Supreme Court clarifies procedure for preliminary issues in civil suits: Sathyanath vs. Sarojamani (2022)

Date of the Judgment: 6 May 2022

Citation: 2022 INSC 445

Judges: Hemant Gupta, J., V. Ramasubramanian, J.

Can a court decide only on preliminary issues and avoid deciding all the issues framed in a civil suit? The Supreme Court of India recently addressed this question in a civil appeal, clarifying the procedure for handling preliminary issues in civil suits. The Court emphasized the importance of deciding all issues to avoid delays and ensure a comprehensive adjudication. This judgment clarifies the circumstances under which a court can decide a preliminary issue first, and when it must decide all issues in a case.

Case Background

The appellants (plaintiffs) filed a suit (O.S. No. 95 of 2016) against their paternal aunt, the respondent (defendant). The appellants sought a declaration of absolute ownership of the suit property, a declaration that the judgment and decree in a previous suit (O.S. No. 65 of 2003) was null and void, and a permanent injunction to prevent the defendant from disturbing their possession of the property. The defendant initially filed an application to reject the plaint, which was dismissed by the trial court on 20 June 2017. Subsequently, the defendant filed an application to frame preliminary issues, including whether the suit was barred by res judicata and limitation, and whether the plaintiffs had abused the process of the court. The trial court dismissed this application on 3 October 2019. The defendant then filed a revision petition before the High Court, which directed the trial court to frame a preliminary issue on res judicata.

Timeline

Course of Proceedings

The trial court initially dismissed the defendant’s application to reject the plaint. Subsequently, the trial court also dismissed the defendant’s application to frame preliminary issues. The High Court, in a revision petition under Article 227 of the Constitution of India, ordered the trial court to frame a preliminary issue on res judicata. This order of the High Court was challenged before the Supreme Court.

Legal Framework

The Supreme Court analyzed Order XIV Rule 2 of the Code of Civil Procedure, 1908, which deals with the framing and trial of issues. The Court discussed the original provision and the amendments made by the Central Act No. 104 of 1976. The original provision stated:

“R. 2. Where issues both of law and of fact arise in the same suit, and the Court is of opinion that the case or any part thereof may be disposed of on the issues of law only, it shall try those issues first, and for that purpose may, if it thinks fit, postpone the settlement of the issues of fact until after the issues of law have been determined.”

The amended provision, effective from 1 April 1977, states:

“2. Court to pronounce judgment on all issues.—(1) Notwithstanding that a case may be disposed of on a preliminary issue, the Court shall, subject to the provisions of sub-rule (2), pronounce judgment on all issues.
(2) Where issues both of law and of fact arise in the same suit, and the Court is of opinion that the case or any part thereof may be disposed of on an issue of law only, it may try that issue first if that issue relates to—
(a) the jurisdiction of the Court, or
(b) a bar to the suit created by any law for the time being in force, and for that purpose may, if it thinks fit, postpone the settlement of the other issues until after that issue has been determined, and may deal with the suit in accordance with the decision on that issue.”

The Court also referred to Order XX Rule 5 of the Code of Civil Procedure, 1908 which states:

“5. Court to state its decision on each issue. – In suits in which issues have been framed, the Court shall state its finding or 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.”

The Court also referred to Order XLI Rules 24 and 25 of the Code of Civil Procedure, 1908, which deals with the powers of the Appellate Court.

Arguments

Appellants’ Arguments:

• The appellants argued that the amendment to Order XIV Rule 2 of the Code of Civil Procedure, 1908, mandates the court to pronounce judgment on all issues, even if the suit can be disposed of on a preliminary issue.
• They contended that the amendment was introduced to avoid delays in disposal of proceedings by ensuring that all issues are decided together, reducing the possibility of remand by appellate or revisional courts.
• The appellants relied on the word “shall” in the amended provision, arguing that it is mandatory for the court to decide all the issues.

