CANARA BANK versus N. G. SUBBARAYA SETTY & ANR.

Citation: [2018] 3 S.C.R. 884 · Decided: 20-04-2018 · Supreme Court of India · Bench: ADARSH KUMAR GOEL · Disposal: Appeal(s) allowed

Cited by 3 judgment(s) · cites 8 · see the full citation network in Lexace

Judgment (excerpt)

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SUPREME COURT REPORTS
[2018] 3 S.C.R.
CANARA BANK
v.
N. G. SUBBARAYA SETTY & ANR.
(Civil Appeal No. 4233 of 2018)
APRIL 20, 2018
[ADARSH KUMAR GOEL AND R. F. NARIMAN, JJ.]
Code of Civil Procedure, 1908 – s.11 – Res judicata – General
rule and its exceptions – Erroneous decision given on a statutory
prohibition in former suit – Statutory prohibition not given effect to
– Plea of res judicata in subsequent suit – Held: An issue of law
which arises between the same parties in a subsequent suit or
proceeding is not res judicata if, by an erroneous decision given on
a statutory prohibition in the former suit or proceeding, the statutory
prohibition is not given effect to – On facts, respondent in order to
repay dues of the bank, signed assignment deed with Bank Manager
for assignment of the trademark and after several months bank
cancelled the assignment deed – Litigations between the parties,
first proceeding, second proceeding – Trial court and first appellate
court treating the statutory prohibition contained in s.45(2) of the
Trade Marks Act as res judicata, was erroneous – Neither of the
court adverted to and/or interpreted s.45, which makes it clear that
the assignment deed, if unregistered, cannot be admitted in evidence
by any court in proof of title to the trademark by the assignment,
unless the court itself directs otherwise – Thus, any reliance upon
the assignment deed by the earlier judgment cannot be sanctified
by the plea of res judicata, when reliance upon the assignment deed
is prohibited by law – Furthermore, trademark cannot be said to be
property which has come into the possession of the bank in
satisfaction or part satisfaction of any of the claims of the bank –
Trademarks are not part of any security for loans or advances that
have been made to the first respondent, or connected with the same
– Thus, the assignment deed clearly hit by ss.6(2) and 8 read with
s.46(4) – Judgment of the trial court and first appellate court set
aside – Trade Marks Act, 1999 – s.45(2) – Banking Regulation Act,
1949 – ss.6(2), 8 and 46(4).
[2018] 3 S.C.R. 884
884
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Allowing the appeal, the Court
HELD: 1.1 Res judicata is a doctrine of fundamental
importance in our legal system, though it is stated to belong to
the realm of procedural law, being statutorily embodied in Section
11 of the Code of Civil Procedure, 1908. However, it is not a
mere technical doctrine, but it is fundamental in our legal system
that there be an end to all litigation, this being the public policy
of Indian law. The obverse side of this doctrine is that, when
applicable, if it is not given full effect to, an abuse of process of
the Court takes place. However, there are certain notable
exceptions to the application of the doctrine. One well known
exception is that the doctrine cannot impart finality to an
erroneous decision on the jurisdiction of a Court. Likewise, an
erroneous judgment on a question of law, which sanctions
something that is illegal, also cannot be allowed to operate as res
judicata. This case is concerned with the application of the last
mentioned exception to the rule of res judicata. [Para 5][894-H;
895-A-B]
1.2 Until the limitation period for filing of an appeal is over,
the res remains sub judice. After the limitation period is over,
the res decided by the first Court would then become judicata.
However, questions arise as to what is to be done in matters
where the hearing in the second case is shortly after the limitation
period for filing an appeal in the first case has ended. At least two
judgments, of the Privy Council and the High Court, have referred
to the fact that, in appropriate cases, the hearing in the second
case may be adjourned or may be stayed in order to await the
outcome of the appeal in the first case. [Para 22][906-G-H; 907-
A]
1.3 If the period of limitation for filing an appeal has not yet
expired or has just expired, the Court hearing the second
proceeding can very well ask the party who has lost the first round
whether he intends to appeal the aforesaid judgment. If the
answer is yes, then it would be prudent to first adjourn the second
proceeding and then stay the aforesaid proceedings, after the
appeal has been filed, to await the outcome of the appeal in the
first proceeding. If, however, a sufficiently long period has elapsed
after limitation has expired, and no appeal has yet been filed in
CANARA BANK v. N. G. SUBBARAYA SETTY
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SUPREME COURT REPO

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