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CASE NO.: Appeal (civil)  2592-2593 of 2000

PETITIONER: AANAIMUTHU THEVAR (DEAD) BY LRS.                         

RESPONDENT: ALAGAMMAL & ORS.                                                 

DATE OF JUDGMENT: 12/07/2005

BENCH: D. M. Dharmadhikari & Tarun Chatterjee

JUDGMENT: J U D G M E N T  

Dharmadhikari J.

       In these two appeals arising out of the impugned common  judgment passed by the High Court of Madras in Second Appeal, the  neat question involved is one of res judicata.   The trial court in its  common judgment passed in cross suits jointly tried came to the  conclusion that the judgment in former suit OS No. 843/74 between  the predecessor-in-title of the appellant and the respondents cannot  operate as res judicata to bar the present suit claiming title to the suit  property by the appellant. The High Court by the impugned common  judgment in Second Appeal has reversed the judgment of the two  courts below and held that the judgment in former suit OS No.843/74  decided on 28.2.1976 operates as res judicata under section 11 of the  Code of Civil Procedure. Consequently, the suit filed by the appellant  has been  dismissed and the cross suit filed by the respondents has  been decreed.

       The facts necessary for deciding the issue of res judicata are as  under:-

       The property involved in the two cross suits is house door  No.206 in Harvaipatt township in Madurai, South Taluk.  The house  was allotted by Madurai Mills Cooperative Housing Society to mother of  Muthuswami Naidu (the husband of respondent No.1 and father of  respondents 3 to 7).  After the death of mother, the formal document  of conveyance by the Housing Society came to be issued in favour of  Muthuswami Naidu on 15.3.1975.  Muthuswami Naidu executed a  mortgage deed on 3.12.74 for raising a loan of Rupees three thousand  from one Chhinnaswamy who was co-plaintiff with him in the former  suit OS No. 843 of 1974.

       Muthuswami Naidu as the mortgagor under mortgage deed  dated 3.12.1974 and Chinnaswamy as the mortgagee jointly filed civil  suit as OS No. 843/74 in the court of District Munsiff, Thirumangalam  against respondent Alagammal (the wife of Muthuswami respondent  No.1 herein).  The mortgagor and mortgagee filed  suit simplicitor for  seeking permanent injunction to restrain the respondent wife of  Muthuswami from interfering with the possession of the suit house on  the ground that it was owned and possessed by them.   

       The aforesaid suit OS  No.843/74 was resisted by the respondent  wife pleading inter alia that when disputes had arisen in the married  life of the parties, a village panchayat was called in the year 1971 in  which the respondent agreed to relinquish his ownership of the suit  house in favour of his wife and children for their residence on the  condition that his wife would discharge dues against the house.  In

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that suit the wife denied the existence of any alleged mortgage deed  and questioned validity of the same.  

       On the pleadings of the parties in the former suit OS No.843/74,  the following issues were framed:-

1)      Whether the othi deed (mortgage deed) dated 3.12.1974  executed in favour of the second plaintiff is true, valid and  binding upon the defendant?

2)      Whether the plaintiffs are entitled to the relief of injunction  prayed for?

3)      Whether the defendant was in possession of the suit property?

4)      Whether the suit is bad for non-joinder of a necessary party?

5)      Whether the alleged settlement pleaded by the defendant is  true?

6)      To what relief, if any, are the plaintiffs entitled?

       On the first issue, the trial court held that registered mortgage  deed seemed to be genuine but it was not binding  as mortgagor had  failed to enter the witness box to prove it.  On issue Nos.2 & 3, the  trial court answered them in favour of the respondent wife by  recording a finding that she had proved to be in possession of the suit  house.   Tax receipts evidencing payment of house tax were relied in  proof of her possession.  On thee findings, it was held that relief of  permanent injunction to restrain the respondent wife from enjoying  the suit property could not be granted.  On issue no. 4 regarding the  alleged settlement reached in village panchayat and relinquishment of   ownership and right by Muthuswami in the suit house in favour of his  wife and children, the trial court recorded a finding that fact of such  settlement in panchayat had been proved.  The finding recorded in the  words of the trial court is as under:-  "In as much as the possession of the defendant on the date of the  suit having been established and no evidence having been let in by the  plaintiffs to disprove the allegation that the property was settled  upon the defendant in a panchayat which was held about 4 years ago.  It has to be held that settlement pleaded by the defendant is true. I  answer this issue in favour of the defendant."

