Holding

A prior judgment is res judicata only when the issue was directly and substantially in dispute, and the 1931 and 1967 decisions are not binding because the statutory definition of public wakf changed and the later Gujarat High Court decision supersedes them.

Summary

The Supreme Court examined whether earlier judgments concerning the status of three wakf rozas could bar a fresh proceeding under the Bombay Public Trusts Act, 1950. It clarified that a prior decision is res judicata only when the issue was "directly and substantially" in dispute, not merely "collaterally or incidentally". The Court held that the 1931 District Court finding that the wakf was private was not directly in issue because the statutory definition of a public wakf had been expanded by the 1950 Act to include wakfs where the sajjadanashin could use surplus for family maintenance. Consequently, the 1931 judgment and the 1967 Assistant Charity Commissioner orders could not operate as res judicata. The Court also noted that the 1967 decision was superseded by the Gujarat High Court judgment in Sayed Mohammed v. Ali Miya (1972). The appeal was dismissed, leaving the matter to be decided on its merits by the Assistant Charity Commissioner.

Issues considered

Whether an issue decided in a prior suit is "directly and substantially" in issue for the purpose of res judicata under Section 11 CPC.
Whether the 1931 District Court judgment classifying the wakf as private is res judicata in the present proceedings.
Whether the 1967 Assistant Charity Commissioner decisions are res judicata.
Whether the definition of public wakf under the Bombay Public Trusts Act, 1950 alters the character of the wakf and defeats the earlier private‑trust finding.
Whether the 1967 decision is superseded by the later Gujarat High Court judgment in Sayed Mohammed v. Ali Miya.

Legislation cited

Bombay Public Trusts Act, 1950s. 19, s. 2(19), s. 9
Code of Civil Procedure, 1908s. 11, s. 92

Subjects

res judicatapublic trustwakfBombay Public Trusts ActSection 11 CPCdirectly and substantiallyestoppelcivil procedure

Judgment

SAJJADANASHIN SAYED MD. B.E. EDR. (D) BY LRS. A
v.
MUSA DADABHAI UMMER AND ORS.

FEBRUARY 23, 2000

[M. JAGANNADHA RAO AND R.C. LAHOTI, JJ.] B
r
Code of Civil Procedure, 190~Section 11-Res Judicat~atters
'directly and substantially' in issue and matters 'collaterally or incidentally' in
issue-Meaning of and distinction betwee11-Held, a11 issue necessary to be
!
decided for deciding the principal issue is 'directly and substa11tially' in c
issue--Held, it is a question offact-Bombay Public Trnsts Act, 1950-Sectio11
9.

Bombay Public Trnsts Act, 1950-Section 2(19}-Public trnsf--Mean-
ing of
D
Members of the Edroos family, which claims to be the descendants
of Hazarat Imam Ali, were the saijadanashins/mutawallis of the rozas at
Ahmedabad, Broach and Surat. That wakf was not only for the main·
tenance of these rozas but also for the benefit of the waquirs family.
E
In Regular Suit No. 201 of 1928 the plaintiffs therein had impleaded
the father of the appellant as defendant and alleged that the father of the
appellant was not legally appointed as the sajjadanashin of the rozas and
that he was mismanaging the funds of the trust. The Sub-Judge dismissed
the suit. On appeal, District Court framed 8 points for consideration out
F
of which one of the issues was as to whether the wakf was a private wakf
or a public wakf. The District Court held the wakf to be a private wakf on
the ground that apart from other obligations and charitable purposes, the
saijadanashin could spend the income from the wakf for the maintenance
of his family.
G

- In 1954, another proceeding was initiated under Section 19 of the
Bombay Public Trusts, Act, 1950 in relation to Ahmedabad roza and a plea
~f res judicata based on the above mentioned judgment of the District
Court (arising out of Regular Suit No. 201 of 1928) was raised by the
appellant. The plea was rejected by the Deputy Collector and the Charity H
1095
7
(~

1096 SUPREME COURT REPORTS 12coo11 S.C.R.
A Commissioner. The District Judge reversed the judgment of the Charity
Commissioner and accepted the plea of res judicata. Single Judge (judg-
ment reported in 1958 (9) Guj. L.R. 1002) and the Division Bench of the
High Court (judgment reported in 1972(13) Guj. L.R. 285), however,
reversed the judgment of the District Judge and rejected the plea of res
B judicata. The Special Leave Petition against the order of the Division Bench
was dismissed as withdrawn. Later on, the District Judge on merits held
the Ahmedabad roza to be a public trust. The decision of the District Judge
was confirmed by fie High Court and the Special Leave Petition filed
against the order of the High Court was dismissed for non-prosecution.

C The respondent initiated a proceeding in 1967 under Section 19 of
the Bombay Public Trusts Act, 1950 for a declaration that the Rozas
situated at Ahmedabad, Broach and Surat were public trusts. The appel-
lant raised a preliminary objection to the petition filed by the respondent
that the petition was barred by res judicata in view of earlier judgments in
D the proceedings arising out of Regular Suit No. 201 of 1928 and the
decisions of the Assistant Charity Commissioner in Inquiry Nos. 3/65 and
14/64 where the trust was held to be a private trust. The Assistant Charity
Commissioner accepted the preliminary objection raised by the appellant.
Before the Joint Commissioner the plea of res judicata was confined only
E to the rozas of Broach and Surat and the said plea in respect of the
Allahabad roza was not pressed in view of the judgments in the proceed-
ings initiated in 1!154. The Joint Charity Commissioner reversed the
judgment and order of the Assistant Charity Commissioner and rejected
the plea of res judicata raised by the appellant. The order of the Joint
Charity Commissioner was confirmed by the Assistant Judge and the
F
Division Bench of the High Court

