The High Court of Bombay dismissed a writ petition challenging the rejection of leave to omit specific performance relief from a suit under Order 2 Rule 2 CPC. The court held that splitting claims to avoid court fees amounts to an abuse of process and upheld the impugned order.
Writ petition dismissed with no order as to costs; Rule discharged.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
APPELLATE JURISDICTION
WRIT PETITION NO.3125 OF 2008
Prakash Balaram Nichani..Petitioner
V/s
Mohandas Parshuram Ahuja..Respondent
Mr. G.S. Godbole i/b M/s DivekAar and Co. for the
petitioner
Mr. Chirag Balsara i/b M/s Daru Shah and Co. for
for respondent
CORAM : A.A. SAYED, J.
DATE : 4th JULY, 2008
P.C.
1.Rule. By consent rule is made returnable
forthwith and heard finally.
2.The City Civil Court, Mumbai by its order
dated 8th April, 2008 has rejected leave to the
petitioner-plaintiff under Order 2 Rule 2 of the Code
of Civil Procedure, 1908 to omit the relief of
specific performance in respect of the agreement in
question from the purview of the suit. Aggrieved by
this order the petitioner has filed the present
petition.
3. The subject-matter of the suit filed by the
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petitioner is a joint venture agreement dated
10-8-1994 ("the said agreement" for short) entered
into between the petitioner, who is developer and the
respondent, who is the owner of the suit property.
According to the petitioner the respondent is trying
to wriggle out of his commitments under the said
agreement which necessitated the filing of the suit.
4.The main prayers in the plaint read thus:-
"(a) that this Hon’ble Court be pleased to
grant leave to the Plaintiff under Order 11,
Rule 2 of Code of Civil Procedure 1908, to
omit the relief of specific performance of the
Agreement dated 10.8.1994, being Exhibit ’D’
to the plaint from the purview of the present
suit;
(b) that this Hon’ble Court be pleased to hold
and declare that the Agreement dated 10th
August,1994, being Exhibit ’D’ to the Plaint
is subsists and binding on the Defendant;
(c) that the Hon’ble Court be pleased to hold
and declare that the Plaintiff alone has a
right to prosecute suit No.5750 of 1994
pending in this Hon’ble Court;
(d) That by permanent injunction this Hon’ble
Court be pleased to restrain the Defendant
from disturbing the possession of the
Plaintiff of the suit property.
(e) That by permanent order of injunction this
Hon’ble Court be pleased to restrain the
Defendant from committing breach of Joint
Venture Agreement dated 10th August, 1994
and/or creating any third party rights in
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respect of the suit property.
5.The petitioner has averred in the plaint that
he reserves his right to claim specific performance
of the said agreement at an appropriate time.
According to the petitioner he is entitled to enforce
a negative covenant contained in clause 27 of the
said agreement without seeking specific performance
of the said agreement. The said clause 27 provides
that under any circumstances the agreement shall not
be revoked by either party.
6.The petitioner accordingly applied to the
Trial Court to seek leave under Order 2 Rule 2 of the
Code of Civil Procedure, 1908 for permission to omit
the claim relating to specific performance of the
agreement from the purview of the suit which was
rejected by the impugned order.
7.The learned Counsel for the petitioner,
relying upon the Order 2 Rule 2(3) of C.P.C.,
submitted that the petitioner is entitled to be
granted leave to omit any relief in the suit and the
Trial Court had erred in rejecting the leave. The
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learned Counsel argued that the petitioner is
entitled to seek a declaration that the said
agreement is valid, subsisting and binding on the
respondent, in view of the dispute between the
petitioner and the respondent and apprehension of the
petitioner that the respondent may commit breach of
the said agreement. Relying upon section 42 of the
Specific Relief Act, 1963, the learned Counsel for
the pointed out that the Court is not precluded from
granting an injunction to perform negative agreement
and therefore, such leave as sought by the
petitioner, can be granted.
8.The learned counsel for the petitioner
contended that by granting leave no substantial right
of the respondent is affected and that the granting
of leave is not an adjudicating process and it is in
the form of intimation to the Court that the
plaintiff is reserving his right to file a suit in
respect of some reliefs which is permissible in law.
