12 April 1954
Supreme Court


Case number: Appeal (civil) 113 of 1953






DATE OF JUDGMENT: 12/04/1954


CITATION:  1954 AIR  352            1955 SCR   99  CITATOR INFO :  C          1991 SC2234  (41)

ACT:    Consent   decree-Legal  effect   thereof-Compromise   not vitiated  by fraud, misrepresentation,  misunderstanding  or mistake-Decree  passed  thereon-  Whether  operates  as  res judicata-  Civil Procedure Code-(Act V of  1908)--Order  II, rule  2(3)  -Relinquishment  Of  claim  in  a  prior   suit- Subsequent suit barred in respect of the claim so omitted.

HEADNOTE:    It  is well settled that a consent decree is  as  binding upon  the  parties thereto as a decree  passed  by  invitum. Where  a compromise is found, not to be vitiated  by  fraud, Misrepresentation, 100 misunderstanding  or mistake, the decree passed thereon  has the binding force of res judicata. Where  the  plaintiff confines his claim to  account  for  a period up to a certain date only, he relinquishes his  claim implicitly  if  not  explicitly  to  the  account  for   the subsequent  period because Order II, rule 2 (3) of the  Code of Civil Procedure lays down that if a person omits,  except with  the leave of the Court, to he sue for all  reliefs  to which  he is entitled, he shall not afterwards sue  for  any reliefs so omitted.

JUDGMENT:    CIVIL  APPELLATE JURISDICTION: Civil Appeal No.   113  of 1953.    Appeal  from the Judgment and Decree, dated the 25th  day of  March, 1952, of the High Court of Judicature  at  Bombay (Bavdekar  and  Dixit JJ.) in Appeal No. 554 of  1951,  from Original  Decree  arising out of the  Judgment  and  Decree, dated the 30th day of June, 1951, of the Court of the  Joint Civil  Judge, Senior Division of Thana, in Special Suit  No. 12 of 1949. K.   S. Krishnaswamy lyengar, (J.  B. Dadachanji, V.B.  Rege and Ganpat Rai, with him) for the appellants.



S.   B.  Jathar, R. B. Kotwal and Naunit Lal for  respondent No. 1. 1954.  April 12.  The Judgment of the Court was delivered by GHULAM HASAN J.-This appeal is brought by leave of the  High Court  of  Bombay  against  the judgment  and  decree  of  a Division Bench of that Court (Bavdekar and Dixit JJ.)  dated March  25,  1952, modifying the judgment and decree  of  the Civil Judge, Senior Division of Thana, dated June 30, 1951. The appeal arises out of a partition between 6 brothers of a joint  Hindu  family.   The joint family  carried  on  joint family  business of a grocery shop, liquor shops,  a  ration shop,  a motor-bus service and also moneylending  under  the name  of  "Sontakke Brothers".  The  family  also  Possessed immovable and movable property.  Balkrishna Sitaram Sontakke is  the  eldest  of  the  brothers  and  is  the   plaintiff respondent  in the present appeal.  He will be  referred  to hereafter as the plain-tiff. It is common ground that up to 1944 the brothers were living and messing together and the income from 101 the  family  business used to be kept  with  the  plaintiff. From  April 14, 1945, the situation changed and the  parties began to appropriate the proceeds of the various  businesses carried on by them separately to themselves.  The  plaintiff was  running the liquor shops, defendants Nos.  I and 2  who are  the appellants, were carrying on the motor-bus  service business while defendant No. 4 was running the grocery shop. The  parties tried to have partition effected  between  them through  arbitrators  but the attempt failed.  On  June  29, 1945,  all  the  five brothers filed a  suit  for  partition against  the  plaintiff  of  all  joint  family   properties including the accounts of all the businesses.  The suit  was numbered  39 of 1945.  It was compromised on March 7,  1946. By  this compromise it was declared that prior to  1942  all the  accounts of the various businesses had  been  correctly maintained  and shown, that the parties had agreed  to  have arbitrators  appointed  through  Court  for  examining   the accounts from 1942 up to March 31, 1946, and for determining the amount due up to that date.  Each of the brothers was to get  one -sixth share in the cash balance as found on  March 31,  1946, upon examination of accounts by the  arbitrators. All  the movable property of the joint family including  the stock-in-trade  of  all  the family  businesses  was  to  be divided  equally  among all the  brothers.   The  compromise further  declared that the plaintiff was to  have  one-sixth share  in the motor garage and that defendants 1 and 2  were to  pay the price of one-sixth share to him.  These are  the material provisions of the compromise.  One of the  brothers was  a minor and the Court finding the compromise to be  for the  benefit  of  the minor accepted it and  passed  a  pre- liminary decree in terms of the compromise on July 25, 1947. If  nothing else had happened to disturb the natural  course of  events,  the  proceedings would have ended  in  a  final decree  for partition.  The plaintiff, however, commenced  a fresh suit on February 23, 1949, confining his relief to his share  of  the  profits and assets  Of  the  motor  business carried  on by defendants Nos. 1 and 2 after March  31,1946. His  case was that the compromise was made in a hurry,  that the  parties omitted to provide in the compromise about  the future conduct 102 of  the  motor business from April 1, 1946, that  the  motor business was still a joint family business and that he had a right  to  ask for accounts of that business  subsequent  to March 31, 1946.



