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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

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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

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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.                              

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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 1st, 2nd and  

3rd 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

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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

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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.

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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:

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“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. Bhulli1 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

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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 Gupta3  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

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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. Bhooralal4 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

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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

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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

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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

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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

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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

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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

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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.

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