Companies Act Case Law The Church Of South Indiatrust Association Vs The Telugu Church Council

PETITIONER:
THE CHURCH OF SOUTH INDIATRUST ASSOCIATION

Vs.

RESPONDENT:
THE TELUGU CHURCH COUNCIL

DATE OF JUDGMENT: 10/01/1996

BENCH:
PUNCHHI, M.M.
BENCH:
PUNCHHI, M.M.
MANOHAR SUJATA V. (J)

CITATION:
1996 AIR 1002 1996 SCC (1) 720
JT 1996 (1) 205 1996 SCALE (1)235
ACT:

 

HEADNOTE:

 

JUDGMENT:
[WITH Special Leave Petition (C) No…../96 (CC 214
73/93)]
J U D G M E N T
S.C. AGRAWAL, J. :-
Special Leave granted in S.L.P. (C) Nos. 14501-02 of
1992.
These appeals arise out of two suits (O.S. No. 41 of
1968 and O.S. No. 26 of 1970) filed by the Telegu Church
Council (for short `TCC’), respondent herein, in respect of
properties of congregationalist churches in the districts of
Cuddapah and Anantpur in the State of Andhra Pradesh. O.S.
No. 41 of 1968 was in respect of properties and institutions
situated in Cuddapah district and O.S. No. 26 of 1970 was in
respect of properties situated in Anantpur district. Both
the suits were decreed in favour of TCC by the Subordinate
Judge, Cuddapah by judgment and decree dated May 7, 1979.
The apeals (A.S. NO. 623-24 of 1979) filed by the appellants
against the said judgment and decree of the Subordinate
Judge were dismissed by the Andhra Pradesh High Court by
judgment dated June 16, 1992.
The London Missionary Society (for short `LMS’) was
founded by people belonging to different Protestant
Christian Denominations in England in 1795 for spreading the
Christian faith in various countries including India. LMS
missionaries, in course of their activities, started
churches, hospitals, educational institutions in various
parts of India. In 1899 the London Missionary Society
Corporation (for short `LMSC’) was registered as the Trustee
under the Companies Act of the United Kingdom for
administering the properties of LMS. In 1908 the churches
founded by different Missionary Societies, including LMS in
South India, unitedly formed a single body known as South
India United Church (for short `SIUC’). SIUC became the apex
body of various Church Councils. TCC was one of the Church
Councils sunder SIUC in respect of churches in the Telugu
speaking area of the former Madras Presidency. The case of
the appellant is that on June 29, 1945, pursuant to the
efforts to bring about a larger union of Churches involving
SIUC, the Church of India, Burma and Ceylon and Methodist
Church of South India, a scheme of union was proposed and
the said proposal of union was discussed both at the level
of various Church Councils as well as at the level of SIUC
General Assembly and that TCC, at a meeting, accepted the
recommendation of its Executive Committee and resolved by
two-third majority to accept the scheme of Church Union. The
case of the appellants is further that on September 28,
1946, SIUC resolved to enter into Church Union on the basis
of the scheme prepared by the Joint Committee and on
February 12/13, 1947 the Executive Body of TCC at its
meeting held at Gooty resolved to form a Continuation
Committee to carry on TCC’s work until the formation of
Diocesan Council as per the scheme of Union and to wind up
the affairs of TCC and that on June 26 to 28, 1947
resolutions were passed in TCC General Body meeting at
Cuddapah to joint the Union and to dissolve TCC from that
day and that TCC ceased to exist thereafter and Continuation
Committee constituted by resolution dated February 12/13,
1947 took over its activities until merger. This fact of
merger of TCC into the Church Union, as claimed by the
appellants, is, however, disputed by the respondent who
claims that the resolution was not passed by two-third
majority and that TCC into the Church Union, as claimed by
the appellants, is, however, disputed by the respondent who
claims that the resolution was not passed by two-third
majority and that TCC has continued to exist. On September
27, 1947, the Church of South India was inaugurated by
special service held at St. George Cathedral, Madras and on
September 26, 1947 Church of South India trust Association
(for short `CSITA’), appellant herein, was incorporated
under the Indian Companies Act, 1913 as trustee for the
purpose of holding and administering the properties, funds,
etc. of the Church of South India. On June 29, 1949, TCC was
registered as a Society under the Societies Registration
Act. On February 10, 1961, LMS transferred the properties in
the Cuddapah and Anantpur districts in favour of CSITA. The
case of the appellant is that LMS ceased to exist on June 1,
1966 as having merged in the Congregation Council for World
Mission.
