Full Judgment Text
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PETITIONER:
BALDEVDAS SHIVLAL & ANR.
Vs.
RESPONDENT:
FILMISTAN DISTRIBUTORS (INDIA) (P) LTD. & ORS.
DATE OF JUDGMENT:
29/04/1969
BENCH:
SHAH, J.C.
BENCH:
SHAH, J.C.
MITTER, G.K.
CITATION:
1970 AIR 406 1970 SCR (1) 435
1969 SCC (2) 201
CITATOR INFO :
F 1976 SC2621 (11)
RF 1977 SC1555 (8)
RF 1977 SC2185 (9)
E&R 1978 SC 47 (14)
ACT:
Code of Civil Procedure, 1908, ss. 1, 115-Consent decree
whether operates as res judicata-Trial Court disallowing
objection to certain questions in cross-examination--order
disallowing question is not a ’case decided’ within meaning
of s. 115-High Court’s jurisdiction in revision.
HEADNOTE:
R and F who held a cinema building in Ahmedabad on lease
entered on November 27, 1954 into an agreement with
respondent no. 1 giving the latter a right to exhibit
cinematograph films in the said building. Later respondent
no. 1 filed ’suit No. 149 of 1960 to assert his right to
exhibit films in the building. The suit resulted in a
compromise decree. In pursuance of the compromise a further
agreement dated December 1, 1960 was executed between the
parties. However in 1963 respondent no. 1 again filed a
suit claiming as a sub-lessee or as lessee a right to
exhibit films in the said building and praying that the
defendants be restrained from interfering with that right.
The suit was filed under s. 28 of the Bombay Rents, Hotel
and Lodging House Rates Control Act, 1947 in the Court of
Small Causes. In this suit respondent no. 1 asked the court
to try additional issues Nos. 11, 12 and 13 as preliminary
issues. In issue no. 11 the question raised was whether the
consent decree in the earlier suit operated as res judicata
so that R & F could not question that the agreements between
them and respondent no. 1 constituted a lease. Issue no.
12 raised the question whether in view of the consent decree
R & F were estopped from leading evidence and asking
questions in cross-examination to show that the said
agreements did not constitute a lease. Issue No. 13 raised
the question whether s. 92 of the Indian Evidence Act
debarred R & F from leading evidence to the effect that the
documents in question did not constitute a lease. The Trial
Court refused to try these as preliminary issues and its
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order was upheld by the High Court. At the hearing of the
case when the counsel for the defendants sought to ask a
witness for respondent No. 1 whether the agreement dated
November 27, 1954 was a commercial transaction and not a
lease respondent No. 1 objected to the question. The
objection was disallowed by the trial court. In revision
under s. 115 of the Code of Civil Procedure the High Court
did not interfere with the trial court’s order in respect of
issues Nos. 12 and 13. In respect of issue No. 11, the High
Court held that the agreement dated November 27, 1954 must
in view of the consent decree in suit No. 149 of 1960 be
held to be a lease, and that the consent decree created a
bar of res judicata in respect of the issue whether the said
agreement created a lease. The defendants-appellants
appealed to this Court.
HELD : (i) The High Court had no jurisdiction to record any
finding on the issue of res judicata in a revision
application filed against an order refusing to uphold an
objection to certain question asked to a witness under
examination. The Court erred in proceeding to decide
matters on which no decision was till then recorded by the
trial court and which could not be decided by the High Court
until the parties had opportunity of leading evidence
thereon. [441 F]
436
(ii) By ordering that a question may properly be put to a
witness who -was examined, no case was decided by the Trial
Court within the meaning -of s. 115 of the Code of Civil
Procedure. The expression ’case’ is not limited in its
import to the entirety of the matter in dispute in a
proceeding. Such an interpretation may result in certain
cases in denying relief -to the aggrieved litigant where it
is most needed. But equally, it is not every order of the
court in the course of a suit that amounts to a case
decided. A case may be said to be decided only if the court
adjudicates, for the purpose of the suit, some right or
obligation of the parties in controversy. [441H-442C]
Major S. S. Khanna v. Brig. F. J, Dillon, [1964] 4 S.C.R.
409, -referred to.
(iii) A consent decree, according to the decisions of
this Court, does not operate as res judicata, because a
consent decree is merely the record of a contract between
the parties to, a suit, to which is superadded the seal of
the court. A matter in contest in a suit may operate as res
judicata only if there is an adjudication by the court : the
terms of s. 1 1 of the Code leave no scope for a contrary
view. [441E]
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1940 of 1967.
Appeal by special leave from the judgment and order dated
April 17, 27, 1967 of the Gujarat High Court in Civil
Revision Application 328 of 1967.
