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CASE NO.: Appeal (civil)  8246 of 2004

PETITIONER: Bhanu Kumar Jain

RESPONDENT: Archana Kumar & Anr.

DATE OF JUDGMENT: 17/12/2004

BENCH: N. Santosh Hegde, B.P. Singh & S.B. Sinha

JUDGMENT: J U D G M E N T

(Arising out of S.L.P. (C) No. 6392 of 2003)

S.B. SINHA, J.

       Leave granted.

       The remedies available to a defendant in the event of an ex-parte  decree being passed against him in terms of Order 9 Rule 13 of the Code of  Civil Procedure (Code) and the extent and limitation thereof is in question  before us in this appeal which arises out of a judgment and order dated  19.12.2002 passed by the High Court of Madhya Pradesh at Jabalpur in First  Appeal No. 109 of 1986.

       The fact of the matter relevant for the purpose of this appeal is as  under:         One Shri N.N. Mukherjee was the owner of the premises in suit.  He  died leaving behind his wife Smt. Suchorita Mukherjee, (original defendant  No. 1), son Shri P.P. Mukherjee, (original plaintiff) and daughter Smt.  Archana Kumar, (original defendant No. 2).  The family is said to be  governed by Dayabhag School of Hindu Law.  The original plaintiff filed a  suit for partition in the year 1976.  The original defendants filed their written  statements.  Respondent No. 2 herein, Surender Nath Kumar who is husband  of Smt. Archana Kumar, Respondent No. 1 herein also filed a written  statement and counterclaim by setting up a plea of mortgage by deposit of  title deeds in respect of property in suit said to have been created by his  mother in law (original defendant No. 1).   

       Smt. Suchorita Mukherjee died on 15.9.1984 whereupon Respondent  No. 1 herein was transposed as defendant No. 1; whereas Respondent No. 2  was transposed as defendant No. 2 therein.  In the suit, the defendant No. 1  did not file any document.  Respondent No. 2 also did not file any document  in support of his purported counter claim.           Having regard to the rival contentions raised in the pleadings of the  parties, the following issues were framed:

"1(a) Whether partition of property owned by late  Shri NN Mukherjee had taken place during his life  time?

(b) If so, what property was available for partition?

(c) What were the shares allotted to the Plaintiff  and the defendant No. 1 in the said partition?

(d) Whether the Plaintiff had separated from his

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father during his life time and was in separate  possession of his share in the property?

2. Whether the Plaintiff is entitled to = share and  separate possession of his share in the property  described in para 3 of the plaint?

3. Whether the plaintiff is entitled to claim mesne  profits for the income derived by the defendant  No. 1 from the share in the property? If so, at what  rate and to what sum?

4. Whether the claim in suit is barred by  limitation?

5. Whether the decision in Civil Suit No. 63-A of  1972 decided on 22.11.75 by IInd Civil Judge,  Class II, Jabalpur will operate as res-judicata in the  present case?

(a) Whether the suit is not maintainable as no relief  has been sought against defendant No. 2?

(b) Whether at the request of Defendant No. 1,  Defendant No. 3 spent Rs. 21000/- till 31.10.74 on  construction and alteration of the suit property and  the interest as on 31.10.74 came to Rs. 10,000.00?

(c) Whether in order to secure the above amount  defendant No. 1 deposited the title deeds of the suit  property with defendant No. 2 and created a  mortgage by deposit of title deeds in favour of  defendant No. 3 and the suit property stands  mortgaged with the defendant No. 3?

(d) Whether defendant No. 3 further spent Rs.  9500/- in the year 1976, 1977 and 1980 and  defendant No. 2 spent Rs. 10500.00?

(e) Whether defendant No. 3 is entitled to get  declaration shown as in para 6(A)(B)(C) of the  written statement of defendant No. 3?

(f) Whether the mother of defendant No. 2 had  made will in favour of defendant No. 2 and thus,  after the death of mother defendant No. 2 became  absolute owner and plaintiff has no right?

(g) Whether the plaintiff had already separated in  the year 1951 and thus he has no right over the suit  property?

