United Breweries Ltd. vs Dhall Traders Private Limited And ...
2007 Latest Caselaw 1027 Del

JUDGMENT

Vipin Sanghi, J.

1. On 7.8.2006, the Court had framed the following preliminary issue:

Whether the suit is barred under Order 2 Rule 2 of the code of Civil Procedure? Onus on the parties.

2. I have heard learned Counsel for the parties on this preliminary issue.

3. The plaintiff earlier filed OS No. 8952/2001 in the Court of City Civil Judge, Bangalore against the defendants on the foundation that the defendant No. 1 was its appointed del-credere agent, and therefore could not act as the del credere agent of any competitor by custom and usage in the trade. It was claimed that the defendants had violated the implied term of that agreement by acting as the del credere agent of a competitor viz. South African Breweries. 4. Consequently, the plaintiff filed the said suit, claiming damages of Rs. 7.5 lacs, rendition of accounts in respect of all contracts entered into by the defendants to sell products which are similar to ones being manufactured and sold by plaintiff; declaring that the defendants are not entitled to take up any temporary or permanent assignment/ arrangement in the nature of del credere agency with any company, firm or concern, in competition with the plaintiff herein, including the South African Breweries India Ltd.; permanently restraining the defendants from accepting or taking up or continuing any temporary or permanent assignment/arrangement in the nature of del credere agency till the arrangement of del credere is subsisting between the plaintiffs and the defendants; permanently restraining the defendants from committing breach of the arrangement with the plaintiff and from divulging or disclosing in any manner to any person, firm or body corporate including to South African Breweries India Ltd. any of the secrets concerning the affairs or information of the plaintiff company acquired by them during the course of their association with the plaintiff or in any manner involving themselves directly or indirectly in promoting of any business similar to or in competition with the business of the plaintiff till the arrangement of del credere is subsisting between the plaintiff and defendants.

5. The cause of action pleaded in the said suit is contained in para 17 reads as follows:

The causes of action for the above suit has arisen on various dates when the first defendant was appointed as a del credere agent and on subsequent dates when the said del credere arrangement were renewed from time to time by the plaintiff company, on 22-09-2001 when the said Company by name South African Breweries India Ltd. intimated some of the wholesalers and traders in Uttar Pradesh that they have appointed the first defendant as their del credere agent, and on 18-09-2001 when the plaintiff sent a fax message to the second defendant and on various other dates in the months of September, October, November, when the plaintiff has repeatedly been making all attempts to telephonically or personally meet the defendants and sort out all issues concerned. The causes of action have arisen within the jurisdiction of this Hon'ble Court as the defendants have approached the plaintiff at its Bangalore office on several occasions to discuss the terms of the del credere arrangement and also for the purposes of renewing the said terms from time to time.

6. It appears that the City Civil Court, Bangalore passed an order in IA No. I and III taking a prima facie view that by a letter dated 30.9.2001 written by defendant No. 1, the contract between the parties is deemed to be terminated.

7. Thereafter, the plaintiff filed an application under Order 23 Rule 1 (3) CPC praying for grant of permission to the plaintiff to withdraw to the said suit and to institute a fresh suit. This application was disposed of on 15.7.2003 by the Court of the VIII Additional City Civil Judge, Bangalore. The Court took the view that no leave could be granted to the plaintiff to file a suit for recovery of the amount "on the petitioner's present cause of action" and further observed "when the suit to be filed against the defendants by the plaintiff is for recovery of the amount, due to him and this Court has already come to the conclusion while passing order in IA No. I, II & III that the contract between the parties is terminated and it is not proper to grant liberty to file a fresh suit on the same cause of action". The operative part of the order reads as follows:

I. A.No. VII filed by the plaintiff under Order XXIII Rule 1(3) read with Section 151 CPC is partly allowed.

It is ordered that the plaintiff shall be permitted to withdraw the present suit but no liberty to institute a fresh suit is granted to the plaintiff as prayed for.

8. The plaintiff thereafter filed the present suit. The plaintiff has claimed an amount of Rs. 1,80,83,698/-. The computation thereof is contained in para 13 and the same reads as follows:

On account of the illegal Debit/Claim No. 7 dated 30.09.2001 and illegal recovery thereof.

Rs.83,82,600/-

On account of the illegal Debit/Claim No. 6 dated 30.09.2001 and illegal recovery thereof.

Rs.9,68,500/-

On account of the illegal Debit/Claim No. 10 dated 30.09.2001 and illegal recovery thereof.

Rs.7,20,000/-

On account of the illegal Debit/Claim No. 11 dated 30.09.2001 and illegal recovery thereof.

Rs.4,75,000/-

On account of outstanding illegally transferred to the plaintiff (Rs.1,61,36,827), less the recovered amount (Rs.85,99,229/-)

Rs.75,37,598/-

Rs.1,80,83,698/-

9. Para 15 contains the averment with regard to the cause of action for filing the present suit reads as follows:

The cause of action for the present suit first arose on 30.9.2001 when the defendant No. 1 raised the illegal debit/claim bill nos.6, 7, 10 and 11 all dated 30.9.2001. The cause of action for the present suit again arose on the date when the defendant No. 1 adjusted the amounts of the said Debit/Claim Bills from the dues of the plaintiff. The cause of action for the present suit again arose on or about 15.10.2001, when the defendant No. 1 informed the plaintiff company that it had transferred the outstandings of the UP and Uttranchal customers amounting to Rs. 1,61,36,826.82 to the plaintiff. The cause of action again arose in August 2002 when part payment was received towards the account of the defendants. The cause of action is a continuing one and continues to arise on every date that the defendants do not pay the outstanding amount to the plaintiff company. The present suit is being filed within the period of limitation.

