Supreme Court sets aside Karnataka High Court order related to Wakf property, says matter already decided

The Supreme Court has set aside the Judgment of the High Court of Karnataka, whereby the High Court dismissed a second appeal filed under Section 100 of the Code of Civil Procedure 1908, affirming the decision of the Trial Court and the First Appellate Court that the suit instituted by the appellant-plaintiff is barred by the principle of res judicata.

The three Judge Bench ofJustices DY Chandrachud, Vikram Nath and Hima Kohli, while analysing the appeal, held that in order to attract the principles of res judicata, the following ingredients must be fulfilled:

Described as the Jamia Masjid Gubbi in the cause title, the appellant instituted the suit through its President, for seeking the following reliefs: 

(i) A declaration that the State Waqf Board is the owner in possession of the suit schedule property, being survey No. 2 of Gubbi village and measuring 2 acres and 4 guntas of non-agricultural land with a cinema building; 

(ii) A decree for possession against the defendants; 

(iii) An Injunction to restrain the defendants from interfering with the possession and enjoyment of the plaintiff; and 

(iv) A decree for mesne profits. 

Abdul Khuddus was managing the property for and on behalf of the Waqf Board. Abdul Khuddus, was entitled to the usufruct of the property subject to the condition precedent that he would perform his service as a Khazior Mutawalli. During his lifetime he had given up his service as a Khazi uponbeing appointed by the Gubbi Muslim Jamath as the Pesh Inam on a monthly salaryof Rs 30 for performing the Namaz (daily prayers). 

Upon the enactment of the Waqf Act 1954, which was adopted by the then Mysore State in 1955, the Assistant Commissioner conducted a survey of Wakf Properties in 1963. Abdul Khuddus gave a declaration to the Waqf Boardfor the registration of the suit schedule property as a waqf. A notice inviting objections for registration of the suit schedule property as a waqf property was issued. No objection to the registration of the suit schedule property was raised and eventually the property was notified as a wakf property. 

A person by the name of H.S. Gururajarao and his brothers were granted a lease over the scheduled suit property on 8 December 1944 by the Muzrai officer to run a ‘cinema talkies’. A suit, OS 748/1968, was instituted by the Waqf Board against Abdul Khuddus and H.S. Gururaja Rao seeking possession of the suit property and a declaration that the property constitutes a wakf. The suit was compromised with Abdul Khuddus being permitted to collect the rent from the lessee (H S Gururajarao) on behalf of the Board. 

After the death of Abdul Khuddus, defendants took possession of the suit property. Allegations of mismanagement of the suit property were made against them. The Chairman, D.W.C Tumkur, recommended that the suit property be directly managed by the Board under section 43(A) of the Wakf Act 1954. Pursuant to the recommendation, the State Wakf Board passed an order dated 6 April 1983 taking over the management. 

H.S. Gururajarao who was in possession of the suit schedule property as a lessee, handed over possession of the cinema building to the WakfBoard on 29 June 1983. Defendants  however executed sale deeds in respect of the property in favour of other Defendants . The cause of action arose on April 16, 1983, when the defendants together with other defendants, interfered with the possession of plaintiff on the strength of sale in their favour executed by Defendants. 

The Trial Court took up two issues – relating to res judicata and limitation as preliminary issues. By its judgment dated 3 February 2006, the trial court held that the suit was not barred by limitation. However, the court held that the suit was barred by res judicata by virtue of the decisions in the suit instituted earlier. An appeal against the decree of the Trial Court was dismissed by the 3rd Additional District Judge at Tumkur on 2 July 2007. 

