Case: State Bank Of India Vs. Gracure Pharmaceuticals Ltd

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 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 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 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 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 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.

Court's reasoning:
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.