S. T. Desai and I. N. Shroff for the appellants.
M. P. Amin, P. M. Amin, P. N. Dua and J. B. Dadachanji,
for respondent No. 1.
R. P. Kapur, for respondents Nos. 2 and 3.
The Judgment of the Court was delivered by
Shah, J. By insistence upon procedural wrangling in a com-
paratively simple suit pending in the Court of Small Causes
at Ahmedabad the parties have effectively prevented all
progress in -the suit during the last six years.
A building in the town of Ahmedabad used as a cinematograph
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theatre belonged originally to Messrs. Popatlal Punjabhai.
estate of the owners and on August 19, 1954, the receivers
,estate of the owners and on August 19, 1954, The receivers
granted a lease of the theatre on certain terms and
conditions to two persons, Raval and Faraqui. By an
agreement dated November 27, 1954, between Raval and Faraqui
on the one hand and Messrs. Filmistan Distributors (India)
Private Ltd. hereinafter called "Filmistan--on the other
hand, right to exhibit cinematograph films was granted to
the latter on certain terms and conditions. "Filmistan"
instituted suit No. 149 of 1960 in the Court of the Civil
Judge (Senior Division) at Ahmedabad against Raval and
Faraqui and two other persons claiming a declaration that it
437
was entitled pursuant to the agreement dated November 27,
1954, to exhibit motion pictures in the theatre. By an
order dated December 1, 1960 the suit was disposed of as
compromised. It was inter alia agreed that Raval and
Faraqui were bound and liable to allow Filmistan to exercise
its "exhibition rights" in the theatre; that Raval and
Faraqui, their servants and agents were not to have any
right to exhibit any picture in contravention of the terms
and conditions of the agreement dated November 27, 1954; and
that Raval and Faraqui shall "execute and register" an
agreement in writing incorporating the said agreement with
the variation as to rental. Pursuant to this agreement, a
fresh agreement was executed on December 1, 1960. On
September 1, 1963, Filmistan filed suit No. 1465 of 1963 in
the Court of Small Causes at Ahmedabad, inter alia, for a
declaration that as sub-lessee or as lessee under law it was
entitled to obtain and remain in possession of the theatre
and to exhibit cinematograph films and to hold
"entertainment performances" etc. in the theatre, and that
one Shabeer Hussain Khan Tejabwala had no right, title or
interest in the theatre, that the defendants in the suit be
ordered to hand over vacant and peaceful possession of the
theatre, and the defendants, their servants and agents be
restrained by an injunction from interfering directly or
indirectly with its rights to obtain and remain in
possession of the theatre or any part thereof and to
exercise its right of exhibiting "motion pictures" and
entertainment performances etc. This suit was filed against
the receivers in insolvency of the owners of the theatre,
against Raval and Faraqui, against Tejabwala and also
against Baldevdas Shivlal who claimed to be the owner of the
theatre. The suit was based on the claim by Filmistan as
lessees or sub-lessees of the theatre and was exclusively
triable by the Court of Small Causes by virtue of s. 28 of
the Bombay Rents, Hotel and Lodging House Rates Control Act,
1947. Three sets of written statements were filed against
the claim made by Filmistan, but no reference need be made
thereto, since at this stage in deciding appeal the merits
of the pleas raised by the defendants are not relevant.
After issues were raised on June 20, 1966, the plaint was
amended and additional written statements were filed by the
Defendants. The learned Judge was then requested to frame
three additional issues in view of the amended pleadings :
the issues were:
1. Whether in view of the said consent
decree in suit No. 149 of 1960 defendants Nos.
5 and 6 are debarred on principles of res
judicata from agitating the question that the
said document dated November 27, 1954 as
confirmed by their letter dated January 31,
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438
1955 and further confirmed by document dated
December 1, 1960 is not a lease?
12. Whether in view of the said consent
decree, defendants 5 and 6 are estopped from
contending and leading any evidence and
putting questions in crossexamination of
plaintiffs witnesses to show that the said
document dated November 27, 1954 as confirmed
by their letter dated January 31, 1955 and
further confirmed by document dated December
1, 1960 is not a lease ?
13. Whether in respect of the terms of the
said consent decree as also of the said
document dated November 27, 1954, as confirmed
by their letter dated January 31, 1955 and
further confirmed by document dated December
1, 1960 defendants Nos. 5 and 6 are debarred
from leading any evidence of the, plaintiffs
witnesses in view of s. 92 of the Evidence Act
?"
In drawing up the additional issues not much care was
apparently exercised : whether a party is entitled to lead
evidence or to put questions in cross-examination of the
plaintiff’s witnesses cannot form the subject-matter of an
issue.
