# 664 SUPREME COURT REPORTS [2019] 2 S.C.R. ASGAR & ORS v. MOHAN VARMA & ORS

- **Citation:** [2019] 2 S.C.R. 664
- **Court:** Supreme Court of India
- **Decided:** 2019-02-05
- **Case number:** Civil Appeal No. 1500 of 2019
- **Bench:** Dr. Dhananjaya Y Chandrachud, Hemant Gupta
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/664-supreme-court-reports-2019-2-s-c-r-asgar-ors-v-mohan-varma-ors-33518
- **Pages:** 28

## Headnote

Code of Civil Procedure, 1908 - Explanation IV to s.11 and
Or.XXI rr.97 to 101 - Constructive Res judicata - Respondents
instituted Execution Petition for delivery of possession of Schedule
'B' property - Application by appellants seeking declaration that
they were entitled to possession of the property as lessees and were
not liable to be dispossessed - Application allowed by the District
Court - However, High Court dismissed the claim of appellants -
SLP was also dismissed - Appellants instituted fresh proceedings
and sought inter alia, a direction for payment to them of the value of
improvements over the property, before an order for delivery of
possession was made - Application dismissed by the District Court
- Writ petition - High Court held that claims advanced by appellants
were barred by the principle of constructive res judicata - Appellant
contended that neither the District Court nor the High Court have
enquired into the merits of the claim advanced by the appellants u/
s.4(1) of the Act, 1958 - Held: In the present case, the appellants
were strangers to the decree - They were required to get that claim
adjudicated in the course of their Execution Application which was
referable to the provisions of Or. XXI, r. 97 - Having failed to
assert the claim at that stage, the deeming fiction contained in
Explanation IV to s.11 is clearly attracted - An issue which the
appellants might and ought to have asserted in the earlier round of
proceedings is deemed to have been directly and substantially in
issue - The High Court was justified in coming to the conclusion
that the failure of the appellants to raise a claim would result in the
application of the principle of constructive res judicata both having
regard to the provisions of ss. 4 and 5 of the Act of 1958 and to the
provisions of Or. XXI, rr. 97 to 101 of the CPC - Kerala
Compensation for Tenants Improvements Act, 1958 - ss.4 and 5.
[2019] 2 S.C.R. 664
664
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Appellants filed application in Execution proceedings for
declaration that they were entitled to possession of the property
as lessees. The District Court allowed the application. Aggrieved,
the respondents moved to the High Court. The High Court
allowed the appeal and dismissed the claim petitions filed by the
appellants. SLP was also dismissed. Thereafter, appellant
instituted fresh proceedings and sought directions for payment
to them of the value of improvements over the property, before
an order of delivery of possession was made. The said application
was dismissed by the District Court. High Court held that claims
advanced by appellants were barred by principle of res judicata.
Hence, Special Leave Petition.
Dismissing the appeal, the Court
HELD : 1. In view of the settled position in law, it is evident
that the appellants were entitled, though they were strangers to
the decree, to get their claim to remain in possession of the
property independent of the decree, adjudicated in the course of
the execution proceedings. The appellants in fact set up such a
claim. They sought a declaration of their entitlement to remain in
possession in the character of lessees. Under Order XXI Rule
97, they were entitled to set up an independent claim even prior
to their dispossession. Under Order XXI Rule 101, all
questions have to be adjudicated upon by the court dealing with
the application and not by a separate suit. Upon the determination
of the questions referred to in Rule 101, Order XXI
Rule 98 empowers the court to issue necessary orders.
The consequence of the adjudication is a decree under Rule 103.
[Para 39][690-D-F]
2. The claim which the appellants have now sought to assert
for compensation under Section 4(1) of the Kerala Compensation
for Tenants Improvements Act, 1958 is intrinsically related to
the claim which they asserted in the earlier round of proceedings
to remain in possession. Indeed, the appellants seek to resist
the execution of the decree on the ground that they are entitled
to c

## Text

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664 SUPREME COURT REPORTS [2019] 2 S.C.R.
ASGAR & ORS.
v.
MOHAN VARMA & ORS.
(Civil Appeal No. 1500 of 2019)
FEBRUARY 05, 2019
[DR. DHANANJAYA Y CHANDRACHUD AND
HEMANT GUPTA, JJ.]
