“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.”= 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.


Hon’ble Dr. Justice D.Y. Chandrachud

REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 1500 OF 2019
(@SLP(C) No. 1216 OF 2016)
ASGAR & ORS. Appellant(s)

VERSUS
MOHAN VARMA & ORS. RESPONDENT(s)
J U D G M E N T
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
1
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
1 “The Act of 1958”
2 The TP Act
3 (O S No. 1 of 1964)
2
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.
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
4 O S No. 553 of 1991
3
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.
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
5 The CPC
4
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
5
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.
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;
6 Writ Petition (c) No. 2125 of 2015
6
(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;
(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
7
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 judgmentdebtor 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;
8
(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
9

  1. 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 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
    10
    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 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.
    11
    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.
    12
    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,
    sub-lessee, 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,
    13
    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 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:
    14
    “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 predecessorin-interest 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:
    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.
  2. 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 setoff:
    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
    sub-sequent 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
    15
    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.
    (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
    16
    against the amount which is found due to the defendant by way of compensation.
    Sub-section 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 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
7 (1987) 2 SCC 416
8 Id at page 422
17
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 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
18
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. These features would of
course depend upon the particular facts of each case.”10
The words “might and ought” are used in a conjunctive sense. They denote that a
matter must be of such a nature as could have been raised as a ground of defence
or attack and should have been raised in the earlier suit.
30 The “might and ought” requirement was construed by the Privy Council in a
judgment of 1892 in Kameswar Pershad v Rajkumari Ruttun Koer11. Lord Morris,
speaking for the Privy Council, held thus:
“That it “might” have been, made a ground of attack is clear.
That it “ought” to have been, appears to their Lordships to
depend upon the particular fact of each case. Where matters
are so dissimilar that their union might lead to confusion, the
construction of the word “ought” would become important; in
this case the matters were the same. It was only an
alternative way of seeking to impose a liability upon Pun
Bahadoor, and it appears to their Lordships that the matter
“ought” to have been made a ground of attack in the former
9 ILR (1975) II Delhi 174
10 Id at page 194
11 1892 SCC OnLine PC 16
19
suit, and therefore that it should be “deemed to have been a
matter directly and substantially in issue” in the former suit,
and is res judicata.”12
The classical dictum on the subject finds formulation in the judgment of Wigram, V C
in Henderson v Henderson13 :
“…I believe, I state the rule of the court correctly, when I say,
that where a given matter becomes the subject of litigation in,
and of adjudication by, a court of competent jurisdiction, the
court requires the parties to that litigation to bring forward
their whole case, and will not (except under special
circumstances) permit the same parties to open the same
subject of litigation in respect of a matter which might have
been brought forward as part of the subject in contest, but
which was not brought forward only because they have, from
negligence, inadvertence, or even accident, omitted part of
their case. The plea of res judicata applies, except in special
cases, not only to points upon which the court was actually
required by the parties to form an opinion and pronounce a
judgment, but to every point which properly belonged to the
subject of litigation and which the parties, exercising
reasonable diligence, might have brought forward at the
time…”
In Greenhalgh v Mallard14, Lord Justice Somervell, speaking for the Court of
Appeal, held :
“…I think that on the authorities to which I will refer it would
be accurate to say that res judicata for this purpose is not
confined to the issues which the court is actually asked to
decide, but that it covers issues or facts which are so clearly
part of the subject-matter of the litigation and so clearly could
have been raised that it would be an abuse of the process of
the court to allow a new proceeding to be started in respect of
them”.
12 Id at page 238
13 67 E.R. 313
14 (1947) 2 All ER 255
20
In Johnson v Gore Wood & Co (a firm)15, Lord Bingham while adverting to the
dictum in Henderson, noted that the underlying public interest in res judicata (as
indeed in cause of action estoppel and issue estoppel) has a common element:
“…The underlying public interest is the same: that there
should be finality in litigation and that a party should not be
twice vexed in the same matter. This public interest is
reinforced by the current emphasis on efficiency and
economy in the conduct of litigation, in the interests of the
parties and the public as a whole. The bringing of a claim or
the raising of a defence in later proceedings may, without
more, amount to abuse if the court is satisfied (the onus being
on the party alleging abuse) that the claim or defence should
have been raised in the earlier proceedings if it was to be
raised at all. I would not accept that it is necessary, before
abuse may be found, to identify any additional element such
as a collateral attack on a previous decision or some
dishonesty, but where those elements are present the later
proceedings will be much more obviously abusive, and there
will rarely be a finding of abuse unless the later proceeding
involves what the court regards as unjust harassment of a
party. It is, however, wrong to hold that because a matter
could have been raised in early proceedings it should have
been, so as to render the raising of it in later proceedings
necessarily abusive. That is to adopt too dogmatic an
approach to what should in my opinion be a broad, meritsbased judgment which takes account of the public and private
interests involved and also takes account of all the facts of
the case, focusing attention on the crucial question whether,
in all the circumstances, a party is misusing or abusing the
process of the court by seeking to raise before it the issue
which could have been raised before. As one cannot
comprehensively list all possible forms of abuse, so one
cannot formulate any hard and fast rule to determine whether,
on given facts, abuse is to be found or not. Thus while I would
accept that lack of funds would not ordinarily excuse a failure
to raise in earlier proceedings an issue which could and
should have been raised then, I would not regard it as
necessarily irrelevant, particularly if it appears that the lack of
funds has been caused by the party against whom it is sought
to claim. While the result may often be the same, it is in my
view preferable to ask whether in all the circumstances a
15 [2001] 2 WLR 72
21
party’s conduct is an abuse than to ask whether the conduct
is an abuse and then, if it is, to ask whether the abuse is
excused or justified by special circumstances. Properly
applied, and whatever the legitimacy of its descent, the rule
has in my view a valuable part to play in protecting the
interests of justice.”
