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Mittasaheb Hirama Kakkalmali Decree-Holder v. Gurunath Hanmant Kulkarni Judgment-Debtor .
Structured Summary of the Reported Opinion
Factual and Procedural Background
This is a second appeal from a decision of the learned District Judge of Bijapur arising out of execution proceedings on a decree dated 9th August, 1934 for sale on a mortgage under the Dekkhan Agriculturists' Relief Act. The mortgage debt was found to be Rs. 1,750, payable by four instalments, and the decree contained a default clause.
The decree-holder filed an application for execution (the application is dated 7th August, 1937 in the opinion). Under Order 21, Rule 22 of the Code of Civil Procedure (CPC), notice was served on the judgment-debtor on 1st September, 1937 to show cause why execution should not proceed. The judgment-debtor did not appear in response to that notice, and the executing Court transferred the proceedings to the Collector on 8th October, 1937. The Collector issued a notice (the opinion records the date as 11th November, 1987). Before the Collector the judgment-debtor asserted that he had paid Rs. 601-13-3 in part satisfaction of the decree-holder's claim. The Collector directed him to move the executing Court further on the matter.
The judgment-debtor thereupon filed an application in the executing Court objecting to the amount claimed in the execution application and pleading that execution should proceed only in respect of the balance. The decree-holder contended that this plea was barred because the judgment-debtor could and should have raised it earlier (before the transfer to the Collector). The executing Court and the District Judge below were divided on this point.
Legal Issues Presented
- Whether the failure of the judgment-debtor to dispute the amount claimed in the execution application after receiving notice under Order 21, Rule 22 CPC operates as a bar (by way of constructive res judicata) to his raising the same dispute at a later stage of the same execution proceedings after the executing Court had transmitted the application to the Collector.
Arguments of the Parties
Decree-holder / Appellant
- Contended that questions which, if raised and decided earlier, would have given some relief to the judgment-debtor should be treated as having been decided by necessary implication, and therefore the judgment-debtor's plea of part satisfaction was barred by the rule of constructive res judicata.
Judgment-debtor / Respondent
- Argued that the doctrine of constructive res judicata (Expln. 4 to section 11, CPC) should be applied with care and caution; it should not be applied where the judgment-debtor had no notice of the point likely to be decided against him and therefore had no opportunity to put forward his contentions.
- Asserted that his contention as to part satisfaction was not decided at the earlier stage and that he had an opportunity to pursue the matter before the Collector and subsequently in the executing Court.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| A.I.R. 1937 Mad. 5111 | Referred to for the view that an order directing execution to proceed implies consideration of whether the decree-holder had a right to execute, whether the judgment-debtor was liable, whether the decree was executable, and whether the claim was barred by limitation. | The District Judge relied on this view to hold that the question of part satisfaction was not necessarily decided at that stage and therefore was not barred. |
| 11 I.A. 372 | Illustrates that the binding force of a judgment in execution proceedings can arise from general principles (even if s.11 CPC does not in terms apply to execution), so that a prior execution decision may be binding in subsequent proceedings. | Used to acknowledge that prior execution decisions can have binding force, but the court examined limits to that principle in execution contexts. |
| 44 Bom. 2273; 44 ALL. 3504; 33 Bom. L.R. 7975 | Show that findings on questions such as limitation, persons liable in execution, executability of a decree, or claims for mesne profits have been treated as binding (res judicata) in subsequent execution proceedings. | Cited as illustrating categories of issues which have been held binding on the parties in later execution proceedings; used to delimit what may be treated as "actually decided." |
| 21 Bom. L.R. 3446 | Shah J. held that in an earlier darkhast the adjudication that an application was "not shown to be in time" did not amount to an adjudication that execution was barred; the rule of res judicata should not be extended to treat every point that might and ought to have been raised as necessarily decided. | Quoted to support the proposition that res judicata in execution proceedings should not be extended unduly and that only the point actually decided is binding. |
