Budhilal Deviprasad And Another v. Jagannathdas Bajrangdar .

1. This is a Letters Patent Appeal against the judgment and decree of T.C. Shrivastava, J. in second appeal No. 757 of 1959, decided on 12-1-1962.

2. The respondent (plaintiff) on 1-8-1944, characterising the suit transaction, as herein below set out, as a usufructuary mortgage, filed a suit for its redemption. The facts pleaded by him were that though he was in urgent need of Rs. 600/-for payment of land revenue, the defendants-creditors were unwilling to advance the amount on a simple transaction of money-lending but insisted on a deed of sale with a condition that they shall remain in possession of the property sold in lieu of interest and that the possession of it would be returned to him when he repaid the loan; that in terms of the aforesaid agreement, the plaintiff put the defendants in possession of this two sir fields, viz., Khasra No. 21/9, area 7.28 acres, and Khasra No. 24/4, area 3.00 acres, both situate at mouza Rehuta, tahsil Mungeli, district Bilaspur, and also executed a formal deed of sale which, however, was never registered, as it was never intended to be an effective document; and that the defendants remained in possession for a few years; but when the plaintiff offered to repay the debt and claimed back possession of the land, they refused. He, therefore, inter alia, prayed that possession of the suit fields be ordered to be delivered to him on his paying to the defendants Rs. 600/-.

3. The defendants contested the suit, chiefly on the ground that the transaction in suit was an out-and-out sale. They also pleaded protection under Section 53A of the Transfer of Property Act, in so far as their possession was under an unregistered deed of sale.

4. The trial Court dismissed the suit, holding that the plaintiff could not be permitted to lead oral evidence to show that the suit transaction was as between a creditor and a debtor and not as between a vendee and a vendor, in view of the fact that there was a written document embodying the terms of the contract which prohibited proof of such agreement under Section 92 of the Evidence Act. The dismissal of the suit was affirmed in appeal; but the High Court (B.P. Sinha, C. J. (as he then was)) in second appeal No. 499 of 1947, decided on 30-10-1952, reversed both the aforesaid judgments and decrees, holding that the plea of an antecedent agreement, which was followed by the execution of a document which was a mere evidence of an advance and which, though containing stipulations as regards an out-and-out sale, was meant to be a security for the money, was not within the mischief of Section 92 of the Evidence Act. Reliance was placed on the decision of the Judicial Committee of the Privy Council in Tyagaraja Mudaliar v. Vedathanni, 63 Ind App 126: (AIR 1936 PC 70). The case was, therefore, remanded to the trial Court for a fresh decision in accordance with law after permitting the parties to lead such evidence for proof or disproof of the antecedent agreement pleaded by the plaintiff as they may choose to lead.

5. After taking evidence, the trial Court on 8-8-1953 held the antecedent agreement proved. If, therefore, decreed the suit of the plaintiff. On appeal, the Third Additional District Judge, Bilaspur, by his judgment dated 19-1-1956, dismissed the plaintiff's suit on the short ground that the suit land, not having been recorded as the plaintiff's sir in the village papers of 1948-49, was not saved to him as his 'home-farm' under the Madhya Pradesh Abolition of Proprietary Rights (Estates. Mahals, Alienated Lands) Act, 1950 (No. I of 1951) but had vested in the State, and that consequently the plaintiff had no right to continue his suit after the coming into force of the aforesaid Act. It was further held that as the suit land was in the: possession of the defendants as their occupancy holding, they were on and from the date of vesting deemed to be tenants of the State in respect of it.

6. The matter again came up in appeal to the High Court, when T. C. Shrivastava, J. in second appeal No. 359 of 1956, decided on 19-1-1959, again set aside the judgment and decree of the lower appellate Court and remanded the case to It for a fresh decision on merits, holding, inter alia, that the dismissal of the plaintiff's suit on the ground that the land in suit had vested in the State was manifestly incorrect in view of the "Full Bench decision of this Court in Rahamatulla Khan v. Mahabir Singh, 1956 Nag LJ 1 : (AIR 1956 Nag 132) wherein it had been held that a wrong recording of the land as occupancy would not alter the real character of the land. He further held that the land, being the plaintiff's sir, would not, under the circumstances be established in the case, become the defendant's occupancy by being wrongly recorded as such in the village papers of 1948-49.