Lord Millett held thus:
“…It is one thing to refuse to allow a party to relitigate a
question which has already been decided; it is quite another
to deny him the opportunity of litigating for the first time a
question which has not previously been adjudicated upon.
This latter (though not the former) is prima facie a denial of
the citizen’s right of access to the court conferred by the
common law and guaranteed by Article 6 of the Convention
for the Protection of Human Rights and Fundamental
Freedoms (Rome, 4th. November 1950). While, therefore, the
doctrine of res judicata in all its branches may properly be
regarded as a rule of substantive law, applicable in all save
exceptional circumstances, the doctrine now under
consideration can be no more than a procedural rule based
on the need to protect the process of the Court from abuse
and the defendant from oppression…”
31 Mr Giri urged, relying upon the above decision of the House of Lords that in
construing the expression “might and ought”, it is necessary for the court to bear in
mind the fundamental distinction between res judicata and constructive res judicata.
He urged that whereas the former encompasses a matter which was directly and
substantially in issue in a previous suit between the same parties and has been
adjudicated upon, the latter brings in a deeming fiction according to which a matter
which might and ought to have been advanced in a previous suit would be deemed
22
to be directly and substantially in issue. He therefore urges that a degree of
circumspection must be exercised in the application of the principle of constructive
res judicata.
32 We are not inclined to decide this question on a priori consideration, for the
simple reason that under the CPC, both res judicata (in the substantive part of
Section 11) and constructive res judicata (in Explanation IV) are embodied as
statutory principles of the law governing civil procedure. The fundamental policy of
the law is that there must be finality to litigation. Multiplicity of litigation enures to the
benefit, unfortunately for the decree holder, of those who seek to delay the fruits of a
decree reaching those to whom the decree is meant. Constructive res judicata, in
the same manner as the principles underlying res judicata, is intended to ensure that
grounds of attack or defence in litigation must be taken in one of the same
proceeding. A party which avoids doing so does it at its own peril. In deciding as to
whether a matter might have been urged in the earlier proceedings, the court must
ask itself as to whether it could have been urged. In deciding whether the matter
ought to have been urged in the earlier proceedings, the court will have due regard
to the ambit of the earlier proceedings and the nexus which the matter bears to the
nature of the controversy. In holding that a matter ought to have been taken as a
ground of attack or defence in the earlier proceedings, the court is indicating that the
matter is of such a nature and character and bears such a connection with the
controversy in the earlier case that the failure to raise it in that proceeding would
debar the party from agitating it in the future.
23
33 In State of U P v Nawab Hussain16, a three judge Bench of this Court noted
that the two principles of res judicata and constructive res judicata seek to achieve
the common objective of assuring finality to litigation. Justice P N Shinghal
observed:
“3. The principle of estoppel per rem judicatam is a rule of
evidence. As has been stated in Marginson v. Blackburn
Borough Council [(1939) 2 KB 426 at p. 437], it may be said
to be “the broader rule of evidence which prohibits the
reassertion of a cause of action”. This doctrine is based on
two theories: (i) the finality and conclusiveness of judicial
decisions for the final termination of disputes in the general
interest of the community as a matter of public policy, and (ii)
the interest of the individual that he should be protected from
multiplication of litigation. It therefore serves not only a public
but also a private purpose by obstructing the reopening of
matters which have once been adjudicated upon. It is thus not
permissible to obtain a second judgment for the same civil
relief on the same cause of action, for otherwise the spirit of
contentiousness may give rise to conflicting judgments of
equal authority, lead to multiplicity of actions and bring the
administration of justice into disrepute. It is the cause of
action which gives rise to an action, and that is why it is
necessary for the courts to recognise that a cause of action
which results in a judgment must lose its identity and vitality
and merge in the judgment when pronounced. It cannot
therefore survive the judgment, or give rise to another cause
of action on the same facts. This is what is known as the
general principle of res judicata.

