2019 Supreme(SC) 114

SUPREME COURT OF INDIA
DHANANJAYA Y. CHANDRACHUD, HEMANT GUPTA, JJ.
ASGAR & ORS. – APPELLANTS
VERSUS
MOHAN VARMA & ORS. – RESPONDENTS
CIVIL APPEAL NO. 1500 OF 2019
(@SLP(C) No. 1216 OF 2016)
Decided On : 05-02-2019

IMPORTANT POINTS
Liberty to appellants to pursue the “appropriate remedy for redressal of their grievances in accordance with law” encompasses both the ability of the appellants to take recourse and of the respondents to raise necessary defences to the invocation of the remedy.
Constructive res judicata, in the same manner as the principles underlying res judicata, is intended to ensure that grounds of attack or defence in litigation must be taken in one of the same proceeding. The principles of res judicata and constructive res judicata seek to achieve the common objective of assuring finality to litigation.
Executing court has to decide all questions in Execution Application. No separate suit is required

Headnote:(a) Code of Civil Procedure, 1908 – Section 11 Explanation IV – Constructive res judicata – Earlier order giving liberty to appellants to pursue the “appropriate remedy for redressal of their grievances in accordance with law” – The liberty encompasses both the ability of the appellants to take recourse and of the respondents to raise necessary defences to the invocation of the remedy – Held, the earlier judgment of High Court and order of Supreme Court did not preclude respondents from raising the bar of constructive res judicata. (Para 22)

       (b) Code of Civil Procedure, 1908 – Section 11 Explanation IV – Constructive res judicata – “Might and ought” – Constructive res judicata, in the same manner as the principles underlying res judicata, is intended to ensure that grounds of attack or defence in litigation must be taken in one of the same proceeding – The principles of res judicata and constructive res judicata seek to achieve the common objective of assuring finality to litigation. (Para 32, 33)

       1892 SCC OnLine PC 16; (1977) 2 SCC 806; (1990) 2 SCC 715; (1986) 1 SCC 100 – Relied upon

       ILR (1975) II Delhi 174 – Cited with approval

       67 E.R. 313; (1947) 2 All ER 255; [2001] 2 WLR 72 – Referred

       (c) Code of Civil Procedure, 1908 – Order XXI Rule 99 and Order XXI Rule 97 – Applicants’ being a stranger to the decree claiming independent right, title or interest in the property filing application styled as one under Rule 99 – Not determinative of true nature of the application – Rule 99 comes into operation after dispossession – Grievance of the obstructionist before actual possession can be adjudicated under Rule 97. (Para 34, 35)

       (d) Code of Civil Procedure, 1908 – XXI Rule 101 and rule 97 – Executing court has to decide all questions in Execution Application – No separate suit is required – Held, appellants were entitled, though they were strangers to the decree, to get their claim to remain in possession of the property independent of the decree, adjudicated in the course of the execution proceedings. (Para 39)

       (1997) 3 SCC 694; (2011) 15 SCC 377 – Relied upon

       AIR 1984 Bom 357 – Cited with approval

       (e) Code of Civil Procedure, 1908 – Section 11 Explanation IV – Constructive res judicata – Applicants in earlier round of litigation seeking to remain in possession – Now applicants seeking compensation u/s 4(1), Kerala Compensation for Tenants Improvements Act 1958 – Presently, applicants resisting execution of decree on ground of being entitled to continue in possession until their claim for compensation is determined and paid – Held such claim ‘could and ought’ to be made and adjudicated in the earlier proceeding – Held such a claim falls within the purview of Explanation IV to Section 11. (Para 40)

       Facts of the case:

       The property having an area of 914 acres originally belonged to Vengunadu Kovilakam of Kollengode. On 25 November 1897, 909 acres of the property came to be leased out to William Espants Watts Esquire for a period of 75 years. By a subsequent transfer, the leasehold rights were transferred to and vested in Anglo American Direct Tea Trading Corporation Limited. On 17 October 1931, an area admeasuring 5 acres (the bungalow site) was leased out in favour of Anglo American Corporation for a period of 43 years. In 1945, Anglo American Corporation assigned its rights over the property to Amalgamated Coffee Estate Limited.

       A suit for partition, was instituted by the respondents in respect of some portions of the property. The petitioners and their predecessors-in-interest were not parties. A preliminary decree for partition was passed on 30 November 1965.

       On 7 August 1969, Amalgamated Coffee Estate Limited assigned its rights over 410 acres of the land to Mathew T Marattukulam, 329 acres in favour of Mrs Annakutty Mathew and 175 acres in favour of Philomina Thomas.

       The lease deed of 1897 expired by efflux of time in 1972. In spite of the fact that the tenure of lease had ended, the above three persons assigned their rights in respect of the property on 28 August 1978 in favour of M/s K J Plantations. On 23 June 1990, acting in pursuance of a Power of Attorney alleged to have been executed by K J Plantations in favour of M S M Haneefa, the latter executed eight sale deeds in favour of the petitioners and M/s South Coast Spices Export Limited. In 1991, M/s K J Plantations instituted a suit seeking inter alia the setting aside of the Power of Attorney executed in favour of M S M Haneefa and the eight sale deeds.

       On 27 May 1995 the Subordinate Judge ordered the property to be divided into a hundred equal shares of which forty were to be allotted to M/s K J Plantations and sixty to the other assignees. An area admeasuring 274.20 acres had been assigned to the petitioners.

       On 21 February 2003 a final decree was passed in the suit for partition. The respondents instituted Execution Petition on 17 November 2008 for delivery of possession of Schedule ‘B’ property.

       On 31 August 2009, several execution applications were filed in the Execution Petition. Among them were execution applications 33 of 2009 (filed by National Spices Company), 38 of 2009 (filed by the petitioners) and 41 of 2009 (filed by K J Plantations) under Order XXI Rule 99 CPC. In their applications, the applicants inter alia sought a declaration that they were entitled to possession of the property as lessees and were not liable to be dispossessed.

       The District Judge allowed execution applications 33, 38 and 41 of 2009 by a judgment dated 6 January 2010.

       The High Court allowed the appeal and, while upholding the submissions of the respondents, dismissed the claim petitions filed by the appellants.

       On 25 July 2014, a Special Leave Petition was dismissed.

       On 24 October 2014, the appellants instituted fresh proceedings in EP No. 7 of 2008 seeking inter alia a direction for the payment to them of the value of improvements over the property, before an order for delivery of possession was made. The respondents, in reply opposing the application, contended that the claim was barred by the principle of constructive res judicata under Explanation IV of Section 11 of the CPC.

       By a judgment and order dated 26 June 2015, the First Additional District Judge dismissed the application filed by the appellants on the ground that they were not transferees of the property and were hence disentitled to seek the value of the improvements alleged to have been made by them, under Section 51 of the TP Act.

       The High Court dismissed the writ petition, holding that the claims of the appellants for the value of the improvements alleged to have been made on the property were barred by the principle of constructive res judicata; and the appellants, not being transferees, were in any event not entitled to raise the claim under Section 51 of the TP Act.

       Finding of the Court:

       The High Court was entirely justified in coming to the conclusion that the failure of the appellants to raise a claim would result in the application of the principle of constructive res judicata both having regard to the provisions of Sections 4 and 5 of the Act of 1958 and to the provisions of Order XXI Rules 97 to 101 of the CPC.

       Result: Appeal dismissed.