Suit Cannot Be Dismissed On Grounds Of Res Judicata Without Giving Party An Opportunity To Respond: Bombay High Court
The Bombay High Court has ruled that the bar of res judicata under Section 11 of the Civil Procedure Code (CPC) cannot be invoked for the first time in a final judgment without framing an issue or giving parties an opportunity to respond. It has set aside a single judge's judgment that dismissed a suit invoking res judicata at the decree stage without prior notice.
A division bench of Justices M.S. Sonak and Jitendra Jain was hearing an appeal filed by M/s. Unique Integrated Transport & Management Consultancies Pvt. Ltd., the original plaintiff, against the judgment dated September 26, 2012, by which the Company's suit was dismissed with costs of ₹1 lakh.
The Single Judge had ruled that the claims in the suit were barred by res judicata, as they had already been adjudicated in four prior arbitral awards between the parties. However, the Division Bench noted that the defence of res judicata was not pleaded in the written statement, no issue was framed at the trial, and the parties were not given any chance to respond.
“While the Court unquestionably has the power to frame additional issues or modify or recast existing ones, it is equally imperative that the parties be provided with a sufficient opportunity to address these new or altered issues,” the Court observed.
The Court emphasised that if an additional issue relating to res judicata needed to be framed, the parties should have been given an opportunity to address this issue by leading relevant evidence or, if they chose to rely solely on documents, by referring to all relevant documents for determining this issue. The framing of proper issues is not some empty formality.
Citing Prem Kishore and others Vs. Brahm Prakash and others [2023 (19) SCC 244], the Court reiterated that “the basic method for determining the question of res judicata is first to determine the case… and then to ascertain what was decided by the judgment that operates as res judicata. The plea of res judicata is basically founded on the identity of the cause of action in the two suits and, therefore, it is necessary for the defence which raises the bar to establish the cause of action in the previous suit.”
The Court remarked that the appellant/plaintiff was caught by surprise at the inclusion of res judicata in the impugned judgment and decree itself, without being provided any opportunity to address this issue or to produce any evidence to demonstrate that this plea was not applicable in the facts and circumstances of the present case.
The Court observed that the procedure adopted was not entirely consistent with the principles of natural justice.
Accordingly, the Court set aside the judgment and decree, and remanded the matter to the learned Single Judge to decide the suit afresh. It granted liberty to frame a res judicata issue if appropriate, but directed that both parties must be afforded a fair opportunity to address it.
Case Title: M/s. Unique Integrated Transport & Management Consultancies Pvt. Ltd. v. Mahanagar Telephone Nigam Ltd. & Ors. [Appeal No. 39 of 2013 in Suit No. 1165 of 1996]