S.S. Sandhawalia, J.
1. The complexities of the practical application of the otherwise settled principles of constructive res judicata have necessitated this reference to the Full Bench. The question for determination has been formulated in the following terms:--
'Whether the decision of the High Court declining to issue a writ of mandamus on the assumption that a statutory rule was valid operates as res judicata in a subsequent suit instituted after the statutory rule had been declared as unconstitutional by the Supreme Court of India?'
The facts are not in dispute and a brief marshalling thereof with particular reference to the issue of law involved, therefore, suffices. Pt Nand Kishore, respondent, was employed a an Assistant in the Food Distribution Branch of the Punjab Civil Secretariat when he was compulsorily retired from service by an order in the following terms:--
'Order of the Governor of Punjab:
Sanction is accorded under the provisions of Rule 5.32(b) of the Punjab Civil Services Rules, Volume II, to the compulsory retirement from Government service of Shri Nand Kishore Assistant Food Distribution Branch, Punjab Civil Secretariat, with immediate effect.
2. He will be entitled to such proportionate pension and death-cum-retirement gratuity as may be admissible under the rules.
Sd/- E.N. Mangat Raj,
Dated : The Chief Secretary to Govt.
6th January, 1961. Punjab'
2. Against the abovesaid order the respondent represented to the higher authorities but no relief was apparently granted. He also submitted a memorial to the Governor but was informed on the 9th June, 1961, that the same had been considered and rejected.
3. Nand Kishore respondent then moved Civil Writ No. 1061 of 1961 praying for the quashing of the order dated the 6th of January, 1961, retiring him compulsorily. This writ petition came up before a Division Bench consisting of I. D. Dua and Tek Chand, JJ. The learned Counsel for the respondent assailed the impugned order of compulsory retirement before the Bench on a variety of grounds. The Division Bench in a lucid and detailed judgment referred to all the points raised on behalf of the petitioner and repelling the same dismissed the writ petition on the 5th February, 1962. Consequently the impugned order of compulsory retirement of the 6th January, 1961, was upheld. Admittedly no appeal was taken against the decision of the Division Bench.
4. On the 24th of February, 1964, the respondent filed a suit in the Court of the Senior subordinate Judge, Patiala, for a declaration that the order dated the 6th January 1961, compulsorily retiring him was invalid and that he continued to be in the service of the Punjab Government enjoying all the necessary rights and benefits thereof. An amended plaint date the 28th of May, 1964, was allowed to be filed in order to enable him to claim the additional relief regarding the payment of arrears of pay to the respondent. In the written statement filed in the suit by the State of Punjab it was inter alia pleaded that the suit was barred by the principles of res judicata because the matter had been heard and finally disposed of by the Division Bench judgment of the Punjab High Court, in Civil Writ No. 1061 of 1961. On the pleadings eight issues were struck by the trial Court but for the purpose of this case reference to the two issues Nos. 3 and 4 in the following terms suffices:--
3. Whether the suit is barred by res judicata?
4. Whether the order dated 6th January, 1961, of the compulsory retirement of the plaintiff is illegal, void, without jurisdiction, inoperative, mala fide, unconstitutional and unauthorised? If so, with what effect?
The trial Court arrived at the following cryptic finding on Issue No. 3:--
'The plaintiff had filed a writ petition in the High Court. Copy of the judgment is Exhibit D, 4. The view of our High Court is that judgment in writ petition does not operate as res judicata. I decide this issue against the defendant.'
On Issue No. 4 the trial Court held that in Gurdev Singh Sidhu v. State Punjab, AIR 1964 SC 1585, already Rule 9.1 of the Pepsu Regulations had been struck down and therefore Rule 5.32 of the Punjab Civil Services Rules, Vol. II, which was similar in nature was also invalid and consequently the impugned order of compulsory retirement passed thereunder was illegal. As a necessary consequence the suit of the respondent was decreed and he was granted a declaration that his compulsory retirement was illegal and further a decree for Rs. 11,321.75 P. As arrears of salary etc; with costs was passed in his favour.
5. The State of Punjab has come up in appeal against the above-said judgment and decree. The specific and indeed the only point urged on its behalf before the referring Division Bench-as also before us-was that the suit of the respondent is barred by the principles of res judicata and hence the finding of the Court on issue No. 3 was incorrect. Now it is manifest that the reasoning of the trial Court for deciding issue No. 3 against the appellant State is clearly unsustainable. The sole ground for that finding was that an earlier judgment in a writ petition did not operate as res judicata in the subsequent suit. In Gulabchand v. State of Gujarat, AIR 1965 SC 1153, their Lordships have now held in categorical terms that a decision in an earlier writ petition on merits bars a subsequent suit involving the same question and for the same relief on the general principles of res judicata. This legal proposition being no longer in doubt the learned counsel for the respondent has rightly not attempted to support the finding on issue No. 3 for the reasons above-mentioned but instead has raised new legal grounds to which detailed reference is made hereafter.
6. Coming now to the question formulated for determination by the Full Bench it may be stated that I was a member of the Division Bench which referred the same. Closer scrutiny, however, reveals that Rule 5.32 of the Punjab Civil Services Rules, under the provisions of which the order of compulsory retirement was passed was not as such declared unconstitutional by the Supreme Court. What in fact was struck down by their Lordships in Gurdev Singh Sidhu's case AIR 1964 SC 1585 was Article 9.1(as amended by the Governor of Punjab by notification issued on the 19th January, 1960) of the Pepsu Service Regulations, Vol. I, which was closely similar in import to Rule 5.32 above-said. Also the decision in Gurdev Singh Sidhu's case was rendered on the 1st of April, 1964, that is before the institution of the present suit by the respondent on the 24th of February, 1964. These two factual matters are no longer disputed on behalf of the parties and the question referred to the Full Bench would not be construed in this background.
7. The core of the argument on behalf of the respondent now rests on the observations of their Lordships in Mathura Prasad Sarjoo Jaiswal v. Dossibai N. B. Jeejeebhoy, AIR 1971 SC 2355. Relying heavily thereupon Mr. H.L. Sibal has contended that a pure question of law can never be res judicata between the parties. He, therefore, submitted that the fact that the Division Bench in C.W. No. 1061 of 1961 has upheld the order dated the 6th January, 1961, of the compulsory retirement of the respondent was no bar to the trial Court subsequently striking the same down on the ground that Rule 5.32 of the Civil Services Rules on which this order was founded was unconstitutional.