10. From the aforesaid, it is seen that the cause of action pleaded by the plaintiff in the present suit arose on 13.9.2001 when, it is claimed, that illegal debit/claim bill No. 6,7,10 & 11 all dated 30.9.2001 were raised by defendant No. 1. It is further stated that the cause of action arose on that date when defendant No. 1 adjusted the amount of the said debit/claim bills from the dues of the plaintiff.

11. Counsel for the plaintiff submits that the bar under Order 2 Rule 2 CPC is only in respect of the filing of a fresh suit founded upon the same cause of action. The cause of action on the basis of which the earlier suit was filed in Bangalore, was the conduct of the defendant in entering into an arrangement with South African Breweries, which was contrary to custom and usage in the trade, whereas the cause of action for filing the present suit, as aforesaid, is the issuance of debit/claim bill No. 6,7,10 & 11 all dated 30.9.2001 and the adjustment of these debit/claim bills from the dues of the plaintiff on the same date by the defendant. Since cause of action in two suits is distinct, the suit is not hit by Order 2 Rule 2.

12. On the other hand, the submission of the defendant is that the cause of action as pleaded in the present suit was available to the plaintiff when it filed the earlier suit and the plaintiff ought to have made its entire claim while filing the first suit, since it was possible for the plaintiff to have made the said claim in the first suit itself. 13. In AIR (36) 1949 Privy Council 1978 Mohmmad Khalil Khan and Ors. v. Mahbub Ali Mian and Ors. the Privy Council observes that under Order 2 Rule 2 CPC, if the plaintiff fails to sue for whole of the claim which he entitled to make in the first suit, then he is precluded from suing in a second suit in respect of the portion so omitted. The issue to be considered is, what was the cause of action in the earlier suit and whether the plaintiff in the earlier suit included all its claims that it was entitled to make in respect of that cause of action. If the plaintiff failed to include to all its claims, then by force of Order 2 Rule 2 CPC he is precluded from including the claims omitted based on the same cause of action in the subsequent suit.

14. From a plain reading of the provision it appears that the rule prohibits spliting up of claims in respect of "a cause of action". It does not appear to be referring to all causes of action or more than one cause of action. The Privy Council refers to its own earlier decision in Moonshee Buzloor Ruheem v. Shumsunnissa Begum, wherein it was observed, "the correct test in all cases of this kind is, whether the claim in the new suit is, in fact, founded on a cause of action distinct from that which was the foundation of the former suit....".

15. The Privy Council then proceeded to deal with the phrase "cause of action" and cited Read v. Brown (1989) 22 Q.B.D. 128 : (58 L.J. Q.B. 120) wherein Lord Esher, M.R. accepted an earlier definition given in Cook v. Gill (1873) L.R. SC.P.107 : (42 L.J. C.P. 98) as "every fact which it would be necessary for the plaintiff to prove, if traversed, in order to support his right to the judgment of the Court. It does not comprise every piece of evidence which is necessary to prove each fact, but every fact which is necessary to be proved."

16. Fry L.J. agreed and said, "Everything which, if not proved, gives the defendant an immediate right to judgment, must be part of the cause of action."

17. The Privy Council also notices its earlier judgment in Mt. Chand Kour v. Partab Singh (1887-1888) 15 I.A. P.156 : (16 Cal.98 P.C.) wherein Lord Watson who delivered the judgment of the Board observed as follows:

Now the cause of action has no relation whatever to the defense which may be set up by the defendant, nor does it depend upon the character of the relief prayed for by the plaintiff. It refers entirely to the grounds set out in the plaint as the cause of action, or, in other words, to the media upon which the plaintiff, asks the Court to arrive at a conclusion in his favor.

18. The Privy Council also notices the decision in Brunsden v. Humphrey (1884-14 Q.B. D.141 : 53 L.J. A.B. 476) wherein it was held that where the question is whether the cause of action in two suits is the same or not, one of the tests that is applied is whether the same evidence would support the claims in both suits; if the evidence required to support the claims is different, then the causes of action are also different.

19. Coming back to the case in hand, there can be no doubt that the cause of action on which the earlier suit of the plaintiff was based is distinct from the cause of action on which the present suit is based. The cause of action pleaded in the suit filed in the Bangalore City Civil Court is the alleged collusion between the defendants with the competitor of the plaintiff to promote the main brand of the competitor in order to bring down the marketing and sale of products manufactured by the plaintiff company in the State of Uttar Pradesh and Uttranchal. It is the alleged breach by the defendant of the custom and usage in trade concerning the subsisting del credere agreement that it had with the plaintiff, which is pleaded as the fact giving a cause of action to the plaintiff.

20. In the present case, however, the cause of action as pleaded is the raising of the alleged illegal debit/claimed Bill No. 6, 7, 8, 10 and 11 of dated 30th September 2001 and the adjustments of the amounts of the said debit/claim bills by the defendant from the dues of the plaintiff. It is also claimed to have arisen on 15.2.2001 when defendant No. 1, is claimed to have informed the plaintiff company that it had transferred the outstanding of the Uttar Pradesh and Uttranchal customers of the plaintiff. The cause of action is also claimed to have arisen in August 2002 when part payment are claimed to have been received towards the accounts of the defendants. Clearly, the bundle of facts that would entitle the plaintiff to a decree in these two suits is separate and the evidence that needs to be led in support of the respective claims is different.

21. In this view of the matter, the cause of action in both the suits is distinct and separate. Since the earlier suit was not based on the same cause of action, the bar under Order 2 Rule 2 CPC would not apply in the present case.

22. Consequently, in my view, the present suit is not barred under Order 2 Rule 2 CPC. This issue is answered in favor of the plaintiff.