Citation Codes

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Case Number

Civil Misc. Appeal No. 290 of 1925

Judges

Ramesam
Jackson, JJ.

Acts

Order 2, Rule 2
Order 2, Rule

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Smart Summary

Structured Summary of the Legal Opinion

Factual and Procedural Background

This civil revision petition arises from litigation connected with a chit (kuri) fund transaction. The plaintiff is the stakeholder of the kuri. Defendant 1, a subscriber, became the successful bidder in April 1925 and executed a bond dated 13 May 1925 to secure payment of future instalments; defendant 2 was added as a surety to that bond. The bond required instalments of Rs. 20 on the 23rd of each month and contained a default clause providing for accelerated liability (including interest and payment of past and future instalments in the event of default).

Default occurred for four instalments (June to September 1925). The plaintiff filed S.C.S. 567 of 1925 and obtained a decree for those instalments; it is assumed (though the plaint is not before the court) that the plaintiff sued for those four instalments only while expressly reserving rights for the remainder. Subsequent defaults from October 1925 to February 1926 led to the present suit, S.C.S. 184 of 1926.

The District Munsif of Udipi held that the second suit (S.C.S. 184 of 1926) was barred by Order 2, Rule 2 and dismissed the suit. The plaintiff filed this revision petition challenging that dismissal.

Legal Issues Presented

Whether the second suit (S.C.S. 184 of 1926) is barred by Order 2, Rule 2 of the Code of Civil Procedure because the earlier suit (S.C.S. 567 of 1925) arose from the same cause of action.
Whether the plaintiff had an option, under the terms of the bond or under Limitation Act jurisprudence, to sue piecemeal for some instalments and reserve the remainder for a later suit (i.e., whether the cause of action was divisible or whether the plaintiff could create an "unnecessary multiplicity of suits").
How authorities on limitation and authorities on Order 2, Rule 2 interact or differ, and whether decisions on limitation necessarily control the question of whether multiplicity of suits is barred under Order 2, Rule 2.

Arguments of the Parties

Petitioner's (Appellant's) Arguments

Mr. Seetharama Rao, counsel for the petitioner, relied on a large number of rulings and attempted to distinguish adverse authorities, including Privy Council decisions (Maung Sin v. Ma Tok was omitted as relating to execution).
He sought to differentiate cases decided on limitation principles from cases decided under Order 2, Rule 2, and argued that the first suit before the District Munsif was not necessarily based on the default clause (at least as to Defendant 1), implying that the plaintiff retained the right to sue subsequently for remaining instalments.
Specifically, he attempted to distinguish Privy Council authorities (Kishen Narain v. Pala Mal and Muhammad Hafiz v. Muhammad Zakariya) as not being applicable to the present facts.

