Kerala High Court
M/S. M.D. Esthappan Infrastructure ... vs Reserve Bank Of India on 17 October, 2025
WP(C) NO. 32541 OF 2025
2025:KER:77317
1
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE MOHAMMED NIAS C.P.
FRIDAY, THE 17TH DAY OF OCTOBER 2025 / 25TH ASWINA, 1947
WP(C) NO. 32541 OF 2025
PETITIONER/S:
1 M/S. M.D. ESTHAPPAN INFRASTRUCTURE PVT. LTD. ,
REPRESENTED BY ITS AUTHORIZED REPRESENTATIVE,
MR. BIJI STEPEHEN HAVING ITS REGISTERED ADDRESS AT: 144,
RAILWAY STATION NAGAR, NEAR ST. JOSEPH HIGH SCHOOL,
ANGAMALY, ERNAKULAM, PIN - 683572
2 MR. M.D. ESTHAPPAN,
MANAGING DIRECTOR OF M.S. M.D. ESTHAPPAN INFRASTRUCTURE
PVT. LTD. THROUGH POWER ATTORNEY HOLDER MR. BIJI
STEPEHEN, S/O. DEVASSY, 14/306, MOOLAN
HOUSE, NH 47, NEAR ST. JOSEPH HIGH SCHOOL, ANGAMALY,
ERNAKULAM, PIN - 683572
BY ADVS.
SMT. MARIA NEDUMPARA
SHRI.SHAMEEM FAYIZ V.P.
SHRI.ROY PALLIKOODAM
RESPONDENT/S:
1 RESERVE BANK OF INDIA,
REPRESENTED BY ITS GOVERNOR SHAHID BHAGAT SINGH ROAD,
FORT, MUMBAI, PIN - 400001
2 BOARD OF DIRECTORS OF DHANLAXMI BANK LTD.,
REPRESENTED BY ITS CEO & MANAGING DIRECTOR, REGISTERED
OFFICE, DHANALAKSHMI BUILDINGS, P.B NO. 9, NAICKANAL,
THRISSUR, KERALA, PIN - 680001
3 DHANLAXMI BANK LTD,
REPRESENTED BY ITS CEO & MANAGING DHANALAKSHMI BUILDINGS,
P.B. NO. 9, NAICKANAL, THRISSUR, KERALA, PIN - 680001
WP(C) NO. 32541 OF 2025
2025:KER:77317
2
4 AUTHORISED OFFICER & CHIEF MANAGER,
DHANLAXMI BANK LTD., REGIONAL OFFICE, DHANALAKSHMI
BUILDINGS, 1ST FLOOR, MARINE DRIVE, KOCHI, KERALA,
PIN - 682031
5 MINISTRY OF MICRO SMALL AND MEDIUM ENTERPRISES,
REPRESENTED BY ITS SECRETARY,UDYOG BHAWAN, RAFI MARG, NEW
DELHI, PIN - 110001
6 UNION OF INDIA,
REPRESENTED BY ITS SECRETARY, DEPARTMENT OF FINANCIAL
SERVICES, MINISTRY OF FINANCE, 3RD FLOOR, JEEVAN DEEP
BUILDING, SANSAD MARG, NEW DELHI, PIN - 110001
7 STATE OF KERALA ,
REPRESENTED BY ITS CHIEF SECRETARY, GOVERNMENT
SECRETARIAT ,THIRUVANANTHAPURAM, PIN - 695001
8 GENERAL MANAGER,
DISTRICT INDUSTRIES CENTRE, KAKKANADU,ERNAKULAM,
PIN - 682030
9 CHAIRMAN,
MICRO AND SMALL ENTERPRISE FACILITATION COUNCIL
(MSEFC),DIRECTORATE OF INDUSTRIES COMMERCE, VIKAS BHAVAN
P.O, THIRUVANANTHAPURAM, KERALA, PIN - 695033
10 CHAIRMAN,
STATE LEVEL INTER-INSTITUTIONAL COMMITTEE,REGIONAL
OFFICE, RESERVE BANK OF INDIA,BAKERY JUNCTION, P.B. NO.