8. The scope and ambit of the ratio in Mathura Prasad's case, AIR 1971 SC 2355, therefore, is the crux of the matter before us. This is so because counsel for both sides have sought to seek support from observations in the very judgment. If I may say so, the matter is not entirely free and difficulty and, therefore, a very close analysis of the facts and the reasoning of this case becomes inevitable. In the above-said case one Mrs. Dossibai had granted a lease of an open piece of land to Mathura Prasad for constructing buildings for residential or business purposes. The appellant Mathura Prasad made construction on the land and later he submitted an application in the Court of the Civil Judge, Borivili, that the standard rent of the land be determined under Section 11 of the Bombay Rents. Hotel and Lodging House Rates Control Act, 1947. The Civil Judge rejected this application on the ground that the provisions of the statute above-mentioned did not apply to open land let out for constructing buildings for residence, education, business, trade or storage. This order was confirmed on September 28, 1955, by a learned Single Judge of the Bombay High Court in a group of revision applications, namely, Dossibai N.B. Jeejeebhoy Nos. 233 to 242 of 1955 Bom. There arose, however, a sharp conflict of judicial opinion regarding the construction to be placed on Section 6(1) of the Bombay Rents, Hotel and Lodging House Rates Control Act and the matter was referred to a Division bench for resolving he same. Gajendragadkar, J., speaking for the Division Bench in the case reported as Vinayak Gopal Limaye v. Laxman Kashinath Athavale, AIR 1957 Bom 94, held that the question whether Section 6(1) of the Act applied to any particular lease must be determined on its terms and a building lease in respect of an open plot was not excluded from Section 6(1) of the Act solely because open land may be used for residence or educational purposes only after a structure is built thereon.
9. Relying upon the law laid down in Vinayak Gopal Limaye's case AIR 1957 Bom 94, Mathura Prasad appellant then filed a fresh application in Court for determining the standard rent of the premises. The trial Judge rejected the application holding that the question whether to an open piece of land let for purposes of constructing building for residence, education, business or trade, Section 6(1) of the Act applied was res judicata since it had been finally decided by the High Court between the same parties in respect of the same land in the earlier proceeding for fixation of standard rent. This was confirmed by a Bench of the Court of Small Causes and later by the High Court of Bombay. With special leave the appellant appealed to the Supreme Court.
10. It is worthy of particular notice that meanwhile an appeal was taken against the decision of the Single Judge of the Bombay High Court in Civil Revision Application No. 233 of 1955, dated the 28th September, 1955(Bombay) and in the judgment reported as Mrs. Dossibai N. B. Jeejeebhoy v. Khemchand Gorumal, AIR 1966 SC 1939, the view expressed therein was overruled. Their Lordships of the Supreme Court referred with approval to the view expressed earlier in Vinayak Gopal Limaye's case AIR 1957 Bom 94, and affirmed the ratio thereof. Though the appeal of Mrs. Dossibai was dismissed on another ground, the view of law expressed by the learned Single Judge in Civil Revision Application No. 233 earlier was authoritatively and finally set aside.
11. Their Lordships allowed the appeal in Mathura Prasad's case AIR 1971 SC 2355 on a two-fold ground, holding that the earlier decision of the Civil Judge that he had no jurisdiction to entertain an application for determination of standard sent was patently erroneous in view of the judgment in AIR 1966 SC 1989; and further if this erroneous decision regarding the jurisdiction of the Court was allowed to become conclusive, it would assume the status of a special rule of law applicable to the parties in derogation to the rule declared by the Legislature.
12. Did their Lordships in Mathura Prasad's case AIR 1971 SC 2355, intend to lay down an abstract and unqualified proposition that a question of law (and for that matter a pure question of law) between the parties can never be res judicata in a subsequent proceeding? My answer to that query is in the negative. A reference to the body of the judgment discloses that it is in terms an affirmance of the view expressed earlier in the Full Bench case of Tarini Charan v. Kedar Nath, AIR 1928 Cal 777. Their Lordships have repeatedly referred to it with approval and in fact quoted in extenso from the observations of Chief Justice Rankin in the said case. A reference to this judgment reveals that the first question formulated by the referring Division Bench for determination was as follows:--
'Whether an erroneous decision on a pure question of law operates as res judicata in a subsequent suit where the same question is raised.'
In the context of the above-said question, Chief Justice Rankin observed as follows:--
'As regards the first question, I am not of opinion that any categorical answer can be given to the question as framed and I do not think that it would be wise for a Full Bench to attempt an exhaustive exposition of all the considerations which are relevant in determining whether a previous decision does or does not operate as res judicata.' Elaborating further the learned Chief Justice opined that indeed pure questions of law were of various kinds and could not possibly be dealt with as though they were all the same or absolutely identical. Especially he listed the questions of law regarding procedure; those affecting jurisdiction; and issues of limitation in which apart from the rights of parties the interest of the public and the Court itself would be equally involved, and for that reason such questions may merit the application of special considerations.
13. Viewed in the background of the observations in the Full Bench of Tarini Charan's case AIR 1928 Cal 777(FB)(supra) which has been expressly affirmed, the observations in Mathura Prasad's case AIR 1971 SC 2355 negative any possible assumption that the Supreme Court intended to lay down any blanket rule that pure questions of law can never operate as res judicata betwixt the parties. Indeed as held by Rankin, C. J., it was neither possible nor desirable to attempt a categorical answer to any such abstruse proposition.
14. Again what their Lordships have themselves observed in the course of the judgment in Mathura Prasad's case AIR 1971 SC 2355 negatives the argument on behalf of the respondent that a question of law like the interpretation of a statute cannot be res judicata. At two places in the judgment it was observed authoritatively in these terms:--
'A previous decision of a competent Court of facts which are the foundation of the right and the relevant law applicable to the determination of the transaction which is the source of the right is res judicata. A previous decision on a matter in issue is a composite decision; the decision on law cannot be dissociated from the decision on facts on which the right is founded. A decision on an issue of law will be as res judicata in a subsequent proceeding between the same parties, if the cause of action of the subsequent proceeding be the same as in the previous proceeding, but not when the cause of action is different, nor when the law has since the earlier decision been altered by a competent authority, nor when the decision relates to the jurisdiction of the Court to try the earlier proceeding, nor when the earlier decision declares valid a transaction which is prohibited by law and again.'