The opinion does not present a detailed statement of any respondent or defendant arguments.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Maung Sin v. Ma Tok, A.I.R. 1927 P.C. 146	Relates to execution (not directly to Order 2, Rule 2 or limitation in the present context).	The decision was omitted from detailed consideration because it relates to execution; no substantive reliance on it by the court in this opinion.
Muthiah Chettiar v. Venkat Subbarayulu Naidu, A.I.R. 1926 Mad. 160	Decision on the question of limitation (distinguishing some decisions on Order 2, Rule 2).	Noted as a decision on limitation and treated as distinguishable from decisions strictly on Order 2, Rule 2; used to illustrate that limitation jurisprudence and Order 2, Rule 2 cases may be different in reasoning though related.
Shib Dayal v. Meherban, A.I.R. 1923 All. 1	Conflicting authority on whether certain bond language gives option to the plaintiff.	Mentioned as conflicting with the view that words like "when required" create a strict option; the court notes the conflict but does not overturn this authority here.
Kaliappa Nadar v. Sami Iyer, [1921] M.W.N. 381	Example of cases where bond phrases ("when required", etc.) were held to give an option to the plaintiff to sue.	Listed as part of a group of decisions where the court accepted that specific language creates an option; the present court accepts those decisions generally but distinguishes them from the facts of the present bond.
Lachakkammal v. Sokkayya Naick, [1918] M.W.N. 586	Another example where specific phrasing was held to give plaintiff an option.	Included among cases where an option was found; the court has "nothing to say against these decisions" but treats them as different from the present bond wording.
Ramadh Bibi Ammal v. M. Kandaswami Pillai, [1919] 9 M.L.W. 479	Example of decision finding option in bond language.	Listed as part of the category of decisions supporting an option theory; not applied to allow piecemeal suits in this case.
Mohideen Kariya v. P. Nayakam Pillai, A.I.R. 1925 Mad. 233	Case cited as an example where an option was found under particular bond wording.	Used illustratively; court distinguishes such fact patterns from the present contract.
Velliappa Chettiar v. Venkata Subbarayalu Naidu, A.I.R. 1926 Mad. 160	Another decision on limitation cited among option-type cases.	Grouped with other Madras decisions on limitation/option; noted but not applied to permit piecemeal suits here.
Narana v. Ammani Amma, [1916] 39 Mad. 981	Decision (without "when required" phrasing) holding mortgagee had option to take advantage of default clause.	Placed in a group of cases holding an option even without explicit phrasing; the court observed these are in conflict with Allahabad and Calcutta decisions and expressed inclination to agree with the latter (i.e., to dissent from some of these Madras decisions).
P.P.B. Kunjunna Nair v. Kunjunna Nair, [1911] 1 M.W.N. 79	Case of chit fund where an option was found though explicit "when required" phrasing was absent.	Noted as part of the group suggesting an option without express words; the judge mentions it but indicates disagreement with that line insofar as he prefers the reasoning of Allahabad and Calcutta decisions.
Gaya Din v. Jhuman Lal, [1915] 37 All. 400	Allahabad decision holding that the plaintiff did not have an option to split cause of action (conflicting with some Madras decisions).	The judge indicates agreement with the Allahabad decision and dissents from the contrary decisions of this Court (Madras) on that point.
Sitap Chand v. Hyder Mulla, [1897] 24 Cal. 281	Calcutta decision aligned with Allahabad, holding against the option theory.	The judge indicates he is inclined to agree with the Calcutta decision and to dissent from some Madras decisions on the question of option and limitation.
Kishen Narain v. Pala Mal, A.I.R. 1922 P.C. 412	Privy Council decision applying Order 2, Rule 2 and treating the first suit as requiring recovery of the whole claim (bar to second suit).	The petitioner attempted to distinguish it; the Privy Council's reasoning was described and the decision treated as an authority that the second suit was barred when the first suit was based on the operative clause requiring whole recovery.
Muhammad Hafiz v. Muhammad Zakariya, A.I.R. 1922 P.C. 23	Privy Council decision where two clauses existed (one giving option about suing on default of interest; the other fixing three years for principal) and the second suit was held barred by Order 2, Rule 2.	The court described the facts and the Privy Council holding; petitioner tried to distinguish it, but the opinion treats it as a relevant authority for the proposition that a second suit can be barred when the first suit already encompassed the operative claim.
Yashvant v. Vithal, [1897] 21 Bom. 267	Decision based on Section 43 (recovery of interest by taking possession) with a peculiar document; addressed whether a suit for interest by sale could be held to bar suit for principal and interest.	The court treated the document as special and peculiar and noted difficulty in following it generally; said it cannot be used as a general authority for other cases.
Badi Bibi v. Sami, [1895] 18 Mad. 257	Older Madras decision whose reasoning the judge could not agree with.	The judge explicitly states inability to agree with the reasoning in that decision; it is not followed.

Court's Reasoning and Analysis

The court structured its analysis around two interrelated lines of authority: (1) cases decided on limitation principles and (2) cases decided under Order 2, Rule 2 (multiplicity of suits). The judge observed that not all limitation decisions are necessarily decisions on Order 2, Rule 2, but that similar reasoning sometimes underlies both questions because both concern whether the plaintiff had an option to sue immediately for the whole claim or to sue piecemeal.