In defence it was pleaded that the compromise was made after due  deliberation, that accounts of the motor ’business  and grocery shop should actually have been taken up to April 14, 1945, the date of disruption of the joint family status, but the parties agreed by way of compromise that account of  all family businesses should be taken up to March 31, 1946.   It was also pleaded that the claim was barred by res  judicata. Upon  the  issues framed in the case the Civil  Judge  found that  the suit was not. barred by reason of the decision  in the previous suit No. 39 of 1945, that the decision in  that suit  was  not obtained by fraud and  misrepresentation  and that  the compromise in the previous suit was not due  to  a mistake  or  misunderstanding.  Despite these  findings  the Civil Judge held that although the motor business carried on after the partition had ceased to be a joint family business yet  as it was carried on by some members of a family  their position  was  analogous to that of a  partner  carrying  on partnership  after  dissolution and applying  the  principle underlying  section 37 of the Partnership Act he  held  that the two brothers carrying on the motor business were  liable to  account.   Accordingly he passed  a  preliminary  decree directing  the  accounts of the motor business to  be  taken from March 31, 1946, up to the date on which a final  decree for payment of the amount found to be due would be made.   A Commissioner was appointed to take the accounts to ascertain the  profits earned by the use of the capital  belonging  to the  shares of brothers other than those who carried on  the motor  business.  In appeal Bavdekar ’J. with whom Dixit  J. agreed  modified the decree of the trial Court by  directing that  the accounts were to be taken up to the date when  the businesses discontinued and not up to the date of the  final decree. The  learned  Judges held that the cause of action  for  the present suit was different from the cause. of action in  the previous suit and that the suit was not barred 103 by res judicata or by Order II, rule 2, of the Code of Civil Procedure.  After delivering themselves of some  conflicting observations  to  which  reference will in  detail  be  made hereafter  they  held  that  the  consent  decree  did   not expressly  negative  the  right for accounts  of  the  motor transport business.  Finally the learned Judges recorded the conclusion that regardless of the pleadings in the case  the defendants  Nos.  I and 2 had made use of the  joint  family property  and that they stood in, the position of  co-owners and  as contemplated in section 90 of the Indian Trusts  Act were  liable to render accounts for the-profits  which  were attributable  to the employment of the assets owned  by  the parties jointly. Learned counsel for the appellants has contested the view of the  High Court upon all the points decided, ,against  them. He  has  contended that the cause of action in  a  suit  for partition  is  the  desire and intention of  the  family  to separate,  that  the  cause of action in the  two  suits  is identically the same and not separate and distinct and. that the suit was, therefore, barred both by the principle of res judicata  and  by Order II, rule 2, of the  Civil  Procedure Code.  Learned counsel also challenged the view of the  High Court  about the applicability of section 90 of  the  Indian Trusts Act It  seems to us that upon a fair reading of  the  compromise arrived  at  between the parties in the  circumstances  then existing,  the only legitimate conclusion possible  is  that the parties had agreed to confine the taking of all accounts upto  March  31,1946, and had closed the door  to  reopening



