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Thuljaram Row v. Gopala Aiyan & Others
Structured Summary of the Opinion (Srinivasa Aiyangar, J.)
Factual and Procedural Background
This appeal arises from a suit by the mortgagee to enforce his security. The mortgagee, who had been the owner of certain lands, sold them to Jatavallabar (the deceased husband of the present defendant 1) on 5 January 1899. On the same day Jatavallabar mortgaged the lands back to the vendor to secure Rs. 11,000 (the bulk of the purchase price). The mortgage-deed provided for interest at "half a rupee per cent per month" (stated as 6% per annum) payable yearly, an agreed payment of Rs. 1,000 of principal on 30 July 1899 and the balance on the vendor-mortgagee's minor sons attaining majority (which occurred in April 1905). In default of the later payment, the mortgagor agreed to pay interest at 12 annas per cent (9% per annum). Most interest remained unpaid and no portion of the principal had been paid. The mortgagee plaintiffs sued to recover the mortgage money by sale of the security.
In a prior 1903 suit the mortgagee sued for interest due up to that time and for Rs. 1,000 of principal, seeking sale of specified parts of the security (Schedule B for interest; Schedule A for principal). At the final hearing, after adducing evidence as to interest, the plaintiff applied to withdraw the claim for Rs. 1,000 with liberty to sue again because he was not then ready with evidence to prove title to sell the Schedule A properties. The Court allowed withdrawal with liberty to sue again and made a decree for interest by sale of Schedule B property; the order regarding the Rs. 1,000 was recorded as: "suit withdrawn in respect of Claim B with liberty to sue again and plaintiff to pay corresponding costs of defendants 2 to 4."
Legal Issues Presented
- Whether the plaintiffs (mortgagee and his sons) were entitled to interest at 9% per annum on the Rs. 1,000 instalment of principal, or whether the deed limited interest on that Rs. 1,000 to 6% per annum.
- Whether the order permitting withdrawal of the claim for Rs. 1,000 "with liberty to sue again" was a nullity (beyond the competence of the Court), and consequently whether the subsequent suit claiming the Rs. 1,000 and later interest was barred by the doctrine of res judicata.
Arguments of the Parties
Appellant's Arguments
- The appellant (defendant 2, now owner of the equity of redemption) contended that the earlier order permitting withdrawal of the claim for Rs. 1,000 was beyond the Court's competence and therefore a nullity, and that the present suit (insofar as it claimed Rs. 1,000 and subsequent interest) was barred by res judicata.
Plaintiffs' (Mortgagee's) Position as Recorded
- The plaintiffs claimed interest at 9% per annum not only on Rs. 10,000 but also on the Rs. 1,000 instalment; the lower Court had allowed that claim (later challenged on appeal).
- In the 1903 suit the plaintiff sought to withdraw the Rs. 1,000 claim with liberty to sue again on the ground of being unready to prove title to sell the Schedule A properties.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Kali Prasanna Sil v. Panehanan Nandi | Where a court has dismissed a suit on the merits, and an appellate court subsequently purports to give leave to withdraw, that permission may be held a nullity and the original dismissal can operate as a bar (res judicata) under the relevant Code provision. | The Court observed this case was principally relied upon by the appellants but distinguished it: in Kali Prasanna Sil the suit had been dismissed on the merits, whereas in the present matter there had been no adjudication on the plaintiff's claim, so the earlier case did not govern the present situation. |
| Robert Watson & Co. v. Collector of Zillah Rajshahye | Illustration that a dismissal for want of evidence (demonstrated to be a dismissal on the merits) operated as a bar to subsequent litigation; appellate procedure showed the dismissal was a decree on the merits. | The Court treated this as another example distinguishing the present facts: in that case there was an effective adjudication on the merits, unlike the present case where no adjudication of the claim for Rs. 1,000 had occurred. |
| Parsotam Gir v. Narabada Gir | Where an appellate Court dismissed a suit but expressly stated it was not deciding the rights of the parties, a subsequent suit on the same subject-matter by the same plaintiff was not res judicata. | The Court regarded this decision as conclusive on the present point and used it to support the conclusion that the subject-matter of the present suit could not be treated as res judicata where there had been no prior adjudication on the claim. |
| Mosor v. Marsden | Language used by Lindley, L.J. to illustrate that an order made under a rule when jurisdiction exists is not necessarily a nullity even if improperly made. | The Court invoked this reasoning to support the proposition that orders made by a Court that had jurisdiction over subject-matter and parties are more properly treated as irregularities rather than total want of jurisdiction rendering them nullities. |
| Gomatham Alamelu v. Komandur Krishna Macharlu | Example where a Court with general jurisdiction rendered judgment for recovery of land outside its territorial jurisdiction, yet such judgment was held not to be a nullity. | The Court cited this case to illustrate that an order made beyond proper limits may be a serious irregularity but not necessarily a nullity if the Court had overall jurisdiction to pass orders of that kind. |
| Perumal v. Pichan | Authority (from two Judges of this Court) supporting the view that permission to withdraw with liberty to sue again should not be treated as a nullity in collateral proceedings. | The Court referred to this decision (not cited at the Bar) as aligned with the view that treating such permission as a nullity is inappropriate; it relied on the reasoning to disallow the appellant's contention. |
| Chhajju v. Khyali Ram (Allahabad High Court) | Decision of the Allahabad High Court endorsing the approach that permission to withdraw with liberty to sue again should not be treated as a nullity. | The Court cited this decision as further support for the conclusion that the withdrawal-with-liberty order could not be treated as a nullity in the present collateral challenge. |
Court's Reasoning and Analysis
The Court addressed the issues in two main parts: (1) the contractual construction question about the interest rate on the Rs. 1,000 instalment; and (2) the procedural question whether the prior withdrawal order was a nullity and whether the present claim was barred as res judicata.
