Supreme Court clarifies the application of res judicata in eviction cases: Prem Kishore & Ors. vs. Brahm Prakash & Ors. (29 March 2023)

Introduction

Date of the Judgment: 29 March 2023

Citation: 2023 INSC 317

Judges: Justice Sudhanshu Dhulia and Justice J.B. Pardiwala

Can a landlord file a second eviction suit if the first one was dismissed because they failed to prove they were actually the landlord? The Supreme Court of India recently addressed this question, focusing on the legal principle of res judicata, which prevents the same issue from being litigated repeatedly. This case examines whether a previous dismissal due to lack of evidence acts as a bar to a new eviction petition.

The core issue revolves around the interpretation of Order 17 Rules 2 and 3 of the Code of Civil Procedure (CPC) and how they relate to the principle of res judicata under Section 11 of the CPC. The Court had to determine whether the dismissal of an earlier eviction petition, due to the landlord’s failure to prove the landlord-tenant relationship, constitutes a decision on merits, thereby barring a subsequent eviction petition on the same grounds.

The judgment was delivered by a two-judge bench comprising Justice Sudhanshu Dhulia and Justice J.B. Pardiwala. The judgment was authored by Justice J.B. Pardiwala.

Case Background

The appellants (landlords) claimed that the respondents (tenants) were inducted into their property on 27 December 1987 by the appellants’ father, at a monthly rent of Rs. 1050. The tenancy was for residential purposes, and rent was paid until February 1993.

On 4 March 1996, the appellants’ father sent a demand notice to the respondents, claiming arrears of rent amounting to Rs. 27,800. When the arrears were not paid, the father filed an eviction petition on 21 May 1996, under Section 14(1)(a) of the Delhi Rent Control Act, 1958.

The respondents denied the landlord-tenant relationship in their written statement. The landlords failed to appear before the Rent Controller to establish the landlord-tenant relationship, despite several opportunities. Consequently, on 27 January 1998, the Rent Controller dismissed the eviction petition due to the landlord’s failure to provide evidence.

After the death of the original landlord, the appellants, as successors, filed another eviction petition on 18 May 2001, claiming rent arrears from 1 March 1993. The respondents argued that the second petition was barred by res judicata, as the landlord-tenant relationship was not proven in the first petition.

Timeline:

Course of Proceedings

The Additional Rent Controller rejected the respondents’ application to dismiss the second eviction petition, stating that the second petition was based on a fresh notice and a separate cause of action. The Additional Rent Controller also noted that there was no finding on merits regarding the landlord-tenant relationship in the first order.

The High Court of Delhi, however, reversed this decision, allowing the respondents’ civil revision petition. The High Court held that the first eviction petition was dismissed due to the landlord’s failure to produce evidence, which constituted a decision on merits under Order 17 Rule 3 of the CPC. The High Court concluded that the second petition was barred by res judicata because the landlord-tenant relationship was not established in the first proceedings.

Legal Framework

The case primarily involves the interpretation of the following legal provisions:

• Section 11 of the Code of Civil Procedure (CPC): This section defines the principle of res judicata, which prevents a court from trying any suit or issue that has been directly and substantially decided in a former suit between the same parties. The section states:
  
  No Court shall try any suit or issue in which the matter directly and substantially in issue has been directly and substantially in issue in a former suit between the same parties, or between parties under whom they or any of them claim, litigating under the same title, in a Court competent to try such subsequent suit or the suit in which such issue has been subsequently raised, and has been heard and finally decided by such Court.
• Order 7 Rule 11 of the Code of Civil Procedure (CPC): This rule specifies the grounds on which a plaint can be rejected. Clause (d) of this rule states that a plaint shall be rejected “where the suit appears from the statement in the plaint to be barred by any law.”
  
  The plaint shall be rejected in the following cases: — (a) where it does not disclose a cause of action; (b) where the relief claimed is undervalued, and the plaintiff, on being required by the Court to correct the valuation within a time to be fixed by the Court, fails to do so; (c) where the relief claimed is properly valued, but the plaint is returned upon paper insufficiently stamped, and the plaintiff, on being required by the Court to supply the requisite stamp-paper within a time to be fixed by the Court, fails to do so; (d) where the suit appears from the statement in the plaint to be barred by any law; (e) where it is not filed in duplicate; (f) where the plaintiff fails to comply with the provisions of rule 9.
• Order 17 Rules 2 and 3 of the Code of Civil Procedure (CPC): These rules outline the procedure when parties fail to appear or produce evidence. Rule 2 deals with situations where parties fail to appear, and Rule 3 deals with situations where a party fails to produce evidence.
  
