Delhi High Court
Kanwal Kishore Manchanda And Anr. vs S.D. Technical Services Pvt. Ltd. on 8 April, 2005
What then is a cause of action? Till there is no cause, there cannot be any action. For a cause, there has to be a right to sue. Infringement of a right or a clear and unequivocal threat to infringe that right would constitute a cause to bring an action. Whether a particular threat gave rise to a compulsory cause of action depends upon the question whether that threat effectively invades or jeopardises the right.
To constitute a cause of action, first is the coming into existence of a right, and secondly, its infringement or threat to be infringed.
Usually, cause of action in substance denotes and determines the starting point of limitation.
It is also understood as the bundles of facts which have to be averred and proved to sustain an action.
The Hon‟ble Supreme Court in ABC Laminart -vs- A.P. Agencies, AIR 1989 SC 1239 succinctly defined cause of action thus:-"A cause of action is a bundle of facts which taken with the law applicable to them gives the plaintiff a right to relief against the defendant. It must include some act done by the defendant since in the absence, no cause of action can possibly accrue. It is not limited to the actual infringement of the right sued on but includes all the material facts on which it is founded. It does not evidence necessary to prove such facts, but every fact necessary for the plaintiff to prove to enable him to obtain a judgment/decree. Everything which if not proved would give the defendant a right to immediate judgment must be part of the cause of action. But it has no relation whatever to the defence which may be set up by the defendant nor does it depend upon the character of the relief prayed for by the plaintiff".
In Swamy Atmananda - vs- Sri Ramakrishna Tapovanam, AIR 2005 SC 2392, after recounting various precedents, the Supreme Court defined cause of action in these words:-"Cause of action means every fact, which, if traversed, would be necessary for the plaintiff to prove in order to support his right to a judgment of the Court. It is a bundle of facts which taken with the law applicable to them gives the plaintiff a right to relief against the defendant. It must include some act done by the defendant since in the absence of such an act, no cause of action can possibly accrue. It is not limited to the actual infringement of the right sued on but includes all material facts on which it is founded".
In Om Prakash Srivastava -vs- Union of India, (2006) 6 SCC 207, the Hon‟ble Supreme Court gave a simple formula to determine the identity of cause of action. The Court observed that:-"The rule is directed to securing the exhaustion of the relief in respect of a cause of action and not to the inclusion in one and the same action or different causes of action, even though they arise from the same transaction. One great criterion, when question arises as to whether the cause of action in the subsequent suit is identical with that in the first suit is whether the same evidence will maintain both actions".
ORDER 2 RULE 2 :
A mere look at the provisions shows that once the plaintiff comes to a court of law for getting any redress basing his case on an existing cause of action, he must include in his suit the whole claim pertaining to that cause of action. But if he gives up a part of the claim based on the said cause of action or omits to sue in connection with the same, then he cannot subsequently resurrect the said claim based on the same cause of action. So far as sub-rule (3) is concerned, before the second suit of the plaintiff can be held to be barred by the same, it must be shown that the second suit is based on the same cause of action on which the earlier suit was based and if the cause of action is the same in both the suits and if in the earlier suit plaintiff had not sued for any of the reliefs available to it on the basis of that cause of action, the reliefs which it had failed to press into service in that suit cannot be subsequently prayed for except with the leave of the court. It must, therefore, be shown by the defendants for supporting their plea of bar of Order II, Rule 2, sub-rule (3) that the second suit of the plaintiff filed is based on the same cause of action on which its earlier suit was based and that because it had not prayed for any relief and it had not obtained leave of the court in that connection, it cannot sue for that relief in the present second suit.
A Constitution Bench of this case of Gurbux Singh v. Bhooralal (1964 (7) SCR 831) in this connection has laid down as under:
"In order that a plea of a bar Order 2, Rule 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 more than one relief the plaintiff, without leave obtained from the Court, omitted to sue for the relief 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. No doubt, a relief which is sought in a plaint could ordinarily be traceable to a particular cause of action but this might, by no means, be the universal rule. As the plea is a technical bar it has to be established satisfactorily and cannot be presumed merely on basis of inferential reasoning. It is for this reason that we consider that a plea of a bar under Order 2, Rule 2, Civil Procedure Code can be established only if the defendant files in evidence the pleadings in the previous suit and thereby proves to the Court the identify of the cause of action in the two suits. It of 1950 were not filed by the appellant in the present suit as evidence in support of his plea under Order 2, Rule 2, Civil Procedure Code. The learned trial Judge, however, without these pleadings being on the record inferred what the cause of action should have been from the reference to the previous suit contained in the plaint as a matter of deduction. At the stage of the appeal the learned District Judge noticed this lacuna in the appellant's case and pointed out, in our opinion rightly, that without the plaint in the previous suit being on the record, a plea of a bar under Order 2, Rule 2, Civil Procedure Code was not maintainable."
The above position was again illuminatingly highlighted by this Court in Bengal Waterproof Limited v. Bombay Waterproof Manufacturing Company and Another (1997 (1) SCC 99).
Order II Rule 2, sub-rule (3) requires that the cause of action in the earlier suit must be the same on which the subsequent suit is based. Therefore, there must be identical cause of action in both the suits, to attract the bar of Order II sub-rule (3). The illustrations given under the rule clearly brings out this position. Above is the ambit and scope of the provision as highlighted in Gurbux Singh's case (supra) by the Constitution Bench and in Bengal Waterproof Limited (supra). The salutary principle behind Order II Rule 2 is that a defendant or defendants should not be vexed time and again for the same cause by splitting the claim and the reliefs for being indicated in successive litigations. It is, therefore, provided that the plaintiff must not abandon any part of the claim without the leave of the Court and must claim the whole relief or entire bundle of reliefs available to him in respect of that very same cause of action. He will thereafter be precluded from so doing in any subsequent litigation that he may commence if he has not obtained the prior permission of the Court.
In Deva Ram and Another v. Ishwar Chand and Another (1995 (6) SCC 733).
The doctrine of res judicata differs from the principle underlying Order II Rule 2 in that the former places emphasis on the plaintiff's duty to exhaust all available grounds in support of his claim, while the latter requires the plaintiff to claim all reliefs emanating from the same cause of action. Order II concerns framing of a suit and requires that the plaintiffs shall include whole of his claim in the framing of the suit. Sub-rule (1), inter alia, provides that every suit shall include the whole of the claim which the plaintiff is entitled to make in respect of the very same cause of action. If he relinquishes any claim to bring the suit within the jurisdiction of any Court, he will not be entitled to that relief in any subsequent suit. Further sub-rule (3) provides that the person entitled to more than one reliefs 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 such relief he shall not be afterwards be permitted to sue for relief so omitted.
(In Deva Ram's case (supra) it was held that where the previous suit was for recovery for loan which was dismissed on the ground that the document on the basis of which the suit was filed was not a sale deed but agreement for sale, subsequent suit for recovery of possession on the basis of title was not hit by Order II Rule 2 as the cause of action in the two suits were not identical or one and the same.)
The expression "cause of action" has acquired a judicially-settled meaning. In the restricted sense cause of action means the circumstances forming the infraction of the right or the immediate occasion for the action. In the wider sense, it means the necessary conditions for the maintenance of the suit, including not only the infraction of the right, but the infraction coupled with the right itself. Compendiously the expression means every fact which it would be necessary for the plaintiff to prove, if traversed, in order to support his right to the judgment of the Court. Every fact which is necessary to be proved, as distinguished from every piece of evidence which is necessary to prove each fact, comprises in "cause of action".
