For Res Judicata To Apply, Previous Suit Should Have Been Decided On Merits : Supreme Court Explains Principles

In a notable judgment explaining the principles of res judiciata, the Supreme Court has held that an order closing the proceedings in a case cannot be construed as a final decision on merits so as to bar a subsequent suit.

Accordingly, the Court set aside a judgment and decree of the Delhi High Court which rejected the plaint of an Eviction Petition for being in violation of the principles of the res judicata.

The division bench of Justice Sudhanshu Dhulia and Justice J. B. Pardiwala observed:

“The order passed by the Rent Comptroller 27.01.1998 did not purport to be one of dismissal for default or on merits and it cannot be taken to mean other than what it purported to be....The order did not purport to be a final disposal of the suit. It merely stopped the proceedings. It did nothing more. This is not final decision of the suit within the meaning of Order 9 Rule 8 and Order 17 Rule 3 resply of the CPC.”

Principles of res-judiciata summarized :

The Court summarized the principles of res-judiciata as follows :

(i) To reject a plaint on the ground that the suit is barred by any law, only the averments in the plaint will have to be referred to;

(ii) The defence made by the defendant in the suit must not be considered while deciding the merits of the application;

(iii) To determine whether a suit is barred by res judicata, it is necessary that (i) the ‘previous suit’ is decided, (ii) the issues in the subsequent suit were directly and substantially in issue in the former suit; (iii) the former suit was between the same parties or parties through whom they claim, litigating under the same title; and (iv) that these issues were adjudicated and finally decided by a court competent to try the subsequent suit; and

(iv) Since an adjudication of the plea of res judicata requires consideration of the pleadings, issues and decision in the ‘previous suit’, such a plea will be beyond the scope of Order 7 Rule 11 (d), where only the statements in the plaint will have to be perused.

Facts

The father of the appellants (landlord) filed an eviction petition on May 21, 1996 under Section 14(1)(a) of the Delhi Rent Control Act, 1958 (the Act of 1958) against the respondents (tenants) alleging that arrears of the rent was not cleared.

In the said eviction petition, the respondents denied the relationship of landlord and tenant.

However, plaintiffs-appellants failed to appear before the Rent Controller for the purpose of establishing the relationship of landlord and tenant between the parties. The plaintiffs were granted numerous opportunities to adduce evidence to establish the relationship of landlord and tenant, last such opportunity was given on November 1, 1997.

The Rent Controller passed an order dated January 27, 1998 stating as follows:

“…………….The PE is thus closed.

Since the relationship of Landlord tenant itself is under dispute and the petitioner has failed to adduce any evidence to establish this fact, I am of the opinion that there is no point in fixing the case further for RE. The petition is thus dismissed as the petitioner has failed to establish his case. File be consigned.”

During the lifetime of original plaintiff ,no appeal or fresh eviction petition was filed.

After the demise of the original plaintiff, the appellants claiming as successors in interest filed another eviction petition in the year 2001 against the respondents under Section 14(1)(a) of the Act 1958 claiming arrears of rent from March 1, 1993 till the date of issuance of notice i.e. till May 18, 2001.

The respondents filed the written statement and an application under the provisions of Order 7 Rule 11 of the CPC stating that the said eviction petition of 2001 was barred by the principles of res judicata and the plaint shall be rejected accordingly.

However, the Additional Rent Controller declined to reject the plaint vide order dated July 23, 2002 on the ground that the second eviction petition filed in was based on a fresh notice dated May 18, 2001 on separate cause of action and that there was no finding on merits as regards the relationship of landlord and tenant between the parties in the order dated January 27, 1998.

The respondents-tenants approached the Delhi High Court in a civil revision petition challenging the impugned order dated July 23, 2022 which was allowed and plaint of the eviction petition of 2001 was rejected by the High Court on the ground that the same was hit by the principles of res judicata.

The appellants approached the Supreme Court challenging the impugned judgment of the Delhi High Court.

