res judicata and precedent

Supreme Court: In an appeal filed under Section 67 of Consumer Protection, 2019 (‘2019 Act') challenging order and judgment passed by National Consumer Disputes Redressal Commission (‘NCDRC') directing the appellant to refund the amount collected towards excess sale area to the respondents, and execute supplementary/correction deeds, the Bench of Sanjiv Khanna*, Bela M. Trivedi and Ujjal Bhuyan, JJ. remanded the matter back to NCDRC for fresh consideration while clarifying the applicability of previous decisions as precedents and restriction of res judicata to specific facts.


The appellant constructed a housing project wherein, an increase and revision in the sale area became a matter of dispute, communicated on 27-04-2017, after allottees/subsequent buyers alleged that there was no increase in carpet area or built-up area. NCDRC directed appellant to refund the amount collected towards excess sale area to the respondents and execute supplementary/correction deeds within 6 weeks.

Court's Analysis of Facts

The Court disagreed with the NCDRC finding of ‘continuing cause of action' till 26-08-2020 (the date when the question of the excess sale area was decided by NCDRC in Pawan Gupta v. Experion Developers Pvt. Ltd., 2020 SCC OnLine NCDRC 788 and Pawan Gupta v. Experion Developers Pvt. Ltd., 2020 SCC OnLine NCDRC 842). The Court explained that the issue of limitation had to be decided in accordance with Section 69 of 2019 Act prescribing 2 years limitation for filing a complaint from the date on which the ‘cause of action' arose. The Court was of the view that since complaint was made on 25-02-2022 and excluding the period between 15-03-2020 to 28-02-2022 due to COVID-19 relaxation by Supreme Court, the said complaints would be well within limitation of 2 years.

The appellant pleaded that Section 9 of Limitation Act, 1963 provided that once limitation starts running, no subsequent disability/inability would stop it, but the Court did not find any merit in the said submission. The Court opined that the appellant’s letter was an assertion without any specific details/particulars. It noted that the appellant had the right to ask for enhanced sale consideration on increase in the sale area, and the said right was not questioned by the respondents, but the computation and calculations were challenged. The ‘cause of action' arose when appellant compelled allottees to make payment but did not furnish the details and particulars which could enable the allottees to ascertain the actual allocated sale area. The Court clarified that the onus to justify and substantiate the claim and calculations of increased sale area was on the appellant. Considering the undisputed fact that sale deeds were executed between 13-04-2018 to 9-01-2020, complaints in the instant case could not be dismissed on the ground of limitation under Section 69 of 2019 Act.

The Court observed that “consumer forums have the power to condone the delay when sufficient cause is shown, even after two years of the ‘cause of action' having arisen.” It further added that NCDRC could always grant an opportunity to the respondents in the absence of any application for condonation of delay.

On appellant's argument on acquiescence and estoppel after respondents sought refund of amount paid without any demur or protest, the Court highlighted that the conveyance deeds were executed on allottees after full payment including that of increased area, paid voluntarily and without reservation. The Court referred to Arifur Rahman Khan v. DLF Southern Homes (P) Ltd., (2020) 16 SCC 512 wherein, it was held that it would be unreasonable to expect that the purchaser must indefinitely defer obtaining a conveyance of the premises purchased for pursuing a compensation claim for delayed handing over of possession, or to forsake the right to claim compensation if they seek to obtain a conveyance deed. It was further held that the subsequent purchasers could not benefit from the said order. The said view was overruled in Laureate Buildwell Pvt. Ltd. v. Charanjeet Singh, 2021 SCC OnLine SC 479 to the extent of restricting subsequent purchaser's entitlement to benefit of the said order and it was held that the extent of relief entitled to such subsequent purchaser would depend upon specific fact and situation.

The Court expressed that “In these cases, it would be fair to assume that the subsequent purchaser had knowledge of the delay, but such knowledge cannot be extended to accept the submission that such delay shall continue indefinitely based on a prior assumption. The equities have to be properly moulded.” Since the said aspects and questions were factual which remained unaddressed in the instant case, the Court remanded the matter back to NCDRC for examining the issue according to the law laid by the Court and application of legal principles.

Cause of Action Explained

The Court explained that “the ‘cause of action' means every fact, which, if traversed, is necessary to prove in order to support the claimant's right to judgment, is not dependent on a decision in another case by an allottee raising a similar issue.”