In Halsbury's Laws of England (Fourth Edition) it has been stated as follows:
"'Cause of action' has been defined as meaning simply a factual situation the 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 act on 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."
As observed by the Privy Council in Payana v. Pana Lana (1914) 41 IA 142, the rule is directed to securing the exhaustion of the relief in respect of a cause of action and not to the inclusion in one and the same action or different causes of action, even though they arise from the same transaction. One great criterion is, when the question arises as to whether the cause of action in the subsequent suit is identical with that in the first suit whether the same evidence will maintain both actions. (See Mohammad Khalil Khan v. Mahbub Ali Mian (AIR 1949 P.C. 78) In Inacio Martins (deceased through LRs.) v. Narayan Hari Naik and Ors. (1993 (3) SCC 123), an almost identical question arose. In that case, the plaintiff had prayed for protection of his possession by a prohibitory injunction. That prayer was refused. Subsequent suit was for recovery of possession. This Court held that in the former suit the only relief that the Court could have granted was in regard to the declaration sought for which the Court could not have granted in view of the provisions of Specific Relief Act. The cause of action for the first suit was based on the apprehension about likely forcible dispossession. The cause of action of the suit was not on the premise that he had, in fact, been illegally and forcefully dispossessed and needed the Courts' assistance for restoration of possession. In that background this Court held that subsequent suit was based on a distinct cause of action not found in or formed the subject matter of the former suit. The ratio of the decision has full application to the facts of the present case.
A Constitution Bench of this Court has explained the scope of the plea based on Order II Rule 2 of the Code in Gurbux Singh Vs. Bhooralal (supra). It will be useful to quote from the Head note of that decision: "Held: (i) A plea under Order 2 rule 2 of the Code based on the existence of a former pleading cannot be entertained when the pleading on which it rests has not been produced. It is for this reason that a plea of a bar under O.2 r.2 of the Code can be established only if the defendant files in evidence the pleadings in the previous suit and thereby proves to the court the identity of the cause of action in the two suits. In other words a plea under O.2 r.2 of the Code cannot be made out except on proof of the plaint in the previous suit the filing of which is said to create the bar. Without placing before the court the plaint in which those facts were alleged, the defendant cannot invite the court to speculate or infer by a process of deduction what those facts might be with reference to the reliefs which were then claimed. On the facts of this case it has to be held that the plea of a bar under O.2 r.2 of the Code should not have been entertained at all by the trial court because the pleadings in civil suit No. 28 of 1950 were not filed by the appellant in support of this plea.
(ii) In order that a plea of a bar under O. 2. r. 2(3) of the Code should succeed the defendant who raises the plea must make out (i) that the second suit was in respect of the same cause of action as that on which the previous suit was based; (ii) that in respect of that cause of action the plaintiff was entitled to more than one relief (iii) 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.
It is held in S. Nazeer Ahmed -vs- State Bank of Mysore, (2007) 11 SCC 75 that Order II Rule 2 is directed to securing an exhaustion of relief in respect of a cause of action and not to the inclusion in one and the same action of different causes of action, even though they arise from the same transaction. What must be appreciated is that but for Order XXXIV Rule 14, it may not have been open to the Plaintiff Bank to sue upon the mortgage executed by the borrower, having omitted to proceed on the mortgage in the first suit which was for recovery of money. The Bank endeavoured to proceed on the mortgage in execution, on an objection being raised by the Judgment Debtor as found to be entitled to file a second suit because of the CPC. We should not forget that law abhor foreclosure of mortgages and instead postulates and favours redemption.
Supreme Court of India
Alka Gupta vs Narender Kumar Gupta on 27 September, 2010
Unless the defendant pleads the bar under Order 2 Rule 2 of the Code and an issue is framed focusing the parties on that bar to the suit, obviously the court can not examine or reject a suit on that ground. The pleadings in the earlier suit should be exhibited or marked by consent or at least admitted by both parties. The plaintiff should have an opportunity to explain or demonstrate that the second suit was based on a different cause of action. In this case, the respondent did not contend that the suit was barred by Order 2 Rule 2 of the Code. No issue was framed as to whether the suit was barred by Order 2 Rule 2 of the Code. But the High Court (both the trial bench and appellate bench) have erroneously assumed that a plea of res judicata would include a plea of bar under Order 2 Rule 2 of the Code. Res judicata relates to the plaintiff's duty to put forth all the grounds of attack in support of his claim, whereas Order 2 Rule 2 of the Code requires the plaintiff to claim all reliefs flowing from the same cause of action in a single suit. The two pleas are different and one will not include the other. The dismissal of the suit by the High Court under Order 2 Rule 2 of the Code, in the absence of any plea by the defendant and in the absence of an issue in that behalf, is unsustainable.
II. The cause of action for the second suit being completely different from the cause of action for the first suit, the bar under order 2 Rule 2 of the Code was not attracted.
10. The first suit was for recovery of balance price under an agreement of sale. The agreement dated 29.6.2004 was not an agreement relating to dissolution of the firm constituted under deed of partnership dated 5.4.2000, or settlement of the accounts of the said partnership. The agreement of sale made it clear that it related to sale of the undivided half share in the second floor at Rohini, 50% (property bearing No.8, Pocket & Block C-9, Sector-8, Rohini, Delhi-110085) and 50% share of the business that was being run in that premises, that is premises at Rohini. The second suit was for rendition of accounts in pursuance of the dissolution of the firm of Takshila Institute constituted under deed of partnership dated 5.4.2000, carrying on business at Bhera Enclave, Paschim Vihar, Delhi-110087 and for payment of the amounts due on dissolution of the said firm.
11. The pleadings in the two suits make it clear that both parties proceeded on the basis that the partnership between appellant and respondent under deed dated 5.4.2000 was only in regard to the business run under the name and style of `Takshila Insittue' at Bhera Enclave, Paschim Vihar, Delhi-110087. The appellant proceeded on the basis that the property at Rohini and the business carried therein under the name of Takshila Institute, was not a part of the partnership business under deed dated 5.4.2000. Even the respondent in his written statement in the first suit asserted that the partnership dated 5.4.2000 between appellant and respondent did not extend to Takshila Institute at Rohini or other places. In fact appellant clearly contended that respondent was carrying on business under the same name of Takshila Institute at Janakpuri, Ashok Vihar and Kalu Sarai in Delhi and also at Dehradun and Palampur, but they were not partnership businesses. The respondent in his written statement asserted that he alone was carrying on business at those places under the name of Takshila Institute. Therefore, the court could not, before trial, assume that the sale of appellant's share in the immovable property at Rohini and the goodwill and assets of the business carried on at Rohini under the name of Takshila Institute should be taken as relinquishment or retirement or settlement of share in regard to the partnership business of Paschim Vihar Takshila Institute.