1. Contractual construction on interest rate
The Court reviewed the language of the mortgage deed and found it "quite plain and against the claim of the plaintiffs." The deed specified a 6% per annum interest rate (expressed in the deed as "half a rupee per cent, per month i.e., 6 per cent per annum") and a higher rate of 9% only on default of the later principal sum. Accordingly, the Court held that interest on the Rs. 1,000 instalment should be at 6% per annum (not 9%) and modified the decree of the lower Court on that point.
2. Whether the withdrawal order was a nullity/res judicata
The appellant urged that the earlier order permitting withdrawal with liberty to sue again was beyond the Court's competence and therefore a nullity, making the subsequent suit (claiming Rs. 1,000 and later interest) barred by res judicata. The Court answered this contention in several steps:
- It first observed that if the previous order were a nullity (and it was the only order disposing of the Rs. 1,000 claim), then the claim would remain undisposed and could be tried — and in fact had been tried in the present suit.
- The Court distinguished authorities relied upon by the appellant (Kali Prasanna Sil; Robert Watson & Co.), noting that in those cases there had been adjudications dismissing suits on the merits such that subsequent permission-to-withdraw-like statements could not prevent the dismissal operating as a bar. In contrast, in the present case, there had been no adjudication on the plaintiff's claim for Rs. 1,000, so those precedents did not govern.
- The Court relied on Parsotam Gir v. Narabada Gir to show that where an appellate court dismisses but expressly does not decide the rights of parties, the subject-matter is not res judicata; this supported the view that the present claim was not barred.
- The Court engaged in a broader analysis of the nature of judicial orders: where a Court is properly seized of subject-matter and parties, orders passed in violation of procedural provisions are more properly characterised as material irregularities in the exercise of jurisdiction rather than as total want of jurisdiction rendering them nullities. The Court gave examples (O.1 R.10, injunctive or receiver orders issued outside proper conditions) and cited Mosor v. Marsden and Gomatham Alamelu v. Komandur Krishna to illustrate how orders outside strict limits have been treated as non-nullities.
- The Court noted that deeming an order granting permission to withdraw with liberty to sue again a nullity and thereby permitting collateral attack would have serious consequences and risks for plaintiffs, and invoked the view in Perumal v. Pichan and Chhajju v. Khyali Ram which supported not treating such permission as a nullity.
- Applying these considerations to the present facts, the Court said there had been a serious argument that the withdrawal order was proper or at least not without jurisdiction; although the Court was "inclined to hold that the permission should not have been granted," it concluded that the appellant could not treat the earlier order as a nullity in collateral proceedings and that the matter was not thereby res judicata.
Two other points were taken before the Court but not pressed. The net effect of the analysis was that the appellant's contention that the earlier withdrawal order was a nullity and that the present suit was barred by res judicata was disallowed.
Holding and Implications
Holding: The appeal was partly allowed. Concretely:
- The decree of the lower Court was modified to allow interest on the Rs. 1,000 instalment at 6% per annum (instead of 9%).
- The appellant's contention that the prior withdrawal order was a nullity and that the present claim was barred by res judicata was disallowed; the appeal was otherwise dismissed.
- The Court ordered consequential amendments: substitution of 9% for 10% as regards the principal in the decree of the lower Court (the opinion records that the decree will be amended accordingly).
- Costs: The appellant will pay and receive proportionate costs here and in the Court below from the plaintiffs; the plaintiffs' memorandum of objections was dismissed with costs. C.R.P. No. 1046 of 1915 was dismissed as unnecessary.
