Uniworld Logistics Pvt. Ltd. vs. Indev Logistics Pvt. Ltd. [July 10, 2024]
Citation: 2024 INSC 515; Supreme Court of India; Bench: Justices Vikram Nath & Prasanna B. Varale
Background and Facts
The dispute arose from a series of agreements between Uniworld Logistics Pvt. Ltd. (appellant) and Indev Logistics Pvt. Ltd. (respondent) regarding the use of a warehouse. The parties initially entered into a Leave and License Agreement on November 25, 2008, which was superseded by another agreement on December 1, 2010. Under the latter, Uniworld became a licensee, paying a monthly fee of ₹30 lakhs with an escalation clause. Uniworld defaulted on payment of storage charges, leading Indev to serve a termination notice on November 27, 2014, demanding arrears, damages, and vacation of the premises. Uniworld denied the dues and objected to the notice.
Indev first filed a suit for permanent injunction and possession, explicitly reserving its right to claim outstanding dues separately. After obtaining leave under Order II Rule 2(3) of the Civil Procedure Code (CPC), Indev filed a second suit for recovery of arrears and damages totaling over ₹8.4 crores. Uniworld challenged the maintainability of the second suit under Order II Rule 2, arguing it was barred as the claims should have been included in the first suit.
Procedural History
The trial court and the Madras High Court both rejected Uniworld’s application under Order VII Rule 11 CPC for rejection of the plaint in the second suit, finding the causes of action to be distinct.
Uniworld appealed to the Supreme Court, contesting the maintainability of the second suit and the application of Order II Rule 2 CPC.
Supreme Court’s Analysis and Findings
The Supreme Court reaffirmed that Order II Rule 2(3) CPC is intended to prevent multiplicity of suits for the same cause of action, not to bar suits based on different causes of action.
The Court found that Indev’s first suit was for possession and injunction, while the second suit was for recovery of arrears and damages—two distinct causes of action.
Indev had explicitly reserved its right to claim arrears and damages in the first suit and had obtained the trial court’s leave to file a subsequent suit for these claims, as required under Order II Rule 2(3) CPC.
The Court cited Bharat Petroleum Corporation Ltd. v. ATM Constructions Pvt. Ltd. to support the view that a suit for possession and a suit for damages for use and occupation are based on different causes of action.
The Supreme Court found no merit in Uniworld’s appeal, holding that there was neither any relinquishment nor omission of relief by Indev in the first suit, and the second suit was clearly maintainable.
Conclusion and Significance
The Supreme Court dismissed Uniworld’s appeal, upholding the maintainability of Indev’s second suit for arrears and damages.
The judgment clarifies the scope of Order II Rule 2(3) CPC: it allows separate suits for distinct causes of action if rights are reserved and leave is obtained, thus preventing unnecessary multiplicity of litigation but not barring legitimate subsequent claims.
The decision reinforces the importance of reserving rights in initial pleadings and obtaining judicial leave for subsequent suits, setting a precedent for future commercial disputes involving sequential claims.
In summary: The Supreme Court upheld the maintainability of Indev’s separate suit for arrears and damages, clarifying that Order II Rule 2(3) CPC does not bar suits based on different causes of action when rights are expressly reserved and leave is granted.
RELATED Blog
0 comments