'A mixed question of law and fact determined in the earlier proceeding between the same parties may not, for the same reason, be questioned in a subsequent proceeding between the same parties. But, where the decision is on a question of law, i.e; the interpretation of a statute, it will be res judicata in a subsequent proceeding between the same parties where the cause of action is the same, for the expression 'the matter in issue' in Section 11, Code of Civil Procedure, means the right litigated between the parties, i.e; the facts on which the right is claimed or denied and the law applicable to the determination of that issue.'
It can hardly be disputed that a mater of interpretation of a statute is a question of law and may well fall within the rather slippery and loose expression of 'a pure question of law'. Nevertheless as noticed above, their Lordships have observed in no uncertain terms that a question of interpretation of a statute also may well become res judicata in a subsequent proceeding between the same parties where the cause of action is the same.
15. There is then such a long line of authoritative precedents of the Supreme Court bearing directly on this aspect of the doctrine of res judicata that it becomes well-high impossible to hold that Mathura Prasad's case AIR 1971 SC 2355 was intended by their Lordships to take a directly contrary view thereto or to unsettle the previous binding precedents. It is a safe rule of construction that a judgment of the final Court is not implied to overrule its earlier decisions which were not even cited before it. As early as 1953 Ghulam Hasan, J; speaking for the Court in Mohanlal v. Benoy Kishna, AIR 1953 SC 65, laid down as follows:--
'There is ample authority for the proposition that even an erroneous decision on a question of law operates as res judicata between the parties to it. The correctness or otherwise of a judicial decision has no bearing upon the question whether or not it operates as res judicata. A decision in the previous execution case between the parties that the matter was not within the competence of the executing Court, even though erroneous is binding on the parties; see Abhoy Kanta v. Gopinath Deb, AIR 1943 Cal 460.'
16. In the two decades that have gone by since the above-said enunciation of the law there has never been a deviation from the rule laid down therein and indeed the principles have found reiteration at the hands of their Lordships in innumerable decisions. Enunciating the principles underlying the rule it was later observed as follows in Satyadhyan Ghosal v. Smt. Deorajin Debi, AIR 1960 SC 941:--
'The principle of res judicata is based on the need of giving a finality to judicial decision. What it says is that one a res 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 to a future suit or proceeding between the same parties to canvass the matter again.'
Again in this very context it is unnecessary to advert in detail to the well-known ratio of the celebrated case of Daryao v. State of U.P. AIR 1961 SC 1457. In Devilal Modi v. Sales Tax Officer, Ratlam, AIR 1965 SC 1150, the principle of constructive res judicata was extended in its application to the writ petitions even in the context of the enforcement of fundamental rights with the following authoritative observations by Chief Justice Gajendragadkar speaking for the Court:--
'As we have already mentioned, though the Courts dealing with the questions of the infringement of fundamental rights must consistently endeavour to sustain the said rights and should strike down their unconstitutional invasion, it would not be right to ignore the principle of res judicata altogether in dealing with writ petitions filed by citizens alleging the contravention of their fundamental rights. Considerations of public policy cannot be ignored in such cases, and the basic doctrine that judgments pronounced by this Court are binding and must be regarded as final between the parties in respect of matters covered by them must receive due consideration.'
Gulabchand Chhotalal Parikh v. State of Gujarat, AIR 1965 SC 1153, which has already been referred to, again reiterated that a decision on merits on a matter after contest given in a writ petition would operate as res judicata in a subsequent regular suit between the same parties with respect to the same matter. It is unnecessary to multiply authorities and it suffices to mention that the rule was again reiterated by a Bench consisting of J.C. Shah and K.S. Hegde, JJ; in Sri Bhavanarayanaswamiviri Temple v. Vadapalli Venkata Bhavanarayana Charyulu, 1970(1) SCC 673. Viewed in the background of the precedents referred above it is manifest that Mathura Prasad's case in 1971 was not intended to make any radical departure from the settled law but was indeed a reiteration of the accepted principles of res judicata which had been repeatedly enunciated by their Lordships earlier.
17. What exactly then is the ratio decidendi in Mathura Prasad's case AIR 1971 SC 2355? It is manifest that the sole issue in the appeal was as to the jurisdiction of the Court of Small Causes for determining the standard rent of premises constructed in pursuance of a building lease of an open site. Therefore, the authority is a precedent primarily on the limited issue of the jurisdiction of a Court. What directly arose for determination therein and what has been specifically laid down by their Lordships is-that a patently erroneous decision (directly contrary to a Supreme Court judgment) in a previous proceeding in regard to the jurisdiction of a Court could not becomes res judicata between the parties. The weighty reason for so holding was that such a result would create a special rule of law applicable to the parties in relation to the jurisdiction of the Court in violation of rule of law declared by the legislature. It is manifest that this enunciation was an engrafted exception to the general principle noticed in the judgment itself, i.e., a question of law including the interpretation of a statute would be res judicata between the same parties where the cause of action is the same.
I am inclined to the view that it is unprofitable and indeed unwarranted to extract an observation and a sentence here and there from the judgment and to build upon it on the ground that certain results logically follow therefrom. Such a use of precedent was disapproved by the Earl of Halsbury L. C. In Quinn v. Leathem, 1901 AC 405. Approving that view and quoting extensively therefrom their Lordships of the Supreme Court in State of Orissa v. Sudhansu Sekhar Misra, AIR 1968 SC 647 have categorically observed as follows:--
'A decision is only an authority for what it actually decides. What is of the essence in a decision is its ratio and not every observation found therein nor what logically follows from the various observations made in it.'
