TaxTMI 
TaxTMI 
2022 (5) TMI 1722
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....PTA, ADVOCATE AND; MR. SHRAWAN DOGRA SENIOR ADVOCATE WITH MR. HARSH KALTA, ADVOCATE. MR. MANIK SETHI, ADVOCATE AS INTERVENERS ORDER These matters have been referred to the Larger Bench by the order of the Single Bench dated 19th December, 2017 passed in two Regular Second Appeals, namely, RSA Nos.57 of 2017 and 381 of 2017. 2. RSA No.57 of 2017 is plaintiff's appeal against the judgment and decree dated 16.09.2016 passed by the Additional District Judge (II) Kangra at Dharamshala who thereby set aside the judgment and decree passed by the Civil Judge(Senior Division), Court No.1, Dehra, District Kangra in the civil suit as well as counter claim decided on 28.09.2012, dismissing the suit filed by the plaintiff/appellant and decreeing the counter claim of the defendants/respondents. Further prayer has been made to set aside the judgment and decree passed by Additional District Judge and decree the suit of the appellant/plaintiff and dismiss the counter claim filed by the respondents/defendants. The plaintiff in this case filed a suit for permanent prohibitory injunction, in which the defendants/respondents filed a counter claim. Both, the suit and the counter claim, were tri....
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....or Counsel, appearing for the respondents in RSA No.57 of 2017 and Mr.K.D. Sood, Mr.Bhupender Gupta and Mr.Shrawan Dogra, learned Senior Counsel & Mr.Malkiyat Singh, learned counsel, appearing as interveners. 6. Mr. B.M. Chauhan, learned Senior Counsel appearing for the appellant in RSA No. 57 of 2017, argued that Section 2(2) of the Code defines decree as formal expression of an adjudication which conclusively determines the right of the parties with regard to all or any of the matters in controversy. Section 2 (9) of the Code defines judgment to be statement given by the judge on the grounds of a decree or order. Order 8 Rule 6-A of the Code provides for filing of counter claim in a suit against the claim of the plaintiff by the defendant. Order 8 Rule 6-A (2) of the Code provides that such counter claim shall have the same effect as the cross suit so as to enable the court to pronounce a final judgment in the same suit both in the original claim and in the counter claim. Sub rule 6-A (4) of Order 8 of the Code categorically provides that counter claim shall be treated as a plaint and governed by the rules applicable to the plaint. Relying on the judgment of Supreme Court in R....
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....a that party upon his failure to file appeal against such finding. A composite appeal covering both the subject matters of original claim as well as the counter claim cannot be maintained. The learned Senior Counsel for the appellant in support of his arguments has relied upon the judgments of the Supreme Court in Premium Tyres Ltd. vs. Kerala State Road Transport Corporation, (1993) Supp (2) SCC 146 and in Sri Gangai Vinayagar Temple and another vs. Meenakshi Ammal and others, (2015) 3 SCC, 624. Learned Senior Counsel in support of his arguments also relied upon the judgments of this Court in Parso Ram vs. Dumnu Ram, 2017(3) SLC 1270, Kahan Singh (supra), Mohan Singh (supra) and Piar Chand vs. Ranjeet, 2016 (Supp) SLC 612. It is submitted that in all these judgments, view has been taken and rightly so that the counter claim has effect of the suit and the same has to be treated as the plaint and the effect of the counter claim is that even if the suit of the plaintiff is stayed, discontinued, dismissed or withdrawn, counter claim can yet be decided on merits. 9. Mr. Ajay Kumar, learned Senior Counsel appearing for the appellant in RSA No.381 of 2017 argued that the plaintiff/res....
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....f Supreme Court in Shreenath and another vs. Rajesh and others, 1998(4) SCC 543, learned Senior Counsel argued that in that it was held that in interpreting any procedural law, where more than one interpretation is possible, the one which curtails the procedure without eluding justice, is to be adopted. The procedural law is always subservient to and in aid of justice. Any interpretation which eludes or frustrates the recipient of justice is not to be followed. 11. Mr. Sanjeev Kuthiala, learned Senior Counsel appearing for the respondents/defendants in RSA No.57 of 2017 submitted that there is an express provision in Order 20 Rule 19(2) of the Code that in the case an appeal from a decree passed in a suit, where a counter claim has been made, can be filed as if no counter claim has been claimed, which necessarily means that the appellants would be entitled to question the decree of the counter claim in the same appeal and there is no necessity of filing separate appeal in case the counter claim preferred in the suit has been decreed by the trial court. Such provision was incorporated by the amendment in CPC whereby the term "counter-claim" was added to the provision of Order 20 ....
