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PETITIONER: IFTIKHAR AHMED AND OTHERS

       Vs.

RESPONDENT: SYED MEHARBAN ALI AND OTHERS

DATE OF JUDGMENT26/02/1974

BENCH: MATHEW, KUTTYIL KURIEN BENCH: MATHEW, KUTTYIL KURIEN ALAGIRISWAMI, A.

CITATION:  1974 AIR  749            1974 SCR  (3) 464  1974 SCC  (2) 151

ACT: Practice--Res-judicata between co-plaintiffs--Order of Court setting   aside   award  and  remitting  award   for   fresh arbitration-If can be questioned in proceedings arising from the second award.

HEADNOTE: The  dispute between the appellants and the respondents,  as to  who  were  the bhumidars  of  certain  properties,  war, referred  by  the  Consolidation  Officer  under  the   U.P. Consolidation of Holdings Act, 1953, to the,Civil Judge, who referred  it to an arbitrator appointed under the Apt.   The arbitrator     held     that     the     respondents     had no  title as bhumidar , relying upon a judgment of the  High Court,  which, according to the arbitrator operated as  res- judicata  between the parties.  That judgment was  delivered in a suit instituted by the appellant’s predecessor and  the Present respondents for a declaration that a mortgage decree in  favour of the defendant in that suit did not affect  the shares of the respondents in the properties in dispute,  and the  High Court held that the appellant’s predecessor  alone was entitled to the properties, accepting the contention  of the defendant in that suit that the respondents had no title whatsoever. The  Civil  Judge held that the award was  manifestly  wrong because,  that judgment according to him did not operate  as res-judicata  between the parties.  He therefore  set  aside the award and remitted the case to another arbitrator.   The second  arbitrator held that the appellant  and  respondents were  cobhumidars and determined the shares of  the  parties holding that the judgment of the High   Court    did     not operate  as res judicata.  This award was confirmed  by  the Civil     Judge  and  the High Court agreed with  the  Civil Judge. Allowing  the appeal to this Court, HELD:     (a)  If a judgment is to operate as  res  judicata between co- defendants it is necessary to establish (i) that there was a conflict of interest between the  co-defendants, (ii)  that it was necessary to decide the conflict in  order to  give relief to the plaintiff, and (iii) that  the  Court actually  decided  the question.  There is no reason  why  a Previous decision could not operate as res judicata  between

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co-plaintiffs  also if these three conditions are  satisfied mutatis mutandis. [467 H;.468 B-C] (b)  In the judgment of the High Court which was relied upon as having operated as res judicata there was actual conflict of  interest between the present appellant on the  one  hand and  the  present  respondent on the other,  they  were  the plaintiffs in that suit, and it was necessary to decide that conflict  in order to give relief to the defendant  in  that suit;  and  the  High  Court  decided  that  the  properties belonged  exclusively to the appellant’s  predecessor.   The effect  of  that judgment is that  the  present  respondents failed to-establish their contention that they had title  to the properties. [467 F-H] (c)  There was no finding by the arbitrator that by  adverse possession  the  respondents  had  acquired  title  to   the property at any time. [468 F] (d)  The Provisions of Arbitration Act apply to  proceedings before  an  arbitrator  under  the  U.P.  Consolidation   of Holdings Act.  Therefore, if the judgment of the High  Court operated in law as res judicata it would be an error of  law apparent  on  the  face of the award if  it  says  that  the judgment  would  not operate as res  judicata.   Hence,  the Award  in the present case was liable,to be set aside  under s. 30 of the Arbitration Act. [468 F-H] (e)  Under s. 39 of the Arbitration Act no appeal lies  from an order remitting an award to an arbitrator under s. 16  of the Arbitration Act.  Therefore, 465 the  appellant could not have challenged the order when  the Civil Judge set aside the first award and remitted the  case to  the arbitrator for passing a fresh award.  Hence,  there is  no  reason why the appellant should  be  precluded  from challenging the correctness of that order in this appeal and getting relief on that basis. [469 B] (f)  Since, in the circumstances of the case it would be  an empty  formality to remit the case again to  the  arbitrator the award of the first arbitrator is restored. [469 C]. Sheonarayan  Singh v. Ramnandan Prasad Narayan Singh  A.I.R. [1916] P.C. 78. applied. Chandu  Lal  v.  Khalilur Rahaman  A.I.R.  [1950]  P.C.  17, referred to.