Dismissing th~ appeal filed by the appellant against the order of the
Division Bench, this Court

G HELD : 1.1. If the matter was in issue 'directly and substantially'
in a prior litigation and decided against a party then the decision would
be res judicata in a subsequent proceeding. If a matter was only 'collaterally
or incidentall~' in issue and decided in a earlier proceeding, the finding
therein would not ordinarily be res judicata in a latter proceeding where
H the matter is directly and substantially in issue. (1104-C-D]
S. SAYbD MD. B.E. EDR. (D) BY LRS. v. M.D. UMMER 1097

1.2. Estoppel by judgment does not extend to any matter which Wds A
only incidentally cognizable or which came collaterally in question, al-
though it may have arisen in the case and have been judicially passed on.
But this rule does not however prevent a judgment from constituting an
estoppel with reference to incidental matters necessarily adjudicated in
determining the ultimate vital point. [1105-G]
B
1.3. A matter in respect of which relief is claimed in an earlier suit
can be said be generally a matter 'directly and substantially' in issue but
it does not mean that if the matter is one in respect of which no relief is
sought it is not 'directly and substantially' in issue. It may be or may not
be. It is possible that it was 'directly and substantially' in issue and it may C
also be possible that it was only collaterally or incidentally in issue,
depending on the facts of each case. The test is that if the issue v.ras
'necessary' to be decided for adjudicating on the principal issue and was
decided, it would have to be treated as 'directly and substantially' in issue
and if it is clear that the judgment was in fact based upon that decision,
then it would be res judicata in a latter case. One has to examine the plaint, D
the written statement, the issues and the judgment to find out if the matter
was directly and substantially in issue. [1106-C-E]

1.4. A collateral or incident issue is one that is ancillary to a direct
and substantive issue; the former is an auxiliary issue and the latter the E
principal issue. [1104-F]

Mulla (15th Edn.) page 104; Holdsworth : History of English Law,
[1944]; Millar - T7ie Historical Relation of Estoppel by Record 35 III. L. Rev.
41; Millar - Res Judicata in Continental and Anglo An1e1ican Law 39 Mich.
L.R. 1; Comparative Study [1940] Wisc. L.R. 234; Development in Res F
!1tdicata [1952] 65 Harv. L.R. 818 and HaMwy's Laws of England (4th
Ed.) Vol. 16, para 1538, referred to.

R v. Knaptoft Inhabitants, [1824] B & C 883, referred to.
G
Hept1tllah Bros. v. 77iakore, [1956] 1 WLR 289, referred to.

Sanders (otlwwise Sa1t11ders) v. Sanders (otherwise Saunders), (1952)
2 All E.R.767 and Blair v. Cunw1, [19391 62 CLR 464, referred to.

Corpus Juris Secundum Vol. 50 para 724, referred to. H
1098 SUPREME COt:RT REPORTS [2C00] 1S.C.R.
A North Carolina R Co. v. Story, 286 US 288, referred to.

American Jurisprndence Vol. 46 para 422, referred to.

Hoag v. New Jersey 356 US 464 and lswar Singh v. Sarwan Singh, AIR
(1965) SC 948, referred to.
B
Mohd. S. labbai v. Mohd. Hanifa, AIR (1965) 1569; Ran Bahadur v.
Lucho Kaer, [1886) ILR ll;Asrar Ahmed v. Durgah Committee, Ajmer, AIR
(1947) PC 1; Pragdasji v. lshwarlal Bhai, AIR (1952) SC 143; Sulochana
Amma v. Narayanan Nair, [1994) 2 SCC 14; Uthiva Somasundareshwar v.
C Rajanga, AIR (1965) Mad. 355; Ali J\-liya v. Sayed Mohammed, (1968) 9 Guj.
L.R. 1002; Sayed Mohammed v. Ali Miya, (1972) 13 Guj. L.R. 285; Sayed
Abdul Edroos v. Sayad Zain Sayad Hasan Edroos, ILR 13 Born. 555; Saiyad
Jaffar El Edroos v. Jayad 1\-fohamed El Edroos, ILR 39 Born. 277, referred
to.
D
2. While the law of public wakfs as it stood in 1928, when the Regular
Suit No. 201 of 1928 was filed under Section 92 of the Code of Civil Proce·
dure, did not take within its meaning a wakfwhere the Sajjadanashin could
spend the income for the maintenance of himsdf and his family members
after expending for the purposes or W"dkf, Bombay Public Trusts Act, 1950
E widened the definition of public wakf even to situations where under the
grant the Sajjadanashin could expend the income for the maintenance of
himself and his family members. The judgment arising out of Regular Suit
No. 201 of 1928 treated the Wakf as 'private' on the b'l'Ound that apart from
other obligation and charitable purposes, the Sajjadanashin could spend
F the income for the pious purposes also, namely for maintenance of mem·
hers of his family. But now the definition in Section 2 (19) of the Bombay
Public Trusts Act, 1950 brings in such a wakf also into the fold of public
trusts. Thus the judgment arising out of Regular Suit No. 201 of 1928 does
not operate as res judicata. [1110-F; 1111-Dl

G 3. Decision rendered by the Assistant Charity Commissioner in
Inquiry No. 14/64 on 19.1.1967 gets superseded by the latter judgment of
the High Court rendered on 14.9.1970 and reported in 1972 (13) Guj. L.R.
285. It is well settled that an earlier decision which is binding between the
parties loses its binding force if between the parties a second decision
H decides to the contrary. (1111-F]
s. S.\ Y'':rJ !>ID.BE. l:'OR. (0) BY LRS v. !-.1.0. UMMERtM. :AGANNAOHARAO.J.) l099

CIVIL APPELLATE JURISDIC..'TION : Civil Appeal No. 5290 of A
1985.

