohol, because of the operation of the Ethyl Alcohol (Price Control) Orders made by the Central Government under Section 18G of the Industries (Development and Regulation) Act, 1951. The appellant / State, however, contended that the power of the State to levy taxes on the sale or purchase of goods was not the subject of consideration in the decision relied upon by the respondents.

The High Court allowed the writ petition and declared the U. P. Act 8 of 1976 to be null and void. This Court was of the view that the decision in Synthetics is not an authority for the proposition canvassed by the assessee, and that the Court had not - and could not have - intended to hold that the Price Control Orders made by the Central Government under the IDR Act imposed a fetter on the legislative power of the State under Entry 54 of List II to levy taxes on the sale or purchase of goods. The reference to sales tax in paragraph 86 of that judgment was found to be merely accidental or per incuriam, and therefore, had no bearing on the validity of the impugned levy.

This Court further noted that the abrupt observation in Synthetics was without a preceding discussion and was inconsistent with the reasoning adopted in earlier decisions, from which no dissent had been 11 (1991) 4 SCC 139 : (1992) 87 STC 289 : 1991 SCC OnLine SC 17 12 (1990) 1 SCC 109 Odisha State Financial Corporation v. Vigyan Chemical Industries and Others expressed on that point. Accordingly, this Court applied the concept of 'sub silentio' and declined to uphold the order of the High Court. The relevant paragraph is extracted below for ready reference: "41. Does this principle extend and apply to a conclusion of law, which was neither raised nor preceded by any consideration. In other words can such conclusions be considered as declaration of law? Here again the English courts and jurists have carved out an exception to the rule of precedents. It has been explained as rule of sub-silentio.

"A decision passed sub-silentio, in the technical sense that has come to be attached to that phrase, when the particular point of law involved in the decision is not perceived by the court or present to its mind. " (Salmond on Jurisprudence 12th Edn. , p. 153). In Lancaster Motor Company (London) Ltd. v. Bremith Ltd. [(1941) 1 KB 675, 677 : (1941) 2 All ER 11] the Court did not feel bound by earlier decision as it was rendered 'without any argument, without reference to the crucial words of the rule and without any citation of the authority'. It was approved by this Court in Municipal Corporation of Delhi v. Gurnam Kaur [(1989) 1 SCC 101]. The bench held that, 'precedents sub-silentio and without argument are of no moment'. The courts thus have taken recourse to this principle for relieving from injustice perpetrated by unjust precedents.

A decision which is not express and is not founded on reasons nor it proceeds on consideration of issue cannot be deemed to be a law declared to have a binding effect as is contemplated by Article 141. Uniformity and consistency are core of judicial discipline. But that which escapes in the judgment without any occasion is not ratio decidendi. In B. Shama Rao v. Union Territory of Pondicherry [AIR 1967 SC 1480 : (1967) 2 SCR 650 : 20 STC 215] it was observed, 'it is trite to say that a decision is binding not because of its conclusions but in regard 30 to its ratio and the principles, laid down therein'. Any declaration or conclusion arrived without application of mind or preceded without any reason cannot be deemed to be declaration of law or authority of a general nature binding as a precedent. Restraint in dissenting or overruling is for sake of stability and uniformity but rigidity beyond reasonable limits is inimical to the growth of law. " 13. 3. In Most Rev. P. M. A.

Metropolitan v. Moran Mar Marthoma13, this Court was dealing with whether an earlier decision could be treated as a binding precedent, and in that context, it examined the doctrine of sub silentio, which refers to a situation where a point of law passes unnoticed or is not consciously decided in a judgment. The following paragraph is relevant: "57. Even assuming, although there appears no doubt, that the finding recorded by the High Court in its earlier judgment on the authenticity of the canon survived, there is yet another reason to disregard it. If the excommunication of Dionysius was invalid for violation of principles of natural justice, as was found by the Bench reviewing the order, then the findings on earlier issues were rendered unnecessary and it is fairly settled that the finding on an issue in the earlier suit to operate as res judicata should not have been only directly and substantially in issue but it should have been necessary to be decided as well.

For instance, when a decision is taken in appeal the rule is that it is the appellate decision and not the decision of the trial court that operates as res judicata. Consequently where a suit is decided both on merits and on technical grounds by the trial court, and the appellate court maintains it on technical ground of limitation or suit being not properly constituted then the decision rendered on merits by the trial court ceases to have finality. In Abdullah Ashgar Ali Khan v. Ganesh Dass [AIR 1917 13 (1995) Supp. 4 SCC 286 Odisha State Financial Corporation v. Vigyan Chemical Industries and Others PC 201: 45 Cal 442 : 19 Bom LR 972] the Court while considering the expression, "heard and finally decided" in Section 10 of the British Baluchistan Regulation IX of 1896 held that where the suit was dismissed by two courts on merits but the decree was maintained in second appeal because the suit was not properly constituted then the finality on merits stood destroyed.