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....re two or more suits are disposed of by a common judgment but separate decrees are prepared or where two suits are filed and connected and decided by a common judgment and decree. In such a situation, where multiple suits are disposed of by one judgment but by different decrees or otherwise, two or more appeals would be requisite. The learned Senior Counsel in support of his arguments relied on the judgments of the Supreme Court in Shri Ramagy Prasad Gupta and others vs. Sri Murli Prasad and others, (1974) 2 SCC 266, Premium Tyres Ltd. (supra), Rajni Rani (supra); Sri Gangai Vinayagar Temple (supra) and State of Andhra Pradesh and others vs. B. Ranga Reddy (Dead ) by Legal Representatives and others, 2020(15) SCC 681 13. Mr. K.D. Sood, learned Senior Counsel, appearing as intervener, submitted that though an appeal lies against a decree under Order 41 Rule 1 of CPC but the requirement of filing appeal, following amendment brought in the Code with effect from 01.07.2002, is that the appeal has to be accompanied with copy of the judgment only. Referring to Order 20 Rule 6 & 6A CPC, the learned Senior Counsel argued that a decree sheet is required to be drawn up/prepared in every c....
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....(v) AIR 1997 SC 1736 Ram Prakash versus Charan Kaur; (vi) Mt. Lachhhmi vs. Mt. Bhuli, AIR 1927 Lahore 289; (vii) Appa and others vs. Kachai Bayyan Kutti and others, AIR 1932 Madras 689; (viii) Satya Devi (supra); (ix) Rajni Rani (supra); were approved by the Supreme Court in Narhari (supra). 14. Mr. K.D. Sood, learned Senior Counsel argued that judgments of the this Court Kahan Singh (supra), Mohan Singh (supra) and Satya Devi (supra) have been correctly decided, wherein it has been held that when two suits or a suit and counter claim, are decided by common judgment, separate appeals have to be filed against the decree sheet in both of them. Judgment of the Rajasthan High Court in Iqbal Banu (supra) does not lay down correct law because Order 20 Rule 19(2) of the Code only provides and enables that an appeal can be filed against the adjudication of a counter claim, set off and nothing more than that is contemplated or provided therein. However, exception will be only in the case where the suits are consolidated and the same is treated as one suit for all intents and purposes, by recording evidence in one case which is treated as evidence in all ca....
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....ppeal has to be filed with respect to the subject matter covering the counter-claim. In other words, a common appeal covering both the subject matters of the original claim as well as counter claim, cannot be maintained. There has to be separate appeal with regard to both subject matters. The learned Senior Counsel argued that in case appeal is filed qua only one subject matter, i.e. original claim or the counter-claim, then the party is, consciously, allowing the findings in respect of the other subject matter, to become final. Such conduct of the party will determine the future consequence of such finality like res-judicata etc. between the parties. Therefore, in case only one appeal is filed touching subject matter and issues. involved either in original claim or in counterclaim, then such appeal has to be confined to such subject matter alone. Resultantly, the consequence of finality attained on other findings in the other claim will entail its necessary effect on the determination of rights of the parties keeping in view the fact of such finality. 16. Mr. Manik Sethi, learned counsel also appearing as intervener, submitted that the counter claim is not an independent suit f....
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....sport Corporation. The respondent also filed a suit for recovery of amount paid in excess of DGS & D contract rates. Both the suits were connected and tried together. As the nature of dispute in both the suits was same, common issues were framed in both the suits. The trial court found that the respondent- Corporation was liable to pay only at DGS & D contract rates and was entitled to refund to the extent of excess payment made by it and that the appellant was entitled to recover to the extent its claim was found to be substantiated even on the basis of DGS & D contract rates. Both the suits were thus decreed partly. The appellant did not file any appeal against dismissal of the suit for the part of its claim but filed appeal against the decree granted in favour of the respondent-Corporation in the suit filed by it. At the time of hearing, the High Court dismissed the appeal of the appellant as barred by res judicata as the finding recorded in the connected suit that the appellant was entitled to charge and collect only on the DGS & D rates and not on the invoice price, had become final. The argument of the appellant before the Supreme Court that Section 11 of CPC pertaining to re....
