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Tuesday, September 11, 2012

the provisions of Order II Rule 2 of the CPC would be applicable only when the first suit is disposed of. As in the present case the second set of suits were filed during the pendency of the earlier suits, it was held, on the ratio of the aforesaid decision of the Division Bench of the High Court, that the provisions of Order II, Rule 2(3) will not be attracted. Judicial discipline required the learned Single Judge of the High Court to come to the aforesaid conclusion. However, we are unable to agree with the same in view of the object behind the enactment of the provisions of Order II Rule 2 of the CPC as already discussed by us, namely, that Order II Rule 2 of the CPC seeks to avoid multiplicity of litigations on same cause of action. If that is the true object of the law, on which we do not entertain any doubt, the same would not stand fully subserved by holding that the provisions of Order II Rule 2 of the CPC will apply only if the first suit is disposed of and not in a situation where the second suit has been filed during the pendency of the first suit. Rather, Order II, Rule 2 of the CPC will apply to both the aforesaid situations.


                                                                  Reportable


                        IN THE SUPREME COURT OF INDIA

                        CIVIL APPELLATE JURISDICTION

                       CIVIL APPEAL No. 6372  of 2012
                 ( Arising out of SLP (Civil) 1088 of 2010)



M/s Virgo Industries (Eng.) P.Ltd.                 … Appellant(s)

                                   Versus

M/s.Venturetech Solutions P.Ltd.             … Respondent(s)


                                    With

                       CIVIL APPEAL No.  6373 of 2012
                 ( Arising out of SLP (Civil) 1184 of 2010)



                            J  U  D  G  M  E  N T


RANJAN GOGOI, J


      Leave granted.

2.    Both the appeals are directed against the common  judgment  and  order
dated 6.10.2009 passed by the High Court of Madras by which the  High  Court
has refused to interdict the proceedings registered and numbered as OS  Nos.
202 and 203 of 2007 pending in the Court  of  the  learned  District  Judge,
Thiruvallur filed by the respondents herein.

3.    The brief facts that would be required to be noticed for  the  purpose
of the present adjudication may now be recapitulated.

The respondent in the two appeals, as the plaintiff, instituted C.S No.  831
of 2005 and C.S. No. 833 of 2005 before the  Madras  High  Court  seeking  a
decree of permanent injunction restraining the  appellant  (defendant)  from
alienating, encumbering or dealing with the plaint  schedule  properties  to
any other third party other than the plaintiff.  The  aforesaid  relief  was
claimed on the  basis  of  two  agreements  of  sale  entered  into  by  the
plaintiffs and the defendant both on 27.7.2005 in respect of  two  different
parcels of immovable property consisting of land and  superstructures  built
on plot No. 65 (old No.43) and plot No. 66 (old No.42),  Second  Main  Road,
Ambattur Industrial Estate, Chennai. In each  of  the  aforesaid  suits  the
plaintiff had stated that under the agreements  of  sale  different  amounts
were paid to the defendants, yet, on the pretext that  restrictions  on  the
alienation of the suit land were likely to be issued by the  Central  Excise
Department on account  of  pending  revenue  demands,  the  defendants  were
attempting to frustrate the agreements in question. In the  suits  filed  by
the plaintiff it was also  stated that as the period of  six  months   fixed
for execution of the sale deeds under the agreements  in  question  was  not
yet over,  the  plaintiff  is  not  claiming  specific  performance  of  the
agreements. The plaintiff, accordingly, sought leave of the  court  to  omit
to claim the relief of specific performance with  liberty  to  sue  for  the
said relief at a later point  of  time,  if  necessary.  The  two  suits  in
question, i.e., C.S. Nos. 831 and 833 of 2005 were filed  by  the  plaintiff
on 28.8.2005 and 9.9.2005 respectively.

4.    Thereafter on 29.5.2007, O.S. Nos. 202  and  203  were  filed  by  the
plaintiff in the Court of the District Judge, Tiruvallur  seeking  a  decree
against the defendant for execution and registration of the  sale  deeds  in
respect of the same property and for delivery of possession thereof  to  the
plaintiff. In the aforesaid latter suits it was mentioned by  the  plaintiff
that in respect of the same suit property it had  earlier  filed  suit  Nos.
C.S. 831 and 833 of 2005 seeking the relief of permanent injunction. As  the
time for performance of the agreements of sale had  not  elapsed  when  C.S.
No.831 and 833 of 2005 were instituted and  the  plaintiff  was  “under  the
bonafide belief that the defendants would perform the agreement” the  relief
of specific performance was not claimed in the aforesaid suits. However,  as
inspite of a legal notice issued to the defendants on  24.2.2006,  the  sale
deeds had not been executed by the defendant the latter suits  i.e.  O.S.Nos
202 and 203 were instituted.

