The South Indian Bank Ltd vs Mr.Anil Paul
2021 Latest Caselaw 21021 Ker

                                                              "CR"
        IN THE HIGH COURT OF KERALA AT ERNAKULAM
                            PRESENT
             THE HONOURABLE MR.JUSTICE V.G.ARUN
  WEDNESDAY, THE 20TH DAY OF OCTOBER 2021 / 28TH ASWINA,
                             1943
                     CRP NO. 358 OF 2019
  OS 12/2017 OF MUNSIFF'S COURT, KOLENCHERRRY, ERNAKULAM


REVISION PETITIONER/S:

    1    ANIL PAUL
         AGED 52 YEARS
         S/O.PAULOSE,PADATHU HOUSE, RAMAMANGALAM KARA,
         RAMAMANGALAM P.O., MUVATTUPUZHA TALUK,
         ERNAKULAM DISTRICT-686 663.
    2    SHEENA ANIL,
         AGED 1 YEARS
         W/O.ANIL PAUL, PADATHU HOUSE, RAMAMANGALAM
         KARA, RAMAMANGALAM P.O., MUVATTUPUZHA TALUK,
         ERNAKULAM DISTRICT-686 663.
         BY ADVS.
         SHEJI P.ABRAHAM
         SMT.THUSHARA PAILY

RESPONDENT/S:

         SOUTH INDIAN BANK
         KOLENCHERY BRANCH, REPRESENTED BY ITS BRANCH
         MANAGER, KOLENCHERY P.O., ERNAKULAM DISTRICT-
         682 311.
         BY ADVS.
         SRI.K.K.JOHN
         SRI.ASISH K.JOHN


THIS CIVIL REVISION PETITION HAVING BEEN FINAL HEARD ON

30.07.2021   ALONG   WITH   OPC     421/2020,   THE   COURT    ON

20.10.2021, THE SAME DAY DELIVERED THE FOLLOWING:
 CRP No.358/2019 & OPC No. 421/2020

                                     -2-




          IN THE HIGH COURT OF KERALA AT ERNAKULAM


                                PRESENT
               THE HONOURABLE MR.JUSTICE V.G.ARUN
  WEDNESDAY, THE 20TH DAY OF OCTOBER 2021 / 28TH ASWINA,
                                  1943
                        OP(C) NO. 421 OF 2020
      CC 505/2015 OF DISTRICT CONSUMER REDRESSAL FORUM,
                        ERANAKULAM, ERNAKULAM
   OS 12/2017 OF MUNSIFF COURT, KOLENCHERRRY, ERNAKULAM
PETITIONER/S:

             THE SOUTH INDIAN BANK LTD.,
             KOLENCHERY BRANCH, GROUND FLOOR, J J ARCADE,
             KOLENCHERY P.O. ERNAKULAM 682 311, REPRESENTED
             BY ITS SENIOR MANGER, MR. BINURAJ .T..
             BY ADV SRI.SUNIL SHANKER

RESPONDENT/S:

             MR.ANIL PAUL,
             PADATHU HOUSE, RAMAMANGALAM KARA, RAMAMANGALAM
             P.O. RAMAMANGALAM VILLAGE, MUVATTUPUZHA TALUK,
             ERNAKULAM DISTRICT 686 663.
             BY ADVS.
             SRI.SHEJI P.ABRAHAM
             SRI.O.K.MURALEEDHARAN


      THIS    OP   (CIVIL)      HAVING       BEEN   FINALLY     HEARD   ON
30.07.2021,     ALONG    WITH   CRP        NO.358/2019,   THE   COURT   ON
20.10.2021, DELIVERED THE FOLLOWING:
 CRP No.358/2019 & OPC No. 421/2020

                                     -3-



                                                                 "CR"

                               ORDER

Dated this the 20th day of October, 2021

The challenge in the civil revision petition

is against the order of the Munsiff's Court,

Kolencherry finding the suit, O.S.No.12 of 2017,

filed by the South Indian Bank (hereinafter "the

Bank") against the revision petitioners, to be

maintainable. The original petition is filed by

the Bank challenging Ext.P6 order of the Consumer

Disputes Redressal Forum, Ernakulam in E.A.No.2

of 2019 in C.C No.505 of 2015 filed by Sri.Anil

Paul (hereinafter 'the petitioner'). The

essential facts, leading to the impugned orders,

are as under;