6. Relief & Costs?"

       An additional issue was framed on 13.6.1985 and the case was fixed  for evidence on 3.8.1985.  On 3.8.1985 nobody was present on behalf of the  defendant but the plaintiff’s advocate was present whereupon, the case was  directed to be placed after some time.  At 2.35 p.m. a request was made for  adjournment on the ground that the defendant could not come from Delhi  whereafter an application was filed by the plaintiff that he had closed his  evidence.  It was further contended that the burden to prove the additional  issue rested on the defendant and if any evidence is to be adduced, he should  adduce evidence first.  It appears that the plaintiff was also not cross- examined by Respondent No. 1 herein.  As the plaintiff was attending to the  court proceedings from Calcutta, a cost of Rs. 200/- was imposed on the

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defendants.  It was further directed that if the costs were not paid, the right  of cross-examination will be closed.  The matter was again posted on  7.10.1985 on which day again the counsel for the defendant was not present.   Even the costs awarded against them was not paid.  Having regard to the fact  that the Respondent No. 1 herein was absent and did not cross-examine the  plaintiff; the case was directed to be posted ex-parte against her and the right  of cross-examination was forfeited.  The case was fixed for final argument  on 11.10.1985.  Yet again on 11.10.1985 the plaintiff was present but the  defendants were not.  Allegedly, owing to strike of the advocates the case  was adjourned for 14.10.1985.  On 14.10.1985 the learned Judge fixed the  case for 25.10.1985 for delivery of judgment.  The judgment, however, was  not pronounced on 25.10.1985.  However, on the next date, viz., 30.10.1985,  an application was filed by the Respondents herein purported to be in terms  of Order 9, Rule 7 of Code for setting aside the order dated 7.10.1985  whereby the suit was posted for ex-parte hearing.  The said application was  rejected by an order dated 31.10.1985.  A preliminary decree for partition,  thereafter was passed on 1.11.1985 in favour of the plaintiff.   

       An application under Order 9, Rule 13 of Code was filed by the  Respondents herein on 5.11.1985 which was marked as Misc. Judicial Case  No. 30/1985.  The said application was dismissed by an order dated  15.1.1986 by the 6th Additional District Judge, Jabalpur holding that the  defendants failed to prove good and sufficient cause for their absence on  7.10.1985.  An appeal marked as Misc. Appeal No. 19/86 thereagainst in  terms of Order 43, Rule 1(d) of the Code was filed on 30.1.1986 which was  also dismissed.   

       A Civil Revision Application was also filed challenging the order  dated 31.10.1985 whereby and whereunder the Respondents’ application  under Order 9, Rule 7 of Code was dismissed.  The said petition was also  dismissed.  Yet again a regular First Appeal being No. 109/86 was filed in  the High Court.  It is contended that the Respondent No. 2 did not file any  appeal against the rejection of his counter claim.  The said Misc. Appeal No.  19/86 was dismissed by an order dated 5.4.1994 whereagainst a Special  Leave Petition was filed which also came to be dismissed as withdrawn by  an order dated 16.12.1994.  In the meanwhile, it appears that the original  plaintiff transferred his right title and interest in favour of the present  Appellant.  The plaintiff died on 1.5.2001.  By reason of the impugned  judgment, the High Court allowed the First Appeal No. 109/86 holding:

"i.     That the Trial Judge has grossly erred in law  by proceeding ex-parte against the defendants.

ii.     The learned counsel further canvassed that  the appellant No. 2, Surendra Kumar, filed the  counter claim and therefore it was incumbent upon  the learned trial judge to decide the counter claim  filed by the defendant in view of the mandate  contained in Order 8 Rule 6(D) of the Code."

       Mr. Anup G. Choudhary, learned senior counsel appearing on behalf  the Appellant would submit that as the counter claim filed by the defendants  under Order 8 Rule 6(D) of the Code was dismissed by the learned Trial  Judge, the First Appeal should not have been entertained by the High Court  at the instance of the Respondent No. 2 and, thus, the impugned judgment  must be set aside.