6507, THIRUVANANTHAPURAM, PIN - 695033
11 GAIL (INDIA) LTD.,
REPRESENTED BY ITS GENERAL MANAGER, KINFRA HI- TECH PARK,
OFF - HMT ROAD, HMT COLONY P.O., KALAMASSERY,ERNAKULAM,
PIN - 683503
12 BHARAT PETROLEUM CORPORATION LTD.,
REPRESENTED BY ITS MANAGING DIRECTOR, KOCHI REFINERY,
AMBALAMUGAL,ERNAKULAM, PIN - 682302
13 COCHIN SMART MISSION LTD.,
REPRESENTED BY ITS MANAGING DIRECTOR,10TH FLOOR, REVENUE
TOWER, PARK AVENUE, ERNAKULAM, PIN - 682011
14 ADV. RASEENA P.R.,
ADVOCATE COMMISSIONER APPOINTED IN MC. NO.1319,IN THE
FILES OF LD.ADDL. CJM, ERNAKULAM, ERNAKULAM BAR
WP(C) NO. 32541 OF 2025
2025:KER:77317
3
ASSOCIATION, PIN - 682031
15 STATION HOUSE OFFICER,
ANKAMALY POLICE STATION, NEAR KSRTC STAND, ANKAMALY P.O.,
KOCHI, PIN - 683572
16 ANIL DHIRAJLAL AMBANI,
39, SEA WIND, CUFFE PARADE,COLABA, MUMBAI, PIN - 400005
17 MUKESH AMBANI,
CHAIRMAN, RELIANCE INDUSTRIES,3RD FLOOR, MAKER CHAMBERS
IV, 222, NARIMAN POINT, MUMBAI, PIN - 400021
18 THE CHAIRMAN,
STATE BANK OF INDIA,CORPORATE CENTER, 16TH FLOOR, MADAM
CAMA ROAD, NARIMAN POINT, MUMBAI, PIN - 400021
BY ADVS.
SHRI.C.K.KARUNAKARAN (R2 TO R4)
SHRI.BENRAJ K.R., CGC
SMT.LEKSHMI P. NAIR
SMT.SHIFNA MUHAMMED SHUKKUR
SMT.KRISHNA SURESH
SMT.MEKHA MANOJ
SHRI.ANIRUDH INDUKALADHARAN
SHRI.AJITH KRISHNAN, SC
SHRI.JITHESH MENON, SC
SHRI.M.U VIJAYALAKSHMI, SC
SHRI.ABEL TOM BENNY, SC
SRI.SREEJITH V.S GP
SMT O.M.SHALINA, DSGI
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON
17.09.2025, THE COURT ON 17.10.2025 DELIVERED THE FOLLOWING:
WP(C) NO. 32541 OF 2025
2025:KER:77317
4
MOHAMMED NIAS C.P., J.
............................................................
WP(C) No.32541 OF 2025
.............................................................
Dated this the 17th day of October, 2025
JUDGMENT
This writ petition is filed by M/s. M.D.Esthappan Infrastructure
Pvt. Ltd and M.D. Esthappan contending that they are a duly registered
Micro, Small and Medium Enterprise (hereinafter MSME) under the Micro
Small Medium Enterprises Development Act, 2006 (hereinafter MSMED
Act), and hence entitled to the protection of the revival and
rehabilitation framework notified by the Central Government through
Notification dated 29.05.2015. They submit that the 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.
2. It is contended that the respondent Bank, in gross violation of
this mandatory framework, classified the petitioners' account as a Non-
WP(C) NO. 32541 OF 2025
2025:KER:77317
Performing Asset (NPA) and initiated coercive steps under the
Securitisation and Reconstruction of Financial Assets and Enforcement
of Security Interest Act (hereinafter referred to as 'the SARFAESI Act')
without first constituting or referring the matter to the Committee for
Stressed MSMEs. The petitioners submit that such action is illegal,
arbitrary, and void ab initio, as the statutory precondition to recovery
was ignored. They rely on the judgment of the Hon'ble Supreme Court
in Pro Knits v. Canara Bank [(2024) 10 SCC 292], wherein it was held that
once MSME status is established prior to NPA classification, banks are
bound to explore corrective steps under the framework before
proceeding with recovery. The petitioners further contend that the
Ext.P3 RBI Notification dated 17.03.2016, which restricts the application
of the MSME framework to accounts with exposure/loan up to Rs. 25
crores, is ultra vires the parent legislation and cannot override the
statutory notification issued by the Central Government. They argue
that such an arbitrary cap undermines the objective of the MSMED Act
and deprives genuine MSMEs of statutory protection. The denial of the
framework's benefit has caused grave prejudice, financial loss, and
WP(C) NO. 32541 OF 2025
2025:KER:77317
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.