The petitioner along with his wife was

sanctioned housing loan of Rs.6,75,000/- on

03.09.2004. The loan amount, with interest at the

rate of 8%, was repayable in 120 equal monthly CRP No.358/2019 & OPC No. 421/2020

installments of Rs.7,290/- each. Petitioner

remitted the installments without default and

after remitting the 120th installment, requested

the Bank to close the loan account and return the

title deeds given as security. To the

petitioner's surprise, he was told that a further

amount of Rs.4,43,284/- was outstanding and the

loan could be closed only after payment of the

balance amount. Thereafter, the Bank issued

notice to the petitioner stating that his EMI had

actually been fixed at the rate of Rs.6,880/- per

mensem and the rate of interest had been enhanced

and hence, the petitioner is bound to pay the

balance amount. The obstinate stand of the Bank

compelled the petitioner to approach the Consumer

Disputes Redressal Forum (CDRF), alleging

deficiency in service and unfair trade practice.

After hearing the parties, the CDRF, allowed the

complaint and directed the Bank to settle and

close the housing loan account of the petitioner CRP No.358/2019 & OPC No. 421/2020

by calculating interest at the rate of 8% per

annum till the date of first communication

regarding hike in the interest rate, as reflected

from the records of the Bank and acknowledged by

the petitioner. The Bank was also directed to

return the title documents within a period of one

month from the date of receipt of the order,

after petitioner settling the account as per the

direction. The Forum also mulcted the Bank with

the liability of paying compensation of

Rs.10,000/- and costs of Rs. 5000/- within one

month.

2. During pendency of the complaint before

the CDRF, the Bank filed O.S.No.12 of 2017 before

the Munsiff's Court, Kolencherry seeking to

recover an amount of Rs.5,71,783.67/- from the

petitioner and his wife. In the wake of the

CDRF's order, the bank amended the plaint by

reducing the amount sought to be recovered to

Rs.1,61,383/-. The petitioner entered appearance CRP No.358/2019 & OPC No. 421/2020

and contended that the suit is barred by res

judicata since the issue had already been decided

by the CDRF. The objection was repelled by the

learned Munsiff finding that CDRF to be

incompetent to settle the account and to direct

calculation of interest at the rate fixed by the

Forum. The learned Munsiff held that the suit is

not barred by res judicata, since the CDRF is not

competent to decide the issue involved in the

suit.

3. On his part, the petitioner filed

execution petition before the CDRF stating that

in compliance of the Forum's order, he had

calculated the balance amount due, following the

method available on the Bank's website. The

amount arrived at was Rs.1,03,483/- and after

deducting the cost and compensation amounting to

Rs.15,000/-, the balance amount of Rs.85,500/-

had been remitted to his loan account on

25.09.2018. It was stated that, despite CRP No.358/2019 & OPC No. 421/2020

remittance of the amount, officials of the Bank

refused to return the security documents. The

petitioner therefore sought issuance of warrant

of arrest against the respondent invoking power

under Section 27 of the Consumer Protection Act,

1986. On being convinced that the judgment

debtor had failed to comply with its direction,

the CDRF addressed the District Collector to

initiate proceedings against the Manager of the

Bank for realisation of the amount of Rs.15,000/-

ordered towards compensation and cost. The Bank

is aggrieved by the said order.

4. Heard Sri.Sheji P.Abraham, learned Counsel

for the petitioner and Sri.Sunil Shankar, learned

Counsel for the Bank.

5. Learned Counsel for the petitioner

contended that the suit instituted by the Bank is

barred by res judicata and assailed the finding

of the learned Munsiff that CDRF not being a

court, Explanation VIII of order 11 CPC will not CRP No.358/2019 & OPC No. 421/2020

apply. In support of the contention, reliance is

placed on the following decisions;

Trans Mediterranean Airways v. Universal Exports,

[(2011) 10 SCC 316], Patel Roadways Ltd. v Birla

Yamaha Ltd., [(2000) 4 SCC 91], Govindan Gopalan

v. Raman Gopalan [1978 KLT 315], Koran v. Kamala

Shetty [AIR 1978 Ker.172]

6. The other contention is regarding the

maintainability of the original petition filed

by the Bank, in view of the alternative remedy

available under the Consumer Protection Act. In

support of this contention, learned Counsel

relied on the decision in Varghesekutty v Manoj

[2019 (4) KLT OnLine 2090].

7. Learned Counsel for the Bank contended

that the suit is maintainable inasmuch as the

Bank had complied with the direction of the CDRF

by reducing the amount due from the petitioner in

terms of the direction and had prayed only for CRP No.358/2019 & OPC No. 421/2020

recovery of the balance amount due after the

deduction. As regards maintainability of the

original petition, learned Counsel contended that

availability of alternative remedy is not an

absolute bar against invocation of the

jurisdiction under Article 227 of the

Constitution of India.

