ERACH BOMAN KHAVARversusTUKARAM SHRIDHAR BHAT AND ANOTHER

                  (2013) 17 S.C.R. 1055


                ERACH BOMAN KHAVAR                             A
                             v.
      TUKARAM SHRIDHAR BHAT AND ANOTHER
           (Civil Appeal f'!o. 11005 of 2013)
                  DECEMBER 12, 2013
                                                                B
        [ANIL R. DAVE AND DIPAK MISRA, JJ.)

    COMPANIES ACT, 1956:

     s.446 - Application by landlord for leave to file eviction c
suit against company in liquidation - Held: Grant of leave of
the court u/s 446 is not a condition precedent for initiation of
a civil action or the legal proceedings - Leave of the winding
up court can be obtained even after initiation of the
proceeding - Court may grant leave if it felt that the company· D
should not enter into unnecessary litigation and incur
avoidable expenditure - In the case at hand, offiCial liquidator
had clearly stated that the suit property was not the property
of the company and, therefore, company should not eRter into
that kind of litigation - Company Judge,granting all protection E
to official liquidator, has rightly allowed the application for
seeking leave - Maharashtra Rent Control Act, 199.9 - Costs.

      Res judicata - Company in liquidation - Application by
landlord uls 446 of Companies Act - Permission granted to
file amendment in suit - Liberty granted to file application, if F
necessary - Subsequent application for leave to file eviction
suit under Maharashtra Rent Control Act - Allowed by
Company Judge - Division Bench setting aside the order on
the ground of res judicata - Held: Fa attract the doctrine of
res judicata it must be manifest that there has been conscious G
adjudication of an issue - A plea of res judicata cannot be
taken aid of unless there is an expression of an opinion on
the merits - Company Judge had not dealt with the earlier
application for grant of ieave on merits and it was disposed
                            1055                                H
   1056     SUPREME COURT REPORTS              [2013) 17 S.C.R.

A of on the basis of a submission made by third respondent that
  if an application for amendment is filed in the pending suit,
  he would not oppose the same - Division Bench, has
  erroneously opined that Company Judge in the main part of
  the order having rejected the application could not have
B granted liberty to apply for filing of another application - It
  could not have been treated to have operated as res judicata
  - Therefore, Division Bench has fallen into serious error in·
  dislodging the order granting leave by Company Judge to file
  a fresh suit - Order passed by Division Bench is set aside
c and that of Company Judge restored - Companies Act, 1956 ·
  - s.446 - !vfaharashtra Rent Control Act, 1999.
                                                '
        The father of the appellant entered into an agreement
   of leave and licence with respondent No. 2- Company, in
   respect of a flat owned by him. He filed an eviction suit
D against respondent No. 2. While the suit was in progress,
   on 9.1.1998 in a separate proceeding the Company Judge
 ·,passed a winding up order against respondent No. 2-
   Company. The appellant filed CA No. 45 of 2006 uls 446
   of the Companies Act, 1956 in Company Petition No. 201
E of 1994 seeking permission -to file eviction suit in the
   Small Causes Court. The Company Judge on 23.2.2006,
   granted permission to file amendment and also granted
   liberty to file application, if necessary. The appellant filed
   CA No. 720 of 2006 for grant of leave to file an eviction
F suit under the Maharashtra Rent Control Act, 1999. The
   Company Judge, ultimately, by order dated 5.3.2007,
   granted leave. The said order was challenged in appeal
   and the Division Bench held that in the absence of any
   changed circumstances, the second application for leave
G was not maintainable as it was barred by principles of res
   judicata being a successive application in the same court
   on self-same facts. It was further opined that it was open
   to the appellant to file an application for review or to file
   an appeal against the order dated 23.2.2006; and as long
H as the said order remained alive, a fresh application could
 ERACH BOMAN KHAVAR v. TUKARAM SHRIDHAR 1057
                 BHAT
not have been entertained by the Company Judge and                A
on the basis of the grant of liberty, the case could not
have been reopened.

    Allowing the appeal, the Court

     HELD: 1.1. Grant of leave of the court u/s 446 of the        B
Companies Act, 1956 is not a condition precedent for
initiation of a civil action or the legal proceedings. It is
because the Section does not expressly provide for
annulment of a proceeding that is undertaken without the
leave of the court. Leave of the winding up court can be          C
obtained even after initiation of the proceeding. Further,
the seminal object behind engrafting the said provision
is to see that the interest of the company is safeguarded
so that it does not face deprivation of its right and claims
are adjudicated without the knowledge of the company              D
court and further the court has a discretion to see
whether leave should be granted and, if so, with what
 conditions or no condition. That apart, the court may
 grant leave if it felt that the company should not enter into
 unnecessary litigation and incur avoidable expenditure.          E
 [para 21] [1072-A-D]

    Central Bank of India v. Mis. Elmot Engineering
Company and others (1994) 4 SCC 159; Ammonia Supplies
Corporation {P) Ltd. v. Modern Plastic Containers Pvt. Ltd. and
others 1998 (1) Suppl. SCR 413:: (1998) 7 SCC 105; State          F
of J&K v. UCO Bank and others (2005) 10 SCC 331;
Bansidhar Shankarlal v. Mohd. Ibrahim 1971 (2) SCR 476       =
(1970) 3 sec 900 - referred to.

       1.2. In the case at hand, the official ·liquidator had     G
, clearly stated that the suit property was not the property
  of the company and, therefore, the company should not
  enter into that kind of litigation. The Company Judge has
  taken note of it and further granting all protection to the
                                                                  H



                                                _., ·' .
    1058    SUPREME COURT REPORTS               [2013] 17 S.C.R.


A   official liquidator, has allowed the application for seeking
    leave. [para 22] [1072-D-E]

      2.1. To attract the doctrine of res judicata it must be·
  manifest that there lias been conscious adjudication of
B an issue. A plea of res judicata cannot be taken aid of
  unless there is an expression of an opinion on the merits.
  Principle of res judicata is applicable between the two
  stages of the same litigation bu~ the question or issue
  involved must have been decided at earlier stage of the
C same litigation. [para 34] [1080-F-G; 1081-A-C]

        Satyadhyan Ghosal and others v. Smt. Deorajin Debi.
    and another 1960 SCR 590 =AIR 1960 SC 941 - relied on.

     Arjun Singh v. Mahindra Kumar and others 1964
D SCR 946 =AIR 1964 SC 993 - referred to. .

          2.2. It is clear that the Company Judge had not dealt
    with the application for grant of leave on merits and it was
    disposed of on the basis of a submission made by the
    third respondent that if an application for amendment is
E filed in the pending suit, he would not oppose the same;
  · that the Company Judge on the basis of the statement
    recorded that it was not necessary to grant the Judge's
    Summons; and that liberty was granted to the applicant
  · to apply if necessary. [para 3B] [1084-G; 1085-A, Bl
F
        . Prahlad Singh v. Col. Sukhdev Singh AIR 1987 SC
    1145; C. V Rajendran and another v. N. M. Muhammed Kunhi
    2002 (2) Suppl. SCR 390 = AIR 2003 SC 649; Arukkflni
    Ammal v. Guruswamy (1987) 100 LW 707; Saroja v:
G Chinnusamy (Dead) by LRs and another2007 (9) SCR 304
     = (2007) 8 SCC 329; Y.B. p.atil and others v. Y.L. Patil 1977
    (1) SCR 320 = (1976) 4 SCC 66 - referred to.