3. In the statement filed on behalf of respondents 2, 3, and 4, it is
contended that the petitioners are guilty of suppression of material
facts and have indulged in repeated and frivolous litigation. It is
submitted that the writ petition is not maintainable, since Dhanlaxmi
Bank Ltd., being a Scheduled Commercial Bank, is not an
instrumentality of the State under Article 12 of the Constitution, and
further, that writ petitions are not maintainable in matters arising
under the SARFAESI Act.
3.1. The respondents submit that the petitioners had earlier
challenged the RBI's Rs. 25 crore cap on restructuring in W.P.(C) No.
4631 of 2025, but, realising that the challenge would not succeed,
withdrew it on 07.02.2025 with liberty to amend W.P.(C) No. 46514 of
2024. Accordingly, the petitioners filed I.A. No. 1 of 2025 in W.P.(C) No.
46514 of 2024, seeking to incorporate the said challenge. Though the
amendment was allowed, the writ petition itself was dismissed by
WP(C) NO. 32541 OF 2025
2025:KER:77317
judgment dated 11.03.2025. The petitioners then preferred W.A. Nos. 481
and 484 of 2025, which were also dismissed by a Division Bench on
24.06.2025.
3.2. The respondents further point out that the petitioners
approached the Hon'ble Supreme Court in S.L.P. No. 17263 of 2025,
which was dismissed on 09.07.2025. Even their M.A. No. 1330 of 2025
seeking restoration of the dismissed SLP was rejected by order dated
28.07.2025, wherein the Apex Court categorically held that no case was
made out to entertain the application. Simultaneously, the petitioners'
Review Petitions Nos. 797 and 799 of 2025, filed against the judgment
dated 24.06.2025 in W.A. Nos. 481 and 484 of 2025 were also dismissed by
this Court on 28.07.2025.
3.3. Notwithstanding the above, the petitioners again filed W.P.(C)
No. 17617 of 2025, which was dismissed on 28.07.2025, inter alia holding
that Transcore v. Union of India (AIR 2007 SC 712) was correctly decided
and that the writ was barred by constructive res judicata. Against this
judgment, they preferred W.A. No. 1872 of 2025, which is still pending,
WP(C) NO. 32541 OF 2025
2025:KER:77317
and in which their earlier counsel had already relinquished vakalath.
3.4. The respondents contend that the petitioners, along with M.D.
Esthappan has filed nearly 19 proceedings before the Hon'ble Supreme
Court, this Court, the Bombay High Court, the DRT, Ernakulam, and the
City Civil Court, Mumbai, most of which have been dismissed. As on
31.07.2025, a total amount of Rs. 42,45,73,281.75 remains due and
recoverable from the petitioners and M.D. Esthappan.
3.5. The respondents submit that the present writ petition is
clearly barred by res judicata and constructive res judicata, and is a
gross abuse of the process of law, and has been filed only to delay
repayment of huge dues. The petitioners, having failed in multiple
rounds of litigation up to the Hon'ble Supreme Court, cannot be
permitted to re-agitate the same issues. The writ petition deserves
dismissal in limine with heavy costs.
4. The learned counsel for the petitioners contends that the
respondent bank's only defence of res judicata or estoppel is untenable,
as there can be no estoppel against law. They submit that the loans were
WP(C) NO. 32541 OF 2025
2025:KER:77317
sanctioned as MSME loans after the bank verified their MSME
registration, and that they had specifically pleaded this in their reply to
the notice under Section 13(2), rendering the notice void ab initio. It is
further argued that the issue regarding the applicability of the Ext. P3
RBI notification was never adjudicated on its merits in the earlier
proceedings, and therefore, res judicata does not apply.
4.1. The petitioners further argue that the doctrine of res judicata
is not intended to deny a litigant what is due to them without an
adjudication on the merits of a right--statutory, equitable, or common
law--but is founded on public policy. It means that even an erroneous
decision of a competent court, rendered after observing natural justice
and settled principles of law, must stand in the larger public interest to
prevent endless litigation. Citing Minerva Mills v. Union of India (AIR
1980 SC 1789), it is submitted that the doctrine applies only where
parties have had a fair opportunity to present their rival contentions
and the matter has been fully adjudicated. The principle, evolved by
Roman jurists like Ulpian, Modestinus, Gaius, Papinian, and Paulus, rests
on the maxims res judicata pro veritate accipitur (a judicial decision must
WP(C) NO. 32541 OF 2025
2025:KER:77317
be accepted as true), interest reipublicae ut sit finis litium (it is in the
State's interest that there be an end to litigation), and nemo debet bis
vexari pro una et eadem causa (no one should be vexed twice for the same
cause).
