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PETITIONER: RAMESHWAR DAYAL

       Vs.

RESPONDENT: BANDA (DEAD) THROUGH HIS LRS.  AND ANR.

DATE OF JUDGMENT13/01/1993

BENCH: SAWANT, P.B. BENCH: SAWANT, P.B. RAY, G.N. (J)

CITATION:  1993 SCR  (1) 198        1993 SCC  (1) 531  JT 1993 (1)   213        1993 SCALE  (1)126

ACT: Res  Judicata--Suit  on  basis of title  by  sub-tenant  for nullity    of   eviction   decree   and   injunction    from dispossession--Decision  binding  inter  parties--Held,   to operate as res judicata, the first finding must be on  issue which was directly and substantially, and not  incidentally, in  issue in that suit--Decision of Small Causes  Court  not referring  to issue, nor giving any finding, cannot  operate as  res judicata--Question of jurisdiction of  Small  Causes Court   to  decide  issue  of  title  to   property   merely academic--Provincial Small Causes Court Act, S.23. Code of Civil Procedure, 1908--S. 2(9), (2), (14), Order  XX Rules  4(1)  and (5), Order XIV Rules  1  and  3--Provincial Small Causes Court Act--S. 17(1)--Held, to be binding  order of   the   court  disposing  of  suit  must  amount   to   a decree--Held, further, in a controversy between the parties, only  judgment  could give rise to decree--Where  point  for determination  of  finding  not even stated,  it  is  not  a judgment within S.2(9).

HEADNOTE: The  appellant  claimed  to have let  out  the  property  in dispute  as  owner in 1966.  In 1974, he filed  a  suit  for eviction of the tenant Habib and the sub-tenant Banda, first respondent in this case.  This suit was decreed against both Habib  and  Banda.  With the  respondent’s  application  for setting  aside  the  eviction  decree,  and  thereafter  his revision   petition  being  dismissed,  according   lo   the appellant   the  eviction  decree  against  Habib  and   the respondent became final on that date. However,  Banda filed the present suit on the basis  of  his tide as owner of the property and claimed two reliefs : that the  eviction  decree was a nullity, and for  an  injunction that the present appellant be restrained from  dispossessing him from the property.  ’The Trial Court dismissed the  suit On  appeal the Civil Judge, District  Mazaffarnagar  decreed the  suit  A second appeal by the present appellant  to  the High Court was dismissed. 199 In  the  Supreme  Court, the appellant  contended  that  the decree passed by a court of competent jurisdiction could not be  declared as not binding on a person who was a  party  to

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the suit; and the view that the judgment of the Small Causes Court  did not operate as res judicata between  the  parties because the Small Causes Court had no jurisdiction to decide title to the suit property, is erroneous in law. Dismissing the appeal, this Court, HELD  : 1. The bar of the res judicata is not applicable  to the  determination of the issue with regard to the title  to the property in the present suit (p.9) [204E] To  operate as res judicata the first finding must be on  an issue which has been directly and substantially in issue  in the former suit.  If the finding given is Incidentally while determining   another   issue   which   was   directly   and substantially in issue, such finding cannot be said to be on an  issue which was directly and substantially in  issue  in the former suit.(p.10) [205C] Gangabai  w/o  Rambilas Gilda v.  Chhabubai  w/o  Pukharajji Gandhi, [1982] 1 SCR 1176, followed. The  so-called decision of the Small Causes Court  does  not refer to the present respondent or to the written  statement riled by him where he had contended that he was the owner of the property and the suit was decreed ex parte. [205D] Not  only has the Small Causes Court not given any  finding, it has not even referred to the said issue in its so  called decision. (pp.8 and 11) [205D] 2.In  order  to  be  binding,  the  order  of  the  court disposing  of  the  suit  must  amount  to  a  decree.   The definitions of decree, order and judgment given in the  Code show that decree or order as the case may be, can come  into existence  only if there is an adjudication on the  relevant issues,  which  conclusively determines the  rights  of  the parties. (pp.11 and 12) [205D, 206A] ’Points   for  determination"  in  rule  4(1)   are   issues contemplated  by  Rules 1 and 3 of Order XIV  of  the  Code. Since  the matters were in controversy between the  parties, it  is  only  a judgment which could have given  rise  to  a decree.  The decision of the Small Causes Court which has 200 not stated the points for determination and given a  finding thereon  is  not a judgment with S.2(9)  of  the  CPC.(p.13) [206G-H] 3.Under S.17(1) of the Provincial Small Causes Court  Act also  it was obligatory for the Small Causes Court to  state the  points  for  determination  and  give  its  finding  or decision on each of the said points.(p.14) [207B] 4.The  decision of the Small Causes Court is non  est  as far as the respondent is concerned.(p.14) [207C] Mohammed  Fasi  v.  Abdul Qyayum, AIR  1978  Allahabad  470; Alimuddin  v.  Mohammed Ishak, AIR 1974 Rajasthan  170;  Ata Mohammed  v. Ghera, AIR 196 H.P. 17; Nongthombam Mani  Singh v. Puyam Chand Mohan Singh, AIR 1959 Manipur 14; Labhu  Rarn v. Mool Chand AIR 1921 Lahore 91; Ganga Prasad v. Nandu  Ram AIR  1916  Patna 75; Smt.  Qaisari Begum v. Munney  &  Anr., (1981)  1  All India Rent Control Journal  549  and  Richpal Singh & Ors. v. Dalip, [1987] 4 SCC 410, referred to.