8. Indisputably, no appeal is filed against

the order of the CDRF and the order has attained

finality. The original suit is filed on the

premise that, after settling the accounts as per

the order of the CDRF, an amount Rs.2,47,569/-

was in arrears as on 29.09.2018. The petitioner

paid Rs.88,500/- on 25.09.205 and after deducting

the amount, as also the amounts ordered towards

compensation and costs, the balance due as on

30.09.2018 is Rs.1,61,383/-. The prayer in the

suit is to pass a decree allowing the plaintiff

to realise the sum of Rs. 1,61,383/- with future

interest at the rate of 10% per annum. According CRP No.358/2019 & OPC No. 421/2020

to the petitioner, he had deposited Rs. 88,500/-

by calculating the balance amount following the

method published by the Bank. The petitioner

raised preliminary objection against

maintainability of the suit, contending that the

suit is barred by res judicata. The trial court

rejected the contention, finding the CDRF order

to be bereft of reasons and that, the Forum is

incompetent to order settlement of accounts and

to direct calculation of interest at the rate

fixed by the Forum. Based on that reasoning, the

trial court went on to hold that the suit is not

barred by res judicata.

9. The finding of the trial court and the

contentions raised in challenge of that order

call for a careful scrutiny of Explanation VIII

to Section 11 of CPC, extracted here under;

"11. Res judicata.--No Court shall try any suit or issue in which the matter directly and substantially in issue has been directly and substantially in issue in a former suit between the same parties, or CRP No.358/2019 & OPC No. 421/2020

between parties under whom they or any of them claim, litigating under the same title, in a Court competent to try such subsequent suit or the suit in which such issue has been subsequently raised, and has been heard and finally decided by such Court.

Explanation VIII.--An issue heard and finally decided by a court of limited jurisdiction, competent to decide such issue, shall operate as res judicata in a subsequent suit, notwithstanding that such court of limited jurisdiction was not competent to try such subsequent suit or the suit in which such issue has been subsequently raised."

Res judicata comes into play when the matter in

issue before a court was directly and

substantially in issue in a previously instituted

suit between the same parties. The further

condition is that the matter should have been

directly and substantially in issue in a court

competent to try such subsequent suit. The

general doctrine of res judicata is founded on

considerations of high public policy to achieve

the twin objectives of providing finality to

litigations and preventing harassment to

individuals twice over, with the same kind of CRP No.358/2019 & OPC No. 421/2020

litigation. Though the rule of res judicata as

enacted in Section 11 has some technical aspects

like pecuniary or subject-wise competence of the

earlier forum to adjudicate the subject-matter or

grant reliefs sought in the subsequent

litigation, those aspects would be immaterial

when the general doctrine of res judicata is to

be invoked. By the introduction of Explanation

VIII to, Section 11, it is clarified that, even

if the issue was heard and decided by a court of

limited jurisdiction competent to decide such

issue, the decision will operate as res judicata

in a subsequent suit.

10. In the case at hand, the question is

whether the Consumer Forum can be considered to

be a 'court of limited jurisdiction' and the

petitioner's complaint to be a 'suit' for the

purpose of Section 11 CPC.

In Trans Mediterranean Airways v Universal

Exports [(2011) 10 SCC 316], while rejecting the CRP No.358/2019 & OPC No. 421/2020

contention that the Consumer Forum is not a court

within the meaning of Rule 29 of the Second

Schedule to the Carriage by Air Act, the Apex

Court held as follows;

"57. The use of the word "court" in Rule 29 of the Second Schedule of the CA Act has been borrowed from the Warsaw Convention. We are of the view that the word "court" has not been used in the strict sense in the Convention as has come to be in our procedural law. The word "court" has been employed to mean a body that adjudicates a dispute arising under the provisions of the CP Act. The CP Act gives the District Forums, State Forums and National Commission the power to decide disputes of consumers. The jurisdiction, the power and procedure of these forums are all clearly enumerated by the CP Act. Though, these forums decide matters after following a summary procedure, their main function is still to decide disputes, which is the main function and purpose of a court. We are of the view that for the purpose of the CA Act and the Warsaw Convention, the consumer forums can fall within the meaning of the expression "court".