7. On remand, the lower appellate Court considered the appeal on merits and in view of the fact that the antecedent agreement pleaded by the plaintiff had been found proved, affirmed the judgment and decree of the trial Court and decreed the plaintiff's suit.

8. The defendants again appealed. The appeal again came for hearing before T.C. Shrivastava, J. By that time, the decision of the Full Bench in Rahamatulla Khan's case, 1956 Nag LJ 1 : (AIR 1956 Nag 132) (supra) had been overruled by the Supreme Court in Haji Sk. Subhan v. Madhorao., AIR 1962 SC 1230, and hence it was argued before him that his remand order was incorrect and, in so far as the land had vested in the State, the plaintiff, who was an ex-proprietor of the land, could not claim it.

The learned single Judge accepted the contention but upheld the decree in favour of the plaintiff on the ground that he could not go behind his re-mand order which, so far as he was concerned, was res judicata. He, however, granted leave to appeal under Clause (10) of the Letters Patent on the ground that an important question of law arose for consideration, viz., whether a remand order based on a ruling of this Court which is later held to be erroneous by the Supreme Court can be reconsidered in appeal against the decision after remand. On the question of proof of the alleged antecedent agreement on which the suit of the plaintff was based, he confirmed the finding of the Courts below.

9. On the question posed, there cannot be two opinions that a decision of an appellate Court remanding a case under Rule 23 of Order 41 of the Code of Civil Procedure cannot be questioned before the same appellate Court in an appeal against the decision of the lower Court after remand. This is because of the application of the principle of res judicata which, as pointed out by the Privy Council in Sheoparsan Singh v. Ramnandan Singh, 43 Ind App 91 : (AIR 1916 PC 78), should be influenced by no technical considerations of form but by matter of substance within the limits allowed by law. It is well settled that the principle is applicable to interlocutory orders. The question was exhaustively considered by the Supreme Court in Satyadhyan v. Smt. Deorajin Debi, AIR 1960 SC 941, when their Lordships, after considering the decisions of the Judicial Committee of the Privy Council in Maharajah Moheshur Singh v. Bengal Govt., 7 Moo Ind App 283 (PC), Forbes v. Amee-roonissa Begum, 10 Moo Ind App 340 (PC), Sheonath v. Ramnath, 10 Moo Ind App 413 (PC) Ram Kirpal v. Rup Kuari, 11 Ind App 37, Bani Ram v. Nanhu Mal, 11 Ind App 181 (PC), and Hook v. Administrator-General of Bengal, 48 Ind App 187: (AIR 1921 PC 11), laid down the following principles :

"The principle of res judicata is based on the need of giving a finality to judicial decisions. What it says is that once a res is judicata, it shall not be adjudged again. Primarily it applies as between past litigation and future litigation. When a matter -- whether on a question of fact or a question of law -- has been decided between two parties in one suit or proceeding and the decision is final, either because no appeal was taken to a higher Court or because the appeal was dismissed, or no appeal lies, neither party will be allowed in a future suit or proceeding between the same parties to canvass the matter again, This principle of res judicata is embodied in relation to suits in section 11 of the Code of Civil Procedure; but even where Section 11 does not apply, the principle of res judicata has been applied by Courts for the purpose of achieving finality in litigation. The result of this is that the original Court as well as any higher Court must in any future litigation proceed on the basis that the previous decision was correct."

"The principle of res judicata applies also as between two stages in the same litigation to this extent that a Court, whether the trial Court or a higher Court, having at an earlier stage decided a matter in one way, will not allow the parties to re-agitate the matter again at a subsequent stage of the same proceedings."