them  beyond  that date.  If the compromise was  arrived  at after full consideration by the parties and was not vitiated by fraud, misrepresentation, mistake or misunderstanding  as held  by the trial Court-a finding which was not  interfered with  by  the  High  Court-it follows  that  a  matter  once concluded  between  the parties who were dealing  with  each other  at arms length cannot now be reopened.  What led  the parties to confine the period of account to March 31,  1946, and  stop  further  accounting  which  would  have  normally extended to the passing of the final decree will appear from the  following circumstances.  The plaintiff knew  that  the licence for the liquor shops 104 carried  on by him was expiring on the 1st April, 1946,  and he  was anxious to run the liquor business  exclusively  and not  jointly or in partnership with his brothers  after  the expiry  of  the licence.  He gave a notice to  his  brothers through pleader on December 12, 1945, stating inter alia the following :- "The  period of (licence for) the liquor shops at  the  said places  expires  by  end of March, 1946.   Hence  after  the expiry  of  the said period, my client having no  desire  to conduct liquor shop business jointly or in partnership  with any of you again, he intends to run and will run as from the date 1st April, 1946, one or more liquor shops as he pleases belonging to him alone independently.  The moneys that  will be  required for (purchase in) auction of the shops will  be paid  by my client by borrowing the same from third  parties on  his own responsibility and my client will not allow  the said   moneys  to  have  the  least  connection   with   the businesses,  properties  and cash which are  at  present  in dispute  in Court and with the profits and income  from  the said businesses or properties.  My client expressly  informs -you by this notice of the fact, viz., that the liquor shops thus purchased by him will solely belong to him and will  be run  by him independently of any of you.  None of  you  will have  any  legal right to meddle with or  interfere  in  the liquor  shops which will be thus purchased by my  client  in the  Government auction for the new year beginning from  1st April,  1946,  and  if  any of  you  make  an  attempt  with malicious intention to cause even the slightest interference in the said business of my client, then my client will  hold you  fully responsible for any harm suffered by him and  for other  damages and expenses incurred by him and will take  a severe legal action against you therefor." This  notice furnishes a true guide as to the  intention  of the  plaintiff which was none other than that he should  run the liquor shops exclusively for himself and appropriate the profits  thereof without making himself accountable  to  his brothers.   Although the plaintiff says that he intended  to pay  for  the auction of liquor shops by  borrowing  he  was really  in a position of vantage for he admittedly  had  Rs. 13,000 cash in hand as 105 against the Rs. 3,000 his brothers had.  The notice explains the  significance  of the provision in the  compromise  that accounts  are to be taken only up to March 31, 1946.   Since the  plaintiff did not want his brothers to  interfere  with his exclusive running of the liquor business after March 31, 1946,  he  perforce had to agree that he  should  sever  his connection with other businesses run by his brothers.   This arrangement was apparently acceptable to all the brothers as being fair and reasonable and as not giving undue  advantage to any party over the other.  This being our construction of the  compromise, it follows that the plaintiff’s conduct  in



going  back upon that arrangement by filing a fresh suit  in regard  to the motor business only is anything  but  honest. The  plaint filed in the previous suit leaves no  manner  of doubt  that the plaintiffs in that suit ,sought  a  complete division  of  all  the  family  property  both  movable  and immovable  and a final determination of all the accounts  in respect  of the family businesses.  It is  also  significant that  after the compromise the plaintiff (Balkrishna)  filed an  application before the Civil Judge in which  he  alleged that  when he agreed in the compromise that the accounts  of the various businesses should be up to the 31st March, 1946, he  was  under a misapprehension regarding his  legal  right inasmuch  as  he thought that when the accounts were  to  be taken up to a certain date, ’the joint family property after that  date  would  not be allowed to  be  utilized  by  some members only of the family for making profits for themselves to  the exclusion of the plaintiff.  He goes on to say  that he  laboured  under  the impression that  the  joint  family business  would be either altogether stopped after the  31st March,  1946, or would be run either by the  arbitrators  or the  Commissioners and the profits accruing therefrom  would be  deposited  in Court for distribution among  the  parties according  to  their shares.  The application  was  made  on November 22, 1947.  His pleader, however, stated on April 6, 1948: " The application is abandoned by the applicant as  he wishes  to pursue his remedy by way of an  independent  suit for the grievance in the application," and the Court  passed the order, "The application is disposed of as 14 106 it is not pressed." The learned Judges of the High Court  in referring to this application observe thus: " It is  obvious therefrom  that really speaking the idea of the  profits  of several businesses after the 1st of April, 1946, was present to the minds of the parties; but the parties did not care to ask  that accounts of the other businesses will be taken  up after  the 1st of April, 1946.  One of the businesses was  a liquor  business, which admittedly was to come to an end  on the  31st  of  March,  1946;  but  there  was  also  another business;  that Was a kirana shop, which was not a very  big business.   But  all  the same it was there,  and  there  is force, therefore, in the contention which has been  advanced on behalf of the appellants that it was not as if there  has been  an  oversight  on the part of  the  parties,  but  the parties knew that the businesses might go on afterwards; but if they were carried on, they did not particularly care  for providing  by  the compromise decree for accounts  of  those businesses being taken after the 1st of April, 1946." Having said all this they record the conclusion that the compromise did not expressly negative the right of the plaintiff to  an account  of  motor business.  We are unable to  accept  this conclusion.   The  observations quoted  above  negative  the plaintiff’s case about mistake or misunderstanding in regard to  the  true  effect of the compromise and  show  that  the plaintiff  abandoned the right to Account after the  crucial date  and the status of the parties thereafter changed  into one of tenants in common.  If the plaintiff really  intended that  accounts of the motor business or indeed of all  other businesses  were  to be taken up to the date of  the  ’final decree,  there  was no point in mentioning the  31st  March, 1946.   The normal course, after the preliminary decree  was passed by the Court, was to divide all the property by metes and  bounds and to award monies as found on  examination  of the accounts right up to the date of the final decree.   But for  the compromise which limited the period of the  account