Filmistan then applied to the Court of Small Causes for an
order that issues Nos. 11, 12 & 13 be tried as preliminary
issues. The learned Judge observed that the issues were not
purely of law, that in any event the case or any part
thereof was not likely to be disposed of on these issues,
and that ordinarily in "appealable cases" the Court should,
as far as possible, decide all the issues together and that
piecemeal trial might result in protracting the litigation.
He also observed that the issues were not of law going to
the root of the case and were on that account not capable of
being decided without recording evidence.
A revision application against that order was dismissed in
limine by the High Court of Gujarat. When the case reached
hearing and the evidence of a representative of Filmistan
was. being recorded, counsel for the defendants asked in
cross-examination the question whether the "agreement
between the plaintiff and defendant Nos. 5 and 6 was a
commercial transaction and was not a lease ?" The question
was objected to by counsel appearing for Filmistan.
Thereafter elaborate arguments were advanced and the Trial
Judge passed an order disallowing the objection.
The objection to the question raised by Filmistan was not
that it related to a matter to be decided by the Court and
on which the opinion of witnesses was irrelevant. The
objection was raised as
439
an attempt to reopen the previous decision given by the
Trial Judge refusing to try issues Nos. 11, 12 & 13 as
preliminary issues. Counsel for Filmistan contended that an
enquiry into the nature of the legal relationship arising
out of the agreement dated December 1, 1960 "was barred by
the principle of res judicata and estoppel under the
provisions of s. 92 of the Evidence Act", since the question
was already concluded by the consent decree in suit No. 149
of 1960. The Trial Judge observed that he had carefully
gone through the consent decree and the registered agreement
dated December 1, 1960, and he found that the consent decree
had not decided that the transaction between the parties of
the year 1954 was in the nature of a lease; that in the
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plaint in the earlier suit it was not even averred that the
rights granted were in the nature of leasehold rights; that
suit No. 149 of 1960 was for declaration of the rights of
Filmistan to exhibit motion pictures, in the theatre under
the agreement dated November 27, 1954, and for an injunction
restraining the defendants from violating the said rights of
Filmistan under the agreement; and that the agreement dated
December 1, 1960 was "not plain enough to exclude the oral
evidence of the surrounding circumstances and conduct of the
parties to explain its terms and language". Accordingly he
held that the question asked in cross-examination of the
witnesses for Filmistan intended to secure disclosure of the
surrounding circumstances and conduct of the parties in
order to show in what manner the language of the document
was related to the existing facts, could not be excluded.
The Court also rejected the contention that there was any
bar of estoppel, and held that evidence as to the true
nature of the transaction was not inadmissible by virtue of
s. 92 of the Evidence Act.
Filmistan feeling dissatisfied with the order invoked the
revisional jurisdiction of the High Court of Gujarat under
s. 115 of’ the Code of Civil Procedure. The revision
petition was entertained and elaborate arguments were
advanced at the Bar. The High Court referred to a number of
authorities and observed that the correctness of the
findings of the Trial Court on issues Nos. 12 and 13 may not
be examined in exercise of the powers under s. 115 of the
Code of Civil Procedure. The Court proceeded to, observe :
"The question then arises for consideration
whether in fact the subordinate Court has
decided the question of res judicata", and
that "it is true that the jurisdiction of the
Court of mall Causes to decide disputes
between a tenant and his landlord and falling
within the purview of s. 28 of the Bombay Rent
Control Act is derived from s. 28 of the said
Act, but at the same time if an issue is in fact
barred by res judicata, then the Court has no
440
jurisdiction on principles of res judicata to
go into that question or to decide that
question over again to the extent to which the
Court, viz., the trial court in the instant
case, proposed to go into that question and
allow the whole question, that was closed once
for all by consent decree of December 1, 1960,
to be reopened, it is proposing to exercise
the jurisdiction which is not vested in it by
law. It is not open to any Court of law to
try an issue over again or reopen the same if
an earlier decision operates as res judicata.
Once the jurisdiction of the Court has been
taken away, any proposal to reopen the
question closed by the earlier decision would
be exercise of jurisdiction which is not
vested in the Court by law and to that extent
the decision would become revisable, even if
it is the decision as to the res judicata of
an issue",
and concluded
"It is not open to me in revision at this
stage to express any opinion about the rights
and contentions of the parties with reference
to the agreement of December 1, 1960. But the
only thing that can be said is that so far as
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the agreement of November 27, 1954, is con-
cerned, it must be held, in view of the
consent decree of December 1, 1960, that that
document of November 27, 1954, created a
lease........