The learned Counsel relied on the case of Canning
Mitra Phoenix Ltd. V. M/s Popular Constructions,
reported in 1994 Mh.L.J. 812 and submitted that
leave of the Court under Order 2, Rule 2 (3) of
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Cr.P.C. can be sought and urged that the petition be
allowed and the impugned order be set aside.
9.The learned Counsel for the respondent on the
other hand, submitted that in filing the suit what
the petitioner is in fact seeking is specific
performance of the said agreement without a specific
prayer in that behalf. The learned Counsel, in
support of his contention, has taken me through the
various clauses of the said agreement. The learned
Counsel relying upon the decisions in the cases of
(1) Deva Ram V. Ishwar Chand, reported in (1995) 6
SCC 733 and (2) SNP Shipping Services Pvt. Ltd. V.
World Tankar Carrier Corporation, reported in AIR
2000 Bombay 34, submitted that the petitioner cannot
split up his claim so as to omit part of the claim
and if the cause of action is the same, the
petitioner is required to place all his claims in one
suit. The learned Counsel submitted that the
respondent cannot be vexed by two separate suits in
respect of the same cause of action. The learned
Counsel further submitted that the use of the words
"shall" in the sub-rules of Order 2 Rule 2 CPC
indicates that the provisions are mandatory and the
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suit has to be framed so as to afford ground for a
final decision upon the subjects in dispute and to
prevent a further litigation. He therefore, urged
that no case of interference has been made out by the
petitioner and submitted that leave has been rightly
refused by the Trial Court.
10.I have heard the learned Counsel for the
parties and perused the material on record. At the
outset it would be necessary to examine the agreement
dated 10th August 1994 which is the subject matter of
the suit. The agreement is titled as a joint venture
agreement and the petitioner is described in the
agreement as the developer and the respondent as the
owner. One of the recitals of the agreement reads
thus:-
"AND WHEREAS the Owner has approached the
Developer for development of the said property
more particularly described in the Schedule
hereunder written on joint venture basis by
virtue of which the owner will make the said
property available for development at the
agreed land cost of Rs.9,00,000/- (Rupees Nine
Lacs only) and the Developer will provide the
necessary funds for the development of the
said property and also for incidental work
connected with Development obtaining of TDR
etc. in the manner and other terms and
conditions herein below contained."
Clause 3 of the agreement reads thus:-
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"In the event of the plans not being
sanctioned on this plot of land, the Developer
will obtain the T.D.R. available on the said
land will and sell jointly the said T.D.R. to
the intending purchaser/buyer as at present
the said land is Reserved for Municipal retail
Market and Municipal Staff quarters."
Clause 6 reads thus:-
"Upon execution of these presents, the Owner
has permitted the Developer to enter upon the
property with an irrevocable Licence and
authority to obtain necessary permission,
N.O.C. from the concerned authorities and/or
to get the Plans sanctioned, obtain I.O.D.
Commencement Certificate from the concerned
authorities and/or to apply to the corporation
for acquisition of the Reserved property to
grant TDR in lieu of compensation."
Clause 7 reads thus:-
"The Developer is entitled to commence the
work of construction of buildings with the
permission of the concerned authorities."
Clause 8 reads thus:-
"The Owner shall be entitled to receive Rs. 9
Lacs (Rupees Nine Lakhs Only) without interest
as and by way of costs of the land after
completion of the project or obtaining TDR."
Clause No. 11 reads thus:-
"The price of the land agreed to be given to
the Owner and the moneys expended by the
Developer, shall be deducted from the total
gross sale process of flats, garages, shops
and or sale of TDR and after deducting the
such amount payable to the owner and the
amount expended by the Developer balance
amount will be shared by the parties in equal
proportion."
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Clause 19 provides for execution of irrevocable power
of attorney by the Owner in favour of the developer.
Clause 27, which is the principal clause relied upon
by the petitioner for seeking leave under Order 2
Rule 2, reads thus:-
" 27. The agreement shall be subject to usual
force, measures, causes and circumstances
beyond the control of the Owner and Developer
and under any circumstances the agreement
shall not be revoked by either party"
11.The averments in the plaint disclose that the
dispute between the parties started after the
respondent alongwith the petitioner filed a suit
being Suit No.5750 of 1994 against one Mohan Chug,
D.M. Builders and one Manjit Singh in the Bombay
City Civil Court at Bombay, for an injunction
restraining them from entering upon or remaining upon
or committing any other acts of trespass on the suit
property, wherein an injunction was obtained. As the
petitioner apprehended that the respondent wanted to
wriggle out the said agreement, the petitioner asked
the respondent to change the advocate as he wanted an
advocate of his choice in the said suit No. 5750 of
1994, which the respondent did not agree.
