Supreme Court Clarifies Order 2 Rule 2 CPC in Specific Performance Suits: Sucha Singh Sodhi vs. Baldev Raj Walia (2018)

Date of the Judgment: April 13, 2018

Citation: (2018) INSC 308

Judges: R.K. Agrawal, J., Abhay Manohar Sapre, J.

Can a plaintiff be barred from filing a suit for specific performance of a contract if they previously filed a suit for a permanent injunction concerning the same property? The Supreme Court of India addressed this question in a recent judgment, clarifying the scope of Order 2 Rule 2 of the Code of Civil Procedure, 1908 (CPC). The court held that a suit for specific performance is not barred by Order 2 Rule 2 CPC when a prior suit for permanent injunction was filed, as the causes of action are distinct. This judgment provides clarity on the application of Order 2 Rule 2 CPC in cases involving different reliefs sought in separate suits.

Case Background

The case involves a dispute over a property sale agreement. On October 11, 1996, Sucha Singh, the original plaintiff, filed a suit for a permanent injunction against Baldev Raj Walia (Respondent No. 1) in the Court of Senior Civil Judge, Delhi. Sucha Singh claimed that he had entered into an agreement to purchase the suit premises from Respondent No. 1 for Rs. 11,50,000, and had paid Rs. 2,00,000 as advance. He alleged that he was placed in possession of the suit premises in February 1996. In May 1996, he further paid Rs. 36,000 in cash to Respondent No. 1. He filed the suit for injunction when Respondent No. 1 threatened to dispossess him on 10.10.1996.

Respondent No. 1, in his written statement, stated that he had already transferred the suit premises to Respondent No. 2. On November 27, 1998, Sucha Singh withdrew the suit for permanent injunction to file proceedings before the competent forum for appropriate relief. On February 25, 1999, Sucha Singh filed a suit for specific performance of the agreement against Respondent No. 1 in the Court of Additional District Judge, Tis Hazari Courts, Delhi. Respondent No. 2 was added as a party to the suit. The respondents argued that the suit was barred by Order 2 Rule 2 of the CPC, as the relief of specific performance could have been claimed in the previous suit for permanent injunction.

Timeline:

Course of Proceedings

The Trial Court dismissed the suit for specific performance, holding that it was barred by Order 2 Rule 2 of the CPC. The court reasoned that the plaintiff should have claimed the relief of specific performance in the earlier suit for permanent injunction. The High Court of Delhi upheld the Trial Court’s decision, concurring with its reasoning and conclusion. The plaintiffs then appealed to the Supreme Court.

Legal Framework

The core legal provision in question is Order 2 Rule 2 of the Code of Civil Procedure, 1908, which 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.”

Order 2 Rule 2(1) of the CPC mandates that a suit must include the entire claim a plaintiff is entitled to make based on the cause of action. Order 2 Rule 2(2) bars a subsequent suit for any claim omitted or relinquished in a prior suit. The Supreme Court examined whether the relief of specific performance could have been claimed in the earlier suit for permanent injunction.

The Court also referred to Order 39 Rule 1(c) of the Code of Civil Procedure, 1908, which deals with the grant of injunctions, and Article 54 and Articles 85, 86 and 87 of the Limitation Act, which govern the limitation periods for suits for specific performance and injunctions respectively.

Arguments

Appellants’ Submissions:

• The appellants argued that the cause of action for a permanent injunction and the cause of action for specific performance are distinct.
• They contended that the relief of specific performance could not have been claimed in the previous suit for permanent injunction.
• The appellants relied on the judgment of the Supreme Court in Rathnavathi & Another vs. Kavita Ganashamdas (2015 (5) SCC 223), which held that Order 2 Rule 2 of the CPC does not bar a subsequent suit for specific performance when a prior suit for injunction was filed.
• They also argued that the statement made by the original plaintiff, Sucha Singh, while withdrawing the earlier suit, indicated his intention to file a fresh suit for specific performance.

Respondents’ Submissions:

• The respondents argued that the suit for specific performance was barred by Order 2 Rule 2 of the CPC.
• They contended that the relief of specific performance should have been claimed in the earlier suit for permanent injunction.
• They argued that the Trial Court did not grant permission to the plaintiff to file a fresh suit when the earlier suit was withdrawn.
• Respondent No. 2 also addressed the Court on the merits of the suit.

The innovativeness of the argument by the appellants lies in their reliance on the distinct nature of the causes of action for injunction and specific performance, as well as the specific statement made by the original plaintiff while withdrawing the initial suit.

Submissions Table

Issues Framed by the Supreme Court

The Supreme Court considered the following issues:

1. Whether the plaintiff was entitled to claim a relief of specific performance of agreement in the previous suit on the basis of cause of action pleaded by the plaintiff in the previous suit against the respondents/defendants in relation to suit property.
2. Whether in the absence of any permission/liberty granted by the Trial Court to the plaintiff at the time of withdrawing the previous suit filed for permanent injunction, the plaintiff was entitled to file the suit for specific performance of agreement against the defendants in relation to the suit property?

Treatment of the Issue by the Court

Authorities

Cases:

• Rathnavathi & Another vs. Kavita Ganashamdas (2015 (5) SCC 223) – Supreme Court of India: The Court relied on this case to hold that Order 2 Rule 2 of the CPC does not bar a subsequent suit for specific performance when a prior suit for injunction was filed. The ratio of this case is that the causes of action for injunction and specific performance are distinct.
• Gurinderpal vs. Jagmittar Singh (2004) 11 SCC 219 – Supreme Court of India: The Court relied on this case to hold that if the order granting permission to withdraw the suit does not specifically mention the liberty to file a fresh suit, the filing of a fresh suit is not hit by Order 2 Rule 2 of the CPC. The ratio is that the statement of the plaintiff can be considered for granting permission to withdraw the suit and file a fresh suit.