JUDGMENT: CIVIL APPELLATE JURISDICTION : Civil Appeal No. 140 of 1993. From the Judgment and Order dated 23.7.1988 of the Allahabad High Court in Second Appeal No. 1116 of 1986. Shanti Bhushan and Vijay K. Jain for the Appellant. P.P. Rao and Shakil Ahmed for the Respondents. The Judgment of the Court was delivered by

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SAWANT, J. Leave granted. 2.The  appellant  claimed  to  be  the  owner  of  ’Gher’ (property  in dispute) in the town of Shameili and  in  that capacity,  according to him, he had let out the property  to one  Habib  as long ago as in 1966.  He had filed  suit  No. 591/66  against Habib for recovery of rent and the suit  was decreed.   According  to  the appellant,  Habib  sublet  the property to one Banda.  In 1974, the appellant filed a  suit for  eviction of both Habib and the subtenant Banda  in  the Court  of Small Causes.  This suit was decreed against  both Habib and Banda. Thereafter,  Banda, filed an application for  setting  aside the said 201 decree.  His application was dismissed.  The revision  filed by  him  before  the  Additional  District  Judge  was  also dismissed  on 26th September, 1977.  Thus, according to  the appellant, the eviction decree against both Habib and  Banda became final on that date. However,  Banda filed the present suit on the basis  of  his title  as the owner of the property which has given rise  to the  present appeal.  In the suit, he claimed  two  reliefs, viz.,  that the decree passed by the Small Causes  Court  in Suit No. 45/1974 was nullity, and an injunction  restraining the  defendant  in  the suit, namely,  Rameshwar  Dayal  the present  appellant, from dispossessing him of the  property. The  Trial  Court  dismissed the suit on 7th  May,  1979  by recording  a finding that plaintiff Banda was not the  owner but  it was the appellant before us, viz.   Rameshwar  Dayal who was its owner.  In support of its conclusion, the  Trial Court  relied on a registered rent deed dated 7th  December, 1956  under  which  the present appellant had  let  out  the property in dispute to some other tenant, earlier. 3.The judgment of the Trial Court was set aside in appeal by  the Civil Judge, District Muzaffarnagar by his  decision dated 13th December, 1985 the effect of which was to  decree the  suit filed by the respondent Banda.  The second  appeal filed  by the appellant was dismissed by the High  Court  by the impugned order. 4.Two  contentions were raised before us by  Shri  Shanti Bhushan,  the learned counsel appearing for  the  appellant. The first was that the decree passed by a court of competent jurisdiction  could  not  be declared as not  binding  on  a person  who  was  a party to the suit, and  the  second  was that,the  view taken by the lower appellate court  that  the judgment  of the Small Causes Court did not operate  as  res judicata between the parties because the Small Causes  Court had  no  jurisdiction  to  decide  the  title  to  the  suit property, is erroneous in law. 5.In  support  of his contentions,  Shri  Shanti  Bhushan relied  upon  Mohammed  Fasi  v.  Abdul  Qyayum,  AIR   1978 Allahabad  470;  Alimuddin  v.  Mohammed  Ishak,  AIR   1974 Rajasthan  170;  Ata Mohammad v. Ghera, AIR  1962  H.P.  17; Nongthombam Mani Singh v. Puyam Chand Mohan Singh, AIR  1959 Manipur  14;  Labhu Ram v. Mool Chand, AIR 1921  Lahore  91; Ganga  Prasad  v.  Nandu Ram, AIR 1916  Patna  75  and  Smt. Qaisari  Begum  v. Munney & Anr., (1981) 1  All  India  Rent Control  Journal  549 which is a decision of  the  Allahabad High Court. 202 6.As against the aforesaid decisions, the learned counsel Shri  P.P. Rao appearing for the respondent has relied  upon two  decisions,  viz.,  Gangabai  w/o  Ram  Bilas  Gilda  v. Chhabubai  w/o  Pukharajji  Gandhi, [1982] 1  SCR  1176  and Richpal Singh & Ors. v. Dalip, [1987] 4 SCC 410.

