IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE THOTTATHIL B.RADHAKRISHNAN & THE HONOURABLE MR. JUSTICE S.S.SATHEESACHANDRAN FRIDAY, THE 30TH JULY 2010 / 8TH SRAVANA 1932 AS.NO. 570 OF 1991(C) --------------------- {OS.196/1979 OF THE PRINCIPAL SUB COURT, KOCHI} .................... APPELLANT(S)/1ST PLAINTIFF: ---------------------------------- M/S.V.O.VAKKAN & SONS, (DIED) ALLEPPEY, A REGISTERED PARTNERSHIP CONCERN REPRESENTED BY ITS MANAGING PARTNER, V.V.JOSEPH, RESIDING AT PACHALAM, COCHIN – 12. ADDL.APPELLANT NO.2 V.V.GEORGE, SON OF V.V.JOSEPH, WARRAM PARAMBIL HOUSE, PACHALAM. COCHIN – 12. IMPLEADED AS ADDITIONAL APPELLANT NO.2 AS THE REPRESENTATIVE-IN-INTEREST OF THE DECEASED MANAGING PARTNER OF THE APPELLANT FIRM IN THE APPEAL AS PER ORDER DATED 28.1.97 ON CMP 2633/96. BY ADV. SRI.S.V.BALAKRISHNA IYER, SENIOR ADVOCATE & SRI.K.JAYAKUMAR RESPONDENT(S)/DEFENDANTS 1 & 2: ------------------------------------------ 1. STATE OF KERALA REPRESENTED BY CHIEF SECRETARY TO GOVT., GOVT. SECRETARIAT, TRIVANDRUM. AS.NO. 570 OF 1991 :: 2 :: 2. DISTRICT COLLECTOR, ERNAKULAM DISTRICT, ERNAKULAM. R1 & R2 BY GOVERNMENT PLEADER SRI.B.RAMANAND R1 & R2 ADDL.ADVOCATE GENERAL SRI.RENJITH THAMPAN THIS APPEAL SUITS HAVING BEEN FINALLY HEARD ALONG WITH AS NO.43 OF 1994 ON 01/06/2010, THE COURT ON 30/07/2010 DELIVERED THE FOLLOWING: “C.R.” THOTTATHIL B.RADHAKRISHNAN & S.S.SATHEESACHANDRAN, JJ. --------------------------------------- A.S.Nos.570 of 1991 & 43 of 1994 --------------------------------------- Dated this the 30th day of July, 2010 JUDGMENT S.S.SATHEESACHANDRAN, J. These two appeals arise from the common judgment passed in two suits jointly tried by the Additional Sub Court, Cochin. 2. Both the suits were filed in forma pauperis challenging the revenue recovery proceedings by the State against the properties of the plaintiffs, a firm and a partner, common in both cases, and seeking re-delivery of the properties sold in revenue sales, allegedly, towards amounts due, recoverable as arrears of public revenue due on land, to the Government. Suits, after trial, were dismissed. A.S.No.570/91 arises from O.S.No.196/79 instituted before the Sub Court, Cochin. The other appeal, A.S.No.43/94 is from a suit transferred to the above court, A.S.Nos.570 of 1991 & 43 of 1994 :: 2 :: and renumbered as O.S.No.86 of 1981, which was earlier instituted as O.S.No.252 of 1979 before the Sub Court, Alleppey. The suits were instituted before two different courts, Sub Court of Cochin and Alleppey, since revenue sales impeached in such suits were in respect of properties situate within the jurisdiction of the respective court. Suit pending on the file of the Sub Court, Alleppey was transferred to the Sub Court, Cochin by orders of this Court to facilitate joint trial and disposal of the suits. 3. The first plaintiff is a registered firm represented by its Managing Partner, and the 2nd plaintiff a partner of the firm, who is also the son of its Managing Partner. The firm was carrying on the business of coir exporting and while so, as its operation was seriously affected resulting in lay off and retrenchment of its workers, the Government intervened, and pursuant to mediation talks for revival of the operation of the firm, A.S.Nos.570 of 1991 & 43 of 1994 :: 3 :: and, more so to protect the interests of its workers, the Government agreed to stand as a guarantor to a Nationalised Bank to extend financial assistance to the firm to the tune of Rs.20 lakhs. A sum of Rs.6 lakhs was then outstanding as liability from the firm to a bank viz., National Grindlays Bank. The Government furnished a guarantee to another bank – Syndicate Bank, to provide financial assistance of Rs.20 lakhs to the firm in which apart from incorporating specific terms insulating the right of the Government to realise the sum from the firm and its assets and also of the partners of the firm both personally and from their properties in the event of default of discharge of the liability to the bank in instalments, for which a period of three years was provided, the bank was empowered to take such other security as required from the firm to extend the financial facility. Ext.A4 is a copy of the guarantee deed executed by the Government to the A.S.Nos.570 of 1991 & 43 of 1994 :: 4 :: bank. The bank guarantee was furnished, admittedly, after the firm as represented by its Managing Partner and also the 2nd plaintiff executed a mortgage of its properties, eight items, as security for the payment of the loan amount of Rs.20 lakhs. Ext.A5 is a copy of that mortgage deed. Already an equitable mortgage over some properties of the firm and its partners was then subsisting in favour