High Court Madras High Court

V. Rajendran vs L.P. Arumugam And Ors. on 22 November, 1985

Madras High Court
V. Rajendran vs L.P. Arumugam And Ors. on 22 November, 1985
Equivalent citations: (1987) 1 MLJ 314
Author: Sathiadev


ORDER

Sathiadev, J.

1. First defendant is the petitioner herein, Plaintiffs 1 and 2 filed a suit under Section 92, C.P.C. in respect of a trust known as Comakulam Chatram otherwise called as Thambachipillai Chatram Charity. It is claimed that after first defendant took over the management of the chatram in 1972, he had committed several acts of misfeasance and malfeasance as stated in para. 7 of the plaint, and therefore, he deserves to be removed, and in his place, a new trustee will have to be appointed vesting B schedule property in the new trustee and for other reliefs like delivery of possession of property, etc.

2. First defendant claims that issue No. 6, which deals with the point as to whether the earlier decision in O.S. No. 688 of 1979 would act as res judicata or not, be tried as a preliminary issue. This resulted in the impugned Order being passed holding that the said decision would not operate as res judicata on the ground that the earlier decision relied upon was based on a compromise, and hence, under Explanation VI to Section 11 C.P.C. it would not operate as res judicata.

3. Mr. Srinivasan, Learned Counsel for the first defendant-petitioner, submitted that, in the light of the decisions referred to hereunder, a compromise decree would also act as res judicata. In Sundharabai v. Devaji , it was held that in respect of a compromise decree, though the terms of Section 11 would not apply (sic)rictly, still the underlined principles of estoppel would apply. In the same volume at page 352 it was held that a consent decree is as binding upon the parties thereto as a decree passed in invitem. If the compromise is not vitiated by fraud, misrepresentation, misunderstanding or mistake, then the decree passed thereon had the binding force of res judicata and it would bar the re-agitation of the same questions by way of fresh suit. In Sailendra Narayanan v. State of Orissa , it was held that a judgment by consent or default is as effective as an estoppel between the parties, as a judgment, whereby the court exercises its mind on a contested case. In dealing with the matter which arose under Section 92, C.P.C. a Division Bench in Chiranjilal v. L.I Corporation , pointed out that the whole of Section 11 is based upon the principles of estoppel by record and therefore, a consent decree operates as res judicata, as much as the decree in invitem. If the conditions laid down under Section 11 exist. Therefore it is held that, both on principle and on authority, there is no substance in the contention that a consent decree in a suit under Section 92, C.P.C, should be put on an entirely different footing from that of decrees in other contested suits. In Biram Prakash v. Narendra Das , a Division Bench also took the same view that even if a compromise resulted in the suit being merely dismissed, it would involve disposal by an agreement against the plaintiff on the contentions raised by him, and it would as much apply in a case instituted under Order 1, Rule 8, C.P.C. In Chintaharan Ghose v. Gujaraddi Sheik , the learned judge took the view that, even in a representative suit, a compromise decree passed will be binding on persons who are represented by the parties to the suit, provided the settlement is bona fide and it will operate as res judicata. In Subba Rao v, Jagannadha Rao (1964) 2 S.C.J. 508 : (1964) 2 An.W.R. (S.C.) 112 :(1964) 2 M.L.J. (S.C.) 112 : (1964) 2 S.C.R. 310 : A.I.R. 1967 S.C. 591, it is held that a compromise is not a decision by the court and it only puts the seal of the court on the agreement arrived at between the parties, not is it a decision rendered by the Court. Unless it is a decision by the court res judicata would not operate, as it would not be a matter which had ¦ been heard and finally decided by the Court. Such a decree might only operate as an estoppel by conduct between the parties, but such an estoppel must be specifically pleaded. By adverting to these decisions, Mr. Srinivasan submits that plaintiffs 1 and 2 herein have taken active part, when earlier suit was instituted by different parties, and with full knowledge they had entered into a compromise and yet they have filed the present suit mainly to cause harassment to first defendant with ulterior motives, and not representing the interests of the public. In spite of being fully aware of the disposal of O.S. No. 668 of 1979, plaintiffs have chosen not to mention about it in the plaint and such suppression had been resorted mainly to institute the present suit, without any valid ground. In the light of the decisions above referred to, he would state that the earlier compromise arrived at would act as res judicata and if not, it would operate as an estoppel by record, as held in Subba Rao v. Jagannatha Rao , Hence the earlier compromise decree having been bona fide arrived at, no fresh representative suit could be laid on the same facts and circumstances.