18. In strictness, therefore, the ratio decidendi of Mathura Prasad's case AIR 1971 SC 2355 is confined to the issue of jurisdiction of the Court but is equally well-settled that the obiter dicta of their Lordships is entitled to the greatest respect and weight and is indeed binding if it can be found that they intended to lay down a principle of law. The issue, therefore, is as to what else, apart from the ratio, was sought to be laid down by the Supreme Court in this case. The very closely guarded language used by their Lordships in the body of the judgment leads me to conclude that they wished to confine their observations within the narrowest limits. The expression used (which is sought to be extended on behalf of the respondent) is-'a pure question of law unrelated to the right of the parties to a previous suit.' It is very significant that their Lordships, with their meticulous precision of language, have no where laid down in the judgment that a pure question of law can never be res judicata between the parties. Indeed it has been said to the contrary in terms. The emphasis, therefore, in the expression abovesaid is on the fact that such a pure question of law must be unrelated to the rights of the parties. It stands noticed that a decision by a Court on a question of law cannot be absolutely dissociated from the decision on the facts on which the right is founded. Consequently what was exactly to be connoted by the expression 'a pure question of law unrelated to the rights of the parties' was itself expounded upon by their Lordships. Without intending to be exhaustive, the Court has indicated specifically the exceptional cases in which special considerations apply for excluding them from the ambit of the general principle of res judicata. The principle of law which their Lordships herein have reiterated is that a pure question of law including the interpretation of a statute will be res judicata in a subsequent proceeding between the same parties. To this salutary rule, four specific exceptions are indicated. Firstly, the obvious one, that when the cause of action is different, the rule of res judicata would not be attracted. Secondly, where the law has, since the earlier decision, been altered by a competent authority. Thirdly, where the earlier decision between the parties related to the jurisdiction of the Court to try the earlier proceedings, the same would not be allowed to assume the status of a special rule of law applicable to the parties and therefore, the matter would not be res judicata. Fourthly, where the earlier decision declared valid a transaction which is patently prohibited by law, that is to say, it sanctifies a glaring illegality.
19. Applying the abovesaid rule with its engrafted exceptions, one may now proceed to determine whether the earlier decision in Civil Writ No. 1061 of 1961 was a pure question of law unrelated to the rights of the parties. To my mind, it was patently not so. The matter that was directly and substantially in issue in the writ proceedings was the validity of the order of compulsory retirement dated January 6, 1961. The express prayer for relief in the writ petition was that the order retiring the petitioner compulsorily be set aside as illegal and it be further directed that the petitioner therein did not cease to hold his post under the Government. This specifically, is the matter directly and substantially in issue in the subsequent present suit. In terms the relevant claim herein is for a declaration that the order of the Governor of Punjab dated January 6, 1961, compulsorily retiring him was illegal and consequently the plaintiff continued to be in the service of the Punjab Government in his original post. Can it be reasonably said that the earlier decision was one unrelated to the rights of the parties? A bare reference to the Division Bench judgment in C. W. No. 1061 of 1961 would show that the issue of the validity of the order was one founded upon and inextricably enmeshed with the rights upon which the learned Judges had adjudicated in detail. The issue rested squarely upon facts and rights as also on the interpretation of the service rules applicable to the respondent-employee; the rights of the employee to continue in service; and the power of the employer to determine the same by way of compulsory retirement. Far from being an issue unrelated to the rights of the parties, it was in fact founded on the particular rights of either an equally related to the facts which gave rise to the interpretation and applicability of the relevant rule and the determination of the other question of law. Hence applying the observations of the Supreme Court (on which so much reliance was placed by the learned Counsel for the respondent) one cannot say that the upholding of the same impugned order of compulsory retirement earlier by the Division Bench was a pure question of law un-related to the rights of the parties.
20. With some ingenuity Mr. Sibal had then attempted to bring his client's case within the exception that a question of law is not res judicata between the parties if the said law has been altered by a competent authority subsequent to the earlier decision. Counsel contended that the Supreme Court in Gurdev Singh's case AIR 1964 SC 1585 had struck down Rule 9.1 of the Pepsu Regulations as unconstitutional and this judgment had hence effected a change in the law applied by the Division Bench in Civil Writ No. 1061 of 1961. Indeed Mr. Sibal has been pushed, by force of logic, into taking up an extreme position and has contended that the moment a Court of record or a superior Court overrules an earlier decision on a point of law or declares a statutory provision as ultra vires, then all decisions rendered earlier inter parties would become nugatory and the parties thereto would be entitled to re-agitate the issues over again subject to the law of limitation. I am unable to accede to any such radical or starting proposition. Such a result would indeed run counter to the settled principles of res judicata that finality must ultimately attach to a decision of the Court, if not appealed from, irrespective of the correctness of the same. If every lis between the parties is liable to be re-opened by a subsequent change of legal opinion, then all earlier litigation relevant thereto would always be in a flux. Learned Counsel for the respondent was repeatedly invited to cite any authority which laid down that the declaration of a statute as ultra vires or the overruling of an earlier decision would re-open all the decided matters within the period of limitation flowing from the date of such decision, but he had frankly conceded his inability to cite any judgment in support of his contention. There is, however, high authority to the contrary. Chief Justice Rankin in Tarni Charan's case AIR 1928 Cal 777(FB) repelled an identical submission in language which is worthy of recapitulation--
'The legislature, by statute, may alter the rights of parties and when it does so, it makes such provision as it thinks proper to prevent injustice. Courts of law are in no way authorized to alter the rights of parties. They profess, at all events, to ascertain the law, and if the binding character of a decision upon a concrete question as to the terms of a particular holding is to fluctuate with every alteration in the current of authority, the Courts will become an instrument for the unsettlement of rights rather than for the ascertainment thereof. The principle relied upon is abhorrent to Section 11, Civil Procedure Code and to the general intention of the doctrine of res judicata.
In an earlier decision in Gowri Koer v. Audh Koer, (1884) ILR 10 Cal 1087, Chief Justice Garth speaking for the Bench has this to say on the point:--
'But although those learned Judges may have made a mistake in point of law in the decision at which they arrived in 1873, their division upon the point at issue is nevertheless a res judicata as between the parties, and it is no less a res judicata, because it may have been founded on an erroneous view of the law, or a view of the law which this Court has subsequently disapproved.'
In view of the above it has been rightly contended on behalf of the appellant-State that the alteration of the law by the competent authority as an exception in the context of the rule of res judicata means a change enacted by the legislature and not by virtue of a different interpretation subsequently given by the Court. The Courts of record including the Supreme Court only interpret the law as it stands but do not purport to amend the same. Their Lordships' decisions declare the existing la but do not enact any fresh law.
