Holding

The Small Causes Court's order does not operate as res judicata on the title issue because it neither had jurisdiction nor rendered a decree or judgment on that issue.

Summary

Rameshwar Dayal, claiming ownership of a house, had earlier obtained an eviction decree against tenant Habib and sub‑tenant Banda from a Small Causes Court. Banda later sued Dayal asserting title to the property and seeking a declaration that the earlier eviction decree was a nullity and an injunction against dispossession. The Supreme Court examined whether the Small Causes Court's decree could operate as res judicata on the title issue, whether the Small Causes Court had jurisdiction to decide title, and whether its order amounted to a decree under the CPC. The Court held that the Small Causes Court neither adjudicated the title issue nor complied with statutory requirements to state points for determination, so its order could not be a decree or res judicata. Consequently, the appeal by Dayal was dismissed.

Issues considered

The decree of the Small Causes Court is res judicata in a subsequent suit concerning title to the property.
The Small Causes Court had jurisdiction to determine the title to immovable property.
Whether the order of the Small Causes Court amounts to a decree and is binding under the CPC.
Whether the Small Causes Court was required to state points for determination and give findings as per the CPC and Provincial Small Causes Court Act.

Legislation cited

Code of Civil Procedure, 1908s. 2(14), s. 2(2), s. 2(9), s. Order XIV Rules 1, s. Order XIV Rules 3, s. Order XX Rules 4(1), s. Order XX Rules 5, s. Section 57
Provincial Small Causes Court Acts. 17(1), s. 23

Subjects

res judicatasmall causes courtjurisdictiontitle to propertydecreecivil procedureinjunctioneviction

Judgment

•
A RAMESHWAR DAYAL
v.
BANDA (DEAD) THROUGH HIS LRS. AND ANR.

JANUARY 13, 1993
B
[P.B. SAWANT AND G.N. RAY, JJ.]

Res Judicata-Suit on basis of title by sub-tenant for nullity of eviction
decree and injunction from dispossession-Decision binding inter. par-
ties-Held, to operate as res judicata, the first finding must be on issue which
C was directly and substantially, and not incidentally, in issue in that
suit-Decision of Small Causes Court not referring to issue, nor giving any
finding, cannot operate as res judicata--{!uestion of jurisdiction of Small
Causes Court to decide issue of title to property merely academic--Provincial
Small Causes Court Act, S.23.
D
Code of Civil Procedure, 1908-S.2(9), (2), (14), Order XX Rules 4(1)
and (5), Order XIV Rules 1 and 3-l'rovincial Small Causes Court Act
-S.17(i)-Held, to be binding order of the court disposing of suit must
amount to a decree-Held, further, in a controversy between the parties, 011/y
judgment could give rise to decree-Where point for determination of finding
E not even stated, it is not a judgment within S.2(9).

The appellant claimed to have let out the property in dispute as
owner in 1966. In 1974, he filed a suit for eviction of the tenant Habib and
the sub-tenant Banda, first respondent in this case. This suit was decreed
F against both Habib and Banda. With the respondent's application for
setting aside the eviction decree, and thereafter his revision petition being
dismissed, according .Ao the appellant the eviction dee""' against Habib
and the respondent became final on that date.

However, Banda filed the present suit on the basis of his title as
G owner of the property and claimed two reliefs : that the eviction decree was
a nullity, and for an injunction that the present appellant be restrained
from dispossessing him from the property. The Trial Court dismissed the
suit. On appeal the Civil Judge, District Mazalfarnagar decreed the suit.
A second appeal by the present appellant to the High Court was dis-
H missed.
198
-
RAMESHWAR DAYALv. BANDA 199

In the Supreme "court, the appellant contended that the decree A
passed by a court of competent jurisdiction could not be declared as not
binding on a person who was a party to the suit; and the view that the
judgment of the Small Causes Court did not operate as res judicata
between the parties because the Small Causes Court had no jurisdiction
to decide title to the suit property, is erroneous in law.
B
-~ Dismissing the appeal, this Court,

HELD : 1. The bar of the res judicata is not applicable to the
determination of the issue with regard to the title to the property in the
present suit. (p.9) [204E] C
To operate as res judicata the first finding must be on an issue which
has been directly and substantially in issue in the former suit. If the finding
given is incidentally while determining another issue which was directly and
substantially in issue, such finding cannot be said to be on an issue which was
directly and substantially in issue In the former suit.(p.10) [20SC] D
Gangabai w!o Rambi/as Gilda v. Chhabubai w/o Pukharajji Gandhi,
(1982] 1 SCR 1176, followed.

