Monday, 11 January 2021

Union of India & Ors. v. Adani Exports Ltd. & Anr

 

In Union of India & Ors. v. Adani Exports Ltd. & Anr., (2002) 1 SCC 567, the Supreme Court considered the scope of Section 20 of CPC and Clause (2) of Article 226 of the Constitution while examining whether in that case the Gujarat High Court had territorial jurisdiction. The Court held that the facts which may be relevant to give rise to the “cause of action”, are only those which have “a nexus or relevance with the lis involved in the case and none else.” In the said case, the respondent had filed an application before the Gujarat High Court claiming the benefit of Pass-book Scheme under the provisions of the Import Export Policy introduced w.e.f. 1-4-1995 in relation to certain credits to be given on export of shrimps. However, none of the respondents in the civil application was stationed at Ahmedabad. Even the Pass-book, was to be issued by an Authority stationed at Chennai; the entries in the pass-book under the Scheme concerned were to be made by the Authority at Chennai and the export of prawns made by them and import of the inputs, benefit of which the respondents had sought in the application, were also to be made at Chennai. The Court held that the Gujarat High Court had no territorial jurisdiction, in spite of the fact that the respondents were carrying on their business of export and import from Ahmedabad, the orders of export and import were placed from and were executed at Ahmedabad, documents and payments of export and imports were sent/made at Ahmedabad, the credit of duty claimed in respect of export were handled from Ahmedabad, the respondents had executed a bank guarantee through their bankers as well as a bond at Ahmedabad, non-grant or denial of utilization of the credit in the pass-book might affect the company’s business at Ahmedabad. The court held as under:-

“......In order to confer jurisdiction on a High Court to entertain a writ petition or a special civil application as in this case, the High Court must be satisfied from the entire facts pleaded in support of the cause of action that those facts do constitute a cause so as to empower the court to decide a dispute which has, at least in part, arisen within its jurisdiction...... each and every fact pleaded by the respondents in their application does not ipso facto lead to the conclusion that those facts give rise to a cause of action within the court’s territorial jurisdiction unless those facts pleaded are such which have a nexus or relevance with the lis that is involved in the case. Facts which have no bearing with the lis or the dispute involved in the case, do not give rise to a cause of action so as to confer territorial jurisdiction on the court concerned. If we apply this principle then we see that none of the facts pleaded in para 16 of the petition, in our opinion, fall into the category of bundle of facts which would constitute a cause of action giving rise to a dispute which could confer territorial jurisdiction on the courts at Ahmedabad. ...... the fact that the respondents are carrying on the business of export and import or that they are receiving the export and import orders at Ahmedabad or that their documents and payments for exports and imports are sent/ made at Ahmedabad, has no connection whatsoever with the dispute that is involved in the applications. Similarly, the fact that the credit of duty claimed in respect of exports that were made from Chennai were handled by the respondents from Ahmedabad have also no connection whatsoever with the actions of the appellants impugned in the application. The non-granting and denial of credit in the passbook having an ultimate effect, if any, on the business of the respondents at Ahmedabad would not also, in our opinion, give rise to any such cause of action to a court at Ahmedabad to adjudicate on the actions complained against the appellants.”

Rajasthan High Court Advocates’ Association v. Union of India & Ors

 

In Rajasthan High Court Advocates’ Association v. Union of India & Ors., AIR 2001 SC 416, the Supreme Court considered the question of territorial jurisdiction of the Principal Seat of the Court at Jodhpur and the Bench at Jaipur and explained the meaning of “cause of action” observing as under:-

“The expression ‘cause of action’ has acquired a judicially settled meaning. In the restricted sense, ‘cause of action’ means the circumstance forming the infraction of the right or the immediate occasion for the action. In the wider sense, it means the necessary conditions for the maintenance of the suit, including not only the infraction of the rights, but the infraction coupled with the right itself. Compendiously the expression means every fact which would be necessary for the plaintiff to prove, if traversed, in order to support his right to the judgment of the court. Every fact which is necessary to be proved, as distinguishing from every piece of evidence which is necessary to prove each fact, comprises in a ‘cause of action.’ It has to be left to be determined in each individual case as to where the cause of action arose.”