5.    While the matter was so situated the defendant in both the suits  i.e.
the present petitioner, moved the Madras High Court by filing  two  separate
applications under Article  227  of  the  Constitution  to  strike  off  the
plaints in O.S. Nos. 202 and 203 of 2007 on the ground that  the  provisions
contained in Order II Rule 2 of the Civil Procedure Code,  1908  (for  short
the ‘CPC’) is a bar to the maintainability of both  the  suits.  Before  the
High Court the defendant had contended that the cause  of  action  for  both
sets of suits were the same,  namely,  the  refusal  or  reluctance  of  the
defendant to execute the  sale  deeds  in  terms  of  the  agreements  dated
27.7.2005. Therefore, at the time of filing of the first set of  suits  i.e.
C.S. Nos. 831 and 833 of 2005, it was open for the plaintiff  to  claim  the
relief of specific performance. The plaintiff did not seek the  said  relief
nor was leave granted by the  Madras  High  Court.  In  such  circumstances,
according to the defendant-petitioner, the suits filed by the plaintiff  for
specific performance i.e O.S.  Nos.  202  and  203  were  barred  under  the
provisions of Order II Rules 2 (3) of the CPC.

6.    The High Court, on consideration of the cases of  the  parties  before
it, took the view that on the date of filing of C.S. Nos.  831  and  833  of
2005  the  time  stipulated  in  the  agreements  between  the  parties  for
execution of the sale deeds had not expired. Therefore, the cause of  action
to seek the relief of specific performance had  not  matured.  According  to
the High Court it is only  after  filing  of  the  aforesaid  suits  and  on
failure of the defendants to execute the sale deeds pursuant  to  the  legal
notice dated 24.2.2006 that the  cause  of  action  to  seek  the  aforesaid
relief of specific performance had accrued.  The  High  Court,  accordingly,
took the view that the provisions of Order II Rule 2 (3)  of  the  CPC  were
not attracted to render the subsequent suits filed  by  the  plaintiff  i.e.
O.S. Nos. 202


and 203 non-maintainable. The  High  Court  also  took  the  view  that  the
provisions of Order II Rule 2 (3) of the CPC would render a subsequent  suit
not maintainable, only, if the earlier suit has been decreed  and  the  said
provisions of the CPC will not apply if the first suit remains  pending.  In
arriving at the aforesaid conclusion the learned Single Judge  of  the  High
Court considered himself to be bound by the decision of a Division Bench  of
the same High  Court  in  the  case  of  R.Vimalchand  and  M.Ratanchand  v.
Ramalingam, T.Srinivasalu & T. Venkatesaperumal[1] .  The  High  Court  also
held that though the application filed by the defendant  under  Article  227
of the Constitution was not maintainable as the defendant had the remedy  of
approaching the learned trial court under Order VII  Rule  11  of  the  CPC,
yet, in view of the elaborate discussions that have been made  and  findings
and conclusions recorded it  would  be  appropriate  to  decide  the  issues
raised on merits.  It is the correctness of the aforesaid view of  the  High
Court that has been assailed in the present appeals.
7.     We have heard Mr. C.A.  Sundaram,  learned  senior  counsel  for  the
appellants and Mr. S.Gurukrishna Kumar, learned counsel for the respondent.

8.    The necessary discussions that will have to follow  may  be  initiated
by extracting the provisions of Order II Rule 2 of the CPC:

      “ORDER II


      2. Suit to include the whole claim.
     
      (1) Every suit  shall  include  the  whole  of  the  claim  which  the
      plaintiff is entitled to make in respect of the cause of action; but a
      plaintiff may relinquish any portion of his claim in  order  to  bring
      the suit within the jurisdiction of any Court.
     
      (2) Relinquishment of part of claim-Where a plaintiff omits to sue  in
      respect of, or intentionally relinquishes, any portion of his claim he
      shall not afterwards sue in respect  of  the  portion  so  omitted  or
      relinquished.
     
