1. The appellant, plaintiff was for some time prior to 1926 a partner of respondent-defendant 1. In that year they fell out, but instead of bringing an action against defendant 1 for dissolution of partnership and accounts they agreed to submit their dispute to arbitration, and defendants 2 to 4 were appointed arbitrators. On 12th August 1928, the plaintiff gave a notice to the arbitrators cancelling his consent to their arbitrating in his dispute with defendant 1, the reason according to him being that he had discovered that they were not disinterested persons but were partisans of defendant 1, and he then brought an action No. 83 of 1928 against Jainarayan for dissolution of partnership and accounts valuing his suit at Rs. 5500. One of the defences to the suit put forward by the defendant was that the arbitrators had delivered their award on 12th August 1928, that is to say on the same day on which, according to the plaintiff, he had served them with notice of cancellation of the agreement to submit to arbitration, and that award was binding on the plaintiff. Preliminary issues were framed in the suit as to whether the arbitrators' award was void or binding and the Court held that the award was binding and the plaintiff's suit was consequently dismissed. This decision was upheld in first appeal by the Judicial Commissioner's Court on 16th April 1930. In 1933 the plaintiff applied to the Judicial Commissioner's Court for a review of judgment in that appeal on the ground that he had discovered in May 1933 new and important documentary evidence which proved that the arbitrators were biased in favour of the defendant. The Court rejected the review application on 25th January 1935.
2. Then on 28th April 1936 the plaintiff applied for permission to bring the present suit as a pauper, but permission was refused, and his application to the High Court for revision of the order met with a similar fate. Accordingly he paid the necessary court-fee and the suit went to trial. In this suit he alleges that it came to his knowledge for the first time on 8th April 1936 that the arbitrators had never given an award at all and that his previous suit had been founded on an erroneous assumption that there had been an award, that the arbitrators fraudulently conspired with defendant 1 to make the plaintiff believe that they had given an award, when actually they had not done so, and therefore he now wants a bare declaration that no award was given. Such a declaration carries with it as a consequence a conclusion that the partnership between defendant 1 and plaintiff is still continuing. The present suit is valued for purposes of jurisdiction at two laks of rupees, but, as it has been framed as a suit for a declaration only, the plaintiff has paid a court-fee of no more than Rs. 15. After the parties had submitted their pleadings the plaintiff applied to amend his plaint by adding to the relief which he claimed an alternative prayer that if the Court should hold that the arbitrators had given an award then the defendants should be ordered to deliver it up to the plaintiff. On the pleadings the following preliminary issues were accordingly framed:
(i) Whether the decision in Civil Suit No. 83 of 1928 operated as res judicata;
(ii) whether the suit for a mere declaration without consequential relief was maintainable; and
(iii) whether the plaintiff should be allowed to amend his plaint as desired.
3. On issue 1 the lower Court has found that the suit is not barred by res judicata but that the plaintiff is estopped from reopening the case. On issue 2 it has held that a suit for a bare declaration is not maintainable, and on issue 3 that the amendment cannot be allowed because it is inconsistent with the first relief claimed. By reason of these findings the plaintiff's suit has been dismissed and he has now come before us on appeal. One line of attack has been against the finding that the plaintiff is estopped from reopening the case, and in answer to that the defendant has argued that the finding that the suit is not barred by the doctrine of res judicata is wrong. Accordingly the main point for determination in the appeal is whether the suit is barred by either of the doctrines of res judicata or estoppel. The new fact which, according to the plaintiff, had come to his knowledge on 8th April 1936 is, as stated above, that no award was in fact given by the arbitrators. The other facts found in the previous suit are not disputed. It is obvious therefore that if in fact the arbitrators have given an award, then it is useless for the plaintiff to say that he has since discovered that no award was given. As to the existence of an award this was admitted by the plaintiff in the previous suit. One has only to glance at the judgment in that suit which is Ex. D-1 in the case before us to see that. The second sentence of that judgment is to the effect:
It has been admitted by both the parties that their disputes were referred to arbitration on 14th August 1926 by a duly executed deed of agreement and that the arbitrators have given their award.