Subsequent to June 19, 1961, there arose disputes
between the respondent and LMS as well as the appellant in
relation to properties of the churches in the districts of
Cuddapah and Anantpur in Andhra Pradesh. A suit (O.S.No. 2
of 1961), hereinafter referred to as `the first suit’, was
filed by the respondent against LMS and the Chartered Bank,
Madras, in the Court of Subordinate Judge, Cuddapah which
suit, on transfer to the Court of Second Additional District
Judge, Cuddapah, was numbered as O.S.No. 12 of 1964, wherein
a decree was sought that the defendants or either of them be
directed to render an account to the plaintiff (TCC) of the
funds deposited in various accounts with the defendant Bank
in the joint name of TCC and LMS and standing to the credit
as up to date and for a decree in favour of TCC against the
defendants for recovery of such sums of money as may be
found due on taking account and also for delivery of such
securities and deposits that should be belonging to TCC and
held by the defendant Bank. The said suit was contested by
LMS on the ground that by resolution dated June 19, 1947 TCC
had dissolved itself and had ceased to exist and, therefore,
the plaintiff (respondent herein) had no right to bring an
action. The said suit was decreed by the Second Additional
District Judge, Cuddapah by his judgment dated December 3,
1966. The Second Additional District Judge held that TCC, as
it existed prior to 1947, did not dissolve itself and did
not cease to exist and continued to function even thereafter
as before and up to date without losing its representative
character. The said judgment of the Second Additional
District Judge, Cuddapah was affirmed in appeal (A.S. No. 31
of 1967) by the Division Bench of the Andhra Pradesh High
Court by judgment dated November 9, 1970.
Another suit (O.S. No. 107 of 1971), hereinafter
referred to as `the second suit’, was filed by the appellant
and the Rayalaseema Disocescan Council against the REV. K.
John, representing TCC, respondent herein, and the Chartered
Bank, Madras, on the original side of the Madras High Court
for a declaration that the plaintiffs are entitled to moneys
and securities held by the defendant Bank in its LMS-TCC
joint account as in 1947 and for a direction to the
defendant Bank to pay to the plaintiffs the securities held
in the said joint account or to release Rs. 48,500/- and for
a direction to the Ist defendant to pay to the plaintiffs
the sum of Rs. 13382.130. The said suit was decided by a
learned judge of the High Court (Vardarajan J., as the
learned Judge then was) by judgment dated March 24, 1975.
The learned Judge held that TCC had voluntarily ceased to
exist and had merged with Church of South India inaugurated
on September 29, 1947 and that the first defendant
association (respondent herein) which was registered only on
June 29, 1949 does not represent the old TCC which was
merged in the Church on South India. The learned Judge was,
however, of the view that the judgment of the Andhra Pradesh
High Court dated November 9, 1970 in A.S. 31 of 1967
operates as res judicate and he, therefore, dismissed the
suit on ground that it was barred by res judicate. On appeal
the Division Bench of the Madras High Court in its judgment
dated September 2, 1976, in O.S.A. 20 of 1976, while
confirming the view of the learned trial Judge on the
question of merger of TCC in Church of South India, set
aside the finding that the suit was barred by re judicate
and decreed the said suit in favour of the plaintiffs. The
learned Judges held that the appellant and the Rayalaseema
Diocesan Council, plaintiffs in the suit, were not the
parties in O.S. No. 12/64 and LMS which was the first
defendant in O.S. No. 12/64 could not have represented the
Church of South India.
In the meanwhile, the respondent had filed the two
suits giving rise to these appeals. O.S. No. 41 of 1968 was
filed by the respondent in the Court of the Subordinate
Judge, Cuddapah against the appellant and others for a
declaration that the plaintiff (respondent herein) is
entitled to hold the suit properties and institutions as a
trustee for the benefit of the Congregationalist churches in
Cuddapah district and for a direction to the defendants to
put the plaintiff in possession of the same. The other suit
(O.S. No. 135 of 11968) was filed by the respondent in the
Court of the Subordinate Judge, Anantpur against the
appellant and LMS for a declaration that the plaintiff
(respondent herein) is entitled to hold the suit properties
and institutions as a trustee for the benefit of the
Congregationalist churches in Anantpur District and for a
direction to the defendants to put the plaintiff in
possession of the same. O.S. No. 135 of 1968 was
subsequently transferred to the Court of Subordinate Judge,
Cuddapah and it was renumbered as O.S. 26 of 1970 and it
was tried alongwith O.S. 41 of 1968.
The case of the respondent in these two suits (O.S. 41
of 1968 and O.S. 26 of 1970) was that the churches founded
by LMS are Congregationalist churches and TCC is the Council
representing the Congregationalist churches founded in
Telugu speaking area of Madras Presidency and that the LMS
and TCC jointly set up the Telugu Combined Committee for
managing properties and institutions with equal number of
representatives and that the Church of South India was
formed in 1947 with a view to uniting several denominational
church-es and even though TCC originally approved the scheme
to join the Church of South India it ultimately declined and
that the transfer of properties by LMS in favour of the
appellant by deed dated February 10, 1961 would amount to
disclaimer of trust and breach of trust since these
properties were held in trust for the Congregationalist
churches by the LMS.