  2. Procedure if parties fail to appear on day fixed .—Where, on any day to which the hearing of the suit is adjourned, the parties or any of them fail to appear, the Court may proceed to dispose of the suit in one of the modes directed in that behalf by Order IX or make such other order as it thinks fit. Explanation. —Where the evidence or a substantial portion of the evidence of any party has already been recorded and such party fails to appear on any day to which the hearing of the suit is adjourned, the Court may, in its discretion, proceed with the case as if such party were present. 3. Court may proceed notwithstanding either party fails to produce evidence, etc .— Where any party to a suit to whom time has been granted fails to produce his evidence, or to cause the attendance of his witnesses, or to perform any other act necessary to the further progress of the suit, for which time has been allowed, the Court may, notwithstanding such default, — (a) if the parties are present, proceed to decide the suit forthwith; or (b) if the parties are, or any of them is, absent, proceed under rule 2.

Arguments

Appellants’ Arguments:

• The appellants argued that the High Court erred in holding that the second eviction petition was barred by res judicata. They contended that the issue of res judicata is a mixed question of law and fact and cannot be decided solely based on the plaint.
• They submitted that the first order passed by the Rent Controller was not on merits and, therefore, could not be binding in the second eviction petition. They argued that the High Court incorrectly applied Order 17 Rule 3 of the CPC.
• The appellants emphasized that the plaint of the second eviction petition did not contain any averment which would suggest that the petition was barred by any law.

Respondents’ Arguments:

• The respondents argued that the High Court was correct in rejecting the second eviction petition. They contended that the original landlord was given sufficient opportunities to establish the landlord-tenant relationship but failed to do so.
• They submitted that the Rent Controller’s order in the first eviction petition was under Order 17 Rule 3 of the CPC and was a decision on merits. Therefore, the appellants, as successors, could not file a fresh eviction petition on the same grounds.
• The respondents relied on several cases, including Union of India v. Nanak Singh, AIR 1968 SC 1370, Satyadhyan Ghosal & Ors. v. Smt. Deorajin Devi & Anr., AIR 1960 SC 941, and others, to support their argument that the second petition was barred by res judicata.

The innovativeness of the arguments lies in the appellants’ challenge to the High Court’s interpretation of the Rent Controller’s order. The appellants argued that the order was not a decision on merits and, therefore, could not operate as res judicata.

Issues Framed by the Supreme Court

The Supreme Court framed the following issue:

1. Whether the High Court was justified in rejecting the plaint of the eviction petition on the ground that the second eviction petition was barred by the principles of res judicata.

Treatment of the Issue by the Court

The following table demonstrates as to how the Court decided the issues

Authorities

The Supreme Court considered the following authorities:

On the principle of res judicata and Order 7 Rule 11 of the CPC:

• V. Rajeshwari v. T.C. Saravanabava, (2004) 1 SCC 551: This case discussed the plea of res judicata and the particulars required to prove it. The Court held that it is necessary to refer to the copies of the pleadings, issues, and judgment of the ‘former suit’ while adjudicating on the plea of res judicata.
• Kamala & others v. K.T. Eshwara Sa, (2008) 12 SCC 661: This case examined the ambit of Order 7 Rule 11(d) of the CPC, stating that the suit must be barred under any law based on the averments in the plaint. The Court also held that the principles of res judicata require examination of the plaint and other evidence, which cannot be done at the stage of Order 7 Rule 11.
• Church of Christ Charitable Trust & Educational Charitable Society v. Ponniamman Educational Trust, (2012) 8 SCC 706: This case reiterated that the power under Order 7 Rule 11 of the CPC can be exercised at any stage of the suit, and the court must look into the averments in the plaint.
• Soumitra Kumar Sen v. Shyamal Kumar Sen, (2018) 5 SCC 644: This case held that the defense in the written statement cannot be considered while deciding an application under Order 7 Rule 11 of the CPC.
• Srihari Hanumandas Totala v. Hemant Vithal Kamat, (2021) 9 SCC 99: This case summarized the guiding principles for deciding an application under Order 7 Rule 11(d) of the CPC.

