Month: February 2018

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FACTS:  Syed Ismail and Ibrahim, sons of Maqdoom, filed a suit impleading their parents and appellant/purchaser (Mahboob Sahab), for possession of the suit lands and for mesne profits from the appellant (Mahboob Sahab). The averments made in support thereof are that their father had executed a gift deed giving 15 acres 38 gunthas, jointly in their favour and their mother Smt. Chandi, the third defendant, who in her turn, orally gifted over her share to Syed Ismail in April 1958 at the time of his marriage. Being minors, their father -second defendant, while cultivating the lands on their behalf, had colluded with the Patwari and executed sale deed in favour of the appellant (Mahboob Sahab) On their becoming aware of the same, they filed the suit since their father had no right, title and interest therein to alienate the lands. The sales, therefore, in favour of the appellant were invalid, inoperative and do not bind them. The appellant (Mahboob Sahab) pleaded that Maqdoom had entered into an agreement of sale. When Maqdoom and Smt. Chandi refused to execute the sale deed, he filed a suit for specific performance which was decreed on a contest and the sale deed of the abovesaid property was executed and registered by the court. Ibrahim son of Maqdoom acted as an attesting witness of the said sale. Their parents had not given any gifts which were set up only to defraud the appellant and none of the elements of a valid gift was fulfilled.

It was brought out at the trial that in another suit filed by Syed Ismail on the foot of a possessory mortgage, the executability of another decree obtained by another creditor, was impugned, wherein by judgment and decree, the Court held that Maqdoom had jointly gifted the lands to the respondents and their mother by a registered gift deed.

The aforesaid finding was pleaded to operate as res judicata against the appellant (Mahboob Sahab) in the present suit.

Issue: Whether the finding in another suit operates as res judicata against co-defendants in present suit?

Holding: The court held that for the application of the doctrine of res judicata between co-defendants four conditions must be satisfied, namely, that (1) there must be a conflict of interest between the defendants concerned; (2) it must be necessary to decide the conflict in order to give the reliefs which the plaintiff claims; (3) the question between the defendants must have been finally decided; and (4) the co-defendants were necessary or proper parties in the former suit.

Where the above four conditions did not exist the decree does not operate as res judicata.

The doctrine of res judicata must, however, be applied to co-defendants with great care and caution. The reason is that fraud is an extrinsic collateral act, which vitiates the most solemn proceedings of courts of justice. If a party obtains a decree from the court by practising fraud or collusion, be cannot be allowed to say that the matter is res judicata and cannot be re-opened. There can also be no question of res judicata in a case where signs of fraud or collusion are transparently pregnant or apparent from the facts on record. As found by the appellate court, Maqdoom was plying fraud upon his creditors by creating false oral gifts or spurious claims of mortgagees with a view to defraud them.

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No Court shall try any suit or issue in which the matter directly and substantially in issue has been directly and substantially in issue in a former suit between the same parties, or between parties under whom they or any of them claim, litigating under the same title, in a Court competent to try such subsequent suit or the suit in which such issue has been subsequently raised, and has been heard and finally decided by such Court.

Explanation VIII.-An issue heard and finally decided by a Court of limited jurisdiction, competent to decide such issue, shall operate as res judicata in as subsequent suit, notwithstanding that such Court of limited jurisdiction was not competent to try such subsequent suit or the suit in which such issue has been subsequently raised.

Facts: Wife of K by a settlement deed gave life estate to K and vested the remainder in favour of the Respondent (Narayan Nair). K, after the death of his wife, alienated the property by a registered sale deed in favour of N and C The respondent files a suit in the District Munsif court to restrain K from alienating the property and committing the acts of waste. Pending the suit the appellant purchased the suit property from N and C. The Trial Court decreed the suit and issued the permanent injunction. The appeal filed by K was dismissed. The appellant being not a party to the earlier suit, the respondent filed a second suit this time against K and the appellant for perpetual injunction restraining them from committing the acts of waste. The suit was decreed. Therein the validity of the appellant title was left open. The respondent filed a third suit in the court of subordinate judge for a declaration of his title and possession against the appellant. The trial court decreed the suit and granted mense profits. On appeal, it was confirmed. The second appeal was dismissed. Thus this appeal by special leave of the appellant.

