Case Title: Life Insurance Corporation v. Sanjeev Builders Private Limited
The Supreme Court observed that the bar of Order 2 Rule 2 of the CPC cannot apply to an amendment which is sought on an existing suit but applies only to the subsequent suits.
The bench comprising Justices Aniruddha Bose and JB Pardiwala also observed that the principle of constructive res judicata has no application when there was no formal adjudication between the parties after a full hearing.
The appeal stems from a 1986 lawsuit brought by plaintiffs seeking particular execution of a contract based on a contract signed on June 8, 1979. The plaintiffs were able to alter the plaint when the Bombay High Court granted their plea. In the initial complaint, damages in the number of Rs. 1,01,00,000/- [Rs. One Crore and One Lakh only] were requested as an alternative. By way of modification, damages in the number of Rs. 4,00,01,00,000/- [Rs. Four Hundred Crore & One Lakh only] are requested.
One of the arguments made in the appeal submitted by LIC (defendant) was that Order 2 Rule 2 of the Civil Procedure Code, 1908's requirements applied to the modification. Additionally, it was argued that the modification fell within the umbrella of constructive res judicata. In this regard, the plaintiffs argued that an application for the revision of a plaint cannot be covered by Order 2 Rule 2 of the CPC. The questions presented in relation to the aforementioned contentions were (a) Can an amendment application be submitted subject to Order 2 Rule 2 CPC? (b) Is the notion of constructive res judicata applicable to the plaint amendment that was made to increase the number of damages?
The court pointed out that Order 2 Rule 2, which addresses the wilful surrender of a component of a claim, states that a plaintiff may not thereafter pursue that element of his claim for which he purposefully withdrew his lawsuit or ceded it. In context of the law laid down in Gurbux Singh v. Bhooralal, the court made the following observation:
"The ratio of the said judgment is that the relief being barred by limitation, the Order 2 Rule 2 of the CPC only came in as an adjunct. However, Gurbux Singh (supra) makes it clear that the bar of Order 2 Rule 2 of the CPC applies only to the subsequent suits.. In the light of the principles discussed and the law laid down by the Constitution Bench as also the other decisions discussed above, we are of the view that if the two suits and the relief claimed therein are based on the same cause of action then the subsequent suit will become barred under Order 2 Rule 2 of the CPC. However, we do not find any merit in the contention raised on behalf of the appellant herein that the amendment application is liable to be rejected by applying the bar under Order 2 Rule 2 of the CPC. Order 2 Rule 2 of the CPC cannot apply to an amendment which is sought on an existing suit."
The court also agreed with the Delhi High Court's stance that the bar under Order 2 Rule 2 of the CPC only applies to later litigation as laid down in the case of Vaish Cooperative Adarsh Bank Ltd. v. Geetanjali Despande & Ors. The court rejected the argument that the principle of constructive res judicata applied to the amendment application. A further study will address additional concerns brought up by this case.