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12.According to the petitioner he is in
possession of the suit property and he has done the
work of earth filling in the suit property and also
got the barbed wire fencing done around the suit
property. He has obtained electric supply and
employed armed security persons to protect and
safeguard the property and as such taken steps and
has incurred expenses. After the execution of the
said agreement an irrevocable power of attorney was
also executed by the respondent in favour of the
petitioner.
13.It is also averred in para 11 of the plaint
that the plaintiff has taken aforesaid steps and now
he wants to wriggle out of the said agreement and
wants to create third party rights in respect of the
suit property and wants to sell the suit property
and/or to have the suit property developed by some
other developer and in any event he is out to commit
breach of the said agreement. In para 13 of the
plaint it is averred as follows:-
".....the plaintiff is entitled to enforce the
negative covenant contained in clause 27 of the said
Agreement without seeking specific performance of the
said Agreement. The plaintiff reserves his right to
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claim specific performance at an appropriate time and
seeks leave of the Hon’ble Court under Order 11, Rule
2, of the Code of Civil Procedure in that behalf".
14.As reproduced in para 4 above, Clause (b) of
the prayer clause of the plaint seeks a declaration
that the said agreement dated 10th August, 1994 is
existing and binding on the respondent. Prayer (d)
seeks permanent injunction for protection of the
petitioner’s possession of the suit property and to
restrain the respondent from disturbing his
possession Prayer (e) seeks a permanent order of
injunction from restraining the respondent from
committing breach of the said agreement and/or
creating third party rights in respect of the suit
property.
15.The above discussion pertains to the factual
aspect of the matter. Let us now examine the legal
provisions. Order 2, Rule 1 and 2 of Code of Civil
Procedure, 1908 are relevant in the present case and
are reproduced hereunder:-
"1-Frame of suit.- Every suit shall as far as
practicable be framed so as to afford ground
for final decision upon the subjects in
dispute and to prevent further litigation
concerning them.
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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 purpose 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.
Illustration.- A lets a house to B at a yearly
rent of Rs. 1,200/-. The rent for the whole
of the year 1905, 1906 and 1907 is due and
unpaid. A sues B in 1908 only for the rent
due for 1906. A shall not afterwards sue B
for the rent due for 1905 or 1907.
16.The above provisions thus provide that once
the plaintiff comes to Court to redress any grievance
of existing cause of action he is required to include
the whole claim pertaining to that cause of action.
If he gives up some part of the claim based on the
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said cause of action or omits to sue in connection
with the same he cannot subsequently seek any relief
based on the same cause of action. Insofar as
sub-rule 3 of Rule 2 is concerned it lays down that
if the cause of action is same and if in the earlier
suit the plaintiff has not sought any reliefs
available to him on the basis of that cause of
action, the reliefs which he failed to seek in that
suit cannot be subsequently prayed, except with the
leave of the Court. Order 2 Rule 2 sub-rule 3 thus
requires that the cause of action in the earlier suit
must be the same on which the subsequent suit is
based. In other words, there must be identity of
cause of action in both the suits to attract the bar
of order 2 Rule 2 sub-rule 3. The salutary
principles behind order 2 rule 2 is that defendant
should not be vexed time and again for the same cause
of action by splitting claim of reliefs in successive
litigations. It is therefore provided that the
plaintiff must not abandon any part of the claim
without leave of the Court and must claim the whole
reliefs available to him in respect of the same cause
of action. He will thereafter be precluded from
doing so in any subsequent litigation he may commence
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if he has not obtained prior permission of the court.
This principle was elucidated by the the Apex Court
in the case of Kunjan Nair Sivaraman Nair V. Narayan
Nair & Others, reported in (2004) 3 SCC 277 as also
in the case of M/s Bengal Waterproof Ltd. V. M/s
Bombay Waterproof Mfg.. Co., reported in AIR 1997
S.C. 1398
17.In this regard reference may also be made to
section 11 of the Code and in particular explanation
IV to the said section. The said Section 11 and
explanation IV is reproduced hereunder:-
"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."