A Special Leave Petition was instituted before the Supreme Court by Defendants. By a judgment dated August 30, 2010, the Court remanded the proceedings back to the High Court on the ground that the High Court had heard only one of the defendants – caveators and that all the defendants were not represented before the High Court. After remand, the High Court by its judgment dated January 23, 2012 dismissed the appeal for the following reasons: 

(i) The ownership of the suit schedule property has been conclusively decided in favour of Abdul Khuddus;

(ii) The judgment in a representative suit under Section 92 CPC binds the parties to the suit and those who are interested in the Trust (RVenugopala Naidu v. Venkatarayulu Naidu Charities); 

(iii) When a suit is filed for determination of a scheme for administration of a Trust, the court must primarily be satisfied that the property belongs to the Trust. The court has the power under Section 92(e) and (cc) of the CPC to order delivery of possession of the property to any person who is entitled to possession; 

(iv) If a declaration was made by Khazi Abdul Khuddus declaring the suit property as aWakf property in 1965, there is no explanation as to why the plaintiff was silent till the filing of Original suit in 1983; and 

(v) An issue that was substantially decided by a competent court of limited jurisdiction will operate as res judicata, though such a court in view of its limited jurisdiction would not be competent to try the subsequent suit (Sulochana Amma v. Narayanan Nair). 

Leave was granted by the Supreme Court on December 8, 2014. 

On behalf of the appellant, the following submissions have been urged: 

(i) OS 92/1950-51 

o The suit was instituted by Muslims in the locality interested in the proper management of the mosque since Abdul Khudduswas trying to set up his own title to the suit property; 

o The suit was not for a declaration of title to the suit property and the appellant was not a party to the suit. It was a suit seeking to set up a scheme for the administration of the suit property; 

o There was no final declaration that the suit property is a private property belonging to Abdul Khuddus; and 

o In a suit for settling a scheme under Section 92 of the CPC, the Court possessed limited jurisdiction and could not have issued declaratory relief. 

(ii) OS 748/1968 

o The basis of the suit was that Abdul Khuddus by virtue of his office as a khazi only has the right to the usufruct and the suit was instituted as an unlawful construction was in place; A compromise memo was filed in the suit stating that the second defendant would continue to remain as a tenant for some time and would thereafter hand over peaceful possession to Abdul Khuddus; 

o On October 27, 1969, a compromise petition was filed by the parties under Order 23 Rule 1 CPC;

o The compromise decree neither concedes title of the suit property to defendants nor does it create any new right in their favour; and 

o The suit proceeded on the basis that Abdul Khuddus was only entitled to the usufruct and the decree based on the compromise deed protected possession without any adjudication of title. 

(iii) OS 100/1983 

o The suit was instituted by the Karnataka Wakf Board for a permanent injunction, apprehending a sale at theinstance of the heirs of the Abdul Khuddus to defendants 1-4; 

o The appellant was not a party to the suit; 

o The suit was dismissed without costs after the plaintiff filed a memo for dismissal; and 

o Before the dismissal of the suit, the present suit which is a comprehensive suit seeking declaration and possession had been instituted. 

Opposing the above submissions, Basava Prabhu Patil, Senior Counsel, submitted: 

(i) In the first suit – 92/1950-51- there was a specific finding that the suit schedule property was the personal property of Abdul Khuddus. Thus, the court having conclusively decided on the title of the suit property, a subsequent suit raising the same issue is barred by the principles of res judicata; 

(ii) In the second suit which was instituted by the State Wakf Board, there was a prayer for declaration and possession. Compromise having been arrived at on a portion of the reliefs claimed in the second suit (relating to possession), this would necessarily amount to an abandonment of the other reliefs. Once a compromise is arrived at, Order 23 Rule 3A bars the maintainability of a subsequent suit; 

(iii) The third suit was for a permanent injunction against alienation of the suit property. This suit was dismissed as withdrawn; and 

(iv) Jamia Masjid is seeking a declaration of the title on behalf of the Wakf Board. The Wakf Board is not a party to the suit and its application for being implemented has been rejected. 

(i) The matter must have been directly and substantially in issue in the former suit; 

(ii) The matter must be heard and finally decided by the Court in the former suit;

(iii) The former suit must be between the same parties or between parties under whom they or any of them claim, litigating under the same title; and 

(iv) The Court in which the former suit was instituted is competent to try the subsequent suit or the suit in which such issue has been subsequently raised. 

