K.N. Radhakrishnan vs P.M.M. Rajammal and 6 others

S.S. Subramani, J.—Plaintiff in O.S. No. 776 of 1981, on the file of District Munsif, Tiruchengode, is the appellant. The appellant filed the

suit for declaration of his title to the property and for recovery of possession from the defendant and for mesne profits. It is his case that the plaint

property was purchased by his father under Ex.B2, dated 30-10-1919, and the plaintiff and his father were residing together in the same house.

They borrowed certain amounts from one Palani Chetty on a promissory note and mortgage. To discharge those debts, the plaintiff and his father

had executed a sale deed in favour of Palani Chetty and got a reconveyance agreement from him. The said sale deed was not registered. At that

time the plaintiff leased out the house to Palani Chetty. Palani Chetty and his wife Ponnammal were living in the house as tenants under the plaintiff.

As the sale deed was not registered, Palani Chetty filed a suit on the pronote and the plaintiff and his father contested the same on the ground that

the debts have been discharged by that sale deed. While the suit was pending Palani Chetty died. After trial the suit was also dismissed. In order to

get possession of the suit property from Ponnammal, who was a tenant, plaintiff and his father executed a sham and nominal sale deed on 12-7-

1962 in favour of the defendant, as they were advised by their Advocate Mr. M.S. Vijayaraghava Chariar Plaintiff was further advised by his

Advocate that an agreement of reconveyance can be taken from the defendant, and the defendant also executed a reconveyance agreement. After

that sale, plaintiff filed O.S. No. 596 of 1963. on the file of District Munsif, Sankari, through the defendant for recovery of possession from

Ponnammal. All proceedings were taken only in the name of the defendant as he was on record in order to get possession. Ultimately the matter

was settled by paying a sum of Rs. 3,700/- to Ponnammal. In that suit all the prior title deeds in respect of the plaint property were also filed. On

settlement of dispute, the defendant obtained possession of the properly and also all the prior title deeds. The plaintiff further laid that the

possession of the defendant was that of a tenant on his agreeing to pay monthly rent of Rs. 60/-. In the year 1969, plaintiff''s father died and

thereafter, plaintiff requested the defendant to pay rent and give possession. Defendant refused to do so, and therefore, a notice was issued to the

defendant to surrender vacant possession, and also to reconvey the property as was agreed by him. The defendant denied the reconveyance

agreement, and therefore, a suit was filed as O.S. No. 805 of 1973. on the file of District Munsif of Sankari at Salem, for specific performance of

the contract of the reconveyance agreement. The suit was dismissed by the trial Court and confirmed in appeal in A.S. No. 100 of 1975. on the

file of II Additional Subordinate Judge. Salem. The plaintiff took the matter in appeal before this Court as S.A. No. 224 of 1977. It was also

dismissed on 19.7.1978. While dismissing the Second Appeal, this Court observed that the plaintiff can seek the relief of declaration of his title, as

it was contended that the sale deed dated 12.7.1962 is sham and nominal. This observation, according to the plaintiff amounts to a liberty given to

the plaintiff to file a fresh suit for title, and therefore, the present suit was filed for declaration of his title and recovery of possession with mesne

profits.

The main contention raised by the defendant was that the suit is barred by res judicata. It was also contended that the sale deed in his favour

dated 12.7.1962 is not sham and nominal. The property was purchased for valid consideration, and at any rate, since he is in possession denying

the right of the plaintiff, the suit is also barred by Limitation and adverse possession.

The trial Court as per Judgment dated 30.7.1981, dismissed the suit with costs. The trial Court held that the earlier decision is res judicata and

the observation made by this Court in Second Appeal No. 224 of 1977, will not enable the plaintiff to file this suit. It also came to the conclusion

that the sale deed in favour of the defendant is not sham and nominal and it was conveyed to him for valid consideration.

