Kanapathipillai v. Kandiah.
1942Present : HowaTd C.J. and Soertsz J.
KANAPATHIPILLAI v. K AND I AH384—D. C. Batticaloa, 334.
Res judicata—Action, on mortgage bond,—Assignment of bond by person notauthorised in writing—-Dismissal of action—Fresh action after validassignment—Civil Procedure Code s. 406.
Plaintiff sued the defendant in case No. 141 D.C., Batticaloa, to recovera sum of money on a mortgage bond given by the defendant in favour-of a- Corporation. The bond was assigned to the plaintiff by a personwho was not authorised in writing to do so, as required by section 54 ofthe Joint Stock Companies Ordinance.
At the trial, the plaintiff admitted that there was nonsuch writing andwithdrew his action, paying defendant’s costs. The Judge recordedthat the plaintiff’s- action was dismissed with costs.
The plaintiff sued on the bond in the present'.action after obtaining avalid assignment.
Held, that the action .was not barred by section 406 of the CivilProcedure Code.
HOWARD C J.—Kanapathipillai v. Kandiah.43
^ PPEAL from a judgment of the District Judge of Batticaloa.
H. V. Perera, K.C. (with him C. T. Olegasegaram), for the plaintiff,appellant.
N. Nadarajah, K.C. (with him G. Thomas and P. Malalgoda), for thedefendant, respondent.
Cut. aav. vult.
November 2, 1942. Howard C.J.—
The plaintiff appeals from a decision of the District Judge, Batticaloa,dismissing his action with costs. His decision is based on his findingthat the decree in case No. 141St D.C. operates as res judicata. In thepresent case the appellant claims a sum of Rs. 945, together with interestby virtue of a deed of assignment dated November 6, 1939, made by theCeylon Financing Corporation, Batticaloa, in his favour of a bond datedJanuary 16, 1935, by which the respondent mortgaged and hypothecatedwith the said Corporation certain properties in the District of Batticaloa.In case No. 141^ D.C. the appellant claimed a sum of Rs. 730, withinterest on an assignment by the said Corporation dated August 24, 1937.The action on the former claim came before the District Court of Batti-caloa on August 13, 1938, when Counsel for the responderit, then thedefendant, stated as follows : —
“The main point is this. One Ragel assigned the bond in questionon behalf of the Company in plaintiff’s favour. Section 54 of No. 4 of1861 says that a Joint Stock Company can authorise a person in writingto execute deeds on its behalf.”
Plaintiff’s Counsel then admitted that there was no such writtenauthority and hence assignment bond in plaintiff’s favour was invalid.He then withdrew the action, paying costs of contest. The DistrictJudge further recorded that the action was dismissed with costs.
As in the District Court, Counsel for the respondent- has relied on theprovisions of section 406 of the Civil Procedure Code. This section isworded as follows:— –
“ 406. .(1) If, at any time after the institution of the action, theCourt is satisfied on the application of the plaintiff (a) that the actionmust fail by reason of some formal defect, or (b) that there are suffi-cient grounds for permitting him to withdraw from the action or toabandon part of his claim with liberty to bring a fresh action for thesubject-matter of the action, or in respect of the part so abandoned,the Court may grant such permission on such terms as to costs orotherwise as it thinks fit.
If the plaintiff withdraw from the action, or abandon part ofhis claim, without such permission, he shall be liable for such costs asthe Court may award, and shall be precluded from bringing a freshaction for the same matter or in respect of the same part.
Nothing in this section shall be deemed to authorise the Courtto permit one of several plaintiffs to withdraw without the consent ofthe others.”
HOWARD C.J.—Kanapathipillai v. Kandiah.
It is contended that the subject-matter of this action is the same as inaction No. 141M D.C. and as the appellant withdrew from the latteraction without liberty to bring a fresh action for the subject-matter ofthe action, he is precluded from bringing a fresh action. It is also main-tained that as the District Judge dismissed the action, the whole matteris res judicata.
