Specific Performance Suit Not Barred by Prior Injunction Suit: Cuddalore Powergen vs. Chemplast Cuddalore (2025) INSC 73

Introduction

Date of the Judgment: 15 January 2025

Citation: 2025 INSC 73

Judges: J.B. Pardiwala, J., R. Mahadevan, J.

Can a party, who initially files a suit for a permanent injunction to protect their possession of a property, later file a suit for specific performance of an agreement to sell that same property? The Supreme Court of India recently addressed this question, focusing on whether the second suit is barred by the principles of Order II Rule 2 of the Code of Civil Procedure (CPC), which prevents the splitting of claims and remedies.

This case revolves around a dispute where the plaintiff first sought an injunction to protect their possession of a property and later filed a suit for specific performance of a sale agreement for the same property. The core issue is whether the second suit is barred by the principles of Order II Rule 2 of the CPC, which prevents the splitting of claims and remedies.

The judgment was delivered by a two-judge bench comprising Justice J.B. Pardiwala and Justice R. Mahadevan. Justice Pardiwala authored the judgment.

Case Background

M/s Chemplast Cuddalore Vinyls Limited (referred to as the “respondent no. 1/original plaintiff”) entered into an agreement for sale with Mrs. Senthamizh Selvi (referred to as the “respondent no. 2/original defendant no. 1”) on 24 January 2007. The agreement was for the sale of a 1-acre property in Thiyagavalli village, Cuddalore, for ₹1,50,000. The respondent no. 1 claims to have been given possession of the property after paying the full amount.

To facilitate the sale, Mrs. Selvi executed an irrevocable Power of Attorney on 26 March 2007, which was registered the same day. On 7 September 2007, the respondent no. 1 also registered the agreement for sale. However, on 2 November 2007, Mrs. Selvi revoked the Power of Attorney. The respondent no. 1 replied to this on 5 November 2007. On 6 February 2008, Mrs. Selvi sent a demand draft for ₹1,50,000, claiming it was for a loan repayment, not the sale consideration. The respondent no. 1 returned the draft on 8 February 2008, and on 9 February 2008, sent a notice to Mrs. Selvi to complete the sale and not to alienate the property.

The respondent no. 1 attempted to register the sale deed on multiple occasions but was refused. On 14 December 2007, another attempt was made, but the revenue authorities did not accept the documents. Aggrieved, the respondent no. 1 filed Writ Petition No. 1783 of 2008 in the Madras High Court on 21 January 2008. It was discovered that the refusal was due to a Government Order (GO) dated 8 August 1986, which reserved the land for a thermal power station to be developed by the Tamil Nadu Electricity Board (TNEB). The TNEB had authorized Cuddalore Powergen Corporation Ltd (referred to as the “appellant/original defendant no. 2”) to develop the power station. This meant the ban on registration did not apply to the appellant.

From the second week of February 2008, the appellant and Mrs. Selvi allegedly began interfering with the respondent no. 1’s possession. To prevent further trespass, the respondent no. 1 filed a suit for permanent injunction (O.S. No. 28 of 2008) on 16 February 2008, in the Principal District Court, Cuddalore. This suit is still pending.

The appellant, in their written statement in the first suit, claimed they had a valid agreement for sale dated 20 February 2007, and a registered sale deed dated 24 January 2008, with Mrs. Selvi. They asserted that they were in possession of the property since 24 January 2008. On 5 March 2008, the Madras High Court quashed the GO of 8 August 1986, and the TNEB letter of 23 October 2006, in a public interest litigation (Writ Petition No. 11453 of 2007), directing the revenue authorities to register documents if they met the requirements of the Registration Act.

The respondent no. 1, on 6 March 2008, wrote to the Tahsildar, Cuddalore, to not alter the revenue records. The writ petition filed by the respondent no. 1 was also disposed of on 25 March 2008, following the High Court’s decision in the public interest litigation. The respondent no. 1 states that they only learned of the sale deed dated 24 January 2008, in favor of the appellant, after filing the first suit. Consequently, they filed a second suit (O.S. No. 122 of 2008) seeking specific performance of the agreement dated 24 January 2007, a declaration that the sale deed of 24 January 2008, was void, and a permanent injunction against interference with their possession.

Timeline:

Course of Proceedings

The appellant filed an application (I.A. No. 17 of 2009) in the second suit, seeking rejection of the plaint under Order VII Rule 11 of the CPC, arguing that the second suit was barred by Order II Rule 2 of the CPC. The First Additional Subordinate Judge, Cuddalore, allowed the application on 30 April 2009, rejecting the plaint in the second suit (O.S. No. 122 of 2008).