Issue: Whether the decree of  District Munsif Court though of limited pecuniary jurisdiction would operate as res- judicata in the subsequent suit between the same parties?

Holding:  Court held that decree of District Munsif Court though of Limited pecuniary jurisdiction would operate as res- judicata in the subsequent suit between the same parties.

In a suit for an injunction when the title is in issue for the purpose of granting an injunction, the issue directly and substantially arises in that suit between the parties. When the same issue is put in issue in a later suit based on title between the same parties or their privies in a subsequent suit the decree in the injunction suit equally operates as res judicata.

Therefore, even the decree founded on equitable relief in which the issue was directly and substantially in issue and decided, and attained finality, would operate as res judicata in a subsequent suit based on the title where the same issue directly and substantially arises between the parties.

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Appeal- Preliminary objection raised by the appellant was rejected which was that the present proceedings initiated by the deceased first respondent on before the Assistant Charity Commissioner to declare three Rozas (situated at three places Ahmedabad, Broach and Surat) that were presently private into public trusts, were barred by res judicata.  In the present proceeding, Assistant Commissioner accepted preliminary objection of res judicata but Joint Charity Commissioner Gujarat did not accept the plea.  He set aside the order and remanded the matter for inquiry. The Division Bench of the Gujarat High Court in First Appeal affirmed it by learned Assistant Judge. Aggrieved by this, appellant has filed this appeal and has raised the same plea of res judicata in High Court.

It was held that Broach and Surat Rozas are private trusts and not public trusts, and were not res judicata. Later District Judge renumbered the case and held Roza of Ahmedabad to be a public trust. High Court held that Broach and Surat Rozas are private trusts and not public trusts, and was not res judicata. Later District Judge renumbered the case and held Roza of Ahmedabad to be a public trust.

Supreme court in a special leave petition held that the appeal failed and the Rozas of Broach and Surat remained to be private trusts as the respondent (sajjadanashin)who was in charge of them had obligations to fulfil, like a pious obligation and charitable purposes and maintenance of members of his family. It wouldn’t operate as res judicata.

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Facts- In this case, the respondent filed a suit (before senior sub-judge) for the ejection of the appellant and also the arrears due to his non-payment of rent. The decision to the suit was given ex parte. The application under Order 9, Rule 13 C.P.C. to set aside the ex parte decree was dismissed and was confirmed on appeal and later in revision by the High Court. When the respondent came for execution of ejectment decision the appellant objected that according to him the Controller under the Act was the competent authority regarding claims for ejectment and by necessary implication, the civil Court was divested of jurisdiction to take cognisance and pass a decree for ejectment. That objection was overruled on a further revision to the High Court also failed. Simultaneously the appellant had also filed a writ petition under article 227 of the Constitution which was also dismissed. The plaintiff then filed an appeal by special leave to the Supreme Court.

Issue- Whether the doctrine of res judicata applies to a case of a decree of nullity?

Judgement-A question relating to jurisdiction of a court or interpretation of provisions of a statute cannot be deemed to have been finally determined by an erroneous decision of a court. Therefore the doctrine of res judicata does not apply to a case of a decree of nullity. If the court inherently lacks jurisdiction consent cannot confer jurisdiction. Where certain statutory rights in welfare legislation are created, the doctrine of waiver also does not apply to a case of decree where the court inherently lacks jurisdiction. Therefore in the instant case, though the decree was passed and the jurisdiction of the court was gone into an issue at the ex parte trial, the decree thereunder is a nullity and does not bind the appellant. Therefore it does not operate as res judicata.

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Facts- In this case, a landlord won a decree against the tenants for eviction from the property but was not able to get possession and further then the act of Calcutta Thikka Tenancy came into force. An application was made by tenants under section 28 of the same act saying they were thikka tenants and the Munsiff ruled they were not and decree was not rescinded. By the time the revision came to place the ordinance and amendment of act omitting section 28 had already come forward. The court saw §1 clause 2 to see whether application under §28 was still alive and answered in positive, held the appellants were Thikka tenants, okayed the revision application and remanded the case for Munsiff to decide according to law. Munsiff took back the earlier decree after remand. High court then rejected the landlord’s application against Munsiff’s orders and his question of applicability of §28 was unsuccessful as the judge held there was Res Judicata between the parties.

