058-NLR-NLR-V-53-NADARAJAH-Appellant-and-PATHTHAKUDDY-Respondent.pdf
PUXiIjE J.—Nadarajah v. Paththakuddy
973
1981Present: Gratlaen J. and Pulle J:NADARAJAH, Appellant, and PATHTHAKUDDY, Respondent
S. C. 139 Inty—D. C. Trincomalee, 3,387
Bes judicata—Claim and counter-claim—Compromise—Right of defendant to bringfresh action in respect of the counter-claim—Civil Procedure Code, ss. 807, 408.
Where, is an action, a counter-claim made by the defendant is in substantialissue but, subsequently, a judgment by consent is entered in full satisfaction oftbe claim and without any reservation of the defendant’s right to bring a separateaction in respect of the counter-claim, the defendant is precluded from bringinga second action in respect of the counter-claim. – If he does so, the consentdecree in the previous action will operate aB res judicata.
A PPEAXi from an order of the District Court, Trincomalee.
H. W. Tambiah, with O. F. Sethukavalar, for the defendant appellant.E. R. S. R. Coomara8wamy, for the plaintiff respondent.
Cur. adv. vult.
May 30, 1951. Puli-e J.—
The plaintiff in this action alleged that the defendant cultivated apaddy field in the year 1945 undertaking to deliver ten am imams ofpaddy. It was also alleged that the defendant cultivated the same fieldin 1946 and became liable to deliver ten amunams of paddy in that yearas well. In the result the plaintiff claimed to be paid Rs. 2,000 beingthe value of twenty amunams at the rate of Rs. 100 per amunam.Various defences were raised by the defendant of which one was that thedecree in an earlier case between the same parties, namely, D. C.,Trincomalee, Case No. 3,224, operated as res judicata. This plea wastaken up as a preliminary issue and was decided against the defendant.
In Case No. 3,224 the defendant in the present action sued the plaintiffon a mortgage bond dated 2nd November, 1939, for the recovery of asinn of Rs. 1,509 and interest and prayed that the land mortgaged bedecreed bound and executable. As against this claim the plaintiff pleaded- that he had paid a sum of Rs. 500 in part settlement of the amount dueon the bond and further alleged .that the defendant had the use andoccupation of the field in question during the years 1945 and 1946promising to deliver to the plaintiff ten amunams of paddy per year asground share. The defence then was that as againsti the claim on thebond the plaintiff was entitled to credit to the extent of Rs. 500 paid incash and the value of twenty amunams of paddy at Rs. 100 per amunam.The present plaintiff’s prayer in that case was that an account be takenof the transactions between the parties to the bond and that the defendantbe “ adjudged and decreed to pay such sum of money as may be found due tohim on such accounting ". In substance the plaintiff’s defence to the
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PUtiLE J.—Nadarajah c. Paththakuddy
action on the mortgage bond was that the claim arising on it had beenpaid and settled and that, if on an accounting, a sum was found due tohim, a decree in his favour for that sum should be entered.
To decide the plea of res judicata it is necessary to read the issues whichwere framed at the trial in Case No. 3,224. They are as follows: —
What sum is due to the plaintiff on the bond sued upon ?
Did the plaintiff cultivate the defendant’s field of nine acres in
1945 and 1946 ?
If so, what is a reasonable rental for that field ?
The defendant gave evidence stating that the plaintiff had borrowedBs. 1,000 on the 2nd November, 1939, agreeing to pay interest at 12 percent. He admitted having received Its. 200 in 1941 and Es. 300 in 1942on account of principal and interest. He claimed Es. 820 as principaland Es. 689 as interest making a total of Es. J,509. At this point ofthe evidence the case was settled and the settlement was recorded in thefollowing terms: —
Of consent judgment for plaintiff for Es. 1,500 in full satisfactionof the claim. No costs. Order to sell not to issue for two. years fromto-day ”.
The learned District Judge rejected the proposition put forward bythe appellant that when parties settle a case all matters that were in issuebetween them become res judicata. He was of the opinion that theterms of section 408 of the Civil Procedure Code were against the apjjellant-.He emphasized that a decree entered upon a compromise was final onlyin so far as it relates to “ so much of the subject-matter of the action asis dealt with by the agreement, compromise or satisfaction Accordingto him the subject-matter of Case No. 3,224 was the debt due on themortgage bond and that the amount claimed by the defendant in thatcase was neither the subject-matter of that case nor any part of the causeof action for which that case was instituted. He thought that evenapart from section 408 parties did no more than settle the claim pn thebond leaving at large the claim involved in the defence set up againstthe appellant. With due deference to the opinion expressed by the learnedDistrict Judge I am unable to agree with him.
