Meaning of Res Judicata
Res Judicata is a phrase which has been evolved from a Latin maxim, which stand for ‘the thing has been judged’, meaning there by that the issue before the court has already been decided by another court, between the same parties.
As per The Law Lexicon “Res Judicata” means “A matter adjudged; a thing judicially acted upon or decided; a thing or matter settled by judgment; a thing definitely settled by judicial decision, the thing adjudged”.
Res Judicata does not merely prevent future judgments from contradicting
Earlier ones, but also prevents them from multiplying judgments, so a
Prevailing Plaintiff could not recover damages from the defendant twice for the
Same injury.
Brief History and Origin of Res Judicata
"Res Judicata pro veritate accipitur" is the full Latin maxim which has, over the years, shrunk to mere "Res Judicata”.
The concept of Res Judicata finds its evolvement from the English Common Law system, being derived from the overriding concept of judicial economy, consistency, and finality.
The rule of res Judicata has a very ancient history it was accepted by the Romans, Hindu jurists, Mohammedan jurists and common wealth countries. It was known to Romans as ‘one suit and one decision was enough for any single dispute’ .The doctrine was accepted in European continent and in the common wealth countries. To the Hindu jurists res Judicata was known as ‘Purva Nyaya’ (former judgment)
From the Civil Procedure Code, the Administrative Law witnesses its applicability. Then, slowly but steadily the other acts and statutes also started to admit the concept of Res Judicata within its ambit.
BASIS OF RES JUDICATA:-
The doctrine of Res Judicata is based on three Roman maxims:-
a) Nemo debet lis vaxari pro eadem causa which means that no man should be vexed (annoyed) twice for the same cause;
b) Interest republicae ut sit finis litium meaning thereby that it is in the interest of the state that there should be an end to a litigation; and
c) Re judicata pro veritate occipitur which bears the meaning as a judicial decision must be accepted as correct.
In CORPUS JURIS (vol. 34, p. 743), it has been stated: Res Judicata is a rule of universal law pervading every well regulated system of jurisprudence and is put upon two grounds, embodied in various maxims of the common law; the one, public policy and necessity, which makes it to the interest of the state that there should be an end to litigation; the other, the hardship to the individual that he should not be vexed twice for the same cause.
The pre-requisites which are necessary for Res Judicata are:-
1) There must be a final judgment;
2) The judgment must be on the merits;
3) The claims must be the same in the first and second suits;
4) The parties in the second action must be the same as those in the first, or
Have been represented by a party to the prior action.
RES JUDICATA UNDER CIVIL PROCEDURE CODE (CPC), 1908
Section 11 of the Code of Civil Procedure embodies the doctrine of res Judicata or the rule of conclusiveness of a judgment. According to this section - “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.”
Provisions under Section 11 CPC, 1908:-
• The provisions of Section 11 are not at all exhaustive even though it has very wide and enlarged amplitude.
• The section “does not affect the jurisdiction of the Court” but “operates as a par to the trial” of the suit or issue, if the matter in the suit was directly and substantially in issue (and finally decided) in the previous suit between the same parties litigating under the same title in a Court, then they are not competent i.e. they become barred to try the subsequent suit in which such issue has been raised.
• Thus, this doctrine of Res Judicata is a fundamental concept based on public policy and private interest. It is conceived in the larger public interest, which requires that every litigation must come to an end. It therefore, applies to civil suits, execution proceedings, arbitration proceedings, taxation matters, writ petitions, administrative orders, interim orders, criminal proceedings, etc.
• Section 11 contains the rule of conclusiveness of the judgment which is based partly on the maxim of Roman Jurisprudence "Interest reipublicaeut sit finish litium" (it concerns the State that there be an end to law suits);
• And partly on the maxim "Nemo debet lis vexari pro una at eadem causa" (no man should be vexed twice over for the same cause). The section does not affect the jurisdiction of the Court but operates as a par to the trial of the suit or issue, if the matter in the suit was directly and substantially in issue (and finally decided) in the previous suit between the same parties litigating under the same title in a Court, competent to try the subsequent suit in which such issue has been raised.
