Why in News?

The Bench comprising of Justice Surya Kant and Justice J.K. Maheshwari, laid down the test to distinguish between a fundamental or collateral determination.

• The Court laid down the test in the matter of Yadaiah and Anr. v. State of Telangana and others.

Background

• The dispute relates to a resumption order concerning an assignment of non-occupied land in the 1960s to landless Scheduled Caste/Scheduled Tribe persons for the purpose of cultivation.
• A Show Cause Notice (SCN) was sent to the Appellants by office of the Collector, Ranga Reddy District, Telangana regarding a land issue in question.
• The notice was adjudged unsustainable afterwards by the District Revenue Officer.
• Thereafter, a second show cause notice was issued to Appellants.
• The Appellants contended that the SCN was barred by doctrine of Res Judicata since it was based on same subject matter as the first SCN.
• This appeal was filed in the Apex Court against the order passed by a Division Bench of the High Court of Telangana.
  • In the order passed by the High Court, an appeal State of Telangana and its revenue authorities was allowed, reversing the decision of the learned Single Judge.

Court’s Observations

• “Only those findings, without which the Court cannot adjudicate a dispute and also form the vital cog in the reasoning of a definite conclusion on an issue on merits, constitute res judicata between the same set of parties in subsequent proceedings”.
• “In the process of arriving at a final conclusion, if the Court makes any incidental, supplemental or non-essential observations which are not foundational to the final determination, the same would not tie down the hands of Courts in future”.

Case Decided on Merits

• The term case decide on merits means that the facts in issue directly involved must have been actually litigated and determined.
• A case will be said to be litigated and determined when the Court has evaluated the party's substantive arguments and relevant evidence.

Legal Provision

Section 11 of CPC – Res Judicata - 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.

• Explanation I - The expression former suit shall denote a suit which has been decided prior to a suit in question whether or not it was instituted prior thereto.
• Explanation II - For the purposes of this section, the competence of a Court shall be determined irrespective of any provisions as to a right of appeal from the decision of such Court.
• Explanation III - The matter above referred to must in the former suit have been alleged by one party and either denied or admitted, expressly or impliedly, by the other.
• Explanation IV - Any matter which might and ought to have been made ground of defence or attack in such former suit shall be deemed to have been a matter directly and substantially in issue in such suit.
• Explanation V - Any relief claimed in the plaint, which is not expressly granted by the decree, shall for the purposes of this section, be deemed to have been refused.
• Explanation VI - Where persons litigate bona fide in respect of a public right or of a private right claimed in common for themselves and others, all persons interested in such right shall, for the purposes of this section, be deemed to claim under the persons so litigating.
• Explanation VII - The provisions of this section shall apply to a proceeding for the execution of a decree and references in this section to any suit, issue or former suit shall be construed as references, respectively, to a proceeding for the execution of the decree, question arising in such proceeding and a former proceeding for the execution of that decree.
• Explanation VIII - An issue heard and finally decided by a Court of limited jurisdiction, competent to decide such issue, shall operate as res judicata in a subsequent suit, notwithstanding that such Court of limited jurisdiction was not competent to try such subsequent suit or the suit in which such issue has been subsequently raised.