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....ubject-matter and common trial and the appeals arising out of the subsequent suit, were dismissed, a question may also arise where the subject-matter is the same and the issues are common in the two suits but where some of the parties are different in one suit, whether the bar of res judicata would operate against the parties who are common, but the subject-matters of the suit are different. The Supreme Court held that even if some of the issues are common but some issues were different, the bar of res judicata would not apply. Whatever may have been the common issues between the two suits, one issue which is not common and makes the subject-matter of both the suits different is that M is solely entitled to compensation from the State. This issue is not necessarily confined to the existence or validity of the partnership but as to whether the other parties to the suit have contributed to the capital of the firm or paid M any amounts which they are entitled to recover from out of the compensation amount. It was therefore held that no question of res judicata would arise. 20. In Laxmidas Dayabhai Kabrawala vs. Nanabhai Chunilala Kabrawala and others, 1964 AIR (SC) 11, the suit was....
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....leadings in a reasonable manner. If, for instance, what is really a plaint in a cross-suit is made part of a Written Statement either by being made an annexure to it or as part and parcel thereof, though described as a counter-claim, there could be no legal objection to the Court treating the same as a plaint and granting such relief to the defendant as would have been open if the pleading had taken the form of a plaint. Mr. Desai had to concede that in such a case the Court was not prevented from separating the Written Statement proper from what was described as a counter-claim and treating the latter as a cross-suit. If so much is conceded it would then become merely a matter of degree as to whether the counter-claim contains all the necessary requisite sufficient to be treated as a plaint making a claim for the relief sought and if it did it would seem proper to hold that it would be open to a Court to covert or treat the counter-claim as a plaint in a cross suit. To. hold otherwise would be to erect what in substance is a mere defect in the form of pleading into an instrument for denying what justice manifestly demands. We need only add that it was not suggested that there was ....
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....on came up for hearing before a learned Single Judge, he made a reference to the Full Bench for an authoritative pronouncement in view of the conflict between two Division Benches of the High Court on the question "whether the appeal is barred by Section 11 of the Code of Civil Procedure or by the general principles of res judicata as the appeals against the decisions in suits Nos. 77 and 91 of 1950 were rejected and dismissed by this Court and those decisions have become final and binding between the parties". In those facts, the Full Bench came to the conclusion that two matters were directly and substantially in issue in all the four suits, namely (i) whether Harnam Singh and his adopted son Ram Kishan died in a state of jointness with the appellant and his father, and (ii) whether the property in suit was joint family property of Ram Kishan and the appellant's father. The decision of the trial court on both these issues was against the appellant and his father and in favour of the respondent-Smt. Daryao Kunwar. The Full Bench held that there were four appeals originally before the High Court, two of them had been dismissed. The very same issues which arose in first appeals ....
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....tation while the other appeal was dismissed on the ground that the appellant therein had not taken steps to print the records. It is therefore urged that the two appeals arising out of suits Nos. 77 and 91 had not been heard and finally decided by the High Court, and so the condition that the former suit must have been heard and finally decided was not satisfied in the present case. Reliance in this connection is placed on the wellsettled principle that in order that a matter may be said to have been heard and finally decided, the decision in the former suit must have been on the merits. Where, for example, the former suit was dismissed by the trial court for want of jurisdiction, or for default of plaintiff 's appearance, or on the ground of non-joinder of parties or misjoinder of parties or multifariousness, or on the ground that the suit was badly framed, or on the ground of a technical mistake, or for failure on the part of the plaintiff to produce probate or letters of administration or succession certificate when the same is required by law to entitle the plaintiff to a decree, or for failure to furnish security for costs, or on the ground of improper valuation or for fai....