Respondent’s Arguments:

• The respondent contended that on a question of res judicata, the preliminary issue needs to be framed.
• The respondent relied on the judgments of the Supreme Court in Abdul Rahman v. Prasony Bai & Anr., Srihari Hanumandas Totala v. Hemant Vithal Kamat & Ors. and Jamia Masjid v. K.V. Rudrappa (Since Dead) by LRs. & Ors. to support their argument.

Submissions Table

Issues Framed by the Supreme Court

• Whether the High Court was right in directing the trial court to frame a preliminary issue on res judicata?

Treatment of the Issue by the Court

Authorities

Cases:

Legal Provisions:

• Order XIV Rule 2 of the Code of Civil Procedure, 1908
• Order XX Rule 5 of the Code of Civil Procedure, 1908
• Order XLI Rules 24 and 25 of the Code of Civil Procedure, 1908

Judgment

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

• Major S. S. Khanna v. Brig. F. J. Dillon [AIR 1964 SC 497]: The Court discussed the principles laid down in this case regarding the trial of issues of law and fact. The Court reiterated that the Code confers no jurisdiction upon the Court to try a suit on mixed issues of law and fact as preliminary issues.
• Sunni Central Waqf Board and Ors. v. Gopal Singh Vishrad and Ors. [AIR 1991 ALL 89]: The Court referred to this case to highlight the changes brought about by the amendment to Order XIV Rule 2 of the Code of Civil Procedure, 1908, holding that it is now discretionary for the Court to decide the issue of law as a preliminary issue.
• Prithvi Raj Jhingta & Anr. v. Gopal Singh & Anr. [AIR 2007 HP 11]: The Court referred to this case to highlight the legislative intent behind the amendment to Order XIV Rule 2 of the Code of Civil Procedure, 1908, holding that except in situations under sub-rule (2), all issues of law and fact should be decided together.
• Hardwari Lal v. Pohkar Mal and Ors. [AIR 1978 P&H 230]: The Court referred to this case to highlight the limited cases in which a preliminary issue can be decided.
• Dhirendranath Chandra v. Apurba Krishna Chandra and Ors. [AIR 1979 Pat 34]: The Court referred to this case to highlight that the Court has a discretion to try an issue of law relating to jurisdiction or bar to the suit as a preliminary issue.
• Usha Sales Ltd. v. Malcolm Gomes and Ors. [AIR 1984 Bom 60]: The Court referred to this case to highlight that the Court may try an issue relating to the jurisdiction of the Court or to the legal bar to the suit as a preliminary issue.
• Smt. Aruna Kumari v. Ajay Kumar [AIR 1991 J&K 1]: The Court referred to this case to highlight that where the issue of jurisdiction is a mixed question of law and fact, it cannot be treated as a preliminary issue.
• Ramesh B. Desai and Ors. v. Bipin Vadilal Mehta and Ors. [(2006) 5 SCC 638]: The Court relied on this case to reiterate the principle that the Code confers no jurisdiction upon the Court to try a suit on mixed issues of law and fact as a preliminary issue.
• Sardar Amarjit Singh Kalra (Dead) by Lrs. v. Pramod Gupta (Smt) (Dead) by Lrs. & Anr. [(2003) 3 SCC 272]: The Court referred to this case to highlight that laws of procedure are meant to regulate effectively, assist and aid the object of doing substantial and real justice.
• Kailash v. Nanhku & Ors. [(2005) 4 SCC 480]: The Court referred to this case to highlight that all rules of procedure are the handmaid of justice.
• Sugandhi v. P . Rajkumar [(2020) 10 SCC 706]: The Court referred to this case to highlight that courts must lean towards doing substantial justice rather than relying upon procedural and technical violations.
• A. Shanmugam v. Ariya Kshatriya Rajakula Vamsathu Madalaya Nandhavana Paripalanai Sangam & Ors. [(2012) 6 SCC 430]: The Court referred to this case to highlight that the court must effectively discourage fraudulent and dishonest litigants.
• Abdul Rahman v. Prasony Bai & Anr. [(2003) 1 SCC 488]: The Court distinguished this case, stating that it was based on admitted facts and did not lay down a principle of law that a plea of res judicata can be decided as a preliminary issue.
• Srihari Hanumandas Totala v. Hemant Vithal Kamat & Ors. [(2021) 9 SCC 99]: The Court distinguished this case, stating that it was examining the scope of Order VII Rule 11 of the Code, whereas the present appeal deals with an application for framing of preliminary issues.
• Jamia Masjid v. K.V. Rudrappa (Since Dead) by LRs. & Ors. [2021 SCC OnLine SC 792]: The Court distinguished this case, stating that it was based on the specific facts of the case and did not lay down a principle of law that a plea of res judicata can be decided as a preliminary issue.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the need to ensure the expeditious disposal of cases and avoid piecemeal trials. The Court emphasized that the amended Order XIV Rule 2 of the Code of Civil Procedure, 1908, mandates the trial court to pronounce judgments on all issues, subject to the limited exceptions in sub-rule (2). The Court noted that res judicata is a mixed question of law and fact, and not a pure question of law that can be decided as a preliminary issue. The Court also highlighted that procedural laws are meant to aid justice, not to obstruct it.

