Monday, 15 August 2016

Whether mere adverse finding in dismissed suit will act as res judicata in future litigation?

Thus, an appeal does not lie against mere "findings"
recorded by a court unless the findings amount to a "decree"
or "order". Where a suit, is dismissed, the defendant against
whom an adverse finding might have come to be recorded on
some issue, has no right of appeal and he cannot question
those findings before the appellate court. (See Ganga Bai v.
Vinay Kumar (1974) 3 S.C.R.882 : (AIR 1974 SSC 1126).”
30. In case of Smt.Ganga Bai Vs. Vijay Kumar and others,
reported in 1974 SC 1126 it was observed as under:
“17. These provisions show that under the Code of Civil
Procedure, an appeal lies only as against a decree or as
ag1ainst an order passed under rules from which an appeal is
expressly allowed by Order 43, Rule 1. No appeal can lie
against a mere finding for the simple reason that the Code
does not provide for any such appeal. It must follow that First
Appeal No.72 of 1959 filed by defendants 2 and 3 was not
maintainable as it was directed against a mere finding
recorded by the trial Court.”
31. As noted, the plaintiffs did try to appeal against the said
judgment in Civil Suit No.113 of 1973. However, said appeal the
District Court dismissed on the ground of limitation. When he filed
revision, the High Court observed that since the suit is dismissed
any adverse finding would not form res judicata against the
defendants.For all these reasons we do not find any error in the view of
the learned Single Judge. The Letters Patent Appeal is dismissed.
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
LETTERS PATENT APPEAL NO. 333 of 1991
In FIRST APPEAL NO. 771 of 1982

MAHABALLI BOGRA SHETTY THR'LEGAL HEIRS & 1....Appellant(s)
Versus
SMT.MOHINI THADHARAM CHAWLA SINCE DECSD. THRU LEGAL HEIRS
& 2....Respondent(s)

CORAM: HONOURABLE MR.JUSTICE AKIL KURESHI
and
HONOURABLE MR.JUSTICE MOHINDER PAL
Date : 08/09/2015
Citation:AIR 2016(NOC)533 Guj

This appeal is directed against the judgment of the learned
Single Judge dated dated 11.06.1991 in First Appeal No.771 of
1982. We would like to borrow facts from the judgment of the
learned Single Judge. One Haridas Kevalram was the owner and
landlord of Shop No.D-23, situated at Gandhidham, Kachchh. He
gave that shop on lease to Thadharam Chavla, father of original
plaintiffs no.1 and 3 and husband of plaintiff no.2. This happened
some time in the year 1951. In January 1959, Thadaram gave the
shop to the defendants under various documents executed from
time to time. Thadaram died in October 1966. On 20.10.1972 an

agreement- Exh.129 came to be executed between the plaintiffs
and defendants which was titled as “agreement to run a business”.
1.1 The plaintiffs filed Special Civil Suit No.84 of 1977 against
the defendants and prayed for direction to defendants to hand over
peaceful charge of running business of Chawla Cafe and Milk Bar
situated at Shop No.D/22-23 at Gandhidham along with all its
property articles as shown in the list attached with the licence
agreement dated 20.09.1972. They also claimed Rs.4,100/-
towards arrears of licence fee due from 01.01.1977 to 19.09.1977.
They also prayed for direction to the defendants to account income
and expenditure of the suit business.
2. According to the plaintiffs under the said agreement,
exh.129, the plaintiffs had given the suit premises to the
defendants by way of licence for running shop for manufacturing
ice candy and to run business in the name of Messrs Chawla Cafe
& Milk Bar for a period of five years. According to the plaintiffs the
term of licence expired on 19.09.1977 and the defendants did not
express any desire to renew licence in terms of the said agreement.
The plaintiffs were therefore, entitled to take back the business as
well as possession of the suit premises. According to the plaintiffs
defendants also committed breach of terms of licence as they had
not paid licence fee regularly.