From the Judgment and Order dated 27.2.85 of the Gujarat High
Court in F.A. No. 985 of 1976.

Dr. Y.S. Chitale, R.P. Bhatt, S.A. Shroff, S.S. Shroff, Harish N. Salve, B
R. Sasiprabhu, S.K. Mt:hta, Aman Vachher, Atul :-.!anda, M.N. Shroff, Anip
Sachthey, Mrs. P.S. Shroff, Ms. Monica Sharma, Sunil Dogra, Dhruv
Mehta, Fazlin Anam, S. Bhowmick, Ms. H. Wahi, Ms. Neetu Singh, Ms.
Nandini Mukherjee, Ms. Anu Sawhcny, ~vb. Shobha, E.C. Vidyasagar, Ms.
Sayali Pathak and Ms. S. Hazarika for the appearing parties. C
The Judgment of the Court was delivt:rcd by

M. JAGA.c~NADHA RAO, J. This appeal arises out of orders passed
rejecting the prdiminary objection raised by the appellant. The preliminary
objection was that the present proceedings initiated by the deceased first D
respondt:nt on 21.8.1967 before the Assistant Charity Commissioner, Surat
Region under section 19 of the Bombay Public Trusts Act, 1950 to declan.:
three Rozas (situat1:d at thrct: places Ahmedabad, Broach and Surat) wt:re
public trusts, were barred by res judicata in view of thrt:e decisions arrived
at earlier - om: in 1931, another datt:d 19.1.1967 and a third one initiated E
in 1965.

In the present proceedings, which relate to the Rozas at all the thn:e
places, the Assistant Commissioner in his orders in Inquiry No.142/67
dated 26.7.68 accepted the preliminary objection of re.r judicata but tht:
Joint Charity Commissioner, Gujarat in his order in Appt:al ~o.85/68 datt:d
F
17.12.73 did not accept the plea (bt:fore him, the plea was confint:d to tht:
Rozas al Broach and Surat). He set asidt: the order and n.:mand.;d tht:
matter for inquiry. Th~ said order of the Joint Commissioner was affirmed
on 30.9. 76 by the !t:arm:d Assistant Judge m Misc. Civil Application 1\u.32
of 1974 and by the Division Bench of the Gujarat High Court in First G
Appeal No.985 of 1976 on 27.7.85. As tht: preliminary objection was
negatived, a dirt:ction was given to the Assistant Commissioner to dispose
of the Inquiry No.142 of 1967 on merits. Aggrieved by the above-said
orders, the appdlant(who was respondt:nt in the main Inquiry No.142/67)
has filed this appt:al and has raised the same plea of res judicata before us H
1100 Sl'PREMF. COCRT REPORTS [2C00] 1 S.C.R.
A once again. In the present appeal, the plea of res judicata is confined to
the Rozas at Broach and Surat.

As the contention of res judicata raised by the appellant concerns
three earlier proceedings, we shall have to refer to them. But we may also
point out that in certain other proceedings relied upon by the respondents
B a view has already been taken that principle of res judicata does not apply.
These other proceedings were those started in 1954 under section 19 of the
Bombay Act (Appl. 289/54) by one Ali Miya Mahmadiya & others, in
connection with the Ahmedabad Roza. There a similar plea of res judicata
was raised by the appellant Sayed Mohumed Baquir El-Edroos and the
C said plea was rejected by the Deputy Commissioner on 23.4.56 and that
decision was confirmed by the Charity Commissioner in Appeal 125/56 on
29.5.57, - reversed by the District Judge in 149/57 on 29.12.1959 - but the
plea of res judicata was once again n:jected by a learned Single Judge of
the Gujarat High Court on 24.4.67 in the case reported in Ali Miya v. Sayed
D Mohammed, (1968) 9 Guj. L.R. 1002 and that decision of the learned Single
Judge was affirmed on 14.9.70 by a Division Bench in Sayed Mohammed
v. Ali Miya, {1972) 13 Guj. L.R. 285. In fact, in the present proceedings,
the Joint Commissioner, the Assistant Judge and the High Court have all
applied the ratio of those two decisions relating to Ahmedabad Roza - on
E the question of res judicata - in relation to the Broach and Surat Rozas as
well. It was held that on the same ratio, that the earlier orders relied upon
-by the appellant dec:laring the Broach and Surat Rozas to be private trusts
and not public trusts, w.:re not res judicata.

We may also point out that special Leave petitions Nos. 2574, 2575/71
F against the Division Bench Judgment of the High Court dated 14.9.70 were
got dismissed by the appellant as withdrawn on 16.11.1971. No doubt, this
Court observ;;;d that the p!t:a of res judicata would be available to the
appellant in the regular inquiry in that case. Later on, the District Judge
renumbered the Petition 149/57 as CMA 352/67 and on merits held that
G the Ahmedabad Roza was a public trust, RFA 488/72 filed by the appellant
was dismissed by th.: High Court on 4.5.73 and SLP (CA No.1974/75) was
dismissed for non-prosecution by this Court. Thus the rejection of the plea
of res judicata and the finding on mt:rits so far as the Ahmedabad Roza
was concerned, became final. That was why in the present proceedings at
H the stage of Joint Charity Commissioner, the plea of res judicata was
S. SAYED !v!D. B.E. EDR (D) BY LRS. v. !vl.D. VMMER!M. JAGANNADHARAO, J.) 1101

confined to the Rozas at Broach and Surat. A
The earlier history of these wakfa is set out in the reported judgments
of the Gujarat High Court referred to above. These judgments refer to two
other judgments of the Bombay High Court.

