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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