58. This view of ours is fortified by the decision of this Court Patel Roadways Ltd. [(2000) 4 SCC 91] wherein this Court has held that a complaint before the Consumer Forum is within the meaning of the term "suit" as employed by Section 9 of the Carriers Act, 1865. In other words, we are of the view that when it comes to CRP No.358/2019 & OPC No. 421/2020

legislations like the CP Act, there can be no restricted meaning given to the word "court". Hence, we reject the argument of Shri Bhagat that the National Commission is not a "court" within the meaning of Rule 29 of the Second Schedule of the CA Act."

In Patel Roadways Ltd. v Birla Yamaha Ltd.,

[(2000) 4 SCC 91] it has been held that the term

"suit" in Section 9 of the Carriers Act will

apply to the proceedings before the National

Consumer Disputes Redressal Commission. The

relevant paragraph is extracted here under;

"49. From the above it is clear that the term "suit" is a generic term taking within its sweep all proceedings initiated by a party for realisation of a right vested in him under law. The meaning of the term "suit" also depends on the context of its user which in turn, amongst other things, depends on the Act or the rule in which it is used. No doubt the proceeding before a National Commission is ordinarily a summary proceeding and in an appropriate case where the Commission feels that the issues raised by the parties are too contentious to be decided in a summary proceeding it may refer the parties to a civil court. That does not mean that the proceeding before the Commission is to be decided ignoring the express statutory provisions of the Carriers Act (Section 9) in a proceeding in which a claim is made against a common carrier as defined in the CRP No.358/2019 & OPC No. 421/2020

said Act. Accepting such a contention would defeat the object and purpose for which the Consumer Protection Act was enacted. A proceeding before the National Commission, in our considered view, comes within the term "suit".

In Gopalan Govindan and Koran (supra), this Court

has held that the rule of res judicata will apply

to proceedings before the Land Tribunal and the

decision of a quasi judicial authority like the

Land Tribunal will be res judicata in a court of

general jurisdiction, provided the decision was

within the competence of the Tribunal.

11. The scope and ambit of the words

"competent to try the subsequent suit" had arisen

for consideration in Sulochana Amma v Narayanan

Nair, [(1994) 2 SCC 14], relevant portion of

which reads as under;

"6. The words "competent to try such subsequent suit" have been interpreted that it must refer to the pecuniary jurisdiction of the earlier court to try the subsequent suit at the time when the first suit was brought. Mere competency to try the issue raised in the subsequent suit is not enough. A decree in a previous suit will CRP No.358/2019 & OPC No. 421/2020

not operate as res judicata, unless the Judge by whom it was made, had jurisdiction to try and decide, not that particular suit, but also the subsequent suit itself in which the issue is subsequently raised.

This interpretation had consistently been adopted before the introduction of Explanation VIII. So the earlier decree of the court of a limited pecuniary jurisdiction would not operate as res judicata when the same issue is directly and substantially in issue in a later suit filed in a court of unlimited jurisdiction, vide P.M. Kavade v. A.B. Bokil [(1971) 3 SCC 530 : AIR 1971 SC 2228] . It had, therefore, become necessary to bring in the statute Explanation VIII. To cull out its scope and ambit, it must be read along with Section 11, to find the purpose it seeks to serve. The Law Commission in its report recommended to remove the anomaly and bring within its fold the conclusiveness of an issue in a former suit decided by any court, be it either of limited pecuniary jurisdiction or of special jurisdiction, like insolvency court, probate court, land acquisition court, Rent Controller, Revenue Tribunal, etc. No doubt the main body of Section 11 was not amended, yet the expression "the court of limited jurisdiction" in Explanation VIII is wide enough to include a court whose jurisdiction is subject to pecuniary limitation and other cognate expressions analogous thereto. Therefore, Section 11 is to be read in combination and harmony with Explanation VIII. The result that would flow is that an order or an issue which had arisen directly and substantially between the parties or their privies and decided finally by a competent court or tribunal, CRP No.358/2019 & OPC No. 421/2020