These suits were contested by the appellant on the
ground that TCC was a constituent body of SIUC and that as a
result of the decision taken by SIUC at the General Assembly
level and the TC at the Council level, the TCC had merged in
the Church of South India on June 19, 1947 and thereafter it
had ceased to exist and the respondent Council, as a
subsequently registered body, had no connection with
original TCC. It was also contended by the appellant that
all the properties were vested in LMSC as Trustee and that
LMS was only a beneficiary and that the respondent is not
entitled to represent the Congregationalist churches of
Anantpur and Cuddapah districts and the suit is barred by
limitation.
On behalf of the Council for World Mission, the
successor of LMS, it was submitted that the judgment of the
Andhra Pradesh High Court dated November 9, 1970 in A.S. No.
31 of 1967 was not binding on the appellant as it was not a
party to the said suit.
Both the suits filed by the respondent were decreed by
the Subordinate Judge, Cuddapah on May 7, 1979 on the ground
that LMS was a Trustee and not a beneficiary and there was
no merger of TCC with the Church of South India. The
Subordinate Judge further held that the judgment of the
Division Bench of the Andhra Pradesh High Court dated
November 9, 1970 in A.S. No. 31 of 1967 operates as res
judicate and that the subsequent judgment of the Division
Bench of the Madras High Court in O.S.A. 20 of 1976 dated
September 2, 1976 on the issue of merger of TCC in the
Church of South India would not operate as res judicate. The
Subordinate Judge also rejected the contention regarding the
suit being barred by limitation.
The appeals (A.S. Nos. 623 and 624 of 1979) filed by
the appellant against the said judgment and decree of the
Subordinate Judge, Cuddapah, have been dismissed by the
Andhra Pradesh High Court by the impugned judgment dated
June 16, 1992. The High Court has held that the appellant is
litigating as successor-in-interest of LMS and that the
finding on the issue as regards merger recorded by the
Additional District Judge, Cuddapah, in his judgment dated
December 3, 1966 in O.S. No. 12 of 1964 which was confirmed
by the Division Bench of the Andhra Pradesh High Court in
the judgment dated November 9, 1970 in A.S. No. 31 of 1967
binds the appellant. As regards the decision of the
Division Bench of the Madras High Court dated September 2,
1976 in O.S.A. No. 20 of 1976 filed by the appellant it was
held that the said decision would not operate as res
judicate since no court in the State of Tamil Nadu can
claim to exercise jurisdiction in respect of properties
situate within the State of Andhra Pradesh. The High Court
has held that LMS land LMSC were one and the same body,
viz., the London Missionary Society and that Churches
founded by LMS were Congregationalist churches and,
therefore, the suits filed by the respondent seeking
declaration to hold the suit properties and institutions as
trustee for the benefit of Congregationalist churches was
maintainable. Feeling aggrieved by the said judgment of the
High Court the appellant has filed these appeals.
The matter in issue between the parties is regarding
the merger of TCC in the Church of South India because the
case of the appellant is that the original TCC had merged in
the Church of South India and has dissolved itself in June
1947 and that respondent which was registered as a society
in 1949 is not the same tcc while the respondent disputes
the merger and dissolution of the original TCC and claims
that the TCC continued to exist. This dispute has been
adjudicated earlier in two suits referred to above, viz.,
O.S. No. 12 of 1964 decided in favour of the respondent and
O.S. No. 107 of 1971 decided in favour of the appellant.
Therefore, the questions which fall for consideration in
these appeals are :
[i] Whether the judgment of the Madras High Court dated
September 2, 1976 in Appeal (O.S.A. No. 20 of 1976) arising
out of O.S.No. 107 of 1971 operates as res judicata so as to
preclude the respondent from asserting that the T.C.C. had
not merged in the Church of South India;
[ii] Whether the judgment of the Andhra Pradesh High Court
dated November 9, 1970 in A.S.No. 31 of 1967 arising out of
O.S. No. 12 of 1964 operates as res judicata so as to
preclude the appellant from asserting that TCC had merged in
the Church of South India; and
[iii] Whether there was a merger of TCC in the Church of
South India in 1947 and the TCC has ceased to exist
thereafter.
If Question No. [i] is decided in favour of the
appellant, it would not be necessary to go into Question
Nos. [ii] and [iii] because in that event the judgment of
the Madras High Court would conclude the questions regarding
the merger of TCC as well as the judgment of Andhra Pradesh
High Court operating as res judicata. If Question No. [i]
is decided against the appellant, it will be necessary to
consider Question No. [ii]. If Question No. [ii] is decided
against the appellant and in favour of respondent, it would
not be necessary to go into Question No. [iii]. Question No.