| 46 Bom. 4677 | Division Bench followed Shah J.'s view that res judicata should not be extended to the length of treating as finally decided matters which were not actually adjudicated in earlier execution proceedings. | Relied on to show judicial caution against broad application of constructive res judicata in execution contexts. |
| 48 Bom. 6388 | Reviewed earlier authorities and stated: "What is binding upon the parties is the point actually decided." Also noted that Expln.4 of s.11 CPC has no direct application but its principle cannot be ignored when determining effect of a prior adjudication. | Used to derive the proposition that the principle underlying Expln.4 must be applied with caution; only the point actually decided binds. |
| (1937) 1 M.L.J. 296 | Where an assignment deed expressly referred to a payment (though not certified), the assignee's right to execute was limited by that admission; the debtor's failure to object earlier was not a bar to raising the point later because the transfer deed itself established the payment. | Distinguished by the court: the result turned on the assignment deed's admission, not on a general rule that objections may always be raised later. |
| 37 ALL. 5899; 44 ALL. 15910; A.I.R. 1929 Mad. 90311 | Support the view that where execution is taken out for an amount greater than that mentioned in the decree, the judgment-debtor's failure to object earlier would not necessarily bar him from raising the objection later; reasoning that the executing Court cannot tacitly vary the decree by permitting execution for an undecreed sum without considering the matter. | These cases were cited to show a different line of reasoning that protects the judgment-debtor from tacit variation of the decree in execution proceedings. |
| 40 Mad. 1016 | Held that an order passed in the absence of a party at one stage of execution proceedings could not necessarily operate as res judicata at a further stage; emphasized that a party affected should have notice of the point likely to be decided and an opportunity to put forward contentions. | Cited for the principle that notice and opportunity are necessary before applying res judicata in execution contexts; used to support the conclusion that the rule must be applied with caution. |
Court's Reasoning and Analysis
The court framed the narrow issue as whether the omission by the judgment-debtor to dispute the amount claimed in the execution application (after notice under O.21, R.22 CPC) should operate as a bar by way of constructive res judicata when raised later after the executing Court transferred the proceedings to the Collector.
The court reviewed the authorities on the application of the res judicata principle to execution proceedings. It accepted that prior decisions in execution matters can have binding force on subsequent proceedings but emphasized two limiting propositions repeatedly drawn from the cited authorities:
- What binds the parties is the point actually decided in earlier proceedings (i.e., the precise question adjudicated), not every question which might and ought to have been raised.
- The principle underlying Expln. 4 to section 11 CPC (constructive res judicata) does not in terms apply to execution proceedings, and where it is given effect by analogy it must be applied with great caution.
The court examined authorities that both supported and limited the extension of constructive res judicata to execution proceedings. It distinguished cases in which a prior adjudication clearly decided a point (for example, findings on limitation, liability of particular persons, executability, or mesne profits) from cases where no such adjudication had been made and where the judgment-debtor lacked notice or opportunity to contest a particular point.
Applying these principles to the present facts, the court observed that there was no direct authority holding that the failure to raise a contention of part satisfaction in response to a notice under O.21, R.22 CPC precludes its later raising by the judgment-debtor after transmission to the Collector. The court concluded that penalizing the judgment-debtor for omission (by treating the matter as necessarily decided) would be inappropriate where the debtor had no direct notice that the point would be decided against him and therefore no opportunity to put forward his contentions.
The court further reasoned that, under proceedings taken under the Dekkhan Agriculturists' Relief Act, if the judgment-debtor reasonably expected that the ultimate proceedings would be before the Collector (and that he would thereby have an opportunity to raise his contentions), he cannot be precluded from raising them later merely because he did not raise them earlier in the executing Court.
Holding and Implications
Holding: The court confirmed the decree of the lower appellate Court and dismissed the decree-holder's second appeal with costs.
