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While Order In REED 2020 SC 10539 Operated As Res Judicata, It Didn't Create A Binding Precedent: SC

A three-judge Bench of the Supreme Court of India comprising Justices Sanjiv Khanna, Bela M. Trivedi and Ujjal Bhuyan was hearing an appeal and held that the Supreme Court held that while the order in Pawan Gupta v. Experion Developers Private Limited, REED 2020 SC 10539 operated as res judicata, it did not create a binding precedent, remanding the case to the National Commission for re-evaluation based on new evidence presented by the appellant.

The appeal was filed by Experion Developers Private Limited under Section 67 of the Consumer Protection Act, 2019, challenging the National Consumer Disputes Redressal Commission's (National Commission) order and judgment dated 16.01.2023 in Consumer Case No. 34/2022. The National Commission had directed Experion Developers to refund the excess sale area amount collected from Himanshu Dewan, Sonali Dewan, and others and to execute supplementary correction deeds within six weeks from the order.

Experion Developers had developed the "Windchants" housing project in Gurgaon, Haryana, governed by the "Apartment Buyer Agreement." Clause 8 of the agreement allowed for a maximum of 10% variation in the sale area and commensurate consideration. The dispute arose when Experion Developers demanded an increased sale area, contested by the respondents as unjustified.

The crux of the dispute was when the 'cause of action' for the consumer complaint arose – when the demand for increased area was raised (appellant's stance) or when the conveyance deeds were executed after payments (respondents' stance). The appellant argued the complaint was time-barred, while the respondents claimed pandemic-induced suspension of limitation.

The National Commission ruled in favour of the respondents, terming the demand for excess area unjustified and an unfair trade practice. However, the Supreme Court disagreed with the Commission on the 'continuing cause of action' and computation of limitation. The Supreme Court held that 'cause of action' arises when an aggrieved party can maintain an action for a successful outcome. Apex Court remanded the case to the National Commission to assess the validity of the area increase and the architect's certificate and report.

The Supreme Court also discussed the doctrine of merger, stating that the judgment in Pawan Gupta v. Experion Developers Private Limited, REED 2020 SC 10539 was binding. Still, the National Commission should re-evaluate the case based on new evidence presented. The appellant's argument of acquiescence and estoppel was addressed, and the Supreme Court sent the case back to the National Commission for a comprehensive examination of factual and legal aspects.

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