21. Lastly it was contended on behalf of the respondent that the earlier decision of the Division Bench in the Civil Writ was erroneous on the point of the validity of Rule 5.32 of the Punjab Civil Services Rules, and therefore could not remain binding between the parties. Reliance was placed on Gurdev Singh's case, AIR 1964 SC 1585 to show that a provision in pari materia with the said rule in Article 9.1 of the Pepsu Regulations has been held unconstitutional and on a parity of reasoning Rule 5.32 may also be not sustainable. There is obviously no merit in this contention because the hallowed and unchallenged rule is that the correctness or otherwise of a previous judicial decision has no bearing upon the question whether or not it operates as res judicata. Once it is found that the rule is attracted, then the correctness or otherwise of the earlier decision is irrelevant to the issue.
22. For the foregoing reasons my answer to the question formulated for determination is in the affirmative.
23. The case will now go back to the Division Bench for decision.
Bal Raj Tuli, J.
24. I agree and have nothing to add.
M.R. Sharma, J.
25. With utmost respect to my learned brother S. S. Sandhawalia, J; I have not been able to concur with the view taken by him.
26. The respondent joined the service of the erstwhile State of Patiala as officiating Octroi Maharrir in May, 1941. After the formation of the Patiala and East Punjab States Union (hereinafter referred to as Pepsu) on August 20, 1948, he was integrated in the service of the Pepsu and promoted as an Assistant with effect form October 6, 1955. He was confirmed in this post on September 1, 1956, and after the merger of Pepsu with the erstwhile State of Punjab he was taken up as an Assistant in the Punjab Civil Secretariat, Chandigarh, with effect form November 1, 1956. Sometime in August, 1960, the Additional chief Secretary to the Government of Punjab, served a notice upon the respondent to show cause why the be not compulsorily retired from service under Rule 5.32 of the Punjab Civil Services Rule Volume II. In reply, the respondent wrote to the said officer that he should be given an opportunity of explaining things personally, because he was likely to level some allegations against his superior authorities. It is alleged that no such opportunity was given to him and vide orders dated January 6, 1961, which were communicated to him on January 16, 1961, he was compulsorily retired from Government service. He filed a suit in the Court of Subordinate Judge First Class, Patiala, on the ground that his compulsory retirement under the impugned orders tantamounted to his removal or dismissal from service within the meaning of Article 311 of the Constitution inasmuch as his services had been terminated on allegations of misconduct, inefficiency, slackness and malingering. It was also alleged that the rule relating to compulsory retirement, which had been invoked in his case, was hit by Article 311(2) of the Constitution.
27. In the written statement filed on behalf of the State, some preliminary objections were taken. It was submitted that the matter involved was not justiciable and that the suit was barred under Section 11 of the Code of Civil Procedure because the writ petition filed by the respondent relating to the 'point in issue' had been dismissed by the Punjab High Court. The other material plea which appears in para 6(c) of the written statement is reproduced as under:--
'The correctness of the contents of this para is denied. The correct position is that the amendment of Rule 5.32 of the Punjab Civil Service Rules volume II was made with the concurrence of the Government of India to whom a reference was made under Section 115 of the State re-organisation Act. Accordingly the amended rules applied to all Punjab Government servants, including hose of the erstwhile Pepsu. So far as the plaintiff is concerned he definitely opted for the Pension Rules etc; as contained in the Punjab C. S. R. Vol. II as amended upon 24th March, 1958(copy attached). Accordingly, the petitioner cannot in any case urge that the rules regarding compulsory retirement after 10 years of qualifying service is not binding on him. The changes made in rules after his appointment are binding on the plaintiff as he continued to serve the defendant under amended rules of service. The amended up-to-date rules of service constituted the contract of service between the plaintiff and the defendant'
28. The learned trial Court framed the following issues:-
(1) Whether the Civil Courts at Patiala have territorial jurisdiction to try the suit?
(2) Whether the matter in question is no justiciable?
(3) Whether the suit is barred by res judicata?
(4) Whether the order dated 6th January, 1961, of the compulsory retirement of the plaintiff is illegal, void, without jurisdiction, inoperative, mala fide, unconstitutional and unauthorised. If so, with what effect?
(5) Whether the notice under Section 80, Civil Procedure Code is invalid?
(6) Whether the plaintiff is entitled to the amount in suit?
(7) Whether the plaintiff is entitled to interest as claimed?
29. All the issues were decided in favour of the respondent and his claim for Rs. 13,6490.08 was decreed. The State of Punjab was also ordered to pay interest at the rate of 6% per annum of this amount from June 10, 1964, till the date of realisation of this amount by the respondent
30. The State of Punjab has come up in appeal against this judgment solely on the ground that Civil Writ No. 1861 of 1961 filed by the respondent had been dismissed by a Division Bench of this Court on February 5, 1962, and so the suit filed by the respondent was barred by the principle of res judicata.
31. When the matter came up for hearing before the Division Bench, it was argued on behalf of the respondent that a division on a pure question of law unrelated to facts, which gave rise to a right could not be deemed to be the matter in issue and such a decision could not operate as res judicata in subsequent litigation. Since this point was likely to be raised in a large number of cases, the following question of law was referred to the Full bench for its opinion:-
'Whether the decision of the High Court declining to issue a writ of mandamus on the assumption that a statutory rule was valid operates as res judicata in a subsequent suit instituted after the statutory rule had been declared as unconstitutional by the Supreme Court of India?'
32. I deem it necessary to observe at this stage that the present suit was filed on February 24, 1964, and AIR 1964 SC 1585, was decided on April 1, 1964, i.e., after the institution of this suit. However, Moti Ram Deka v. General Manager, North East Frontier Rly; AIR 1964 SC 600, upon which reliance had been placed in Gurdev Singh's case (supra), was decided on December 5, 1963. In other words, the principle on the basis of which second proviso to Article 9.1 of the Pepsu Services Regulations, Volume I (hereinafter called the Pepsu Regulations), was declared illegal as being opposed to Article 311 of the Constitution, had been settled earlier. Even otherwise, this Court had taken the view that dismissal of a writ petition on merits did not bar a regular suit on the same cause of action. This view was, for the first time, overruled in AIR 1965 SC 1153, which was decided on December 14, 1964. Even if the decision in Gurdev Singh's case AIR 1964 SC 1585(supra) had come during the pendency of the suit, the learned trial Court was bound to take judicial notice of subsequent events which in this case was the law declared by the Supreme Court, which is binding on all the subordinate Courts as laid down in Article 141 of the Constitution. The date of the institution of the suit, therefore, bears no relevance to the principle of law involved in this case.