2.1 The defendants appeared and filed written statement- exh.46
in which they contended, inter alia, that civil court has no
jurisdiction to entertain the suit. In view of the fact that the
plaintiffs are tenants of the original landlord and defendant no.2 is
sub-tenant any suit for recovery of rent must lie before rent court.
The defendants also raised issue of res judicata contending that
several litigations between the parties had taken place in the past
and judgments of the competent courts would bind both the sides.
According to the defendants in one such proceedings they were
declared as tenants of the suit property. To several past litigations
referred to by defendants, we would make mention at a later stage.
3. The Trial Court raised several issues including regarding
maintainability of the suit, jurisdiction of the Court to try the same,
regarding question of res judicata as also regarding the true import
of the agreement, exh.129. The Trial Court also framed an issue at
the instance of the defendants whether the defendants prove that
they had executed the said agreement under misrepresentation.
4. The Trial Court held that the agreement in question was not
in the nature of leave and licence and that the same could not have
been executed in face of judgment of the previous litigation. The
Trial Court held that the plaintiffs were not entitled to any relief,
however, with respect to execution of document under
misrepresentation or fraud the Trial Court held in favour of the

plaintiffs.
5. Judgment of the Trial Court was carried in appeal by the
plaintiffs before the learned Single Judge. The learned Single Judge
in detailed judgment reversed the judgment of the Trial Court and
allowed the appeal. The learned Judge on the basis of pleadings
and submissions made before him noted that merely two points
came up for consideration, viz.
(i) Whether what was granted by the appellants to the
respondents under the suit agreement was a licence or
whether it was a tenancy?
(ii) Whether the appellants' contention that the
respondents are the licensees is barred by res judicata?
6. The learned Judge took minute note of various terms of the
said agreement, exh.129 and concluded that,
“15. The learned trial Judge has, in his judgment, after
referring to some of the terms contained in exh.129,
said that the conditions embodied in those terms are
consistent with the tenancy agreement. The learned
Judge has not endeavoured to show as to how the said
terms are consistent with the tenancy agreement.
Presently, I will point out that the learned Judge's
decision has been very much affected by irrelevant
considerations. He has referred to 5.15A of the Rent
Act, which is applicable in Maharashtra State, but not
applicable in Gujarat.

16. Having read and re-read the agreement exh.129
and the list of movables130 annexed thereto, I am
convinced that the manifest intention of the parties to
the agreement was to create a licence to manufacture
ice candy and to run the business of M/s Chawla Cafe &
Milk Bar, in favour of the respondents and for running
that business, the appellants gave to the respondents
the movables, the fittings, the fixtures, the furniture,
the machinery, crockery, etc. mentioned in the list list
Exh.130. I am also convinced that the parties clearly
intend to exclude any relationship of tenancy in favour
of the respondents.”
7. With respect to misrepresentation or fraud the learned Judge
confirmed the view of the Trial Court and held that the agreement
was executed by the parties with eyes wide open.
8. On the question of res judicata the defendants had referred
to three previous litigations. First was a Civil Suit No.113 of 1973
which was filed by Haridas, original owner of the suit shop in which
defendant no.2 admitted himself to be sub-tenant of the shop. The
plaintiff was also co-defendant and described himself as a mere
licensee, who was given licence to run business. The said suit of
Haridas in relation to relief of possession came to be dismissed by
Anjar Civil Court on the ground that notice terminating tenancy
was illegal. The plaintiffs' suit for eviction was therefore,
dismissed. However, the present plaintiffs were ordered to pay
arrears of rent.
9. Another litigation was Civil Suit No.12 of 1969 filed by
plaintiffs before Gandhidham court against defendant no.2 alleging

that the said defendant was Manager of their business and though
they had asked for account he had not rendered account of the
business. In the said suit, viz. Civil Suit NO.12 of 1969 defendant
no.2 herein denied that he was the Manager, but set up a case of
sub-tenancy. The suit came to be dismissed by Trial Court and
plaintiff filed Appeal No.97 of 1972 before District Court, Bhuj. It
appears that during the pendency of such appeal parties arrived at
a settlement, which culminated into execution of agreement dated
20.09.1972, exh.129, upon which appeal came to be withdrawn on
22.09.1972.
10. Third litigation pertains to Civil Suit No.255 of 1967 which
was filed in December 1967 by defendant no.2 for declaration that
he was tenant of the suit land, which came to be withdrawn by him
by filing purshis dated 27.12.1972, on which Trial Court passed an
order that the plaintiffs withdrew the suit unconditionally and
accordingly suit was disposed of. This purshis along with order
passed by the court dated 27.12.1972 was produced at exh.105 in
the present proceedings.
11. Principally, according to the defendants effect of the order
passed by the civil court in Civil Suit No.113 of 1973 would be that
defendants would be treated as statutory tenants of the suit
property. They would point out that the plaintiff had filed appeal
against judgment of the Trial Court. However, the Appellate Court

