2014 (10) TMI 919 - SC - Indian Laws

Suit for specific performance - Specific performance of the agreement for sale - Held that - If the two suits and the relief claimed therein are based on the same cause of action then only the subsequent suit will become barred under Order 2, Rule 2 of the CPC. However, when the precise cause of action upon which the previous suit for injunction was filed because of imminent threat from the side of the defendant of dispossession from the suit property then the subsequent suit for specific performance on the strength and on the basis of the sale agreement cannot be held to be the same cause of action. In the instant case, from the pleading of both the parties in the suits, particularly the cause of action as alleged by the plaintiff in the first suit for permanent injunction and the cause of action alleged in the suit for specific performance, it is clear that they are not the same and identical. Besides the above, on reading of the plaint of the suit for injunction filed by the plaintiff, there is nothing to show that the plaintiff intentionally relinquished any portion of his claim for the reason that the suit was for only injunction because of the threat from the side of the defendant to dispossess him from the suit property. It was only after the defendant in his suit for injunction disclosed the transfer of the suit property by the Housing Board to the defendant and thereafter denial by the defendant in response to the legal notice by the plaintiff, the cause of action arose for filing the suit for specific performance. As noticed above, the High Court, although formulated various points for consideration and decision, as quoted hereinabove, but has not considered other points in its right perspective. The High Court, being the final court of facts in a first appeal, is required to decide all the points formulated by it. In view of the same, the matter needs to be remanded back to the High Court to consider and decide other points formulated by it. Civil Appeal are allowed in part and the decision arrived at by the High Court against point no.4 holding that the suit was barred under Order 2 Rule 2 of the CPC is set aside. The matter is remanded back to the High Court to decide the appeals by recording its finding on other points formulated by it. Consequently, other connected appeals, filed by the defendant against the plaintiff, stand disposed of with a direction to maintain status quo with regard to possession of the suit property till further orders of the High Court in this regard.

Issues Involved:
1. Enforceability of the agreement (Ex.A1).
2. Maintainability of the suit O.S. No.252/1986 based on Ex.A1 considering variations in Exs.B7 and B9.
3. Plaintiff's readiness and willingness to perform his part of the contract.
4. Bar of the suit O.S. No.252/1986 under Order 2, Rule 2 of the Code of Civil Procedure (CPC).
5. Plaintiff's entitlement to the relief of specific performance given the allegation of coming to court with unclean hands.

Issue-wise Detailed Analysis:

1. Enforceability of the Agreement (Ex.A1):
The trial court found the agreement dated 19.1.1984 enforceable and decreed the suit for specific performance filed by the plaintiff. However, the High Court did not delve into this issue in detail, as it decided the appeal primarily on other grounds.

2. Maintainability of the Suit O.S. No.252/1986 Based on Ex.A1 Considering Variations in Exs.B7 and B9:
This issue was not explicitly addressed by the High Court in its judgment. The High Court focused on the applicability of Order 2, Rule 2 CPC and the plaintiff's conduct in coming to court.

3. Plaintiff's Readiness and Willingness to Perform His Part of the Contract:
The High Court did not specifically address this issue. The trial court had found that the plaintiff was ready and willing to perform his part of the contract, which was a key factor in decreeing the suit for specific performance.

4. Bar of the Suit O.S. No.252/1986 Under Order 2, Rule 2 of the CPC:
The High Court concluded that the suit for specific performance (O.S. No.252/1986) was barred under Order 2, Rule 2 of the CPC. It reasoned that the causes of action in both the suits filed by the plaintiff (O.S. No.445/1985 and O.S. No.252/1986) were identical and arose from the same transaction. The plaintiff should have included the relief for specific performance in the earlier suit (O.S. No.445/1985) and, failing to do so, relinquished his right to seek specific performance in the subsequent suit without obtaining leave of the court.

5. Plaintiff's Entitlement to the Relief of Specific Performance Given the Allegation of Coming to Court with Unclean Hands:
The High Court held that the plaintiff came to court with unclean hands. It noted that in the earlier suit (O.S. No.3/1986), the plaintiff had stated that the sale deed was executed in favor of the defendant by the Housing Board on 18.2.1985. However, in the subsequent suit (O.S. No.252/1986), the plaintiff falsely claimed that the defendant had been representing that he had not yet obtained the sale deed from the Housing Board. This contradiction led the High Court to conclude that the plaintiff suppressed material facts and was not entitled to the equitable relief of specific performance.

Supreme Court's Analysis:

The Supreme Court found that the High Court erred in concluding that the suit was barred under Order 2, Rule 2 of the CPC. It emphasized that the causes of action in the two suits were different and distinct. The first suit (O.S. No.445/1985) was based on the imminent threat of dispossession, while the subsequent suit (O.S. No.252/1986) was for specific performance based on the sale agreement. The Supreme Court reiterated that Order 2, Rule 2 CPC applies only when the causes of action in both suits are identical, which was not the case here.

The Supreme Court also noted that the High Court failed to address other points formulated for consideration. Consequently, it remanded the matter back to the High Court to decide on the remaining points.

Conclusion:

The Supreme Court allowed the appeals in part, setting aside the High Court's decision that the suit was barred under Order 2, Rule 2 CPC. The matter was remanded to the High Court to decide on the other points formulated by it. The court also directed maintaining the status quo regarding possession of the suit property until further orders from the High Court.

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