[iii] would thus be required to be considered only if
Question No. [i] is decided against the appellant and
Question No. [ii] is decided in their favour. We will,
therefore, first deal with Question No. [i] and examine
whether the judgment of the Madras High Court in the second
suit operates as res judicata.
It is not disputed that the appellant as well as the
respondent were both parties in the second suit O.S.No. 107
of 1971 in the Madras High Court. In the suits giving rise
to the present appeals, the other defendant is the L.M.S.
while in O.S.No. 107 of 1971 plaintiff No. 2 was the
Rayalaseema Diocession Council claiming through L.M.S. The
High Court has held that the judgment of the Madras High
Court does not operate as res judicata for the reason that
the two suits from which the present appeals arise relate to
rights in immovable properties situate in the State of
Andhra Pradesh and no court in the State of Tamil Nadu can
claim to exercise jurisdiction in respect of properties
situated within the State of Andhra Pradesh and the Madras
High Court, not being a court competent to try such
subsequent suit within the meaning of Section 11 C.P.C., Any
finding recorded by it on any issue would not operate as res
judicata. It is, therefore, necessary to examine the
provisions of Section 11 C.P.C. in order to determine
whether lack of territorial jurisdiction in the court which
had decided the earlier suit to try the subsequent suit
excludes the applicability of Section 11 C.P.C.
We may, at the outset, mention that even though Shri
F.S. Nariman, the learned senior counsel appearing for the
appellant, had at one stage submitted that apart from the
provisions of Section 11 C.P.C. general principle of res
judicata can also be invoked but subsequently, in view of
the decision of this Court in L. Janakirama Iyer & Ors. v.
P.M.Nilakanta Iyer & Ors., 1962 Supp. [1] SCR 206, he
conceded that the general principles of res judicata cannot
have an application in cases where the earlier judgment in a
suit is relied upon in a subsequent suit and that in such a
situation the matter has to be examined on the basis of
provisions contained in Section 11 C.P.C. only. We will,
therefore, confine ourselves to the provisions of Section 11
C.P.C.
Section 11 C.P.C. (excluding the Explanations) provides
as under :
“Section 11. Res Judicata.- 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.”
Shri Nariman has urged that for the purpose of Section 11
C.P.C. the competence of the court to try the subsequent
suit mans competence in the matter of pecuniary jurisdiction
and the subject matter and the fact that the court which
decided the earlier suit does not have territorial
jurisdiction in respect of the subsequent suit would not
preclude the applicability of the principle of res judicata
under Section 11 C.P.C. In support of his aforesaid
submission Shri Nariman has placed strong reliance on the
judgment of the Privy Council in Misir Raghobardial v. Rajah
Sheo Baksh Singh,(1881-82) 9 I.A. 197 and the decisions of
this Court in Gulabchand Chhotalal Parikh v. State of
Bombay(Now Gujarat), 1965 (2) SCR 547 and Seth Hiralal Patni
v. Sri Kali Nath, 1962 (2) SCR 747.
Shri Sitaramiah, the learned senior counsel appearing
for the respondent, has, on the other hand, urged that lack
of territorial jurisdiction goes to the competence of the
court for the purpose of applicability of the principle of
res judicata under Section 11 C.P.C. and that the High Court
was right in holding that the judgment of the Madras High
Court does not operate as res judicata since Madras High
Court does not have territorial jurisdiction to deal with
the suits giving rise to these appeals which relate to
immovable properties lying in the State of Andhra Pradesh.
Shri Sitaramah has placed reliance on the decision of this
Court in Kiran Singh & Ors. v. Chaman Paswan & Ors., 1955
(1) SCR 117 and Official Trustee, West Bengal & Ors. v.
Sachindra Nath Chatterjee & Anr., 1969 (3) SCR 92.
The principles governing the rule of res judicata in
England were laid down in 1776 in Duchess of Kingston’s case
(2 Smith’s L.C. 13th Edn. 644) wherein it was said :
“From the variety of cases relative to
judgments being given in evidence in
civil suits, these two deductions seem
to follow as generally true : first that
judgment of a court of concurrent
jurisdiction, directly upon the point,
is as a plea, a bar, or as evidence
conclusive, between the same parties,
upon the same matter, directly in
question in another Court; secondly that
the judgment of a court of exclusive
jurisdiction, directly upon the point,
is, in like manner, conclusive upon the
same matter, between the same parties,
coming incidentally in question in
another court, for a different purpose.”