4.2. It further argues that for the doctrine of res judicata to apply,
the following conditions, inter alia, must be complied with:
i. The court should have the jurisdiction to adjudicate the entire lis in
question and bring it to finality. The judgment of the court should not
lead to the termination of the lis. This Court, under Article 226,
exercises a limited jurisdiction, which is a discretionary one, unlike the
civil court.
ii. The court should have exclusive jurisdiction of the subject matter,
and the controversy should be one that fell for its consideration
collaterally.
iii. The lis should have been adjudicated on its merits in full, either
actually or at least constructively.
iv. The court should have observed the principles of natural justice and
allowed both parties to the lis an opportunity to adduce evidence and
WP(C) NO. 32541 OF 2025
2025:KER:77317
contradict the evidence appearing against them.
v. The matter in issue in the previous litigation and the subsequent
litigation must be the same and ought not be distinct; in other words,
the cause of action should be identical in every respect.
vi. Parties should have been the same.
vii. The cause of action ought to be the same.
viii. And most importantly, res judicata/estoppel by verdict concludes
only questions of fact decided, and not questions of law.
4.3. It is further submitted that Exceptio rei judicatae non aliter
petenti obstat quam si eadem quaestio inter eosdem revocetur, itaque ita
demum nocet si omnia sint eadem, idem corpus, eadem quantitas, idem jus,
eadem causa petendi, eadem conditio personarum - the rough translation
being: the plea of res judicata does not bar a claimant unless the same
question is raised again between the same parties; and thus it only
operates as a bar if everything is the same; the same subject matter, the
same amount, the same right, the same cause of action, and the same
condition of the persons. Estoppel is an odious doctrine. If there is
uncertainty as to whether the earlier judgment constitutes res
WP(C) NO. 32541 OF 2025
2025:KER:77317
judicata/estoppel, the doctrine of res judicata has no application. The
reason is that res judicata is a technical doctrine whereby the law
permits it to be treated as truth.
4.4. The core contention of the petitioner is that there is no
estoppel against the law. The banks had acted in violation of the
statutory prohibition and invoked SARFAESI. It was the duty of the
courts to know the law (iura novit curia) and to give effect to the law and
to quash and set aside the action of the bank in violation of the law. The
failure to plead the law, nay, the protection under the notification, has
led to the scenario where the existence or non-existence of the
petitioners' rights under the MSMED Act and the notifications
thereunder has not been adjudicated in the previous litigation.
4.5. The petitioner contends that proceedings under the SARFAESI
Act or IBC have not attained finality and that each subsequent action,
such as notices for taking possession or sale of property, gives rise to a
fresh cause of action, thereby enabling the borrower or MSME to raise
all available legal and factual contentions. It is argued that for res
judicata to apply, the proceedings must have reached termination,
WP(C) NO. 32541 OF 2025
2025:KER:77317
which has not occurred here. Relying on Chief Justice Coke's
observation (MM Bigelow, p. 88), it is urged that the doctrine must be
construed strictly. The petitioner further cites A.R. Antulay v. R.S.
Nayak and anr. [(1988) 2 SCC 602), Canara Bank v. N.G. Subbaraya Setty
and anr. [(2018) 16 SCC 228], Experion Developers v. Himanshu Diwan
and ors. (2023 SCC OnLine SC 1029), and Anisminic Ltd. v. Foreign
Compensation Commission (1968 App L.R. 12/17) Khoday Distilleries
Limited and Ors v. Sri Mahadeshwara Sahakara Sakakre Karkhane
Limited, Kollegal (2019 4 SCC 376), M/s Navinchandra Steels Pvt. Limited
and anr. v. Union of India and ors. (WPC No. 4620/2022), Manisha
Nimesh Mehta v. The Board of Directors of Technology Development
Board and ors. (CA (L) No. 25072/2024), Shri Shri Swami Samarath
Construction and finance solution and anr. v. The Board of Directors of
NKGSB Co-op Bank Ltd. and Ors. (WPC No. 684/2025) and Holligton v. F.
Hewthorn and Company Limited and Another (1 K.B 587) to elucidate the
scope and foundation of the doctrine of estoppel by record and by
verdict. Reference was made to the proposition that a judgment of a
competent court, once final, operates as a bar between the same parties
WP(C) NO. 32541 OF 2025
2025:KER:77317
or their privies in respect of matters directly adjudicated, and that even
in a subsequent proceeding on a different cause of action, an issue
actually and necessarily decided in the earlier litigation cannot be
reopened (issue estoppel). It was contended that the essential
conditions for such estoppel are the identity of parties or privies, the
competency of the earlier tribunal, the finality of the prior decision on
the merits, and certainty of the subject matter.