Against the said Judgment, plaintiff preferred A.S. No. 21 of 1983, on the file of II Additional Subordinate Judge, Salem. The lower Appellate

Court also found that the present suit is barred by res judicata and dismissed the appeal with costs. The other findings of the trial Court are also

confirmed in appeal. It is against the concurrent Judgment, the plaintiff has preferred this Second Appeal, on the following substantial questions of

law :-

Whether the Courts below have properly appreciated and applied the principles regarding res judicata to the facts of the present case?

Whether the Courts below have properly appreciated and applied the principles to find out whether the transaction is a sham and nominal one to

the facts of the present case? and

Whether the courts below have misconstrued and omitted to construe the material evidence on record when they negatived the case of the

appellant?

The antecedent title of plaintiff''s father under Ex.B2 is admitted. The plaintiff himself filed the suit as O.S. No. 805 of 1973, for specific

performance of reconveyance agreement. In that suit, the plaintiff has alleged that the sale deed Ex.B1 is sham and nominal. The defendant

disputed that allegation and said that the sale deed in his favour -Ex.B1 is valid and the property was purchased by him for valid consideration. He

also denied having executed any reconveyance agreement. Ex. A4 is the Judgment of the trial Court in O.S. No. 805 of 1973, dated 14.7.1975.

Issue No. 1 in that case was ""Whether the sale deed dated 12.7.62 is only a nominal one as alleged in para 9 of the plaint?

The trial Court held that this issue is left open to be decided in a separate suit. It came to the conclusion that the reconveyance agreement is not

valid in law, and finally dismissed the suit.

The matter was taken in appeal by the plaintiff as A.S. No. 100 of 1975, on the file of II Addl. Subordinate Judge, Salem. Ex.A5 is the

Judgment of the appellate Court dated 20.3.1976. In paragraph 5 of the Judgment, the lower Appellate Court held thus:-

It is the contention of the plaintiff that the sale deed executed by him and his father on 12.7.1962 is only a nominal document and on that ground

he claims reconveyance. Therefore, it is necessary for a proper decision in this case to give a finding whether the sale deed in favour of the

defendant executed by the plaintiff and his father is a sham and nominal document and not intended to convey title to the defendant. For creating a

nominal document, there must be a motive. The motive alleged by the plaintiff is that in order to evict the prior occupants of the suit property

through legal proceedings, the sale deed Exhibit B1 was nominally executed by the plaintiff and his father in favour of the defendant. But it is not

made clear in what way the sale deed under Exhibit B1 had helped the plaintiffs case against the earlier occupants. It is not made out how the

plaintiffs attempts to get possession from the prior occupants would have been proved futile, if he had laid the suit himself. Hence, there is no clear

proof of motive for executing a nominal sale in favour of the defendant.

In Ex.A5. it was further found that the defendant was in custody of all the prior documents, and the motive alleged by the plaintiff is not correct,

since the defendant obtained possession, and that the purchase of properties under Ex.B1 was after verifying that the properties are free from

encumbrances, and the defend ant is not a name lender. Finally, in paragraph 10 of the Judgment - Ex. A5, it was held thus:-

In view of the above said overwhelming circumstances, I have no hesitation in coming to the conclusion that the sale under Exhibit B1 in favour of

the defendant was not a nominal one. On the other hand, it is a real sale transaction under which title to the suit house had validly passed on,'' to

the defendant.

In paragraph 11 of the Judgment - Ex. A5, it was held that ""the agreement for reconveyance is not a true document and the defendant has also not

executed any agreement of reconveyance as alleged in the plaint, and therefore, the plaintiff cannot get a decree for specific performance."" The

appeal was dismissed with costs.

Against the said Judgment, plaintiff preferred S.A. No. 224 of 1977. Ex.A17 is the copy of Judgment made by this Court in the said Second

Appeal. While dismissing the Second Appeal, this Court held thus-

If Ex.B.1, the alleged sale by the father of the plaintiff and the plaintiff in favour of the defendant itself as per the above recitals was sham and

nominal, and that no consideration was paid, not title could pass in favour of the defendant. That being so, there is no question of specifically

enforcing the suit contract under Ex. A1. The proper remedy, in my view, is to file a suit for declaration. Excepting to make these observations, I

find that the judgments of both the Courts below are unassailable. The Second Appeal will stand dismissed, however without costs.

