Baldevdas Shivlal & ANR Vs.
Filmistan Distributors (India) (P) Ltd. & Ors  INSC 131 (29 April
29/04/1969 SHAH, J.C.
CITATION: 1970 AIR 406 1970 SCR (1) 435 1969
SCC (2) 201
F 1976 SC2621 (11) RF 1977 SC1555 (8) RF 1977
SC2185 (9) E&R 1978 SC 47 (14)
Code of Civil Procedure, 1908, ss. 1,
115-Consent decree whether operates as res judicata-Trial Court disallowing
objection to certain questions in cross-examination--order disallowing question
is not a 'case decided' within meaning of s. 115-High Court's jurisdiction in
R and F who held a cinema building in
Ahmedabad on lease entered on November 27, 1954 into an agreement with
respondent no. 1 giving the latter a right to exhibit cinematograph films in
the said building. Later respondent no. 1 filed 'suit No. 149 of 1960 to assert
his right to exhibit films in the building. The suit resulted in a compromise
decree. In pursuance of the compromise a further agreement dated December 1,
1960 was executed between the parties. However in 1963 respondent no. 1 again
filed a suit claiming as a sub-lessee or as lessee a right to exhibit films in
the said building and praying that the defendants be restrained from
interfering with that right.
The suit was filed under s. 28 of the Bombay
Rents, Hotel and Lodging House Rates Control Act, 1947 in the Court of Small
Causes. In this suit respondent no. 1 asked the court to try additional issues
Nos. 11, 12 and 13 as preliminary issues. In issue no. 11 the question raised
was whether the consent decree in the earlier suit operated as res judicata so
that R & F could not question that the agreements between them and
respondent no. 1 constituted a lease. Issue no.
12 raised the question whether in view of the
consent decree R & F were estopped from leading evidence and asking
questions in cross-examination to show that the said agreements did not
constitute a lease. Issue No. 13 raised the question whether s. 92 of the
Indian Evidence Act debarred R & F from leading evidence to the effect that
the documents in question did not constitute a lease. The Trial Court refused
to try these as preliminary issues and its order was upheld by the High Court.
At the hearing of the case when the counsel for the defendants sought to ask a
witness for respondent No. 1 whether the agreement dated November 27, 1954 was
a commercial transaction and not a lease respondent No. 1 objected to the
question. The objection was disallowed by the trial court. In revision under s.
115 of the Code of Civil Procedure the High Court did not interfere with the
trial court's order in respect of issues Nos. 12 and 13. In respect of issue
No. 11, the High Court held that the agreement dated November 27, 1954 must in
view of the consent decree in suit No. 149 of 1960 be held to be a lease, and
that the consent decree created a bar of res judicata in respect of the issue
whether the said agreement created a lease. The defendants-appellants appealed
to this Court.
HELD : (i) The High Court had no jurisdiction
to record any finding on the issue of res judicata in a revision application
filed against an order refusing to uphold an objection to certain question
asked to a witness under examination. The Court erred in proceeding to decide
matters on which no decision was till then recorded by the trial court and
which could not be decided by the High Court until the parties had opportunity
of leading evidence thereon. [441 F] 436 (ii) By ordering that a question may
properly be put to a witness who -was examined, no case was decided by the
Trial Court within the meaning -of s. 115 of the Code of Civil Procedure. The
expression 'case' is not limited in its import to the entirety of the matter in
dispute in a proceeding. Such an interpretation may result in certain cases in
denying relief -to the aggrieved litigant where it is most needed. But equally,
it is not every order of the court in the course of a suit that amounts to a
case decided. A case may be said to be decided only if the court adjudicates,
for the purpose of the suit, some right or obligation of the parties in
controversy. [441H-442C] Major S. S. Khanna v. Brig. F. J, Dillon,  4
409, -referred to.
(iii) A consent decree, according to the
decisions of this Court, does not operate as res judicata, because a consent
decree is merely the record of a contract between the parties to, a suit, to
which is superadded the seal of the court. A matter in contest in a suit may
operate as res judicata only if there is an adjudication by the court : the
terms of s. 1 1 of the Code leave no scope for a contrary view. [441E]
CIVIL APPELLATE JURISDICTION: Civil Appeal
No. 1940 of 1967.
Appeal by special leave from the judgment and
order dated April 17, 27, 1967 of the Gujarat High Court in Civil Revision
Application 328 of 1967.
S. T. Desai and I. N. Shroff for the
M. P. Amin, P. M. Amin, P. N. Dua and J. B.
Dadachanji, for respondent No. 1.