Code of Civil Procedure, 1908 - Explanation IV to s.11 and
Or.XXI rr.97 to 101 - Constructive Res judicata - Respondents
instituted Execution Petition for delivery of possession of Schedule
'B' property - Application by appellants seeking declaration that
they were entitled to possession of the property as lessees and were
not liable to be dispossessed - Application allowed by the District
Court - However, High Court dismissed the claim of appellants -
SLP was also dismissed - Appellants instituted fresh proceedings
and sought inter alia, a direction for payment to them of the value of
improvements over the property, before an order for delivery of
possession was made - Application dismissed by the District Court
- Writ petition - High Court held that claims advanced by appellants
were barred by the principle of constructive res judicata - Appellant
contended that neither the District Court nor the High Court have
enquired into the merits of the claim advanced by the appellants u/
s.4(1) of the Act, 1958 - Held: In the present case, the appellants
were strangers to the decree - They were required to get that claim
adjudicated in the course of their Execution Application which was
referable to the provisions of Or. XXI, r. 97 - Having failed to
assert the claim at that stage, the deeming fiction contained in
Explanation IV to s.11 is clearly attracted - An issue which the
appellants might and ought to have asserted in the earlier round of
proceedings is deemed to have been directly and substantially in
issue - The High Court was justified in coming to the conclusion
that the failure of the appellants to raise a claim would result in the
application of the principle of constructive res judicata both having
regard to the provisions of ss. 4 and 5 of the Act of 1958 and to the
provisions of Or. XXI, rr. 97 to 101 of the CPC - Kerala
Compensation for Tenants Improvements Act, 1958 - ss.4 and 5.
[2019] 2 S.C.R. 664
664
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Appellants filed application in Execution proceedings for
declaration that they were entitled to possession of the property
as lessees. The District Court allowed the application. Aggrieved,
the respondents moved to the High Court. The High Court
allowed the appeal and dismissed the claim petitions filed by the
appellants. SLP was also dismissed. Thereafter, appellant
instituted fresh proceedings and sought directions for payment
to them of the value of improvements over the property, before
an order of delivery of possession was made. The said application
was dismissed by the District Court. High Court held that claims
advanced by appellants were barred by principle of res judicata.
Hence, Special Leave Petition.
Dismissing the appeal, the Court
HELD : 1. In view of the settled position in law, it is evident
that the appellants were entitled, though they were strangers to
the decree, to get their claim to remain in possession of the
property independent of the decree, adjudicated in the course of
the execution proceedings. The appellants in fact set up such a
claim. They sought a declaration of their entitlement to remain in
possession in the character of lessees. Under Order XXI Rule
97, they were entitled to set up an independent claim even prior
to their dispossession. Under Order XXI Rule 101, all
questions have to be adjudicated upon by the court dealing with
the application and not by a separate suit. Upon the determination
of the questions referred to in Rule 101, Order XXI
Rule 98 empowers the court to issue necessary orders.
The consequence of the adjudication is a decree under Rule 103.
[Para 39][690-D-F]
2. The claim which the appellants have now sought to assert
for compensation under Section 4(1) of the Kerala Compensation
for Tenants Improvements Act, 1958 is intrinsically related to
the claim which they asserted in the earlier round of proceedings
to remain in possession. Indeed, the appellants seek to resist
the execution of the decree on the ground that they are entitled
to continue in possession until their claim for compensation is
determined upon adjudication and paid. Such a claim falls within
the purview of Explanation IV to Section 11 of the CPC. Such a
claim could certainly have been made in the earlier round of
ASGAR & ORS. v. MOHAN VARMA & ORS.
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proceedings. Moreover, the claim ought to have been made in
the earlier round of proceedings. The provisions of Order XXI
Rules 97 to 103 constitute a complete code and provide the sole
remedy both to parties to a suit and to a stranger to a decree. All
questions pertaining to the right, title and interest which the
appellants claimed had to be urged in the earlier Execution
Application and adjudicated therein. To take any other view would
only lead to a multiplicity of proceedings and interminably delay
the fruits of the decree being realized by the decree holder.
[Para 40][690-F-H; 691-A-B]
3. This view is adopted following the consistent line of
precedent on Rules 97 to 103 of Order XXI is buttressed by the
provisions of the Act of 1958. A claim under Section 4 (1) has to
be addressed to the court which passes a decree for eviction. In
the present case, the appellants are strangers to the decree. They
were required to get that claim adjudicated in the course of their
Execution Application which was referable to the provisions of
Order XXI Rule 97. Having failed to assert the claim at that stage,
the deeming fiction contained in Explanation IV to Section 11 is
clearly attracted. An issue which the appellants might and ought
to have asserted in the earlier round of proceedings is deemed
to have been directly and substantially in issue. The High Court
was, in this view of the matter, entirely justified in coming to the
conclusion that the failure of the appellants to raise a claim would
result in the application of the principle of constructive res judicata
both having regard to the provisions of Sections 4 and 5 of the
Act of 1958 and to the provisions of Order XXI Rules 97 to 101
of the CPC. [Para 41][691-C-E]
Direct Recruit Class II Engg. Officers' Assn. v. State of
Maharashtra (1990) 2 SCC 715 : [1990] 2 SCR 900
- followed.
