Shankar Sitaram Sontakke & ANR Vs.
Balkrishna Sitaram Sontakke & Ors  INSC 41 (12 April 1954)
GHULAM MAHAJAN, MEHAR CHAND (CJ) BOSE, VIVIAN
CITATION: 1954 AIR 352 1955 SCR 99
CITATOR INFO :
C 1991 SC2234 (41)
Consent decree-Legal effect
thereof-Compromise not vitiated by fraud, misrepresentation, misunderstanding
or mistake-Decree passed thereon Whether operates as res judicataCivil
Procedure Code-(Act V of 1908)--Order II, rule 2(3) -Relinquishment Of claim in
a prior suit Subsequent suit barred in respect of the claim so omitted.
It is well settled that a consent decree is
as binding upon the parties thereto as a decree passed by invitum.
Where a compromise is found, not to be
vitiated by fraud, Misrepresentation, 100 misunderstanding or mistake, the
decree passed thereon has the binding force of res judicata.
Where the plaintiff confines his claim to
account for a period up to a certain date only, he relinquishes his claim
implicitly if not explicitly to the account for the subsequent period because
Order II, rule 2 (3) of the Code of Civil Procedure lays down that if a person
omits, except with the leave of the Court, to he sue for all reliefs to which
he is entitled, he shall not afterwards sue for any reliefs so omitted.
CIVIL APPELLATE JURISDICTION: Civil Appeal
No. 113 of 1953.
Appeal from the Judgment and Decree, dated
the 25th day of March, 1952, of the High Court of Judicature at Bombay
(Bavdekar and Dixit JJ.) in Appeal No. 554 of 1951, from Original Decree
arising out of the Judgment and Decree, dated the 30th day of June, 1951, of
the Court of the Joint Civil Judge, Senior Division of Thana, in Special Suit
No. 12 of 1949.
K. S. Krishnaswamy lyengar, (J. B.
Dadachanji, V.B. Rege and Ganpat Rai, with him) for the appellants.
S. B. Jathar, R. B. Kotwal and Naunit Lal for
respondent No. 1.
1954. April 12. The Judgment of the Court was
delivered by GHULAM HASAN J.-This appeal is brought by leave of the High Court
of Bombay against the judgment and decree of a Division Bench of that Court
(Bavdekar and Dixit JJ.) dated March 25, 1952, modifying the judgment and
decree of the Civil Judge, Senior Division of Thana, dated June 30, 1951.
The appeal arises out of a partition between
6 brothers of a joint Hindu family. The joint family carried on joint family
business of a grocery shop, liquor shops, a ration shop, a motor-bus service
and also moneylending under the name of "Sontakke Brothers". The
family also Possessed immovable and movable property. Balkrishna Sitaram
Sontakke is the eldest of the brothers and is the plaintiff respondent in the
present appeal. He will be referred to hereafter as the plain-tiff.
It is common ground that up to 1944 the
brothers were living and messing together and the income from 101 the family
business used to be kept with the plaintiff.
From April 14, 1945, the situation changed
and the parties began to appropriate the proceeds of the various businesses
carried on by them separately to themselves. The plaintiff was running the
liquor shops, defendants Nos. I and 2 who are the appellants, were carrying on
the motor-bus service business while defendant No. 4 was running the grocery
The parties tried to have partition effected
between them through arbitrators but the attempt failed. On June 29, 1945, all
the five brothers filed a suit for partition against the plaintiff of all joint
family properties including the accounts of all the businesses. The suit was
numbered 39 of 1945. It was compromised on March 7, 1946.
By this compromise it was declared that prior
to 1942 all the accounts of the various businesses had been correctly
maintained and shown, that the parties had agreed to have arbitrators appointed
through Court for examining the accounts from 1942 up to March 31, 1946, and
for determining the amount due up to that date. Each of the brothers was to get
one -sixth share in the cash balance as found on March 31, 1946, upon
examination of accounts by the arbitrators.