       Issue No.4 on non-joinder of children as parties to the suit, was  also decided in favour of the defendant. It was held that in the  Panchayat settlement, the husband relinquished the property in favour  his wife and children.  Therefore, children were necessary parties and  the suit was bad for mis-joinder of a necessary party.

       The aforesaid judgment with decree of the trial court at  Thirumangalam in suit OS No.843/74 was not appealed against by   Muthuswami Naidu, the husband or his mortgagee and has attained  finality.   

       After the judgment and decree against him in the above  mentioned suit OS No. 843/74, Muthuswami Naidu sold the suit house  by registered sale-deed at 15.3.1975 in favour of Annaimuthu Thevar  the appellant herein.  On the basis of his purchase, the present  appellant instituted civil suit OS No.335/83 seeking declaration of his  title and possession from respondent and her children.

       The respondent wife jointly with her children filed cross suit  registered OS No.202/84 seeking permanent injunction against the  present appellant claiming ownership of the suit house under the

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settlement of the year 1971 in panchayat and the consequent  judgment and decree passed inter se between her and her husband  Muthuswami in civil suit OS No.843/74 decided on 28.2.1976.  The  cross suits were jointly tried and decided by common judgments giving  rise to two appeals before the first appellate court and two second  appeals before the High Court which have all been decided by   common judgments.

       The trial court and the first appellate court by common  judgments delivered by them respectively rejected the plea of res  judicata raised by the respondent wife and her children on the ground  that in the former suit OS No. 843/74 the question of title to the suit  house was neither directly nor substantially involved and decided.  The  trial court and the first appellate court, therefore, decreed the suit of  the present appellant and dismissed the cross suit of the wife and  children.

       The High Court in the two Second Appeals by the impugned  judgment, however, took a contrary view and reversed the judgments  of the courts below. On examining the counter pleas and the judgment  of the trial court in the former suit between the husband and wife, the  High Court came to the conclusion that the bar of res judicata squarely  applied to the subsequent suit filed by the purchaser of the suit  property from the husband of the respondent wife.  According to the  learned Judge of the High Court in the former suit, the right and title  of husband Muthuswami to the suit house was substantially involved  which was negatived and the right of the wife and children was upheld.   The finding of res judicata recorded by the High Court needs to be  reproduced as arguments have been addressed on it by the learned  counsel on either side before us in these appeals :-

"In the earlier judgement right and title of Muthuswami had been  negatived and that of Alagammal and her children were upheld.  Therefore it follows that the plaintiff in the present suit claiming  title through Muthuswami cannot be sustained as by the earlier  judicial determination right, title and interest of Alagammal and her  children had been upheld and that of Muthuswami had been  negatived. The earlier decision namely Ex.B.14 and B.15 definitely  constitutes res judicata. That apart, a finding in the earlier suit that  Muthuswami has no title or interest in the suit property and  Alagammal and her children are the owners was the decision which  had been directly and substantially necessary for the disposal of the  suit O.S. No. 843 of 1974 and therefore it has to be held that the  issue in the earlier suit in which the matter was directly and  substantially an issue constitutes res judicata."

       The High Court placed reliance on the decisions of this Court  reported in Sulachana Amma vs. Narain Nair [1994 (2) SCC 14];  Ishar Singh vs. Sarwan Singh [AIR 1965 SC 948]; and Jumma  Masjid vs. Kodimaniandra Deviah [AIR 1962 SC 847].

       Learned counsel appearing for the appellant after taking us  through the issues and findings recorded by the trial court in the  former suit OS No.843/74 contended that question of title to the suit  house was neither expressly nor substantially involved in the said suit  and therefore the judgment cannot operate as res judicata in the  subsequent suit.  The contention advanced is that the suit was filed on  the basis of a mortgage deed executed on 3.12.1974 by Muthuswami  in favour of Chinnaswamy.  In that suit jointly filed, Muthuswami was  not examined to prove the mortgage deed and hence decree of  permanent injunction was refused on a finding that the respondent  wife and her children were in possession of the suit house on the basis  of the alleged settlement in village panchayat which was reached for  resolving family dispute between Muthuswami Naidu - the husband

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and his wife the respondent.

