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SUPREME COURT OF INDIA
Adarsh Kumar Goel, R.F. Nariman, JJ.
Canara Bank – Appellant
Versus
N.G. Subbaraya Setty & Anr. – Respondents
Civil Appeal No. 4233 of 2018 (Arising Out of SLP (C) No. 25649 of 2017)
Decided On : 20-04-2018
AIR 1916 PC 78; (1962) 1 SCR 574 – Relied upon
[2013] 4 All ER 715 – Referred
(b) Code of Civil Procedure, 1908 – Section 11 – Res judicata – When appeal is filed within limitation, the res never becomes judicata – Res judicata though discussed before courts below extensively, not framed as an issue – Ground taken before Supreme Court for first time – Not hit by res judicata – A decree from which an appeal lies and has been filed would render the res sub judice and not judicata. (Para 13, 14, 16, 18)
(1966) 3 SCR 300 – Relied upon
(1888) ILR 11 All 148; AIR 1931 PC 263; AIR 1963 Guj. 30; AIR 1963 Mysore 120; AIR 1952 Calcutta 124; AIR 1957 AP 557 – Cited with approval
(c) Code of Civil Procedure, 1908 – Section 11 – Res judicata – Until expiry of limitation period for filing of an appeal the res remains sub judice – Thereafter the res decided by the first Court would become judicata – Period of limitation for filing an appeal not yet expired or just expired – If the party who has lost the first round intends to appeal then it would be prudent to first adjourn the second proceeding and then stay the aforesaid proceedings, after the appeal has been filed, to await the outcome of the appeal in the first proceeding – If, however, a sufficiently long period has elapsed after limitation has expired, and no appeal has yet been filed in the first proceeding, the first proceeding may be treated as res judicata – No hard and fast rule can be applied. (Para 22, 23)
(1941) 69 IA 51 (PC); ILR 1948 Bom 346 – Cited with approval
(d) Section 11 – Res judicata – A court not having inherent jurisdiction but assuming it based on a wrong decision – A wrong decision cannot be res judicata – In other words a Court having no jurisdiction in law cannot be conferred with jurisdiction by applying principle of res judicata – A wrong decision on a point of jurisdiction could not operate as res judicata. (Para 27, 30, 33)
(1970) 1 SCC 613; (1990) 1 SCC 193; (1991) 1 SCC 494; (1953) SCR 377; (1995) 6 SCC 614; (1964) 5 SCR 683; (1996) 6 SCC 424; (2005) 5 SCC 390 – Relied upon
AIR 1974 P&H 303; (1977) 3 SCC 99; AIR 1928 Calcutta 777 – Referred
(e) Trade Marks Act, 1999 – Section 45 – Plea relating to section 45 taken in proceedings in 2004 and turned down – Again raised in 2008 – 2004 decision relying on unregistered assignment deed as valid, contrary to law – Proceeding of 2008 seeking payment of certain amount with interest – Assignment deed also hit by sections 6, 8 and 46(4), Banking Regulation Act, 1949 – Held, decision in 2004 cannot operate as res judicata. (Para 35, 36, 38, 39, 41)
Facts of the case:
respondent No.1 availed a credit facility from the petitioner bank sometime in 2001. Respondent No.2, his son, stood as a guarantor for repayment of the said facility. As respondent No.1 defaulted in repayment of a sum of Rs.53,49,970.22, the petitioner bank filed O.A. No. 440 of 2002 before the DRT Bangalore, against respondent Nos.1 and 2. Respondent No.1, in order to repay the dues of the bank, signed an assignment deed dated 8.10.2003 with the Chief Manager, Basavanagudi Branch, Bangalore for assignment of the trademark “EENADU” in respect of agarbathies (incense sticks) on certain terms and conditions.
On 15.4.2004, respondent No.1 filed O.S. against the bank challenging the cancellation of the said assignment deed and for recovery of Rs.2,16,000/- with interest thereon for the period 1.10.2003 to 31.3.2004. On 17.9.2004, the petitioner bank filed O.S. for a declaration that the assignment deed entered into between it and respondent No.1 is vitiated by mistake, undue influence and fraud and that, therefore, the said deed is unenforceable in the eye of law.
The two suits as aforestated were consolidated and disposed of by a common judgment. It was found that the assignment deed was not vitiated by fraud, misrepresentation or undue influence. Consequently, the bank had no right to cancel or rescind the aforesaid assignment deed. Respondent No.1’s claim for a money decree for Rs.2,16,000/- was dismissed. It was also held that the Civil Court had jurisdiction to entertain the suits, despite the pendency of DRT proceedings. The bank’s suit came to be dismissed.