4. On behalf of the plaintiffs, it is contended that, in the light of the said decisions, the plea of res judicata is unavailable, and as to whether it would be an estoppel by record, cannot be decided at this stage and therefore, first defendant cannot ask for dismissal of the suit on such a preliminary issue. As to whether the plaintiffs have taken active part or not, no evidence had been adduced so far, and it cannot be presumed, and would depend upon the evidence yet to be let in the suit. On the question of estoppel, it could be decided only after the evidence is let in, and cannot be presumed. In Pichai Pillai v. Lingam Iyer A.I.R. 1928 Mad. 268, it is held that if a compromise is arrived at by fraud the withdrawal of the suit would not operate as res judicata. In Kumaravelu v. Ramaswami (1933) 60 I.A. 278 : 65 M.L.J. 87 : (1933) 38 L.W. 16 : I.L.R. 56 Mad. 657 : A.I.R. 1933 P.C. 183 (P.C.) it was held that to bind outsiders by a decree passed in a suit filed under 0.1,R.8,CP.C. it must be established that it was a bona fide litigation. Reference is made to the reply filed to the written statement wherein it is stated that the first plaintiff in the said suit was allotted a site in the trust property, and hence plaintiffs have fraudulently failed to prosecute the suit and have reported that the suit was settled. Therefore it was not filed and prosecuted ‘bona fide’ by them. The plaintiffs herein were not aware of the said suit and the required procedure either under Order 1, Rule 8 or Section 92, C.P.C. had not been followed. In the additional written statement a reference was made to O.S. No. 668 of 1979 and it was claimed that the present suit is therefore barred by res judicata. In para. 7 therein the plea of fraud has been disputed and it was further claimed that the present plaintiffs took active interest in the filing and conduct of the earlier suit, and were aware of the compromise arrived at by Panchayatdars. As for the property occupied by plaintiffs in the earlier suit, it was stated that it was an encroachment, and on the recommendation made by the mediators, it was conveyed to Mr. Omagundam.

5. Though the first defendant would plead that ¦ the plaintiffs herein were actively associated in the institution of the earlier suit, no material had been placed in the court below either by oral or by documentary evidence, to proceed on the basis that they were so involved in the earlier proceedings. Exs. B. 1 to B. 5 nowhere support such a claim. Hence, the failure to mention in the plaint about O.S. No. 668 of 1979 cannot at this stage be treated as a suppression of a material fact. On the written statement filed, a reply had been filed disputing the correctness of the claim so made, and it was also claimed that the decree passed therein is vitiated by fraud and of how the plaintiffs therein got benefited to the prejudicial interests of the charity. In the additional written statement, though it was reiterated that the present plaintiffs took active interest and that panchayatdars brought about the compromise no oral evidence had been let in nor the minutes of the Panchayatdhars filed.

6. About the properties taken by the plaintiffs in the earlier suit, it is admitted that it was done on the mediator’s decision. This is sufficient to show that the plaintiffs in the earlier suit had unjustly benefited themselves at the expense of the Charity. Certainly the earlier proceedings cannot be characterised as a bona fide proceeding, and hence, as pointed out in Chintaharan Ghose v. Gujaraddi Sheik such a decree cannot operate as ‘res judicata’. On the plea that it would operate as an estoppel on record; unless evidence is adduced in the suit it cannot be summarily decided at this stage of suit and decision vitiated by fraud could never operate as ‘res judicata’. Further, it is a decree based on a compromise fraught with fraud as held by the Division Bench in Pichai Piilai v. Lingam Iyer A.I.R. 1928 Mad. 268 not by invitem.

7. Hence, the Civil Revision Petition is dismissed with costs. Counsel’s fee Rule 250.