Page 1 1

Reportable

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 5527 OF 2014

(Arising out of SLP (C) No.26157 of 2012)

Coffee Board .… Appellant

versus

M/S. Ramesh Exports Pvt. Ltd. ....Respondents

J U D G M E N T

Pinaki Chandra Ghose, J.

1.Leave granted.

2.This appeal is preferred against the judgment and order dated

December 19, 2011 passed by the High Court of Karnataka at

Bangalore in Regular First Appeal No.1033 of 2005 partly

allowing the appeal filed by the respondent herein and partly

decreeing the Original Suit being O.S. No. 4763 of 1986 filed by

the respondent being the original plaintiff. The said original suit

Page 2 2

was dismissed by a judgment and decree dated March 17,

2005.

3.Pre-liberalization, till 1996 all the coffee grown in India was

pooled with the appellant-Board which is a statutory body

under the Coffee Act, 1942. The appellant-Board (hereinafter

referred to as “Board”) marketed the pooled coffee and

distributed the net realization to the growers in proportion the

quantity pooled by them. The Board marketed the pooled

coffee by means of auctions and separate auctions were held

for export and domestic market. Only registered exporters are

allowed to participate in the said auctions and the successful

bidders amongst them enter into contracts with the Board for

the purchase of the coffee. The Board is a member of the

International Coffee Organization (hereinafter referred to as

“ICO”) which is the main intergovernmental organization

controlling and regulating the global coffee export and import.

Majority of the coffee growing and consuming countries are

members of the ICO. The import and export of coffee is

regulated by ICO by fixing quotas on the member countries in

accordance with the quantum produced. As per the then

Page 3 3

International Coffee Agreement of 1983 the export quota

system was supported by an obligatory system of controls.

Each export by a Member was covered by a Certificate of

Origin. Importing Members did not admit coffee from Members

unless the Certificate was validated by coffee export stamps

issued by the Organization. When quotas were in effect

importing Members were required to limit their imports from

non-members and exports to non -members were closely

monitored.

4.Accordingly, India being a member of ICO through the Board

was subject to the same agreement and as per the fixed quota

for exporting coffee the Board received stamps from ICO for

each quarter through State Bank of India. Thus, the Board

subject to ICO rules and regulations regulated the coffee

production and marketing in India by accordingly distributing

stamps to the exporters who had successfully purchased coffee

from the auctions. The respondent M/s. Ramesh Exports Pvt.

Ltd. being the original plaintiff was registered with the Board as

an exporter during the coffee year October 1, 1981 to

September 30, 1982.

Page 4 4

5.In this backdrop, the facts leading to the present appeal are as

under:

5.1.On August 24, 1980, the appellant Board sent the ‘Terms

and Conditions of Sale of Coffee in the Course of Export’, after

amendment of certain clauses, to all the registered exporters

of coffee. On October 9, 1980 the appellant Board issued a

Circular regarding introduction of Coffee Export stamp system

for export of coffee to member importing countries of ICO from

November 1, 1980. The respondent purchased coffee at the

export auction. The respondent shipped 230.4 tonnes of coffee

to USA and Germany who were members of ICO, on 1

st

, 2

nd

and

3

rd

September, 1982 without valid ICO certificate of origin. On

September 22, 1982, the respondent wrote to the appellant

Board requesting for ICO stamps for export of 230.4 tonnes of

coffee and on September 29, 1982, the respondent wrote to

the appellant Board for issue of necessary permit/authority to

re-import 230.4 tonnes of coffee into India. The appellant

Board issued a show cause notice to the respondent alleging

that the respondent has committed breach of terms of ICO

Agreement by making false statement. The respondent replied

Page 5 5

to the show cause notice. Thereafter, the respondent filed two

suits against the appellant Board in the Court of City Civil

Judge, Bangalore, one being O.S. No.3150 of 1985 praying for

a decree of Rs.5,32,012.31 p. with interest at the rate of 19%

per annum and costs of the suit and another suit being O.S.

No. 4763 of 1986 praying for a decree of Rs.11,70,446.39 p.

with interest at the rate of 19% per annum and costs of the

suit. The appellant Board resisted the suits and denied the

claims made by the respondent.