Implications:
- The court held that the principle of constructive res judicata (as reflected in Expln. 4 to s.11 CPC) must be applied with great caution in execution proceedings, especially where a party had no direct notice of the point and therefore no opportunity to contest it.
- On the facts, the judgment-debtor was not precluded from raising the contention of part satisfaction at a later stage of the execution proceedings after transfer to the Collector; the District Judge's contrary-to-executing-court conclusion was upheld.
- The immediate practical effect is that the judgment-debtor may have his plea of part satisfaction examined and decided in the executing Court; the appeal seeking to bar that was dismissed. The court did not purport to lay down an unqualified rule extending constructive res judicata to all unraised points in execution proceedings.
Concurring opinion: Broomfield, J. agreed with the result. The final order recorded: "Appeal dismissed."
Wassoodew, J.:— This is a second appeal from a decision of the learned District Judge of Bijapur in proceedings in execution of a decree dated 9th August, 1934 for sale on a mortgage passed under the Dekkhan Agriculturists' Relief Act. The mortgage debt was found to be Rs. 1750 and it was made payable by four instalments. There was also a default clause provided by the decree. The only question raised in this appeal is whether the failure of the judgment-debtor to dispute the amount of the claim made in the application for execution after he had received a notice under O. 21, R. 22 of the CPC, operates as a bar to his raising the dispute at another stage of the same execution proceedings, after the executing Court had made an order transmitting the application for execution to the Collector, on the principle of rea judicata. The material facts may be shortly stated. The decree-holder alleged in his application for execution that as the judgment-debtor had not made any payment the mortgaged property was liable to be sold under the provisions of the Dekkhan Agriculturists' Relief Act. Upon that application made on 7th August, 1937, notice was given to the judgment-debtor under O. 21, R. 22 of the CPC, on 1st September 1937. That notice required the judgment-debtor to show cause why the decree should not be executed against him. The judgment-debtor did not appear in response to that notice, and the executing Court transferred the proceedings to the Collector on 8th October, 1937. Thereupon, the Collector issued a notice to the judgment-debtor on 11th November, 1987. It appears that the judgment-debtor contended before the Collector that he had paid Rs. 601-13-3 in part satisfaction of the decree-holder's claim, and that to that extent execution should not proceed. The Collector directed the judgment-debtor to move the executing Court further in the matter. In that Court the judgment-debtor filed an application objecting to the amount claimed in the application for execution by the decree-holder on the grounds referred to. He pleaded that execution should proceed only in respect to the balance. The decree-holder contended that plea was not open to him as he might and ought to have raised that contention before the order transferring the application to the Collector was made in those proceedings. The Courts below were divided on the point.
2. The learned Judge of the executing Court thought that the contention of the judgment-debtor was barred, for, if he had raised it successfully, it would have resulted in modification of the orders of the Court, and that the omission to do so operated constructively as res judicata. The learned District Judge in the appeal by the judgment-debtor took a contrary view. He held that the principle of res judicata could not be applied to the facts of this case because the judgment-debtor had no notice of the point which was likely to be decided against him and there, fore had no opportunity of putting forward his contentions. He has referred to the ruling in A.I.R 1937 Mad. 5111, for the view that the order directing execution to proceed could only imply that the Court considered the questions as to whether the decree, holder had a right to execute the decree, whether the judgment-debtor was liable to satisfy the decree, whether the decree was executable, and whether the claim was not barred by limitation. He held that the question of part satisfaction was not decided nor required to be decided at that stage. He therefore directed that the question of part satisfaction should be raised and decided by the executing Court upon the contentions of the judgment-debtor. Against that decree the decree-holder has filed this second appeal. The numerous authorities cited at the Bar on the question whether the principle of constructive res judicata enunciated in section 11, exgln. 4 of the cpc, applies to proceedings in execution do not all yield any intelligent principle. For the appellant it was contended that all questions which, if raised and decided, would result in giving some relief to the judgment-debtor, should be treated as being decided by necessary implication, and that on that principle the judgment-debtor's plea should be held as barred. On the other hand, it has been urged that the principle of constructive res judicata should be applied with care and caution and that it should never be applied in a case where the judgment-debtor had no opportunity to raise and did not raise the question for obtaining a decision. There can be no doubt upon authority that the provisions of section 11 of the cpc, which though in terms do not apply to execution proceedings have been applied on general principles to such proceedings: see, 11 I.A 372, In that case a decision was given in the former execution proceedings, and it was held that it operated as res judicata in subsequent proceedings in execution. Their Lordships remarked that (pp. 41-43):
The binding force of such a judgment depends not upon s. 13, act 10 of 1877 (s. 11 of the present Code), but upon general principles of law. If it we re not binding there would be no end to litigation…. The parties were bound by the decision of Mr. Probyn, who, whether right or wrong, had decided that it did (that is, that the decree awarded future mesne profits); a decision which, not having been appealed, was final and binding upon the parties and those claiming under them.