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"The very fact that in further litigation it will not be open to either of the parties to challenge the correctness of the decision on a matter finally decided in a past litigation makes it important that in the earlier litigation the decision must be final in the strict sense of the term. When a Court has decided the matter, it is certainly final as regards that Court. Should it always be treated as final in later stages of the proceeding in a higher Court which had not considered it at all merely on the ground that no appeal lay or no appeal was preferred? As was pointed out by the Privy Council in Moheshur Singh's case, 7 Moo Ind App 283 (PC) (supra), the effect of the rule that at every stage of the litigation a decision not appealed from must be held to be finally decided even in respect of the superior Courts, will put on every litigant against whom an interlocutory order is decided, the burden of running to the higher Courts for redress of the grievances, even though it may very well be that though the interlocutory order is against him, the final order will be in his favour and so it may not be necessary for him to go to the appeal Court at all. Apart from the inevitable delay in the progress of the litigation that such a rule would cause, the interests of the other party to the litigation would also generally suffer by such repeated recourse to the higher Courts in respect of every interlocutory order alleged to have been wrongly made. It is in recognition of the importance of preventing this mischief that the Legislature included in the Code of Civil Procedure from the very beginning a provision that in an appeal from a decree it will be open to a party to challenge the correctness of any interlocutory order which had not been appealed from but which has affected the decision of the case."

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"It is clear therefore that an interlocutory order, which had not been appealed from either because no appeal lay or, even though an appeal lay, an appeal was not taken, could be challenged in an appeal from the final decree or order."

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".....the order of remand was an interlocutory order which did not terminate the proceedings and so the correctness thereof can be challenged in an appeal from the final order."

10. It may here be mentioned that this has also been the view of this Court as reported in Sultan Beg v. Chunilal Maluram Shop, AIR 1918 Nag 193 where a Division Bench of the Court of the Judicial Commissioner (Prideaux and Kotval, A. J. Cs.) held :

"No case has been cited before us where a remand order under Order 41, Rule 23, has been reconsidered in a subsequent appeal from the decision of the first Court after remand. In the present instance the remand order was under Order 41, Rule 23, and the appeal cannot be said to have been pending or undisposed of cm this Court's file. In our opinion, the whole case is not opened up on the present appeal from the decree after remand, and it is not open to us, therefore, to reconsider the remand order."

Similar view was also taken in Kanhaya Singh v. Bhagwat Singh, AIR 1954 Pat 326 and Lalbati Kuer v, Satchitanand, AIR 1960 Pat 418.

11. The learned single Judge was, therefore, correct in holding that he could not reconsider his order of remand when hearing the appeal from the judgment and decree passed by the lower appellate Court after remand.

12. The question then arises whether this Court, sitting as a Court of appeal against the judgment and the decree of the learned Single Judge under Clause (10) of the Letters Patent can reconsider the order of remand.

13. The principle on which the Supreme Court held that the appellate Court is competent to do so proceeded on the principle that under Section 105(1) of the Code of Civil Procedure an interlocutory order which had not been appealed from either because no appeal lay or, even though an appeal lay, an appeal was not taken could be challenged in appeal from the final decree or order; but because of Sub-section (2) as regards orders of remand, if an appeal lay and still the appeal was not taken, the correctness of the order of remand could not later be challenged in an appeal from the final decision, but if an appeal did not lie from the order of remand, the correctness thereof could be challenged by an appeal from the final decision as in the cases of other interlocutory orders. It was further held that so far as the Supreme Court was concerned, the bar created by the aforesaid Sub-section (2) did not apply because no appeal lay to the Supreme Court against an order of remand. On a parity of reasoning, as no appeal lies against an order of remand passed by a High Court, the bar of Sub-section (2) of Section 105 shall also not be applicable to the High Court when considering an appeal against the judgment and decree of a Single Judge under Clause (10) of the Letters Patent.

14. Thus, though we are competent to go behind the order of remand passed by T.C. Shrivastava, J. and can reconsider it for giving relief to the defendants-appellants, the question is whether the relief claimed by them can be granted to them under the circumstances of the case.

