2025 (5) TMI 591 - HC - Customs

Pinciple of Constructive Res Judicata - Determination of rewards for informers - Constitutional validity of Clause 3.3 of the Guidelines for Grant of Reward to Informers and Government Servants 2015 - HELD THAT - The principle of Constructive Res Judicata is an extension of the principle of Res Judicata. The origin of this principle in law can be found in the provisions contained in Order II Rule 2 read with Section 11 of the CPC - Order II Rule 2 pertains to relinquishment of part of claim according to which in a situation where a plaintiff omits to sue in respect of or intentionally relinquishes any portion of his claim he cannot afterwards sue in respect of the omitted portion of his claim or the claim which has been relinquished. The principle of res judicata though appears to be technical or artificial prescribed by the Code of Civil Procedure however the said principle is founded on considerations of public policy as well because in case the doctrine of Constructive Res Judicata is not applied to writ proceedings it may lead to a situation where a party will be entitled to take one proceeding after another and urge new grounds every time which will be inconsistent with the consideration of public policy. The Hon ble Supreme Court in the judgment rendered in the case of Devilal Modi v. Sales Tax Officer Ratlam and Others 1964 (10) TMI 43 - SUPREME COURT has clearly held that principle of Res Judicata would be applicable to the writ proceedings as well though fundamental rights guaranteed in Part III of the Constitution of India are a significant feature of our Constitution and the High Courts under Article 226 are bound to protect these Fundamental Rights. Constructive Res Judicata is based on the principle inter-alia that the parties to a proceeding should present their entire case in one go to avoid multiplicity of litigations over the same issue and that if a party could have raised a particular issue in a prior proceeding but failed to do so even due to negligence or oversight in our opinion such a party will be deemed to have lost the right to raise it in a later proceeding. Such a doctrine has been developed to permit finality in legal proceedings and prevent parties from repeatedly litigating. The principle of Constructive Res Judicata does not require a final judgment on the issue which was not raised earlier. It operates on the premise that the issue should have been included in the earlier proceedings. Challenge to Clause 3.3 of the Guidelines having been omitted by the petitioner in earlier round of litigation in our opinion by applying the principle of Constructive Res Judicata the instant writ petition where a prayer to strike down Clause 3.3 of the Guidelines as being unconstitutional has been made will not be maintainable. If such a challenge is permitted there will be no end to the litigation between the petitioner and the respondents. The principle of Constructive Res Judicata has evolved as a matter of public policy to prevent multiplicity of litigations on an issue. Conclusion - The writ petition challenging Clause 3.3 of the Guidelines for Grant of Reward to Informers and Government Servants 2015 is barred by the principle of Constructive Res Judicata and is dismissed as not maintainable. The prayer made in the present writ petition is barred by the principle of Constructive Res Judicata and therefore the writ petition is not maintainable - Petition dismissed.

1. ISSUES PRESENTED and CONSIDERED

The core legal question considered by the Court was whether the prayer made in the present writ petition challenging Clause 3.3 of the Guidelines for Grant of Reward to Informers and Government Servants, 2015, is barred by the principle of Constructive Res Judicata. The petitioner sought to declare Clause 3.3 unconstitutional and ultra vires, alleging arbitrariness, lack of transparency, and violation of Articles 14 and 21 of the Constitution of India. However, the Court limited its examination primarily to the issue of maintainability of the petition in light of prior adjudications on similar claims by the petitioner.

2. ISSUE-WISE DETAILED ANALYSIS

Applicability of the Principle of Constructive Res Judicata to Writ Proceedings under Article 226 of the Constitution of India

Relevant legal framework and precedents: The principle of Constructive Res Judicata is an extension of the doctrine of Res Judicata, codified in Order II Rule 2 and Section 11 of the Code of Civil Procedure (CPC). Order II Rule 2 bars a plaintiff from suing subsequently on a portion of the claim omitted or intentionally relinquished in an earlier suit. Section 11 bars subsequent suits involving the same parties and issues that were directly and substantially in issue in a prior suit. Explanation IV to Section 11 further clarifies that any matter which might or ought to have been made ground of defence or attack in a former suit is deemed to have been directly and substantially in issue.

