Conditions for application of Res Judicata (Section 11 of CPC,1908)

 There must be two suits – One former & other subsequent: Former suit
means previously decided suit. It doesn’t matter when the suit was
instituted. What it matters is when the decision came from the court. For
example,

Suit Filled on Suit Decided    on Former suit

1/10/2012 Still pending No

1/01/2013 10/11/2017 Yes

 It is not the date on which the suit is filed that matters but the date
on which the suit is decided; so that even if a suit was filed later, it
will be a former suit within the meaning of Explanation I if it has
been decided earlier.

 Matter directly and substantially in the subsequent suit: It means that

matter must be directly related to the suit. It must not be collateral or
incidental to the issue. For example, ‘A’ and her mother filed a suit
against her father’s brother for claiming a share in the property of her
mother. The question of marriage expenses was not directly or
substantially in issue. The claim of partition was dismissed by the court.
However, the principle of res judicata doesn’t bar ‘A’ to file a
subsequent suit for her marriage expenses as the matter was not directly
in issue in the former suit.

 There must be same parties: The parties to a suit are those whose name
appears on the record of the suit at the time of the decision. A party who
withdraws or whose name is stuck off is not considered as a party.
 Further, a minor not represented by the guardian for the suit is not a
party to the suit. Where any decision made by the court in favor of or
against any party then it not only binds the party but also their successors
too. For an instance, a suit filed by any person for recovery of possession
and ownership title and the court decided in his favor, then his legal heirs
also considered as the parties after his death and res judicata will apply.

For example, A sues B for rent. B contends that C and not A is the
landlord. A fails to prove his title and the suit is dismissed. A then sues
B and C for a declaration of his title to the property. The suit is not
barred as the parties in both the suits are not the same.

 There must be the same title: ‘Same title’ means ‘in same capacity’. It
has been held in the number of cases that ‘a verdict against a man suing
in one capacity will not stop him when he sues in another capacity’. For
example, ‘A’ file suit against ‘B’ as the owner of property and suit is
dismissed by the court. Later on, he filed a suit to claim his right as
mortgagee will not bar him to institute a subsequent case. So where the
suit is filed in a different capacity then it is considered to be a valid suit
and doesn’t bar by this doctrine.

 The decision must be made by the competent court: The Former

decision must be given by competent court having jurisdiction on the
case. If the case is decided by the court has no jurisdiction over the
subject matter then res judicata will not apply. For an instance, revenue
courts exercising authority under the Act can be held to be a court of
limited jurisdiction and decision by it within its competence will operate
as res judicata.

 Heard and finally decided: The matter directly & substantially in issue

in subsequent suit must have been heard and finally decided by the court
 in a former suit. “Heard and finally decided” means that the court has
exercised its judicial mind & after argument and consideration came to
decision on contested matter and decision is made on the merits of the
case. In following cases the matter is deemed to be finally decided on
merits even if the former suit is disposed of in the following manner:

1. By ex parte
2. By dismissal
3. By decree on an award
4. By oath tender under section 8 on Indian Oath Act,1873
5. By dismissal owing to plaintiff failed to produce evidence at the hearing.

The doctrine of Res Judicata will not apply to a writ of “Habeas Corpus”.

A collateral or incidental issue means an issue which is ancillary to the direct and
substantive issue. It refers to a matter in respect of which no relief is claimed and
yet it is put in issue to enable a Court to adjudicate upon the matter which is
directly and substantially in issue.

Illustration, A sues B for the rent due. B pleads abatement of rent on the ground
that the actual area of the land is less than that mentioned in the lease deed. The
Court, however, finds the area greater than that shown in the lease deed. The
finding as to the excess area, being ancillary and incidental to the direct and
substantial issue, is not res judicata.

‘Substantially’ means essentially or materially. It is something short of certainty

but indeed more than mere suspicion. A matter can be said to be substantially in
issue if it is of importance for the decision of the case.[13] The question whether
or not a matter is ‘directly and substantially in issue’ has to be determined with
reference to the plaint, written statement, issues and judgment. No rule of
universal application can be laid down and the question should be decided on the
facts of each case.

Illustration, A sues B for possession of certain properties on the basis of a sale

deed in his favour. B impugns the deed as fictitious. The plea is upheld and the
suit is dismissed. A subsequent suit for some other properties on the basis of the
same sale deed is barred as the issue about the fictitious nature of the sale deed
was actually in issue in the former suit directly and substantially.

