2023 INSC 1042

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REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO……….. OF 2023

(ARISING OUT OF S.L.P. (C) NO. 8292 OF 2021)

M/s BHARAT PETROLEUM

CORPORATION LTD. AND ANOTHER … Appellant(s)

VERSUS

ATM CONSTRUCTIONS PVT. LTD. … Respondent(s)

J U D G M E N T

RAJESH BINDAL, J.

1. Leave granted.

2. Challenge in the present appeal is to the order dated

07.01.2021 passed by the High Court

1

, vide which the application filed

by the appellants/defendants under Order VII Rule 11(d) C.P.C. in the

suit

2

filed by the respondent-plaintiff, was dismissed.

1

High Court of Judicature at Madras

2

Civil Suit (Commercial Division) No. 62 of 2020

2

3. Briefly, the facts as available on record are that the

respondent-plaintiff is presently the absolute owner of the property in

dispute. It was originally owned by T. Padmanabhan, T. Sethuraman

and T. Gopinath. At that time, M/s Burma Shell Oil Storage and

Distribution Company of India Ltd. had taken the property on lease with

effect from 01.01.1958 for the purpose of erecting pump service and

filling station for storage of petrol, diesel and carrying on business in

such products for a period of twenty years by entering a lease deed

dated 08.01.1958. The said Company was the predecessor-in-interest

of the appellants-defendants. The property was put to public auction

owing to default in repayment of the loan availed by the owners. The

same was purchased by Mrs. S. Bharwani in the auction. Sale deed was

registered in her favour on 24.06.1978. The respondent-plaintiff had

purchased the property from Mrs. S. Bharwani. Finally, the lease in

favour of the appellants expired on 31.12.1997. Thereafter, as pleaded,

the respondent-plaintiff issued notice to the appellants demanding

surrender of possession. The same having not been done, first suit

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was

filed by the respondent-plaintiff in the year 2006. During the pendency

of first suit, the suit in question was filed claiming liquidated damages

for a period from 01.01.1998 till 31.12.2019 along with interest and

3

Civil Suit NO. 711 of 2006

3

future damages of ₹30,50,000/- per month from 01.01.2020 onwards till

the date of handing over the vacant possession of the suit property. It

is in the aforesaid suit that the appellants-defendants filed application

under Order VII Rule 11(d) C.P.C. The same having been dismissed by

the High Court, the matter is before this Court.

4. Mr. V. Giri, learned senior counsel for the appellants

submitted that it is not a matter of dispute that the lease in favour of the

appellants expired on 31.12.1997. The first suit for possession was filed

by the respondent-plaintiff in 2006. At the stage of filing of the aforesaid

suit, though the relief for damages for use and occupation was available

to the respondent-plaintiff, however, the same was not claimed. It has

been specifically pleaded in Paragraph No. XXI in the plaint that the

respondent-plaintiff is entitled to damages for wrongful occupation of

the premises by the appellants-defendants, but still while claiming the

final relief, only possession was sought after removal of the structure,

which existed thereon. The first suit was decreed on 30.10.2010.

5. During the pendency of the aforesaid suit, the respondent-

plaintiff filed the suit in question in January 2020 claiming liquidated

damages of ₹1,28,90,000/- payable towards illegal occupation from

01.01.1998 till 31.12.2019 along with interest @ 12% per annum from

01.01.1998 till realization. Future damages @ ₹30,50,000/- per month

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from 01.01.2020 till the date of handing over vacant possession of the

property in dispute were also claimed. It is the case of the parties that

possession was handed over by the appellants to the respondent-

plaintiff in June 2022.

6. The argument raised by learned senior counsel for the

appellants is that from the pleadings in the first suit filed by the

respondent-plaintiff it is evident that it had touched the issue of

damages for use and occupation of the property in dispute, which could

be claimed at that time, the lease having expired on 31.12.1997.