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....rial court loses its character of finality and what was once res judicata again becomes res subjudice and it is the decree of the appeal court which will then be res judicata. But if the contention of the appellant were to be accepted and it is held that if the appeal court dismisses the appeal on any preliminary ground, like limitation or default in printing, thus confirming into the trial court's decision given on merits, the appeal court's decree cannot be res judicata, the result would be that even though the decision of the trial court given on the merits is confirmed by the dismissal of the appeal on a preliminary ground there can never be res judicata. We cannot therefore accept the contention that even though the trial court may have decided the matter on the merits there can be no res judicata if the appeal court dismisses the appeal on a preliminary ground without going into the merits, even though the result of the dismissal of the appeal by the appeal court is confirmation of the decision of the trial court given on the merits. Acceptance of such a proposition will mean that all that the losing party has to do to destroy the effect of a decision given by the tri....
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.... appeal filed earlier registered as Appeal No. 331 of 1346 F. At the hearing of the appeals, a preliminary objection was raised by the defendants that as the other appeal i.e., No. 332 of 1346F. was filed beyond the period of limitation, it cannot be maintained and that when the other appeal is thus dismissed, the principle of res judicata would apply to the first appeal, i.e., No. 331 of 1346 and it should also fail. The High Court held that the plaintiffs should have filed two separate appeals within the period of limitation and as the other appeal was admittedly time-barred, the first appeal also failed by the application of the principle of res judicata. The High Court dismissed both the appeals. Against this judgment of the High Court, two appeals were preferred to the Judicial Committee of the State which were made over to the Supreme Court under article 374(4) of the Constitution. The Supreme Court while reversing the judgment of the High Court in para 5 of the report held as under:- "5. The plaintiffs in their appeal to the High Court have impleaded all the defendants as respondents and their prayer covers both the appeals and they have paid consolidated court-fee ....
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....set aside by the High Court in exercise of revisional jurisdiction under Section 115 of CPC or in exercise of power of superintendence under Article 227 of the Constitution of India or the same is required to be assailed by preferring an appeal. The Supreme Court held that a counterclaim preferred by the defendant in a suit is in the nature of a cross-suit and by a statutory command even if the suit is dismissed, counter-claim shall remain alive for adjudication. For making a counter- claim entertainable by the court, the defendant is required to pay the requisite court fee on the valuation of the counter-claim. The plaintiff is obliged to file a written statement and in case there is default the court can pronounce the judgment against the plaintiff in relation to the counter-claim put forth by the defendant as it has an independent status. Interpreting the provisions of Order 8 Rule 6-A(2) of CPC, it was held that the court is required to pronounce a final judgment in the same suit both on the original claim and also on the counter-claim. The plaintiff can file an application for exclusion of a counter-claim and can do so at any time before issues are settled in relation to the c....
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....spondents against only one of the decrees. It was held that non-filing of appeals by the respondents and the appellants against all the respective adverse decrees, resulted in their attaining status of former suit and finality and this consequence permeated into sinews of all three suits. Accordingly, finding that the appellants had title over the suit property, contrary to the respondents claim, had become final and operated as res judicata. In absence of appeals against adverse decrees the respondents were barred by the principle of res judicata from challenging findings of trial court especially in regard to the appellant Trust's ownership of demised property. Similarly, the appellant Trust not having filed any appeal against any of the decrees, all findings against it had also attained finality. 26. In Satya Devi vs. Partap Singh and others, AIR 2006 HP 75, this Court was dealing with regular second appeal filed by defendant-appellant Smt Satya Devi against the judgments and decrees of the Courts below whereby the two suits, one filed by Partap Singh and the other Smt. Suhli Devi, were decreed and the sale deed in favour of Smt. Satya Devi was held to be illegal and void and....
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....mier Tyres Limited (supra) it was held that the appeal filed by Smt. Satya Devi was liable to be dismissed, since Smt. Satya Devi had filed only one appeal against the two decrees, whereby the suits filed by Partap Singh and Smt. Suhli Devi had been decreed by the trial Court and only one appeal was filed against the decree passed in the suit filed by Smt. Suhli Devi and in this manner, the decree passed in the suit filed by Pratap Singh became final between the parties and the findings recorded therein would be res judicata in the appeal filed by Smt. Satya Devi against the decree in the suit filed by Smt. Suhli Devi. 27. In Kedar Singh (supra), this court was dealing with regular second appeal filed against the judgment and decree passed by the District Judge, Kinnaur Civil Division at Rampur Bushahr, affirming the judgment and decree passed by Civil Judge (Senior Division), Kinnaur camp at Rampur Bushahr. The respondent-plaintiff in that case filed a suit for recovery of Rs.10,512.94 paise against appellant-defendant. The defendant by filing written statement refuted the claim of the respondent-plaintiff. The appellant-defendant filed a counter claim to the tune of Rs.30,600/....