4.6. Learned counsel further relied on the distinction drawn
between judgments in rem, which bind all persons where the right has
been conclusively determined, and judgments in personam, which bind
only the parties and those claiming under them. It was urged that, save
in cases of want of jurisdiction or fraud apparent on the face of the
record, the conclusiveness of a judgment cannot be collaterally
impeached, and that dismissals on preliminary or procedural grounds
do not operate as res judicata, whereas a determination upon an issue
essential to the decree, even though interlocutory, binds the parties.
The argument thus advanced is that the doctrine of estoppel by record,
rests on the larger principles of finality of litigation and consistency of
WP(C) NO. 32541 OF 2025
2025:KER:77317
judicial determinations, and precludes re-agitation of matters once
finally and necessarily adjudicated between the same parties. Reliance
is also placed on the authorities of A Treatise on the Law of Estoppel and Its
Application in Practice by Melville M. Bigelow (4th Edn., 1886), Res
judicata by Handley, 3rd Edn., (Page 272-73) and on Everest on Estoppel,
to support the above propositions.
5. The learned counsel for the respondent Bank, apart from
pointing out the previous litigations and reiterating their contentions,
relies on the judgment in Celir LLP v. Sumati Prasad Bafna and ors
[(2024) SCC OnLine SC 3727], in particular paragraphs 29 and 32, to
contend that repeated filing is not only hit by the principles of
constructive res judicata but also an abuse of process of law.
6. Heard Sri. Mathew J. Nedumpara, and Smt. Maria Nedumpara,
learned counsel for the petitioners, and Sri. C.K. Karunakaran, learned
counsel, appeared for the respondent Bank.
7. The earlier litigations of the petitioner before this Court,
WP(C) NO. 32541 OF 2025
2025:KER:77317
wherein the contention claiming the protections to MSME were raised
and considered, are as follows:
Sl.No. Case Number MSME Contentions Details in Judgment
The Court noted that the same
petitioners had already raised
the issue in W.P.(C) No. 46514 of
The petitioners challenged the RBI 2024, where the bank had
Notification No. FIDD.MSME & contended that their loan
NFS.BC.No.21/06.02.31/2015-16 dated account exceeded the Rs. 25
17.03.2016 (Ext.P3) to the extent it restricted crore limit. The Court held that
the revival and rehabilitation framework for the petitioners should have
WPC No. 4631/2025,
MSMEs to accounts with exposure up to Rs. challenged Ext.P3 in that
1 withdrawn on
25 crores. They argued that such a pending writ petition and not
07.2.2025
restriction was arbitrary and contrary to the through a separate one. On
MSMED Act, 2006, and that they were request of the petitioner's
entitled to the statutory protection under counsel, the writ petition was
the framework for stressed MSMEs notified dismissed as withdrawn with
on 29.05.2015. liberty to amend W.P.(C) No.
46514 of 2024 to incorporate the
challenge to Ext.P3, expressly
leaving open all contentions.
2 WPC No. The petitioners contended that they are Held that the claims were
46514/2024, MSMEs under the MSMED Act, 2006, and barred by the rulings in Pro
judgment dated that all proceedings initiated by Dhanlaxmi Knits v. Canara Bank and P.K.
11.03.2025 Bank under SARFAESI were illegal since the Krishnakumar v. IndusInd Bank,
bank had failed to follow the RBI-mandated since the petitioners had not
"Framework for Revival and Rehabilitation sought reference to the MSME
of MSMEs" notified on 29.05.2015 (Ext. P2) Committee prior to their
and made binding through RBI Circular account being classified as NPA
dated 17.03.2016 (Ext. P3). They argued that on 27.09.2024. The Court
once a borrower is registered as an MSME, further noted that their loan
the bank must refer its account to the exposure exceeded Rs. 25
Committee for Stressed MSMEs before crores, hence outside the scope
declaring it NPA, and that no recovery can of the MSME framework, which
proceed until rectification or restructuring applies only to exposures up to
is found unfeasible. They relied on Pro Knits Rs. 25 crores. It also found that
v. Canara Bank (2024 10 SCC 292) and other petitioners had engaged in
precedents to assert that failure to piecemeal and repetitive
constitute such a Committee rendered all litigation before various fora.