However, still in the first suit filed in January 2006 only possession was

sought. The relief, which was available and not claimed, is deemed to

be omitted for which no fresh suit lies. The plaint in the suit in question

filed by the respondent-plaintiff in the year 2020 was liable to be

rejected under Order VII Rule 11(d) C.P.C., as the same was not

maintainable. In the suit filed subsequently, the claim of the

respondent-plaintiff is also barred by law for the reason that in the

second suit filed in the year 2020, the claim is made for damages for use

and occupation from the year 1998 onwards. To appreciate the

contentions raised by the appellants-defendants, copy of the earlier

suit and the judgment therein have been placed on record by the

respondent-plaintiff along with the subsequent suit. It is not that any

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pleadings of the appellants-defendants are to be considered. He

further referred to the provisions of Order II, Rules 2(2), (3) and

especially (4) C.P.C. in terms of which without even seeking permission

of the court, relief for damages for use and occupation of the premises

can be joined in a suit for recovery of immoveable property. In support

of his arguments, reliance was placed upon the judgment of this Court

in Virgo Industries (Eng.) Private Limited v. Venturetech Solutions

Private Limited

4

.

7. On the other hand, Mr. S. Nagamuthu, leaned senior counsel

for the respondent-plaintiff submitted that the application filed by the

appellants-defendants was totally mis-conceived. It is the undisputed

fact on record that the lease granted to the appellants expired on

31.12.1997. Despite that, they did not hand over vacant physical

possession of the property in dispute to the lesser- respondent, who

had purchased the same on 03.01.1997. The respondent-plaintiff did not

have any choice but to file the first suit in 2006. In that also, all kinds of

frivolous pleas were raised by the appellants making the respondent to

contest the litigation for over a decade. The suit was initially decreed

on 30.10.2010. After the lease expired on 31.12.1997, from January 1998

onwards the appellants were in occupation of the property in dispute

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(2013) 1 SCC 625

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without paying any damages for use and occupation thereof. The

respondent-plaintiff filed a suit in January 2020 seeking a direction to

the appellants-defendants to pay liquidated damages of ₹1,28,90,000/-

along with interest @ 12% per annum from 01.01.1998 till realization.

Future damages @ ₹30,50,000/- per month from 01.01.2020 till the date

of handing over vacant possession of the property in dispute were also

claimed. The calculation was on a very conservative estimate, the

details whereof have been furnished in the suit. As there was huge

delay on the part of the appellants to pay the damages for use and

occupation of the property in dispute, interest was also claimed. As had

been the attitude of the appellants in delaying the process of law,

instead of defending the suit which otherwise was not defendable, an

application was filed under Order VII Rule 11(d) C.P.C. for rejection of

the plaint. The same was totally mis-conceived. There is no bar in filing

a separate suit for claiming damages for use and occupation of the

property in dispute, in case in the first suit pertaining to the same

premises, only possession was claimed. The law thereon is well settled.

Even the High Court has also referred to the judgments starting from a

Full Bench of Madras High Court in Ponnammal v. Ramamirda Aiyar

and two others

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. Subsequently, the matter was considered by the Full

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ILR (1915) XXXVIII 829

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Bench of Punjab and Haryana High Court in Sadhu Singh etc. v. Pritam

Singh, Etc.

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Same view was endorsed. Even this Court in Gurbux

Singh v. Bhooralal

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had settled the issue that even if damages for use

and occupation had not been claimed in a suit filed earlier seeking

possession of the property, a fresh suit being a distinct cause of action

is maintainable. In view of the aforesaid settled position of law, the

subsequent suit filed by the respondent-plaintiff cannot be said to be

barred under any law. It was further submitted that the issue with

regard to maintainability of the suit in terms of Order II Rule 2 C.P.C.

has already been framed and the matter will be examined by the Trial

Court after the parties lead evidence. Even if the appellants-defendants

had any objection with regard to any part of the claim made in the suit

being beyond limitation or otherwise, the issue can always be raised

and tried.

8. Heard learned counsel for the parties and perused the

paper book.

9. The respondent-plaintiff is the absolute owner of the

property in dispute. It was originally owned by T. Padmanabhan, T.

Sethuraman and T. Gopinath. At that time, M/s Burma Shell Oil Storage

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6 ILR (1976) 1 P&H 120

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AIR 1964 SC 1810

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and Distribution Company of India Ltd. had taken the property on lease

with effect from 01.01.1958 for a period of twenty years by executing a

lease deed dated 08.01.1958. The said Company was the predecessor-

in-interest of the appellants-defendants. The property was put to

auction for recovery of loan availed by the owners. The same was

purchased by Mrs. S. Bharwani in the auction. Sale deed was registered

in her favour on 24.6.1978. The respondent-plaintiff had purchased the

property from Mrs. S. Bharwani. Finally, the lease in favour of the

appellants expired on 31.12.1997. Thereafter, as pleaded, the

respondent-plaintiff issued notice to the appellants seeking possession.