refused to condone the delay and the appeal stood dismissed on the
ground of limitation. Further, revision preferred before the High
Court was also not maintained. According to the defendants
therefore, the combined effect of judgment of the Trial Court in
Civil Suit No.113 of 1973 and Civil Suit No.12 of 1969 would be
that the plaintiffs would be precluded from raising any ground that
the agreement in question was one in nature of licence agreement.
These contentions were turned down by the learned Single Judge,
firstly on the ground that judgment in Civil Suit No.12 of 1969
would have no bearing since after judgment and decree the parties
have entered into fresh agreement dated 20.09.1972 and in
compliance with such agreement the plaintiffs withdrew their
appeal against the judgment of the Trial Court. The learned Judge
was convinced that all disputes raised by the plaintiffs in Civil Suit
NO.12 of 1969 would no longer survive in view of such further
developments resulting into settlement between the parties and
execution of agreement dated 20.09.1972, exh.129. The learned
Judge noted that after execution of said agreement the appeal
came to be withdrawn by the plaintiffs.
12. With respect to outcome of Civil Suit No.113 of 1973 the
learned Judge noted that the plaintiffs herein filed appeal against
judgment and decree in Civil Suit No.113 of 1973 before the
District Court. The appeal was belated one. Application for
condonation of delay was rejected by the District Court, upon

which the plaintiffs approached the High Court by filing Civil
Revision Application No.587 of 1977, which was rejected at
admission stage by passing the following order:
“As the alleged finding about relations between
defendants no.1, 2 and 3 cannot operate as res judicata,
the plaintiff's suit having been dismissed and there
being no question of an appeal by defendants, the
apprehension of Mr.Shah is not well based. The
Revision Application which is otherwise resting on
finding of facts, is rejected.”
13. The learned Judge referred to several decisions of various
High Courts to come to the conclusion that,
“54. The line of decisions referred to hereinabove
clearly points to the proposition that the test whether a
contention would be res judicata is whether the party
against whom that contention was decided in the
earlier proceeding had or had not a right of appeal
against the decision in the earlier proceeding. If that
party had a right of appeal against the decision in the
earlier proceeding where the contention was found
against him, then, if that party attempts to raise the
same contention over again in the subsequent
proceedings, it would be barred by res judicata. If
however, that party had no right of appeal to challenge
that decision in the earlier proceeding, on the ground
that the ultimate decision was all in his favour, though
the finding of a particular issue was against him, then
in that event, no res judicata would be established
against him in the subsequent proceedings, where he
tries to re-agitate that very same contention.”
14. In view of such conclusions the learned Single Judge allowed
the appeal in following terms:

“60. In view of the foregoing discussion, the appeal
should be allowed. Hence it is ordered that:
(a) The respondents- defendants do hand over vacant
and peaceful possession of the suit shop along with the
running business in the name of M/s Chawla Cafe &
Milk Bar, which is being run therein, to the appellantsplaintiffs;
and they also should hand over to the
appellants- plaintiffs, all the items of movable
properties as mentioned in the list attached to the
agreement, exh.129, or the value of those articles as
mentioned in that list. That agreement exh.129 and the
list annexed thereto are ordered to form part of this
decree.
(b) The respondents- defendants are also directed to
pay to the appellants- plaintiffs, Rs.4,100/- being
licence fee, upto the date of the suit.
(c) The appellants- plaintiffs are also entitled to
mesne profits and for that the trial court is directed to
hold necessary inquiry for determination of the mesne
profits.
(d) The respondents- defendants shall pay to the
appellants- plaintiffs the costs of the suit and of this
appeal.”
15. It is this judgment which the original defendants have
challenged in this LPA. Learned counsel Ms.Paurami B. Sheth for
the defendants submitted that the learned Single Judge committed
serious error in considering the terms of agreement, exh.129. She
would contend that premises were given on rent, giving licence to
run business was merely a cloak. She submitted that previously
the Trial Court had already ruled that defendant no.2 was tenant of
the suit premises. The plaintiffs could not aver to the contrary on
the ground of res judicata. She further contended that the learned
Judge committed serious error in interpreting various terms of the

