1999 Supreme(SC) 360

1999(3) Supreme 171
Supreme Court of India
(From Orissa High Court)
S.B. Majmudar & A.P. Misra, JJ.
Ferro Alloys Corpn. Ltd. & Anr. —Appellants
versus
Union of India & Ors. —Respondents
Civil Appeal No. 1626 of 1999
(Arising out of SLP (Civil) No. 17987 of 1998
Decided on 22-3-1999
Counsel for the Parties :
For the Appearing Parties : C.S. Vaidyanathan, Additional Solicitor General, F.S. Nariman, I.M. Chagla, Dipankar Gupta, Shanti Bhushan, P.N. Misra, Ashok H. Desai, Sr. Advocates, Ashok Parija, Subhash Sharma, Ramesh Singh, Praveen Kumar, Ms. Anuradha Dutt, Ms. Vijaya­lakshmi Menon, Gautam Mitra, Rajiv Lal, Mrs. Indira Sawhney, Jayant Bhushan, Ashok K. Srivastava, D.S. Mehra, R.S. Jena, S. Misra, Abhisth Kumar, R. Patnaik, K.K. Lahiri, Ejaz Maqbool, B.K. Mishra, Gaurav Kumar, Advocates.

Important Points
1. Before any issue is said to be heard and finally decided, the Court considering it has to be shown to have expressly considered such an issue and to have decided it one way or the other and such decision should have obtained finality in the hierarchy of proceedings. Then only such an issue can be said to be heard and finally decided between the parties.
2. In order to attract the bar of Explanation IV to Section 11 CPC and before it can be held that any subsequent conten­tion on the point can be treated to be hit by the bar of constructive res judicata, it has to be seen whether such a contention might and ought to have been made the ground of defence or attack in such former proceedings. Only then such a matter can be deemed to have been a matter directly and substantially in issue in such former proceedings.
3. Pleas based on independent causes of action inter se Respondents cannot be said to be barred by constructive res judicata in the earlier proceedings where the lis is between the appellants on the one hand and all the contesting Respondents on the other.

Headnote:(i) Code of Civil Procedure, 1908—Section 11—Res judicata—Court consid­ering an issue has to be shown to have expressly considered such an issue and to have decided it one way or other—Such decision should have attained finality—Writ petition by TISCO challenging refusal to renew lease of mining in respect of entire area—Appellant FACOR made as party respondent at its request—High Court directing Government to reconsider decision—Committee appointed by Government to consider issue — Committee recommended renewal of lease in respect of part of area — Committee also assessed need of party respondents including FACOR—Court upheld findings of Committee as approved by Govern­ment—Appeal to Supreme Court—Dismissal—Subsequent writ peti­tion by appellant FACOR claiming lease in respect of entire area—Dismissal as barred by res judicata—Whether correct—No—No issue as regards assessment of need of FACOR by Committee arose in earlier writ—Question of under estimate of requirement did not arose—Express decision on vexed question as to assessment of need of appellant FACOR given by Court—Writ petition not barred by res judi­cata.

       Held : Before any issue is said to be heard and finally decided, the Court considering it has to be shown to have expressly considered such an issue and to have decided it one way or the other and such decision should have obtained finality in the hierarchy of proceedings. Then only such an issue can be said to be heard and finally decided between the parties. (Para 21)

       In the earlier writ petition dispute projected only one controversy between the parties, namely, whether TISCO could be granted more than 406 hectares of land by way of renewal of its lease and whether any excess area could be made available to the other rival claimants, like the appellant and Respondents 3 to 7, who were before this Court as party Respondents. Consequently, TISCO’s challenge to direction No. 2 did not raise a further question for consideration regarding the correctness of assessment of relative needs of the appellant and Respondents 3 to 7 for chrome ore. On these aspects, there was no dispute inter se between TISCO and others. Of course, there could have been such a dispute between the appellant on the one hand, and the Central Government, on the other, who were party Respondents in the very said proceedings. There would also be an inter se dispute in this connection between the appellant as well as other Respondents 3 to 7, who were also Respondents before this Court in the earlier proceedings. It is also well settled that there can be res judicata on issues raising question inter se amongst contesting Re­spondents but in order that such dispute can be said to have been adjudicated upon, express decision rendered by the Court on such issues has to be ascertained. (Para 23)