On the interpretation of Order 17 Rules 2 and 3 of the CPC:

• B. Janakiramaiah Chetty v. A.K. Parthasarthi & Ors., (2003) 5 SCC 641: This case discussed the scope of Order 17 Rule 2 and Order 17 Rule 3 of the CPC, highlighting the discretionary power of the court.
• Prativadi Bhayankaram Pichamma v. K. Sreeramulu, AIR 1918 Mad 143 (FB): This Full Bench decision of the Madras High Court held that Rules 2 and 3 of Order XVII of the Code of Civil Procedure are mutually exclusive.
• Mariannissa v. Ramkalpa Gorsin, ILR 34 Cal 235: This decision of the Calcutta High Court considered the relationship between Section 157 and 158 of the Code of Civil Procedure, 1882, which correspond to Order XVII rules 2 and 3 respectively of the Code of Civil Procedure of 1908.
• Gopi Kishan v. Ramu, AIR 1964 Raj 147: This Full Bench decision of the Rajasthan High Court discussed the application of Order XVII Rules 2 and 3.
• Shidramappa Irappa Shivangi v. Basalingappa Kushnapa Kumbhar, AIR 1943 Bom 321: This Full Bench decision of the Bombay High Court discussed the interpretation of Order XVII Rules 2 and 3.
• Prakash Chander Manchanda v. Janki Manchanda, (1986) 4 SCC 699: This case clarified that the court has to proceed under Rule 2 when a party is absent and no evidence has been examined on their behalf.
• R. Ravindran v. M. Rajamanickam, 2006 SCC Online Mad 169: This case discussed the interpretation of Order 17 Rules 2 and 3 of the CPC.

Legal Provisions:

• Section 11 of the Code of Civil Procedure (CPC): Defines the principle of res judicata.
• Order 7 Rule 11 of the Code of Civil Procedure (CPC): Specifies grounds for rejection of a plaint.
• Order 17 Rules 2 and 3 of the Code of Civil Procedure (CPC): Outlines procedures when parties fail to appear or produce evidence.

Judgment

How each authority was viewed by the Court?

• The Court relied on V. Rajeshwari v. T.C. Saravanabava, (2004) 1 SCC 551* to emphasize that a plea of res judicata needs to be substantiated by producing copies of the pleadings, issues, and judgments of the previous case.
• The Court cited Kamala & others v. K.T. Eshwara Sa, (2008) 12 SCC 661* to highlight that Order 7 Rule 11(d) of the CPC has a limited application and that the suit must be barred by law based on the averments in the plaint.
• The Court referred to Church of Christ Charitable Trust & Educational Charitable Society v. Ponniamman Educational Trust, (2012) 8 SCC 706* to reiterate that the court must scrutinize the averments in the plaint while considering an application under Order 7 Rule 11 of the CPC.
• The Court considered Soumitra Kumar Sen v. Shyamal Kumar Sen, (2018) 5 SCC 644* to underscore that the defense in the written statement cannot be gone into while deciding an application under Order 7 Rule 11 of the CPC.
• The Court used Srihari Hanumandas Totala v. Hemant Vithal Kamat, (2021) 9 SCC 99* to summarize the guiding principles for deciding an application under Order 7 Rule 11(d) of the CPC.
• The Court analyzed B. Janakiramaiah Chetty v. A.K. Parthasarthi & Ors., (2003) 5 SCC 641* to discuss the scope of Order 17 Rule 2 and Order 17 Rule 3 of the CPC.
• The Court examined Prativadi Bhayankaram Pichamma v. K. Sreeramulu, AIR 1918 Mad 143 (FB)* and other cases to discuss the interpretation of Order 17 Rules 2 and 3 of the CPC.
• The Court referred to Prakash Chander Manchanda v. Janki Manchanda, (1986) 4 SCC 699* to clarify that the court has to proceed under Rule 2 when a party is absent and no evidence has been examined on their behalf.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the following factors:

• Distinction between dismissal on merits and dismissal for default: The Court emphasized that the first eviction petition was dismissed due to the landlord’s failure to produce evidence, which constitutes a dismissal for default under Order 17 Rule 2 of the CPC, not a decision on merits under Order 17 Rule 3.
• Interpretation of Order 17 Rules 2 and 3: The Court clarified that Rule 3 applies when a party is present but fails to produce evidence, while Rule 2 applies when a party is absent. The Court noted that the High Court erred in applying Rule 3 when the landlord was absent and had not presented any evidence.
• Application of res judicata: The Court held that for res judicata to apply, the matter must have been decided on merits in the former suit. Since the first eviction petition was dismissed for default, it did not operate as res judicata to bar the second petition.
• Emphasis on the plaint: The Court reiterated that for rejecting a plaint under Order 7 Rule 11(d) of the CPC, only the averments in the plaint should be considered. The defense in the written statement cannot be considered at this stage.