---4. The so-called decision of the Small Causes Court does not refer to
the present respondent or to the written statement filed by him where he E
had contended that he was the owner of the property and the suit was
decreed ex parte. [20SD]

Not only has the Small Causes Court not given any finding, it has not
even referred to the said issue in its so called decision. (pp.8 and 11) [20SD]
F
2. In order to be binding, the order of the court disposing of the suit
must amount to a decree. The definitions of decree, order and judgment
given in the Code show that decree or order as the case may be, can come
into existence only if there is an adjudication on the relevant issues, which
conclusively determines the rights of the parties. (pp.11 and 12)
G
[205D, 206A)

"Points for determination" in rule 4(1) are issues contemplated by
Rules 1 and 3 of Order XIV of the Code. Since the matters were in
controversy between the parties, it is only a judgment which could_ have
given rise to a decree. The decision of the Small Causes Court which has H
200 SUPREME COURT REPORTS (1993) 1 S.C.R.

A not stated the points for determination and given a finding thereon is not
a judgment with S.2(9) of the CPC.(p.13) [206G-H]

3. Under S.17(1) of the Provincial Small Causes Court Act also it was
obligatory for the Small Causes Court to state the points for determination
and give its finding or decision on each of the said points.(p.14) [2078]
B
4. Tue decision of the Small Causes Court is non est as far as the
respondent is concerned.(p.14) [207C]

Mohammed Fasi v. Abdul Qyayum, AIR 1978 Allahabad 470;
Alimuddin v. Mohammed Ishak, AIR 1974 Rajasthan 170; Ata Mohammed
C v. Ghera, AIR 1962 H.P. 17; Nongthombam Mani Singh v. Puyam Chand
Mohan Singh, AIR 1959 Manipur 14; Labhu Ram v. Moo/ Chand, AIR 1921
Lahore 91; Ganga Prasad v. Nandu Ram, AIR 1916 Patna 75; Smt. Qaisari
Begum v. Munney & Anr., (1981) 1 All India Rent Control Journal 549 and
Richpal Singh & Ors. v. Dalip, [1987] 4 SCC 410, referred to.
D CIVIL APPELLATE JURISDICTION : Civil Appeal No. 140 of
199_3.

From the Judgment and Order dated 23.7.1988 of the Allahabad
High Court in Second Appeal No. 1116 of 1986. ).._
E
Shanti Bhushan and Vijay K. Jain for the Appellant.

P.P. Rao and Shakil Ahmed for the Respondents.

The Judgment of the Court was delivered by
F SAWANT, J. Leave granted.

2. The appellant claimed to be the owner of 'Gher' (property in
dispute) in the town of Shameiii and in that capacity, according to him, be
had let out the property to one Habib as long ago as in 1966. He had filed
G suit No. 591/66 against Habib for recovery of rent and the suit was decreed.
According to the appellant, Habib sublet the property to one Banda. In
1974, the appellant filed a suit for eviction of both Habib and the sub-
tenant Banda in the Court of Small Causes. This suit was decreed against
both Habib and Banda.

H Thereafter, Banda, filed an application for setting aside the said
RAMESHWAR DAYAL v. BANDA [SAWANT, J.] 201

decree. His application was dismissed. The revision filed by him before the A
Additional District Judge was also dismissed on 26th September, 19n.
Thus, according to the appellant, the eviction decree against both Habib
and Banda became final on that date.

However, Banda filed the present suit on the basis of his title as the
owner of the property which has given rise to the present appeal. In the
suit, he claimed two reliefs, viz., that the decree passed by the Small Causes B
Court in Suit No. 45/1974 was a· nullity, and an injunction restraining the
defendant in the ·suit, namely, Rameshwar Dayal, the present appellant,
from dispossessing him of the property. The Trial Court dismissed the suit
on 7th May, 1979 by recording a finding that plaintiff Banda was not the
owner but it was the appellant before us, viz. Rameshwar Dayal who was
its owner. In support of its conclusion, the Trial Court relied on a C
registered rent deed dated 7th December, 1956 tlnder which the present
appellant had let out the property in dispute to some other tenant, earlier.