Navinchandra N. Majithia v. State of Maharashtra & Ors

 

In Navinchandra N. Majithia v. State of Maharashtra & Ors., AIR 2000 SC 2966, the Supreme Court while considering the provisions of Clause (2) of Article 226 of the Constitution, observed as under:-

“In legal parlance the expression ‘cause of action’ is generally understood to mean a situation or state of facts that entitles a party to maintain an action in a court or a tribunal; a group of operative facts giving rise to one or more basis for suing; a factual situation that entitles one person to obtain a remedy in court from another person......’Cause of action’ is stated to be the entire set of facts that gives rise to an enforceable claim; the phrase comprises every fact, which, if traversed, the plaintiff must prove in order to obtain judgment......the meaning attributed to the phrase ‘cause of action’ in common legal parlance is, existence of those facts which give a party a right to judicial interference on his behalf.”

The Apex Court held that while considering the same, the court must examine as to whether institution of a complaint/ plaint is a mala fide move on the part of a party to harass and pressurise the other party for one reason or the other or to achieve an ulterior goal. For that consideration, the relief clause may be a relevant criterion for consideration but cannot be the sole consideration in the matter.

Oil & Natural Gas Commission v. Utpal Kumar Basu & Ors

 

In Oil & Natural Gas Commission v. Utpal Kumar Basu & Ors., (1994) 4 SCC 711, the Supreme Court considered the provisions of Clause (2) of Article 226 of the Constitution of India, which provides for territorial jurisdiction of the High Courts. The Apex Court held that while deciding the territorial jurisdiction of the Court, within which the cause of action, wholly or partly, arises, the facts must first be decided. It must also be ascertained which facts are true and the other facts must be disregarded, because the facts form integral part of the cause of action. In the said case, facts involved were that ONGC decided to set-up a Kerosene Processing Unit at Hajaria (Gujarat). EIL was appointed by the ONGC as its consultant and in that capacity, EIL issued advertisement from New Delhi calling for tenders and this advertisement was printed and published in all leading news papers in the country including The Times of India in circulation in West Bengal. In response to which tenders or bids were forwarded to EIL at New Delhi, which were scrutinized and finalized by the ONGC at New Delhi. However, the writ petition had been filed in the Calcutta High Court challenging the acceptance of tenders of the other party. Before the Supreme Court, it was contended that the Calcutta High Court had no jurisdiction as no cause of action had arisen, even partly, in its territorial jurisdiction. Mere communication to any person at a particular place or publication or reading of the news or notice etc. does not confer jurisdiction. After examining the facts of that case, the Apex Court came to the conclusion that the Calcutta High Court lacked jurisdiction. While deciding the said case, the Supreme Court placed reliance upon the judgment in Chand Koer V. Partab Singh, 15 Ind. Appeals 156, wherein it had been observed as under:-

“The cause of action has no relation whatsoever to the defence which may be set up by the defendant, nor does it depend upon the character of the relief prayed for by the plaintiff. It refers entirely to the grounds set-forth in the plaint as the cause of action; in other words, to the media upon which the plaintiff asked the court to arrive at a conclusion in his favour.”

Therefore, in determining the objection of lack of territorial jurisdiction, the court must take all the facts pleaded in support of the cause of action into consideration albeit without embargo upon an inquiry as to the correctness or otherwise of the said facts.

Suit to include the whole claim: O2 R2

 

Code of Civil Procedure

 

2. Suit to include the whole claim.—(1) Every suit shall include the whole of the claim which the plaintiff is entitled to make in respect of the cause of action; but a plaintiff may relinquish any portion of his claim in order to bring the suit within the jurisdiction of any Court.

(2) Relinquishment of part of claim.—Where a plaintiff omits to sue in respect of, or intentionally relinquishes, any portion of his claim, he shall not afterwards sue in respect of the portion so omitted or relinquished.

(3) Omission to sue for one of several reliefs.—A person entitled to more than one relief in respect of the same cause of action may sue for all or any of such reliefs; but if he omits, except with the leave of the Court, to sue for all such reliefs, he shall not afterwards sue for any relief so omitted.

Explanation.—For the purposes of this rule an obligation and a collateral security for its performance and successive claims arising under the same obligation shall be deemed respectively to constitute but one cause of action.

Illustration: A lets a house to be at a yearly of rent Rs. 1,200. The rent for the whole of the years 1905, 1906 and 1907 is due and unpaid. A sues B in 1908 only for the rent due for 1906. A shall not afterwards sue B for the rent due for 1905 or 1907.

 

Part in Red is original provisions from CPC reproduced here for reference.

Code of Civil Procedure


Simplified Explanation of provisions:

Explanation (4) of Section 11 of CPC also governs this rule. It is based on the doctrine of Res Judicata. 