      (3) Omission to sue for one of several reliefs-A  person  entitled  to
      more than one relief in respect of the same cause of  action  may  sue
      for all or any of such reliefs; but if he omits, except with the leave
      of the Court, to sue for all such reliefs, he shall not afterwards sue
      for any relief so omitted.


      Explanation-For  the  purposes  of  this  rule  an  obligation  and  a
      collateral security for its performance and successive claims  arising
      under the same obligation shall be deemed respectively  to  constitute
      but one cause of action.”


9.    Order II Rule 1 requires every suit to include the whole of the  claim
to which the plaintiff is entitled in respect of  any  particular  cause  of
action. However, the plaintiff has an option to relinquish any part  of  his
claim if he chooses to do so. Order  II  Rule  2  contemplates  a  situation
where a plaintiff omits to sue or intentionally relinquishes any portion  of
the claim which he is entitled to make. If the plaintiff so acts,  Order  II
Rule 2 of CPC makes it clear that he shall  not,  afterwards,  sue  for  the
part or portion of the claim that has been omitted or relinquished. It  must
be noticed that Order II  Rule  2  (2)  does  not  contemplate  omission  or
relinquishment of any portion of the plaintiff’s claim  with  the  leave  of
the court so as to entitle him to come back later  to  seek  what  has  been
omitted or relinquished. Such leave of the Court is  contemplated  by  Order
II Rule 2(3) in situations where a plaintiff being  entitled  to  more  than
one relief on a particular cause of  action,  omits  to  sue  for  all  such
reliefs. In such a situation, the plaintiff is  precluded  from  bringing  a
subsequent suit to claim the relief earlier omitted except  in  a  situation
where leave of the Court had been obtained. It is, therefore, clear  from  a
conjoint reading of the provisions of Order II Rule 2 (2)  and  (3)  of  the
CPC that the aforesaid two sub-rules of Order  II  Rule  2  contemplate  two
different situations, namely, where a  plaintiff  omits  or  relinquishes  a
part of a claim which he is  entitled  to  make  and,  secondly,  where  the
plaintiff omits or relinquishes one out  of  the  several  reliefs  that  he
could have claimed in the suit. It is only in the  latter  situations  where
the plaintiff can file a subsequent suit seeking the relief omitted  in  the
earlier suit proved that at the time of omission  to  claim  the  particular
relief he had obtained leave of the Court in the first suit.

10.   The object behind enactment of Order II Rule 2 (2) and (3) of the  CPC
is  not  far  to  seek.  The  Rule  engrafts  a  laudable   principle   that
discourages/prohibits vexing the  defendant  again  and  again  by  multiple
suits except in a  situation  where  one  of  the  several  reliefs,  though
available to a plaintiff, may not have been claimed for  a  good  reason.  A
later suit for such relief is contemplated only with the leave of the  Court
which leave, naturally, will be granted upon due satisfaction and  for  good
and sufficient reasons. The situations where the bar under Order II  Rule  2
(2) and (3) will be attracted  have  been  enumerated  in  a  long  line  of
decisions spread over a century now. Though each of the aforesaid  decisions
contain a clear and precise narration of the principles of  law  arrived  at
after a detailed analysis, the principles laid down in the judgment  of  the
Constitution Bench of this Court in Gurbux Singh  v.  Bhooralal[2]   may  be
usefully recalled below:

      “In order that a plea of a bar under O. 2. r.  2(3),  Civil  Procedure
      Code should succeed the defendant who raises the plea  must  make  out
      (1) that the second suit was in respect of the same cause of action as
      that on which the previous suit was based, (2) that in respect of that
      cause of action the plaintiff was entitled to more  than  one  relief,
      (3) that being thus entitled to more than one  relief  the  plaintiff,
      without leave obtained from the Court, omitted to sue for  the  relief
      for which the second suit had been filed. From this analysis it  would
      be seen that the defendant would have to establish  primarily  and  to
      start with, the precise cause of action upon which the  previous  suit
      was filed, for unless there is identity between the cause of action on
      which the earlier suit was filed and that on which the  claim  in  the
      later suit is based there would be no scope for the application of the
      bar.”