• Thus, this doctrine of res Judicata is a fundamental concept based on public policy and private interest. It is conceived in the
larger public interest, which requires that every litigation must come to an end. It therefore, applies to civil suits, execution proceedings, arbitration proceedings, taxation matters, writ petitions, administrative orders, interim orders, criminal proceedings, etc.
Conditions
There are five conditions for res Judicata to apply and they are:-
• Matter in issue- It means 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. Such issue may be an issue of fact, issue of law or mixed issue of law and fact.
• Same parties-suit between same parties or between parties under whom they or any of them claim. This condition recognized the general principle of law that judgments and decrees bind parties and privies therefore when parties in subsequent suit are different from the former suit, there is no res judicata
• Same title-Parties to subsequent suit must have litigated under the same title as in the former suit. Same title means same capacity. Title refers to the capacity or interest of a party
• Competent court-the court which decided the former suit must have been a court competent to try the subsequent suit. Thus the decision in a previous suit by a court, not competent to try the subsequent suit, will not operate as res Judicata.
• Heard and finally decided-the matter directly and substantially in issue in the subsequent suit must have been heard and finally decided by a court in the former suit.
PRINCIPLE OF RES JUDICATA IN TAX MATTERS
The general principle of law is that no one should blow hot and cold on the same set of facts to reach different conclusions / findings in different years. The need for consistency is as important for revenue authorities as it is expected from the assessee. The common understanding is that, notwithstanding the public policy behind the rule, it has no relevance to tax disputes. It is said that a finding or an opinion recorded by an authority or even by a court of law for one assessment year has no binding effect on the issues in subsequent assessment years. The various decisions of Supreme Court have held that the principle of Res Judicata is inapplicable in Tax matters:-
In cases involving income tax or sales tax, the general trend is not to apply the doctrine of 'res Judicata'. As explained by the Supreme Court inInstalment Supply (Pvt) Ltd, Vs Union of India[i] , “year's assessment is final only for that year and does not govern later years, because it determines only the tax for a particular period. However, it doesn't mean that tax authorities can reopen arbitrarily a question previously settled.”
The principle of Res Judicata is not the creature of any statute or the handiwork of any code of law. It is the gift of public policy. The Bombay High Court, in H.A. Shah and Co. vs. CIT[ii] has held that “the principle of estoppel or res Judicata does not strictly apply to the Income Tax authorities” and yet declaring that:-
“An earlier decision on the same question cannot be reopened if that decision is not arbitrary or perverse, if it had been arrived at after due inquiry, if no fresh facts are placed before the Tribunal giving the later decision and if the Tribunal giving the earlier decision has taken into consideration all material evidence.”
Again in case of Radhasoami Satsang vyas Vs. CIT[iii] the Supreme Court have held that:-
"So far as the proposition of law is concerned, it is well settled and needs no further discussion. In taxation matters, the strict rule of res Judicata as envisaged by Section 11 of the Code of Civil Procedure, 1908 has no application. As a general rule, each year's assessment is final only for that year and does not govern later years, because it determines the tax for a particular period. It is, therefore, open to the Revenue/Taxing Authority to consider the position of the assessee every year for the purpose of determining and computing the liability to pay tax or octroi on that basis in subsequent years.
In the case of Municipal Corporation of City of Thane vs. Vidyut Metallics Ltd & Anr.[iv] the Hon’ble Supreme Court observed that in taxation matters, the strict rule of res judicata as envisaged by section 11, CPC 1908 has no application. As a general rule, each year’s assessment is final only for that year and does not govern later years, because it determines the tax for a particular period.
The Hon’ble Supreme Court further observed that in facts of present case it was not possible to hold that the earlier decision would not continue to operate in subsequent years unless it is shown that there are changed circumstances or the goods imported by the company in subsequent years was different than the one which was imported earlier and in respect of which decision had been arrived at by the court. Therefore, it was held that the Divisional Court as well as the High Court were right in giving benefit of the decision in the earlier litigation to the respondent company. The Hon’ble Supreme Court upheld the observation of Supreme Court in case of Radhaswami Satsang (Supra).
