O2 R2 CPC not a bar to subsequent Suit if cause of action in two Suits is different.

HIGH COURT OF JUDICATURE AT ALLAHABAD

Judgment reserved on 13.09.2012 

Judgment delivered on 28.09.2012 
Court No.2 

Civil Misc. Writ Petition No.42756 of 2012 
M/s. Trademan International Pvt. Ltd. 
Vs. 
Debts Recovery Appellate Tribunal, Allahabad & Ors. 
~~~~~~~ 

Hon’ble Dilip Gupta, J. 

This petition seeks the quashing of the order dated 8th May, 2012 passed by the Debts Recovery Appellate Tribunal, Allahabad (hereinafter referred to as the ”Appellate Tribunal’) by which the appeal filed by the respondent-Bank of India against the order dated 22nd September, 2005 passed by the Debts Recovery Tribunal, Jabalpur (hereinafter referred to as the ”Tribunal’) has been allowed and the order passed by the Tribunal has been set aside with a direction to the Tribunal to decide the dispute on merits. 
The respondent Bank of India had filed Original Application No.165 of 2002 under Section 19 of the Recovery of Debts Due to the Banks and Financial Institutions Act, 1993 (hereinafter referred to as the ”Act’) for recovery of Rs.1,05,57,987.31 with interest from petitioner-defendant no.4-M/s. Trademan International Pvt. Ltd., Indore. No relief was claimed from defendant nos.1, 2 and 3 of the Original Application and they have been impleaded as respondent nos.3, 4 and 5 in this petition. The Original Application was dismissed by the Tribunal for the reason that the Bank had omitted to claim this relief in Suit No.802 of 2002 which the Bank had earlier filed in the Singapore High Court against respondent nos.3, 4 and 5 of this petition and in view of the provisions of Order 2 Rule 2 (hereinafter referred to as ”O2 R2′) of the Code of Civil Procedure, 1908 (hereinafter referred to as the ”CPC’), could not sue afterwards for the relief omitted to be claimed. 
The respondent-Bank of India has its Head Office at Mumbai and a branch of the Bank is situated at Singapore. Respondent no.3-M/s. Som International Pvt. Ltd., Singapore (hereinafter referred to as the ”Singapore Company’), is a Private Limited Company incorporated at Singapore of which respondent no.4-Som Nath Sood and his wife respondent no.5-Renu Sood are the Directors. The Singapore Company, which is engaged in wholesale import and export of Timber Logs etc., approached the Singapore Branch of the Bank of India for availing banking facilities like Letter of Credit Facility, Trust Receipt with Letter of Credit Facility and Foreign Purchase Facility of Bills of Exchange and for this purpose filed an application before the Bank. In this application the Singapore Company represented that all their bills are drawn in India; 90% bills are drawn under Letter of Credit in Indian Banks; turnover has increased from 27 million Singapore Dollars in the year 1999 to 50,000,000 Singapore Dollars in the year 2000 and the projected turnover for the year 2001 would be 80,000,000 Singapore Dollars. 
The Singapore Branch of the Bank of India sanctioned the following credit facilities to the Singapore Company by the letter dated 3rd May, 2001. 
1. Letter of Credit (DP) for 4,000,000 Singapore Dollars; 
2. Trust Receipt (30 days) for switching purpose for 3,000,000 Singapore Dollars; 
3. Foreign Bills Purchase (DP) including discount document under Letter of Credit till acceptance for 3,000,000 Singapore Dollars. 

The said sanction letter contained various stipulations and for compliance of the conditions mentioned therein, the Singapore Company not only confirmed its acceptance to the facilities and the terms and conditions to which the facilities were subject to but also executed and delivered the security documents to the Bank and respondent no.4-Som Nath Sood and respondent no.5-Renu Sood, in their individual and personal capacities, also executed a Continuing Guarantee Agreement to guarantee repayments of all the monies including the interest accrued therein with all costs, charges and expenses on demand made by the Bank of India. In addition thereto Som Nath Sood mortgaged his plot situated in New Delhi. 
In terms of the aforesaid banking facilities made available by the Bank of India, the Singapore Company started selling goods to its customers in India and presented the Bills of Exchange to the Bank of India which were purchased under the Letter of Credit and Foreign Bill Purchasing Facilities contained in the sanction letter dated 3rd May, 2001. 
The petitioner-M/s. Trademan International Pvt. Ltd. (hereinafter referred to as the ”Indian Company’) purchased goods from the Singapore Company under the Bill of Exchange dated 20th June, 2001 drawn by the Singapore Company on the Indian Company (petitioner) in favour of the Bank of India. The Bill of Exchange with the shipping invoices was sent by the Bank of India to the Corporation Bank, Gandhidham Branch, which was the agent Bank, for collection of payment from the Indian Company on maturity. The Indian Company accepted the Bill of Exchange for payment but the Indian Company failed to make payment of the amount to the Bank of India by 1st October, 2001 which was the maturity date. On the request of the Bank of India, the Corporation Bank got the bill noted and protested on 14th March, 2002 and thereafter the Bank of India issued the notice calling upon the Indian Company to make the payment of the outstanding amount with interest. The Indian Company, however, failed and neglected to make payment of the amount and the interest mentioned in the Bill of Exchange. 
The Bank of India then filed Suit No.802 of 2002 before the Singapore High Court on 8th July, 2002 against the Singapore Company (defendant no.1) and the two Directors namely Som Nath Sood and Renu Sood (defendant nos.2 and 3) with the averment that the Bank had agreed to grant banking facilities to the Singapore Company in terms of the sanction letter dated 3rd May, 2001 and the Continuing Guarantee and under the Foreign Bills Purchase Facility an amount of US$486,200.44 was due from the Singapore Company as on 31st March, 2002 on which interest was accruing at the rate of 2.5% but despite the demand made by the Bank, the defendants did not make the payment. The averments made in the plaint are:- 
“2. The Plaintiffs agreed to grant banking facilities to the 1st Defendants under the Plaintiffs’ letter of office dated 3 May, 2001 which provided, inter alia, for facilities on the purchase of foreign bills up to a limit of Singapore Dollars Three Million (S$3,000,000.00) with interest thereon at the rate of 0.5% per annum above the Plaintiffs’ US Dollar or Singapore Dollar prime lending rate. The Plaintiffs’ letter of offer dated 3 May 2001 also set forth, inter alia, the following terms and conditions: 
a. Additional interest on default at 2% over the rate of interest will be charged on all irregular and overdue facilities/accounts from the date of their becoming irregular/overdue until full payment. 
b. All costs, expenses, legal or otherwise connected with the execution, implementation, enforcement and recovery of dues in respect of the facilities shall be borne by the 1st Defendants; 
c. The banking facilities granted or to be granted are subject to the Plaintiffs’ standard terms and conditions. 
3. The Plaintiffs’ standard terms and conditions provided, inter alia, that : 
a. Interest rates may be varied by the Plaintiffs from time to time at their absolute discretion and shall be payable both before and after judgment. Interest on the facilities will accrue on a compound basis and will be calculated on a daily basis unless otherwise stipulated or agreed to by the Plaintiffs. 
b. All facilities granted and/or monies lent or advanced shall be repayable on demand, unless otherwise stipulated by the Plaintiffs. 
4. In consideration of the Plaintiffs making advances and/or granting banking facilities and/or continuing to do the same for the benefit and for the account of the 1st Defendants at the request of the 2nd and 3rd Defendants, the 2nd and 3rd Defendants executed a written personal continuing guarantee dated 3 May 2001 (hereinafter referred to as the “Guarantee”) in favour of the Plaintiffs. 
5. The Guarantee provided, inter alia, : 
a. that the 2nd and 3rd Defendants jointly and severally guarantee the payment of all sums which shall at any time be owing to the Plaintiffs anywhere on any account whatsoever whether from the 1st Defendants solely or from the 1st Defendants jointly with any other person(s) together with all interest and other bankers’ charges including legal charges occasioned by or incident to this; 
b. that the Guarantee shall be continuing guarantee up to the total principal limit of Singapore Dollars Seven Million Only (S$7,000,000.00) and all interest thereon. c. that the Guarantee shall be in addition to and not in substitution for any other guarantee or other security for the 1st Defendants which the Plaintiffs may at anytime hold. 

The Plaintiffs shall refer to the said letter of offer and Guarantee for their full terms and effect at the trial or at such other hearing in these proceedings. 