Brahmdeo Chaudhary v. Rishikesh Prasad Jaiswal
(1997) 3 SCC 694 : [1997] 1 SCR 463 - relied on.
Shamma Bhatt v. T Ramakrishna Bhatt (1987) 2 SCC
416; Kameswar Pershad v. Rajkumari Ruttun Koer
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(1892) SCC OnLine PC 16 ; State of U. P. v. Nawab
Hussain (1977) 2 SCC 806 : [1977] 3 SCR 428;
Forward Construction Co. v. Prabhat Mandal (Regd.),
Andheri (1986) 1 SCC 100 : [1985] 3 Suppl. SCR
766 ; Shreenath v. Rajesh (1998) 4 SCC 543 : [1998] 2
SCR 709; Har Vilas v. Mahendra Nath (2011) 15 SCC
377 - referred to.
Delhi Cloth & General Mills Co. Ltd v. Municipal
Corporation of Delhi ILR (1975) II Delhi 174;
Nusserwanji E Poonegar v. Mrs Shirinbai F Bbesania
AIR 1984 Bom 357 - referred to.
Henderson v. Henderson 67 E.R. 313; Greenhalgh v
Mallard (1947) 2 All ER 255; Johnson v. Gore Wood
& Co (a firm) [2001] 2 WLR 72 - referred to.
Case Law Reference
(1987) 2 SCC 416
referred to
Para 27
[1977] 3 SCR 428
referred to
Para 33
[1990] 2 SCR 900
followed
Para 33
[1985] 3 Suppl. SCR 766
referred to
Para 33
[1997] 1 SCR 463
relied on
Para 35
[1998] 2 SCR 709
referred to
Para 36
(2011) 15 SCC 377
referred to
Para 37
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1500
of 2019.
From the Judgment and Order dated 11.12.2015 of the High Court
of Kerala at Ernakulam in O.P. (C) No. 2125 of 2015
V. Giri, Sr. Adv., M. Gireesh Kumar, Amit Krishnan, Svedha
Shankar, Ankur S. Kulkarni, Advs. for the Appellants.
Gourab Banerji, Sr. Adv., C. K. Sasi, Ms. Nayantara Roy, Abdulla
Naseeh, Ms. Raka Chatterjee, Subhro P. Mukherjee, Sahil Tagotra, Advs.
for the Respondents.
ASGAR & ORS. v. MOHAN VARMA & ORS.
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The Judgment of the Court was delivered by
DR. DHANANJAYA Y CHANDRACHUD, J.
1. Leave granted.
2. This appeal arises from a judgment of the Kerala High Court
dated 11 December 2015. Dismissing a petition instituted by the appellants
under Article 227 of the Constitution, the High Court held that the claim
set up by the appellants before the executing court for the value of the
improvements alleged to have been made by them on the land in dispute
under the Kerala Compensation for Tenants Improvements Act 19581
was barred by the principle of constructive res judicata. The High Court
upheld the finding of the executing court that the appellants are not entitled
to claim compensation under Section 51 of the Transfer of Property Act
18822.
3. The genesis of the dispute needs to be explained. The property
encompassing an extent of 914 acres originally belonged to Vengunadu
Kovilakam of Kollengode. True to the bounties of nature, it comprised
of coffee, cardamom, orange and pepper plantations. On 25 November
1897, 909 acres of the property came to be leased out to William Espants
Watts Esquire for a period of 75 years. By a subsequent transfer, the
leasehold rights were transferred to and vested in Anglo American Direct
Tea Trading Corporation Limited ("Anglo American Corporation").
On 17 October 1931, an area admeasuring 5 acres of what is described
as the bungalow site was leased out in favour of Anglo American
Corporation for a period of 43 years. In 1945, Anglo American
Corporation assigned its rights over the property to Amalgamated Coffee
Estate Limited.
4. A suit for partition3 was instituted by the respondents before
the District Judge, Palakkad in respect of some portions of the property.
The petitioners and their predecessors-in-interest were not parties. A
preliminary decree for partition was passed by the District Judge,
Palakkad on 30 November 1965.
5. On 7 August 1969, Amalgamated Coffee Estate Limited
assigned its rights over 410 acres of the land to Mathew T Marattukulam,
329 acres in favour of Mrs Annakutty Mathew and 175 acres in favour
of Philomina Thomas.
1"The Act of 1958"
2 The TP Act
3 (O S No. 1 of 1964)
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6. The lease deed of 1897 expired by efflux of time in 1972. In
spite of the fact that the tenure of lease had ended, the above three
persons assigned their rights in respect of the property on 28 August
1978 in favour of M/s K J Plantations. On 23 June 1990, acting in
pursuance of a Power of Attorney alleged to have been executed by K
J Plantations in favour of M S M Haneefa, the latter executed eight sale
deeds in favour of the petitioners and M/s South Coast Spices Export
Limited. In 1991, M/s K J Plantations instituted a suit4 before the
Subordinate Judge, Palakkad seeking inter alia the setting aside of the
Power of Attorney executed in favour of M S M Haneefa and the eight
sale deeds.