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....ve passed separate decree specially dismissing the counter claim but the argument of the defendant that he was not required to challenge the judgment on the counter claim because of non-preparation of decree cannot be accepted, held this Court. 28. This Court in Parso vs. Dummu Ram and others, 2017(3) SimLC 1270, was dealing with a case where the respondents-plaintiffs filed a suit for declaration for permanent prohibitory injunction against the appellant-defendant. The defendant-appellant in that case had filed counter claim. While the suit filed by the respondents-plaintiffs was dismissed, the counter claim filed by the defendant-appellant was allowed. The respondents-plaintiffs filed a single appeal against the dismissal of the civil suit and allowing of counter claim. The first appellate court allowed the appeal thereby decreed suit filed by the respondents-plaintiffs and set aside the decree passed in favour of the defendant-appellant in counter claim. This Court relying on the judgments of the Supreme Court in Ramagya Prasad Gupta (supra), Premier Tyres Limited (supra), Ram Prakash (supra) and Shri Gangai Vinayagar Temple (supra), set aside the judgment of the first appell....
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....to be challenged separately and filing only one appeal against both the said adjudications was not permissible in law as the adjudication of suit as well as counter claim assumes the status of two distinct decrees. 31. This Court in Piar Chand and others vs. Ranjeet Singh and others, 2016 (supp) Shim. LC 612 was dealing with a case in which the plaintiff filed a suit for declaration and injunction whereas the defendant filed counter claim. The trial court decreed the suit and dismissed the counter claim. Aggrieved thereby, the defendant-respondent approached the court of District Judge by filing regular first appeal under Section 96 of CPC while praying for setting aside the judgment and decree passed by the trial court, the defendant in his appeal also prayed for allowing the counter claim. The Additional District Judge, Ghumarwin vide his judgment and decree dated 20.3.2005 accepted the appeal preferred by the defendants by setting aside the judgment and decree passed by the learned trial Court and also decreed the counter claim of the defendants. The plaintiff approached this Court in the regular second appeal. The argument of the defendants before this Court was that since n....
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....le filing the appeal had challenged the findings of the trial Court not only with regard to the suit of the plaintiff having been partly decreed but also with regard to the dismissal of his counter-claim, the same would be of no consequence since nothing has come on the record to show that during arguments the counsel appearing for defendant No.2 before the lower appellate court had also sought any relief against the dismissal of the counter-claim filed by him. The question of filing two separate appeals would arise only if the defendant was also pressing his counter-claim, which was dismissed by the learned trial court and the question regarding the counter-claim could be considered only if defendant No.2 had filed two appeals, one against the suit of the plaintiff having been partly decreed and the other against the dismissal of the counter claim. In case defendant No.2 is not seeking relief before the lower appellate Court in respect of the counter-claim, it would not be necessary for him to file two separate appeals against the judgment and decree of the trial court. 33. Before the Gujarat High Court in Darayas Bamanshah Medhora vs. Nariman Bamansha Medhora, AIR 2002 Gujrat ....
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.... our opinion, would have a bearing on this controversy is the principle of acquiescence and/or estoppel. This principle would also apply to the controversy in issue, inasmuch as it could be urged that when only one decree is challenged in the singular appeal, the other decree which is not the subject matter in appeal, is a decree which is acquiesced to. Ultimately it makes no difference whether the same set of reasons and the same set of findings justify both the decrees. This may perhaps appear to be similar to calling a glass half full or also calling it half empty. It may be that such a description carries different concepts, although the factual result is the same. The distinction in law lies in the real and substantive distinction between an appeal from a judgment and an appeal from a decree. Once this distinction is established and kept in mind, it becomes a simpler exercise to appreciate the view expressed by the Supreme Court in the decisions hereinafter discussed. 12 to 17. xxxxx xxxxx xxxxx 18. In the premises aforesaid, we are of the opinion that the present appeal is not maintainable and is consequently dismissed with no order as to costs." 34. The ....