5.2.By judgment dated February 14, 2002, the Trial Court

decreed O.S. No.3150 of 1985 with costs and interest at 6%

per annum. Aggrieved by the judgment and decree dated

February 14, 2002 passed by the Trial Court, the appellant

Board filed R.F.A. No.901 of 2002 before the High Court of

Karnataka. However, the other suit being O.S. No. 4763 of

1986 was dismissed by the Trial Court by judgment dated

March 17, 2005 and aggrieved thereby, the respondent filed

R.F.A. No.1033 of 2005 before the High Court of Karnataka.

After considering the submissions of both the parties, the High

Court partly allowed the regular first appeals. Aggrieved by the

Page 6 6

judgment and order dated December 19, 2011 passed by the

High Court of Karnataka at Bangalore in Regular First Appeal

No.1033 of 2005, the appellant Board has come up before this

Court.

6.The case of the appellant before us is based on two grounds.

Firstly, it has been contended by the learned counsel appearing

for the appellant that the High Court has incorrectly held that

the Original Suit being O.S. No.4763 of 1986 is not barred by

the provisions of Rule 2 of Order 2 of the Code of Civil

Procedure, 1908 (hereinafter referred to as “the Code”). In

support of the same, it has been submitted by the learned

counsel that the High Court incorrectly determined the above

without considering the specific pleadings in O.S. No.3150 of

1985 filed by the respondent, as against the pleadings in the

original suit being O.S. No.4763 of 1986. It was further

submitted that the High Court also did not consider the cogent

findings of the judgment dated March 17, 2005 passed by the

Trial Court in O.S. No.4763 of 1986.

Page 7 7

7.The second ground raised by the learned counsel for the

appellant is on merits wherein it has been contended that when

the respondent by letter dated September 29, 1982 agreed to

re-import 230.4 tonnes of coffee into India which was exported

without ICO Stamps by them in haste and against the ICO

Regulations of which they were aware and which entailed in the

debarring of India from the membership of ICO, then they are

estopped from claiming any damages and costs being freight

and other charges arising due to the re-import.

8.Having heard the arguments advanced by the counsel

appearing for the parties and considering the documents on

record in light of the averments of the parties, we will first

consider the procedural validity of the original suit and would

accordingly proceed with the merits.

9.It is the claim of the appellant being the original defendant in

the original suit being O.S. No.4763 of 1986 that the present

suit is barred by Order 2 Rule 2 of the Code. The said provision

should be read in context of Rule 1 of Order 2. The relevant

rules are reproduced below for ready reference:

Page 8 8

“1. Frame of suit .—Every suit shall as far as

practicable be framed so as to afford ground for final

decision upon the subjects in dispute and to prevent

further litigation concerning them.

2. Suit to include the whole claim .—(1) Every suit

shall include the whole of the claim which the plaintiff is

entitled to make in respect of the cause of action; but a

plaintiff may relinquish any portion of his claim in order

to bring the suit within the jurisdiction of any court.

(2) Relinquishment of part of claim.—Where a plaintiff

omits to sue in respect of, or intentionally relinquishes,

any portion of his claim, he shall not afterwards sue in

respect of the portion so omitted or relinquished.

(3) Omission to sue for one of several reliefs.—A person

entitled to more than one relief in respect of the same

cause of action may sue for all or any of such reliefs;

but if he omits, except with the leave of the court, to

sue for all such reliefs, he shall not afterwards sue for

any relief so omitted.”

10. The above rules are offshoots of the ancient principle that

there should be an end to litigation traced in the Full Bench

decision of the Court in Lachmi vs. Bhulli

1

and approved by this

Court in many of its decisions. The principle which emerges

from the above is that no one ought to be vexed twice for the

same cause. In light of the above, from a plain reading of Order

2 Rule 2, it emerges that if different reliefs and claims arise out

of the same cause of action then the plaintiff must place all his

1

ILR (1927) 8 Lah 384

Page 9 9

claims before the Court in one suit and cannot omit one of the

reliefs or claims except without the leave of the Court. Order 2

Rule 2 bars a plaintiff from omitting one part of claim and

raising the same in a subsequent suit. (See: Deva Ram & Anr.

vs. Ishwar Chand & Anr.

2

). Furthermore, this Court in Alka

Gupta v. Narender Kumar Gupta

3

stated that:

“The object of Order 2 Rule 2 of the Code is twofold.

First is to ensure that no defendant is sued and vexed

twice in regard to the same cause of action. Second is

to prevent a plaintiff from splitting of claims and

remedies based on the same cause of action. The effect

of Order 2 Rule 2 of the Code is to bar a plaintiff who

had earlier claimed certain remedies in regard to a

cause of action, from filing a second suit in regard to

other reliefs based on the same cause of action. It does

not however bar a second suit based on a different and

distinct cause of action.”