The same having not been done, the first suit filed by the respondent-

plaintiff was decreed 30.10.2010. During the pendency of the first suit,

the appellants-defendants sought to invoke Section 9 of the Tamil Nadu

City Tenants Protection Act, 1921 claiming right to purchase the

property, but failed in that process as well. In the first suit filed by the

respondent-plaintiff, the prayer was only for seeking possession of the

property. In the suit in question filed in the year 2010, the prayer was

made for claiming damages for use and occupation of the property from

01.01.1998 onwards, as admittedly the lease in favour of the appellants

expired on 31.12.1997. Copy of the plaint and the judgment in the first

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suit have been placed on record by the respondent-plaintiff along with

the second suit.

10. Application under Order VII Rule 11(d) C.P.C. was filed by

the appellants-defendants for rejection of the plaint. It was on the

ground that a subsequent suit only for claiming damages for use and

occupation of the property in dispute, for which a suit for possession

was filed earlier without claiming any damages for use and occupation,

will not be maintainable in terms of Order II Rule 2 C.P.C.

11. The primary issue which requires consideration by this

Court to appreciate the arguments regarding maintainability of the

subsequent suit is with reference to cause of action. The first suit was

filed by the respondent for possession, whereas the second suit was

filed for damages for use and occupation of the property after expiry of

the lease period.

12. Paragraphs in the two suits mentioning the cause of action

are extracted below:

“Suit for possession

“XXI. The plaintiff submits that after the statutory

intervention, the first renewal period by virtue of

Section 5 & 7 of the Burma-Shell Acquisition of

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Undertakings in India Act, the defendants got the

lease deed executed for a period of 20 years from

01.01.1978. The said first renewal period expired on

31.12.1997. The plaintiff submits that the Apex Court

as well as the Madras High Court have clearly held

that the statutory right of the defendant Corporation

to renew the lease can be exercised only one time

and no more. Hence, the possession of the defendants

in the plaint schedule property after the expiry of the

first renewal period i.e. 31.12.1997 is that of a

trespasser. The plaintiff submits that till date they

have not received any rental from the defendants.

The plaintiff is entitled to damages for the wrongful

occupation of the premises by the defendants. Hence

the possession of the defendants is wrongful, and the

suit is therefore laid for recovery of possession of the

actual demised premises.

XXI. The cause of action for the suit arose at

Madras on 08.01.1958, when the defendants as it then

stood as Burma-Shell Oil & Storage Company Limited

entered into a contract of lease with plaintiff’s

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predecessor in title and was let into possession of the

plaint schedule property, on 31.07.1997, when the

plaintiff purchased the said property from the

predecessor in title of the plaint schedule property;

on 23.07.2005 when the plaintiff through its lawyers

sent a registered notice calling upon the defendants

to surrender possession of the plaint schedule

property and on 01.08.2005 when the first defendant

by its letter dated 02.08.2005 addressed to the

lawyers of the plaintiff declined to surrender

possession of the plaint schedule and on subsequent

dates.”

Suit for damages for use and occupation of

property

“13. The cause of action for the suit arose within

the jurisdiction of this Hon’ble Court on 01.01.1958

when the lease under the predecessors-in-title and

the erstwhile Burma Shell Oil Storage and

Distribution Company had commence; on 08.01.1958

when the said lease deed was executed by the

parties; on 20.01.1976 when the Government of India

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acquired the equity shares of the Burma Shell Oil

Storage and Distribution Company and incorporated

the Bharat Petroleum Corporation Ltd., on the dates

between 1976 and 1978 when the predecessor-in-title

of the suit property availed loan from the Egmore

Benefit Society, brought the property to public

auction and Mrs. S. Bharwani purchased the suit

property in public auction; on 01.01.1978 when the

renewed period of lease has commenced; on

06.07.19078 when the defendant had requested Mrs.

