1. The first defendant in O. S. 54/55 on the file of the District Judge. Eluru preferred the above appeal against the judgment and decree of Krishna Rao, J: in A. s. 4/1961. During the pendency of this appeal the appellant died and his legal representatives have been brought on record. The suit was filed by the first respondent on 4-11-1955 for partition and separate possession of 1/8th share in Sri Ramakrishna Oil Mills. Eluru (hereinafter referred as the suit mill) and for rendition of account by the first respondent of the income from the suit mill from 6-1-1946 on the following allegations;
2. The plaintiff and defendants 1 to 3 are co-owners and the plaintiff being entitled to 1/8 share, first defendant to 1/2 share and the second defendant to 1/4th share and the second defendant to 1/4th share and the 3rd defendant to 1/8th share respectively. Duo to differences between them they agreed to lease out the suit mill by auction among themselves on 6-1-1946 and the first defendant was the highest bidder at Rs. 20,000/- per year. The first defendant accordingly became the lessee of the suit mill. He was also the Managing Co-owner and as such was liable to render to the co-owner the account of the rents and profits.
3. The defence of the first defendant material to the appeal was that he was not the lessee. He bid at the auction not for himself but on behalf of the 6th defendant-Firm of which he, 4th and 5th defendants were the partners and therefore, the 6th defendant alone was liable for rent. he further contended that he was not the managing co-owner and was not therefore liable to account. He raised also the plea that the suit was barred by limitation.
4. The trial court on a consideration of the evidence held that the first defendant was the lessee and was also the managing co-owner and that the suit was not barred by limitation. He therefore, passed a preliminary decree for partition and delivery of possession of plaintiff's 1/8th share in the suit mill and directed the first defendant to render account of the suit mill business from 6-1-1946 until 25-5-1957 the date on which the possession of the suit mill was taken over by the Commissioner appointed by the Court.
5. The first defendant thereupon preferred A. S. 4/61 to this court. He did not dispute the right of the plaintiff to a decree for 1/8th share and for recovery of possession, but questioned his liability to render account. In addition to the pleas raised in the court below that he was not a co-owner, that the 6th defendant, and not he was the lessee and that the suit was barred by limitation, he attempted to raise a further contention, namely that the finding in two prior suits. O. S. 66/51 and 93/52 on the file of the Court, Eluru that the 6th defendant was the lessee and not the first defendant operated as res judicata and it was therefore not open to the lower court to find that the first defendant was the lessee. He also urged that certain directions given by the lower court with reference to the rendition of accounts were erroneous and the interest ought to have been awarded at 6%.
6. Our learned brother. Krishna Rao. J., after a consideration of the evidence agreed with the findings of the lower court that the first defendant was the co-owner and was also the lessee and that the suit was not barred by limitation. He gave certain directions regarding account and also held that the interest should have been awarded at 6% per annum. only from the date of suit. He however, refused to permit the appellant to raise the plea of res judicata which had not been raised in the lower court. In the result subject to the modifications relating to the directions regarding accounting and interest he dismissed the appeal with costs. The present Letters Patent Appeal is direct against the said judgment and decree.
7. We are not inclined to interfere with the concurrent findings of fact of our learned brother and the trial court on the questions whether the first defendant was the managing co-owner and whether he was lessee. The findings were arrived at by the trial court after elaborate consideration of the evidence. In fact, on the question whether the first defendant was the managing co-owner, there is the admission of the first defendant in the prior proceedings, in which he stated that he was directed to manage the mill by all of them (co-owners) including the plaintiff. On the question, whether the first defendant or the 6th defendant was the lessee, also the court considered the entire documentary and oral evidence and our learned brother, Krishna Rao. J. agreed with that finding. No other fresh material has been placed before us to differ from the conclusions of the trial court and our learned brother on these points and we, therefore, affirm those findings.