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7.In  order  to appreciate the rival contentions,  it  is first  necessary to reproduce Section 23 of  the  Provincial Small  Causes  Court  Act (hereinafter referred  to  as  the ’Act’).               "23.   Return  of Plants  in  suits  involving               questions   of  title.   (1)   Notwithstanding               anything in the foregoing portion of this Act,               when  the right of a plaintiff and the  relief               claimed  by  him in a Court  of  Small  Causes               depend  upon the proof or disproof of a  title               to  immovable  property or other  title  which               such  a  Court cannot finally  determine,  the               Court  may  at any stage  of  the  proceedings               return  the plaint to be presented to a  Court               having jurisdiction to determine the title.               (2)When a Court returns a plaint under sub-               section   (1),  it  shall  comply   with   the               provisions of the second paragraph of  section               57  of  the Code of Civil Procedure  and  make               such  order with respect to costs as it  deems               just, and the Court shall, for the purposes               of the Indian Limitation Act, 1877, be  deemed               to  have been unable to entertain the suit  by               reason of a cause of a nature like to that  of               defect of jurisdiction." 8.It is sought to be argued before us on the basis of the aforesaid   provisions  of  Section  23,  that  it  is   not obligatory  on the Small Causes Court to refer the issue  of title  to immovable property to a Court having  jurisdiction to  determine such title.  The expression ’The Court may  at any  stage of the proceedings.....................  suggests that an option is given to the Small Causes Court to use its discretion  whether  it would proceed to  decide  the  title itself   or   refer  the  question  to  the   Court   having jurisdiction to do so.  According to us, in the facts of the present  case, it is not necessary to go into that  question since  the  decision  of  the  Small  Causes  Court  nowhere indicates that the Court had used. any such discretion, even assuming that it is the discretion of the Court to refer  or not  the question, to the Court of  competent  jurisdiction. The  decision  which is contained in  two  paragraphs  only, reads as follows: 203               "This  suit is for ejectment of the  defendant               from  a Gher (House) as per details  given  at               the  foot  of the plaint as well  as  for  the               recovery of Rs. 1756.50 towards rent at Rs. 50               a month with effect from 7.6.1974 upto date of               delivery of possession.  The defendant did not               turn up to contest the suit on the date  fixed               for  hearing.  Hence, the case  proceeded  ex-               parte  against him.  The plaintiff has  proved               his case by adducing necessary evidence.               The  suit is ex-parte decreed with  costs  for               the ejectment of the defendants from the  suit               property  as well as for the recovery  of  Rs.               1756.50   as  prayed.   The  plaintiff   shall               further  be entitled to recover mesne  profits               with  effect  from  7.6.74 upto  the  date  of               delivery of possession as permitted by law  at               Rs. 50 a month on paying the requisite  court-               fees on the execution side.’ 9.   In order to appreciate what the Small Causes Court  has and  has not done, it is necessary to remember that in  that suit the present appellant was the plaintiff and both  Habib