However, Section 141 of the CPC excludes proceedings under Article 226 of the Constitution from the applicability of certain procedural provisions of the CPC, including those related to res judicata. Despite this, the Supreme Court has held that the principles underlying Res Judicata and Constructive Res Judicata, grounded in public policy, apply to writ proceedings as well.

Court's interpretation and reasoning: The Court relied heavily on the Supreme Court's judgment in Devilal Modi v. Sales Tax Officer, which held that while fundamental rights are crucial and protected under Article 226, allowing successive writ petitions on the same issue would contravene public policy principles underlying Res Judicata. The Court emphasized that finality of judicial decisions and avoidance of multiplicity of litigation are key public policy considerations.

Further, the Court referred to State of U.P. v. Nawab Hussain, which explained that even if the same facts give rise to multiple causes of action, litigating them piecemeal to prolong litigation is an abuse of process. The Court also noted that the doctrine of Constructive Res Judicata prevents a party from raising issues in subsequent proceedings which could or should have been raised earlier.

The Court further cited Forward Construction Co. v. Prabhat Mandal, which clarified that adjudication is final not only on the actual matters decided but also on all matters that the parties might and ought to have litigated. The principle applies to writ petitions, as affirmed by the Constitution Bench in Direct Recruit Class II Engg. Officers' Assn. v. State of Maharashtra and the judgment in M. Nagabhushana v. State of Karnataka, which reiterated that constructive res judicata applies to writ petitions.

Key evidence and findings: The petitioner had earlier filed writ petitions challenging the quantum of reward under the same Guidelines, which were dismissed by both a Single Judge and a Division Bench of the High Court. Clause 3.3 of the Guidelines was available and could have been challenged in those earlier proceedings but was not. The petitioner now sought to challenge the constitutional validity of Clause 3.3 in a fresh writ petition.

Application of law to facts: Given the earlier adjudications and the availability of Clause 3.3 for challenge at that time, the Court found that the petitioner ought to have raised the constitutional challenge in the earlier proceedings. The failure to do so amounted to relinquishment of the right to raise it later, invoking the principle of Constructive Res Judicata.

Treatment of competing arguments: While the petitioner argued that the Guidelines are arbitrary, opaque, and violate fundamental rights, the Court refrained from delving into these substantive issues on merits due to the bar of Constructive Res Judicata. The respondents contended that the reward scheme is ex-gratia and discretionary, not creating any vested right, and that the petitioner's claim was already adjudicated. They also invoked Order II Rule 2 CPC to assert the bar of successive litigation. The Court agreed with the respondents' position on the bar of successive litigation.

Conclusions: The Court concluded that the present writ petition challenging Clause 3.3 of the Guidelines is barred by the principle of Constructive Res Judicata and is therefore not maintainable. The Court dismissed the petition without considering the constitutional validity of the Clause on merits.

3. SIGNIFICANT HOLDINGS

"The principle of Constructive Res Judicata is an extension of the principle of Res Judicata... if any matter which might or ought to have been made a ground of attack or defence shall be deemed to have been a matter directly and substantially in issue in such suit and, therefore, any subsequent suit will not be maintained."

"Though the provisions of CPC contained in Order II Rule 2 and Section 11 may not be strictly applicable to the proceedings under Article 226 of the Constitution of India, however, the broad principles enshrined therein including the principle of Constructive Res Judicata, will have application even to writ proceedings."

"The general principle underlying the doctrine of res judicata is ultimately based on considerations of public policy. One important consideration of public policy is that the decisions pronounced by courts of competent jurisdiction should be final, unless they are modified or reversed by appellate authorities; and the other principle is that no one should be made to face the same kind of litigation twice over, because such a process would be contrary to considerations of fairplay and justice."

"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."

"Constructive Res Judicata is based on the principle inter-alia that the parties to a proceeding should present their entire case in one go to avoid multiplicity of litigations over the same issue, and that if a party could have raised a particular issue in a prior proceeding but failed to do so, even due to negligence or oversight, such a party will be deemed to have lost the right to raise it in a later proceeding."

"If such a challenge is permitted, there will be no end to the litigation between the petitioner and the respondents. The principle of Constructive Res Judicata has evolved as a matter of public policy to prevent multiplicity of litigations on an issue."

Final determination: The writ petition challenging Clause 3.3 of the Guidelines for Grant of Reward to Informers and Government Servants, 2015, is barred by the principle of Constructive Res Judicata and is dismissed as not maintainable.

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