IFTIKHAR AHMED AND OTHERS versus SYED MEHARBAN ALI AND OTHERS

IFTIKHAR AHMED AND OTHERS

SYED MEHARBAN ALI AND OTHERS

February 26, 197 4

[K. K. MATHEW AND A. ALAGJRISWAMI, JJ.]

· Pwctice~Res-judicata between co-plain!ifJ~~.der oJ f:ourt setti.ng . aside 6pr_oceedings [ward and ,·emitting award for fresh arbrtratzon-lf can be questroned in ]arising from rJte ~cond ward. . ... .

· The dispute between the a·~nants and lli.e i-e~p6ncfents, as. io _who were the bhumidars of certain prol!erties, was ~ferred by the Consohdatton Officer under the U.P. Consolidation of Holdings[1]·Att, 1953,o to the Civil Judge, who _ referred it to an arbitrato~ appointed under. the A\!t. The arbitrator held that the respondents had no . title ·as bhumidars, rely~ng upon a, .judgment of ~e High Court, which, accordin,~t to the arbitrator oj)erated as r'es-ittdicata between the parties. That judgment was delivered in suit instituted by the appellant's predecessor and the present respondents for declaration that mottg11ge decree in fl\vour of the :.defendant in that suit ·did not affect the .shl\[es ·of the respondents in the J}roperties in dispute, and the High Court held that the appellant's predecessor alo_ne was e11titled to the properties, accepting the contention of the defendant in that suit that the respondents had no title whatsoever. · · ·

The Civil Jud&e held that the award was manifestly wrong because, that judgment according. to him did not operate as res~judicata between the parties. He therefore ~et aside the award and remitted the case to another arbitrator. The second arbitrator held that the appellant and respqndents were co· bhumidars and determined the shares 'of the ]larties holding that the judgQ~ent of the High Court did not operate as res· .judicata. .This award was confirmed by the Civil Judge and the Hi_gh Qourt aareed with the Civil Judge.

Allowin~ the appeal to th~ Court,

HELD: ·(a)·~'Jf judgment is to operate as res judicata between . co-defendants it is necessary to-.establish (i) tqat Qlere was ;~ conflict of interest between the co-defendants, (ii) that" ·it was necessary to ·decide the conflict in order to give relief to the plaintiff, .. and (iii) ,fbat the Court actually decided the question. There is no reason why_ previous decision could not operate as res judicata between c;o.plai~\iffs . also if these three cottditions are satisfied mutatis mutand1's. [467 H; 4~ B-C] · . .

. (b) In the judgment of the High Court which was relied upon as having. operated as res judicata there was actual conflict of interest between the present ap~ell.arit _on the o~e hand. and the pre~ent respon~ent on the other; they were the pla.rnhffs m that smt, a~d 1t. was. necessary to. decide th;tt. conflict in order to give relief to the. defendant m that su1t; and the H1gh Court decided that the properties !Jelonged exclusively to the appellant's .Jl.redecessor. · The effect of th,at judgment 1s "that the present respondents failed to establish their ·contention that they had title to the properties. [467 F-H]

(c) There was no finding by the arbitrator that by adverse possession the res_pondents had acquired title to the property at any time. {468 F]

(d) The provisions of Arbitration Act·. apply to proceedings before an arbitrator under the; U.P .. Cpnsolidation of Holdings Act. Therefore, if the . iud~ent of the Hi~h Court operated .in law 'as res judicata it would be an .-ettor of law apparent on ~e face of the''a'Watd."·if it says that the judgment l~\fld'i!\bt'~li~e· as· :ref f«dicata. I mn:ee, the Award in the present case wa' ' liable td'be·~ftiide iu\trer s. 30 ·bf 'the 'Arbitration Act. [468 F-Hl

