Ramchandra Sheshgiri Kamath Vs. Janardan Vishwanath Hegde - Court Judgment

1. This is an appeal by the plaintiff from the judgment of the City Civil Court, Bombay dismissing his suit on the preliminary issue that it is barred by res judicata by reason of a previous decision between him and the defendant.

2. The plaintiff used to run a tailoring shop at Tribhuvan Road, Girgaum, Bombay. The shop consisted of two rooms and was run by the plaintiff in the name of Kamath Brothers. The plaintiff was a tenant in respect of the two rooms but by an agreement dated the 1st of November 1965, he gave to the defendant the right to conduct the shop for one year. The defendant obtained possession of one of the two rooms under this agreement and at the end of the year, he exercised the option available to him under the agreement for extension of the period mentioned therein. Under the terms of the agreement, the plaintiff was entitled to recover possession of the shop from the defendant if he failed to pay the monthly royalty for a period of three months. The defendant appears to have fallen in arrears for over three months and thereupon, the plaintiff terminated agreement and filed an application under Section 41 of the Presidency Small Cause Courts Act, 1882 (Ejectment Application No.8/177 E of 1958) for possession of the shop premises from the defendant. The plaintiff alleged in that application that the defendant was put in possession of the shop as a licensee and that the licence having been withdrawn he was liable to hand over possession. The defendant contended in that proceeding that he was in possession not as a licensee of the plaintiff but as his sub-tenant and he was therefore entitled to the protection of the Rent Act. The Small Cause Court, Bombay by its order dated the 14th of March 1960 dismissed the plaintiff's application for possession on the ground that the defendant was a sub-tenant and not a licensee of the plaintiff.

3. On the 28th of April 1960, the plaintiff brought the present suit against the defendant (Suit No.2364 of 1960) in the City Civil Court, Bombay for possession of the shop premises from the defendant alleging that the defendant was his licensee and that the licence was duly determined. The defendant contended by his written statement that he was in possession of the premises as a sub-tenant of the plaintiff and therefore, the plaintiff had no right to recover possession from him, save under the Bombay Rent Act On the 28th of November 1966, the defendant amended his written statement with the leave of the Court and he raised an additional contention that the suit was barred by res judicata or on principles analogous to res judicata, by reason of decision of the Court of Small Causes, Bombay in Ejectment Application No. 8/177 E of 1958.

4. The learned trial Judge then framed an issue, whether the suit was barred by res judicata as contended by the defendant and tried that issue as a preliminary issue. The learned Judge was apparently in two minds and he felt that there was considerable substance in the submission made on behalf of the plaintiff that, the decision in the earlier proceeding could not create the bar of res judicata. The attention of the learned trial judge was however, drawn to a decision of the then Principal Judge of the City Civil Court in which he had taken the view that a suit of the present nature would be barred by principles analogous to res judicata. The learned trial judge felt that in the interest of uniformity he should follow the decision of the principal judge and he has therefore dismissed the suit on the ground that it is barred by principles analogous to res judicata. The correctness of this view is questioned in this appeal.

