ORDER
1. On 21st April, 1990, the Plaintiffs filed this suit against the Defendants for declaration that the bank guarantee given by the 2nd Defendants at the instance of the Plaintiffs in favour of the 1st Defendants is null, void and of no legal effect in law and to restrain the 1st Defendants from invoking and/or receiving moneys under the said bank guarantee.
2. In or about March, 1988, the Director General of Naval Project (B) (hereinafter referred to as “DGNP (B)”) invited tenders for provisions of workshop building for electroplating and battery repair facility at Naval Dockyard, Bombay. The 1st Defendants were interested in submitting a tender. An agreement dated 3rd August, 1988 was arrived at between the Plaintiffs and the 1st Defendants. By the said agreement, the 1st Defendants agreed to give to the Plaintiffs sub-contract for the work of electroplating equipment if the DGNP(B) awarded the main contract to the 1st Defendants. The Plaintiffs also agreed to furnish and did furnish bank guarantee for the sum of Rs. 10 lakhs in favour of the 1st Defendants in anticipation of entering into the sub-contract with the 1st Defendants. The DGNP(B) did award the contract to the 1st Defendants. The 1st Defendants, however, failed and neglected to enter into a sub-contract with the Plaintiffs setting out the terms and conditions, including the detaiis of payment and work to be carried out. In the circumstances, according to the Plaintiffs, since there was complete failure of consideration in respect of the said
bank guarantee furnished by the plaintiffs, no liability or obligation arose on the part of the plaintiffs and/or the 2nd defendants thereunder and that no right or benefit accrued in favour of the 1st defendants by virtue of the said bank guarantee. The plaintiffs have therefore filed the present suit for declaration that the said bank guarantees is null, void and of no effect in law.
3. Since, according to the plaintiffs, the 1st defendants have committed breach of the contract and the plaintiffs have suffered damages by reason of the breach of the contract committed by the 1st defendants, in para 25A of the plaint filed in the suit, the plaintiffs have stated as under :
“25A. The plaintiff says that the plaintiff is entitled to claim damages from the 1st defendant. The plaintiff however says that the same have yet to be quantified. The present suit is being filed in a hurry. The plaintiff therefore craves leave of this Hon’ble Court under O. II, R. 2 of the Code of Civil Procedure 1908 to file a separate suit claiming damages from the 1st defendant.”
4. However, at the time of instituting the suit the plaintiffs did not obtain leave of this Court under O. II, R. 2 of the Code of Civil Procedure, 1908 to file separate suit claiming damages from the 1st defendants. Since the plaintiffs now intend to file a separate suit against the 1st defendants to recover damages for breach of the said contract alleged to have been committed by the 1st defendants after obtaining leave under O. II, R. 2 of the Code, the plaintiffs are applying for such leave at this stage.
5. The 1st defendants have objected to grant of such leave to the plaintiff’s at this stage. According to the 1st defendants, the plaintiffs ought to have obtained the leave of this Court to omit to sue the 1st defendants for relief of claiming damages from the 1st defendants under the provisions of O. II, R. 2 of the Code at the time of filing of this suit and the plaintiffs having then not obtained such leave, the plaintiffs are not entitled to obtain the same at this stage and as such, the petition now filed by the plaintiffs for leave under O. II, R. 2 of the Code is misconceived and not maintainable in law. It is also the case of the 1st defendants that the plaintiffs having not obtained the leave to omit to sue the 1st defendants for recovery of damages at the time of filing of this suit, the 1st defendants had altered their position to their detriment and the plaintiffs are now estopped from filing any other suit against the 1st defendants to recover any damages.
6. Mr. Parikh, the learned counsel appearing for the plaintiffs, has submitted that in view of the statements of the plaintiffs as contained in the aforesaid para 25A of the plaint, the question of the plaintiffs being estopped from obtaining leave to omit to sue the 1st defendants to recover damages does not arise. He has further submitted that it was not necessary for the plaintiffs to obtain leave under O. II R. 2 of the Code to omit to sue the 1st defendants to recover damages at the time of institution of this suit as the plaintiffs are entitled to obtain such leave at any time during the pendency of the suit. Mr. Parikh has further submitted that in re-enacting this provision of O. II, R. 2(3) in the Code of 1908, the Legislature has omitted certain words which were found in the corresponding provision in the Codes of 1882 and 1877. In the last clause of S. 43 of the older Codes, there occurred in parenthesis the words “except with the leave of the Court obtained before first hearing “between the words “omits” and “to sue”. In the submission of Mr. Parikh, by this omission, it was intended to leave the question of time for making the application at large. In support of this submission, Mr. Parikh has put reliance upon the case of Edara Venkayya v. Edara Venkata Rao reported in AIR 1938 Mad 979, wherein Varadachariar, J. has held that where leave is not a condition precedent to the jurisdiction of the Court to entertain a particular action, there is no inherent necessity that the application for leave should be made before the institution of the suit itself or at least along with the plaint. In that case, the Madras High Court has further held as under (at pages 981 & 982) :
“Where the objection under O. 2, R. 2,
Civil P.C., arises, the omissions to ask for a particular relief is not a defect that goes to the maintainability of the very suit in which leave should have been asked for; it only entails a disability as regards subsequent proceedings. It therefore seems to me that there is even less reason in this class of cases for insisting that the application for leave to omit must precede or at least be contemporaneous with the plaint in the first suit. It may be that as a matter of prudence the plaintiff will do well to make the application for leave even before he files his plaint or at least along with his plaint, because he will otherwise be running the risk of the application being refused when it will be too late to set matters right. But that is different from saying that the Court has no power to grant leave unless the application is made before the institution of the suit or along with the presentation of the plaint.”