Reference:

1) http://www.nja.nic.in/16%20CPC.pdf

Judgments on Res Judicata

We have already discussed Res judicata in Code of Civil Procedure. Here are some judgments about the doctrine of Res Judicata.

Judgment:

1) Kunjan Nair Sivaraman Nair v. Narayanan Nair (2004) 3 SCC 277: “Res judicata pro veritate accipitur” (a thing adjudged must be taken as truth) is the full maxim which has, over the years, shrunk to mere “res judicata”.

2) Dr. Subramanian Swamy v. State of Tamil Nadu & Ors 2014 (1) SCALE 79: The doctrine contains the rule of conclusiveness of the judgment which is based partly on the maxim of Roman jurisprudence “interest reipublicae ut sit finis litium” (it concerns the State that there be an end to law suits) and partly on the maxim “nemo debet bis vexari pro uno et eadem causa” (no man should be vexed twice over for the same cause).

3) Shah Shivraj Gopalji v. ED, Appakadh Ayiassa Bi & Ors., AIR 1949 PC 302; and Mohanlal Goenka v. Benoy Kishna Mukherjee & Ors., AIR 1953 SC 65: Even an erroneous decision on a question of law attracts the doctrine of res judicata between the parties to it. The correctness or otherwise of a judicial decision has no bearing upon the question whether or not it operates as res judicata. 

4) In Smt. Raj Lakshmi Dasi & Ors. v. Banamali Sen & Ors., AIR 1953 SC 33 and Sheoparsan Singh v. Ramnandan Singh, AIR 1916 PC 78: Apex Court while dealing with the doctrine of res judicata referred to and relied upon the judgment in Sheoparsan Singh v. Ramnandan Singh, AIR 1916 PC 78 wherein it had been observed as u: “…….. the rule of res judicata, while founded on ancient precedents, is dictated by a wisdom which is for all time….. Though the rule of the Code may be traced to an English source, it embodies a doctrine in no way opposed to the spirit of the law as expounded by the Hindu commentators. Vijnanesvara and Nilakantha include the plea of a former judgment among those allowed by law, each citing for this purpose the text of Katyayana, who describes the plea thus: 'If a person though defeated at law, sue again, he should be answered, ‘‘you were defeated formerly". This is called the plea of former judgment.’... And so the application of the rule by the courts in India should be influenced by no technical considerations of form, but by matter of substance within the limits allowed by law’’

5) Satyadhyan Ghosal & Ors. v. Smt. Deorajin Debi & Anr., AIR 1960 SC 941: The apex Court explained the scope of principle of res-judicata observing as under: “7. The principle of res judicata is based on the need of giving a finality to judicial decisions. What it says is that once a res is judicata, it shall not be adjudged again. Primarily it applies as between past litigation and future litigation, When a matter - whether on a question of fact or a question of law - has been decided between two parties in one suit or proceeding and the decision is final, either because no appeal was taken to a higher court or because the appeal was dismissed, or no appeal lies, neither party will be allowed in a future suit or proceeding between the same parties to canvass the matter again. This principle of res judicata is embodied in relation to suits in S. 11 of the Code of Civil Procedure; but even where S. 11 does not apply, the principle of res judicata has been applied by courts for the purpose of achieving finality in litigation. The result of this is that the original court as well as any higher court must in any future litigation proceed on the basis that the previous decision was correct.”

Also the Supreme Court considered the applicability of the doctrine in the proceedings at different stages in the same Suit and held as under:- “The principle of res judicata is based on the need of giving a finality to judicial decision. What it says is that once a res is judicata, it shall not be adjudged again. Primarily, it applies as between past litigation and future litigation....... This principle of res judicata is embodied in relation to Suits in Section 11 of the Code of Civil Procedure; but even where Section 11 does not apply, the principle of res judicata has been applied by courts for the purpose of achieving finality in litigation...... The principle of res judicata applies also as between two stages in the same litigation to this extent that a court, whether the trial court or a higher court, having, at an earlier stage, decided a matter in one way, will not allow the parties to re-agitate the matter again at the subsequent stage of the same proceedings.”

6) Amalgamated Coalfields Ltd. & Anr. v. Janapada Sabha Chhindwara & Ors., AIR 1964 SC 1013: The Constitution Bench of the apex court considered the issue of res judicata applicable in writ jurisdiction and held as under: “…Therefore, there can be no doubt that the general principle of res judicata applies to writ petitions filed under Article 32 or Article 226. It is necessary to emphasise that the application of the doctrine of res judicata to the petitions filed under Art. 32 does not in any way impair or affect the content of the fundamental rights guaranteed to the citizens of India. It only seeks to regulate the manner in which the said rights could be successfully asserted and vindicated in courts of law.”