12. The cause of action for the first suit was non-payment of price under the agreement of sale dated 29.6.2004, whereas the cause of action for the second suit was non-settling of accounts of a dissolved partnership constituted under deed dated 5.4.2000. The two causes of action are distinct and different. Order 2 Rule 2 of the Code would come into play only when both suits are based on the same cause of action and the plaintiff had failed to seek all the reliefs based on or arising from the cause of action in the first suit without leave of the court. Merely because the agreement of sale related to an immovable property at Rohini and the business run therein under the name of `Takshila Institute' and the second suit referred to a partnership in regard to business run at Pachhim Vihar, New Delhi, also under the same name of Takshila Institute, it cannot be assumed that the two suits relate to the same cause of action. Further, while considering whether a second suit by a party is barred by Order 2 Rule 2 of the Code, all that is required to be seen is whether the reliefs claimed in both suits arose from the same cause of action. The court is not expected to go into the merits of the claim and decide the validity of the second claim. The strength of the second case and the conduct of plaintiff are not relevant for deciding whether the second suit is barred by Order 2 Rule 2 of the Code.
III. The second suit was not barred by constructive res judicata.
13. The learned trial bench passed the order on 13.3.2009 on the preliminary issue (Issue No.1) relating to res judicata. But there is absolutely no discussion in the order of the learned Single Judge in regard to the bar of res judicata except the following observation at the end of the order: "Of course it cannot be said that the present suit is barred by res judicata inasmuch as the said claims were not decided in that case. But the principle of constructive res judicata is applicable." This was not interfered by the appellate bench. Both proceeded on the basis that the suit was not barred by res judicata, but barred by principle of constructive res judicata without assigning any reasons. Plea of res judicata is a restraint on the right of a plaintiff to have an adjudication of his claim. The plea must be clearly established, more particularly where the bar sought is on the basis of constructive res judicata. The plaintiff who is sought to be prevented by the bar of constructive res judicata should have notice about the plea and have an opportunity to put forth his contentions against the same. In this case, there was no plea of constructive res judicata, nor had the appellant plaintiff an opportunity to meet the case based on such plea.
14. Res judicata means `a thing adjudicated' that is an issue that is finally settled by judicial decision. The Code deals with res judicata in section 11, relevant portion of which is extracted below (excluding Explanations I to VIII):
"11. Res judicata.--No Court shall try any suit or issue in which the matter directly and substantially in issue has been directly and substantially in issue in a former suit between the same parties, or between parties under whom they or any of them claim, litigating under the same title, in a Court competent to try such subsequent suit or the suit in which such issue has been subsequently raised, and has been heard and finally decided by such Court"
Section 11 of the Code, on an analysis requires the following essential requirements to be fulfilled, to apply the bar of res judicata to any suit or issue:
(i) The matter must be directly and substantially in issue in the former suit and in the later suit.
(ii) The prior suit should be between the same parties or persons claiming under them.
(iii) Parties should have litigated under the same title in the earlier suit.
(iv) The matter in issue in the subsequent suit must have been heard and finally decided in the first suit.
(v) The court trying the former suit must have been competent to try particular issue in question.
To define and clarify the principle contained in Section 11 of the Code, eight Explanations have been provided. Explanation I states that the expression `former suit' refers to a suit which had been decided prior to the suit in question whether or not it was instituted prior thereto. Explanation II states that the competence of a court shall be determined irrespective of whether any provisions as to a right of appeal from the decision of such court. Explanation III states that the matter directly and substantially in issue in the former suit, must have been alleged by one party or either denied or admitted expressly or impliedly by the other party. Explanation IV provides that any matter which might and ought to have been made a ground of defence or attack in such former suit shall be deemed to have been a matter directly and substantially in issue in such suit. The principle of constructive res judicata emerges from Explanation IV when read with Explanation III both of which explain the concept of "matter directly and substantially in issue".
15. Explanation III clarifies that a matter is directly and substantially in issue, when it is alleged by one party and denied or admitted (expressly or impliedly) by the other. Explanation IV provides that where any matter which might and ought to have been made a ground of defence or attack in the former suit, even if was not actually set up as a ground of attack or defence, shall be deemed and regarded as having been constructively in issue directly and substantially in the earlier suit. Therefore, even though a particular ground of defence or attack was not actually taken in the earlier suit, if it was capable of being taken in the earlier suit, it became a bar in regard to the said issue being taken in the second suit in view of the principle of constructive res judicata. Constructive res judicata deals with grounds of attack and defence which ought to have been raised, but not raised, whereas Order 2 Rule 2 of the Code relates to reliefs which ought to have been claimed on the same cause of action but not claimed. The principle underlying Explanation IV to Section 11 becomes clear from Greenhalgh v. Mallard [1947 (2) All ER 257] thus:
"....it would be accurate to say that res judicata for this purpose is not confined to the issues which the court is actually asked to decide, but that it covers issues or facts which are so clearly part of the subject matter of the litigation and so clearly could have been raised that it would be an abuse of the process of the court to allow a new proceeding to be started in respect of them.
(emphasis supplied) In Direct Recruit Class II Engineering Officers' Association v. State of Maharashtra [1990 (2) SCC 715], a Constitution Bench of this Court reiterated the principle of constructive res judicata after referring to Forward Construction Co. v. Prabhat Mandal [1986 (1) SCC 100) thus:
"an adjudication is conclusive and final not only as to the actual matter determined but as to every other matter which the parties might and ought to have litigated and have had decided as incidental to or essentially connected with subject matter of the litigation and every matter coming into the legitimate purview of the original action both in respect of the matters of claim and defence."
In this case the High Court has not stated what was the ground of attack that plaintiff-appellant ought to have raised in the first suit but had failed to raise, which she raised in the second suit, to attract the principle of constructive res judicata. The second suit is not barred by constructive res judicata. IV. A suit cannot be dismissed without trial merely because the court feels dissatisfied with the conduct of the plaintiff.
Supreme Court of India
M/S Virgo Industries (Eng) P.Ltd vs M/S Venturetech Solutions P.Ltd on 7 September, 2012
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.
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.
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.
Supreme Court of India
State Of Madhya Pradesh vs State Of Maharashtra & Ors on 5 January, 1977
The plaintiff will be barred under Order 2 Rule 2 of the Code of Civil Procedure only when he omits to sue for or relinquishes the claim in a suit with knowledge that he has a right to. sue for that relief. On the contrary, it will be correct to say that he knew that he was not entitled to make such a claim. If at the date of the former suit the plain- tiff is not aware of the right on which he insists in the latter suit the plaintiff cannot be said to be disentitled to the relief in the latter suit. The reason is that at the date of the former suit the plaintiff is not aware of the right on which he insists in the subsequent suit. A right which a litigant does not know that he possesses or a right which is not in existence at the time of the first suit can hardly be regarded as a "portion of his claim" within the meaning of Order 2 Rule 2 of the Code of Civil Procedure.
This Court in Jai Chand Sawhney v. Union of India (2) held that in a suit for setting aside the order of dismissal and for arrears of salary a claim for salary for the period prior to three years of the suit would be barred. The reason given is that when the order of dismissal is set aside the Government servant is deemed to be in service throughout the period during which the order of dismissal remains operative. Once an order of dismissal is declared bad it is held to be bad from the date of dismissal and salary would be due from the date when the dismissal order was bad.