JUDGMENT: CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1646 (N)  of 1967. Appeal  by Special Leave from the judgment and  order  dated the May 19, 1967 of the Allahabad High Court in First Appeal No. 424 of 1969. J. P. Goyal and Sobhagmal Jain, for the appellants. Hira Lal Jain, (not present) for respondent No. 1(a). V. S. Desai and N. M. Kshatriya, for respondent no. 1. The Judgment of the Court was delivered by MATHEW,  J.-In this appeal, by special leave,  the  question for consideration is whether the High Court of Allahabad was right  in  setting aside the decree passed by  the  District Judge,  Meerut, in appeal, setting aside an award passed  by the   arbitrator   appointed   under   the   Uttar   Pradesh Consolidation of Holdings Act, 1953 (hereinafter referred to as the Act) In order to appreciate the question in issue, the  following pedigree is useful              Buniyad Ali-Smt.  Kuri (his widow)                (died in 1900)

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Smt. Tarifun Nisa (daughter)  (died in 1905 or 1906) Shri Ishtiaq Ahamad Iftikhar Ahmad (Appellant No.1) Sri Aftab Ali-Smt. (died in 1910) Intisar Ahmad (Appellant No.2) Matluban-Nisa (died in 1925) Smt. Kaniz Fatima Mukhtiar Ahmad (Appellant No. 3) Smt. Majidun Nisa (daughter) (died in 1920) Syed Meharaban Ali (Respondent No.1) The  appellants  are the legal  representatives  of  Ishtiaq Ahmed.  In the consolidation proceedings under the Act  with respect  to  the  properties in  question  which  originally belonged to Buniyad Ali, dispute arose between Ishtiaq Ahmed on  the  one hand and Meharban Ali and Kaniz Fatima  on  the other  hand as regards the title to them.  Meharban Ali  and Kaniz  Fatima claimed that they were co-bhumidhars 1 of  the properties   along  with  Ishtiaq  Ahmed.    Ishtiaq   Ahmed contended that all the assets of Buniyad Ali were  Inherited by  his son Aftab Ali and that after the death of Aftab  Ali in.  1910  and his widow in 1925, he  became  the  exclusive owner of the properties as the other heirs had 466 relinquished  their  rights  in them.   Ishtiaq  Ahmed  also claimed  title to the properties by adverse possession.   As the dispute between the parties was concerned with the title to  the properties, the Consolidation Officer  referred  the matter  to the Civil Judge, Meerut who referred the same  to an arbitrator appointed under the Act.  The arbitrator  held that Meharban Ali and Kaniz Fatima had no title and so  were not co-bhumidhars of the properties with Ishtiaq Ahmad.  For reaching  this conclusion the arbitrator mainly relied on  a judgment of the High Court of Allahabad which, according  to the arbitrator, operated as res judicata between the parties with respect to the title to the properties. Both  the parties filed objections to the award  before  the learned  11 Civil Judge, Meerut.  He held that the  judgment of  the  High  Court relied on by  the  arbitrator  did  not operate  as res judicata between the parties as regards  the title  to  the  properties  and that  the  decision  of  the arbitrator,  based as it was on that judgment  operating  as res  judicata,  was  manifestly  wrong  and  the  award  was consequently  vitiated  by an error of law apparent  on  the face  of the award.  He, therefore, set aside the award  and remitted the case to the arbitrator for a fresh decision. The arbitrator Mr. R. P. Gupta considered the case.  He came to the conclusion, on the basis of the oral and  documentary evidence,  that  the  parties  were  co-bhumidhars  of   the properties except in respect of 9 bighas 3 biswas 3 biswasis and   determined  their  shres  in  the   properties.    The arbitrator  was  of the view that the judgment of  the  High Court  was  not  res judicata as regards the  title  of  the parties to the properties. Against  this award, Ishtiaq Ahmed filed  objections  before the II Civil Judge, Meerut.  The Civil Judge considered  the objections  and  found that there was no manifest  error  or illegality in the award and he confirmed the award.