7. On 27 May 1995, the Subordinate Judge, Palakkad ordered the
property to be divided into a hundred equal shares of which forty were
to be allotted to M/s K J Plantations and sixty to the other assignees. An
area admeasuring 274.20 acres had been assigned to the petitioners.
8. On 21 February 2003, the District Judge, Palakkad passed a
final decree in the suit for partition. The respondents instituted Execution
Petition No. 7 of 2002 in OS No. 1 of 1964 on 17 November 2008 for
delivery of possession of Schedule 'B' property. When the Amin came
to effect delivery, the appellants and other similarly situated persons
raised an obstruction.
9. On 31 August 2009, several execution applications were filed
in Execution Petition No. 7 of 2008. Among them were execution
applications 33 of 2009 (filed by National Spices Company), 38 of 2009
(filed by the petitioners) and 41 of 2009 (filed by K J Plantations) under
Order XXI Rule 99 of the Code of Civil Procedure 19085. In their
applications, the applicants inter alia sought a declaration that they were
entitled to possession of the property as lessees and were not liable to be
dispossessed.
10. The District Judge, Palakkad allowed execution applications
33, 38 and 41 of 2009 by a judgment dated 6 January 2010. The District
Judge held that the appellants had established that they had a subsisting
interest and were in possession of the property as a consequence of
which the respondents were not entitled to delivery of possession. In
view of the order of the District Court, the respondents, as decree holders,
were held not to be entitled to the delivery of actual physical possession
of the property and their remedy would be to file a suit impleading the
appellants as parties.
4 O S No. 553 of 1991
5 The CPC
ASGAR & ORS. v. MOHAN VARMA & ORS.
[DR. DHANANJAYA Y CHANDRACHUD, J.]
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11. Aggrieved by the order of the District Judge, Palakkad, the
respondents moved the High Court of Kerala in a proceeding described
as Execution First Appeal No. 12 of 2010. By its judgment dated 29
June 2012, the High Court allowed the appeal and, while upholding the
submissions of the respondents, dismissed the claim petitions filed by the
appellants.
12. On 25 July 2014, a Special Leave Petition filed under Article
136 of the Constitution was dismissed by this Court in the following
terms:
"Heard learned senior counsel and learned counsel for the parties.
Special leave petitions are dismissed.
No order needs to be passed in Interlocutory Application No. 5 of
2014 made by the applicants - Ravi Varma Thampan and Sarada
Thampatty - for impleadment in S.L.P. (Civil) No. 27268 of 2012
in view of dismissal of special leave petition and application is
disposed of as such.
In so far as question of compensation of improvements made by
the petitioners is concerned, petitioners are free to pursue
appropriate remedy for redressal of their grievance in accordance
with law."
13. On 24 October 2014, the appellants instituted fresh proceedings,
numbered as EA No. 414 of 2014 in EP No. 7 of 2008 seeking inter alia
a direction for the payment to them of the value of improvements over
the property, before an order for delivery of possession was made. The
respondents, in reply opposing the application, contended that the claim
was barred by the principle of constructive res judicata under Explanation
IV of Section 11 of the CPC.
14. By a judgment and order dated 26 June 2015, the First
Additional District Judge dismissed the application filed by the appellants
on the ground that they were not transferees of the property and were
hence disentitled to seek the value of the improvements alleged to have
been made by them, under Section 51 of the TP Act. During the course
of the proceedings before the ADJ, it was only the claim under Section
51 which was pressed. The claim under the Act of 1958 was not
advanced. The ADJ rejected the submission of the respondents that the
claim in execution was barred by the principle of constructive res
judicata. However, on merits the ADJ came to the conclusion that the
claim was not maintainable under Section 51 of the TP Act.
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15. A Writ Petition under Article 227 of the Constitution was
instituted before the High Court of Kerala on 3 September 20156. By its
judgment and order dated 11 December 2015, the High Court dismissed
the writ petition, holding inter alia that:
(i)
The claims advanced by the appellants for the value of the
improvements alleged to have been made on the property were
barred by the principle of constructive res judicata; and
(ii)
The appellants, not being transferees, were in any event not entitled
to raise the claim under Section 51 of the TP Act.