Legal Provisions:

• Order 2 Rule 2 of the Code of Civil Procedure, 1908: This provision deals with the inclusion of the whole claim in a suit and the bar on subsequent suits for omitted claims.
• Order 39 Rule 1(c) of the Code of Civil Procedure, 1908: This provision deals with the grant of injunctions.
• Article 54 of the Limitation Act: This provision governs the limitation period for suits for specific performance.
• Articles 85, 86 and 87 of the Limitation Act: These provisions govern the limitation periods for suits for injunctions.

Authorities Considered by the Court

Judgment

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

How each authority was viewed by the Court?

• The Supreme Court followed Rathnavathi & Another vs. Kavita Ganashamdas (2015 (5) SCC 223)* to hold that the bar under Order 2 Rule 2 of the CPC does not apply to a subsequent suit for specific performance when a prior suit for injunction was filed.
• The Supreme Court followed Gurinderpal vs. Jagmittar Singh (2004) 11 SCC 219* to hold that the statement of the plaintiff can be considered for granting permission to withdraw the suit and file a fresh suit.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the distinct nature of the causes of action for permanent injunction and specific performance. The Court emphasized that a suit for permanent injunction is based on a threat to possession, while a suit for specific performance arises from a breach of contract. The Court also considered the statement of the original plaintiff, Sucha Singh, while withdrawing the earlier suit, which indicated his intention to file a fresh suit for specific performance. The Court found that the statement coupled with the court’s permission to withdraw the suit satisfied the requirements for filing a fresh suit.

Fact:Law Ratio

The court’s reasoning was largely based on legal principles and precedents, with a lesser emphasis on the specific facts of the case.

Logical Reasoning

Issue 1: Could the plaintiff claim specific performance in the previous suit for injunction?

Issue 2: Could the plaintiff file a suit for specific performance without explicit permission?

Reasoning

The Supreme Court held that the suit for specific performance was not barred by Order 2 Rule 2 of the CPC. The Court reasoned that the cause of action for a suit for permanent injunction is different from the cause of action for a suit for specific performance. A suit for permanent injunction is based on a threat to the plaintiff’s possession, while a suit for specific performance is based on a breach of contract. The Court noted that the factual ingredients necessary to constitute the respective causes of action for both the reliefs are different and are governed by separate articles of the Limitation Act. The Court also emphasized that the plaintiff had clearly stated his intention to file a fresh suit when withdrawing the earlier suit. The Court relied on its previous decisions in Rathnavathi & Another vs. Kavita Ganashamdas and Gurinderpal vs. Jagmittar Singh to support its decision.

The Court rejected the respondents’ argument that the plaintiff should have claimed the relief of specific performance in the earlier suit, stating that the relief was not available in the previous suit. The Court also rejected the argument that the plaintiff did not have permission to file a fresh suit, holding that the plaintiff’s statement coupled with the court’s permission was sufficient.

The court stated, “In our considered opinion, the sine qua non for invoking Order 2 Rule 2(2) against the plaintiff by the defendant is that the relief which the plaintiff has claimed in the second suit was also available to the plaintiff for being claimed in the previous suit on the causes of action pleaded in the previous suit against the defendant and yet not claimed by the plaintiff.”

The court further stated, “First, the cause of action to claim a relief of permanent injunction and the cause of action to claim a relief of specific performance of agreement are independent and one cannot include the other and vice versa.”

The Court also observed, “In our considered opinion, reading of the statement of the original plaintiff (Sucha Singh) coupled with the permission granted by the Court to withdraw the suit satisfies the requirement of Order 23 Rule 1 (3) of the Code. It certainly enabled the plaintiff to file a fresh suit, namely, the civil suit for claiming specific performance of the agreement against the defendants.”

Key Takeaways

• A suit for specific performance is not barred by Order 2 Rule 2 of the CPC if a prior suit for permanent injunction was filed concerning the same property.
• The causes of action for permanent injunction and specific performance are distinct and independent.
• A plaintiff can file a fresh suit for specific performance if they have clearly stated their intention to do so while withdrawing a previous suit for injunction, even if the court’s order does not explicitly grant permission.
• This judgment clarifies the scope of Order 2 Rule 2 of the CPC and provides guidance for future cases involving similar issues.

Directions

The Supreme Court directed the Trial Court to decide the civil suit on merit expeditiously and preferably within one year, without being influenced by any of its observations.

Specific Amendments Analysis

There was no discussion on any specific amendments in the judgment.

Development of Law

The ratio decidendi of this case is that the bar under Order 2 Rule 2 of the Code of Civil Procedure, 1908 does not apply to a subsequent suit for specific performance of an agreement when a prior suit for permanent injunction was filed concerning the same property. This judgment reinforces the principle that causes of action for different reliefs must be considered separately. There is no change in the previous position of law, but this decision clarifies the application of Order 2 Rule 2 in specific performance suits.

Conclusion

The Supreme Court allowed the appeal, setting aside the judgments of the High Court and the Trial Court. The Court held that the suit for specific performance was maintainable and not barred by Order 2 Rule 2 of the CPC. The Court clarified that the causes of action for permanent injunction and specific performance are distinct. This judgment provides clarity on the application of Order 2 Rule 2 CPC and ensures that plaintiffs are not unfairly barred from seeking appropriate relief.