" Explanation.-IV. Any matter which might and
ought to have been made 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."
18.Both Order 2 Rule 2 and section 11 are thus
primarily based on the principle that there should be
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conclusiveness of judgment, which in turn is based on
the maxim "Nemo debet bis vexari pro una at eadem
cause" (no man should be vexed twice over for the
same cause of action) and that multiplicity of suits
should be avoided.
19.The Constitution Bench of the Apex Court in
case of Gurubux Singh V.Bhoorlal, AIR 1964 SC 1810
which dealing with Order 2 rule 2(3), has laid down
as under:-
"In order that a plea of a bar under 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 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 claim in the later suit is based there
would be no scope for the application of the
bar."
20.In K.S. Bhoopathy V. Kokil, AIR 2000 S.C.
213, the Supreme Court has observed as follows:-
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"The Court has to discharge the duty mandated
under the provisions of Code on taking into
consideration all relevant aspects of the
matter including the desirability of
permitting the party to start a fresh round of
litigation on the same cause of action."
It must however be mentioned that in the above
matter, the Court was dealing with the issue whether
the plaintiff can be permitted to withdraw the suit
with leave to file a fresh suit under the provisions
of Order 23 of CPC.
21.Thus on going through the averments in the
plaint and reading the entire plaint as a whole and
considering the over all factual aspect of the matter
as well as the position of law as discussed above, I
have no doubt in my mind that the petitioner is
substantially seeking specific performance of the
agreement in question, though in a circuitous manner.
In my view the petitioner cannot pick out any clause
from the said agreement and reserve his right to
bring a fresh suit for reliefs based on that clause.
The reliance by the petitioner on section 42 of
Specific Relief Act, which deals with injunction to
perform negative agreement, is misplaced inasmuch as
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section 42 deals with the cases and circumstance
wherein the Court is unable to compel the specific
perform of the affirmative agreement, which is not
the case in the present matter.
22.It is interesting to note that in the instant
case, nowhere in the body of the plaint there is any
explanation given as to what necessitated the
splitting of the reliefs so as to seek leave under
order 2 rule 2. Thus, apart from the reasons
mentioned above, in absence of reasons or explanation
on record for splitting the reliefs, no leave can be
granted to the petitioner. It is required to be
noted that the evidence in the present suit as well
as in the proposed suit for which leave is sought,
would have been no different. The question, however
remains as to why the petitioner wants to reserve his
right to file a separate suit for specific
performance. The answer, seemingly lies in fact that
the petitioner wants to avoid payment of ad valorem
Court fees as provided under Bombay Court Fees Act,
1959. Here, reference may be made to the decision in
the case of Shamsher Singh V. Rajinder Prashad, AIR
1973 S.C. 2384 wherein it was held by the Apex Court
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that mere astuteness in drafting the plaint will not
be allowed to stand in the way of the Court looking
at the substance of the reliefs asked for and that
the Court fee would be decided accordingly.
23.The granting of leave under Order 2 Rule 2 in
cases such as the present one could perhaps set an
incorrect precedent, inasmuch as in every such suit,
instead of seeking prayer for specific performance,
the plaintiffs would only seek a prayer for a
declaration that the agreement is subsisting and
binding and the plaintiffs would thus avoid the
payment of proper Court fees. This would lead to
nothing but a revenue loss which has a direct
correlation with the costs of administration of civil
justice.