of the Grindlays Bank, which had extended earlier some financial facility to the firm and in respect of which then a liability of Rs.6 lakhs was outstanding. Pursuant to furnishing of the guarantee by the Government, after taking Ext.A5 mortgage from the firm, Syndicate Bank advanced financial facility of Rs.20 lakhs to the firm, out of which Rs.6 lakhs was paid to discharge the liability of Grindlays Bank. Security documents furnished with the above bank were collected, and other documents afresh were taken from the firm, to secure the facility provided. The firm A.S.Nos.570 of 1991 & 43 of 1994 :: 5 :: failing to repay the amount to the bank, even after expiry of the period specified under the guarantee given by the Government, after giving notice to discharge the liability and that being not responded by payment, the Government initiated proceedings under the Revenue Recovery Act {for short “RR Act”} against the firm, and, later, after revenue sale, honouring the commitment made in its guarantee cleared off the liabilities due from the firm to the bank. 4. Pursuant to the attachment effected over the properties in the revenue recovery proceedings and in continuation thereof, the properties of the firm and its partners including the eight items covered by Ext.A5 mortgage deed, were brought to sale. The properties sold in public auction in recovery proceedings were purchased by the Government for nominal price since there were no bidders to purchase properties even on the second auction held for sale. Some of the items, situate in Alleppey, A.S.Nos.570 of 1991 & 43 of 1994 :: 6 :: pursuant to such revenue sale were later assigned to the 3rd defendant in O.S.No.86/81. 5. The two suits were instituted impeaching the revenue sales as vitiated by fraud and material irregularities in the proceedings taken and also in conducting of the sales. Seeking declaration of the revenue sale of the properties under the RR Act as void, the plaintiffs in the respective suit sought for recovery of possession of the properties with mesne profits. 6. In O.S.No.196/79 the State and the District Collector, are the defendants and the properties in that suit are situate in Cochin. In the other suit, re-numbered as O.S.No.86/81, previously, instituted as O.S.No.252 of 79 before the Sub Court, Alleppey, the properties are situate in Alleppey, in which apart from the State and the District Collector, Alleppey, two more defendants, the State Coir Corporation Limited and Formatrics Limited have been A.S.Nos.570 of 1991 & 43 of 1994 :: 7 :: impleaded as 3rd and 4th defendants. In the respective suit, the defendants therein have filed written statement, with the State and the District Collector concerned filing joint written statements, raising identical contentions in which, among others, the maintainability of the suit challenging the jurisdiction of the Civil Court to entertain the dispute canvassed for adjudication, was also raised. Defendants 3 and 4 in O.S.No.86/81 filed separate written statements and, later, an additional written statement by the 3rd defendant as well. Refuting the case of the plaintiffs as to the fraud alleged in the revenue sale, these defendants contended that after coming into possession, huge investments had been made in the properties, constructing buildings and installing imported machineries and that a factory is now operated for manufacturing coir products. Apart from challenging the suit claim as barred by limitation, the maintainability of the suit was also resisted A.S.Nos.570 of 1991 & 43 of 1994 :: 8 :: contending that it is barred by the principles of res judicata as the plaintiffs had unsuccessfully challenged and questioned the revenue sale over the properties covered by the suit in a writ petition earlier and such petition had been disposed on merits repelling all the challenges to the sale. 7. Having joint trial of the two suits in which Pws.1 to 5 were examined on behalf of the plaintiffs and Dws.1 to 7 for the defendants, with documentary evidence Exts.A1 to A40 and Exts.B1 to B17 for the respective side, and after meticulous consideration of the pleadings, and the materials and evidence, and hearing the counsel on both sides, the court below non-suited the plaintiffs arriving at a conclusion that the challenges mooted against the revenue sales as vitiated by fraud and material irregularity are unworthy of any merit. Having regard to Section 81 of the RR Act and also noting that there was an A.S.Nos.570 of 1991 & 43 of 1994 :: 9 :: allegation of 'fraud' in the plaint in the respective suit, it was held that the challenge against the maintainability of the suit as barred under Section 72 of