  1. But it may be that the same set of facts may give rise to
    two or more causes of action. If in such a case a person is
    allowed to choose and sue upon one cause of action at one
    time and to reserve the other for subsequent litigation, that
    would aggravate the burden of litigation. Courts have
    therefore treated such a course of action as an abuse of its
    process and Somervell, L.J., has answered it as follows
    in Greenhalgh v. Mallard [(1947) All ER 255 at p. 257] :
    “I think that on the authorities to which I will refer it would be
    accurate to say that res judicata for this purpose is not
    16 (1977) 2 SCC 806
    24
    confined to the issues which the court is actually asked to
    decide, but that it covers issues or facts which are so clearly
    part of the subject-matter of the litigation and so clearly could
    have been raised that it would be an abuse of the process of
    the court to allow a new proceeding to be started in respect of
    them.”
    This is therefore another and an equally necessary and
    efficacious aspect of the same principle, for it helps in raising
    the bar of res judicata by suitably construing the general
    principle of subduing a cantankerous litigant. That is why this
    other rule has some times been referred to as constructive
    res judicata which, in reality, is an aspect or amplification of
    the general principle.”17
    A Constitution Bench of this Court in Direct Recruit Class II Engg. Officers’ Assn.
    v State of Maharashtra18 referred to the decision of a three judge bench of this
    Court in Forward Construction Co. v Prabhat Mandal (Regd.), Andheri19 and
    noted the following position in law:
    “20…an adjudication is conclusive and final not only as to the
    actual matter determined but as to every other matter
    which the parties might and ought to have litigated and
    have had decided as incidental to or essentially
    connected with subject matter of the litigation and every
    matter coming into the legitimate purview of the original
    action both in respect of the matters of claim and
    defence…”20
    (emphasis supplied)
    34 In determining as to whether the bar of constructive res judicata stands
    attracted, it is necessary to advert to the earlier application which was filed by the
    appellants in the execution proceedings. The appellants styled the application as
    17 Id at pages 809-810
    18 (1990) 2 SCC 715
    19 (1986) 1 SCC 100
    20 Id at page 112
    25
    one under Order XXI Rule 99 of the CPC but that, in our view, is not determinative of
    the true nature of the application. Order XXI Rule 97 provides as follows:
    “97. Resistance or obstruction to possession of immovable
    property.—(1) Where the holder of a decree for the
    possession of immovable property or the purchaser of any
    such property sold in execution of a decree is resisted or
    obstructed by any person in obtaining possession of the
    property, he may make an application to the Court
    complaining of such resistance or obstruction. [(2) Where any
    application is made under sub-rule (1), the Court shall
    proceed to adjudicate upon the application in accordance with
    the provisions herein contained.]”
    Order XXI Rule 99 provides thus:
    “[99. Dispossession by decree-holder or purchaser.—(1)
    Where any person other than the judgment debtor is
    dispossessed of immovable property by the holder of a
    decree for the possession of such property or, where such
    property has been sold in execution of a decree, by the
    purchaser thereof, he may make an application to the Court
    complaining of such dispossession.
    (2) Where any such application is made, the Court shall
    proceed to adjudicate upon the application in accordance with
    the provisions herein contained.]”
    35 In Brahmdeo Chaudhary v Rishikesh Prasad Jaiswal21
    , this Court held that
    the view taken by the High Court that the only remedy available to a stranger to a
    decree who claims an independent right, title or interest in the property is to pursue
    the remedy under Order XXI Rule 99, was unsustainable. The court held that a
    stranger to a decree is entitled to agitate his/her grievance and claim for adjudication
    for an independent right, title and interest in the decretal property, even after being
    dispossessed in accordance with Order XXI Rule 99. Order XXI Rule 97 deals with
    21 (1997) 3 SCC 694
    26
    the stage which is prior to the actual delivery of possession and the grievance of the
    obstructionist can be adjudicated upon before the actual delivery of possession to
    the decree holder. In other words, both sets of remedies are available to a stranger
    to the decree. Justice S B Majmudar, speaking for the Court held:
    “9…the High Court has totally ignored the scheme of Order
    21, Rule 97 in this connection by taking the view that only
    remedy of such stranger to the decree lies under Order 21,
    Rule 99 and he has no locus standi to get adjudication of his
    claim prior to the actual delivery of possession to the decreeholder in the execution proceedings. The view taken by the
    High Court in this connection also results in patent breach of
    principles of natural justice as the obstructionist, who alleges
    to have any independent right, title and interest in the decretal
    property and who is admittedly not a party to the decree even
    though making a grievance right in time before the warrant for
    execution is actually executed, would be told off the gates
    and his grievance would not be considered or heard on merits
    and he would be thrown off lock, stock and barrel by use of
    police force by the decree-holder. That would obviously result
    in irreparable injury to such obstructionist whose grievance
    would go overboard without being considered on merits and
    such obstructionist would be condemned totally unheard.