In the case of Amalgamated Coal fields Ltd., V. Janapada Sabha[v] the Supreme Court held – “In our opinion, however, it is necessary to distinguish a decision on question which directly and substantially arose in any dispute about the liability for a particular year, and question which arose incidentally or collaterally. If, for instance, the validity of a taxing statute is impeached by an assessee who is called upon to pay a tax for a particular year and the matter is taken up to a High court or to Supreme Court and it is held that the taxing statute is valid, it may not be easy to hold that the decision on this basic and material issue would not operate as res Judicata against the assessee in a subsequent year”.
Dealing with matters relating to penalty, the courts have held that once assessee has been given assurance that there will not be penalty, and thereafter the Assessing Officer levies the penalty the same is not valid and liable to be deleted. As held in Ramnath Jaganata vs. State of Maharashtra[vi] , Sir Shadilal Sugar and General Mills Ltd. & Anr. vs. CIT[vii], CIT vs. Suresh Chandra Mittal[viii].
So from the above judgments it is clear that the principle of res Judicata is not only inapplicable in income tax proceedings but also in other tax proceedings also.
DISMISSAL OF SPECIAL LEAVE PETITION BY SUPREME COURT - SPEAKING ORDER
When a writ petition after contest is disposed of on merits by a speaking order, the question decided in that petition would operate as Res Judicata, but not a dismissal in limine or dismissal on the ground of laches or availability of alternative remedy [Pujari Bai vs. Madan Gopal[ix]; Workmen vs. Board of Trustees of the Cochin Port Trust[x]].
In Grih Kalyan Kendra Workers’ Union vs. Union of India[xi], it was held that a question raised and decided by the Supreme Court in earlier writ proceedings cannot again be raised through a fresh writ petition under article 32.
The decision given by the High Court in a writ petition would accordingly act as a res Judicata in regard to the same facts and the issues even in a criminal proceeding between the parties as was held in Gulab Chand Sharma vs. S.P. Sharma, CIT[xii]. Thus a decision on merits rendered by the High Court while disposing of the writ petition would bring about finality to the issue between the parties till such time that judgment of the High Court is not stayed, modified or reversed by the Supreme Court in appeal or other proceedings before it.
In V. M. Salgaocar & Bros. Pvt. Ltd., etc vs. CIT[xiii], the Apex Court held that when an appeal is dismissed by the Supreme Court, by mere speaking order, the order of the High Court or Tribunal from which the appeal arose merges with that of the Supreme Court
DISMISSAL OF SPECIAL LEAVE PETITION BY SUPREME COURT – NON SPEAKING ORDER
There is some confusion on the point whether 'res Judicata' applies when a writ petition is dismissed without the court making a speaking order. The apex court has held in a case that this doctrine should not operate in such a case. In Hoshnak Singh Vs Union of India, the SC has ruled clearly that “where a petition under Article 226 is dismissed in lime line without a speaking order, such a dismissal would not constitute a bar to a subsequent petition”. A high court can only review a decision where some mistake or error apparent on the face of the record is found. But, this power of review may not be exercised on the ground that the earlier decision was erroneous on merits.
If a person goes first to a high court under Article 226 and his petition is dismissed on merits, he cannot approach the SC under Article 32 because of 'res Judicata'. He can reach the SC only by way of appeal. If, however, high court dismisses his or her writ petition not on merits, then 'res Judicata' does not apply and petitioner can move the SC.
In case of M S M Sharma Vs Sinha[xiv], Hon’ble SC have laid the emphasis on writ Proceedings and Res Judicata and have held that :-
“This rule of law has been made applicable even to writ proceedings as well. The position, therefore, is that when once a writ petition has been moved in a high court or Supreme Court (SC), and has been rejected there on merits, then a subsequent writ cannot be moved in the same court on the same cause of action”.