The Court emphasized that the power under Rule 3 of Order 17 is a drastic one that should be used sparingly, and that the mere existence of the conditions mentioned in Rule 3 is not sufficient to decide the suit on merits unless there are some materials on record to decide the suit.

Fact:Law Ratio:

The Court’s reasoning was primarily based on a legal analysis of the relevant provisions of the CPC and the application of the principle of res judicata. While factual aspects of the case were considered, the legal interpretation of the rules of procedure played a more significant role in the Court’s decision.

Logical Reasoning:

The Supreme Court considered the argument that the High Court’s decision was based on an incorrect application of Order 17 Rule 3 of the CPC. The Court rejected this interpretation, emphasizing that the dismissal was due to the landlord’s absence and failure to produce evidence, which falls under Order 17 Rule 2, not Rule 3. The Court also considered the argument that the second eviction petition was barred by res judicata, but rejected it on the grounds that the previous dismissal was not on merits.

The Court decided that the High Court had erred in rejecting the second eviction petition. The Supreme Court held that the first eviction petition was dismissed for default and not on merits. Therefore, the principle of res judicata did not apply, and the second eviction petition was maintainable.

The Court’s decision was based on the following reasons:

• The first eviction petition was dismissed because the landlord failed to produce evidence to establish the landlord-tenant relationship. This dismissal was for default under Order 17 Rule 2 of the CPC, not a decision on merits under Rule 3.
• The principle of res judicata applies only when a matter has been decided on merits in a former suit. A dismissal for default does not constitute a decision on merits.
• The High Court incorrectly applied Order 17 Rule 3 of the CPC. The Court stated that Rule 3 comes into play when a party is present but fails to produce evidence, whereas Rule 2 applies when a party is absent.
• The Court reiterated that the power under Order 7 Rule 11(d) of the CPC should be exercised only when the suit is barred by any law based on the averments in the plaint, not on the basis of the defense in the written statement.

Final Order

The Supreme Court allowed the appeal, setting aside the impugned judgment and order passed by the High Court of Delhi. The Court held that the High Court was not justified in rejecting the plaint of the eviction petition. The matter was remitted to the Additional Rent Controller for further proceedings in accordance with the law. The Court also clarified that the observations made in the judgment should not influence the Additional Rent Controller while deciding the matter on merits.

Key Takeaways

The Supreme Court’s judgment in Prem Kishore & Ors. vs. Brahm Prakash & Ors. clarifies several important aspects of res judicata and the application of Order 17 Rules 2 and 3 of the Code of Civil Procedure (CPC) in eviction cases:

• Res Judicata Requires Decision on Merits: The principle of res judicata applies only when a matter has been heard and finally decided on its merits in a former suit. A dismissal for default, such as when a party fails to produce evidence, does not constitute a decision on merits and, therefore, cannot bar a subsequent suit on the same grounds.
• Distinction between Order 17 Rules 2 and 3 of CPC:
  • Order 17 Rule 2: Applies when a party fails to appear on the day fixed for hearing. In such cases, the court may proceed under Order IX or make such other order as it thinks fit.
  • Order 17 Rule 3: Applies when a party is present but fails to produce evidence or perform any other necessary act for the progress of the suit. In such cases, the court may decide the suit forthwith or proceed under Rule 2 if the party is absent.
• Limited Scope of Order 7 Rule 11(d) of CPC: The power to reject a plaint under Order 7 Rule 11(d) of the CPC should be exercised only when the suit appears to be barred by any law based on the averments in the plaint. The defense in the written statement cannot be considered at this stage.
• Importance of Procedural Correctness: The Court emphasized that the power under Rule 3 of Order 17 is a drastic one that should be used sparingly, and that the mere existence of the conditions mentioned in Rule 3 is not sufficient to decide the suit on merits unless there are some materials on record to decide the suit.

This judgment serves as a crucial reminder of the importance of adhering to the procedural aspects of the law and the need to distinguish between dismissals on merits and dismissals for default. It also clarifies the limited scope of the power under Order 7 Rule 11(d) of the CPC.