Case: State Bank Of India Vs. Gracure Pharmaceuticals Ltd

it does not contemplate unity of distinct and separate cause of action. 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 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 CDN and second Letter of Credit was opened with BNP. The date of issue of first Letter of Credit by CDN 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 the bills of exchange against the Letter of Credit opened with CDN 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, 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 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 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 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 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-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 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 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 against the Plaintiff in relation to various credit facilities, which were being enjoyed by the plaintiff and thereby did 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 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 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 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 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 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, 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 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. 16.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]15. When we go through the above quoted paragraph 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 21.05.2003. No fresh cause of action arose in between the first suit and the second suit. The closure of account, as 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 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, 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 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.