Vaish Aggarwal Panchayat vs Inder Kumar & Ors on 25 August, 2015
Author: D Misra
Bench: Dipak Misra, Prafulla C. Pant
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 2089 OF 2015
[Arising out of SLP(C) NO. 6919 OF 2008]
Vaish Aggarwal Panchayat ... Appellant
Versus
Inder Kumar and Others ... Respondents
J U D G M E N T
10. We have referred to the decision of the High Court in extenso as it has used the words “admittedly” and scrutinized in detail the factual scenario. It is submitted by Mr. Mahabir Singh, learned senior counsel appearing for the appellant that the suit was filed seeking declaration of the judgment and decree dated 19.9.1998 in civil suit no. 806/92 as null and void being resultant of fraud and collusion. That apart, the appellant was not a party to the earlier suit. It is urged by him that a written statement was filed on 23.7.2003 and on the basis of the plaint and the written statement, the learned trial Judge has framed number of issues and the issue number 1 relates to maintainability of the suit and issue number 9 pertains to whether the suit of the plaintiff is barred by principles of resjudicata. As is evident, after the framing of the issues the defendant filed the application under Order VII Rule 11 C.P.C. stating that the suit is not maintainable as barred by resjudicata. The learned trial Judge, as is evident from the order passed by him, has taken note of the stand taken in the written statement which has been regarded as the incorrect approach by the learned appellate Judge. The High Court, as it appears, has been guided by the finding recorded by the learned trial Judge totally ignoring the factum that such a conclusion has been arrived at by taking into consideration the averments made in the plaint and the assertions put forth in the written statement. The crux of the matter is whether, in the obtaining factual matrix, the High Court should have applied the principle of resjudicata. The cause of action for filing the suit is different. The grounds urged in the suit, as we find, are also quite different. Even if the plaint is read keeping in mind the cleverness and deftness in drafting, yet it is not prima facie discernible from the plaint that it lacks any cause of action or is barred by any law. On a perusal of the plaint alone it cannot be said that the suit is barred by the principle of resjudicata.
11. In this context, we may profitably refer to the decision in V. Rajeshwari v. T.C. Saravanabava[1]. In the said case, a two-Judge Bench while dealing with the concept of resjudicata has held:- “11. The rule of res judicata does not strike at the root of the jurisdiction of the court trying the subsequent suit. It is a rule of estoppel by judgment based on the public policy that there should be a finality to litigation and no one should be vexed twice for the same cause.
12. The plea of res judicata is founded on proof of certain facts and then by applying the law to the facts so found. It is, therefore, necessary that the foundation for the plea must be laid in the pleadings and then an issue must be framed and tried. A plea not properly raised in the pleadings or in issues at the stage of the trial, would not be permitted to be raised for the first time at the stage of appeal [see (Raja) Jagadish Chandra Deo Dhabal Deb v. Gour Hari Mahato[2], Medapati Surayya v. Tondapu Bala Gangadhara Ramakrishna Reddi[3] and Katragadda China Anjaneyulu v. Kattaragadda China Ramayya[4]].” After so stating, the Court further observed that:- “Not only the plea has to be taken, it has to be substantiated by producing the copies of the pleadings, issues and judgment in the previous case. Maybe, in a given case only copy of judgment in previous suit is filed in proof of plea of res judicata and the judgment contains exhaustive or in requisite details the statement of pleadings and the issues which may be taken as enough proof. But as pointed out in Syed Mohd. Salie Labbai v. Mohd. Hanifa[5] the basic method to decide the question of res judicata is first to determine the case of the parties as put forward in their respective pleadings of their previous suit and then to find out as to what had been decided by the judgment which operates as res judicata.”
12. We are conscious that the observations reproduced above were made in a different context but we have reproduced the same to understand the impact of the plea of resjudicata regard being had to the principle enshrined under Order VII Rule 11(d) of the C.P.C.