The same view has been taken by this Court in Sakal Dean Sahai Srivastava v. Union of India(3). In that case the plaintiff filed a suit on 27 November, 1962 for a declara- tion that from 1 July, 1949 the date of illegal reversion up to 30 September, 1959 the date of his retirement he was a railway employee.The plaintiff's cause of action for arrears of salary is this. When the plaintiff was reinstated on 12 December, 1953 pursuant to the decree dated 30 August, 1953 the plain- tiff became entitled to salary which was suspended during the period of suspension._ The plaintiff was again suspended from 19 January, 1954 and he was dismissed from service on 23 February, 1956. Therefore, when the plaintiff filed the suit on 6 October, 1956 his entire claim for salary is founded first on his reinstatement on 12 December, 1953 pursuant to the decree and second on the order of suspension dated 19 January, 1954 and the order of dismissal on 23 February 1956 which the plaintiff challenged as illegal. The original order of suspension on 16 September, 1943 as welt as the original dismissal dated 7 November, 1945 was declared to be illegal by the decree dated 30 August, 1953. Therefore, when the plaintiff was reinstated on 12 December, 1953 it is then that the plaintiff's claim for salary accrued due. This salary was again suspended from 19 January, 1954. Dismissal on 23 February, 1956 was at a time when the plaintiff was still under suspension. The order of suspension does not put an end to his service. Suspension merely suspends the claim to salary. During suspension there is suspension allowance. See Khem Chand v. Union of 2-112 SCI/77 India(1) where this Court said that the real effect of the order of suspension is that though he continues to be a member of the service he is not permitted to work and is paid only subsistence allowance which is less than his salary. Under Fundamental Rule 52 'the pay and allowance of a Government servant who is dismissed or removed from service, cease from the date. of his dismissal or remov- al.Therefore, there would be no question of salary accruing or accruing due so long as orders of suspension and dismiss- al stand. The High Court was correct in the conclusion that the plaintiff's claim for salary accrued due only on the order of dismissal dated 23 February, 1956 being set aside. For the foregoing reasons the appeal is dismissed. There will be costs only to the plaintiff respondent to be paid by the State of Madhya Pradesh.
Chattisgarh High Court
Rajendra Kumar Agrawal vs Dharam Sonkar on 2 August, 2010
The present suit is not based on continuous cause of action. The cause of action for filing suit for specific performance of contract in favour of the appellant arose when, as per the claim of the appellant, the respondents tried to dispossess the appellant after placing him in possession, though we have not considered parting of possession in favour of the appellant or the case that whether the appellant was in possession or not. Definitely, as held by the Apex Court in the matter of M/s. Bengal Waterproof (supra), the appellant was under obligation to include all his claims which he was entitled to make in support of the cause of action in terms of Order 2 Rule 2 of the Code.
As regards non-maintainability of present suit in the light of the provisions of Order 2 Rule 2 (2) of the Code, the plaintiff/appellant herein has not claimed specific performance of contract in previous suit and he has omitted such claim in previous suit. In accordance with the provisions of Order 2 Rule 2 of the Code, parties are required to include the whole claim for which they are entitled to make in respect of the cause of action, but the plaintiff may relinquish any portion of his claim in order to bring the suit within the jurisdiction of any Court.
Order 2 of the Code provides the provisions for framing of suit. Order 2 Rule 2 of the Code provides suit to include the whole claim and Order 2 Rule 2 (2) of the Code makes the provision that if 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. Rules 1 & 2 of Order 2 of the Code read as under:-
"1. Frame of suit.-Every suit shall as for as practicable be framed so as to afford ground for final decision upon the subjects in dispute and to prevent further litigation concerning them.
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."
19. While dealing with the question of inclusion and relinquishment of the claim coupled with the question of constructive res judicata in accordance with Explanation IV to Section 11 and Order 2 Rule 2 of the Code, the Apex Court has held in the matter of Dadu Dayalu Mahasabha, Jaipur (Trust) v. Mahant Ram Niwas and another8 that even if any concession is given by the Apex Court, then the principle of res judicata will apply and the Court while passing the judgment cannot take away the right of the successful party indirectly which it cannot do directly. An observation made by a superior court is not binding. Paras 22, 25, 26, 27 and 28 of the said judgment read as under:-
"22. The judgment of a court, it is trite, should not be interpreted as a statue. The meaning of the words used in a judgment must be found out from the backdrop of the fact of each case. The court while passing a judgment cannot take away the right of the successful party indirectly which it cannot be directly. An observation made by a superior court is not binding. What would be binding is the ratio of the decision. Such a decision must be arrived at upon entering into the merit of the issues involved in the case.
25. Explanation IV of Section 11 of the Code extends the principle of res judicata stating that the reliefs which could have been or ought to have been prayed for even if it was not prayed for would operate as res judicata. Section 12 thereof bars filing of such suit at the instance of a person who is found to be otherwise bound by the decision in the earlier round of litigation and in a case where the principle of res judicata shall apply.
26. We, however, are not unmindful of the principles of estoppel, waiver and res judicata are procedural in nature and, thus, the same will have no application in a case where judgment has been rendered wholly without jurisdiction or issues involve only pure questions of law. Even in such cases, the principle of issue estoppel will have no role to play.
27. However, once it is held that the issues which arise in the subsequent suit were directly and substantial in issue in the earlier suit, indisputably Section 11 of the Code would apply.
28. Similarly the provisions of Order 2 Rule 2 bars the jurisdiction of the court in entertaining a second suit where the plaintiff could have but failed to claim the entire relief in the first one. We need not go into the legal philosophy underlying the said principle as we are concerned with the applicability thereof."
20. While dealing with same question the Apex Court in the matter of Hope Plantations Ltd. v. Taluk Land Board, Peermade and another9 has held that an adjudication is conclusive and final not only as to the actual matter determined but as to every other matter which the parties might and ought to have litigated and have had it decided as incidental to or essentially connected with the subject-matter of the litigation and every matter coming within the legitimate purview of the original action both in respect of the matter of claim or defence. The principle underlying Explanation IV is that where the parties have had an opportunity of controverting a matter that should be taken to be the same thing as if the matter had been actually controverted and decided. It is true that where a matter has been constructively in issue it cannot be said to have been actually heard and decided. It could only be deemed to have been heard and decided. The first reason, therefore, has absolutely no force.
21. While dealing with same question the Apex Court in the matter of Kunjan Nair Sivaraman Nair v. Narayanan Nair and others10 has held in para 13 as under:-
"13. Section 11 contains the rule of conclusiveness of the judgment which is based partly on the maxim of Roman jurisprudence "interest reipublicae ut sit finis litium" (it concerns the State that there be an end of law suits) and partly on the maxim "nemo debet bis vexari pro una et eadem causa" (no man should be vexed twice over for the same cause). The section does not affect the jurisdiction of the court but operates as a bar to the trial of the suit or issue, if the matter in the suit was directly and substantially in issue (and finally decided) in the previous suit between the same parties litigating under the same title in a court, competent to try the subsequent suit in which such issue has been raised."
22. In the present case, claim for specific performance of contract was available to the plaintiff/appellant herein at the time of filing previous suit, but the plaintiff has intentionally omitted and relinquished such claim without any leave of the Court. In these circumstances, the plaintiff/ appellant herein is precluded from filing such suit and claiming specific performance of contract against the respondents in accordance with Order 2 Rule 2 (2) of the Code. Learned Additional District Judge has substantially dismissed the suit on the ground of its maintainability in the light of Order 2 Rule 2 (2) of the Code. The present suit is not maintainable in the light of Order 2 Rule 2 (2) of the Code.
