Holding

A plaintiff must plead the entire claim arising from a single cause of action in one suit; filing a separate suit for omitted reliefs constitutes a bar under Order II Rule 2 CPC.

Summary

The State Bank of India (SBI) sued Gracure Pharmaceuticals Ltd. for recovery of dues arising from letters of credit, while Gracure filed a separate suit for damages alleging wrongful withdrawal of credit facilities. The two suits were filed within two months of each other, and SBI moved to dismiss the damages suit under Order II Rule 2 of the CPC, arguing that both suits arose from the same cause of action. The District Court agreed and dismissed the second suit; however, the Delhi High Court reversed that decision, holding the suits were based on distinct causes of action. On appeal, the Supreme Court examined the scope of Order II Rule 2, emphasizing that a plaintiff must include the whole claim arising from a single cause of action in one suit and cannot split reliefs. The Court found that the facts underlying the damages claim existed at the time of the first suit, and Gracure had omitted those reliefs, thereby relinquishing the right to sue later. Consequently, the Supreme Court allowed the appeals, set aside the High Court judgment, and upheld the dismissal of the second suit. No costs were awarded.

Issues considered

Whether the two suits filed by Gracure Pharmaceuticals arise from the same cause of action and are barred by Order II Rule 2 of the CPC.
Whether the plaintiff, having omitted certain reliefs in the first suit, is estopped from filing a separate suit for those reliefs.
Whether the High Court erred in holding that the second suit was based on a distinct cause of action.

Legislation cited

Code of Civil Procedure, 1908s. Order II Rule 2, s. Order VII Rule 11

Subjects

Order II Rule 2 CPCsplitting cause of actionmultiplicity of suitsrelief relinquishmentcivil procedurebanking disputeletter of creditdamages claim

Judgment

[2013] 12 S.C.R. 617

STATE BANK OF INDIA A
v.
GRACURE PHARMACEUTICALS LTD.
(Civil Appeal Nos. 10531-10532 of 2013)

NOVEMBER 22, 2013
B
[K.S. RADHAKRISHNAN AND A.K. SIKRI, JJ.]

Code of Civil Procedure, 1908 - Or. II, r. 2 - Applicability
of- In respect of two suits filed by the respondent- Held: The
object of Or.II, r.2 is to avoid multiplicity of proceedings and C
not to vex the parties over and again in a litigative process -
In the instant case, the facts on the basis of which subsequent
suit was filed, existed on the date on which the earlier suit was
filed - No fresh cause of action arose in between the first suit
and the second suit - When the first suit for recovery of dues D
was filed for the alleged relief, damages sought for in the
subsequent suit could have also been sought for -
Respondent not entitled to split the cause of action into parts
by filing separate suits - It omitted certain reliefs which were
available to it at the time of filing of the first suit and after E
having relinquished the same, it could not have filed a
separate suit.

Two suits were filed by the respondent, one in the
Original side of the High Court and another before the
District Court. Original Suit No.1145 of 2003 w~s filed by F
the respondent on 15.05.2003 for recovery of an amount
of Rs.44,30,994 against the appellant bank and its officers
towards the amount of Letter of Credit issued by Credit
Du Nord, Paris (CON) and towards interest for the delay
in receipt of payment from BNP - Paribas S.A., lvry-Sur- G
Seine (BNP) with cost pendente lite and future interest @
18% per annum. Suit No.288103104 of 2003 was also filed
by the respondent on 21.05.2003 claiming damages of
Rs.3,09,0001- with cost and pendente lite and future
617 H
618 SUPREME COURT REPORTS [2013] 12 S.C.R.

A il"iterest @ 18% per annum against the bank and its
officers for withdrawing credit facility on 23.03.2002.

The bank and its officers filed application under Order
7 Rule 11 CPC in Suit No.288/03/04 of 2003 before the
8 District Court for rejection of the plaint in the suit for
damages on the ground that the same was barred by the
provisions of Order 2 Rule 2 CPC. The District Court held
that the cause of action in both the suits was same and
the relief sought for in Suit No.288/03/04 of 2003 could
C have been claimed by the plaintiff in the Suit No.1145 of
2003 filed before the High Court. The application under
Order 7 Rule 11 was, therefore, allowed, holding that the
latter suit was barred under Order 2 Rule 2, CPC and
plaint was accordingly rejected. On appeal by the
respondent, the High Court set aside the order of the
D District Court, and therefore the instant appeals.
Allowing the appeals, the Court