R. P. Kapur, for respondents Nos. 2 and 3.
The Judgment of the Court was delivered by
Shah, J. By insistence upon procedural wrangling in a comparatively simple suit
pending in the Court of Small Causes at Ahmedabad the parties have effectively
prevented all progress in -the suit during the last six years.
A building in the town of Ahmedabad used as a
cinematograph theatre belonged originally to Messrs. Popatlal Punjabhai.
estate of the owners and on August 19, 1954,
the receivers ,estate of the owners and on August 19, 1954, The receivers
granted a lease of the theatre on certain terms and conditions to two persons,
Raval and Faraqui. By an agreement dated November 27, 1954, between Raval and
Faraqui on the one hand and Messrs. Filmistan Distributors (India) Private Ltd.
hereinafter called "Filmistan--on the other hand, right to exhibit
cinematograph films was granted to the latter on certain terms and conditions.
"Filmistan" instituted suit No. 149 of 1960 in the Court of the Civil
Judge (Senior Division) at Ahmedabad against Raval and Faraqui and two other
persons claiming a declaration that it 437 was entitled pursuant to the
agreement dated November 27, 1954, to exhibit motion pictures in the theatre.
By an order dated December 1, 1960 the suit was disposed of as compromised. It
was inter alia agreed that Raval and Faraqui were bound and liable to allow
Filmistan to exercise its "exhibition rights" in the theatre; that
Raval and Faraqui, their servants and agents were not to have any right to
exhibit any picture in contravention of the terms and conditions of the
agreement dated November 27, 1954; and that Raval and Faraqui shall
"execute and register" an agreement in writing incorporating the said
agreement with the variation as to rental. Pursuant to this agreement, a fresh
agreement was executed on December 1, 1960. On September 1, 1963, Filmistan
filed suit No. 1465 of 1963 in the Court of Small Causes at Ahmedabad, inter
alia, for a declaration that as sub-lessee or as lessee under law it was
entitled to obtain and remain in possession of the theatre and to exhibit
cinematograph films and to hold "entertainment performances" etc. in
the theatre, and that one Shabeer Hussain Khan Tejabwala had no right, title or
interest in the theatre, that the defendants in the suit be ordered to hand
over vacant and peaceful possession of the theatre, and the defendants, their
servants and agents be restrained by an injunction from interfering directly or
indirectly with its rights to obtain and remain in possession of the theatre or
any part thereof and to exercise its right of exhibiting "motion
pictures" and entertainment performances etc. This suit was filed against
the receivers in insolvency of the owners of the theatre, against Raval and
Faraqui, against Tejabwala and also against Baldevdas Shivlal who claimed to be
the owner of the theatre. The suit was based on the claim by Filmistan as
lessees or sub-lessees of the theatre and was exclusively triable by the Court
of Small Causes by virtue of s. 28 of the Bombay Rents, Hotel and Lodging House
Rates Control Act, 1947. Three sets of written statements were filed against
the claim made by Filmistan, but no reference need be made thereto, since at
this stage in deciding appeal the merits of the pleas raised by the defendants
are not relevant.
After issues were raised on June 20, 1966,
the plaint was amended and additional written statements were filed by the
Defendants. The learned Judge was then requested to frame three additional
issues in view of the amended pleadings :
the issues were:
1. Whether in view of the said consent decree
in suit No. 149 of 1960 defendants Nos.
5 and 6 are debarred on principles of res
judicata from agitating the question that the said document dated November 27,
1954 as confirmed by their letter dated January 31, L13 Sup. CI/6917 438 1955
and further confirmed by document dated December 1, 1960 is not a lease?
12. Whether in view of the said consent
decree, defendants 5 and 6 are estopped from contending and leading any
evidence and putting questions in cross examination of plaintiffs witnesses to
show that the said document dated November 27, 1954 as confirmed by their
letter dated January 31, 1955 and further confirmed by document dated December
1, 1960 is not a lease ?
13. Whether in respect of the terms of the
said consent decree as also of the said document dated November 27, 1954, as
confirmed by their letter dated January 31, 1955 and further confirmed by
document dated December 1, 1960 defendants Nos. 5 and 6 are debarred from
leading any evidence of the, plaintiffs witnesses in view of s. 92 of the Evidence
Act ?" In drawing up the additional issues not much care was apparently
exercised : whether a party is entitled to lead evidence or to put questions in
cross-examination of the plaintiff's witnesses cannot form the subject-matter
of an issue.