The respondent no. 1 appealed this order in the Principal District Court, Cuddalore, but the appeal was dismissed as not pressed on 5 October 2009, as a regular appeal against an order passed in an I.A. was not maintainable. The respondent no. 1 then filed a fresh appeal against the decree rejecting the plaint. The First Appellate Court also dismissed this appeal, confirming the Trial Court’s order.

The respondent no. 1 then filed a second appeal (S.A No. 858 of 2014) before the Madras High Court. On 30 June 2016, the High Court allowed the appeal ex-parte, ruling that the second suit was not barred by Order II Rule 2 and restored the plaint in the second suit. The High Court held that there was no deliberate omission on the part of the plaintiff to make a claim in the earlier suit, and that the suit for bare injunction was a necessary and immediate relief to prevent further damage or abuse. The High Court also directed the Trial Court to try both suits together.

The appellant then filed a Civil Misc. Petition (CMP No. 12498 of 2016) to review the ex-parte judgment. The High Court rejected this petition on 1 September 2016, stating that the objections raised by the appellant’s counsel had no merit, and reopening the matter would not serve any useful purpose.

Legal Framework

The core legal provision in this case is Order II Rule 2 of the Code of Civil Procedure (CPC), which deals with the inclusion of the whole claim in a suit. It states:

“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.”

This provision aims to prevent the multiplicity of suits and ensures that a person is not vexed twice for the same cause of action. It mandates that every suit should include the whole claim arising from a single cause of action. If a plaintiff omits to sue for a portion of the claim or intentionally relinquishes it, they cannot later sue for that portion. Similarly, if a person is entitled to more than one relief for the same cause of action, they must sue for all reliefs, unless they obtain leave from the court to omit some.

The explanation to Order II Rule 2 clarifies that an obligation and a collateral security for its performance are considered one cause of action, as are successive claims arising under the same obligation.

Arguments

Appellant’s Arguments:

• The appellant argued that the respondent no. 1 had a cause of action to seek specific performance in the first suit itself. The revocation of the Power of Attorney and the return of the sale consideration indicated a refusal by respondent no. 2 to perform the contract. Despite this, the respondent no. 1 chose to sue only for permanent injunction, which amounts to a deliberate relinquishment of the relief of specific performance.
• The appellant pointed out that the respondent no. 1 was aware of the sale deed in favor of the appellant even before filing the first suit. This was evident from the plaint in the first suit, where the respondent no. 1 stated that the appellant claimed to have purchased the property from respondent no. 2. The second suit’s cause of action also acknowledges knowledge of the sale deed in February 2008, before the first suit was filed.
• The appellant submitted that the respondent no. 1 did not obtain leave from the court to file a separate suit for specific performance, as required by Order II Rule 2(3) of the CPC.
• The appellant contended that the respondent no. 1’s knowledge of the sale deed dated 24 January 2008, meant that the relief of declaring it null and void was also available when the first suit was filed. Therefore, omitting this relief also attracts Order II Rule 2.
• The appellant argued that the respondent no. 1 impleaded the appellant in the first suit as the second defendant, which indicates that the respondent no. 1 was aware of the appellant’s claim to the property.
• The appellant relied on the case of Vurimi Pullarao v. Vemari Venkata Radharani (2020) 14 SCC 110, arguing that the facts of the present case are similar, where the Supreme Court held that the second suit for specific performance was barred under Order II Rule 2.
• The appellant contended that the decisions in Rathnavati v. Kavita Ganashamdas (2015) 5 SCC 223 and Inbasagaran v. S. Natarajan (2015) 11 SCC 12, relied upon by the High Court, are distinguishable on facts.

Respondent’s Arguments:

• The respondent no. 1 argued that the causes of action in both suits were different. The first suit was filed for immediate protection against dispossession, while the second suit was for specific performance, declaration, and injunction.
• The respondent no. 1 contended that the threat of dispossession necessitated an urgent approach to the court, and the facts did not allow for a prayer for specific performance in the first suit. The respondent no. 1 was not aware of the sale deed in favor of the appellant at the time of filing the first suit.
• The respondent no. 1 pointed out that the second suit was filed after the High Court’s decision in the public interest litigation, which quashed the Government Order that prevented the registration of sale deeds. This decision gave rise to a new cause of action.
• The respondent no. 1 also argued that they had reserved their right to sue for specific performance at a later stage.
• The respondent no. 1 submitted that the appellant did not establish the principles laid down in Gurbux Singh v. Bhooralal AIR 1964 SC 1810, which are necessary for a successful plea under Order II Rule 2.
• The respondent no. 1 relied on the decisions in Rathnavathi (supra), Inbasagaran (supra), and Sucha Singh Sodhi (Dead) through Legal Representatives v. Baldev Raj Walia and Anr. (2018) 6 SCC 733 to support their argument that Order II Rule 2 does not apply in the present case.
• The respondent no. 1 argued that the appellant was not a bona fide purchaser, as their agreement to sell was dated 20 February 2007, which was after the agreement to sell dated 24 January 2007, in favor of respondent no. 1.
• The respondent no. 1 contended that if the plaint in the second suit was rejected, they would be left without a remedy.