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and the present respondent Banda were defendant Nos. 1 and 2 respectively.    It  is  not  disputed  that   the   present respondent had filed his written statement, and had in terms contended that he was the owner of the property in  question being  in  possession  of the same since  the  time  of  his ancestors,  and  he had not been living in the  property  as subtenant.  However, the aforesaid so-called decision of the Small Causes Court does not refer to the present  respondent or to the written statement filed by him and the plea  taken by  him in the said written statement.  It only states  that "the suit is for ejectment of the defendant (not defendants) as  per the details given at the foot of the plaint as  well as  for the recovery of Rs. 175650 towards rent etc. etc  It also says that "the defendant (not defendants) did not  turn up  to  contest the suit hence the case  proceeded  ex-parte against him (not them)." Then it proceeds to state that  the plaintiff   has  proved  his  case  by  adducing   necessary evidence. In the second paragraph, the decision says that "the suit is ex-parte  decreed  with  costs  for  the  ejectment  of  the defendants from the suit property.....". 10.  It  is, therefore, obvious that the Small Causes  Court proceeded to dispose of the suit as if what mattered in  the suit  was  only  the presence or absence  of  the  defendant Habib.  It did not take any cognizance of the 204 present respondent’s presence or absence, and of the written statement  filed  by him.  Had it taken  cognizance  of  the written  statement, it would have become obligatory  on  its part  to  set  down the points for  determination.   Had  it further  itself decided to proceed with adjudication of  the title  instead  of referring it to the  Court  of  competent jurisdiction, it could have done so after stating the points for determination.  What is more, the Court had to give  its decision on the point.  The Small Causes Court did  neither. In  fact, as is clear from the so-called decision the  whole of  which is reproduced above, there is no reference to  the written  statement or to the question of title to  the  suit property  raised,  therein nor is there a  decision  on  the point even remotely, not to say incidentally. 11.  In the circumstances, the controversy raised before  us as to whether the Small Causes Court is under an  obligation or  not to refer the issue with regard to the title  to  the property  to a Court of competent jurisdiction  and  whether the  bar  of res judicata would apply to  the  present  suit brought  to  establish  title to  the  property,  is  purely academic.  It would be a travesty of justice to hold that by the above order the Small Causes Court had even incidentally decided  the issue with regard to the title which  fell  for determination  directly and substantially in the  subsequent suit which has led to the present appeal. 12.  We are, therefore, more than satisfied that the bar  of res  judicata is not applicable to the determination of  the issue  with  regard  to the title to  the  property  in  the present suit.  It is for these reasons that we do not  think it  necessary  to discuss in detail the decisions  cited  on both  sides.   However, we may refer to a decision  of  this Court   Gangabai  w/o  Rambilas  Gilda  v.   Chhabubai   who Pukharajji  Gandhi  [1982] 1 SCR 1176, which  has  a  direct bearing on the question as to when a finding on the question of  title to immovable property rendered by a  Small  Causes Court  would  operate  as res  judicata.   After  discussing various decisions on the point, this Court has held there as follows :               "when  a  finding  as to  title  to  immovable