In Sheosagar Singh v. Sitaram Singh [ILR (1897) 24 Cal 616 : 24 IA 50 : 1 CWN 297] where parentage of defendant was decided in his favour by the trial court but the High Court maintained the order as the suit was defective the claim of the defendant in the latter suit that the finding on parentage operated as res judicata was repelled and it was held that the question of parentage had not been heard and finally decided in the suit of 1885. The appeal in that suit had put an end to any finality in the decision of the first court, and had not led to a decision on the merits. 58.

The rationale of these decisions is founded on the principle that if the suit was disposed of in appeal not on merits but for want of jurisdiction or for being barred by time or for being defectively constituted then the finality of the findings recorded by the trial court on merits stands destroyed as the suit having been found to be bad for technical reasons it becomes operative from the date the decision was given by the trial court thus rendering any adjudication on merits impliedly unnecessary. On the same rationale, once the Royal Court of Appeal allowed the review petition and dismissed the appeal as the excommunication of Dionysius was contrary to principles of natural justice and he had not become heretic then the finding on authenticity of the canon etc. rendered in the original order was rendered unnecessary. Therefore, the finding recorded on the authenticity of the canon and power of the Patriarch etc.

recorded in the earlier order could not operate as res judicata in subsequent proceedings. " 32 13. 4. In Arnit Das v. State of Bihar14, while dealing with the determination of the age of an accused under the Juvenile Justice Act, 1986, for the purpose of trial, this Court clarified that the earlier ruling in Arnit Das (1) was rendered sub silentio, as the relevant provision of law had not been brought to the court's attention. Accordingly, the Court overruled the said decision and held that the relevant date for determining whether an accused is a juvenile is the date of the offence, not the date of production. The following paragraphs are pertinent in this regard: "19.

Generally speaking these cases are authorities for the propositions that: (i) the technicality of the accused having not claimed the benefit of the provisions of the Juvenile Justice Act at the earliest opportunity or before any of the courts below should not, keeping in view the intendment of the legislation, come in the way of the benefit being extended to the accusedappellant even if the plea was raised for the first time before this Court; (ii) a hypertechnical approach should not be adopted while appreciating the evidence adduced on behalf of the accused in support of the plea that he was a juvenile and if two views may be possible on the same evidence, the court should lean in favour of holding the accused to be a juvenile in borderline cases; and (iii) the provisions of the Act are mandatory and while implementing the provisions of the Act, those charged with responsibilities of implementation should show sensitivity and concern for a juvenile.

However, in none of the cases the specific issue -- by reference to which date (the date of the offence or the date of production of the person before the competent authority), the court shall determine whether the person was a juvenile or not, was neither raised nor decided. 20. A decision not expressed, not accompanied by reasons and not proceeding on a conscious consideration of an issue cannot be deemed to 14 (2000) 5 SCC 488 : 2000 SCC (Cri) 962 : 2000 SCC OnLine SC 936 Odisha State Financial Corporation v. Vigyan Chemical Industries and Others be a law declared to have a binding effect as is contemplated by Article 141. That which has escaped in the judgment is not the ratio decidendi. This is the rule of sub silentio, in the technical sense when a particular point of law was not consciously determined. (See State of U. P. v. Synthetics & Chemicals Ltd. [(1991) 4 SCC 139, para 41] SCC, para 41. )" 13. 5. In the State of W. B. v. Kesoram Industries Ltd.

15, this Court made an important and elaborate observation on the doctrine of sub silentio while discussing the binding nature of precedents under Article 141 of the Constitution. The central issue was whether the cess levied by the State of West Bengal on coalbearing land was in the nature of a tax on land (Entry 49 of List II - State List) or a tax on mineral rights (Entry 50 of List II or Entry 54 of List I - Union List). While addressing this, the Court reinforced that courts should exercise caution in blindly following precedents, and that only reasoned decisions involving conscious deliberation on the issues raised can be treated as law declared by this Court. The relevant paragraphs are extracted below: "485. In Goodricke Group [1995 Supp (1) SCC 707] it has, thus, wrongly been recorded that generally speaking no tea estate markets green tea leaves. The writ petitioners have stated that there are about fifty bought-leaf factories in West Bengal.

Bought-leaf factories function within a statutory scheme viz. the Tea (Marketing) Control Order, 2003. 486. Furthermore, once it is found that the definition of "tea" both in the Tea Act, 1953 and the impugned Acts is the same, the Court cannot keep the effect of Sections 25 and 30 of the Tea Act, 1953 out of its consideration for the purpose of ascertaining the true scope and purport thereof. 487. It is relevant to note that in Goodricke Group [1995 Supp (1) SCC 707] no opinion was expressed 15 (2004) 10 SCC 201: (2004) 266 ITR 721: 2004 SCC OnLine SC 70 (5-Judge Bench) 34 on Section 25 of the Act or the notification dated 30- 10-1986 issued thereunder. Once it is conceded that green tea leaves would come within the purview of the definition of "tea", it is inconceivable as to how impost of excise duty on tea in terms of sub-section (2) of Section 25 of the Tea Act will have no bearing on the subject. By reason of sub-section (2) of Section 25, additional excise duty is levied.