16. Assailing the judgment of the High Court, Mr V Giri, learned
Senior Counsel urged that:
(i)
Neither the District Court nor the High Court have enquired into
the merits of the claim advanced by the appellants under Section
4(1) of the Act of 1958;
(ii)
By the judgment of a Division Bench of the High Court in the
earlier proceedings, it was clarified that the court was not going
into the entitlement of the appellants under Section 4(1) of the Act
1958 since "it is not a question which arises from the order on the
claim petitions". The High Court clarified that it was only holding
that the claim of the appellants to possess leasehold rights was
without merit;
(iii)
When the case travelled to this Court, the appellants were granted
liberty to pursue an appropriate remedy for the redressal of their
grievance in regard to the payment of compensation for the
improvements made by them, in accordance with law;
(iv)
Once the High Court had declined to enquire into the claim of
compensation under the Act of 1958 and this Court had specifically
kept open the right of recourse to remedies under law, the principle
of constructive res judicata would have no application;
(v)
In Explanation IV to Section 11 of the CPC, the expression "might
and ought" has to be conjunctively construed. Hence, merely
because the claim for compensation under the Act of 1958 could
have been raised in the earlier proceedings in the execution
application, that does not debar the appellants from filing a fresh
application;
6 Writ Petition (c) No. 2125 of 2015
ASGAR & ORS. v. MOHAN VARMA & ORS.
[DR. DHANANJAYA Y CHANDRACHUD, J.]
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(vi)
The test should be whether allowing the claim to be raised could
be construed as an abuse of the process and it is only when the
claim is of a nature that might have been urged and ought to have
been urged in the earlier proceedings, that the bar of constructive
res judicata would be attracted;
(vii)
The concession made by Counsel in the earlier proceedings
asserting only the claim under Section 51 of the TP Act, would not
operate as an estoppel against the appellants from raising the claim
for improvements under Section 4 of the Act of 1958;
(viii) The second application moved by the appellants was of a nature
which they would have raised if the respondents had filed an
application under Order XXI Rule 97 of the CPC. Since the
respondents did not file any application under Order XXI Rule 97,
but it was the appellants who had filed an application under Order
XXI Rule 99, the bar of constructive res judicata is not attracted;
and
(ix)
The claim of the appellants at the present stage is not in the
character of lessees (since their claim as lessees was rejected
earlier) but as a judgment- debtor who is entitled to retain
possession until the value of the improvements made by them on
the land is paid under Section 4 of the Act of 1958. The juridical
character in which the claim is asserted under Section 4 is hence
distinct from their earlier claim as lessees entitled to possession of
the land.
17. Opposing these submissions, Mr Gourab Banerji, learned Senior
Counsel submitted that:
(i)
Execution Application No. 38 of 2009 was in essence not an
application under Order XXI Rule 99 but under Order XXI Rule
97 of the CPC;
(ii)
Order XXI Rule 97 has been broadly interpreted by this Court to
allow even a third party to move the executing court before
dispossession in pursuance of a decree takes place;
(iii)
The provisions of Rules 97 to 103 of Order XXI constitute a
complete code. They provide the sole remedy for parties and for
strangers to a proceeding which has ended in a decree of the civil
court;
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(iv)
The adjudication which followed upon the earlier proceedings was
in the nature of a decree under Order XXI Rule 103. All claims
that the appellants seek to urge presently could have been and
ought to have been raised in the earlier proceedings. The appellants,
having failed to do so, the bar of constructive res judicata is
squarely attracted;
(v)
The claim under the Act of 1958 ought to have been raised in the
earlier proceedings because of the provisions of Section 5 of the
Act of 1958. Section 5 postulates that every such claim has to be
raised and adjudicated upon before the decree is passed. Hence
the defence of being entitled to possession, unless the value of
the improvements is paid, should have been raised in the earlier
proceedings;
(vi)
The language of Order XXI Rule 101 is peremptory. The order
by the High Court constitutes a decree under Order XXI
Rule 103;
(vii)
The question of compensation under the Act of 1958 is intrinsically
connected to the claim of the appellants to retain possession until
the value of the improvements alleged to have been made is paid.
In the previous round of proceedings, the prayer was for the
retention of possession and hence the claim could have been raised
and ought to have been addressed when the decree was passed;
and
(viii)
The second application before the ADJ was under Section 151 of
the CPC. A conscious decision was taken by counsel representing
the appellants to only urge the claim under Section 51 of the TP
Act. Once that claim was rejected, it is not open to the appellants
to press the claim under the Act of 1958 in a fresh round of
proceedings. If the issue was raised earlier, the respondents would
have been entitled to maintain a claim for a set-off under the Act
of 1958. Once the issue of possession stands concluded, it is not
open to the appellants to protect their possession, albeit on the
basis of a claim for compensation under the Act of 1958.
18. The rival submissions now fall for consideration.
19. We must begin our analysis of the controversy in this appeal
with a reference to the decision rendered on 29 June 2012 by a Division
Bench of the Kerala High Court. The First Appeal in execution before
the Kerala High Court arose from a judgment of the District Judge in
ASGAR & ORS. v. MOHAN VARMA & ORS.