the above Act is not correct and both the suits are entertainable before the Civil Court. So far as the revenue sale conducted over the properties covered by O.S.No.86/81, situate in Alleppey, the contention raised that the suit is barred by res judicata in view of the decision rendered earlier in the original petition filed by the 2nd plaintiff before this court, was accepted and it was held that the above suit is barred by res judicata. Suits, both of them, were found to be barred by limitation, as the suits impeaching revenue sales had been filed beyond the prescribed period fixed under Section 81 (2) of the RR Act. 8. Propriety, legality and correctness of the decision of the court below dismissing both the suits is challenged in the appeals, which too are prosecuted as A.S.Nos.570 of 1991 & 43 of 1994 :: 10 :: indigent persons obtaining permission to do so. Both appeals were preferred by the 1st plaintiff firm alone as represented by its managing partner. On the death of that managing partner pending appeals, the second plaintiff, partner of the firm, who is the son of the Managing Partner, was substituted to represent the firm. 9. We have heard the learned senior counsel for the appellant Sri.S.V.Balakrishna Iyer, the learned Government Pleader Sri.K.B.Ramanand , for the common respondents 1 and 2 in both appeals and also, Sri.C.C.Thomas, Senior Advocate, who appeared for the 3rd respondent and Sri.P.R.Venkitesh, who appeared for the 4th respondent in A.S.No.43 of 1994, in extenso. 10. On the rival submissions made, we notice that before examining the challenges canvassed by the plaintiffs impeaching the revenue sales, in respect of which declaration had been sought for in the respective A.S.Nos.570 of 1991 & 43 of 1994 :: 11 :: suit that such sales are void, the maintainability of the suits before the civil court, with both the suits having been found barred by limitation, and one of them by res judicata as well, by the court below, has to be examined at first and then alone the claim of the plaintiffs that the revenue sales are vitiated by fraud, the fulcrum of the case for the reliefs in the suits, need be gone into. 11. The learned Sub Judge has found that the suit, O.S.No.86/81, which was earlier instituted before the Sub Court, Alleppey as O.S.No.252/79, in which the challenge was against the revenue sale over the properties situate in Alleppey, is barred by res judicata as such revenue sale had been unsuccessfully challenged earlier in a writ petition by the 2nd plaintiff. That writ petition was disposed on merits, negativing the challenges as to the illegality and irregularities of the revenue sale, was given weightage to reach a conclusion that a subsequent A.S.Nos.570 of 1991 & 43 of 1994 :: 12 :: challenge by the suit, setting up a case that the sale is vitiated by fraud is barred by res judicata. There is no dispute that the 2nd plaintiff had filed a writ petition as O.P.No.2592/76 challenging the revenue sale over the properties of the firm in Alleppey, the subject matter of O.S.No.86/81 and that writ petition was dismissed by this court on 25.10.1976. In Ext.B11 file produced by defendants 1 and 2 in the above suit, the judgment rendered in the above writ petition forms part of, and the court below, after taking note of the findings made thereunder, negativing the challenges over the revenue sale assailed in the writ petition, concluded that the plaintiffs cannot re-agitate the issue again before the civil court by a fresh suit. 12. Before us, the learned senior counsel appearing for the plaintiffs adverting to the circumstances that defendants 1 and 2, the State and the District A.S.Nos.570 of 1991 & 43 of 1994 :: 13 :: Collector, who had conducted the recovery proceedings and also the revenue sale, in their joint written statement, have not set up a plea of res judicata, that the plea thereof canvassed by the other defendants (defendants 3 and 4) is vague, without any particulars, that the writ petition was filed by the 2nd plaintiff in his personal capacity and the present suit was by a firm impeaching the revenue sale over its properties, and that the suit challenging the sale is based on the fraud in the revenue recovery proceedings, and more so of the sale, which was discovered after the disposal of the writ petition, contended that the finding entered by the court below that the suit is barred by res judicata is palpably erroneous under law and facts. Learned counsel further contended that res judicata being a mixed question of fact and law, without necessary foundation being made in the pleadings and materials produced in support of such a plea, on the basis of the A.S.Nos.570 of 1991 & 43 of 1994 :: 14 :: observations made in a previous judgment alone, it is not proper and correct to form a conclusion that the suit instituted later is barred by res judicata especially when the allegations made in the suit spell out that the revenue sale is assailed on the ground of fraud subsequently detected, which was not the case when such sale was assailed in the writ petition. 