The main legal point established in the judgment is that a suit for specific performance may be barred under Order II Rule 2(3) of the Code of Civil Procedure if the plaintiff had earlier filed a suit for a different relief arising from the same cause of action.

Headnote:
specific performance - agreement for sale - The court found that the present suit for specific performance was barred under Order II Rule 2(3) of the Code of Civil Procedure as the plaintiff had earlier filed a suit for prohibitory injunction against alienating the property to strangers, arising from the same cause of action. The court also considered the readiness and willingness of the plaintiff and held that there was no sufficient funds available with the plaintiff during the stipulated period of the agreement. The defendant was granted a decree for the realization of the advance sale consideration with interest.
Fact of the Case:

The plaintiff entered into an agreement for sale with the defendant, who later rescinded the agreement. The plaintiff filed a suit for specific performance, while earlier filing a suit for prohibitory injunction against alienating the property to strangers.
Finding of the Court:

The court found that the present suit for specific performance was barred under Order II Rule 2(3) of the Code of Civil Procedure. It also considered the readiness and willingness of the plaintiff and found that there was no sufficient funds available with the plaintiff during the stipulated period of the agreement.
Issues: The issues included the bar under Order II Rule 2(3) of the Code of Civil Procedure, the defendant's responsibility for breach of the contract, and the readiness and willingness of the plaintiff.
Ratio Decidendi: The court held that the present suit for specific performance was barred under Order II Rule 2(3) of the Code of Civil Procedure as the plaintiff had earlier filed a suit for prohibitory injunction against alienating the property to strangers, arising from the same cause of action. It also considered the plaintiff's readiness and willingness and found that there was no sufficient funds available during the stipulated period of the agreement.
Final Decision: The appeal was allowed, and the decree and judgment of the trial court were set aside. The plaintiff was granted a decree for the realization of the advance sale consideration with interest from the defendant.

J U D G M E N T

The decree for specific performance is under challenge by the defendants.

2. On 02.01.2007, Ext.A1 agreement for sale was entered into between the plaintiff and the first defendant. The 2nd defendant is the wife of the 1st defendant and his power of attorney holder. As per Ext.A1 the defendant had agreed to sell the plaint schedule property having an extent of 69 cents to the plaintiff for a sale consideration of ₹ 49,500/- per cent. On the date of agreement an amount of ₹ 5 lakhs was paid towards advance sale consideration. The period fixed for performance was six months. On 09.02.2007, the defendant issued Ext.A3 notice rescinding Ext.A1 agreement. Coming to know that the defendant is proposing to alienate the property to strangers, the plaintiff filed OS 196/2007 for prohibitory injunction against the defendant from alienating the property. Pending the said suit, the present suit was filed seeking specific performance of Ext.A1 agreement.

3. The defendant contended that the suit is barred under Order II Rule 2(3) of the Code of Civil Procedure(“CPC” for short). It was also contended that Ext.A1 agreement was rescinded by the defendant since in violation of the terms of the agreement the plaintiff had attempted to trespass into the property and caused damages therein. It was also contended that the plaintiff was not ready and willing to go ahead with the transaction and that he was not having sufficient funds.

4. The trial court negatived the defendant's contentions and granted a decree for specific performance.

5. I have heard Sri.S.V.Balakrishna Iyer, the learned senior counsel for the appellants-defendants and Sri.T.Krishnanunni, the learned senior counsel for the respondent-plaintiff.

6. The points that arise for determination are :-

(i) Is the finding of the trial court that the suit is not barred under Order II Rule 2(3) of the Code of Civil Procedure correct in law?

(ii) Was the defendant responsible for breach of the contract or was the rescission of the contract by him justified?

(iii) Is the finding of the trial court with regard to the readiness and willingness of the plaintiff, sustainable on the evidence?

(iv) Does the decree and judgment of the trial court warrant any interference?

7. Ext.A1 agreement for sale dated 02.01.2007 is not in dispute. As per Ext.A3 notice dated 09.02.2007 the defendant rescinded the contract. Thereupon, on 01.03.2007 the plaintiff filed OS 196/2007 for prohibitory injunction to restrain the defendant from alienating the property to strangers. Pending the same the present suit was filed seeking specific performance of the agreement. Whether the present suit is barred by Order II Rule 2(3) CPC, is the question. Order II Rule

2(3) reads thus:-

“(3) Omission to sue for one of several reliefs.- A person entitled to more than one relief in respect of the same cause of action may sue for all or any of such reliefs; but if he omits, except with the leave of the Court, to sue for all such reliefs, he shall not afterwards sue for any relief so omitted.

Explanation.- For the purposes of this rule an obligation and a collateral security for its performance and successive claims arising under the same obligation shall be deemed respectively to constitute but one cause of action.”

As per the provision, if more than one relief flow out of the same cause of action, the suit has to be filed for all such reliefs unless he obtains leave of the court. In the absence of such leave, a separate suit for the other reliefs will not lie.

8. OS No.196/2007 was filed by the plaintiff for a prohibitory injunction against alienating the plaint schedule property to strangers and the present suit is one for specific performance of Ext.A1 agreement.

Relying on the judgment of the Apex Court in Ms/ Virgo Industries (Eng.) P. Ltd. v. M/s Venturetech Solutions P. Ltd. 2013 (1) SCC 625, the learned Senior Counsel for the appellant would argue that, on the rescission of Ext.A1 agreement under Ext.A3 notice there arose

Click Here to Read the rest of this document