The court examined groups of decisions. One group involved bonds containing express phrases such as "when required" or "when you require," which courts had treated as creating a strict option for the plaintiff not to sue for the entire claim until an overt act established the plaintiff's election to accelerate. The judge accepted that line of decisions as correct for their facts but distinguished them from the present case.

Another group of cases (including some Madras decisions and a chit-fund case) found an option even where such express phrasing was absent; these decisions conflicted with Allahabad and Calcutta decisions. The judge expressed inclination to agree with the Allahabad and Calcutta authorities and to dissent from the contrary Madras authorities, but declined to resolve the broader limitation jurisprudence fully in this opinion.

The court then concentrated on decisions directly addressing Order 2, Rule 2. It discussed Privy Council authorities (Muhammad Hafiz and Kishen Narain) in which the Privy Council held second suits barred where the operative clause or the facts showed the first suit was necessarily for the whole claim. The petitioner attempted to distinguish those Privy Council cases, but the court found them instructive.

Turning to the facts of the present bond, the court observed that the bond imposed joint and several liability upon two defaults ("we and our descendants jointly and severally pay to you...") and did not contain language indicating that the plaintiff had liberty or a mere option to recover piecemeal. The earlier suit was brought against the surety as well and was plainly based on the chit bond dated 13 May 1925. Given those facts, the court concluded the plaintiff had a complete cause of action for all instalments when the first suit was brought and that it was not open to the plaintiff to sue for four instalments only and reserve the rest for a later suit.

The court therefore held that the second suit was barred by Order 2, Rule 2, applying the principle that a plaintiff cannot split a single cause of action into multiple suits to create unnecessary multiplicity, particularly where the instrument and prior proceedings demonstrate that the whole claim was capable of being and was the subject of the first suit.

Justice Jackson concurred, emphasizing that the question under Order 2, Rule 2 is whether the plaintiff has an option to cause an unnecessary multiplicity of suits; he held that the plaintiff has no such option and cannot bring suits piecemeal on the same cause of action. Jackson, J. noted that issues under the Limitation Act raise separate and difficult questions but that those need not be discussed here.

Holding and Implications

Holding: The revision petition is dismissed; the suit is barred by Order 2, Rule 2.

Implications:

The court affirmed that, on the facts of this case and given the wording of the bond and the prior suit (which included the surety and relied on the chit bond), the plaintiff could not split the cause of action and sue piecemeal; the second suit was barred by Order 2, Rule 2.
The revision petition was dismissed with costs, meaning the District Munsif's dismissal of the second suit on the basis of Order 2, Rule 2 stands.
The opinion refrains from resolving the broader, difficult questions arising under the Limitation Act and does not purport to lay down a new general rule beyond applying Order 2, Rule 2 to the facts presented.

This summary is confined strictly to matters and statements contained in the provided opinion; no additional facts or legal conclusions have been inferred.

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Mahadum Beg Sahib v. M.J. Muhammad Meera Sahib

1. This civil revision petition arises out of a suit in connexion with a chit fund. Plaintiff 1 is the stakeholder of the kuri. Defendant 1 who is one of the subscribers became the successful bidder-in April 1925. He then executed bond dated 13th May 1925 to secure the payment of the future instalments. Under this bond defendant 2 was added as a surety. The bond stipulates that the instalments will be payable at the rate of Rs. 20 on 23rd of each month and if any instalment is not paid on the due date the subscriber (defendant 1) will pay the amount in arrears with interest at Rs. 33-5-4 per cent. along with the next instalment amount and if default is made then also, we and our descendants jointly and severally pay to you or your descendants in one lump sum all the previous instalments that had fallen due and the future instalments with interest at the rate from the date of default for the payment of the first instalment regardless of the fact that the future instalments are yet to fall due and the right to profits.