HELD: 1.1. Order 2 Rule 2, CPC requir~s the unity of
E all claims based on the same cause of action in one suit,
it does not contemplate unity of distinct and separate
cause of action. If a plaintiff is entitled to seek reliefs
against the defendant in respect of the same cause of
action, the plaintiff cannot split up the claim so as to omit
one part to the claim and sue for the other. If the cause
F of action is same, the plaintiff has to place all his claims
before the Court in one suit, as Order 2 Rule 2, CPC is
based on the cardinal principle that defendant should not
be vexed twice for the same cause. [Paras 11, 12) [625·
G A-C]
1.2. In the instant case, it is clear that the facts on the
basis of which subsequent suit was filed, existed on the
date on which the earlier suit was filed. The earlier suit
was filed on 15.03.2003 and subsequent suit was filed on
H 21.05.2003. No fresh cause of action arose in between the
STATE BANK OF INDIA v. GRACURE 619
PHARMACEUTICALS LTD.
first suit and the second suit. The closure of account was A
intimated on 20.03.2002 'due to the alleged fault of the
respondent in not 'regularizing their accounts i.e. after
non-receipt of payment of LC, the account became
irregular. When the first suit for recovery of dues was filed
Le. on 15.03.2001 for alleged relief, damages sought for B
in the subsequent suit. could have also . been sought for.
Order 2 Rule 2 provides that every suit shall include .the
whole of the claim which the plaintiff is entitled to make
~'. in respect of the same cause of action. Respondent is not
i. entitled to split the cause of action into parts by filing
separate suits ..The respondent had omitted certain reliefs
c
which were available to it at the time of filing of the first
suit and atter having relinquished the same, it cannot file
a separate suit in view of the provisions· of sub-rule 2 of
Order 2 Rule 2, CPC. The .object of Order 2 Rule 2 is to
avoid multiplicity of proceedings 'and not to vex the D
Ji
parties over and again in a litigative process. The object i
enunciated In Order 2 Rule 2, CPC is laudable and it has t
a larger public purpose to achieve by not burdening the
court with repeated suits. The High Court. committed an
i"
error in reversing the order passed by th11 District Court, E t
allowing the application under Ord~r 7 Rule 11; CPC. J
[Paras 15, 16] [627 -D-H; 628-A·C] I
Sandeep Pofymers.(P) Ltd. v. Bajaj Auto Ltd. and others
I
(2007) 7 sec 148: 2001 . (8) scR 437; Sidramappa . v.
.
F
Rajashetty and
. .. ..
Others.(1970)
.
Gurbux Singh v. Bhoorala/ AIR
1 SCC 186: 1970 (3) SCR 319
. 1964
~ ..
SC .1810 .'7' .relied on .
Naba Kumar Hazra v. Radhashyam Mahish AIR 1931
PC 229 - referred to.
.. .

G
Deva Ram and another v. lshwar Chand and another
(1995) 6 SCC 733: 1995 (4) Suppl. SCR 369...: cited.
1

Case Law Reference:
1995 (4) Suppl. SCR 369 cited Para 6 H

I
I
I
-
620 SUPREME COURT REPORTS [2013] 12 S.C.R.

A 2007 (8) SCR 437 relied on Para 6
AIR 1931 PC 229 referred to Para 9
'
; 1970 (3) SCR 319 relied on Para 9.·
,.",•
AIR.1964 SC 1810 relied on Paras
B
. CIVIL·APPELLATE JURISDICTION : Civil Appeal Nos.
10531.-32 of 2013.

From the Judgment and Order dated 08.12.2008 in RFA ·
c . No. 497 of 2006 and dt. 30.01.2009 in RA No. 36 of 2009 of
the High Court of Delhi at New Delhi. . ·

C.U. Singh, Sanjay Kapur, Rajiv Kapur, Vatsala Rai and
rShubhra Kapur for the Appellant

D -
..•. Dr. Kailash Chand for the Respondent.·
\ .-- "

The Judgment of the Court was delivered by
•
K.S. RADHAKRISHNAN, J. 1. Leave. granted ..
'. j •

E 2. We are, in this case, concerned with the applicability .
. of Order 2 Rule 2 of the Code of Civil Procedure (for short "the
CPC") in respect of two suits filed by the respondent, one. in
the Original side of the Delhi High Court and another before
the District Court, Delhi. Original Suit No.1145 of 2003 was filed
F by the respondent herein on 15.05.2.003 f<;>r recoverY of an
amount of Rs.44,30,994 against the appellant bank. and its
officers towards the. amount of Letter of Credit issued by Credit
Du Nord, Paris (CON) and towards interest for the delay in
receipt of payment from BNP- Paribas SiA., lvry-.Sur-Scine
G (BNP) with cost pendente lite and future interest@ 18% per
annum.