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....urpose. There may be two situations emerging out of this, first; where the trial Court in terms of Order 20 Rule-6-A (1) has prepared the decree little later than the delivery of the judgment, which as per the requirement of the said provisions, should be within 15 days and secondly suits in which counterclaim has also been decided, may be by a common order or a separate judgment but where only a common decree has been prepared or no separate decree is prepared on counter claim. Even in such situation the order by itself would tantamount to decree. In Rajni Rani case, supra, the Supreme Court examined the question as to when can an order amount to a decree and held that the order of dismissal of counter-claim by itself constitutes a decree. It was held that when a counterclaim is conclusively adjudicated on merits and dismissed by order of the Court, finality is attached in respect of the rights of the defendant. Such order of dismissal on the ground of being barred under Order 2 Rule 2 amounts to decree where against the appeal is the proper remedy and a Revision Petition under Section 115 of the CPC and Petition under Article 227 of the Constitution, would not be maintainable. ....
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....as held that such an order has to be also treated as a decree. 38. Now coming to Order 20 Rule 19 CPC wherein counter claim has been inserted along with set off by amending Act 104 of 1976 w.e.f. 1.2.1977. Sub-Rule 1 of Rule 19 of Order 20 provides where the defendant has been allowed a setoff or counter-claim against the claim of the plaintiff, the decree shall state what amount is due to the plaintiff and what amount is due to the defendant, and shall be for the recovery of any sum which appears to be due to either party. An argument has been raised that a common appeal against a decree passed in the suit as well as the counter claim can be maintainable by relying on the judgment of Rajasthan High Court in Iqbal Banu's case, supra . Order 20 Rule 19 (2), inter alia provides that any decree passed in a suit in which set off or counter claim is claimed, shall be subject to the same provisions in respect of an appeal to which it would have been subject if no set off or counter claim had been claimed. The Rajasthan High Court in Iqbal Banu's case supra while interpreting Order 20 Rule 19 (2) CPC held that the language of this provision is explicit, wherein, it has expressly provid....
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....t or by different appellants, the Appellate Court may dispense with the filing of more than one copy of the judgment. 40. The contention that the counter-claim cannot be tried as an independent suit for all purposes but is deemed to be an independent suit for the purposes as mentioned in the Code under Order 8 Rule 6A (2), (3) & (4) and for the purpose of limitation as per Section 3(2)(b) of the Limitation Act, 1963, cannot be countenanced for reasons to be stated presently. We also cannot agree with the argument that if the counter claim is to be treated as a separate suit, independent from the main suit, then it would amount to rewriting Order 8 Rule 6A (2), which mandates "a final judgment" and in "same suit". Further argument that treating counter claim as a separate suit would mean that there will be a "common judgment" as against the "final judgment" and that it will be common for "both the suits" as against the mandate of having it in the "same suit" per Order 8 Rule 6A (2) also does not convince us. Further submission that since the counter claim can also be set up through amendment (Order 8 Rule 8 the Code) and by way of subsequent pleadings (Order 8 Rule 9 the Code), t....
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....udgment against him. That however, is not the position of law now after 1976 amendment in CPC. After the 1976 Amendment of Order 41 Rule 22, the insertion made in sub-rule (1) thereof makes it permissible to file a cross-objection against a finding. The difference is basically that a respondent may defend himself without taking recourse to file a cross-objection to the extent the decree stands in his favour. But if he intends to assail any part of the decree, it is obligatory on his part to file the cross-objection. Post-amendment, read in the light of the Explanation to Order 41 Rule 22(1) though it is still not necessary for the respondent to take any cross-objection laying challenge to any finding adverse to him as the decree is entirely in his favour, yet he may support the decree without cross-objection. It gives him the right to take cross-objection to a finding recorded against him either while answering an issue or while dealing with an issue. After the aforesaid amendment in CPC, if the appeal stands withdrawn or dismissed in default, the cross-objection taken to a finding by the respondent would still be adjudicated upon on merits which remedy was not available to the res....