6. Under the foreign bills purchase facility granted by the Plaintiffs to the 1st Defendants pursuant to the letter of offer hereinbefore referred to, the sum of US$486,200.44 was due from the 1st Defendants to the Plaintiffs as at 31 March 2002 on which interest is accruing from 31 March 2002 at 2.5% above the Plaintiffs’ US dollar prime lending rate. 
7. Despite the Plaintiffs’ demands and Plaintiffs’ solicitors’ letters of demand to the Defendants of 21 March 2002, the Defendants have failed refused and/or neglected to make payment of the sum due to the Plaintiffs. 
8. The Plaintiffs therefor claim against the Defendants the sum of US$486,200.44 being the amount due as at 31 March 2002 in respect of banking facilities granted by the Plaintiffs to the 1st Defendants together with contractual interest thereon with effect from 31 March 2002 at the rate of 2.5% per annum above the Plaintiffs’ US dollar lending rate.” 

The relief claimed in the suit is as follows:- 

“a. the sum of US$486,200.44 as at 31 March 2002 and contractual interest thereon from 31 March 2002 at the rate of 2.5% per annum above the Plaintiffs’ US dollar prime lending rate until full payment is made; 
b. all solicitor and client costs against the Defendants on an indemnity basis; 
c. such further order or other relief as the Court thinks fit.” 

The Singapore High Court decreed Suit No.802 of 2002 on 8th November, 2002 and the Bank of India filed Execution Case No.7 of 2003 against the Singapore Company and the two Directors before the Debts Recovery Tribunal at New Delhi which passed an order on 29th May, 2003 for preparation of the recovery certificate. 
The Bank of India also filed Original Application No.165 of 2002 under Section 19 of the Act on 24th September, 2002 in which the Singapore Company was arrayed as defendant no.1, Som Nath Sood was arrayed as defendant no.2, Renu Sood was arrayed as defendant no.3 and the Indian Company was arrayed as defendant no.4. The relief claimed in this Original Application was against the Indian Company on the basis of the Bill of Exchange dated 20th June, 2001 drawn by the Singapore Company on the Indian Company in favour of Bank of India and it was specifically stated that defendant Nos. 1, 2 and 3 were proforma defendants and no relief was claimed against them. 
The relevant paragraphs of Original Application No.165 of 2002 are as follows:- 
“(xii) The Applicant submits that documents including Bills of Exchange together with shipping documents, invoices etc. were sent to Corporation Bank, Ghandhidham branch for acceptance of the Bills of Exchange and collection of payment from Defendant no.4-M/s Trademan International at maturity. The Applicant submits that Defendant 4-Trademan International accepted the bills of exchange and taken delivery of the goods covered by the subject Bills of Lading. Though the bill was accepted to mature for payment on 1st October 2001, Defendant no.4 failed to pay the bill. At the request of the Applicant bank, the Agent bank Corporation Bank, Ghandhidham Branch through the Notary Murari R Sharma got the said bill noted and protested on 14.03.2002. The copy of Bills of Exchange duly accepted by the Defendant no 4 and dishonoured as well as copy of certificate of protest from the Notary is annexed and marked as Exhibit. A-14. 
(xiii) The Applicant further submits that the Applicant bank on 9.09.2002 through its Advocates issued legal recall notice calling upon the Defendant No.4 to make payment of the outstanding amount of the bills plus interest thereof. However, Defendant No.4 has failed and neglected to make the payment of the amount of the said bills and interest thereof. Copy of the said recall notice dated 09.09.02 & postal receipts are marked as Exhibit-A/15 and A/16 respectively. Therefore, the Applicant is constrained to file the present original application to recover its outstanding dues. 
(xiv) That the Applicant bank respectfully submits that the bills were drawn in favour of the drawee, the Defendant No.4 and which has also taken delivery thereof and as such the present application is filed for the recovery of its dues against the Defendant No.4 and the other Defendants are only pro-forma parties, therefore, no relief is claimed against the said Defendant No.1 to 3 under this instant original application. 
(xv) That the Applicant submits that in the eventualities which have happened, it is entitled to demand repayments of the entire balance outstanding amount of the aforesaid account and to which the Defendant No.4 is liable to pay. 
(xvi) That the Applicant respectfully submits that in respect of the above said bills purchased account there is a total amount of Rs.1,05,57,987.31 (One Crore Five Lacs, Fifty seven thousand, Nine hundred eighty seven and paise thirty one only) which is equivalent to US $ 2,17,690.46 at the present exchange rate, is now due and payable to the Applicant Bank and by the Defendant No.4, herein inclusive of uncharged interest upto 20.4.02. Thus the Defendant No.4 as on 20.09.02 is liable to pay Rs.1,05,57,987.31 together with further interest thereon @ 9.5% per annum in the said account from 21.9.02 to till the date of full & final satisfaction of the entire balance outstanding amount. 
(xvii) That the Applicant also submits copy of statement of accounts indicating the balance outstanding amount till 20.09.2002 which is annexed and marked as Exhibit-A/17. The entries in the accounts were made in the usual course of banking transactions. 
(xviii) It is submitted that the cause of action accrued to the Applicant finally on 03.05.2001 when the Defendant No.1 to 3 executed and delivered the documents and on the basis of Bills of Purchase Facility made available to them, then on 04/12/2001 when the bill No PDA-10345 was raised by Defendant No.1 on Defendant No.4 in favour of the Applicant, and which was not honoured on due date thereof by the Defendant No.4, thereafter on 14/03/2002 when the Bills was protested by the Notary, and lastly on 09/09/2002 when the final demand notice was sent to Defendant No.4.” 

The following reliefs were claimed in the Original Application:- 
“In view of the facts mentioned above, the Applicant prays for the following reliefs:- 
(i) That this Hon’ble Tribunal be pleased to order and decree and issue a certificate for recovery against the Defendant No.4 for a sum of Rs.1,05,57,987.31 (Rupees One Crore Five Lacs, fifty seven thousand, Nine hundred eighty seven and paise thirty one only) due as on 20.9.02 in respect of the aforesaid account. 
(ii) That this Hon’ble Tribunal be pleased to pass a Decree and issue a certificate for interest on the amount mentioned in prayer (Relief) (i) above @ 9.5% P.A. in the aforesaid account from 21.09.2002 to till date of full and final satisfaction of the entire balance outstanding amount. 
(iii) That the Hon’ble Tribunal be also pleased to pass a decree and certificate for attachment and sale of the building, plant and machineries, equipments and all raw materials which are available in the factory premises or its godown or anywhere else or in transit of Defendant No.4 and to adjust the sale proceeds thereof against the dues of the Applicant. 
(iv) That the Hon’ble Tribunal be also pleased to direct the Defendant No.4 to declare their assets so to enable the Applicant to make recoveries therefrom.” 

Various defences were taken by the Indian Company against whom the relief was claimed in the Original Application including that of O2 R2 CPC and it was urged that since the relief claimed in the Original Application could have been claimed by the Bank of India in Suit No.802 of 2002 that had earlier been filed by the Bank of India in the Singapore High Court, the Bank of India could not afterwards sue for such a relief . 
Issue No.1 that was framed by the Tribunal is as follows:- 
“Whether claim against defendant No.4 is not maintainable in view of the facts that earlier the applicant bank has filed suit for the amount involved in this case against defendant No.1 to 3 at High Court of Republic of Singapore as per provisions of Rule 2 of Order 2 CPC?” 

This issue was decided by the Tribunal in favour of the Indian Company and against the Bank of India in the following manner:- 
“12. ……………. 
From perusal of above quoted provisions of Order 2, Rule 2 CPC, it is clear that where a plaintiff omits to sue in respect of or intentionally relinquishes any portion of his claim, he shall not afterwards sue in respect of the portion so omitted or relinquished. From perusal of documents filed by the defendants in respect of proceedings before Hon’ble High Court of Republic of Singapore, it appears that applicant bank has not filed claim against defendant No.4. It further appears that the applicant even has not made any averments as regards to bill of exchange relating to defendant No.4 though they sought and got relief as regards to amount involved in the Bill of Exchange pertaining to Defendant No.4. It further appears that applicant has not even pleaded anything in this regard and also not sought any permission of that Court to get the relief against defendant No.4 through competent court having jurisdiction. There is also no material available on record that Hon’ble High Court of Republic of Singapore was not having jurisdiction against defendant No.4 pertaining to Bill of Exchange for which applicant has got decree from Hon’ble High Court of Republic of Singapore. 
13. From perusal of Judgement passed by Hon’ble High Court of Republic of Singapore, it appears that Hon’ble High Court has ordered to pay defendant No.1 to 3 a sum of US$486,200.44 with contractual rate of interest alongwith costs vide judgement dtd. 19.07.2002 and 08.11.2002. 