        2.3. The .Division Bench has erroneously opined that
    the Company Judge in the main part of the order having
H
  ERACH BOMAN KHAVAR v. TUKARAM SHRIDHAR 1059
                  BHAT

  rejected the application could not have granted liberty to A
  apply for filing of another application. The Division Bench
  has not appositely appreciated the ratio laid down in
  Ke·wal Chand Mimani. The words, namely, "grant of
  liberty" are to be understood, regard being had to the
  context in which they are used. Context is really material. B
  Had the Compa·ny Judge adjudicated the matter on
  merits, the matter would have been absolutely different.
  He had, in fact, on the basis of a statement made by the
  counsel for the third •respondent, not dwelt upon the
  merits and, in that context, had granted liberty to C
. applicant to apply, if necessary;. It is eminently so
  because the Judge has also stated "it is not necess-ary
  to grant the present Judge's Summons". Thus; the
  application for grant of leave was really not dealt with on
 ·merits and on the basis of a statement of respondent No. D
  3, the ~ompany Judge opined that it was not necessary
  for the present and in that context liberty was granted.
  [para ?III [1086-A, B]

     Kewal Chand Mimani v. S.K. Sen and others 2001 (3)
           =
 SCR 1056 (2001) 6 SCC 512; State of U.P. v. Brahm Datt         E
                             =
 Sharma 1987 (2) SCR 444 (1987) 2 SCC 179 - referred
 to.

      2.4, The princip1es .stated in Arjun Singh, Satyadhyan
  Ghosal and the other authorities. clearly spell out that      F
  principle of res judicata operates at the. successive
. stages in the same litigation but, the basic foundation of
  res judicata rests on d_elineation of merits and it has at
  least an expression of an opinion for rejection of an
  application. As is evident, there hai; been no advertence     G
  on merits and further the Company Judge has guardedly
  stated two facets, namely, "not necessary to grant
  present.Judge's Summons" and "liberty· to applicant to
  apply, if necessary". On 1a-seemly reading of the order, It
  leaves no doubt that the same_ could not have been
                                                                H
    1060   SUPREME COURT REPORTS               [2013) 17 S.C.R.


A treated to have operated as res judicata. Therefore, the
  irresistible conclusion is that the Division Bench has
  fallen into serious error in dislodging the order granting
  leave by the Company Judge to file a fresh suit. [para 38)
  [1085-8-C, F-H; 1086-A-B]
B
       3. The order passed by the Division Bench is set
  aside and that of the Company Judge restored. [para
  39) [1086-F]
                       Case Law Reference:
c      1964 SCR 946              referred to          para 11
       2001 (3) SCR 1056         referred to          para 11
       (1994) 4 sec 159          referred to          para 18

D      1998 (1) Suppl. SCR 413 referred to            para 19
       2005 (10)-SCC 331         referred to          para 20
       1971 (2) SCR 476          referred to          para 20
       1960 SCR 590              relied on            para 24
E
       1987 AIR 1145             ref~r~ed to          para 28
       2002 (2) Suppl. SCR 390 referred to            para 30
       (1987) 100 LW 707         referred to          para 31
F      2007 (9) SCR 304          referred to           para 32
       1977 (1) SCR 320          referred to          para 33
       1987 (2) SCR 444          referred to           para 36
        CIVIL APPELLATE JURISDICTION : Civil Appeal No.
G
    11005 of 2013.
       From the Judgment and Order dated 23.06.2010 of the
 . High Court of Bombay in Appeal No. 262 of 2007 in Company
   Application No. 720 of 2006 in Company Petition No. 201 of
H 1994.
 ERACH BOMAN KHAVAR v. TUKARAM SHRIDHAR 1061
                 BHAT

   Shyam Divan, Pratap Venugopal, Nainesh, Meenalshi                  A
Chauhan (for K.J. John & Co.) for the Appellant.

    Shekhar Naphade, Jagdish A. Karia, E.C. Agrawala, for
the Respondents.

     The Judgment of the Court was delivered by                       8

     DIPAK MISRA, J. 1. Leave granted.

      2. This appeal, by special leave, is directed against the
judgment and order dated 23.6.2010 passed by the Division             c
Bench of the High Court of Judicature at Bombay in Appeal No.
262 of 2007 reversing the judgment and order passed by the
learned single Judge in Company Application No. 720 of 2006
in Company Petition No. 201 of 1994 whereby the learned
 single Judge had granted leave to the appellant to institute a
                                                                      0
 suit for eviction against the respondent therein.

       3. The broad essential facts giving rise to the present
 appeal are that on 17 .6.1975 the father of the appellant entered
 into an agreement of leave and licence with respondent No. 2
 - Company, namely Mis. Poysha Industrial Co. Ltd. in respect         E
 of a flat owned by him. As put forth by the appellant, the licence
 expired by efflux of time but the. respondent No. 2 continued to
 pay the licence fee and the same was accepted by the father
 of the appellant without prejudice. In the year 1990 a suit for
 eviction was instituted by the predecessor-in-interest of the        F
 appellant against respondent No. 2 and the sub-tenant under
 the Bombay Rent Act, 1947. On 4.3.1997 the sub-tenant, the
 first respondent herein, filed an application for impleading
·himself as a party in the suit contending that he was the sub-
 tenant. It is apt to note here that he was the Managing Director     G
 of the respondent No. 2 - company. On 17.6.1997 the Small
  Causes Court allowed the application and impleaded the
  respondent No. 1 as a defendant. While the suit was in
  progress, on 9.1.1998 in a separate proceeding the l~arned
 Company Judge passed a winding up order again'st the
                                                                      H
    1062     SUPREME COURT REPORTS                (2013] 17 S.C.R.


A respondent No. 2 - Company, At that stage, the landlord filed
  CA No. 731 of 1999 before the High Court seeking possession
  of the flat. On 14.2.2000, the learned single Judge rejected the
  application opining that before the premises could be returned,
  the rights of the person to occupy the premises are required
B to be determined. It was observed that it was only in the clear
  case where there is no valid or legal subsisting tenancy or sub-
  tenancy that the premises could be returned to the landlord. The
  said order was assailed before the Division Bench which by
  order dated 22.8.2000 accepted the reasoning ascribed by the
c learned single Judge and dismissed the appeal.

        4 .. As the factual matrix wou!d further undrape, the father
  of the appellant filed an application for amendment of the plaint
  in the suit for incorporation of the certain other grounds including
  the unlawful subletting by the respondent-company to the first
D respondent and the said amendment was sought to be made
  in terms of Section 3(1)(b) of the Bombay Rent Act, 1947.
  Eventually, by order dated 9.11.2000 the said application for
  amendment was rejected on the ground that the Bombay Rent
  Act had been rep~aled on 31.3.2000. Thereafter, Suit No. 226/
E 336 of 2001 was instituted in the Small Causes Court for
  eviction on the ground of illegal subletting. As set forth, the said
  suit was filed after obtaining leave from the Companies Court
  under Section 446 of the Companies Act, 1956 (for short "the
  1956 Act"). On 2.1.2002 as the original plaintiff, the father of
F the present appellant expired, an application for substitution
  was filed and thereafter the legal representatives including the
  appellant were brought on record vide order dated 28.3.2002.
  As the factual matrix would unveil, the said suit was withdrawn
  on 12.7.2004.
G
        5. On 21.9.2005 the appellant terminated the tenancy and
  thereafter on 18.10.2005 filed CA ·No. 45 of 2006 before the
   learned Company Judge under Section 446 of the 1956 Act
  seeking permission to file eviction suit in the Small Causes
   Court as the respondent - Company was not entitled to
H
 ERACH BOMAN KHAVAR v. TUKARAM SHRIDHAR 1063
          BHAT [DIPAK MISRA, J.]

protection under Maharashtra Rent Control Act, 1999 (for brevity       A
"the 1999 Act") in view of Section 3(1)(b) of the said Act.

