Not Filing Separate Appeals Against Dismissal Of Suit And Decree In Counter Claim Acts As Res Judicata: Himachal Pradesh High Court

This ruling came in the context of an appeal filed by the Himachal Pradesh State Electricity Board Limited. The appellant contested the decisions of the lower courts, which had dismissed the plaintiff's suit for recovery while decreeing the defendants' counterclaim.

The Himachal Pradesh State Electricity Board Limited had filed a suit for recovery of Rs. 1,37,354/-, alleging that the defendant, an industrial unit, had defaulted on paying electricity bills.

The defendants contested this claim and filed a counterclaim for Rs. 70,857/-, arguing that the plaintiff owed them this excess amount. The trial court dismissed the plaintiff's suit and partially allowed the defendants' counterclaim, prompting the subsequent appeals.

Aggrieved by the order, the plaintiff filed a composite appeal against both the dismissal of its suit and the decree granted in favour of the defendants in the counterclaim. The appellate court subsequently rejected this appeal, prompting the appellant to approach the High Court.

Justice Ajay Mohan Goel, presiding over the case, underscored the principle that when a trial court issues distinct decrees on a suit and a counterclaim, separate appeals are mandatory. He stated, “It is settled law that in case a Trial Court either decrees a suit and dismisses the counterclaim or dismisses the suit and decrees the counterclaim, then both amount to passing of two distinct decrees and if they are assailed by way of a single appeal, then non-filing of appeal in one acts as res judicata to the findings returned in the other.”

Justice Goel supported his ruling by referring to a Division Bench judgment in Shri Ramesh Chand vs. Om Raj and others, which provided detailed guidance on the necessity of filing separate appeals in such cases.

The Division Bench had articulated that when a trial court's judgment includes decisions on both a suit and a counterclaim, and two separate decrees are prepared, each decree must be independently challenged. Failure to file separate appeals can result in the finality of the judgment on the decree not appealed against, thereby invoking the principles of res judicata, waiver, and estoppel.

The Division Bench had previously also clarified that even when a single appeal is permissible in certain consolidated cases if separate decrees are issued, separate appeals remain necessary. If one appeal is not filed, the decree not challenged becomes final, and the principles of res judicata come into play, barring any further challenges.

Eventually, the court, drawing on the adjudication by the Division Bench, which as per the judgement, was based on the established precedents of the Hon'ble Supreme Court of India, dismissed the appeal accordingly.

Case Title: Himachal Pradesh State Electricity Board Limited Versus Raj Kumar and another

Citation: 2024 LiveLaw (HP) 47

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