The contention of the learned counsel for the appellant is that the observation of this Court viz. ""the proper remedy, in my view, is to file a suit

for declaration"" permits him to file a suit for declaration of title and recovery of possession. The principle of res judicata will not apply, when such

permission is granted is the sure and substance of the argument of learned counsel for the appellant. As against the said contention learned counsel

for the respondents contented that the above observation should not be construed as a liberty to file a fresh suit, for the suit has been dismissed,

confirming the Judgment of the trial Court as well as the Lower Appellate Court. According to the respondents, the above observation is one of

the reasonings for dismissing the Second Appeal, and to hold that the reconveyance agreement would not have been executed if the sale is sham

and nominal. It is further contended that the above observation is only the result of the recognition of the case of the defendant that the earlier

reconveyance agreement was a fraudulent document and at any rate the principle of res judicata cannot be taken away by those observations.

After having considered the rival contentions of both the counsel, I feel that the contention of the defendant has to be accepted.

In one of the very early decisions of the Privy Council reported in AIR 1925 P.C. 55 = 22 L.W. 58 (Fateh Singh and others v. Jagannath

Bakhsh Singh and another), a similar question was considered. The facts before the Privy Council were that certain reversioners instituted a suit for

declaration that a gift deed by a Hindu widow is void as against reversionary heirs of her husband. Besides the widow and the alienee some other

persons were also impleaded as defendants, including a person by name Ganga Bakhsh, who was a nearest reversioner. Under normal

circumstances, the suit ought to have been filed by Ganga Bakhsh, being the nearest reversioner. It is alleged in that case, that the nearest

reversioner is in-different to his rights, and therefore the plaintiff being remote reversioner is entitled to have a declaration. During the pendency of

the suit, the widow died, whose alienation was sought to be set aside. An application for amendment of the plaint was made by adding a prayer for

possession and also by adding a new ground for such a claim, viz., that according to the custom, both the nearer as well as the remote heirs will

inherit the property. The application for amendment was dismissed on the ground that it was an attempt to introduce a new case averring the family

custom. The suit was also dismissed. In the result portion it was held thus:-

''I, therefore, order that the plaintiffs being one degree remoter to the last male holder than Defendant No. 3 they have no cause of action. The suit

must be, therefore, dismissed.

After the dismissal of the suit, some of the reversioners filed a second suit for the same relief. In that suit the alienee contended that the decision in

the earlier suit is res judicata. The said contention was accepted. While dismissing the second suit filed by the reversioners, the trial Court has also

observed thus:-

''The death of the lady has given the plaintiffs a fresh cause of action for possession. I leave them to the liberty of filing a fresh suit for possession.

The effect of this observation was also considered by their Lordships of the Privy Council, and held thus:-

When the plaintiffs brought their first suit, they had to show their title to impeach the widow''s gift. For this purpose they had to show either that

they were some at least of the nearest reversionary heirs, or that the only nearer reversionary heir had colluded with the widow. In their plaint they

did not rely on collusion, which they only introduced in their replication. Taking, however, that view of the pleadings which is most favourable to

them and treating them as relying equally on both grounds of claim, it is now clear that they can only make out a claim to be some of the next

reversioners on the fooling of the family custom, and that the allegation of that custom therefore was an allegation which ""might and ought to have

been made"" within the meaning of Explanation 4.

Or, to put it in another way. One of the alternative cases on which they were basing their title to sue was their nearness of kin, and to prove their

nearness of kin it was essential to aver the family custom. They claimed as next heirs, and their claim was dismissed. They cannot fight it over

attain.

