Plea Of Res Judicata Can Be Determined As A Preliminary Issue When It Only Involves Adjudication Of Question Of Law: Supreme Court

The Supreme Court observed that plea of res judicata can be determined as a preliminary issue only when it only involves adjudication of question of law.

When a mixed question of law or fact is raised, the issue should await a full-fledged trial after evidence is adduced, the three judges bench headed by Justices DY Chandrachud observed.

The court also observed that, while a compromise decree in a prior suit will not bar a subsequent suit by virtue of res judicata, the subsequent suit could be barred by estoppel by conduct. A suit under section 92 CPC is of a representative character and all persons interested in the Trust would be bound by the judgment in the suit, and persons interested would be barred by the principle of res judicata from instituting a subsequent suit on the same or substantially the same issue, the court added.

In this case, Jamia Masjid Gubbi filed a suit seeking inter alia a declaration that the State Wakf Board is the owner in possession of the suit schedule property. The Defendants, in their written statement, raised the issue of Res Judicata. They contended that the issue is already decided in an earlier suit. The Trial Court heard the parties by taking issue of Res Judicata as a preliminary issue. It held that the suit is barred by Res Judicata. This order was upheld by the First Appellate Court and the High Court.

Assailing these orders, the plaintiff-appellant before the Apex Court contended that any determination of the application of the principle of res judicata can only be made after evidence is adduced pursuant to a full-fledged trial. 

In this regard, the bench, also comprising Justices Vikram Nath and Hima Kohli, referred to Order 14 Rule 2 CPC which provides that if questions of fact and law arise in the same suit, the court can dispose the case on the question of law alone if if it relates to a bar to the suit created by any law. Referring to judgments in Sushil Kumar Mehta v. Gobind Ram Bohra  (1990) 1 SCC 193 , Mathura Prasad Bajoo Jaiswal v. Dossibai N.B Jeejeebhoy (1970) 1 SCC 613, the court observed: 

The court while undertaking an analysis of the applicability of the plea of res judicata determines first, if the requirements of section 11 CPC are fulfilled; and if this is answered in the affirmative, it will have to be determined if there has been any material alteration in law or facts since the first suit was decreed as a result of which the principle of res judicata would be inapplicable. We are unable to accept the submission of the appellants that res judicata can never be decided as a preliminary issue. In certain cases, particularly when a mixed question of law or fact is raised, the issue should await a full-fledged trial after evidence is adduced. (Para 23)

Therefore the Court held:

Issues that arise in a subsequent suit may either be questions of fact or of law or mixed questions of law and fact. An alteration in the circumstances after the decision in the first suit, will require a trial for the determination of the plea of res judicata if there arises a new fact which has to be proved. However, the plea of res judicata may in an appropriate case be determined as a preliminary issue when neither a disputed question of fact nor a mixed question of law or fact has to be adjudicated for resolving it. (Para 52(i))

The court also observed that, in order to attract the principles of res judicata, the following ingredients must be fulfilled:

(i) The matter must have been directly and substantially in issue in the former suit; (ii) The matter must be heard and finally decided by the Court in the former suit; (iii) The former suit must be between the same parties or between parties under whom they or any of them claim, litigating under the same title; and (iv) The Court in which the former suit was instituted is competent to try the subsequent suit or the suit in which such issue has been subsequently raised. (Para 17)

The court also said that the twin test that is used for the identification of whether an issue has been conclusively decided in the previous suit is:

A. Whether the adjudication of the issue was 'necessary' for deciding on the principle issue ('the necessity test'); and

B. Whether the judgment in the suit is based upon the decision on that issue ('the essentiality test'). (Para 40)

In this case, the Court found that the previous suits was for administration and management of trust properties and for accounts, and is thus distinct from the issues in the present suit. The court found:

(v) There was no adjudication in the first suit (OS 92 of 1950-51) on whether Abdul Khuddus had absolute title to the suit property. There was only a prima facie determination that Items 2 and 3 of the schedule of properties to the first suit belonged to Abdul Khuddus. The matters substantially in issue in OS 92 of 1950-51, which was a suit for administration and management of trust properties and for accounts, are distinct from the issues in the suit out of which the instant proceedings arise. Therefore, OS 149 of 1998 is not barred by res judicata in view of the decision in the first suit; (

vi) While a compromise decree in a prior suit will not bar a subsequent suit by virtue of res judicata, the subsequent suit could be barred by estoppel by conduct. However, neither the compromise petition dated 27 October 1969 nor the final decree in the second suit dated 27 October 1969 indicate that a compromise on the title to the suit property was arrived at. The compromise was restricted to the issue of the erstwhile lessee handing over possession of the suit property at the end of the lease; and

(vii) The third suit (OS 100/1983) was a suit for an injunction simpliciter. The third suit was withdrawn after the suit out of which the instant proceeding arises was filed for seeking a substantive declaration and an injunction. No adjudication on the rights of the parties was made in the third suit

Therefore, it set aside the impugned orders and restored the suit before the Trial Court.

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