The Supreme Court in Indian Oil Corporation Ltd. vs. State of Bihar & Ors.[xv] has clarified that the dismissal of a special leave petition by the Supreme Court by a non-speaking order would not operate as res Judicata by observing that-
“When the order passed by this Court was not a speaking one, it is not correct to assume that this Court had necessarily decided implicitly all the questions in relation to the merits of the award, which was under challenge before this Court in the special leave petition. A writ proceeding is a wholly different and distinct proceeding. Questions which can be said to have been decided by this Court expressly, implicitly or even constructively while dismissing the special leave petition cannot, of course, be reopened in a subsequent writ proceeding before the High Court. But neither on the principle of res Judicata nor on any principle of public policy analogous thereto, would the order of this Court dismissing the special leave petition operate to bar the trial of identical issues in a separate proceeding, namely, the writ proceeding before the High Court merely on the basis of an uncertain assumption that the issues must have been decided by this Court at least by implication. It is not correct or safe to extend the principles of res Judicata or constructive res Judicata to such an extent so as to found it on mere guesswork”.
In all cases of admission of the SLP the further decision on merits follows whereas in every case of dismissal there is no question of further decision or proceedings from the Supreme Court and effectively the order of the lower Court/authority which is challenged before the apex Court is affirmed and becomes final. In such a situation the question whether the person/s aggrieved by the order of the lower Court could agitate his grievance by way of an application for review or rectification of mistakes apparent from record so as to persuade the lower authority to modify its final order in the light of the application for rectification or review, to the extent and in the manner found appropriate is still open for consideration. The respondent often pleads that the order of the lower Court having been affirmed by the Supreme Court it is no more open to the lower authority, after the dismissal of the SLP to entertain any application and/or decide the same for the purpose of review, revision or modification of the order which has been upheld by the Supreme Court. The controversy is not free from doubt. The effect of dismissal of SLP by the Supreme Court is that the order of the Supreme Court does not constitute res Judicata to deny the petitioner the right to agitate matters on merits before the competent Court / Tribunal.
A mere dismissal of SLP does not mean that High Court decision is approved on merits so as to be a judicial precedent. In Smt. Tej Kumari vs. CIT[xvi] Full Bench of the Patna High Court held that when a SLP is summarily rejected or dismissed under Art. 136 of the Constitution such dismissal does not lay down any law. The decision of the High Court against which the SLP is dismissed in limine would not operate as res-judicata.
However, when Supreme Court dismisses an SLP with reason it might be taken as the affirmation of the High Court views on merits of the case, thus there is no reason to dilute the binding nature of precedents in such cases.
The Supreme Court has considered the scope of Article 136 in a caseKunhayammed vs. State of Kerala[xvii] and held that:-
“(a) Where an appeal or revision is provided against an order passed by a Court, Tribunal or any other authority before superior forum and such superior forum modifies, reverses or affirms the decision put in issue before it, the decision by the subordinate forum merges in the decision by the superior forum and it is the latter which subsists, remains operative and is capable of enforcement in the eye of law.
(b) An order refusing special leave to appeal may be a non speaking order or speaking one. In entire case it does not attract the doctrine of merger
(c) Once leave to appeal has been granted and appellate jurisdiction of Supreme Court has been invoked the order passed in appeal would attract the doctrine of merger; the order may be of reversal, modification or merely affirmation.”
A small introduction of Administrative Law
Administrative law is an often-misunderstood subject. As the name suggests, Administrative Law deals with the structure, powers and functions of the organs of administration, the limits on their powers, the methods and the procedures followed by them in exercising their powers and functions, the method by which their powers are controlled .
Administrative law, also known as regulatory law, is created and enforced by some type of administrative government body from whom the law derives its power to set and enforce regulations depends on whether the agency is executive. It applies to all public officials and public agencies.
An Administrative Government body may act through rulemaking, adjudication, or by enforcing a specific regulatory agenda. Administrative law is technically considered a branch of public law. Administrative law is that body of law which applies for hearings before quasi-judicial bodies, boards, commissions or administrative tribunals supplement the rules of natural justice with their own detailed rules of procedure.
As distinguished from legislative and judicial authority, administrative authority entails the power to issue rules and regulations based on statutes, grant licenses and permits to facilitate the conduct of government business, initiate investigations of and provide remedies for complaints or problems, and issue orders directing parties to conform to governing statutes or rules.
The two basic principles of administrative law are “audi alteram partem” (no person shall be condemned, punished or have any property right deprived, unheard) and “nemo judex in parte sua” (no person can judge a case in which he or she is party or in which he/she has an interest)
The main reason for the development of administrative law has been the expansion of the administrative apparatus, functions and powers of the government. This was primarily due to the effect of Laissez Faire era which was prevalent in the 9th Century. When extensive powers are conferred on the administration, it becomes necessary to evolve a suitable control mechanism over the powers upholded by the administration.