Sub-Submissions Categorized by Main Submissions

Issues Framed by the Supreme Court

The Supreme Court framed the following issue for determination:

1. Whether, in the facts and 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?

Treatment of the Issue by the Court

The following table demonstrates as to how the Court decided the issues

Authorities

The Supreme Court considered the following authorities:

General Principles of Order II Rule 2 CPC:

• Mohammad Khalil Khan and Others v. Mahbub Ali Mian and Others AIR 1949 PC 78 – The Privy Council discussed the meaning of “cause of action” and the tests for determining if causes of action in two suits are the same. It emphasized that the cause of action is the set of facts that gives rise to an enforceable claim and that the correct test is whether the claim in the new suit is founded on a cause of action distinct from that of the former suit.
• Gurbux Singh v. Bhooralal AIR 1964 SC 1810 – A Constitution Bench of the Supreme Court held that the defendant must prove that the second suit was based on the same cause of action, the plaintiff was entitled to more than one relief, and the plaintiff omitted to sue for the relief in the second suit without the court’s leave.
• S. Nazeer Ahmed v. State Bank of Mysore and Others (2007) 11 SCC 75 – The Supreme Court held that the defendant must show that the causes of action were identical and that there was a relinquishment of relief without leave of the court. It also clarified that Order II Rule 2 is directed towards the exhaustion of relief for a cause of action and not the inclusion of different causes of action in one suit.

Status of First Suit and Applicability of Order II Rule 2 CPC:

• Virgo Industries (Eng.) Private Limited v. Venturetech Solutions Private Limited (2013) 1 SCC 625 – The Supreme Court held that Order II Rule 2 applies even when the subsequent suit is filed during the pendency of the first suit.

Reading of Plaints for Rejection Under Order VII Rule 11(d) CPC:

• Saleem Bhai and Others v. State of Maharashtra and Others (2003) 1 SCC 557 – The Supreme Court held that for deciding an application under Order VII Rule 11 CPC, the averments in the plaint are germane, and the pleas taken by the defendant are irrelevant.
• Ram Prakash Gupta v. Rajiv Kumar Gupta and Others (2007) 10 SCC 59 – The Supreme Court held that the entire plaint must be read to ascertain its true import, and a few lines or passages should not be read in isolation.
• Coffee Board v. Ramesh Exports Private Limited (2014) 6 SCC 424 – The Supreme Court stated that both plaints must be read as a whole to identify the cause of action and that if the cause of action is identical and the relief could have been claimed in the earlier suit, the subsequent suit is barred.
• Chhotan ben and Another v. Kiritbhai Jalkrushnabhai Thakkar and Others (2018) 6 SCC 422 – The Supreme Court stated that only the averments in the plaint are germane for rejecting a plaint under Order VII Rule 11(d) CPC.

Application of Order II Rule 2 in Specific Performance Suits:

• Virgo Industries (Eng.) Private Limited v. Venturetech Solutions Private Limited (2013) 1 SCC 625 – The Supreme Court held that when the plaintiff is aware of the defendant’s intention not to honor the agreement, the relief of specific performance should have been included in the first suit.
• Inbasagaran v. S. Natarajan (2015) 11 SCC 12 – The Supreme Court held that the cause of action for a suit for specific performance arises when the defendant discloses the transfer of the property and denies the agreement.
• Rathnavathi v. Kavita Ganashamdas (2015) 5 SCC 223 – The Supreme Court held that the cause of action for a suit for specific performance is different from the cause of action for a suit for injunction.
• Vurimi Pullarao v. Vemari Venkata Radharani (2020) 14 SCC 110 – The Supreme Court held that the second suit for specific performance was barred under Order II Rule 2 because the cause of action for the specific performance suit arose before the first suit for injunction.