A good deal of argument has been developed with regard to theinterpretation to be given to the expression “subject-matter”. Can itbe said that the subject-matter in the two actions is the same ? Thewording of the corresponding provision in the Indian Procedure Code—Order 23 Rule 1—is similar. At page 2170 of the Second Volume ofChitaley it is stated that the term “ subject-matter ” means the plaintiff’scause of action for his suit, and a suit for a different cause of action is,therefore, not barred under this rule even though the suit may relate to thesame property. Conversely, a suit based on the same cause of actionas the first one is barred. The question, therefore, arises whether thetwo suits were based on the same cause of action. In this connectionour attention was invited by Mr. Perera to two Indian cases, BliagabanDas Maliesri v. Prosanna Dev Raikot1 and Pandillapalli Singha Reddi v.Yeddula Subba Reddi2. In the Calcutta case, it was held that, where asuit for possession from tenants-at-will has bejen withdrawn withoutpermission to bring fresh suit, as no notice had been served to the heirsof one tenant, who had been served with notice, but had died before theinstitution of the suit, a subsequent suit for same relief after propernotice to all the parties is not barred under Order 23 Rule 1(3) . In theMadras case the reversioners of a Hindu widow sued, during her lifetime,for a declaration that an alienation made by her was not binding on them.The alienee, in defence, pleaded that he was the illatom son-in-law of thelast male owner. The widow having died during the pendency of thesuit, the plaintiffs withdrew the suit and subsequently brought a suit forpossession of the property alienated. It was held that the second suitwas not barred by the provisions of Order 23 Rule 1(3). It will beobserved that, in this case, as. in the Calcutta case, the reliefs claimed inboth suits were the same, namely, the relief in the shape of recovery ofland. So, in the present case, the reliefs claimed in both suits are thesame, namely, the recovery of a sum of money due on a mortgage bond.In the Madras case the following view was taken : —
“ Without attempting an exhaustive definition of all that may beincluded in the term ‘ subject-matter ’ it should be held that where thecause of action and the relief claimed on the second suit are' not thesame as the cause of action and the relief claimed in the first suit, thesecond suit cannot be considered to have been brought in respect ofthe same subject-matter as the first suit within the meaning of Order 23Rule 1(3).”
This view Was contrary to the decision in the case of Achuta Menon v.Achutan Nayar which was overruled-. In Chenchuram Naidu v. Baha-vuddin Sahib *, which was a case in which the plaintiffs as landlord had
■ A. I. R. (1934) Cal. 433.5 (1893) 21 Mad. 36.
– A. I. R. (1917) Mad. 512.J .4. T. R. (1933) Mad. 139.
HOWARD CJT.—Kanapathipillai v. Kandiah.
instituted a suit in ejectment against a tenant but the suit was allowedto be withdrawn on the ground that there was absence of the requisitenotice to quit but no liberty was reserved to the plaintiff to issue a freshsuit and thereafter the plaintiff instituted another suit after havinggiven the necessary notice, it was held that the second suit was not asuit in respect of the same subject-matter because the word subject-matter in Order 23 Rule 1 means : —
‘* the series of acts or transactions alleged to exist giving rise to therelief claimed.”
In the present case the first series of acts or transactions which formed-the basis of the first suit was incomplete or the appellant would havebeen able to prosecute his suit to decree. It was incomplete becausethe assignment by Ragel was invalid. The second series of acts ortransactions is complete because the assignment is made in accordancewith law and, therefore, the two suits are not in respect of the samesubject-matter. In my opinion, it is impossible to distinguish the presentcase from the Indian cases I have cited. In these circumstances, thelearned Judge should not have dismissed the suit by reason of theprovisions of section 406 (2) of the Civil Procedure Code.