13. We do not find any merit in the submissions made by the counsel that the suit assailing the revenue sale is not barred, despite the adverse decision rendered by this court dismissing the writ petition of the 2nd plaintiff at an earlier point of time impeaching such sale since the 2nd plaintiff had filed the writ petition in his personal capacity and the present suit is by the firm. The enabling provision under Rule XXX of Code of Civil Procedure, permitting a firm to file a suit in its name does not in any way indicate that the suit is not by the partners of the firm, A.S.Nos.570 of 1991 & 43 of 1994 :: 15 :: but by a different entity. A suit filed by a firm is in fact one filed by the partners of the firm. A challenge under Article 226 of the Constitution by way of a writ petition can be entertained only by a legal entity and so much so, the previous challenge in the petition by one of the partners - 2nd plaintiff, to assail the revenue sale of the properties of the firm, is nothing but a challenge for and on behalf of the firm and it is binding on the firm. True, the plea of res judicata is a mixed question of fact and law and to raise such a plea, the essential pleadings are to be spelt out by the defendant in his written statement. Even then, away from the res judicata, the judgment given in a previous suit is a relevant piece of evidence under Sections 11, 13 and 35 of the Evidence Act, 1872 and has material bearing on the controversy arising for decision in the latter suit. The findings recorded in a judgment by a competent court in a previous suit, if they have relevance in a latter suit cannot A.S.Nos.570 of 1991 & 43 of 1994 :: 16 :: be ignored for the reason that the essential foundation to substantiate a plea of res judicata is not made out in the pleadings and no other material of the previous case other than the judgment was produced in the latter case. The question to be then considered is whether the judgment has relevance in the latter suit. In appreciating the relevancy of the judgment in a previous case, in the subsequent suit or proceeding, as a vital piece of evidence, the court has to examine the consequences that may flow ignoring such a material piece of documentary evidence on the controversy arising for decision, and the court if satisfied that the judgment in the previous case is a relevant and material piece of evidence of undoubted veracity, it cannot be ignored as it would result in serious error of law having a vitiative effect on the findings on a most vital issue in the case. {see Madhukar D. Shende v. Tarabai Aba Shedage [AIR 2002 SC 637] and A.S.Nos.570 of 1991 & 43 of 1994 :: 17 :: Tirumala Tirupati Devasthanams v. K.M.Krishnaiah [AIR 1998 SC 1132]}. We also take note that defendants 3 and 4 in their written statements, separately filed, raising a plea of res judicata have specifically contended that the suit is barred in view of the decision rendered in the previous writ petition by the 2nd plaintiff. The plaintiffs have thereupon filed a replication raising identical pleas now canvassed that the decision on the writ petition filed by the 2nd plaintiff was not binding on the firm. We have already stated the the writ petition filed by the 2nd plaintiff, a partner, is binding on the firm. An issue had also been raised in the suit whether the challenge against the revenue sale is barred by res judicata in view of the decision in the previous writ petition. No prejudice was caused to the plaintiffs asthe plea of res judicata had been raised in the trial of the suit, even if no other material was produced other than the judgment forming part of A.S.Nos.570 of 1991 & 43 of 1994 :: 18 :: Ext.B11 file. We have gone through the judgment rendered in O.P.No.2592/76 filed by the 2nd plaintiff challenging the revenue sale over the properties of the firm situate in Alleppey. This court, taking note of the inordinate delay in challenging the revenue sale under the writ petition has held that no valid explanation was offered for such delay to question the legality of the auction sale. On merits also, it was found that the petitioner has not been able to make out any irregularity much less any illegality in the conduct of the impugned auction sale. Challenges raised by the petitioners that the