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Ishtiaq Ahmed preferred an appeal from this decision  before the District Judge.  Ishtiaq Ahmed died during the  pendency of  the  appeal and his legal representatives,  the  present appellants, prosecuted the appeal.  The District Judge held, that the award suffered from an error of law apparent on the face  of  the  record in that  the  arbitrator  ignored  the judgment of the High Court which operated as res judicata as regards  the  title of the parties to the  properties.   He, therefore,  allowed  the  appeal and set  aside  the  decree appealed from and remitted the case to the arbitrator for  a fresh decision. The  respondents  filed  a revision before  the  High  Court against  the  decision of the District Judge  and  the  High Court  reversed the decision and restored the decree  passed by the Civil Judge confirming the award. Mr.  Goel  appearing for the appellants submitted  that  the High  Court  went  wrong  in reversing  the  decree  of  the District Judge.  He argued that the award was vitiated by an error of law apparent on the fare of the record as the award proceeded  on the basis that the judgment of the High  Court did not operate as res judicata in respect 467 of  the  title  of  the  parties  to  the  properties,   and therefore, the decision of the District Judge setting  aside the award was correct. Now,  let us consider the nature of the judgment  passed  by the  High Court and see whether it operated as res  judicata in  respect of the question of title of the parties  to  the properties  and whether there was any manifest error of  law apparent on the face of the award.. That judgment related to the  properties in dispute and was passed in  second  appeal from a decree in a suit (Suit No. 600 of 1934) instituted by Meharban   Ali,  Kaniz  Fatima  and  Ishtiaq  Ahmed  for   a declaration that the decree obtained in O.S. No. 128 of 1929 by Ishari Prasad, the defendant in that suit on the foot  of a  mortgage  deed  dated November 5, 1925  executed  in  his favour  by  Matlub-un-nissa  did not affect  the  shares  of Meharban  Ali and Kaniz Fatima in the  mortgaged  properties and that the mortgage, and the decree obtained thereon  were invalid  to  the extent of their shares in  the  properties. Ishari  Prasad, the defendant in that suit,  contended  that Matlub-un-nissa,  the  mortgagor alone was entitled  to  the properties mortgaged and that the decree obtained by him  on the  mortgage  was valid.  In substance, the  contention  of Ishari Prasad was that Meharban Ali and Kaniz Fatima had  no title  to  the  properties as the latter  and  the  former’s mother  had relinquished their shares and that the title  to the  properties vested exclusively in the mother of  Ishtiaq Ahmed,  namely, Matlub-un-nissa.  The trial Court  passed  a decree  dismissing  the suit holding that Kaniz  Fatima  and Meharban  Ali’s  mother  relinquished their  shares  in  the properties  and that Matlub-un-nissa, the  mortgagor,  alone was entitled to the properties and, therefore, the mortgage, and the decree based thereon were valid.  The plaintiffs  in the suit (Suit No. 600 of 1934) preferred an appeal from the decree.   That  was dismissed.  The  decree  dismissing  the appeal was confirmed by the High Court in the second  appeal filed by them. There can be no doubt that by the written statement,  Ishari Prasad, the mortgagee, denied the title of Kaniz Fatima  and Meharban  Ali  to the properties and set up  the  contention that Matlub-un-nissa, the mortgagor, from whom Ishtiaq Ahmed traced  his  title, alone was entitled  to  the  properties. There was, therefore, an actual conflict of interest between Ishtiaq   Ahmed  on  the  one  hand  and  Kaniz  Fatima  and