The above principles have been reiterated  in  several  later  judgments  of
this Court. Reference by way of illustration may be made  to  the  judgments
Deva Ram & Anr. v. Ishwar Chand & Anr.[3] and M/s.  Bengal  Waterproof  Ltd.
v. M/s Bombay Waterproof Manufacturing Co.& Anr.[4]

11.   The cardinal requirement for application of the  provisions  contained
in Order II Rule 2(2) and (3), therefore, is that the  cause  of  action  in
the later suit must be the same as in the first  suit.  It  will  be  wholly
unnecessary to enter into any discourse on the  true  meaning  of  the  said
expression, i.e. cause  of  action,  particularly,  in  view  of  the  clear
enunciation in a recent judgment of this  Court  in  the  Church  of  Christ
Charitable Trust and Educational  Charitable  Society,  represented  by  its
Chairman   v.   Ponniamman   Educational   Trust    represented    by    its
Chairperson/Managing Trustee[5]. The huge number  of  opinions  rendered  on
the  issue  including  the  judicial  pronouncements  available   does   not
fundamentally detract from what is stated  in  Halsbury’s  Law  of  England,
(4th  Edition).  The  following  reference  from  the  above   work   would,
therefore, be apt for being extracted hereinbelow:
      “Cause of Action”  has  been  defined  as  meaning  simply  a  factual
      situation existence of which entitles one person to  obtain  from  the
      Court a remedy against another person. The phrase has been  held  from
      earliest time to include every fact which is material to be proved  to
      entitle the plaintiff to succeed, and every  fact  which  a  defendant
      would have a right to traverse. ‘Cause of action’ has also been  taken
      to mean that particular action the part of the defendant  which  gives
      the plaintiff  his  cause  of  complaint,  or  the  subject-matter  of
      grievance founding the action,  not  merely  the  technical  cause  of
      action."




12.   In the instant case though leave to sue for  the  relief  of  specific
performance at a later stage was claimed by the plaintiff in C.S.  Nos.  831
and 833 of 2005, admittedly, no such leave was granted  by  the  Court.  The
question, therefore, that the Court will have to  address,  in  the  present
case, is whether the cause of action for the first and second set  of  suits
is one and the same. Depending on such answer as the  Court  may  offer  the
rights of the parties will follow.

13.   A reading of the plaints filed in C.S. Nos. 831 and 833 of  2005  show
clear averments to the effect that after  execution  of  the  agreements  of
sale dated 27.7.2005 the plaintiff received a  letter  dated  1.8.2005  from
the defendant conveying the information that the Central  Excise  Department
was contemplating  issuance  of  a  notice  restraining  alienation  of  the
property. The advance amounts paid by the  plaintiff  to  the  defendant  by
cheques were also returned. According to the plaintiff it was  surprised  by
the aforesaid stand of the defendant who had  earlier  represented  that  it
had clear and marketable title to  the  property.  In  paragraph  5  of  the
plaint, it is stated that the encumbrance certificate dated  22.8.2005  made
available to the plaintiff did not inspire confidence of  the  plaintiff  as
the same contained an  entry  dated  1.10.2004.  The  plaintiff,  therefore,
seriously doubted the claim made by the defendant regarding the  proceedings
initiated by the Central Excise Department. In the  aforesaid  paragraph  of
the plaint it was averred by the plaintiff that the  defendant  is  “finding
an excuse to cancel the sale agreement and sell the property to  some  other
third party.”
In the aforesaid paragraph of the plaint, it was  further  stated  that  “in
this background, the plaintiff submits that the defendant is  attempting  to
frustrate the agreement entered into between the parties.”

14.   The averments made by the plaintiff in C.S. Nos. 831 and 833 of  2005,
particularly the pleadings extracted above, leave no room for doubt that  on
the dates when C.S. Nos. 831  and  833  of  2005  were  instituted,  namely,
28.8.2005 and 9.9.2005, the plaintiff itself  had  claimed  that  facts  and
events have occurred which entitled it to contend that the defendant had  no
intention to  honour  the  agreements  dated  27.7.2005.  In  the  aforesaid
situation it was open  for  the  plaintiff  to  incorporate  the  relief  of
specific performance alongwith  the  relief  of  permanent  injunction  that
formed the subject matter of above two suits. The foundation for the  relief
of permanent injunction claimed in the two suits furnished a complete  cause
of action to the plaintiff in C.S. Nos. 831 and 833  to  also  sue  for  the
relief of specific performance. Yet, the said  relief  was  omitted  and  no
leave in this regard was obtained or granted by the Court.