4. The last paragraph of that judgment also contains the finding:
The award given by the arbitrators is not void. As the arbitrators have decided all the disputes finally by fixing the date of dissolution of partnership as well as the amount finally due by the defendant to the plaintiff this suit is not maintainable.
5. It was never suggested in that suit that there was any doubt as to the existence of the award. The admission of the plaintiff as to the existence of that award in that suit is contained in Ex. P-64—the statement by the plaintiff's pleader admitting the defendant's documents. He says:
The following documents out of those filed by Tulsidas (defendant 3 in the case before us) are admitted.
6. Item 12 in the list is a postal acknowledgment dated 16th August 1928, and he concluded his statement by saying: “It is admitted that arbitrators sent a copy of award to plaintiff by post.” The postal acknowledgment dated 16th August 1928, Ex. D-12, shows that the plaintiff received a registered letter No. 108 from Mr. J.R Paranjpe, pleader, who is one of the arbitrators and defendant 2 in the case before us, and Ex. D-11 shows that the same letter was posted in Jubbulpore on 13th August 1928, i.e, the day after the award is said to have been given. So it is obvious that the plaintiff received a letter from Mr. Paranjpe on 16th August 1928, and he does not even now dispute that the paper which he received then satisfied him at the time that it was a copy of the award which the arbitrators had given. Unfortunately the paper which the plaintiff then received is not forthcoming, the explanation being that it had remained with the plaintiff's pleader Mr. Sheo Prasad and could not be found among his effects when he died. Two documents were produced in that case by the defendant as Exs. D-15 and D-14, and it was assumed in that case that, whether they constituted the original award or not, they certainly represented the conclusion to which the arbitrators had come, and as the existence and nature of the award was not in dispute, no question arose as to whether Exs. D-15 and D-14 were the original award or only a copy of it or, as the plaintiff now contends, not even a copy of it but a fictitious document which did not represent the correct findings of the arbitrators, but was sent to the plaintiff fraudulently to make him believe that an award had been given. In his deposition in that suit, a copy of which is before us as Ex. P-56, the plaintiff said:
I do not remember that I received the award by registered post before filing this suit, but I have received the award by registered post.
7. The only doubt he had was whether he received it before or after the filing of the suit. The plaint was actually filed on 29th August 1928, Ex. P-52. So after he was in possession of the copy of the award he filed the suit. Consequently, he knew the contents of the award and the fact that the award had been given was brought to his notice. Moreover he had one of the foremost pleaders in Jubbulpore to help him and there could be no doubt about the document being a copy of an award, and if it was a copy of the award, there must have been an original award for it to be a copy thereof. Why then has the plaintiff come to the conclusion that Exs. D-15 and D-14 did not represent the real award of the arbitrators and that in point of fact no award ever existed? For this we have to see Ex. P. 3. This is an application dated 10th February 1936 by the plaintiff to the arbitrator Tulsidas asking him if he had the original award in his possession, since it had come to the plaintiff's knowledge on 8th February 1936 from Tulsidas's agent that no award had been given, when the plaintiff's notice revoking the submission of the case to arbitration was received by the arbitrators, and that the award produced in Court had been fraudulently prepared. From this it is clear that the award produced in that Court was Exs. D-15 and D-14 and the list of documents filed in that case does not disclose any other document which could have been this award, nor does it show that any document was removed from the record after the case terminated. To this application, Ex. P-3, Tulsidas wrote a reply on the same paper, the reply being dated 8th April 1936 and saying:
On your first application, it has been clearly stated that no papers concerning the above are with me but even then you people are unnecessarily incurring expenses. The original application is being sent back to you again along with the stamp. Kindly do not take the trouble in future; otherwise no heed will be paid now, nor will any papers be sent back. All will be filed in the office. Be it known.