Implications: The immediate practical consequences affect only the parties: the plaintiffs' entitlement to 9% on the Rs. 1,000 instalment was denied and reduced to 6%, the decree was amended regarding the principal rate as indicated, and the appellant's res judicata/nullity challenge failed so the subsequent proceedings were not barred. The opinion emphasises a legal position — that orders made by a court having jurisdiction are, in many cases, irregularities rather than absolute nullities — but it does not purport to lay down a novel binding rule of broader application beyond the reasoning applied to these facts. No new authoritative precedent was announced beyond the Court's application of existing authorities and principles to the facts before it.
Disposition: Appeal partly allowed.
Judge: Srinivasa Aiyangar, J. (Abdur Rahim, J. agreed). Reported disposition: "Appeal partly allowed." (Text used exactly for summary is limited to what is recorded in the provided opinion.)
Srinivasa Aiyangar, J.:— This is an appeal of defendant 2, the present owner of the equity of redemption in a suit by the mortgagee to enforce his security. The mortgagee was himself the owner of the lands. He sold them to defendant 1's deceased husband one Jatavallabar on 5th January 1899, who on the same day mortgaged them to the vendor to secure Rs. 11,000, the bulk of the price. The mortgagor covenanted to pay interest at half a rupee per cent, per month i.e, 6 per cent, per annum once every year. He agreed to pay Rs. 1,000, out of the principal amount on 30th July 1899 and the balance immediately the vendor mortgagee's minor sons attained majority, which event happened in April 1905, when the youngest of them became a major. In default of payment of the latter sum on the due date, the mortgagor agreed to pay interest at 12 annas per cent, (i.e) 9 per cent, per annum. Most of the interest has not been paid and no portion of the principal money and the suit is to recover the mortgage money by sale?of the security. The plaintiffs—the 1st is the mortgagee and the other two are his sons—claimed interest at the rate of 9 per cent, not merely on the sum of Rs. 10,000, but also on the sum of Rs. 1,000. It was allowed by the lower Court and the first point raised in the appeal is against that claim. The language of the mortgage-deed is quite plain and against the claim of the plaintiffs. The decree of the lower Court must be modified by allowing interest on the Rs. 1,000 at 6 per cent, per annum instead of 9 per cent.
2. The 2nd point is more serious and it is this.
3. The mortgagee in 1903 sued for the interest accrued due till then and for the Rs. 1,000 out of the principal. He prayed for the sale of a part of the security, viz., that specified in Sch. B to that plaint to realise the interest and of another part specified in Sch. A to realise the principal amount. Jatavallabar was the defendant 1 in that suit but he died before the trial and on his death, the present defendant 1 was brought on the record. Besides Jatavallabar, three other persons who apparently claimed the Sch. A property adversely to both the mortgagor and the mortgagae, were made defendants. Jatavallabar or the present defendant 1 did not appear to defend the suit, but the other defendants set up their adverse title. At the final hearing, the plaintiff after having adduced evidence as regards his claim for interest against the mortgagor, defendant 1 applied for leave to withdraw his claim for Rs. 1000, the first instalment of the principal, with liberty to file a fresh suit on the ground that he was not ready with his evidence to prove his title to sell the Sch. A properties with which alone the contesting defendants were concerned. This was allowed by the Judge and a mortgage-decree was passed for the interest by sale of the Sch. B properties; as regards the claim for Rs. 1,000 the order was:
“suit withdrawn in respect of Claim B with liberty to sue again and plaintiff to pay corresponding costs of defendants 2 to 4.”
4. The appellant contends that the order permitting the withdrawal was beyond the competence of the Court and is a nullity and the present suit, in so far as it includes a claim to recover Rs. 1,000 and the subsequent interest, is barred as the matter was res judicata. There is a short answer to this contention, viz., that if the previous order is a nullity, that being the only order which disposed of the claim for Rs. 1,000, that claim still remains undisposed of and must be tried, and, it has now been tried in this suit. In Kali Prasanna Sil v. Panehanan Nandi(1), which was principally relied on by the appellants, the 1st Court had dismissed the suit on the merits and in appeal, that dismissal was confirmed; but the appellate Court, in addition, purported to give leave to withdraw the suit, which permission was held to be a nullity. The result was the original dismissal of the suit became final and the matter became res judicata under S. 11, of the Code corresponding to S. 13 of the Code of 1882. That appears also to have been the case in Robert Watson & Co. v. Collector of Zillah Rajshahye(2). There was a dismissal of the suit for want of evidence which was a dismissal on the merits, as is shown conclusively by the subsequent proceedings in the case. There was first a summary appeal to the Sudder Court, but they held that the appeal must be brought by way of a regular appeal, i.e, not as an appeal from an order, but as from a decree on the merits; and on a regular appeal being preferred the appeal was dismissed: sea p. 164 of the report; Macpherson's Civil Procedure, Ch. 39, for summary appeals. There was no question of permission to withdraw, for there was no such procedure then, and there was only a statement that the order then passed which was a decree for dismissal was not intended to bar the plaintiffs from proceeding as if the action had not been brought. This statement, it was held by their Lordships, could not prevent the actual dismissal from operating as a bar to the maintainability of the subsequent suit under S. 2 of the Act of 1859, which corresponds to the present S. 11 of the Code. That those decisions do not affect the present case is obvious, for there had been no adjudication of any sort in the case on the claim of the plaintiff and the matter cannot therefore be treated as res judicata.