33. In C. W. No. 1061 of 1961(Punj) Nand Kishore Vaid v. Punjab State filed by the respondent, he had urged that his case was governed by Article 9.1 of the Pepsu Regulations, the first proviso to which laid down that the Government could retire a Government servant after he had completed a qualified service of 25 years and the Government could not assume the power to compulsorily retire a servant after he had completed ten years of service by amending the rules. It was also averred that the Government could not affect the position of its existing Government servants by any unilateral action without obtaining the consent of the Government servants concerned to the changed conditions. Second proviso to Article 9.1 of the Pepsu Regulations introduced by a notification issued on January 19, 1960, reads as under:--
'Provided further that Government retains an absolute right to retire any Government servant after he has completed ten years qualifying service without giving any reason and no claim to special compensation on this account will be entertained. This right will not be exercised except when it is in the public interest to dispense with the further services of a Government servant such as on account of inefficiency, dishonesty, corruption or infamous conduct. Thus, the rule is intended for use..................'
34. Rule 5.32 of the Punjab Civil Services Rule Volume II, incorporates the conditions of grant of pension to the retiring Government servants. This rule was amended on November 27, 1957. The new rule provided that a retiring Government servant, if permitted to retire from service after completing qualifying service of 25 years or such less time as may for any special class of Government servants be prescribed, would be eligible to receive pension. Note I appearing under this rule was worded in exactly the same manner in which the second proviso to Article 9.1 of the Pepsu Regulations was worded. It appears that Rule 5.32 of the Punjab Civil Services Rules Volume II had been amended earlier and the Pepsu Regulations were amended in 1960 so as to bring the two provisions at par. In this view of the matter, it would make no difference whatsoever whether the service of the respondent had been terminated under second proviso to Article 9.1 of the Pepsu Regulations or under Note 1 appearing under Rule 5.32 of the Punjab Civil Services Rules Volume II. The controversy which the High Court was called upon to resolve in C. W. No. 1061 of 1961 was whether a public servant could be compulsorily retired in exercise of powers under a service rule which allowed the Government to retire him after he had put in ten years of service.
The Division Bench which decided this petition of February 5, 1962, observed as under:--
'No principle or authority has been cited in support of this submission, nor has the counsel drawn our attention to any provision of law which confers on the petitioner the right to continue in service if the State does not require his services any more. There is of course no binding agreement conferring any such right on the petitioner, at least none was pointed out to us. Without a binding precedent or other convincing argument, I cannot persuade myself to quash the impugned order as contrary to law and unauthorised on the basis of this submission.
It has next been submitted that Rule 9.1 of the Pepsu Regulations contained in Chapter IX as it existed before the Notification of 1960, by which the power to retire compulsorily after 10 years of service was included in the rules, governs the present case and in the background of this rule compulsory retirement before 25 years of service must be considered to amount to wrongful removal, hit by Article 311 of the Constitution
This contention ignores the notification of 30th September, 1957, by means of which it had become permissible to compulsorily retire a person after 10 years of service. When once it is held that the petitioner had opted for being governed by the Punjab Civil Services Rules Vol. II as amended upto 24th March, 1958, there can scarcely be any question of Pepsu Rule 9.1 operating to the exclusion of the Punjab Rules. As a matter of fact, the amended Punjab Rules would also seem to meet the petitioner's second point already disposed of. This rule does clearly contemplate the existence of power in the Government to retire the petitioner compulsorily after 10 years of service.'
Apparently, the Division Bench held that Article 311 of the Constitution was not attracted because Article 9.1 of the Pepsu Regulations had been amended and even if Rule 5.32 of the Punjab Civil Services Rules Vol. II was applied to the case of the respondent that would also meet the point raised on his behalf. The case was not decided on the basis that, where, while reserving the power to the State to compulsorily retire a public servant a rule is framed prescribing a proper age of superannuation and another rule is added giving the power to the State to compulsorily retire a permanent public servant at the end of 10 years of his service, that rule would be violative of Article 311(2) of the Constitution. In other words, whether it was second proviso to Article 9.1 of the Pepsu Regulations or Note 1 to Rule 5.32 of the Punjab Civil Services Rules Vol. II, the same was presumed to be valid and the retirement of the respondent under any of these constitutionally invalid provisions was held to be valid. The Division Bench also observed that under Article 310 of the Constitution, the tenure of office of persons serving the State was subject to the pleasure of the Governor. This pleasure was of course subject to Article 311 but a show-cause notice was required to be given to a Government servant in case he was to be dismissed, removed, of reduced in rank only. The compulsory retirement of a Government servant did not per se amount to removal, and so the petition of respondent was dismissed.
35. In Moti Ram Deka's case AIR 1964 SC 600(supra), the Court was called upon to consider the validity of Rules 148(3) and 149(3) of the Railway Rules. These Rules authorised the termination of services of the railway employees by serving them a notice for a requisite period or paying them their salary for the said period in lieu of notice. The Court held that a person who substantively held a permanent post had a right to continue in service subject to two exceptions: (i) superannuation and (ii) compulsory retirement. The second exception was affirmed by the Court with the reservation that rules of compulsory retirement would be valid if, having fixed proper age of superannuation, they permit the compulsory retirement of a public servant, provided he has put in the minimum period of service. The Court observed that if the compulsory retirement permitted the authority to retire a public servant at a very early stage of his career, the question whether such a rule would be valid might have to be considered on a proper occasion.