8. So this is evidently the information which formed the basis of the statement in the present plaint that the plaintiff came to know on 8th April 1936 that no award had in fact ever been given. On 28th April 1936, as already stated, the plaintiff applied to the lower Court for permission to sue as a pauper. That application closed with the prayer that the award dated 12th August 1928 and decree dated 15th August 1929 be set aside. So although in the suit the plaintiff alleges that it came to his knowledge on 8th April 1936 that there was in fact no award, three weeks later on 28th April 1936 he was still admitting the existence of the award and asking that it be set aside. Even on 29th September 1936, when he made an oral statement in the lower Court in support of his application to sue as a pauper, he was still asking the Court to set aside the award of the arbitrators, the ground then put forward being that he had come to know of fraud between May and August 1933 on the part of the arbitrators who were colluding with the defendant, and in the closing passage of that statement, which is at p. 85 of the paper-book, he says:
By the award I was given about 2200 from Jainarayan and this amount was got attached by Jainarayan and Tulsidas and I got nothing out of the money that was said to have been given to me.
9. So even by 29th September 1936 it had not entered the plaintiff's head to base his suit on the non-existence of any award. Hence it is obvious that when his application to sue as a pauper was dismissed and he was faced with necessity to pay court-fees it occurred to him or his advisers that an improvement might be made in the case by suing for a declaration which would involve an expenditure of only Rs. 15 and basing the revised claim on a plea that no award in fact existed. Even in the plaint, which was eventually presented in the lower Court, there is another admission of the existence of an award since in para. 11, on page 6 of the paper-book, the plaintiff has said:
That during the arbitration proceedings the plaintiff suspected that defendants 2 and 4 were not acting straight towards him and he therefore gave them notice not to arbitrate but in spite of plaintiff's notices they gave an award. The said award being the result of conspiracy hatched by the defendants against the plaintiff is void in law.
10. The reason why according to the lower Court the doctrine of res judicata does not apply to this case is that the previous suit was valued at Rs. 5500 while this suit is valued at Rs. 2 lakhs and therefore the Court which tried the first suit was by reason of its pecuniary jurisdiction incompetent to try the present suit, and hence Section 11 of the CPC, is no bar to the present suit. The respondents say that this is not correct and Expln. 4 to S. 11 applies here because the plaintiff ought to have taken this ground about the non-existence of the award in the previous suit. To this the plaintiff replied that it was impossible for him to have taken the point when he was unaware that the award was not in existence and that Expln. 4 only applies where a person has the necessary knowledge to take the plea. In support of this contention he has referred to 11 MIA 60; (1866-67) 11 MIA 50 , 10 WR (PC) 1 , 2 Sar 212 (PC) 87 IC 119 (’17) 4 AIR 1917 Lah 19 , 37 IC 119 , 94 PR 1916 and 42 CWN 560.3 In 11 MIA 50 (1866-67) 11 MIA 50 , 10 WR (PC) 1 , 2 Sar 212 (PC) at p. 73 their Lordships say:
When a plaintiff claims an estate, and the defendant being in possession, resists that claim, he is bound to resist it upon all the grounds that it is possible for him, according to his knowledge, then to bring forward.
(The italics are ours.)
11. In 37 IC 119 (’17) 4 AIR 1917 Lah 19 , 37 IC 119 , 94 PR 1916 the Punjab Chief Court held:
A right, which a litigant possesses without knowing or ever having known that he possesses it, can hardly be regarded as a portion of his claim which can be ‘intentionally relinquished’ within the meaning of O. 2, R. 2 of the CPC.
12. In that case the learned Judge has followed another Privy Council ruling 15 Cal 8004 where their Lordships observed that a right, which a litigant possesses without knowing or ever having known that he possesses it, can hardly be regarded as ‘a portion of his claim.’ In 42 CWN 560 (’17) 4 AIR 1917 Lah 19 , 37 IC 119 , 94 PR 1916 it was held that the plaintiff being unaware of the deed of gift, and there being no circumstance which would put the plaintiff on enquiry as to the deed of gift, or which would lead the plaintiff to the discovery thereof at the time he instituted the first suit, the plaintiff was not hit by the rule of constructive res judicata. In that case it was argued, as it has been argued before us, that the “plaintiff might have come to know of the existence of the deed of gift if he had exercised due diligence,” that is to say, that the plaintiff might have obtained knowledge of the fact about which he claimed ignorance in the suit if he had shown diligence to ascertain the truth. It was then pointed out that in that case the plaintiff could not with due diligence have discovered the fact which it was said he ought to have pleaded in the first suit. It is this circumstance which distinguishes that case from the case before us because here there was no reason why the plaintiff could not have discovered the fact that there was no award in existence if that was really the case. He received what he believed to be a copy of the award and presumably he read it before he allowed it to disappear into his pleader's archives, whence it never appears to have come out again to the light of day. Whether it was an award or not ought to have been patent on its face, and if it was not an award then he should have instituted an enquiry to find out where was the real award. If it was an award, there is an end to the plaintiff's present contention that there was in point of fact no award. He had the assistance of one of the ablest counsel in Jubbulpore for finding out whether it was an award or not and it is clear from the suit which he filed that both he and his counsel were quite satisfied that it was an award.
