Mahalinga Sundara Thevan v. Krishna Thevan

Sadasiva Aiyar, J.:— The contention that under the compromise arrangement in the former suit, the 2nd plaintiff's vendor transferred his right as owner to the defendant cannot be upheld. The said compromise petition merely allowed the defendant to redeem the 2nd plaintiff's vendor (first mortgagee of both items Nos. 1 and 2) and did not transfer to the defendant the rights obtained by the 1st mortgagee as the purchaser of the mortgagor's right, a purchase not binding on the defendant so far as his right to redeem the 1st mortgage was concerned. The decree also does not, in terms, convey the 1st mortgagee's interest as such owner of the equity of redemption to the defendant.

2. It is, however, argued that the 1st mortgagee ought to have insisted on the relief of the redemption of item No. 2 from the defendant being given to him in the former suit, that relief should, therefore, be deemed to have been refused to him under Explanation 5 to Section 11 of the CPC and that by such refusal he and his vendee, the second plaintiff (who stands in his shoes), are barred from bringing the present suit for that relief.

3. This ingenious contention as res judicata was not set up in the written statement in the first suit, did not form the subject of any issue in the present suit and was not raised in the grounds of appeal to the lower Appellate Court.

4. Nor do I think that any of the grounds in the memorandum of second appeal raises the question. Even if the defendant is entitled to argue it before us, I am not satisfied that when a matter was not “heard and finally decided” (see Section 11 of the CPC) in a suit but a decree was passed on the basis of a compromise agreement, the reliefs claimed in the plaint but not included in such a decree should be deemed to have been refused so far as to bar a fresh suit for the said reliefs, if the cause of action in the succeeding suit had not arisen on the date of the presentation of the plaint in the prior suit. In Minalal Shadiram v. Kharsetji, Karsetji v. Minalal Skadiram(1), it is said on page 408: “The lower Court was also wrong in holding that the defendant is barred by Section 13 of the CPC” (present S. 11) “from raising the questions of fraud or wager…. In Suit No. 105 of 1897 there was no hearing and disposal of any matter in issue and the provisions of S. 13 have, therefore, no application. It has, however, been argued that the consent decree…. operates as an estoppel by judgment…… but when the facts of the case and the wording of the Purshis,” (that is, the application for the passing of the consent decree) “above set out, are borne in mind, the reason and the scope of the consent decree at once become apparent.”

5. The above case is quoted with approval in the judgment of this Court in Rajah Kumara Venkata Perumal Raja Bahadur v. Thatha Ramasamy Chetty(2), and the learned Judges proceed to say: “What then is the test for determining whether there is an estoppel in any particular case in consequence of a decree passed on a compromise? In our opinion the answer must depend on the answer to the question ‘Did the parties decide for themselves the particular matter in dispute by the compromise? and was the matter expressly embodied in the decree of the Court passed on the compromise or was it necessarily involved in, or was it the basis of, what was embodied in the decree?’ For settling this point it would be legitimate, and sometimes necessary, to look into the pleadings between the parties in the suit terminated by the compromise decree.” Then at pages 85 and 86, the learned Judges say: “What the Court has to do in determining with respect to what matter each of the parties to a compromise decree is estopped, is to find out what it was that the parties agreed to in the previous action; and for this purpose it would not be enough merely to see what was the relief granted in the decree of the Court, but it would be necessary also to examine what was the basis on which it was granted.” The present suit is not for the same relief as in the former suit (which was brought for the redemption of item No. 2 alone on payment of what was due to the defendant on the second mortgage of item No. 2) but is brought for redemption of both items Nos. 1 and 2 on payment of what was due to the defendant on the 1st mortgage of items Nos. 1 and 2 discharged by him in pursuance of the compromise decree in the first suit and of what was due to him on the 2nd mortgage of item No. 2. “The basis on which” the former decree “was granted” was clearly the following: that if the defendant pays up to the 1st mortgagee (the plaintiff in that case) the mortgage amount, he (the defendant) shall become the mortgagee of items Nos. 1 and 2 for that amount so paid, while remaining the 2nd mortgagee of item No. 2 alone for the 2nd mortgage amount. His own liability to be redeemed as a person holding rights as mortgagee in those two capacities after he redeems the first mortgage, was not intended to be finally decided and was not decided by the compromise decree in the former suit. It was only in case he did not pay up the 1st mortgage amount that his liability to allow the redemption of item No. 2 alone was intended to be decided, but as he did pay up the 1st mortgage, his said contingent liability under the former decree never became an actual enforceable liability under that decree. To borrow the language of Abdur Rahim and Krishnaswamy Iyer, JJ., in Hukdar Syed Bacha Saheb v. Karuppanna Pillay(3), “Does what is decided” in the former suit “involve a decision” as to the plaintiffs right after the defendant redeemed the first mortgage? No such decision negativing the plaintiff's rights as under his Court-auction purchase of the mortgagor's right is involved in the decree passed on this compromise agreement.

6. There is, therefore, no force in the contention that the present suit is barred on account of estoppel by the judgment or the decree in the former suit.

7. The second appeal fails and is dismissed with costs.

Napier, J.:— I entirely concur. I agree with my learned brother that we should follow Rajah Kumara Venkataperumal Baja Bahadur v. Thatha Ramasamy Chetty as correctly laying down the principles on which compromise decrees should be interpreted.

S.N/R.K

8. Appeal dismissed.