11. The bar of Order 2 Rule 2 comes into operation where the

cause of action on which the previous suit was filed, forms the

foundation of the subsequent suit; and when the plaintiff could

have claimed the relief sought in the subsequent suit, in the

earlier suit; and both the suits are between the same parties.

Furthermore, the bar under Order 2 Rule 2 must be specifically

2

(1995) 6 SCC 733

3

(2010) 10 SCC 141

Page 10 10

pleaded by the defendant in the suit and the Trial Court should

specifically frame a specific issue in that regard wherein the

pleading in the earlier suit must be examined and the plaintiff

is given an opportunity to demonstrate that the cause of action

in the subsequent suit is different. This was held by this Court

in Alka Gupta v. Narender Kumar Gupta (supra) which referred

to decision of this Court in Gurbux Singh vs. Bhooralal

4

wherein

it was held that:

“6. In order that a plea of a bar under Order 2 Rule

2(3) of the Civil Procedure Code should succeed the

defendant who raises the plea must make out: (1) that

the second suit was in respect of the same cause of

action as that on which the previous suit was based; (2)

that in respect of that cause of action the plaintiff was

entitled to more than one relief; (3) that being thus

entitled to more than one relief the plaintiff, without

leave obtained from the court omitted to sue for the

relief for which the second suit had been filed. From

this analysis it would be seen that the defendant would

have to establish primarily and to start with, the precise

cause of action upon which the previous suit was filed,

for unless there is identity between the cause of action

on which the earlier suit was filed and that on which the

claim in the later suit is based there would be no scope

for the application of the bar.”

12. The Courts in order to determine whether a suit is barred

by Order 2 Rule 2 must examine the cause of action pleaded by

4

AIR 1964 SC 1810

Page 11 11

the plaintiff in his plaints filed in the relevant suits (See: S.

Nazeer Ahmed v. State Bank of Mysore & Ors.

5

). Considering

the technicality of the plea of Order 2 Rule 2, both the plaints

must be read as a whole to identify the cause of action, which

is necessary to establish a claim or necessary for the plaintiff to

prove if traversed. Therefore, after identifying the cause of

action if it is found that the cause of action pleaded in both the

suits is identical and the relief claimed in the subsequent suit

could have been pleaded in the earlier suit, then the

subsequent suit is barred by Order 2 Rule 2.

13. In the present case we have found the first suit is claimed

to be O.S. No. 3150 of 1985 and the subsequent suit is claimed

to be O.S. No.4763 of 1986. The first suit was filed by Ramesh

Enterprises which is admitted to be the Coffee Division of

Ramesh Exports Pvt. Ltd. which is the plaintiff in the second

suit. It has also been admitted by the plaintiff in the second suit

that Ramesh Exports Pvt. Ltd. is a wholly owned subsidiary of

Ramesh Enterprises Pvt. Ltd. Both the entities are operated out

of the same premises and suits were filed by their Director who

5

(2007) 11 SCC 75

Page 12 12

is Mr. T. Thangapalam. Therefore, we are of the opinion that de

facto the parties are the same in both the suits. Having

perused the written statement of the defendant being the

appellant before us in O.S. No.4763 of 1986 we have found that

the defendant in paragraph 14(c) of his written statement has

specifically pleaded that:

“The suit is barred under Order 2, Rule 2 of the CPC as

the plaintiff having filed O.S. No. 3150/1985 in respect

of the alleged failure of the board to supply stamps for

the coffees purchased by it between 11-8-1982 and 8-

9-1982, the claim now made must be deemed to have

been relinquished.”

The Trial Court also in its judgment dated March 17, 2005

specifically framed the following issue:

“(5) Whether Defendant prove that this is barred as per

para 14 (c) of the Written Statement?”

14. It is evident from the above that the two requirements for

the operation of bar under Order 2 Rule 2 are met with and

what remains to be seen is whether the cause of action in the

subsequent suit is the same and the relief claimed therein

Page 13 13

could have been claimed in the earlier suit. For the same, both

the plaints are discussed in the subsequent paragraphs.