14. Admittedly the amount involved in the Judgement passed by Hon’ble High Court of Republic of Singapore includes the amount as claimed against defendant No.4 in the instant recovery application. 
15. If the Hon’ble High Court of Republic of Singapore was not having territorial jurisdiction against respondent No.4 then this fact should have averred in the suit filed at Hon’ble High Court of Republic of Singapore. 
………………… 
21. On the basis of above discussions it is obvious that applicant bank has omitted to sue in respect of liability of bill of Exchange against defendant No.4 in the Hon’ble High Court of Republic of Singapore even though there appears no bar to claim relief against defendant No.4. Applicant has deliberately tried to suppress the facts of decree passed by Hon’ble High Court of Republic of Singapore in the original application. In case if defendant would have been exparte or could not be in a position to bring facts of the case of Hon’ble High Court of Republic of Singapore, applicant bank could have got decree by suppressing material facts which shows that applicant has not come with clean hands and for this reason alone applicant is not entitled to claim any relief against defendant No.4. Thus issue No.1 is decided in affirmative.” 
(emphasis supplied) 

In view of the aforesaid finding on Issue No.1, the Tribunal dismissed the Original Application filed by the Bank. 
It is against this decision of the Tribunal that the Bank of India filed an appeal before the Appellate Tribunal under Section 20 of the Act. This appeal was registered as Appeal No.636 of 2005 and was allowed by the judgment dated 8th May, 2012 as the Appellate Tribunal came to the conclusion that in the facts and circumstances of the case O2 R2 CPC did not preclude the Bank of India from filing the Original Application to claim relief from the Indian Company and the Original Application was, accordingly, directed to be decided by the Tribunal on merits. 
Sri Anurag Khanna, learned counsel appearing for the petitioner submitted that the Appellate Tribunal committed an illegality in holding that O2 R2 CPC will have no application as the relief claimed in the Original Application could have been claimed by the Bank of India in the Suit which it had filed in the Singapore High Court and the Tribunal correctly came to the conclusion that in view of the provisions of O2 R2 CPC, the Bank could not be permitted to afterwards sue for claiming this relief. In this connection he pointed out that the Bill of Exchange is part of the same Credit Facility given by the Bank to the Singapore Company and the amount claimed in the Original Application is also included in the amount which was claimed by the Bank of India in the Suit filed in the Singapore High Court. He, therefore, submitted that the Original Application is based on the same cause of action for which the suit was filed in the Singapore High Court as the bundle of facts required to be proved for succeeding before the Singapore High Court and in the Tribunal are same. In support of his contention, learned counsel placed reliance upon the decisions of the Supreme Court in Alka Gupta Vs. Narender Kumar Gupta, (2010) 10 SCC 141 and Om Prakash Srivastava Vs. Union of India & Anr., (2006) 6 SCC 207. 
Learned counsel for the petitioner also submitted that the provisions of CPC will apply to proceedings before the Tribunal in view of the provisions of Section 22 of the Act and in support of his contention he placed reliance on the decision of the Supreme Court in Industrial Credit and Investment Corporation of India Vs. Grapco Industries & Ors., (1999) 4 SCC 710. 
Sri Siddharth, learned counsel appearing for the respondent-Bank, however, submitted that O2 R2 CPC will have no application for the reason that the Original Application filed by the Bank before the Tribunal was based on a different cause of action. He submitted that the suit filed by the Bank of India in the Singapore High Court against the Singapore Company and its two Directors was based on the financial assistance granted by the Bank through its sanction letter dated 3rd May, 2001, while the Original Application was filed before the Tribunal against the Indian Company to seek payment of the Bill of Exchange dated 20th June, 2001 which was accepted by the Indian Company. In this connection he placed reliance on the decision of Madras High Court in Revathi C.P. Equipments Ltd., Coimbatore Vs. Sangeetha Tubewell Corporation, Madras, 1990 (1) Bank CLR 49. Learned counsel also placed before the Court the provisions of Section 139, 140 and 141 of the Indian Contract Act, 1872 and submitted that the Bank of India had to institute the proceedings against the Indian Company, which was the acceptor of the Bill of Exchange, otherwise the liability of the Singapore Company to pay the amount to the Bank of India in terms of the sanction letter would stand discharged and in support of his connection he has placed reliance on the decision of the Bombay High Court in M/s. M. Ramnarain Pvt. Ltd. & Anr. Vs. State Trading Corporation of India Ltd., 1989 (1) Bank CLR 59. 
I have considered the submissions advanced by the learned counsel for the parties. 
It first needs to be examined whether this Court would have the jurisdiction to entertain the writ petition as the order passed by the Tribunal at Jabalpur was assailed before the Appellate Tribunal at Allahabad for the reason that the Appellate Tribunal is situated at Allahabad. 
This controversy was settled by the Supreme Court in Kusum Ingots & Alloys Ltd. Vs. Union of India & Anr. (2004) 6 SCC 254 in which, after referring to the decision of the Supreme Court in Nasiruddin Vs. State Transport Appellate Tribunal, AIR 1976 SC 331, the Supreme Court pointed out that the place from where an appellate order or a revisional order is passed may give rise to a part of cause of action and so the writ petition would be maintainable in the High Court within whose jurisdiction the Appellate Authority is situated and the observations are as follows:- 
“25. The said decision is an authority for the proposition that the place from where an appellate order or a revisional order is passed may give rise to a part of cause of action although the original order was at a place outside the said area. When a part of the cause of action arises within one or the other High Court, it will be for the petitioner to choose his forum. 
……………….. 
27. When an order, however, is passed by a Court or Tribunal or an executive authority whether under provisions of a statute or otherwise, a part of cause of action arises at that place. Even in a given case, when the original authority is constituted at one place and the appellate authority is constituted at another, a writ petition would be maintainable at both the places. In other words, as order of the appellate authority constitutes a part of cause of action, a writ petition would be maintainable in the High Court within whose jurisdiction it is situate having regard to the fact that the order of the appellate authority is also required to be set aside and as the order of the original authority merges with that of the appellate authority.” 
(emphasis supplied) 

The aforesaid decision leaves no manner of doubt that though the order against which the Appeal was filed before the Appellate Tribunal at Allahabad was passed by the Tribunal at Jabalpur, part cause of action would arise within the territorial jurisdiction of this Court as the order passed by the Appellate Tribunal at Allahabad is under challenge in this petition. The petition, therefore, can be entertained in the Allahabad High Court. 
The Original Application filed by the Bank of India was dismissed by the Tribunal for the reason that the relief claimed in the application should have been claimed by the Bank of India in the earlier suit filed in the Singapore High Court and since it omitted to do so, it could not sue afterwards for the relief so omitted in view of the provisions of O2 R2 CPC. 
It is, therefore, necessary to examine the provisions of O2 R2 CPC which, as amended in the State, are as follows:- 
“O.2 R.2. Suit to include the whole claim. – (1) Every suit shall include the whole of the claim which the plaintiff is entitled to make in respect of the cause of action; but a plaintiff may relinquish any portion of his claim in order to bring the suit within the jurisdiction of any Court. 
(2) Relinquishment of part of claim-Where a plaintiff omits to sue in respect of, or intentionally relinquishes, any portion of his claim he shall not afterwards sue in respect of the portion so omitted or relinquished. 
(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-I:-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. 

Explanation II:-For the purposes of this rule a claim for ejectment of the defendant from immovable property let out to him and a claim for money due from him on account of rent or compensation for use and occupation of that property, shall be deemed to be claims in respect of distinct causes of action” 

O2 R2(3) CPC provides that a person entitled to more than one relief in respect of the same cause of action may sue for all or any of the 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. 
The Supreme Court has time and again held that for the bar under O2 R2(3) to be applicable, the defendant has to establish that the later Suit is based on the same cause of action as the earlier Suit. 
In this connection reference needs to be made to the Constitution Bench decision of the Supreme Court in Gurbux Singh Vs. Bhooralal, AIR 1964 SC 1810 and the observations are:- 
“In order that a plea of a bar under Order 2 Rule 2(3) of the Civil Procedure Code should succeed the defendant who raises the plea must make out: (i) that the second suit was in respect of the same cause of action as that on which the previous suit was based; (2) that in respect of that cause of action the plaintiff was entitled to more than one relief; (3) that being thus entitled to more than one relief the plaintiff, without leave obtained from the court, omitted to sue for the relief for which the second suit had been filed. From this analysis it would be seen that the defendant would have to establish primarily and to start with, the precise cause of action upon which the previous suit was filed, for unless there is identity between the cause of action on which the earlier suit was filed and that on which the claim in the later suit is based there would be no scope for the application of the bar.” 