15. The contention of the learned counsel for the defendants-appellants is that the suit of the plaintiff had been dismissed by the lower appellate Court by its judgment and decree dated 19-1-1956. On appeal, the learned single Judge on 19-1-1959 set aside the judgment and decree of the lower appellate Court and remanded the case for a decision on merits, relying on a Full Bench decision of this Court, viz., Rahamatullah Khan's case, 1956 Nag LJ 1 : (AIR 1956 Nag 132) (supra). The Full Bench decision was subsequently overruled by the Supreme Court in AIR 1962 SC 1230 (supra). Consequently, if that decision did not govern the case, the suit of the plaintiff ought to be dismissed for the reasons given by the learned Additional District Judge in his judgment dated 19-1-1956, which reasons it is submitted are also in accord with the decision of the Supreme Court in AIR 1962 SC 1230 (supra).

16. There appear to be two objections to the contention. The first is whether it was competent for the lower appellate Court on remand in 1952 to consider the question on which it proceeded to dismiss the suit after remand; and the second is whether the principle laid down by the Full Bench* of this Court in Rahamatulla Khan's case, 195S Nag LJ 1 : (AIR 1956 Nag 132) and that laid down by the Supreme Court in AIR 1962 SC 1230 (supra) have any relevance to the problem involved in this case.

17. As to the first, it has to be remembered that after the suit of the plaintiff-respondent had been dismissed by the Courts below on the ground that Section 92 of the Evidence Act precluded the plaintiff from leading oral evidence to prove the alleged antecedent agreement pleaded by him, wherefrom he claimed that the relationship between the parties was that of a debtor and a creditor and not that of a vendor and a vendee, nor that of a mortgagor or a mortgagee, an appeal was pending against its dismissal in the High Court, when the Madhya Pradesh Abolition of Proprietary Rights (Estates, Mahals, Alienated Lands) Act, 1950 (Act No. I of 1951) came into force. Consequently, when the second appeal, No. 499 of 1947, was decided by B.P. Sinha, C. J. (as he then was) on 30-12-1952, the objection on the ground that the plaintiff's suit for possession was not tenable in view of the Abolition of Proprietary Rights (Estates, Mahals, Alienated Lands) Act, 1950 was available to the defendants-appellants but was not taken, with the result that the learned Chief Justice set aside the judgment and decree of the Courts below and remanded the case for a fresh decision on merits in the following terms :

"The judgment and decree passed by the Courts below are, therefore, set aside and the suit remitted to the Court of first instance to allow the plaintiff to adduce all the evidence that he can in proof of the antecedent agreement alleged by him. It will then be for the Court to decide whether or not the plaintiff had succeeded in making out the case he set out to prove."

18. The powers and jurisdiction of the lower Court to deal with the suit, after remand, depended on the specifications of the remand order. Because, but for the order of remand, it had ceased to have any seisin of the case and the jurisdiction conferred on it to re-deal with it was circumscribed by the terms of the order in which the remand was made. We are, therefore, of opinion that where the order of remand lays down any limits for the enquiry to be made by the lower Court, that Court has no jurisdiction to enter into any question which falls outside those limits.

19. In the instant case, the order of remand by the High Court, dated 30-12-1952, specifically directed the lower Court to determine if -- and, if so, how far -- the plaintiff was successful in making out the case of an antecedent agreement which he had set out in the pleadings. The question whether he could be non-suited on any other ground was foreign to the suit at that stage, and consequently the lower Court could not have, suo motu or otherwise- entertained the plea that the plaintiff's right to claim possession of the suit land had come to an end by the coming into force of the Madhya Pradesh Abolition of Proprietary Rights (Estates, Mahals, Alienated Lands) Act, 1950.

20. The question then is whether we should afford relief to the defendant-appellant, if any, after taking into consideration the change in the legal position as a result of the Madhya Pradesh Abolition of Proprietary Rights (Estates, Mahals, Alienated Lands) Act, 1950.