13. Therefore, ignorance of the fact that there was no award will not help the plaintiff in the present case. Accordingly Explanation 4 to Section 11 of the CPC, will apply unless the lower Court is right in holding that the section cannot apply because of the difference in the pecuniary jurisdiction of the two Courts. As to this we are satisfied that even if S. 11 itself cannot be applied, according to its terms, at any rate the principle can be applied. But we also hold the view that S. 11 can be applied in a suit such as this, for the original suit, being one for dissolution of partnership and accounts, the plaintiff placed a tentative valuation of Rs. 5500 upon it, reserving the right to receive more than Rs. 5500 if more were found due to him subject only to payment by him of additional court-fee. Therefore, in that suit he could have been given a decree even for the two lakhs which he is now claiming: 8 CPLR 865 and 9 NLR 112.6 So it was not beyond the jurisdiction of the first Court to give a decree for the claim which is now made in this suit. It might, however, be said that even so the first Court was not competent to try this suit which commenced with a valuation of two lakhs and, therefore, S. 11 is excluded. It is for this reason that we hold that if S. 11 does not in terms bar this suit, at any rate its principle bars it. The Privy Council has held that S. 11 is not exhaustive of the circumstances in which an issue is res judicata: 48 Cal 499 (’21) 8 AIR 1921 PC 11 , 60 IC 631 , 48 Cal 499 , 48 IA 187 (PC) in which at p. 508 their Lordships quoted with approval an observation by Sir R. Peacock in 6 ALL 2698 to the following effect:
The binding force of such a judgment in such a case as the present depends not upon Section 13 of Act 10 of 1877 (now replaced by Section 11 of the CPC, 1908), but upon general principles of law. If it were not binding, there would be no end to litigation.
14. Again in AIR 1930 PC 22 (’30) 17 AIR 1930 PC 22 , 121 IC 200 , 57 IA 24 (PC) their Lordships said:
The terms of S. 11 are not to be regarded as exhaustive. The binding force of a judgment in probate proceedings depends not upon S. 11, but upon the general principles of law. The rule of res judicata, though it may be traced to an English source, embodies a doctrine in no way opposed to the spirit of the law as is expounded by the learned Hindu commentators. The application of the rule of res judicata, therefore, by the Courts in India should be influenced by no technical considerations of form but by matter of substance within the limits allowed by law.
15. A reference may also be made to AIR 1936 Mad 951 (’36) 23 AIR 1936 Mad 951 , 166 IC 75 , 71 MLJ 619 where the learned Judges have followed another Privy Council ruling in 29 Cal 70711 in which Lord Davey observed that:
The limitations as to pecuniary jurisdiction embodied in S. 13 of the Code of 1882 (and S. 11 of the Code of 1908) are not part of the general principle of res judicata:
See also 10 Lah 528 (’28) 15 AIR 1928 Lah 929 , 113 IC 90 , 10 Lah 528 , 30 PLR 620 and AIR 1931 Lah 217. (’31) 18 AIR 1931 Lah 217 , 134 IC 524 , 32 PLR 214
16. Moreover a judgment by consent and facts admitted are just as effective for the purposes of res judicata as a judgment passed on contest or facts which were in dispute: vide, 63 Cal 55014 where at p. 555 we find the following observation:
On this authority it becomes absolutely clear that the consent order is as effective as an order passed on contest, not only with reference to the conclusions arrived at in the previous suit but also with regard to every step in the process of reasoning on which the said conclusion is founded. When we say “every step in the reasoning” we mean the findings on the essential facts on which the judgment or the ultimate conclusion was founded. In other words the finding which it was necessary to arrive at for the purposes of sustaining the judgment in the particular case will operate as estoppel by judgment.