All the movable property of the joint family
including the stock-in-trade of all the family businesses was to be divided
equally among all the brothers. The compromise further declared that the
plaintiff was to have one-sixth share in the motor garage and that defendants 1
and 2 were to pay the price of one-sixth share to him. These are the material
provisions of the compromise. One of the brothers was a minor and the Court
finding the compromise to be for the benefit of the minor accepted it and
passed a preliminary decree in terms of the compromise on July 25, 1947.
If nothing else had happened to disturb the
natural course of events, the proceedings would have ended in a final decree
for partition. The plaintiff, however, commenced a fresh suit on February 23,
1949, confining his relief to his share of the profits and assets Of the motor
business carried on by defendants Nos. 1 and 2 after March 31,1946.
His case was that the compromise was made in
a hurry, that the parties omitted to provide in the compromise about the future
conduct 102 of the motor business from April 1, 1946, that the motor business
was still a joint family business and that he had a right to ask for accounts
of that business subsequent to March 31, 1946.
In defence it was pleaded that the compromise
was made after due deliberation, that accounts of the motor 'business and
grocery shop should actually have been taken up to April 14, 1945, the date of
disruption of the joint family status, but the parties agreed by way of
compromise that account of all family businesses should be taken up to March
31, 1946. It was also pleaded that the claim was barred by res judicata.
Upon the issues framed in the case the Civil
Judge found that the suit was not. barred by reason of the decision in the
previous suit No. 39 of 1945, that the decision in that suit was not obtained
by fraud and misrepresentation and that the compromise in the previous suit was
not due to a mistake or misunderstanding. Despite these findings the Civil
Judge held that although the motor business carried on after the partition had
ceased to be a joint family business yet as it was carried on by some members
of a family their position was analogous to that of a partner carrying on
partnership after dissolution and applying the principle underlying section 37
of the Partnership Act he held that the two brothers carrying on the motor
business were liable to account. Accordingly he passed a preliminary decree
directing the accounts of the motor business to be taken from March 31, 1946,
up to the date on which a final decree for payment of the amount found to be
due would be made. A Commissioner was appointed to take the accounts to
ascertain the profits earned by the use of the capital belonging to the shares
of brothers other than those who carried on the motor business. In appeal
Bavdekar 'J. with whom Dixit J.
agreed modified the decree of the trial Court
by directing that the accounts were to be taken up to the date when the
businesses discontinued and not up to the date of the final decree.
The learned Judges held that the cause of
action for the present suit was different from the cause. of action in the
previous suit and that the suit was not barred 103 by res judicata or by Order
II, rule 2, of the Code of Civil Procedure. After delivering themselves of some
conflicting observations to which reference will in detail be made hereafter
they held that the consent decree did not expressly negative the right for
accounts of the motor transport business. Finally the learned Judges recorded
the conclusion that regardless of the pleadings in the case the defendants Nos.
I and 2 had made use of the joint family property and that they stood in, the
position of co-owners and as contemplated in section 90 of the Indian Trusts
Act were liable to render accounts for the-profits which were attributable to
the employment of the assets owned by the parties jointly.
Learned counsel for the appellants has
contested the view of the High Court upon all the points decided, against them.
He has contended that the cause of action in
a suit for partition is the desire and intention of the family to separate,
that the cause of action in the two suits is identically the same and not
separate and distinct and. that the suit was, therefore, barred both by the
principle of res judicata and by Order II, rule 2, of the Civil Procedure Code.
