IV-- COMPETENT COURT (EXPLANATION VIII & II)
The fourth condition of res judicata is that the court which decided the former suit must have been a court competent to try the subsequent suit.
Thus, the decision in a previous suit by a court, not competent to try the subsequent suit, will not operate as res judicata.
The principle behind this condition is that the decision of the court of limited jurisdiction ought not to be final and binding on a court of unlimited jurisdiction.
COMPETENT COURT- MEANING: EXPLANATION VIII---
DEVENDRA KUMAR V. PRAMUDA KANTA, AIR 1933 CAL 879
The expression "competent to try" means "competent to try the subsequent suit if brought at the time the first suit was brought".
In other words, the relevant point of time for deciding the question of competence of the court is the date when the former suit was brought and not the date when the subsequent suit was filed.
TYPES OF COURTS--
In order that a decision in a former suit may operate as res judicata, the court which decided that suit must have been either:
(a) a court of exclusive jurisdiction; or A plea of res judicata can successfully be taken in respect of judgments of courts of exclusive jurisdiction, like Revenue Courts, Land Acquisition Courts, Administration Courts, etc. If a matter directly and substantially in issue in a former suit has been adjudicated upon by a court of exclusive jurisdiction, such adjudication will bar the trial of the same matter in a subsequent suit in an ordinary civil court. (Raj Lakshmi v. Banamali Sen, AIR 1953 SC 33 at p. 40:)(Bhagwan Dayal v. Reoti Devi, AIR 1962 SC 287)
(b) a court of limited jurisdiction; or A decision on an issue heard and finally decided by a court of limited jurisdiction will also operate as res judicata in a subsequent suit irrespective of the fact that such court of limited jurisdiction was not competent to try the subsequent suit. ([P.V.N. Devoki Amma v. P.V.N. Kunhi Raman, AIR 1980 Ker 230; Biro v. Banta Singh, AIR 1980 Punj 164.])
(c) a court of concurrent jurisdiction. Where the court which decided the former suit was a court of concurrent jurisdiction having competence to try the subsequent suit, the decision given by it would operate as res judicata in a subsequent suit. ([Pandurang Mahadeo v. Annaji Balwant, (1971) 3 SCC 530: AIR 1971 SC 2228.])
Concurrent jurisdiction means concurrent as regards the pecuniary limit as well as the subject-matter of the suit.
"Competency" in Section 11 has no reference to territorial jurisdiction of the court. ([Maqbul v. Amir Hasan, AIR 1916 PC 136.])
COURT OF LIMITED JURISDICTION
The expression "court of limited jurisdiction" has been interpreted differently by different High Courts.
In Nabin Majhi v. Tela Majhi AIR 1978 Cal 440; the High Court of Calcutta held that courts of limited jurisdiction are courts other than ordinary civil courts, such as Revenue Courts, Land Acquisition Courts, Insolvency Courts, etc. A court of limited pecuniary jurisdiction cannot be said to be a court of limited jurisdiction.
According to S. 11. The court which decided the former suit shall be competent to try such subsequent suit or issue in subsequent suit.
In Nabin Majhi v. Tela Majhi it was contended that a court of Munsif by reason of its limited pecuniary jurisdiction can be said to be a court of limited jurisdiction and hence, its decision would operate as res judicata in a subsequent suit instituted in the court of a subordinate judge.
Negativing the contention and interpreting Explanation VIII in the light of the substantive provision (Section 11), the Court observed: "One of the conditions for the applicability of Section 11 is that the Court in which the former suit was instituted must be competent to try the subsequent suit. If the former Court is unable to try the subsequent suit as it is beyond its pecuniary jurisdiction, the decision of the former court will not be res judicata in the subsequent suit. If the legislature had really intended to remove the condition retaining to the competency of the former Court, in that case it would have removed the same from the section itself. In the face of the provision of Section 11, retaining the said condition for the applicability of res judicata, that the former Court must be competent to try the subsequent suit, it is difficult for us to accept the interpretation of Explanation VIII as suggested on behalf of the appellant.