impugned sale was held in violation of the provisions of the RR Act were repelled. While dismissing the petition and that too indisputably on merit, the only reservation made was that the decision of this court would not preclude the petitioner from moving any representation before the Government for redressal of the hardship that might have caused to him A.S.Nos.570 of 1991 & 43 of 1994 :: 19 :: from the revenue sale. That reservation at the most was only an enabling one to move a mercy petition before Government, and not of conferment of any legal right to re- agitate the challenges to revenue sale again by fresh proceedings or suit. The present suit, at a later point of time, after dismissal of the writ petition, as indicated above, is based on fraud in the conducting of the revenue sale and such fraud was discovered only after the disposal of the writ petition, the plea now advanced by the counsel for the firm to wriggle out of the entanglement of the bar of res judicata, from the adverse decision rendered in the writ petition negativing the challenges to revenue sale, deserve only to be taken note of for its rejection. Even assuming that there was some fraud in the revenue recovery proceedings or in the conducting of the sale, then also recourse by review of the judgment rendered by this court in the writ petition, but not a fresh challenge against A.S.Nos.570 of 1991 & 43 of 1994 :: 20 :: the revenue sale instituting a suit before the civil court is permissible under law. 14. The bar of res judicata canvassed by defendants 3 and 4 in the above suit, whether or not spelt out with specific particulars thereof and also substantiated by the pleadings of the previous case is not of material value when the judgment rendered in the writ petition referred to above clearly demonstrate that the issue, challenge against the revenue sale canvassed in the suit had been raised earlier before this court and on merits the challenge thereof had been negatived. Where an issue of fact has been raised by a competent court on a previous occasion and finding has been reached one way or other, such finding under the judgment would constitute estoppel by record precluding the reception of evidence, to disturb the finding of fact previously entered, in the latter proceeding. In fact, on the proved facts and circumstances A.S.Nos.570 of 1991 & 43 of 1994 :: 21 :: presented, there is a clear bar of cause of action estoppel interdicting the plaintiffs from re-agitating the challenge against the revenue sale in respect of the properties situate in Alleppey. In that view of the matter, we find that the bar of res judicata to the suit which was upheld by the court below, impeached on the ground of technicalities as to the non-furnishing of specific particulars and non- production of pleadings of the previous case, has no merit as the judgment rendered in the writ petition clearly spell out that the matter directly and substantially in issue in the suit and the writ petition is the same and a fresh adjudication of such issue again in the suit is interdicted by public policy, and not to be entertained. Fraud in the conduct of recovery proceedings and sale, detection of which later after disposal of the writ petition, canvassed as giving rise to the cause of action for the suit, but not so pleaded in the plaint, makes no difference over the bar of A.S.Nos.570 of 1991 & 43 of 1994 :: 22 :: res judicata to the latter proceeding, and that is so even if such a case is pleaded, since the decision rendered in the writ petition can be annulled or varied only as provided by law, and not by a fresh suit seeking adjudication of the issue already decided and conclusively determined between the parties. Entertaining a fresh suit on the plea canvassed, detection of fraud, after having been worsted in the previous case over the same cause of action, would defeat the very purpose of res judicata, which is based on public policy that none should be vexed twice in the same cause and also that there should be finality to the litigation. Such a bar to the fresh suit is based on the salutary principle that once a res is judicata it shall not be adjudged again. The finding of the court below that O.S.No.86 of 1981 is barred by res judicata is proper and correct, and it is so affirmed. A.S.Nos.570 of 1991 & 43 of 1994 :: 23 :: 15. The court below has also found that both the suits are barred by limitation. We notice that more or less identical allegations are raised in both the suits to challenge the revenue sales over the properties of the firm in Alleppey and also Cochin, setting forth a common case, and similar cause of action that after the dismissal