5. In order to determine the question whether the suit is barred by principles analogous to res judicata, it would be necessary to draw attention to the provisions of Chapter 7 of the Presidency Small Cause Courts Act, 1882, which is entitled 'Recovery of Possession of Immoveable Property'. Section 41 which is the first of the group of nine sections appearing in that chapter provides, to the extent it is material, that when any person has had possession of any immovable property situate within the local limits of the Small Cause Court's jurisdiction and of which the annual value at a rack rent does not exceed three thousand rupees, as the tenant, or by permission, of another person and such tenancy or permission has determined or been withdrawn, and such tenant or occupier refuses to deliver up such property in compliance with a request made to him in this behalf by such other person, an application may be made to the Small Cause Court for a summons against the occupant, calling upon him to show cause why he should not be compelled to deliver up the property. Section 43 provides that if the occupant does not appear to show cause, the applicant shall be entitled to an order addressed to a bailiff of the Court directing him to give possession of the property to the applicant. The explanation to Section 43 says that if the occupant proves that the tenancy was created or permission was granted by virtue of a title which determined previous to the date of the application, he shall be deemed to have shown cause within the meaning of the section. Section 46 provided that nothing in Chapter VII shall be deemed to protect any applicant obtaining possession of any property under the chapter from a suit by my person deeming himself aggrieved hereby, when such applicant was not at the time of applying for such order entitled to the possession of the property. The second paragraph of Section 46 provided that when the applicant was not, at the time of applying for an order of possession, entitled to the possession of the property, the application for an order of possession, though no possession is taken thereunder, shall be deemed to be an act of trespass committed by the applicant against the occupant. Section 47 provided that if on an application under Section 41 the occupant bound himself with two sureties to institute a suit in the High Court or the City Civil Court against the applicant for compensation for trespass, the Small Cause Court shall stay the proceeding until the suit is disposed of. It further provided that if the occupant obtains a decree in any such suit against the applicant, such decree shall supersede the order, if any, made under Section 43. Section 49 provided that recovery of the possession of any immoveable property under Chapter VII shall be no bar to the institution of a suit in the High Court or the City Civil Court for trying the title thereto.

6. Extensive amendments were made Chapter VII by the Presidency Small Cause Courts (Maharashtra Amendment) Act, 1963 (Act No.41 of 1963) which came into force on the 28th of November 1963. The first of such amendments was the introduction of a new provision, namely, Section 42A. Stated briefly, Section 42A provides by sub-section (1) that if in an application for possession made to the Small Cause Court, the occupant claims that he is a tenant of the applicant with in the meaning of the Bombay Rent Act and such claim is not admitted by the applicant, the question shall be decided by the Small Cause Court as a preliminary issue. Sub-section (2) of Section 42A provides for an appeal against the decision the preliminary issue to a bench of two Judges of the Small Cause Court. By Section 3 of the Amending Act, Sections 45,46 and 47 were deleted. I have not referred to the provisions contained in Section 45 as it is not relevant for the purposes of this appeal. But it may be recalled that Sections 46 and 47 provided that the occupant could file a suit in spite of an order for possession made under Section 43 and that the occupant could, as a matter of right, obtain stay of the proceedings instituted under Section 41 by binding himself to bring an appropriate proceeding in the High Court or the City Civil Court as the case may be. By Section 4 of the Amending Act Section 49 as it originally stood was substituted by a fresh section. The new section provides that an order made for recovery of possession of any immovable property on an application under Section 41 shall bar the institution of a suit in any Court, except a suit in which relief is claimed on the basis of title (other than title as the applicant's tenant within the meaning of the Bombay Rent Act) to such immoveable property.

7. The question which arises in the light of these provisions is whether as contended by the defendant the suit filed by the plaintiff in the City Civil Court is barred either by res judicata or by principles analogous to res judicata by virtue of the decision of the Court of Small Causes in the ejectment application (No. 8/177 E of 1958) filed by the plaintiff under Section 41 of the Presidency Small Cause Courts Act. As to the first part of this question, namely, whether the suit is barred by res judicata under Section 11 of the Civil Procedure Code, the position is quite clear, for the matter does not fall within the terms of Section 11 and there fore, the suit cannot be barred by res judicata under that section. Under Section 11, an issue can be barred by res judicata if it has been directly and substantially in issue in a former 'suit' and since the proceeding taken by the plaintiff under Section 41 of the Presidency Small Cause Courts Act was not a suit but was an application, Section 11 can have no application.

8. It is however urged on behalf of the defendant, and that submission has been accepted by the learned trial Judge, that Section 11 is not exhaustive of the circumstances in which an issue may be barred by res judicata and even though Section 11 may not in terms apply, a suit or an issue can be barred on principles analogous to res judicata. Now it is well settled that the application of the rule of res judicata 'should be influenced by no technical considerations of form, but by matter of substance within the limits allowed by law'. It was held by the Privy Council in Hook v. Administrator General 48 Ind App 187= (AIR 1921 PC 11) that the plea of res judicata still remains apart from the limited provisions of the Code.