Filmistan then applied to the Court of Small
Causes for an order that issues Nos. 11, 12 & 13 be tried as preliminary
issues. The learned Judge observed that the issues were not purely of law, that
in any event the case or any part thereof was not likely to be disposed of on
these issues, and that ordinarily in "appealable cases" the Court
should, as far as possible, decide all the issues together and that piecemeal
trial might result in protracting the litigation.
He also observed that the issues were not of
law going to the root of the case and were on that account not capable of being
decided without recording evidence.
A revision application against that order was
dismissed in limine by the High Court of Gujarat. When the case reached hearing
and the evidence of a representative of Filmistan was. being recorded, counsel
for the defendants asked in cross-examination the question whether the
"agreement between the plaintiff and defendant Nos. 5 and 6 was a
commercial transaction and was not a lease ?" The question was objected to
by counsel appearing for Filmistan.
Thereafter elaborate arguments were advanced
and the Trial Judge passed an order disallowing the objection.
The objection to the question raised by
Filmistan was not that it related to a matter to be decided by the Court and on
which the opinion of witnesses was irrelevant. The objection was raised as 439
an attempt to reopen the previous decision given by the Trial Judge refusing to
try issues Nos. 11, 12 & 13 as preliminary issues. Counsel for Filmistan
contended that an enquiry into the nature of the legal relationship arising out
of the agreement dated December 1, 1960 "was barred by the principle of
res judicata and estoppel under the provisions of s. 92 of the Evidence
Act", since the question was already concluded by the consent decree in
suit No. 149 of 1960. The Trial Judge observed that he had carefully gone
through the consent decree and the registered agreement dated December 1, 1960,
and he found that the consent decree had not decided that the transaction
between the parties of the year 1954 was in the nature of a lease; that in the
plaint in the earlier suit it was not even averred that the rights granted were
in the nature of leasehold rights; that suit No. 149 of 1960 was for declaration
of the rights of Filmistan to exhibit motion pictures, in the theatre under the
agreement dated November 27, 1954, and for an injunction restraining the
defendants from violating the said rights of Filmistan under the agreement; and
that the agreement dated December 1, 1960 was "not plain enough to exclude
the oral evidence of the surrounding circumstances and conduct of the parties
to explain its terms and language". Accordingly he held that the question
asked in cross-examination of the witnesses for Filmistan intended to secure
disclosure of the surrounding circumstances and conduct of the parties in order
to show in what manner the language of the document was related to the existing
facts, could not be excluded.
The Court also rejected the contention that
there was any bar of estoppel, and held that evidence as to the true nature of
the transaction was not inadmissible by virtue of s. 92 of the Evidence Act.
Filmistan feeling dissatisfied with the order
invoked the revisional jurisdiction of the High Court of Gujarat under s. 115
of' the Code of Civil Procedure. The revision petition was entertained and
elaborate arguments were advanced at the Bar. The High Court referred to a
number of authorities and observed that the correctness of the findings of the
Trial Court on issues Nos. 12 and 13 may not be examined in exercise of the
powers under s. 115 of the Code of Civil Procedure. The Court proceeded to,
"The question then arises for
consideration whether in fact the subordinate Court has decided the question of
res judicata", and that "it is true that the jurisdiction of the
Court of mall Causes to decide disputes between a tenant and his landlord and
falling within the purview of s. 28 of the Bombay Rent Control Act is derived
from s. 28 of the said Act, but at the same time if an issue is in fact barred
by res judicata, then the Court has no 440 jurisdiction on principles of res
judicata to go into that question or to decide that question over again to the
extent to which the Court, viz., the trial court in the instant case, proposed
to go into that question and allow the whole question, that was closed once for
all by consent decree of December 1, 1960, to be reopened, it is proposing to
exercise the jurisdiction which is not vested in it by law. It is not open to
any Court of law to try an issue over again or reopen the same if an earlier
decision operates as res judicata.
Once the jurisdiction of the Court has been
taken away, any proposal to reopen the question closed by the earlier decision
would be exercise of jurisdiction which is not vested in the Court by law and
to that extent the decision would become revisable, even if it is the decision
as to the res judicata of an issue", and concluded "It is not open to
me in revision at this stage to express any opinion about the rights and
contentions of the parties with reference to the agreement of December 1, 1960.