       The learned counsel would urge that the subject matter of an  application under Order 9, Rule 13 of the Code and the subject matter of the  appeal being same, it is against public policy to allow two parallel  proceedings to continue simultaneously.  Reliance in this behalf has been  placed on Badvel Chinna Asethu and another Vs. Vettipalli Kesavayya and  another [AIR 1920 Madras 962], Munassar Bin Jan Nisar Yarjung (died) his  L.Rs Marian Begum and others Vs. Fatima Begum and others [AIR 1975 AP

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366], M/s. Mangilal Rungta, Calcutta Vs. Manganese Ore (India) Ltd.,  Nagpur [AIR 1987 Bombay 87], Dr. M.K. Gourikutty and etc. Vs. M.K.  Raghavan and Others [AIR 2001 Kerala 398], Rani Choudhury Vs. Lt.-Col.  Suraj Jit Choudhury [(1982) 2 SCC 596] and P.Kiran Kumar Vs. A.S.  Khadar and Others [(2002) 5 SCC 161].

       In any event, Mr. Choudhari would contend that the Respondents’  claim would be hit by the doctrine of Issue Estoppel.  Reliance in this behalf  has been placed on Y.B. Patil and Others Vs. Y.L. Patil [(1976) 4 SCC 66],  Vijayabai and Others Vs. Shriram Tukaram and Others [(1999) 1 SCC 693]  and Hope Plantations Ltd. Vs. Taluk Land Board, Peermade and Another  [(1999) 5 SCC 590].

       As regard the counter claim of Respondent No. 2 herein, Mr.  Choudhari would contend that the same was directed only against his mother  in law being the original defendant No. 1, and, thus, it could not have been  enforced against the plaintiff.  The learned counsel in this connection has  drawn our attention to Issue No. 5 framed by the learned Trial Judge.   Drawing our attention to the judgment of the learned Trial Judge, it was  argued that the High Court committed a manifest error in coming to the  conclusion that the learned Trial Judge did not determine the counter claim  which in fact was done.

       Mr. Ranjit Kumar, learned senior counsel appearing on behalf of the  Respondents, on the other hand, would contend that the Respondents were  entitled to maintain an appeal against the ex-parte decree in terms of Section  96(2) of the Code.  The learned counsel would argue that the High Court in  its impugned judgment having arrived at a conclusion that the suit was  directed to be proceeded ex-parte only against Respondent No. 1 and not  against the Respondent No. 2; he was entitled to raise a contention as  regards the legality or validity of the order dated 31.10.1985.  It was further  submitted that in any event, Respondents herein were entitled to assail the  judgment on merit of the matter.  Drawing our attention to the provisions of  Order 8, Rule 10 of the Code, the learned counsel would contend that even  in a case where no written statement is filed, the Court may direct the parties  to adduce evidence in which event the Court must pass a decree only upon  recording a satisfaction that the plaintiff has been able to prove his case.  If  on the basis of the materials on record, Mr. Ranjit Kumar would urge, the  plaintiff fails to prove his case, the judgment would be subject to an appeal  in terms of Section 96(2) of the Code which confers an unrestricted statutory  right upon a party to a suit.   

       The learned counsel would further contend that the Appellant herein  has no locus standi to maintain this appeal as upon the death of the original  plaintiff he was not substituted in his place.  Mr. Ranjit Kumar would submit  that, in the event if it be held that the Respondents are not entitled to  question the order of the learned Trial Judge to pass an ex-parte decree  against both the Respondents, the matter may be remitted to the High Court  for a decision on merit of the matter.

       In reply, Mr. Choudhari would point out that only two contentions  were raised before the High Court and its findings thereupon being ex facie  erroneous, no purpose would be served by remitting the matter back to the  High Court for determination of the merit of the matter.    It was argued that  the Respondents have not raised any contention on merit of the matter and in  any event, they having not adduced any evidence, there is no material on the  record of the appeal enabling the court to determine the same on merit.  It  was further contended that even the deed in terms whereof the purported  mortgage was created was not annexed with the written statement of the  Respondent No. 2 as it was mandatorily required under Order 8, Rule 1 of  the Code, he cannot raise any contention on merit of the counter claim and  furthermore even no evidence was produced in support thereof.

