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Maganbhai Vs. Chetanlal - Court Judgment

LegalCrystal Citation
SubjectTenancy
CourtRajasthan High Court
Decided On
Case NumberSecond Appeal No. 451 of 1964
Judge
Reported inAIR1968Raj81
ActsContract Act, 1872 - Sections 231; Code of Civil Procedure (CPC) , 1908 - Sections 11 and 100; Constitution of India - Article 374(4)
AppellantMaganbhai
RespondentChetanlal
Appellant Advocate S.L. Kothari, Adv.
Respondent Advocate K.M. Singhvi, Adv.
DispositionAppeal dismissed
Cases Referred and Alimunnisa Khatoon v. Syed Hossein Ali
Excerpt:
.....he is an agent. it is no doubt true that in the body of the civil procedure code as well as in other enactments the word 'suit' is often used as including proceedings before an appellate court, and also other proceedings of a civil nature but having regard to the pharaseology used in section 11 and more particularly to explanation 2, which, it might be noted, was for the first time added in 1908, the word court as used in this section can but mean the trial court, and 'suit' signifies proceedings beginning with the plaint and ending with the decree in, that court. kamdeo prasad singh, air 1962 sc 338 have clearly mentioned while taking notice of air 1953 sc 419 that it was the judgment of the supreme court in deeplal v. 1. the plaintiff in that case claimed the relief for subrogation..........whom the judgment is obtained could not be held entitled to any relief claimed by him in any other suit, appeal or proceeding. the decision of their lordships of the supreme court in badri narayan's case, air 1962 sc 338 was of this nature. the facts of that case have been correctly summarised in the head note of all india series thus:-- 'a, b and c contested an election to legislative assembly from same constituency a having polled the largest number of votes was declared elected. c got the least number of votes. c filed an election petition on the ground that a was guilty of corrupt practice and that both a and b held offices of profit under state government and that their nomination papers were not validly accepted. the relief claimed by him was that election of a be declared void and.....
Judgment:

D.M. Bhandari, J.

1. This Civil Second Appeal on behalf of the defendant arises out of suit for ejectment and arrears of rent. Initially the suit was filed by Mandirdas Chetan Lal against the defendant alleging that he was the owner of a bungalow known as 'Rajendra Villa' at Mount Abu which the defendant had taken on rent from his Mukhtiar-Am Ramchandra on 18th November, 1957, agreeing to pay rent including Municipal tax of Rs. 768 per annum. The defendant had deposited advance rent of one year. After the expiry of one year, he did not vacate the bungalow On this the plaintiff brought the suit for ejectment and arrears of rent amounting Rs. 1, 113-12-0 including Rs. 25-12-0 for expenses of notice served by the said plaintiff on the defendant. The defendant denied that the bungalow belonged to Mandirdas Chetanlal plaintiff. He further said that he had taken the said bungalow on rent from Premchand, son of Ram Chandra agreeing to pay rent at the rate of Rs. 768 per mensem but the said Premchand had reduced the rent next year to Rs. 600 per mensem and another rent-note was executed, and the said Premchand had been paid Rs. 600 towards rent. The plaint was amended twice and in this appeal, I am concerned only with the second amendment. On 17th January, 1961, an application for amendment of the plaint was filed that in the title of the suit, the plaintiff had been wrongly mentioned as Mandirdas Chetanlal and that only Chetan Lal was the plaintiff and so the plaint may be amended. This application was opposed but the amendment was allowed on 13th March, 1961.

2. The trial court dismissed the suit holding that the rent-note (Ex. 1) was executed in favour of Ramchandra, and not in favour of plaintiff Chetanlal, as such, the plaintiff Chetanlal could not maintain the suit against the defendant. The trial court did not accept as correct the defendant's case that the bungalow was given on rent by Premchand and so also the plea of payment of Rs. 600 to Premchand was not accepted. It also found that the notice for ejectment was served by Mandirdas Chetanlal and such notice was not sufficient to terminate the tenancy. With these findings, the suit was dismissed in toto. Ghetanlal plaintiff filed an appeal in the court of the Civil Judge, Sirohi, but the appeal was confined only to the claim for the recovery of rent and no appeal was filed against the dismissal of the suit for ejectment. Learned Civil Judge held that the suit property belonged to Chetanlal who held a valid power of attorney executed by Chetanlal plaintiff, authorising him to grant lease of the property in dispute and also to file suit for ejectment of a tenant and that it was established by Ramchandra's statement that he had given the bungalow on lease to the defendant as Chetanlal's agent. Taking this view of the matter, the appeal was allowed and the suit for rent was decreed to the extent of Rs. 1,088. Hence this second appeal on behalf of the defendant.

