The meaning of the phrase “heard and finally decided” was considered in Krishan Lal v. State of J&K, (1994) 4 SCC 422 where it was held, matter must have been heard on merits to have been “heard and finally decided”. Erach Boman Khavar v. Tukaram Shridhar Bhat, (2013) 15 SCC 655 has held, res judicata can only apply when there has been a conscious adjudication of the issue on merits.

Res judicata cannot apply solely because the issue has previously come up before Court. Doctrine will apply where the issue has been “heard and finally decided” on merits through a conscious adjudication by Court.

– Hon’ble Justice Dr. D.Y. Chandrachud, Ebix Singapore Private Ltd. v. Committee of Creditors of Educomp Solutions Ltd., [Civil Appeal No. 3224 of 2020] decided on 13.09.2021.

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Syed Mohd. Salie Labbai v. Mohd. Hanifa, (1976) 4 SCC 780 noted, ‘best method’ to decide question of res judicata is to determine case of parties, as they are put forward in their respective pleadings of their previous suits, and then to find out as to what had been decided which operate as res judicata.

We are unable to accept, res judicata can never be decided as a preliminary issue.

The locus classicus for determining if an issue was ‘directly and substantially’ decided in previous suit is Sajjadanashin Syed v. Musa Dadabhai Ummer, (2000) 3 SCC 350. In a more recent decision, Nand Ram v. Jagdish Prasad, (2020) 9 SCC 393 reiterated, if a matter has only collaterally or in an auxiliary manner been in issue or decided in an earlier proceeding, finding would not ordinarily be res judicata in a later proceeding where matter is directly and substantially in issue. The twin test used for identification of whether an issue has been conclusively decided in previous suit is: whether adjudication of an issue was ‘necessary’ for deciding on principle issue (‘necessity test’) and whether decision in suit is based upon decision on that issue (‘essentiality test’).

– Hon’ble Justice Dr. D.Y. Chandrachud, Jamia Masjid v. K.V. Rudrappa, [Civil Appeal No. 10946 of 2014] decided on 23.09.2021.

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While determining applicability of principle of res judicata under Section 11 of The Code of Civil Procedure, 1908 Court must be conscious, grave issues of public interest are not lost in woods merely because it is initially filed and dismissed, without a substantial adjudication on merits. There is a trend of poorly pleaded Public Interest Litigations being filed instantly with a conscious intention to obtain a dismissal and preclude those genuine from approaching Court in public interest. Court must interpret principles of res judicata or constructive res judicata in a manner which does not debar access to justice.

– Hon’ble Justice Dr. D.Y. Chandrachud, National Confederation of Officers Association of Central Public Sector Enterprises v. Union of India, [Writ Petition (Civil) No. 229 of 2014] decided on 18.11.2021.