Delhi High Court
Dhall Traders Pvt. Ltd. vs United Breweries Ltd. on 17 March, 2010
The Plaintiff is engaged in the manufacture, distribution and sale of beer under various brand names. The Defendants were an exclusive del credere agent appointed by the Plaintiff for sales in the states of Uttar Pradesh and Uttarakhand. The Defendant was transacting business under the name and style of Max Trading Company which reconstituted to form Dhall Traders Pvt. Ltd.
3. The Plaintiff/Respondent has filed the Suit to recover the amounts paid by it to the Defendant against the Debit Claims/Bills which are alleged to have been wrongly and illegally raised by the Defendants in September, 2001.
4. Paragraph 18 of the Plaint discloses that the Plaintiff had filed O.S. No.8952/2001 before the City Civil Judge, Bangalore. It states that the cause of action in relation to the said Suit was the alleged illegal act of the Defendant to enter into del credere agreements with another company, called South Africa Breweries Ltd.
5. On a Preliminary Objection of the Defendants as to the maintainability of the Suit in the light of the bar under Order II Rule 2 of the CPC, a Preliminary Issue was struck vide Order dated 7.8.2006 which reads as follows:-
Whether the Suit is barred under Order II Rule 2 of CPC?
6. The Issue has been decided in favour of the Plaintiff and against the Defendants.
7. The Defendants have urged that the Order of the learned Single Judge is erroneous in law on the ground that since the Plaintiff had already filed a Suit against the Defendants in Bangalore, which was withdrawn under Order XXIII Rule 1 without liberty to file a fresh suit on the same cause of action, the present Suit is not maintainable in the light of the specific bar under Order II Rule 2.
The Suit in Bangalore for relief of damages, rendition of accounts, declaration and injunction was predicated on the grievance of alleged violation of the del credere agency agreement by entering into a similar agreement simultaneously with another company which was in direct competition with the Plaintiff. The Suit before the learned Single Judge is a Suit for recovery based on the payments made against the Debit Claims/Notes raised by the Defendant in September, 2001. The cause of action for this Suit is thus the „Debit Claims‟ raised by the Defendants, which is totally distinct from the one in the previous Suit. We may also add that the Suit for accounts, declaration and injunction was filed by the Plaintiff on the basis that the dealership was continuing and subsisting at the relevant date of filing of the Bangalore Suit. There would have been no occasion for the Plaintiff to raise claims for recovery on the basis of bills raised by the Defendants during the currency of the dealership unless there was a clear intendment of settling the accounts with the Defendants finally at the time of the filing of the previous Suit. For a cause of action to fructify in the legal sense, the bundle of facts giving rise to the claim have to be so conclusively manifest as to leave no alternative to one of the parties to take resort to legal recourse for its redressal. In a continuing or subsisting contract, the mere fact that some squabbles arose between the parties will not necessarily be a strong enough compulsion for one to move the courts. Thus, the courts, while determining the cause of action in a given suit, have to perspicuously look at the events or facts which, out of the entire gamut of averments, have, in fact, led the Plaintiff to institute the Suit before them. In the case in hand, the facts which form the basis of cause of action are the payment made towards Debit Claims which the Plaintiff alleges to be unlawful and which it wants to recover from the Defendants. Thus, the cause of action for raising the same fructified only on the termination of the agreement which is an event subsequent and distinct from the dispute which gave rise to the earlier Suit.
In light of the above observations, the Appeal is held to be without merit and is dismissed with costs of Rupees Twenty Five Thousand.
Delhi High Court
Syndicate Bank vs Raj Kumar Tanwar on 30 September, 2008
The relevant facts on which the bar of Order 2 Rule 2 of the Code of Civil Procedure has been predicated is that the respondent, who is the landlord, had filed a suit on 31.01.1996, seeking ejectment of the appellant from the tenanted premises stating that the lease having come to an end by efflux of time and even otherwise terminated by a notice, the landlord was entitled to recovery possession of the tenanted premises.
The second suit, being the suit in question, was filed by the landlord claiming damages for unauthorized use and occupation for the period when tenancy was stated to have been determined and till the date of the suit which was filed on 7.1.1999.
The claim for mesne profits has been decreed for the period 07.01.1996 onwards.
Since appeal has been urged on the plea of bar of Order 2 Rule 2, we need not note any fact other than the one relevant to consider the bar of Order 2 Rule 2.
"The principle enshrined under Order 2 Rule 2 is aimed against a multiplicity of suits in respect of the same cause of action. The Rule is based on the principle that a party should not be vexed twice for the one and the same cause of action. However, the said rule must be applied with caution. The plea of bar under Order 2 Rule 2 defeats, what otherwise may be legitimate claim of a party, and therefore, care must be taken to see that complete identity of cause of action is established. Can it be said that the recovery of damages for unauthorized use and occupation of a premises for different periods constitutes a single cause of action. To our mind it does not. Cause of action to recover rent for a premises or damages for unauthorized use and occupation would arise each month for which possession is retained by the tenant or the person in unauthorized occupation as the case may be.
In the case of S. Santosh Singh and Others V. S. Gurbux Singh - MANU/DE/0704/2001, the Division Bench of this Court, following the three Full Bench decisions of the Madras High Court, Bombay High Court and Punjab and Haryana High Court and one Single Judge judgment of this Court held that the subsequent suit for possession was not barred by Order 2 Rule 2 of the Code of Civil Procedure. The relevant portion of the judgment is reproduced below:-
"12. Full Bench of Madras High Court in Ponnamal v. Ramamirda Aiyar and others A.I.R. 1915 Madras 912 considered the following question:- "If a plaintiff sues for possession only when he might have joined in the same action claims for profits and damages, is it open to him to sue subsequently for the profits which became payable before the institution of the suit and which might have been included in such suit."
13. The answer was given in affirmative holding that claims for recovery of possession of land and claims for mesne profits are separate causes of action. If the plaintiff sues for possession only when he might have joined in the same action claims for profits and damages, it is open to him to sue subsequently for he profits, which became payable before the institution of the suit and which might have been included in such suit.
14. Full Bench of Bombay High Court in Shankarlal Laxminarayan Rathi and others v. Gangabisen Maniklal Sikchi and another MANU/MH/0071/1972 also answered a similar question holding that claims for damages and claim for mesne profits are regarded as distinct and separate causes of acting from the cause of action for recovery of immovable property.
15. Similar view was expressed by Full Bench of Punjab Haryana High Court in Sadhu Singh and others v. Pritam Singh Son of Narain Singh and another MANU/PH/0007/1976 saying that Order 2 Rule 2 of Civil Procedure Code does not bar a suit for mesne profits field subsequently to a suit for possession of the property because the claim for accrued mesne profits had not been earlier included therein.
16. A Single Judge of this Court in Prem Nath Kapur v. Gurdit Singh and others RSA No. 35/67 decided on 28.10.1971 reported as 1971 R.L.R. (Note) 126 held that a suit for recovery of possession of property is based on a distinct cause of action from a claim for recovery of mesne profits, although a large field of controversy is common to both and overlaps. he held that in a suit for recovery of possession cause of action is complete the moment trespass has been committed and the plaintiff is required to establish his title to the property and the obligation of the defendant to surrender its possession to him. Limitation for such a suit is 12 years. On the other hand in a suit for recovery of mesne profits, the plaintiff has to allege continuous deprivation of the property for which mesne profits are claimed. In such a suit the plaintiff may also incidentally be required to prove his title and right to obtain the profits and the liability of the defendant to pay the same but the cause of action for mesne profits continues from day to day and for that reason different articles for limitation have been prescribed for each, suit for mesne profits may also be field in small Cause Court while suit for possession cannot be so filed."
