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PETITIONER: MATHURA PRASAD BAJOO JAISWAL & ORS.

       Vs.

RESPONDENT: DOSSIBAI N. B. JEEJEEBHOY

DATE OF JUDGMENT: 26/02/1970

BENCH: SHAH, J.C. BENCH: SHAH, J.C. HEGDE, K.S. GROVER, A.N.

CITATION:  1971 AIR 2355            1970 SCR  (3) 830

ACT: Code of Civil Procedure (Act 5 of 1908), s.  11-Jurisdiction of Court-Erroneous decision-If res judicata.

HEADNOTE: The   appellant   obtained  lease  of  an  open   land   for construction  of  buildings.  After the  constructions,  the appellant applied for determination of standard -rent  under the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947.  The application was rejected holding that the  provi- sions  of  the  Act  did not apply  to  open  land  let  for construction.   This view was confirmed by the  High  Court. Sometime thereafter in another case the High Court held that the  question whether the provisions of the Act  applied  to any  particular lease must be determined on its terms and  a building  lease in respect of an open plot was not  excluded from the provisions of the Act solely because open land  may be used from residence or educational purposes only after  a structure is built thereon.  Relying upon this judgment, the appellant  filed  a fresh application  for  determining  the standard  rent.   The Trial Judge rejected  the  application holding  that question of the applicability of the  Act  was res  judicata since it had been finally decided by the  High Court  between the same parties in respect of the same  land in  the  earlier proceeding for fixation of  standard  rent. The  order  was confirmed by first appellate  court  and  on further appeal by the High Court. HELD:The judgment did not operate as res judicata. A  question relating. to the jurisdiction of a Court  cannot be  deemed to have been finally determined by  an  erroneous decision of the Court.  If by an erroneous interpretation of the statute the court holds that it has no jurisdiction, the decision will not, operate as res judicata.  Similarly by an erroneous  decision if the Court assumes jurisdiction  which it does not possess under the statute, the decision will not operate  as res judicata between the same  parties,  whether the cause of action in the subsequent litigation is the same or otherwise. in  determining the application of the rule of res  judicata the court is not concerned with the correctness or otherwise of the earlier judgment.  The matter in issue, if it is  one

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purely  of  fact,  decided in the earlier  proceeding  by  a competent court must in a subsequent litigation between  the same  parties be regarded as finally decided and  cannot  be reopened.   A mixed question of law and fact  determined  in the  earlier proceeding between the same parties  may  -not, for   the  same  reason,  be  questioned  in  a   subsequent proceeding  between  the  same parties where  the  cause  of action is the same, for the expression "the matter in issue" in s. 11, Code of Civil Procedure means the right  litigated between  the parties, i.e., the facts on which the right  is claimed   or   denied  and  the  law   applicable   to   the determination  of that issue.  Where, however, the  question is  one purely of law and it relates to the jurisdiction  of the  Court or a decision of the Court sanctioning  something which  is illegal, by resort to the rule of res  judicata  a party  affected by the decision will not be precluded_  from challenging  the validity of that order because of the  rule of  res judicata, for a rule of procedure  cannot  supersede the law of the land. 83 1 if  the decision in the previous proceeding be  regarded  as conclusive  it will assume the status of a special  rule  of law  applicable to the parties relating to the  jurisdiction of_the  Court,  in derogation of the rule  declared  by  the Legislature. [835G 836 F] Parthasardhi  Ayyangar v. Chinnakrishna Ayyangar,  I.L.R.  5 Mad.  304, Chamanlal v. Bapubhai, I.L.R. 22 Bom. 669,  Kanta Devi  v.  Kalawati,  A.I.R. 1946 Lah.  419,,  Tarini  Charan Bhattacharjee v. Kedar Nath Haldar, I.L.R. 56 Cal. 723,  and Broken Hill Proprietary Company Ltd. v. Municipal Council of Broken Hill, 1926 A.C. 94, approved. Chandi Prasad v. Maharaja Mahendra Mahendra Singh, I.L.R. 23 All.,5, disapproved. Bindeshwari  Charan Singh v. Bageshwari, Charan Singh,  L.R. 63 I.A. 53, doubted.