       Order 9, Rule 7 of the Code postulates an application for allowing a  defendant to be heard in answer to the suit when an order posting a suit for

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ex-parte hearing was passed only in the event, the suit had not been heard as  in a case where hearing of the suit was complete and the court had adjourned  a suit for pronouncing the judgment, an application under Order 9, Rule 7  would not be maintainable.  (See Arjun Singh Vs. Mohindra Kumar and  others, AIR 1964 SC 993)  The purpose and object of Order 9, Rule 7 of the  Code has been explained by this Court in Vijay Kumar Madan and Others  Vs. R.N. Gupta Technical Education Society and Others [(2002) 5 SCC 30]  and Ramesh Chand Ardawatiya Vs. Anil Panjwani [(2003) 7 SCC 350]

       It is true that the suit was not directed to be heard ex-parte against  Respondent No. 2 herein but it remains undisputed that both the  Respondents filed application for setting aside the ex-parte decree before the  learned Trial Judge, preferred appeal against the judgment dismissing the  same as also filled a revision application against the order dated 31.10.1985  setting the suit for ex-parte hearing.  The said applications and appeal had  been dismissed.  Even a Special Leave Petition filed was dismissed as  withdrawn.  In that view of the matter it is not permissible for the  Respondents now to contend that it was open to the Respondent No. 2 to  reagitate the matter before the High Court.  The contention which has been  raised by the Respondent No. 2 before the High Court in the first Appeal,  furthermore, was not raised in the said application under Order 9, Rule 13 of  the Code and even in the Misc. Petition and the Revision Application filed in  the High Court.  Such a question having not been raised, in our opinion, the  Respondents disentitled themselves from raising the said contention yet  again before the High Court in the First Appeal.   

       It is now well-settled that principles of res judicata applies in different  stages of the same proceedings.  [See Satyadhyan Ghosal and others Vs.  Smt. Deorajin Debi and another, AIR 1960 SC 941) and Prahlad Singh Vs.  Col. Sukhdev Singh [(1987) 1 SCC 727].

       In Y.B. Patil (supra) it was held:

"4\005 It is well settled that principles of res judicata  can be invoked not only in separate subsequent  proceedings, they also get attracted in subsequent  stage of the same proceedings. Once an order  made in the course of a proceeding becomes final,  it would be binding at the subsequent state of that  proceeding..."

       In Vijayabai (supra), it was held: "13. We find in the present case the Tahsildar  reopened the very question which finally stood  concluded, viz., whether Respondent 1 was or was  not the tenant of the suit land. He further  erroneously entered into a new premise of  reopening the question of validity of the  compromise which could have been in issue if at  all in appeal or revision by holding that  compromise was arrived at under pressure and  allurement. How can this question be up for  determination when this became final under this  very same statute ?..."

       Yet again in Hope Plantations Ltd. (supra), this Court laid down the  law in the following terms: "17\005One important consideration of public policy  is that the decisions pronounced by courts of  competent jurisdiction should be final, unless they  are modified or reversed by appellate authorities;  and the other principle is that no one should be  made to face the same kind of litigation twice over,  because such a process would be contrary to  considerations of fair play and justice."

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       It was further held: "31. Law on res judicata and estoppel is well  understood in India and there are ample  authoritative pronouncements by various courts on  these subjects. As noted above, the plea of res  judicata, though technical, is based on public  policy in order to put an end to litigation. It is,  however, different if an issue which had been  decided in an earlier litigation again arises for  determination between the same parties in a suit  based on a fresh cause of action or where there is  continuous cause of action. The parties then may  not be bound by the determination made earlier if  in the meanwhile, law has changed or has been  interpreted differently by a higher forum. But that  situation does not exist here. Principles of  constructive res judicata apply with full force. It is  the subsequent stage of the same proceedings. If  we refer to Order XLVII of the Code (Explanation  to Rule. 1) review is not permissible on the ground  "that the decision on a question of law on  which the judgment of the Court is based  has been reversed or modified by the  subsequent decision of a superior court in  any other case, shall not be a ground for the  review of such judgment"."

       The question which now arises for consideration is as to whether the  First Appeal was maintainable despite the fact that an application under  Order 9, Rule 13 of the Code was dismissed.   

       An appeal against an ex-parte decree in terms of Section 96(2) of the  Code could be filed on the following grounds: (i)     The materials on record brought on record in the ex-parte  proceedings in the suit by the plaintiff would not entail a decree in  his favour, and (ii)    The suit could not have been posted for ex-parte hearing.

       In an application under Order 9, Rule 13 of the Code, however, apart  from questioning the correctness or otherwise of an order posting the case  for ex-parte hearing, it is open to the defendant to contend that he had  sufficient and cogent reasons for not being able to attend the hearing of the  suit on the relevant date.   