Edroos family in Gujarat claimed to be descendants of Hazarat
B
Imam Ali, the son-in-law and cousin of Prophet Muhamed. One of the
descendants of the said Hazrat came down to India in 1542 A.D. and
founded his Gadi at Ahmedabad, Broach and Surat. The members of the
Edroos family were Sajjadanashins or Mutavallis of the wakf throughout.
The three Rozas at the three places as wdl as the villages which were C
granted - not only for the maintenance of these Rozas but also for the
benefit of the Waquifs family, - constituted the wakf. The holder was
buried in the house and his Dargah is situated in this place. There is also
a place for reciting prayers. In Sayed Abdul Edroos v. Sayad Zain Sayad
Hasan Edroos, (ILR 13 Born. 555), a Division Bench of the Bombay High D
Court, traced the history of the wakf and held that the custom of
primogeniture did not apply to the office of Sajjadani;,hin or Mutavalli of
this wakf. In the next litigation, in Saiyad Jaffar El Edroos v. layad
Mahomed El Edroos, (ILR 39 Born. 277), which is more important, another
Division Bench hdd, after con,truing the wyal grants relating to the E
•:illag<::s lJmrn.o and Orma that t]1c grants w.:re primarily for tk Rozas ond
Dargas and they clearly constit·uh:d ''wakt" but that the Saiiadanashin or
MutavaUi had, however, a right to the surplus income left o~er after
discharge of the legal obligations regarding the wakf. In exercise of that
power over the surplus income, the Sajjadanishin, it was held, could
provide for the needs of the indigent members of the family and this was
F
a pious obligation which was only a moral obligation and not a legal
obligation and hence the indigent members of the Edroos family could not,
as of right, claim maintenance out of the surplus income.

We shall now co:..1e to the 1928 suit filed under Section 92 of the G
Code of Civil Procedure which is the first of the cases giving rise to the
plea of res judicata. This was a Regular Suit No.201 of 1928 filed under
-r section 92 CPC by three plaintiffs impleading the father of Sayed Mohamed
Baquir-El-Edroos, the appellant in this appeal, as defendant. (The appel-
lant before us was also the appellant before the Division Bench which H
1102 SUPRFMF COURT REPORTS (2CCO] l S.C.R.
A decided Sayed Mohamed v. Ali Miya, (1972) 13 Guj. L.R. 285 in relation
to the Ahmedabad Roza). The plaintiffs contended that the appellant's
father was not kgally appointed to the ~hrines at the three places and that
he was mismanaging the properties and prayed that an injunction should
be granted. They also asked for tht: framing of a scheme and for appointing
a board of trustees. The CoUcctor granted permission on 22.2.28 for filing
B
the suit under 'ection 92 CPC. The first Sub Judge, Surat dismissed the
suit on 6.10.1931. Appeal No.80/31 filed by the plaintiffs was also dbmissed
and cross-objections wert allowed on 21.l 1.1938. The Second appeal to the
High Court wa~ withdra\\n. In the judgmt:nt of the District Court, we find
that there wt:re ~ points. Points I tc 7 rdatt:d to tht: validity of appointment
c of the defondant and the nature of the office and the: right to tht: surplus
etc. On those points, it was held that the appointm..:nt of the defondant as
Sa.uadanishin w.is valid and that the grnnt of the property was both fur the
Rozas and for tht: maintenance, presumably of Sajjadanishin and his family
members. lt W<i s hdd that tht: Sajjadanishin had complt:tt: power of dis-
D posal over the 'urplus as he was not in the position of an ordinary trustee.
While the upkeep of the Dargas, the holding of fairs and proper attention
to the visitors to the Rozas was a primary legal obligation and a charge on
the income of t'.:ten villages, the Sajjadanishin, it was held, had full power
over the surplus. On this basis, the plaintiffs plea that tht: Saiiadanishin
E was misutilising the income was rejected by the District Judge and the
judgment of th~ trial Judge dated 6.10.31 dismissing the suit filed under
Section 92 of t'.1c Cude of Civil Procedure was aftirm~d. This j udgmcnt of
the learned Dhtrict Judge is dated 2Ll 1.38.

F The District Court in its judgmrnt of 1931 had also framed Issue 9.
The issue wa> as to whether the wakf was a privat.: wakf or a public wakf
and the lt:arned Judge found that the wakf was a private wakf. He observed
in para 15 of his jud!,'llltnt that from 1-'46 A.D. onwards, tht: "Sajjadanishins
were using the revenue of these villages for their own mainknance and that
of the members of their families and other dependants" and this was
G permissible according to the tarlier judgment of the Bombay High Court
in Saiyad laffar El Edruos Case (39 Bom.L.R.277). Alway,; the Saj-
jadanishin wa~ from the family and never a stranger or outsider. These
facts, the learned District Judge held were sutlicient to lead to the con-
clusion that the wakf was a 'private' one. Ht: observed that the documents
H in the case wne also inconsistent with the wakf being a public one. lt is
S. SAYED MD. B.E EDR (D) BY LRS. >. M.D. t:MMER (M. JAGANNADHA RAO, J.[ 1103

this finding that is plead.:d by the appellant as res judicata in the present A
proceedings.