The binding force therefore of a judgment depends really not upon whether Section 11 in terms applies or not, but upon the general principle of law, that there should be finality to litigation. In a series of decisions, beginning with Rajlakshmi v. Banamali. l953 SCR 154=(AIR l953 SC 33) the Supreme Court has reaffirmed this view and has held that the principle underlying Section 11 that there should be finality to litigation is of general application and the principle would apply even if the case does not fall within the strict terms of Section 11.

9. The question for consideration therefore is whether the suit filed by the plaintiff in the City Civil Court is barred by principles analogous to res judicata by reason of the decision in the application which was filed by him under Section 41 of the Presidency Small Cause Courts Act. The decision of this question depends on the provisions of Chapter VII of that Act which I have already set out above. Chapter VII provides, as held in J. Manicka Chettiar v. Kuppuswami Naicker : AIR1927Mad321 a Summary remedy for recovering possession of property and the decision in a summary proceeding cannot create the bar of res judicata. My attention has been drawn by Mr. Joseph who appears on behalf of the plaintiff to a decision of the Privy Council in Babu Bhagwan Din V. Gir Har Saroop in which a question arose whether the order of the District Judge under the Charitable and Religious Trusts Act, 1920 precluded a person who was party to that proceeding from disputing that the particular temple was the subject of a public religious trust. It was held by Their Lordships that the decision of the District Judge under the Charitable and Religious Trusts Act - a decision from which under Section 12 there is no appeal - was a decision in a summary proceeding, that it was not made final by any provision in the Act and the doctrine of res judicata would not apply so as to bar a regular suit even in the case of a person who was a party to the proceeding under the Act of 1920. Now, the order of possession passed under Section 43 of the Presidency Small Cause Courts Act on an application under Section 41 was not appealable prior to the amendment introduced by Amending Act No.41 of 1963 and that is relevant, though not conclusive, on the question whether the order can preclude a substantive suit by the party aggrieved by the order.

10. The several provisions contained in Chapter VII would themselves show that the order passed under Section 43 was not intended to have finality and indeed, the order is expressly made subject to the decision in a regular suit. Section 46 which has now been deleted by the Amending Act provided that nothing in Chapter VII shall be deemed to protect any applicant obtaining possession of the property under the chapter from a suit by any person deeming himself aggrieved thereby, if the applicant was not at the time of applying for such order entitled to the possession of the property. The second paragraph of Section 46 created a fiction by providing that if the applicant was not, at the time of applying for an order under Section 43 entitled to the possession of the property, the application for obtaining such order would be deemed to be an act of trespass committed by the applicant against the occupant, even if possession is not taken under the order. Section 47 which has now been deleted, provided that if an application was made for possession under Section 41, the occupant could bind himself to institute a suit in the High Court or the City Civil Court, as the case may be, against the applicant, for compensation for trespass and thereupon the Small Cause Court was required to stay the proceedings before it. The second paragraph of Section 47 provided that if the occupant obtained a decree in any such suit against the applicant, the decree would supersede the order, if any, made under Section 43. Finally, Section 49 which has now been substituted by a fresh section provided that recovery of the possession of any immoveable property under Chapter VII would be no bar to the institution of a suit in the High Court or the City Civil Court, as the case may be, for trying the title thereto.

11. The provisions contained in Sections 46, 47 and 49 which were on the Statute Book at the material time show that a proceeding under Chapter VII is in the Legislature itself contemplated that an nature of a summary inquiry and order under Section 43 would be subject to a decree passed in a regular suit. The second paragraph of Section 47 expressly provided that the decree in the suit would supersede the order, if any, made under Section 43. Section 49 also in terms saved the right of a party to institute a suit in the High Court or the City Civil Court for trying the title to the property.

