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PETITIONER:

SHANKAR SITARAM SONTAKKE AND ANOTHER

Vs.

RESPONDENT:

BALKRISHNA SITARAM SONTAKKE AND OTHERS.

DATE OF JUDGMENT:

12/04/1954

BENCH:

HASAN, GHULAM

BENCH:

HASAN, GHULAM

MAHAJAN, MEHAR CHAND (CJ)

BOSE, VIVIAN

CITATION:

1954 AIR 352 1955 SCR 99

CITATOR INFO :

C 1991 SC2234 (41)

ACT:

Consent decree-Legal effect thereof-Compromise not

vitiated by fraud, misrepresentation, misunderstanding or

mistake-Decree passed thereon- Whether operates as res

judicata- Civil Procedure Code-(Act V of 1908)--Order II,

rule 2(3) -Relinquishment Of claim in a prior suit-

Subsequent suit barred in respect of the claim so omitted.

HEADNOTE:

It is well settled that a consent decree is as binding

upon the parties thereto as a decree passed by invitum.

Where a compromise is found, not to be vitiated by fraud,

Misrepresentation,

100

misunderstanding or mistake, the decree passed thereon has

the binding force of res judicata.

Where the plaintiff confines his claim to account for a

period up to a certain date only, he relinquishes his claim

implicitly if not explicitly to the account for the

subsequent period because Order II, rule 2 (3) of the Code

of Civil Procedure lays down that if a person omits, except

with the leave of the Court, to he sue for all reliefs to

which he is entitled, he shall not afterwards sue for any

reliefs so omitted.

JUDGMENT:

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 113 of

1953.

Appeal from the Judgment and Decree, dated the 25th day

of March, 1952, of the High Court of Judicature at Bombay

(Bavdekar and Dixit JJ.) in Appeal No. 554 of 1951, from

Original Decree arising out of the Judgment and Decree,

dated the 30th day of June, 1951, of the Court of the Joint

Civil Judge, Senior Division of Thana, in Special Suit No.

12 of 1949.

K. S. Krishnaswamy lyengar, (J. B. Dadachanji, V.B. Rege

and Ganpat Rai, with him) for the appellants.

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S. B. Jathar, R. B. Kotwal and Naunit Lal for respondent

No. 1.

1954. April 12. The Judgment of the Court was delivered by

GHULAM HASAN J.-This appeal is brought by leave of the High

Court of Bombay against the judgment and decree of a

Division Bench of that Court (Bavdekar and Dixit JJ.) dated

March 25, 1952, modifying the judgment and decree of the

Civil Judge, Senior Division of Thana, dated June 30, 1951.

The appeal arises out of a partition between 6 brothers of a

joint Hindu family. The joint family carried on joint

family business of a grocery shop, liquor shops, a ration

shop, a motor-bus service and also moneylending under the

name of "Sontakke Brothers". The family also Possessed

immovable and movable property. Balkrishna Sitaram Sontakke

is the eldest of the brothers and is the plaintiff

respondent in the present appeal. He will be referred to

hereafter as the plain-tiff.

It is common ground that up to 1944 the brothers were living

and messing together and the income from

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the family business used to be kept with the plaintiff.

From April 14, 1945, the situation changed and the parties

began to appropriate the proceeds of the various businesses

carried on by them separately to themselves. The plaintiff

was running the liquor shops, defendants Nos. I and 2 who

are the appellants, were carrying on the motor-bus service

business while defendant No. 4 was running the grocery shop.

The parties tried to have partition effected between them

through arbitrators but the attempt failed. On June 29,

1945, all the five brothers filed a suit for partition

against the plaintiff of all joint family properties

including the accounts of all the businesses. The suit was

numbered 39 of 1945. It was compromised on March 7, 1946.

By this compromise it was declared that prior to 1942 all

the accounts of the various businesses had been correctly

maintained and shown, that the parties had agreed to have

arbitrators appointed through Court for examining the

accounts from 1942 up to March 31, 1946, and for determining

the amount due up to that date. Each of the brothers was to

get one -sixth share in the cash balance as found on March

31, 1946, upon examination of accounts by the arbitrators.