The law governing the said rule in India is, however,
slightly different. We would, therefore, briefly refer to
the legislative history of the provisions regarding res
judicata in Indian law. The earliest enactment governing the
procedure in civil courts in India was the Code of Civil
Procedure of 1859 (hereinafter referred to as `the Code of
1859′). Section 2 of the said Code provided :
“The civil courts shall not take
cognizance of any suit brought on a
cause of action which should have been
heard and determined by a Court of
competent jurisdiction in a former suit
between the same parties or between the
parties under whom they claim litigating
under the same title.”
In Mussumat Edun v. Mussumat Bechun, 8 Suth. W.R. 175, Chief
Justice Sir Barnes Peacock has considered the said
provisions. After referring the rule laid down in Duchess of
Kingston’s case (supra) and the limited nature of the
jurisdiction conferred on various courts in India the
learned Chief Justice has observed :
“It appears to me to be of much more
importance in this country than it would
be in England, that, in order to render
a judgment between the same parties,
upon the same point in one Court,
conclusive in another Court, the two
Courts must be Courts of concurrent
jurisdiction. If it were not so, the
whole procedure, as regards appeals,
might be entirely changed.”
[p. 178]
“It appears to me, therefore, that the
rule which is laid down, viz., that to
render a judgment of one Court between
the same parties upon the same point
conclusive in another Court, the two
Courts must be Courts of concurrent
jurisdiction. Concurrency of
jurisdiction is a necessary part of the
rule which creates an estoppel in such a
case.”
“It is quite clear that, in order to
make the decision of one Court final and
conclusive in another Court, it must be
a decision of a Court which would have
had jurisdiction over the matter in the
subsequent suit in which the first
decision is given in given in evidence
as conclusive.
[p. 179]
The Code of 1859 was followed by Code of Civil Procedure.
1877 (hereinafter referred to as `the Code of 1877) which
contained the following provisions in Section 13 :
“No Court shall try any suit or issue in
which the matter directly and
substantially in issue has been heard
and finally decided by a Court of
competent jurisdiction, in a former suit
between the same parties, or between
parties under whom they or any of them
claim, litigating under the same title.”
The said provision came up for consideration before the
Privy Council in Misir Raghobardial v. Rajah Sheo Baksh
Singh (supra) wherein the observations of Sir Barnes Peacock
C.J. in Mussumat Edun v. Mussumat Bechun (supra) have been
referred with approval and it has been said :
“As to what is a Court of concurrent
jurisdiction, it is material to notice
that there is in India a great
number of Courts, that one main feature
in the Acts constituting them is that
they are of various grades with
different pecuniary limits of
jurisdiction, and that by the Code of
Procedure a suit must be instituted in
the Court of the lowest grade competent
to try it. For instance, in Bengal, by
the Bengal Civil Courts Act, No. VL of
1871, the jurisdiction of a munsif
extends only to original suits in which
the amount or value of the subject
matter in dispute does not exceed Rs.
1000. The qualifications of a munsif and
the authority of his judgment would not
be the same as those of a district or of
a subordinate judge, who have
jurisdiction in civil suits without any
limit of amount. In their Lordships’
opinion it would not be proper that the
decision of a munsif upon (for instance)
the validity of a will or of an adoption
in a suit for a small portion of the
property affected by it should be
conclusive in a suit before a district
judge or in the High Court for property
of a large amount, the title to which
might depend upon the will or the
adoption.”
[p. 203]
Keeping in view the aforesaid position in India, the Privy
Council has held :
“By taking concurrent jurisdiction to
mean concurrent as regards the pecuniary
limit as well as the subject-matter,
this evil or inconvenience is avoided.”
“By Court of competent jurisdiction Act
X of 1977 means a Court which has
jurisdiction over the matter in the
subsequent suit in which the decision is
used as conclusive, or in other words, a
Court of concurrent jurisdiction.”
[pp. 204-05]
In the Code of Civil Procedure, 1882 (hereinafter referred
to as `the Code of 1882′) provision regarding res judicata
are found in Section 13 but the words “Court of competent
jurisdiction” which were contained in Section 13 of the Code
of 1877 were replaced by the words “Court of jurisdiction
competent to try such subsequent suit or the suit in which
such issue has been subsequently raised.” This change in the
language was in consonance with the observations made by Sir
Barnes Peacock C.J. in Mussumat Edun v. Mussumat Bechun
(supra) and the Privy Council in Misir Raghobardial v. Rajah
Sheo Baksh Singh (supra). Explaining the expression
“competent jurisdiction” Sir Dinshah F. Mulla in his
nommentary on the Code of 1882 (published in 1900) has said
:
“The test in this case is this : Is
the second suit such as could have been
tried by the first Court? If yes, the
matter can be res judicata. This can
only be the case if the jurisdiction of
the first court is concurrent with that
of the second Court both as regards its
pecuniary limit and the subject-matter
of the suit.”
