We always come across these two terms which seems analogous to each other and yet have a completely different meaning. These are subject matter and matter in issue. If vaguely understood, we can construe that both these terms are quintessentially important for a suit and thus are an important element of a suit.
A subject matter in a suit can either be property or some personal rights of the plaintiff. There cannot be practically anything other than these things for a subject matter of a suit. In terms of property, it may either be rent, or a dispute related to mortgage, redemption, mesne profits, sale, gift, etc., and the personal rights of plaintiff have a wider umberella and include everything else. But it must be kept in mind there exists a test for a suit to know which rights are enforceable or and which ones are not. Section 9 f the Code of Civil Procedure, 1908 provides for this test. It says that the Court shall have jurisdiction to try all suits of civil nature excepting suits of which their cognizance is expressly or impliedly barred. Therefore, it can be adduced that only suits of civil nature are enforceable. A suit of civil nature is one where the right must be granted and protected which is enjoyed in the personal capacity of individual and is violated and same is enforced by the law. It is to be kept in mind that though a suit is not a civil proceeding but t is of civil nature.
Suits relating to property include right in property and right over property. Rights in property are therefore classified as those rights relating to movable property, immovable property, tangible property and intangible property. Right over property are ones which are of nature such a right to fishing, right to collect reeds, right to discharge water, etc. While personal rights of an individual can be right to vote, right of worship, contractual rights, rights of burial and cremation, etc. A third category is also observed which involves around matrimonial rights. These can be related to marriage, divorce, restitution of conjugal rights, etc. Whereas disputes which are not of civil nature are ones, on which subject matter could not be based upon. These can be political disputes which may be promises of purely political matter or religious matters, caste matters which are specifically social wrongs or foreign diplomatic matters, etc.
The proviso to section 9, bearing exclusive barring power, provides that if principle question is of a civil nature and the adjudication incidentally involves determination relating to caste or religious rites, in such a case the court has jurisdiction to adjudicate upon incidental question also in order to decide the principal question. Therefore it widens the door for subject matter of a suit. While a cause of action is the existent legal right and violation of the same, it enables the court to understand the subject matter of the suit and on that basis, the court conducts the suit.
It can be established that subject matter of the suit is the particular thing in respect of which the suit has been filed. It can either be some property upon which the plaintiff exercises his legal right or it can be a personal right of the plaintiff not related to any property. To finally put the theory regarding the subject matter into an practical illustration, let’s assume there exists persons F and S where the question in issue is whether F is the legitimate father of S? In such a suit, the cause of action will be an existent legal right while the subject matter of such suit will be what kind of legal right is in existence which in this case is legitimacy and paternity. While in another example, in a suit of foreclosure by the mortgagor against mortgagee, the cause of action would be of foreclosure, while the subject matter would be the mortgaged property.
Matter in issue on the other hand are the rights litigated between the parties, that is the facts on which the right is claimed and the law applicable to the determination of the issues. In every suit the said cause of action has to be either proved or disproved by the adverse parties. The process of proving and disproving can be done on basis of certain facts. These facts which essentially go on to prove or disprove the cause of action will be called the matter in issue. Matter in issue may be classified as under matter directly and substantially in issue and matter collaterally and incidentally in issue. Matters which are directly and substantially in issue are the ones from which we seek a relief. Basically such matter would depend upon whether a decision on such an issue would materially affect the decision of a suit. It can further be divided into matter actually in issue and matter constructively in issue.
When a matter is decided on merits, such a matter is actually in issue while on the other hand, when the words “might and ought” comes into question, such matters are construed to be constructively in issue. It means that matter which might and ought to have been made a ground of defence or attack in a former suit, but which has not been made a ground of attack or defence, shall be deemed to have been a matter directly and substantially in issue in such suit. Doctrine of res judicata will apply in suits involving the matters directly and substantially in issue.
The matters incidentally or collaterally in issue means an issue which is contrary to matter directly and substantially in issue. No relief is claimed from this matter, since these are in issue only for the fact finding of the court. For example, in a suit, if for determination of matters directly in issue, the court so requires such facts or certain points of determination to be adduced, such fact finding would be matters incidentally and collaterally in issue. And therefore, no res judicata will apply on suits having such ancillary matters. All these submissions draw the meaning of the subject matter and matter in issue.
 Mathura Prasad v. Dossibai N.B. Jeejeebhoy AIR 1971 SC 2355
 Section 11 explanation IV