"19. .........Otherwise also, we are in full agreement with the view expressed in the three Full Bench decisions aforementioned and by learned Single Judge of this Court in Prem Nath Kapur's case (supra) and we hold that the suit filed by the plaintiff/respondent for possession was not barred under Order 2 Rule 2 of the Code."
11. Needless to state, it is settled law that the rule enshrined in Order 2 Rule 2 is directed at securing the exhaustion of the relief in respect of a cause of action and is not intended to include in one and the same action, different causes of action, even though they arise from the same transaction.
12. As per Rule 3, it is permissible for a plaintiff to unite in the same suit several causes of action against the same defendant or defendants. Rule 6 empowers a court to order separate trial of different causes of action joined in one suit if the court is satisfied that the joinder of causes of action in one suit may embarrass or delay the trial.
13. Now, Rule 4 of Order 2 guides the court that in a suit for recovery of possession, no cause of action can be joined other than the cause of action enumerated in Clauses (a), (b) and
(c) thereof.
14. Thus, the Code of Civil Procedure itself clarifies that an action for recovery of immovable property is a distinct cause of action vis-a-vis a cause of action for a claim for mesne profits.
15. If the two are different causes of action, the bar of Order 2 Rule 2 of the Code of Civil Procedure would obviously be not attracted.
16. It is trite that a cause of action to recover damages or mesne profits against a person in unauthorized occupation of a property accrues each month.
17. What is relevant to be noted in the instant case that the second suit i.e., the suit in question, was filed on 7.1.1999 and sought recovery of mesne profits for the period post filing of the earlier suit seeking ejectment, which suit we note was filed on 31.1.1996.
18. The decision of the Hon'ble Supreme Court in Shiv Kumar Sharma's case itself recognizes the distinction in various causes of action contemplated in relation to an immovable property and recognizes a distinction when suit for possession of immovable property is filed and a claim for mesne profits is made. In para 20 of the decision, the Hon'ble Supreme Court noted as under:-
"20. In terms of Order 2 Rule 2 of the Code, all the reliefs which could be claimed in the suit should be prayed for. Order 2 Rule 3 provides for joinder of causes of action. Order 2 Rule 4 is an exception thereto. For joining causes of action in respect of matters covered by Clauses (a), (b) and (c) of Order 2 Rule 4, no leave of the court is required to be taken. Even without taking leave of the court, a prayer in that behalf can be made. A suit for recovery of possession on declaration of one's title and/or injunction and a suit for mesne profit or damages may involve different cause of action. For a suit for possession, there may be one cause of action; and for claiming a decree for mesne profit, there may be another. In terms of Order 2 Rule 4 of the Code, however, such causes of action can be joined and therefore no leave of the court is required to be taken. If no leave has been taken, a separate suit may or may not be maintainable but even a suit wherefore a prayer for grant of damages by way of mesne profit or otherwise is claimed, must be instituted within the prescribed period of limitation. Damages cannot be granted without payment of court fee. In a case where damages are required to be calculated, a fixed court fee is to be paid but on the quantum determined by the court and the balance court fee is to be paid when a final decree is to be prepared."
Learned counsel for the appellant highlighted the observations in the next succeeding para i.e., para 21 where the Hon'ble Supreme Court has opined as under:-
"21. If the respondent intended to claim damages and/or mesne profit, in view of Order 2 Rule 2 of the Code itself, he could have done so, but he chose not to do so. For one reason or the other, he, therefore, had full knowledge about his right. Having omitted to make any claim for damages, in our opinion, the plaintiff cannot be permitted to get the same indirectly."
20. The observations of the Hon'ble Supreme Court have to be read and understood with reference to the final opinion expressed by the Lordships in para 29 and 30 of the decision wherein following has been observed:-
"29. We, therefore, are of the opinion that the High Court was not correct in framing the additional issues of its own which did not arise for consideration in the suit or in the appeal. Even otherwise, the High Court should have formulated the points for its consideration in terms of Order 41 Rule 31 of the Code. On the pleadings of the parties and in view of the submissions made, no such question arose for its consideration. In any event, if a second suit was maintainable in terms of Order 2 Rule 4 of the Code, as was submitted by Ms Luthra, no leave was required to be granted therefor. A civil court does not grant leave to file another suit. If the law permits, the plaintiff may file another suit but not on the basis of observations made by a superior court.
30. In view of our findings aforementioned, it is not necessary for us to determine the question as to whether in a situation of this nature, the plaintiff was entitled to damages. He might have been entitled thereto but no prayer having been made, that part of the judgment of the High Court which is impugned before us cannot be sustained."
It would be relevant to note that the Lordships of the Hon'ble Supreme Court were seized of certain observations made by the Division Bench of this court dealing with RFA No.229/2004. The observations were set out by the Lordships in the Supreme Court in para 13 of the decision. The observations of the Division Bench of this court were as under:-
"Subject to all just exceptions including limitations, liberty is given to the plaintiff to claim relief by way of damages/mesne profits in a separate suit filed before the competent court"
22. The Hon'ble Supreme Court held that a Civil Court cannot grant leave to file another suit. Only if law permits, can the plaintiff file another suit.
The Hon'ble Supreme Court clearly held that the maintainability of the second suit, if at all filed, would have to be adjudicated with reference to the authority/entitlement to institute the suit as per law and not on the liberty granted by the Division Bench.
In other words, the ratio of the decision of the Hon'ble Supreme Court in Shiv Kumar case could be stated in the following words:-
No Civil Court can grant liberty to resort to a civil action and an issue of maintainability of a civil suit has to be decided with reference to the law applicable.
Since the appeal has been dismissed, the decretal amount deposited by the appellant is directed to be paid over to the respondent.
In the case of Mohammad Khalil Khan v. Mehbub Ali Mian, the earlier suit related to the property at Oudh. The parties belonged to the Sunni sect and the properties belonged to one Rani Barkatunnissa who owned properties at Shahjahanpur and Oudh. The first suit did not include the property at Shahjahanpur. The Court proceeded to uphold the views taken by the Courts in India and maintained the finding that second suit, in relation to the property at Shahjahanpur, was barred by virtue of Order II Rule 2. It would be profitable to refer to paragraphs 45 and 46 as they throw light upon what constitutes cause of action:
“45. Shortly stated O.2, R.2, Civil P.C., enacts that if a plaintiff fails to sue for the whole of the claim which he is entitled to make in respect of a cause of action in the first suit, then he is precluded from suing in a second suit in respect of the portion so omitted. As pointed out in Moonshee Buzloor Ruheem v. Shumsunnissa Begum, (1867) 11 M.I.A. 551.
The correct test in all cases of this kind is, whether the claim in the new suit is, in fact, founded on a cause of action distinct from that which was the foundation of the former suit….
The object of the rule is clearly to avoid splitting up of claims and to prevent multiplicity of suits”.
46. “every fact which it would be necessary for the plaintiff to prove, if traversed, in order to support his right to the judgment of the Court. It does not comprise every piece of evidence which is necessary to prove each fact, but every fact which is necessary to be proved.” I agree with the definition given by the Master of Rolls of a cause of action, and that it includes every fact which it would be necessary to prove, if traversed, in order to enable a plaintiff to maintain his action. Now the cause of action has no relation whatever to the defence which may be set up by the defendant, nor does it depend upon the character of the relief prayed for by the plaintiff. It refers entirely to the grounds set out in the plaint as the cause of action, or, in other words, to the media upon which the plaintiff asks the Court to arrive at a conclusion in his favour.”
