Filing Of Cross Objections By Defendants Not Necessary To Dispute Adverse Findings In The Dismissed Suit: SC [Read Judgment]

The Supreme Court has observed that it is not necessary that defendants should file cross objections to the appeal against dismissal of a suit to dispute certain findings adverse to them in the judgment appealed against.

The bench comprising Justice L. Nageswara Rao and Justice Hemant Gupta observed that, in such a situation, in the appeal filed by plaintiffs, the defendants have a right to support the ultimate decree passed by the trial court of dismissal of suit on grounds other than which weighed with trial court.

In State Of Andhra Pradesh vs. B. Ranga Reddy (D), the Supreme Court dealt with an interesting argument based on the Principle of Res Judicata. Three separate suits filed against the defendants including the State, out of which two were dismissed and one was decreed. The Trial Court, in the judgment dismissing the suits, however, answered a finding on an issue, against the state. The state filed appeal against the judgment decreeing the suit. The High Court, invoking principle of Res Judicata, dismissed the appeal, holding that findings recorded on Issue in the dismissed suits have to be treated as decree and would operate as res judicata.

Assailing this judgment, the State represented by Senior Advocate Vaidyanathan, contended before the Apex Court that the effect of amendment in Order XLI Rule 22 of the Code is only to enable an aggrieved person to file cross objections but that does not take away the right of an aggrieved person to support the decree of dismissal of the suit in appeal on the grounds other than what weighed with the trial court in dismissing the suit. On the other hand, Senior Advocate Dushyant Dave, representing the respondents contended that the state could have impugned such findings by way of an appeal in the first and second suit as well and as the State has not filed any appeal against the findings recorded in the first and the second suit, the findings recorded therein will operate as res judicata and the appeal arising out of the third suit is barred by res judicata.

Referring to earlier judgments dealing with the principles of Res Judicata, the bench observed:

"We find that the High Court has failed to draw the distinction between the decree and a finding on an issue. It is the decree against which an appeal lies in terms of Section 96 of the Code. Decree in terms of Section 2(2) of the Code means formal expression of an adjudication conclusively determining the rights of the parties. The defendants-State could not file an appeal against a decree which was of a dismissal of a suit simpliciter. The findings on Issue No. 1 against the State could be challenged by way of cross-objections in terms of amended provisions of Order XLI Rule 22 of the Code but such filing of cross-objections is not necessary to dispute the findings recorded on Issue No. 1 as the defendants have a right to support the ultimate decree passed by the trial court of dismissal of suit on grounds other than which weighed with the learned trial court. Even in terms of Order XLI Rule 33 of the Code, the Appellate Court has the jurisdiction to pass any order which ought to have been passed or made in proceedings before it."

Setting aside the High Court order, the court also noticed that, in this case, the plaintiffs are in appeal in both the suits before the First Appellate Court and thus the decree including the finding on the issue has not attained finality as the Appellate Court is ceased of the entire controversy including the findings of fact. 

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