(e) Under s. 39 of the Arbitration Act no appeal lillll from an order remit-ting an award .to an arbitrator under s. 16 of the Arbitration Act. Therefore,

the appellant could not have challenged the order when the Civil Judge set • aside the first award and remitted the case to the arbitrator. for passing fresh award. Hence. there is no· reason why the appellant .should be. precl\lded from challenging the correctness of that order in this apJ)eal and gettina relief on that basis. [469 BJ ·

(f) Since, in the circumstances ?f the case it would be an empty -~Orinl!li~ to remit the case aRain to. the arbitrator the award of the first arbitrator •s restored. [469 C)

9-heonarayan Singh v. Ramnandan Prasad Narayan Singh A.I.R. [1916) P.C. 78, applied.

Chandu Lal v. K/,ali/ur Rol.aman A.I.R. [1950] P.C. 17, referred to. CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1646 (N) of 1967. Appeal by Special Leave from the judgment and order dated the May 19, 1967 of the Allahabad High Court in First Appeal No. 424 of 1969.

l. P. Goyal and Sobhagmal Jain, for the appellants.

Hira Lal Jain, (not present) for respondent No. 1(a).

V. S. Desai and N. M. Kslratriya, for respondent no. 1.

The Judgment of the Court was delivered by

MATHEW, J.-In this appeal, by special ]eave, the question for consideration is whether the High Court of Allahabad was right in setting aside the..decree passed by the Distric;,t Judge, Meerut, in appeal, setting aside an award passed by the arbitrator appointed under the Uttar Pradesh Consolidation of Holdings Act, 1953 (hereinafter re-ferred to as the Act) .

In order to appreciate the question in issue, the following pedigree useful : ·

The appellants are the legal representatives of Ishtiaq Ahmed. In the consolidation proceedings under the Act with respect to the pro-perties in question which originally belonged to Buniyad Ali, dispute arose between Ishtiaq Ahmed on the one hand and Meharban Alf and Kaniz Fatima on the other hand as regards the title to them. Meharban Ali and Kaniz Fatima claimed that they were co-bhumidhars II of the properties along with Ishtiaq Ahmed. Ishtiaq Ahmed contended that all the assets of Buniyad Ali were inherited by his son Aftab Ali and that after the death of Aft Ali in 191 0 and his widow in 1925 he became the excJusive owner of the properties as the other heirs had

relinquished their' rights in them. Ishtiaq Ahmed *o claimed title to the properties· by adverse posses~ion. As the dispute between the part~s was coqcerned with the title to the properties, the Consolida.tion Officer referred the matter to the Civil Judge, Meerut who referred the, fame to an arbitrator app9inted under ·the Act. The arbitrator hefd that Meharban Ali and Kaniz Fatima ·had no title and so were not ~o-bhumidhars of the properties with lshtiaq Ahmad. For reach-ing (his conclusion the arbitrator mainly relied on judgment of the High Court of Allahabad which, according to the arbitrator, operated as res iudicata between the parties with respect to the title to the pro-perties.

Both the parties fihid objections to the award before the learned II Civil Judge, Meerut. He held that the judgment of the High Court relieq on by the arbitrator did not operate as res judicata between the parties as regards the title to the properties and that the decision of the arbitrator, based as. it was on that judgment operating as res judicat~, was manifestly wrong and the award was consequently vitiated by an error of law apparent on the face of the award. He therefore set aside the awar'd and remitted the case· to the arbitrator for fresh decision.The arbitrator Mr:,R. ·P. Gupta considered the c~se. He came to the conclusion, on the basis of the ora] and documentary evidence, that the. parties were co-bhumidhars of the properties except in respect o~ 9 bzghas. 3 biswas 3 hiswasis and determined their shres in · the properties. The arbitrat0r was of the view that the judgment of the High Court was not res judicata as regards the title of the parties to the properties.

Against this award, lshtiaq Ahn.cd filed objections before the II Civil Judge, Meerut. . The Civil Judge considered the objections and found that there was no manifest error or illegality in the award and he confirmed the award.