the  plaintiff  would  have obtained the relief  he  is  now seeking,  in the partition suit as accounts would have  been taken  of  all the businesses up to the date  of  the  final decree.   The plaintiff has himself to thank for  preventing the natural 107 course of events and for forbidding the accounts to be taken after the 31st March, 1946.  The plaintiff on the other hand has  no  real  grievance in the  matter,  for  although  the defendants  Nos.  1 and 2, who continued to  run  the  motor business, may have made some money with the- help of the two old  motor  buses, the plaintiff whose keenness to  run  the liquor  business  is apparent from the  notice  referred  to above  was  not precluded from reaping the  fruits  of  that business.   It is hard to conceive that the plaintiff  would have  agreed  to share his burden of the loss if  the  motor business  had sustained any.  We hold, therefore,  that  the compromise closed once for all the controversy about  taking any  account  of the joint family businesses  including  the motor  business  after  the  31st  March’,  1946,  and   the plaintiff  is bound by the terms of the compromise  and  the consent decree following upon it. The obvious effect of this finding is that the plaintiff  is barred by the principle of res judicata from reaitating  the question  in  the present suit.  It is well settled  that  a consent  decree is as binding upon the parties thereto as  a decree passed by invitum.  The compromise having been  found not   to   be   vitiated   by   fraud,    misrepresentation, misunderstanding  or mistake, the decree passed thereon  has the binding force of res judicata. We are also of opinion that the plaintiff’s claim is  barred by  the  provisions of Order II, rule 2(3), of the  Code  of Civil  Procedure.  The plaintiff by confining his  claim  to account  up  to  March  3, 1946,  only,  implicitly  of  not explicitly,  relinquished his claim to the account  for  the subsequent  period.  Sub-rule 3 clearly lays down that if  a person Omits, except with the leave of the Court, to sue for all reliefs to which he is entitled, he shall not afterwards sue  for  any relief so omitted.  We do not agree  with  the High  Court that the cause of action in the subsequent  suit was  different from the cause of action in the  first  suit. The cause of action in the first suit was the desire of  the plaintiff  to separate from his brothers and to  divide  the joint  family  property.   That  suit  embraced  the  entire property  without any reservation and was  compromised,  the plaintiff  having abandoned his claim to account in  respect of 108 the  motor  business  subsequent to  March  31,  1946.   His subsequent suit to enforce a part of the claim is founded on the same cause of action which he deliberately relinquished. We are clear, therefore, that the cause of action in the two suits  being  the same, the suit is barred under  Order  II, rule 2(3), of the Civil Procedure Code. As  the. suit is barred both by res judicata and  Order  II, rule 2(3), of the Civil Procedure Code, no further  question as  to the applicability of section 90 of the Indian  Trusts Act can possibly arise under the circumstances. The result is that we allow the appeal and dismiss the  suit with costs throughout.                                         Appeal allowed.