       When an ex-parte decree is passed, the defendant (apart from filing a  review petition and a suit for setting aside the ex-parte decree on the ground  of fraud) has two clear options, one, to file an appeal and another to file an  application for setting aside the order in terms of Order 9, Rule 13 of the  Code.  He can take recourse to both the proceedings simultaneously but in  the event the appeal is dismissed as a result whereof the ex-parte decree  passed by the Trial Court merges with the order passed by the appellate  court, having regard to Explanation appended to Order 9, Rule 13 of the  Code a petition under Order 9, Rule 13 would not be maintainable.   However, the Explanation I appended to said provision does not suggest that  the converse is also true.

       In an appeal filed in terms of Section 96 of the Code having regard to  Section 105 thereof, it is also permissible for an Appellant to raise a  contention as regard correctness or otherwise of an interlocutory order  passed in the suit subject to the conditions laid down therein.

       It is true that although there may not be a statutory bar to avail two  remedies simultaneously and an appeal as also an application for setting  aside the ex-parte decree can be filed; one after the other; on the ground of

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public policy the right of appeal conferred upon a suitor under a provision of  statute cannot be taken away if the same is not in derogation or contrary to  any other statutory provisions.  

There is a distinction between ’issue  estoppel’ and  ’res judicata’ [See  Thoday vs. Thoday \026 1964 (1)  All. ER 341]

Res judicata debars a court from exercising its jurisdiction to  determine the lis if it has attained  finality between the parties whereas the  doctrine issue estoppel is invoked against the party.  If such an issue is  decided against him, he would be estopped from raising the same in the  latter proceeding.   The doctrine of res-judicata creates a different kind of  estoppel viz Estopper By Accord. In a case of this nature, however, the doctrine of  ’issue  estoppel’ as  also  ’cause of action estoppel’ may arise.  In  Thoday (supra) Lord Diplock  held : "\005"cause of action estoppel" is that which prevents a  party to an action from asserting or denying, as against  the other party, the existence of a particular cause of  action, the non-existence or existence of which has been  determined by a court of competent jurisdiction in  previous litigation between the same parties.  If the cause  of action was determined to exist, i.e., judgment was  given on it, it is said to be merged in the judgment\005.If it  was determined not to exist, the unsuccessful plaintiff  can no longer assert that it does; he is estopped per rem  judicatam."

The said dicta was followed in Barber vs. Staffordshire Country  Council, (1996) 2 All ER 748.  A cause of action estoppel arises where in  two different proceedings identical issues are raised, in which event, the  latter proceedings between the same parties shall be dealt with similarly as  was done in the previous proceedings.  In such an event the bar is absolute in  relation to all points decided save and except allegation of fraud and  collusion.   [See C. (a minor) Vs. Hackney London Borough Council,   (1996) 1 All ER 973].

       It is true that the Madras High Court in  Badvel Chinna Asethu (supra)  held that two alternative remedies in succession are not permissible stating: "Assuming that it is open to a defendant in the  appeal against the exparte decree to object to the  decree on the ground that he had not sufficient  opportunity to adduce evidence in a case where he  did not choose to avail himself of the special  procedure, it does not by any means follow that,  where he did actually avail himself of the special  procedure and failed, still it would be open to him  to have the same question reagitated by appealing  against the decree."

       Oldfield, J. in his concurring judgment stated: "\005No case has been cited before us in which the  question now under consideration, whether a party  against whom a decree has been passed ex parte  can proceed in succession under O.9, R.13, as well  as by taking objection to the order placing him ex  parte in his appeal against the substantive decree  has been dealt with.  On principle it would appear  that he could only do so at the expense of the rules  as to res judicata; and there can be no reason why  the adjudication on his application under O.9,  R.13, if there were one should not be conclusive  against him for the purpose of any subsequent  appeal.  In the present case it is suggested that the

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facts that his application under O.9, R.13, was not  carried further than the District Munsif’s Court and  that he acquiesced in the District Munsif’s  unfavourable order, would make a difference to his  right to appeal against the decree on this ground.   The answer to this is that the District Munsif’s  order not having been appealed against, has  become final.  It seems to me that it would be a  matter for great regret if a party could pursue both  of two alternative remedies in succession and that  the recognition of a right to do so would be a  unique incident in our procedure.  I am  accordingly relieved to find that such a right has  not been recognized by authority\005"

       The aforementioned view was reiterated in the subsequent decisions  of different High Courts in Marian Begum (supra) M/s. Mangilal Rungta,  Calcutta (supra) and Dr. M.K. Gourikutty (supra).   