    Such an order of the executing court, therefore, would fail
    also on the ground of non-compliance with basic principles of
    natural justice. On the contrary the statutory scheme
    envisaged by Order 21, Rule 97 CPC as discussed earlier
    clearly guards against such a pitfall and provides a statutory
    remedy both to the decree-holder as well as to the
    obstructionist to have their respective say in the matter and to
    get proper adjudication before the executing court and it is
    that adjudication which subject to the hierarchy of appeals
    would remain binding between the parties to such
    proceedings and separate suit would be barred with a view to
    seeing that multiplicity of proceedings and parallel
    proceedings are avoided and the gamut laid down by Order
    21, Rules 97 to 103 would remain a complete code and the
    sole remedy for the parties concerned to have their
    grievances once and for all finally resolved in execution
    proceedings themselves.”22
    22 Id at page 702
    27
    36 Under Order XXI Rule 10123, all questions including questions relating to right,
    title and interest in the property arising between parties to a proceeding on an
    application under Rule 97 or Rule 99 or their representatives shall be determined by
    the court and not by a separate suit. In Shreenath v Rajesh24
    , Justice A P Misra,
    speaking for a two judge Bench of this Court, while interpreting the expression “any
    person” in Rule 97, held thus :
    “10…We find the expression “any person” under sub-clause
    (1) is used deliberately for widening the scope of power so
    that the executing court could adjudicate the claim made in
    any such application under Order 21 Rule 97. Thus by the
    use of the words “any person” it includes all persons resisting
    the delivery of possession, claiming right in the property, even
    those not bound by the decree, including tenants or other
    persons claiming right on their own, including a stranger.”25
    37 These principles have been reiterated in Har Vilas v Mahendra Nath26, in
    which it has been held that the provisions of Order XXI Rule 99 will not defeat the
    right of a third person claiming to be in possession of the property forming the
    subject matter of a decree in his own right to get his objection decided under Rule
    97, at a stage prior to dispossession.
    38 In a succinct elucidation of the law in Nusserwanji E Poonegar v Mrs
    23 Order XXI Rule 101 provides thus :
    Question to be determined.- All questions (including questions relating to right, title or interest in the property)
    arising between the parties to a proceeding on an application under rule 97 or rule 99 or their representatives, and
    relevant to the adjudication of the application, shall be determined by the court dealing with the application, and not by a
    separate suit and for this purpose, the court shall, notwithstanding anything to the contrary contained in any other law for
    the time being in force, be deemed to have jurisdiction to decide such questions.
    Order XXI Rule 103 provides thus :
    Orders to be treated as decrees.- Where any application has been adjudicated upon under rule 98 or rule
    100, the order made thereon shall have the same force and be subject to the same conditions as to an appeal or
    otherwise as if it were a decree.
    24 (1998) 4 SCC 543
    25 Id at page 549
    26 (2011) 15 SCC 377
    28
    Shirinbai F Bbesania27
    , Justice R A Jahagirdar as a Single Judge of the Bombay
    High Court interpreted Rule 101 of Order XXI:
    “10. From the rule extracted above, it is easily seen that the
    language of the rule is peremptory and the powers given to
    the executing Court under the said rule are plenary. The
    powers given to the executing Court under Rule 101 are not
    qualified or hedged by any restrictions. On the other hand it
    shows that the executing Court is required to adjudicate upon
    all questions mentioned in the said rule as if it had jurisdiction
    to deal with every question that may so arise. By a legal
    fiction, an executing Court which may otherwise have no
    jurisdiction is invested with the jurisdiction to try all questions
    under the aforesaid rule.”28
    39 In view of the settled position in law, as it emerges from the above decisions,
    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
    27 AIR 1984 Bom 357
    28 Id at page 359
    29
    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.
    40 The claim which the appellants have now sought to assert for compensation
    under Section 4(1) of the Act of 1958 is intrinsically related to the claim which they
    asserted in the earlier round of proceedings to remain in possession. Indeed as we
    have seen, 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 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.
    41 This view which we have 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
    30
    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.
    42 For the above reasons, we find no merit in the appeal. The appeal shall stand
    dismissed. Pending applications, if any, are disposed of. There shall be no order as
    to costs.
    …………….……………………………………………….J
    [Dr DHANANJAYA Y CHANDRACHUD]
    ..……………..……………………………………………..J
    [HEMANT GUPTA]
    New Delhi;
    February 05, 2019.
    31