[DR. DHANANJAYA Y CHANDRACHUD, J.]
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execution proceedings holding that the appellants had established a
subsisting interest, entitling them to continue in possession of the property.
The appellants made the claim under a purported assignment after the
expiration of the original deed of lease in 1972. Justice K M Joseph (as
the learned Judge then was), speaking for the Division Bench held that a
tenant "at sufferance" is only entitled to protection against unlawful
eviction. As assignees, the tenants at sufferance were not entitled to any
estate or property and the right to remain in possession could not have
been assigned. Consequently, the Division Bench of the High Court held:
"56. We need not consider the case that the transfers are
fraudulent. We take the view that there was no estate or property
which could have been transferred either by the assignors in Ext.
A6 or subsequent assignors on the said basis. Possession by itself
may be treated as being changed hands unaccompanied by any
legal right."
Concluding its discussion, the High Court observed that:
"59. The upshot of the above discussion is that we are inclined to
reverse the findings and the decision rendered by the court below.
We hold that the respondents cannot claim as tenants by holding
over. Nor can they claim any right as tenants at sufferance. The
result is that while they may have possession, it is unaccompanied
by any right..."
20. Now in this background, it is necessary to advert to the reliefs
that were sought by the appellants in Execution Application 38 of 2009
instituted by them in Execution Petition 7 of 2008. The reliefs which they
sought were in the following terms:
"A) Establishing and declaring the claim of the petitioners for
possession as lessees over 274.20 acres of property included in
the schedule hereunder and also included in the schedule to the
execution petition;
B) Declaring the respondents 1 to 6 are not entitled to dispossess
the petitioners from the properties in their possession and take
actual delivery of the same;"
21. Clearly, what the appellants sought was a declaration that their
possession was entitled to protection in their character as lessees over
274.20 acres of the land. No claim was set up in the execution application
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on the basis of the provisions contained in Section 4(1) of the Act of
1958. When the proceedings were before the High Court, the appellants
sought to urge that "it may be borne in mind" that they would be entitled
to compensation under the Act of 1958. Besides, they also invoked
Section 51 of the TP Act. The respondents objected on the ground, as
the High Court recorded, "that such a case is not there in the claims and
they cannot raise such a claim". Adverting to the submission of the
appellants that they had a claim under the Act of 1958, the High Court
observed that:
"62. We feel that we need not go into this question, as it is not a
question which arises from the order on the claim petitions. In
fact, whether the respondents /claimants can raise the said issue,
are all matters which we will not pronounce on..."
22. The above observations of the High Court indicate that the
reason why it did not go into the question was because it did not arise
from the order on the claim petitions. In fact, the High Court also observed
that it would not pronounce judgment on whether the appellants were
entitled to raise the issue. While dismissing the Special Leave Petition
against the judgment of the High Court, this Court in its order dated 25
July 2014 observed that "insofar as the question of compensation for
improvements made by the appellants is concerned, the appellants were
free to pursue an appropriate remedy for the redressal of their grievances
in accordance with law." These observations as contained in the order
of this Court cannot be construed to mean that the respondents would
be deprived of their right to set up a plea of constructive res judicata if
the appellants were to raise such a claim. The appellants were, as this
Court observed, free to pursue the "appropriate remedy for redressal of
their grievances in accordance with law." This must necessarily be
construed to mean that all defences of the respondents upon the
invocation of a remedy by the appellants were kept open for decision.
The liberty granted by this Court was not one-sided. It encompasses
both the ability of the appellants to take recourse and of the respondents
to raise necessary defences to the invocation of the remedy. Therefore,
we do not find any merit in the submission urged on behalf of the appellants
that the earlier judgment of the Kerala High Court and the order of this
Court preclude the respondents from raising the bar of constructive res
judicata.
ASGAR & ORS. v. MOHAN VARMA & ORS.
[DR. DHANANJAYA Y CHANDRACHUD, J.]
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23. Having cleared this ground, we now proceed to analyse the
provisions contained in the Act of 1958. The Act, as its long title indicates,
has been enacted "to make provisions for payment of compensation for
improvements made by the tenants in the State of Kerala". Section 2(b)
defines the expression "improvement" in the following terms:
"(b) "improvement" means any work or product of a work which
adds to the value of the holding, is suitable to it and consistent
with the purpose for which the holding is let, mortgaged or occupied,
but does not include such clearances, embankments, leveling,
enclosures, temporary wells and water-channels as are made by
the tenant in the ordinary course of cultivation and without any
special expenditure or any other benefit accruing to land from the
ordinary operations of husbandry:"
Section 2(d) defines the expression "tenant" as follows:
"(d) "tenant" with its grammatical variations and cognate
expressions includes-
(i) a person who, as lessee, sub-lessee, mortgagee or submortgagee or in good faith believing himself to be lessee, sublessee, mortgagee of land, is in possession thereof;
(ii) a person who with the bona fide intention of attorning and
paying a reasonable rent to the person entitled to cultivate or let
waste-land, but without the permission of such person, brings such
land, under cultivation and is in occupation thereof as cultivator;
and
(iii) a person who comes into possession of land belonging to another
person and makes improvement thereon in the bona fide belief
that he is entitled to make such improvements."