     6. The learned Company Judge on 23.2.2006, on the
basis of a statement made by the contesting respondent,
granted permission for filing an amendment subject to the rights B
and contentions of respondent No. 3 therein on merits. However,
the Court observed that it was not necessary to present Judge's
Summons and granted liberty to file application, if necessary.
Though such an order was passed, the appellant did not file
an application for amendment on the legal advice and keeping C
in view the liberty granted by the learned single Judge, filed CA
No. 720 of 2006 for grant of leave to file the eviction suit in
terms of the provisions contained in the 1999 Act. The learned
single Judge vide order dated 27.7.2006 passed the following .
order: -                                   ·
                                                                       D
     "Perused the affidavit in support. Since the applicant has
     instituted a Suit against the Company in Liquidation,
     seeking its eviction from the premises, more particularly,
     described in the affidavit in support and the Suit!
     Application is pending. Company Application is made               E
     absolute in terms of prayer clause (a).            ·

     This order is passed without prejudice to the rights and
     contentions of the Official Liquidator and it would be open
     for the Liquidator to raise all such contentions as are
                                                                       F
     permissible in law. "

      7. Thereafter, an application for recall was filed contending,
inter alia, that the court was misguided as the order indicated
that the court was under an impression that the suit had already
been instituted earlier. The learned Company Judge, on peru&al         G
of the Company Application No. 720 of 200.6, found that the
court was not misguided as the said suit was mentioned as
proposed suit in the affidavit in support of the application. Being
of this view, he opined that the order dated 27.7.2006 did not
require to be interfered with. He further observed that as no          H
    1064     SUPREME COURT REPORTS                   [2013) 17 S.C.R.


A   provision of law had been shown under which the proposed
    defendants to the suit were required to be heard before leave
    was granted under Section 446 of the 1956 Act. He also took
    note of the fact that the official liquidator in the earlier
    proceedings had made a statement to the court that the suit
a   premises were not required by the liquidator for effective
    management of the winding up proceedings and the order was
    passed without prejudice to the rig!its and contentions of the
    official liquidator and further it was observed that it would be
    open for the official liquidator to raise ail such co:i;·o;;:liors as
c   permissible in law. The learned Company Judge also took note
    of the fact that the tenancy right of the company had not been
    disputed by the plaintiff anc1 no decree could be passed without
    a full-fledged trial in the suit. Being of this view, he dismissed
    the application.
D      8. The said order came to be assailed in appeal No. 779
  of 2006 before the Division Bench which by order dated
  7.11.2006, upon adumbration of all the facts and delineation
  of the impugned orders, set aside the orders dated 27.7.2006
  and 28 9.2006 as the learned Company Judge had not kept
E himself alive to Rule 117 of the Companies (Court) Rules, 1959
  which envisages that an application under Section 446(1) for
  leave of the Court to commence or continue in suit or
  proceedings against the company shall be made upon notice
  to the official liquidator and the parties to the suit or
F proceerJings sought to be commenced or continued and,
  accordingly, remitted the matter to the learned Company Judge
  to hear and decid& the application afresh in accordance with
  law after affording opportunity to the sub-tenant also.

         9. After the remit, the learned Company Judge vide order
G
    dated 5.3.2007, adverting to the submissions raised at the bar,
    came to hold that the objection as regards the maintainability
    of the application raised by the counsel on behalf of the sub-
    tenant that failure to obtain leave prior to institution of the suit
    would debar the court from granting leave was devoid of any
H
ERACH BOMAN KHAVAR v. TU KARAM SHRIDHAR 1065
         BHAT [DIPAK MISRA, J.)
substance; that the contention to the effect that the order          A
passed on 23.2.2006 debarred the applicant from moving and
prosecuting another application for grant of leave to file a fresh
suit under Section 41 of the Presidency Small Causes Court
Act being hit by principle analogous to doctrine of res judicata
was untenable inasmuch as on an earlier occasion the question        B
of grant of leave had not been decided on merits and further
liberty was reserved in favour of the applicant to apply; that the
object behind Section 446 of the 1956 Act is to save the
company which is being wound up from unnecessary litigation
and to protect the assets for equitable distribution among its
                                                                     c
creditors and shareholders and the court, while dealing with
the question of grant of leave has to necessarily consider the
interest of the company and ordinarily leave should be granted
where the question at issue in such a situation cannot be gone
into and decided in the winding up proceedings as in the case
                                                                     D
at hand, the tenancy rights of the company in the tenanted
 premises are not the assets for the purpose of liquidation
 proceedings and merely because the company is in liquidation
and liquidator has been appointed, the rights of the company
vis-a-vis the landlord or tenants did not go through any change;
 and that the official liquidator had no objection for releasing     E
 the premises in favour of the landlord and as the sub-tenant
 was the only contesting party, and accordingly granted leave.
 Be it noted, the learned Company Judge while granting leave
 has opined thus: -
                                                                     F
      "The issues involved in the suit and the reliefs claimed
      cannot be adjudicated upon or decided by this Court in
     exercise of company jurisdiction. That jurisdiction shall
     be with the court trying the suit. The interest of the
     company in liquidation is not at all involved in the said       G
     suit as already recorded hereinabove for the reasons
     stated. Therefore, the question of invocation of
     jurisdiction of the Small Causes Court either under
      Section 28 of the Bombay Rent Act or under Section 33
      of the Maharashtra Rent Act or under Section 41 of the
                                                                     H
    1066    SUPREME COURT REPORTS               [2013) 17 S.C.R.


A       Presidenc;.y Small Causes Court Act is not relevant for
         the purpose of grant of leave because the question of
        jurisdiction of the court will have to be decided on the
        basis of the plaint pleadings.

        The small Causes Court would be well within its right to
B
        decide its own jurisdiction. In the event; it comes to the
        conclusion that it has no jurisdiction to try a suit under
        the Presidency Small Causes Court Act, in that event, it
        would be open for that Court either to return or reject the
        plaint or permit the conversion of the suit. All these
c       conflicting questions need not be gone into and
        adjudicated upon by this Court at the stage of grant of
        leave. Only this Court has to consider that the suit is no(
        a frivolous suit, that the suit is not such which is bound
        to fail for the reasons apparent on the face of the record
D       and the same is not going to create strain on the
        resources of the Official Liquidator. At any stage the
        question raised in the suit is arguable one. "

        [Underlining is ours)
E
        10. The legal substantiality of the aforesaid order was
   challenged in Appeal no. 262 of 2007 and before the Division
   Bench it was contended that the application for grant of leave
   had already been disposed by refusing it vide order dated
   23.2.2006 and granting permission to file an application for
F amendment in the plaint in the Small Causes Court and the
   concession given by the appellant not to oppose the same was
  ·not availed of and hence, a second application seeking grant
   of the same relief was not maintainable. It was further urged
   that TER Suit No. 1111127 of 2006, the second suit, was
G instituted pursuant to leave granted by the learned Company
   Judge vide order dated 27.7.2006 which was revoked by order
   of the Division Bench in appeal and, therefore, the learned
   Company Judge could not have granted leave to continue the
   said suit. The grant of leave by the learned Company Judge
H was criticized further on the ground that the earlier order dated
                                                                      I
  ERACH BOMAN KHAVAR v. TUKARAM SHRIDHAR 1067
           BHAT [DIPAK MISRA, J.]