3. There are numerous authorities of the Indian Courts which show that a finding given on a question of limitation or a decision as to which persons are liable in execution or as to whether the decree is capable of execution or whether the claim for mesne profits could properly be made, is binding on the parties on the principle of res judicata in subsequent proceedings in execution between the same parties — see cases such as 44 Bom. 2273, 44 ALL. 3504 and 33 Bom. L.R 7975, The important question is whether the principle underlying Expln. 4 of section 11 of the cpc, could be properly extended to the present case on the ground that the question as to part satisfaction might and ought to have been raised, and not having been raised, was by necessary implication decided against the judgment-debtor. There is no direct authority on the point whether the judgment-debtor, who has omitted to appear in response to a notice under O. 21, R. 22 of the Code, can be precluded from contending that there has been a partial adjustment of the decree. That could only be done if the rule of constructive res judicata could be so extended as to penalize the judgment-debtor for his omission. In 21 Bom. L.R 3446 a decree was passed in 1910, and in 1914 an application to execute it was dismissed as barfed by time. A second application to execute the decree was made in 1915 and it was pleaded that it was within time in consequence of certain earlier applications and acknowledgments. The question arose as to whether the adjudication in the earlier darkhast operated as res judicata. Shah J., sitting singly held that in the earlier darkhast the adjudication was not that the execution of the decree was barred, but only that the application was not shown to be in time, and that to that extent only the adjudication was binding on the parties. He says (p. 347):
The rule, of res judicata applicable to execution proceedings makes all decisions binding upon the parties in subsequent proceedings but it does not necessarily involve the result that any point which is not heard and decided but which night and ought to have been raised must be treated as necessarily decided as under S. 11 of the Code…..I do not think that the application of the doctrine of res judicata to execution proceedings would involve the result that it should be taken to have been decided. At least, as I read the decisions bearing on this point, I do not understand the rule to go so far.
4. That view was followed in 46 Bom. 4677 by a Division Bench of which Shah J. was a member. There the applicant obtained a decree in 1913 which he sought to execute first in 1915 and again in 1919. The second application to execute the decree was rejected as barred by limitation. The applicant relied on an acknowledgment, dated 19th June, 1917, and applied on 19th June, 1920, to execute the decree. The executing Court dismissed the application on the ground that the decision in the darkhast of 1919 operated as res judicata. In appeal Macleod C.J, observed as follows (p. 469):
It does not seem to me that the doctrine of res judicata can be extended to that length. I agree with what was said by my brother Shah in 21 Bom. L.R 344, which was cited, that in the earliest darkhast there was no adjudication that the execution of the decree was barred but only that the application was not shown to be in time.
5. In the later case in 48 Bom. 6388 the authorities were reviewed by Sir Lallubhai Shah A.C.J and Fawcett J. The Acting Chief Justice remarked (page 645):
What is binding upon the parties is the point actually decided. The principle of Expln. 4 of section 11 of the cpc, has no direct application; but in determining the exact effect of the point decided on the subsequent proceedings the principle cannot be altogether ignored.
