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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,                 L13 Sup.  CI/69- 17

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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