Respondent No.1 filed a review petition which was rejected. On 16.3.2015, this petition was allowed, and O.S. No.2832 of 2004 filed by respondent No.1 was fully decreed against the bank, including the prayer for payment.
Respondent No.1 filed another suit against the bank for recovery of a sum of Rs.17,89,915/- with interest for the period 1.4.2004 to 30.4.2007 which was decreed on the footing that the earlier judgment dated 27.4.2013, not having been appealed against, was res judicata between the parties. The High Court dismissed the appeal filed by the bank on the self-same ground of res judicata.
Finding of the Court:
Decision in 2004 cannot operate as res judicata.
Result: Appeal allowed.
JUDGMENT :
R.F. Nariman, J.
1. Leave granted.
2. Roma locuta est; causa finita est. Rome has spoken, the cause is ended. Rome spoke through her laws. One of the pillars of Roman law is contained in the maxim res judicata pro veritate accipitur (a thing adjudicated is received as the truth). This maxim of Roman law is based upon two other fundamental maxims of Roman law, namely, interest reipublicae ut sit finis litium (it concerns the State that there be an end to law suits) and nemo debet bis vexari pro una at eadem causa (no man should be vexed twice over for the same cause). Indeed, that this maxim is almost universal in all ancient laws, including ancient Hindu texts, was discussed by Sir Lawrence Jenkins in Sheoparsan Singh v. Ramnandan Singh, AIR 1916 PC 78 at 80-81 as follows:
“There has been much discussion at the Bar as to the application of the plea of res judicata as a bar to this suit. In the view their Lordships take, the case has not reached the stage at which an examination of this plea and this discussion would become relevant. But in view of the arguments addressed to them, their Lordships desire to emphasise that the rule of res judicata, while founded on ancient precedent, is dictated by a wisdom which is for all time. “It has been well said,” declared Lord Coke, “interest reipublicae ut sit finis litium, otherwise great oppression might be done under colour and pretence of law”: (6 Coke, 9a). Though, the rule of the Code may be traced to an English source, it embodies a doctrine in no way opposed to the spirit of the law as expounded by the Hindu commentators. Vijnanesvara and Nilakantha include the plea of a former judgment among those allowed by law, each citing for this purpose the text of Katyayana, who describes the plea thus: “If a person though defeated at law sue again he should be answered, ‘You were defeated formerly’. This is called the plea of former judgment.” (See “The Mitakshara (Vyavahara)” Bk. II, ch. i, edited by J.R. Gharpure, p. 14, and “The Mayuka,” Ch. I., sec. 1, p. 11 of Mandlik’s edition.)
And so the application of the rule by the Courts in India should be influenced by no technical considerations of form, but by matter of substance within the limits allowed by law.”
3. This Court in Daryao and others v. State of U.P. and others, (1962) 1 SCR 574 at 583-584, put it very well when it said:
“In considering the essential elements of res judicata one inevitably harks back to the judgment of Sir William De Grey (afterwards Lord Walsingham) in the leading Duchess of Kingston’s case [2 Smith Lead. Cas. 13th Ed. pp. 644, 645]. Said William De Grey, (afterwards Lord Walsingham) “from the variety of cases relative to judgments being given in evidence in civil suits, these two deductions seem to follow as generally true: First, that the judgment of a court of concurrent jurisdiction, directly upon the point, is as a plea, a bar, or as evidence, conclusive between the same parties, upon the same matter, directly in question in another court; Secondly, that the judgment of a court of exclusive jurisdiction, directly upon the point, is in like manner conclusive upon the same matter, between the same parties, coming incidentally in question in another court for a different purpose”. As has been observed by Halsbury, “the doctrine of res judicata is not a technical doctrine applicable only to records; it is a fundamental doctrine of all courts that there must be an end of litigation [Halsbury’s Laws of England, 3rd Ed., Vol. 15, para. 357, p. 185]”. Halsbury also adds that the doctrine applies equally in all courts, and it is immaterial in what court the former proceeding was taken, provided only that it was a Court of competent jurisdiction, or what form the proceeding took, provided it was really for the same cause (p. 187, paragraph 362). “Res judicata”, it is observed in Corpus Juris, “is a rule of universal law pervading every well regulated system of jurisprudence, and is put upon two grounds, embod
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