15.   Furthermore, according to the plaintiff, which fact is also stated  in
the plaints filed in C.S. Nos. 831 and 833, on the date when  the  aforesaid
two suits were filed  the  relief  of  specific  performance  was  premature
inasmuch as the time for execution of the sale documents  by  the  defendant
in terms of the agreements dated 27.7.2005 had  not  elapsed.  According  to
the plaintiff, it is only after the expiry of the aforesaid period  of  time
and upon failure of the defendant to execute  the  sale  deeds  despite  the
legal notice dated 24.2.2006 that the cause of action to  claim  the  relief
of specific performance had accrued. The above stand of the plaintiff  found
favour with the High Court. We disagree. A suit claiming a relief  to  which
the plaintiff may become entitled at a subsequent point of time, though  may
be termed as premature, yet, can not per se be dismissed to be presented  on
a future date. There is no universal rule to the above  effect  inasmuch  as
“the question of a suit being premature does not  go  to  the  root  of  the
jurisdiction of the Court” as held by this Court in Vithalbhai (P)  Ltd.  v.
Union Bank of India[6]. In the aforesaid case this Court has taken the  view
that whether a premature suit is required to be  entertained  or  not  is  a
question of discretion and unless “there is a mandatory  bar  created  by  a
statute which disables the plaintiff from filing the suit  on  or  before  a
particular date or the occurrence of a particular  event”,  the  Court  must
weigh and balance the several competing factors  that  are  required  to  be
considered including the question as to whether any useful purpose would  be
served by dismissing the suit as premature as the  same  would  entitle  the
plaintiff to file a fresh suit on a subsequent date. We may usefully add  in
this connection that there is no provision in the Specific Relief Act,  1963
requiring a plaintiff claiming the relief of specific  performance  to  wait
for expiry of the due date for performance of the agreement in  a  situation
where the defendant may have made his intentions clear by his overt acts.

16.   The learned Single Judge of the High Court had  considered,  and  very
rightly, to be bound to follow an earlier Division Bench order in  the  case
of  R.Vimalchand  and  M.Ratanchand  v.  Ramalingam,  T.Srinivasalu   &   T.
Venkatesaperumal (supra) holding that the provisions of Order II Rule  2  of
the CPC would be applicable only when the first suit is disposed of.  As  in
the present case the second set of suits were filed during the  pendency  of
the earlier suits, it was held, on the ratio of the  aforesaid  decision  of
the Division Bench of the High Court, that the provisions of Order II,  Rule
2(3) will not be attracted. Judicial discipline required the learned  Single
Judge of the High Court to come to the aforesaid  conclusion.  However,   we
are unable to agree  with  the  same  in  view  of  the  object  behind  the
enactment of the provisions of Order  II  Rule  2  of  the  CPC  as  already
discussed by us, namely, that Order II Rule 2 of  the  CPC  seeks  to  avoid
multiplicity of litigations on same cause of action. If  that  is  the  true
object of the law, on which we do not entertain any doubt,  the  same  would
not stand fully subserved by holding that the provisions of Order II Rule  2
of the CPC will apply only if the first suit is disposed of  and  not  in  a
situation where the second suit has been filed during the  pendency  of  the
first suit. Rather, Order II, Rule 2 of the  CPC  will  apply  to  both  the
aforesaid situations. Though direct judicial  pronouncements  on  the  issue
are somewhat scarce, we find that  a  similar  view  had  been  taken  in  a
decision of the High Court at Allahabad in Murti v. Bhola Ram[7] and by  the
Bombay High Court in Krishnaji v. Raghunath[8].

17.   In the light of the above discussions we are  of  the  view  that  the
present appeals deserve to be allowed. Accordingly we  allow  the  same  and
set aside the judgment and order dated 6.10.2009 passed by  the  High  Court
of Madras in C.R.P.PD. Nos. 3758 and 3759 of 2007.  Consequently, we  strike
off the plaint in O.S.Nos.202 and 203  of  2007  on  the  file  of  District
Judge, Thiruvallur.
                                             ...……………………J.
                                             [P. SATHASIVAM]


                                             ………………………J.
                                               [RANJAN GOGOI]
New Delhi,
September 07, 2012.


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   -----------------------
[1]    2002 (3) MLJ page 177
[2]    AIR 1964 SC 1810
[3]    1995 (6) SCC 733
[4]    AIR 1997 SC 1398
[5]    JT 2012 (6) SC 149
[6]    2005(4) SCC 315
[7]    (1894) ILR 16 All 165
[8]    AIR 1954 BOM 125



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