But, as the Judges in the Court of the Judicial Commissioner have observed, sortie complication was introduced by the language of the Judge who

tried the first case and by his expressing himself as if he had power to give leave to bring a fresh suit. It was contended on behalf of the plaintiffs

that in so expressing himself he was purporting to exercise the powers given to the Court by Order 23, which allows the Court in certain cases to

grant the plaintiff permission to withdraw from a suit with liberty to issue a fresh suit, in which case the bar against a fresh suit which is otherwise

imposed on a plaintiff who abandons his first suit is removed.

The same point was raised at their Lordships'' bar, but their Lordships agree with the Court of the Judicial Commissioner that it is not a good one.

There was no application for leave to withdraw the suit, nor was it withdrawn; it was dismissed and the power of the learned Judge ceased upon

this dismissal. It may have been unfortunate for the plaintiffs that the learned Judge thought that he had a power which he did not possess, hut

happily, as the Judges on the appeal observed, it is improbable that there was substance in the claim which they have been prevented from further

prosecuting.

In passing it may be observed that if the learned Judge thought that he was exercising power under 0.23 he must also have thought that the subject

mailer of any future suit would be the same subject mailer as that of the suit which he dismissed.

This confirms the view which the Courts below and their Lordships have taken.

(Emphasis supplied)

The above decision was considered by our High Court in AIR 1925 Madras 1162 - 22 L.W. 170 (Palani Goundou and others v. Suppia

Goundan and others). In that case, a previous suit by a presumptive reversioner for declaration that a mortgage by widow was not binding on the

reversionary heirs was dismissed, on refusal of his prayer to withdraw the suit with permission to bring a fresh suit with the following remarks: -

After all this suit is only for a declaration and there is no hardship for the plaintiffs reversioners if no permission to bring a fresh suit for declaration

is granted; for they could after the widows death bring a suit for possession, contesting also the present alienations.

On the basis of this observation, a second suit was filed. The question was whether this observation will take away the applicability of res judicata,

since the earlier suit was dismissed. At pages 1165 & 1166 of the reports, it was held thus:-

The respondent supports his contention that the matter has not become res judicata, by relying upon the (above) passage in the order of the

District Munsif in the previous suit, the order referred to by me, by which permission to withdraw from the suit with liberty to file a fresh suit was

refused.

...

I fail to see how these observations of the Munsif can prevent the rule of res judicata from applying In Patch Singh v. Jagannath Baksh Singh (1925

PC 55 = 22 L.W. 58), already referred to, a similar contention was put forward by reason of the words: ""I leave them to the liberty of filing a fresh

suit for possession,"" occurring in the previous judgment. But that contention was over-ruled by the Judicial Committee. The respondent also relies

upon Singa Reddi v. Subba Reddi (AIR 1915 (39) Madras 987). The second suit for possession was held not barred under O.23, R. 1, by

reason of the first suit for declaration being withdrawn without liberty.

This is clearly not an authority in favour of the respondent. O.23, R.1 Cl. 3 says:-

where the plaintiff withdraws from a suit without the permission referred to in sub-R.(ii), he shall be precluded from instituting any fresh suit in

respect of such subject-matter or such part of the claim.

The case, referred to, decided that the suit for possession cannot be considered as having been brought in respect of the same subject- matter as

the earlier suit for declaration. In the present case this section is utterly inapplicable for the very simple reason that the plaintiff has not withdrawn

from the suit without permission. It was open to the plaintiff to have adopted this course. But the case was allowed to be tried and judgment was

delivered in due course.

I am clearly of the opinion that the subject-matter of the action has become res judicata and that the plaintiffs suit, therefore, fails. The second

appeal is accordingly allowed and the suit is dismissed with costs throughout.

In AIR 1931 Madras 268 (Krishnaswami Mudliar v. Manikka Mudali), a learned Judge of this Court has held that ""even if the plaintiff had

alternative claims arising out of the same cause of action, he might and ought to have set up his alternative claims."" In the previous suit, the following

observation was made by the District Munsif:-

If the amount was found not to be due from defendant 1, the plaintiff will get a cause of action to sue defendant 2 for damages. This the plaintiff

can do only in a separate suit making the necessary allegations.�

Considering the above observation, the learned Judge held thus:-

There is abundant authority for the position that no such statement as this in a judgment will create in the plaintiff any right to bring a fresh suit

which he does not already enjoy. The code provides only one set of circumstances in which such a right arises, namely under the terms of O.23, R.