2. Default was committed in respect of four instalments due from June to September, and the plaintiff filed S. C.S. 567 of 1925 and obtained a decree for those instalments. We will assume (though the plaint has not been filed) that in that plaint it was stated that the plaintiff was content to sue for four instalments only and expressly reserved his right to sue for the remaining instalments. Again the defendant committed default in respect of instalments from October 1925 to February 1926, and the present suit was filed (S. C.S. 184 of 1926).

3. The District Munsif of Udipi held that the suit is barred by Order 2, Rule 2, and dismissed the suit. The plaintiff files the revision petition.

4. Mr. Seetharama Rao, the learned vakil for the petitioner, in arguing the case has called our attention to a large number of rulings. Omitting the decision Maung Sin v. Ma Tok A.I.R. 1927 P.C. 146, which relates to execution, I may roughly divide them into two classes, those bearing on the question of limitation and those in which the question is raised whether the suit is barred by Order 2, Rule 2. In one of the decisions on the question of limitation, namely Muthiah Chettiar v. Venkat Subbarayulu Naidu A.I.R. 1926 Mad. 160 two of the decisions bearing on Order 2, Rule 2, were cited and they were distinguished on the ground that they are decisions under Order 2, Rule 2, and are not authorities on the point of limitation. Adopting the same method one may say that all decisions on the question of limitation are not decisions on the question whether the suit is barred by Order 2, Rule 2, but it seems to me that if one goes into the reasoning on which the various decisions on the question of limitation are based there is something common to both. The question is whether the plaintiff has an option to say that he is not bound to sue for the whole of the claim immediately on the operation of the default clause and thus avoid limitation, as well as Order 2, Rule 2. On the other hand Courts seem to be of opinion that different considerations arise in the case where two suits are filed and Order 2, Rule 2, was relied on as a defence, as opposed to the case where only one suit was filed and limitation was relied on.

5. Therefore, it is unnecessary at present to discuss fully all the decisions on the question of limitation, but I will make only a few observations. So far as all those cases in which the bond contains words like " when required "or " when you require " or "if you choose " or thy mortgagee will be at liberty to sue," it is easy to hold that there is strictly an option given to the plaintiff, though this view conflicts with the decision in Shib Dayal v. Meherban A.I.R. 1923 All. 1, and in such a case until there is an overt act on the part of the plaintiff showing his volition that he intended to take advantage of the default clause and wants the default clause to operate, the right does not arise to sue for the whole amount immediately. Such cases are for example. Kaliappa Nadar v. Sami Iyer [1921] M.W.N. 381; Lachakkammal v. Sokkayya Naick [1918] M.W.N. 586; Ramadh Bibi Ammal v. M. Kandaswami Pillai [1919] 9 M.L.W. 479; Mohideen Kariya v. P. Nayakam Pillai A.I.R. 1925 Mad. 233 and Velliappa Chettiar v. Venkata Subbarayalu Naidu A.I.R. 1926 Mad. 160. I have nothing to say against these decisions but there is another group of cases where without the use of such phrases, it was said the mortgagee has got an option to take advantage of the default clause. They are for example Narana v. Ammani Amma [1916] 39 Mad. 981 and P.P.B. Kunjunna Nair v. Kunjunna Nair [1911] 1 M.W.N. 79, (a case of chit fund). The seare in conflict with the decisions in Gaya Din v. Jhuman Lal [1915] 37 All. 400 and Sitap Chand v. Hyder Mulla [1897] 24 Cal. 281. I am inclined to agree with the Allahabad and Calcutta decisions and dissent from the decisions of this Court but, as I have said already, these are all decisions on the question of limitation and I do not want to pursue this point any further,