23.3.2006 was only for the limited purpose for seeking                   A
clarification of the order and not for filing a fresh application
seeking grant of leave. The aforesaid submissions were
resisted by the present appellant on many a score including the
interpretation of the earlier order and how it would not operate
as res judicata.                                                         B

       11. The Division Bench placed reliance on Arjun Singh
 v. Mahindra Kumar and others' and came to hold that when
 the second application for leave was filed, there was no change
  in the circumstances and in the absence of any changed
 circumstances, the second application for leave was not                 C
  maintainable as it was barred by principles of res judicata
  being a successive application in the same court on self-same
 facts. It was further opined that it is open to the appellant to file
  an application for review or to file an appeal against the. S<!.id
  order and as long as the said order remained alive, a fresh            D
  application could not have been entertained by the learned
  Company Judge. To interpret the term "grant of .liberty" the
  Division Bench held that on the basis of the grant of liberty the
  case could not have been reopened. For the said conclusion
  reliance was placed on Kewal Chand Mimani v. S.K. Sen and              E
   others 2 • The Division Bench, however, clarifi'ed that the
· respondent No. 3 therein would be entitled to make an
   application for grant of leave for instituting a fresh suit after
  taking recourse to such remedy for annulment of the order dated
   23.2.2006 passed in Company Application No. 45 of 2006.               F

      12. We have heard Mr. Shyam Divan, learned senior
 counsel appearing for the appellant and Mr. Shekhar Naphade,
 learned senior counsel appearing for the respondents.

      13. The central issues that seems to be cemented by the            G
 verdict of the Division Bench are that the order dated 23.2.2006


 1.   AIR 1964 SC 993.
 2.   c2001) a sec s12.
    1068     SUPREME COURT REPORTS                 (2013] 17 S.C.R.


A   passed by the learned single Judge in Company Application
    No. 45 of 2006 in Company Petition No. 201 of 1994 operates
    as res judicata debarring the appellant to file an application for
    grant of leave and further the observation "liberty to applicant
    to apply'' does not enable the appellant to get out from that legal
s   labyrinth because it does not confer a right on a party to re-
    agitate the matter.

        14. To appreciate the heart of the controversy, it is
    necessary to reproduce the order dated 23.2.2006 in entirety:-

c        "Leave to amend the title in respect of Respondent No.
         2 to read "The Official Liquidator of Mis. Poysha
         Industrial Company Limited". Amendment to be carried
         out within two weeks from today.

D        2. Mr. Thakkar, the learned Senior Counsel appearirig
         on behalf of Respondent No. 3 states that in the event
         of the Petitioner making an Application for amendment
         of the plaint in R.A.E. suit No. 2281336 of 2001 on the
         basis of the averments made in the present Judges
         Summons, Respondent No. 3 will not oppose the same.
E
         In view thereof, it is not necessary to grant the present
         Judges' Summons.

         3. Liberty to the Applicants to apply, if necessary. The
         amendment, if granted, will however be subject to the
F        rights and contentions of Respondent No. 3 on merits. "

       15. Criticizing the analysis and the conclusion of the
  Division Bench Mr. Shyam Divan, learned senior counsel for
  the appellant, has submitted that the said order goes against
G the spirit of Section 446 of the 1956 Act and further it would
  not remotely attract the doctrine of res judicata in its conceptual
  essentiality, for none of the ingredients on which the edifice of
  the said principle is built are attracted to the facts of the case.
  It is his further submission that when there had been no
H
 ERACH BOMAN KHAVAR v. TUKARAM SHRIDHAR 1069
          BHAT [DIPAK MISRA, J.]

adjudication on merits by the learned Company Judge with               A
regard to grant or refusal of leave on earlier occasion, the
principles set out in the case of Arjun Singh (supra) would not
be attracted. That apart, contends Mr. Divan, that the words
"liberty to the applicants to apply, if necessary" are to be
contextually understood and regard being had to the backdrop           B
of the. application and the delineation by the learned Company
Judge and rrorto be put in a straight-jacket formula and, in any
case, the decision in Kewal Chand Mimani (supra) is not
applicable.
                                                                       c
       16. Mr. Nephade, learned senior counsel for the
 respondents, per contra, would contend with emphasis that the
 order dated 23.2.2006 has been appositely understood by the
 Division Bench and it has justifiably been held to operate as
 res judicata debarring a party from filing a successive
 application on self-same facts and hence, no fault can be found       D
 with the decision rendered in appeal. He would further submit
 that the learned Judges of the Division Bench have correctly
 understood the observation of the learned Company Judge
 "liberty to applicant to apply" and in law, no benefit did accrue
 to the appellant to file another application in the said              E
  proceeding for grant of leave. That apart, the appellant chose
  not to file amendment in the pending suit which was conceded
  not to be opposed by the respondents but, on some pretext or
  other he filed another application for grant of leave to institute
  a suit under another enactment and, therefore, the Division          F
  Bench has rightly unsettled and dislodged the order passed by
. the learned Company Judge.

    17. To appreciate. the submissions in their proper
perspective, we may refer to Section 446 of the 1956 Act which         G
reads as follows: -

     "446. Suits stayed on winding up order. - (1) When a
     Winding up order has been made or the Official Liquidator
     has been appointed as provisional liquidator, no suit or
                                                                       H
    1070         SUPREME COURT REPORTS               [2013) 17 S.C.R.


A        other legal proceeding shall be commenced, or if
         pending at the date of the winding up order, shall be
         proceeded with, against the company, except by leave
         of the Tribunal and subject to such terms as the Tribunal
       · may impose.
B
        (2) Tribunal shall, notwithstanding anything contained in
        any other law for the time being in force, have jurisdiction
        to entertain, or dispose of- ·

           (a)     any suit or proceeding by or against the company;
c
           (b)     any craim made by or against the company
                   (including claims by or against any of its branches
                   in India);

           (c)     any application made under section 391 by or in
D                  respect of the company;                         -

           (d)      any question of priorities or any other question
                    whatsoever, whether of law or fact, which may relate
                  . to or rise in course of the winding up of the
E                   company,

        whether such suit or proceeding has been instituted or
        is instituted or such claim or question has arisen or arises
        or such application has been made or is made before
        or after the order for the winding up of the company, or
F
        before or after the commencement -of the Companies
        (Amendment) Act, 1960 (65 of 1960).