3. Suit No.288/03/04 of 2003 was also filed by the
1

respondent on 21.05.2003 claiming damages of Rs. \..
H 3,09,000/-with cost and pendente lite and future interest@
STATE BANK OF INDIA v. GRACURE 621
PHARMACEUTICALS LTD. [K.S. RADHAKRISHNAN, J.]
18% per annum against bank and its officers for withdrawing A
credit facility on 23.03.2002. Notice was issued to the bank and
its officers by the District Court, Delhi.

4. The bank and its officers then filed an application under
Order 7 Rule 11 CPC in Suit No.288/03/04 of 2003 before the B
District Court, Delhi for rejection of the plaint in the suit for
damages on the ground that the same is barred by the
provisions of Order 2 Rule 2 CPC. The District Court elaborately
heard the matter and after perusing the plaints, averments in
both the suits as well as the reliefs sought for, came to the c
conclusion that the cause of action in both the suits was same
and the relief sought for in Suit No.288/03/04 of 2003 could have
been claimed by the plaintiff in the Suit No.1145 of 2003 filed
before the Delhi High Court. The application under Order 7 Rule
11 was, therefore, allowed, holding that the latter suit was 0
barred under Order 2 Rule 2, CPC and plaint was accordingly
rejected.

5. The respondent, aggrieved by the said order, filed RFA
No.490 of 2006 before the Delhi High Court. The High Court
took the view that the earlier suit No.1145 of 2003 was founded E
on cause of action pertaining to the contract between the parties
and the second Suit No.288/03/04 of 2003 was on entirely
different footing, being the malicious action of the officers of the
bank to withdraw the credit facility because of their animus
emanating from the action of the respondent to lodge a F
complaint before the Ombudsman Banking. Holding so, the
appeal was allowed and the order dated 10.05.2006 of the
District Court was set aside. Challenging the above-mentioned
order these appeals have been filed by the State Bank of India.
G
6. Shri C.U. Singh, learned senior counsel appearing for
the bank submitted that the High Court has failed to consider
the scope of Order 2 Rule 2, CPC and committed a mistake in
holding that the respondent could not have claimed the relief of
H
622 SUPREME COURT REPORTS [2013] 12 S.C.R.

A damages in Suit No.1145 of 2003, the earlier surt filed before
the High Court. Learned senior counsel subn1itted that the
respondent, on the date of filing of the earlier suit, was aware
that the bank had declined to grant any further credit facility, in
the event of which, the respondent could have sought the relief
B for damages against the bank and its officers in the earlier suit.
Learned senior counsel submitted that, having omitted to claim
such a relief in the earlier suit, the Court ought to have held that
the respondent had relinquished its claim and is estopped from
preferring a second suit in view of the provisions of Order 2
C Rule 2, CPC. Learned senior counsel also submitted, what is
required is, that every suit shall hold whole of the claim arising
out of one and the same cause of action and it was obligatory
on the part of the respondent to raise the whole claim at the
time of institution of the first suit. Learned senior counsel placed
D reliance on the Judgments of this Court in Deva Ram and
another v. /sh war Chand and another ( 1995) 6 sec 733 and
Sandeep Polymers (P) Ltd. v. Bajaj Auto Ltd. and others
(2007) 7 sec 148.

E 7. The respondent filed a detailed counter affidavit before
this Court explaining its stand. It was pointed out that the cause
of action to file the first suit arose much prior to the subsequent
suit since on the basis of wrongful debits made by the bank to
the account of the respondent on 01.05.2001 and 14.06.2001
F for the amounts of two Letters of Credit, one of which the bank
could not recover and second was recovered later from the
foreign bank. Further, it was also pointed out that the facts on
the basis of which two suits have been filed and respective
reliefs sought for, are absolutely distinct and separate and
cause of action subsequently arose because of the wrongful
G acts of the bank depriving the respondent of various banking
facilities. Further, it was also pointed out that the damages
claimed in the subsequent suit have no link or nexus to the
cause of action with the previous one. Consequently, it was
H pointed out that the High Court has rightly allowed the appeal
STATE BANK OF INDIA v. GRACURE 623
PHARMACEUTICALS LTD. [K.S. RADHAKRISHNAN, J]
'
which calls for no interference by this Court under Article 136 A
of the Constitution of India.