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             property  is  rendered  by a  Court  of  Small               Causes res judicata cannot be pleaded as a bar               in  a  subsequent regular civil suit  for  the               determination  or enforcement of any right  or               interest  in immovable property.  In order  to               operate  as res judicata the finding  must  be               one   disposing  of  a  matter  directly   and               substantially in issue in the               205               former  suit  and the issue should  have  been               heard and finally decided by the court  trying               such suit.  A matter which is collaterally  or               incidentally  in  issue  for  the  purpose  of               deciding the matter which is directly in issue               in the case cannot be made the basis of a plea               of  res  judicata.  A question of title  in  a               Small Cause suit can be regarded as incidental               only to the substantial issue in the suit  and               cannot operate as res judicata in a subsequent               suit  in  which  the  question  of  title   is               directly raised." This  is  a sufficient answer to the  contention  that  when Small  Causes Court incidentally determines the question  of title,  it operate as res judicata.  The contention  ignores that to operate as res judicata the first finding must be on an issue which has been directly and substantially in  issue in  the former suit.  If the finding is  given  incidentally while  determining  another  issue which  was  directly  and substantially in issue, such finding cannot be said to be on an  issue which was directly and substantially in  issue  in the  former  suit.  However, it is not necessary for  us  to discuss  this  point  at length since we have  come  to  the conclusion  that  not only the Small Causes  Court  has  not given any finding on the issue even incidentally, it has not even referred to the said issue in its so-called decision. 13.  The next question is whether the decision of the  Small Causes  Court is binding on the respondent Banda.  In  order to be binding, the order of the Court disposing of the  suit must  amount  to a decree.  Section 2 (2) of Code  of  Civil Procedure (the ’Code’) defines decree as follows :               "(2)  ’Decree’ means the formal expression  of               an  adjudication which, so far as regards  the               court  expressing it, conclusively  determines               the right of the parties with regard to all or               any of the matters in controversy in the  suit               and    may    be   either    preliminary    or               final................... The  definition  of ’Order’ given in Section 2 (14)  of  the Code is as follows: (14) "Order’ means the formal expression of any decision  of a Civil Court which is not a decree." However, neither the order nor the decree should be confused with judgment’ which is defined by Section 2 (9) of the Code as "the statement 206 given  by  the Judge of the grounds of a decree  or  order’. The  definitions of decree, order and judgment given in  the Code show that decree or order as the case may be, can  come into  existence  only  if there is an  adjudication  on  the relevant issues, which conclusively determines the rights of the parties.    14.    We have already pointed out earlier that the Small Causes Court has not even noticed the matters in controversy between the appellant and the respondent, and  consequently, there  has  been  no adjudication or decision  on  the  said

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matters.    There   is  thus  no   ’formal   expression   of adjudication.............   conclusively   determining   the rights  of  the  parties  with  regard  to.............  the matters in controversy in the suit".     15.   It  must  be remembered in  this  connection  that Rules 4 (1) and 5 of order XX of the Code are applicable  to the  judgments of the Small Causes Court.  The Rules are  as follows :               "4.  Judgment  of Small Causes  Courts   (1)               Judgments of a Court of Small Causes need  not               contain more than the points for determination               and the decision thereon.               (2)   Judgments of other Courts Judgments  of               other courts shall contain a concise statement               of the case, the points for determination, the               decision  thereon  and the  reasons  for  such               decision."               "S. Court to state Its decision on each issue.               In suits in which issues have been framed, the               Court  shall  state its finding  or  decision,               with the reasons therefore, upon each separate               issue, unless the finding upon any one or more               of the issue is sufficient for the decision of               the suit."        ’Points  for determination" referred to in Rule  4(1) are  obviously nothing but ’issues" contemplated by Rules  1 and 3 of Order XIV of the Code.  The present decision of the Small Causes Court which has not even stated the points  for determination and given finding thereon, is obviously not  a judgment  within the meaning of Section 2 (9) of  the  Code. Since  the matters were in controversy between the  parties, it  is  only  a judgment which could have given  rise  to  a decree.   The so-called decision of the Small Causes  Court, therefore, does not amount to a decree within the me 207 of Section 2 (2) read with Section 2(9) and Rules 4(1) and 5 of Order XX of the Code. 16.  It  is not disputed that in view of the  provisions  of Section 17 (1) of the Provincial Small Causes Court Act, the Code is applicable to Small Causes Court except where it  is otherwise  provided  either  by the Code or  the  said  Act. Apart  from Rules 4 (1) and .5 of Order XX of the  Code,  on this  count  also, it was obligatory for  the  Small  Causes Court,  in  the  present  case,  to  state  the  points  for determination  and give its finding or decision on  each  of the  said points.  Hence the present decision of  the  Small Causes  court is not a judgment and a decree in the  eye  of law  and is, therefore, non est as far as the respondent  is concerned. 17.  In  the  circumstances, the appeal  is  dismissed  with costs. U.R.                            Appeal dismissed. 208