Sathyanath & Anr. Vs.

Sarojamani

A two-judge Bench of Justice Hemant Gupta and Justice V. Ramasubramanian

has held that when dealing with a mixed question of law and fact, a plea of Res
Judicata cannot be considered as a preliminary issue.

The matter came up before the Bench through an appeal filed by the plaintiff(s)
aggrieved by the High Court’s order to frame and consider issues of Res Judicata
as Preliminary Issues.

Initially, the defendant had filed an application before the Trial Court under Order
XIV Rule 2(2) of the Code of Civil Procedure, 1908 requesting the issues related to
Res Judicata and Estoppel be considered as preliminary Issues. The learned trial
court had dismissed this application following which the Defendant approached the
High Court through a Revision Petition under Article 227 of the Constitution of
India. The Learned High Court on hearing the contentions made by the
Defendant’s Counsel ordered the Trial Court to frame issues concerning Res
Judicata and Estoppel to be considered as Preliminary Issues.

The matter was placed before the Apex Court to examine and determine –
Whether Issues on Res Judicata can be considered and tried as Preliminary
Issues in case of a mixed question of law and fact ?

Considering the issue at hand, the Bench expressed that –

“Preliminary Issues are those where no evidence is required and on the basis of
reading of the plaint or the applicable law, if the jurisdiction of the court or the

1
bar to the suit is made out, the Court may decide such issues with the sole
objective of expeditious decision.”

Order XIV Rule 2 states – “Court to pronounce judgment on all issues —

(1) Notwithstanding that a case may be disposed of on a preliminary issue, the
Court shall, subject to the provisions of sub-rule (2), pronounce judgment on all
issues.
(2) Where issues both of law and of fact arise in the same suit, and the Court is of
opinion that the case or any part thereof may be disposed of on an issue of law
only, it may try that issue first if that issue relates to —
(a) The jurisdiction of the Court, or
(b) A bar to the suit created by any law for the time being in force,
And for that purpose may, if it thinks fit, postpone the settlement of the other issues
until after that issue has been determined, and may deal with the suit in
accordance with the decision on that issue.”

The Counsel appearing on behalf of the Appellants relied on the principle laid
down by the Supreme Court in Ramesh B. Desai and Ors. V. Bipin Vadilal
Mehta and Ors. that not all issues of law can be decided as preliminary issues.
Only those issues of law which fall within the ambit of Order XIV Rule 2(2) clause
(a) relating to the “jurisdiction of the Court” and (b) which deal with the “bar to the
suit created by any law for the time being in force”, can be decided as preliminary
issues.

Further in Major S.S. Khanna v. Brig. F.J. Dillon, where Rule 2 of Order XIV
was scrutinized, it was held that – “the Code confers no jurisdiction upon the
Court to try a suit on mixed issues of law and fact as preliminary issues. Normally
2
all the issues in a suit should be tried by the Court: not to do so, especially when
the decision on issues even of law depend upon the decision of issues of fact, would
result in a lopsided trial of the suit.”

Additionally the Court observed that – “Under Order XIV Rule 2 Code of Civil
Procedure, where issues both of law and of fact arise in the same suit, and the
Court is of opinion that the case or any part thereof may be disposed of on the
issues of law only, it shall try those issues first, and for that purpose may, if it
thinks fit, postpone the settlement of the issues of fact until after the issues of law
have been determined. The jurisdiction to try issues of law apart from the issues of
fact may be exercised only where in the opinion of the Court the whole suit may be
disposed of on the issues of law alone.”

Relying on the above, the Bench opined that – “ if Order XIV Rule 2 is read along
with Order XII Rule 5, the Court is expected to decide all the issues together
unless the bar of jurisdiction of the Court or bar to the suit in terms of sub-rule (2)
clause (a) and (b) arises. The reason to substitute Rule 2 is to avoid piecemeal
trial, protracted litigation and possibility of remand of the case, where the
appellate court differs with the decision of the trial court on the preliminary issues
upon which the trial court had decided.”

Based on the arguments presented by the Counsels appearing on behalf of the

Appellant and the Respondent, and the case laws cited, it was adjudged by the
Hon’ble Bench that –

3
 The legislative intent behind the amendment to Order XIV Rule 2 is to
avoid the possibility of a matter being remanded after a decision has been
made on the preliminary issues.
 Order XLI Rules 24 and 25 provide for the recording of evidence by the
learned Trial Court on all issues, so as to facilitate the first Appellate Court
to decide the questions of fact, through reformulating the same, if required.
When the Appellate Court finds that there is no evidence presented by the
parties, only then, it may call upon the parties to lead evidence either before
the Appellate Court or the Trial Court. The primary objective of these
provisions is to ensure an expeditious disposal of the matter, so as to not
delay and thus, deny justice to the concerned parties.
 Hence, the order of the High Court remanding the matter to the Trial Court
for the framing of preliminary issues being in contradiction with the
provision under Order XIV Rule 2 of the Code of Civil Procedure, 1908, is
set aside.
 Consequently, the learned Trial Court shall record findings on all issues so
as to facilitate the first Appellate Court and to eliminate the possibility of
remand, if the suit is decided solely on the basis of the preliminary issue.