We have already stated that in relation to the Roza at Ahmedabad,
an identical plea raised by the appellant was rejected by the learned Single
Judge of the Bombay High Court in Ali Miya v. Sayed Mohamed, (1968) 9.
Guj. L.R. 1C02 and on appeal by the Division Bench in Sayed Mohamed v. B
Ali Miya, (1972) 13 Guj. L.R. 285. It is true that the above-said reported
judgments of the High Court related to the Ahmedabad Roza and were
rendered at the preliminary stage on a plea of res judicata but we find that
the learned Judges in the said judgments havt gone into the matter in detail
as to why tht decision rendered by the District Judge on 21.11.1938 would
not be res judicata in the 1954 proceedings initiated under section 19 of the c
Maharashtra Public Trusts Act, 1950. Our task in this behalf has thertfore
been lightened and we will be adverting to the reasons given by the Division
Bench of the High Court in Sayed Mahomed v. Ali Miya, (1972) 13 Guj.
L.R. 285 on the question of res judicata under Point 2. Under point 3, we
shall refer to two other proceedings of 1967 and 1965 as these two decisions D
of the authorities also relied upon the 1931 judgment.

The points that arise for consideration are:

(i) What is meant in Section 11, CPC by an issue being collatt:rally
or incidentally in issue as di~tinct from bt'ing directly and substantially in E
iswe'!

(ii) Whether the dt:cision of the District Judge, Surat in Appeal
No.80/31 operates as res judicata in the prtsent proceedings'!

(iii) Whether the decision of the Assistant Charity Commissioner F
dated 19.1.1967 in Inquiry No.14/64 filed by Peer Mohammed Fruitwala
and Inquiry No.3/65 filed by Sayed Hasan Sayed Mohammed El-Edroos
holding the properties in respect of Dargahs at Ahmedabad, Broach and
Surat not to be public trust are res judicata in the present proceedings?

Point No. 1: G

The words 'collatt:rally or incidentally in issue' have come up for
interpretation in several common law jurisdictions in the context of the
principle of res judicata. While the principlt: has been accepted that matters
collaterally or incidentally in issue are not ordinarily res judicata, it has H
1104 SVPREME COVRT REPORTS (2000] 1 S.C.R.
A however been accepttod that there are exceptions to this rule. The English,
American, Australian and Indian Courts and Jurists have therefore
proceeded to lay down certain tests to find out if even an earlier finding
on such an issue can be res judicata in a later proceeding. There appears
to be a common thread in the tests laid down in all these countries.• We
shall therefore refer to these developments.
B
Mattei~· collaterally or incidentally in issue:

It will be noticed that the words used in Section 11 CPC arc ''directly
and substantially in issue". If the matkr was in issue directly and substan-
tially in a prior litigation and decided against a party then the decision
c would be res judicata in a subsequent proceeding. Judicial decisions have
however held that if a matter was only 'collaterally or incidentally' in issue
and decided in an earlie~ proceeding, the finding therein would not or-
dinarily be res judicata in a latter proceeding where the matter is directly
and substantially in issue.
D
As pointed out in Halsbury's Laws of England (Vol. 16, para 1538)
(4th Ed), the fundamental rule is that a judgment is not conclusive if any
matter came collaterally in question (R v. Knaptoft Inhabitants, (1824) B &
C 883; Heptulla Bros v. 77iakore,(1956) 1 WLR. 289 (297)(PC); or if any
matter was incidentally cognizable (Sanders (otlwwise Saundersj v. Sanders
E (othenvise Saunders), (1952) 2 All ERR p. 767 at 771).

A collateral or incidental issue is one that is ancillary to d dii·ed and
substantive issue; the former is an auxiliary issue and the latter the principal
issue. The expre,sion 'colL1terally or incidentally' in issue implies that there
F is another matter which is 'directly and substantially' in issue ( Mulla, CPC
15th Ed., p.104).

Difficulty in distinguishing whether a matter was directly in issue or collateral-
". ly or i11cide11tally in issue and tests laid down in various Cowts:

G .. Difficulty in this area of law has bt:en felt in various jurisdictions and
therefore some tests havt: been evolved. Halsbury says ( Vol.16, para 1538)
( 4th Ed.) that while the general principle is clear, ·difficulty arises in the
See Huldswunh HislUI)" uf English Law 147-54 ( 1944); Millur 1/ie Hiswrical Relazion
uf Estoppd by Record 35 111.L.Rev.41 ( l941J); Millar - res !udirnta in Co111inentul and
Anglo American Luw - 39 \fich. L.R1(1940); Comparative S1Udy (1940) Wisc LR 234;
H Developmenl in Res Judicaza 1952. 65 Haxv. LR 818;
S. SAYED MD. B.E. EDR (D) BY LRS. v. M.D. UMMER (M. JAGANNADHA RAO, J.J 1105

application of the rule in determining in each case what was the point A
decided and what was the matter incidentally cognizable, and the opinion
of Judges seems to have undergone some fluctuations".