(emphasis supplied) 

In Kunjan Nair Sivaraman Nair Vs. Narayanan Nair & Ors., (2004) 3 SCC 277, the Supreme Court also examined the provisions of O2 R2 CPC and made the following observations:- 
“6. We shall first deal with the question regarding applicability of Order 2 Rule 2 of the Code. The said provision lays down the general principle that suit must include whole claim which the plaintiff is entitled to make in respect of a cause of action, and if he does not do so then he is visited with the consequences indicated therein. It provides that all reliefs arising out of the same cause of action shall be set out in one and the same suit, and further prescribes the consequences if the plaintiff omits to do so. In other words Order 2 Rule 2 centers round one and the same cause of action. 
……………… 
8. A mere look at the provisions shows that once the plaintiff comes to a court of law for getting any redress basing his case on an existing cause of action, he must include in his suit the whole claim pertaining to that cause of action. But if he gives up a part of the claim based on the said cause of action or omits to sue in connection with the same, then he cannot subsequently resurrect the said claim based on the same cause of action. So far as Sub-rule (3) is concerned, before the second suit of the plaintiff can be held to be barred by the same, it must be shown that the second suit is based on the same cause of action on which the earlier suit was based and if the cause of action is the same in both the suits and if in the earlier suit plaintiff had not sued for any of the reliefs available to it on the basis of that cause of action, the reliefs which it had failed to press into service in that suit cannot be subsequently prayed for except with the leave of the court. It must, therefore, be shown by the defendants for supporting their plea of bar of Order 2, Rule 2, Sub-rule (3) that the second suit of the plaintiff filed is based on the same cause of action on which its earlier suit was based and that because it had not prayed for any relief and it had not obtained leave of the court in that connection, it cannot sue for that relief in the present second suit. ……………………… 
9. The above position was again illuminatingly highlighted by this Court in Bengal Waterproof Limited v. Bombay waterproof Manufacturing Company and Anr. (1997) 1 SCC 99. 
10. Order 2 Rule 2, Sub-rule (3) requires that the cause of action in the earlier suit must be the same on which the subsequent suit is based. Therefore, there must be identical cause of action in both the suits, to attract the bar of Order 2 Sub-rule (3). The illustrations given under the rule clearly brings out this position. Above is the ambit and scope of the provision as highlighted in Gurbux Singh case by the Constitution Bench and in Bengal Waterproof Limited (supra). The salutary principle behind Order 2 Rule 2 is that a defendant or defendants should not be vexed time and again for the same cause by splitting the claim and the reliefs for being indicated in successive litigations. It is, therefore, provided that the plaintiff must not abandon any part of the claim without the leave of the Court and must claim the whole relief or entire bundle of reliefs available to him in respect of that very same cause of action. He will thereafter be precluded from so doing in any subsequent litigation that he may commence if he has not obtained the prior permission of the Court. 
………………… 
15. The doctrine of res judicata differs from the principle underlying Order 2 Rule 2 in that the former places emphasis on the plaintiff’s duty to exhaust all available grounds in support of his claim, while the latter requires the plaintiff to claim all reliefs emanating from the same cause of action. Order 2 concerns framing of a suit and requires that the plaintiffs shall include whole of his claim in the framing of the suit. Sub-rule (1), inter alia, provides that every suit shall include the whole of the claim which the plaintiff is entitled to make in respect of the very same cause of action. If he relinquishes any claim to bring the suit within the jurisdiction of any Court, he will not be entitled to that relief in any subsequent suit. Further sub-rule (3) provides that the person entitled to more than one reliefs 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 such relief he shall not be afterwards be permitted to sue for relief so omitted. 
(emphasis supplied) 

This principle has been reiterated and re-emphasised by the Supreme Court in S. Nazeer Ahmed Vs. State Bank of Mysore & Ors., (2007) 11 SCC 75. 
In Alka Gupta Vs. Narender Kumar Gupta, (2010) 10 SCC 141, the Supreme Court also had the occasion to examine the provisions of O2 R2 CPC and the observations are :- 
“12. The object of Order 2 Rule 2 of the Code is twofold. First is to ensure that no defendant is sued and vexed twice in regard to the same cause of action. Second is to prevent a plaintiff from splitting of claims and remedies based on the same cause of action. The effect of Order 2 Rule 2 of the Code 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. It does not however bar a second suit based on a different and distinct cause of action. 
17. The cause of action for the first suit was non-payment of price under the agreement of sale dated 29.6.2004, whereas the cause of action for the second suit was non-settling of accounts of a dissolved partnership constituted under deed dated 5.4.2000. The two causes of action are distinct and different. Order 2 Rule 2 of the Code would come into play only when both suits are based on the same cause of action and the plaintiff had failed to seek all the reliefs based on or arising from the cause of action in the first suit without leave of the court. Merely because the agreement of sale related to an immovable property at Rohini and the business run therein under the name of ‘Takshila Institute’ and the second suit referred to a partnership in regard to business run at Paschim Vihar, New Delhi, also under the same name of Takshila Institute, it cannot be assumed that the two suits relate to the same cause of action. 
18. Further, while considering whether a second suit by a party is barred by Order 2 Rule 2 of the Code, all that is required to be seen is whether the reliefs claimed in both suits arose from the same cause of action. The court is not expected to go into the merits of the claim and decide the validity of the second claim. The strength of the second case and the conduct of plaintiff are not relevant for deciding whether the second suit is barred by Order 2 Rule 2 of the Code.”
(emphasis supplied) 

Thus, from the decisions of the Supreme Court referred to above, it is clear that the effect of O2 R2 CPC is to bar a plaintiff who had earlier claimed certain reliefs with regard to a cause of action from filing a second suit for claiming other reliefs based on the same cause of action and it does not bar a second suit based on a different and distinct cause of action. The Supreme Court has emphasised that it is important for the Court, while considering whether the second suit is barred under O2 R2 CPC, to see whether the reliefs claimed in both the suits arise from the same cause of action. It is, therefore, clear that the main emphasis is on “cause of action” because it is only when the ”cause of action’ in the both the suits is same that the defendant can plead bar under O2 R2 CPC. 
“Cause of action” has been explained by the Supreme Court in Om Prakash Srivastava Vs. Union of India & Anr., (2006) 6 SCC 207, and the observations are:- 
9. By “cause of action” it is meant every fact, which, if traversed, it would be necessary for the plaintiff to prove in order to support his right to a judgment of the Court. In other words, a bundle of facts, which it is necessary for the plaintiff to prove in order to succeed in the suit. (See Bloom Dekor Ltd. v. Subhash Himatlal Desai, (1994) 6 SCC 322). 
10. In a generic and wide sense (as in Section 20 of the Civil Procedure Code, 1908) “cause of action” means every fact, which it is necessary to establish to support a right to obtain a judgment. (See Sadanandan Bhadran v. Madhavan Sunil Kumar, (1998) 6 SCC 514. 
11. It is settled law that “cause of action” consists of bundle of facts, which give cause to enforce the legal inquiry for redress in a court of law. In other words, it is a bundle of facts, which taken with the law applicable to them, gives the plaintiff a right to claim relief against the defendant. It must include some act done by the defendant since in the absence of such an act no cause of action would possibly accrue or would arise. (See South East Asia Shipping Co. Ltd. v. Nav Bharat Enterprises (P) Ltd., (1996) 3 SCC 443. 
12. The expression “cause of action” has acquired a judicially settled meaning. In the restricted sense “cause of action” means the circumstances forming the infraction of the right or the immediate occasion for the reaction. In the wider sense, it means the necessary conditions for the maintenance of the suit, including not only the infraction of the right, but also the infraction coupled with the right itself. Compendiously, as noted above the expression means every fact, which it would be necessary for the plaintiff to prove, if traversed, in order to support his right to the judgment of the Court. Every fact, which is necessary to be proved, as distinguished from every piece of evidence, which is necessary, to prove each fact. comprises in “cause of action”. (See Rajasthan High Court Advocates’ Association v. Union of India, 2001 (2) SCC 294). 
13. The expression “cause of action” has sometimes been employed to convey the restricted idea of facts or circumstances which constitute either the infringement or the basis of a right and no more. In a wider and more comprehensive sense, it has been used to denote the whole bundle of material facts, which a plaintiff must prove in order to succeed. These are all those essential facts without the proof of which the plaintiff must fail in his suit. (See Gurdit Singh v. Munsha Singh (1977) 1 SCC 791). 