Issue- Does the fact that in an earlier stage a court has decided an interlocutory matter in one way and no appeal has been taken therefore or appeal did lie and a higher court at a later stage of the same litigation consider the same matter again?

Principle of Judgement- An interlocutory order which did not terminate the proceedings and which had not been appealed from either because no appeal was present or even though an appeal was present an appeal was not taken, could be challenged in an appeal from the final decree or order. Remand was an interlocutory judgment which did not terminate the proceedings and so the correctness of it can be challenged in an appeal from the final order.

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Facts- The plaintiff (Moser Baer) took patent licensing for manufacturing discs from the defendant (Philips).  The agreement stated that in case of any disputes between the parties with regard to agreement (including any question regarding its existence, validity or termination) it shall be submitted to the competent courts of the Hague, the Netherlands, provided always that, in case Philips is the plaintiff, Philips may at its sole discretion submit any such dispute either to the competent courts in the venue of Licensee’s registered office, or to any of the competent courts in the Territory. Some dispute arose and first, the defendant backed down the defendant filed a suit in Hague against the plaintiff.

Through this application under Order 39 Rules 1 & 2 (Rules for giving Interim Injunctions), the plaintiff is seeking, as an interim injunction, to restrain the defendants from initiating any fresh proceedings against the plaintiff in a foreign court and from continuing with the suit filed by the defendant at The Hague, The Netherlands.

Issue- Whether injunction can be granted keeping in view the facts of the case.

Judgement- It was held that the court granting an anti-suit injunction must otherwise have jurisdiction over the matter. Similarly, the court rejecting a matter on the principle of forum non conveniens, must otherwise also have jurisdiction to entertain the same. It came to be established that present court had no jurisdiction over the matter and moreover The Hague was the court of preferred jurisdiction in respect of the defendant who filed a suit there. Also, there was no essential problem that the anti-suit injunction could be given as plaintiff didn’t establish any reason such as not being able to contest suit in Hague.

The parties may agree to have their disputes resolved by a foreign court which may be a neutral court or a court of choice creating exclusive or non-exclusive jurisdiction in it although such court may not otherwise have jurisdiction. This settled position eliminates any argument that may be advanced claiming that the courts of The Hague, the Netherlands, do not have jurisdiction and the parties could not by agreement confer jurisdiction on it.

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Facts- Prior to appearing before the Delhi High Court, the parties had filed a series of suits against each other in three different courts, which were on-going and the suits filed in the Delhi High Court was the fourth and the fifth suit filed.

In the fourth and the fifth suits filed, GSK and Horlicks filed two suits against Heinz India Ltd., alleging disparaging advertisements made by the latter. Heinz contended that the suits should not be heard on the principle of “forum non convenience” and the parties had already been heard extensively on the matter. GSK contended that the principle of “forum non convenience” had no application and the Court was bound to hear this case since it was within the Court’s jurisdiction.

Holding-

• The Court held that Section 151 of the Code gave it the power to pass any orders or decisions that it may see fit in the interests of justice. This power is only limited if there is an explicit prohibition against a certain order that the court wishes to pass.
• The Court was of the view that “forum non convenience” did not confer a jurisdiction on a court contrary to the provisions of section 20, but it came into effect where a court for valid and sound reasons, does not wish to entertain a suit that it otherwise has jurisdiction over.
• The court observed that it is accepted that Section 20 of the Code does not bar or prohibit parties from entering into a contract or mutual understanding that courts only at a particular location will have exclusive jurisdiction to decide the disputes and oust jurisdiction of courts located at other locations. This interpretation was used by the court to hold that the principle of forum non-convenience was not barred by, or alien to section 20 of the code.
• The court also held that while High Courts could not transfer cases to other high courts under section 24, and that power was reserved only with the Supreme court under section 25; the plaints of the suit could, however, be returned on the grounds of forum non convenience.
• The court further held that the doctrine of forum non-convenience is invoked by the court to not entertain a matter presented before it in view of the fact that there exists a more appropriate court of competent jurisdiction, which would be in a better position to decide the issue between the parties. In this way, it was distinguished from an anti-suit injunction, where one Court restrains the parties from approaching another court. “Forum non convenience” however, allows a court to refuse to exercise its own jurisdiction and directs parties to approach what it feels is the better, more appropriate forum.
• The court held that the principle of forum non convenience should not be exercised unless the court comes to a conclusion that the case can be tried most suitably in the alternative forum and it is in the interest of all parties, in the ends of justice and there are grounds not to entertain a party. There should be a clear, real and a distinct dis-advantage, to negate right of the plaintiff to decide the forum or the court where he wants to institute a suit.
•  It is appropriate to repeat that principle of ‘forum non-convenience’ can be applied rarely when there are overwhelming facts and interest of justice requires that a Court that has jurisdiction should not adjudicate the suit/legal proceedings. It should only be applied when failure to do so, could result in abuse of process of Court and cause grave injustice.