On the other hand, in P.V.N. Devoki Amma v. P.V.N.Kunhi Raman, [AIR 1980 Ker 230 (233): the High Court of Kerala did not agree with the Calcutta view in Nabin Majhi case and observed that the term "a court of limited jurisdiction" is wide enough to include a court whose jurisdiction is subject to a pecuniary jurisdiction and it will not be right to interpret the said expression as connoting only courts other than ordinary civil courts.
Explanation VIII: —AN ISSUE heard and finally decided by a Court of limited jurisdiction, competent to decide such issue, shall operate as res judicata in a subsequent suit, notwithstanding that such Court of limited jurisdiction was not competent to try such subsequent suit in which such issue has been subsequently raised."
The High Court of Kerala, however, took a contrary view in P.V.N. Devoki Amma v. P.VN. Kunhi Raman
Disagreeing with the ratio laid down in Nabin Majhi and keeping in mind the object of enacting Explanation VIII, the Court concluded: "In our opinion, the expression 'a Court of limited jurisdiction' is wide enough to include a Court whose jurisdiction is subject to a pecuniary limitation and it will not be right to interpret the said expression as connoting only Courts other than ordinary civil courts. Such a narrow and restricted interpretation is not warranted by the words used by Parliament. The Statement of Objects and Reasons for the Bill which was subsequently enacted as Amending Act 104 of 1976 and the report of the Joint Select Committee, which effected some substantial changes in the Bill as originally drafted, make it abundantly clear that the intention underlying the introduction of Explanation VIII was that the decisions of the Courts of limited jurisdiction should operate as res judicata in a subsequent suit although the Court of limited jurisdiction may not be competent to try such subsequent suit... .
"In our opinion the object and purpose underlying the introduction of Explanation VIII was much wider, namely, to render the principle of res judicata fully effective so that issues heard and finally decided between the parties to an action by any Court competent to decide such issues should not be allowed to be reagitated by such parties or persons claiming through them in a subsequent litigation."
It is submitted that the view taken by the High Court of Kerala in Devoki Amma is correct and preferable to the one taken by the High Court of Calcutta in Nabin Majhi.
The underlying object of the amendment and insertion of Explanation VIII is to avoid multiplicity of suits.
It is, no doubt, true that Parliament has not deleted from Section 11 the words "in a court competent to try such subsequent suit or the suit in which such issue has subsequently been raised", but the section and the explanation must be read harmoniously.
If it is not so read, the primary object of enacting Explanation VIII would be defeated, in as much as a party by adding some property or increasing the value thereof from time to time may go on instituting suits after suits, deliberately and successfully avoiding the decision against him to operate as res judicata. It would encourage endless litigation.
It is further submitted that it would have been better had Parliament, in view of insertion of Explanation VIII by the Amendment Act of 1976, deleted the words "a court competent to try such subsequent suit or the suit in which such issue has been subsequently raised".
But it is settled law that an explanation to a section in a given case, instead of serving the traditional purpose of explaining a section, may work as an independent provision. Ultimately it is the intention of the legislature which is paramount, and the mere use of a label cannot control or deflect such intention.
Moreover, such a construction would result in an anomalous situation. If a matter is decided by a court of limited jurisdiction, Explanation VIII would apply and such decision would operate as res judicata in a subsequent suit.
But if it is decided by a court of limited pecuniary jurisdiction, the decision would not attract Section 11. This is really absurd. Further, such an interpretation would be against the basic principle underlying the doctrine of res judicata which is reflected in the well-known maxim that "larger public interest requires that all litigation must, sooner than later, come to an end".
SULOCHANA AMMA V. NARAYANAN NIAIR. [AIR 1994 SC152.]
A special reference may be made to a decision of the Supreme Court in above case. In that case, A by a deed of settlement gave life estate to B, and the remainder to C. After the death of A, B alienated the property to D. C filed a suit against B in the Munsif’s court restraining B from alienating the property and committing acts of waste.
During the pendency of the suit, D sold the property to E. C's suit against B was decreed and it was held that B had no right to alienate property and permanent injunction was also granted. B's appeal was also dismissed. D, who was not a party to the earlier suit was committing acts of waste. C, therefore, filed another suit against B and D for permanent injunction. That suit was also decreed. But the question of D's title was left open.
