A.R. Peter v. Sarada Narayanan

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Order II Rule 2 of CPC – Specific Performance – Bar of Suit – Cause of Action – Plaintiff sought specific performance of a sale agreement or refund of advance amount – Earlier suit for injunction filed and withdrawn without leave to file fresh suit – Trial court held suit barred under Order II Rule 2 of CPC, granted refund of advance with interest – Appeal dismissed.

Held: Suit for specific performance barred under Order II Rule 2 as it arose from same cause of action as earlier injunction suit; plaintiff failed to seek all reliefs in first suit or obtain leave for subsequent suit – Execution of sale agreement and advance payment proved, but specific performance discretionary and barred – Refund of advance upheld to prevent unlawful enrichment – Decree and judgment of trial court confirmed – Parties to bear own costs.

Citation: 2025 (4) KLR 201
Court: High Court of Kerala
Judge: A. Badharudeen, J.
Case Number: RFA No. 82 of 2017
Date of Judgment: 7 April 2025
Parties: A.R. Peter v. Sarada Narayanan

Facts

The plaintiff, A.R. Peter, filed a suit (O.S. No. 159/2011) in the Sub Court, Muvattupuzha, seeking specific performance of a sale agreement (Ext.A1) dated 26.08.2010. The agreement allegedly involved the defendant, Sarada Narayanan, agreeing to sell 7 ¼ cents of property at Rs.55,000 per cent. The plaintiff claimed to have paid Rs.50,000 as an advance on the agreement date and an additional Rs.15,000 on 06.10.2010. Despite the plaintiff’s readiness to pay the balance and execute the sale deed, the defendant failed to comply. The plaintiff sought specific performance or, alternatively, a refund of the advance amount.

The defendant contested the suit, denying the execution of Ext.A1 as a sale agreement, claiming it was a security document for a Rs.50,000 loan taken by her husband for construction purposes. She also argued that the suit was barred under Order II Rule 2 of the Code of Civil Procedure (CPC) because the plaintiff had previously filed a suit (O.S. No. 340/2011) for an injunction, which was withdrawn without court permission to file a fresh suit for specific performance.

Procedural History

The trial court dismissed the claim for specific performance, finding the suit barred under Order II Rule 2 of CPC due to the earlier injunction suit. However, it granted the alternative relief of refunding the advance amount (Rs.65,000) with 12% interest from the date of the suit. The plaintiff appealed to the High Court, challenging the trial court’s findings on the applicability of Order II Rule 2 and the denial of specific performance.

Issues

  1. Is the suit for specific performance barred under Order II Rule 2 of CPC?
  2. What are the essentials for applying the bar under Order II Rule 2 of CPC?
  3. Did the trial court err in denying specific performance and granting only the refund of the advance amount?
  4. Does the trial court’s judgment require interference?
  5. What reliefs and costs are appropriate?

Holding

The High Court dismissed the appeal, confirming the trial court’s judgment. The suit was held to be barred under Order II Rule 2 of CPC, and the relief of specific performance was not granted. The refund of the advance amount with interest was upheld.

Reasoning

  1. Bar under Order II Rule 2 of CPC:
    • The court analyzed whether the cause of action for the earlier injunction suit (O.S. No. 340/2011) and the present suit for specific performance was identical. Citing precedents like Virgo Industries v. Venturetech Solutions and Vurimi Pullarao v. Vemari Vyankata Radharani, the court held that both suits arose from the same cause of action—the sale agreement (Ext.A1) and its non-performance. The plaintiff could have sought specific performance in the first suit but failed to do so without obtaining court leave to file a subsequent suit, thus triggering the bar under Order II Rule 2.
    • The plaintiff’s reliance on Inbasegaran v. S. Natarajan was distinguished, as the cause of action in that case was different between the two suits. Here, the court found no distinct cause of action.
  2. Essentials of Order II Rule 2:
    • The court outlined that for Order II Rule 2 to apply: (1) the second suit must involve the same cause of action as the first; (2) the plaintiff must be entitled to multiple reliefs in respect of that cause of action; and (3) the plaintiff omitted to seek one of those reliefs without court leave. The defendant must prove the identity of the cause of action, typically by producing pleadings from the earlier suit.
  3. Execution of Ext.A1 and Plaintiff’s Evidence:
    • The court upheld the trial court’s finding that Ext.A1 was executed, based on the unshaken testimony of the plaintiff (PW1), the scribe (PW2), and the document writer (PW3). The advance payment of Rs.65,000 was also confirmed. However, the total sale consideration was Rs.3,98,750, indicating the plaintiff had paid only a fraction of the amount.
  4. Denial of Specific Performance:
    • Specific performance is a discretionary relief. The bar under Order II Rule 2 precluded granting this relief. Additionally, the court noted that the trial court’s grant of the alternative relief (refund) was based on the principle of preventing unlawful enrichment, though strictly, no relief should be granted in a barred suit. The defendant’s willingness to refund the advance supported upholding this relief.
  5. No Interference with Trial Court’s Judgment:
    • The court found no error in the trial court’s reasoning or conclusions, affirming both the dismissal of specific performance and the refund order. The parties were directed to bear their own costs.

Disposition

The appeal was dismissed, and the trial court’s decree and judgment were confirmed. All pending interlocutory applications were dismissed, with parties bearing their respective costs.

Significance

This case reinforces the strict application of Order II Rule 2 of CPC, emphasizing that plaintiffs must include all reliefs arising from the same cause of action in a single suit or seek court leave to pursue additional reliefs later. It clarifies the importance of proving identical causes of action and the discretionary nature of specific performance in contract disputes.

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