The Delhi High Court held that proceeding ahead with appeal despite consent order, amounts to relitigation which is an abuse of process.
A division bench of Justice Manmohan and Justice Mini Pushkarna stated that relitigation amounts to abuse of process extended the res judicata principle in two respects, namely, the rule applies not to matters which were decided by a Court, but to matters which might have been decided but were not. The rule applies not just to subsequent litigation between the same parties but also to parties to the subsequent proceedings who were not joined as parties to the earlier proceedings.
It has also been held by English Courts that there is no distinction in law between cases where the original action concludes by settlement and where it concludes by judgement.
The Appellants themselves realising that the consent judgement would operate as a bar in prosecuting the underlying suit, filed an application for rescission of the judgement before the Tel Aviv Court.
Once the Appellants chose not to file a fresh/separate action for rescission of the consent order dated 11th May, 2017 as directed by the Court in the aforesaid order, it is implied that they accepted the consent order in its present form.
Consequently, as the consent order dated 11th May, 2017 results in resolution of the disputes between the parties stemming from the Share Entitlement dated 17th October, 2006, all the disputes between the parties (including those pending in other jurisdictions) as on the date of passing of the consent order, came to an end and the present appeal as well as the underlying suit became infructuous. Accordingly, with the cause of action no longer surviving, the Appellants cannot continue to prosecute the present appeal.
“This Court is of the opinion that while adjudicating the present appeal, it cannot go behind the orders passed by the Tel Aviv District Court. To allow the continuance of the present appeal by the Appellants would be violative of the principle of comity of courts as it could result in conflict of decisions between an Israeli and Indian Court,” the court said.
The court noted that Since the Appellants entered into a Settlement which resulted in the consent order dated 11th May, 2017 without reserving any liberty to continue the Indian proceedings despite being fully aware of the nature of the holding of Respondent No.2 in the downstream entities, the Appellants by continuing to agitate their rights under Share Entitlement dated 17th October, 2006 in the present appeal are now ‘mounting a collateral attack’ on the final consent decree / order passed by a competent Court of law.
The court held that the Appellants by continuing to prosecute the present appeal are re-litigating which is an abuse of process.