Sunday 26 September 2021

To what extent doctrine of res judicata is applicable to Compromise decree?

 E.2.4 Compromise decree and Res Judicata

46. It is contended by the counsel for the appellant that since a compromise deed was arrived at between the Mysore State Board of Wakf, Abdul Khuddus and the lessee with regard to the possession of the suit property, the other reliefs have been abandoned. It was thus contended that in view of the compromise deed, the claim of title to the suit property has been abandoned and cannot be raised in the subsequent suit. In Pulavarthi Venkata Subba Rao v. Valluri Jagannadha Rao AIR 1967 SC 591 and Sunderabai v. Devaji Shankar Deshpande AIR 1954 SC 82, this Court held that since a compromise decree is not a decision of the court, the principle of res judicata cannot be made applicable. However, it was held that the compromise decree may in effect create estoppel by conduct between the parties, and the parties by estoppel will be prevented from initiating a subsequent suit. Chief Justice Bhagwati (as he was then) writing for a three judge bench in Sunderabai observed:

“12. The bar of res judicata however, may not in terms be applicable in the present case, as the decree passed in Suit No. 291 of 1937 was a decree in terms of the compromise. The terms of Section 11 of the CPC would not be strictly applicable to the same but the underlying principle of estoppel would still apply. Vide: the commentary of Sir Dinshaw Mulla on Section 11 of the CPC at p. 84 of the 11th Edn. under the caption Consent decree and estoppel:

“The present section does not apply in terms to consent decrees; for it cannot be said in the cases of such decrees that the matters in issue between the parties ‘have been heard and finally decided’ within the meaning of this section. A consent decree, however, has to all intents and purposes the same effect as res judicata as a decree passed in invitum. It raises an estoppel as much as a decree passed in invitum.”

Since it is the principle of estoppel by conduct that will bar the institution of the subsequent suit, it is pertinent that we refer to the compromise decree to determine if any compromise was arrived at between the parties on the title to the suit property. On a perusal of the compromise deed, it is evident that a compromise was reached only on the issue of possession and lease. When no compromise was arrived at between the parties on the title to the suit property, then no estoppel by conduct could also be inferred. Additionally, the counsel for the respondent referred to Order 23 Rule 3A to contend that a subsequent suit is barred when the previous suit is dismissed through a compromise decree. However, the provision would not be applicable to the case at hand since it only bars the challenge to a compromise decree on the ground that it is unlawful. Therefore, the disposal of the second suit in view of the compromise would not bar the filing of the suit out of which the instant proceedings arise.

III. OS 100 of 1983: the third suit

47. The suit was instituted in the Court of Munsif at Gubbi by the Karnataka Wakf Board. The defendants were Khazi Abdul Masood son of Abdul Khuddus (the first defendant) while the second, third, fourth and fifth defendants were persons to whom the property was sought to be alienated by the first defendant.

48. In was averred in the plaint that the cause of action arose when the first defendant who had no right and interest in the suit schedule property was trying to interfere with the possession of the plaintiff with the assistance of the second, third and fourth defendants. The relief which was sought in the suit was a permanent injunction restraining the defendants from interfering with the possession of the plaintiff – Karnataka Board of Wakfs. The suit was instituted on 4 August 1983. Significantly, the suit out of which the present dispute arises was instituted on 5 November 1984 for seeking declaration and possession. It was only thereafter on 22 November 1984 that OS 100 of 1983 was withdrawn. OS 100 of 1983 was a suit for a bare injunction and no declaration was claimed. In any event there was no adjudication on merits.

49. The third suit of 1983 instituted by the Karnataka Board of Wakfs was a suit for injunction simpliciter. No question of title was raised and none was adjudicated upon. As a matter of fact, the suit was instituted on the apprehension that the property was likely to be alienated by the legal representatives of Abdul Khuddus. Before the suit of 1983 was withdrawn, the suit out of which these proceedings arise was instituted for seeking comprehensive reliefs in terms of a declaration of title and a permanent injunction. Therefore, the decision in the third suit does not bar the initiation of the suit out of which the instant proceeding arises.

50. The High Court dismissed the second appeal holding that the courts conclusively decided on the title to the suit property in the first suit (OS 92/1950-51) and that any subsequent suit on the same issue of title would be barred by the principles of res judicata. In view of the discussion above, this finding arrived at by the High Court is erroneous. While holding that the judgment in the first suit has conclusively decided that the title over the suit property belongs to Abdul Khuddus, the High Court has lost sight of the observations in paragraph 7 and 10 of the judgment of the trial court. It has been specifically held there that the suit property was a Khazi service Inam and that Abdul Khuddus has a prima facie right to the suit property. There was no adjudication to the effect that Abdul Khuddus had an absolute title to the suit property. Additionally, the decision of the courts in the first suit was delivered before the suit property was notified as a wakf property in view of Notification No. MWB 19(11) dated 6 July 1965. The principle of res judicata can thus not be applied without taking into consideration this changed circumstance.

51. We are also of the opinion that the High Court has committed an error in applying the principle of res judicata based on the judgment in the second suit. It was observed by the High Court that the second suit that was decreed in terms of the compromise was intended to put the litigation to an end and would thus bar any subsequent suit on the title to the suit property by virtue of the principle of res judicata. For this purpose, reliance was placed on a two judge bench decision of this court in Byram Pestonji Gariwala (supra) where it was held that a challenge to a consent decree six years later was vitiated by reason of delay, estoppel, and res judicata. However, the High Court lost sight of the fact that the compromise deed was entered into specifically with regard to the handing over of possession of the suit property by the lessee at the end of the lease and no compromise on the title to the suit property was arrived at.




Civil Appeal No. 10946 of 2014

The Jamia Masjid Vs  Sri K V Rudrappa

Author: Dr Dhananjaya Y Chandrachud, J

Dated:September 23, 2021.

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