Counsel for the respondent has also contended that as the first suitwas dismissed by the Judge the whole matter is res judicata. I am unableto accept this contention. The law with regard to res judicatawas expounded by Jayewardene A.J. in Sinniah v. Eliakutty1 in' thefollowing passage: —
“ Our law of res judicata, which is founded on the Civil law. .res judicata diciiur quae finem controversiarura pronuntiatione judicisaccepit, quod vel condemnatione vel absolutione contingit ….(Digest XL11.1,I) is to be found in sections 34, 207, and 406 of theCivil Procedure Code, supplemented by the English law (SamitchyAppu v. Per era)’. A decree is decisive as to every right of propertywhich can be claimed, set up, or put in issue between the parties uponthe cause of action for which the action is brought, according to theexplanation to section 207 of the Code.
The doctrine of res judicata applies to all matters which existed atthe time of giving the judgment and which the party had an opportunityof bringing before the Court. The conditions for the exclusion ofjurisdiction on the grounds of res judicata are that the identical mattershall have come in question already, that the matter shall have_beencontroverted, and that it should have been decided. If the parties havehad an opportunity of controverting it, that is the same thing as ifthe matter had actually been controverted and decided. (Newingtonv. Levy’).”
A further exposition of the law is to be found in the judgment ofFernando A.J., in Ameen v. Patimuttu4. In the coure of his-judgment, 3
> 34 N- L. R. 37.
– 3 C. .4. C. 30.
3 6 C. P. Cases 180.< 38 N. L. S. 264.
HOWARD C.J.—Kanapathipillai v. Kandiah.
the learned Judge stated that on the question of res judicata there is nodistinction between the law of Ceylon and that of England and theprovisions of sections 34, 207 and 406 of the Civil Procedure Code are notexhaustive and may be supplemented by the English law- The learnedJudge then refers to the law as set out by Spencer Bower in his treatiseon res judicata and cites with approval the following passage frompage 23
“ Any judgment or order which in other respects answers to thedescription of res judicata is none the less so because it was made inpursuance of the consent and agreement of the parties. It is true thatin such cases the Court is discharged from the duty of investigatingthe matters in controversy and does not pronounce a judicial opinionupon any of such matters ; but it is none, the less true also that at thejoint request of the parties the tribunal gives judicial sanction to whatthose parties have settled between themselves, and in that wayconverts a mere agreement into a judicial decision on which a plea ofres judicata may be founded …. But though consent judg-ments and orders are undoubtedly decisipns in the sense that theactual mandatory or prohibitive parts of the judgment is conclusivelybinding, it may often be a matter of legitimate doubt as to what, if any,particular questions or issues^ were expressly or impliedly the subjectof the consent, and of the decision. For this purpose the Court willclosely examine all such evidence, if any, as is available and admissible.Any issue or question which is thus shown to have been recognised ortaken by the parties as the subject of the litigation, and of the judgmentor order agreed to, is deemed to have been thereby conclusively deter-mined so -as to preclude any subsequent challenge. Where,however, there are nO such materials available as are above indicatedthere is nothing which can operate as a decision of any particularquestion or issue, and neither party is estopped from disputting anythingbut the actual judgment or order itself.”
The principle set out in the passage I have cited was followed in Newing-ton v. Levy (supra). In his judgment in that case, Blackburn J. atpage 193 stated as follows : —
“ I incline to think that the doctrine of res judicata applies to allmatters which existed at the time of the giving of the judgment, andwhich the party had an opportunity of bringing before the Court,But, if there be matter subsequent, which could not have been broughtbefore the Court at the time, the party is not estopped fromraising it.”
Applying the law as expounded by Spencer Bower and the judgment inNewington v. Levy (supra) to the facts of the present case, the only issuethat was decided in the first suit was the question as to whether theassignment by Ragel was valid so far as the Corporation was concerned.Neither that decision nor the judgment based thereon could subsequentlybe challenged. The appellant is, therefore, not precluded from bringingfresh action based on the subsequent assignment.
HEARNE J.—Adihetty v. Sirisena.
For the reasons I have given, the appeal must be allowed and the case^sent back to the District Judge to determine issue 3, namely, “Whatarfiomt, if any, is due to the plaintiff ? After determining suchAmount he will enter judgment for the same in favour of the plaintiff.The plaintiff must have his costs in this Court and the Court below.
Soertsz J.—I agree.