In Gurdev Singh's case AIR 1964 SC 1585(supra), the Court had to consider the validity of second proviso to Article 9.1 of the Pepsu Regulations. It relied upon Moti Ram Deka's case (supra) and observed as under:--
'Therefore, it seems that only two exceptions can be treated as valid in dealing with the scope and effect of the protection afforded by Article 311(2). If a permanent public servant is asked to retire on the ground that he has reached the age of superannuation which has been reasonably fixed, Art. 311(2) does not apply, because such retirement is neither dismissal nor removal of the public servant. If a permanent public servant is compulsorily retired under the rules which prescribe the normal age of superannuation and provide for a reasonably long period of qualified service after which alone compulsory retirement can be ordered, that again may not amount to dismissal or removal under Article 311(2) mainly because that is the effect of a long series of decisions of this Court. But where while reserving the power to the State to compulsorily retire a permanent public servant, a rule is framed prescribing a proper age of superannuation, and another rule is added giving the power to the State to compulsorily retire a permanent public servant at the end of 10 years of his service, that cannot, we think, be treated as falling outside Article 311(2). The termination of the service of a permanent public servant under such a rule, though called compulsory retirement, is in substance, removal under Article 311(2).'
It does not need elaborate arguments to hold that the Service Rules must be held to be void if they come in conflict with Article 311 of the Constitution. These Rules are framed under Article 309 of the Constitution, the opening words of which are 'subject to the provisions of this Constitution................., which implies that these Rules must not come in conflict with any constitutional provision. It is precisely for this reason that second proviso to Article 9.1 of the Pepsu Regulations and Note 1 to Rule 5.32 of the Punjab Civil Services Rules Volume II were suitably amended on May 31, 1965, and the Government was empowered to compulsorily retire its servants soon after they had put in 25 years of service.
36. In view of the above observations made in Gurdev Singh's case AIR 1964 SC 1585(supra), the decision in C. W. No. 1061 of 1961(Punj) filed by the respondent must be deemed to have been overruled. The period for which the respondent had served the Government was never in dispute at any stage. It was agreed and indeed it is a matter of fact that he had put in less than 25 years of service when the orders of his compulsory retirement were passed. If the judgment given in that petition is allowed to stand in the way of the respondent, then the following consequences would ensue:--
Firstly, the decision of the High Court on a pure question of law unrelated to facts, i.e., the right of the Government to retire its servant under either second proviso to Article 9.1 of the Pepsu Regulations or under Note. 1 appearing under Rule 5.32 of the Punjab Civil Service Rules Volume II would have to be regarded as binding on him.
Secondly, the respondent would be deemed to be governed by a service rule which was not only different from the rules governing other public servants but which had also been held void by the highest Court of the land. In other words an unconstitutional rule would have to be clothed with validity by a judicial process.
Thirdly, the principle that a decision based on law which is subsequently altered or amended does not operate as res judicata would have to be given a complete go by in the case of the respondent.
Can it be done? To answer this question, one has to understand the true ambit and the scope of the principle of res judicata enshrined in Section 11 of the Code of Civil Procedure. Shorn of surplusages this section reads as under:--
'No Court shall try any suit or issue in which the matter directly and substantially in issue has been directly and substantially in issue in a former suit between the same parties, or between parties under whom they or any of them claim, litigating under the same title, in a Court competent to try such subsequent suit or the suit in which such issue has been subsequently raised, and has been heard and finally decided by such Court.'
This section is based upon two maxims of common law:--
(i) interest reipublicae ut sit finis litium--it concerns the State that there be an end to law suits.
(ii) nemo debet bis vexari pro una et eadem cause--no man should be vexed twice over for the same cause.
But for the rule contained in this section, there would be no end to litigation and the rights of litigants would be involved in endless confusion.
37. Apart from this, there are some other principles which have acquired statutory recognition in the Code of Civil Procedure (hereinafter called the Code). One such principle has been enunciated in Sangram Singh v. Election Tribunal, Kotah, AIR 1955 SC 425, in the following terms:--
'Now a code of procedure must be regarded as such. It is 'procedure' something designed to facilitate justice and further its ends: not a penal enactment for punishment and penalties; not a thing designed to trip people up. Too technical a construction of sections that leaves no room for reasonable elasticity of interpretation should therefore be guarded against (provided always that justice is done to 'both sides) lest the very means designed for the furtherance of justice be used to frustrate it.'
In Mehar Chand v. Mulkhi Ram, AIR 1932 Lah 401, it was observed as under:--
'The Code of Civil Procedure is an adjective law as opposed to substantive law and is not primarily intended to create new rights or to take away existing rights. Its main function is to provide and regulate the procedure of the Courts for enforcing the rights of the parties.'
In Thakar Lal v. Nathulal, AIR 1964 Raj 140, it was stated thus--
'It would be a grave mistake therefore if we may say so with utmost deference, to forget that it deals with procedural matters, that is, with matters relating to the machinery for the enforcement of substantive rights, as contra-distinguished from the substantive rights themselves. As to the latter rights, we must look elsewhere, that is, to the statute law or the general principles of law. Indeed, even in matters relating to procedure, it seems to us to be recognised that all procedure should be accepted to be permissible unless it is prohibited by the Code of Procedure either expressly or by necessary implication.'
38. Procedural law is the hand-maid of justice and if the provisions of a statute are capable of two interpretations, the one which advances the interests of justice should be adopted.
39. The order principle which is worthy of mention is that an act of Court shall prejudice no man. Under this principle, a Court of law is entitled to correct its own mistakes apart from the statutory jurisdiction conferred upon it to correct any error committed by it in the course of a trial. Under this very principle, a Court would be deemed to have a power to interpret laws in such a manner that its power to correct its own errors could be freely exercised in the absence of anything to the contrary in a statute.
40. All the three principles enunciated above have a pride of place in our system of laws. Each one of them may have individual area of operation but cases also arise in which a Court is called upon to draw upon more than one of them. In that event, the Court is under a duty to read them harmoniously and to strike a happy balance between them. It is settled law of the pleadings that a party to a cause has to plead facts leaving it to the Court to apply the principles of law. If a decision is given on a mixed question of law and facts, then it cannot be re-opened because it is in the interest of all concerned that there should be some finality to the litigation and nobody should be vexed again over the same cause. The Court cannot be blamed because the facts have to be proved by the parties and the law has to be interpreted in the background of these facts. But if a wrong decision on a pure question of law is given, then really speaking it is the Court itself which is to be lamed. If finality is attached to such a decision then the principle that the act of a Court shall injure nobody would have to be ignored. In such a situation, justice may have to be denied to an aggrieved party because of mere technicalities of procedural law. Again, where a Court has no jurisdiction to decide a matter the decision given by it could not be regarded as binding in subsequent proceedings. Otherwise, a Court would be arrogating to itself a power to create jurisdictions instead of exercising them in accordance with the mandate given by the Legislature.
