Supreme Court: Dismissal Due to Default Doesn’t Bar New Suit on Same Issue

The Supreme Court recently ruled that the dismissal of a suit for default under Order IX Rule 2 or Rule 3 of the Civil Procedure Code (CPC) does not amount to a judgment or decree, and therefore, the principle of res judicata does not apply. As a result, a fresh suit based on the same cause of action is permissible.

A bench comprising Justices J.B. Pardiwala and R. Mahadevan noted:
“It is, therefore, clear that an order of dismissal of a suit or application in default under Rule 2 or Rule 3 of Order IX of the C.P.C. is neither an adjudication or a decree nor it is an appealable order. If that is so, such order of dismissal of a suit under Rule 2 or Rule 3 of Order IX of the C.P.C. does not fulfill the requirement of the term ‘judgment’ or ‘decree’, inasmuch as there is no adjudication. In our considered opinion, therefore, if a fresh suit is filed, then such an order of dismissal cannot and shall not operate as res judicata.”

Case Context:
In this matter, the plaintiff’s father had initially filed a suit for declaration and permanent injunction, which was dismissed under Order IX Rule 2 CPC due to his absence. An application for restoration under Order IX Rule 4 was subsequently filed but rejected and attained finality. Later, the plaintiff filed a new suit seeking the same relief. The trial court ruled in favor of the plaintiff, permitting the suit. Although the First Appellate Court reversed this decision, the High Court upheld the trial court’s view, allowing the plaintiff to proceed.

The defendant challenged the High Court’s ruling before the Supreme Court, arguing that the fresh suit should be barred by res judicata. However, the Supreme Court disagreed, stating that a dismissal for default under Order IX does not equate to an adjudication on merits and thus does not prevent filing a new suit.

Key Insight:
The Court clarified that an order dismissing a suit for non-appearance does not amount to a final decision on the dispute. Hence, litigants retain the right to initiate a fresh suit on the same grounds, subject to the law of limitation.