Availability of Relief and Order II Rule 2:

• Ramjilal v. Board of Revenue, Rajasthan AIR 1964 Raj 114 – The Rajasthan High Court held that Order II Rule 2 does not require a person to seek all remedies if it is impossible to obtain them from the opposite party.
• National Security Assurance Company Ltd. v. S.N. Jaggi AIR 1971 All 421 – The Allahabad High Court held that a subsequent suit for a claim revived by an enactment is not barred by Order II Rule 2.

Judgment

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

• Mohammad Khalil Khan and Others v. Mahbub Ali Mian and Others [AIR 1949 PC 78]*: The Court applied the principles laid down in this case to define “cause of action” and to determine that the causes of action in the two suits were different.
• Gurbux Singh v. Bhooralal [AIR 1964 SC 1810]*: The Court used the principles laid down in this case to determine that the defendant failed to prove that the second suit was based on the same cause of action and that the plaintiff omitted to sue for the relief in the second suit without the court’s leave.
• S. Nazeer Ahmed v. State Bank of Mysore and Others [(2007) 11 SCC 75]*: The Court applied the principles laid down in this case to determine that Order II Rule 2 is directed towards the exhaustion of relief for a cause of action and not the inclusion of different causes of action in one suit.
• Virgo Industries (Eng.) Private Limited v. Venturetech Solutions Private Limited [(2013) 1 SCC 625]*: The Court distinguished this case by stating that the relief of specific performance was not available to the plaintiff at the time of filing the first suit.
• Saleem Bhai and Others v. State of Maharashtra and Others [(2003) 1 SCC 557]*: The Court applied the principles laid down in this case to determine that the averments in the plaint are germane for deciding an application under Order VII Rule 11 CPC.
• Ram Prakash Gupta v. Rajiv Kumar Gupta and Others [(2007) 10 SCC 59]*: The Court applied the principles laid down in this case to determine that the entire plaint must be read to ascertain its true import.
• Coffee Board v. Ramesh Exports Private Limited [(2014) 6 SCC 424]*: The Court applied the principles laid down in this case to determine that both plaints must be read as a whole to identify the cause of action.
• Chhotan ben and Another v. Kiritbhai Jalkrushnabhai Thakkar and Others [(2018) 6 SCC 422]*: The Court applied the principles laid down in this case to determine that only the averments in the plaint are germane for rejecting a plaint under Order VII Rule 11(d) CPC.
• Inbasagaran v. S. Natarajan [(2015) 11 SCC 12]*: The Court distinguished this case by stating that the cause of action for a suit for specific performance arises when the defendant discloses the transfer of the property and denies the agreement, which was not the case in the present matter.
• Rathnavathi v. Kavita Ganashamdas [(2015) 5 SCC 223]*: The Court distinguished this case by stating that the cause of action for a suit for specific performance is different from the cause of action for a suit for injunction, and in the present case, the relief of specific performance was not available at the time of filing the first suit.
• Vurimi Pullarao v. Vemari Venkata Radharani [(2020) 14 SCC 110]*: The Court distinguished this case by stating that the cause of action for the specific performance suit arose before the first suit for injunction.
• Ramjilal v. Board of Revenue, Rajasthan [AIR 1964 Raj 114]*: The Court applied the principles laid down in this case to determine that Order II Rule 2 does not require a person to seek all remedies if it is impossible to obtain them from the opposite party.
• National Security Assurance Company Ltd. v. S.N. Jaggi [AIR 1971 All 421]*: The Court applied the principles laid down in this case to determine that a subsequent suit for a claim revived by an enactment is not barred by Order II Rule 2.

Decision

The Supreme Court dismissed the appeal. The Court held that the High Court was correct in holding that the second suit was not barred by Order II Rule 2 of the CPC. The Court stated that the cause of action for specific performance arose only after the ban on registration of sale deeds was lifted by the High Court in the public interest litigation. The Court held that the relief of specific performance was not available to the respondent no. 1 at the time of filing of the first suit. The Court also stated that the Trial Court should try both suits together.

Key Takeaways

This judgment clarifies several important aspects of Order II Rule 2 of the CPC:

• Availability of Relief: A suit for specific performance is not barred by a prior suit for injunction if the relief of specific performance was not available at the time of filing the first suit.
• Distinct Causes of Action: The cause of action for a suit for injunction and a suit for specific performance are different, especially when a new cause of action arises due to subsequent events.
• Order II Rule 2: The principles of Order II Rule 2 do not apply if the plaintiff could not have claimed the relief in the earlier suit.
• Reading of Plaints: The entire plaint must be read to determine the true cause of action and not just a few lines or passages.
• Trial of Suits: When multiple suits are filed concerning the same property, the court should try them together.

Procedural Flowchart