24. The expression "tenant" in Section 2(d) is defined in a broad
sense. It includes for instance, a person who in good faith, believing
himself to be a lessee, sub-lessee or mortgagee of land, is in possession.
Similarly, it includes a person who without the permission of a person
entitled to cultivate or let waste-land brings the land under cultivation
and is in occupation under the bona fide intention of attorning to and
paying a reasonable rent to the person entitled to cultivate. The definition
includes a person who comes into possession of land belonging to another
and makes improvements in the bona fide belief that he is entitled to
make those improvements. Similarly, Section 3 defines certain work or
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the products of work which shall be presumed to be improvements for
the purposes of the Act. Section 3 is in the following terms:
"3. What are presumed to be improvements.- Until the contrary
is shown, the following works or the products of such works shall
be presumed to be improvements for the purposes of this Act:-
(a) the erection of dwelling houses, buildings appurtenant there to
and farm buildings;
(b) the construction of tanks, wells, channels, dams and other
works for the storage or supply of water for agricultural or domestic
purposes;
(c) the preparation of land for irrigation;
(d) the conversion of one-crop into two-crop land;
(e) the drainage, reclamation from reverse or other waters or
protection from floods or from erosion or other damage by water,
of land used for agricultural purposes, or of waste-land which is
culturable;
(f) the reclamation, clearance, enclosure or permanent
improvement of land for agricultural purposes;
 (g) the renewal or reconstruction of any of the foregoing works
or alterations therein or additions thereto; and
(h) the planting or protection and maintenance of fruit trees, timber
trees and other useful trees and, plants."
25. Sections 4 and 5 have a material bearing on the present
controversy and are hence extracted below:
"4. Tenant entitled to compensation for improvements.-(1) Every
tenant shall, on eviction, be entitled to compensation for
improvements which were made by him, his predecessor- ininterest or by any person not in occupation at the time of the
eviction who derived title from either of them and for which
compensation had not already been paid, and every tenant to whom
compensation is so due shall, notwithstanding the determination
of the tenancy of the payment or tender of the mortgage money
or premium, if any, be entitled to remain in possession until eviction
in execution of a decree or order of court:
ASGAR & ORS. v. MOHAN VARMA & ORS.
[DR. DHANANJAYA Y CHANDRACHUD, J.]
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 Provided that nothing herein contained shall be construed as
affecting the provisions of the Kerala Land Conservancy Act,
1957:
Provided further that this section shall not apply to tenants holding
lands under the Government,
(2) A tenant so continuing in possession shall, during such
continuance, hold as a tenant subject to the terms of his lease or
mortgage, if any.
5. Decree in eviction to be conditional on payment of
compensation.- (1) In a suit for eviction instituted against a tenant
in which the plaintiff succeeds and the defendant establishes a
claim for compensation due under section 4 for improvements,
the court shall ascertain as provided in section 7 to 16, the amount
of the compensation and shall pass a decree declaring the amount
so found due and ordering that on payment by the plaintiff into the
court of the amount so found due and also the mortgage money or
the premium, as the case may be, the defendant shall put the
plaintiff into possession of the land with the improvements thereon.
(2) If in such suit the court finds any sum of money due by the
defendant to the plaintiff for rent, or otherwise in respect of the
tenancy, the court shall set off such sum against the sum found
due under sub section (1), and shall pass a decree declaring as
the amount payable to him on eviction the amount, if any, remaining
due to the defendant after such set-off:
Provided that the court shall not set off any sum of money due for
rent as aforesaid, if such sum is not legally recoverable.
(3) The amount of compensation for improvements made subsequent to the date up to which compensation for improvements
has been adjudged in the decree and the revaluation of an
improvement, for which compensation has been so adjudged,
when and in so far as such re-valuation may be necessary with
reference to the condition of such improvement at the time of
eviction as well as any sum of money accruing due to the plaintiff
subsequent to the said date for rent, or otherwise in respect of the
tenancy, shall be determined by order of the court executing the
decree and the decree shall be varied in accordance with such
order.
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(4) Every matter arising under subsection (3) shall be deemed to
be a question relating to the execution of a decree within the
meaning of sub-section (1) of section 47 of the Code of Civil
Procedure, 1908."