3. Learned counsel for the defendant has urged that the trial court should not have permitted the amendment of the plaint and should not have allowed Chetanlal to be brought on record as plaintiff. There is no substance in this plea as the amendment was allowed on the ground that due to inadvertence the name of Mandirdas Chetanlal in place of Chetanlal was mentioned in the title. This mistake in my opinion was rightly allowed to be corrected.

4. The next question is, whether the plaintiff Chetanlal could sue the defendant even when the rent-note had been executed by the defendant in favour of Ramchandra. Ramchandra has been proved to be an agent of the plaintiff Chetanlal authorised to grant lease of the bungalow in question. It is further proved that Ramchandra had given the bungalow on lease as Chetan Lal's agent. These are findings of fact arrived at by the lower appellate court and cannot be disturbed in second appeal. Neither are there any substantial arguments advanced by the defendant-appellant to challenge these findings.

5. It is, however, urged by the learned counsel for the defendant-appellant that at the time of granting lease Ramchandra had not disclosed that the lease was being granted to the defendant on behalf of the plaintiff Chetanlal and as such, there was no privity of contract between the plaintiff and the defendant. It is further urged that evidence is not admissible to prove that Ram Chandra acted as agent of the plaintiff when the rent note does not disclose this fact. These contentions have got no force. Except in special cases, the general rule of law is that the principal can enforce the contract entered into by his agent with a third party even though the agent had not disclosed the name of the principal. In this connection, I may refer to Chitty on Contracts, 22nd Edition, Vol. II, Page 32 -

'As the contract of the agent is in law the contract of the principal, the latter may sue and be sued thereon, although, at the time the contract was made, the agent appeared to be the principal. Evidence is admissible to prove the fact of agency and the identity of the principal. 'If B contracts with C prima facie that is a contract between these two only, but if at the time B entered into the contract he was really acting as agent for A, then evidence is generally admissible to show that A was the principal, and A can take advantage of the contract as if it had been actually made between himself and C.............'

Any power of the agent to claim and enforce performance of the contract is subordinate to the principal's right to enforce the contract, on the exercise of which the agent's right of action ceases.'

The same principle has been embodied in Section 231 of the Indian Contract Act which runs, as follows:--

'If an agent makes a contract with a person who neither knows, nor has reason to suspect, that he is an agent, his principal may require the performance of the contract; but the other contracting party has, as against the principal, the same rights as he would have had as against the agent if the agent had been principal. ......'

This section clearly lays down that the principal has a right to enforce the contract entered into by his agent with a third person even when that person neither knows or has reason to suspect that he is an agent.

6. The last point that has been urged in this case is that of res judicata. This point was not taken up in the lower appellate court and was not even mentioned in the memorandum of appeal, but as this is a point of law, it was allowed to be raised at the time of arguments. The point of res judicata has been argued in this manner. The trial court had dismissed the suit for ejectment of the defendant on two grounds, firstly, it found that the plaintiff had no right to maintain the suit against the defendant and secondly, it held that notice for ejectment was not sent by the plaintiff Chetanlal but by Mandirdas Chetan Das and such notice was therefore not sufficient to terminate the tenancy. On the first ground the suit for arrears of rent was also held not maintainable. The plaintiff filed an appeal against only part of the decree which related to the dismissal of the suit so far as it related to arrears of rent but did not file any appeal challenging the finding of the trial court relating to ejectment which was based on the ground that the plaintiff had no right to file the suit for ejectment and since that finding remained unchallenged the plaintiff could not be granted any decree for arrears of rent. It is clear that this contention of the learned counsel for the defendant-appellant is not based on anything contained in Section 11 C. P. C. Section 11 C.P.C. in its terms applies only when there are two suits and the matter directly and substantially in issue in subsequent suit or issue must be the same matter which was directly and substantially in issue either actually or constructively in the former ' suit. At one time there was a serious controversy on the point that Section 11 C.P.C. applies only when there are two suits, and not to appeals in the same suit A Full Bench of the Lahore High Court has noticed this controversy in Mst. Lachhmi v. Mst. Bhulli, AIR 1927 Lah 289 In this case. Tek Chand J. observed, as follows:--