        3. (omitted by Act 11 of 2003, sec. 6!)
G       4. Nothing in sub-section (1) or sub-section (3) shall
        apply to any proceeding pending in appeal before the
        Supreme Court or a High Court."
                          .
       18. Reflecting on the said provision, this Court in Central
    Bank of India v. Mis. Elmot Engineering Company and
H
  ERACH BOMAN KHAVAR v. TUKARAM SHRIDHAR 1071
           BHAT [DIPAK MISRA, J.]
 others" has ruled that it aims at safeguarding the assets of a       A
 company in winding up against wasteful or expensive litigation
 as far as matters which could be expeditiously and cheaply
 decided by the company court are concerned. In granting leave
 under the said provision, the court always takes into
 consideration whether the company is likely to be exposed to         B
 unnecessary litigation and cost.

      19. In Ammonia Supplies Corp·oration (P) Ltd. v. Modern
 Plastic Containers Pvt. Ltd. and others• , while dealing with
 power under Section 446(1) of the 1956 Act, it has been
 observed that in the said sub-section the words used would           c
 indicate that the discre.tion to exercise such power is with the
 company court.

         20. In State of J&K v. UCO Bank and others 5 , while
  interpreting Section 446(1) of the 1956 Act, the Court opi!Jed      D
· that a suit cannot be instituted once a winding-up order is
  passed except by !eave of the court. The two-Judge Bench
  referred to the earlier decision rendered in Bansidhar
  Shankarlal v. ·Mohd. lbrahim 6 , wherein the leave had been
  obtained at the time of filing of the suit and the question was     E
  whether fres~ leave ought to be obtained before proceeding
  under Section 446(1) of the 1956 Act before institution of
  execution proceedings. The Court considered the contrary
  views expressed by different High Courts on the effect and
   purport of Section 446(1) of the 1956 Act and came to the
                                                                      F
  conclusion that the view that failure to. obtain leave prior to
   institution of suit would not debar the court from granting such
   leave subsequently and.that the only consequence of the same
   would be that the proceedings'Would be regarded as having
   been instituted on the date on which the leave was obtained
   from the High Court.                                               G

 3.   (1994) 4 SCC' 159.
 4.   (1998) 1 sec 105.
 5. ·(2oosi 10 sec 331.
 e. (1970) 3 sec 900.                                                 H
     1072      SUPREME COURT REPORTS              [2013] 17 S.C.R.

A       21. We have referred to the aforesaid decisions solely for
  the two purposes. First, grant of leave of the court is not a
  condition precedent for initiation of a civil action or the legal
  proceedings. It is because the Section does not expressly
  provide for annulment of a proceeding that is undertaken
B without the leave of the court. There can be no shadow of doubt
  that leave of the winding up court can be obtained even after
  initiation of the proceeding. The second, the seminal object
  behind engrafting of the said provision is to see that the interest
  of the company is safeguarded so that it does not face
C deprivation of its right and claims are adjudicated without the
  knowledge of the company court and further the court has a
  discretion to see whether !eave should be granted and, if so,
  with what conditions or no condition. That apart, the court me1y
  grant leave if it felt that the company should not enter into
  unnecessary litigation and incur avoidable expenditure.
D
        22. In the case at hand, the official liquidator had clearly
  stated that the suit property was not the property of the company
  and, therefore, the company should not enter into that kind of
  litigation. The learned Company Judge has taken note of it and
E further granting all protection to the official liquidator, has
  allowed the application for seeking leave. However, as is seen,
  the Division Bench had dislodged the order of the learned
  single Judge solely on the ground that the earlier order dated
  23.2.2006 stared at the face of the appellant and operates as
F res judicata.

         23. Presently we shall address to the issue whether the
     order which has been construed operating as res judicata by
     the Division Bench, does really come within the ambit and
     sweep of the principles of res judicata or not.
G.
        24. In Satyadhyan Ghosal and others v. Smt. Deorajin
     Debi and another', a three-Judge Bench adverted to the


H    7.   AIR 1960 SC 941.
 ERACH BOMAN KHAVAR v. TUKARAM SHRIDHAR 1073
          BHAT [DIPAK MISRA, J.]

principle of res judicata and its application as between two A
stages in the same litigation and opined that when a Court at
an earlier stage decided the matter in one way will not allow
the parties to re-agitate the matter again at a subsequent stage
of the same proceeding. The facts in the said case are that the
appellant-landlord who had obtained a decree for ejectment B
against the tenant had not yet been able to get possession in
execution of the decree. The decree was obtained on February
10, 1949 and soon thereafter the Calcutta Thika Tenancy Act,
1949 came on the statute book on March 3, 1949. The tenants
made an application under Order IX, Rule 13 of the Code of      c
Civil Procedure for setting aside the decree. The said
application was dismissed on July-16, 1949. On 9.9.1949, an
application was made by:fhe tenant under Section 28 of the
Calcutta Thika Tenancy Act alleging that they were Thika
tenants and hence, the decree made against them may be 0
rescinded. After contest, the learned Munsif came to hold that
applicants were not Thika tenants within the meaning of Thika
Tenancy Act and accordingly declined to rescind the decree.
The aforesaid order was challenged in a revision under Section
 115 of the Code of Civil Procedure. At the time when the E
 revision application was taken up for hearing, the Calcutta Thika
 Tenancy Ordinance had come into force op October 21, 1952
 and thereafter the Calcutta Thika Tenancy (Amendment) Act,
 1953 came into force. The Amendment Act omitted Section 28
 of the original Act. In order to decide whether the application
 under Section 28 was still alive, the High Court had to consider F
 the effect of Section 1 (2) of the Amendment Act. The learned
 Single Judge on interpretation of the provisions cameto hold
 that Section 1(2) of the Amendment Act did not affect the
 operation of Section 28 of the original Act to the proceeding
 and on that basis disposed of the application holding that G
 Section 28 was applicable. The High Court had also held that ·
 in view of the amended provision of Section 28 of the Thika
 Act and the Ordinance which was recorded by the learned
 Munsif, the revisionists before the High Court were Thika
 tenants. Being of this view, he allowed the revision and set H
    1074    SUPREME COURT REPORTS                [2013) 17 S.C.R.


A aside the order of the Munsif by which he dismissed the
  application under Section 28 and remanded the case to the
  Court of Munsif for disposal in accordance with law. After the
  remand, the Munsif rescinded the decree. The landlord
  preferred a revision under Section 115 of the Code of Civil
B Procedure contending that Section 28 of the Act was not
  applicable but the said submission was repelled by the learned
  Single Judge holding that the said issue having been decided
  earlier was res judicata between the parties. The said order
  passed in the revision was the subject matter of appeal before
c this Court by special leave. This Court stated the principle of
  res judicata which is based on the need of giving finality to
  judicial decisiors. The learned Judges opined once a res is
  judicata, it shall not be adjudged again and it primarily applies
  between past litigations and future litigations. Further
D elucidating it was stated that when in a matter - whether a
  question of fact or a question of law had been decided between
  the parities in one suit or proceeding and the decision is final,
  either because of an appeal was taken to a higher court or an
  appeal was dismissed, or when no appeal lies, neither party
E will be allowed in a future suit or proceeding between the same
  parties to canvass the matter again. In that context, the Court
  addressed the applicability of the principle of res judicata
  between two stages in the same litigation and, eventually, ruled
  thus:-

F       "The principle of res judicata applies also as between two
        stages in the same litigation to this extent that a court,
        whether the trial court or a higher court having at an
        earlier stage decided a matter in one way will not allow
        the parties to re-agitate the matter again at a subsequent
G       stage of the same proceedings."