26. Sub-section 1 of Section 4 stipulates that every tenant shall,
on eviction, be entitled to compensation for improvements which were
made by him, or his predecessor-in-interest or by any person who though
not in occupation at the time of eviction, has derived title from either of
them. Under sub-section 1, such a person is entitled, notwithstanding the
determination of the tenancy, to remain in possession until eviction in
execution of a decree or order of a court. Sub-section 1 of Section 5
indicates that in a suit for eviction instituted against a tenant in which the
plaintiff succeeds and the defendant establishes a claim for compensation,
the court is required to ascertain the amount of compensation (under
Sections 7 to 16). The court will then pass a decree declaring the amount
found due and that on payment by the plaintiff into the court of the
amount found due, the defendant shall place the plaintiff in possession of
the land with the improvements thereon. The provisions contained in
sub-section 1 of Section 5 indicate that a determination of the amount of
compensation which is payable to the tenant precedes the passing of the
ultimate decree and the plaintiff would be entitled to be placed into
possession conditional on the deposit in court of compensation found
due. Sub-section 2 of Section 5 enables the plaintiff to seek a set off on
account of money due by the defendant for rent against the amount
which is found due to the defendant by way of compensation. Subsection 3 of Section 5 provides for an eventuality where improvements
have been made subsequent to the date upto which compensation for
improvements has been adjudged in the decree. On account of such
improvements after the passing of the decree, the amount due will be
determined by the court executing the decree upon which the decree
shall be varied in accordance with such order.
27. The provisions contained in the Act of 1958 came up for
consideration before a two judge Bench of this Court in Shamma Bhatt
v T Ramakrishna Bhatt7. Justice V Khalid, speaking for this Court
held:
"8...Section 5 comes into operation only when a defendant against
whom a suit for eviction is instituted establishes a claim for
compensation under the Act. The judgment of the High Court
7 (1987) 2 SCC 416
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[DR. DHANANJAYA Y CHANDRACHUD, J.]
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rendered in 1969 has clearly held that the value of improvement
awarded was not under Section 4 of the Act but was an amount
agreed by the plaintiff. The appellants cannot succeed and have
not succeeded in satisfying us that they ever made a claim for
compensation under Section 4 of the Act and succeeded in such a
claim. Therefore their further claim for getting the improvements
revalued cannot be accepted."8
28. In the present case, what the appellants now seek to assert is
that in pursuance of the provisions of Section 4(1), they are entitled to
remain in possession until their claim for compensation for the
improvements made on the land is adjudicated upon. As we have found
earlier, the claim which the appellants asserted in Execution Application
38 of 2009 was specifically for declaring that they were entitled to remain
in possession as lessees and that the respondents were not entitled to
dispossess them from the property in their possession. Though they sought
to assert that claim in their character as lessees, the issue which requires
consideration is whether the claim to compensation under Section 4(1)
of the Act of 1958 could have been asserted in the earlier proceedings
and should have been asserted then.
29. The substantive part of Section 11 of the CPC together with
Explanation IV provide thus:
"11. Res judicata.-No Court shall try any suit or issue in which
the matter directly and substantially in issue has been directly and
substantially in issue in a former suit between the same parties, or
between parties under whom they or any of them claim, litigating
under the same title, in a Court competent to try such subsequent
suit or the suit in which such issue has been subsequently raised,
and has been heard and finally decided by such Court.
Explanation IV- Any matter which might and ought to have been
made ground of defence or attack in such former suit shall be
deemed to have been a matter directly and substantially in issue
in such suit."
Under Section 11, a matter which has been directly and
substantially in issue in a former suit between the same parties or between
parties litigating under the same title cannot be raised before a court
subsequently, where the issue has been heard and finally decided by a
competent court. Explanation IV enacts a deeming fiction. As a result
8 Id at page 422
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of the fiction, a matter which "might and ought" to have been made a
ground of defence or attack in a former suit shall be deemed to have
been a matter directly and substantially in issue in such a suit. In other
words, Explanation IV is attracted when twin conditions are satisfied:
the matter should be of a nature which might and ought to have been
made a ground of defence or attack in a former suit. Justice S Rangarajan
(as the learned Judge then was) sitting as a Single Judge of the Delhi
High Court in Delhi Cloth & General Mills Co. Ltd v Municipal
Corporation of Delhi9 noticed this feature :
"35...The words employed - might and ought - are cumulative;
they are not in the alternative. It is a well-established rule that any
plea which if taken would have been inconsistent with or destructive
of the title in the earlier suit is not a matter which ought to be
raised therein because even though it might also have been raised
in the alternative. This aspect was explained by the Judicial
Committee
of
the
Privy
Council
in Kameswar
Pershad v. Rajkumari Ruttan Koer (I.L.R. 20 Calcutta 79 at p.
85). The possibility of merely raising it as a ground of attack or
defence, at least in the alternative, is alone not sufficient; the test
is one which is more compulsive, namely, that the said plea "ought"
to have been taken as a ground of attack or defence.