1, and as has been pointed out in Fateh Singh v. Jagannath Bakhsh Singh (cited supra), it is a necessary part of the procedure that in respect of a

portion of the claim the plaintiff should withdraw his suit or abandon part of his claim; and it is only then that permission can be granted to him to

institute a fresh suit in respect of the subject-matter withdrawn or abandoned. No such circumstances arises in the present case, and I cannot find

therefore that the plaintiff can derive from what the District Munsif said any defence against the plea of res judicata which appears to me to be

clearly established.

The decision reported in AIR 1931 Bombay 417 (Vyankatesh Shiverram Gokhale v. Krishna Bal Chavan and others) is a case where landlord

filed a suit for eviction alleging that the tenants are annual tenants. The tenants in that case put forward a contention that they are not annual tenants

but permanent tenants. Rejecting their claim, the suit was decreed. When the matter was taken in appeal, a contention was taken before the

Appellate Court, that they could not adduce their evidence and the question whether they are permanent tenants may be left open to decide by a

separate suit. On the said representation, the appellate Court held that ""the permission asked for is granted and the appeal is dismissed with costs.

On the basis of this observation, a separate suit was filed alleging that they are permanent tenants. What is the effect of the earlier decision was the

question that came up for consideration before the High Court of Bombay. At page 418 of the reports, it was held thus-

Order 12, P.6, was referred to for the tenants. But that rule refers to admissions and judgments on admissions and has no application to the

present question. Had the former suit been a suit for rent and not in ejectment and capable of decision without deciding the question of permanent

or annual tenancy and being so decided, that judgment could not be res judicata; Surendra Nath v. Kamakhya Narain Singh (AIR 1930 PC 45)

But as pointed out above, that was not the case, and under the circumstances it has been held by this Court that the mere fact that the Court refers

the party in its judgment to a fresh suit or gives liberty to bring a fresh suit is not sufficient to take the case out of the bar of res judicata: Tara

Chand v. Bai Hansli (1904 (6) Bom. L.P. 594). In that case the plaintiff who sited on title could have sued in the alternative as mortgagee, but did

not do so and asked for an amendment at a late stage and was refused but the Court in its judgment referred him to a fresh suit. Such a permission

in a judgment was held to be no bar to the application of the doctrine of res judicata when he tiled subsequently a suit on his mortgage. Similarly,

reversioners who ought to have relied upon custom but failed to do so and whose amendment for an addition was refused, filed a second suit

relying upon custom; it was held (hat though the trial Court while refusing the amendment gave them liberty to file a fresh suit for possession, the

second suit was barred by res judicata: Patch Singh v. Jagannath Bakhsh Singh (AIR 1925 PC 55) In this view it appears to me that here the

permission which the defendants-tenants sought could not be given to reserve the only question in suit. It was a permission which they could not

apply on the most elementary principles of judicial decision and which the Court could not give, and the permission purporting to be granted by the

learned subordinate Judge in appeal cannot save the present suit from being res judicata. They admitted their failure to adduce evidence in that suit

to prove permanent tenancy. They could not ask and the subordinate Judge had no power to give them permission to raise the same question in a

second suit with liberty to adduce fresh evidence.

In AIR. 1990 Kerala 88 (Bharathi Amma and others v. Kumaran Peethambaran and another), a learned Judge of Kerala High Court held that

bar of res judicata is mandatory. When it is applicable, it could be avoided only on grounds available under S.44 of the Evidence Act. Res

judicata is not concerned with the question whether the previous decision is right or wrong.

