Non-Compliance With Order II Rule 2 CPC Does Not Necessarily Bar A Subsequent Suit: Supreme Court

Summary:

[1]The Hon’ble Supreme Court of India clarified the application of Order II Rule 2 of the Code of Civil Procedure, 1908 (CPC), focusing on whether a subsequent suit for specific performance is barred when a prior suit for injunction was filed concerning the same transaction. The court held that non-inclusion of claims in the earlier suit does not automatically attract the bar under Order II Rule 2 if the causes of action are distinct.

The appeals arose from a High Court judgment restoring the plaint in a second suit after a trial court and appellate court dismissed it. The Supreme Court upheld the High Court’s decision, emphasizing that Order II Rule 2 CPC must be applied considering the underlying facts and circumstances.

Facts:

• On January 24, 2007, M/s Chemplast Cuddalore Vinyls Limited (Respondent no. 1) entered into a sale agreement with Mrs. Senthamizh Selvi (Respondent no. 2) for 1 acre of land in Cuddalore, Tamil Nadu. The Respondent no. 1 paid the full sale consideration and was given possession.
• On March 26, 2007, Respondent no. 2 executed an irrevocable Power of Attorney enabling Respondent no. 1 to register the sale deed.
• On November 2, 2007, Respondent no. 2 revoked the Power of Attorney and subsequently sold the property to Cuddalore Powergen Corporation Ltd. (the appellant) on January 24, 2008, registering the sale deed.
• Respondent no. 1 filed the first suit seeking a permanent injunction to protect possession of the property, alleging threats from the appellant and Respondent no. 2.
• Respondent No. 1 was required by Order II Rule 2 CPC to include the reliefs of recovery of possession and specific performance of the sale agreement in the original suit. However, these reliefs could not be obtained at that time since there was government ban on the execution of sale deeds in the village. Respondent No. 1 filed a second lawsuit after the ban was lifted in order to get these extra reliefs.
• The trial court and appellate court rejected the plaint in the second suit under Order II Rule 2 of CPC, holding that the reliefs in the second suit could have been claimed in the first suit. The High Court reversed this decision of the trial court.

Issue:

1. Whether in the facts & circumstances of the present case, the principles enumerated under Order II Rule 2 CPC would bar the institution of a second suit and warrant rejection of the plaint filed by the respondent no. 1 herein in O.S. No. 122 of 2008?

Judgment:

1. Principles of Order II Rule 2 CPC

The court explained that Order II Rule 2 aims to prevent multiple suits arising from the same cause of action. It bars a subsequent suit if:

• The cause of action in the first and second suits is identical.
• The plaintiff was entitled to more than one relief in the first suit but omitted to claim additional reliefs without obtaining leave from the court.
• Distinction Between Causes of Action

The court highlighted that the cause of action in the first suit (possession threatened by dispossession) was distinct from that in the second suit (specific performance of the sale agreement and cancellation of the sale deed).

• Reservation of Right to Sue

The plaintiff explicitly reserved the right to file a suit for specific performance in the first suit. Although no leave was sought, the court noted that this alone did not bar the second suit since the causes of action were distinct.

• Substantive Justice Over Technicality

The court emphasized that technical objections under Order II Rule 2 must not override the substantive rights of parties, especially when no deliberate omission or abuse of process is evident.

• High Court’s Decision Upheld

The Supreme Court upheld the High Court’s judgment restoring the plaint in the second suit, observing that the lower courts erred in conflating distinct causes of action.

• Analysis of Precedents

The Supreme Court relied on Gurbux Singh v. Bhooralal AIR 1964 SC 1810, where the court established that for a bar to apply, the second suit must arise from the same cause of action as the first, with the plaintiff having omitted a relief without the court’s leave.

In Rathnavathi v. Kavita Ganashamdas (2015) [5 SCC 223], the court held that a second suit is permissible if it stems from a new cause of action, even if connected to the same transaction. This precedent reaffirmed that the threat of dispossession in the first suit and the failure to execute the sale deed in the second were distinct, allowing both suits to proceed independently.

Analysis:

The judgment reinforces the principle that Order II Rule 2 CPC cannot be used as a technical weapon to defeat genuine claims. It aligns with the broader objective of ensuring substantive justice and maintaining the integrity of contractual relationships. By distinguishing between the reliefs sought in the two suits and the underlying causes of action, the court provided clarity on the nuanced application of Order II Rule 2. The decision emphasizes that courts must adopt a liberal interpretation of procedural rules to serve the ends of justice. The judgment is a significant precedent for contract enforcement, providing relief to parties who are compelled to file multiple suits due to unforeseen developments or external obstructions, as in this case.

[1]  https://www.sci.gov.in/sci-get-pdf/?diary_no=135482017&type=j&order_date=2025-01-15&from=latest_judgements_order

BEFORE THE HON’BLE SUPREME COURT OF INDIA

Cuddalore Powergen Corporation Ltd. v. M/s Chemplast Cuddalore Vinyls Ltd. & Anr.

CIVIL APPEAL NOS. 372-373 OF 2025

Judgment Dated: 15th January 2025