New Delhi, 24.11.2025 : The Delhi State Consumer Disputes Redressal Commission has ruled that rejection of a civil suit under Order VII Rule 11 of the Code of Civil Procedure, 1908 does not amount to a decision on merits and therefore cannot operate as res judicata to bar a consumer complaint arising from the same cause of action.
Allowing an appeal filed by Ms. Shobha Rani, the State Commission set aside the order of the District Consumer Disputes Redressal Forum (West), Janakpuri, which had dismissed her complaint on the ground of res judicata. The matter was remanded to the District Forum for fresh adjudication on merits, with a direction to dispose of the case expeditiously in view of its long pendency.
The appeal was decided by Ms. Bimla Kumari, Presiding Member of the State Commission. The dispute relates to an insurance claim arising out of a fire incident at Vishal Market, Chandni Chowk, Delhi, in May 1995, which allegedly destroyed the complainant’s shop, stock, and business records. Ms. Shobha Rani, who was engaged in the business of sale and purchase of photographic material, had taken a burglary and fire insurance policy for a sum insured of ₹20 lakh from National Insurance Co. Ltd.
Following the fire, a surveyor assessed the loss at ₹14,10,407. However, the insurer paid only ₹5,46,000. The complainant claimed that the amount was accepted under protest and not towards full and final settlement, while the insurer maintained the contrary. Aggrieved by the partial settlement, she approached the consumer forum seeking recovery of the balance amount along with compensation.
The consumer complaint was initially dismissed on the ground that the services were availed for commercial purposes. That order was later set aside by the State Commission, which remanded the matter to the District Forum for decision on merits. In parallel, the complainant had filed a civil suit in 2004 for recovery of ₹14,54,000 against the insurer and Punjab National Bank. The civil court rejected the plaint under Order VII Rule 11 CPC on the grounds of limitation and lack of jurisdiction.
After revival of the consumer complaint pursuant to remand, the District Forum once again dismissed it, this time holding that rejection of the civil suit operated as res judicata. This finding was challenged before the State Commission.
Examining the issue, the State Commission held that rejection of a plaint under Order VII Rule 11 CPC does not involve adjudication of the substantive rights of the parties. It observed that res judicata requires a prior decision on merits after consideration of pleadings, issues, and findings, which is absent in a rejection under Order VII Rule 11.
Relying on judgments of the Supreme Court of India, including Pandurangan v. T. Jayarama Chettiar and Srihari Hanumandas Totala v. Hemant Vithal Kamat, the Commission reiterated that a plea of res judicata cannot be conclusively determined at the stage of rejection of a plaint. Since the civil suit had been rejected only on technical grounds of limitation and jurisdiction, it could not bar proceedings before a competent consumer forum.
Holding that the District Forum had committed a material irregularity, the State Commission allowed the appeal, set aside the impugned order, and remanded the complaint for fresh decision on merits, directing disposal preferably within three months.
Cause Title: Ms. Shobha Rani v. National Insurance Co. Ltd.
Case No.: First Appeal No. 50/2010
Coram: Ms. Bimla Kumari, Presiding Member