'It must, therefore, be settled at the very outset whether Section 11 applies to appeals or whether its operation is limited only to suits as meaning proceedings in an action in Courts of the first instance as distinguished from proceedings in appellate Courts. After a careful examination of the section I have reached the conclusion that it applied to suits only and not to appeals. It is no doubt true that in the body of the Civil Procedure Code as well as in other enactments the word 'suit' is often used as including proceedings before an appellate Court, and also other proceedings of a civil nature But having regard to the pharaseology used in Section 11 and more particularly to explanation 2, which, it might be noted, was for the first time added in 1908, the word Court as used in this section can but mean the trial court, and 'suit' signifies proceedings beginning with the plaint and ending with the decree in, that Court. It seems to me that no other interpretation is possible.'

7. Their Lordships of the Supreme Court must be taken to have approved this law in Narhari v. Shanker, AIR 1953 SC 419, in which it has been observed :--

'The question of res judicata arises only when there are two suits, it has been held that a decision given simultaneously cannot be a decision in the former suit. When there is only one suit, the question of res judicata does not arise at all.....'

The doubt about the binding nature of the authority of AIR 1953 SC 419 raised by the Orissa High Court in Sumi Debi v. Pranakrushna Panda, AIR 1956 Ori 68 on the ground that the decision in that case was not that of the Supreme Court of India, but was of the Supreme Court of Hyderabad, must be taken to be baseless in view of the provision of Article 374(4) of the Constitution of India. Their Lordships of the Supreme Court in Badri Narayan Singh v. Kamdeo Prasad Singh, AIR 1962 SC 338 have clearly mentioned while taking notice of AIR 1953 SC 419 that it was the judgment of the Supreme Court In Deeplal v. Parshwanath Digambar Jain Vidyalaya, AIR 1956 Raj 166, the Rajasthan High Court has also taken Narhari's case, ATR 1953 SC 419 to be a decision of the Supreme Court and accepted the law laid down in that case.

8. Learned counsel for the appellant has pointed out that Narhari's case, AIR 1953 SC 419 has been distinguished in Badri Narayan's case, AIR 1962 SC 338 but nothing said in Badri Narayan's case, AIR 1962 SC 338 can be construed as laying down that Section 11 C.P.C. in its terms will be attracted oven when there are no two suits, but only one suit. In Badri Narayan's case, AIR 1962 SC 338 their Lordships did not apply Section 11 C.P.C. to the facts of that case, but applied the general principles of res judicata. Narhari's case, ATR 1953 SC 419 has been recently referred to in Sheodan Singh v. Daryao Kunwar, AIR 1966 SC 1332 and Narhari's case, AIR 1953 SC 419 was again distinguished on the ground that that case related to the case where there was only one suit followed by two appeals. Thus, to my mind, section 11 C.P.C. in its terms does not apply to the present case.

9. It is, however, contended that general principles of res judicata which are of universal application should be applied to the present case inasmuch as the trial court had rejected the right of the plaintiff to maintain the suit for ejectment and arrears of rent against the defendant on the ground that the plaintiff was not the landlord and that finding remained intact as no appeal has been filed by the plaintiff for setting aside that part of the judgment of the trial Court by which the suit for ejectment has been dismissed, & on that finding the plaintiff's right to claim arrears of rent must be rejected as barred by res judicata. The law of res judicata may be taken to be based on two principles, one is that there must be an end of litigation and a party should not be twice vexed for the same cause, and the other is that a party must be debarred by applying the rule of estoppel from questioning what it has accepted, or must be deemed to have accepted as binding on him. For invoking the first principle, it is necessary that there must be on record a judgment which is final and conclusive between the parties and which has not been questioned in appeal where an appeal was competent and further the effect of that judgment must be such that the party against whom the judgment is obtained could not be held entitled to any relief claimed by him in any other suit, appeal or proceeding. The decision of their Lordships of the Supreme Court in Badri Narayan's case, AIR 1962 SC 338 was of this nature. The facts of that case have been correctly summarised in the head note of All India series thus:--

