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1935 Supreme(SC) 27
PRIVY COUNCIL [ON APPEAL FROM THEEAST INDIES]
LORD ATKIN, SIR JOHN WALLIS, AND SIR SHADI LAL.
KEDAR NATH GOENKA - Appellant
Versus
RAM NARAIN LAL - Respondents
On Appeal from the High Court at Patna.
Decided On : June 4. 1935.
Solicitors for appellant: Hy. S. L. Polak & Co.
Solicitors for second respondent: Douglas Grant & Dold.
Res judicata applies between co-defendants if the issue was directly and substantially in issue and necessary for the court's decision. Additionally, a sale of property by a person without title is a nullity and not barred by the limitation period for setting aside sales.
Headnote:(A) Civil Procedure Code, 1908 - Section 11, Explanation V - Res Judicata - Co-defendants - Where a question is directly and substantially in issue between co-defendants in a previous suit and its decision is necessary to grant relief to the plaintiff, such decision is binding on the co-defendants in subsequent litigation.
(B) Religious Trust Properties - Power of Mahant - A Mahant has the power to sell or mortgage trust properties for necessary purposes; borrowing money to defend title to the office of Mahant constitutes such a necessary purpose.
(C) Limitation Act - Article 12 - Nullity of Sale - A sale of property conducted by a person who does not hold the title at the time of sale is a nullity; consequently, a suit for possession is not barred by the limitation period prescribed for setting aside a sale.
Facts of the case:
A money decree was obtained against a religious head for loans taken to defend a title suit. The decree was executed by selling the religious head's share in the trust properties, and the sale was confirmed by the court. Subsequently, in separate suits brought by other auction-purchasers, the validity of this court sale was upheld. The current plaintiff, as the successor to the decree-holder, sued the successor religious head for possession. The High Court dismissed the suit on the grounds of res judicata under the Code of Civil Procedure, claiming the relief for sale of trust properties had been refused in the original suit. Additionally, a third party claimed title through a subsequent sale for arrears of cess.
Findings of Court:
The High Court erred in applying Explanation V of Section 11 of the Code of Civil Procedure because the original suit's reliefs were based on void agreements, and the subsequent money decree did not preclude execution against the trust properties. The validity of the sale was already decided as res judicata between the parties in previous suits where they were co-defendants. The subsequent sale for arrears of cess was a nullity as the title had already passed to the plaintiff's predecessor.
Issues: Whether the suit was barred by res judicata under Explanation V of Section 11 of the Code of Civil Procedure; whether the decision on the validity of the sale in previous suits between co-defendants was binding; and whether the suit was barred by Article 12 of the Limitation Act regarding the cess sale.
Ratio Decidendi: Res judicata applies between co-defendants if the issue was directly and substantially in issue and necessary for the court's decision to provide relief to the plaintiff. Furthermore, a sale of property by a party lacking title is a nullity and cannot be barred by the limitation period intended for challenging the validity of a legal sale.
Result: Judgments of the High Court reversed and the judgment of the Subordinate Judge restored.
Legal Category Hierarchy
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practice and procedure
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civil procedure
- res judicata
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civil procedure
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property law
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religious endowments
- powers of mahant
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execution of decrees
- court sales
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religious endowments
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limitation law
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limitation act
- article 12
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limitation act
Judgement
Consolidated Appeal (No. 41 of 1932) from a decree of the High Court (May 30, 1930) reversing a decree of the Subordinate Judge of Monghyr (December 6, 1926).
In a suit by Baijnath Goenka, the father of the plaintiff, on ekrarnamas giving him a lien on the properties of a Mutt and a right to a lease in lieu of interest it was found that the ekrarnamas were unconscionable and void, but a simple money decree for the amount actually lent with interest to date of suit was given against the mahant who had borrowed the money, Siaram Das, and, at the time of the decree, had an equal share in the Mutt properties with Mahant Mahabir Das. In execution of the decree Baijnath Goenka brought Siaram Dass share to sale and purchased some of the properties. The sale was confirmed on May 5, 1913, but Baijnath Goenka did not obtain possession of the properties. In 1918 suits were instituted by two other purchasers in the sale against Baijnath Goenka and Mahabir Das, who had then succeeded to the whole of the Mutt properties, for a declaration that the sale was invalid. In this suit the validity of the sale was upheld. On May 5, 1925, the appellant, who had succeeded to his father, instituted the present suit for possession of the properties purchased by his father against Mahabir Das and impleaded as defendants Ram Narain Lal, one of the respondents, who had on July 6, 1914, purchased some of the suit properties in a sale for arrears of cess due from Mahabir Das, Dalip Narain Singh, who had leased some of the properties from Mahabir Das, and others. Mahabir Das and Ram Narain Lai contested the claim on the grounds (inter alia) that the sale was invalid and the suit was barred by limitation.
The facts are more fully stated in the judgment of the Judicial Committee.
1935. May 2, 3. Dunne K.C. and Khambatta for the appellant. Explanation V. of s. 11 of the Civil Procedure Code under which the High Court dismissed the suit is not applicable to the facts of this case. The plaintiffs father obtained a money decree. If the money was not paid, he was entitled in execution to proceed against the property of the judgment-debtor. Necessity for the sale would have to be proved in execution. There was obviously necessity in this case for the loan, as the mahant had no other means of obtaining money to defend the suit in which his title to the Mutt properties was attacked. The validity of the sale was a necessary issue between the plaintiff and Mahabir Das in the suit in 1918 and, having been decided, it was res judicata between them in the present suit Munni Bibi
v. Tirloki Nath (L. R. 58 I. A. 158.) and Maung Sein Done v. Ma Pan Nyun. (L. R. 59 I. A. 247.) Art. 12 of the Limitation Act is not applicable. In 1914 the title to the property was in the plaintiff and not in Mahabir Das, and the sale to Ram Narain Lai was a nullity Jwala Sahai v. Masiat Khan. (I. L.
R. 26 A. 346.)
Chinna Durai and Miss Miles for the respondent Rai Bahadur Dalip Narain Singh. The sale was invalid. There was no necessity for the loan. Siaram Das, in defending the suit, was not acting in the best interests of the Mutt. Mahabir Das did not contest the suit in 1918. If the sale was invalid, the title was in Mahabir, through whom Ram Narain Lal claims. [Reference was made to Vidyapurna Tirtha Swami v. Vidyanidhi Tirtha Swami . (( 1904) I. L. R. 27 M. 435.)]
The other respondents were not represented.
Dunne K.C. was not called upon to reply.
June 4. The judgment of their Lordships was delivered by
SIR JOHN WALLIS. In this case the right of a judgment creditor to bring the properties of a Mutt to sale in execution of a money decree against the mahant of the Mutt has for more than a quarter of a century been the subject of incessant litigation and a multiplicity of suits in the Courts below, and now comes before this Board for the first time. In 1898 the mahant of the Suja Mutt died and was succeeded by Siaram Das, the judgment-debtor in this case. A few months later, in Janua