The Privy Council proceeded to summarize the principles in paragraph 61, which reads as follows:
“61. The principles laid down in the cases thus far discussed may be thus summarized:
(1) The correct test in cases falling under O.2 R.2, is “whether the claim in the new suit is in fact founded upon a cause of action distinct from that which was the foundation for the former suit. (2) The cause of action means every fact which will be necessary for the plaintiff to prove if traversed in order to support his right to the judgment.
(3) If the evidence to support the two claims is different, then the causes of action are also different.
(4) The causes of action in the two suits may be considered to be the same if in substance they are identical.
(5) The cause of action has no relation whatever to the defence that may be set up by the defendant nor does it depend upon the character of the relief prayed for by the plaintiff. It refers….. to the media upon which the plaintiff asks the Court to arrive at a conclusion in his favour.”
"In the case before us the trespass on title or slander of title in the case so far as the Oudh suit was concerned was not distinct and different either in point of time or in point of character from the trespass on possession in the case of the Shahjahanpur property... (Seep 72) Again they state as follows :
Here in the present ease we find that the two trespasses, one on the Shahjahanpur property and the other on the Oudh property were similar in character and formed part of the same transaction and the evidence to prove the facts which it was necessary for the plaintiffs to prove was the same and the bundle of essential facts was also the same"
In S. Nazeer Ahmed v. State Bank of Mysore (2007) 11 SCC 75, the appellant/defendant borrowed some money from the plaintiff's bank by hypothecating and by mortgaging two items. The money suit filed by the bank was decreed. The proceedings in execution was unsuccessful as the bus, which was hypothecated, could not be traced. The bank prayed to proceed against the mortgaged property in execution. It was resisted by the appellant by pointing out that there was no decree on the mortgage and the bank could only attach the properties and could not sell it straightaway. The said objection was upheld. Thereupon, the bank instituted the second suit for enforcement of the equitable mortgage. This Court proceeded to take a view that the cause of action in the second suit was different. The Court also further drew support from Order XXXIV Rule 14 and proceeded to hold as follows:
“14. Applying the test so laid down, it is not possible to come to the conclusion that the suit to enforce the equitable mortgage is hit by Order 2 Rule 2 of the Code in view of the earlier suit for recovery of the mid term loan, especially in the context of Order 34 Rule 14 of the Code. The two causes of action are different, though they might have been parts of the same transaction. Even otherwise, Order 34 Rule 14 read with Rule 15 removes the bar if any that may be attracted by virtue of Order 2 Rule 2 of the Code. The decision of the Rangoon High Court in Pyu Municipality Vs. U. Tun Nyein (AIR 1933 Rangoon 158) relied on by learned counsel for the appellant does not enable him to successfully canvass for the position that the present suit was barred by Order 2 Rule 2 of the Code, as the said decision itself has pointed out the effect of Order 34 Rule 14 and in the light of what we have stated above.”
Different period of limitation will not affect application of Order II Rule 2
In a recent judgment - Pramod Kumar & Anr v Zalak Singh & Anr, the Supreme Court was dealing with a situation where two suits were filed by the plaintiffs for setting aside two different sale deeds executed by their father. They sought the relief on the plea that their father had unauthorizedly alienated joint family property and that the alienation was prejudicial to the interests of the family.
The sale deeds were executed in a month's gap, and related to different portions of the same property. The purchaser of both the portions were the same person.
The question was whether the second suit was barred by Order 2 Rule II.
The plaintiff referred to Article 109 of the Limitation Act, which states limitation period for suit by a Hindu governed by Mitakshara law to set aside father's alienation of ancestral property will start running after the alienee takes possession of the property.
Based on this, the plaintiff argued that the cause of action for the second suit was different, as it arose only later to the first suit.
This was rejected by the bench of Justices Ashok Bhushan and K M Joseph. The bench noted that the basis of claim in both the suits were substantially the same. Both the suits contained identical averments in relation to both the sale transactions. Therefore, both the suits were held to have arisen from the same cause of action, which was identified as the alienation of ancestral property by plaintiffs' father. The Court adopted the approach followed by Privy Council in the Mohammad Khalil Khan(supra).
"the mere fact that a different period of limitation is provided, cannot stand in the way of the bar under Order II Rule 2.", said the bench.
In Coffee Board v Ramesh Exports Private Ltd (2014) 6 SCC 424, the respondent purchased coffee at the export auctions and exported them to certain countries. The Coffee Board had provided for stamps system for exporting of coffee. Complaint of the plaintiff was that the defendants failed to supply the stamps which delayed exports resulting in losses. He filed two suits for damages.
The second suit was held to be barred by Order II Rule 2. The Court held that plaintiff could only succeed only by proving failure by the appellant to provide stamps. The grounds of difference in the suit were found to be as regards the amount of coffee and the date when the same was purchased. That difference by alone will not make the cause of action different.
It was observed :
"In both the suits the fact required to be proved by the respondent (being the plaintiff therein), to succeed in its claims was that on account of the failure of the appellant (being the defendant) to provide the required ICO stamps as assured by it, the respondent had to suffer losses. The two separate reliefs claimed by the respondent are dependent on the same fact being the omission of duty by the appellant. The grounds of disparity in the suits are the amount of coffee and the dates when the same was purchased, however it must be noted that the period between August 11, 1982 and August 18, 1982 is common to both the suits and there are no specific pleadings differentiating the same. Furthermore, the suits were filed within a span of nine days of each other".
Supreme Court of India
Pramod Kumar vs Zalak Singh . on 10 May, 2019
In this case, we have noticed the pleadings. The case of the plaintiffs appears to be that the property is ancestral property. Their late father Tikaram was given to wasteful ways and addicted to drink and otherwise. He was given to selling properties. His well-wishers intervened and partition ensued. However, 8.22 acres falling in Kh.No.189 was kept out of the partition deed. He decided to sell 8.22 acres without there being any legal necessity and without any benefit to the joint family. The first part of the transaction, which consisted of two parts, pertained to sale deed dated 21.01.1959 and that was the subject matter of the first suit. At the time of filing of the said first suit, late predecessor-in-interest of the plaintiff, had also executed another sale deed which constituted the remaining portion which consisted of the 8.22 acres as already noticed. The suits contained virtually identical averments in regard to both the transactions. The first suit was filed in 1963 and the second suit filed in the year 1971.
We are of the view that in such circumstances, this is a case where the plaintiff ought to have included relief in the form of setting aside the second sale deed also. This is not a case where the second sale deed had not been executed when the plaintiff instituted the first suit. We are not, for a moment, declaring the effect of the sale deed having been executed subsequently to the institution of the suit as we do not have to pronounce on the effect of such a sale. We are only emphasizing that it was open to the respondent/plaintiff to seek relief in respect of the second sale executed by their predecessor-in- interest and what is more important in favour of the same parties (defendants) who are the appellants before us.