       On the other side, learned counsel appearing for the respondent  wife and her children supported the judgment of the High Court by  contending that the former suit was for permanent injunction on the  basis of right claimed by Muthuswami Naidu as owner of suit house  with competence to execute a mortgage deed in favour of  Chinnaswamy plaintiff No.2 in that suit.  The suit for injunction  substantially was based on the claim of ownership of the suit house by  the mortgagor and the right to remain in undisturbed possession by  the mortgagee.  It is, therefore, contended that the issue of title was  directly and substantially in issue in the former suit. Alternatively, it is  argued that doctrine of constructive res judicata in accordance with  Explanation IV to section 11 of the Civil Procedure Code clearly barred  the subsequent suit filed by the purchaser from Muthuswami.  Reliance  is placed on AIR 1966 SC 1061 and 1997 (2) SCC 552.          The main legal question that requires decision is whether the  judgment in the former suit directly or constructively operates as res  judicata in the subsequent suits which have given rise to these  appeals.  

       The undisputed facts are that the house in suit was initially  allotted to the mother of Muthuswami by Madurai Mills Co-operative  Housing Society. After the death of his mother, Muthuswami as son  inherited the right in the house. The house was in possession of the  family of Muthuswami. According to the case of the respondent wife,  Muthuswami was a spendthrift and had wayward habits.  As pleaded in  the former suit, differences and family disputes arose between  Muthuswami and her. In the year 1971, a village panchayat was held  in which Muthuswami agreed to relinquish his right of ownership in the  suit house in favour of his wife and children.  However, pursuant to the  decision of the panchayat and the commitment made by the husband  in the course of panchayat proceedings, no formal document of  conveyance came to be executed in favour of the wife.  

       Instead of honouring the commitment made in thevillage  panchayat, Muthuswami executed the registered deed of mortgage on  3.12.1974 in favour of Chinnaswamy. Muthuswami as the mortgagor  and Chinnaswamy as the mortgagee  jointly filed  the former suit OS  No. 843 of 1974 against Alagammal wife of Muthuswami, for seeking a  decree of permanent  injunction simplicitor. The foundation of the suit  as appears from the judgment, was that Muthuswami as the owner of  the suit house had executed a mortgage with delivery of possession to  Chinnaswamy. The cause of action for the suit seeking mandatory  injunction was alleged to have arisen as the wife of Muthuswami was  asserting her right to the suit house and interfering with their  possession. The aforesaid former suit was resisted by Alagammal  mainly on the ground that in the village panchayat her husband had  relinquished his right of ownership of the suit house in her favour and  their children for their residence. She also denied the existence and  validity of the registered mortgage deed.  

       The issues framed in the former suit have been reproduced  above. No specific issue seems  to have been framed on title or  ownership of the suit house but the issues raised  on the existence and  validity of the mortgage deed and the fact or otherwise of the alleged  settlement pleaded by the defendant in the village panchayat  substantially involved decision on claim of right and ownership of the  house by the husband. The other issue raised was concerning the  dispute as to who was in possession of the suit house.  

       As is apparent from the judgment in the former suit,  Muthuswami, who was claiming to be the owner and the mortgagor,  did not enter the witness box either to prove the execution of the

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mortgage or to deny the case pleaded by his wife that he had  relinquished his right in the suit house in the settlement reached in the   village panchayat. The suit jointly filed by Muthuswami as  owner/mortgagor and Chinnaswamy as mortgagee was dismissed on  findings inter alia that mortgage was not proved and that in village  panchayat, a settlement had indeed taken place in favour of wife and  children who were in possession. It was also held that the children  were necessary parties to the suit and their non-joinder was fatal to  the suit. The dismissal of the suit filed by Muthuswami as mortgagor  and Chinnaswamy as mortgagee against wife of the former was not  appealed against by either of the plaintiffs. The same, therefore,  attained finality.          The present cross suits arose when Muthuswami, after obtaining  a formal conveyance deed of the house from the housing society on  15.3.1975, executed a registered  deed of sale of the suit house on  28.2.1983 in favour of the present appellant.  