All the movable property of the joint family including the

stock-in-trade of all the family businesses was to be

divided equally among all the brothers. The compromise

further declared that the plaintiff was to have one-sixth

share in the motor garage and that defendants 1 and 2 were

to pay the price of one-sixth share to him. These are the

material provisions of the compromise. One of the brothers

was a minor and the Court finding the compromise to be for

the benefit of the minor accepted it and passed a pre-

liminary decree in terms of the compromise on July 25, 1947.

If nothing else had happened to disturb the natural course

of events, the proceedings would have ended in a final

decree for partition. The plaintiff, however, commenced a

fresh suit on February 23, 1949, confining his relief to his

share of the profits and assets Of the motor business

carried on by defendants Nos. 1 and 2 after March 31,1946.

His case was that the compromise was made in a hurry, that

the parties omitted to provide in the compromise about the

future conduct

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of the motor business from April 1, 1946, that the motor

business was still a joint family business and that he had a

right to ask for accounts of that business subsequent to

March 31, 1946.

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In defence it was pleaded that the compromise was made after

due deliberation, that accounts of the motor 'business and

grocery shop should actually have been taken up to April 14,

1945, the date of disruption of the joint family status, but

the parties agreed by way of compromise that account of all

family businesses should be taken up to March 31, 1946. It

was also pleaded that the claim was barred by res judicata.

Upon the issues framed in the case the Civil Judge found

that the suit was not. barred by reason of the decision in

the previous suit No. 39 of 1945, that the decision in that

suit was not obtained by fraud and misrepresentation and

that the compromise in the previous suit was not due to a

mistake or misunderstanding. Despite these findings the

Civil Judge held that although the motor business carried on

after the partition had ceased to be a joint family business

yet as it was carried on by some members of a family their

position was analogous to that of a partner carrying on

partnership after dissolution and applying the principle

underlying section 37 of the Partnership Act he held that

the two brothers carrying on the motor business were liable

to account. Accordingly he passed a preliminary decree

directing the accounts of the motor business to be taken

from March 31, 1946, up to the date on which a final decree

for payment of the amount found to be due would be made. A

Commissioner was appointed to take the accounts to ascertain

the profits earned by the use of the capital belonging to

the shares of brothers other than those who carried on the

motor business. In appeal Bavdekar 'J. with whom Dixit J.

agreed modified the decree of the trial Court by directing

that the accounts were to be taken up to the date when the

businesses discontinued and not up to the date of the final

decree.

The learned Judges held that the cause of action for the

present suit was different from the cause. of action in the

previous suit and that the suit was not barred

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by res judicata or by Order II, rule 2, of the Code of Civil

Procedure. After delivering themselves of some conflicting

observations to which reference will in detail be made

hereafter they held that the consent decree did not

expressly negative the right for accounts of the motor

transport business. Finally the learned Judges recorded the

conclusion that regardless of the pleadings in the case the

defendants Nos. I and 2 had made use of the joint family

property and that they stood in, the position of co-owners

and as contemplated in section 90 of the Indian Trusts Act

were liable to render accounts for the-profits which were

attributable to the employment of the assets owned by the

parties jointly.

Learned counsel for the appellants has contested the view of

the High Court upon all the points decided, ,against them.

He has contended that the cause of action in a suit for

partition is the desire and intention of the family to

separate, that the cause of action in the two suits is

identically the same and not separate and distinct and. that

the suit was, therefore, barred both by the principle of res

judicata and by Order II, rule 2, of the Civil Procedure

Code. Learned counsel also challenged the view of the High

Court about the applicability of section 90 of the Indian

Trusts Act

It seems to us that upon a fair reading of the compromise

arrived at between the parties in the circumstances then

existing, the only legitimate conclusion possible is that

the parties had agreed to confine the taking of all accounts

upto March 31,1946, and had closed the door to reopening

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them beyond that date. If the compromise was arrived at