Spencer Bower and Turner on 'The Doctrine of Res Judicata' (2nd
Ed, 1969) (p.181) refer to the English and Australian experience and quote
Dixon, J. of the Australian High Court in Blair v. Cu"an, (1939) 62. CLR.
B
464 (553) to say: "The difficulty in the actual application of these concep-
tions is to distinguish the matters fundamental or cardinal to the prior
decision on judgment, or necessarily involved in it as its legal justification
or foundation, from matters which, even though actually raised and decided
as being in the circumstances of the case the determining considerations, c
yet are not in point of law the essential foundation of a groundwork of the
judgment". The authors say that in order to understand this essential
distinction, one has always to inquire with unrelenting severity - is the
determination upon which it is sought to find an estoppel so fundamental
to the substantive decision that the latter cannot stand without the former. D
Nothing less than this will do. lt is suggested by Dixon J that even where
this inquiry is answered satisfactorily, there is still another test to pass: viz.
whether the determination is the 'immediate foundation' of the decision as
opposed to merely "a proposition collateral or subsidiary only, i.e. not more
than ?art of the n:asoning supporting the conclusion". It is well settled, say
the above authors, "that a mere step in reasoning is insufficient. What is E
requin:d is no less than the determination of law, or fact or both, fun-
damental to the substantive decision".

American jurists and Courts have also found difficulty but they have
tried to lay down some tests. It is conceded in Corpus Juris Secundum F
(Vol.SO, para 725) that ;•it is sometimes difficult to determine when par-
ticular issue determined is of sufficient dignity to be covered by the rule of
estoppel. It is said that estoppd by judgment does not extend to any matter
which was only incidentally cognizable or which came collaterally in ques-
tion, although it may have arisen in the case and have been judicially passed
on (Per Taft, J. in North Carolina R Co. v. Story, 45 S.Ct. 531 = 268 US G
288). But this rule does not however prevent a judgment from constituting
an estoppel with reference to incidental matters necessarily adjudicated in
determining the ultimate vital point. American Jurisprudence (Vol. 46
Judgments para 422) too says: "Under this rule, if the record of the former
trial shows that the judgment could not have been rendered without deciding H
1106 SUPREME COURT REPORTS (2000] 1 S.C.R.
A the particular matter, it will be considered as having settled that matter as
to all future actions between the parties'. Per Harlan, !. in Hoag v. New
Jersey 356, US 464 = 78. S.Ct.829), quoting Restatement, Judgments (para
68(1)) and 'Developments in the Law - Res Judicata' (1952) 65 Harv.
L.Review 818(820).(See also collateral estoppel by judgment - by Prof.
Scott. (1942) Harvha R 1.)
B
In India, Mulla has n:ferred to similar tests (Mulla, 15th Ed.p.104).
The learned author says: A matter in respect of which relief is claimed in
an earlier suit can be said to be generally a matter 'directly and
substantially' in i~sue but it does not mean that if the matter is one in
C respect of which no relief is sought it is not directly or substantially in issue.
It may or may not be. It is possible that it was 'directly and substantially'
in issue and it may also be possible that it was only collaterally or inciden-
tally in issue, depending upon the facts of the case. The question arises as
to what is the test for deciding into which category a case falls? One test
D is that if the issue:: was 'necessa1y' to be decided for adjudicating on the
principal issue and was decided, it would have to be treated as 'directly
and substantially' in issue and if it is clear that the judgment was in fact
based upon that decision, then it would be res judicata in a latter case.
(Mulla, p.104) One has to examine the plaint, the written statement, the
issues and the judgment to find out if the matter was directly and substan-
E tially in issue Lvhwar Singh v. Smwan Singh, AIR (196.'i) SC 948 Mohd. S.
Labbai v. Mohd. Hanifa, AIR (1965) SC 1569. We iin: of the view that the
above summary in Mulla is a correct statement of the law.

We have here to adv.:rt to another principle of caution referred to
F by Mulla (p.105). 'It is not co be assumed that matters in respect of which
issues have been framed are all of them directly and substantially in issue.
Nor is there any special significance to be attached to the fact that a
particular issue is the first in the list of issues. Which of the matters are
directly in issue and which collaterally or incidentally, must be determined
011 the facts of each case. A material test to be applied is whether the Court
G considers the adjudication of the issue material and essential for its
decision".

The Privy Council and the Supreme Court had occasion to deal with
these points. Three decisions,- two of the Privy Council and one decided
H by the Supreme Court -can be referred to in this context as illustrations of
S. SAYED MD. B.E. EDR (D) BY LRS. v. M.D. UMMER (M. JAGANNADHA RAO, J.] 1107

cases where in spite of an issue and a decision in an earlier case, the finding A
was treated as being only collaterally or incidentally in issue and not res
judicata. In Ru11 Bahadur v. Lucho Koer, (1885) ILR 11 Cal 301 (PC) (see
Mulla p.107), A, a Hindu, died leaving a widow and a brother C.The widow
sued B, the tenant for rent of certain property forming part of the estate
of htT husband. C, the husband's brother, claimt:d the rent on the ground
that the property was joint family property and that he was entitled to the
B
rent by survivorship. C was then joined as a defendant. Two issues were
framed (1) wht:ther the deceased alone received the whole rent of the
property in his life timt:, or whether the rent was received by him jointly
with his brother C'! (2) whether any rent was due and if so, how much was
due from B? The finding on the first issut: was that the deceased alone c
received the whole rent in his life time. Subsequently, C sued the widow
for declaration that he and his brother were joint, and he claimed tht:
property by right of survivorship. The question arose whether the deceased
and C were joint or separate and the earlier finding was held 11ot res
judicata inasmuch as the matter was not 'directly and substantially' in issue D
in the earlier suit. It was in issue in the earlier suit only 'collaterally or
incidentally', as it did not cover the e11tire question of C's title but related
merely to the joint or separate receipt of rent.