8. Sri Bapiraju, however, urged that there is a finding in certain prior proceedings between the same parties that the lessee was not the first defendant but the 6th defendant-firm and that operates as re judicata in these proceedings, and that Krishna Rao, J., erred in refusing to permit the appellant to raise that question in the appeal before him. In order to appreciate the contention based on res judicata, it is necessary to set out briefly the previous proceedings;
9. The second defendant filed two suits, O. s. 66/51 and O. S. 93/52 in the Sub-court. Elurur, for recovery of his 1/4th share of rent due from the first defendant for the period from 6-1-46 to 6-4-1949 and from 6-4-1949 to 6-1-1952 respectively. The present plaintiff was the third defendant in that suit and the present 3rd defendant was the second defendant therein. they supported the second defendant's case and asked for a decree in their favour for their share and offered to pay the necessary court-fee, if the suit was decreed for their share and the rent as well. The suits were tried together and dismissed on 7-3-1953. The additional Subordinate Judge, found that the plaintiff and defendants 1 to 3 constitute an unregistered firm and therefore, the suit was not maintainable at the instance of one of them only. he also held that the lessee of the mill was not the first defendant but the 6th defendant herein. It may be observed that the 6th defendant was not a party to those proceedings. Against the dismissal of the suit, the second defendant appealed to the High Court in A. S. Nos, 874 and 875/53.
10. While the appeals were pending the second defendant and the first defendant entered into a compromise on 14-7-1958 by which the first defendant agreed to pay on behalf of the 6th defendant-firm a sum of Rs. 16,000/- to the second defendant in full settlement of his claims. In view of the compromise the appeals were withdrawn and were dismissed on 5-9-1958. It is contended that as the appeals were withdrawn and dismissed, the decision of the subordinate Judge in those suits have become final and operates as res judicata in these proceedings.
11. It is contended for the respondents that the plaintiff herein and the 3rd defendant were only pro forma defendants in that suit and as they were do-defendants with the first defendant, any decision therein cannot operate as res judicata in these proceedings as the requirements necessary to make the decision between the co-defendants as res judicata are not resent in this case.
12. Before considering the question whether the finding operate as res judicata, it has to be decided first, whether the first defendant should have been allowed to raise this question of res judicata in the appeal before our learned brother and should be allowed to raise it again before us. This contention was admittedly not raised in the written statement. It is argued that it could not have been raised as the appeal in the High Court was still pending at the time when the written statement was filed on 6-3-1956. But the appeals were withdrawn and dismissed on 5-9-1958 and the judgment of the trial court in this suit was given on 31-101960. Thus the suit was pending for more than two years after the dismissal of the appeals in the High Court. no reason has been given as to why the written statement was not amended or an additional written statement was not filed raising the pleas of res judicata during this long period. we find from the judgment that issues 13 to 15 regarding the limitation, mis-joinder of parties, maintainability of suit were decided as preliminary issues on 16-2-59. Even at this stage the defendant could have asked for an issue regarding res judicata also to be raised. a revision petition was preferred against the order of the preliminary issues to the High Court and the petition was dismissed on 8-1-1960. During all these stages no attempt was made to raise the plea of res judicata. If the plea had been raised and an issue had been framed, this court could have had the benefit of the judgment of the trial court on that aspect. Further it is possible that the plaintiff might not have allowed the appeals in the High Court to be withdrawn and would have taken steps to transpose himself as the appellant and continue the appeal on the ground that the second defendant, (the plaintiff therein) had entered into compromise with the first defendant. The defendant by trying to raise this plea of res judicata is making an attempt to defeat the claims of the plaintiff for his share of the profits which are admittedly due to him.
13. For all these reasons we do not consider in the interest of justice that it is a fit case for permitting the first defendant to raise the plea of res judicata and our learned brother was also equally right in refusing that permission.
14. Mr. Bapiraju, argued that one of the main reasons for Krishnarao, J., to refuse the permission to raise this plea was that he considered that the plea of res judicata was not one which affects the jurisdiction of the Court and is a plea in a bar which a party may waive. Mr. Bapi Raju contends that this is not a correct statement of law. he has relied on a decision in Pandurang v. Maruti. : 1SCR102 in support of his contention that the plea of res judicata concerns jurisdiction. Our learned brother. Krishnarao, J., relied on a decision of a Bench of this court in Venkatasubbarao v. janakiramyya 1959 Andh LT 156, at page 165 it was stated as follows;
'In Jagadish Chandra Deo v. Gour Hari Mahato, Air 1936 PC 258 the Privy Council upheld the decision of the Calcutta High court which had declined to go into the question of res judicata on the ground that it had not been properly raised by the pleadings or in the issues, particularly in the issues. the plea of res judicata is not one which affects the jurisdiction of the court. It is a plea in a bar which a party may waive.'
