Continuous Cause of Action and Limitation: Experion Developers Pvt. Ltd. v. Himanshu Dewan & Sonia Dewan; Order dated 22nd August 2023 – Supreme Court

Dismissal of an appeal without any reason will not be treated as a binding precedent and precedents cannot decide questions of fact.

Summary:

In the case of Pawan Gupta, this Court did not exercise the jurisdiction granted by Article 136 of the Constitution of India, but instead acted within its appellate capacity. As per the principle established in Kunhayammed, this appellate order stands as the final executable verdict. Thus, the dismissal of the appeal by this Court in Pawan Gupta’s case conclusively marked the end of the legal dispute in that particular case. However, it’s important to note that the dismissal of the appeal would not serve as res judicata for the respondents against the appellant in their situation. This is due to the fact that they were not involved as parties in the aforementioned case, and the legal proceedings initiated by Pawan Gupta were specific to the facts and circumstances of that case, rather than representing a general or representative capacity.

The doctrine of merger is based on the principle that a single effective decree or order should govern a specific subject matter. When a decree or order from a lower court is challenged before a higher court, the lower court’s decision remains binding but its finality is uncertain. Once the higher court addresses the issue, its decree becomes the final and binding one, encompassing the lower court’s decision. However, this doctrine isn’t universally applicable and depends on the nature of jurisdiction exercised by the higher court and the scope of the challenge.

Facts of the Case:

The case revolves around the “Windchats” housing project in Gurugram, where the appellant acted as the developer and the respondent as the buyer. The dispute arises from the appellant’s demand for increased payment due to a larger sale area, which the respondent agreed to. The property transaction took place between December 2017 and August 2018. However, the respondents filed a consumer complaint with the National Commission on February 25, 2022, invoking similarities with the judgment of Pawan Gupta vs. Exporian Private Limited. The appellant argues that this complaint surpasses the limitation period, which expired around 3 years ago. In response, the respondents claim that the pandemic-induced suspension of the limitation period (from 15.03.2020 to 28.a02.2022) should be considered, and they highlight the absence of evidence regarding the communication about the area increase. They also challenge the validity of post-dated reports from architects. The National Commission ruled in favor of the respondents, demanding a refund and corrective actions. This ruling led the appellant to appeal to the Supreme Court for remedy.

Issues raised/ discussed:

The Court examined whether the dismissal of an appeal should be treated as res judicata. Does the doctrine of merger universally apply to rulings of inferior courts, regardless of the superior court’s jurisdictional scope and the significance of non-speaking orders as precedents?

Judgment:

The court ruled that “cause of action” arises when the appellant communicates the demand to the respondent. However, the court did not interfere with the National Commission’s authority to condone the delay. The court also held that the judgment in the Pawan Gupta case would apply as res judicata only in that specific case. The court reiterated that a past dismissal cannot be a binding precedent for the current situation, as precedents do not decide factual matters.

The previous dismissal stemmed from inadequate evidence provided by the appellant and focused on the circumstances of that particular case. The court emphasized that this dismissal did not consider later additional evidence. As a result, the National Commission is required to reconsider the appellant’s arguments without applying principles of res judicata or binding precedent. The court’s statements regarding the limitation period are definitive, but its remarks on acquiescence/estoppel and merits are open for the National Commission’s fresh evaluation. Therefore, the court overturned the National Commission’s decision and sent the case back for revaluation.

KSK Analysis:

The judgment analyzes the concept of cause of action and the doctrine of res-judicata and doctrine of merger. The judgment stems from an important facet of the precedent being a bar under the doctrine of res-judicata. As per the dicta of the Hon’ble Supreme Court, the A precedent operates to bind in similar situations in a distinct case, whereas res judicata operates to bind parties to proceedings for no other reason, but that there should be an end to litigation. The principle of res judicata should apply where the lis was inter-parties and has attained finality on the issues involved. The principle of res judicata will have no application in cases where the judgment or order has been passed by the Court having no jurisdiction thereof or involving a pure question of law. Law of Binding Precedents has a larger connotation as it settles the principles of law that emanates from the judgment which are then treated as binding precedents.