Gracure Pharmaceuticals Ltd. vs The State Bank Of India & Ors.
2008 Latest Caselaw 2188 Del

i.6

* IN THE HIGH COURT OF DELHI AT NEW DELHI

%                              Date of Order: December 08, 2008

+                              RFA 497/2006

      GRACURE PHARMACEUTICALS LTD.        ..... Appellant
               Through: Mr. Pawan Kumar, Advocate
                        Mr. Ravi Bassi, Advocate

                               versus

      THE STATE BANK OF INDIA & ORS.       ..... Respondents
               Through: Mr. Rajiv Kapur, Adv. with
                         Mr. Nitish, Advocate for SBI

      CORAM:
      HON'BLE MR. JUSTICE PRADEEP NANDRAJOG
      HON'BLE MR. JUSTICE J.R.MIDHA

1.        Whether Reporters of Local papers may
          be allowed to see the Judgment?
2.        To be referred to the Reporter or not?
3.        Whether the judgment should be
          reported in the Digest?
Pradeep Nandrajog, J. (Oral)

1. Heard learned counsel for the parties.

2. Vide impugned order dated 10.5.2006 suit filed by

the appellant seeking damages in sum of Rs.3,09,000/- has been

held to be barred under Order 2 Rule 2 of the Code of Civil

Procedure.

3. It is not in dispute that the appellant had filed a suit

for recovery of Rs.44,30,994/- having 4 distinct heads

being:-

 A.           Rs.31,28,421/-

B.           Rs.10,15,955/-

C.           Rs. 2,64,618/-

D.           Rs.     22,000/-

             ______________

Total:       Rs.44,30,994/-

             ______________

4. The material allegations in the said suit were that the

appellant was a customer of State Bank of India and was

availing various credit facilities from the bank. That two letters

of credit were negotiated through the bank for which goods

were exported and requisite applications submitted to the bank

for realization of the dues. It was alleged that the officers of the

bank remained negligent in not realizing the dues covered by

the letter of credit resulting in the foreign buyer receiving the

consignments and no money flowing to the coffers of the

appellant. Stating that after the appellant move the „Banking

Ombudsman‟, the officers of the bank could recover the money

due under only one export transaction; it was stated that money

due under the other export consignment in sum of

Rs.31,28,421/- was recoverable by the appellant. Interest on

said sum for the pre-suit period was claimed at Rs.10,15,955/-.

Pertaining to the export consignment for which the money was

subsequently realized by the bank and credited in the account

of the appellant, loss of interest in sum of Rs.2,64,618/- was

claimed. Rs.22,000/- were claimed as lawyer‟s fee who served

pre-suit notice.

5. A second suit was filed in which after narrating the

facts which were pleaded in the earlier suit, as the backdrop

facts of the action in the second suit, it was stated that due to

the fact that the appellant had approached the „Banking

Ombudsman‟, the officers of the bank and in particular the

Deputy General Manager, Sh.D.S.Dass and the Chief Manager

Sh.W.V.G. Venkata Ramana became inimical towards the

appellant resulting in a malicious action on their part to

withdraw the facilities granted by the bank to the appellant;

stating that the same was a tortuous act, damages were

claimed not only against the bank but even against the tort-

feasors.

6. The second suit which sought damages in sum of

Rs.3,09,000/- has been held to be barred under Order 2 Rule 2

of the Code of Civil Procedure.

7. The reasoning of the learned Trial Judge is, to quote:-

"I find that paragraph no.1 if these two plaints are identical. Similarly, the contents of para 5, para 6, para 7, para8, para 9 and para 10 of the present suit are almost identical to para 4, para 10, para 12, para 13, para 16 and para 19 of the suit pending disposal before the Hon‟ble High Court. There may be a few minor variations here and there. The facts justifying the filing of the two suits are almost identical. The case of the Plaintiff is that it is a public limited

company. It was enjoying cash credit limit vide account no.01600005374 from the Industrial Finance Branch of Defendant no.1. In the suit bearing no.1145/03 which is pending disposal before the Hon‟ble High Court, it was alleged by the Plaintiff that "to cover up its negligence, deficiency in private services and failure to perform contractual and professional obligations, the Defendant illegally and wrongfully debited the account of the Plaintiff on 01.05.01 for the amount of Rs.31,28,421/- and on 14.6.01 for the amount of Rs.30,91,185/-. Since the Defendant has give the credit of Rs.30,91,185/-, therefore, it is claiming interest on this amount. The Plaintiff had claimed Rs.41,44,376/- with interest. In the present suit the Plaintiff is claiming the damages from the Defendants."

8. Learned Trial Judge has held that a meaningful

reading of the two plaints would make it evident that the cause

of action for the second suit had accrued when the first suit was

filed.

9. Unfortunately, the learned Trial Judge has failed to

appreciate the legislative intent under Order 2 Rule 2 of the

Code of Civil Procedure.

10. Order 2 Rule 2 is aimed at avoiding multiplicity of

suits in respect of the same cause of action. The rule is based

on the principle that a party should not be vexed twice for the

one and the same cause of action.

11. It is apparent that the emphasis is on the cause of

action and not on various causes which may flow from the acts

of the parties.

12. As explained by the privy counsel in the decision

reported as 26 IC 228 Payana Vs. Pannalal the rule under Order

2 Rule 2 has to be applied with caution for the reason claims

which are otherwise legitimate may result in the same being

jettisoned. It was held that the rule is directed to securing the

exhaustion of the relief in respect of a cause of action and not to

the inclusion in one of the same action, of different causes of

action, even though they arise from the same transaction.

13. If one peruses Rule 3 of Order 2, one would notice

that it is at the option of the plaintiff to unite in the same suit

several causes of action. Meaning thereby that joinder of

causes of action is at the option of the plaintiff and not a

compulsion of law. Further, where joinder of causes of action

may embarrass the trial or delay the same, exercising power

under Rule 6 of Order 2, it is open to the Court to order that

separate suits would be filed pertaining to different causes of

action which may accrue on the same transaction.

14. In this case it is important to note that the earlier suit

was founded on a cause of action pertaining to the contract

between the parties. The second suit was on an entirely

different footing being the malicious action of the officers of the

bank to withdraw the credit facilities because of their animus

emanating from the action of the appellant to lodge a complaint

before the „Ombudsman Banking‟.

15. We allow the appeal.

16. Impugned order, which has to be treated as a decree

in terms of sub-Section 2 of Section 2 of the Code of Civil

Procedure, is set aside.

17. The order is dated 10.5.2006 in suit No.288/2003-04.

18. The suit is restored.

19. The parties shall appear before the learned District

and Sessions Judge at Tis Hazari on 18.12.2008. Successor

Court would be identified before whom the parties shall appear.

Learned Trial Judge shall decide the suit on merits and in

accordance with law.

20. TCR be returned forthwith through a special

messenger.

21. No costs.

22. Copy of this order be supplied dasti to learned

counsel for the parties.

PRADEEP NANDRAJOG, J.

J.R.MIDHA, J.

DECEMBER 08, 2008 mm