15. In the plaint in O.S. No. 3150 of 1985 being the earlier

suit, it has been claimed by the respondent being the plaintiff

therein that the appellant being the defendants failed to supply

ICO Stamps for 268.08 tonnes of coffee purchased by him for

export between August 11, 1982 and September 8, 1982,

inspite of its assurances leading to delay in the shipment of the

coffee resulting in losses to the plaintiff. On the basis of the

same, the respondent claimed for the losses suffered by him

along with damages. The respondent further averred that the

cause of action for the suit arose on various dates when the

respondent purchased coffee from the appellant in the auctions

held by them on the assurance that the ICO Stamps will be

supplied by the appellant to them.

16. The cause of action in the above suit is the failure of ICO

to supply stamps to the respondent inspite of its assurances.

The respondent to ensure the success of his claim, was

required to prove that on account of the omission of the

Page 14 14

appellant i.e. failure to provide ICO Stamps for the coffee

purchased by them, the respondent suffered losses.

17. Inspite of the different wording of the plaint in O.S. No.

4763 of 1986, being the subsequent suit, the respondent has

primarily claimed that inspite of the assurance given by the

appellant regarding the ICO stamps by its Circular dated

August 18, 1982, the appellant failed to provide the requisite

ICO Stamps for 230.4 tonnes coffee purchased by it between

July 25, 1982 and August 18, 1982. That on the basis of the

assurance of the appellant the respondent started making

preparations for the shipment and after requesting for the ICO

Stamps on August 28, 1982 and waiting for the same, he was

forced for shipment of the coffee without the necessary stamps

which lead to the recalling of the ship. That the respondent had

to bear to and fro freight charges and other costs being the

damages to importers for delay in shipment as the shipment

was called back wrongfully; on account of the omission of the

appellant for which the respondent is not accountable; and the

appellant is liable for the cost arising from the recall of the

shipment. Furthermore, as per the plaintiff, the cause of action

Page 15 15

arose when the circular assuring the availability of stamps was

issued, when the coffee was shipped and subsequently called

back.

18. Though the plaint in the subsequent suit is more specific,

we however, find that the respondent so as to recover the cost

of the freight charges and other costs suffered by it, must

prove that the appellant was under a duty to provide ICO

stamps; and its failure to provide the stamps timely lead to the

coffee being shipped without the stamps and ultimately lead to

the losses being suffered by the respondent.

19. In both the suits the fact required to be proved by the

respondent (being the plaintiff therein), to succeed in its claims

was that on account of the failure of the appellant (being the

defendant) to provide the required ICO stamps as assured by it,

the respondent had to suffer losses. The two separate reliefs

claimed by the respondent are dependent on the same fact

being the omission of duty by the appellant. The grounds of

disparity in the suits are the amount of coffee and the dates

when the same was purchased, however it must be noted that

Page 16 16

the period between August 11, 1982 and August 18, 1982 is

common to both the suits and there are no specific pleadings

differentiating the same. Furthermore, the suits were filed

within a span of nine days of each other.

20. In the light of the above, we are of the opinion that suits

should have been merged with the claims against coffee

purchased between July 25, 1982 and September 8, 1982, (a

period arising from the merging of the two periods claimed in

the suits wherein eight days overlapped each other) clubbed

together in the same suit from which two reliefs, first being the

losses due to delayed shipment and second being the costs

and losses arising due to the recall of the shipment, could have

been claimed.

21. In the present factual matrix both the reliefs are being

claimed separately in the two concerned suits. This scenario

negates the principle of Order 2, Rule 2 in absence of any

explanation as to why the respondent failed to claim the relief

by way of a single suit when the cause of action was the same

in the both. Therefore, we are of the opinion that the Trial Court

Page 17 17

in its judgment dated March 17, 2005 correctly held that in

light of O.S. No. 3150 of 1985 the present suit is barred under

Order 2 Rule 2 of the Code.

22. In view of the aforesaid discussion, we find that the High

Court has misappreciated the facts in the light of Order 2 Rule

2 of the Code and thereby the reasoning of the High Court

cannot be sustained in the eye of law. The said suit

(O.S.No.4763 of 1986) is barred. Considering the facts, as

discussed above, we set aside the judgment and order of the

High Court and uphold the order of the Trial Court. Accordingly,

the present appeal is allowed and the suit of the respondent is

dismissed.

……………… ..…....……....…………..J.

(Chandramauli Kumar Prasad)

……………… ..…....……....…………..J.

(Pinaki Chandra

Ghose)

New Delhi;

May 9, 2014.

Page 18 18

Page 19 19