       However, it appears that in none of the aforementioned cases, the  question as regard the right of the defendant to assail the judgment and  decree on merit of the suit did not fall for consideration.  A right to question  the correctness of the decree in a First Appeal is a statutory right.  Such a  right shall not be curtailed nor any embargo thereupon shall be fixed unless  the statute expressly or by necessary implication say so.  [See Deepal  Girishbhai Soni Vs. United India Insurance Co. Ltd. (2004) 5 SCC 385 and  Chandravathi P.K. and Others Vs. C.K. Saji and Others, (2004) 3 SCC 734]

       We have, however, no doubt in our mind that when an application  under Order 9, Rule 13 of the Code is dismissed, the defendant can only  avail a remedy available thereagainst, viz, to prefer an appeal in terms of  Order 43, Rule 1 of the Code.  Once such an appeal is dismissed, the  Appellant cannot raise the same contention in the First Appeal.  If it be held  that such a contention can be raised both in the First Appeal as also in the  proceedings arising from an application under Order 9, Rule 13, it may lead  to conflict of decisions which is not contemplated in law.

       The dichotomy, in our opinion, can be resolved by holding that  whereas the defendant would not be permitted to raise a contention as  regards the correctness or otherwise of the order posting the suit for ex-parte  hearing by the Trial Court and/ or existence of a sufficient case for non- appearance of the defendant before it, it would be open to him to argue in  the First Appeal filed by him against Section 96(2) of the Code on the merit  of the suit so as to enable him to contend that the materials brought on  record by the plaintiffs were not sufficient for passing a decree in his favour  or the suit was otherwise not maintainable.  Lack of jurisdiction of the court  can also be a possible plea in such an appeal.  We, however, agree with Mr.  Choudhari that the ’Explanation’ appended to Order 9 Rule 13 of the Code  shall receive a strict construction as was held by this court in Rani  Choudhury (supra), P. Kiran Kumar (supra) and Shyam Sundar Sarma Vs.  Pannalal Jaiswal and Others [2004 (9) SCALE 270].

       We, therefore, are of the opinion that although the judgment of the  High Court cannot be sustained on the premise on which the same is based,  the Respondents herein are entitled to raise their contentions as regards merit  of the plaintiff’s case in the said appeal confining their contentions to the  materials which are on records of the case.   

       We, however, do not agree with Mr. Ranjit Kumar that the Appellant  herein has no locus standi to maintain this appeal.  In terms of Order 22,  Rule 10 of the Code he could have been substituted in place of the plaintiff.   Even if he was not substituted in terms of the aforementioned provision, an  application under Order 1, Rule 10 of the Code on his behalf was  maintainable as he became the legal representative of the original plaintiff.  

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       For the view we have taken, it is not necessary for us to examine the  claim of the original plaintiff for partition of suit properties or claim of the  Respondent No. 2 herein as regard creation of a mortgage in relation thereto  by the original defendant No. 1 and/ or efficacy thereof.  We refrain  ourselves from even considering the submission of Mr. Choudhari to the  effect that even otherwise the Respondent No. 2 herein could not have raised  a counter claim in the partition suit vis-‘-vis the plaintiff and the effect, if  any, as regards his non-filing of an appeal relating to his counter claim.  We  may notice that Mr. Choudhari has further contended that in terms of Order  17, Rule 2 of the Code in the event, in the suit which was adjourned and if  on the date of adjourned date the defendant did not appear, the court has no  other option but to proceed ex-parte.  The High Court, in our opinion, should  be allowed to examine all aspects of the matter.

       For the reasons aforementioned, we are of the opinion that although  the judgment of the High Court is not sustainable as the reasons in support  thereof cannot be accepted, the High Court for the reasons assigned  hereinbefore must examine the Respondents’ claim on merit of the matter.   

       The Appeal is, therefore, allowed, the impugned judgment is set aside  and the case remitted to the High Court for consideration of the case of the  parties on merit of the matter.  As the suit is pending since 1976, we would  request the High Court to dispose of the appeal at an early date and  preferably within a period of three months from the date of communication  of this order.  No costs.