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2024 Supreme(Online)(Bom) 11597
HIGH COURT OF BOMBAY
M. S. Sonak, J
Indian Hotels Company Limited – Appellant
Versus
Antonio Floriano Fernandes – Respondent
SECOND APPEAL NO. 67 OF 2007
For the Appellants/Petitioners: S. S. Kantak, Iftikhar Agha, Simoes Kher, Ketan Morajkar, Saicha Desai, V. Fernandes
For the Respondents: S.G. Desai, Tejas Rane, Dhaval Zaveri
An appeal lies solely against a decree, not a mere finding. Consequently, an adverse finding in a judgment does not become res judicata against a party who lacks standing to appeal. Appellate courts reversing findings must provide detailed, independent reasoning based on a complete reassessment of evidence.
Headnote:(A) Code of Civil Procedure, 1908 - Sections 96 and 100 - Doctrine of Res Judicata - Appealability of findings vs. decrees - A party is not required to appeal a judgment where the final decree is in their favour despite an adverse finding. Such findings do not operate as res judicata in subsequent suits because the party lacks the legal standing to challenge a finding in the absence of an adverse decree. (Paras 26, 29, 31)
(B) Appellate Jurisdiction - Reversal of judgment - While an appellate court possesses broad powers to re-evaluate facts and law, a reversal must be grounded in an independent assessment of evidence. The court must specifically address the chain of reasoning provided by the trial court to satisfy the requirements of a proper judicial review. (Paras 42-45, 48)
Facts of the case:
The controversy arose from two distinct suits involving the same subject matter. In the first suit, despite the court finding that the claimants were owners, the suit was dismissed on the ground of limitation. The claimants later initiated a second suit, and the appellate court erroneously held that the ownership finding from the first suit constituted a binding precedent on the second suit under the doctrine of res judicata. The appellant challenged this approach, arguing that they were not aggrieved by the decree in the first suit and therefore could not have appealed the adverse finding.
Findings of Court:
The court determined that an appeal can only be maintained against a decree, not against a mere finding. Since the appellant was not adversely affected by the final decree in the previous suit, the adverse finding on ownership did not acquire the status of finality sufficient to trigger res judicata in the second suit. Additionally, the appellate court failed to provide a comprehensive re-evaluation of the evidence when reversing the trial court's decision.
Issues: (i) Whether a finding in a previous suit regarding ownership operates as res judicata when the overall decree was not appealed due to a lack of grievance. (ii) Whether the lower appellate court correctly discharged its duty in reversing the trial court's conclusions.
Ratio Decidendi: An appellate court must adhere to the principle that a right of appeal arises only from an aggrieved decree. Findings delivered within a judgment lacking an adverse decree do not meet the threshold for res judicata. Furthermore, a court of appeal exercising powers of reversal is mandated to rigorously re-examine the evidentiary record and the contested reasoning of the trial court to ensure a fair and reasoned outcome.
Result: Appeals allowed.
| Table of Content |
|---|
| 1. procedural background and origin of the res judicata dispute. (Para 1 , 2 , 3 , 4 , 5 , 6 , 7 , 8 , 9 , 10 , 11 , 12 , 13 , 14) |
| 2. parties' contentions regarding the application of the doctrine of res judicata. (Para 15 , 16 , 17 , 18 , 19 , 20 , 21) |
| 3. findings cannot be appealed; res judicata does not apply merely based on unfavorable findings in a dismissed suit. (Para 22 , 23 , 24 , 25 , 26 , 27 , 28 , 29 , 30 , 31) |
| 4. appellate court failed to perform independent merit-based review of evidence during reversal. (Para 32 , 33 , 34 , 35 , 36 , 37 , 38 , 39 , 40 , 41 , 42 , 43 , 44 , 45 , 46 , 47 , 48) |
| 5. judgment set aside and remanded for independent re-evaluation of evidence by first appellate court. (Para 49 , 50 , 51 , 52) |
JUDGMENT
1. Heard Mr S.S. Kantak, learned Senior Advocate, with Mr Iftikhar Agha, Mr S. Kher, Mr K. Morajkar, Ms S. Desai and Ms V. Fernandes, learned counsel for the Appellant, Mr S.G. Desai, learned Senior Advocate with Mr T. Rane, learned counsel for Respondent Nos. 1, 2, 4, 5, 6 and 7, and Mr Dhaval Zaveri, learned counsel for Respondent No.1(f).
2. This Second Appeal is directed against the judgment and decree dated 09.01.2007 made by the Ad-hoc District Judge-2 at Panaji (First Appellate Court) allowing Regular Civil Appeal No. 149/2001 setting aside the judgment and decree dated 29.09.2001 and decreeing Regular Civil Suit No.226/2000/Jr instituted by Respondent Nos. 1 and 2 herein against the Appellant and Respondent Nos.3 to 7. In terms of the impugned judgment and decree, the sale deed dated 09.04.1985, by which the suit property was conveyed to the Appellant, was declared void to the extent of 596 square metres only. The Appellant was directed to hand over the possession of this area of 596 square metres to Respondent Nos. 1 and 2 herein(plaintiffs) in the suit.
3. This Second Appeal was admitted by order dated 17.01.2014 on the following substantial question of law:
Whether there is no consideration of the merits of the case by the Appellate Court, in as much as the Appellate Court records the finding that the original plaintiffs were owners solely because of the findings rendered by the Appellate Court based on Civil Appeal No.148/2001 that they become res-judicata?
4. To appreciate the contentions based on the Doctrine of Res Judicata, a brief reference becomes necessary to the circumstances in which the impugned judgment and decree dated 29.09.2001 came to be made in Regular Civil Appeal No.149/2001. This appeal arose from a decree dated 29.09.2001 in Regular Civil Suit No.226/2000/Jr.
5. Respondent Nos. 1 and 2 herein (plaintiffs) had earlier, i.e. on 16.05.1983, instituted Regular Civil Suit No.148/1983 against some of the Respondents herein for declaration of ownership in respect of the suit property and for perpetual injunction. For convenience of reference, this suit shall be referred to as “Suit No. I” or “First Suit”.
6. During the pendency of the First Suit, the defendants in the said suit vide sale deed dated 09.04.1985 sold the suit property to the Appellant herein. Therefore, the plaintiffs impleaded the Appellant herein as a defendant in the First Suit. However, no relief to set aside the sale deed dated 09.04.1985 was sought in the First Suit.
7. Instead, the plaintiffs instituted Regular Civil Suit No. 226/2000 (earlier registered as Suit No.131/1988) seeking a declaration that the sale deed dated 09.04.1985 was null & void and for recovery of possession and mesne profits. For convenience of reference, this suit shall be referred to as “Suit No. II” or “Second Suit”. This Second Suit was filed while the First Suit was pending.
8. On 29.09.2001, the trial Court dismissed the First Suit, holding that the plaintiffs had failed to prove the issue of ownership, and in any case, the suit was barred by limitation. On the same date, i.e. 29.09.2001, the trial Court also dismissed the Second Suit instituted by the plaintiffs, thereby d