The High Court has proceeded to reason based on Order II Rule 3. It is open to the plaintiff to combine causes of action. Order II Rule 3 reads as follows:
“3. Joinder of causes of action (1) Save as otherwise provided, a plaintiff may unite in the same suit several causes of action against the same defendant, or the same defendants jointly; and any plaintiffs having causes of action in which they are jointly interested against the same defendant or the same defendants jointly may unite such causes of action in the same suit.
(2) Where causes of action are united, the jurisdiction of the Court as regards the suit shall depend on the amount or value of the aggregate subject-matters at the date of instituting the suit.”
It is undoubtedly true that the law does not compel a litigant to combine one or more causes of action in a suit. It is open to a plaintiff, if he so wishes, however to combine more than one cause of action against same parties in one suit. However, it is undoubtedly true that the embargo in Order II Rule 2 will arise only if the claim, which is omitted or relinquished and the reliefs which are omitted and not claimed, arise from one cause of action. If there is more than one cause of action, Order II Rule 2 will not apply. It is undoubtedly also true that Order II Rule 2 manifests a technical rule as it has the effect of posing an obstacle in the path of a litigant ventilating his grievance in the Courts. But as already noted, there is an equally important principle that no person shall be vexed twice on the same cause of action.
That on the same cause of action, the plaintiffs having omitted to sue in respect of the sale deed in question, we would think that bar under Order II Rule 2 would apply. In this view of the matter we do not think it necessary to pronounce on the question relating to constructive res judicata. In the light of this, we allow the appeal and set aside the judgment of the High Court. Parties to bear their respective costs.
Delhi High Court
Parsvnath Developers Limited & ... vs Rail Land Development Authority on 19 May, 2020
Post the amendment, scope of examination under Section 11 of the Act by a Court again came up before the Supreme Court in the case of Duro Felguera, S.A. v. Gangavaram Port Ltd., [(2017) 9 SCC 729]. The Supreme Court in as many words held that while examining a petition under Section 11 of the Act, the Court would confine itself only to examining the existence of an Arbitration Agreement between the parties and no more. The Court also laid down a single test for such examination and observed that the only requirement was to see if the contract between the parties contained an Arbitration Clause. Relevant part of the judgment is as under :-
"48. ...... From a reading of Section 11(6-A), the intention of the legislature is crystal clear i.e. the court should and need only look into one aspect--the existence of an arbitration agreement. What are the factors for deciding as to whether there is an arbitration agreement is the next question. The resolution to that is simple--it needs to be seen if the agreement contains a clause which provides for arbitration pertaining to the disputes which have arisen between the parties to the agreement.
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59. The scope of the power under Section 11(6) of the 1996 Act was considerably wide in view of the decisions in SBP and Co. [SBP and Co. v. Patel Engg. Ltd., (2005) 8 SCC 618] and Boghara Polyfab [National Insurance Co. Ltd. v. Boghara Polyfab (P) Ltd., (2009) 1 SCC 267 : (2009) 1 SCC (Civ) 117] . This position continued till the amendment brought about in 2015. After the amendment, all that the courts need to see is whether an arbitration agreement exists--nothing more, nothing less. The legislative policy and purpose is essentially to minimise the Court's intervention at the stage of appointing the arbitrator and this intention as incorporated in Section 11(6- A) ought to be respected."
Supreme Court recently in the case of Uttarakhand Purv Sainik Kalyan Nigam Limited v. Northern Coal Field Limited (2019 SCC OnLine SC 1518), where the High Court had dismissed the application under Section 11 of the Act on the ground that it was barred by limitation, after noticing the 2015 Amendment, observed that by virtue of the non- obstante clause in Section 11(6A), the earlier judgments in Patel Engineering and National Insurance Co. Ltd. v. Boghara Polyfab (P) Ltd. [(2009) 1 SCC 267], were legislatively overruled and the scope of examination is now confined only to the existence of the Arbitration Agreement at this stage and nothing more. Court placed reliance on the judgment in case of Duro Felguera (supra). Court also held that the Arbitral Tribunal is empowered under Section 16 of the Act to rule on its own jurisdiction, including determining all other jurisdictional issues. This doctrine according to the Court is intended to minimize judicial intervention so that the arbitral process is not thwarted at the threshold, when a preliminary objection is raised by one of the parties. Court held that limitation being a mixed question of fact and law is a jurisdictional issue and would be determined by the Arbitral Tribunal. It is not within the scope of examination under Section 11 by the Court to delve into issues of jurisdiction such as limitation etc. Relevant paras of the judgment are as under :
. By virtue of the non obstante clause incorporated in Section 11(6-A), previous judgments rendered in Patel Engg. [SBP & Co. v. Patel Engg. Ltd., (2005) 8 SCC 618] and Boghara Polyfab [National Insurance Co. Ltd. v. Boghara Polyfab (P) Ltd., (2009) 1 SCC 267 : (2009) 1 SCC (Civ) 117], were legislatively overruled. The scope of examination is now confined only to the existence of the arbitration agreement at the Section 11 stage, and nothing more.
Reliance is placed on the judgment in Duro Felguera S.A. v. Gangavaram Port Ltd. [Duro Felguera S.A. v. Gangavaram Port Ltd., (2017) 9 SCC 729 : (2017) 4 SCC (Civ) 764. Refer to TRF Ltd. v. Energo Engg. Projects Ltd., (2017) 8 SCC 377 : (2017) 4 SCC (Civ) 72] , wherein this Court held that: (SCC p. 759, para 48) "48. ... From a reading of Section 11(6-A), the intention of the legislature is crystal clear i.e. the court should and need only look into one aspect-- the existence of an arbitration agreement. What are the factors for deciding as to whether there is an arbitration agreement is the next question. The resolution to that is simple -- it needs to be seen if the agreement contains a clause which provides for arbitration pertaining to the disputes which have arisen between the parties to the agreement."
In view of the legislative mandate contained in Section 11(6-A), the Court is now required only to examine the existence of the arbitration agreement. All other preliminary or threshold issues are left to be decided by the arbitrator under Section 16, which enshrines the kompetenz-kompetenz principle.
The doctrine of "kompetenz-kompetenz", also referred to as "compétence-compétence", or "compétence de la recognized", implies that the Arbitral Tribunal is empowered and has the competence to rule on its own jurisdiction, including determining all jurisdictional issues, and the existence or validity of the arbitration agreement. This doctrine is intended to minimise judicial intervention, so that the arbitral process is not thwarted at the threshold, when a preliminary objection is raised by one of the parties.
xxx xxx xxx
Limitation is a mixed question of fact and law. In ITW Signode (India) Ltd. v. CCE [ITW Signode (India) Ltd. v. CCE, (2004) 3 SCC 48] a three-Judge Bench of this Court held that the question of limitation involves a question of jurisdiction. The findings on the issue of limitation would be a jurisdictional issue. Such a jurisdictional issue is to be determined having regard to the facts and the law."
36. Reading of Section 11(6A) and the judgments of the Supreme Court, as mentioned above, leaves no doubt that the law on the scope of examination by the Court in a petition under Section 11 is no longer res integra. At this stage, the scope and power is restricted only and only to examining the existence of the Arbitration Clause and not even its validity. Therefore, the objection raised by the Respondent requiring this Court to examine whether the disputes sought to be raised are overlapping with the claims in the earlier arbitrations between the parties and / or are barred by principles of Order II Rule 2 CPC cannot be sustained in law. These are issues which clearly fall in the domain of the Arbitral Tribunal and would be decided if and when raised by the Respondent before the Tribunal.