S. Bharwani, the then title holder to grant extension of

lease from 01.01.1978; on 27.07.1978 and on

18.10.1978 when the said Mrs. S. Bhawani caused

further notices to the defendants to vacate the suit

property; on 17.11.1978 when the defendants

informed the said Mrs. S. Bharwani that they have the

statutory right under the Burma Shell Acquisition of

Undertaking in India Act; on 14.11.1996 when the

plaintiff entered into the agreement for sale of the suit

property; on 03.01.1997 when the Deed of Sale in

favour of the plaintiff was registered; on 02.12.1997

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when the said Mrs. Bharwani has caused a notice

demanding vacant possession; on 01.091.1998 when

the extended period of lease in respect of the suit

property had expired; on 09.01.1998 when the said

has issued demand notice to vacate the suit property,

on 10.1.2000 when the said Mrs. Bharwani issued

another notice for vacant possession of lease for

another 30 years was rejected; in the year 2006, when

the suit for eviction in O.S. No. 711 of 2006 was filed

in the City Civil Court; on 27.11.2009 when the

Defendants filed the Petition in I. A. No. 6009 of 2009

under Section 9 of the City Tenants Protection Act, in

the year 2010 when the CMA 20 of 2010 was filed

before the III Additional Judge, City Civil Court,

Chennai; on 15.2.2010 when the CMA was dismissed;

on 30.10.2010 when the suit in O.S. No. 711 of 2006

was decreed; in the year 2010, when the Defendants

preferred the A.S. No. 361 of 2010; in the year 2011,

when the Defendants preferred a SLP in the Hon’ble

Supreme Court of India against the orders passed in

CRP above; in the year 2011, when the Defendants

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filed CRP No. 610 of 2011 before the Hon’ble Court,

Madras against the Orders passed in CMA; on

09.01.2012, when the CRP was dismissed by the

Hon’ble High Court; and each and every day

thereafter.”

13. Similar issue was considered by a Full Bench of Allahabad

High Court in Ram Karan Singh v. Nakchhad Ahir

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. In the aforesaid

case, a suit for recovery of possession and mesne profits was filed on

24.08.1925. In the suit, the plaintiff claimed mesne profits upto the date

of filing of the suit. The suit was decreed in favour of the plaintiff. Future

and pendente lite mesne profits were neither claimed nor refused in

that suit. Possession of the land was delivered on 01.04.1927. The

plaintiff then instituted a second suit for recovery of mesne profits from

the date of institution of the first suit i.e., 24.08.1925 till the date of

delivery of possession, i.e., 01.04.1927. The Full Bench opined that a

subsequent suit for claiming mesne profits where an earlier suit

claiming possession and mesne profits upto the date of filing of the suit

was already decided, was maintainable. Relevant paragraph thereof is

extracted below:

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AIR 1931 All 429

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“It seems to us that the cause of action for recovery of

possession is not necessarily identical with the cause of

action for recovery of mesne profits. The provisions of

Order 2 Rule 4, indicate that the legislature thought it

necessary to provide specially for joining a claim for

mesne profits with one for recovery of possession of

immovable property, and that but for such an express

provision, such a combination might well have been

disallowed. A suit for possession can be brought within

twelve years of the date when the original

dispossession took place and the cause of action for

recovery of possession accrued. The claim for mesne

profits can only be brought in respect of profits within

three years of the institution of the suit and the date of the

cause of action for mesne profits would in many cases be

not identical with the original date of the cause of action

for the recovery of possession. Mesne profits accrue from

day to day and the cause of action is a continuing one,

and arises out of the continued misappropriation of the

profits to which the plaintiff is entitled. …”

(Emphasis supplied)

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14. Subsequently, a Full Bench of Punjab & Haryana High Court

in Sadhu Singh’s case (supra) considered the following question:

“Whether Order 2, rule 2 of the Code of Civil

Procedure, 1908, bars a suit for mesne profits filed

subsequently to a suit for possession of the property

because the claim for those accrued mesne profits

had not been earlier included therein.”

14.1 The same was answered in negative by majority.

15. The Full Bench judgment of Allahabad High Court in Ram

Karan Singh’s case (supra) was quoted with approval in Indian Oil

Corporation Ltd. v. Sudera Realty Pvt. Ltd.