It has been held by the Supreme Court that a determination of whether res judicata is attracted, raises a mixed question of law and facts. In Madhukar D. Shende and Ram Harakh, it was held that the plea of res judicata was a mixed question of law and facts. In both the cases, the plea of res judicata was taken for the first time before this Court. Justice K. Ramaswamy, writing for a three judge bench of the Apex court in Sushil Kumar Mehta vs Gobind Ram Bohra, held that the principle of res judicata cannot fit into the pigeon hole of ‘mixed question of law and facts’ in every case. Rather, the plea of res judicata would be a question of law or fact or a mixed question of both depending on the issue that is claimed to have been previously decided. 

Apart from the issue whether the title to the suit property was conclusively decided in the first suit, it is necessary that the Court identify if the matters in issue in the former and the subsequent suits are the same, observed the Court. 

The Supreme Court is of the opinion that the High Court has committed an error in applying the principle of res judicata, based on the judgment in the second suit. It was observed by the High Court that the second suit that was decreed in terms of the compromise was intended to put the litigation to an end and would thus bar any subsequent suit on the title to the suit property by virtue of the principle of res judicata.

For this purpose, reliance was placed on a two-judge bench decision of the court in Byram Pestonji Gariwala (supra), where it was held that a challenge to a consent decree six years later was vitiated by reason of delay, estoppel, and res judicata. However, the High Court lost sight of the fact that the compromise deed was entered into specifically with regard to the handing over of possession of the suit property by the lessee at the end of the lease and no compromise on the title to the suit property was arrived at. 

The Top Court summarised their findings as below: 

(i) Issues that arise in a subsequent suit may either be questions of fact or of law or mixed questions of law and fact. An alteration in the circumstances after the decision in the first suit,will require a trial for the determination of the plea of res judicata if there arises a new fact which has to be proved. However, the plea of res judicata mayin an appropriate case be determined as a preliminary issue when neither a disputed question of fact nor a mixed question of law or fact has to be adjudicated for resolving it; 

(ii) While deciding on a scheme for administration in a representative suit filed under Section 92 of CPC, the court may, if the title is contested, have to decide if the property in respect of which the scheme for administration and management is sought belongs to the Trust; 

(iii) A suit under Section 92 CPC is of a representative character and all persons interested in the Trust would be bound by the judgment in the suit,and persons interested would be barred by the principle of res judicata from instituting a subsequent suit on the same or substantially the same issue; 

(iv) Since the first suit (OS 92 of 1950-51) was filed by members interested in theJamia Masjid and the suit out of which the instant proceedings arise (OS 149 of1998) was filed by the President of Jamia Masjid, the formulation in (iii) above is satisfied; 

(v) There was no adjudication in the first suit (OS 92 of 1950-51) on whether Abdul Khuddus had absolute title to the suit property.There was only a prima facie determination that Items 2 and 3 of the schedule of properties to the first suit belonged to Abdul Khuddus. The matters substantially in issue in OS 92 of 1950-51, which was a suit for administration and management of trust properties and for accounts, are distinct from the issues in the suit out of which the instant proceedings arise. Therefore, OS149 of 1998 is not barred by res judicata in view of the decision in the first suit; 

(vi) While a compromise decree in a prior suit will not bar a subsequent suit by virtue of res judicata, the subsequent suit could be barred by estoppel by conduct. However, neither the compromise petition dated October 27, 1969 nor the final decree in the second suit dated October 27, 1969 indicate that a compromise on the title to the suit property was arrived at. The compromise was restricted to the issue of the erstwhile lessee handing over possession of the suit property at the end of the lease; and 

(vii) The third suit (OS 100/1983) was a suit for an injunction simpliciter. The third suit was withdrawn after the suit out of which the instant proceeding arises was filed for seeking a substantive declaration and an injunction. No adjudication on the rights of the parties was made in the third suit.
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