'A, B and C contested an election to Legislative Assembly from same constituency A having polled the largest number of votes was declared elected. C got the least number of votes. C filed an election petition on the ground that A was guilty of corrupt practice and that both A and B held offices of profit under State Government and that their nomination papers were not validly accepted. The relief claimed by him was that election of A be declared void and that it be declared that C was duly elected. The Tribunal held that A and B did not hold offices of profit but that A was guilty of corrupt practice. He therefore set aside the election of A but did not declare C to be duly elected. Both A and C went in appeal before the High Court. Appeal by C was Appeal No. 8 and the appeal by A was Appeal No. 7. The High Court held that both A and B held offices of profit but that A was not guilty of corrupt practice. Accordingly it set aside the election of A on grounds different from those on which the Tribunal had set it aside and allowing the appeal by C (No. 8) declared C as duly elected. Appeal No. 7 was dismissed and Appeal No. 8 was allowed. Separate decrees were prepared. By special leave A appealed against the decree in Appeal No. 8 to the Supreme Court. The grounds of appeal related to finding that A and B held offices of profit. The special leave had not mentioned the relief which A sought from the Supreme Court. Presumably he prayed for setting aside the order in Appeal No. 7 confirming the order of the Tribunal and also order in Appeal No. 8.'

A preliminary objection was taken in that case that the appeal was incompetent as barred by the principle of res judicata inasmuch as the appellant did not appeal against the order of the High Court passed in Appeal No. 7. By that order the High Court confirmed the order of the Election Tribunal setting aside the election of the appellant on the finding that A held the office of profit. It was held by the Supreme Court that as there was no appeal from Appeal No. 7, the order setting aside 'A's election had become final and that the finding arrived at in that appeal that A held office of profit operated as res judicata in the appeal before the Supreme Court. Badri Narayan's case, AIR 1962 SC 338 is therefore a case in which a particular order passed in another appeal had become final and remained on record unchallenged and the effect of that order was that the appeal filed by A in the Supreme Court could not succeed in the face of that order. No doubt in Badri Narayan's case, AIR 1962 SC 338 the general principles of res judicata were applied to the appeals arising out of one proceeding, but it was applied in a second appeal on the basis that the order passed in another appeal which could be appealed against was allowed to go unchallenged and had become final. The ratio decidendi in that case cannot be extended to the case of the first appeal by a plaintiff who has challenged the entire basis of the judgment of the trial court but in appeal has not claimed the entire relief which he had claimed in the trial court. The reason is that the finding of the trial court which has led to the dismissal of the suit has been challenged in appeal and the plaintiff in such a case has not accepted any part of the finding of the trial court.

If the law is laid down to the contrary, it may lead to certain absurd consequences in certain circumstances. As an illustration, suppose a plaintiff has filed a suit for the recovery of Rs. 10,000 on the basis of a promissory note and the defendant's contention is that he had not executed it. The plaintiff's suit is dismissed by the trial court which accepted the plea of the defendant. The plaintiff files an appeal challenging the finding of the trial Court on the point of execution of the promissory note, but in appeal he confines his relief to a decree for Rs. 5,000 only as in his opinion looking to the financial status of the defendant, he would not be in a position to recover more even if he gets a decree for a larger amount. Can it be said that in such a case the plaintiff cannot maintain his appeal for part of the claim? To my mind the obvious answer is that such a contention is unsound and cannot be given effect to. The important point which I am emphasising is that the plaintiff has left nothing unchallenged in the judgment of the trial court which would stand in his wav in getting a decree for Rs. 5,000. He is not faced with any judgment which has not been challenged. In the instant case, the plaintiff had challenged the entire basis of the judgment of the trial court (except the finding on the point of the validity of the notice) in the appeal filed by him, though he claimed not the entire relief which the plaintiff claimed in the trial court, and gave up part of it. It may be that he gave up the latter part of the relief for the reason that he had no answer to the finding of the trial court on the point of the validity of the notice. In these circumstances it cannot be construed that the plaintiff has accepted the position that he was not the landlord simply because he had not preferred an appeal against that part of the decree of the trial court by which his suit for ejectment has been dismissed.