3. The judgment of the Trial Court was set aside in appeal by the
Civil Judge, District Muzaffarnagar by his decision dated 13th December,
1985 the effect of which was to decree the suit filed by the respondent D
Banda. The second appeal filed by the appellant was dismissed by the High
Court by the impugned order.

4. Two contentions were raised before us by Shri Shanti Bhushan,
the learned counsel appearing for the appellant. The first was that the
decree passed by a court of competent jurisdiction could not be declared
as not binding on a person who was a party to the suit, and the second was &
that .the view taken by the lower appellate court that the judgment of the
Small Causes Court did not operate as res judicata between the parties
because the Small Causes Court had no jurisdiction to decide the title to
the suit property, is erroneous in law.

5. In support of his contentions, Shri Shanti Bhushan relied upon
Mohammed Fasi v. Abdul Qyayum, AIR 1978 Allahabad 470; Alimuddin v. F
Mohammed Ishak, AIR 1974 Rajasthan 170; Ala Mohammad v. Ghera,
AIR 1%2 H.P. 17; Nongthombam Mani Singh v. Puyam Chand Mohan
.->-. Singh, AIR 1959 Manipur 14; Labhu Ram v. Moo/ Chand, AIR 1921
Lahore 91; Ganga Prasad v. Nandu Ram, AIR 1916 Patna 75 and Smt.
Qaisari Begum v. Munney & Anr., (1981) 1 All India Rent Control Journal
549 which is a decision of the Allahabad High Court. G
202 SUPREME COURT REPORTS (1993) 1 S.C.R.

A 6. As against the aforesaid decisions, the learned counsel Shri P.P.
Rao appearing for the respondent has relied upon two decisions, viz.,
Gangabai w/o Ram Bi/as Gilda v. Chhabubai w/o Pukharajji Gandh~ (1982)
1 SCR 1176 and Richpal Singh & Ors. v. Dalip, (1987) 4 SCC 410.

B 7. In order to appreciate ilic rival contentions, it is first necessary to
reproduce Section 23 of the Provincial Small Causes Court Act (hereinafter
referred to as the 'Act').

"23. Return of plaints in suits Involving questions of title. - (1)
Notwithstanding anything in the foregoing portion of this Act,
c when the right of a plaintiff and the relief claimed by him in a
Court of Small Causes depend upon the proof or disproof of
a title to immovable property or other title which such a Court
cannot finally determine, the Court may at any stage of the
proceedings return the plaint to be presented to a Court having
D jurisdiction to determine the title.

(2) When a Court returns a plaint under sub-section (1), it
shall comply with the provisions of the second paragraph of
section 57 of the Code of Civil Procedure and make such order
with respect to costs as it deems just, and the Court shall, for
E the purposes of the Indian Limitation Act, 1877, be deemed to
have been unable to entertain the suit by reason of a cause of
a nature like to that of defect of jurisdiction."

8. It is sought to be argued before us on the basis of the aforesaid
F provisions of Section 23, that it is not obligatory on the Small Causes Court
to refer the issue of title to immovable property to a Court having jurisdic-
tion to determine such title. The expression 'The Court may at any stage
of the proceedings ................... " suggests that an option is given to the Small
Causes Court to use its discretion whether it would proceed to decide the
G title itself or refer the question to the Court having jurisdiction to do so.
According to us, in the facts of the present case, it is not necessary to go
into that question since the decision of the Small Causes Court nowhere
indicates that the Court had used any such discretion, even assuming that
it is the discretion of the Court to refer or not the question, to the Court
of competent jurisdiction. ·The decision which is contained in two para-
H graphs only, reads as follows :
RAMESHWAR DAYAL v. BANDA [SAWANT, J.] 203

"This suit is for ejectment of the defendant from a Gher A
{House) as per details given at the foot of the plaint as well as
for the recovery of Rs. 1756.50 towards rent at Rs. 50 a month
with effect from 7.6.1974 upto date of delivery of possession.
The defendant did not turn up to contest the suit on the date
fixed for hearing. Hence, the case proceeded ex-parte against
him. The plaintiff has proved his case by adducing necessary B
evidence.