6. Coming to the question whether the suit is barred by Order 2, Rule 2, it is enough to consider the decision bearing only on this. Two decisions of the Privy Council Kishen Narain v. Pala Mal A.I.R. 1922 P.C. 412 and Muhammad Hafiz v. Muhammad Zakariya A.I.R. 1922 P.C. 23, have been mentioned by Mr. Seetharama Rao and he attempted to distinguish them. In Muhammad Hafiz v. Muhammad Zakaria A.I.R. 1922 P.C. 23, there were two clauses. Clause 2 mentions the period for the payment of principal as three years. There is no other time fixed in the bond so that unless this clause is regarded as a clause fixing the date of the cause of action for suing for principal there will be none. The earlier clause relates to payment of interest, and default of such payment gives an option to the mortgagee to sue either for the unpaid interest or for the principal and interest. It seems to me 'that if Clause 1 only is considered it is a case giving option strictly co-called to the mortgagee, but at the time when the first suit was filed the three years referred to in Clause 2 had elapsed so that both had begun to operate. Their Lordships of the Privy Council held that the second suit was barred by Order 2, Rule 2. Mr. Seetharama Rao distinguishes this case on the ground that Clause 2 makes it compulsory on the plaintiff to sue for the whole amount of the claim, principal and interest, at the time when he filed the first suit. This is true. He contends that this case ought not to be pressed against him. He contends that in the case before us the first suit is not necessarily based on the default clause, at least as far as defendant 1 is concerned. Similar remarks apply to the judgment in Kishen Narain v. Pala Mal A.I.R. 1922 P.C. 412. In that case the first stipulation was construed as one for the payment of the interest personally and not out of the mortgage property. Clause 2 relates to both payment of principal and interest put of the mortgage property. The first suit was a suit for sale and, therefore, it was a suit based on the second clause and, therefore, their Lordships hold that the suit must have been for the whole of the principal and interest and the second suit was, therefore, barred.

7. A third decision based on Section 43 is Yashvant v. Vithal [1897] 21 Bom. 267. In that case there is a distinct provision for the recovery of interest by taking possession of the mortgage property. But apart from this, the document is strictly a simple mortgage giving security without possession, for both the principal and interest. The time for payment of principal was five years and the first suit was brought after lapse of the five years. It was a suit for interest to be recovered by sale of mortgaged property. If the first suit was a suit for possession of the mortgaged property for the purpose of realizing interest only, the decision presents no difficulties, but it is a suit to recover the amount of interest by sale and one feels a difficulty why the suit should not be brought for principal and interest since the security was for both. I feel some difficulty in following that decision if similar facts arose but at present it is enough to say that the document is a special and a peculiar one and it cannot be used for any other case. I am also unable to agree with the reasoning in Badi Bibi v. Sami [1895] 18 Mad. 257.

8. In the present case the former suit was against the surety also, so that it was clearly based on the chit bond with security executed on 13th May 1925 and not on the terms of the original kuri transaction. It is rather a far-fetched suggestion to say that the cause of action was different for each defendant. Apart from this on the terms of this bond, when there are two defaults in the payment of instalments the liability of both at once follows. It does not say " you are at liberty to recover," but " we and our descendants jointly and severally pay to you...." It is difficult to say how such a stipulation can give an option to the plaintiff to cut up the cause of action which has accrued to him to sue for the whole in two parts-and say:

I am content to sue for one part. I am not, compellable to sue for the other. I might sue if I like, but I will wait and bring a second suit.

9. He has got a complete cause of action for the recovery of all instalments and it is not open to him to say that he would sue for four of the instalments and reserve the suit in respect of the others for a later suit. I think that the suit is barred by Order 2, Rule 2 and dismiss this revision petition with costs.

Jackson, J.

10. I agree. In my opinion the question which arises under Order 2, Rule 2, and which does not arise under the Limitation Act, is whether the plaintiff has an option to decide that there shall be an unnecesary multiplicity of suits. In my opinion he has no such option and cannot bring suits piecemeal on the same cause of action. I agree that, under the Limitation Act, the case-law has raised a. very difficult point whether the plaintiff has really an option to decide when the cause of action has or has not accrued; but that question need not be discussed.

Mahadum Beg Sahib v. M.J. Muhammad Meera Sahib

Structured Summary of the Legal Opinion

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Petitioner's (Appellant's) Arguments

Table of Precedents Cited

Court's Reasoning and Analysis

Holding and Implications

Mahadum Beg Sahib v. M.J. Muhammad Meera Sahib

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