2014 Supreme(SC) 729

SUPREME COURT OF INDIA
ANIL R. DAVE, VIKRAMAJIT SEN, PINAKI CHANDRA GHOSE, JJ.
SRI GANGAI VINAYAGAR TEMPLE & ANR. - APPELLANTS
Versus
MEENAKSHI AMMAL & ORS. - RESPONDENTS
CIVIL APPEAL No.4227 OF 2003
Decided on : 09-10-2014

IMPORTANT POINTS
Where parties are aware of the rival cases the failure to formally formulate an Issue fades into insignificance.
Tenants are stopped from challenging title of landlord.
Dismissal of a suit is indicative of all assertions of fact and law being legally untenable.
Order of appellate court without hearing a party who was defendant in original suit but was not impleaded in the appeal is not justified.
In case of common issues and common trial, losing party must file appeals in respect of all adverse decrees founded even on partially adverse or contrary speaking judgments. Decree not assailed will be “former suit” and operate as res judicata.

Headnote:(a) Code of Civil Procedure, 1908 – Section 11 r/w Order II, rule 2 – Res judicata – Tenants filing suit for injunction from dispossession – In the process disputing title of landlord, though indirectly – Suit dismissed – No appeal filed – Decree attaining finality – Would operate as res judicata as regards question of title in future litigation. (Para 5)

       1993 (Suppl.) 2 SCC 146; (1976) 3 SCC 528; (1977) 2 SCC 181 – Relied upon

       (b) Code of Civil Procedure, 1908 – Order XVI, rule 1 – Parties aware of rival cases – Failure of court to formally formulate an Issue – Becomes insignificant, especially when it is prominently present in connected matters and extensive evidence has been recorded on it without demur. (Para 12)

       (c) Indian Evidence Act, 1872 – Section 116 – Estoppels – Tenants are stopped from challenging title of landlord – However, title of a transferee can be challenged by tenants installed by the transferor. (Para 13)

       (d) Code of Civil Procedure, 1908 – Section 11, Order XVI, rule 1 – Suit by tenants for injunction from dispossession – Tenants not challenging title but arguing on the basis that plaintiffs had no title as transfer was illegal – Trial court dismissing suit – Dismissal indicative of all assertions of fact and law being legally untenable – No appeal filed – Decision attaining finality stopping tenants from questioning title in subsequent suit. (Para 16)

       (e) Code of Civil Procedure, 1908 – Section 96 and 100 – Tenants in appeal not impleading Transferees who were defendants in the original suit – First and second appellate courts reversing trial court findings without hearing transferees – Not tenable. (Para 16)

       (f) Practices and procedures – Procedural norms, technicalities and processal law evolve after years of empirical experience – To ignore them or give them short shrift inevitably defeats justice – Laws of procedure though handmaidens to justice cannot be wantonly ignored because – Doing so will inevitably and inexorably ensue miscarriage of justice – Statutory law and processal law are two sides of the judicial drachma, each being the obverse of the other. (Para 22)

       (g) Code of Civil Procedure, 1908 – Section 11 – Res judicata – Disposal of two or more suits by one common judgment but separate decrees – Appeal filed against decree in one suit but not against the others – Filing of a single appeal leads to the entire dispute becoming sub judice once again – In case of common issues and common trial, losing party must file appeals in respect of all adverse decrees founded even on partially adverse or contrary speaking judgments – Decree not assailed will be “former suit”. (Para 22)

       1993 (Suppl.) 2 SCC 146; (1976) 3 SCC 528; (1977) 2 SCC 181; (1966) 3 SCR 300; (2004) 3 SCC 85 – Relied upon

       AIR (1927) Lah 289; ILR (1906) 29 Mad 333; AIR 1946 Oudh 33 (FB); ILR (1911) 33 All 51; 37 Cal LJ 184: AIR 1923 Cal 496; ILR 12 Pat 139 : AIR 1933 Pat 78 – Referred