The suit is ex-parte decreed with costs for the ejectment of the
defendants from the suit property as well as for the recovery
of Rs. 1756.50 as prayed. The plaintiff shall further be entitled
to recover mesne profits with effect from 7.6.74 upto the date
I
of delivery of possession as permitted by law at Rs. 50 a month C
on paying the requisite court-fees on the execution side."

9. In order to appreciate what the Small Causes Court has and has
not done, it is necessary to remember that in that suit the present appellant
was the plaintiff and both Habib and the present respondent Banda were
defendant Nos. 1 and 2 respectively. It is not disputed that the present D
respondent had filed his written statement, and. had in terms contended
that he was the owner of the property in question being in po5session of
the same since the time of his ancestors, and he had not been living in the
property as subtenant. However, the aforesaid so-called decision of the
Small Causes Court does not refer to the present respondent or to the
wirtten statement filed by him and the plea taken by him in the said written
statement. It only states that "the suit is for ejectment of the defendant (not E
defendants) as per the details given at the foot of the plaint as well as for
the recovery of Rs. 1756.50 towards rent etc. etc........... ". It also says that "the
·"- defendant {not defendants) did not turn up to contest the suit ........ hence
the case proceeded ex-parte against him (not them).' Then it proceeds to
state that the plaintiff has proved his case by adducing necessary evidence.

In the second paragraph, the decision says that "the suit is ex-parte
F
decreed with costs for the ejectment of the defendants from the suit
property ........ '.

10. It is, therefore, obvious that the Small Causes Court proceedeci
to dispose of the suit as if what mattered in the suit was only the presence
or absence of the defendant Habib. It did not take any cognizance of the G
204 SUPREME COURT REPORTS [1993) 1 S.C.R.

A present respondent's presence or absence, and of the written statement
filed by him. Had it taken cognizance of the written statement, it would
have become obligatory on its part to set down the points for determina-
tion. Had it further itself decided to proceed with adjudication of the title
instead of referring it to the Court of competent jurisdiction, it could have
done so after stating the points for determination. What is more, the Court
b had to give its decision on the point. The Small Causes Court did neither.
In fact, as is clear from the so-called decision the whole of which is
reproduced above, there is no reference to the written statement or to the
question of title to the suit property raised, therein nor is there a decision
on the point even remotely, noc to say incidentally.
c
1.1. In the circumstances, the controversy raised before us as to
whether the Small Causes Court is under an obligation or not to refer the
issue with regard to thle title to the property to a Court of competent
jurisdiction and whether the bar of res judicata would apply to the present
U suit brought to establish title to the property, is purely academic. It would
be a travesty of justice to l'iold that by the above order the Small Causes
Court had even incidentally decided the issue with regard to the title which
fell for determination directly and substantially in the subsequent suit
which has led to the present appeal.

E 12. We are, therefore, more than satisfied that the bar of res judicata
is not applicable to the determination ,.,f the issue with regard to the title
to the property in the present suit. .It is for these reasons that we do not
think it necessary to discuss in detaUI the decisions citeq on both sides.
However, we may refer to a decision of this Court Gangabai w/o Rambi/as
F Gilda v. Chhabubai w/o Pukharajji Gandh~ (1982) 1 SCR 1176, which has
a direct bearing on the question as to when a finding on the question of
title to immovable property rendered by a ·Small Causes Court would
operate as res judicata. After discussing various decisions on the point, this
Court has held there as follows :

G "When a finding as to title to immovable property is rendered
by a Court of Small Causes res judicata cannot be pleaded as
a bar in a subseque.nt regular civil suit for the determination
or enforcement of.any right or interest in immovable property.
In order to operate as res judicata the finding rnust be one
H disposing of a matter directly and substantially in issue in the
RAMESHWAR DAYAL v. BANDA (SAWANT, J.] '.W5

former suit and the issue should have been heard and finally A
decided by the court trying such suit. A matter which is col-
laterally or incidentally in issue for the purpose of deciding the
matter which is directly in issue in the case cannot be made the
basis of a plea of res judicata. A question of title in a Small
Cause suit can be regarded as mcidental ollly to •he substantial
issue in the suit and cannot operate as res judicata in a sub- B
sequent suit in which the question of title is directly raised."