13. In this regard the pronouncement in Kamala and others v. K.T. Eshwara SA and others[6] would be seemly. In the said case while dealing with the principle engrafted under Order VII Rule 11(d) C.P.C., the Court has held thus:-
“21. Order 7 Rule 11(d) of the Code has limited application. It must be shown that the suit is barred under any law. Such a conclusion must be drawn from the averments made in the plaint. Different clauses in Order 7 Rule 11, in our opinion, should not be mixed up. Whereas in a given case, an application for rejection of the plaint may be filed on more than one ground specified in various sub-clauses thereof, a clear finding to that effect must be arrived at. What would be relevant for invoking clause (d) of Order 7 Rule 11 of the Code are the averments made in the plaint. For that purpose, there cannot be any addition or subtraction. Absence of jurisdiction on the part of a court can be invoked at different stages and under different provisions of the Code. Order 7 Rule 11 of the Code is one, Order 14 Rule 2 is another.
22. For the purpose of invoking Order 7 Rule 11(d) of the Code, no amount of evidence can be looked into. The issues on merit of the matter which may arise between the parties would not be within the realm of the court at that stage. All issues shall not be the subject-matter of an order under the said provision.” After so stating, while proceeding to deal with the concept of resjudicata, the Court opined:-
“23. The principles of res judicata, when attracted, would bar another suit in view of Section 12 of the Code. The question involving a mixed question of law and fact which may require not only examination of the plaint but also other evidence and the order passed in the earlier suit may be taken up either as a preliminary issue or at the final hearing, but, the said question cannot be determined at that stage.
24. It is one thing to say that the averments made in the plaint on their face discloses no cause of action, but it is another thing to say that although the same discloses a cause of action, the same is barred by a law.
25. The decisions rendered by this Court as also by various High Courts are not uniform in this behalf. But, then the broad principle which can be culled out therefrom is that the court at that stage would not consider any evidence or enter into a disputed question of fact or law. In the event, the jurisdiction of the court is found to be barred by any law, meaning thereby, the subject-matter thereof, the application for rejection of plaint should be entertained.”
14. In this regard a reference to a three-Judge Bench decision in Balasaria Construction (P) Ltd. v. Hanuman Seva Trust[7] and others would be frutiful. Be it noted the said case was referred to a larger Bench vide Balasaria Construction (P) Ltd. v. Hanuman Seva Trust[8]. The order of reference reads as follows:-
“4. This case was argued at length on 30-8-2005. Counsel appearing for the appellant had relied upon a judgment of this Court in N.V. Srinivasa Murthy v. Mariyamma[9] for the proposition that a plaint could be rejected if the suit is ex facie barred by limitation. As against this, counsel for the respondents relied upon a later judgment of this Court in Popat and Kotecha Property v. State Bank of India Staff Assn.[10] in respect of the proposition that Order 7 Rule 11(d) was not applicable in a case where a question has to be decided on the basis of fact that the suit was barred by limitation. The point as to whether the words “barred by law” occurring in Order 7 Rule 11(d) CPC would include the suit being “barred by limitation” was not specifically dealt with in either of these two judgments, cited above. But this point has been specifically dealt with by the different High Courts in Mohan Lal Sukhadia University v. Priya Soloman[11], Khaja Quthubullah v. Govt. of A.P.[12], Vedapalli Suryanarayana v. Poosarla Venkata Sanker Suryanarayana[13], Arjan Singh v. Union of India[14] wherein it has been held that the plaint under Order 7 Rule 11(d) cannot be rejected on the ground that it is barred by limitation. According to these judgments the suit has to be barred by a provision of law to come within the meaning of Order 7 Rule 11 CPC. A contrary view has been taken in Jugolinija Rajia Jugoslavija v. Fab Leathers Ltd.[15], National Insurance Co. Ltd. v. Navrom Constantza[16], J. Patel & Co. v. National Federation of Industrial Coop. Ltd.[17] and State Bank of India Staff Assn. v. Popat & Kotecha Property. The last judgment was the subject-matter of challenge in Popat and Kotecha Property v. State Bank of India Staff Assn. This Court set aside the judgment and held in para 25 as under:
“25. When the averments in the plaint are considered in the background of the principles set out in Sopan Sukhdeo case[18] the inevitable conclusion is that the Division Bench was not right in holding that Order 7 Rule 11 CPC was applicable to the facts of the case. Diverse claims were made and the Division Bench was wrong in proceeding with the assumption that only the non-execution of lease deed was the basic issue. Even if it is accepted that the other claims were relatable to it they have independent existence. Whether the collection of amounts by the respondent was for a period beyond 51 years needs evidence to be adduced. It is not a case where the suit from statement in the plaint can be said to be barred by law. The statement in the plaint without addition or subtraction must show that it is barred by any law to attract application of Order 7 Rule 11. This is not so in the present case.”