Learned counsel also challenged the view of the High Court about the
applicability of section 90 of the Indian Trusts Act It seems to us that upon a
fair reading of the compromise arrived at between the parties in the
circumstances then existing, the only legitimate conclusion possible is that
the parties had agreed to confine the taking of all accounts upto March
31,1946, and had closed the door to reopening them beyond that date. If the
compromise was arrived at after full consideration by the parties and was not
vitiated by fraud, misrepresentation, mistake or misunderstanding as held by
the trial Court-a finding which was not interfered with by the High Court-it
follows that a matter once concluded between the parties who were dealing with
each other at arms length cannot now be reopened. What led the parties to
confine the period of account to March 31, 1946, and stop further accounting
which would have normally extended to the passing of the final decree will
appear from the following circumstances. The plaintiff knew that the licence
for the liquor shops 104 carried on by him was expiring on the 1st April, 1946,
and he was anxious to run the liquor business exclusively and not jointly or in
partnership with his brothers after the expiry of the licence. He gave a notice
to his brothers through pleader on December 12, 1945, stating inter alia the
following :"The period of (licence for) the liquor shops at the said
places expires by end of March, 1946. Hence after the expiry of the said
period, my client having no desire to conduct liquor shop business jointly or
in partnership with any of you again, he intends to run and will run as from
the date 1st April, 1946, one or more liquor shops as he pleases belonging to
him alone independently. The moneys that will be required for (purchase in)
auction of the shops will be paid by my client by borrowing the same from third
parties on his own responsibility and my client will not allow the said moneys
to have the least connection with the businesses, properties and cash which are
at present in dispute in Court and with the profits and income from the said
businesses or properties. My client expressly informs -you by this notice of
the fact, viz., that the liquor shops thus purchased by him will solely belong
to him and will be run by him independently of any of you. None of you will
have any legal right to meddle with or interfere in the liquor shops which will
be thus purchased by my client in the Government auction for the new year
beginning from 1st April, 1946, and if any of you make an attempt with
malicious intention to cause even the slightest interference in the said
business of my client, then my client will hold you fully responsible for any
harm suffered by him and for other damages and expenses incurred by him and
will take a severe legal action against you there for." This notice
furnishes a true guide as to the intention of the plaintiff which was none
other than that he should run the liquor shops exclusively for himself and
appropriate the profits thereof without making himself accountable to his
brothers. Although the plaintiff says that he intended to pay for the auction
of liquor shops by borrowing he was really in a position of vantage for he
admittedly had Rs. 13,000 cash in hand as 105 against the Rs. 3,000 his
brothers had. The notice explains the significance of the provision in the
compromise that accounts are to be taken only up to March 31, 1946. Since the
plaintiff did not want his brothers to interfere with his exclusive running of
the liquor business after March 31, 1946, he perforce had to agree that he
should sever his connection with other businesses run by his brothers. This
arrangement was apparently acceptable to all the brothers as being fair and
reasonable and as not giving undue advantage to any party over the other. This
being our construction of the compromise, it follows that the plaintiff's
conduct in going back upon that arrangement by filing a fresh suit in regard to
the motor business only is anything but honest.
The plaint filed in the previous suit leaves
no manner of doubt that the plaintiffs in that suit ,sought a complete division
of all the family property both movable and immovable and a final determination
of all the accounts in respect of the family businesses. It is also significant
that after the compromise the plaintiff (Balkrishna) filed an application
before the Civil Judge in which he alleged that when he agreed in the
compromise that the accounts of the various businesses should be up to the 31st
March, 1946, he was under a misapprehension regarding his legal right inasmuch
as he thought that when the accounts were to be taken up to a certain date,
'the joint family property after that date would not be allowed to be utilized
by some members only of the family for making profits for themselves to the
exclusion of the plaintiff. He goes on to say that he laboured under the
impression that the joint family business would be either altogether stopped
after the 31st March, 1946, or would be run either by the arbitrators or the
Commissioners and the profits accruing there from would be deposited in Court
for distribution among the parties according to their shares. The application
was made on November 22, 1947. His pleader, however, stated on April 6, 1948:
" The application is abandoned by the applicant as he wishes to pursue his
remedy by way of an independent suit for the grievance in the
application," and the Court passed the order, "The application is
disposed of as 14 106 it is not pressed." The learned Judges of the High
Court in referring to this application observe thus: " It is obvious
therefrom that really speaking the idea of the profits of several businesses
after the 1st of April, 1946, was present to the minds of the parties; but the
parties did not care to ask that accounts of the other businesses will be taken
up after the 1st of April, 1946. One of the businesses was a liquor business,
which admittedly was to come to an end on the 31st of March, 1946; but there
was also another business; that Was a kirana shop, which was not a very big
business. But all the same it was there, and there is force, therefore, in the
contention which has been advanced on behalf of the appellants that it was not
as if there has been an oversight on the part of the parties, but the parties
knew that the businesses might go on afterwards; but if they were carried on,
they did not particularly care for providing by the compromise decree for
accounts of those businesses being taken after the 1st of April, 1946."
