2007 (1) TMI 549 - SC - Indian Laws

Whether the suit is barred by Order II Rule 2 of the Code? Whether the appellant has established that there was a tripartite arrangement come to, by which the bus was made over by him to one Fernandes and Fernandes undertook to the Bank to discharge the liability under the mid term loan? Whether the High Court was correct in granting the Bank a decree in the suit?

Issues Involved:
1. Whether the second suit is barred by Order II Rule 2 of the Code of Civil Procedure (CPC).
2. Whether the appellant's liability was discharged due to a tripartite arrangement involving the transfer of the vehicle to one Fernandes.

Detailed Analysis:

1. Bar by Order II Rule 2 of CPC:

The appellant contended that the second suit was barred by Order II Rule 2 of the CPC, which mandates that all claims arising from the same cause of action must be included in one suit. The trial court held that the suit was not barred by Order II Rule 2, especially in the context of Order XXXIV Rules 14 and 15 of the CPC. However, the High Court opined that the suit was barred since the Bank omitted to sue on the equitable mortgage in the prior suit without the court's leave. Despite this, the High Court granted the Bank a decree against the appellant under Order XLI Rule 33 of the CPC.

The Supreme Court found the High Court's reasoning flawed. It clarified that a respondent in an appeal could support the trial court's decree by challenging any adverse findings without filing a memorandum of cross-objections, provided they do not seek additional relief. The Court emphasized that Order XLI Rule 33 allows an appellate court to pass any decree that ought to have been passed by the trial court, but it was unnecessary in this case since the Bank had appealed the trial court's dismissal of its suit.

The Supreme Court further noted that the appellant failed to produce the plaint from the earlier suit (O.S. No. 131 of 1984) to establish the identity of the cause of action. The Court referenced several precedents, including Gurbux Singh Vs. Bhooralal, to underscore that a plea under Order II Rule 2 requires the previous suit's pleadings to be produced. The Court concluded that the causes of action in the two suits were different: the first suit was for recovery of the loan, while the second was for enforcement of the equitable mortgage. Additionally, Order XXXIV Rule 14 explicitly permits a suit for sale in enforcement of a mortgage, notwithstanding Order II Rule 2.

2. Discharge of Liability Due to Tripartite Arrangement:

The appellant argued that his liability was discharged through a tripartite arrangement where the vehicle was transferred to one Fernandes, who allegedly undertook to discharge the loan. The trial court found no evidence of a concluded arrangement or that the Bank agreed to such an arrangement. The High Court did not disturb this finding.

The Supreme Court reviewed the evidence, including Exhibits D1 to D4, and found no proof of a concluded tripartite agreement. The Court noted that the appellant failed to examine Fernandes to support his claim. The Court agreed with the trial court's assessment that the burden of proving the tripartite arrangement and the discharge of liability lay with the appellant, which he failed to do. Consequently, the Court rejected the appellant's plea that his liability had been transferred to Fernandes.

Conclusion:

The Supreme Court upheld the High Court's judgment, confirming that the second suit was not barred by Order II Rule 2 of the CPC and that the appellant's liability was not discharged by any tripartite arrangement. The appeal was dismissed with costs, affirming the decree in favor of the Bank.

← Previous Next →