But the only thing that can be said is that so far as the agreement of November
27, 1954, is concerned, it must be held, in view of the consent decree of
December 1, 1960, that that document of November 27, 1954, created a
The consent decree must be held to create a
bar of res judicata as far as the question of document of November 27, 1954,
creatin g a lease is, concerned. The learned Judge will not proceed with the
By s. 115 of the Code of Civil Procedure the
High Court is invested with power to call for the record of any case decided by
any Court subordinate to such High Court and in which no appeal lies thereo, if
such subordinate court appears-(a) to have exercised a jurisdiction not vested
in it by law, or (b) to have failed to exercise a jurisdiction so vested, or
(c) to have acted in the exercise of its jurisdiction illegally or with
material irregularity, and to make such order in the case as it thinks fit.
Exercise of the power is broadly subject to three important conditions (1) that
the decision is of a Court subordinate to the High Court; (2) that there is a
case which has been decided by the subordinate Court; and (3) that the
subordinate Court has exercised jurisdiction not vested in it by law or to have
failed to exercise a jurisdiction so vested, or to have acted in the exercise
of its jurisdiction illegally or with material irregularity.
441 In the present case the Court of Small
Causes had only decided that a question seeking information about the true
legal relationship arising out of the document could be permitted to 'be put to
the witnesses for Filmistan. The Court gave no finding expressly or by
implication on the issue of res judicata or any other issue. In the view of the
Trial Court the question whether the legal relationship arising out of the
agreement dated December 1, 1960 was in the nature of a lease or of other
character had to be decided at the trial and the previous judgment being a
judgment by consent ,'could not operate as res judicata", for, it was not
a decision of the Court, and that the consent decree in suit No. 149 of 1960
had not decided that the agreement dated March 27, 1954, was of the nature of a
lease, and that in the plaint in that suit it was not even averred that it was
The Trial Judge in overruling the objection
did not decide any issues at the stage of recording evidence : he was not
called upon to decide any issues at that stage. The observations made by him
obviously relate to the arguments advanced at the Bar and can in no sense be
regarded even indirectly as a decision on any of the issues. But the High Court
has recorded a finding that the agreement dated November 27, 1954, created a
lease and that the consent decree operated as res judicata. A consent decree,
according to the decisions of this Court, does not operate as res judicata,
because a consent decree is merely the record of a contract between the parties
to a suit, to which is superadded the seal of the Court. A matter in contest in
a suit may operate as res judicata only if there is an adjudication by the
Court : the terms of s. II of the Code leave no scope for a contrary view.
Again it was for the Trial Court in the first instance to decide that question
and there-after the High Court could, if the matter were brought before it by
way of appeal or in exercise of its revisional jurisdiction, have decided that
question. In our judgment, the High Court had no jurisdiction to record any
finding on the issue of res judicata in a revision application filed against an
order refusing to uphold an objection to certain question asked to a witness
The true nature of the order brought before
the High Court and the dimensions of the dispute covered thereby apparently got
blurred and the High Court proceeded to decide matters on which no decision was
till then recorded by the Trial Court, and which could not be decided by the
High Court until the parties had opportunity to lead evidence thereon.
It may also be observed that by ordering that
a question may properly to put to a witness who was being examined, no case was
decided by the Trial Court. The expression "case" is not limited in
its import to the entirety of the matter in dispute in an action.
442 This Court observed in Major S. S. Khanna
v. Brig. F. J.
Dillon(1) that the expression
"case" is a word of comprehensive import : it includes a civil
proceeding and is not restricted by anything contained in s. 115 of the Code to
the entirety of the proceeding in a civil court. To interpret the expression
"case" as an entire proceeding only and not a part of the proceeding
imposes an unwarranted restriction on the exercise of powers of superintendence
and may result in certain cases in denying relief to the aggrieved litigant
where it is most needed and may result in the perpetration of gross injustice.
But it was not decided in Major S. S. Khanna's case(1) that every order of the
Court in the course of a suit amounts to a case decided. A case may be said to
be decided, if the Court adjudicates for the purposes of the suit some right or
obligation of the parties in controversy; every order in the suit cannot be
regarded as a case decided within the meaning of s. 115 of the Code of Civil
The order passed by the High Court is set
aside and the Trial Court is directed to proceed and dispose of the suit.
We trust that the suit will be taken up early
for hearing and disposed of expeditiously. We recommend that the form of the
issues Nos. 11, 12 and 13 will be rectified by the learned Trial Judge.
Filmistan will pay the costs of the appeal in
this Court and in the High Court.
G.C. Appeal allowed.
(1) 1964 4 S.C.R. 409.