In view of the aforesaid interpretation placed by the Privy
Council on the expression “competent jurisdiction”, it has
been said that the rule governing applicability of res
judicata in India is more restricted than the rule law laid
down in Duchess of Kingston’s case (supra) in England. [See
: Gokul Mandar v. Pudmanund Singh, (1902) ILR 29 Cal. 707
P.C.,; Mst. Gulab Bai v. Manphool Bai, 1962 (3) SCR 183, at
pp. 493-94].
There is no alteration in law in this field in the Code
of Civil Procedure, 1908 (hereinafter referred to as “the
present Code”) because Section 11 of the present Code is
substantially in the same terms as Section 13 of the Code of
1882. As regards competence of the Court to try the
subsequent suit under Section 11 of the present Code, the
Law Commission in its fifty-fourth Report has observed that
“the principle behind this condition is sound one, namely,
that the decision of a Court of limited jurisdiction ought
not to be final and binding on a court of unlimited
jurisdiction.”
(p.21)
The question which, therefore, arises is whether the
competence of the Court, as contemplated in Section 11 of
the present Code, extends to territorial jurisdiction also
and the Court which has decided the earlier suit should be a
Court having territorial jurisdiction to try the subsequent
suit. Juridically speaking, the concept of jurisdiction of a
court comprehends (i) pecuniary jurisdiction, (ii)
territorial jurisdiction, and (iii) jurisdiction of the
subject-matter. [See : Hirday Nath Roy v. Ramachandra Barma
Sarma, ILR 58 Cal. at p. 146; Official Trustee, West Bengal
v. Sachindra Nath Chatterjee, (supra) at p. 100]. When
Section 11 of the present Code talks of the competence of
the Court, does it mean the competence in all the three
aspects of the jurisdiction of the Court including the
territorial jurisdiction of the Court? In order to answer
this question, it is necessary to take note of some other
provisions of the present Code which given an indication
that the present Code makes a distinction between
territorial jurisdiction and other aspects of the
jurisdiction of the Court. In Section 21 of the present
Code, it has been provided that “no objection as to the
place of suing shall be allowed by any appellant or
revisional court unless such objection was taken in the
Court of first instance at the earliest possible opportunity
and in all cases where issues are settled at or before such
settlement, and unless there has been a consequent failure
of justice.” Having regard to the said provision, it has
been held that though the defect of jurisdiction, whether it
is pecuniary or territorial, or whether it is in respect of
subject-matter of the action, strikes at the very authority
of the Court to pass any decree and such a defect cannot be
cured even by consent of parties, the policy of the
Legislature has been to create objections to territorial
jurisdiction as technical and not open to consideration by
an appellant Court, unless there has been a prejudice on the
merits. [See : Kiran Singh & Ors. v. Chaman Paswan & Ors.
(supra) at pp 121-22]. In that case, this Court has also
taken note of Section 11 of the Suits Valuation Act, 1887,
to hold that even objection as to the pecuniary jurisdiction
is technical in nature and not open to consideration by an
appellant court, unless there has been a prejudice on the
merits. To the same effect in the decision in Seth Hiralal
Patni v. Sri Kali Nath (supra) wherein it has been held that
“the objection to its territorial jurisdiction is one which
does not go to the competence of the Court and can,
therefore, be waived”. [at p. 751]. In this context,
reference may also be made to Section 21(A) introduced by
the Code of Civil Procedure (Amendment) Act, 1976, which
lays down that “on suit shall lie challenging the validity
of a decree passed in a former suit between the same
parties, or between the parties under whom they or any of
them claim, litigating under the same title, on any ground
based on an objection as to the place of suing.”
Under sub-clause (a) of sub-section (1) of Section 24
of the Code, the High Court or the District Court can
transfer any suit, appeal or other proceeding pending before
it for trial or disposal to any court subordinate to it or
competent to try or dispose of the same. Similarly, under
sub-clause (ii) of clause (b) of sub-section (1) of Section
24, the High Court or the District Court non withdraw any
suit, appeal or other proceeding in any court subordinate to
it and transfer the same for trial or disposal to any court
subordinate to it and competent to try or dispose of the
same. There is near unanimity amongst the High Courts that
the words “competent to try” in Section 24 refer to
pecuniary competence of the Court only and do not comprehend
the territorial aspect of jurisdiction. [See : Krishna Lal
v. Balakrishan, AIR 1932 All. 660 at p. 661 per Sulaiman
C.J.; P.M. Unni v. M.J. Nadar, AIR 1973 Mad. 2 (F.B.);
Mulraj Doshi v. Gangadhar Singhania, AIR 1982 Orissa 191;
Prabha Singh v. S.Narasimha Rao, AIR 1957 Andhra Pradesh
992; Mohd. Ali v. Bhanwari Bai, AIR 1981 Raj. 176]
In some cases, the competence of the court for the
purpose of Section 11 of the present Code has been construed
to refer to pecuniary jurisdiction and not to territorial
jurisdiction. [See : In re. Aiyisha Bohi Ammal, AIR 1925
Mad. 1167; Kishorlal v. Balkishan (supra); Raghu v. Gajraj
Singh, AIR 1939 All. 202; Prabha Singh v. S. Narashmha RAO,
(supra)]
Reference may also be made to Section 13 of the present
Code which relates to conclusiveness of foreign judgments.