Having said all this they record the conclusion that the compromise did not
expressly negative the right of the plaintiff to an account of motor business.
We are unable to accept this conclusion. The observations quoted above negative
the plaintiff's case about mistake or misunderstanding in regard to the true
effect of the compromise and show that the plaintiff abandoned the right to
Account after the crucial date and the status of the parties thereafter changed
into one of tenants in common. If the plaintiff really intended that accounts
of the motor business or indeed of all other businesses were to be taken up to
the date of the 'final decree, there was no point in mentioning the 31st March,
1946. The normal course, after the preliminary decree was passed by the Court,
was to divide all the property by metes and bounds and to award monies as found
on examination of the accounts right up to the date of the final decree. But
for the compromise which limited the period of the account the plaintiff would
have obtained the relief he is now seeking, in the partition suit as accounts
would have been taken of all the businesses up to the date of the final decree.
The plaintiff has himself to thank for preventing the natural 107 course of
events and for forbidding the accounts to be taken after the 31st March, 1946.
The plaintiff on the other hand has no real grievance in the matter, for
although the defendants Nos. 1 and 2, who continued to run the motor business,
may have made some money with thehelp of the two old motor buses, the plaintiff
whose keenness to run the liquor business is apparent from the notice referred
to above was not precluded from reaping the fruits of that business. It is hard
to conceive that the plaintiff would have agreed to share his burden of the
loss if the motor business had sustained any. We hold, therefore, that the
compromise closed once for all the controversy about taking any account of the
joint family businesses including the motor business after the 31st March',
1946, and the plaintiff is bound by the terms of the compromise and the consent
decree following upon it.
The obvious effect of this finding is that
the plaintiff is barred by the principle of res judicata from reaitating the
question in the present suit. It is well settled that a consent decree is as
binding upon the parties thereto as a decree passed by invitum. The compromise
having been found not to be vitiated by fraud, misrepresentation,
misunderstanding or mistake, the decree passed thereon has the binding force of
We are also of opinion that the plaintiff's
claim is barred by the provisions of Order II, rule 2(3), of the Code of Civil
Procedure. The plaintiff by confining his claim to account up to March 3, 1946,
only, implicitly of not explicitly, relinquished his claim to the account for
the subsequent period. Sub-rule 3 clearly lays down that if a person Omits,
except with the leave of the Court, to sue for all reliefs to which he is
entitled, he shall not afterwards sue for any relief so omitted. We do not
agree with the High Court that the cause of action in the subsequent suit was
different from the cause of action in the first suit.
The cause of action in the first suit was the
desire of the plaintiff to separate from his brothers and to divide the joint
family property. That suit embraced the entire property without any reservation
and was compromised, the plaintiff having abandoned his claim to account in
respect of 108 the motor business subsequent to March 31, 1946. His subsequent
suit to enforce a part of the claim is founded on the same cause of action
which he deliberately relinquished.
We are clear, therefore, that the cause of
action in the two suits being the same, the suit is barred under Order II, rule
2(3), of the Civil Procedure Code.
As the. suit is barred both by res judicata
and Order II, rule 2(3), of the Civil Procedure Code, no further question as to
the applicability of section 90 of the Indian Trusts Act can possibly arise
under the circumstances.
The result is that we allow the appeal and
dismiss the suit with costs throughout.