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Meharjan  Ali on the other, and it was necessary  to  decide the  conflict  in  order 10 give  relief  to  the  defendant (Ishari  Prasad) and the Court decided that  the  properties belonged exclusively to the mortgagor, the mother of Ishtiaq Ahmed. The effect of the judgment is that Kaniz Fatima and Meharban Ali failed to establish their contention that they had title to  the  properties,  and, the question is,  could  they  be allowed to agitate the same question? Now it is settled by a large number of decisions that for  a judgment  o  operate as res judicata between  or  among  co- defendants, it is necessary to establish that (1) there  was a conflict of interest between codefendants; (2) that it was necessary to decide the conflict in order to give the relief which  the plaintiff claimed in the suit; and (3)  that  the court actually decided the question. 468 in Chandu Lai v. Khalilur Rahman(1) Lord Simonds said                "It may be added that the doctrine may  apply               even  though  the party, against  whom  it  is               sought  to  enforce  it, "I  did  not  in  the               previous suit think fit to enter an appearance               and  contest  the question.  But to  this  the               qualification  must be added that, if  such  a               party is to be bound by a previous judgment it               must be proved clearly that he had or must  be               deemed  to have had notice that  the  relevant               question  was  in issue and would have  to  be               decided". We see no reason why a previous decision should not  operate as   res  judicata  between  co-plaintiffs  if   all   these conditions  are mutatis mutandis satisfied.  In  considering any  question  of res judicata we have to bear in  mind  the statement  of  the Board in Sheoparsan Singh  v.  Ramanandan Prasad Narayan Singh(2) that the rule of res judicata "while founded  on ancient precedent is dictated by a wisdom  which is for all time’ and that the application of the rule by the courts "should be influenced by no technical  considerations of   form,   but   by  matter  of   substance   within   the limits.,allowed by law.               "The  raison  detre of the rule is  to  confer               finality on decisions arrived at by  competent               Courts   between  interested   parties   after               genuine contest; and to allow persons who  had               deliberately chosen a position to reprobate it               and  to  blow hot now when they  were  blowing               cold before would be completely to ignore  the               whole foundation of the rule." (see Ram Bhaj v. Ahmad Saidakhtar Khan(3). In the award, the arbitrator has stated that the judgment of the High Court in the second appeal would not operate as res judicata as regards the title to the properties but was only a piece of evidence.  The arbitrator came to the  conclusion that  the  respondents  were  in  joint  possession  of  the properties  and,  therefore, there was no  ouster.   If  the judgment  operated as res judicata, the respondents  had  no title  to  the  properties.  There was  no  finding  by  the arbitrator  that  by adverse possession  they  had  acquired title to the properties at any point of time.  The  question which was referred to the arbitrator was the dispute between the, parties as regards the title to the properties.  If the judgment of the High-Court operated in law as  res-judicata, it  would  be an error of law apparent on the  face  of  the award if it were to say that the judgment would not  operate as res judkata.  The District Judge was, therefore, right in

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holding  that  the  award was vitiated by an  error  of  law apparent on its face in that it was based on the proposition that the judgment of the High Court would not operate as res judicata on the Question of title to the properties.  If  an award  sets forth a proposition of law which  is  erroneous, then the award is liable to be set aside under S. 30 of  the Arbitration Act.  This Court has held that the provisions of the  Arbitration  Act  Will  apply  to  proceedings  by   an arbitrator  under  the Act (see Charan Singh and  Others  v. Babulal and Others(4). (1)  A.I.R. 1950 P.C. 17. (2)  A.I.R. 1916 P.C. 78. (3)  A.I.R. 1938 Lab. 571. (4) [1966] Supp.   S.C.R. 63. 469 It  might be recalled that the 11 Civil Judge set aside  the first  award  and remitted the case to  the  arbitrator  for passing  a fresh award under s. 16 of the  Arbitration  Act. That was only on the basis that the arbitrator committed  an error of law in relying upon the judgment of the High  Court as finally determining the title to the, properties.  As  no appeal under s. 39 of the Arbitration Act lay from an  order remitting  an  award  to an arbitrator under s.  16  of  the Arbitration Act, Ishtiaq Ahmed could not have challenged the order.   There is, therefore, no reason why  the  appellants should be precluded from challenging the correctness of that order in this appeal and getting relief on that basis. We  set  aside  the order of the High Court  and  allow  the appeal.  In ’the circumstances we think it would be an empty formality to restore the decision of the District Judge  and remit  the  case again to the arbitrator.   We  restore  the award dated March 30, 1959, passed by Mr. K. C.  Govil,  the first arbitrator.  We make no order as to costs, V.P.S. Appeal allowed. 470