Ishtiaq Ahmed preferred an appeal from this decision before the District Judge. Ishtiaq Ahmed died during the pendency of the appeal and his Ie~al representatives, the present appellants, prosecuted the· appeal. The District Judge held, that the award suffered fr~m an error. of law apparent on the face of the r~cord in that the ar~1t~ator ignored the judgment of the High Court wh1ch ope~ated as res JUdicata as regards the title of the parties to t~e -properties. He, therefo~e, allowed the appeal and set aside the \:Iecree appealed from and remit-ted 'the case to the arbitrator for fresh decision.

. -The respondents filed revision befor~ the High Court against th.e decision of the District Judge and the Htgh Court reversed the deci-sion and restored the decree passed by tht! Civil Judge confirming the award.

Mr. Goel appearing for the appellants submitt~d .that the High Court went wrong in reversing the decree of the' DIStrict Judge. He ar2Ued that the award was vitiated by an error of law apparent on the faoe of the record as the award proceeded on ~he. bas~ that the judgment of the High Court did not operate as res JUdicata tn respect

of the title of the parties to the properties, and therefore, the decision of the District J 11d~e setting aside the award was correct.

Now, let us consider the nature of the judgment passed by the High Court and see whether it operated as res judicata in respect of the question of title of the parties to the properties and whether there was any manifest error of Jaw apparent on !he face of the award. That judgment rela~ to the pr~rties in dispute and was passed in second appeal from decree in suit (Suit J'l:o. (;00 of 1.9.34) instituted by Meharban Ali, Kaniz Fatima and Ishtiag Ahmed for declaration that the decree obtained in O.S. No. 128 of 19.29 J>y Ishari Prasad, the, defendant in that suit on the foot of m~rtgage deed aated. November 5, 1925 executed in his favour by Matlub-un-nissa did not affect the shares of Meharban Ali and Kaniz 'Fatima in the mohgaged properties and that the mortgage, and the decree obtained thereon were invalid to the extent of their shares in the properties. !,shari Prasad, the de· fendant in that suit, contended that Matlub-un-nissa~ the mortgagor alone was ·entitled to the properties mortgaged and that the decree ob~ tained by him on the mortgage ·was valid. In substance, the con•ention of lshari'Prasad was that Meharban Ali and Kaniz Fatima had no title to the properties as the latter and the former's mother had relinquished · their shares and that the title to the properties vested exclusively in the mother of Ishtiaq Ahmed, namely,. Matlub.un-ni~sa. The trial Court passed decree dismissing the suit holding that Kaniz Fatima and Meharban Ali's -mother relinquished their shares in the properties and that Matlub-un-nissa, the mortgagor, alone was entitled to the pro-perties and, therefore, the mongage, and the decree based thereon were valid. The plaintiffs in the suit (Suit No. 600 of 1934) preferred an appeal from the decree. That was dismissed. The decree dismissing the appeal was confirmed by the High Court in the second appeal filed by them.There can be: no doubt that by the written statement, !shari Prasad, the mortgagee, denied the title of· Kaniz Fatima and Meharban Ali to the properties and set up the contention that Matlub-un-nissa, the mor-F gagor, from whom lshtiaq Ahmed traced his title, alone was entitled to 1he properties. There was, therefore, an actual conflict Of interest between·Ishtiac(Ahmed on the one hand and Kaniz Fatima and Mehar-ban Ali on the other, and it was necessary to decide the conflict in order tQ give relief to the defendant (fshari Prasad) and the Coun decided that the propenies belonged exclusively to the mortgagor, the mother of lshtiaq Ahmed.

· The effect of the ~udgment is that Kaniz Fatima and Meharban Ali fail¢ to establish therr contention that they had title to the properties, and, the question is, could they be allowed to agitate the same question'!