Mulla on CPC -Fifteenth Edition- Vol.1 - 1995, at pages 180 & 181, the learned author said thus:-

(9) Liberty To Bring A Fresh Suit:- Where a former suit between the same parties in the same Court and for the same relief results in a decree of

dismissal, but the Judgment leaves it open to the plaintiff to bring fresh suit and leaves ""open untouched and undecided all matters"" affecting the

right of the parties, the decree does not constitute res judicata, as such matters cannot be said to have been ""heard and finally decided''"" within the

meaning of this section. But if the Court has in the particular circumstances of a case no power to reserve liberty to a party to bring a fresh suit the

subsequent suit may be barred as res judicata notwithstanding the liberty to bring a fresh suit. Thus, in ""Watson v. Collector of Rajshahye, the

former suit was dismissed for the plaintiffs failure to produce evidence, but a direction was given that the plaintiff could institute a fresh proceeding

as if no suit had been brought. Nevertheless the Privy Council held that the subsequent suit was barred by res judicata for the reservation was of

no effect. Again, Fateh Singh v. Jagannath Bakhsh, is a case directly on this point. In that ease the plaintiffs brought a suit to set aside a gift made

by a Hindu widow out other husband''s estate; they alleged that they were presumptive heirs. The widow died pending the suit. After her death the

plaintiffs applied to amend the plaint by setting up a family custom of inheritance. Upon that application failing and the plaintiffs admitting that apart

from the alleged custom they could not succeed, the trial Court dismissed the suit, but gave them liberty to file a fresh suit for possession.

Subsequently, the plaintiffs brought another suit to recover from parties to the former suit a share in the property basing their claim upon family

custom. It was held that the suit was barred by res judicata since the custom was a matter which might and ought to have been set up in the former

suit, and further, that the trial Court having dismissed the suit, it had no power under O.23 r. 1(1), to give liberty to bring a fresh suit.

On the basis of the above legal position, it cannot be doubted that the Judgment of this Court will not give the plain tills a liberty to file a fresh

suit and the applicability of resjudicata also cannot be taken away. The Court finds that the Judgments in O.S. No. 805 of 1973 and A.S. No. 100

of 1976 are unassailable, and the Second Appeal is dismissed. The plaintiff also did not seek a liberty to file a fresh suit and he did not want

permission to withdraw the suit, after filing the Second Appeal. In spite or the fact that the trial Court in O.S. No. 805 of 1973, held whether

Ex.B1 is sham and nominal need not be considered, when the matter was taken in appeal, he again asserted his right that Ex.B1 is sham and

nominal and wanted a decision on that point. The appellate Court considered this question and held by entering detailed reasoning that Ex.B1 is a

valid transaction and has come into effect and the defendant is the owner having purchased the properly for valid consideration. By dismissing the

Second Appeal, this Court upheld that decision by stating that they are unassailable. The observation made, while dismissing the Second Appeal, is

not a liberty to file a fresh suit, for Order 23, Rule 1, C.P.C., has no application to the facts. If Order 23, Rule 1, C.P.C., has no application, the

liberty is also not given.

According to me, the observation could be supported in favour of the defendant. If the case of the plaintiff is that Ex.B1 is sham and nominal,

he need not have taken an agreement for reconveyance. By taking an agreement for reconveyance, he admits the title of the defendant, and

therefore, he cannot contend that Ex.B1 is sham and nominal. It is in that context, this Court held that if Ex.B1 is sham and nominal, the suit ought

to have been one for declaration and recovery of possession and not for specific performance of the agreement for reconveyance. It is only one of

the supporting reasons for dismissing the Second Appeal. Holding that Ex.B1 is not a sham and nominal document, is not a liberty given to the

plaintiff to file a fresh suit. I hold that the finding of the Courts below that the present suit is : barred by res Judicata is correct. The other two

questions do not arise for consideration, in view of my finding that the suit is barred by res judicata. Findings on those issues are also entered in the

previous litigation. Therefore, those questions of law are also to be found against the appellant. In the result the substantial questions of law are

found against the appellant, and the second appeal is dismissed with costs.