5. The decision of their Lordships in Parsotam Gir v. Narabada Gir(3) is conclusive on the point. In that case there was first a suit for recovery of possession of certain villages which was decreed by the first Court which decree, on appeal to the High Court, was reversed and the suit dismissed. The appellate Court however expressly stated that they were not deciding on the rights of the parties. A second suit was brought by the same plaintiff against the representative of the same defendant for the same reliefs and their Lordships, reversing the judgment of the High Court, held that the subject-matter of the second suit was not res judicata. The provisions of Cl. 3, O. 23, R. 1, do not help the appellant as there has been no withdrawal without permission and the appellant is not entitled to treat one portion of the order, that giving permission, as a nullity while holding the plaintiff bound by his withdrawal. It is not therefore necessary to express an opinion on the question, whether an order granting permission to withdraw with liberty to sue again, in a case where the Court grants such permission on an erroneous construction of the provisions of law which gives the power, is a nullity. But with all respect to the learned Judges who decided otherwise, I venture to doubt whether such an order is a nullity as one passed without jurisdiction, strictly so called.
6. When a Court is properly seized of jurisdiction of the subject-matter of a suit and of the parties, orders passed in violation of the provision of law regulating the further proceedings in the suit in relation to the subject-matter till termination of the suit cannot be said to be so totally without jurisdiction as to render them nullities. It can only amount to a material irregularity in the exercise of jurisdiction; for example, there is O. 1, R. 10, which gives power to the Court to add or strike out parties; if an improper order is made under that rule, can the parties ignore it and treat it as a nullity though such an order may be said to have been made in one sense without jurisdiction: see the language used by Lindley, L.J, in Mosor v. Marsden(4). Or again if an injunction is issued or a receiver appointed under conditions or in circumstances not coming within the terms of the sections conferring the power, can a party treat those orders as nullities? I think the true rule is that if the Court has jurisdiction to pass orders of a particular kind, that in a particular case it passed an order which it should not have passed is not a case of total want of jurisdiction so as to render that order a nullity. This is well illustrated by Gomatham Alamelu v. Komandur Krishna, macharlu(5), where a Court having general jurisdiction of such suits rendered judgment for recovery of land outside its territorial jurisdiction and yet that judgment was held not to be a nullity. The consequence of holding that an order giving permission to withdraw with liberty to sue again is a nullity and is capable of collateral attack may be serious.
7. The terms of a rule are wide, and in particular cases it may be very difficult to decide whether permission should or should not have been granted; orders improperly passed but with jurisdiction and orders passed without jurisdiction are incapable of precise definition. In this very case there was a serious argument that the order was quite proper, at any rate it was not one passed with out jurisdiction, though we are inclined to hold that the permission should not have been grantee. If a party who is dissatisfied with such an order is to be allowed to treat it as a nullity in a subsequent proceedings, without vacating the order by proper proceedings, the plaintiff may be subject to a serious risk, conceivably without any fault of his own. This was the view taken in Perumal v. Pichan(6) by my learned brother and another learned Judge of this Court which was not cited at the Bar and in Chhajju v. Khyali Ram(7) by the Allahabad High Court. This contention must therefore be disallowed. Two more points were taken, but were not pressed. The decree of the lower Court will therefore be modified in respect of interest as stated above and the appeal otherwise dis missed. The appellant will pay and receive proportionate costs here and in the Court below from the plaintiffs. The plaintiffs have preferred a memorandum of objections; but there is no sub-stance in the points taken and it must be dismissed with costs. It is argued that 9 per cent is to be substituted for 10 per cent as regards the principal, and the decree of the lower Court will be amended accordingly. C.R.P No. 1046 of 1915 is also dismissed, as it has now be come unnecessary.
Abdur Rahim, J.:— I agree.
S.N/R.K
8. Appeal partly allowed.
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