6. That shows a modification of the view as to the applicability of the provisions of Expln. 4 of S. 11 expressed in the two earlier decisions. Fawcett J. examined the case law on the point and thought that the following deduction was permissible from those cases (page 654):
On the other hand I quite agree with the rulings already referred to that great caution should be used in applying it, and that generally speaking the mete fact that an objection has not been raised at one stage of execution proceedings is not a sufficient ground for holding that the objection is barred at another stage.
7. It was pointed out that although there was no real authority for the proposition that the principle of constructive res judicata referred to in Expln. 4 of S. 11 cannot be applied to execution proceedings, the authorities laid down that caution was needed in applying it. It seems to me that the authorities cited on behalf of the parties by their learned advocates in support of the two extreme views can be distinguished on the facts. In (1937) 1 M.L.J 296 there was an assignment of the decree and the assignment deed expressly referred to a payment made towards the decree, which payment was not certified, and the assignment deed conferred on the assignee the right to execute the decree only for such sum as was due after making the deductions mentioned in the deed. When the assignee made an application for execution for the full amount of the decree, the judgment-debtor did not raise any objection and his failure was not regarded as a bar to his raising the same contention at a subsequent stage of the execution proceedings. The reasoning underlying that decision was not that the rule of constructive res judicata did not apply without qualification to execution proceedings, but that the transfer deed containing the admission by the decree-holder that a payment though uncertified was received was in itself sufficient for recording the payment of that amount, and there was no necessity for the judgment-debtor to object to the claim is the application. Reference was made with approval to the decision in 37 ALL. 5899, which held that where execution is taken out for an amount greater than that mentioned in the decree, failure to object by the judgment-debtor would not debar him from raising the objection at a later stage. The reasoning in that case and similar cases such as 44 ALL. 15910, as also A.I.R 1929 Mad. 90311 proceeds entirely on a different basis. The reasoning adopted in those cases was that the judgment-debtor could not assume that the decree-holder would make an application for execution for a sum which was not decreed against him, and that if the executing Court permitted it, it would be tacitly varying and superseding the decree itself, a fact which could not be permitted to be done in execution unless the question was considered and decided. In 40 Mad. 101612 the reasoning for holding that an order passed in the absence of a party at one stage of the execution proceedings could not operate as res judicata at any further stage, though not quite convincing was this: that it was open to a decree-holder to proceed piecemeal with his execution, and as the decree-holder was not bound to proceed against all the properties comprised in the decree at once, the principle underlying the general rule of res judicata could not be applied to such proceedings. The Court observed that (page 1026) the party who is sought to be affected by the bar of res judicata should have notice of the point which is likely to be decided against him and should have an opportunity of putting forward his contentions against such a decision.
8. No direct authority has been cited on the point as to whether the failure to raise the contention as to part satisfaction at an earlier stage of the execution proceedings would preclude by the operation of the rule of constructive res judicata underlying Expln. 4 of S. 11, the judgment-debtor from raising the same question at a subsequent stage of the execution proceedings. It seems to me that the rule of constructive res judicata must be applied with great caution against a party to the execution proceedings who had no direct notice of the point and therefore no opportunity to raise it.
9. When proceedings were taken under the Dekkhan Agriculturists' Relief Act, if the judgment-debtor thought that the ultimate proceedings would be conducted before the Collector and that he would have an opportunity of raising his contentions there, he cannot be precluded, by reason of his failure to raise them at an earlier stage in the executing Court, from raising them at a later stage. I think the decision of the learned District Judge was correct and must be upheld. Accordingly, I would confirm the decree of the lower appellate Court and dismiss this appeal with costs.
10. Broomfield, J.:— I agree.
11. Appeal dismissed.
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