S. P. v. CHIT FUNDS & EXECUTORSHIP CO. LTD. VS MOHAMED MOIDEEN
1977-11-29
GEORGE VADAKKEL
body1977
DigiLaw.ai
Judgment :- 1. The decree-holder, a Company, is the appellant in this case. It is the foreman of a Chitty. The 1st defendant was a subscriber in that Chitty. He prized the ticket and he along with his three brothers, defendants Nos. 2 to 4, executed the mortgage bond on which the appellant instituted the suit, in which the decree under execution was passed. The said mortgage was in 1961. The decree that is put in execution is dated 22 21970. By that decree the decree-holder is allowed to realise the mortgage amount by sale of the mortgage holding which, as seen from the schedule to the decree, is a substantial building consisting of nine rooms and situate in Ward No. XIX of the than Ernakulam Municipality now the Cochin Corporation. 2. Admittedly, the building aforesaid directed to be sold by the decree stands on a stranger's land and the same constitutes the kudikidappu of the judgment-debtors. When the building was put up for sale in execution of the decree, the judgment-debtors objected to sale of the same claiming that the same being their kudikidappu it is inalienable as provided in S.78 of the Kerala Land Reforms Act, 1963. The lower courts upheld the aforesaid contention and stopped the sale. Hence this appeal 3. The questions that arise for consideration are whether the execution Court can, despite the decree for sale, on any ground refuse to execute the same and stop the sale; and, whether S.75 and 78 of the Kerala Land Reforms Act, 1963 prohibit Court-Sale of a kudikidappu in execution of a mortgage-decree for sale of it. 4. A competent judicial decision is conclusive until reversed, and the verity of the matter or issue decided cannot be contradicted by either of the parties thereto nor raised again by them in any subsequent proceeding between them including execution proceedings in the same suit. Though this principle of res judicata is applicable to proceedings in execution of a decree in the same suit, S.11 of the Code of Civil Procedure, 1908 in terms does not govern those proceedings for (he reason that there are no two suits, a former and a subsequent suit, as contemplated by that provision. See Appayya v. Venkataratnam (AIR. 1954 Madras 1).
See Appayya v. Venkataratnam (AIR. 1954 Madras 1). It is not disputed in this case that the decree for sale of the kudikidappu was passed by a Court having jurisdiction over the parties and the subject matter. I will therefore proceed on the basis that the appellant has made out a primafacie case of res judicata by establishing all the constituent elements of an estoppel by judgment or estoppel per rem judicatam. 5. When a primafacie case of res judicata is established and if the opposite party is not in a position to meet by direct denial or disproof the case so made against him, it is still open to him to defeat the estoppel by setting up and establishing certain affirmative answers. Of these there are four main classes 'fraud, cross-estoppel, contract and public policy'; Spencer-Bower and Turner on Res judicata, second Edn. Para 369. The first three answers are not advanced in this case, and the fourth alone remains to be examined here. 6. The earlier view was that'public policy has little or no importance in cases of estoppel by res judicata'. See Spencer Bower on Res judicata, First Edition, para 274, and Second Edition Para 388 However, it appears that without so stating Courts were recognising an affirmative answer of public policy when judicial decisions upheld such contentions as 'there is no estoppel against a statute', 'that a public officer cannot be estopped from carrying oat his duties under the statute' like a taxation statute etc. In taxation cases the plea of res judicata was got over by Courts by upholding also the answer that 'the questions were different because the years were different' See Instalement Supply (Pri) Ltd. v. Union Bank of India (AIR 1962 SC. 53), New Jehangir Vakil Mills Co. Ltd v. Income Tax Commissioner (AIR 1964 SC 318), Society of Medical Officers of Health v. Hope Valuation Officer (1960 AC. 551 H.L ), and Caffoor v Income Tax Commissioner (1961 AC.
53), New Jehangir Vakil Mills Co. Ltd v. Income Tax Commissioner (AIR 1964 SC 318), Society of Medical Officers of Health v. Hope Valuation Officer (1960 AC. 551 H.L ), and Caffoor v Income Tax Commissioner (1961 AC. 584 P.C.) In the last mentioned case Lord Radcliffe said (at pages 599 and 600): "It may be that the principles applied in these cases form a somewhat anomalous branch of the general law of estoppel per rem judicatam and are not easily derived from or transferred to other branches of litigation in which such estoppels have to be considered; but in their Lordships' opinion they are well established in their own field, and it is not by any means to be assumed that the result is one that should be regretted in the public interest." 7. In Kok Hoong v. Leong Cheong Kweng Mines Ltd. (1964 A.C. 993 P.C.) Viscount Radcliffe elaborated the above statement of law. That was a case on appeal from the Federation of Malaya. The Civil Procedure Code of the Federation which contained a provision corresponding to S.11 of our Code was repealed from April 1, 1958. The case was decided applying the general principles of res judicata. The appellant, one K had let certain machinery to the respondent Company, L, for 12 months at an agreed monthly rent. K. Brought an action for arrears of rent from September 1953 and obtained a judgment by default in November, 1954. Thereafter brought an action in 1957 claiming arrears of rent from April 20, 1955. L raised the contention that K was a money lender within the meaning of Money Lender's Ordinance, 1951, that the transaction was a money lending transaction and that K having not complied with the provisions of the Ordinance, the loans were not recoverable. The respondent also contended that the transaction was not in compliance with certain provisions of Bills of Sales Ordinance, 1950. K replied that the earlier decision is res judicata.
The respondent also contended that the transaction was not in compliance with certain provisions of Bills of Sales Ordinance, 1950. K replied that the earlier decision is res judicata. Two points were considered by the Board: (i) the proper limitations of a judgment by default as res judicata, and (ii) the scope 'of the rules that preclude a Court from allowing an estoppel, if to do so would be to act in the face of a statute and give recognition through the admission of one of the parties to a state of affairs which the law has positively declared is not to subsist'. 7. On the second point, the Board said: "The respondent has invoked in support of its defence a principle which appears in our law in many forms, that a party cannot setup an estoppel in the face of a statute..." "It does not appear to their Lordships that the principle invoked is confined to transactions that have been made the subject of legislation or that, where legislation is in question, the bare prescription that a transaction is to be void or unenforceable is sufficient by itself to justify the principle's application. Thus, on the one hand, the common law may itself prohibit the enforcement of certain contracts, such as those of an infant not for necessaries, and it cannot be supposed that it would any the less refuse to base a judgment on an estoppel against an infant who had so contracted..." "It has been said that the question whether an estoppel is to be allowed or not depends on whether the enactment or rule of law relied upon is imposed in the public interest or "on grounds of general public policy" (see In re A Bankruptcy Notice, per Atkin L. J.). But a principle as widely stated as this might prove to be rather an elusive guide, since there is no statute, at least public general statute, for which this claim might not be made.
But a principle as widely stated as this might prove to be rather an elusive guide, since there is no statute, at least public general statute, for which this claim might not be made. In their Lordships' opinion a more direct test to apply in any case such as the present, where the laws of money lending or monetary security are involved, is to ask whether the law that confronts the estoppel can be seen to represent a social policy to which the Court must give effect in the interests of the public generally or some section of the public, despite any rules of evidence as between themselves that the parties may have created by their conduct or otherwise. Thus the laws of gamming or usury (Carter v. James) override an estoppel: so do the provisions of the Rent Restriction Acts with regard to orders for possession of controlled tenancies (Welch v. Hagy). General social policy does from time to time require the denial of legal validity to certain transactions by certain persons. This may be for their own protection, as in the case of the infant or other category of persons enjoying what is to some extent a protected status, or for the protection of others who may come to be engaged in dealings with them, as for instance, the creditors of a bankrupt. In all such cases there it no room for the application of another general and familiar principle of the law that a man may, if he wishes, disclaim a statutory provision enacted for his benefit, for what is for a man's benefit and what is for his protection are not synonymous terms. Nor is it open to the court to give its sanction to departures from any law that reflects such a policy, even though the party concerned has himself behaved in such a way as would otherwise tie his hands. See In re Stapleford Colliery Co., per Bacon V. C." 8.
Nor is it open to the court to give its sanction to departures from any law that reflects such a policy, even though the party concerned has himself behaved in such a way as would otherwise tie his hands. See In re Stapleford Colliery Co., per Bacon V. C." 8. The principle deducible is that illegality and public policy derived from statute, certainly, and derived from the common law and not from statute also, perhaps, may furnish an adequate answer to estoppel per rem judicatam, if the statutory provision or common law rule represents a social policy for the protection of certain persons entering into certain transactions or for the protection of others who may be affected by dealings with the first mentioned persons, so that it is beyond those persons' competence to disclaim such protection. If on the other band, the statutory provision or common law rule is intended only for the benefit of certain class of persons and not for their or others' protection and no social policy of protection of anyone is discernible behind it, any person of that class, though he may avail of such benefit, may also disclaim the same, and therefore, violation of the statutory provision or contravention of the common law rule is no answer to defeat estoppel per rem judicatam. I hasten to caution that lam stating the above principle only in relation to a plea of res judicata founded on general principle and not with reference to such a plea based on S.11 of the Code where, perhaps, different considerations may arise. 9. Therefore, the question for consideration in this case is whether S.75 and 78 of the Kerala Land Reforms Act, 1963 enshrine any social policy intended for the protection of any class of persons or whether they are intended only for the benefit of certain class of persons. If the former be the legislative intent, the execution Court, despite a mortgage-decree for sale of a kudikidappu, taking note of such intention on the part of the legislature should refuse to execute the; decree and bring to sale the kudikidappu, but not otherwise. 10.
If the former be the legislative intent, the execution Court, despite a mortgage-decree for sale of a kudikidappu, taking note of such intention on the part of the legislature should refuse to execute the; decree and bring to sale the kudikidappu, but not otherwise. 10. The material portion of S.75 reads: "Kudikidappukaran to have fixity: (1) No Kudikidappukaran shall be liable to be evicted from his Kudikidappu except on the following grounds namely: (i) that he has alienated his right of Kudikidappu to a person other than (a) a member of his family; or (b) a person who has no other homestead or any land in possession, either as owner or as tenant, on which he could erect a homestead and whose annual income does not exceed two thousand rupees; (ii) that he has rented or leased out his entire kudikidappu to another person for a period of not less than two years; (iii) that he has ceased to reside in the kudikidappu continuously for a period of two years; or (iv) that he has another kudikidappu or has obtained ownership and possession of land which is fit for erecting a homestead within a distance of five kilometres from his kudikidappu: Provided that the kudikidappukaran shall not be liable to be evicted on the ground mentioned in sub-clause (iv) if the extent of the land over which be has obtained ownership and possession is not more than three cents if it is in a city or municipality or five cents if it is in any other municipality or ten cents if it is in a panchayat area or township: Provided further that a kudikidappukaran shall be liable to be evicted, if he has obtained ownership and possession of land situate beyond a distance of five kilometers where the extent of such land is not less than twenty-five cents." S. 78 is as follows: "Right of kudikidappukaran to be heritable but not alienable except in certain cases: The rights of a kudikidappukaran in his kudikidappu shall be heritable but not alienable except to any person mentioned in sub-clause (a) or sub-clause (b) of clause (i) of sub-section (1) of S.75." 11.
Noticing that, ' generally speaking a kudikidappukaran is a hutment dweller in permissive occupation of the land on which his but stands and who holds no land on which he could erect a homestead Raman Nayar C. J. in Narayanan Nair v. State of Kerala (1970 KLT. 659 F.B ) examining the constitutional validity of S.75 said that, 'so far as agricultural land is concerned, it seems to us that there is in all cases some connection between the existence of kudikidappu therein and the cultivation of that land so that the conferment of benefits on kudikidappukaran must prima facie be regarded as a measure of agrarian reform' and that 'S. 75 of the Act only prevents a kudikidappukaran from being thrown out without good reason the reasons are specified while at the same time making provision (albeit cumbrous and largely impracticable) for shifting the kudikidappu and seems to us to come within the ambit of agrarian reform. (See Paras 57 to 59). Approvingly extracting these paragraphs and the preceding three paragraphs in extenso and noticing the measures taken by the Cochin State and T-C State for 'giving relief against eviction of kudikidappukars' the Supreme Court in Kunjukutty Sahib v. State of Kerala (1972 KLT. 353) in meeting the argument that that provision is unconstitutional for the reason that the definition of kudikidappukaran is not confined to agricultural labourers alone but also even non-agricultrists said: "It may, however be recalled that according to the High Court all the lands in the cases with which we are concerned are agricultural lands constituting estates within the contemplation of Art.31A (2) (a) (iii) and all persons benefited by the impugned provisions are occupants of huts on such agricultural lands and are connected with agriculture " That decision shows that during the course of arguments the learned Advocate General 'suggested that the provisions of the Act may be read down so as to confine the statutory benefit only to those kudikidappukars who are agricultural labourers'. 12. In the backdrop of the above mentioned judicial pronouncements the provisions relating to kudikidappukars in the Act appear to be intended to ameliorate the conditions of kudikidappukars by conferring on them certain benefits like prevention of indiscriminate eviction, making the kudikidappu right heritable and also to a certain extent, alienable and enabling the kudikidappukaran to purchase the kudikidappu and some land appurtenant to it.
The Act provides that all arrears of rent due from him on 1 11970 shall be deemed to be discharged by payment of one year's rent or the actual amount in arrears, whichever is less and puts a ceiling on the annual rent payable by him thereafter. Under the provisions of the Act he can maintain, repair and reconstruct the kudikidappu without increasing the plinth area by more than 50% and is entitled to customary and other rights for the proper enjoyment of the kudikidappu. In short certain rights in respect of the kudikidappu which he till then had not are for the first time conferred on him to improve his conditions. One of such rights conferred on him is a restricted right of alienation. Alienation to anyone other than a person mentioned in Sub-clause (a) or (b) of clause (i) of Subsection 1 of S.75 is a ground for his eviction. S.78 rather emphasises the fact that his right of alienation in restricted than prohibits him from alienating the kudikidappu to a person not falling within sub-clause (a) or (b) of clause (i) of S 75(1). In other words S.78 only defines, declares and delimits the restricted right of alienation conferred on him. That alienation of kudikidappu to one outside those mentioned in sub-clauses (a) and (b) is a ground for eviction would not mean that he is prohibited from making such an alienation. If it were so, equally it could be said that his ceasing to reside in the kudikidappu for a period of 2 years or his obtaining ownership and possession of land tit for erecting a homestead within a distance of 5 kilometres of his kudikidappu (these are also grounds on which eviction may be sought) are also prohibited but it is inconceivable that it is so. In short, while prior to the enactment of the statute a kudikidappukaran could be evicted from his kudikidappu without assigning any reason whatsoever, and perhaps, only subject to the provisions of S.60 of the Easements Act, 1882 (See Vasu v. Sreedharan (1977 KLT. 898) and Vasu v. Sreedharan (1974 KLT. 466), after its commencement, he could be evicted only on one or the other of the grounds mentioned in S.75(1) of the Act.
898) and Vasu v. Sreedharan (1974 KLT. 466), after its commencement, he could be evicted only on one or the other of the grounds mentioned in S.75(1) of the Act. This does not mean that he may not disclaim the benefit and may not make himself liable to be evicted by doing an act which will be a ground for his eviction under S.75(1) of the Act. On the other hand the Section proceeds as if he can do so, for it does not invalidate or make void such an act The result is that S.75(1) and S.78 are not protective provisions though they are beneficial legislations. The respondents cannot therefore, relying on these provisions defeat the conclusiveness of the decree for sale of the building which is their kudikidappu. 13. The learned counsel for the respondents cited the Full Bench decision of the Madras High Court in Mohan Ram v. T.L. Sundararamier (AIR. 1960 Madras 377(FB)). The Madras decision concerned the alienation of certain service inam lands by way of mortgage. On the said mortgage the mortgagee obtained a decree for sale. When the decree was put is execution and the property itself was brought to sale, the same was purchased in execution and the sale was confirmed after overruling certain objections raised by the mortgagor and his son. It was the order confirming the sale that was impugned in the appeal before the Full Bench. It was observed therein by Ramswami J. that the principle that the execution court cannot go behind the decree would not be applicable 'to the extent of compelling the executing court to sell inalienable service inam lands prohibited on grounds of public policy cither by statute or under the general law'. (See para 24 at pages 381, 382). It was noticed by Anantanarayanan J in the same decision that'under certain exceptional circumstances at least, an executing court can go behind the decree, and refuse to execute a decree which is both opposed to public policy and to enacted law'. (See para 32). According to the learned judge the said power is a power vested in the court and not the right of a party or 'the power of a party at all'. The principle was stated to be in the same paragraph as: 'the power arises really because the conscience of the court is stirred'.
(See para 32). According to the learned judge the said power is a power vested in the court and not the right of a party or 'the power of a party at all'. The principle was stated to be in the same paragraph as: 'the power arises really because the conscience of the court is stirred'. However, it was also said in the aforesaid decision as follows: "The power of the executing court to go behind the decree, because it is opposed to public policy and also offends a statutory prohibition, is upon another plane altogether. It must be carefully delimited, and no executing Court can launch into what is virtually a fresh trial, because of more allegations, or of further new material claimed to be available. To stir the conscience of the court, material on the same footing, as the decree itself, and equally evident and indisputable, must show that the land is inalienable, and that the sale offends public policy and law" (para 32 pp 383 84,". 14. The Madras decision aforesaid referred to and dissented from the decision of the Full Bench of the Andhra Pradesh High Court in Venkataseshayya v. Virayya (AIR 1968 Andhra Pradesh 1) (FB) relied on behalf of the appellant. In that case Subba Rao C. J. of that Court, as he then was, pointed out as follows: "There is no conflict between the principle of res judicata and that of prohibited alienation of particular properties on the ground of public policy. An alienation of properties prohibited by public policy or statute may be void. But the said prohibition cannot have the effect of depriving the jurisdiction of Courts to decide in a particular suit whether the alienation is void or not. Nor can it override the principles of res judicata. The former belongs to the domain of substantive law and the latter to the rule giving finality to decrees of competent Courts. The sanctity of final judgments is as much based on public policy as prohibition against the alienation of properties annexed to certain public offices. The fundamental question in each case, therefore, is whether the Court has inherent jurisdiction to entertain a particular suit. A duty is cast upon a Court to raise relevant issues arising on the pleadings and give definite findings on each of the issues.
The fundamental question in each case, therefore, is whether the Court has inherent jurisdiction to entertain a particular suit. A duty is cast upon a Court to raise relevant issues arising on the pleadings and give definite findings on each of the issues. The question whether a carpenter service inam is alienable raises a mixed question of fact and law which is certainly within the jurisdiction of the Court to decide. When it decides the question one way, the finding will be res judicata in another suit. If the defence which ought to be raised is not raised, the Court must be deemed to have decided against the contention not raised. In the instant case, the validity of the mortgage on the ground of public policy was not raised in the earlier suit or in the execution proceedings, and therefore, the decree and the order confirming sale could operate as res judicata in the present suit". (Para 19 at p 7). The reasoning mentioned by the learned Chief Justice in the Andhra Pradesh decision was adverted to by the Madras Full Bench Anantanarayanan J. in relation to the aforesaid statement of law said as follows: "With the greatest respect, I venture to suggest that the two principles of res judicata or constructive res judicata, and of prohibited alienation of properties on grounds of public policy and the enacted law, are upon different planes. The first principle inhibits the party and takes away the power of the court to try the plea, in all contested cases raising a mixed question of fact and law (as the learned Chief Justice himself observes in this very context), by deeming a decision to the effect that the land was alienable. The second principle is an overriding principle, really related to the conscience of the court. Though a party may invoke the exercise of the power, the court will exercise it only under exceptional circumstances; that is, under the conditions enunciated by my learned brother (Ramaswami, J). In this case, the principles are reconcilable and no party can invite an executing court to embark on an enquiry into a controverted question of fact, with reference to material which is not upon the same footing as the decree sought to be executed, nor equally evident.
In this case, the principles are reconcilable and no party can invite an executing court to embark on an enquiry into a controverted question of fact, with reference to material which is not upon the same footing as the decree sought to be executed, nor equally evident. But where the fact is not in dispute that the decree contravenes both public policy and the law, because it is a decree for sale of service inam land, or where it is incontrovertibly established by material on the same footing as the decree itself, in the very suit the executing court is entitled, as a matter of conscience and its power, to go behind the decree and to refuse to execute it. The rule of constructive res judicata cannot operate to prevent the court from doing so, both because this is an overriding power, and because, in such an instance, it would really be a matter of refusal to infringe the law, and there can be no estoppel against statute." (paragraph 37 at page 384) 15. With greatest respect it appears to me that the Andhra decision seems to have stated the proposition a little too broadly when it said that since the sanctity of finality of judgments is as much based on public policy, a competent decision is conclusive between the parties thereto and that the plea of resjudicata arising from such conclusiveness cannot be defeated by an affirmative answer that the decision is violative of social policy enshrined in a protective statutory provision. But, note that the plea of resjudicata raised in that case was founded on S.11 CPC. and not on general principles as in the Madras Case. In the Andhra case, the plaintiffs mortgaged certain carpenter service inam lands. On the mortgage, the mortgagee filed a suit for sale, obtained a decree and sold the mortgaged lands in execution of that decree. The sale was confirmed. The mortgagee auction purchaser assigned the sale rights to the defendants in the suit. The mortgagors then filed a suit for injunction restraining the defendants from further proceeding with the execution on the ground that the decree for sale and the sale in execution of that decree were null and void. Holding that S.47 CPC. is no bar to the maintainability of the suit, the question of resjudicata was considered with reference to S.11 CPC, and with respect, rightly so.
Holding that S.47 CPC. is no bar to the maintainability of the suit, the question of resjudicata was considered with reference to S.11 CPC, and with respect, rightly so. (See Kelappan v. Anandan (1970 KLT. 510) and Koran v. Kamala Shetty (1977 KLT. 358)). While fraud, waiver, cross-estoppel, that is, a later decision on the same rights between the same parties (see Padmanabhan Krishnan v. Mathevan Pillai Kesava Pillai (1952 KLT. 319), Mundan Raman alias Kochukunju v. Kochukunju Narayanan (1957 KLT. 196) and Devaru Vasudevan v. Raman Pillai Neelakanta Pillai and another (AIR. 1963 Kerala 217)) and a contract disclaiming the plea of res judicata may nullify the decision, a protective statutory provision may not perhaps, have that effect it is not necessary for me to decide these questions here and therefore, may not be an affirmative answer to defeat S.11 of the CPC. But, I am at one with the Madras decision (hat it would defeat a plea of res judicata founded on general principles, and that the execution Court cannot be compelled to do something prohibited by a protective statutory provision enacted on grounds of social policy. 16. An affirmative answer defeats estoppel per rem judicatam, and the answer is advanced on the premise that the opposite parly has established all the constituent elements including the competency of the Court to try ana render the decision, and conceding the same. If so, an answer founded on illegality and public policy can be, and has to be, as one founded, for instance, on fraud or later decision (cross-estoppel) pleaded and established by adducing evidence, if necessary, and I see no reason to confine this enquiry to the pleadings and other records in the case. It is likely that the plaint will not disclose that the transaction sued on is illegal as contravening a protective statutory provision enshrining public policy and the suit might have been decided by default, or ex parte, as in this case, wherefore, the records of the case will not disclose any illegality. If the answer was raised and decided, the decision, even if erroneous, will operate as res judicata.
If the answer was raised and decided, the decision, even if erroneous, will operate as res judicata. It appears to me that unless it had been raised and decided against the person who subsequently raises that question wherefore he will be precluded from raising it over again, he would be entitled to establish it by adducing evidence in that behalf, for to confine him to the records of the case would mean that his right to defeat a plea of res judicata founded on general principles by an affirmative answer is an illusory right. Therefore, there is no merit in the contention advanced on behalf of the appellant that there is nothing on the records which will go to show that the appellant, a company, is not a person falling within sub-clause (a) or (b) of clause (i) of sub-section (1) of S.75 of the Act, but it is not necessary to pursue further this aspect of the case in the face of what is stated in Para.2 above, namely, that S.75 (1) and 78 of the Act, though are beneficial legislations, are not protective statutory provisions. 17. I am not, in this case, concerned as to what would be the consequence of sale in execution of the mortgage holding pursuant to the decree in that behalf. That is a matter between the auction-purchaser and the owner of the land, on which the building stands and it is not necessary for me to say anything thereon. In view of what is stated above, the appellant is entitled to succeed. I set aside the orders-passed by the lower courts which are under appeal. I hold that the appellant is entitled to execute the decree and bring the mortgage-holding to sale in execution of the same. The appeal is allowed as aforesaid, but in the circumstances of the case there will be no order as to costs. Allowed.