         25. After discussing the law in the field it was ruled that
    there was no reason to hold that the appellant was precluded
    from raising before this Court the question about the
    applicability of Section 28 of the 1953 Act merely because he
H
 ERACH BOMAN KHAVAR v. TUKARAM SHRIDHAR 1075
          BHAT [DIPAK MISRA, J.]

had not appealed from the High Court's order of remand, taking      A
the view against him the Section was applicable.

    26. In the case of Arjun Singh (supra) the defendant had
approached this Court as his application under Order IX Rule
13 of the Code to set aside an ex parte decree passed against
                                                                    B
him had been dismissed as barred by res judicata. The
question that basically arose before this Court was when an
application is made under Order IX Rule 7 of the Code and the
Court considers that there is not any good cause for the
previous non-appearance and proceeds further with the suits
and ultimately results in an ex parte decree, can a court in        c
dealing with applications to set aside the ex parte decree under
Order IX Rule 13 reconsider the question as to whether the
defendant had a sufficient cause for non-appearance on the day
in regard to which the application under Order IX Rule 7 had
been filed. The Court referred 'to the decision in Satyadhyan       D
Ghosal (supra) and quoted a passage from the said decision
and thereafter took note of two submissions advanced by the
learned counsel for the respondents therein which were to the
effect that (1) an issue of fact or law decided even in an
interlocutory proceeding could operate as res judicata in a later   E
 proceeding, and (2) in order to attract the principle of res
judic<1ta the order or decision first rendered and which is
 pleaded as res judicata need not be capable of being appealed
 against. Dealing with the same the Court observed thus: -
                                                                    F
     'We agree that generally speaking these propositions are
     not open to objection. If the court which rendered the first
     decision was competent to entertain the suit or other
     proceeding, and had therefore competency to decide the
     issue or matter, the circumstance that it is a tribunal of
     exclusive jurisdiction or one from whose decision no           G
     appeal lay would not by themselves negative the finding
     on the issue by it being res judicata in later proceedings.
     Similariy, as stated already, though S. 11 of the Civil
     Procedure Code clearly contemplates the existence of
                                                                    H
    1076    SUPREME COURT REPORTS                (2013] 17 S.C.R.


A       two suits and the findings in the first being res judicata
        in the later suit, it is well established that the principle
        underlying it is equally applicable to the case of
        decisions rendered at successive stages of the same suit
        or proceeding. But where the principle of res judicata is
B       invoked in the case of the different stages of proceedings
        in the same suit, the nature of the proceedings, the scope
        of the enquiry which the adjectival law provides for the
        decision being reached, as well as the specific provisions
        made on matters touching such decision are some of the
        material and relevant factors to be considered before the
c       principle is held applicable."

        27. After so stating the three-Judge Bench proceeded to
  deal with different kinds of interlocutory orders and, in that
  context, observed that interlocutory orders are of various kinds;
D some like orders of stay, injunction or receiver are designed
  to preserve the status quo pending the litigation and to ensure
  that the ·parties might not be prejudiced by the normal delay
  which the proceedings before the court usually take. They do
  not, in that sense, decide in any manner the merits of the
E controversy in issue in the suit and do not, of course, put an
  end to it even in part. Such orders are certainly capable of being
  altered or varied by subsequent applications for the same
  relief, though normally only on proof of new facts or new
  situations which subsequently emerge. As they do not impinge
F upon the legal rights of parties to the litigation the principle of
  res judicata does not apply to the findings on which these
  orders are based, though if applications were made for relief I
  on the same basis after the same has once been disposed of
  the court would be justified in rejecting the same as an abuse
G of the process of Court. There are other orders which are also
  interlocutory, but would fall into a different category. These are
  not directed to preserve the property pending the final
  adjudication, but are designed to ensure the just, smooth,
  orderly and expeditious disposal of the suit. They are

H
 ERACH BOMAN KHAVAR v. TUKARAM SHRIDHAR 1077
          BHAT [DIPAK MISRA, J.]

interlocutory in the sense that they do not decide any matter in     A
issue arising in the suit, nor put an end to the litigation.

      28. In Prahlad Singh v. Col. Sukhdev Singh" an ex-parte
decree passed in a petition for eviction based on ground of
default in payment of rent was set aside on the finding that the     B
landlord had agreed to withdraw the petition and accept rent
from the tenant. After the decree was set aside the petition for
eviction was once again ordered on the ground of default of
payment of rent for the same period. The submission of the
tenant that the eviction petition could not be allowed to continue   C
and deserved to be dismissed on the finding of the court in the
proceeding for setting aside the ex parte order was negatived
by the High Court on the ground that those findings were made
in the context of setting aside the ex parte order and not in the
context of deciding the main petition for eviction. This Court, in
appeal by special leave preferred by the tenant, observed that       D
the view of the High Court was not right, for the decision given
by a court at earlier stage of a case is binding at a later stage
and for the said purpose reliance was placed on the
 pronouncement in Satyadhyan Ghosal (supra). While
 dislodging the order of the High Court this Court stated thus: -    E
      "In the present case, in the proceeding to be set aside
      an ex parte order, the Court recorded an express finding
      that the landlord had agreed to withdraw the suit and
      receive the rent from the tenant. That was a finding which     F
      was binding on the landlord at later stages of the
      proceeding. He could have questioned the finding before
      the appellate authority and the High Court in the appeals
      preferred by the tenant. He did not choose to do so. In
      fact he could not do so as he had earlier thought it           G
      prudent not to enter the witness box though he put the
      question in issue in the proceeding to set aside the ex
      parte order by contesting the statement of the tenant."


8.   AIR 1987 SC 1145.                                               H
    1078      SUPREME COURT REPORTS              [2013] 17 S.C.R.


A         29. We have referred to the said decision for the purpose
    that the Court to.ck note of the express finding recorded by the
    trial court while passing the ex parte decree. There was an
    expression of an opinion.

B        30. In C. V. Rajendran and another v. N.M. Muhammed
    Kunht~ the question arose for consideration whether the order
  of remand passed by the Rent Control Appellate Authority,
   Payyannur, dated November 25, 1988, holding that the second
  eviction petition (R.C.P. No. 13/87) filed by the respondent
  against the appellants under sub-section (3) of Section 11 of
C the Kerala Buildings (Lease and Rent Control) Act, 1965, is not
  barred by Section 15 of the Act, can be permitted to re-agitate
  in a proceeding arising from the order passed by the Rent
  Controller pursuant to the order of remand. Be it noted, in the
   said case, learned Rent Controller had declined to grant relief
D to the respondent on the ground that under Section 15(3) of the
  Act the eviction petition was not maintainable. On appeal being
  preferred the appellate authority remanded the matter to the
   Rent Controller for fresh disposal. After remand, the Rent
  Controller found that the need of the respondent was bona fide
E and alternative accommodation in the area was available and,
   accordingly, allowed the eviction petition. The same was
   affirmed by the Rent Control Appellate Authority. On a civil
   revision being preferred the High Court opined that the earlier
   order of the appellate authority holding that Section 15 of the
F Act does not bar the eviction proceeding against the tenant,
   had become final and could not be re-agitated. However, the
   High Court recorded a finding that Section 15 of the Act did
   not bar the S! •bsequent eviction petition and being of that view
   dismissed the revision petition. A contention was raised before
G this Court that order passed by the appellate authority holding
  .that the eviction petition was maintainable and Section 15 of
   the Act was not a bar, does not operate as res judicata. In that
   context, this Court observed as follows: -

H   9.   AIR 2003 SC 649.
 ERACH BOMAN KHAVAR v. TUKARAM SHRIDHAR 1079
          BHAT [DIPAK MISRA, J.]