The next decision, again of the Privy Council is the one in Asrar
Ahmed v. Durgah Committee, Ajmer, AIR (1947) PC 1 relating to the E
famous Di:lrgah of Moinuddin Chisti, Ajmer. In a former suit of 1880 under
Section 18 of the Rdigious Endowments Act, 1863 filed by the Prt:sident
and ont: Member of tht: Durgah Committee for removal of one Ameer Ali,
the Mutavalli on ground of maladministration, the question as to the
hereditary nature of the office was the subject matter of a specific issue F
,.
\ and it was held that the office was hereditary, accepting the plea of the
I defendant. While decreeing the suit for removal of the Mutavalli, the Court
however held that if the Mutavalli behaved properly, he could be reinstated
as the office was hereditary. ln 1918, the Dargah Committee filed a suit
against Nisar Ahmed, brother of the deceased Mutawalli, whom the Com-
missioner proposed to recognise as legal heir and Mutawalli, thus treating G
the office as hereditary. But in that case the Committee claimed that the
office was not hereditary. Nisar Ahmed, the defendant claimed the office
;..
) as hereditary and relied upon the earlier finding. This suit however abated.
Nisar Ahmed died in 1940. Then Ameer Ali's son filed a suit claiming the
office to be hereditary. The suit was decreed by the District Judge but H
1108 SUPREME COURT REPORTS (2000] l S.C.R.
A dismissed on appeal. In the plaintiffs appeal to the Privy Council, their
Lordships rejected the plea of res judicata and held that the issue as to the
hereditary nature of the office was iTTelevant in the earlier suit and the
decision was i11cide11tal to and not the substance of the earlier suit.

The Supreme Court decided a similar case in Pragdasji v. lshwarlal
B
Bhai, AIR (1952) SC 143.There the question of res judicata arose at two
stages of the same proceeding. The plaintiffs filed a suit under Section 92
CPC in 1928 for (i) a declaration that the properties under the manage-
ment of the defendant we'e religious and charitable trust properties (ii)
the defendant be removed from the Gadi from possession of the properties
c and a suitable successor be appointed, (iii) the defendant be called upon
to account for his period of management and (iv) to frame a scheme for
proper management of the institution. The defendant traversed the
material allegations and pleaded that the suit was not maintainable inas-
much as 110 public trnst existed and the properties were private properties
D of the defendant. On these pleadings, a number of issues were framed of
which two were treated as preliminary issues (i) whether the temple and
the properties in suit were public charitable properties? and (ii) if not,
whether this Court has jurisdiction to try the suit? On the preliminary
issues, the District Court gave a judgment on 18.7.1935 against the plaintiff
and dismissed the suit. The High Court however held on 24.1.1938 that the
E charity was a public one covered by Section 92 of the Code of Civil
Procedure. In th.: application for specidl leave, the Privy Council refused
the application inasmuch as the ca'e was at a preliminary stage but said
that the order was without prejudice to the presentation of a fresh petition
(for special leave) after all the issues were determined. Later, the District
F Court took up the suit for decision on merits. The court held that allega-
tions of breach of trust and misconduct were not proved and the suit was
dismissed but "subject to the declaration already given by the High Court
that the temple and the properties in possession of the defendant were
public, religious and charitable properties". The High Court affirmed the
same on appeal by the plaintiff. The ddendant came up in appeal to the
G Supreme Court objecting to the 'declaration' as to the public nature of the
properties, virtually attacking the earlier finding dated 24.1.38. The
Supreme Court vacated the 'declaration' made as to the public character
of the charity and its properties on the ground that the said question was
beyond the scope of Section 92 CPC in the earlier suit. This Court also
H held that in a suit under Section 92 CPC the only reliefs that could be
S. SAYED MD. B.B. E.OR (D) BY LRS. v. M.D. UMMER fM. JAGANNADHARAO, J.J 1109

claimed were those specified in Section 92 CPC and "a relief praying for a A
declaration that the properties in the suit are trust properties, does not
come under any of these clauses". This Court observed:

"When the defendant denies the existenct: of the trust, a dec-
laration that the trust does exist might be made as au.xilia1y to the
main reliefs under the section if the plaintiff is held entitled to it". B

It was then stated by this Court that when the suit failed for want of cause
of action, there was no warrant for giving the plaintiff a declaratory relief
as to the public natun: of the trust under Section 92 CPC. The finding as
to the existence of a public trust in such circumstances was not more than
an obiter dictum according to this Court. The appeal of the defendants was
c
allowed and the declaration as to the trust being a public trust was set
aside.

These three cases are therefore instances where in spite of a specific
issue and an adverse finding in an earlier suit, the finding was treated as D
not res judicata as it was purely incidental or auxiliary or collateral to the
main issue in each of these cases, and not necessary for the earlier case
nor its foundation.

