Isabella Mariam

The High Court of Kerala Division Bench of Justice Anil K. Narendran and Justice Muralee Krishna S. dismissed a writ appeal filed by borrowers challenging a Single Judge judgment that had declined to interfere with recovery measures initiated by a bank under the SARFAESI Act. The borrowers’ writ petition had principally sought a stay of proceedings under the SARFAESI Act and other recovery statutes, pending constitution of a committee for “resolution of stress,” invoking the MSME stress-revival framework. The Single Judge had found that the attempt to re-agitate similar contentions against the same adversary was barred by res judicata/constructive res judicata and that none of the stated exceptions applied.

A company borrower and the legal heirs of its deceased managing director filed an intra-court writ appeal under Section 5(i) of the Kerala High Court Act, 1958, challenging the Single Judge’s dismissal of their writ petition filed under Article 226 of the Constitution. The writ petition was filed mainly against steps initiated by the bank under the SARFAESI Act, and it sought extensive declaratory and consequential reliefs, including reliefs concerning the Central Government/RBI notification dated 29.05.2015 on resolution of “stress” in MSMEs, and prayers to restrain recovery actions under multiple statutes. The interim relief sought was a stay of proceedings against the petitioners under the SARFAESI Act, RDB Act, IBC and NI Act, pending disposal of the writ petition/constitution of a committee for stress resolution.

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In the writ petition, the bank’s standing counsel filed a statement opposing the reliefs, and produced documents as exhibits. The Single Judge dismissed the writ petition, holding that the petition could not be maintained as the same person was raising the same contentions against the same adversary, and that the earlier litigations (including up to the Supreme Court) foreclosed reconsideration on merits.

The Court recorded the scope of the appeal as one challenging the dismissal of the writ petition and noted the nature of interim relief sought: “To stay all proceedings against the petitioners under the SARFAESI Act, RDB Act, IBC and NI Act…”

On finality and repeated challenges, the judgment relied on binding effect of prior adjudication, quoting that: “If a judgment has been pronounced by a court of competent jurisdiction, it is binding between the parties…” It also reproduced the proposition that: “an original petition for a writ under Article 32 cannot take the place of an appeal…”

On abuse of process and the “Henderson Principle”, the Court stated that the principle “stipulates that all claims and issues that could and should have been raised in an earlier proceeding are barred… except in exceptional circumstances.” It noted the rationale of avoiding repetitive litigation and preserving finality: “This rule not only supports the finality of judgments…” The judgment further referred to Celir LLP for the classification of res judicata/abuse-of-process situations, including “extended or constructive res judicata… where an issue… could, and should, have been raised… but was not raised” and that “piecemeal litigation… is… a facet of abuse of process of law”

In relation to the appellants’ attempt to reopen earlier determinations, the Court rejected the argument that previous judgments were liable to be recalled in later proceedings: “we find absolutely no merit in the argument…”

On the outcome, the Bench concluded: “we find no reason to interfere with the judgment… whereby [the writ petition] stands dismissed, for the reasons stated therein.”

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The Division Bench stated that “In the above circumstances, we find no reason to interfere with the judgment dated 17.10.2025 of the learned Single Judge, whereby W.P.(C)No.32541 of 2025 stands dismissed, for the reasons stated therein. In the result, this writ appeal fails and the same is accordingly dismissed.”

After the judgment was pronounced, the appellants sought a two-week stay to approach the Supreme Court. The Court stated: “for the reasons stated in the judgment, we find that the appellants are not entitled to such an order of stay,” and therefore “the oral request made by the learned counsel for the appellants is declined.”

Advocates Representing the Parties

For the Petitioners: Mathews J. Nedumpara, Senior Counsel; Maria Nedumpara; Shameem Fayiz V.P.; Roy Pallikoodam.

For the Respondents: Benraj K.R., CGC; O M Shaleena, DSGI; Nisha Bose, Senior Government Pleader; C K Karunakaran (Standing Counsel, Dhanlaxmi Bank); Ajithkrishnan; S. Mohammed Al-Rafi (Standing Counsel, GAIL); M.U. Vijayalakshmi (Standing Counsel, CSML); Jithesh Menon (Standing Counsel, SBI); Abel Tom Benny (Standing Counsel for BPCL).

Case Title: M/s. M.D. Esthappan Infrastructure Pvt. Ltd. & Ors. v. Reserve Bank of India & Ors.
Neutral Citation: 2025: KER:91345.
Case Number: W.A.No.2629 of 2025.
Bench: Justice Anil K. Narendran, Justice Muralee Krishna S.