SARFAESI actions void ab initio. Following binding precedent
WP(C) NO. 32541 OF 2025
2025:KER:77317
and holding that the SARFAESI
Act prevails over notifications
under section. 9 MSMED Act,
the writ petitions were
dismissed, with the Court
rejecting all reliefs sought.
The Division Bench, following
Pro Knits v. Canara Bank, held
1. Non-implementation of MSME
that MSME protections must be
Framework: Central Govt. and RBI failed to
invoked before an account is
implement the notification dated 29.05.2015
classified as NPA (or at the
mandating a "Committee for Stressed
stage of incipient stress); a
MSMEs".
belated claim raised after
2. Violation of MSME Protection: Banks
classification cannot be used to
could not classify MSME accounts as NPAs or
W.A. 481 and 484 of derail SARFAESI/ recovery
proceed under SARFAESI/RDB/IBC without
2025 in WPC No. steps. Applying that dictum, the
following the corrective action mechanism
45166/2024, and in Court found the petitioners had
under the 2015 notification.
3 WPC No. sought MSME relief only after
3. Supremacy of MSMED Act: MSMED Act,
46514/2024, their accounts were declared
being a special and later law, prevails over
judgment dated NPA, so their plea was
SARFAESI, RDB, and IBC Acts; recovery can
24.06.2025 unsustainable. The Bench
only follow the MSME rehabilitation
therefore reaffirmed that
process.
MSME notifications are
4. Unconstitutionality Challenge: Sections 13
facilitative only when acted
of SARFAESI, 19 of RDB, and certain IBC
upon at the proper stage, not a
provisions are unconstitutional for being
shield to be raised post-
one-sided in favour of banks.
classification, and upheld the
Single Judge's dismissal of the
writs.
SLP was filed against W.A. No. 481 and 484 of
4 SLP No. 17263/2025 Dismissed SLP on 09.07.2025
5 MA 1330/2025 Filed to restore the dismissed SLP. Dismissed MA on 28.07.2025.
6 RP No. 797/2025 and The judgment sought to be reviewed is one Dismissed on 28.07.2025
799/2025 in W.A. No. rendered after taking note of the rival
481 of 2025 and 484 contentions on the law laid down by the
of 2025 Apex Court in Pro Knits [(2024) 10 SCC 292]
and that laid down by the Division Bench of
this Court in P.K. Krishnakumar [2024 SCC
OnLine Ker 6888]. There is no error
apparent on the face of the record,
WP(C) NO. 32541 OF 2025
2025:KER:77317
warranting an interference in the exercise
of the review jurisdiction under Order XLVII
Rule 1 of the Code.
Dismissed the writ petition on
28.07.2025, holding that the law
laid down in Transcore and
reaffirmed in M.D. Frozen Foods
The petitioners, M.D. Esthappan
Infrastructure Pvt. Ltd. and its Managing and Sri Nangli Rice Mills
Director claimed to be registered MSMEs remained binding under Article
under the MSMED Act, 2006, and contended 141. The Court held that
that the Dhanlaxmi Bank had violated the SARFAESI and RDB Acts are
mandatory rehabilitation framework under complementary and
the MSME Notification dated 29.05.2015 and simultaneous proceedings are
the RBI Notification dated 17.03.2016 by legally permissible. It rejected
classifying their account as NPA on the plea that Transcore was per
31.07.2023 without first initiating corrective incuriam and deprecated any
action. They relied on Pro Knits v. Canara deviation from settled
Bank [(2024) 10 SCC 292], asserting that the precedent. The Court further
framework was obligatory and that the found that the petitioners'
7 earlier writ petitions (W.P.(C)
SARFAESI proceedings initiated thereafter
were void. They also challenged the Bank's Nos. 45166 and 46514 of 2024)
simultaneous recourse under SARFAESI and and writ appeals (W.A. Nos. 481
the RDB Act, contending that such dual and 484 of 2025) had already
proceedings were barred under Section adjudicated the same MSME
13(10) of SARFAESI and the proviso to contentions, and that the
Section 19(1) of the RDB Act, and violated present writ was barred by
principles of ne bis in idem and res judicata. constructive res judicata and
The petitioners urged reconsideration of amounted to re-litigation.
Citing Celir LLP v. Sumati Prasad
Transcore v. Union of India (AIR 2007 SC 712),
arguing that it was wrongly decided and per Bafna (2024 SCC OnLine SC
incuriam. 3727), the Court reaffirmed that
MSME registration does not bar
NPA classification or recovery
under SARFAESI and dismissed
the writ petition as meritless
and repetitive.