       In the aforesaid proceedings no issue arose for consideration as to whether the assessment of the need of the appellant for chrome ore by the Sharma Committee as accepted by the Central Government by its order dated 17th August, 1995, was an under­estimate. Consequently, whatever observations might have been made by his Court while dealing with issue No. 4, cannot be said to be an express decision on the vexed question as to whether the assessment of the need for chrome ore, so far as the appellant is concerned, as approved by the Sharma Committee and accepted by the Central Government, involved any error or not or whether it was required to be re-assessed for upward revision. It is, therefore, difficult to agree with the contention of learned Senior counsel for the Respondents that such an issue was expressly adjudicated upon by this Court in the aforesaid decision and the findings thereon, therefore, could not be made the subject matter of fresh proceedings between the parties. Not only the contesting parties were not heard on this issue but also there was no final decision thereon inter se these parties. Conse­quently, it is difficult to appreciate the reasoning in the impugned order of the High Court that the controversy in this connection raised by the appellant in the present writ petition was finally concluded by this Court and, hence, the writ petition raising this contention, was barred by res judicata. (Para 24)

       (ii) Code of Civil Procedure, 1908—Explanation IV to Section 11—Constructive res judicata—Condition precedent to attract—Princi­ples of constructive res judicata can be invoked inter se res­pondents—Pleas based on independent causes of action inter se respondents cannot be said to be barred by constructive res judicata.

       Held : In order to attract the bar of Explanation IV to Section 11 CPC and before it can be held that any subsequent conten­tion on the point can be treated to be hit by the bar of constructive res judicata, it has to be seen whether such a contention might and ought to have been made the ground of defence or attack in such former proceedings. Only then such a matter can be deemed to have been a matter directly and substantially in issue in such former proceedings. It is no doubt true that principle of constructive res judicata can be invoked even inter se Respondents, but it is well settled that before any plea by contesting Respondents could be said to be barred by constructive res judicata in future proceedings inter se such contesting Respondents, it must be shown that such a plea was required to be raised by the contesting Respondents to meet the claim of the appellant in such proceedings. If such a plea is not required to be raised by the contesting Respondents with a view to successfully meet the case of the appellant, then such a plea inter se contesting Re­spondents would remain in the domain of an independent proceedings giving an entirely different cause of action inter se the contesting Respondents with which the appellants would not be concerned. Such pleas based on independent causes of action inter se Respondents cannot be said to be barred by constructive res judicata in the earlier proceedings where the lis is between the appellants on the one hand and all the contesting Respondents on the other. In other words, when the appellants are not concerned with the inter se disputes between the contesting Respondents such inter se disputes amongst Respondents would not give rise to a situation wherein it can be said that such contesting Respondents might and ought to have raised such a ground of defence or attack for decision of the Court. (Paras 27 & 28)

       The present appellant was a party respondent to an earlier writ peti­tion filed by TISCO against refusal to renew mining lease in its favour. The writ petition resulted in appointment of a High Power Committee which considered the issue and recommended renewal of lease only in respect of part of the area in favour of TISCO. The Committee assessed the requirements of the contesting respondents’ requirements also and reached its own conclusion. The Committees report was accepted by the Government. TISCO filed appeal to Supreme Court challenging the order in writ petition and also the order of the Government. The present appellant who was party respondent opposed the claim for lease of entire area stating that assess­ment of Committee as regards appel­lants requirement was not correct. Appeal came to be dismissed by the Supreme Court. Even before final verdict of the Supreme Court the present appellant stalked its claim before the Government for mining lease in respect of the entire area which was not accepted. Its writ petition was dismissed on the ground of principles of res judicata. On appeal before the Supreme Court, the issue arose whether do appellate was barred by the principles of constructive res judicata.

       Held : The present appellant as party-Respondent in that proceedings was only interested in supporting the order of the Central Government in so far as it had held the appellant to be entitled to the grant of appropriate lease on the basis of the assessment of its requirement of chrome ore. TISCO and IDCOL had contended before this Court that the appellant and other contesting three claimants who were also Respondents, were not required to be granted any lease. Thus, in the said proceedings, the dispute between the contesting parties was a limited one, namely, whether TISCO and IDCOL should be granted lease of the entire land in question or whether the contesting Respondents including the appellant were entitled to get their assessed requirements for chrome ore as considered by the authorities upheld while considering the question of re-grant of appropriate mining lease to TISCO. It becomes at once clear that the inter se dispute between the appellant, on the one hand, and the other contesting three claimants on the other centering round the correct assessment of their respective requirements of chrome ore was not in the anvil of controversy between the contesting Respondents including the appellant in those proceedings. In fact they all had a common defence against TISCO and IDCOL who were the appel­lants before this Court. Under these circumstances, the question arises whether the appel­lant as one of the Respondents might have raised the further question regarding its claim for further upward revision of its assessed requirement of chrome ore and also whether it ought to have raised such a question for consideration of this Court in those proceedings. (Paras 26 & 27)

