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the issues were:
1. Whether in view of the said consent decree in suit No. 149 of 1960 defendants Nos.

5 and 6 are debarred on principles of res judicata from agitating the question that the said document dated November 27, 1954 as confirmed by their letter dated January 31, L13 Sup. CI/69- 17 1955 and further confirmed by document dated December 1, 1960 is not a lease?

12. Whether in view of the said consent decree, defendants 5 and 6 are estopped from contending and leading any evidence and putting questions in crossexamination of plaintiffs witnesses to show that the said document dated November 27, 1954 as confirmed by their letter dated January 31, 1955 and further confirmed by document dated December 1, 1960 is not a lease ?

Filmistan then applied to the Court of Small Causes for an order that issues Nos. 11, 12 & 13 be tried as preliminary issues. The learned Judge observed that the issues were not purely of law, that in any event the case or any part thereof was not likely to be disposed of on these issues, and that ordinarily in "appealable cases" the Court should, as far as possible, decide all the issues together and that piecemeal trial might result in protracting the litigation. He also observed that the issues were not of law going to the root of the case and were on that account not capable of being decided without recording evidence. A revision application against that order was dismissed in limine by the High Court of Gujarat. When the case reached hearing and the evidence of a representative of Filmistan was. being recorded, counsel for the defendants asked in cross-examination the question whether the "agreement between the plaintiff and defendant Nos. 5 and 6 was a commercial transaction and was not a lease ?" The question was objected to by counsel appearing for Filmistan. Thereafter elaborate arguments were advanced and the Trial Judge passed an order disallowing the objection. The objection to the question raised by Filmistan was not that it related to a matter to be decided by the Court and on which the opinion of witnesses was irrelevant. The objection was raised as an attempt to reopen the previous decision given by the Trial Judge refusing to try issues Nos. 11, 12 & 13 as preliminary issues. Counsel for Filmistan contended that an enquiry into the nature of the legal relationship arising out of the agreement dated December 1, 1960 "was barred by the principle of res judicata and estoppel under the provisions of s. 92 of the Evidence Act", since the question was already concluded by the consent decree in suit No. 149 of 1960. The Trial Judge observed that he had carefully gone through the consent decree and the registered agreement dated December 1, 1960, and he found that the consent decree had not decided that the transaction between the parties of the year 1954 was in the nature of a lease; that in the plaint in the earlier suit it was not even averred that the rights granted were in the nature of leasehold rights; that suit No. 149 of 1960 was for declaration of the rights of Filmistan to exhibit motion pictures, in the theatre under the agreement dated November 27, 1954, and for an injunction restraining the defendants from violating the said rights of Filmistan under the agreement; and that the agreement dated December 1, 1960 was "not plain enough to exclude the oral evidence of the surrounding circumstances and conduct of the parties to explain its terms and language". Accordingly he held that the question asked in cross-examination of the witnesses for Filmistan intended to secure disclosure of the surrounding circumstances and conduct of the parties in order to show in what manner the language of the document was related to the existing facts, could not be excluded. The Court also rejected the contention that there was any bar of estoppel, and held that evidence as to the true nature of the transaction was not inadmissible by virtue of s. 92 of the Evidence Act.
"The question then arises for consideration whether in fact the subordinate Court has decided the question of res judicata", and that "it is true that the jurisdiction of the Court of mall Causes to decide disputes between a tenant and his landlord and falling within the purview of s. 28 of the Bombay Rent Control Act is derived from s. 28 of the said Act, but at the same time if an issue is in fact barred by res judicata, then the Court has no jurisdiction on principles of res judicata to go into that question or to decide that question over again to the extent to which the Court, viz., the trial court in the instant case, proposed to go into that question and allow the whole question, that was closed once for all by consent decree of December 1, 1960, to be reopened, it is proposing to exercise the jurisdiction which is not vested in it by law. It is not open to any Court of law to try an issue over again or reopen the same if an earlier decision operates as res judicata. Once the jurisdiction of the Court has been taken away, any proposal to reopen the question closed by the earlier decision would be exercise of jurisdiction which is not vested in the Court by law and to that extent the decision would become revisable, even if it is the decision as to the res judicata of an issue", and concluded "It is not open to me in revision at this stage to express any opinion about the rights and contentions of the parties with reference to the agreement of December 1, 1960. But the only thing that can be said is that so far as the agreement of November 27, 1954, is con- cerned, it must be held, in view of the consent decree of December 1, 1960, that that document of November 27, 1954, created a lease........

The Trial Judge in overruling the objection did not decide any issues at the stage of recording evidence : he was not called upon to decide any issues at that stage. The observations made by him obviously relate to the arguments advanced at the Bar and can in no sense be regarded even indirectly as a decision on any of the issues. But the High Court has recorded a finding that the agreement dated November 27, 1954, created a lease and that the consent decree operated as res judicata. A consent decree, accord- ing to the decisions of this Court, does not operate as res judicata, because a consent decree is merely the record of a contract between the parties to a suit, to which is superadded the seal of the Court. A matter in contest in a suit may operate as res judicata only if there is an adjudication by the Court : the terms of s. II of the Code leave no scope for a contrary view. Again it was for the Trial Court in the first instance to decide that question and there-after the High Court could, if the matter were brought before it by way of appeal or in exercise of its revisional jurisdiction, have decided that question. In our judgment, the High Court had no jurisdiction to record any finding on the issue of res judicata in a revision application filed against an order refusing to uphold an objection to certain question asked to a witness under examination.