said agreement to come to the conclusion that agreement created
relationship of leave and licence.
16. On the other hand opponent no.1- Shri Ashok Thadharam
Chawla appearing in person submitted that the learned Judge has
examined the matter at length and correctly found that agreement,
exh.129 was in nature of licence agreement, previous litigation had
no bearing on the present suit. He submitted that defendants could
not claim sub-tenancy which was not permissible under the law. He
referred to various decisions in support of his contentions.
17. As noted only two questions came up for consideration before
the learned Single Judge, viz., whether agreement, exh.129 was in
nature of licence agreement or it created tenancy in favour of the
defendants and whether suit was barred by res judicata.
In order to deal with the first question we may refer to agreement,
exh.129 dated 20.09.1972. It is titled as, “agreement to run a
business” and starts with preamble which reads, “This deed of
licence for running a business in the name of “Chawla Cafe & Milk
Bar” is made on this … ”. Agreement also referred to differences
between the parties which resulted into defendant no.2 filing Civil
Suit No.255 of 1967 before Civil Court at Gandhidham for a
declaration that he is a tenant and the plaintiffs filing Civil Suit
No.12 of 1969 for taking account and charge of the business. In

this background agreement recorded as under:
“WHEREAS the present licensees and the licensors
having satisfied; agree to withdraw their objections and
also the suits as mentioned above and WHEREAS the
present licencees, having handed over the charge of the
said business and possession of the premises to the
owners, i.e. present licensors.
WHEREAS the present licensees now approach the
present owners licensors with a request to grant unto
them leave and licence to run the said business in shop
no.D-23, including all its furniture, fixtures and Ice
Candy Machine as a pure and simple licensee and
WHEREAS the licensors having felt the bona fides of
the said licencees, agree to do so on terms and
conditions mutually agreed upon as enumerated
hereinafter. This deed of leave and licence, therefore,
witnesseth as under:”
17.1 In para 1 of the said agreement it is provided that the
licensors hereby grant the leave and licence unto the licensees, for
manufacturing ice candy and for running the said business of
Chawla Cafe & Milk Bar along with the furniture and fixtures as
shown in the list annexed with the agreement for a period of five
years with an option of further five years after completion of the
original period subject to condition that the licensees shall inform
the licensors in writing at least two months prior to end of original
five year period of leave. If licensees want to continue business on
leave and licence basis thereafter they should approach the
licensors at least three months before end of the period of five
years and if they offer a compensation equal to the market rate,
then licensors can give preference to the licensees for a further

period of five years.
18. In para 2 licensors agreed to pay licensees sum of Rs.475/- by
way of licence fee for the first original five years, and Rs.600/- per
month as a licence fee for second optional period of five years for
running the said business of Cafe and Milk Bar and for
manufacturing ice candy (hereinafter referred to as 'the said
business') including use of furniture, fixtures, ice candy machine,
radio, etc. as shown in the list attached herewith.
19. Paras 4, 5 and 6 are clauses of considerable importance
which read as under:
“4. That the licensees have no connection with the
landlord of premises and that the licensors will pay the
rent to him directly. That it is mutually agreed that out
of the two family room cabins which are there in Hotel
premises some portion of the first one is kept in the
possession of the licensors and they may use the same
as they like with a board on it as 'owners cabin' on the
outside of the cabin.
5. That the licensors have reserved their rights to
utilize in any way and enjoy full rights and benefits of
whatever the nature of the two cabins (one of Panbidi
and cigarette and other as mentioned above in the
above paragraph) situated along with the wall of the
shop premises and other one in the shop and as such
the licensees will have no right or any interest, of
whatever nature therein and that the licensees shall not
carry on any business of panbidi or any other business
in the hotel in any form whatsoever except the one for
manufacturing ice candy and for running 'Chawla Cafe
& Milk Bar' for which this leave and licence is granted.
6. That it is mutually agreed if the licensees do not