24.The argument of the learned Counsel on behalf
of the petitioner that seeking of leave under Order 2
Rule 2 is only in the form of intimation to the Court
and that leave has to be granted as a matter of
course, does not appeal to me in the least. If that
be the case, there would be no necessity of any
provision for seeking leave of the Court. The word
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’leave’ necessarily means that the plaintiff is
required to seek ’permission’ of the the court to
split the reliefs in respect of the same cause of
action. Such permission may be granted by the Court
only after it is ’satisfied’ that a case for granting
leave is made out. While considering whether leave
under order 2 rule 2 ought to granted to the
plaintiff or not, the Court is required to keep in
mind the object of the legislature in enacting
provisions of Order 2 Rule 1 also, which provides for
bringing finality to the dispute and to prevent
further litigation as far as practicable. The
provisions in Order 2 Rule 2(3) for grant of leave is
thus an exception to the general principle of law
that multiplicity of suits should be avoided. It is
a prayer for concession from the Court. The grant of
leave is thus at the discretion of the Court and the
Court will exercise such discretion with required
caution and circumspection. The Court is to keep in
mind the wastage of public time of Courts which is
more relevant in the present scenario in view of the
large accumulation of cases in Courts. The Court is
also duty bound to verify whether the correct Court
fee is paid or not and may refuse leave in case it is
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found that leave is being sought with as oblique
motive to avoid payment of proper Court fee. Thus it
is only after weighing the pros and cons and upon its
satisfaction, that leave would be granted by the
Court.
25.In the case of Canning Mitra Phoenix Ltd.
(Supra) relied upon by the petitioner, the ratio laid
down is with respect to the ’point of time’ when the
leave of the Court is required to be obtained and
this is evident from para 1 of the judgment which
reads as under:-
"....the question which requires determination
is at what point of time leave of the Court to
sue for relief which was omitted to be sought
earlier is required to be obtained under
sub-rule (3) of Rule 2 of Order 2 of CPC."
Thus the reliance on this decision is of no
assistance to the petitioner.
26.I respectfully agree with the observations of
the Single Judge of this Court in the case of SNP
Shipping Services Pvt. Ltd. (Supra) relied upon by
the respondent, wherein it was observed that the
provisions of Order 2 Rule 2 are mandatory in nature.
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In the case of Deva Ram (Supra) also, it is
reiterated that if the cause of action is the same,
the plaintiff has to place all his claims before the
Court in one suit as Order 2 Rule 2 is based on the
cardinal principle that the defendant should not be
vexed twice for the same cause.
27.In light of the aforesaid discussion, in my
view, the action on the part of the petitioner in
seeking leave under Order 2 Rule 2 is not bonafide
and would amount to abuse of process of Court. No
case is made out by the petitioner for interference
with the impugned order of the Trial Court so as to
exercise writ jurisdiction of this Court under
Article 227 of the Constitution of India. The
petition is therefore dismissed with no order as to
costs. Rule is discharged.
28.However, before parting, considering the facts
and circumstances of the case, I find that certain
directions to the Trial Court are warranted. The
Trial Court shall first examine the issue of the
payment of proper Court fee by the petitioner in
valuing the suit, in accordance with law and pass
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necessary orders in that regard after hearing the
parties. Consequently, the Trial Court would also
decide whether it would have pecuniary jurisdiction
to entertain and try the suit.
(A.A. SAYED, J.)
3 issues framed by the court
Whether leave should be granted under Order 2 Rule 2 CPC to omit the specific performance of an agreement from a suit seeking declaration and injunction.
Whether splitting claims to avoid payment of proper court fees constitutes an abuse of the court's process.
Whether the petitioner substantially seeks specific performance in a circuitous manner.
Colour shows how this judgement treated each authority
Canning Mitra Phoenix Ltd. V. M/s Popular ConstructionsDistinguished¶25
1994 Mh.L.J. 812 · Who else cites this
Deva Ram V. Ishwar ChandRelied on¶26
(1995) 6 SCC 733 · Who else cites this
SNP Shipping Services Pvt. Ltd. V. World Tanker Carrier CorporationRelied on¶26
AIR 2000 Bombay 34 · Who else cites this
Kunjan Nair Sivaraman Nair V. Narayan Nair & OthersRelied on¶72
(2004) 3 SCC 277 · Who else cites this
M/s Bengal Waterproof Ltd. V. M/s Bombay Waterproof Mfg. Co.Relied on¶72
AIR 1997 S.C. 1398 · Who else cites this
Gurubux Singh V. BhoorlalRelied on¶19
(1964) 1 SCR 1935 · Who else cites this
K.S. Bhoopathy V. KokilRelied on¶21
AIR 2000 S.C. 213 · Who else cites this
Shamsher Singh V. Rajinder PrashadRelied on¶90
AIR 1973 S.C. 2384 · Who else cites this
4 provisions across 4 enactments
Prakash Balaram Nichani
Mohandas Parshuram Ahuja
A. A. Sayed
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court