       The present two appeals arise out of the cross suits - the one  filed by the purchaser on the basis of registered sale deed in his favour  on 28.2.1983, against the wife of Muthuswami and her children.  The  other suit was filed by wife of Muthuswami and her children seeking  injunction against her husband and the present appellant as purchaser  from him.  

       On these above undisputed facts, the main argument advanced  by the learned counsel for the appellant is that at the time of filing of  the former suit, Muthuswami had neither any transferable title nor any  right to execute a mortgage. He became owner of the suit house only  on 15.3.1975 when a formal deed of conveyance was executed in his  favour by the housing society. It is also submitted that in the former  suit, there was no issue of title or ownership of the suit house directly  or substantially involved. The findings and the judgment in the former  suit against Muthuswami and the alleged mortgagee rested on the  grounds of non-proof of mortgage deed, fact of settlement in village  panchayat and possession of the house to be with the wife and  children. Non-joinder of children as parties to the suit was also  additional ground to dismiss the former suit. The present subsequent  suit is founded on the registered sale deed executed on 28.2.1983 by  Muthuswami after he had obtained a saleable title under formal deed  of conveyance from the Housing Society on 15.3.1975.  

       On the other side, learned counsel appearing for the wife  Alagammal and her children supported the judgment on doctrine of res  judicata as applied by the High Court to the subsequent suits. He  contends that in the issues framed in the former suits, the question of  title and ownership of the suit house were substantially involved. In  any case, the doctrine of constructive res judicata applies under  explanation IV to section 11 of the Code of Civil Procedure to the  present case.

       Section 11 of the Code which contains the doctrine of res  judicata states :-  "11. Res judicata.- 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."

[Emphasis added]             The main part of section 11 undoubtedly applies. The former suit  was jointly filed by Muthuswami as owner and mortgagor with the

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mortgagee. The subsequent suit is by the appellant who is purchaser  from Muthuswami. The present appellant is, therefore, litigating under  the same title which Muthuswami had in the suit house.  

The next question that arises is whether the issue of ownership  and title in the suit house was directly and substantially in issue in the  former suit or not. In the subsequent suit undoubtedly the foundation  of claim is title acquired by the present appellant under registered sale  deed dated 28.2.1983 from Muthuswami.  

       If we examine the nature of claim and pleadings in the former  suit of Muthuswami as mortgagor and plaintiff No. 2 the mortgagee,  the suit appears to be based on the alleged right of Muthuswami as  the owner to execute the mortgage. The decree of mandatory  injunction in the former suit was sought on the ground that  Muthuswami could execute a valid mortgage with possession in favour  of the mortgagee and defendant wife had no right or title, whatsoever,  to interfere with the possession of the plaintiffs. The suit was resisted  by the wife Alagammal on the ground that she had been placed in  possession of the suit house with her children for their residence on  the alleged settlement reached in the village panchayat in the year  1971 in which her husband relinquished his right in the suit house in  their favour. True it is, that relinquishment of an immovable property  cannot be validly made without a written and registered document. It  seems from the conduct of  Muthuswami that he had no courage to  enter the witness box in the former suit to face the cross-examination  on behalf of the wife on the existence of alleged settlement in the  village panchayat and relinquishment by him of his right in the suit  house. It is apparent that he wanted to wriggle out of that settlement  reached in village panchayat.  As a first attempt in that direction he  executed a mortgage deed to enable the mortgagee to institute a suit  against his wife to dispossess her and deprive her of the right in the  house which Muthuswami had earlier agreed to grant to her in the  village panchayat. Having failed in the joint suit filed by him with his  mortgagee, he did not prosecute the litigation any further and  preferred no appeal. As a second attempt to deprive his wife and  children of right in the house, he executed a registered sale deed in  the year 1983 in favour of the present appellant.  The aforementioned  sale deed was executed after he had obtained a document of  conveyance from the housing society and that he could obtain being  an heir his late mother who was the original allottee of the house from  the housing society. The present subsequent suit has been filed by the  present appellant who is purchaser by registered deed dated  28.2.1983 obtained from Muthuswami.  

