Supreme Court on Res Judicata: Dismissal for Default Does Not Bar Fresh Claim, But Abandonment May Cost Relief
In Sharada Sanghi & Ors. v. Asha Agarwal & Ors., the Supreme Court held that dismissal of a suit for default does not operate as res judicata because there is no adjudication on merits. However, the Court clarified that a party who repeatedly allows proceedings to be dismissed for non-prosecution and fails to pursue restoration or fresh remedies may be denied relief on equitable grounds, as such conduct can amount to abuse of process of court.
A Bench of Justice Dipankar Datta and Justice Augustine George Masih dismissed the appeal in a property dispute relating to a decree for specific performance, holding that although res judicata under Section CPC was not attracted, the appellants could not enforce the decree through execution proceedings after consciously abandoning earlier suits challenging rival sale deeds.
The appellants, original plaintiffs and decree-holders in a 1988 suit for specific performance concerning immovable property in Hyderabad, had obtained a decree in 1998. At the execution stage, third parties resisted possession claiming independent title on the basis of sale deeds executed in July 1990. Though the appellants had earlier filed separate suits seeking cancellation of those sale deeds, both suits and restoration applications were dismissed for default, leaving the rival title claims undecided on merits.
The Supreme Court held that while dismissal for default does not bar a fresh suit, a litigant who abandons available remedies cannot later revive the same dispute in collateral or execution proceedings under Order XXI Rule CPC. The Court found the appellants’ conduct lacking in bona fides and amounting to abuse of judicial process, and therefore upheld the refusal to grant them the benefit of the decree in execution, while affirming the dismissal of the appeal.