after full consideration by the parties and was not vitiated

by fraud, misrepresentation, mistake or misunderstanding as

held by the trial Court-a finding which was not interfered

with by the High Court-it follows that a matter once

concluded between the parties who were dealing with each

other at arms length cannot now be reopened. What led the

parties to confine the period of account to March 31, 1946,

and stop further accounting which would have normally

extended to the passing of the final decree will appear from

the following circumstances. The plaintiff knew that the

licence for the liquor shops

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carried on by him was expiring on the 1st April, 1946, and

he was anxious to run the liquor business exclusively and

not jointly or in partnership with his brothers after the

expiry of the licence. He gave a notice to his brothers

through pleader on December 12, 1945, stating inter alia the

following :-

"The period of (licence for) the liquor shops at the said

places expires by end of March, 1946. Hence after the

expiry of the said period, my client having no desire to

conduct liquor shop business jointly or in partnership with

any of you again, he intends to run and will run as from the

date 1st April, 1946, one or more liquor shops as he pleases

belonging to him alone independently. The moneys that will

be required for (purchase in) auction of the shops will be

paid by my client by borrowing the same from third parties

on his own responsibility and my client will not allow the

said moneys to have the least connection with the

businesses, properties and cash which are at present in

dispute in Court and with the profits and income from the

said businesses or properties. My client expressly informs

-you by this notice of the fact, viz., that the liquor shops

thus purchased by him will solely belong to him and will be

run by him independently of any of you. None of you will

have any legal right to meddle with or interfere in the

liquor shops which will be thus purchased by my client in

the Government auction for the new year beginning from 1st

April, 1946, and if any of you make an attempt with

malicious intention to cause even the slightest interference

in the said business of my client, then my client will hold

you fully responsible for any harm suffered by him and for

other damages and expenses incurred by him and will take a

severe legal action against you therefor."

This notice furnishes a true guide as to the intention of

the plaintiff which was none other than that he should run

the liquor shops exclusively for himself and appropriate the

profits thereof without making himself accountable to his

brothers. Although the plaintiff says that he intended to

pay for the auction of liquor shops by borrowing he was

really in a position of vantage for he admittedly had Rs.

13,000 cash in hand as

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against the Rs. 3,000 his brothers had. The notice explains

the significance of the provision in the compromise that

accounts are to be taken only up to March 31, 1946. Since

the plaintiff did not want his brothers to interfere with

his exclusive running of the liquor business after March 31,

1946, he perforce had to agree that he should sever his

connection with other businesses run by his brothers. This

arrangement was apparently acceptable to all the brothers as

being fair and reasonable and as not giving undue advantage

to any party over the other. This being our construction of

the compromise, it follows that the plaintiff's conduct in

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going back upon that arrangement by filing a fresh suit in

regard to the motor business only is anything but honest.

The plaint filed in the previous suit leaves no manner of

doubt that the plaintiffs in that suit ,sought a complete

division of all the family property both movable and

immovable and a final determination of all the accounts in

respect of the family businesses. It is also significant

that after the compromise the plaintiff (Balkrishna) filed

an application before the Civil Judge in which he alleged

that when he agreed in the compromise that the accounts of

the various businesses should be up to the 31st March, 1946,

he was under a misapprehension regarding his legal right

inasmuch as he thought that when the accounts were to be

taken up to a certain date, 'the joint family property after

that date would not be allowed to be utilized by some

members only of the family for making profits for themselves

to the exclusion of the plaintiff. He goes on to say that

he laboured under the impression that the joint family

business would be either altogether stopped after the 31st

March, 1946, or would be run either by the arbitrators or

the Commissioners and the profits accruing therefrom would

be deposited in Court for distribution among the parties

according to their shares. The application was made on

November 22, 1947. His pleader, however, stated on April 6,

1948: " The application is abandoned by the applicant as he

wishes to pursue his remedy by way of an independent suit

for the grievance in the application," and the Court passed

the order, "The application is disposed of as

14

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it is not pressed." The learned Judges of the High Court in