17. Similarly a question which is decided by necessary implication operates as res judicata. In the previous suit before the Court could say whether the award was binding or not it had to be presumed that the award existed: see, 24 CWN 223 (’20) 7 AIR 1920 Cal 253 , 54 IC 952 , 24 CWN 223 which follows a Privy Council decision in 18 WR 18216 in observing that it may also be pointed out that where a question is decided by necessary implication, the decision would operate as res judicata. In 4 Cal 19017 Sir R. Peacock in delivering the judgment of their Lordships of the Privy Council observed at p. 199:
…. nemo debet his vexari proeadem ca usa. This law has been laid down by a series of cases in this country with which the profession is familiar. It probably has never been better laid down than in the case, which was referred to, in (1736-55) 3 Atk 626, (1736-55) 3 Atk 626 in which Lord Hardwicke held that where a question was decided in effect, though not in express terms, between parties to the suit, they could not raise the same question as between themselves in any other suit in any other form; and that decision has been followed by a long course of decisions…..
18. See also 15 Bom 8919 and AIR 1938 Bom 291. (’38) 25 AIR 1938 Bom 291 , 175 IC 866 , 40 Bom LR 359 It appears to us that in valuing his claim in this suit at two lakhs, whereas in the previous suit he valued it at Rs. 5500, the plaintiff was over-valuing it in an endeavour to escape from the bar of res judicata. The bar cannot be eluded by that means: see, 10 CPLR 8921 and 10 Cal 697.22 We hold therefore that this suit is barred by the doctrine of res judicata. This finding is sufficient to dispose of the appeal, but, as the other two preliminary issues which were decided in the lower Court have also been challenged in the memorandum of appeal, it is necessary to say something about them. Of these one relates to the bar of Section 42 of the Specific Relief Act, and the other to the refusal by the lower Court to permit an amendment of the plaint. Very little has been said on either of these matters before us so that we do not think it necessary to go into the questions very deeply. It is said that the finding of the lower Court about the application of the proviso to Section 42 of the Specific Relief Act, is wrong because it is not made clear what consequential relief the plaintiff could have asked for in addition to his prayer for a declaration. The learned Judge has disposed of the matter in one short paragraph No. 9 in which he says:
Issue 2. Moreover the suit for mere declaration without a consequential relief is not maintainable under the proviso to Section 42 of the Specific Relief Act. Numerous consequential reliefs as asked for in the previous suit as well as in the pauper application were available to the plaintiff among others and it shall be against the principle of law to entertain such a suit for a mere declaration without a consequential relief.
19. One consequential relief for which the plaintiff might have prayed was the one which he obviously hoped would follow from a successful termination of this appeal, namely that he can bring a new action for dissolution of partnership and accounts. We are disposed therefore to agree with the finding of the lower Court on this issue. Even less has been said on the question of the amendment of the plaint, the plaintiff being content with referring us to ILR (1939) Nag 194 (’38) 25 AIR 1938 Nag 388 , 176 IC 728 , ILR (1939) Nag 194 in which it was held that:
Amendments should readily be allowed unless the; prejudice the rights of the opposite party. An amendment of the plaint should not ordinarily be allowed when the application is made at a very late stage and the result of the amendment is to bring on the record a new case which on the date of the amendment is time-barred.
20. The amendment which the plaintiff seeks to make in his plaint is to add a prayer that if it be held that there was an award the defendants should be called upon to produce it. We do not think that there is any point in such an amendment because Mr. Padhye has conceded before us that if in point of fact there was an award then he is precluded by the judgment in the previous suit from challenging its contents. Accordingly the appeal fails and is dismissed with costs.
D.S/R.K
21. Appeal dismissed.