       The former suit in which decree of permanent injunction was  sought was clearly founded on the claim of Muthuswami as the owner  of the suit house to execute a mortgage. The issue of title or  ownership of the suit house was thus directly or substantially involved  in the former suit.  

       We find sufficient force in the alternative contention advanced on  behalf of wife Alagammal and her children that doctrine of constructive  res judicata, as contained in explanation IV to section 11 of the Code  certainly, can be invoked against the present appellant, who claims by  a purchase from  Muthuswami. Explanation IV to section 11 of the  Code states :-

"Explanation IV.-Any matter which might and ought to have been  made ground defence or attack in such former suit shall be deemed  to have been a matter directly and substantially in issue in such suit."  

       In the former suit, respondent Alagammal wife of Muthuswami  clearly set up her own right of ownership to the suit house on the basis  of settlement and relinquishment of the suit house in her favour by the

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husband in the village panchayat. Claim of such ownership and title   might have been found ineffectual in law, as pursuant to such oral  relinquishment in village panchayat, the husband did not execute any  formal written and registered document. On the aforesaid plea of wife  Alagammal, in the former suit in which she had set up claim of  ownership of the suit house on the relinquishment of right by her  husband in village panchayat, it was open to her husband Muthuswami  and his mortgagee to raise a counter plea that the alleged oral  relinquishment in village panchayat was ineffectual in law and  conferred no title on her.  

       In the former suit the wife had claimed to be in possession with  her children of the suit house pursuant to the settlement reached with  her husband in the village panchayat. In the former suit, in reply to  the plea of the wife, it was open to the plaintiffs to alternatively seek a  decree of possession on the basis of their title to the suit house.  

       On the date of former suit, true it is that there was no formal  document of conveyance of the suit house executed by the society in  favour of Muthuswami.  There existed on that date merely a right he  had inherited in the house allotted to her late mother. Between an  allottee of the house from the housing society and the person merely  in occupation as licencee or member of the family, the allottee has a  better title. In the former suit, the claim of Muthuswami was as an heir  of his late mother who was the allottee of the house and was in  possession. As against him, the claim set up by his wife was of an oral  relinquishment by Muthuswami in her favour in village panchayat.  Between these two competing claims of ownership and right of  possession of the suit house, the husband certainly had a better right  to remain in possession and, if dispossessed, to claim possession. This  ground of seeking possession and permanent injunction was available  to Muthuswami against his wife in support of his joint claim with his  mortgagee. The aforesaid plea founded on ownership and mortgage  having not been raised in the former suit, the doctrine of constructive  res judicata under explanation IV to section 11 of the Code is clearly  attracted.

       We can not prepared to accept the argument advanced on behalf  of the above appellant as the successor-in-title of Muthuswami that in  the absence of formal deed of conveyance of the suit house by the  housing society in favour of Muthuswami, the issue of title to the suit  house could neither be raised nor was raised in the former suit. On the  examination of case pleaded by the parties in the former suit and the  judgment rendered therein we find that the plea of ownership to the  suit house was substantially involved for seeking relief of permanent  injunction.   Undoubtedly, such plea of ownership could and ought to  have been raised in the former suit. Therefore, this subsequent suit  filed by the present appellant as purchaser from Muthuswami is barred  by constructive res judicata and the High Court was right in holding  accordingly. See the following observations of this Court in the case of   Sulochana Amma v. Narayan Nair, (1994) 2 SCC 14 :-    "(It was) contended that the remedy of injunction is an equitable  relief and in equity, the doctrine of res judicata cannot be extended  to a decree of a court of limited pecuniary jurisdiction. We find no  force in the contention. It is settled law that in a suit for injunction  when title is in issue for the purpose of granting 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."

For the reasons aforesaid, these two appeals preferred by the  appellant are dismissed and the judgment of the High Court is upheld.

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In the circumstances, we make no order as to costs in these  appeals.