Now it is settled by large number of decisions that for judgment to operate as res judicata between or among co-defendants, it is neces-·H sary to establish that ( 1) there was conflict of interest between co-defendants; (2) that it was necessary to decide the conflict in ord'er to give the r~lief which the plaintiff claimed in the suit; and (3) that the court actually decided the question.

[ 1974 l 3 s.c.ll.

In Chandu Lal v. Khali/ur Rahman(') Lord Simonds said: "It may be added that the doctrine may apply even though the party, against whom it is sought to enforce it, did not in the previous suit think fit to enter an appearance and contest the question. But. to this the qualification must be. added that, if such party is to be bound by previous judgment~ it must be proved clearly that he h~ or must be dee.i:ned to have had notice that the relevant question· was in issue and wo'\lld have to be decided".

We see no reason why previous decision should not operate as ies judicata between co-plaintiffs if all these conditions are mutatis mutandis satisfied. In consi(lering any question of res judicata we have to bear in mind the statement of the Board in Sheoparsan Singh v. Ramanandim Prasad Narayan Singh(2) that the rule of res judicata "while found,ed on ancient precedent is dictated by wisdom which is for all time' and that the application of the rule by the courts "shoul<i be infiuenced by no technical considerations of form, but by matter of liUbstance within the limits. allowed by law.

: "The raison d'etre of the rule is to confer finality on ~ci­sions arrived at by competent Courts between interested parties after genuine contest; and to allow persons who had deliberately chosen position to reprobate it and to blow bot no~ when t?ey were blowin~ cold before would be completely · to Jgnore the whole found~uon of the rule."

{see Ram Bhaj v. Ahmad Saidakhtar Khan([3 ]) .

In the award, the arbitrator has stated that the judgment of the High Court in the second appeal would not operate as res judicata as regards the title to the properties but was. only piece of evidence. The arbitrator came to the conclusion that the respondents were in joint possession of the properties and, therefore, there was no ouster. If the judgment operated as res judicata, the respondents had no title to the properties. There was no finding by the ·arbitrator that by adverse possession they had acquired title to the properties at any point of time. The question which was referred to the arbitrator was the dispute bet-ween the parties as regards the title to the properties. If the judgment · of the HiJth.Court operated in law as res judicata, it would be an error of law apparent on the face of the award if it were to' say that the judgmen( would not operate as res judicata. The District Judge was, therefore, right in holding that the award. was vitiated by an error of Jaw apparent on its face in that it was based on the proposition that the judgment of the High Court would not operate as res judicata on tb~ auestion of title to the properties. If an award sets forth proposi~ tion of law which is erroneous, then the award is liable to be set aside under s. 30 of the Arbitration Act. This Court has held that the pro~ visions of the Arbitration Act will apply to proceedings by an arbitrator under the Act (see Charan Singh and Others v. Babulal and Others([4]).

(I) A.I.R. 1950 P.C. 17. (2) A.I.R. 1916 P.C. 78. (3) A.I.R. 1938 Lah. 571. (4) [1966] Supp. S.C.R. 63.

It might be recalled that the ll Civil J udgc set <~side the first award and remitted the case to the arbitrator for passing fresh award under s. 16 of the Arbitration Act. That was only on the basis that the arbi-trator committed an error of law in relying upon the judgment of the Hig~ Court as finally determining the titl~ to the properties. As no appeal under s. 39 of the Arbitration Act lay from an order remitting an award to an arbitrator under s. 1'6 of the Arbitration Act, Ishtiaq 8 Ahmed could not have challenged the order. There is, therefore, no reason why the appellants should be precluded from challenging the correctness of that order in this appeal and getting relief on that basis.

.... the We circumstances ~et. aside the order of we think it the would High Court and be an empty formality allow the appeal. to restore In . the deCision of the District Judge and remit the case again to the arbi-C trator. We restore the award dated March 30, 1959, passed by Mr. K. C. Govil, the first arbitrator. We make no order as to costs.

Appeal allowed.