       (h) Code of Civil Procedure, 1908 – Section 11 – Res judicata – Issue collateral and incidental vis-à-vis direct and substantial – Tenants filing suit for injunction – Tenants making specific and pointed assertion that the transfer of the demised land by the Trust to the Transferees was not in consonance with Section 26 of the Puducherry Hindu Religious Institutions Act, 1972 – Issue an important assertion in later suits also – Issue of ownership of the demised premises cannot be held to be irrelevant for the earlier suit – The issue could not be irrelevant for earlier suit for injunction but relevant for suit for arrears of rent – It was direct and substantial issue in all the three suits – Non filing of appeal against dismissal of earlier suit has completely non-suited the tenants. (Para 23)

       AIR 2000 SC 1238; (1958) 356 U.S. 464; AIR 1965 SC 948; AIR 1947 PC 1; AIR 1952 SC 143; (1915-16) 43 I.A.91 – Relied upon

       Facts of the case:

       Husband of the first Respondent/Tenants took the suit land on lease from Sethurama Chettiar on 1.3.1953 for a period of 12 years on a monthly rent of Rs.150/-. The Tenants were permitted to construct a cinema theatre on the suit land at their own cost, which they have done in the name and style of ‘Raja Talkies’. In 1959 one of the partners died, resulting in the husband of Respondent No.1 assuming sole proprietorship of ‘Raja Talkies’. On 8.11.1967 a fresh Registered Notaire Lease Deed was executed for a period of 15 years commencing from 1.1.1968 between the husband of Respondent No.1 and the Appellant Trust, Gangai Vinayagar Temple through its Trustee’s President namely, Shri Sethurama Chettiar. Consequent on the death of the husband of Respondent No.1, she continued as the tenant along with her children as legal representatives of her late husband.

       The Trust sold the suit property and the Tenants were informed of this transaction on 14.10.1976, calling upon them to attorn to the new owners. As a repercussion, in 1976 itself, the Tenants filed O.S.5/78 (re-numbered) impleading the purchasers as Defendants 7 to 9 and assailing the sale of the suit land on the predication that the legal formalities necessary for the transfer of trust property had not been adhered to as it was a Public Trust, and further that, subsequent to the aforementioned transaction, the Tenants (Plaintiffs in O.S.5/78) apprehended their dispossession therefrom at the hands of the Defendants, including Defendants 7 to 9.

       In sequel, the Trust filed two suits by the Trust, being O.S.6/78 and O.S.7/78, claiming arrears of rent from the Tenants (Respondent Nos. 1 to 6, in which the Transferees were not impleaded) pertaining to the period prior to the transfer of the suit lands by them to the Transferees.

       O.S.5/78 came to be ‘dismissed’.

       O.S.6/78 was partially decreed; whilst O.S.7/78 was dismissed on the ground that the alleged claim of arrears of rent in this suit was not tenable as the said land was part of and encompassed in the suit land which was the subject matter of O.S.6/78 and, accordingly, the claim was covered and subsumed therein. The Tenants have not filed any appeal in respect of O.S.5/78 and O.S.7/78; and the Trust has not filed any appeal on the dismissal of their suit O.S.7/78. All three suits have been decided, after recording of common evidence, by a common Judgment passed on 6.11.1982 by the Court of 2nd Additional District Judge at Pondicherry. Pursuant to this Judgment three different decrees have been drawn.

       Essentially, it is the ambit and sweep of the principle of res judicata that is at the centre of present controversy. Additionally, Order II Rule 2 of the Code of Civil Procedure, which enshrines another complexion of res judicata, also requires to be cogitated upon. The contention of the Appellant through its Trustees is that the Respondents/Tenants of the demised property are barred by the principle of res judicata from challenging the findings of the Trial Court especially the Trust’s ownership of the demised property, since the said Tenants have filed only one appeal, i.e. arising from O.S.6/78, without assailing identical conclusions arrived at by the Trial Court in O.S.5/78 and O.S.7/78.

       Finding of the Court:

       Having failed or neglected or concertedly avoided filing appeals against the decrees in O.S.5/78 and O.S.7/78 the cause of the Respondents/Tenants was permanently sealed and foreclosed since res judicata applied against them.

       Result: Appeal allowed.