5. Noticing the conflict between the various High Courts and the apparent conflict of opinion expressed by this Court in N.V. Srinivasa Murthy v. Mariyamma and Popat and Kotecha Property v. State Bank of India Staff Assn. the Bench referred† the following question of law for consideration to a larger Bench:
“Whether the words ‘barred by law’ under Order 7 Rule 11(d) would also include the ground that it is barred by the law of limitation.””
15. The three-Judge Bench opined that there was no conflict of opinion and thereafter the matter came back to the Division Bench for adjudication. The Division Bench reproduced what has been stated by the three-Judge Bench. It is as under:-
“Before the three-Judge Bench, counsel for both the parties stated as follows:
“…It is not the case of either side that as an absolute proposition an application under Order 7 and Rule 11(d) can never be based on the law of limitation. Both sides state that the impugned judgment is based on the facts of this particular case and the question whether or not an application under Order 7 Rule 11(d) could be based on law of limitation was not raised and has not been dealt with. Both sides further state that the decision in this case will depend upon the facts of this case.”
16. After so stating, the Division Bench opined that in the facts of the said case, the suit could not be dismissed as barred by limitation without proper pleadings, framing of issue on limitation and taking evidence, for question of limitation is a mixed question of fact and law and on ex-facie reading of the plaint it could not be held that the suit was barred by time.
17. Coming to the case at hand we find that the allegations in the plaint are absolutely different. There is an asseveration of fraud and collusion. There is an assertion that in the earlier suit a decree came to be passed because of fraud and collusion. In such a fact situation, in our considered opinion, the High Court has fallen into error by expressing the view that the plea of resjudicata was obvious from the plaint. In fact, a finding has been recorded by the High Court accepting the plea taken in the written statement. In our view, in the obtaining factual matrix there should have been a trial with regard to all the issues framed.
18. Resultantly, the appeal is allowed and the order passed by the High Court is set aside and that of the appellate Judge is restored. The trial court is directed to proceed with the suit and dispose of the same within a period of six months hence. There shall be no order as to costs.
Author: D Misra
Bench: Dipak Misra, Prafulla C. Pant
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 2089 OF 2015
[Arising out of SLP(C) NO. 6919 OF 2008]
Vaish Aggarwal Panchayat ... Appellant
Versus
Inder Kumar and Others ... Respondents
J U D G M E N T
10. We have referred to the decision of the High Court in extenso as it has used the words “admittedly” and scrutinized in detail the factual scenario. It is submitted by Mr. Mahabir Singh, learned senior counsel appearing for the appellant that the suit was filed seeking declaration of the judgment and decree dated 19.9.1998 in civil suit no. 806/92 as null and void being resultant of fraud and collusion. That apart, the appellant was not a party to the earlier suit. It is urged by him that a written statement was filed on 23.7.2003 and on the basis of the plaint and the written statement, the learned trial Judge has framed number of issues and the issue number 1 relates to maintainability of the suit and issue number 9 pertains to whether the suit of the plaintiff is barred by principles of resjudicata. As is evident, after the framing of the issues the defendant filed the application under Order VII Rule 11 C.P.C. stating that the suit is not maintainable as barred by resjudicata. The learned trial Judge, as is evident from the order passed by him, has taken note of the stand taken in the written statement which has been regarded as the incorrect approach by the learned appellate Judge. The High Court, as it appears, has been guided by the finding recorded by the learned trial Judge totally ignoring the factum that such a conclusion has been arrived at by taking into consideration the averments made in the plaint and the assertions put forth in the written statement. The crux of the matter is whether, in the obtaining factual matrix, the High Court should have applied the principle of resjudicata. The cause of action for filing the suit is different. The grounds urged in the suit, as we find, are also quite different. Even if the plaint is read keeping in mind the cleverness and deftness in drafting, yet it is not prima facie discernible from the plaint that it lacks any cause of action or is barred by any law. On a perusal of the plaint alone it cannot be said that the suit is barred by the principle of resjudicata.