14. The expression “cause of action” is generally understood to mean a situation or state of facts that entitles a party to maintain an action in a court or a tribunal; a group of operative facts giving rise to one or more bases of suing; a factual situation that entitles one person to obtain a remedy in court from another person. (See Black’s Law Dictionary). In. Stroud’s Judicial Dictionary a “cause of action” is stated to be the entire set of facts that gives rise to an enforceable claim; the phrase comprises every fact, which if traversed, the plaintiff must prove in order to obtain judgment. In “Words and Phrases” (4th Edn.) the meaning attributed to the phrase “cause of action” in common legal parlance is existence of those facts, which give a party a right to judicial interference on his behalf. (See Navinchandra N. Majithia v. State of Maharashtra, (2000) 7 SCC 640). 
15. In Halsbury’s Laws of England (Fourth Edition) it has been stated as follows: 
” ”Cause of action’ has been defined as meaning simply a factual situation the existence of which entitles one person to obtain from the Court a remedy against another person. The phrase has been held from earliest time to include every fact which is material to be proved to entitle the plaintiff to succeed, and every fact which a defendant would have a right to traverse. ‘Cause of action’ has also been taken to mean that particular act on the part of the defendant which gives the plaintiff his cause of complaint, or the subject matter of grievance founding the action, not merely the technical cause of action.” 
16. As observed by the Privy Council in Payana Reena Saminathan v. Pana Lana Palaniappa (1913-14) 41 IA 142 the rule is directed to securing the exhaustion of the relief in respect of a cause of action and not to the inclusion in one and the same action or different causes of action, even though they arises from the same transaction. One great criterion is, when the question arises as to whether the cause of action in the subsequent suit is identical with that in the first suit whether the same evidence will maintain both actions. (See Mohd. Khalil Khan v. Mahbub Ali Mian, AIR 1949 PC 78). 
(emphasis supplied) 
Thus, “cause of action” in the restricted sense means the circumstances forming the infraction of the right or the immediate occasion for the reaction. In the wider sense, it means the necessary conditions for the maintenance of the suit including not only the infraction of right but also the infraction coupled with the right itself. “Cause of action” is generally understood to mean a situation or a state of facts that entitles a party to maintain an action in a Court or a Tribunal. In common legal parlance it is existence of those facts, which give a party a right to judicial interference on his behalf. 
It is in the light of the aforesaid discussion that the Court has now to determine whether the Original Application filed by the Bank of India before the Tribunal is based on the same cause of action for which the Bank of India had filed the suit in the Singapore High Court but before proceeding to examine this, the objection raised by Sri Siddharth, learned counsel for the Bank of India, though very feebly, that O2 R2 CPC will not apply to proceedings before the Tribunal needs to be considered. 
Learned counsel for the Bank of India submitted that O2 R2 CPC may not apply to proceedings before the Tribunal in view of the provisions of Section 22 of the Act and in support of his contention he placed reliance upon the decision of the Supreme Court in State Bank of India Vs. Sarathi Textiles & Ors. (2009) 16 SCC 328. 
Learned counsel for the petitioner, however, placed reliance upon the decision of the Supreme Court in Industrial Credit & Investment Corporation of India Ltd. Vs. Grapco Industries Ltd. & Ors. (1999) 4 SCC 710 and contended that O2 R2 CPC will apply to the proceedings before the Tribunal. 
To appreciate the contentions advanced by learned counsel for the parties, it will be appropriate to reproduce Section 22 of the Act which is as follows:- 
22. Procedure and Powers of the Tribunal and the Appellate Tribunal.–(1) The Tribunal and the Appellate Tribunal shall not be bound by the procedure laid down by the Code of Civil Procedure, 1908 (5 of 1908), but shall be guided by the principles of natural justice and, subject to the other provisions of this Act and of any rules, the Tribunal and the Appellate Tribunal shall have powers to regulate their own procedure including the places at which they shall have their sittings. 
(2) The Tribunal and the Appellate Tribunal shall have, for the purposes of discharging their functions under this Act, the same powers as are vested in a civil court under the Code of Civil Procedure, 1908 (5 of 1908), while trying a suit, in respect of the following matters, namely:– 
(a) summoning and enforcing the attendance of any person and examining him on oath; 
(b) requiring the discovery and production of documents; 
(c) receiving evidence on affidavits; 
(d) issuing commissions for the examination of witnesses or documents; 
(e) reviewing its decisions; 
(f) dismissing an application for default or deciding it ex parte; 
(g) setting aside any order of dismissal of any application for default or any order passed by it ex parte; 
(h) any other matter which may be prescribed 
(3) Any proceeding before the Tribunal or the Appellate Tribunal shall be deemed to be a judicial proceeding within the meaning of sections 193 and 228, and for the purposes of section 196, of the Indian Penal Code (45 of 1860) and the Tribunal or the Appellate Tribunal shall be deemed to be a civil court for all the purposes of section 195 and Chapter XXVI of the Code of Criminal Procedure, 1973 (2 of 1974).” 

While Interpreting Section 22 of the Act, the Supreme Court in Industrial Credit and Investment Corporation of India (supra), observed:- 

“11. We, however, do not agree with the reasoning adopted by the High Court. When Section 22 of the Act says that the Tribunal shall not be bound by the procedure laid down by the Code of Civil Procedure, it does not mean that it will not have jurisdiction to exercise powers of a court as contained in the Code of Civil Procedure. Rather, the Tribunal can travel beyond the Code of Civil Procedure and the only fetter that is put on its powers is to observe the principles of natural justice.” 

The decision in the State Bank of India (supra) will not help the respondents. The Supreme Court pointed out that the provisions of Section 19(20) of the Act deal with the power of the Tribunal to grant interest and since a special procedure has been provided in the Act, the question of considering the provisions of Order 34 Rules 2, 3, 4 and 11, CPC does not arise. 
Thus, in view of the decision of the Supreme Court in Industrial Credit & Investment Corporation of India (supra), the provisions of O2 R2 CPC will apply to proceedings before the Tribunal. 
The main issue as to whether the Original Application filed by the Bank of India before the Tribunal is based on the same cause of action for which the Bank of India had filed the Suit before the Singapore High Court has now to be considered and for this it is necessary to examine the averments made in the Suit filed by the Bank of India before the Singapore High Court and the averments made in the Original Application filed before the Tribunal. 
SUIT NO.802 of 2002 FILED BY THE BANK IN THE SINGAPORE HIGH COURT 
Suit No.802 of 2002, as is clear from a perusal of the averments made in the plaint, was filed by the Bank of India in the Singapore High Court against the Singapore Company and its two Directors with respect to the banking facilities made available to the Singapore Company by the Bank of India in terms of the sanction letter dated 3rd May, 2001 and the stipulations contained therein including the standard terms and conditions, securities and continuing guarantee given by the Singapore Company. The plaint refers to the banking facilities made available to the Singapore Company by the Bank of India by the letter dated 3rd May, 2001 which included the facilities on the Purchase of Foreign Bills upto the extent of 3,000,000.00 Singapore Dollars. The standard terms and conditions of the Bank of India provided that all the facilities granted and/or money lent or advanced shall be repayable on demand. The continuing guarantee dated 3rd May, 2001 also provided that the Directors of the Singapore Company, who had given the guarantee jointly and severally, guarantee the payment of all the sum which shall at any time be owing to the Singapore Company. The plaint further specifically mentions that under the Foreign Bills Purchase Facility granted under the sanction letter dated 3rd May, 2001 by the Bank to the defendants, a sum of US$486,200.44 was due from the Singapore Company as on 31st March, 2002. The Indian Company was not impleaded as a defendant and nor any relief was claimed from the Indian Company on the Bill of Exchange. 
Such facts are borne out from the averments made in paragraphs 6, 7 and 8 of the plaint filed by the Bank of India in the Singapore High Court, which have been reproduced above but which for the sake of convenience are also reproduced below:- 
“6. Under the foreign bills purchase facility granted by the Plaintiffs to the 1st Defendants pursuant to the letter of offer hereinbefore referred to, the sum of US$486,200.44 was due from the 1st Defendants to the Plaintiffs as at 31 March 2002 on which interest is accruing from 31 March 2002 at 2.5% above the Plaintiffs’ US dollar prime lending rate. 
7. Despite the Plaintiffs’ demands and Plaintiffs’ solicitors’ letters of demand to the Defendants of 21 March 2002, the Defendants have failed refused and/or neglected to make payment of the sum due to the Plaintiffs. 