8. We may, before examining the rival contentions, extract
the relevant provisions of Order 2 Rule 2, CPC for easy
reference which reads as under: B
"2. Suit to include the whole claim.- (1) Every suit shall
include the whole of the claim which the plaintiff be 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. C

(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. D

(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 ahy 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 reliefs E
so omitted."

9. The scope of the above-mentioned provisions came up·
for consideration before this Court in several cases. The earliest
one dealt by the Privy Council was reported in Naba Kumar F
Hazra v. Radhashyam Mahish AIR 1931 PC 229 wherein the
Privy Council held that the plaintiff cannot be permitted to draw
the defendant to court twice for the same cause by splitting up
the claim and suing, in the first instance, in respect of a part of
claim only. In Sidramappa v. Rajashetty and Others (1970) 1 G
SCC 186 this Court held that if the cause of action on the basis
of which the previous suit was brought, does not form the
foundation of subsequent suit and in the earlier suit the plaintiff
could not have claimed the relief which he sought in the
subsequent suit, the latter, namely, the subsequent suit, will not H
624 SUPREME COURT REPORTS [2013] 12 S.C.R.

A be barred by the rule contained in Order 2 Rule 2, CPC. In
Gurbux Singh v. Bhoora/al AIR 1964 SC 1810 the scope of
the above-mentioned provision was further explained as under:

"In order that a plea of a Bar under Order 2 Rule 2(3) of
B the 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
c 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 whicti the previous
D 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 latter suit is based there would be
no scope for the application of the bar."

E 10. In Sandeep Polymers (P) Ltd.'s case (supra), the
above-mentioned principles were reiterated and this Court held
as under:

"Under Order 2 Rule 1 of the Code which. contains
provisions of mandatory nature, the requirement is that the
F
plaintiffs are duty-bound to claim the entire relief. The suit
has to be so framed as to afford ground for final decision
upon the subjects in dispute and to prevent further litigation
concerning them. Rule 2 further enjoins on the plaintiff to
.nclude the whole of the claim which the plaintiff is entitled
G to make in respect of the cause of action. If the plaintiff
omits to sue or intentionally relinquishes any portion of his
claim, it is not permissible for him to sue in respect of the
portion so omitted or relinquished afterwards.

H 11. The above-mentioned decisions categorically lay down
STATE BANK OF INDIA v. GRACURE 625
PHARMACEUTICALS LTD. [K.S. RADHAKRISHNAN, J ]
the law that if a plaintiff is entitled to seek reliefs against the A
defendant in respect of the same cause of action, the plaintiff
cannot split up the claim so as to omit one part to the claim
and sue for the other. If the cause of action is same, the plaintiff
has to place all his claims before the Court in one suit, as Order
2 Rule 2, CPC is based on the cardinal principle that defendant B
should not be vexed twice for the same cause.

12. Order 2 Rule 2, CPC, therefore, requires the unity of
all claims based on the same cause of action in one suit, it does
not contemplate unity of distinct and separate cause of action. C
On the above-mentioned legal principle, let us examine whether
the High Court has correctly applied the legal principle in the
instant case.

13. We have gone through the plaints and the averments
contained in both the suits in extenso and also the reliefs 0
claimed in both the suits. Respondents had availed of various
credit facilities from the State Bank of India. It had an export
order from M/s Medipharma Company, France who had
opened two Letters of Credit. The first Letter of Credit was
opened with CON and second Letter of Credit was opened with E
BNP. The date of issue of first Letter of Credit by CON was
16.01.2001 and it was to expire on 10.04.2001. Similarly,
second Letter of Credit opened with BNP was issued on
16.01.2001 and was to expire on 30.04.2001. On 20.03.2001,
proceeds of the export deal were paid by the bank honouring F
the bills of exchange against the Letter of Credit opened with
CON and credited the same to the account of the respondent
on the understanding that in case the relevant documents were
accepted by the opening owner/issuing bank for any reason
whatsoever, the respondent was liable to repay to the bank, G
without demur or demand, the amount of the bills/documents
along with overdue interest and other charges. Other clauses
were also incorporated so as to safeguard the interest of the
bank. On 28.03.2001, the bank honoured the bills of exchange
against the LC opened with BNP subject to the various H
626 SUPREME COURT REPORTS [2013] 12 S.C.R.