This is a sufficient answer to the contention that when Small Causes
Court incidentally determines the question ol title, ii operate as res
judicata. The contention ignores that to operate as res judicata the first
finding must be on an issue which has been directly and substantially in
issue in the former suit. If the, finding is given incidentally while determin- c
ing another issue which was directly and substantially in issue, such finding
cannot be said to be on an issue which was diw;tly and substantially in
issue in the former suit. However, it is not necessary for us to discuss this
point at length since we have come to the conclusion that not only the Small
Causes Court has not given any finding on the issue even incidentally, it
has not even referred to the said issue in its so-called decision.
D
13. The next question is whether the decision of the Small Causes
Court is binding on the respondent Banda. In order to be binding, the
order of the Court disposing of the suit must amount to a decree. Section
2 (2) of Code of Civil Procedure (the 'Code') defines decree as follows :

"(2) "Decree" means the formal expression of an adjudication E
which, so far as regards the court expressing it, conclusively
determines the right of the parties with regard to all or any of
the matters in controversy in the suit and may be either prelimi-
nary or final ................."

The definition of 'Order' given in Section 2 (14) of the Code is as
follows:
F

"(14) "Order" means the formal expression of any decision of a
Civil Court which is not a decree."

However, neither the order nor the decree should be confused with
'judgment' which is defined by Section 2 (9) of the Code as "the statement G
206 SUPREME COURT REPORTS (1993] 1 S.C.R.

A given by the Judge of the grounds of a decree or order'. The definitions of
decree, order and judgment given in the Code show that decree or order
as the case may be, can come into existence only if there is an adjudication
on the relevant issues, which conclusively determines the rights of the
parties.

B 14. We Jiave already pointed out earlier that the Small Causes Court
has not even noticed the matters in controversy between the appellant and
the respondent, and consequently, there has been no adjudication or
decision on the said matters. There is thus no 'formal expression of
adjudication .....:....... conclusively determining the rights of the parties with
C regard to ............. the matters in controversy in the suit".

15. It must be remembered in this connection that Rules 4 (1) and 5
of order XX of the Code are applicable to the judgments of the Small
Causes Court. The Rules are as follows :

D "4. Judgment of Small Causes Courts-(1) Judgments of a
Court of Small Causes need not contain more than the points
for determination and the decision thereon.

(2) Judgments of other Courts-Judgments of other courts
shall contain a concise statement of the case, the points for
E
determination, the decision thereon and the reasons for such
decision."

'5; Court to state its decision on each issue. -In suits in which
issues have been framed, the Court shall state its finding or
F decision, with the reasons therefor, upon each separate issue,
unless the finding upon any one or more of the issue is sufficient
for the decision of the suit.'

'Points for determination" referred to in Rule 4(1) are obviously
nothing but 'issues' contemplated by Rules 1 and 3 of Order XIV of the
G Code. The present decision of the Small Causes Court which has not even
stated the points for determination and given finding thereon, is obviously ...._
not a judgment within the menaing of Section 2 (9) of the Code. Since the
matters were in controversy between the parties, it is only a judgment which
could have given rise to a decree. T)le so-called decision of the SmaD
H Causes Court, therefore, does not amount to a decree within the meaning
RAMESHWAR DAYAL v. BANDA [SAWANT, J.] '1JJ7

of Section 2 (2) read with Section 2(9) and Rules 4(1) and 5 of Order XX A
of the Code.

16. It is not disputed that in view of the provisions of Section 17 (1)
of the Provincial Small Causes Court Act, the Code is applicable to Small
Causes Court except where it is otherwise provided either by the Code or
th.e said Act. Apart from Rules 4 (1) and5 of Order XX of the Code, on B
this count also, it was obligatory for the Small Causes Court, in the present
case, to state the points for determination and give its finding or decision
on each of the said points. Hence the present decision of the Small Causes
court is not a judgment and a decree in the eye of Jaw and is, therefore,
non est as far as the respondent is concerned.
c
17. In the circumstances, the appeal is dismissed with costs.

U.R. Appeal dismissed.