intend to continue the said business in the said
premises which is given to them for use only as a
permissive use and inciliary to running the business
they should inform the licensors at least before two
months before the end of original five years or if it is
renewed for further five years as mentioned above then
at least before three months before the date of expiry of
further five years and in any case if the licence period
is expired or the licence is cancelled then the licensees
shall hand over the peaceful possession of the said
business with furnitures fixtures, etc. as mentioned in
the list, on the expiry of the period or on the date fixed
by the cancellation and in case the licensees fail to do
so then the licensors will take necessary legal actions
for taking possession against them and the licensees
will be solely responsible for all the costs and
consequences thereof.”
20. In para 7 the parties agreed that the licensors will remain in
legal possession of the shop building and will have a control over
the same and the licensors allow the licensees to make use of the
premises as permissible use only and as ancillary for running the
said business for certain fee mentioned in the document. It was
further made clear that the licensees will have no right or interest
in the said shop premises in any form whatsoever and that neither
tenancy rights nor any right of any nature would be created in their
favour. In para 8 it was reiterated that,
“8. It is also made clear that the licensors shall have
a complete control over the said premises and that the
said shop premises will remain in the name of licensors
and they will be only responsible to the landlord and
that it is further clear that the licensees are not been
(sic.) given any occupancy rights nor any rights of
whatsoever nature nor exclusive possession of the said
premises and that it will remain as the property of the
and in the legal possession of the licensors.”

In para 10 it was provided that if licensees want to hand over the
possession of the said business before the stipulated period the
licensors will be entitled to claim the full licence fee for the entire
period irrespective of handing over the possession of the business.
In para 12 the parties agreed that the licensors would not be
entitled to cancel leave and licence before the expiry of the licence
period, original or optional, unless there is a breach of any other
conditions committed by the licensee. In para 14 it was provided
that licensors will be at liberty to make use of their cabins which
they have reserved for their personal use and will also be at liberty
to inspect the business and furnitures, fixtures and machinery at
any time during the business hours and licensees shall show them
and shall create no obstruction in the process.
21. It can thus, be seen that the document clearly was one in
nature of licence agreement. At no stage, the plaintiffs intended to
create any tenancy rights in favour of the defendants by executing
the said agreement. As noted at the very outset the agreement is
titled as 'deed of licence'. It gives right to defendants to run
business in the name of Chawla Cafe and Milk Bar. Emphatically
the agreement provides at multiple places that the plaintiffs
continued to enjoy control and possession of the suit premises and
defendants are permitted to permissive use thereof for limited

purpose of running business. As noted in para 7 the plaintiffs will
have full control of the suit premises. As per para 8, the plaintiffs
would be solely responsible to the landlord. It was clarified that
licensees were not given any occupancy right. In para 14 the
parties agreed that the plaintiffs would have right to inspect the
premises, furnitures and fixtures during the working hours and the
defendants would not obstruct any such inspection. In para 4 it
was provided that the licensees have no connection with the
landlord of premises and that the licensors will pay the rent to him
directly.
22. Looked from any angle the learned Judge was perfectly
justified in coming to the conclusion that the agreement was in
nature of leave and licence agreement and not tenancy agreement.
23. Regarding res judicata, as noted, the defendants referred to
three civil litigations intra-party. With respect to the plaintiffs' suit,
viz. Civil Suit No.12 of 1969 and defendants' suit, viz. Civil Suit
No.255 of 1967, issue is possible of a summary disposal. We may
recall that the plaintiffs' Civil Suit No.12 of 1969 for taking account
of business came to be dismissed against which Appeal No.97 of
1972 was pending before District Court. On the other hand the suit
filed by defendant no.2 being Civil Suit No.255 of 1967 was also
pending before the Civil Court at Gandhidham when the
agreement, Exh.129 was executed. Both these proceedings were

