1. The question raised in this appeal is one of res judicata. The facts necessary for the disposal of this may be shortly stated. The suit is in ejectment against the defendant and for recovery of possession of certain lands on the ground that the defendant is in occupation thereof as a tenant under a lease given by the plaintiffs. The defence is a denial of the lease as well as the title of the plaintiffs. Previous to the institution of this suit the plaintiffs filed a suit, O.S. No. 4 of 1925, on the file of the District Munsif's Court of Markapur for recovery of possession of the lands from the defendant alleging that they are the owners thereof, that they leased the land to the defendant, that the defendant was unlawfully setting up title thereto and prayed that the right of the plaintiffs in the suit land may be declared and possession be delivered to them free of any objection by the defendant. The defendant filed a written statement in that suit stating that he had a right to a half-share in the said property and that the plaintiffs had no right to possession or enjoyment of the entire land, that the plaintiffs never leased the land to him and so far as his half-share was concerned he was entitled to enjoy the same with absolute right. He also set up enjoyment by adverse possession. The following issues were raised in the case :

(1) Whether the alleged lease is true ? (2) Whether the defendant has been in adverse possession of the suit land for over 12 years ? and (3) Whether the suit is bad for want of notice ?

2. The learned District Munsif who tried, the suit went fully into the question and held that the plaintiffs' title as alleged in the plaint should be found in their favour that the lease is true and that the defendant had not made out a case of adverse enjoyment for over 12 years but as the plaintiffs had not given notice to quit, the suit for possession is bad without notice. Accordingly on the said findings he dismissed the suit. But he disallowed the costs of the defendant. The ground on which he did so was stated thus :

The defendant having set up title and adverse possession failed to prove both. He will therefore bear his own costs.

3. Thus it will be seen that the order disallowing costs was based on the express finding by the District Munsif regarding, the title of the defendant which was negatived. Both parties preferred appeals to the District Court; the appeal of the plaintiffs was against the order of dismissal and the appeal of the defendant against the order disallowing costs and the memorandum of the grounds of his appeal would clearly show that the findings of the District Munsif in regard to title and adverse possession were attacked. Both the appeals were heard by the learned Subordinate Judge of Kurnool and the points for determination which he set to himself were as follows : (1) Whether the plaintiffs are entitled to the suit land ? (2) Whether the lease set up is true ? (3) Whether the suit is bad for want of notice to quit ? and (4) What is the right order to be made as regards costs ? The learned Judge found in favour of the plaintiffs both as regards title and adverse possession and he further found that the lease in favour of the plaintiffs is true. But he also concurred with the District Munsif in regard to want of notice to quit. In regard to point No. 4 as regards costs the judgment ran thus :

The lower Court has disallowed the defendant's costs. I think that order is quite correct. All the pleas set up by the defendant have been held to be false. It is only on a technical point that the plaintiffs' suit has failed. So the defendant is not entitled to claim his costs. In the result both the appeals are dismissed with costs.

4. It will thus be seen that the learned Subordinate Judge affirmed the finding as regards disallowance of costs by the District Munsif on the very same ground as the learned District Munsif did namely that all the pleas set up by the defendant have been held to be false and he also gave costs against the defendant in favour of the plaintiffs in regard to the appeal filed by him. The question in this appeal is whether the findings in regard to title, adverse possession and the lease are res judicata. The learned District Munsif was of opinion that they will be res judicata. But the learned Subordinate Judge took a different view. It is contended before me by Mr. L.S. Veeraraghava Ayyer that this view of the learned Subordinate Judge is unsound. There are two principles which have to be kept in view in dealing with this question. If the suit results in a decision in favour of a party, a finding against him on any issue will not be res judicata in a subsequent suit. This is laid down by the Privy Council in Midnapore Zamindari Co. v. Naresh Narayana Roy AIR 1922 PC 241, which has been followed by our High Court in a number of cases. Though a finding on an issue may not be necessary for the disposal of the suit, yet, if a party invites the decision of the Court on that issue and the Court also considers it necessary to go into it and gives a finding thereon, the decision on that issue will constitute res judicata, in a subsequent suit, provided that the party against whom there was a finding on that issue would be in a position to carry the matter in appeal. This follows from the decision of the Privy Council in Midnapore Zamindari Co. v. Naresh Narayana Roy AIR 1924 PC 144. In that case their Lordships of the Privy Council affirmed the decision of the Calcutta High Court oil a question of res judicata. The learned Judges of the Calcutta High Court dealt with the matter thus :

It was contended before us that whatever the appellants might have done in this respect, the issue in fact was not a necessary or proper one to be tried in that suit, and that it is open to us to say so. But we must see first whether this Court adjudged otherwise, that is, whether this Court having the question before its mind decided that the issue did arise. If so, that decision would be as much res judicata as the final determination of the issue on the merits. If we are of opinion that the Court did so decide, we are not concerned to see whether it did so rightly or not, and indeed cannot do so. * * * The defendant, the present appellant, has expressly urged that the Judge was wrong in not deciding this question even though his action was based on the plaintiff's adviser's statement and he asked this Court expressly to decide it.