8. The Plaintiffs therefor claim against the Defendants the sum of US$486,200.44 being the amount due as at 31 March 2002 in respect of banking facilities granted by the Plaintiffs to the 1st Defendants together with contractual interest thereon with effect from 31 March 2002 at the rate of 2.5% per annum above the Plaintiffs’ US dollar lending rate.” 

ORIGINAL APPLICATION NO.165 OF 2002 FILED BY THE BANK BEFORE THE TRIBUNAL 
Original Application No.165 of 2002 filed by the Bank of India before the Tribunal, however, refers to the Bill of Exchange dated 20th June, 2001 drawn by the Singapore Company on Indian Company in favour of the Bank of India and it is stated that the Original Application was being filed as the Indian Company, even after acceptance of the Bill of Exchange for payment on the maturity date which was 1st October, 2001, failed to pay the amount mentioned in the Bill of Exchange despite repeated requests. This is clear from a perusal of the averments made in the Original Application and for the sake of convenience paragraph nos.(xii) and (xvi) are again reproduced:- 
“(xii) The Applicant submits that documents including Bills of Exchange together with shipping documents, invoices etc. were sent to Corporation Bank, Ghandhidham branch for acceptance of the Bills of Exchange and collection of payment from Defendant no.4-M/s Trademan International at maturity. The Applicant submits that Defendant 4-Trademan International accepted the bills of exchange and taken delivery of the goods covered by the subject Bills of Lading. Though the bill was accepted to mature for payment on 1st October 2001, Defendant no.4 failed to pay the bill. At the request of the Applicant bank, the Agent bank Corporation Bank, Ghandhidham Branch through the Notary Murari R Sharma got the said bill noted and protested on 14.03.2002. The copy of Bills of Exchange duly accepted by the Defendant no 4 and dishonoured as well as copy of certificate of protest from the Notary is annexed and marked as Exhibit. A-14. 
…………………
………………… 
(xvi) That the Applicant respectfully submits that in respect of the above said bills purchased account there is a total amount of Rs.1,05,57,987.31 (One Crore Five Lacs, Fifty seven thousand, Nine hundred eighty seven and paise thirty one only) which is equivalent to US $ 2,17,690.46 at the present exchange rate, is now due and payable to the Applicant Bank and by the Defendant No.4, herein inclusive of uncharged interest upto 20.4.02. Thus the Defendant No.4 as on 20.09.02 is liable to pay Rs.1,05,57,987.31 together with further interest thereon @ 9.5% per annum in the said account from 21.9.02 to till the date of full & final satisfaction of the entire balance outstanding amount.” 

It needs to be noticed that though the Singapore Company and the two Directors were made defendant nos.1, 2 and 3 in the Original Application but it was specifically stated that since the Application was filed for recovery of dues from the Indian Company (defendant no.4), the other defendants (defendant nos.1, 2 and 3) were only pro-forma parties and no relief was claimed against them in the Original Application. The relief claimed was for payment of Rs.1,05,57,987.31 with interest which is equivalent to US Dollars 2,17,690.46. 
The contention of learned counsel for the petitioner is that the Bill of Exchange is part of same credit facilities given by the Bank of India to the Singapore Company and since the amount claimed by the Bank of India in the Original Application filed before the Tribunal is included in the amount which the Bank of India had claimed from the Singapore Company in the Suit filed before the Singapore High Court, the Suit and the Original Application are based on the same cause of action and, therefore, if the Bank of India had omitted to claim this relief in the Suit, it cannot afterwards sue for the relief not claimed. 
Learned counsel for the Bank of India, however, submitted that the Suit in the Singapore High Court was founded on the banking facilities made available to the Singapore Company in terms of the sanction letter, while the Original Application was founded on the Bill of Exchange which was accepted by the Indian Company. He, therefore, submitted that in view of the provisions of Sections 5, 32 and 37 of the Negotiable Instruments Act, 1881 (hereinafter referred to as the ”Negotiable Instruments Act’) an independent contract had come into existence between the Bank of India and the Indian Company when the Indian Company accepted the Bill of Exchange as a result of which the Indian Company became the principal debtor and the Singapore Company became the surety. 
To appreciate the submissions, certain provisions of the Negotiable Instruments Act needs to be examined. 
A Bill of Exchange has been defined under Section 5 of the Negotiable Instruments Act which is as follows:- 
“5. “Bill of exchange”.–A “bill of exchange” is an instrument in writing containing an unconditional order, signed by the maker, directing a certain person to pay a certain sum of money only to, or to the order, of a certain person or to the bearer of the instrument. 
A promise or order to pay is not “conditional” within the meaning of this section and section 4, by reason of the time for payment of the amount or any instalment thereof being expressed to be on the lapse of a certain period after the occurrence of a specified event which, according to the ordinary expectation of mankind, is certain to happen, although the time of its happening may be uncertain. 

The sum payable may be “certain” within the meaning of this section and section 4, although it includes future interest or is payable at an indicated rate of exchange, or is according to the course of exchange, and although the instrument provides that, on default of payment of an instalment, the balance unpaid shall become due. 

The person to whom it is clear that the direction is given or that payment is to be made may be a “certain person”, within the meaning of this section and section 4, although he is misnamed or designated by description only.” 

Section 7 of the Negotiable Instruments Act is as follows:- 
“7. “Drawer”, “Drawee”. – The maker of a bill of exchange or cheque is called the “Drawer”; the person thereby directed to pay is called the “drawee”. 
“Drawee in case of need “:- When in the bill or in any endorsement thereon the name of any person is given in addition to the drawee to be resorted to in case of need such person is called a “drawee in case of need”. 
“Acceptor”: – After the drawee of a bill has signed his assent upon the bill, or, if there are more parts thereof than one, upon one of such parts, and delivered the same or given notice of such signing to the holder or to some person on his behalf, he is called the “acceptor”. 
“Acceptor for honour”: When a bill of exchange has been noted or protested for non-acceptance or for better security and any person accepts it supra protest for honour of the drawer or of any one of the indorsers, such person is called an “acceptor for honour”. 
“Payee”:- The person named in the instrument, to whom or to whose order the money is by the instrument directed to be paid, is called the “payee”. 

Section 32 of the Negotiable Instruments Act deals with the liability of the maker of a promissory note and acceptor of the Bill of Exchange and is as follows:- 
“32. Liability of maker of note and acceptor of bill.–In the absence of a contract to the contrary, the maker of a promissory note and the acceptor before maturity of a bill of exchange are bound to pay the amount thereof at maturity according to the apparent tenor of the note or acceptance respectively, and the acceptor of a bill of exchange at or after maturity is bound to pay the amount thereof to the holder on demand. 

In default of such payment as aforesaid, such maker or acceptor is bound to compensate any party to the note or bill for any loss or damage sustained by him and caused by such default.” 

Section 37 of the Negotiable Instruments Act is as follows:- 
“37. Maker, drawer and acceptor principals:- The maker of a promissory note or cheque, the drawer of bill of exchange until acceptance, and the acceptor are, in the absence of a contract to the contrary, respectively liable thereon as principal debtors, and the other parties thereto are liable thereon as sureties for the maker, drawer or acceptor, as the case may be. 

It is thus seen that the necessary parties to a Bill of Exchange are: (1) the party giving the order, who must sign it, and who is called the drawer; (2) the party to whom the order is given, who is called the drawee, and who on assenting to the terms of the order and signing it is called the acceptor and (3) the party to whom the money is to be paid, who is called the payee, or, if the bill be expressed to be payable to bearer, the bearer. 
It is also seen that once the drawee has accepted the Bill of Exchange, he responds to the request of the drawer to take up the instrument, and thus becomes the party primarily liable with the drawer as the surety. 
The Supreme Court in American Express Bank Ltd. Vs. Calcutta Steel Co. & Ors., (1993) 2 SCC 199 considered the consequences of a drawee accepting the Bill of Exchange and the observations are :- 
“12. In Halsbury’s Laws of England, 4th Edition, Vol. 4 at page 153 in paragraph 352 it is stated that the acceptance of a bill is the signification by the drawee of his assent to the order of the drawer. Thereafter the drawee is called the acceptor. But the drawee, in the absence of any special agreement, is under no obligation to accept a bill. In paragraph 354 it was stated that the party primarily liable on a bill of exchange is the acceptor. The acceptor is the person to whom the order to pay is addressed. He is on the face of the bill as drawn, the drawee; but as such he is not, apart from special contract, by English law under any obligation to accept the bill. The drawee who does not accept is not, therefore, liable on the bill. In paragraph 356 it was stated that in the case of a bill of exchange, when the drawee does accept, he undertakes that he will pay the bill according to the tenor of the acceptance, but, where the drawee declines to accept, the drawer must bear all the losses and expenses incurred as well by reason of the non-acceptance as of the non-payment. In paragraph 357 it was further elucidated that wherever a bill is accepted the acceptor is and remains the party primarily liable on the bill whatever may happen to the other parties and whether any of the other parties are discharged or not. Should an indorser have to pay the bill, the acceptor by the fact of his acceptance is liable to indemnify him. 