specifically mentioned in the agreement- Exh.169 suggesting that
pending such proceedings the parties have arrived at a settlement
which culminated into agreement, exh.129. The learned Judge was
therefore, perfectly justified in holding that orders passed in such
proceedings would cast no shadow on the present litigation since
the present suit arises out of bilateral relations emerging from
agreement- exh.129. In the said agreement itself it was noted that
pending such proceedings the parties having arrived at settlement
executed the said document. It was precisely for this reason that
within two days of execution of this document the plaintiffs
withdrew their Appeal No.97 of 1972. Defendant no.2 sometime
thereafter withdrew his Civil Suit NO.255 of 1967. Civil Suit
No.255 of 1967 came to be disposed as withdrawn unconditionally.
Obviously therefore, nothing in the said suit would prevent the
present plaintiffs from prosecuting their rights in these
proceedings. The appeal of the plaintiffs against the judgment of
the Trial Court in Civil Suit No.12 of 1969 came to be withdrawn in
view of execution of agreement, Exh.129. Whatever might have
been stated by the Trial Court while disposing of Civil Suit No.12 of
1969, therefore, would not form res judicata against the plaintiffs
in pursuing their remedies arising out of agreement, exh.129. The
question that needs little more elaborate consideration is
judgment of the Trial Court in Civil Suit No.113 of 1973 filed by
Haridas. Present plaintiffs and defendant no.2 were co- defendants
in such suit. The said suit came to be disposed of by the Trial

Court by judgment dated 09.05.1975. The plaintiffs' prayer for
eviction of the suit premises was dismissed. However, the plaintiff
was held entitled to recover Rs.100/- as arrears of rent from
defendants no.1, 2 and 3, viz. present plaintiffs, and further sum of
Rs.50/- per month from the said defendants by way of mesne profit
for certain period. In such judgment the Trial Court referred to
Civil Suit No.12 of 1969 filed by the present plaintiffs in which
according to the Court issue regarding sub-letting of suit premises
was directly at issue which was decided against the plaintiffs in
such proceedings. The learned Judge noted that the plaintiffs'
appeal came to be dismissed by the District Court. In this
background the learned Judge deiced issue no.8 in favour of
present defendant no.2, which issue reads as under:
“Issue No.8.
27. Now the plff claimed Rs.100/- for the arrears of
rent for Oct and Nov of 1967 and Rs.50/- per month for
the mesne profits for the use and occupation. As far as
this issue is concerned, there is no contest. It is also
admitted fact that the deft no.1 has not paid rents of
Oct & Nov 1967 to the plff. So, in my view, the plff
succeeds to prove that he is entitled to recover Rs.100/-
for the rents for Oct & Nov of 1967 and Rs.50/- p.m. for
the mesne profits from the defts no.1 to 3 from the date
of this suit till the date of order. So, in my opinion the
plff succeeds to this issue and hence I am inclined to
hold it decided in favour of the plaintiff accordingly.”
Whether defendant no.4 proves that he is statutory tenant in
respect of suit shop and is protected by section 15 of th Bombay
Rent Act?

24. We are of the opinion that the learned Single Judge was
perfectly justified in coming to the conclusion that the findings and
conclusions arrived by the Trial Court in the said judgment dated
09.05.1975 would not constitute res judicata in the present
proceedings. As noted the suit was filed by original landlordHaridas.
Plaintiffs and defendant no.2 were co- defendants. The
suit was for eviction decree. The Trial Court dismissed this prayer
and refused to grant eviction. Since the suit was dismissed, the
defendants no.1, 2 and 3, viz. present plaintiffs had no right to file
appeal against such judgment since an appeal under section 96 of
the Code of Civil Procedure would lie only against a decree. When
decree is refused defendants could not have maintained their
appeal merely on a finding or an issue which was decided against
them. This is not to suggest that between co-plaintiffs in a given
situation if unsuccessful defendant was aggrieved, finding would
not act as res judicata in future litigation, if ingredients of section
11 of the CPC are satisfied. This is only to suggest that in a case
where suit is dismissed, defendants would have no right to appeal
merely on an adverse finding.
25. In a decision in case of Midnapur Zamindari Co. Ltd. Vs.
Naresh Narayan Roy, reported in A.I.R. 1922 Privy Council 241 it
is observed that defendants having succeeded on the other plea,
had no occasion to go further as to the finding against them. On