5. I might in this connexion usefully refer to the case of the Privy Council in Krishna Chandra Gajapati Narayana Deo v. Challa Ramanna AIR 1932 PC 50. In that case the landlord sued the tenant for a declaration that the settlement of rent made by the Court of Wards during the time they were in management of the estate is not binding and that the defendants were bound to pay rent in kind instead of cash according to the settlement made by the Court of Wards. Therefore the only question raised by the prayer was whether the plaintiff was entitled to have the rent in kind instead of money rent, but the defendants set up a title of permanent occupancy and an issue was raised thereon and that question also was decided. The District Judge found in that case that the plaintiff was entitled to take only cash rent and not rent in kind. But he held that the defendants had not proved occupancy rights. But the High Court reversed the finding as to occupancy rights ultimately dismissing the appeal concurring with the finding of the lower Court on the question as to payment of rent. Dealing with the question how far the finding as to the permanent occupancy rights was binding on the parties. Their Lordships made the following observation :

As their Lordships have pointed out, all this enquiry about occupancy rights and as to whether the settlement of 1869 was a permanent one, was not properly raised by the plaint, but as both parties have without protest chosen to join issue upon these points, their Lordships see no reason why those matters in dispute should not be res judicata between them.

6. But in both these cases it will be seen there was a decision in favour of the defendant and against the plaintiff who was entitled to prefer an appeal. In this case though the ultimate decision of the suit was in favour of the defendant, there was a decree disallowing costs to the defendant. The defendant chose to prefer an appeal, invited the appellate Court to give a decision on the question of title and of the lease and the appellate Court did go into them and gave findings. It seems to me that these findings will be res judicata against the defendant and would clearly come within the principle of the decision in Midnapore Zamindari Co. v. Naresh Narayana Roy AIR 1924 PC 144. But it is argued by Mr. Somayya that as the suit was dismissed and the ultimate decision was in the defendant's favour the finding could not be res judicata in view of the decision in Midnapore Zamindari Co. v. Naresh Narayana Roy AIR 1922 PC 241. It seems to me that Midnapore Zamindari Co. v. Naresh Narayana Roy AIR 1922 PC 241 is distinguishable. Here there was an order of the first Court disallowing costs against which he did prefer an appeal. There was also the decree of the appellate Court giving costs to the plaintiff against the defendant and the defendant could have preferred an appeal against the said decree. A case in point is Veerasami Mudali v. Palaneappan AIR 1924 Mad 626. That was a suit between landlord and tenant. There was originally a suit by the landlord against the tenant for eviction and there was dismissal of the suit on the ground that there was no notice to quit, but there was a finding against the defendant in regard to the question of occupancy right and the plaintiff was awarded costs and there was this decree against the defendant in regard to costs though the suit was ultimately dismissed. The defendant did prefer an appeal as to costs and the learned District Judge upheld the decision of the District Munsif on that point and in regard to costs in the appeal the defendant was asked to bear his own costs. The learned Judges held that the finding as to occupancy right would constitute res judicata. Ayling, J. in the course of the judgment observed thus :

It is argued that the determination of the issue was unnecessary. But the order awarding plaintiff his costs in the first Court which is expressly based upon it, is as much a part of the decree as the order dismissing plaintiff's prayer for possession. The District Judge in effect decided all the points in dispute, and found that the plaintiff was entitled to recover possession of the land, conditionally on his giving defendants a proper notice to quit. Defendants are not entitled to reagitate the points then decided against them.

7. Odgers, J. who took the same view says :

Here the plaintiff's title was the first issue in the case and a decision was given upon it by both Courts. It was not until the appeal that the point of the notice to quit was taken and decided against plaintiff. Moreover the defendants might have appealed against the decree in so far as costs were awarded against them which award was expressly made on the ground that the finding as to title was against them. This is as much a part of the decree as anything else.

8. But Mr. Somayya contended that this case is inconsistent with the decision of the Privy Council in Midnapore Zamindari Co. v. Naresh Narayana Roy AIR 1922 PC 241. He pointed out that in that case also there was a cross-appeal by the defendant in respect of the finding against him to the High Court. Though the ultimate decision was in his favour and there was a dismissal of that appeal by the High Court affirming the said finding of the first Court, still the Privy Council held that the adverse finding would not constitute res judicata in a subsequent suit. It will be seen however that the cross-appeal was incompetent because there could be no appeal against the finding. It does not appear from the judgment whether there was a decree awarding costs against the defendant or disallowing costs to him which he could have appealed against. Odgers, J. in Veerasami Mudali v. Palaneappan AIR 1924 Mad 626 distinguished the Privy Council decision thus:

This order as to costs against the defendants appears to me to effect a radical distinction between this case and those cited above for the respondent; and the costs were awarded on the ground that the question of title had been found in plaintiff's favour. I therefore agree that the matter is covered by Section 11, Civil P.C., and the respondents are not entitled to have the matter re-opened.

9. The decision in Veerasami Mudali v. Palaneappan AIR 1924 Mad 626 was considered by the Officiating Chief Justice in a recent decision reported in Venkatachala Padayachi v. Velayuda Padayachi AIR 1935 Mad 701 wherein he remarked as follows :

That decision, whether right or wrong, is easily distinguishable, as there the adverse finding was made explicitly the ground for directing the defendants to bear their costs.

10. He distinguished the case before him on the ground that "the adverse finding was not made the ground for depriving the defendants of their costs." He further observed as follows :

The distinction is important, for the principle of the decision in Veerasami Mudali v. Palaneappan AIR 1924 Mad 626, is that the defendants could have attacked the adverse finding by filing an appeal against the order as to costs. But in this case that requisite is wanting, the adverse finding and the order regarding the costs not being related to each other as cause and effect.

11. But in the present case it is clear from the decision of both the learned District Munsif and the learned Subordinate Judge in the prior suit that the findings as to title and the lease and the order relating to costs are clearly related to each other as cause and effect. I am therefore of opinion that the findings in the previous suit would constitute res judicata. I therefore reverse the decree of the learned Subordinate Judge and restore that of the District Munsif with costs throughout. Leave to appeal refused. The appellant is entitled to a refund of the court-fee paid in appeal.