Under that Section, except in cases falling under clauses
(a) to (f), a foreign judgment is conclusive as to matter
thereby directly adjudicate upon between the same parties or
between parties under whom they or any of them claim
litigating under the same title. Exception (a) denies such
conclusiveness to a foreign judgment where it has not been
pronounced by a court of competent jurisdiction. In the Code
of 1882 provisions relating to conclusiveness of foreign
judgments were part of the provision regarding res judicata
contained in Section 13 and in Explanation VI to the said
Section it was prescribed that where a foreign judgment is
relied on the production of the judgment duly authenticated
is presumptive evidence that the Court which made it had
competent jurisdiction, unless the contrary appear on the
record; but such presumption may be removed by proving the
want of jurisdiction. In Babanbhat v. Narharbhat & Ors., ILR
(1889) 13 Bom. 224, a Division Bench of the Bombay High
Court has held that a Court of competent jurisdiction with
the Court trying the subsequent suit, whether as regards the
pecuniary limit of its jurisdiction or the subject-matter of
the suit, to try it with conclusive effect.” Construing the
expression “Court of competent jurisdiction” in Explanation
VI to Section 13, the Court rejected the contention that it
means the court of jurisdiction competent to try the
subsequent suit and held that such an interpretation would
restrict the application of Section 13 in a way which could
not have been intended and would deprive Explanation VI of
all meaning. In that case, the secree of the court on a
native State in respect of property situate within the
jurisdiction of the native State deciding the question of
adoption in favour of the plaintiff was held to operate as
res judicata in a suit filed in British India in respect of
property situate therein on the basis of the plaintiff being
the adopted son.
In R.Viswanathan v. Rukn-Mulk Syed Abdul Wajid. 1963
(3) SCR 22, this Court has laid down that “Section 13
incorporates a branch of the principle of res judicata and
extends it within certain limits to judgments of foreign
courts if competent in an international sense to decide the
dispute between the parties.” [at p. 54]
The acceptance of the contention urged on behalf of the
respondent that for the purpose of Section 11 of the present
Code, the competence of the court which has decided the
earlier suit also postulates the said court having
territorial jurisdiction to try the subsequent suit, would
mean that the judgment of a court in India which was
competent to try the earlier suit would not operate as res
judicata in the subsequent suit because the court which
decided the earlier suit did not have territorial
jurisdiction to try the subsequent suit but the said
judgment, if rendered by a foreign court, would be
conclusive in an Indian Court in a subsequent suit even
though the foreign court which decided the earlier suit does
not have territorial jurisdiction to try the subsequent
suit. This anomaly would be avoided if competence of the
court which has decided the earlier suit for the purpose of
Section 11 of the present Code is construed as not referring
to the territorial jurisdiction of the court.
While construing Section 11 of the present Code, we
must bear in mind that the rule of res judicata is founded
on considerations of public policy and that is in the
interest of the public at large that a finality should
attach to the binding decisions pronounced by courts of
competent jurisdiction and that it is also in the public
interest that individuals should not be vexed twice over
with the same kind of litigation. [See : Daryao & Ors. v.
The State of U.P. & Ors., 1962 (1) SCR 574, at pp. 582-83].
The amendments that have been introduced in the present Code
by the Code of Civil Procedure (Amendment) Act, 1976,
indicate an intention on the part of the Legislature to
enlarge the field of applicability of the rule of res
judicata contained in Section 11. In this regard, it may be
mentioned that in its fifty-fourth Report on the present
Code, the Law Commission has expressed the view that the
existence of the conditions regarding the competence of the
court to try the subsequent suit to a certain extent
detracts from the finality of the judgments and gives rise
to a certain amount of multiplicity of proceedings. [at p.