that basis it was held that mere adverse finding earlier decided
would not act as res judicata in subsequent proceedings.
26. In case of Saligram Sharan Singh Vs. The State of Bihar
and others reported in A.I.R. 1974 Patna 1 brief facts were such
the suit was dismissed by the Trial Court deciding all the issues
including preliminary issues regarding maintainability of the suit
for want of notice under section 80 of the Code of Civil Procedure
and for absence of cause of action. The Appellate Court while
confirming the decree of dismissal of the suit on the preliminary
issues gave adverse findings on other issues. It was held that
decision on those issues being of no effect cannot operate as res
judicata in subsequent suit or proceeding and as such the
defendant had no right to file a second appeal against the decision.
The learned Single Judge of this Court in case of Mehta Jivanlal
Vasantji Vs. The Trustees of Gayatri Mandir, reported in 1965
GLR 194, held that,
“4. With respect to the learned trial Judge, it must be
pointed out that the learned trial Judge has completely
overlooked one important aspect of the law relating to
re judicata. It is well settled law and it is also provided
in section 11 of the Code of Civil Procedure that before
any issue or any subsequent suit can be barred by res
judicata the earlier matter must have been heard and
finally disposed of by the Court in the earlier suit. Now,
in the earlier suit at the stage of the Second Appeal
before the High Court, which was disposed of by Vyas,
J. in 1958, the 'Pujari', who is the defendant in the
present suit, had succeeded. Therefore, the 'Pujari'
could not have appealed to the Supreme Court or by

way of Letters Patent Appeal against the findings of
Vyas, J. regarding the legality of the Trust or the
validity of the appointment of the trustees or the
validity of the rules framed by them, which points were
decided by Vyas, J. on merits in Second Appeal No.153
of 1957 on January 9, 1958. Therefore, it could not be
said that on those points there was any final disposal by
the High Court in the earlier litigation. In the
commentaries of Sir Dinshah Mulla on the Civil
Procedure Code, 12th Ed. it has been observed as
follows:
“If the plaintiff's suit is wholly dismissed, no issue
decided against the defendant can operate as res
judicata against him in a subsequent suit, for the
defendant cannot appeal from a finding on any
such issue, the decree being wholly in his favour”
On the finding recorded by him that the notice given by
the trustees to the 'Pujari' violated the principles of
natural justice, Vyas, J. held that the suit of the
plaintiffs should be wholly dismissed. That being the
case, whatever observations were made regarding the
merits of the case, viz., regarding the validity of the
Trust or the appointment of the trustees or validity of
the rules or the competence of the trustees to remove
the 'Pujari' cannot operate as res judicata on any of
these points. In illustration No.(1) based on a decision
of the Calcutta High Court, at page 92 of Sir Dinshah
Mulla's Book on C.P.C. It has been stated as follows:
“In a suit by A against B for ejectment, B
contends (1) that no notice to quit was given, and
(2) that the land being majhes land, he is not
liable to be evicted at all. The suit is dismissed on
a finding that no notice to quit was given. The
Court, however, also finds that the land is not
majhes land. A afterwards sues B to evict him
from the land after giving notice to B. B contends
that the land is majhes land and that he is not
liable to be evicted. The finding in the first suit
that the land was not majhes land does not
operate as res judicata so as to preclude B from
raising the same contention in the subsequent
suit, the reason being that A's suit having been
dismissed, B could not have appealed from the
finding that the land was not majhes land. The
Court having found in the first suit that A had not

given notice to quit, it was not necessary for the
determination of the suit to decide whether the
land was majhes land or not. The first suit was
dismissed in spite of the finding in A's favour that
the land was not majhes land.”
This principles in connection with the rule of res
judicata is so well known that it is not necessary for me
to cite any authorities or any further rulings in this
connection. It is, therefore, clear that the learned Trial
Judge was in error when he held that the points
referred to in issues nos.3 and 4 to the extent that he so
held were barred by res judicata. Under these
circumstances it is clear that the decision that points
referred to in issue no.3 and the question of legality of
the Trust referred to in issue no.4 were barred by res
judicata, was clearly contrary to legal principles.”
27. In case of Banarsi and others Vs. Ram Phal, reported in
A.I.R. 2003 SC 1989, the Supreme Court held and observed as
under:
“8. Sections 96 and 100 of the CPC make provision for an
appeal being preferred from every original decree or from
every decree passed in appeal respectively; none of the
provisions enumerates the person who can file an appeal.
However, it is settled by a long catena of decisions that to be
entitled to file an appeal the person must be one aggrieved by
the decree. Unless a person is prejudicially or adversely
affected by the decree he is not entitled to file an appeal (See
Phoolchand and Anr. v. Gopal Lal, [1967] 3 SCR 153; Smt.
Jatan Kanwar Golcha v. M/s Golcha Properties (P) Ltd., [1970]
3 SCC 573; Smt. Ganga Bai v. Vijay Kumar and Ors., [1974] 2
SCC 393. No appeal lies against a mere finding. It is
significant to note that both Sections 96 and 100 of the CPC
provide for an appeal against decree and not against
judgment.”
28. In case of Nalakath Sainuddin Vs. Koorikadan Sulaiman,
reported in A.I.R. 2002 SC 2562, Supreme Court observed as
under:

“16. We agree with the view taken by the High Courts of
Madhya Pradesh and Madras. We are of the opinion that __
(i) .. .. ..
(ii) .. .. ..
(iii) ’Any aggrieved party’, the expression employed in
Section 20(1), means a person feeling aggrieved by the
ultimate decision, that is, the operative part of the order. A
party to the proceedings, who has succeeded in securing the
relief prayed for, is not a party aggrieved though the order
contains a finding or two adverse to him. The respondent can
support the order and pray for the ultimate decision being
sustained, without filing a revision of his own, and for
achieving such end he may seek reversal of any findings
recorded against him. However, if the non-petitioning party
feels entitled to a more beneficial or larger order in his
favour but was allowed a lesser or smaller relief then to the
extent of claiming the more beneficial or larger relief he
should have filed a revision petition of his own as he was ’an
aggrieved party’ to that extent.”
29. In case of Deva Ram and another Vs. Ishwar Chand and
another, reported in A.I.R. 1996 SC 378 it was observed as under:
“24. Let us now consider the plea regarding the effect of an
adverse finding recorded by the court against a party in
whose favour the suit or the appeal is ultimately decided.
25. It is provided in Section 96 of the C.P.C. that an appeal
shall lie from every decree passed by any court exercising
original jurisdiction to the court authorised to hear appeal
from the decision of such court. So also, Section 100 provides
that an appeal shall lie to the High Court from every decree
passed in appeal. Thus sine qua non in both the provisions is
the "decree" and unless the decree is passed, an appeal
would not lie under Section 96 nor would it lie under Section
100 of the Civil Procedure Code. Similarly, an appeal lies
against an "order" under Section 104 read with Order 43
Rule 1 of the Civil Procedure Code where the "orders"
against which appeal would lie have been enumerated.
Unless there is an "order" as defined in Section 2(14) and

unless that "order" falls within the list of "orders" indicated in
Order 43, an appeal would not lie.
26. Thus, an appeal does not lie against mere "findings"
recorded by a court unless the findings amount to a "decree"
or "order". Where a suit, is dismissed, the defendant against
whom an adverse finding might have come to be recorded on
some issue, has no right of appeal and he cannot question
those findings before the appellate court. (See Ganga Bai v.
Vinay Kumar (1974) 3 S.C.R.882 : (AIR 1974 SSC 1126).”
30. In case of Smt.Ganga Bai Vs. Vijay Kumar and others,
reported in 1974 SC 1126 it was observed as under:
“17. These provisions show that under the Code of Civil
Procedure, an appeal lies only as against a decree or as
ag1ainst an order passed under rules from which an appeal is
expressly allowed by Order 43, Rule 1. No appeal can lie
against a mere finding for the simple reason that the Code
does not provide for any such appeal. It must follow that First
Appeal No.72 of 1959 filed by defendants 2 and 3 was not
maintainable as it was directed against a mere finding
recorded by the trial Court.”
31. As noted, the plaintiffs did try to appeal against the said
judgment in Civil Suit No.113 of 1973. However, said appeal the
District Court dismissed on the ground of limitation. When he filed
revision, the High Court observed that since the suit is dismissed
any adverse finding would not form res judicata against the
defendants.
32. For all these reasons we do not find any error in the view of
the learned Single Judge. The Letters Patent Appeal is dismissed.
No cost.

33. Consequently all the Civil Applications are disposed of.
Record & Proceeding be transmitted to the Trial Court.
34. Learned counsel for the appellants requests for continuance
of interim protection for a period of four weeks to enable them to
file an appeal. This judgment shall stand stayed till 30th October
2015.
(AKIL KURESHI, J.)
(MOHINDER PAL, J.)

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