In the case of Sinniah v. Eliakutty 1 it was laid down that a judgmentby consent is as effective by way of estoppel as a judgment whereby theCourt exercised its miiid in a contested case and has the full effect of ares judicata between the parties. In re South American and MexicanGo., 2 Lord Hersehell said:
“ The truth is a judgment by consent is intended to put a stop tolitigation between the parties just as much as is a judgment whichresults from the decision of the Court after the matter has been foughtout to the end. And I think it would be very mischievous if one werenot to give a fair and reasonable interpretation to such judgments_and were to allow questions that were really involved in the action tobe fought over again in a subsequent action
{1982) 34 N. L. R. ST.
{1895) » Oh. 87. SO.
t’CtiLK J.—ffadarajah v. Paththakuddy
876
It is undoubtedly true as laid down in Appuhamy v. Punchihamy *that- the issue for the purposes of res judicata must be a substantial;ind not a mere incidental issue and that where an action has been settled'the decree embodying the settlement can operate as res judicata only" where there is no legitimate doubt as to the issues which were involvedin the decision or the facts which have impliedly or expressly been decidedthereby Ame.cn c. Patimuttu -. Applying these tests there is no'room for doubtiug that the counter claim of the plaintiff-respondent inCase No. 3,224 became a substantial issue for, if it had succeeded, theappellant would have failed in that action and perhaps would have beenordered to pay a sum of money to the plaintiff. It seems to me that thelearned District Judge has placed a narrow construction on the phrase,
" subject matter of the action ”, in section 408 of the Code. When aclaim is made in a legal proceeding and a defence has been delivered andthe case set down for trial for the purposes oE the final adjudicationmatters of defence become as much the subject matter of the action asthe claim itself. Had the defeuce in Case No. 3,224 been simpliciterthat the claim on the bond had been discharged by the appropriationby the appellant of a quantity of paddy equivalent to the claim and had acompromise been effected in the same terms as in this case the plea ofres judicata could not possibly have been contested. I do not think thatit makes any difference that the plaintiff alleged that the paddy appro-priated exceeded even the claim.It hastobe rememberedin this
connexion that it was open to the plaintiff in coming to a settlement tohave reserved his rights to institute a separate action for the recoveryof the whole or a part of the value of paddy appropriated by the appellant.
Reliance was placed by learnedcounselforthe respondenton the
cases of Maludinga Smidarathevan v. Krishna Thevan and others 3and Ishri Prasad v. Mungra Lai*. In the former case the followingtest laid down in Rajah KumaruVenkataPerumal Raja Bahadur v.
Thutha Ramasamy Chetty 5 was applied:“ What then is the test for
determining whether there is anestoppelinany particularcase in
i-onsequencs of a decree passed on a compromise ? In our opinion theanswer must depend on the answer to the question ' Did the partiesdecide for themselves the particular matter in dispute by the compromise,and was the matter expressly embodied in the decree of the Court passedon the compromise or was it necessarily involved in, or was it the basisof, what was embodied in the decree ? ’ For settling" this point it wouldbe legitimate, and sometimes necessary; to look into the pleadings betweenthe parties in the suit terminated by the compromise decree ….What the Court has to do in determining with respect to what mattereach of the parties to a compromise decree is estopped, is to find out whatit was the parties agreed to in the previous action ; and for this purposeit would not be enough merely to see what was the relief granted in thedecree of the Court, but it would be necessary also to examine what wasthe basis on which it was granted ”. -Learned counsel for the respondentvery properly drew our attention to the decree in Case No. 3,224 in which
» {1914) 17 N. L.R. 271.3 (1916) A. I. R. Madras 411.
* (1936) 38 N. Tj. R. 264.* (1930) A. I. R. Allahabad 619.
* (1912) SS Madras 75.
276
The Attorney-General v. Seedin
there is no mention of the counter claim made by the plaintiff in thepresent case. It is a mortgage decree in the ordinary form for the recoveryof Bs. 1,500. Applying the tests laid down in the case cited, whenone has regard to not merely the pleadings in the suit but to the issuesformulated for the trial of the matters in dispute, one is forced to theconclusion that though the counter claim was not expressly mentionedin the decree its disallowance was necessarily involved in the award ofa decree for Bs. 1.500 in favour of the appellant.
In the Allahabad case which was cited an action was instituted for therecovery of a parcel of land described as lot 421. A plea of res judicatawas raised on the ground that in a previous suit the plaintiff asked for adecree for the possession of one lot 419 and an injunction in respect oflots 415 and 421. The action was compromised by a decree which dis-missed the claim for possession of lot 419 and allowed the injunction inrespect of lot 415. Nothing was said about lot 421. The plea failed forthe obvious reason that the cause of action in the later suit for possessionwas fundamentally different from the claim for an injunction. There-were other reasons stated in the judgment. It is not necessary to advertto them as I am unable to extract from- them any principle which wouldassist the contention on behalf of the plaintiff respondent. The plaintiff'salleged right to be paid the value of 20 amunams of paddy was specificallyput in issue in Case No. 3,224 upon the cause of action on the mortgagebond and in terms of section 207 of the Civil Procedure Code the decreein that case operates as res judicata.
I would allow the appeal and dismiss the plaintiff’s action with costshere and below.
Gratiaen J-—I agree.
Appeal allowed