Perhaps, the later portion of this observation, namely, that the plea of res judicata is not one which affects the jurisdiction of the Court and is a plea in a bar which a party may waive, is open to question. The decision of the Privy Council relied on in that Judgment, namely. Air 1936 PC 258 does not support that proposition. On the other hand, a decision of a Bench of the Madras high Court in Raja of Venkatagiri v. Madras Province. Air 1947 Mad 5 (2) consisting of Panatela Sister and Bell, DU., is to the effect that----
'though the doctrine of res judicata is often treated as a branch of the law of estoppel it is really founded on the public policy of putting an end to all litigation in regard to the same matter or in other words, of setting to rest rights of litigants, and cannot be waived even by the consent of the parties.'
Further it is doubtful whether the mere fact that the plea was not raised in the written statement amounts to waiver. In the decision in Shivraj Gopalji v. Ayyissai, AIR 1949 PC 302 their Lordhisps of the Privy Council held that the High Court was right in allowing the plea of res judicata to be raised before them even though it was not pressed in the trial court having been raised there.
15. If a plea which has been raised and not pressed could be permitted again to be raised in the High Court, we do not see any reason why the plea which was not raised at all in the trial court should not be allowed in the High court on the ground of waiver and therefore. We are inclined to agree with the argument of Mr. Bapiraju, that in this case waiver may not be a proper reason for residing the permission to raise this plea as an additional and new ground of appeal. Bit as pointed out by the Privy Council in AIR 1936 PC 258 (supra) if the plea of res judicata is not raised properly by the pleadings or in the issues, particularly in the issue, the High Court would be justified in declining to allow the appellant to go into the question of res judicata.
16 . Mr. Bapiraju relied on a number of decision to the effect that a pure question of law can be raised for the first time in an appeal, if it is based either on facts which are admitted or which have been proved beyond controversy and in this case as there is no dispute about the prior proceedings which from the basis of the plea of res judicata, the said question should have been permitted to be raised. he relied upon the oft-quoted decision in Connecticut Fire Insurance Co. v. Kavanagh, 1892 AC 473 where Lord Watson observed as follows:
'When a question of law is raised for the first time in a court of last resort upon the construction of a document or upon facts either admitted or proved beyond controversy, it is not only competent but expedient in the interests of justice to entertain the plea.'
17. These observations have been referred to an followed in a number of decisions of the High Courts and of the Supreme Court, for instance, see decision in Raghubans Narain v. Govt. of Uttar Pradesh, AIR 1967 SC 465 of the Supreme Court. But the question in each case is whether the circumstances of that case and the interests of justice require that the appellate court should exercise its discretion to entertain a new point, even though it is a pure question of law. For the reasons stated in the earlier part of our judgment we feel that this is not a fit case for entertaining this plea of res judicata for the firs time.
18. In this view it is unnecessary to go into the question whether the findings in the prior proceedings operate as res judicata between the plaintiff and the first defendant who were co-defendants in those proceedings.
19. Sri Bapi Raju contends that the suit is barred by limitation under Art. 89 of the Limitation Act of 1908 which deals with a suit by a principal against his agent for movable property received by the latter and not accounted for and period of three years is to commence when the account is, during the continuance of the agency, demanded and refused or, where no such demand is made, when the agency terminates. He contended that in the prior suit which was filed by the second defendant it was stated that the first defendant had agreed to pay the lease amount individually to each of the other co-owners and the present plaintiff in his written statement which he filled as a second defendant in that suit also took up the same position. He contends that the agency was terminated by reasons of the stand taken up in that suit and that he also ceased to be a co-owner because the plaintiff chose to treat him as a lessee by filing the written-statement as the second defendant to that effect.
20. Mr. Ramachandra Rao contends that these two suits were for recovery of rent upto 1952 and not suits for accounts and there was no question, therefore, of asking for accounts on the footing of agency or the termination of agency. We agree with this contention. we do not construe the written statement of the plaintiff as second defendant in those suits as amounting to termination of the agency of the first defendant or affecting his characters co-owner. The character of those suits is entirely different from the character of the suit in the present case as the previous ones wee for rent against the lessee whereas the present suit is one for accounts against co-owner. In the circumstances, it cannot be stated that there is any termination of agency or refusal by the first defendant to account as co-owner or as agent. The account as co-owner was asked for, for the first time by notice Ex. A-5 dated 27-10-1953 and the suit was filed on 4-11-1955, within three years thereafter. The suit was, therefore, within time. the plea of limitation also therefore, fails.
21. In the circumstances the appeal is dismissed with costs of respondent 1.
22. Appeal dismissed.