JUDGMENT: CIVIL  APPELLATE JURISDICTION: Civil Appeals Nos.  1061  and 1627 to 1629 of 1966. Appeals  by special leave from the judgment and order  dated March  9,  10,  1965 of the Bombay High  Court  in  Revision Applications Nos. 1428, 1427, 1430 and 1676 of 1961. M.   C. Chagla, J. L. Hathi, K. L. Hathi and K. N. Bhat  for the appellants (in all the appeals). R.   P. Bhat, Janendra Lal, R. A. Gagrat and B. R. Agarwala, for the respondent (in all the appeals). The Judgment of the Court was delivered ’by Shah, J. Under an indenture dated August 2, 1950,  Dossibai- respondent  in this appeal-granted a lease of 555 sq.  yards in  village  Pahadi,  Taluka  Borivli  to  Mathura   Prasad- appellant herein-for constructing buildings for  residential or,business  purposes.  The appellant constructed  buildings on the land.  He then submitted an application in the  Court of  the  Civil  Judge, Junior  Division,  Borivli,  District Thana,  that  the standard rent of the  land  be  determined under  s.  11 of the Bombay Rents, Hotel and  Lodging  House Rates  Control  Act,  1947.  The Civil  Judge  rejected  the application holding that the provisions of the Bombay Rents, Hotel  and  Lodging House Rates Control Act, 1947,  did  not apply  to  open  land let  for  constructing  buildings  for residence,  education,  business, trade  or  storage.   This order was confirmed on September 28, 1955, by a single Judge of the Bombay High Court in a group of revision applications

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-: Mrs. Dossibai N. B. Jeejeebhoy v. Hingoo Manohar Missar : Nos.  233  to 242 of 1955.  But in Vinayak Gopal  Limaye  v. Laxman  Kashinath Athavale(1) the High Court of Bombay  held that the question whether s. 6(1) of the Act applies to  any particular  lease  must  be determined on its  terms  and  a building lease in respect of an open plot is not ex- (1)  I.L.R. [1956] Bom. 827. 832 cluded from s. 6(1) of the Act solely because open land  may be  used for residence or educational purposes only after  a structure is built thereon.  Relying upon this judgment, the appellant  filed a fresh petition in the Court of the  Small Causes,  Bombay, for an order determining the standard  rent of the premises.  The application was filed in the Court  of Small Causes because the area in which the land was situated had  since  been included within the limits of  the  Greater Bombay  area.   The  Trial Judge  rejected  the  application holding  that the question whether to an open piece of  land let   for   the  purpose  of  constructing   buildings   for -residence.  education, business  or trade s. 6 (1)  of  the Act  applied  was  res judicata since it  had  been  finally decided  by  the  High Court between  the  same  parties  in respect  of  the  same land in the  earlier  proceeding  for fixation  of  standard rent.  The order was confirmed  by  a Bench of the Court,of Small Causes and by the High Court  of Bombay.   With special leave, the appellant has appealed  to this Court. The  view  expressed  by the High Court of  Bombay  in  Mrs. Dossibai N. B.  Jeejeebhoy v. Hingoo Manohar Missar  (Civil) Revision  Application No. 233 of 1955 (decided on  September 28, 1955) was overruled by this Court in Mrs. Dossibai N. B. Jeejeebhoy v. Khemchand Gorumal & Others(1).  In the  latter case  the  Court affirmed the view expressed by  the  Bombay High Court in Vinayak Gopal Limaye’s case (2). But  all the Courts have held that the earlier  decision  of the  High  Court  of Bombay between  the  same  parties  and relating  to the same land is res judicata.  Section  II  of the Code of Civil Procedure which enacts the general rule of res judicata, insofar as it is relevant, provides :               "No Court shall try any suit or issue in which               the matter directly and substantially in issue               has  been directly and substantially in  issue               in a former suit between the same parties,  or               between parties under whom they or any of them               claim  litigating under the same title,  in  a               Court competent to try such subsequent suit or               the   suit  in  which  such  issue  has   been               subsequently  raised, and has been  heard  and               finally decided by such Court." The Civil judge, Junior Division, Borivli, was competent  to try the application for determination of standard rent,  and he  held that s 6(1) of the Bombay Rents, Hotel and  Lodging House  Rates Control Act, 1947, did not apply to  open  land let for construction of residential and business premises. The rule of res judicata applies if "the matter directly and substantially in issue" in a suit or proceeding was directly and sub- (1) I.L.R. (1956) Bom. 827. (2) [1962] 3 S.C.R. 928. 833 stantially  in issue in the previous suit between  the  same parties  and  had  been  heard  and  finally  decided  by  a competent Court.  The Civil Judge, Junior Division, Borivli, decided  the application between the parties to the  present proceeding for determination of standard rent in respect  of