C filed a third suit against E in the court of the Subordinate judge for declaration of his title which was decreed. It was confirmed up to the High Court. E approached the Supreme Court.
Considering the purpose of the amendment and insertion of Explanation VIII, the Supreme Court stated, "No doubt main body of Section 11 was not amended, yet the expression 'the court of limited jurisdiction' in Explanation VIII is wide enough to include a court whose jurisdiction is subject to pecuniary limitation and other cognate expressions analogous thereto. Therefore, Section 11 is to be read in combination and harmony with Explanation VIII.
The result that would flow is that an order or an issue which had arisen directly and substantially between the parties or their privies and decided finally by a competent court or tribunal, though of limited special jurisdiction, which includes pecuniary jurisdiction, will operate as res judicata in a subsequent suit or proceeding, notwithstanding the fact that such court of limited or special jurisdiction was not a competent court to try the subsequent suit.
The technical aspect, for instance, pecuniary or subject-wise competence of the earlier forum to adjudicate the subject-matter or to grant reliefs sought in the subsequent litigation, should be immaterial when the general doctrine of res judicata is to be invoked.
Explanation VIII, inserted by the Amending Act of 1976, was intended to serve this purpose and to clarify this purpose and to clarify this position.
Thus, Supreme Court overruled the "very narrow view" of the High Court of Calcutta [Nabin Majhi v. Tela Majhi, Promode and Ranjan v. Nirapada Mondal,] and approved the "broader view" of the High Courts of Kerala, [P.V.N. Devoki Amma v. P.V.N. Kunhi Raman, ] Orissa [Kumarmonisa v. Himachal Sahu, AIR 1981 Ori 177.] and Madras,[C. Aruniugathan v. S. Muthusami, (1991) 2 Mad LJ 538.].
CHURCH OF SOUTH INDIA TRUST ASSN. V. TELUGU CHURCH COUNCIL [AIR 1996 SC 987.]
In above case, it was contended that lack of territorial jurisdiction goes to the root of the competence of a court trying a suit and a decision rendered by a court lacking territorial jurisdiction would not operate as res judicata in a subsequent suit.
Negating the contention and referring to leading decisions on the point, the Supreme Court stated, "We are, therefore, of the opinion that Section 11 of the present Code (excluding Explanation VIII) envisages that the judgment in a former suit would operate as a res judicata, if the court which decided the said suit was competent to try the same by virtue of its pecuniary jurisdiction and the subject-matter to try the subsequent suit and that it is not necessary that the said court should have had territorial jurisdiction to decide the subsequent suit."
TEST
The test in such case is whether the second suit could have been decided by the first court? If the answer to the question is in affirmative, the decision will operate as res judicata. But if the reply is in the negative, res judicata has no application.
RIGHT OF APPEAL: EXPLANATION II
POSITION PRIOR TO EXPLANATION II
Under the Code of 1882, it was held by the High Courts of Bombay, Madras and Punjab that a prior decision in which no second appeal lay, such as suits of a nature cognizable by a Court of Small Causes when the amount of subject-matter does not exceed five hundred rupees, could not operate as res judicata in a subsequent suit in which such appeal was maintainable.
The High Court of Calcutta, on the other hand, had taken a contrary view and held that such decision would operate as res judicata, notwithstanding that no second appeal was allowed by law in the former suit.
POSITION AFTER EXPLANATION II —
Explanation II to Section 11 makes it clear that for the purpose of res judicata, the competence of the court shall be determined irrespective of any provision as to a right of appeal from the decision of such court.
Explanation II as inserted in the present Code affirms the Calcutta view and clarifies that the competence of a court does not depend on the right of appeal from a decision from such Court.
The fact that no second appeal lay in the previous suit is no longer a valid ground for holding that the decision in the previous suit would not operate as res judicata.
EXPLANATION II. —
For the purposes of this section, the competence of a Court shall be determined irrespective of any provisions as to a right of appeal from the decision of such Court.