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opining therein that the

cause of action claiming mesne profits accrue from day to day and the

cause of action is a continuing one. Relevant paragraphs 64 and 65

thereof are extracted below:

“64. The case of the respondent is that the plea

of limitation was not pressed before the learned

Single Judge and was also not taken up before the

Division Bench. It is further contended that a claim for

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2022 SCC OnLine SC 1161: 2022:INSC: 926

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mesne profits involves a liability, which accrues on a

day- to-day basis. In this regard, attention is drawn to

Ram Karan Singh and others v. Nakchhed Ahir and

others, AIR 1931 Allahabad 429, which has been

referred to by this Court in the Judgment reported in

Raptakos Brett and Company Limited v. Ganesh

Property, (2017) 10 SC 643 and we may notice only

paragraph-21 of Raptakos Brett and Company

Limited (supra):

“21. Bench of the Allahabad High Court while

examining the issue of maintainability of second

suit for pendente lite and future mesne profits

where earlier suit for possession and past mesne

profits has already been decided has held as

follows : (SCC Online All)

“It seems to us that the cause of action for

recovery of possession is not necessarily

identical with the cause of action for

recovery of mesne profits. The provisions

of Order 2 Rule 4, indicate that the

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legislature thought it necessary to

provide specially for joining a claim for

mesne profits with one for recovery of

possession of immovable property, and

that but for such an express provision,

such a combination might well have been

disallowed. A suit for possession can be

brought within twelve years of the date

when the original dispossession took

place and the cause of action for recovery

of possession accrued. The claim for

mesne profits can only be brought in

respect of profits within three years of the

institution of the suit and the date of the

cause of action for mesne profits would in

many cases be not identical with the

original date of the cause of action for the

recovery of possession. Mesne profits

accrue from day to day and the cause of

action is a continuing one, and arises out of

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the continued misappropriation of the

profits to which the plaintiff is entitled. …”

(Emphasis supplied)

65. In the said passage, what has been considered,

was the issue relating to the maintainability of the second

Suit for pendente lite and future mesne profits, in a

situation, where an earlier suit for recovery of possession

and for past mesne profits had been decided. We notice

that what the Court has essentially held is that but for

Order IV Rule 2

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of the CPC, as it stood specifically

providing for joining a claim for mesne profits with one

for recovery of possession of an immovable property,

such a joining together of claims in one suit, may have

been not allowed. It is thereafter stated that a claim for

mesne profits can only be brought in respect of profits

within three years of the institution of the suit. Still further,

it is found that the date of cause of action for action for

mesne profits may not coincide with the date of cause of

action for recovery of possession. It is thereafter that the

10

Apparently, there is an error. It should be Order II Rule 4

20

statement which is relied upon by the respondent has

been made. The Court held that mesne profits accrue

from day-to-day, and the cause of action is a continuing

one. It arises out of the continued misappropriation of the

profits, which a plaintiff is entitled to.”

16. If considered in the light of the facts of the case in hand, it is

undisputed that the respondent-plaintiff is the absolute owner of the

property in dispute at present. The lease of the property in favour of the

appellants by the predecessors-in-interest of the respondents expired

on 31.12.1997. After a prolonged litigation, the possession was handed

over to the respondent only in June 2022. The first suit was filed seeking

possession of the property. No claim was made regarding mesne

profits. Subsequent suit was filed claiming damages for use and

occupation of the property from 1998 onwards.

17. In view of the enunciation of law, as referred to above, suit

for possession and suit for claiming damages for use and occupation of

the property are two different causes of action. There being different

consideration for adjudication, in our opinion, second suit filed by the

respondent claiming damages for use and occupation of the premises

was maintainable. The application filed by the appellants for rejection

of the plaint was rightly dismissed by the Courts below. However, the

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appellants are well within their right to raise the issue, if any part of the

claim in the suit is time-barred but the entire claim cannot be said to be

so.

18. The judgment in Virgo Industries (Eng.) Private

Limited’s case (supra), relied upon by learned counsel for the

appellants is distinguishable as in that case, on the date the suit for

injunction was filed, even as per the averments in the plaint, the cause

of action to file suit for specific performance had arisen but was not

claimed. Under those circumstances, this Court held that the

subsequent suit would be barred under Order II Rule 2 C.P.C.

19. In view of our aforesaid discussions, we do not find any

merit in the present appeal. The same is, accordingly, dismissed.

There shall be no order as to costs.

…..…………… ….J

(VIKRAM NATH)

…………………..J

(RAJESH BINDAL)

New Delhi

November 30, 2023.