The consent decree must be held to create a
bar of res judicata as far as the question of
document of November 27, 1954, creatin
g a lease
is, concerned. The learned Judge will not
proceed with the trial".
By s. 115 of the Code of Civil Procedure the High Court is
invested with power to call for the record of any case
decided by any Court subordinate to such High Court and in
which no appeal lies thereo, if such subordinate court
appears-(a) to have exercised a jurisdiction not vested in
it by law, or (b) to have failed to exercise a jurisdiction
so vested, or (c) to have acted in the exercise of its
jurisdiction illegally or with material irregularity, and to
make such order in the case as it thinks fit. Exercise of
the power is broadly subject to three important conditions
(1) that the decision is of a Court subordinate to the High
Court; (2) that there is a case which has been decided by
the subordinate Court; and (3) that the subordinate Court
has exercised jurisdiction not vested in it by law or to
have failed to exercise a jurisdiction so vested, or to have
acted in the exercise of its jurisdiction illegally or with
material irregularity.
441
In the present case the Court of Small Causes had only
decided that a question seeking information about the true
legal relationship arising out of the document could be
permitted to ’be put to the witnesses for Filmistan. The
Court gave no finding expressly or by implication on the
issue of res judicata or any other issue. In the view of
the Trial Court the question whether the legal relationship
arising out of the agreement dated December 1, 1960 was in
the nature of a lease or of other character had to be
decided at the trial and the previous judgment being a
judgment by consent ,’could not operate as res judicata",
for, it was not a decision of the Court, and that the
consent decree in suit No. 149 of 1960 had not decided that
the agreement dated March 27, 1954, was of the nature of a
lease, and that in the plaint in that suit it was not even
averred that it was a lease.
The Trial Judge in overruling the objection did not decide
any issues at the stage of recording evidence : he was not
called upon to decide any issues at that stage. The
observations made by him obviously relate to the arguments
advanced at the Bar and can in no sense be regarded even
indirectly as a decision on any of the issues. But the High
Court has recorded a finding that the agreement dated
November 27, 1954, created a lease and that the consent
decree operated as res judicata. A consent decree, accord-
ing to the decisions of this Court, does not operate as res
judicata, because a consent decree is merely the record of a
contract between the parties to a suit, to which is
superadded the seal of the Court. A matter in contest in a
suit may operate as res judicata only if there is an
adjudication by the Court : the terms of s. II of the Code
leave no scope for a contrary view. Again it was for the
Trial Court in the first instance to decide that question
and there-after the High Court could, if the matter were
brought before it by way of appeal or in exercise of its
revisional jurisdiction, have decided that question. In our
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judgment, the High Court had no jurisdiction to record any
finding on the issue of res judicata in a revision
application filed against an order refusing to uphold an
objection to certain question asked to a witness under
examination.
The true nature of the order brought before the High Court
and the dimensions of the dispute covered thereby apparently
got blurred and the High Court proceeded to decide matters
on which no decision was till then recorded by the Trial
Court, and which could not be decided by the High Court
until the parties had opportunity to lead evidence thereon.
It may also be observed that by ordering that a question may
properly to put to a witness who was being examined, no case
was decided by the Trial Court. The expression "case" is
not limited in its import to the entirety of the matter in
dispute in an action.
442
This Court observed in Major S. S. Khanna v. Brig. F. J.
Dillon(1) that the expression "case" is a word of
comprehensive import : it includes a civil proceeding and is
not restricted by anything contained in s. 115 of the Code
to the entirety of the proceeding in a civil court. To
interpret the expression "case" as an entire proceeding only
and not a part of the proceeding imposes an unwarranted
restriction on the exercise of powers of superintendence and
may result in certain cases in denying relief to the
aggrieved litigant where it is most needed and may result in
the perpetration of gross injustice. But it was not decided
in Major S. S. Khanna’s case(1) that every order of the
Court in the course of a suit amounts to a case decided. A
case may be said to be decided, if the Court adjudicates for
the purposes of the suit some right or obligation of the
parties in controversy; every order in the suit cannot be
regarded as a case decided within the meaning of
s. 115 of the Code of Civil Procedure.
The order passed by the High Court is set aside and the
Trial Court is directed to proceed and dispose of the suit.
We trust that the suit will be taken up early for hearing
and disposed of expeditiously. We recommend that the form
of the issues Nos. 11, 12 and 13 will be rectified by the
learned Trial Judge.
Filmistan will pay the costs of the appeal in this Court and
in the High Court.
G.C. Appeal allowed.
(1) 1964 4 S.C.R. 409.
443