       It is difficult to appreciate how the appellant as a contesting Respondent was of necessity required to raise the defence that the assessment by the Sharma Committee of its requirement of chrome ore was an underestimate and was required to be revised upwards and, hence, it could have been a valid ground of defence against the claim of the appellants, namely, TISCO and IDCOL before this Court. Without raising such a contention, the appellant could have defended and actually defended the decision of the Central Government dated 17th August, 1995 treating the appellant to be one of the eligible claimants for a mining lease in the very same area in which TISCO and IDCOL were claiming such leases to the exclusion of the appellant amongst others. Equally, such a contention would not have been made a ground of attack by the appellant against contesting Respondents inter se or even against the State of Orissa and the Central Govern­ment, who were the other contesting Respondents for getting TISCO and IDCOL non-suited in their appeals. In fact, all of them as Respondents at that stage were interested in supporting the order of the Central Government dated 17th August, 1995. That was their common defence against the claims of only contesting opponents, namely, TISCO and IDCOL who were the appellants before this Court. Consequently, Expla­nation IV to Section 11 CPC on the facts of the present case, cannot be said to be attracted at all. (Para 27)

       Considering the basic requirements of the principle of constructive res judicata amongst co-Respondents in TISCO and IDCOL’s appeals, it has to be found out whether inter se those co-Respon­dents the question of correct assessments of present appellant’s need for chrome ore was necessary to be agitated by the present appellant for enabling the Court to give appropriate relief to TISCO and IDCOL in their appeals before this Court. It becomes absolutely clear on the facts of the present case that the grievance of the appellant in the present proceedings regarding the alleged error in the assessment of its requirement for chrome ore and the question whether such assessment was required to be revised upwards, which may be relevant for deciding the appellant’s independent claim against the Central Government as well as the State of Orissa and also vis-a-vis other contesting claim­ants being three other Respondents had nothing to do with the question of granting relief to the appellants TISCO and IDCOL in the said earlier proceedings. As this important condition was not satisfied for attracting the bar of constructive res judicata against the appellant, it is not possible to agree with the contention of learned counsel for the Respondents that the appellant’s grievance in the present proceedings was also barred on the ground of constructive res judicata. (Para 28)

       (iii) Waiver—Ground to non-suit a party on ground of waiver—Appel­lant was party respondent to writ petition filed by respondents—That writ petition resulted into appointment of High Power Committee—Committee decided the issue of renewal of lease of mining lease are recommended renewal of part of area—Committee also assessed requirement of appel­lant—Govern­ment accepted report of Committee which stood approved by the Court —Appellant did not raise any issue regarding correctness of assessment of Committee before Court—Subsequently appellant filed writ petition claiming mining lease in respect of entire area contend­ing Committee’s assessment about appellant’s requirement was not correct—Writ dismissed as barred by res judicata—Held: principles of res judicata technically not attrac­ted—But its conduct amounted to conscious waiver of dispute regarding correctness of assessment of its needs by the Committee—Writ could not be maintained on this score. (Paras 34 & 35)

       (iv) Estoppel—Appellant was a party respondent to earlier writ peti­tion and appeal thereagainst—Dispute in those proceedings was renewal of mining lease in favour of TISCO—Appellant opposed claim of TISCO—Writ petition resulted in appointment of a Committee by Government — Commit­tee recommen­ded renewal only in respect of part of area in favour of TISCO—Committee also assessed requirements of appellant fixed area that would be required by appellant—Report accepted by Government and same approved by Supreme Court—Appellant did not question correctness of assessment of Committee—Subsequent writ petition by appellant claiming mining lease in respect of entire area contending that assess­ment of its requirement made by Committee was not correct—Not tena­ble—Appellant liable to be non-suited on ground of principles of estoppel. (Paras 36 to 44)