The Court observed that the intention to substitute Rule 2 is the speedy disposal of the lis on a question which oust either the jurisdiction of the Court or bars the plaintiff to sue before the Civil Court.

The Court was also influenced by the fact that the absence of a decision on all issues can necessitate the matter to be remanded back, defeating the object of expeditious disposal of lis between the parties.

The Court held that the order of the High Court to direct the learned trial court to frame preliminary issue on the issue of res judicata is not desirable to ensure speedy disposal of the lis between parties.

Fact:Law Ratio

The Court’s reasoning was primarily based on the interpretation of the law, particularly Order XIV Rule 2 of the Code of Civil Procedure, 1908, and the legislative intent behind its amendment. The factual aspects of the case were considered to a lesser extent.

The Court considered alternative interpretations but rejected them in favor of a strict interpretation of Order XIV Rule 2, emphasizing the need to avoid delays and ensure a comprehensive adjudication of all issues.

The Court’s decision was to set aside the order of the High Court and direct the trial court to record findings on all the issues. This was based on the interpretation of Order XIV Rule 2 of the Code of Civil Procedure, 1908, and the legislative intent behind the amendment.

Ratio Decidendi

The Supreme Court held that under Order XIV Rule 2 of the Code of Civil Procedure, 1908, as amended, a court is mandated to pronounce judgment on all issues, even if the case can be disposed of on a preliminary issue. The exception to this rule is when the preliminary issue relates to the jurisdiction of the court or a bar to the suit created by any law. In such cases, the court may try that issue first. However, the court must still pronounce judgment on all issues, even if the preliminary issue is decided against the plaintiff. The court emphasized that res judicata is a mixed question of law and fact and cannot be treated as a preliminary issue.

Obiter Dicta

The Supreme Court made several observations that are not directly related to the main issue but provide guidance on the interpretation of procedural laws and the conduct of litigation. These observations include:

• Procedural laws are meant to regulate effectively, assist, and aid the object of doing substantial and real justice.
• Procedure has always been viewed as the handmaid of justice and not meant to hamper the cause of justice.
• The object of prescribing procedure is to advance the cause of justice.
• Courts must lean towards doing substantial justice rather than relying upon procedural and technical violations.
• Courts must effectively discourage fraudulent and dishonest litigants.
• It is the duty of the court to take appropriate remedial and preventive steps so that no one should derive benefits or advantages by abusing the process of law.

Conclusion

The Supreme Court’s judgment in Sathyanath vs. Sarojamani clarifies the procedure for handling preliminary issues in civil suits. The Court emphasized that the amended Order XIV Rule 2 of the Code of Civil Procedure, 1908, mandates the trial court to pronounce judgments on all issues, subject to the limited exceptions in sub-rule (2). The Court’s decision aims to ensure the expeditious disposal of cases and avoid piecemeal trials. The Court’s decision also highlights the importance of deciding all issues, even if a preliminary issue could potentially dispose of the case, to avoid delays and ensure a comprehensive adjudication. The decision reinforces the principle that procedural laws are meant to aid justice, not to obstruct it.