7) Hope Plantations Ltd. v. Taluk Land Board, Peermade & Anr., (1999) 5 SCC 590: The apex Court has explained the scope of finality of the judgment of this Court observing as under: “One important consideration of public policy is that the decision pronounced by courts of competent jurisdiction should be final, unless they are modified or reversed by the appellate authority and other principle that no one should be made to face the same kind of litigation twice ever because such a procedure should be contrary to consideration of fair play and justice. Rule of res judicata prevents the parties to a judicial determination from litigating the same question over again even though the determination may even be demonstratedly wrong. When the proceedings have attained finality, parties are bound by the judgment and are estopped from questioning it.”

8) The State of Punjab v. Bua Das Kaushal, AIR 1971 SC 1676: A three-Judge Bench of the apex court considered the issue and came to the conclusion that if necessary facts were present in the mind of the parties and had gone into by the court, in such a fact-situation, absence of specific plea in written statement and framing of specific issue of res judicata by the court is immaterial.

9) Union of India v. Nanak Singh, AIR 1968 SC 1370 and Gulabchand Chhotalal v. State of Gujarat, AIR 1965 SC 1153: A similar view has been re-iterated by the apex court observing as under: “The apex Court in Gulabchand Chhotalal v. State of Gujarat, AIR 1965 SC 1153 observed that the provisions of Section 11 of the Code of Civil Procedure are not exhaustive with respect to all earlier decision operating as res judicata between the same parties on the same matter in controversy in a subsequent regular suit, and on the general principle of res judicata, any previous decision on a matter in controversy, decided after full contest or after affording fair opportunity to the parties to prove their case by a Court competent to decide it, will operate as res judicata in a subsequent regular suit. It is not necessary that the Court deciding the matter formerly be competent to decide the subsequent suit or that the former proceeding and the subsequent suit have the same subject-matter. There is no good reason to preclude, such decisions on matters in controversy in writ proceedings under Article 226 or Article 32 of the Constitution from operating as res judicata in subsequent regular suits on the same matters in controversy between the same parties and thus to give limited effect to the principle of the finality of decisions after full contest.”

10) Laxman Pandya v. State of U.P., (2011) 14 SCC 94: It was held that dismissal of earlier writ petitions would not affect adjudication of present writ petitions because both were based on different causes. In earlier writ petitions, they neither had the opportunity nor could they claim that acquisition will be deemed to have lapsed due to non-compliance with Section 11-A. Thus, dismissal or writ petitions filed in 1982 for default or otherwise did not operate as bar to the filing of fresh writ petitions in 2000. Undoubtedly, the doctrine of res judicata is applicable where earlier the Suit had been decided. Though the doctrine may not be attracted in different proceedings at different stages in the same Suit but the principle enshrined therein is, undoubtedly, applicable.

11) Arjun Singh v. Mohindra Kumar, AIR 1964 SC 993: The Apex Court observed as under:- “...... though Section 11 of the Code of Civil Procedure clearly contemplates the existence of two Suits and the findings in the first being res judicata in the later Suit, it is well established that the principle underlying it is equally applicable to the case of decision rendered at successive stages of the same Suit or proceeding. But where the principle of res judicata is involved in the case at the different stages of proceedings in the same Suit, the nature of the proceedings, the scope of the inquiry which the adjective law provides for decision being reached as well as the specific provisions made on matters touching decision are some of the material and relevant factors to be considered before the principle is held applicable.”

12) Vijayabai v. Shriram Tukaram, AIR 1999 SC 451: It would be impermissible to permit any party to raise an issue inter se where such an issue under the very Act has been decided in an early proceeding. Even if res judicata in its strict sense may not apply but its principle would be applicable. Parties who are disputing, if they were parties in an early proceeding under the very Act raising the same issue would be stopped from raising such an issue both on the principle of estoppel and constructive res judicata.

13) Munnibibi v. Triloki Nath, AIR 1931 PC 114: Three conditions were laid down:

1. There must be a conflict of interest between the defendants concerned

2. It must be necessary to decide this conflict to give the plaintiff the relief claimed

3. The question between the defendants must be finally decided. 

These rules govern the applicability of res judicata on the co-defendants.

