LINK ENGINEERS (P) LIMITED vs BIELOMATIK LEUZE GMBH + CO. KG

$~5
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision: 19th March, 2024
+ CS(COMM) 812/2016
LINK ENGINEERS (P) LIMITED ….. Plaintiff
Through: Mr. Aditya Bakshi, Advocate.

versus
BIELOMATIK LEUZE GMBH + CO. KG ….. Defendant
Through: None.

CORAM:
HON’BLE MS. JUSTICE NEENA BANSAL KRISHNA
J U D G M E N T (oral)
1. Present none on behalf of the defendant No. 2. The defendant No. 2 is proceeded ex parte.
2. Issues in the present Suit were framed vide Order dated 27.07.2019. Issue No. 3 was taken as a preliminary issue which reads as under: –
“(iii) Whether the present suit is barred by Order II Rule 2 of the CPC or on any other principle of law on account of CS(OS) No.2181/2015 re-numbered as CS No.208I30/20I6 earlier filed by the plaintiff against defendant no. 1 having been withdrawn by the plaintiff? OPD.”

3. The plea taken by the defendant is that the present Suit is barred under Order II Rule 2 CPC. The basis for this assertion is that the plaintiff had filed an earlier Suit bearing No. CS(OS) 2181/2015 (renumbered as CS No. 208130/2016) before the Additional District Judge, District Court for the same relief and the same had been withdrawn by the plaintiff vide Order dated 21.05.2017 without any liberty. The plaintiff has now filed the present Suit for Recovery of Rs. 10,24,65,154/- on the same cause of action and thus, the present Suit is barred under Order II Rule 2 of Code of Civil Procedure, 1908 (hereinafter referred to as “CPC, 1908”).
4. Before considering the merits, it is apposite to analyse the of Order II Rule 2 of CPC, 1908 and the cardinal principles envisaged therein.
5. While explaining the object of Order II Rule 2 CPC, the Supreme Court in Alka Gupta Vs Narender Kumar Gupta AIR 2011 SC 860 has observed that the object of Order II Rule 2 of the Code is to primarily ensure that no defendant is sued and vexed twice in regard to the same cause of action and also to prevent a plaintiff from splitting of claims and remedies based on the same cause of action.
6. In the landmark case of Gurbux Singh Vs. Bhura Lal 1964 AIR SC 1810, the Apex court laid down the essential ingredients to be satisfied for the raising the plea of a bar under Order II Rule 2(3), CPC 1908. Firstly, the defendants must establish that the second suit filed is in respect of the same cause of action as that on which the previous suit was based; Secondly, in respect of that cause of action the plaintiff was entitled to more than one relief; and Lastly, the plaintiff has omitted to sue for the relief for which the second suit had been filed, without any leave obtained from the Court. Elaborating the concept of “Cause of action” it was also held that it is the bundle of facts which forms the basis or foundation of any suit.
7. Similarly, observations have been made in the case of Sidramappa Vs. Rajashetty and Ors. 1970 AIR SC 1059 and Deva Ram Vs. Ishwar Chand 1996 AIR (SC) 378, to hold that if the cause of action on the basis of which the previous suit was brought, does not form the foundation of the subsequent suit and in the earlier suit if the plaintiff could not have claimed the relief sought then, the subsequent suit will not be barred by the rule contained in Order II Rule 2, CPC.
8. Further, in the case of Inbasagaran and Anr. V. S. Natarajan (Dead) thought Legal Representatives, (2015) 11 SCC 12, the Apex Court has reiterated that the bar of Order II Rule 2 would be attracted only if the Plaintiff omits to sue for or relinquishes the claim in the suit with the knowledge that he had any such right existing.
9. The effect of Order II Rule 2 of the CPC 1908 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. However, Order 2 Rule 2 would not bar a second suit based on a different and distinct cause of action. The object of Order II Rule 2 is unity of claims/reliefs arising from the same cause of action and not unity of distinct cause of actions. Hence, it emerges that it is incumbent to ascertain primarily the precise cause of action upon which the previous suit was filed, to determine whether the bar under Order 2 Rule 2(3), CPC 1908 would be attracted.
10. Now the factual matrix of two suits may be examined to find if the bar of Order II Rule 2 CPC is attracted in the present suit.
11. The earlier Suit bearing No. CS(OS) 2181/2015, (renumbered as CS No. 208130/2016) had been filed by the plaintiff for the Declaration that the plaintiff was entitled to recover a commission of 8% on the Invoice value of all products for new equipment supplied to the customers w.e.f. 19.05.2009 on the basis of the Commercial Agency Agreement dated 03.07.2003 which was entered into between the parties and was reaffirmed on 21.05.2009.
12. During the pendency of that Suit, the parties arrived at an amicable settlement dated 09.03.2016, the relevant extracts of which reads as under:
“bielomatik will pay an amount of 800,000 Euro (in words: eight hundred thousand Euros only) by March 2016 if this agreement is signed by all participants of this meeting, representing bielomatik Group and Link Engineers today.

