Res judicata continues to bind inter partes judgments even when later Supreme Court interpretation differs

A prior inter partes judgment bars a later suit or writ petition where the matter was directly and substantially in issue, heard, and finally decided by a competent court. The earlier decision remains conclusive between the parties under Section 11 CPC even if its reasoning was later stated differently by the Supreme Court; Article 141 makes the later interpretation binding, but it does not automatically undo the final effect of the earlier adjudication. A subsequent judicial interpretation is not the same as a legislative change and does not defeat res judicata. The later suit was therefore barred.

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Issues: Whether a prior judgment between the same parties operates as res judicata in a later suit or writ petition even if the earlier decision is said to be contrary to a subsequently declared view of the Supreme Court.

Analysis: The decisive test was whether the matter directly and substantially in issue had been directly and substantially in issue in the earlier proceeding and had been heard and finally decided by a competent court. The later declaration of law by the Supreme Court under Article 141 of the Constitution of India makes the contrary view no longer good law, but it does not automatically obliterate the final effect of an inter partes judgment. Correctness of the earlier decision is irrelevant once the conditions of Section 11 of the Code of Civil Procedure are satisfied. A subsequent judicial interpretation is not equivalent to a legislative alteration of law, and therefore does not defeat the rule of res judicata.

Conclusion: A judgment inter partes in the prior writ petition operated as res judicata in the subsequent suit notwithstanding that it was founded on a view later expressed differently by the Supreme Court. The subsequent suit was barred and the appeal failed.

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