11. In this context, we may profitably refer to the decision in V. Rajeshwari v. T.C. Saravanabava[1]. In the said case, a two-Judge Bench while dealing with the concept of resjudicata has held:- “11. The rule of res judicata does not strike at the root of the jurisdiction of the court trying the subsequent suit. It is a rule of estoppel by judgment based on the public policy that there should be a finality to litigation and no one should be vexed twice for the same cause.
12. The plea of res judicata is founded on proof of certain facts and then by applying the law to the facts so found. It is, therefore, necessary that the foundation for the plea must be laid in the pleadings and then an issue must be framed and tried. A plea not properly raised in the pleadings or in issues at the stage of the trial, would not be permitted to be raised for the first time at the stage of appeal [see (Raja) Jagadish Chandra Deo Dhabal Deb v. Gour Hari Mahato[2], Medapati Surayya v. Tondapu Bala Gangadhara Ramakrishna Reddi[3] and Katragadda China Anjaneyulu v. Kattaragadda China Ramayya[4]].” After so stating, the Court further observed that:- “Not only the plea has to be taken, it has to be substantiated by producing the copies of the pleadings, issues and judgment in the previous case. Maybe, in a given case only copy of judgment in previous suit is filed in proof of plea of res judicata and the judgment contains exhaustive or in requisite details the statement of pleadings and the issues which may be taken as enough proof. But as pointed out in Syed Mohd. Salie Labbai v. Mohd. Hanifa[5] the basic method to decide the question of res judicata is first to determine the case of the parties as put forward in their respective pleadings of their previous suit and then to find out as to what had been decided by the judgment which operates as res judicata.”
12. We are conscious that the observations reproduced above were made in a different context but we have reproduced the same to understand the impact of the plea of resjudicata regard being had to the principle enshrined under Order VII Rule 11(d) of the C.P.C.
13. In this regard the pronouncement in Kamala and others v. K.T. Eshwara SA and others[6] would be seemly. In the said case while dealing with the principle engrafted under Order VII Rule 11(d) C.P.C., the Court has held thus:-
“21. Order 7 Rule 11(d) of the Code has limited application. It must be shown that the suit is barred under any law. Such a conclusion must be drawn from the averments made in the plaint. Different clauses in Order 7 Rule 11, in our opinion, should not be mixed up. Whereas in a given case, an application for rejection of the plaint may be filed on more than one ground specified in various sub-clauses thereof, a clear finding to that effect must be arrived at. What would be relevant for invoking clause (d) of Order 7 Rule 11 of the Code are the averments made in the plaint. For that purpose, there cannot be any addition or subtraction. Absence of jurisdiction on the part of a court can be invoked at different stages and under different provisions of the Code. Order 7 Rule 11 of the Code is one, Order 14 Rule 2 is another.
22. For the purpose of invoking Order 7 Rule 11(d) of the Code, no amount of evidence can be looked into. The issues on merit of the matter which may arise between the parties would not be within the realm of the court at that stage. All issues shall not be the subject-matter of an order under the said provision.” After so stating, while proceeding to deal with the concept of resjudicata, the Court opined:-
“23. The principles of res judicata, when attracted, would bar another suit in view of Section 12 of the Code. The question involving a mixed question of law and fact which may require not only examination of the plaint but also other evidence and the order passed in the earlier suit may be taken up either as a preliminary issue or at the final hearing, but, the said question cannot be determined at that stage.
24. It is one thing to say that the averments made in the plaint on their face discloses no cause of action, but it is another thing to say that although the same discloses a cause of action, the same is barred by a law.
25. The decisions rendered by this Court as also by various High Courts are not uniform in this behalf. But, then the broad principle which can be culled out therefrom is that the court at that stage would not consider any evidence or enter into a disputed question of fact or law. In the event, the jurisdiction of the court is found to be barred by any law, meaning thereby, the subject-matter thereof, the application for rejection of plaint should be entertained.”