14) Escorts Farms Ltd. v. Commissioner, Kumaon Division, Nainital, U.P. & Ors., (2004) 4 SCC 281: The Supreme Court examined the issue of res judicata observing that doctrine applied to give finality to “lis” in original or appellate proceedings. The issue once decided should not be allowed to be reopened and re-agitated twice over. The literal meaning of “res” is “everything that may form an object of rights and includes an object, subject- matter or status” and “res judicata” literally means “a matter adjudged a thing judicially acted upon or decided; a thing or matter settled by judgments”.

15) Forward Construction Co. & Ors. v. Prabhat Mandal, Andheri & Ors., AIR 1986 SC 391: The Supreme Court explained the scope of constructive res judicata as envisaged in Explanation IV to Section 11 of CPC and observed that the High Court was not right in holding that the earlier judgment would not operate as res judicata as one of the grounds taken in the present petition was conspicuous by its absence in the earlier petition. The Court held as under:

“Explanation IV to S.11, CPC provides that any matter which might and ought to have been made ground of defence or attack in such former suit shall be deemed to have been a matter directly and substantially in issue in such suit. An adjudication is conclusive and final not only as to the actual matter determined but as to every other matter which the parties might and ought to have litigated and have had it decided as incidental to or essentially connected with the subject matter of the litigation and every matter coming within the legitimate purview of the original action both in respect of the matters of claim or defence. The principle underlying Explanation IV is that where the parties have had an opportunity of controverting a matter that should be taken to be the same thing as if the matter had been actually controverted and decided. It is true that where a matter has been constructively in issue it cannot be said to have been actually heard and decided. It could only be deemed to have been heard and decided. The first reason, therefore, has absolutely no force.”

16) State of Karnataka v. All India Manufactures Organisation & Ors. AIR 2006 SC 1846: The Court held that doctrine also applies in case of a PIL, provided the earlier case was a genuine and a bona fide litigation as the judgment in the earlier case would be a judgment in rem. The doctrine of res judicata is not merely a matter of procedure but a doctrine evolved by the Courts in the larger public interest. Section 11 merely recognizes the said doctrine which is basically based on public policy.

The Supreme Court also explained the principle enshrined in Explanation IV to Section 11 observing that it is for preventing the abuse of the process of the Court through re-agitation of settled issues merely because the petitioners drew semantic distinctions from the earlier case. If the issues that had been raised ought to have been raised in the previous case, it would amount to abuse of process of the Court and, thus, cannot be allowed. 

17) Deewan Singh & Ors. v. Rajendra Pd. Ardevi & Ors., (2007) 10 SCC 528: The Apex Court examined a case where in the first round of litigation the Supreme Court had categorically opined that the disputed property was a Jain temple. In subsequent litigation, the Apex Court held that it was not permissible for the State to contend that it was Hindu temple as the finding in the earlier petition attained finality on this issue.

18) Tata Industries Ltd. v. Grasim Industries Ltd. (2008) 10 SCC 187: This case deals with jurisdiction to appoint the arbitrator u/s 11(6) of Arbitration and Conciliation Act, 1996. Supreme Court rejected the argument raised before the High Court and held – Question of locus standi not having been raised before the High Court did not survive – it amounted to an abandonment of the issue and cannot be raised before the Supreme Court. An issue which ought to have been raised earlier cannot be raised by the party in successive round of litigation.

19) Fatima Bibi Ahmed Patel v. State of Gujarat (2008) 6 SCC 789: Supreme Court held that the principle analogous to Res Judicata or constructive Res judicata does not apply to criminal cases. Where the entire proceedings have been initiated illegally and without jurisdiction, in such a case – even the principle of Res judicata (wherever applicable) would not apply.

20) Raju Ramsing Vasave v. Mahesh Deorao Bhivapurkar (2008) 9 SCC 54: The Supreme Court laid down 3 exceptions to the rule of Res Judicata

(i) When judgment is passed without jurisdiction

(ii) When matter involves a pure question of law.

(iii) When judgment has been obtained by committing fraud on the Court.




Reference:

1) http://www.nja.nic.in/16%20CPC.pdf

Order under rule 101 or rule 103 to be subject to the result or pending suit: O21 R104

 

Code of Civil Procedure

 

1[104. Order under rule 101 or rule 103 to be subject to the result or pending suit.—Every order made under rule 101 or rule 103 shall subject to the result of any suit that may be pending on the date of commencement of the proceeding in which such order, is made if in such suit the party against whom the order under rule 101 or rule 103 is made has sought to establish a right which he claims to the present possession of the property.

Note 1: Ins. by s. 72, ibid. (w.e.f. 1-2-1977).

 

Code of Civil Procedure


Explanation: