Perpetual transfer of right, title, or interest in an immovable property, by way of Agreement to Sale, Power of Attorney, or Will, whether valid?

Does the POA (Power of Attorney) transfers any right, title, or interest in an immovable property? What if such POA (Power of Attorney) is irrevocable?

 

OR

 

Ajay Chakraborty, a resident of Jalpaiguri District but falling in Siliguri, who was owning ½ share of land located in Fulbari under Rajganj Block of Jalpaiguri, sold his share to Babu Ghosh, of Jalpaiguri Sadar, by the documents like Agreement to Sell, Power of Attorney, or Will. Ajay himself got the ½ share on 11.3.1984 by way of Agreement to Sale, Power of Attorney, or Will in his favor by the Original Owner. Is Babu Ghosh the owner of the ½ share?

OR

 

Biplab Saha, a resident of Darjeeling District of Phansidewa area of Siliguri, who was owning land located in Bagdogra sold his share to Amlan Bose, of Matigara, by Will. Biplab himself got the land on 11.9.1994 by way of Agreement to Sale, Power of Attorney, or Will in his favor by the Original Owner. Is Biplab Saha the owner of the land?

 

DISCUSSION AND ANSWER.

 

The Supreme Court has considered the question of the validity of transactions in the form of power of attorney in Suraj Lamp and Industries Pvt. Ltd. through Director vs. State of Haryana & Anr. (2012) 1 SCC 656, and has held that no rights could be accrued on such transactions as this is not a legal mode of transfer. The Apex Court has observed :

 

"20. A power of attorney is not an instrument of transfer in regard to any right, title, or interest in an immovable property. The Power of Attorney is a creation of an agency whereby the grantor authorizes the grantee to do the acts specified therein, on behalf of the grantor, which when executed will be binding on the grantor as if done by him (see, Section 1A and Section 2 of the Powers of Attorney Act, 1882). It is revocable or terminable at any time unless it is made irrevocable in a manner known to law. Even an irrevocable attorney does not have the effect of transferring title to the grantee.

21. In-State of Rajasthan vs. Basant Nehata 2005 (12) SCC 77 this Court held:

"13. A grant of power of attorney is essentially governed by Chapter X of the Contract Act. By reason of a deed of power of attorney, an agent is formally appointed to act for the principal in one transaction or a series of transactions or to manage the affairs of the principal generally conferring necessary authority upon another person. A deed of power of attorney is executed by the principal in favor of the agent. The agent derives a right to use his name and all acts, deeds, and things are done by him and subject to the limitations contained in the said deed, the same shall be read as if done by the donor. A power of attorney is, as is well known, a document of convenience.

Execution of a power of attorney in terms of the provisions of the Contract Act as also the Powers-of-Attorney Act is valid. A power of attorney, we have noticed hereinbefore, is executed by the donor so as to enable the done to act on his behalf. Except in cases where power of attorney is coupled with an interest, it is revocable. The donee in exercise of his power under such power of attorney only acts in place of the donor subject, of course, to the powers granted to him by reason thereof. He cannot use the power of attorney for his own benefit. He acts in a fiduciary capacity. Any act of infidelity or breach of trust is a matter between the donor and the done.

An attorney holder may, however, execute a deed of conveyance in the exercise of the power granted under a power of attorney and convey title on behalf of the grantor.

 

Scope of Will

 

A will is the testament of the testator. It is a posthumous disposition of the estate of the testator directing the distribution of his estate upon his death. It is not a transfer inter vivo. The two essential characteristics of a will are that it is intended to come into effect only after the death of the testator and is revocable at any time during the lifetime of the testator. It is said that so long as the testator is alive, a will is not beworth the paper on which it is written, as the testator can at any time revoke it. If the testator, who is not married, marries after making the will, by operation of law, the will stands revoked. (see Sections 69 and 70 of the Indian Succession Act, 1925). Registration of a will does not make it any more effective.

 

Conclusion

 

Therefore, a Special Power of Attorney/General Power of Attorney/WILL transaction does not convey any title nor create any interest in an immovable property. The observations by the Delhi High Court, in Asha M. Jain vs. Canara Bank 94 (2001) DLT 841 that the "concept of power of attorney sales have been recognized as a mode of transaction" when dealing with transactions by way of SA/GPA/WILL are unwarranted and not justified, unintended misleading the general public into thinking that SA/GPA/WILL transactions are some kind of a recognized or accepted mode of transfer and that it can be a valid substitute for a sale deed. Such decisions to the extent they recognize or accept SA/GPA/WILL transactions as concluded transfers, as contrasted from an agreement to transfer, are not good law.

We will draw our conclusion from paras 16 and 17 of the recent judgment of the Supreme Court in Shiv Kumar & Anr. vs. Union of India and Ors. 2019 0 AIR(SC) 5374; 2019 10 SCC 229, (3 Judges Bench) :

Para 16. We, therefore, reiterate that immovable property can be legally and lawfully transferred/ conveyed only by a registered deed of conveyance. Transactions of the nature of 'GPA sales' or 'SA/GPA/WILL transfers' do not convey title and do not amount to transfer, nor can they be recognized or valid mode of transfer of immovable property. The courts will not treat such transactions as completed or concluded transfers or as conveyances as they neither convey title nor create any interest in an immovable property. They cannot be recognized as deeds of title, except to the limited extent of Section 53A of the Transfer of Property Act. Such transactions cannot be relied upon or made the basis for mutations in Municipal or Revenue Records. What is stated above will apply not only to deeds of conveyance in regard to freehold property but also to transfer of leasehold property. A lease can be validly transferred only under a registered Assignment of Lease. It is time that an end is put to the pernicious practice of SA/GPA/WILL transactions known as GPA sales.

 

Para 17. It has been submitted that making declaration that GPA sales and SA/GPA/WILL transfers are not legally valid modes of transfer is likely to create hardship to a large number of persons who have entered into such transactions, and they should be given sufficient time to regularize the transactions by obtaining deeds of conveyance. It is also submitted that this decision should be made applicable prospectively to avoid hardship.” No right can be claimed based on a transfer made by way of execution of Power of Attorney, Will, etc., as it does not create any interest in immovable property.

 

Answer to Question II.

Ajay Chakraborty, a resident of Jalpaiguri District falling in Siliguri, who was owning ½ share of land located in Fulbari under Rajganj Block of Jalpaiguri, sold the share to Babu Ghosh, of Jalpaiguri Sadar, by the documents like Agreement to Sell, Power of Attorney, or Will. Ajay himself got the ½ share on 11.3.1984 by way of Agreement to Sale, Power of Attorney, or Will in his favor by the Original Owner,. The purchase made through Agreement to Sale, Power of Attorney, or Will by Ajay did not confer a title upon him to transfer it to Babu Ghosh. Based on purchase made from such owners whose title was not perfect, Babu Ghosh had no derivative title in the eye of law. There was no legally recognized title deed in favor of Ajay Chakraborty in the first place. A person cannot bequeath a better title than what he has. Therefore no title accrues in favour of Babu Ghosh.

Answer to Question III.

Biplab Saha, a resident of Darjeeling District of Phansidewa area of Siliguri, who was owning land located in Bagdogra sold his share to Amlan Bose, of Matigara, by Will. Biplab himself got the land on 11.9.1994 by way of Agreement to Sale, Power of Attorney, or Will in his favor by the Original Owner. For the same reasons as stated above in reply to Question II, Biplab acquires no Right, Title or Interest in the Land.

 

UNDERSTANDING WEDNESBURY PRINCIPLE OF UNREASONABLENESS

Wednesbury Principle of unreasonableness (or reasonableness)

Courts rarely interfere in commercial, policy, and financial decisions taken by the Governments (executive). Courts enunciated the principle that the modern trend points to judicial restraint in administrative action. The Court does not sit as a court of appeal but merely reviews the manner in which the decision was made. The Court does not have the expertise to correct the administrative decision. If a review of the administrative decision is permitted it will be substituting its own decision, without the necessary expertise, which itself may be fallible. The Government must have freedom of contract. In other words, a fairplay in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi- administrative sphere. However, when challenged, the decision of the executive must not only be tested by the application of Wednesbury principles of unreasonableness but must be free from arbitrariness, bias or actuated by mala fides.

Associated Provincial Picture Houses vs. Wednesbury Corporation [1 KB 223, EWCA Civ. 1] is a 1947 decision by the Court of Appeals that sets out the standard of unreasonableness of public-body decisions that would make them liable to be quashed on judicial review, known as Wednesbury unreasonableness.  The court speaking through Lord Greene refused to interfere with the decision taken by the Local Licensing Authority under the provisions of the Sunday Entertainments Act, 1932 which authorised opening cinemas on Sunday subject to such conditions to the SATISFACTION of the Authorities.  In Associated Pictures (Supra) the Local Authorities allowed cinemas to be open on Sundays provided no children under 15 were admitted on Sundays.  This decision when challenged by Wednesbury Corporation, Lord Greene speaking for the Court of Appeal laid down three grounds of interference by the Court (under the realm of Judicial Review) if the decision making process under scrutiny reveals that 1) in reaching the decision, the Defendant took into account factors that ought not to have been taken into account (ILLEGALITY); 2) the Defendant failed to take into account factors that ought to have been taken into account (PROCEDURAL IMPROPRIETY); and, 3) the decision was so unreasonable that no reasonable authority or prudent person would have considered it (IRRATIONALITY). The third limb – that the decision was “so absurd that no sensible person could ever dream that it lay within the powers of the authority” [229] has become known as Wednesbury Unreasonableness.  In this particular case, whether or not the Court thought the condition was fair or the best outcome was irrelevant – it was only relevant whether it was lawful, and it was.  This was because the Parliament wants the decision maker to make the decision, not the Court.  Therefore Associated’s case failed.  This case therefore shows that a Court can only intervene in very limited circumstances.  THE DOCTRINE OF WEDNESBURY PRINCIPLE OF UNREASONABLENESS IS A PRINCIPLE OF JUDICIAL REVIEW THAT APPLIES ONLY WHEN THERE IS A DESCRETION CREATED BY A STATUTE AND THE AUTHORITY EXERCISED IT SO IRRATIONALY THAT IT COULD BE ONLY OUT OF WHIMS, FANCIES OR PRIVATE AFFECTIONS.

Later cases developed upon the Wednesbury Principle only to dilute it by expanding the scope of Judicial review.  Reference may be made to Sir Edward Coke CJ’s dicta in Rookes Case [(1598) 5 Co.Rep. 99b] which said - “notwithstanding the words of the commission give authority to the commissioners to do according to their discretions, yet their proceedings ought to be limited, and bound with the rule of reason and law. For discretion is a science or understanding to discern between falsity and truth, between wrong and right, between shadows and substance, between equity and colourable glosses and pretences, and not to do according to their wills and private affections”. Similarly, in Council of Civil Service Unions vs. Minister for the Civil Service [1984] UKHL 9, or the GCHQ case, Lord Diplock widened the grounds of judicial review by including the fourth pillar of “Proportionality”.  The principle of proportionality envisages that a public authority ought to maintain a sense of proportion between his particular goals and the means he employees to achieve those goals, so that his action impinges on the individual rights to the minimum extent to preserve public interest.  The Wednesbury principles have also been diluted, if not rejected, by the House of Lords in Ex parte Daly in 2001 [Regina vs. Secretary of State For The Home Department, Ex Parte Daly, [2001] UKHL 26], when Lord Cooke severely criticised in the following words “the day will come when it will be more widely recognised that Associated Provincial Picture Houses Ltd vs. Wednesbury Corporation [1948] 1 KB 223 was an unfortunately retrogressive decision in English administrative law, insofar as it suggested that there are degrees of unreasonableness and that only a very extreme degree can bring an administrative decision within the legitimate scope of judicial invalidation.  The depth of judicial review and the deference due to administrative discretion vary with the subject matter.  It may well be, however, that the law can never be satisfied in any administrative field merely by a finding that the decision under review is not capricious or absurd.”

Therefore, what was once considered to be the Wednesbury Principle of Unreasonableness can be safely said to have become Wednesbury Principle of Reasonableness. The septuagenarian journey FROM - interfere only if unreasonable – TO – find reason to interfere has been a long drawn one.  If there is however, Substantial Compliance to the Statute and the discretion is to attain the object of the act, no interference is required.

 

Substantial compliance, doctrine of

The Doctrine of Substantial Compliance has been followed in India.  The selected text from two judgments reproduced below may sum up the development of the Doctrine in India.

 

T.M. Jacob vs. C. Poulose AIR 1999 SC 1359 [5 Judges]

 

Para 40: The object of serving a "true copy" of an Election Petition and the affidavit filed in support of the allegations of corrupt practice on the respondent in Election Petition is to enable the respondent to understand the charge against him so that he can effectively meet the same in the written statement and prepare his defence. The requirement is, thus, of substance and not of form.

 

Para 41: The expression "copy" in Sec. 81(3) of the Act, in our opinion, means a copy which is substantially so and which does not contain any material or substantial variation of a vital nature as could possibly mislead a reasonable person to understand and meet the charges / allegations made against him in the election petition. Indeed a copy which differs in material particulars from the original cannot be treated as a true copy of the original within the meaning of Sec. 81(3) of the Act and the vital defect cannot be permitted to be cured after the expiry of the period of limitation.

 

Para 42: We have already referred to the defect which has been found in the copy of the affidavit served on the appellant in the present case. There is no dispute that the copy of the affidavit served on the appellant contained the endorsement to the effect that the affidavit had been duly signed, verified and affirmed by the election petitioner before a Notary. Below the endorsement of attestation, it was also mentioned : Sd/- Notary. There, however, was an omission to mention the name and particulars of the Notary and the stamp and seal of the Notary in the copy of the affidavit served on the appellant. There was no other defect pointed out either in the memo of objection or in C.M.P. No. 2903 of 1996 or even during the course of arguments in the High Court or before us. Could this omission be treated as an omission of a vital or material nature which could possibly mislead or prejudice the appellant in formulating his defence? In our opinion, No. The omission was inconsequential. By no stretch of imagination can it be said that the appellant could have been misled by the absence of the name and seal or stamp of the Notary on the copy of the affidavit, when endorsement of attestation was present in the copy which showed that the same had been signed by the Notary. It is not denied that the copies of the Election Petition and the affidavit served on the appellant bore the signatures of respondent No. 1 on every page and the original affidavit filed in support of the Election Petition had been properly signed, verified and affirmed by the election petition and attested by the Notary. There has, thus, been a substantial compliance with the requirements of Sec. 81(3) read with the proviso to Sec. 83(1)(c) of the Act. Defects in the supply of true copy under Sec. 81 of the Act may be considered to be fatal, where the party has been misled by the copy on account of variation of a material nature in the original and the copy supplied to the respondent. The prejudice caused to the respondent in such cases would attract the provisions of Sec. 81(3) read with Sec. 86(1) of the Act. Same consequence would not follow from non-compliance with Sec. 83 of the Act.

 

Para 43: We are unable to agree with Mr. Salve that since proceedings in election petitions are purely statutory proceedings and not "civil proceedings" as commonly understood, there is no room for invoking and importing the doctrine of substantial compliance into Sec. 86(1) read with Sec. 81(3) of the Act. It is too late in the day to so urge. The law as settled by the two Constitution Bench decisions of this Court referred to above is by itself sufficient to repel the argument of Mr. Salve. That apart, to our mind, the Legislative intent appears to be quite clear, since it divides violations into two classes - those violations which would entail dismissal of the election petition under Sec. 86(1) of the Act like non-compliance with Sec. 81(3) and those violations which attract Sec. 83(1) of the Act i.e. non-compliance with the provisions of Sec. 83. It is only the violation of Sec. 81 of the Act which can attract the application of the doctrine of substantial compliance as expounded in Murarka Radhey Shyam (AIR 1964 SC 1545) and Ch. Subbarao's cases (AIR 1964 SC 1027).

 

The defect of the type provided in Sec. 83 of the Act, on the other hand, can be dealt with under the doctrine of durability, on the principles contained in the Code of Civil Procedure. This position clearly emerges from the provisions of Sections 83(1) and 86(5) of the Act, which read :

 

"83. Contents of petition.- (1) An election petition-

(a) shall contain a concise statement of the material facts on which the petitioner relies;

 

(b) shall set forth full particulars of any corrupt practice that the petitioner alleges, including as full a statement as possible of the names of the parties alleged to have committed such corrupt practice and the date and place of the commission of each such practice; and

 

(c) shall be signed by the petitioner and verified in the manner laid down in the Code of Civil Procedure, 1908 (5 of 1908) for the verification of pleadings."

 

"86. Trial of election petition.-

. . .. . .. . .

 

(5) The High Court may, upon such terms as to costs and otherwise as it may deem fit, allow the particulars of any corrupt practice alleged in the petition to be amended or amplified in such manner as may in its opinion be necessary for ensuring a fair and effective trial of the petition, but shall not allow any amendment of the petition which will have the effect of introducing particulars of a corrupt practice not previously alleged in the petition."

 

Para 44: Applying the test as laid down in Murarka Radhey Shyam Ram Kumar's case (supra), to the fact situation of the present case, we come to the conclusion that the defects complained of in the present case were not such as could have misled the appellant at all.  The non-mention of the name of the notary or the absence of the stamp and seal of the notary in the otherwise true copy supplied to the appellant could not be construed to be omission or variation of a vital nature and, thus, the defect, if at all it could be construed as a defect was not a defect of any vital nature attracting consequences of Sec. 86(1) of the Act.  Under the circumstances, it must be held that there was no failure on the part of the election petitioner to comply with the last part of sub-sec. (3) of Sec. 81 of the Act and, under the circumstances, Sec. 86(1) of the Act was not attracted and the election petition could not have been dismissed by reason of the alleged failure to comply with the provisions of Sec. 81 of the Act.  In this connection, it is also relevant to note that the appellant, neither in the memo of objections nor in the written objections or in C.M.P. No. 2903 of 1996 has alleged that he had been misled by the absence of the name, rubber stamp and seal of the notary on the copy of the affidavit supplied to him or that he had been prejudiced to formulate his defence.  Even during the arguments, learned counsel for the appellant was not able to point out as to how the appellant could have been prejudiced by the alleged omissions on the copy of the affidavit served on him.

 

Para 45: In our opinion it is not every minor variation in form but only a vital defect in substance which can lead to a finding of non-compliance with the provisions of Sec. 81(3) of the Act with the consequences under Sec. 86(1) to follow.  The weight of authority clearly indicates that a certain amount of flexibility is envisaged. While an impermissible deviation from the original may entail the dismissal of an election petition under Sec. 86(1) of the Act, an insignificant variation in the true copy cannot be construed as a fatal defect.  It is, however, neither desirable nor possible to catalogue the defects which may be classified as of a vital nature or those which are not so.  It would depend upon the facts and circumstances of each case and no hard and fast formula can be prescribed.  The tests suggested in Murarka Radhey Shyam's case (AIR 1964 SC 1545) (supra) are sound tests and are now well settled.  We agree with the same and need not repeat those tests.  Considered in this background, we are of the opinion that the alleged defect in the true copy of the affidavit in the present case did not attract the provisions of Sec. 86(1) of the Act for alleged non-compliance with the last part of Sec. 81(3) of the Act and that there had been substantial compliance with the requirements of Sec. 81(3) of the Act in supplying 'true copy' of the affidavit to the appellant by the respondent.

 

Commissioner of Central Excise, New Delhi vs. Hari Chand Shri Gopal & Ors. 2011 (1) SCC 236 [5 Judges]

 

Para 22: The law is well settled that a person who claims exemption or concession has to establish that he is entitled to that exemption or concession.  A provision providing for an exemption, concession or exception, as the case may be, has to be construed strictly with certain exceptions depending upon the settings on which the provision has been placed in the Statute and the object and purpose to be achieved.  If exemption is available on complying with certain conditions, the conditions have to be complied with.  The mandatory requirements of those conditions must be obeyed or fulfilled exactly, though at times, some latitude can be shown, if there is a failure to comply with some requirements which are directory in nature, the non-compliance of which would not affect the essence or substance of the notification granting exemption.  In Novopan Indian Ltd. (supra), this Court held that a person, invoking an exception or exemption provisions, to relieve him of tax liability must establish clearly that he is covered by the said provisions and, in case of doubt or ambiguity, the benefit of it must go to the State.  A Constitution Bench of this Court in Hansraj Gordhandas vs. H.H. Dave (1996) 2 SCR 253, held that such a notification has to be interpreted in the light of the words employed by it and not on any other basis.  This was so held in the context of the principle that in a taxing statute, there is no room for any intendment, that regard must be had to the clear meaning of the words and that the matter should be governed wholly by the language of the notification, i.e., by the plain terms of the exemption.

 

Para 23:  Of course, some of the provisions of an exemption notification may be directory in nature and some are of mandatory in nature.  A distinction between provisions of statute which are of substantive character and were built in with certain specific objectives of policy, on the one hand, and those which are merely procedural and technical in their nature, on the other, must be kept clearly distinguished.  In Tata Iron and Steel Co. Ltd. (supra), this Court held that the principles as regard construction of an exemption notification are no longer res integra; whereas the eligibility clause in relation to an exemption notification is given strict meaning wherefor the notification has to be interpreted in terms of its language, once an assessee satisfies the eligibility clause, the exemption clause therein may be construed literally.  An eligibility criteria, therefore, deserves a strict construction, although construction of a condition thereof may be given a liberal meaning if the same is directory in nature.

 

Para 24: The doctrine of substantial compliance is a judicial invention, equitable in nature, designed to avoid hardship in cases where a party does all that can reasonably expected of it, but failed or faulted in some minor or inconsequent aspects which cannot be described as the "essence" or the "substance" of the requirements.  Like the concept of "reasonableness", the acceptance or otherwise of a plea of "substantial compliance" depends upon the facts and circumstances of each case and the purpose and object to be achieved and the context of the prerequisites which are essential to achieve the object and purpose of the rule or the regulation.

 

Such a defence cannot be pleaded if a clear statutory prerequisite which effectuates the object and the purpose of the statute has not been met.  Certainly, it means that the Court should determine whether the statute has been followed sufficiently so as to carry out the intent for which the statute was enacted and not a mirror image type of strict compliance.  Substantial compliance means "actual compliance in respect to the substance essential to every reasonable objective of the statute" and the court should determine whether the statute has been followed sufficiently so as to carry out the intent of the statute and accomplish the reasonable objectives for which it was passed.  Fiscal statute generally seeks to preserve the need to comply strictly with regulatory requirements that are important, especially when a party seeks the benefits of an exemption clause that are important.  Substantial compliance of an enactment is insisted, where mandatory and directory requirements are lumped together, for in such a case, if mandatory requirements are complied with, it will be proper to say that the enactment has been substantially complied with notwithstanding the non- compliance of directory requirements.  In cases where substantial compliance has been found, there has been actual compliance with the statute, albeit procedurally faulty.  The doctrine of substantial compliance seeks to preserve the need to comply strictly with the conditions or requirements that are important to invoke a tax or duty exemption and to forgive non-compliance for either unimportant and tangential requirements or requirements that are so confusingly or incorrectly written that an earnest effort at compliance should be accepted.  The test for determining the applicability of the substantial compliance doctrine has been the subject of a myriad of cases and quite often, the critical question to be examined is whether the requirements relate to the "substance" or "essence" of the statute, if so, strict adherence to those requirements is a precondition to give effect to that doctrine.  On the other hand, if the requirements are procedural or directory in that they are not of the "essence" of the thing to be done but are given with a view to the orderly conduct of business, they may be fulfilled by substantial, if not strict compliance.  In other words, a mere attempted compliance may not be sufficient, but actual compliance of those factors which are considered as essential.

RES JUDICATA - WHEN THE LIS IS JUDICATA - HOW IT DIFFERS FROM ESTOPPEL, ACQUIESCENCE AND WAIVER?

DOCTRINE OF RES JUDICATA

INTRODUCTION

ONE LINER :: A matter finally decided on its merits by a court having competent jurisdiction shall not be subject to litigation again between the same parties, unless fraud, jurisdiction, or question of law is directly or substantially in issue before the Court.

Res Judicata is the Latin term for ‘a matter judged.’ It means ‘a thing decided.’ Section 11 of the Civil Procedure Code, 1908, talks about Res Judicata.

 

BASED ON THREE MAXIMS - 1. Nemo debet bis vexari pro una et eadem causa – It means no man shall be punished twice for the same offence; 2. Interest Reipublicae Ut Sit Finis Litium – It means it is in the interest of the state that there should be an end to litigation. Or Litigation must come to an end; AND, 3. Res Judicata Pro Veritate Accipitur – It means that a judicial decision must be accepted as correct.

 

WORKS ON TWO DIMENSIONS - CLAIM PRECLUSION AND ISSUE PRECLUSION – Claim preclusion [works vertically] focuses on baring a suit from being brought again on a legal cause of action that has already been finally decided between the parties. Issue preclusion [works horizontally] bars the re-litigation of factual issues that have already been necessarily determined by a judge as a part of an earlier claim.

 

A three Judges bench of the Hon’ble SUPREME COURT, in the case of Uttar Pradesh State Road Transport Corporation vs. State of Uttar Pradesh, Judgment dated NOVEMBER 29, 2004 (AIR 2005 SC 446 : 2005 (1) SCC 444) , observed as follows –

 

Para 11: The principle of res judicata is based on the need of giving a finality to judicial decisions. The principle which prevents the same case being twice litigated is of general application and is not limited by the specific words of Sec. 11 of the Code of Civil Procedure in this respect. Res judicata applies also as between two stages in the same litigation to this extent that a court, whether the trial court or a higher court having at an earlier stage decided a matter in one way will not allow the parties to reagitate the matter again at a subsequent stage of the same proceedings.

 

Yet again, a three Judges Bench of the Hon’ble SUPREME COURT, in the case of Satyadhyan Ghosal vs. Deorajin Debi, Judgment dated APRIL 20, 1960, (AIR 1960 SC 941; 1960 (3) SCR 590), observed as under –

 

Para 7: The principle of res judicata is based on the need of giving a finality to judicial decisions. What it says is that once a lis is judicata, it shall not be adjudged again. Primarily it applies as between past litigation and future litigation. When a matter - whether on a question of fact or a question of law - has been decided between two parties in one suit or proceeding and the decision is final, either because no appeal was taken to a higher court or because the appeal was dismissed, or no appeal lies, neither party will be allowed in a future suit or proceeding between the same parties to canvass the matter again. This principle of res judicata is embodied in relation to suits in sec. 11 of the Code of Civil Procedure; but even where sec. 11 does not apply, the principle of res judicata has been applied by courts for the purpose of achieving finality in litigation. The result of this is that the original court as well as any higher court must in any future litigation, proceed on the basis that the previous decision was correct.

 

WHETHER RES JUDICATA APPLIES TO ARTICLE 32 PETITION?

OR

WHETHER RES JUDICATA APPLIES TO WRIT PETITION U/A 226?

 

 

A Constitution Bench of the SUPREME COURT, in the case of Daryao vs. State of Uttar Pradesh, Judgment dated MARCH 27, 1961, (AIR 1961 SC 1457 : 1962 (1) SCR 574), observed as –

 

Para 10: In considering the essential elements of res judicata one inevitably harks back to the Judgement of Sir William B. Hale in the leading Duchess of Kingston's case, 2 Smith Lead Case. Said Sir William B. Hale "from the variety of cases relative to judgments being given in evidence in civil suits, these two deductions seem to follow as generally true: First, that the Judgement of a court of concurrent jurisdiction, directly upon the point, is as a plea, a bar, or as evidence, conclusive between the same parties, upon the same matter, directly in question in another court; Secondly, that the Judgement of a court of exclusive jurisdiction, directly upon the point, is in like manner conclusive upon the same matter, between the same parties, coming incidentally in question in another court for a different purpose." As has been observed by Halsbury, "the doctrine of res judicata is not a technical doctrine applicable only to records; it is a fundamental doctrine of all courts that there must be an end of litigation" - Halsbury's Laws of England. Halsbury also adds that the doctrine applies equally in all courts, and it is immaterial in what court the former proceeding was taken, provided only that it was a court of competent jurisdiction, or what from the proceeding took, provided it was really for the same cause" "Res judicata", it is observed in Corpus Juris, "is a rule of universal law pervading every well regulated system of jurisprudence, and is put upon two grounds, embodied in various maxims of the common law; the one, public policy and necessity, which makes it to the interest of the State that there should be an end to litigation- interest republiae ut sit finis litium; the other, the hardship on the individual that he should be vexed twice for the same cause- nemo debet is vexari pro eaden causa", Corpus Juris. In this sense the recognised basis of the rule of res judicata is different from that of technical estoppel. "Estoppel rests on equitable principles and res judicata rests on maxims which are taken from the Roman Law", . Therefore, the argument that res judicata is a technical rule and as such is irrelevant in dealing with petitions under Art. 32 cannot be accepted.

 

Para 19: We must now proceed to state our conclusion on the preliminary objection raised by the respondents. We hold that if a writ petition filed by a party under Art. 226 is considered on the merits as a contested matter and is dismissed the decision thus pronounced would continue to bind the parties unless it is otherwise modified or reversed by appeal or other appropriate proceedings permissible under the Constitution. It would not be open to a party to ignore the said Judgement and move this Court under Art. 32 by an original petition made on the same facts and for obtaining the same or similar orders or writs. If the petition filed in the High Court under Art. 226 is dismissed not on the merits but because of the laches of the party applying for the writ or because it is held that the party had an alternative remedy available to it, then the dismissal of the writ petition would not constitute a bar to a subsequent petition under Art. 32, except in cases where and if the facts thus found by the High Court, may themselves be relevant even under Art. 32. If a writ petition is dismissed in limine and an order is pronounced in that behalf, whether or not the dismissal would constitute a bar would depend up on the nature of the order. If the order is on the merits it would be a bar; if the order shows that the dismissal was for the reason that the petitioner was guilty of laches or that he had an alternative remedy it would not be a bar, except in cases which we have already indicated. If the petition is dismissed in limine without passing a speaking order then such dismissal cannot be treated as creating a bar of res judicata. It is true that, prima facie, dismissal in limine even without passing a speaking order in that behalf may strongly suggest that the Court took the view that there was no substance in the petition at all, but in the absence of a speaking order, it would not be easy to decide what factors weighed in the mind of the Court and that makes it difficult and unsafe to hold that such a summary dismissal is a dismissal on merits and as such constitutes a bar of res judicata against a similar petition filed under Art. 32. If the petition is dismissed as withdrawn it cannot be a bar to a subsequent petition under Art. 32. Because in such a case there has been no decision on the merits by the Court. We wish to make it clear that the conclusion thus reached by us are confined only to the point of res judicata which has been argued as a preliminary issue in these writ petitions and no other. It is in the light of this decision that we will now proceed to examine the position in the six petitions before us.

 

RES JUDICATA NOT TO BE CONFUSED WITH ACQUIESCENCE AND WAIVER

[SUBSEQUENT WRIT WHEN NOT MAINTAINABLE]

 

ORDER 9 RULE 9 - RES JUDICATA - whether applies to writ proceedings when earlier petition dismissed for default-the principles underlying Order IX Rules 8 and 9 are based on sound public policy- litigant who approaches the court should agitate the matter with due diligence and take a decision on merits-these principles equally apply to writ proceedings-petitioner, whose first petition was dismissed for default had a remedy for recalling that order-if petitioner does not choose to avail remedy provided by Legislature he cannot have any grievance-bar of res judicata applies to writ proceedings - no discretion on any court to ignore such principles-writ petition rejected. [D. Sangya Naik vs. DoT ILR 2005 KAR 1874]

When a party engages a Counsel it is his duty to see that his Counsel is present when the case is called for hearing. Order IX Rule 9 provides for a remedy to petitioner to file an application to recall the said order by showing sufficient cause for his absence. When a legislature provides a remedy for getting the said order set-aside, he has to follow the procedure prescribed under law. If he does not choose to follow the said procedure and if chooses to follow the procedure which is not recognized in law, he cannot have any grievance. Under these circumstances, the bar contained in Order IX Rule 9 CPC which is equally applicable to writ rules is absolute and no discretion is conferred on any court to ignore the aforesaid statutory provision and entertain the second writ petition challenging the order which was the subject matter of earlier proceedings which came to be dismissed for non-prosecution.

 

Sarguja Transport Service vs. State Transport Appellate Tribunal, M. P. , Gwalior, 12 Nov 1986

1987 0 AIR(SC) 88; 1987 0 JLJ 142; 1986 1 JT 808; 1986 2 Scale 757; 1987 1 SCC 5; 1987 0 SCC(Cri) 19; 1987 1 SCR 200

 

Para  8. The question for our consideration is whether it would or would not advance the cause of justice if the principle underlying R. 1 of O. XXIII of the Code is adopted in respect of writ petitions filed under Art. 226/227 of the Constitution also. It is common knowledge that very often after a writ petition is heard for some time when the petitioner or his counsel finds that the Court is not likely to pass an order admitting the petition, request is made by the petitioner or by his counsel, to permit the petitioner to withdraw from the writ petition without seeking permission to institute a fresh writ petition. A Court which is unwilling to admit the petition would not ordinarily grant liberty to file a fresh petition while it may just agree to permit the withdrawal of the petition. It is plain that when once a writ petition filed in a High Court is withdrawn by the petitioner himself he is precluded from filing an appeal against the order passed in the writ petition because he cannot be considered as a party aggrieved by the order passed by the High Court. He may as stated in Daryao vs. State of U.P., (1962) SCR 574: (AIR 1961 SC 1457) in a case involving the question of enforcement of fundamental rights file a petition before the Supreme Court under Art. 32 of the Constitution because in. such a case there has been no decision on the merits by the High Court. The relevant observation of this Court in Daryao's case (supra) is to be found at page 593 and it is as follows :

 

       "If the petition is dismissed as withdrawn it cannot be a bar to a subsequent petition under Art. 32, because in such a case there has been no decision on the merits by the Court. We wish to make it clear that the conclusions thus reached by us are confined only to the point of res judicata which has been argued as a preliminary issue in these writ petitions and no other."

 

      Para  9. The point for consideration is whether a petitioner after withdrawing a writ petition filed by him in the High Court under Art. 226 of the Constitution of India without the permission to institute a fresh petition can file a fresh writ petition in the High Court under that Article. On this point the decision in Daryaos’ case (supra) is of no assistance. But we are of the view that the principle underlying R. 1 of O. XXIII of the Code should be extended in the interests of administration of justice to cases of withdrawal of writ petition also, not on the ground of res judicata but on the ground of public policy as explained above. It would also discourage the litigant from indulging in bench-hunting tactics. In any event there is no justifiable reason in such a case to permit a petitioner to invoke the extraordinary jurisdiction of the High Court under Art. 226 of the Constitution once again. While the withdrawal of a writ petition filed in High Court without permission to file a fresh writ petition may not bar other remedies like a suit or a petition under Art. 32 of the Constitution since such withdrawal does not amount to res judicata, the remedy under Art. 226 of the Constitution should be deemed to have been abandoned by the petitioner in respect of the cause of action relied on in the writ petition when he withdraws it without such permission. In the instant case the High Court was right in holding that a fresh writ petition was not maintainable before it in respect of the same subject-matter since the earlier writ petition had been withdrawn without permission to file a fresh petition. We, however, make it clear that whatever we have stated in this order may not be considered as being applicable to a writ petition involving the personal liberty of an individual in which the petitioner prays for the issue of a writ in the nature of habeas corpus or seeks to enforce the fundamental right guaranteed under Art. 21 of the Constitution since such a case stands on a different footing altogether. We, however, leave this question open.

 

 

APPLICABILITY OF RES JUDICATA TO INDUSTRIAL ACT AND LABOR COURTS

 

A three Judges Bench of the Hon’ble SUPREME COURT, in the case of Workmen Of The Straw Board Manufacturing Company Limited vs. Straw Board Manufacturing Company Limited, Judgment dated MARCH 21, (1974 AIR 1974 SC 1132 : 1974 (4) SCC 681), observed as follows –

 

Para 25: It is now well established that, although the entire Civil Procedure Code is not applicable to industrial adjudication, the principles of res judicata laid down under Section 11 of the Code of Civil Procedure, however, are applicable, wherever possible, for very good reasons. This is so since multiplicity of litigation and agitation and re-agitation of the same dispute at issue between the same employer and his employees will not be conducive to industrial peace which is the principal object of all labour legislation bearing on industrial adjudication. But whether a matter in dispute in a subsequent case had earlier been directly and substantially in issue between the same parties and the same had been heard and finally decided by the Tribunal will be of pertinent consideration and will have to be determined before holding in a particular case that the principles of res judicata are attracted.

 

 

The Hon’ble SUPREME COURT OF INDIA, in the case of Ishwar Dutt vs. Land Acquisition Collector, Judgment dated AUGUST 2, 2005, AIR 2005 SC 3165 : 2005 (7) SCC 190), observed–

 

Para 18: In the Reference Court or for that matter the High Court exercising its appellate jurisdiction u/s. 54 of the Act could not have dealt with the said question. The principle of res judicata is species of the principle of estoppel. When a proceeding based on a particular cause of action has attained finality, the principle of res judicata shall fully apply.

 

Para 29: In Y.B. Patil (supra) it was held:

 

"4... It is well settled that principles of res judicata can be invoked not only in separate subsequent proceedings, they also get attracted in subsequent stage of the same proceedings. Once an order made in the course of a proceeding becomes final, it would be binding at the subsequent stage of that proceeding..."

 

Para 30: It was further observed:

 

"In a case of this nature, however, the doctrine of 'issue estoppel' as also 'cause of action estoppel' may arise. In Thoday (supra) Lord Diplock held: "..."cause of action estoppel" is that which prevents a party to an action from asserting or denying, as against the other party, the existence of a particular cause of action, the non-existence or existence of which has been determined by a court of competent jurisdiction in previous litigation between the same parties. If the cause of action was determined to exist, i.e., Judgement was given on it, it is said to be merged in the judgment.... If it was determined not to exist, the unsuccessful plaintiff can no longer assert that it does; he is estopped per rem judicatam."

 

The said dicta was followed in Barber vs. Staffordshire Country Council, 1996 2 AllER 748. A cause of action estoppel arises where in two different proceedings identical issues are raised, in which event, the latter proceedings between the same parties shall be dealt with similarly as was done in the previous proceedings. In such an event the bar is absolute in relation to all points decided save and except allegation of fraud and collusion.

 

EXCEPTIONS TO THE APPLICABILITY OF RES JUDICATA

 

Raju Ramsing Vasave vs. Mahesh Deorao Bhivapurkar & Ors. [(2008) 9 SCC 54]

 

Para 23: Contention of Mr. Savant must be tested on the premise as to whether the principle of res judicata applies in a case of this nature.

 

Principle of res judicata is undoubtedly a salutary principle. Even a wrong decision would attract the principle of res judicata. The said principle, however, amongst others, has some exceptions, e.g., when a judgment is passed without jurisdiction, when the matter involves a pure question of law or when the judgment has been obtained by committing fraud on the court.

 

Para 24: Two legal principles which would govern a case of this nature, are:

(i) A decision rendered without jurisdiction being a nullity, the principle of res judicata shall not apply.

 

ii) If a fraud has been committed on the court, no benefit therefrom can be claimed on the basis of thereof or otherwise.

 

Para 25: In support of the first principle, we may at the outset refer to Chief Justice of Andhra Pradesh and Others vs. L.V.A. Dixitulu, 1979 2 SCC 34 wherein this Court, while discussing the effect of Sec. 11 of the Code of Civil Procedure on a pure question of law or a decision given by a court without jurisdiction, opined:

 

"Moreover, this is a pure question of law depending upon the interpretation of Art. 371D. If the argument holds good, it will make the decision of the Tribunal as having been given by an authority suffering from inherent lack of jurisdiction. Such a decision cannot be sustained merely by the doctrine of res judicata or estoppel as urged in this case."

 

Ashok Leyland Ltd. vs. State of Tamil Nadu and Anr., 2004 1 JT 289

 

The principle of res judicata is a procedural provision. A jurisdictional question if wrongly decided would not attract the principle of res judicata. When an order is passed without jurisdiction, the same becomes a nullity. When an order is a nullity, it cannot be supported by invoking the procedural principles like, estoppel, Waiver or res judicata."(See also, Dwarka Prasad Agarwal (D) By LRs. and Anr. vs. B.D. Agarwal and Ors., 2003 6 JT 398, Union of India vs. Pramod Gupta, 2005 12 SCC 1 and National Institute of Technology and Ors. vs. Niraj Kumar Singh, 2007 2 SCC 481).

 

 

Whether Writ Court order will bar (res judicata to) civil suit ?

Or

Whether civil suit will bar the writ remedy under 226 on the grounds of Res Judicata?

Or

Can an issue conclusively determined in a Civil Suit be re-opened before the writ jurisdiction (parallel proceedings)?

 

It is a settled proposition of law that a decision or order given in a summary proceeding, which by an express enactment is not appealable, and no finality was attached by the Legislature in express terms to the order and that therefore the decision under that Act (by the tribunal or the District Judge acting as a Tribunal) did not operate as res judicata so as to preclude the parties from re-agitating the question in a subsequent suit. (see, Arikapudi Balakotayya vs. Yadlapalli Nagayyaheld, 1946 (0) AIR (Mad) 509).

Parallel proceedings is always discouraged as it amounts to Forum Shopping, but when a substantial issue has not attained finality because it was not decided on merits then subsequent writ or civil suit shall not be res judicata.

Negligence - Res Ipsa Loquitor, Strict Liability and Absolute liability made simple

One Liner :: Res Ipsa Loquitor, Strict Liability and Absolute liability they all spring from the same doctrinal foundation in that they assist Plaintiffs’ in establishing liability when direct proof is beyond their reach, while reducing defences of the tortfeasor IN ASCENDING ORDER.

Act of negligence give rise to Torts.  Res Ipsa Loquitor is when the negligence is Writ Large and speaks for itself, nothing changes, it simply shifts the burden of proving diligence upon the tortfeasor.  All defences are available for the tortfeasor, though. Inference of Negligence may be dispelled in Res Ipsa Loquitor by an affirmative showing of proper care.  In strict liability, only three defences are available [plaintiff’s fault, vis major and act of third party].  In absolute liability, no defences are available and the liability is absolute. Therefore, strict and absolute liability are also “no fault liability”.

Res Ipsa Loquitor  ::  A was passing by the boundary of B’s Factory when a whistle traveling in projectile motion and originating from B’s Factory hit A’s head who died.  A will sue B for negligence and the principle of Res Ipsa Loquitor would apply.  As in, the cause of the accident to the best of the knowledge of B, A shall need to prove only the accident and B needs to rebut negligence.  The burden shifts. B in his defence can plead anything under the sun.

 

Now, we will see how the position of B in the example above changes when the definition of liability changes from Res Ipsa Loquitor to Strict Liability to Absolute Liability.  But then let’s revise the concept of Strict Liability to begin with.

Strict Liability, doctrine of

Strict liability applies to three categories of cases 1) Animal attacks (both person or property; pet or animal farae naturae; 2) Abnormally dangerous activity; and, 3) Product Liability.  The Rule of Strict Liability originated in the case of Rylands vs. Fletcher [1868] UKHL 1; L.R. 3 H.L. 330 (1868) and it is imminent that we understand Reylands.

 

Rylands vs. Fletcher  ::  Fletcher (plaintiff) leased several underground coal mines from land adjacent to that owned by Rylands (defendant).  Rylands owned a mill, and built a reservoir on his land for the purpose of supplying water to that mill.  Rylands employed competent engineers and contractors to build the reservoir.  In the course of building the reservoir, these employees learned that it was being built on top of abandoned underground coal mines the shafts of which joined up with Fletcher’s mine.  

Despite, instead of blocking the shafts, the contractors left it as it were.  This fact was unknown to Rylands.  After the reservoir was completed, it broke and flooded Fletcher’s coal mines.  This caused damage to Fletcher’s property, and Fletcher brought suit against Rylands.  Justices in the lower court differed as to whether Rylands should be liable, and the decision was appealed to the Court of Exchequer Chamber.  There, Rylands was held strictly liable for damage caused to Fletcher’s property by water from the broken reservoir.  Rylands appealed.  The House of Lords upheld strict liability upon Rylands and hold him liable. 

 

Thus there are five ingredients for the Rule of Rylands vs. Fletcher to apply 1) Accumulation. The defendant must bring hazardous material on his land and keep it there. If the thing is already on the land or is their naturally, Rylands vs. Fletcher is not attracted. [Giles vs. Walker 1890 24 QBD 656; ]. However, the thing that escapes may not be the thing accumulated. [Miles vs. Forest Rock Granite 1918 34 TLR 500]. 2) Likely to do mischief. [Hale vs. Jennings Bros 1938 1 All ER 579]. 3) Escapes. 4) Non -natural use. [Rickards vs. Lothian 1913 AC 263] [Transco vs. Stockport MBC 2004 1 All ER 589] [But See, Sochacki vs. Sas 1947 All ER 344 (An open fire in a domestic fire grate is not non-natural use of land)]. 5) Remoteness of damage. Rylands vs. Fletcher is subject to the rules of remoteness of damages. [Cambridge Water vs. Eastern Counties Leather 1994 2 AC 264].

 

Some of the common defences available to the Defendant are 1) Act of Stranger. [Box vs. Jubb LR 4 Ex Div ] [Ribee vs. Norrie 2000 EWCA Civ 275]. 2) Third Party Intervention. [Rickards vs. Lothian 1913 AC 263]. 3) Act of God [Nichols vs. Marsland 1867 2 Ex D 1]. 4) Statutory Authority [Green vs. Chelsea Waterworks Co 1894 70 LT 547]. 5) Consent/Benefit. If the Defendant received benefit from the things accumulated it is a deemed consent. [Peters vs. Prince of Wales Theatre 1943 KB 73].

The Rule of Rylands vs. Fletcher has been recognized by the courts in India. The Hon’ble Supreme Court has held thus:

 

AIR 2002 SC 551

 

Para 8: Even assuming that all such measures have been adopted, a person undertaking an activity involving hazardous or risky exposure to human life, is liable under law of torts to compensate for the injury suffered by any other person, irrespective of any negligence or carelessness on the part of the managers of such undertakings. The basis of such liability is the foreseeable risk inherent in the very nature of such activity. The liability cast on such person is known, in law, as "strict liability". It differs from the liability which arises on account of the negligence or fault in this way i.e. the concept of negligence comprehends that the foreseeable harm could be avoided by taking reasonable precautions. If the defendant did all that which could be done for avoiding the harm he cannot be held liable when the action is based on any negligence attributed. But such consideration is not relevant in cases of strict liability where the defendant is held liable irrespective of whether he could have avoided the particular harm by taking precautions.

 

Para 9: The doctrine of strict liability has its origin in English Common Law when it was propounded in the celebrated case of Rylands V/s. Fletcher (1868 Law Reports (3) HL 330), Blackburn J., the author of the said rule had observed thus in the said decision :

 

"The rule of law is that the person who, for his own purpose, brings on his land and collects and keeps there anything likely to do mischief if it escapes, must keep it at his peril, and if he does so he is prima facie answerable for all the damage which is the natural consequence of its escape."

 

ABSOLUTE LIABILITY

 

By analysing the 19^th Century rule laid in Ryland vs. Fletcher, the Apex Court in M.C. Mehta vs. Union of India 1987 SCR (1) 819 (aftermath of Shriram Food and Fertilizer oleum gas leak) and Union Carbide vs. Union of India AIR 1992 SC 248 (Bhopal Gas leak Case)the Hon’ble Supreme Court through Justice Bhagwati applied the rule of Absolute Liability.  The difference between Strict and Absolute liability rules as laid down by Supreme Court in M.C. Mehta (Supra), has been explained in Ratanlal & Dhirajlal : Law of Tort 26th edition at pg. 520:

Firstly, In Absolute Liability only those enterprises shall be held liable which are involved in hazardous or inherently dangerous activities, this implies that other industries not falling in the above ambit shall be covered under the rule of Strict liability.

Secondly, the escape of a dangerous thing from one’s own land is not necessary; it means that the rule of absolute liability shall be applicable to those injured within the premise and person outside the premise.

Thirdly, the rule of Absolute liability does not have an exception, whereas as some exception were provided in rule of Strict Liability. Also in the case of Union of India vs. Prabhakaran Vijay Kumar [(2008) 9 SCC 527: (2008) 2 KLT 700] the view of constitutional bench was that the rule of MC Mehta is not subject to any type of exception.

Fourthly, the Rule of Ryland vs. Fletcher apply only to the non-natural use of land but the new rule of absolute liability apply to even the natural use of land. If a person uses a dangerous substance which may be natural use of land & if such substance escapes, he shall be held liable even though he have taken proper care.

Further, the extent of damages depends on the magnitude and financial capability of the institute. Supreme Court also contended that the enterprise must be held to be under an obligation to ensure that the hazardous or inherently dangerous activities in which it is engaged must be conducted with the highest standards of safety and security and if any harm results on account of such negligent activity, the enterprise/institute must be held absolutely liable to compensate for any damage caused and no opportunity is to given to answer to the enterprise to say that it had taken all reasonable care and that the harm caused without any negligence on his part.

 

Thus, in the example above when whistle traveling in projectile motion and originating from B’s Factory hit A’s head who dies instantly, the defences that may be taken by B would severally limit in case of Strict Liability.  In case of Absolute Liability B may be restrained to take any defence, at all, even if, everything else be the same.