21]. According to the Law Commission, the problem is
inherent in co-existence of the courts with limited or
unlimited jurisdiction and that it con be solved if a court
of limited jurisdiction is required to submit the case to
the district court – which is a court of unlimited
jurisdiction – whenever the former is satisfied that the
suit involves a question of such a nature that if a suit had
been brought for relief based principally on that question,
the court would have been incompetent to try the suit. [at
p. 25]. The Law Commission suggested the insertion of
Section 23-A making a provision on these lines. The Law
Commission also recommended that the principle of res
judicata should be applied to the situations of proceedings
in execution and independent proceedings and recommended
insertion of Section 11-A for that purpose. Instead of
inserting Section 11-A and 23-A, the Joint Committee of
Parliament suggested insertion of explanations to Section 11
and, on the basis of the said report, Explanations VII and
VIII have been inserted in Section 11 by the C.P.C.
(Amendment) Act, 1976. By Explanation VII the provisions of
Section 11 have been made applicable to a proceeding for
execution of a decree. Explanation VIII which has a bearing
on the question under consideration provides as under :
“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 or the suit in which such issue has
been subsequently raised.”
Earlier there was a conflict of views among the High Courts
on the meaning of expression “a Court of limited
jurisdiction” in Explanation VIII. The Calcutta High Court
in Nabin Majhi v. Tela Majhi & Anr., AIR 1978 Cal. 440, had
taken the view that the expression “a Court of limited
jurisdiction” in Explanation VIII means the Courts other
than ordinary civil courts and refers to Revenue Courts,
Land Acquisition Courts, Administrative Courts, Insolvency
Courts, Guardianship Courts, Probate Courts, etc. which are
trying certain specific matters. The High Courts of Kerala,
Orissa and Madras placed a wider construction on the said
expression and held that it includes limited pecuniary
jurisdiction also. The said conflicts has now been resolved
by this Court in Sulochana Amma v. Narayanan Nair, 1994 (2)
SCC 14, wherein, agreeing with the view of the High Courts
of Kerala, Orissa and Madras, this Court has held that the
expression “a Court of limited jurisdiction” would also
cover a court of limited pecuniary jurisdiction. (pp.19-20)
Explanation VIII thus removes the litigations that were
placed on the principle of res judicata as applicable in
India by the Privy Council in Misir Raghobardial v. Rajah
Sheo Baksh Singh (supra). It would be rather incongruous to
read a limitation in the applicability of the said principle
by construing the competence of the court to mean that the
court which has decided the earlier suit must have the
territorial jurisdiction to try the subsequent suit. Such a
construction would be running against the trend in the
development of law in this field. 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. On that view of the matter, it
must be held that the judgment of the Madras High Court in
O.S.A. 20 of 1976 dated September 2, 1976 arising out of
second suit (O.S.No. 107 of 1971) operates as res judicata
in as much as Madras High Court had pecuniary jurisdiction
as well as jurisdiction over the subject-matter to try the
subsequent suit and it cannot be held that the said judgment
does not operate as res judicata for the reason that the
Madras High Court does not have territorial jurisdiction to
try the subsequent suit relating to properties in Andhra
Pradesh.
Once it is held that the judgment of the Madras High
Court would operate as res judicata, it follows that the
decision in that said case regarding merger of TCC with the
Church of South India as well as about the judgment of the
Andhra Pradesh High Court in A.S. 31 of 1976 arising out of
O.S.12 of 1961, not being res judicata, would be binding on
the respondent and the civil suits giving rise to these
appeals which were filed by the respondent cannot succeed
and have to be dismissed. In the circumstances, it is not
necessary to consider Questions Nos. (ii) and (iii) referred
to above.
The appeals are accordingly allowed, the impugned
judgment of the Andhra Pradesh High Court dated June 16,
1992 in Appeals Nos. 623-624 of 1979 arising out of O.S.Nos.
41 of 1968 and 26 of 1970 are set aside and the said suits
are dismissed. No orders as to costs.
S.L.P. …………../96 [CC No. 21473/931
Delay condoned.
I.A.No.3/94 is allowed and the legal heirs of the
petitioner as mentioned in the application are brought on
record.
The grievance of the petitioner in this petition for
special leave to appeal against the judgment date June 16,
1992 passed in Appeal No. 623 of 1979 is that the petitioner
is claiming title on the basis of adverse possession and
enjoyment in respect of certain immovable properties lying
in District Anantapur and that the said properties have been
included in the schedule to the plaint of the Suit No.
O.S.No. 26 of 1970 and by the impugned judgment the said
properties have been held to be of respondent No. 1, the
plaintiff in the said suit. It is submitted that the
petitioner was not impleaded as a party in that said suit
and that in respect of the properties over which the
petitioner is claiming title by adverse possession another
suit [O.S. No. 31/80] filed by respondent No. 1 is pending.
Having regard to the fact that O.S. 26 of 1970 has been
dismissed by this judgment the petitioner can have no
subsisting cause for grievance. The special leave petition
is, therefore, dismissed.

 

 

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