Change Of Form Or Rephrasing Of Relief Can’t Defeat Principle Of Res Judicata Or Constructive Res Judicata: Kerala High Court

The Kerala High Court observed that a change of form or rephrasing of relief cannot defeat the principle of res judicata or constructive res judicata.

The Court observed thus in a Writ Petition filed by a company against the Reserve Bank of India (RBI) and others.

A Single Bench of Justice Mohammed Nias C.P. reiterated, “It is trite that res judicata and constructive res judicata apply with full force to writ proceedings, and earlier rejection bars a second petition unless there are changed circumstances. A change of form or rephrasing of relief cannot defeat the principle of res judicata or constructive res judicata.”

The Bench added that the doctrine of res judicata, rooted in Section 11 of the Code of Civil Procedure, 1908 (CPC), and reinforced by public policy, mandates that a matter once finally adjudicated by a competent Court cannot be reopened between the same parties.

Advocates Mathew J. Nedumpara and Maria Nedumpara appeared on behalf of the Petitioners, while Advocate C.K. Karunakaran appeared on behalf of the Respondents.

Facts of the Case

The Petitioners contended that they were a duly registered Micro, Small and Medium Enterprise (MSME) under the Micro Small Medium Enterprises Development Act, 2006 (MSMED Act), and hence entitled to the protection of the revival and rehabilitation framework notified by the Central Government through Notification dated May 29, 2015. It was submitted that said framework, having statutory force, obliges all banks and financial institutions to refer stressed MSME accounts to a Committee for corrective measures – rectification, restructuring, and only thereafter recovery.

It was contended that the Respondent-Bank in gross violation of this mandatory framework, classified the Petitioners’ account as a Non-Performing Asset (NPA) and initiated coercive steps under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI Act) without first constituting or referring the matter to the Committee for Stressed MSMEs. It was further submitted that such action is illegal, arbitrary, and void ab initio, as the statutory precondition to recovery was ignored. It was also contended that the denial of the framework’s benefit has caused grave prejudice, financial loss, and reputational injury to the Petitioners, defeating the very purpose of the MSMED Act, which recognises MSMEs as the dynamic sector of the Indian economy requiring support for revival and growth.

Reasoning

The High Court after hearing the contentions of the counsel, noted, “Explanation IV to Section 11 embodies the principle of constructive res judicata, deeming that every matter which might and ought to have been made a ground of claim or defence in the earlier proceedings shall be treated as directly and substantially in issue therein. Even an erroneous or mistaken decision on a question of law or fact operates as res judicata between the same parties, for what binds is not the correctness of the reasoning but the finality of the decision itself. The rule extends to issues of fact, law, and mixed questions alike.”

The Court said that while doctrines such as estoppel, waiver, and acquiescence are conceptually distinct, they often reinforce the bar of res judicata when a party knowingly permits a state of affairs to continue.

“Ultimately, the principle upholds the rule of law and judicial finality, preventing multiplicity of proceedings, conserving judicial time, and protecting parties from being vexed twice over the same cause. Certainty of the law, consistency of decisions and comity of courts, all flowering from the same principle converge to the conclusion that a decision once rendered must later bind like cases, ie, a prior decision rendered by a competent court on identical facts and law is binding in subsequent proceedings on the same points, and such a decision must govern later cases unless shown to be per incuriam or rendered in manifest error”, it remarked.

The Court was of the view that while matters collaterally or incidentally in issue may not ordinarily operate as res judicata, matters directly or substantially considered in the prior decision constitute res judicata.

“The petitioners cannot dispute the multiple earlier proceedings instituted by them and the judgments rendered against them up to the Hon’ble Supreme Court. Their attempt to re-agitate the same grounds is clearly barred”, it further observed.

The Court also said that accepting the contentions on behalf of the Petitioners would mean that a litigant can go on filing cases despite dismissal of their pleas if they feel that the decision is wrong, even without filing an Appeal, and it will be the litigant's understanding that decides the maintainability of the subsequent challenge and not the interparte Judgments.

Conclusion

Furthermore, the Court noted that each sale notice may furnish a fresh cause of action; even then, an adjudication on the points already raised and rejected, is legally impermissible.

“The Supreme Court has also consistently condemned repeated and piecemeal litigation as a serious abuse of the judicial process. In Celir LLP v. Sumati Prasad Bafna (supra), the Court comprehensively articulated that re-litigation on the same cause or issues, whether by re agitating decided matters, raising issues that could or should have been raised earlier, or fragmenting claims across multiple proceedings, constitutes a textbook case of abuse of process under the Henderson principle. The Court made clear that merely changing the form or forum of such proceedings does not alter their oppressive and repetitive nature”, it added.

The Court, therefore, concluded that none of the principles argued by the counsel for the Petitioner based on the authorities referred holds that a Writ Petition can be filed by the same person raising the same contentions against the same adversary and none of the exceptions stated for avoiding principles of res judicata applies to the instant case.

Accordingly, the High Court dismissed the Writ Petition.

Cause Title- M/s. M.D. Esthappan Infrastructure Pvt. Ltd. & Anr. v. Reserve Bank of India (Neutral Citation: 2025:KER:77317)

Appearance:

Petitioners: Advocates Mathew J. Nedumpara, Maria Nedumpara, Shameem Fayiz V.P., and Roy Pallikoodam.

Respondents: CGC Benraj K.R., SCs Ajith Krishnan, Jithesh Menon, M.U Vijayalakshmi, Abel Tom Benny, GP Sreejith V.S., DSGI O.M. Shalina, Advocates C.K. Karunakaran, Lekshmi P. Nair, Shifna Muhammed Shukkur, Krishna Suresh, Mekha Manoj, and Anirudh Indukaladharan.

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