Excise duty in terms of the Central Excise Act, it is trite, can not only be levied on finished products but also the products at intermediary stages. 488. Unfortunately, in Goodricke case [1995 Supp (1) SCC 707] the learned Judges did not consider the matter from this angle. 489. Goodricke [1995 Supp (1) SCC 707] also runs counter to India Cement [(1990) 1 SCC 12 : 1989 Supp (1) SCR 692 : AIR 1990 SC 85] as also Kannadasan [(1996) 5 SCC 670]. Effect of the expression "immovable property" in the Cess Act, 1880 was also not brought to its notice and had the same been done, there would not have been a conclusion that tea estate would be treated as a unit as therefrom the standing crops and structures were required to be excluded. Goodricke Group case [1995 Supp (1) SCC 707] does not, therefore, lay down a good law and should be overruled. Summary of our findings ...

(viii) Tax on lands and buildings in terms of Entry 49 of List II of the Seventh Schedule of the Constitution of India can be levied on land as a unit and not otherwise. (ix) As green tea leaves are marketable, the decision in Goodricke Group [1995 Supp (1) SCC 707] having mainly been rendered on the premise that green tea leaves are not marketable must be held to have Odisha State Financial Corporation v. Vigyan Chemical Industries and Others passed sub silentio and, thus, does not lay down correct legal position. (x) In view of the definitions of "land" and "immovable property" contained in the Bengal Cess Act, 1880, as no road cess or public works cess can be imposed on standing crops or any kind of structures, houses, shops or other buildings which would include factories and workshops for processing tea, no levy by way of cess can be imposed by reason of the impugned Acts either on the mining leasehold or the tea estate containing standing crops as also houses and buildings. " 13.

6. In Zee Telefilms Ltd. v. Union of India16, the question for consideration was whether the Board of Control for Cricket in India (BCCI) is a "State" within the meaning of Article 12 of the Constitution, and therefore amenable to writ jurisdiction under Article 32. Ruling that a prior judgment cannot be treated as binding on a point of law that was not consciously examined or discussed, the Constitutional Bench of this Court clarified that BCCI cannot be held to be a "State" for the purpose of Article 12. The following paragraph is pertinent in this connection: "256. It is further well settled that a decision is not an authority for a proposition which did not fall for its consideration. It is also a trite law that a point not raised before a court would not be an authority on the said question. In A-One Granites v. State of U. P. [(2001) 3 SCC 537] it is stated as follows: (SCC p. 543, para 11) "11. This question was considered by the Court of Appeal in Lancaster Motor Co.

(London) Ltd. v. Bremith Ltd. [(1941) 1 KB 675 : (1941) 2 All ER 11 (CA)] and it was laid down that when no consideration was given to the question, the decision cannot be said to be binding and precedents sub silentio and without arguments are of no moment. " 16 (2005) 4 SCC 649 : 2005 SCC OnLine SC 213 36 13. 7. In Delhi Airtech Services (P) Ltd v. State of U. P. 17, this Court directly addressed the doctrine of sub silentio while clarifying the limits of binding precedent, to the effect that when a point does not fall for decision of a court but incidentally arises for its consideration and is not necessary to be decided for the ultimate decision of the case, such a decision does not form part of the ratio, but is treated as a decision passed sub silentio. It may also be noted that a point in respect of which no argument was advanced, no citation or authority was cited, and no discussion or adjudication is made, is not binding and would not be followed.

The relevant paragraphs read as under: "42. It has been held in the decision of this Court in MCD v. Gurnam Kaur [(1989) 1 SCC 101 : AIR 1989 SC 38] that when a point does not fall for decision of a court but incidentally arises for its consideration and is not necessary to be decided for the ultimate decision of the case, such a decision does not form a part of the ratio of the case but the same is treated as a decision passed sub silentio. 43. The concept of "sub silentio" has been explained by Salmond on Jurisprudence, 12th Edn. as follows: (Gurnam Kaur case [(1989) 1 SCC 101 : AIR 1989 SC 38], SCC pp. 110-11, para 11) "11. ... 'A decision passes sub silentio, in the technical sense that has come to be attached to that phrase, when the particular point of law involved in the decision is not perceived by the Court or present to its mind. The Court may consciously decide in favour of one party because of Point A, which it considers and pronounces upon.

It may be shown, however, that logically the court should not have decided in favour of the particular party unless it also decided Point B in his favour; but Point B was not argued or considered by the Court. In such circumstances, although Point B was logically involved in the facts and although the case had a specific outcome, the 17 (2011) 9 SCC 354 : (2011) 4 SCC (Civ) 673 : 2011 SCC OnLine SC 1115 Odisha State Financial Corporation v. Vigyan Chemical Industries a