1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION APPEAL NO.844 OF 2006 IN SUIT NO.1050 OF 1996 Shri Dilipkumar G. Badlani ] Proprietor of M/s Beekay ] Pharmaceuticals, having its ] Appellant office at 23/25, Chewool Wadi, ] (Ori. plaintiff) Kolbhat Lane, Kalbadevi, ] Mumbai - 400 002. ] Vs. 1. Maharashtra State Financial ] Corporation, A body incorporated ] under the State Financial ] Corporation Act, 1951, having its ] office at New Excelsior Building, ] A.K. Nayak Marg, Fort, ] Mumbai - 400 001 ] ] Respondents 2. Shri S.R. Peety, ] (Ori. defendants) 635, Mistry Building, 3rd Floor, ] J.S.S. Road, Dhobi Talao, ] Mumbai - 400 002. ] ] 3. M/s Ray Pharmaceuticals, ] having its office at 5/1 Sher-e Punjab ] Colony, Mahakali Caves Road, ] Andheri (East), Mumbai - 400 093 ] Mr. P.J. Pandit, Advocate for appellant Mr. A.K. Barthakur, Advocate for respondent no.1 2 Coram : D.K. Deshmukh & Smt.R.P. SondurBaldota, JJ. Date : 10th June, 2010 PC : 1. This appeal arises out of the order dated 5th September 2006 passed by the learned single Judge dismissing Suit No.1050 of 1996 filed by the appellant as barred by res judicata under Section 11 Code of Civil Procedure. 2. The appellant had taken a loan from respondent no.1, Maharashtra State Financial Corporation and mortgaged the suit property to it under two deeds of mortgage. When he failed to repay the loan, respondent no.1 proceeded under Section 29 of State Financial Corporation Act, 1951 and sold the suit property to respondent no.2. The suit filed by the appellant was to challenge validity of that sale. The appellant had similarly taken a loan from the State Bank of India and created a mortgage over the same property. When he failed to repay the loan to the State Bank of India also, it filed proceedings for recovery before the Debt Recovery Tribunal 3 (D.R.T.), Mumbai being O.A. No. 339 of 1999. Respondent no.1, obviously, was not made a party to the proceedings before D.R.T.. It was subsequently impleaded therein at the instance of the appellant. After getting respondent no.1 impleaded, the appellant filed an interim application being Miscellaneous Application dated 2nd April 2001 in the proceedings in D.R.T. for setting aside the sale by respondent no.1. That application was heard and rejected by D.R.T. vide order dated 19th July 2004. The challenge to the order of rejection by the appellant was also unsuccessful since the appellate tribunal, D.R.A.T. dismissed his appeal by the order dated 22nd December 2004 and this Court dismissed the Writ Petition preferred against the order of D.R.A.T. 3. Respondent no.1 then took out a Notice of Motion contending that in view of the order dated 19th July 2004 passed by D.R.T., the suit filed by the appellant gets barred by res- judicata and praying that the issue of the suit being barred by res judicata be framed as preliminary issue and tried under Order 14, Rule 2(2) Code of Civil Procedure. Accordingly 4 the preliminary issue came to be framed and decided by the impugned judgment and order. The learned single Judge found that the issue involved in both the proceedings was same i.e. Whether the sale of suit property by defendant no. “ 1 was legal or otherwise and the sale was required to be set aside , the appellant and respondent no.1 were parties to ” both the proceedings, the D.R.T. was competent to try the issue and that the issue had been finally decided not only by the D.R.T. but by D.R.A.T. and finally by this court in writ petition No.440 of 2005. With these findings, the preliminary issue was answered in the affirmative and the suit dismissed. 4. We have heard learned counsel appearing for both sides. In our opinion, the learned single Judge is not correct in holding that the suit of the appellant is barred by res- judicata. Undisputedly the application filed by respondent no. 1 before the D.R.T. questioning validity of sale was an application for interim reliefs. The decision of D.R.T. on this interim application came to be confirmed by D.R.A.T. and later by this court. Consequently the decision of D.R.T. attained 5 finality as a decision at interlocutory stage. It did not finally decide the issue as regards validity of the sale. A decision or direction in an interlocutory proceedings cannot operate as res judicata so as to bar the hearing of the issue at the final hearing of the subsequent proceedings. This is clear from plain reading of Section 11 Code of Civil Procedure, which requires that the issue is heard and finally decided in the “ ” former proceedings. A decision or finding on the issue at the interlocutory stage may attain finality on rejection of the challenge to it in higher forums but that is only as an interim decision. It does not amount to final decision on “ ” the issue. This is because the considerations to be applied by the court at the two stages of the proceedings for deciding the question are entirely different. An application for interim reliefs is decided on a prima facie view of the matter which is based on probability of the plaintiff obtaining a relief on the material produced before the court whereas the final decision is based on the proof or evidence produced by the plaintiff. There can be no comparison between the two 6 stages. 5. Mr. Barthakur, learned counsel for respondent no.1 however submits that the principles of res judicata apply in different stages of the proceedings and therefore, the learned Single Judge was correct in answering the preliminary issue in favour of respondent no.1 and dismissing the suit. In this connection, he relies upon following two decisions of the Supreme Court : (i) Ajay Mohan and others vs. H.N. Rai and others, reported in (2008) 2 Supreme Court Cases, page 507 (ii) Bhanu Kumar Jain vs. Archana Kumar and another reported in (2005) 1 Supreme Court Cases page 787 6. We have gone through the decisions with the assistance of the learned counsel and find that none of them is applicable to the facts of the present case. In the first decision cited in Ajay Mohan s case, the second application for interim reliefs ’ in the same suit was held to be barred by res-judicata in view of dismissal of the earlier application on merits and there being no change in the circumstances justifying 7 reconsideration. 7. In the case of Bhanu Kumar Jain (supra), the proceedings giving rise to identical issue for consideration were i)application filed under Order 9, Rule 13 Code of Civil Procedure for setting aside exparte decree on the ground that posting of the case for exparte hearing was not correct and ii) the first appeal filed under Section 96(2) Code of Civil Procedure, that included challenge to the decree on merit also. The Apex Court observed at paragraph 37 of the judgment that- 37. We have, however, no doubt in our mind that “ when an application under Order 9 Rule 13 of the Code is dismissed, the defendant can only avail a remedy available thereagainst viz. to prefer an appeal in terms of Order 43 Rule 1 of the Code. Once such an appeal is dismissed, the appellant cannot raise the same contention in the first appeal. If it be held that such a contention can be raised both in the first appeal as also in the proceedings arising from an application under Order 9 Rule 13, it may lead to conflict of decisions which is not contemplated in law.” 3e8. The facts of the case on hand being entirely different, the decisions cited by Mr.Barthakur are not applicable. We have already observed above that an interim order/decision on any issue 8 in the former suit cannot operate as res-judicata for final consideration of the issue in another suit. In the circumstances, the appeal is allowed. The impugned order dated 5th September 2006 is set aside. The Suit No.1050 of 1996 is restored to file. ( Smt.R.P. SondurBaldota,J) ( D.K. Deshmukh, J.)