    "In the light of the above discussion we hold that as the       A
    question whether S. 15 of the Act bars the present eviction
    petition, was decided against the appellants by the
    appellate authority ·at the earlier stage of the suit and it
    was allowed to become final, it is not open to the
    appellants to reagitate the same at the subsequent stage        B
    of the suit. Jn this view of the matter, we do not find any
    illegality in the order under appeal to warrant any
    interference. "

     31. From the aforesaid decision it is clear that this Court
concurred with the view of the High Court as a finding was          C
returned that the proceeding was not barred by Section 15 of
the Kerala Buildings (Lease and Rent Control) Act, 1965 and
thereafter the matter was remanded by the appellate court.
Thus, on earlier occasion there was an expression of an
opinion. In this context, we may fruitfully reproduce a passage     D
from Arukkani Ammal v. Guruswamy10 : -

    "It is also difficult to appreciate the view taken by the
    District Munsif that ex parte decree cannot be considered
    to be 'full decree on merits'. A decree which is passed         E
    ex parte is as good and effective as a c;Jecree passed after
    contest. Before the ex parte decree is passed, the court
    has to hold that the averments in the plaint and the claim
    in the suit have been proved. It is, therefore, difficult to
    endorse the observation made by the Principal District          F
    Munsif that such a decree cannot be considered to be a
    decree passed on merits. It is undoubtedly a decree
    which is passed without contest; but it is only after the
    merits of the claim of the plaintiff have been proved to
    the satisfaction of the trial court, that an occasion to pass   G
    an ex parte decree can arise. "

     32. The aforesaid passage was approved by this Court


10. (1987) 100 LW 707.
                                                                    H
    1080     SUPREME COURT REPORTS                 [2013) 17 S.C.R.

A   in Saroja v. Chinnusamy (Dead) by LRs and another". The
    purpose of citing the said authority is that though an ex parte
    decree is passed without contest but it is passed only after the
    merits of the claim of the plaintiff have been proved to the
    satisfaction of the trial court.
B
        33. In this regard, the pronouncement in Y.B. Patil and
  others v. Y.L. Pati/1 2 is worth referring to. In that case the High
  Court in the writ petition preferred on earlier point of time had
  recorded a finding and gave directions to the tribunal not to
C reopen the question of fact in revision and the tribunal complied
  with those directions of the High Court. This Court opined that
  the appellants therein were bound by the judgment of the High
  Court and ii was not open to them to go behind the judgment
  earlier passed by the High Court as they had not preferred any
  appeal against the said judgment and it had attained finality.
D The Court observed that it is well settled that principle of res
  judicata can be invoked not only in separate subsequent.
  proceedings, they also got attracted in subsequent stage of the
  same proceeding. The aforesaid decision has noted the fact
  that in the earlier writ petition the High Court has clearly stated
E that the tribunal shall not reopen the question of fact in revision.
  It is manifest that, this Court has taken note of the fact that there
  was an expression of opinion by the High Court that facts need
  not be adverted to again by the tribunal and that attracted the
  principle of res judicata.
F
        34. From the aforesaid authorities it is clear as crystal that
  to attract the doctrine of res jud.icata it must be manifest that
  there has been conscious adjudication of an issue. A plea of
  re,s judicata cannot be taken aid of unless there is an
G expression of an opinion on the merits. It is well settled in law
  that principle of res judicata is applicable between the two



    11. (2007) a sec 329.
H   12. (1976) 4 sec 66.
 ERACH BOMAN KHAVAR v. TUKARAM SHRIDHAR 1081
          BHAT [DIPAK MISRA, J.]

stages of the same litigation but the question or issue involved A
must have been decided at earlier stage of the same litigation.
In the case at hand, as the order dated 23.2.2006 would show
that a statement was made by the counsel for the third
respondent that in the event of the petitioner's making an
application for amendment of the plaint in the pending suit on B
the basis of the averments made in the summons issued, he
would not oppose the same. The learned Company Judge
recorded the same and opined that it is not necessary to grant
the present Judge's Summons. Thereafter, the learned
Company Judge has observed "liberty to applicant to apply, if c
necessary". The Division Bench, after relying on the decision
in Kewal Chand Mimani's case, has opined that grant of liberty
is adopted by the court to obliterate any confusion or any
difficulty being experienced in the matter but the said grant of
liberty does not confer any right on the party to agitate the D
matter further nor does it confer any jurisdiction on the court to
further probe the correctness of the decision arrived at. To
 appreciate the correctness of the said conclusion it is
 imperative to appreciate the verdict in Kewal Chand Mimani
 (supra). In the said case, an appeal was preferred against an
 order passed by the learned single Judge in the writ petition.
                                                                   E
 The appeal was heard from time to time and the hearing was
 concluded but before the judgment could be pronounced, one
 of the Judges hearing the appeal was transferred as a
 consequence of which the judgment could not be pronounced.
 At that stage, the respondents 7 to 10, after expiry of about 9 F
 years, filed an application for being transposed as appellants
 to conduct the pending appeal and the Division Bench allowed
 the application for transposition, however, stating that the said
 transposition was without prejudice to the rights of the
 complainant to contest the appeal as appellant. Subsequently, G
 the appeal was reheard by a reconstituted Division Bench of
 the High Court and the judgment was reserved by the Bench.
  During the pendency of the pronouncement of the judgment the
  appellant therein moved this Court under Article 136 against
                                                                  H
    1082    SUPREME COURT REPORTS                 (2013] 17 S.C.R.

A   the order of transposition and this Court had passed an order
    to the following effect: -

        "The order against which the SLP has been filed is an
        order on transposition as appellants. The order itself
B       indicates that the petitioners are at liberty to raise all the
        objections. We see that even including the transposition
        and their right to contest in the capacity as appellants a/so
        is left open.

        The petitioners are at liberty to have the matter
c       adjudicated."