In the submission of Mr. Parikh, till the suit already filed is decreed, right to apply for leave under O. II, R. 2 of the Code in such suit survives and hence this Court should grant the leave applied for by the plaintiffs.
7. Mr. Thakkar, the learned counsel appearing for the 1st defendants, has submitted that granting of leave under O. II, R. 2 of the Code is discretionary and leave is not required to be granted mechanically. He has further submitted that where a person is entitled to more than one relief in respect of the same cause of action, leave has to be obtained at the time of omitting to sue for all such reliefs i.e, at the time of filing of the first suit. In his submission, a defendant should not be vexed twice for one and the same cause of action. This Rule is aimed against multiplicity of suits in respect of the same cause of action i.e. to prevent further litigation. While putting reliance upon the case of K. R. Deshpande v. R. S. Deshpande . Mr. Thakkar has submitted that if one closely looks at the language of O. II, R. 2(3), it is clear that the point of time under O. II, R. 2(3) is the point of time of the institution of the first suit.
8. Reading R. 1 with R. 2 of O. II of the Code, the intention of the legislature appears to be that as far as possible all matters in dispute between the parties relating to the same transaction should be disposed of in the same suit. These Rules are aimed against a multiplicity of suits in respect of the same cause of action. The object is to prevent further litigation. R. 2 provides that every suit shall include the whole of the claim which the plaintiff is entitled to make in respect of the same cause of action. He is not entitled to split his cause of action into parts and bring separate suits in respect of each part. If he omits to sue in respect of, or intentionally relinquishes, any portion of the claim arising from the same cause of action, he will be precluded from suing the portion so omitted or relinquished, even though he states in his plaint that he intends to bring a second suit for the portion omitted. It is clear from the language of O. II, R. 2(2) of the Code that the point of time under O. II, R. 2(2) is the point of time of the institution of the suit since some meaning has to be given to the expression “afterwards” occurring in O. II, R. 2(2), and expression “afterwards” as held by Dixit, J. in the case of K. R. Deshpande (supra) can be construed only with reference to what proceeds it viz., “omits to sue”. The language used in O. II, R. 2(2) has also been used in O. II, R. 2(3) of the Code so far as the point of time is concerned. As per O. II, R. 2(3) of the Code, 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 any such reliefs, he shall not afterwards sue for any relief so omitted. Some meaning has to be given to the expression “afterwards” also occurring in O. II, R. 2(3) of the Code and the expression “afterwards” in this sub-rule also can be construed only with reference to what proceeds it viz., “sue for any relief so omitted”. When, therefore, the expressions “Sue for any relief so omitted” and “afterwards” are considered together, in my view, it must follow that the point of time is not the date of passing of the decree as submitted by Mr. Parikh but the date of the institution of the suit as submitted by Mr. Thakkar. If that is so, then it is clear that the plaintiffs did not obtain the leave of this Court to omit to sue
the 1st Defendants for relief of claiming damages at the time of institution of the suit and as such, the Plaintiffs are not now entitled for any relief against the 1st Defendants so omitted to sue in the suit. The older Codes obviously contemplated that the application for leave might be made after the institution of the suit, though it fixed the time limit by prescribing that leave should be obtained before the first hearing. However, in re-enacting this provision in the Code of 1908, the legislature has omitted the words “obtained before the first hearing” between the words “except with the leave of the Court” and “to sue for any such reliefs”. The effect of this omission is that though such leave could earlier be obtained before the first hearing of the suit, it is now to be obtained at the time of institution of the suit and not afterwards. Accordingly, I am not in agreement with the view expressed by Varedachariar, J. in the case of Edara Venkayya v. Edara V. Rao (supra).
9. Even otherwise also the suit was instituted on 21st April, 1990. The Plaintiffs could have claimed the relief for damages in the suit which the Plaintiffs omitted to sue. There is a gross delay on the part of the Plaintiffs in making the present application for leave under Order II, Rule 2 of the Code.
10. In the facts and circumstances of the case, I am not inclined to exercise the discretion in favour of the Plaintiffs by granting the application for leave now presented by the Plaintiffs.
11. In the result, the leave is refused. However, in the circumstances of the case, there shall be no order as to costs.
12. Order accordingly.