…………………….. 
14. “Acceptance” in regard to a bill of exchange is a technical term. It does not mean “taking” or “receiving.” Acceptance of a bill of exchange is the signification by the drawee of his assent to the order of the drawer. It is the act by which the drawee evinces his consent to comply with, and be bound by, the request contained in a bill of exchange directed to him, and is the drawee’s agreement to pay the bill when it falls due. In commercial parlance acceptance of a bill of exchange is the drawee’s signed engagement to honour the draft as presented. The contract of the acceptor is a new and independent one. It comes within the rules as to consideration for a contract on a negotiable instrument, and, like every contract on a negotiable instrument, is incomplete and revocable until delivery of the instrument for the purpose of giving effect thereto. Acceptance, generally speaking, is therefore, necessary to render a drawee liable upon a bill of exchange and until he accepts it the drawee is not liable on the bill. As between a drawer and a drawee, the latter is to be under an obligation to accept a bill of exchange drawn by the former. Thus it is a well-settled rule of commercial law that no one but the person upon whom it is drawn, or his duly authorised agent, can accept a bill except for need or honour. We have, therefore, no hesitation to hold that no person except a drawee of a bill of exchange can bind himself by acceptance. The drawee of the bill of exchange, in the absence of any contract to the contrary, on acceptance is the acceptor before maturity by the bill of exchange and is bound to pay the amount thereof at maturity to the holder on demand. When the drawee does accept he undertakes that he will pay the bill according to the tenor of the acceptance and he remains primarily liable on the bill of exchange as acceptor.” 
(emphasis supplied) 

The liability of acceptor of a Bill of Exchange is, therefore, independent and is based on a new contract since an acceptor of Bill of Exchange becomes the debtor and the drawee becomes the surety. 
This is what was also observed by the Madras High Court in Revathi C.P. Equipments Ltd, Coimbatore (supra) :- 
“25. In the light of the above pronouncement of the Supreme Court, I find no difficulty in holding that the Bills of Exchange in question accepted by the plaintiff and co-accepted by the second defendant-Bank, formed a separate and independent contract and, therefore, there cannot be any injunction against the second defendant on the ground of dispute with regard to the performance of the main contract. I also hold that the Bills of Exchange accepted by the buyer operate as absolute payment irrespective of the main and wider contract subject of course to one and only exception as pointed out by the Supreme Court. The only exception pointed out by the Supreme Court reads as follows: 
“…….The only exception to that rule was where fraud by one of the parties to the underlying contract had been established and the bank had notice of the fraud.” 

These principles have to be kept in mind while considering the submissions made by learned counsel for the parties.
To appreciate the submissions made by learned counsel for the parties, it will also be necessary to refer to the decisions of the Supreme Court in S. Nazeer Ahmad (supra) and State of Maharashtra & Anr. Vs. M/s National Construction Company, Bombay and Anr. (1996) 1 SCC 735 as they deal with the issues urged by learned counsel for the petitioner regarding Bill of Exchange being part of the same credit facilities made available by the Bank and the inclusion of the amount claimed in the Suit in the Original Application. 
In S. Nazeer Ahmad (supra), the appellant had borrowed a sum of Rs.1,10,000/- from the plaintiff-Bank for the purpose of purchasing a bus. He secured repayment of the loan by hypothecating the bus and by equitably mortgaging two items of immovable properties. The Bank first filed Original Suit No.131 of 1984 for recovery of money due and the said Suit was decreed. The Bank sought to proceed against the hypothecated bus in the execution proceedings but the bus could not be recovered. The Bank then instituted Original Suit No.35 of 1993 for enforcement of the equitable mortgage. The appellant resisted the second suit by pleading that the suit was barred by O2 R2 CPC. The Supreme Court held that the second suit filed to enforce the equitable mortgage was not hit by O2 R2 CPC as the earlier suit was for recovery of loan and the two causes of action were different though they might have been parts of the same transaction and the ultimate relief that the Bank was entitled to was recovery of the term loan. The relevant portion of the decision is :- 
“9. Now, we come to the merit of the contention of the appellant that the present suit is hit by Order 2 Rule 2 of the Code in view of the fact that the plaintiff omitted to claim relief based on the mortgage, in the earlier suit O.S. No. 131 of 1984. Obviously, the burden to establish this plea was on the appellant. The appellant has not even cared to produce the plaint in the earlier suit to show what exactly was the cause of action put in suit by the Bank in that suit. That the production of pleadings is a must is clear from the decisions of this Court in Gurbux Singh Vs. Bhooralal (supra) and M/s Bengal Waterproof Limited Vs. M/s Bombay Waterproof Manufacturing Co. & Anr. (supra). From the present plaint, especially Paras 10 to 12 thereof, it is seen that the Bank had earlier sued for recovery of the loan with interest thereon as a money suit. No relief was claimed for recovery of the money on the foot of the equitable mortgage. In that suit, the Bank appears to have attempted in execution, to bring the mortgaged properties to sale. The appellant had objected that the suit not being on the mortgage, the mortgaged properties could not be sold in execution without an attachment. That objection was upheld. The Bank was therefore suing in enforcement of the mortgage by deposit of title deeds by the appellant. 
10. From this, it is not possible to say that the present claim of the plaintiff Bank has arisen out of the same cause of action that was put forward in O.S. No. 131 of 1984. What Order 2 Rule 2 insists upon is the inclusion of the whole of the claim which the plaintiff is entitled to make in respect of the cause of action put in suit. ……………… 
….. 
12. That apart, the cause of action for recovery of money based on a medium term loan transaction simpliciter or in enforcement of the hypothecation of the bus available in the present case, is a cause of action different from the cause of action arising out of an equitable mortgage, though the ultimate relief that the plaintiff Bank is entitled to is the recovery of the term loan that was granted to the appellant. On the scope of Order 2 Rule 2, the Privy Council in Payana Reena Saminatha & Anr. Vs. Pana Lana Palaniappa (1913-14) 41 IA 142 has held that Order 2 Rule 2 is directed to securing an exhaustion of the relief in respect of a cause of action and not to the inclusion in one and the same action of different causes of action, even though they may arise from the same transactions. In Mohammad Khalil Khan & Ors. Vs. Mahbub Ali Mian & ors. A.I.R. 1949 PC 78, the Privy Council has summarised the principle thus: 
“The principles laid down in the cases thus far discussed may be thus summarised: 
(1) The correct test in cases falling under Order 2 Rule 2, is “whether the claim in the new suit is, in fact, founded on a cause of action distinct from that which was the foundation for the former suit.” (Moonshee Buzloor Ruheem V. Shumsunnissa Begum (1867) 11 MIA 551) 
(2) The cause of action means every fact which will be necessary for the plaintiff to prove if traversed, in order to support his right to the judgment. Read V. Brown, (1888) 22 Q.B.D. 128 
(3) If the evidence to support the two claims is different, then the causes of action are also different. Brundsden v. Humphrey, (1884) 14 Q.B.D. 141 
(4) The causes of action in the two suits may be considered to be the same if in substance they are identical. Brundsden v. Humphrey, (1884) 14 Q.B.D. 141 
(5) The cause of action has no relation whatever to the defence that may be set up by the defendant, nor does it depend upon the character of the relief prayed for by the plaintiff. It refers to the media upon which the plaintiff asks the Court to arrive at a conclusion in his favour. Chandkour v. Partab Singh, (ILR 16 Cal. 98 P.C.). This observation was made by Lord Watson in a case under section 43 of the Act of 1882 (corresponding to Order 2 Rule 2), where plaintiff made various claims in the same suit.” 
14. Applying the test so laid down, it is not possible to come to the conclusion that the suit to enforce the equitable mortgage is hit by Order 2 Rule 2 of the Code in view of the earlier suit for recovery of the mid term loan, especially in the context of Order 34 Rule 14 of the Code. The two causes of action are different, though they might have been parts of the same transaction.”