Constructive res judicata is an ‘artificial form of res judicata’. It provides

that if a plea could have been taken by a party in a proceeding between him
and his opponent, he should not be permitted to take that plea against the
same party in a subsequent proceeding with reference to the same subject
matter. In the case of Workmen v. Board of Trustees, Cochin Port Trust, the
Supreme Court observed that the principle of res judicata comes into play
when by the judgment and order a decision of a particular issue is implicit
in it, i.e., it must be deemed to have been necessarily decided by implication,
then also the principle of res judicata on that issue is directly applicable.

Res Judicata between co-defendants and co-plaintiffs

As a matter may be res judicata between  a plaintiff and a defendant, similarly, it

may be res judicata between co-defendants and co-plaintiffs also. An
adjudication will operate as res judicata between co-defendants if the following
conditions are satisfied:

 There must be a conflict of interest between co-defendants;

 It must be necessary to decide that conflict in order to give relief to the
plaintiff;
 The question between co-defendants must have been finally decided;
 The co-defendants were necessary or proper parties in the former suit.
The test of res judicata between co-defendants has been laid down in the case
of Cottingham v. Earl of Shrewsbury that if a plaintiff cannot get at his right
without trying and deciding a case between co-defendants, the Court will try and
decide the case, and the co-defendants will be bound. But if the relief given to the
plaintiff does not require or involve a decision of any case between the co-
defendants, the co-defendants will not be bound as between each other by any
proceeding which may be necessary only to the decree the plaintiff obtains.

In Iftikhar Ahmed v. Syed Meherban Ali, it was held that if there is a conflict of
interest between plaintiffs and it is necessary to resolve the same by a court in
order to give relief to a defendant, and the matter is in fact decided, it will operate
as res judicata between co-plaintiffs in the subsequent suit.

Iftikhar Ahmed v. Syed Meherban Ali 

There was a dispute as to title to some land. The appellant sought to challenge the decision
of the High Court, which was to the effect that the respondents also had some title to the land
in question. Initially, the dispute between the parties was referred to an arbitrator by the Civil
Judge. The holding of the arbitrator was that that the respondents had no title and sole title
belonged to the appellant. The decision of the arbitrator was based upon a judgment of the
High Court in an earlier judgement, wherein both the present appellant and respondents were
co-plaintiffs in a suit against another person, again in respect of title to the land. Such a
decision of the High Court was considered by the arbitrator to operate as res judicata, and
hence held in favour of the appellants.

The respondents then filed objections against the decision of the arbitrator with the Civil
Judge, Meerut, and the Civil Judge said that the decision of the High Court did not operate as
res judicata and since the decision of the arbitrator, dependent as it was on the decision of the
High Court as res judicata, was manifestly wrong and vitiated by error of law. An order for
fresh arbitration was passed.

The appellants then filed objections before the Civil Judge who did not find anything
manifestly wrong on the face of the record and confirmed the decision of the arbitrator. The
appellants preferred an appeal to the District Court, which allowed it, opining that the
decision of the High Court did constitute res judicata and hence ordered a fresh arbitration.
The respondents then filed a revision petition in the High Court, and the High Court
confirmed the decision of the Civil Judge, reversing the decision of the District Court.

The matter then came up before the Supreme Court a Special Leave Petition. The Supreme
Court considered the matter, and considered the question of whether the respondents, who
had had failed previously to establish title to the properties, could agitate the matter again. In
doing so, the Court also explained the concept of res judicata between defendants and
reiterated the established rule that in order that such a principle may be invoked, the
following conditions must be met:

1) there was a conflict of interest between co-defendants;

(2) that it was necessary to decide the conflict in order to give the relief which the plaintiff
claimed in the suit;

(3) and that the court actually decided the question.

The Court then went on to say that if all these conditions were satisfied mutatis mutandis,
there was no reason why the previous decision should not operate as res judicata between co-
plaintiffs as well. On this reasoning, the Court agreed with the holding of the earlier
arbitrator and contention of the appellants that the earlier decision of the High Court did
operate as res judicata, since all the three conditions had been met mutatis mutandis between
the co-plaintiffs in the earlier case, and accordingly allowed the appeal.

It is also important to mention that the parties in the subsequent suit, though they may be the
same, must additionally be litigating in the same capacity as they were in the former suit.

Proceedings where res judicata is not applicable are:

 Taxation matters
 Res Judicata is not applicable to cases of habeas corpus petitions.
 Dismissal of suit in default
 Dismissal in limine
 Dismissal of Special Leave Petition in limine by a non speaking order
 Compromise decree, though party is precluded from challenging it by rule of
estoppel
 Fraudulent decree
 Withdrawal of suit
 In case of change in circumstances
 Change in law subsequent to a decision rendered by the Court.