41. A Court discovers law and does not lay it down. When law is changed by the competent authority, it cannot insist that the decision given by it on the basis of old law should be regarded as sacrosanct.
42. In AIR 1971 SC 2355, the controversy arose out of the following facts. The appellant had acquired a lease of vacant site from the respondent for constructing buildings for residential or business purposes. He filed a petition under Section 11 of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947(hereinafter called the Bombay Act), for determining the standard rent. The Civil Judge rejected the application holding that the provisions of this Act did not apply to open land let for constructing buildings for residential and business purposes. This order was confirmed by a learned Single judge of the Bombay High Court in a group of revision petitions (Nos. 233 to 242 of 1955) Mrs. Dossibai N.B. Jeejeebhoy v. Hingoo Manohar Missar, but in another case reported as ILR (1956) Bom 827 = (AIR 1957 Bom 94) the Court held that the question whether Section 6(1) of the Bombay Act applies to any particular lease must be determined on its terms and a building lease in respect of an open plot is not excluded from Section 6(1) of this Act. Relying upon Vinayak Gopal's case ILR (1956) Bom 827 = (AIR 1957 Bom 94)(supra), the appellant filed a fresh petition in the Court of Small Causes, Bombay for an order determining the standard rent of the premises. This application was dismissed by the Court on the ground that the same was barred by the principle of res judicata. This order was confirmed by the Bombay High Court. In the meantime the view expressed by the Bombay High Court in Civil Revn. Appln. No. 233 of 1955(Bom) was overruled by the Supreme Court in Mrs. Dossibai N. B. Jeejeebboy v. I. Khemchand Gorumal, AIR 1966 SC 1939.
The appellant approached the Supreme Court with special leave. The Court observed as under:--
'A pure question of law unrelated to facts which give rise to a right, cannot be deemed to be a matter in issue. When is said that a previous decision is res judicata, it is meant that the right claimed has been adjudicated upon and cannot again be placed in contest between the same parties. A previous decision of a competent Court on facts which are the foundation of the right and the relevant law applicable to the determination of the transaction which is the source of the right is res judicata.....................
A question relating to the jurisdiction of a Court cannot be deemed to have been finally determined by an erroneous decision of the Court. If by an erroneous interpretation of the statute the Court holds that it has no jurisdiction, the question would not, in our judgment, operate as res judicata. Similarly by an erroneous decision if the Court assumes jurisdiction which it does not possess under the statute the question cannot operate as res judicata between the same parties, whether the cause of action in the subsequent litigation is the same or otherwise.'
Where, however, the question is one purely of law and it relates to the jurisdiction of the Court or a decision of the Court sanctioning something which is illegal, by resort to the rule of res judicata a party affected by the decision will not be precluded from challenging the validity of the order under the rule of res judicata, for a rule of procedure cannot supersede the law of the land.
If the decision in the previous proceeding be regarded as conclusive it will assume the status of a special rule of law applicable to the parties relating to the jurisdiction of the Court in derogation of the rule declared by the Legislature.'
43. In my humble opinion, these observations provide an excellent illustration how the three principles of procedural law mentioned above should be read and applied in a harmonious manner. If the principles enunciated in Mathura Prasad's case AIR 1971 SC 2355(supra) are applied to the instant case, it becomes obvious that the decision given in C. W. 1061 of 1961 cannot operate as res judicata. The decision whether second proviso to Article 9.1 of the Pepsu Regulations or Note. 1 appearing under Rule 5.32 of the Punjab Civil Services Rules Vol. II could be validly invoked to justify the order of compulsory retirement was a decision on a pure question of law unrelated to facts. These rules could not be held constitutional in the case of the petitioner and unconstitutional qua all other public servants. After the decision of the Supreme Court in Mathura Prasad's case (supra) these rules would have to be considered as non-existent. Some rule which does not exist cannot from the basis of a binding judgment. In Niranjan Singh v. State of Madhya Pradesh, AIR 1972 SC 2215, it was held that the principle of res judicata is inapplicable to a fundamentally lawless order. Furthermore, after the highest Court of the land had declared these rules to be invalid, the High Court were bound to take notice of this declaration even qua past transactions. Otherwise, they would be arrogating to themselves the power of prospective overruling, which, according to the pronouncements made in I. C. Golak Nath v. State of Punjab, AIR 1967 SC 1643, lies solely within the domain of the Supreme Court.
44. Even on behalf of the appellant, it has not been disputed, that a wrong decision on the point of jurisdiction of a Court cannot operate as res judicata. Mathura Prasad's case AIR 1971 SC 2355(supra) is a clear authority for this proposition. In that case, the Civil Judge had held that the Bombay Act did not apply to open land let for constructing buildings for residential and business purposes. Under that Act, the application for fixation of standard rent also lay before the Court of Small Causes. It is, therefore, obvious that the Civil Courts were charged with the duty of administering the provisions of the Bombay Act. When the Civil Judge held the Section 6(1) of the Bombay Act did not apply to open land let for constructing buildings, the decision rendered by him was regarded as a decision touching the jurisdiction of the Court. In the instant case, the decision given in C. W. No. 1061 of 1961(Punj), has laid down that a Government servant could be retired under second proviso to Article 9.1 of the Pepsu Regulations or under Note. 1 to Rule 5.32 of the Punjab Civil Services Rules Vol. II. On a parity of reasoning, it must be held that the decision in that writ petition related to the jurisdiction of the Court. A wrong decision on this point could not operate as the bar of res judicata.
45. For the reasons mentioned above, I would answer the question referred to the Full Bench in the negative.
BY THE COURT
46. By majority the answer to the question referred to the Full Bench for decision and as formulated in the opening part of the judgment of Sandhawalia, J., is returned in the affirmative. The case will now go back to the Division Bench for decision.
47. Answer in the affirmative.