Issue

Whether the finding recorded by the Rent Controller while dismissing the Eviction Petition of 1996 that the eviction petition deserves to be dismissed as the plaintiff Samey Singh had failed to establish the relation of landlord and tenant between the parties could be said to be on merits so as to render the second Eviction Petition of 2001 not maintainable on the principles of res judicata.

The Supreme Court’s Observation

The Court noted:

“The general principle of res judicata under Section 11 of the CPC contain rules of conclusiveness of judgment, but for res judicata to apply, the matter directly and substantially in issue in the subsequent suit must be the same matter which was directly and substantially in issue in the former suit. Further, the suit should have been decided on merits and the decision should have attained finality.”

The Supreme Court noted:

“The exact words used by the Rent Controller in the order dated 27.01.1998 are: “the PE is thus closed.” In the second part of the order, the Rent Controller, thereafter, proceeds to observe that since the relationship of Landlord-Tenant is under dispute and the plaintiff has failed to produce any evidence to establish such relationship, he did not find any good reason to fix the case further for recording of evidence. In such circumstances, he dismissed the eviction petition, as the plaintiff could be said to have failed to establish his case. In the last, he observed that the file be consigned.”

The court averred that the abovementioned order do not mean dismissal either on merits or on default.

The Court held:

“The words, which we have quoted above, certainly do not mean dismissal either on merits or on default. It was argued before us that the order should only be taken to mean what an order under Order 17 can possibly be and nothing else. We are not impressed by such submission.”

Thus, the court allowed the appeal and set aside the impugned judgment and decree passed by the Delhi High Court.

However, the Court clarified:

“First, we have not expressed any opinion on rival contentions regarding the applicability or otherwise of the principle of res judicata or for that matter any other contentious issue in the pending suit. Secondly, nothing stated in this judgment will prevent the concerned defendants from requesting the Court to decide such an issue as a preliminary issue. Such an application would obviously be decided on its merits about which also we expressed no opinion. The suit is revived.”

Case Title: Prem Kishore & Ors. v. Brahm Prakash & Ors.

Coram: Justice Sudhanshu Dhulia and Justice J. B. Pardiwala

Citation : 2023 LiveLaw (SC) 266

Code of Civil Procedure 1908 - Section 11- Res Judicata- Guiding principles summarized -Para 33

Code of Civil Procedure 1908- Section 11- Res Judiciata - The general principle of res judicata under Section 11 of the CPC contain rules of conclusiveness of judgment, but for res judicata to apply, the matter directly and substantially in issue in the subsequent suit must be the same matter which was directly and substantially in issue in the former suit. Further, the suit should have been decided on merits and the decision should have attained finality. Where the former suit is dismissed by the trial court for want of jurisdiction, or for default of the plaintiff’s appearance, or on the ground of non-joinder or mis-joinder of parties or multifariousness, or on the ground that the suit was badly framed, or on the ground of a technical mistake, or for failure on the part of the plaintiff to produce probate or letter of administration or succession certificate when the same is required by law to entitle the plaintiff to a decree, or for failure to furnish security for costs, or on the ground of improper valuation, or for failure to pay additional court fee on a plaint which was undervalued, or for want of cause of action, or on the ground that it is premature and the dismissal is confirmed in appeal (if any), the decision, not being on the merits, would not be res judicata in a subsequent suit - Para 34

Code of Civil Procedure - Order 17 Rule 3- The power conferred on Courts under Rule 3 of Order 17 of the CPC to decide the suit on the merits for the default of a party is a drastic power which seriously restricts the remedy of the unsuccessful party for redress. It has to be used only sparingly in exceptional cases. Physical presence without preparedness to co-operate for anything connected with the progress of the case serves no useful purpose in deciding the suit on the merits and it is worse than absence. There must be some materials for a decision on the merits, even though the materials may not be technically interpreted as evidence. Sometimes the decision in such cases - Para 52

Code of Civil Procedure - Section 11 - Res judicata- An order closing the proceedings is not final decision of the suit within the meaning of Order 9 Rule 8 and Order 17 Rule 3 resply of the CPC- will not operate as res judiciata- Para 55

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