14. In this regard a reference to a three-Judge Bench decision in Balasaria Construction (P) Ltd. v. Hanuman Seva Trust[7] and others would be frutiful. Be it noted the said case was referred to a larger Bench vide Balasaria Construction (P) Ltd. v. Hanuman Seva Trust[8]. The order of reference reads as follows:-
“4. This case was argued at length on 30-8-2005. Counsel appearing for the appellant had relied upon a judgment of this Court in N.V. Srinivasa Murthy v. Mariyamma[9] for the proposition that a plaint could be rejected if the suit is ex facie barred by limitation. As against this, counsel for the respondents relied upon a later judgment of this Court in Popat and Kotecha Property v. State Bank of India Staff Assn.[10] in respect of the proposition that Order 7 Rule 11(d) was not applicable in a case where a question has to be decided on the basis of fact that the suit was barred by limitation. The point as to whether the words “barred by law” occurring in Order 7 Rule 11(d) CPC would include the suit being “barred by limitation” was not specifically dealt with in either of these two judgments, cited above. But this point has been specifically dealt with by the different High Courts in Mohan Lal Sukhadia University v. Priya Soloman[11], Khaja Quthubullah v. Govt. of A.P.[12], Vedapalli Suryanarayana v. Poosarla Venkata Sanker Suryanarayana[13], Arjan Singh v. Union of India[14] wherein it has been held that the plaint under Order 7 Rule 11(d) cannot be rejected on the ground that it is barred by limitation. According to these judgments the suit has to be barred by a provision of law to come within the meaning of Order 7 Rule 11 CPC. A contrary view has been taken in Jugolinija Rajia Jugoslavija v. Fab Leathers Ltd.[15], National Insurance Co. Ltd. v. Navrom Constantza[16], J. Patel & Co. v. National Federation of Industrial Coop. Ltd.[17] and State Bank of India Staff Assn. v. Popat & Kotecha Property. The last judgment was the subject-matter of challenge in Popat and Kotecha Property v. State Bank of India Staff Assn. This Court set aside the judgment and held in para 25 as under:
“25. When the averments in the plaint are considered in the background of the principles set out in Sopan Sukhdeo case[18] the inevitable conclusion is that the Division Bench was not right in holding that Order 7 Rule 11 CPC was applicable to the facts of the case. Diverse claims were made and the Division Bench was wrong in proceeding with the assumption that only the non-execution of lease deed was the basic issue. Even if it is accepted that the other claims were relatable to it they have independent existence. Whether the collection of amounts by the respondent was for a period beyond 51 years needs evidence to be adduced. It is not a case where the suit from statement in the plaint can be said to be barred by law. The statement in the plaint without addition or subtraction must show that it is barred by any law to attract application of Order 7 Rule 11. This is not so in the present case.”
5. Noticing the conflict between the various High Courts and the apparent conflict of opinion expressed by this Court in N.V. Srinivasa Murthy v. Mariyamma and Popat and Kotecha Property v. State Bank of India Staff Assn. the Bench referred† the following question of law for consideration to a larger Bench:
“Whether the words ‘barred by law’ under Order 7 Rule 11(d) would also include the ground that it is barred by the law of limitation.””
15. The three-Judge Bench opined that there was no conflict of opinion and thereafter the matter came back to the Division Bench for adjudication. The Division Bench reproduced what has been stated by the three-Judge Bench. It is as under:-
“Before the three-Judge Bench, counsel for both the parties stated as follows:
“…It is not the case of either side that as an absolute proposition an application under Order 7 and Rule 11(d) can never be based on the law of limitation. Both sides state that the impugned judgment is based on the facts of this particular case and the question whether or not an application under Order 7 Rule 11(d) could be based on law of limitation was not raised and has not been dealt with. Both sides further state that the decision in this case will depend upon the facts of this case.”
16. After so stating, the Division Bench opined that in the facts of the said case, the suit could not be dismissed as barred by limitation without proper pleadings, framing of issue on limitation and taking evidence, for question of limitation is a mixed question of fact and law and on ex-facie reading of the plaint it could not be held that the suit was barred by time.
17. Coming to the case at hand we find that the allegations in the plaint are absolutely different. There is an asseveration of fraud and collusion. There is an assertion that in the earlier suit a decree came to be passed because of fraud and collusion. In such a fact situation, in our considered opinion, the High Court has fallen into error by expressing the view that the plea of resjudicata was obvious from the plaint. In fact, a finding has been recorded by the High Court accepting the plea taken in the written statement. In our view, in the obtaining factual matrix there should have been a trial with regard to all the issues framed.
18. Resultantly, the appeal is allowed and the order passed by the High Court is set aside and that of the appellate Judge is restored. The trial court is directed to proceed with the suit and dispose of the same within a period of six months hence. There shall be no order as to costs.
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