(emphasis supplied) 

It will also be useful to refer to the decision of the Supreme Court in State of Maharashtra & Anr. (supra). In 1967, the appellants invited tenders for performing work on the masonry portion of the Paithan Dam. The first respondent, M/s. National Construction Company, Bombay submitted its tender offer for the work which was conditionally accepted by the appellants on 30.3.1967. On 6.1.1968, the second respondent, the Central Bank of India, executed Performance Guarantee No. 57/22 whereby it guaranteed that the contractor would faithfully conform to the terms and conditions of the contract to be entered into between the appellants and the contractor. Under the terms of the guarantee, the Bank was jointly and severally liable with the contractor for the latter’s default in performance. The liability of the Bank was, however, limited to Rs.14,12,836, i.e. 5 per cent of the contract price. Soon thereafter, on 8.1.1968, the contract for commencing construction was executed but instead of commencing work, the contractor abandoned the work on 19.12.1969. On 21.6.1972, the appellants filed Short Cause Suit No. 491 of 1972 only against the Bank in the Bombay High Court for recovery of Rs.14,12,836 with interest which was the amount stipulated in Performance Guarantee. On 17.1.1983, the Bombay High Court dismissed the suit and the appeal was dismissed on 7.4.1983. On 7.4.1983, the appellants filed Special Civil Suit No. 29 of 1983 against both the contractor and the Bank in the Court of the Civil Judge (Senior Division) at Aurangabad. In this suit, the appellants claimed Rs.1,13,27,298.16, with interest, from the contractor by way of damages for breach of contract. This was inclusive of their claim for Rs.14,12,836 against the Bank under the performance guarantee. On 28.7.1992, the Civil Judge dismissed the suit holding that the cause of action was identical to the one in the former suit and so it was barred by res judicata under Explanation IV to Section 11 CPC as also O2 R2 CPC. The appellants appealed but the Division Bench of the Bombay High Court dismissed the appeal. 
Feeling aggrieved, the appellants approached the Supreme Court. The Supreme Court rejected the plea of res-judicata as also the plea of O2 R2 CPC. While rejecting the plea of O2 R2 CPC, the Supreme Court observed that the foundation of the appellants’ claim in Short Cause Suit No.491 of 1972 rested upon the performance guarantee while the relief claimed in the Special Suit No.29 of 1983 was based on the contract entered into between the appellants and the contractor and though the amount claimed in the subsequent suit included the claim made in the first suit, the subsequent suit was not barred under O2 R2 CPC as the relief sought in the Short Cause Suit was based on a different cause of action from that in the Special Suit and the relevant observations are:- 
“10. It is well settled that the cause of action for a suit comprises of all those facts which the plaintiff must aver and, if traversed, prove to support his right to the judgment. 

11. It is the contention of the appellants that the two suits are in respect of two separate causes of action. The first suit was filed to enforce the bank guarantee, while the second suit was filed to claim damages for breach of the contract relating to the work. 

12. In the plaint of the short cause suit, the foundation of the appellants’ claim rested upon the Performance Guarantee No. 57/22. The basis of the appellants’ claim was that under the terms of the bank guarantee, the Bank was liable to make good to the appellants all losses that became due by reason of any default on the part of the contractor in the proper performance of the terms of the contract. The appellants annexed particulars and laid out facts to show that the contractor had, by allegedly abandoning the work, failed to observe the terms of the contract. The appellants further alleged that these actions of the contractor had caused them to incur losses of Rs. 76,37,557.76. However, in view of the limitation prescribed in the bank guarantee, the appellants had limited their claim to Rs. 14,12,836. 
…………………………. 
15. In the plaint of the special suit, the main relief sought by the appellants was on the basis of the contact entered into between the appellants and the contractor. The appellants alleged and laid out facts and particulars to the effect that the abandonment of work by the contractor was in breach of the contract and this had caused the appellants to suffer losses worth Rs. 1,13,27,298.16. This amount was inclusive of the claim of Rs. 14,12,836 based on the Performance Guarantee No. 57/22 for which the contractor and the Bank were jointly and severally liable. 

16. The relief sought in the short cause suit was therefore based on a different cause of action from that upon which the primary relief in the special suit was founded. 

17. In Sidramappa v. Rajashetty, AIR 1970 SC 1089, this Court held that where 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, the plaintiff could not have claimed the relief which he sought in the subsequent suit, the plaintiff’s subsequent suit is not barred by Order 2 Rule 2. Applying this ruling to the facts of the present case, it is clear that, in the first suit, the appellants could only claim reliefs in respect of Rs.14,12,836 which was the maximum amount stipulated in the performance guarantee. They could not have claimed reliefs of Rs.1,13,27,298.16 which they did in the second suit on the basis of the contract relating to the work to be performed by the contractor. 

18. It is, therefore, clear that when the appellants, by way of Short Cause Suit No.491 of 1972, sought to enforce the Performance Guarantee No. 57/22, they were seeking reliefs on the basis of a cause of action which was distinct from the one upon which they subsequently based their claim in Special Civil Suit No. 29 of 1983. 

19. In the result, both the issues are decided in favour of the appellants. The appeal succeeds. No costs.” 
(emphasis supplied) 

It is seen from the decision of the Supreme Court in S. Nazeer Ahmad (supra) that the cause of action for recovery of money based on a loan transaction simplicter or in enforcement of the hypothecation of the bus is a cause of action different from the cause of action arising out of an equitable mortgage, though the ultimate relief that the Bank was entitled to was the recovery of the term loan that was granted to the appellant. The Supreme Court pointed out that the two causes of action are different though they might have been parts of the same transaction. In view of this decision of the Supreme Court, it is not possible to accept the contention of the learned counsel for the petitioner that since the Bill of Exchange was part of the banking facility made available to the Singapore Company, the Original Application was based on the same cause of action as the Suit filed in the Singapore High Court. 
Further, the Supreme Court in State of Maharashtra & Anr. (supra), after noticing that the amount claimed in the second Suit was included in the amount claimed in the first Suit, held that O2 R2 CPC would not bar the second Suit since the two suits were based on separate causes of action. The Supreme Court found that the first Suit was filed to enforce the bank guarantee, while the second Suit was filed to claim damages for breach of the contract relating to the work and in the first Suit, the foundation of the claim rested on the performance guarantee while the relief claimed in the second Suit was based on the contract entered into between the appellant and the contractor. It is, therefore, also not possible to accept the contention of the learned counsel for the petitioner that merely because the amount of 2,17,690.460 US Dollars claimed in the Original Application filed by the Bank of India before the Tribunal was included in the amount of 486,200.44 US Dollars claimed by the Bank of India against the Singapore Company in the Singapore High Court, O2 R2 CPC would bar the filing of the Original Application. 
The scope of O2 R2 CPC was also considered by the Privy Council in Payana Reena Saminatha & Anr. Vs. Pana Lana Palaniappa (1913-14) 41 IA 142 and it was held that Order 2 Rule 2 is directed to securing an exhaustion of the relief in respect of a cause of action and not to the inclusion in one and the same action of different causes of action, even though they may arise from the same transactions. 
In Mohammad Khalil Khan & Ors. Vs. Mahbub Ali Mian & Ors. A.I.R. 1949 PC 78. The Privy Council also summarised the principles and pointed out that the cause of action has no relation whatever to the defence that may be set up by the defendant, nor does it depend upon the character of the relief prayed for by the plaintiff. It refers to the media upon which the plaintiff asks the Court to arrive at a conclusion in his favour. 
It is clear from what has been noticed hereinabove that the cause of action which led to the filing of the Suit in the Singapore High Court was the banking facilities made available by the Bank of India to the Singapore Company in terms of the sanction letter dated 3rd May, 2001 issued by the Bank and the other terms and conditions stipulated therein, while the cause of action for filing the Original Application was the non payment of the amount by the Indian Company after accepting the Bill of Exchange dated 20th June, 2001. Thus, the causes of action for filing the Suit in the Singapore High Court and the Original Application before the Tribunal are different and if this be so, O2 R2 CPC would not bar the Bank of India from afterwards filing the Original Application. 
In such circumstances, it is not necessary for the Court to examine the contention of learned counsel for the Bank of India that the Bank of India had to institute the proceedings against the Indian Company, which was the acceptor of the Bill of Exchange, otherwise the liability of the Singapore Company to pay the amount to the Bank of India in terms of the sanction letter would stand discharged. 
The Tribunal, therefore, committed an illegality in dismissing the Original Application filed by the Bank of India for the reason that the relief claimed in the Original Application could have been claimed by the Bank of India in the Singapore High Court and the Bank could not afterwards sue for this relief and the Appellate Tribunal was justified in setting aside the judgment of the Tribunal and directing the Tribunal to decide the matter on merits. 
Thus, for all the reasons stated above, the writ petition deserves to be dismissed and is, accordingly, dismissed. 
Date: 28.09.2012 

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