12. The provision contained in Section 47 as it stood prior to the amendment also shows that in an application under Section 41, the Small Cause Court was not concerned with the title of either party to the proceeding, to the immoveable property. In other words, in a proceeding under Section 41 the Small Cause Court was not concerned with the several legal rights of the parties before it and the simple issue before it would be whether the tenancy or the licence has been determined or has been withdrawn. If the applicant established that the tenancy or the licence was determined or withdrawn, the applicant was entitled under Section 43 to an order addressed to a bailiff of the Court directing him to give possession of the property to the applicant on the appointed day. The explanation to Section 43 which is important on this aspect of the case shows that if the occupant proved that the tenancy was created or permission granted by virtue of a title which determined previous to the date of the application. the application had to be dismissed and the occupant was to be deemed to have shown good cause within the meaning of Section 43. The explanation shows that the proceedings contemplated by Chapter VII were essentially of a summary nature, the only issue before the Court being whether the applicant was entitled to recover possession of immoveable property on the ground that the tenancy was determined or the licence was withdrawn.

13. The issue which arises in the suit is entirely different and that issue is whether as contended by the plaintiff the defendant is his licensee. If the City Civil Court finds that the defendant is not a licensee and if it incidentally records a finding that the defendant is a sub-tenant of the plaintiff, the suit is liable to be dismissed. In the prior proceeding under Section 41 the narrow issue before the Small Cause Court was whether the plaintiff, who was the applicant in those proceedings was entitled to the possession on the ground that the licence of the occupant was withdrawn. Therefore, apart from the fact that the proceeding under Chapter VII was of a summary nature and no appeal was provided for against an order passed under Section 43, the matter directly and substantially in issue in the two proceedings is different. The suit, therefore, cannot be held to be barred even on principles analogous to res judicata.

14. Mr. Joshi, who appears on behalf of the defendant, relies however very strongly on a decision of the Supreme Court in Gulabchand Chhotalal Parikh v. State of Gujarat, : [1965]2SCR547 . In that case, the Supreme Court was considering the question whether Section 11 of the Civil Procedure Code is exhaustive in regard to the application of the principle of res judicata in a suit and whether in a subsequent suit general principles of res judicata can bar the consideration of matters directly in issue and identical with those which had been earlier and after full contest, decided on merits by a competent Court in any other proceeding, including proceedings on a writ petition. The appellant therein had filed a writ petition under Article 226 of the Constitution in the High Court and that petition having been dismissed, he filed a suit for the same reliefs and involving the consideration of a matter which was directly and substantially in issue in the writ petition. After referring to the history of the law of res judicata, the several amendments made to Section 11 of the Civil Procedure Code and the various decisions of the Privy Council and the other Courts, the majority held that the principle of res judicata is not based on a rule of technicality but is founded on high public policy to bring about an end to litigation by giving finality to judgments inter parties and to save a litigant from harassment for the second time. The discussion is summed up by Raghubar Dayal J., who spoke for the majority, at p. 688 (of Bom LR)= (at p. 1167 of AIR) of the report this:

'As a result of the above discussion, we are of opinion that the provisions of Section II. Civil Procedure Code are not exhaustive with respect to an earlier decision operating as res judicata between the same parties on the same matter in controversy in a subsequent regular suit and that on the general principle of res judicata, any previous decision on a matter in controversy, decided after full contest or after affording fair opportunity to the parties to prove their case by a Court competent to decide it, will operate as res judicata in a subsequent regular suit. It is not necessary that the Court deciding the matter formerly be competent to decide the subsequent suit or that the former proceeding and the subsequent suit have the same subject matter. The nature of the former proceeding is immaterial.'

15. Mr. Joshi relies on this passage and says that the fact that the previous proceeding was an application and not a suit or that the previous proceeding was of a summary nature is wholly immaterial. Now I am prepared to assume for the purposes of argument that under the judgment of the Supreme Court the fact that the previous proceeding in this case was of a summary nature would not make difference to the question whether the suit filed by the plaintiff would be barred by principles analogous to res judicata. But even if the nature of the prior proceedings be immaterial, it is still necessary that the previous decision should be on a matter which is now in controversy, for it is then alone, and not otherwise, that principles analogous to res judicata would apply. As I have stated above, the simple issue in the summary inquiry under Chapter VII as it existed at the material time was whether the tenancy was determined or the licence was withdrawn and if the applicant established that bare fact, he was entitled to an order under Section 43. The matter which is directly and substantially in issue in the suit is whether the plaintiff is the licensor or the landlord of the defendant, which is a very much different matter from the one which was involved in the earlier proceeding. That is why the present suit would not be barred by principles analogous to res judicata.