21. It is undoubted that the Court has the power to do so, because we, sitting as a Court of appeal, are not only required to correct any error in the judgment under appeal but also to dispose of the case according to the requirements of justice, which means that we are bound to give effect to any change in the law which has come into existence after the judgment under appeal was given : (see Patterson v. State of Alabama, (1935) 294 US 600, Minnesota v. National Tea Co., (1940) 309 US 551, Lachmeshwar Prasad v. Keshwar Lal, AIR 1941 FC 5 and Chhote Khan v. Mohammad Obedulla, AIR 1953 Nag 361 (FB)

22. The question, therefore, arises whether the Madhya Pradesh Aboliton of Proprietary Rights Act, 1950 has any application to the facts of this case. The learned counsel for the defendants-appellants contends, on the authority of Haji Sk. Subhan's case, AIR 1962 SC 1230 (supra), that the said Act bars the right of the plaintiff-respondent to possession of the suit land on the ground that on and from the date of vesting he had lost his proprietary rights in respect of it and that it could not be saved to him as his 'home-farm' as it was not recorded as his sir or khudkasht in the khasra and jamabandi of the year 1948-49.

23. In our opinion, the principle of law enunciated in Haji Sk. Subhan's case, AIR 1962 SC 1230 (supra) shall have no application to the facts of this case. There, in the first place, as pointed out by their Lordships, the respondent had 'based his claim on his proprietary right to recover possession and not on the loss of possession on account of the appellant's dispossessing him'. Secondly, there, the respondent had not only lost his proprietary rights; but the appellant had acquired rights of occupancy, subsequent to the High Court's decree, from the State in whom the proprietary rights vested after the coming into force of the Madhya Pradesh Abolition of Proprietary Rights Act and who had also conferred on him the rights of a malik makbuja. Thirdly there, the respondent was not recorded and could not have been recorded to have khudkasht in the land in suit in the papers of 1948-49 and, therefore could not have claimed the land as his 'home-Farm'; that he, in fact, did not claim so, and consequently he had lost his proprietary rights in the land which had got vested in the State.

None of these considerations have any application here. The suit is not for possession based on proprietary rights. There is no evidence that the defendants-appellants have been accepted as occupancy tenants by the State, nor that they had acquired the rights of malik makbuja therein; nor is there evidence to show that the respondent could not have claimed the suit fields as his sir, nor that he had not so claimed them in the compensation proceedings. In fact, the land, being 'sir', the defendants-appellants could not have claimed the rights of an occupancy tenant in it; and the mere recording of it as his occupancy was only presumptive evidence which had been adequately rebutted by the evidence showing that it was the plaintiff's sir in which the defendants-appellants could not in law claim the rights of an occupancy tenant. After the deletion of Section 50 from the C. P-Tenancy Act by Act 11 of 1940, it became unnecessary to obtain permission of a Revenue Officer for transferring 'sir'. Consequentlv. the transferee of" sir became a sub-tenant as defined in Section 37 of the C. P. Tenancy Act, whose rights would be governed by the contract creating the tenancy. It may also be mentioned here that the suit land, which was the sir of the plaintiff-respondent, had been put in possession of the defendants-appellants in pursuance of an agreement which was not, nor was it claimed to be, an agreement of tenancy.

The suit, as held by Sinha, C. J. (as he then was) in the first remand order, was a suit between a debtor and a creditor in which in pursuance of a prior agreement the debtor had placed the creditor in possession of the suit land which he was claiming back on his offering to repay the debt The character of the land and the status of the plaintiff-respondent qua lambardar or a proprietor Was not germane to the suit.

24. At best, the defence could be construed to be a plea of jus tertii which, as pointed out by Hidayatullah. J. (as he then was) in Chhotekhan's case, AIR 1953 Nag 361 (supra) at n. 363, is no defence, unless the defendants-appellants could show that the act complained of was done by the authority of the true owner : (see Narayana Row v. Dharmachar, ILR 26 Mad 514. Graham v. Peat, (1801) 1 East 244, Chambers v. Donaldson, (1809) 11 East 65 and B. Gangayya v. V. Satyanarayana, AIR 1925 Mad 1021). There is nothing to show that the State had authorized the acts when the cause of action arose, nor is there anything to show that it had approved of them or ratified them even today. He has also pointed out, on the authority of a long track of cases, that an action must be tried in all its stages on the cause of action as it existed at the commencement of the action; and that no advantage could be given to a defendant because a third party had acquired the right and title of the plaintiff. The law on the subject has also been elaborately discussed by Sir Asutosh Mookerjee, J. in the leading iudgment on the subject reported in Rai Charan v. Biswanath. AIR 1915 Cal 103.