8. W.A No.1872 of 2025 Filed against the judgment dated 28.07.2025 When the case was posted for
in WPC No. in WPC No. 17617/2025 arguments vakalath for the
17617/2025 appellants (petitioners) was
relinquished by the counsel.
The following order was passed
by the learned Division Bench
of this Court on 31.07.25:
WP(C) NO. 32541 OF 2025
2025:KER:77317
"After arguing for sometime, Adv.
Mathew J. Nedumpara, the learned
counsel would submit that he is
relinquishing vakalat for the
appellants writ petitioners."
The same is now posted to
30.10.2025 for arguments by the
new Counsel.
8. Despite the argument of the learned counsel for the petitioner
based on judgments and the textbooks cited above that the writ petition
is not barred by res judicata or estoppel, the same has to fail for the
reasons to follow. This writ petition with the same prayer between the
same parties stood considered and negatived earlier, and the petitioner,
having failed, is further estopped from re-agitating the identical issue
by instituting successive writ petitions, as it is barred by the principles
of res judicata as well as constructive res judicata. 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.
9. The doctrine of res judicata, rooted in Section 11 of the Code of
Civil Procedure, and reinforced by public policy, mandates that a matter
WP(C) NO. 32541 OF 2025
2025:KER:77317
once finally adjudicated by a competent court cannot be reopened
between the same parties. 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.
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
WP(C) NO. 32541 OF 2025
2025:KER:77317
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.
(see: Forward Construction Co. v. Prabhat Mandal (Regd.) Andheri (1986
KHC 598); Kalinga Mining Corpn. v. Union of India ((2013) 5 SCC 252);
Canara Bank v. N.G. Subbaraya Setty ((2018) 16 SCC 228); Celir LLP v.
Sumati Prasad Bafna (2024 SCC OnLine SC 3727); P.K. Krishnakumar v.
IndusInd Bank (2024 SCC OnLine Ker 6888) and Darayao v. State of U.P.
(AIR 1961 SC 1487), Mamleshwar Prasad and anr. v. Kanhaiya Lal (Dead)
Through L.Rs [(1975) 2 SCC 232].
10. In the instant case, the issue raised in this writ petition was
directly and substantially in issue in the earlier litigations referred to
above. 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.
WP(C) NO. 32541 OF 2025
2025:KER:77317
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. True, each sale
notice may furnish a fresh cause of action; even then, an adjudication on
the points already raised and rejected, is legally impermissible..
11. 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.
WP(C) NO. 32541 OF 2025
2025:KER:77317
12. None of the principles argued by the learned counsel for the
petitioner based on the authorities referred above holds that a writ
petition can be filed by the same person raising the same contentions
against the same adversary. None of the exceptions stated for avoiding
principles of res judicata applies to the instant case. The litigations
having lost up to the Apex Court, a reconsideration on the merits of the
present case cannot be made.
For the following reasons, I find no merit in this writ petition, and
the same would stand dismissed.
SD/-
MOHAMMED NIAS C.P.
JUDGE
JJ
WP(C) NO. 32541 OF 2025
2025:KER:77317
APPENDIX OF WP(C) 32541/2025
PETITIONER EXHIBITS
Exhibit P1 A COPY OF THE UDYAM REGISTRATION CERTIFICATE
NO. UDYAM-KL-02-0015023 DATED 27.03.2021,
ISSUED TO THE PETITIONER NO. 1 BY THE MSME
MINISTRY, GOVERNMENT OF INDIA
Exhibit P2 A COPY OF THE MSME NOTIFICATION NO. S.O.1432
(E) DATED 29.05.2015
Exhibit P3 A COPY OF THE RBI NOTIFICATION NO. RBI
NOTIFICATION NO. FIDD.MSME & NFS.BC.NO.