10. I admit that the position may be different if a party has accepted or must be taken to have accepted a finding of the trial court which would stand in his way to get the relief claimed by him in appeal against part of the decree. Learned counsel for the defendant has relied on Pichai Konar v. Narasimha Rama Iyer, AIR 1930 Mad 471 and Narendra Nath v. Ganesh Prasad, AIR 1946 Pat 408, Pichai Konar's case, AIR 1930 Mad 471 was a second appeal by Defendant No. 1. The plaintiff in that case claimed the relief for subrogation inasmuch as he had discharged in good faith a prior mortgage in respect of the properties which the plaintiff alleged he had purchased in court auction. The trial court decided that the plaintiff was entitled to be subrogated to the rights of the prior mortgagees and consequently it gave the plaintiff a decree for the amount prayed for with costs. Appeals were preferred to the first court by the plaintiff and the defendant. The appeal of Defendant No, 1 was confined to interest and costs allowed to the plaintiff. This appeal was dismissed. In the second appeal by defendant No. 1, it was argued that it was open to him to impugn the correctness of the first court's decree relating to subrogation in so far as he claimed relief with reference to interest and costs. This contention was rejected with the following observations :--

'It seems to me that it is not open to the learned counsel in the circumstances to avoid the effect of the finality attaching to the plaintiffs right of subrogation. When it is said that the portion of the decree relating to subrogation has become final, it means that the plaintiff was properly held to have the right to subrogation. If that is so, how could that portion of the decree relating to subrogation be called in question in the later stage of the very same proceeding in respect of the question of interest and costs. Either the plaintiff has got the right of subrogation or he has not. If he has, not only is he entitled to the relief on the footing of subrogation in respect of the principal amount he has paid, but he is also entitled to the incidence relating to subrogation, viz., interest on the money paid by him. If, on the other hand, he is not entitled to subrogation, he could not claim any relief either with respect to principal or interest. To say that the plaintiff is entitled to subrogation in respect of the principal and to say that he is not entitled to subrogation with respect to interest, is, I think an inconsistent position to take.'

The learned Judge also referred to Kandaswamy Chetty v. Annamalai Chetty, (1905) ILR 28 Mad 67, Rughu Nath Singh v. Preshram Mahata, (1883) ILR 9 Cal 635 and Alimunnisa Khatoon v. Syed Hossein Ali, (1880) 6 Cal LR 267. The reasoning on which these cases is based is that if a party has accepted part of the decree of a trial court, he must be deemed to have accepted all the other consequences flowing from such a decree. This case is clearly distinguishable from the case before me, Narendra Nath Sen's case, AIR 1946 Pat 408 is also distinguishable. In that case which was a suit for declaration for title to a certain property and for possession of the same the plaintiff obtained decree for both the reliefs The defendant went in appeal in which he challenged only the decree for declaration of title. It was held that a decree for possession which was not appealed against would operate as res judicata as the right to relief of possession depended on the very same facts which gave rise to the plaintiff's title. In this case reliance was placed by the learned Judges of the Patna High Court on AIR 1930 Mad 471. The judgment of the Patna High Court is based on the same principle, that is, a person who has accepted Dart of the decree must be deemed to have accepted not only what appears on the face of it, but also what is necessarily implied in such a decree. In the case before me, the entire basis of the judgment of the trial court so far as it affected the plaintiff's claim as landlord was challenged, though the plaintiff abandoned part of his relief. No rule of estoppel can be invoked against the plaintiff in such a case.

11. There is yet another reason for not invoking the principle of res judicata in this case. The plaintiff's suit for ejectment was dismissed also on the ground that there was no valid notice of termination of tenancy and the plaintiff may have found difficult to challenge this finding and for this reason he confined his appeal only to the arrears of rent.

12. The rule of estoppel cannot be applied to such a case as the plaintiff has an explanation which must be accepted as to why he did not go in appeal against the decree refusing him the relief for ejectment. In my view, the contention of the learned counsel for the appellant that the principles of res judicata are attracted in this case is not sound.

13. The appeal has therefore got no force and is dismissed with costs.


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