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the same piece of land let for construction of buildings for residential  or business purposes.  The High Court has  held that  a  decision of a competent Court may  operate  as  res judicata in respect of not only an issue of fact, but  mixed issues of law and fact, and even abstract questions of  law. It  was  also  assumed by the High  Court  that  a  decision relating  to the jurisdiction of the Court to  entertain  or not  to  entertain a proceeding is  binding  and  conclusive between  these parties in respect of the same question in  a later proceeding. But  the doctrine of res judicata belongs to the  domain  of procedure  :  it  cannot  be exalted  to  the  status  of  a legislative direction between the parties so as to determine the  question  relating to the interpretation  of  enactment affecting the jurisdiction of a Court finally between  them, even though no question of fact or mixed question of law and fact  and  relating  to the right  in  dispute  between  the parties  has  been  determined thereby.   A  decision  of  a competent Court on a matter in issue may be res judicata  in another proceeding between the same parties : the "matter in issue"  may be an issue of fact, an issue of law, or one  of mixed  law and fact.  An issue of fact or an issue of  mixed law  and  fact  decided  by a  competent  court  is  finally determined  between  the  parties and  cannot  be  re-opened between  them in another proceeding.  The previous  decision on a matter in issue alone is res judicata : the reasons for the  decision  are  not res judicata.   A  matter  in  issue between  the parties is the right claimed by one  party  and denied  by the other, and the claim of right from  its  very nature  depends upon proof of facts and application  of  the relevant  law thereto.  A pure question of law unrelated  to facts  which give rise to a right, cannot be deemed to be  a matter  in issue.  When it is said that a previous  decision is res judicata, it is meant that the right claimed has been adjudicated  upon  and  cannot again be  placed  in  contest between  the  same  parties.   A  previous  decision  of   a competent  Court  on facts which are the foundation  of  the right  and the relevant law applicable to the  determination of  the , transaction which is the foundation of  the  right and  the relevant   law applicable  to  the determination of the  transactions which is   the soured of the  right is res judicata.   A previous decision on a  matter in issue  is  a composite   decision:  the  decision  of  law  can  not   be dissociated from the decision on facts on which the right is founded.   A  decision  on an issue of law will  be  as  res judicata   in  a  subsequent  proceeding  between  the  same parties,   if  the  cause   of  action  of  the   subsequent Proceeding  be the same as in the previous  proceeding,  but not when the cause of action is different, nor 834 when the law has since the earlier decision been altered  by a competent authority, nor when the decision relates to  the jurisdiction of the Court to try the earlier proceeding, nor when the earlier decision declares valid a transaction which is prohibited by law. The  authorities  on the question whether a  decision  on  a question  of, law operates as res- judicata disclose  widely differing  views.   In  some cases it  was  decided  that  a decision on a question of law can never be res judicata in a subsequent   proceeding   between   the   same   parties   : Parthasardhi   Ayyangar   v.   Chinnakrishna    Ayyangar(1); Chamanlal  v. Bapubhai (2) ; and Kanta Devi v.  Kalawati(3). On  the other hand Aikman, J., in Chandi Prasad v.  Maharaja Mahendra  Mahendra  Singh(1)  held  that  a  decision  on  a question of law is always res judicata.  But as observed  by

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Rankin,  C.J., in Tarini Charan Bhattacharjee v. Kedar  Nath Haldar(5) :               "Questions of law are of all kinds and  cannot               be  dealt  with as though they  were  all  the               same.    Questions  of  procedure,   questions               affecting    jurisdiction,    questions     of               limitation,  may all be questions of law.   In               such  questions the rights of parties are  not               the only matter for consideration." We may analyse the illustrative cases retating to  questions of  law,  decisions on which may be deemed res  judicata  in subsequent  proceeding.   In  Bindeshwari  Charan  Singh  v. Bageshwari Charan Singh(1) the Judicial Committee held  that a  decision of a court in a previous suit between  the  same parties  that s. 12A of the Chota Nagpur Encumbered  Estates Act  6 of 1876 which renders void a transaction to which  it applies  was inapplicable, was Yes judicata.  In  that  case the  owner  of an impartable estate, after  his  estate  was released  from management, executed a maintenance  grant  in favour  of his minor son B, but without the sanction of  the Commissioner  as  required  by s. 12A of  the,  Act.   B  on attaining  majority  sued  his father  and  brothers  for  a maintenance  grant at the rate of Rs. 4,000 per annum.   The claim  was decreed, and the plaintiff was awarded  a  decree for a grant of Rs. 4,000 inclusive of the previous grant  of 1909, and the Court held that the grant of 1909 was valid in law.   The  father  implemented  the  decree  and  made   an additional  maintenance grant upto the value of the  decreed sum.   In an action by the sons of B’s brothers  challenging the two grants on the plea that the grants were illegal  and not binding upon them, the Judicial Committee held that  the plea  was  barred  as res judicata in respect  of  both  the grants-in respect of the first because there was an  express decision  on the validity of the first grant in the  earlier suit, and in respect of the second the (1)  I.L.R. 5 Mad. 304. (3)  A.I.R. [1946] Lah. 419. (5)  I.L.R. 56 Cal. 723. (2)  I-L.R, 22 Bom. 669. (4)  I.L.R. 23 All. 5. (6)  L.R. 63 I.A. 53. 83 5 decision  in  the  first suit was res  judicata  as  to  the validity  of the second grant which was made in  fulfillment of the obligation under the Court’s decision.  The  Judicial Committee  held  that  in respect of the  first  grant,  the decision  that  s. 12A did not apply to the grant,  was  res judicata,   and   in  respect  of  the  second   grant   the construction  between  the same parties of s.  12A  was  res judicata.    Validity   of  the  second  grant   was   never adjudicated upon in any previous suit; the second grant  was held  valid because between the parties it was decided  that to  the grant of maintenance of an impartible  zamindari  s. 12A  of  the  Chota Nagpur Encumbered  Estates  Act  had  no application.   This  part of the judgment  of  the  Judicial Committee is open to doubt. Where  the  law is altered since the earlier  decision,  the earlier  decision will not operate as res  judicata  between the  same, parties : Tarini Charan Bhattacharjee’s  case(1). It  is  obvious  that the matter in issue  in  a  subsequent proceeding  is not the same as in the  previous  proceeding, because the law interpreted is different. In  a  case  relating  to levy of  tax  a  decision  valuing property  or  determining liability to tax  in  a  different taxable  period or event is binding only in that  period  or