referring to this application observe thus: " It is obvious

therefrom that really speaking the idea of the profits of

several businesses after the 1st of April, 1946, was present

to the minds of the parties; but the parties did not care to

ask that accounts of the other businesses will be taken up

after the 1st of April, 1946. One of the businesses was a

liquor business, which admittedly was to come to an end on

the 31st of March, 1946; but there was also another

business; that Was a kirana shop, which was not a very big

business. But all the same it was there, and there is

force, therefore, in the contention which has been advanced

on behalf of the appellants that it was not as if there has

been an oversight on the part of the parties, but the

parties knew that the businesses might go on afterwards; but

if they were carried on, they did not particularly care for

providing by the compromise decree for accounts of those

businesses being taken after the 1st of April, 1946." Having

said all this they record the conclusion that the compromise

did not expressly negative the right of the plaintiff to an

account of motor business. We are unable to accept this

conclusion. The observations quoted above negative the

plaintiff's case about mistake or misunderstanding in regard

to the true effect of the compromise and show that the

plaintiff abandoned the right to Account after the crucial

date and the status of the parties thereafter changed into

one of tenants in common. If the plaintiff really intended

that accounts of the motor business or indeed of all other

businesses were to be taken up to the date of the 'final

decree, there was no point in mentioning the 31st March,

1946. The normal course, after the preliminary decree was

passed by the Court, was to divide all the property by metes

and bounds and to award monies as found on examination of

the accounts right up to the date of the final decree. But

for the compromise which limited the period of the account

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the plaintiff would have obtained the relief he is now

seeking, in the partition suit as accounts would have been

taken of all the businesses up to the date of the final

decree. The plaintiff has himself to thank for preventing

the natural

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course of events and for forbidding the accounts to be taken

after the 31st March, 1946. The plaintiff on the other hand

has no real grievance in the matter, for although the

defendants Nos. 1 and 2, who continued to run the motor

business, may have made some money with the- help of the two

old motor buses, the plaintiff whose keenness to run the

liquor business is apparent from the notice referred to

above was not precluded from reaping the fruits of that

business. It is hard to conceive that the plaintiff would

have agreed to share his burden of the loss if the motor

business had sustained any. We hold, therefore, that the

compromise closed once for all the controversy about taking

any account of the joint family businesses including the

motor business after the 31st March', 1946, and the

plaintiff is bound by the terms of the compromise and the

consent decree following upon it.

The obvious effect of this finding is that the plaintiff is

barred by the principle of res judicata from reaitating the

question in the present suit. It is well settled that a

consent decree is as binding upon the parties thereto as a

decree passed by invitum. The compromise having been found

not to be vitiated by fraud, misrepresentation,

misunderstanding or mistake, the decree passed thereon has

the binding force of res judicata.

We are also of opinion that the plaintiff's claim is barred

by the provisions of Order II, rule 2(3), of the Code of

Civil Procedure. The plaintiff by confining his claim to

account up to March 3, 1946, only, implicitly of not

explicitly, relinquished his claim to the account for the

subsequent period. Sub-rule 3 clearly lays down that if a

person Omits, except with the leave of the Court, to sue for

all reliefs to which he is entitled, he shall not afterwards

sue for any relief so omitted. We do not agree with the

High Court that the cause of action in the subsequent suit

was different from the cause of action in the first suit.

The cause of action in the first suit was the desire of the

plaintiff to separate from his brothers and to divide the

joint family property. That suit embraced the entire

property without any reservation and was compromised, the

plaintiff having abandoned his claim to account in respect

of

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the motor business subsequent to March 31, 1946. His

subsequent suit to enforce a part of the claim is founded on

the same cause of action which he deliberately relinquished.

We are clear, therefore, that the cause of action in the two

suits being the same, the suit is barred under Order II,

rule 2(3), of the Civil Procedure Code.

As the. suit is barred both by res judicata and Order II,

rule 2(3), of the Civil Procedure Code, no further question

as to the applicability of section 90 of the Indian Trusts

Act can possibly arise under the circumstances.

The result is that we allow the appeal and dismiss the suit

with costs throughout.

Appeal allowed.