CANNING MIYRA PHOENIX LIMITED Vs. POPULAR CONSTRUCTIONS

JUDGEMENT

(1.) Both these appeals can be conveniently disposed of by common judgment as the question which falls for determination in these appeals is identical. The question which requires determination is at what point of time leave of the Court to sue for relief which was omitted to be sought earlier is required to be obtained under sub-rule (3) of Rule 2 of Order II of Code of Civil Procedure, 1908. To appreciate the question which arises, only few facts are required to be stated.

(2.) In Appeal No. 509 of 1992, appellant instituted Suit No. 1334 of 1990 on the Original Side of this Court on April 21, 1990 for a declaration that the Bank guarantee dated January 27, 1989 in the sum of Rs. 10 lakhs furnished in favour of respondent No. 1 is null and void and of no legal effect. The appellant sought injunction restraining respondent No. 1 from invoking or recovering money under the Bank guarantee. The respondent No. 1 had submitted tender for grant of contract floated by Director General of Naval Project for setting up of workshop building for electroplating and battery repair facility at Naval Dockayard, Bombay. On August 3, 1988, the appellant and respondent No. 1 entered into an agreement providing for a sub-contract in favour of the appellant. The appellant furnished Bank guarantee in anticipation of entering into sub-contract. The contract was allotted to respondent No. 1 and the appellant claims that respondent No. 1 failed to enter into sub-contract but was threatening to enforce the Bank guarantee and that is why the suit for declaration and injunction. In paragraph 21A of the plaint, the appellant asserted that respondent No. 1 is also liable to pay damages but as the quantum is not determined, the appellant seeks leave under Order II, Rule 2 of the Code of Civil Procedure to file a separate suit claiming damages from respondent No. 1. The appellant did not seek leave of the Court on the date of the institution of the suit but a separate petition was filed on April 18, 1992.

(3.) In Appeal No. 210 of 1993, respondent No. 1 Central Bank of India instituted Suit No. 324 of 1977 on the Original Side of this Court on February 25, 1977 for recovery of sum of Rs. 3,71, 382.45 in respect of cash credit facility granted by the Bank to M/s. Multi Block Private Limited, a Private Limited Company, which was joined as defendant No. 1. The appellants were joined as defendants Nos. 2, 3 and 7 being the Directors of the Company and who had furnished guarantee for return of the amounts due by a composite deed of guarantee dated December 16, 1974. The composite guarantee was in respect of cash credit facility as well as term loan facility which was sanctioned to defendant No. 1 on October 31, 1973. Suit No. 324 of 1977 was for recovery of amounts due only under cash credit facility. The Central Bank of India instituted Suit No. 975 of 1978 on the Original Side of this Court on March 30, 1978 for recovery of Rs. 1,21,245/- together with interest thereon in respect of amounts outstanding under the term loan facility. The appellants were joined as party defendants in view of the guarantee furnished by composite deed of guarantee. The appellants filed written statement in the second suit on December 9, 1978 and, inter-alia, claimed that the second suit was not maintainable in view of the provisions of Order II, Rule 2 of the Code of Civil Procedure. During the pedency of the second suit, on July 14, 1988, the Central Bank of India took out Chamber Summons No. 611 of 1988 for amendment of the plaint, in the first suit, i.e. Suit No. 324 of 1977. The amendment sought was that the Bank be granted leave under Order II, Rule 2 of the Code of Civil Procedure to omit to sue defendants Nos. 2, 4, 5, 7 and 8 in respect of the term loan facility for which seek certain reliefs. The learned counsel urged that plain reading of Order II, Rule 2 of the Code of Civil Procedure does not indicate that leave is required to be secure before institution of the first suit. It was submitted that change of phraseology in Order II, Rule 2(3) of the Code of Civil Procedure of 1908 was not properly appreciated and it was overlooked that the object of the provisions was to avoid multiplicity of litigation. The learned Counsel urged that it is always open for the plaintiff to seek amendment of the plaint and seek relief which was omitted to be sought on the date of institution of the suit and, therefore, the finding of the trial Judge that leave cannot be sought to institute separate suit for the reliefs omitted during the pendency of the first suit cannot be sustained. Shri Tulzapurkar submitted that the jurisdiction of the Court to grant leave under Sub-rule (3) of Rule 2 of Order II of the Code of Civil Procedure can be exercised anytime during the pendency of the suit. Shri Kadam, learned Counsel appearing on behalf of the appellants in Appeal No. 210 of 1993, urged that leave can be granted under Order II, Rule 2 of the Code of Civil Procedure before institution of second suit and it is not permissible for the Court to grant leave after the institution of the second suit seeking reliefs which were omitted to be sought in the first suit. Shri Samadhani, learned Counsel appearing on behalf of respondent No. 1 in Appeal No. 509 of 1992 and Shri Shah, learned Counsel appearing on behalf of respondent No. 1 Central Bank of India in Appeal No. 210 of 1993, supported the orders passed by the trial Court in the two appeals.