Before parting with this point, we would like to reft:r to two more
rulings. lnSulochanaAmma v. Narayanan Nair, (1994] 2 SCC 14, this Court E
held that a finding as to title given in an earlier injunction suit would be
res judicata in a subsequent suit on title. On the other hand, the Madras
High Court, in Uthiva Somasundareswarar v. Rajanga, AIR (1965) Mad 355
held (see para 8 therein) that the previous suit was only for injunction
relating to the crops. May be, the question of title was decided, though not F
raised in the plaint. In the latter suit on title, the finding in the earlier suit
on title would not be res judicata as the earlier suit was concerned only
with a possessory right. These two decisions, in our opinion, cannot be
treated as being contrary to each other but should be understood in the
context of the tests referred to above. Each of them can perhaps be treated
as correct if they are understood in the light of the tests stated above. In G
the first case decided by this Court, it is to be assumed that the tests above
referred to were satisfied for holding that the finding as to possession was
substantially rested on title upon which a finding was felt necessary and in
the latter case decided by the Madras High Court, it must be assumed that
the tests were not satisfied. As stated in Mulla, it all dept:nds on the facts H
1110 SUPREME COURT REPORTS [2COOl l S.C.R.
A of each case and whether the finding as to title was treated as necessary for
grant of an injunction in the earlier suit and was also the substantive basis
for grant of injunction. In this context, we may refer to Corpus Juris
Secundum (Vol.50, para 735, page 229) where a similar aspect in regard
to findings on possession and incidental findings on title were dealt with.
It is stated:
B
"Where title to property ii, the basis of the right of possession,
a decision on the question of possession is res judicata on the
question of title to the extent that adjudication of title was essential
to the judgment; but where the question of the right to possession
C was tht: only issue actually or necessarily involved, the judgment is
not conclusive on the qut:stion of owm:rship or title".

We have gone into the above aspects in some detail so that when a
question arises before the Courts as to whether an issue was t:arlier decided
only incidentally or collaterally, the Courts could deal with tht: qut:stion as
D a matter of lt:gal principle rather than on vague grounds. Point 1 is dt:cidt:d
accordingly.

Point 2:

This point concerns the difference in the meaning of wakf in 1928
E when the suit under Section 92 of the Code of Civil Proct:dure was filed
and the wider meaning given in 1950 in the definition of wakf undt::r the
Bombay Act of 1950. While the law of public wakfs as it stood in 1928 did
not take withm its meaning a wakf where the Sajjadanashin could spend
the income for the maintenance of himself and his family membtrs after
p expending for the purpost:s of wakf, tht: 1950 Act widened the di:finition
of public wakf i:ven to situations where under the grant tht: Sajjadanashin
could expend the income for the maintenance of himself and his family
members. This aspect was consider ~d in great detail by the Division Bench
of the Gujarat High Court in Sayed Mohammed v.Ali Miya, (1972) 13 Guj.
LR 285. It was pointed out in that case that the definition of Wakf in
G Section 2(19) of the Bombay Public Trusts Act, 1950 covered a permanent
dedication by a person professing hlam not only for the purposes which
Islamic Law considered as 'religious' and 'charitable' but also which it
considered as 'pious' such as where provision was made for the benefit of
the members of the settlor's family or of the Sajjadanashin and his family
H members, who were poor. Section 2(19) covered even a wakf such as the
S. SAYED MD. B.E EDR. (D) BY LRS v. M.D. lMMER (M. JAOANNADHARAO.J.) 1111

one described in Section 3 of the Mussalrnan Wakf Validating Act, 1913 A
under which any benefit was claimable by the founder, his family, children
and descendants, - provided that the ultimate benefit in such cases express-
ly or impliedly was reserved for the poor or for any other purpose recog-
nised by the Muslim Law as religious, pious or charitable purpose of a
permanent character. Section 9 of the Bombay Act included charitable
purposes also. The Gujarat High Court pointed out as follows: (p.296}
B

"It could never be argued after these provisions that the wakf
is not a public trust on the ground that the entire surplus goes to
the Sajjadanashin or Mutawalli or because the obligation was a
pious obligation and not a legal obligation so that he could dispose C
of surplus in any manner he liked. This aspect cannot in any
manner alter the public character of the public trust".

We agree with the above observations of the Gujarat High Court.
The 1931 judgment arising out of the 1928 suit treated the Wakf as 'privatt:' D
on the ground that apart from other obligations and charitable purposes,
the Sajjadanashin could spend the income for the pious purposes also,
namely for maintenance of members of his family. But now the definition
in Section 2( 19} brings in such a wakf also into its fold. Thus, for this reason
also, the 1931 judgment does not operate as res judicata. Point 2 is decided
against the appellant. E

Point 3:

The decision of the Assistant Charity Commissioner on 19.1.1967 in
Inquiry 14/64 filed by Peer Mohammed Fruitwala was no doubt in a case F
arising under the Bombay Act 1950. It is true that this very wakf was held
to be private but the point is that that decision dated 19.1.67 gets super-
seded by the latter judgment of the Gujarat High Court in Sayed
Mohammed v. Ali Miya, (1972) 13 Guj. LR 285 dated 14.9.1970. The latter
judgment governs. lt is well settled that an earlier decision which is binding
between the parties loses its binding force if between the parties a second G
decision decides to the contrary. Then, in the third litigation, the decision
in the second one will prevail and not the decision in the first. We may also
state that the 19.1.67 decision merely relied upon the 1931 decision without
noticing the change in the definition. Hence, the 19.l.67 decision cannot
become res judicata. H
1112 SUPREME COURT REPORTS (20C:JJ 1 S.C.R.

A So far as the proceeding initiated in 1965, no plea of res judicata
based on it was raised in the lower courts in the present proceedings.

Therefore, we hold on point 3 against the appellant. The rejection of
the preliminary objection is confirmed. It will now be for the Assistant
Charity Commissioner to go into the merits in Inquiry No. 142/67 as
B directed by the Joint Commissioner in his orders dated 17.12.73 insofar as
the Rozas at Broach and Surat are concerned, in the light of this judgment
and the judgment of the Gujrat High Court in Sayed Mohammed v. Ali
Miya, (1972) 13 Guj. L. R. 285.

The appeal is dismissed. There will be no order as to costs.
c
B.K.M. Appeal dismissed.