21/06.02.31 /2015-16, DATED 17.03.2016
Exhibit P4 A TRUE COPY OF THE EMAIL COMMUNICATION DATED
13.09.2021,BETWEEN THE PETITIONERS AND THE
RESPONDENT-BANK
Exhibit P5 A TRUE COPY OF THE DEMAND NOTICE DATED
16.08.2023 ISSUED BY THE 4TH RESPONDENT TO THE
PETITIONERS,
Exhibit P6 A TRUE COPY OF THE OBJECTION DATED 11.10.2023
ISSUED BY THE PETITIONERS TO THE 4TH
RESPONDENT,
Exhibit P7 A TRUE COPY OF THE REPLY DATED 18.10.2023,
ISSUED BY THE 4TH RESPONDENT TO THE
PETITIONERS
Exhibit P8 A TRUE COPY OF THE LETTER DATED 25.10.2023
ISSUED BY THE PETITIONERS TO THE 4TH
RESPONDENT
Exhibit P9 A TRUE COPY OF THE POSSESSION NOTICE DATED
31.10.2023 ISSUED BY THE 4TH RESPONDENT TO THE
PETITIONERS
Exhibit P10 A TRUE COPY OF THE LETTER DATED 02.11.2023
ISSUED BY THE PETITIONERS TO THE 4TH
RESPONDENT
Exhibit P11 A TRUE COPY OF THE LETTER DATED 03.11.2023
ISSUED BY THE 4TH RESPONDENT TO THE
PETITIONERS
Exhibit P12 A TRUE COPY OF THE SALE-NOTICE DATED
25.06.2024 ISSUED BY THE 4TH RESPONDENT TO THE
PETITIONERS
Exhibit P13 A TRUE COPY OF THE ORDER DATED 22.01.2025
PASSED BY THE LD. CJM, ERNAKULAM
Exhibit P14 A TRUE COPY OF THE JUDGEMENT DATED 27.11.2023
IN W.P. (C) NO. 38732/2023 BY THE HON'BLE HIGH
COURT OF KERALA
Exhibit P15 A TRUE COPY OF THE JUDGEMENT DATED 24.06.2024
IN W.P. (C) NO. 22424/2024 BY THE HON'BLE HIGH
WP(C) NO. 32541 OF 2025
2025:KER:77317
COURT OF KERALA
Exhibit P16 A TRUE COPY OF THE ORDER DATED 11.12.2024 IN
W.P. (L) NO. 35456/2024 BY THE HON'BLE BOMBAY
HIGH COURT
Exhibit P17 A COPY OF THE JUDGEMENT DATED 11.03.2025
PASSED IN W.P.(C) NO. 46514 OF 2024
Exhibit P18 A CHART DETAILING THE VARIOUS PROCEEDINGS
INITIATED BY THE PETITIONER
Exhibit P19 A TRUE COPY OF THE CASE DETAILS OF THE OA
NO.104/2025, EXTRACTED FROM THE DRT WEBSITE
Exhibit P20 A COPY OF THE NOTIFICATION NO. S.O 2119 (E)
DATED 26.6.2020 ISSUED BY THE GOVERNMENT OF
INDIA
Exhibit P21 A COPY OF THE NOTICE DATED 05.08.2025, PASTED
ON THE WALL OF THE PETITIONERS' PROPERTIES
Exhibit P22 A COPY OF THE ORDER OF NCLT_I, MUMBAI, DATED
19/12/2023 IN IA 2429/2021 IN CP(IB)
NO.3025(MB) OF 2019
Exhibit P23 A COPY OF THE ORDER OF NCLT_I, MUMBAI, DATED
18/02/2024 IN IA 54/2024 IN CP(IB) NO.845(MB)
OF 2022
Exhibit P24 A COPY OF THE ORDER DATED 15.07.2025 OF NCLT-
I, MUMBAI PASSED IN IA 1773/2024 IN CP(IB)
NO.916 OF 2020
RESPONDENT EXHIBITS
Exhibit R4(a) THE TRUE COPY OF THE JUDGEMENT DATED
07.02.2025 IN WP(C) NO.4631 OF 2025
Exhibit R4(b) THE TRUE COPY OF IA NO.1 OF 2025 FILED BY THE
WRIT PETITIONERS IN WP(C) NO. 46514 OF 2024
Exhibit R4(c) TRUE COPY OF THE MEMORANDUM OF AMENDED WRIT
PETITION IN WP(C) NO. 46514 OF 2024
Exhibit R4(d) THE TRUE COPY OF THE JUDGEMENT DATED
11.03.2025 IN WP(C) NO. 46514 OF 2024
Exhibit R4(e) THE TRUE COPY OF JUDGEMENT DATED 09.07.2025 IN
SLP NO. 17263 OF 2025 BEFORE THE HON'BLE
SUPREME COURT
Exhibit R4(f) THE TRUE OF COPY OF THE ORDER DATED 28.07.2025
IN MA 1330 OF 2025 IN SLP NO. 17263 OF 2025
