Saturday, October 26, 2019

Requirements of a Representative Suit and Suits against Government

I have written before on the essential requirements of institution of a representative suit under Order 1, Rule 8. I recently came across two judgements of the Supreme Court which shed more light on its nuances and scope. The first one was delivered in 1963 and the second in 1990.

In the first judgement, the issue before the Court involved a combined interpretation of Section 80 of the CPC (suits against Government) and Order 1, Rule 8. In this case, two individuals issued a notice under Section 80 to the then State Government of Madras notifying the Government of their intention to the sue it and also highlighting the fact that their notice was on behalf of other individuals with similar grievances as them. While the notice did not identify all such individuals, it clearly identified the grievance, the cause of action, names and places of residence of the two individuals issuing the notice and the reliefs sought. Out of the said two individuals, however, only one of them finally sued the Government.

The Government objected to the maintainability of the suit on the ground that (a) the Section 80 notice was not in accordance with the law since it failed to specify the particulars of all individuals who had such a grievance; (b) that before issuing the Section 80 notice on behalf of others their consent was not sought; and (c) that only one of the “noticers” finally sued the Government instead of both of them, which according to the Government was not in accordance with Order 1, Rule 8.

The Supreme Court held that as long as the Section 80 notice clearly identified the grievance along with the particulars of the issuers of the notice and the reliefs claimed, and had a statement to the effect that the notice was representative in nature, the fact that it did not specify the details of other aggrieved individuals did not affect the legality of the notice. The Court also clarified that the consent of the other affected parties was not needed to issue a Section 80 notice on their behalf and categorically rejected the argument that the leave of the Court was needed even before issuing the Section 80 notice.

Keeping with this logic, the Court further held that it was not necessary to seek the permission of all affected parties to sue on their behalf under Order 1, Rule 8 since such permission to sue in representative capacity was, in any case,  to be sought from and granted by the Court to the Plaintiff upon institution of the suit. The Court reasoned that since the provision itself envisaged issuance of a public notice by the trial court to similarly placed individuals/parties at the expense of the Plaintiff, there was no need for the Plaintiff to seek permission from such parties prior to the institution of the suit. The Court also pointed out that there was nothing either in Section 80 or in Order 1, Rule 8 which mandated institution of the suit by everyone who issued the Section 80 notice in order for the suit to be maintainable.

In the second judgement, delivered in 1990, the case involved demands for additional payments issued by the State Housing Board of Tamil Nadu to allottees of housing units. When a representative suit was instituted by the one of the allottees, the State Government objected to its maintainability on the ground that a representative suit could not be filed against monetary claims since the claim amounts would differ from person to person, and that the demand made to each person would give rise to a separate cause of action, thereby precluding the application of Order 1, Rule 8. 

The Apex Court dismissed these contentions on the ground that there was nothing in Order 1, Rule 8 which precluded its application to any class of claims or actions. Importantly, the Court reiterated the position that the fundamental basis of a suit under the provision was a commonality of interest, which in itself would arise from the nature of the cause of action notwithstanding the differences in the quantum of claims. In other words, it could either be argued that the cause of action i.e. the demand for payment, need not be the same for Order 1, Rule 8, or it could be argued that the cause of action in such a case would be the broad fact that similar demands were issued to similarly placed parties/individuals. The net result would be the same.

The following extracts from the judgement capture the position with great clarity:

The provisions of Order 1 of Rule 8 have been included in the Code in the public interest so as to avoid multiplicity of litigation. The condition necessary for application of the provisions is that the persons on whose behalf the suit is being brought must have the same interest. In other word,s either the interest must be common or they must have a common grievances which they seek to get redressed.

In Kodia Goundar and Another v. Velandi Goundar and others, |LR 1955 Madras 339, a Full Bench of the Madras High Court observed that on the plain language of Order 1, Rule 8, the principal requirement to bring a suit within that Rule is the sameness of interest of the numerous person on whose behalf or for whose benefit the suit is instituted. The Court, while considering whether leave under the Rule should be granted or not, should examine whether there is sufficient community of interest to justify the adoption of the procedure provided under the Rule. 

The object for which this provision is enacted is really to facilitate the decision of questions, in which a large number of persons are interested, without recourse to the ordinary procedure. The provision must, therefore, receive an interpretation which will subserve the object for its enactment. There are no words in the Rule to limit its scope to any particular category of suits or to exclude a suit in regard to a claim for money or for injunction as the present one.

8. Coming to the relevant circumstances in the present case it will be seen that all the allotments in Ashok Nagar were made under the same Scheme and all the relevant facts are common. The basis of the impugned demand of the appellant is equally applicable to all the allottees and the plea of the plaintiff is available to all of them. The trial court was, therefore, perfectly right in permitting the plaintiff to proceed under Order 1, Rule 8 of the Code of Civil Procedure. Nobody in this situation can complain of any inconvenience or injustice. On the other hand, the appellant is being saved from being involved in unnecessary repeated litigation.

9. It is true that each of the allottees is interested individually in fighting out the demand separately made or going to be made on him and, thus, separate causes of action arise in the case, but, that does not make Order 1. Rule 8 inapplicable. Earlier there was some doubt about the Rule covering such a case which now stands clarified by the Explanation introduced by the Code of Civil Procedure (Amendment) Act, 1976, which reads as follows: "Explanation--For the purpose of determining whether the persons who sue or are sued, or defend, have the same interest in one suit, it is not necessary to establish that such persons have the same cause of action as the persons on whose behalf, or for whose benefit, they sue or are sued, or defend the suit, as the case may be."

The objects and reasons for the amendment were stated below: "OBJECTS AND REASONS: Clause 55; sub-clause (iv),--Rule 8 of Order 1 deals with representative suits. Under this rule, where there are numerous persons having the same interest in one suit, one or more of them may, with the permission of the Court, sue or be sued, on behalf of all of them. The rule has created a doubt as to whether the party represent- ing others should have the same cause of action as the persons represented by him. The rule is being substituted by a new rule and an explanation is being added to clarify that such persons need not have the same cause of action." There is, therefore, no doubt that the persons who may be represented in a suit under Order 1, Rule 8 need not have the same cause of action."