16. It is necessary to appreciate that in the case relied upon by Mr. Joshi, their Lordships of the Supreme Court were dealing with a matter of an entirely different nature and the provisions of Chapter VII of the Presidency Small Cause Courts Act were not before them. The argument of the appellant before the Supreme Court was that a decision on a writ petition under Article 226 of the Constitution cannot create the bar of res judicata and that an issue decided in the writ petition can be reagitated in a regular suit. It is while rejecting this argument that their Lordships said that the nature of the former proceeding is immaterial, that it is not necessary that the Court deciding the matter formerly be competent to decide the subsequent suit and that any previous decision on a matter in controversy, decided after full contest or after affording fair opportunity to the parties to prove their cases, will operate as res judicata in a subsequent regular suit.

17. Sections 46 and 49 of the Presidency Small Cause Courts Act in terms contemplated a substantive suit and therefore, the very Statute under which the previous decision was recorded contemplated in a sense the removal of the possible bar of res judicata. Such instances are not unknown and one can draw attention to the provision contained in O. 21, R, 103 of the Civil Procedure Code and Section 6 of the Specific Relief Act, 1963. Rule 103 saves the right of a party against whom an order under Rules 98, 99 and 101 is made to institute a suit to establish the right which he claims to the present possession of the property. It can be no answer to such a suit that his claim has already been investigated and that he is trying to agitate the same issue once over again. Similarly sub-section (4) of Section 6 of the Specific Relief Act says that nothing in Section 6 shall bar any person from suing to establish his title to the property and to recover possession there of. This provision is more to the point, because like the old Section 49 in Chapter VII of the Presidency Small Cause Courts Act it emphasises that what is in issue in the summary proceeding is not the nature of the title of the parties to the property but the mere right of one to recover possession from the other. Just as it is no answer to the suit filed by an unsuccessful party under Section 6(4) of the Specific Relief Act that his right to possession has already been investigated, it can be no answer to the present suit filed by the plaintiff that his right to obtain possession has already been adjudicated upon in the proceedings under Section 41.

18. There is one more aspect of the matter which also is vital. That aspect arises from the argument of Mr. Joshi that Sections 46 and 49 as they stood prior to their deletion preserved the right of an unsuccessful occupant to bring a suit but not of an unsuccessful applicant to bring such a suit. I am not disposed to accept this construction of the two sections. But even assuming that Mr. Joshi is right, it would, in my opinion, be strange that an unsuccessful occupant could bring a fresh suit to agitate what according to the learned counsel is a matter which was directly and substantially in issue in a previous proceeding but that an unsuccessful applicant can be denied this right on principles analogous to res judicata. As observed by the Privy Council and the Supreme Court, Section 11 is founded on a principle of public policy and that principle is that there should be finality to litigation. If the principle has to apply it must apply with equal vigour to all parties to the earlier proceeding and it cannot be enforced so as to deprive only one of the two parties of an opportunity to reagitate an issue. Whether it is the terms of Section 11 or the principle underlying it, there must be some reciprocity in the bar which arises by reason of the principle and it cannot be that the principle that a party should not be harassed twice over in respect of the same cause would apply to one party to the proceeding but not to the other. This, of course, is apart from my view that Sections 46 and 49 preserved the right of bringing a subsequent suit, in favour of the unsuccessful occupant as also in favour of the unsuccessful applicant.

19. For these reasons, the appeal is allowed, the decree passed by the learned trial Judge is set aside and the suit is remanded to him for a decision on other issues.

20. Costs will be costs in the suit.

21. Mr. Joshi says on behalf of the defendant that the defendant agrees to pay a sum of Rs. 5000 to the plaintiff towards compensation for use and occupation This amount shall be paid on account and the payment is without prejudice to the rights and contentions of the parties. Plaintiff agrees to accept the amount as compensation. The amount shall be paid within four weeks from to-day.

22. Appeal allowed.