The expansion in the administrative powers creates the spectacle of misuse and abuse of power. Therefore, for the regulation and control of the administrative powers, Administrative Law began to grow
It is important to consider two vital factors in dealing with administrative agencies: 1) the rules and regulations are often special for each agency and are not usually found in the statutes but in those regulations; 2) a member of the public must "exhaust his/her administrative remedies" (take every step, including appeals) with the agency and its system before he/she can challenge the administrative ruling with a lawsuit in court.
An administrative-law judge is a government official with quasi-judicial powers, including the authority to conduct hearings, makes findings of fact, and recommends resolution of disputes concerning the agency’s actions.
Over-view of Res Judicata as a concept under Administrative Law
Basically, the Doctrine of Res Judicata is applicable to the Code of Civil Procedure. But, at times, in many other statutes there is a use of the doctrine.
As we know that the work or the role played by the Administrative Law is that of a watch dog. The Administrative Law sees that there is no use of power which has a malicious intention. The Administrative Law is there to see that there is an improvement in the society without any hurdles and the administration performs its duty in an honest manner.
In Administrative Law, the use of this doctrine is that, it administers as to how well the Judiciary does its work, how efficiently the Judiciary disposes off the case and the doctrine makes itself applicable where there is more than one petition filed in the same or in the other court of India.
The parties can file another suit in another court, just to harass and malign the reputation of the opposite party or can do so for receiving compensation twice from the different courts. Therefore, just to prevent such over-loads and extra cases in the court’s kitty, Res Judicata holds a big responsibility and importance.
A comparison of Res Judicata as a concept between Administrative Law and the other Laws
In Administrative Law, the doctrine works as a working principle and has been adopted or taken from Code of Civil Procedure. In C.P.C., as we have discussed above, Section 11 has a big role to be played in the civil courts of India. Even in International Law which is applicable in The International Court of Justice, there too Section 38 (1) (c) is dedicated towards the doctrine of Res Judicata.
Conclusion
The Doctrine of Res Judicata can be understood as something which restrains the either party to “move the clock back” during the pendency of the proceedings. The extent of Res Judicata is very-very wide and it includes a lot of things which even includes Public Interest Litigations. This doctrine is applicable even outside the Code of Civil Procedure and covers a lot of areas which are related to the society and people. The scope and the extension have widened with the passage of time and the Supreme Court has elongated the areas with its judgments.
By: - Pratyush Prasanna
IVth B.S.L. LL.B
ILS LAW COLLEGE
Pune
[i] AIR 1976 SC 53
[ii] (1956) 30 ITR 618 (Bom.)
[iii] 1991 Indlaw SC 948
[iv] (2007) 8 SCC 688
[v] 1962 IndlawSC 490
[vi] (1984) 57 STC 46 (Bom.) (51)
[vii] (1987) 168 ITR 705 (SC);
[viii] (2001) 251 ITR 9 (SC)
[ix] (1989) 3 SCC 433, 440 (SC)
[x] AIR 1978 SC 1283, 1288
[xi] (1991) 1 SCC 619, 630-31 (SC)
[xii] (1974) 95 ITR 117 (Del.).
[xiii] (2000) 243 ITR 383 (SC)
[xiv] AIR 1960 SC 1186
[xv] (1987) 167 ITR 897 (SC)
[xvi] (2001) 247 ITR 210 (Patna)
[xvii] (2000) 245 ITR 360 (SC)
References
Books:
1) Takwani C.K., ‘Civil Procedure Code’, Edition 5. Reprint 2007, Eastern Book Publication, Lucknow
2) Halsbury Laws of India, Vol. 1: Administrative Law.
3) Halsbury Laws of India, Vol. : Code of Civil Procedure
Web References:
1) http:// www.legalserviceindia.com/articles/rju.htm
2) http://en.wikipedia.org/wiki/Res_judicata
3) http://www.wisegeek.com/what-is-res-judicata.htm
4) http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1102910#
6) http://www.taxindiaonline.com
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