Kandhari Beverages Pvt. Ltd. vs Suzlon Energy Ltd.

Hemant Gupta, J.—The Petitioner has sought appointment of an Arbitrator u/s 11 of the Arbitration and Conciliation, Act, 1996 (for short the ''Act'') in respect of the disputes arising out of an Agreement dated 19.11.2005 regarding the installation of 1250 K.W. Wind Turbine GeneratOrs.

The Petitioner has filed earlier a petition before this Court on 10.5.2009 (Arbitration Case No. 11 of 2010) claiming adjudication of disputes such as failure to ensure Minimum Guarantee Generation of electricity i.e. for the period from May 2006 to April 2008. In the said petition this Court appointed an arbitrator on 29.4.2011.

The present petition was initially filed on 25.4.2011. It was returned with objections. The same has been placed for hearing before the Court for the first time on 4.5.2011 before the Court.

The Petitioner in the present petition claims adjudication of disputes on account of failure of Respondent to ensure Minimum Guarantee Generation of electricity for the period from May 2008 to March 2010. When the petition came up for hearing before this Court on 4.5.2011, learned Counsel for the Petitioner took time to examine the question; whether the present petition to claim Minimum Guarantee Generation of power can be raised as a separate dispute once, the disputes raised in an earlier petition have been referred to an Arbitrator.

Learned Counsel for the Petitioner has argued that for every default of the failure to generate the Minimum Guaranteed electricity, is a separate cause of action, therefore, the Petitioner has a right to seek adjudication of such disputes by an Arbitrator.

Having heard learned Counsel for the Petitioner, for some time, I do not find that the present petition to seek adjudication of dispute through an Arbitrator for a subsequent period is maintainable. The Petitioner has filed the previous petition seeking adjudication of the disputes on 10.5.2009 for failure of the Respondent to ensure Minimum Guarantee Generation of electricity for the period from May 2006 to April 2008.

The Petitioner has not claimed future Minimum Guarantee Generation of electricity in the earlier reference, therefore, in terms of Order 2 Rule 2, CPC, the claim of the Petitioner is barred. The said provision read as under:

Order 2 Rule 2. Suit to include the whole claim

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.-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.

In Kunjan Nair Sivaraman Nair Vs. Narayanan Nair and Others, , the Court elucidated purpose of such provisions in the following words:

...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 indicted 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.

Now the question is as to whether, the claim for future damages could be raised in the first reference, or the cause of action in respect of such relief is a separate and distinct cause of action which could not raised and included in earlier proceedings.

Again in Kunjan Nair Sivaraman Nair Vs. Narayanan Nair and Others, , the court explained the scope of expression "cause of action". It held

16 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 action. In the wider sense, it means the necessary conditions for the maintenance of the suit, including not only the infraction of the right, but the infraction coupled with the right itself. Compendiously the expression means every fact which 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".

In Halsbury''s Laws of England (4th Edn.) 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.

As observed by the Privy Council in Payana Reena Saminathan v. Pana Lana Palaniappa (1914) 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 of different causes of action, even though they arise 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 AIR 1949 78 (Privy Council) .)

In the present case, except period, the basis of dispute and consequences arises from the same set of evidence. Therefore, it was incumbent upon the Petitioner to claim such relief in the earlier reference. The only exception is in respect of claim of mesne profits falling within Sub Rule 4 of Rule 2 of Order 2 read with Order 20 Rule 12 of the Code. It is so held in Shiv Kumar Sharma Vs. Santosh Kumari, , when it so observed:

In terms of Order 2 Rule 2 of the Code, all the reliefs which could be claimed in the suit should be prayed for. Order 2 Rule 3 provides for joinder of causes of action. Order 2 Rule 4 is an exception thereto. For joining causes of action in respect of matters covered by Clauses (a), (b) and (c) of Order 2 Rule 4, no leave of the court is required to be taken. Even without taking leave of the court, a prayer in that behalf can be made. A suit for recovery of possession on declaration of one''s title and/or injunction and a suit for mesne profit or damages may involve different cause of action. For a suit for possession, there may be one cause of action; and for claiming a decree for mesne profit, there may be another. In terms of Order 2 Rule 4 of the Code, however, such causes of action can be joined and therefore no leave of the court is required to be taken. If no leave has been taken, a separate suit may or may not be maintainable but even a suit wherefore a prayer for grant of damages by way of mesne profit or otherwise is claimed, must be instituted within the prescribed period of limitation. Damages cannot be granted without payment of court fee. In a case where damages are required to be calculated, a fixed court fee is to be paid but on the quantum determined by the court and the balance court fee is to be paid when a final decree is to be prepared.

In view of the judgments mentioned above, the claim of the Petitioner for damages the subsequent period on account of failure to generate minimum electricity is not a separate cause of action but a cause of action which is continuing and arising out of the breach of contract. The explanation to Sub Rule 2 provides that 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. Such breach is subject matter of adjudication in earlier petition. The Petitioner has not claimed such damages in the earlier petition for the future nor sought the permission of the court to separately sue for it, therefore, such damages cannot be claimed in the present petition. Having failed to include such claim in the earlier petition, the Petitioner cannot split up its cause of action and claim damages for failure to generate minimum guaranteed electricity for the subsequent period by way of present petition.