Link will withdraw immediately all legal actions against bielomatik Group, which means all bielomatik companies, all bielomatik employees, and former bielomatik employees, shareholders and representatives within one week, after 100% of the payment Is received.

With this agreement and the payment of the above mentioned amount all claims between blelomatik (and Barry Wehmiller Bielomatik GmbH) and Link Engineers are fully compensated, either if they are known or unknown at this point of time.

Link convinced bielomatik in our meeting today that the amount that needs to be claimed at the creditor list of the Insolvency is about 2,800,000 Euro. There is serious documentation that is supporting this amount. LINK Engineers will deliver this documentation before Mid of April 2016 and will modify their claim accordingly.

bielomatik, Mr. Carstensen understood and accepted this amount of 800,000 Euros based on the documents that have been shown to him today, justifying LINK Engineers claim of 2,800,000 Euros. After this amount is filed at the creditors list the management of bielomatik will approve this amount.

With this agreement LINK is declaring that all the future payments by the trustees resulting from the Insolvency filing of LINK will be assigned to bielomatik Leuze GmbH.”

13. This settlement had two parts; one was the immediate payment of 8,00,000/- Euro and the second part was that the amounts that need to be claimed at the creditor list of insolvency is about 28,00,000 Euro and would also be payable. It was also recorded in the agreement that there was serious documentation that is supporting the amount of 28,00,000 Euro and the plaintiff had agreed to deliver this documentation before the mid of April, 2016 and to modify its Claim accordingly.
14. Hence it emerges, that by way of the above Settlement dated 09.06.2016, the parties had agreed to make payment of 8,00,000 Euros and the same was transferred on 24.03.2016. Since the payment was admittedly received by the Plaintiff, the Defendant No. l, vide email dated 04.04.2016, sought withdrawal of the legal action and by way of subsequent E-mails dated 12.04.2016 and 15.04.2016, the Plaintiff informed about the pendency of the application of withdrawal, as part of its claim to the extent of 8,00,000 Euros stood satisfied. Consequently, the Suit was withdrawn in terms of the settlement under Order XXIII Rule 3 of CPC, 1908, vide Order dated 25.01.2017, as the claim to the extent of 8,00,000 Euro stood satisfied.
15. However, in the said Settlement dated 09.03.2016, there was a further agreement for payment of 2,800,000 Euro by both the defendants. Moreover, vide E-mail dated 15.04.2016, it was clearly communicated that rest of the claim for Euros 2,800,000 is being made to be processed by Defendant No. l & 2 and the Defendant No. 1 confirmed the receipt of the claim vide E-mail dated 21.04.2016. Thus, it emerges that the “cause of action” of the present Suit has arisen from a Settlement inter se the parties dated 09.03.2016, which took place during the pendency of first suit. The present Suit is, therefore, based on the subsequent cause of action based on a claim of 28,00,000 Euro. The present Suit is based on the subsequent cause of action arising from the Settlement dated 09.03.2016.
16. It is also pertinent to mention that the earlier Suit bearing No. CS(OS) 2181/2015 was filed on 24.07.2015. Pertinently, the Application No. 14956/2015 under Order II Rule 2 CPC, for seeking liberty to file for recovery of due amount subsequently determined, had been filed in the first Suit, which was allowed vide Order dated 28.07.2015. The plaintiff in the first Suit had, therefore, taken the permission to file the subsequent Suit for Recovery. Even in the application under Order XXIII Rule 3 filed on 08.04.2016, the Plaintiff specifically sought to secure their right to recover the balance amount of 2,800,000 Euros, in case the Defendant fails and neglects to pay the same.
17. The present Suit had been filed on 11.07.2016, during the pendency of the first Suit, which was withdrawn vide Order dated 25.01.2017, which also categorically records the submission by the plaintiff that another suit filed by him against the defendant, is pending adjudication before this Court and the statement was recorded separately in this regard.
18. It is therefore, held that the Plaintiff cannot be disentitled to seek a relief in a subsequent suit which is based on distinct “cause of action” which had arisen during the pendency of the previous suit. The bar of Order II Rule 2 CPC is not attracted in the present case.
19. In the light of the foregoing, it is held the second Suit was based on independent cause of action for which permission to initiate recovery action against the defendants, had already been taken. Thus, the earlier Suit bearing No. CS(OS) 2181/2015, is not a bar to the present Suit.
20. Issue no. 3 is decided in favour of the Plaintiff.

21. List before the Joint Registrar for recording of evidence on 08.05.2024.

(NEENA BANSAL KRISHNA)
JUDGE
MARCH 19, 2024
S.Sharma

CS(COMM) 812/2016 Page 7 of 7