A conditions. The amount was credited to the account of the
respondent subject to realization of LC. Since the amount of the
LC was not received with the issuing bank on 01.05.2001, the
amount was debited to the account of the respondent on
account of non-receipt of LC from CDN. Similarly, the amount
B of LC having not received from the issuing bank by 14.06.2001,
the amount was debited to the account of the respondent for
non-receipt of LC from BNP.

14. The bank sent various letters to the respondent to
C regularize the accounts. Since the accounts were not
regularized, the bank decided not to grant further facility. The
respondent then on receipt of the payment from the foreign buyer
and having failed to take any steps to realize the payment from
the buyer or issuing bank, filed a complaint on 30.09.2001 with
D the Banking Ombudsman against the bank on account of
reversing the entry on non-receipt of payment of LCs. The
complaint filed by the respondent was, however, later withdrawn.
The bank's stand is that closure of account was done on
20.03.2002 due to the fault of the respondent on non-
E regularization of their accounts i.e. after non-receipt of payment
of LC, the amount became irregular and remained so
continuously. Let us now examine the averments contained in
paragraph 37 of the subsequent suit No.288/03/04 of 2003 in
the above perspective. Paragraph 37 is extracted hereinbelow
F for easy reference:

"37. That the cause of action to file the present suit accrued
in favour of the plaintiff and against the Defendants on all
those occasions when the Defendants wrote various letters
to the Plaintiff threatening initiate or actually initiating action
G against the Plaintiff in relation to various credit facilities
which were being enjoyed by the Plaintiff. The cause of
action to file the present suit accrued further in favour of
the Plaintiff and against the Defendants on all those
occasions when the Defendants actually initiated action
H against the Plaintiff in relation to various credit facilities,
STATE BANK OF INDIA v. GRACURE 627
PHARMACEUTICALS LTD. [K.S. RADHAKRISHNAN, J.]
which were being enjoyed by the plaintiff and thereby did A
not provide the said facilities to the Plaintiff. The cause of
action further accrued when the Defendants wrote letter
dated 20.03.2002 to the Plaintiff conveying their decision
to unilaterally and illegally rescind and contract between the
parties and thereby stopping all credit facilities to the B
Plaintiff. The cause of action accrued further when on
26.3.2002, the general Manager (Commercial) of the
Defendant No.1 did not intervene to stop the arbitrary and
illegal action of the concerned officers of the Industrial
Finance Branch. The cause of action accrued further when c
prior to filing of the suit, the Plaintiff through its counsel,
issued and served upon the Defendants a legal notice
dated 24.12.2002. The cause of action is still continuing
and subsisting."

15. When we go through the above quoted paragraph it is D
clear that the facts on the basis of which subsequent suit was
filed, existed on the date on which the earlier suit was filed. The
earlier suit was filed on 15.03.2003 and subsequent suit was
filed on 21.05.2003. No fresh cause of action arose in between
the first suit and the second suit. The closure of account, as E
already indicated, was intimated on 20.03.2002 due to the
alleged fault of the respondent in not regularizing their accounts
i.e. after non-receipt of payment of LC, the account became
irregular. When the first suit for recovery of dues was filed i.e.
on 15.03.2001 for alleged relief, damages sought for in the F
subsequent suit could have also been sought for. Order 2 Rule
2 provides that every suit shall include the whole of the claim
which the plaintiff is entitled to make in respect of the same
cause of action. Respondent is not entitled to split the cause
of action into parts by filing separate suits. We find, as such, G
that respondent had omitted certain reliefs which were available
to it at the time of filing of the first suit and after having
relinquished the same, it cannot file a separate suit in view of
the provisions of sub-rule 2 of Order 2 Rule 2, CPC. The object
H
628 SUPREME COURT REPORTS [2013] 12 S.C.R.

A of Order 2 Rule 2 is to avoid multiplicity of proceedings and
not to vex the parties over and again in a litigative process. The
object enunciated in Order 2 Rule 2, CPC is laudable and it
has a larger public purpose to achieve by not burdening the
court with repeated suits.
B
16. We are, therefore, of the view that the High Court has
committed an error in reversing the order dated 10.05.2005,
passed by the District Court, allowing the application under
Order 7 Rule 11, CPC. The appeals are accordingly allowed
c and the judgment of the High Court is set aside. However, there
will be no order as to costs.

B.B.B. Appeals allowed.