though of limited or special jurisdiction, which includes pecuniary jurisdiction, will operate as res judicata in a subsequent suit or proceeding, notwithstanding the fact that such court of limited or special jurisdiction was not a competent court to try the subsequent suit. The issue must directly and substantially arise in a later suit between the same parties or their privies. This question is no longer res integra. In Rai Bajrang Bahadur Singh v. Rai Beni Madho Rakesh Singh [AIR 1938 PC 210, 214 : 65 IA 314 : (1938) 2 MLJ 596] the facts were that under U.P. Land Revenue Act 3 of 1901, the consolidation and partition of the lands were effected and became final. Thereafter, one of the landowners claimed title in a civil suit for a declaration that he was the superior landholder. In view of Section 233(k) of the Land Revenue Act, on a divergence of opinion among Oudh Chief Court and Allahabad High Court, the judicial committee held at p. 214 that if a question of title affecting the partition, which might have been raised in the partition proceedings, was not raised and the partition was completed, Section 233(k) debars parties to the partition from raising the question of title subsequently in a civil court. The revenue court is a court of special jurisdiction. In Daryao v. State of U.P. [(1962) 1 SCR 574, 582 : AIR 1961 SC 1457] this Court held that the doctrine of res judicata is in the interest of public at large and a finality should be attached to the binding decisions pronounced by courts of competent jurisdiction, and it is also in the public interest that individuals should not be vexed twice over with the same kind of CRP No.358/2019 & OPC No. 421/2020

litigation. In Gulam Abbas v. State of U.P. [(1982) 1 SCC 71, 90 : 1982 SCC (Cri) 82] this Court held that the principle of res judicata , though technical in nature, is founded on considerations of public policy. The technical aspect, for instance, pecuniary or subject-wise competence of the earlier forum to adjudicate the subject- matter or to grant reliefs sought in the subsequent litigation, should be immaterial when the general doctrine of res judicata is to be invoked. Explanation VIII, inserted by the Amending Act of 1976, was intended to serve this purpose and to clarify this position."

12. The next question is whether the

Consumer Forum was competent to decide the issue

regarding settlement of accounts between the

petitioner and the Bank. Section 3 of the

Consumer Protection Act, 1986, makes it clear

that the powers of the Consumer Forum is in

addition and not in derogation of any other law

for the time being in force. Therefore, when the

issue of settlement of accounts arises for

consideration in a complaint alleging deficiency

of service and unfair trade practice, the

Consumer Forum is well within its powers to CRP No.358/2019 & OPC No. 421/2020

decide the issue. The legal position being thus

settled, the finding of the learned Munsiff that

the Consumer Forum is not competent to decide the

issue in the subsequent suit filed by the bank is

unsustainable.

13. In the execution petition pending before

the CDRF, the bank has raised contentions

regarding the balance amount due from the

petitioner. The impugned order of the CDRF being

only to recover the cost and compensation part of

its order, the dispute with respect to the

balance amount due from the petitioner is yet to

be decided.

14. The contention regarding maintainability

of the original petition filed by the bank is

rejected, since the original petition was

admitted and interim order granted more than a

year back. In my considered opinion, it would be

appropriate to afford the Bank with an

opportunity to deposit the cost and compensation CRP No.358/2019 & OPC No. 421/2020

before the CDRF.

For the aforementioned reasons, CRP No.358 of

2019 is allowed. The impugned order in O.S.No. 12

of 2017 is set aside and the suit is held to be

barred by res judicata. O.P.(C) No.421 of 2020 is

disposed of as follows;

(i) The bank is permitted to remit the

compensation and cost before the CDRF within one

month of receipt of a copy of this order.

(ii) The dispute with regard to the

balance amount due from the petitioner shall be

decided by the CDRF afresh, considering the

account statements and affording an opportunity

of hearing to the parties.

Sd/-

V.G.ARUN JUDGE Scl/ CRP No.358/2019 & OPC No. 421/2020

APPENDIX OF OPC 421/2020

PETITIONER EXHIBITS

OF 2015 OF THE CONSUMER DISPUTES REDRESSAL FORUM ERNAKULAM.

EXHIBIT P2 TRUE COPY OF THE AMENDED PLAINT IN OS NO. 12 OF 2017, HONBLE MUNSIFF COURT, KOLENCHERY.

EXHIBIT P3 TRUE COPY OF ORDER OF THE MUNSIFF COURT, KOLENCHERRY IN OS NO. 12 OF 2017.

EXHIBIT P4 TRUE COPY OF EA NO. 2 OF 2019 FILED BY THE RESPONDENT.

EXHIBIT P5 TRUE COPY OF OBJECTION FILED BY PETITIONER IN EA NO. 2 OF 2019.

EXHIBIT P6 TRUE COPY OF ORDER OF THE CONSUMER DISPUTES REDRESSAL FORUM, ERNAKULAM IN EA NO. 2 OF 2019 IN CC NO. 505 OF 2015.

EXHIBIT P7 TRUE COPY OF SUMMONS IN ST NO. 5 OF 2020 OF CONSUMER DISPUTES REDRESSAL FORUM.