       35. Thereafter, the High Court decided the appeal by
  delivering a judgment on 21.5.1997. A direction was issued to
  the State Government and the Municipal Corporation to restore :
o the possession of the property to the owner and/or the occupier,
  as the case may be, within seven days from the date of the
  judgment. However, the Division Bench had stated "liberty to
  mention" the matter. Shortly thereafter, the matter was taken up
  by the concerned Collector to which certain objections were
E raised. In the said case, as the factual matrix would unfurl, on
  23.5.1997 the matter was mentioned before the Appellate
  Bench by the learned advocate for the State arguing for
  extension of time for making over possession in terms of the
  order and the High Court thereupon extended the time.
  However, it directed the matter to appear on a particular day.
F Subsequently, a formal application was filed by the owners for
  a direction to restore the possession of the premises in
  question to the owners as the appellants, as alleged, were not
  the owners. It was on the state of facts the second judgment
  was pronounced by the Appellate Bench which directed making
G over of pos 3ession to the owners without prejudice to the rights
  and contentions of the parties and without prejudice to the rights
  of the lessee to file a suit for appropriate proceedings for
  recovery or otherwise and/or to enforce an agreement for
  purchase of the properties in accordance with law. The High
H Court allowed 48 hours time from the date of the
                                                                     I
 ERACH BOMAN KHAVAR v. TUKARAM SHRIDHAR 1083
          BHAT [DIPAK MISRA, J.]

communication of the order and by reason wherefor a notice          A
was sent to the owners requiring them to be present to receive
the possession of the land. The Mimanis being grieved by the
said order moved this Court and maintenance of status quo
was directed without creation of any third party interest. The
Court, apart from other issues, addressed to the submission         B
as raised by the learned counsel for the appellants therein to
the effect of liberty granted to mention the matter after the
judgment was ·delivered. It was urged that by the judgment
directions were issued and it connoted a final disposal and
specifically determined the issue raised in the matter. It was      c
canvassed that when the High Court had recorded that though
many other points were argued and several case laws were
cited,. but it was not necessary for deciding those points.as the
appeal succeeded on the point of order of requisition not been
continued on the basis of a lapsed statute and the appeal got
                                                                    0
disposed of, shelter or aid could not have been taken to "liberty
to mention" for reopening the whole issue. In that context, this
 Court observed thus: -

     "Be it noted, however, that the words "liberty to mention"
     have been as a matter of fact a phraseology which did not E
     come through judicial process without any definite legal
     sanction for the purpose of clarification, if needed, but not
     otherwise. It is a legal process which has been evolved for
     convenience and for shortening the litigation so that the
     parties are not dragged into further and further course of F
     litigation, and it is in this context that the submissions of
     Mr. Gupta, that the Court has no jurisdiction to reopen the
     issue on the ground of availability of the legal phraseology
     of liberty to mention cannot be brushed aside. As noticed      r
     hereinbefore, the insertion of the above-noted legal G
     phraseology is to obliterate any confusion or any difficulty
     being experienced in th'ematter - it does not give the right
     anew to the party to agitat~13 matter further nor does it
     confer jurisdiction on the court itself to further probe the
     correctness of the decision arrived at: review of a judgment H
    1084     SUPREME COURT REPORTS                 [2013] 17 S.C.R.


A       cannot be had on the basis of this liberty. The
        circumstances under which review can be had are
        provided under Order 47 of the Code of Civil Procedure.
        In any event, law is well settled on this score that the power
        to review is not any inherent power and it must be
B       conferred by law either specifically or by necessary
        implication."

        36. After so stating the Court referred to the decision in
  State of U.P. v. Brahm Datt Sharma 13 wherein it has been held
  that when proceedings stand terminated by final disposal of writ
C petition it is not open to the court to reopen the proceedings
  by means of a miscellaneous application in respect of a matter
  which provided a fresh cause of action, for if the said principle
  is not followed, there would be confusion and chaos and the
  finality of the proceedings would cease to have any meaning.
D
        37. Coming to the case at hand, the Division Bench, after
  reproducing paragraph 19 of the judgment in Kewal Chand
  Mimani's case, held that the liberty granted by the learned
  single Judge to file an application was not maintainable, for the
E liberty granted by the learned single Judge cannot be used to
  seek from him orders which are contrary to his principal order
  rejecting the company application for grant of leave. On a
  studied scrutiny of the order passed by the learned single Judge
  on 23.2.2006, we find that the Division Bench has committed
F three fundamental errors, namely (i) that the learned single
  Judge had rejected the application; (ii) that liberty granted could
  only mean the parties to seek further direction pursuant to the
  said order; and (iii) that the liberty granted by the learned single
  Judge could not be used to seek from him any relief which is
G contrary to the main order.

         38. It is clear to us that the learned single Judge had not
    dealt with the application for grant of leave on merits; that the


H   13. (1987) 2 sec 119
 ERACH BOMAN KHAVAR v. TUKARAM SHRIDHAR 1085
          BHAT [DIPAK MISRA, J.)

application was disposed of on the basis of a submission A
made by the third respondent that if an application for
amendment is filed in the pending suit, he would not oppose
the same; that the learned Company Judge on the basis of the
statement recorded that it was not necessary to grant the
present Judge's Summons; and that liberty was granted to the B
applicant to apply if necessary. The Division Bench, we are
disposed to think, has erroneously opined that the learned
single Judge in the main.part of the order having rejected the
application could not have granted liberty to apply for filing of
another application. As we notice, the Division Bench has not      c
appositely appreciated the ratio laid down in Kewal Chand
Mimani (supra) wherein the High Court had pronounced a
judgment and, as a matter of practice, has stated "liberty to
mention" and in that context, this Court stated that that did not
confer jurisdiction on the High Court to dwell upon a different 0
issue in a disposed of case. In fact, in the said case the order
passed by this Court on earlier occasion has been reproduced
wherein liberty was granted to get the matter adjudicated which,
 in the context, simply conveyed that as the controversy relating
 to transposition therein was pending before the High Court and
                                                                     E
 the order indicated that the applicants were at liberty to raise
 all objections including the transposition and the right to contest
 in the capacity as appellants. When this Court said "liberty was
 granted to get the matter adjudicated", it meant that it was open
 to the petitioner in the SLP to raise all contentions before the
 High Court as the High Court itself had granted liberty in the F
 order which was the subject-matter of challenge and the matter
 was sub-judice. We are only analyzing on this score to highlight
 that words, namely, "grant of liberty" are to be understood,
 regard being had to the context in which they are used. Context
 is really material. Had the learned Company Judge adjudicated G
 the matter on merits, the matter would have been absolutely
 different.. He had, in fact, on the basis of a statement made by
 the learned counsel for the third respondent, had not dwelled
  upon the merits and, in that context, had granted liberty to
 applicant to apply, if necessary. It is eminently so because the H
    1086     SUPREME COURT REPORTS               [2013] 17 S.C.R.


A learned Judge has also stated "it is not necessary to grant the
  present Judge's Summons". Thus, the application for grant of
  leave was really not dealt with on merits and on the basis of a
  statement of respondent No. 3 the learned Company Judge
  opined that ii was not necessary for the present and in that
B context liberty was granted. The principles stated in Arjun Singh
  (supra), Satyadhyan Ghosal (supra) and the other authorities
  clearly spell out that principle of res judicata operates at the
  successive stages in the same litigation but, the basic
  foundation of res judicata rests on delineation of merits and ii
c has at least an expression of an opinion for rejection of an
  application. As is evident, there has been no advertence on
  merits and further the learned Company Judge has guardedly
  stated two facets, namely, "not necessary to grant present
  Judge's Summons" and "liberty to applicant to apply, if
D necessary". On a seemly reading of the order we have no
  shadow of doubt that the same could not have been treated to
  have· operated as res judicata as has been held by the Division
  Bench. Therefore, the irresistible conclusion is that the Division
  Bench has fallen into serious error in dislodging the order
E granting leave by the learned Company Judge to file a fresh
  suit.

       39. In view of the aforesaid analysis, we allow the appeal,
  set aside the order passed by the Division Bench and restore
  that of the learned Company Judge. The first respondent is
F directed to pay Rs.50,000/- to the appellant towards costs of
  the appeal.
    Rajendra Prasad                                   Appeal allowed.