It further added that “‘Cause of action' being the foundation of the claim refers to the entire set or bundle of facts necessary and material to prove in order to get a judgment. It refers to a definite point of time when the requisite ingredients constituting that ‘cause of action' are complete. The ‘cause of action' is complete when they provide the aggrieved party with the right to invoke jurisdiction of the court/forum. The test is to determine when the aggrieved person could have first maintained action for a successful result.”

Discussion over Doctrine of Merger, Res Judicata and Precedents

The Court reproduced the case history in Pawan Gupta (supra) to decide whether orders passed by Supreme Court in the said case would affect the instant case by applying doctrine of merger, principle of res judicata and rule of precedential value. The Court referred to a catena of cases examining doctrine of merger and cited Kunhayammed v. State of Kerala, (2000) 6 SCC 359 which refers to several decisions and crystallised the legal position that draws a distinction between a simple non-speaking order for Article 136 of Constitution of India and Supreme Court's appellate power. The said decision was reiterated in Khoday Distilleries Ltd. v. Sri Mahadeshwara Sahakara Sakkare Karkhane Ltd., (2019) 4 SCC 376.

The Court clarified that dismissal of appeal in Pawan Gupta (supra), put an end to litigation to that case. The said unreasoned order bars and prevents any tribunal or parties from taking a view which would have the effect of reexamination of the issues and points already determined on application of principle of judicial discipline. Also, dismissal of appeal would not operate as res judicata for respondents in the instant case as they were not parties to that case and proceedings initiated by Pawan Gupta were fact specific and not in representative capacity and would not attract Article 141 of Constitution in the absence of any law being declared by the Court.

The Court also referred to the distinction between law of precedents and res judicata in State of Rajasthan v. Nemi Chand Mahela, (2019) 14 SCC 179 as approved in Malook Singh v. State of Punjab, 2021 SCC OnLine SC 876. It was clarified that precedent binds in similar situations in distinct case, while res judicata binds parties to proceedings to put an end to litigation.

Doctrine of Merger Elaborated

The Court explained that “To merge, as held in Kunhayammed (supra), and Khoday Distilleries Ltd. (supra) means to sink or disappear in something else, to become absorbed or extinguished. The logic behind the doctrine of merger is that there cannot be more than one decree or operative orders governing the same subject matter at a given point of time. When a decree or order passed by an inferior court, tribunal or authority is subjected to a remedy available under law before a superior forum, then the decree or order under challenge continues to be effective and binding; nevertheless, its finality is put in jeopardy. Once the superior court disposes the dispute before it in any manner, either by affirming the decree or order, by setting aside or modifying the same, it is the decree of the superior court, tribunal or authority, which is the final binding and operative decree.” Restricting any unlimited or universal jurisdiction, the Court clarified that the same would depend upon specific subject matter and jurisdiction.


The Court decided that orders passed in Pawan Gupta (supra) operate as res judicata in the said case, but not as binding precedent in the instant case and clarified that precedents cannot decide questions of fact. Any additional evidence sought to be produced at the appellate stage can only be introduced when an appropriate application under Rule 27 to Order XLI of the Code of Civil Procedure, 1908 is moved and an order is passed taking them on record.

The Court set aside the impugned judgment and order passed by NCDRC. The Court further clarified that observations related to limitation in the instant order would be binding/attained finality. Regarding observations around acquiescence/estoppel and merits/justification of increased sale area need to be considered afresh by NCDRC.

[Experion Developers (P) Ltd. v. Himanshu Dewan, 2023 SCC OnLine SC 1029, decided on 18-08-2023]

*Judgment authored by: Justice Sanjiv Khanna

Know Thy Judge| Supreme Court of India: Justice Sanjiv Khanna

Advocates who appeared in this case :

For Appellants: Senior Advocate Abhishek M Singhvi, Senior Advocate Amit Sibal, Advocate Debmalya Banerjee, Advocate Manmeet Kaur, Advocate Rohan Sharma, Advocate Kartik Bhatnagar, Advocate Anmol, Advocate Nicholas Choudhury, Advocate Gurtejpal Singh, Advocate Suditi Batra, Advocate Shreesh Chadha, Advocate Abhishek Rana, Advocate Amit Bhandari, Advocate Abhishek Grover, Advocate Ashna Arora, Advocate on Record for Karanjawala & Co.

For Respondents: Senior Advocate Bishwajit Bhattacharyya, Advocate Chandrachur Bhattacharyya, Advocate on Record Sahil Tagotra, Advocate Abhishek Pandey, Advocate Abhivyakti Banerjee

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