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• A party to the contract containing jurisdiction clause cannot normally be prevented from approaching the court of choice of the parties as it would amount to aiding breach of the contract, yet when one of the parties to the jurisdiction clause approaches the court of choice in which exclusive or non- exclusive jurisdiction is created, the proceedings in that court cannot per se be treated as vexatious or oppressive nor can the court be said to be forum non-conveniens.
• The burden of establishing that the forum of choice is a forum non- conveniens or the proceedings therein are oppressive or vexatious would be on the party so contending to aver and prove the same.
• Here, two contentions have been urged; the first is that the English Court is forum non-conveniens in view of the alleged breach of the agreement by the respondent in the manner not foreseen. This, in our view, is far from being a good and sufficient reason to ignore the jurisdiction clause. Even otherwise the fact that the parties had agreed to resolve their disputes arising under the agreement, shows that they had foreseen possible breach of the agreement by any of the parties and provided for the resolution of the disputes which might arise therefrom.
• And the second is that English Court has no connection with either of the parties or the subject-matter and it is not a court of natural jurisdiction. This reason can be taken note of when strong reasons are shown to disregard the contractual obligation. It cannot be a good and sufficient reason in itself to justify the court of natural jurisdiction to interdict action in a foreign court of choice of the parties.
• The rule that parties cannot confer jurisdiction on a court which does not possess it originally is not applicable to foreign courts and parties could confer jurisdiction on a court of neutral law.

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The Code of Civil Procedure has made a distinction between lack of inherent jurisdiction and objection to territorial jurisdiction and pecuniary jurisdiction. Whereas, an inherent lack of jurisdiction may make a decree passed by that court one without jurisdiction or void in law, a decree passed by a court lacking territorial jurisdiction or pecuniary jurisdiction does not automatically become void. At best it is voidable in the sense that it could be challenged in appeal therefrom provided the conditions of Section 21 of the Code of Civil Procedure are satisfied. It may be noted that Section 21 provided that no objection as to place the suing can be allowed by even an appellate or revisional court unless such objection was taken in the court of first instance at the earliest possible opportunity and unless there has been a consequent failure of justice.

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Fact:- Property is situated in Gurgaon District. But suit for declaration, for specific performance of an agreement for possession of property and for permanent injunction, was filed in Delhi court.

Issue:-

Whether the suit against the immovable property can be tried by the courts in the Delhi jurisdiction when the property is situated at Gurgaon.

Holding:-

The apex court held that section 16 recognizes a well-established principle that action against res or property should be brought in the forum where such res or property situate. A court within whose territorial jurisdiction the property is not situated has no power to deal with and decide the rights or interests in such property.

This Court found that the agreement conferring jurisdiction on a court not having jurisdiction was not legal, valid and enforceable

The proviso to Section 16, no doubt, states that though the court cannot, in case of immovable property situate beyond jurisdiction, grant a relief in rem still it can entertain a suit where the relief sought can be obtained through the personal obedience of the defendant. The proviso is an exception to the main part of the section which cannot be interpreted or construed to ‘enlarge’ the scope of the principal provision. It would apply only if the suit falls within one of the categories specified in the main part of the section and the relief sought could entirely be obtained by the personal obedience of the defendant. The proviso to section 16 is applicable only when the relief sought is obtainable through the personal obedience of the defendant, i.e., when the defendant has not at all go out of the jurisdiction of the court for such purpose. It enables a person to file a suit in the court within local limits of whose jurisdiction the defendant actually or voluntarily resides or carries on business or personally works for gain.

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