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event,  and  is  not binding in the  subsequent  years,  and therefore the rule of, res judicata has no application;  see Broken Hill Proprietary Company Ltd. v. Municipal Council of Broken Hill(2) A question of jurisdiction of the Court, or of procedure, or a pure question of law unrelated to the right of the parties to  a previous suit, is not res judicata in  the  subsequent suit.   Rankin,  observed in Tarini  Charan  Bhattacharjee’s case(1) :               "The object of the doctrine of res judicata is               not to     fasten    upon   parties    special               principles of law as applicable to them  inter               se,  but  to ascertain their  rights  and  the               facts  upon  which these rights  directly  and               substantially  depend;  and  to  prevent  this               ascertainment   from  becoming   nugatory   by               precluding  the  parties  from  reopening   or               recontesting  that  which  has  ’been  finally               decided." A question relating to the jurisdiction of a Court cannot be deemed  to  have  been finally determined  by  an  erroneous decision of the Court.  If by an erroneous interpretation of the statute the Court holds that it has no jurisdiction, the question  would  not,  in  our  judgment,  operate  as   res judicata.   Similarly by an erroneous decision if the  Court assumes  jurisdiction which it does. not possess  under  the statute, the question cannot operate as res judicata bet- (1) I.L.R. 56 Cal. 723. (2) [1926] A.C. 94. 83 6 ween  the same parties, whether the cause of action  in  the subsequent litigation is the same or otherwise. It  is true that in determining the application of the  rule of  res  judicata  the  Court  is  not  concerned  with  the correctness  or  otherwise  of the  earlier  judgment.   The matter in issue, if it is one purely of fact, decided-in the earlier proceeding by a competent court must in a subsequent litigation  between the same parties be regarded as  finally decided  and cannot be, reopened.  A mixed question  of  law and  fact determined in the earlier proceeding  between  the same  parties may not, for the same reason, be questioned  a subsequent proceeding between the same parties.  But,  where the  decision is on a question law, i.e. the  interpretation of  a  statute,  it will be res  judicata  in  a  subsequent proceeding  between  the  same parties where  the  cause  of action is the same for the expression "the matter in  issue" in  s. 11 Code of Civil Procedure means the right  litigated between  the parties, i.e. the facts on which the  right  is claimed   or   denied  and  the  law   applicable   to   the determination  of that issue.  Where, however, the  question is  one purely of law and it relates to the jurisdiction  of the  Court or a decision of the Court sanctioning  something which is illegal, by resort to the rule of res    judicata a party affected by the decision will not be    precluded from challenging the validity of that order under the rule of res judicata,for a rule of procedure cannot supersede the law of the land. In the present case the decision of the Civil Judge,  Junior Division, Borivli, that he had no jurisdiction to  entertain the  application for determination of standard rent, is,  in view of the judgment of this Court, plainly erroneous :  see Mrs.  Dossibai  N.  B. Jeejeebhoy  v.  Khemchand  Gorumal  & Others(1)   If the decision in the previous  proceeding  be. regarded  as  conclusive  it will assume  the  status  of  a special  rule of law applicable to the parties  relating  to

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the  jurisdiction  ’of the Court in derogation of  the  rule declared by the Legislature. The  appeals are allowed, and the orders passed by the  High Court  and the Court of Small Causes are set aside  and  the proceedings  are remanded to the Court of First Instance  to deal with and dispose them of in accordance with law.  There will be no order as to costs throughout. Y.P. Appeals allowed. (1) [1962] 3 S.C.R. 928. 837