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Indian Express Newspapers (Bombay) Ltd. Vs. Basumati Private Ltd. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtMumbai High Court
Decided On
Case Number Appeal No. 35 of 1966 and Summary Suit No. 4 of 1966
Judge
Reported inAIR1969Bom40; (1968)70BOMLR195
ActsCode of Civil Procedure (CPC), 1908 - Sections 10, 100 and 101 - Order 37, Rules 2 and 3; Bombay High Court Original Side Rules - Rules 104 and 105
AppellantIndian Express Newspapers (Bombay) Ltd.
RespondentBasumati Private Ltd.
Appellant AdvocateA.B. Diwan and ;S.J. Sorabji, Advs., i/b., Chimanlal Shah and Co.
Respondent AdvocateF.S. Nariman and ;Murzaban Mistree, Advs., i/b., Divekar and Co.
Excerpt:
civil procedure code (act v of 1908), order xxxvii, section 10 - summary suit--whether defendant in such suit without obtaining leave to defend can apply for stay of suit under section 10.;under order xxxvii of the civil procedure code, 1908, as amended by the bombay high court, it is not necessary for a defendant to obtain leave to appear in a summary suit. the defendant in such a suit can make applications which do not raise defence to the suit without obtaining leave to defend. therefore, a defendant in a summary suit can make an application under section 10 of the civil procedure code for stay of suit without obtaining leave to defend the suit.;when ordering a suit to be stayed under the provisions of section 10 of the code the questions that the court decides are not those of merits.....k.k. desai, j.1. this is the plaintiff's appeal from the order dated march 30, 1966, passed by mr. justice mody on the defendants' notice of motion dated february 11, 1966, whereby the summary suit no.4 of 1966 was stayed pending the hearing and final disposal of the defendants' suit no. 2270 of 1965 in the high court at calcutta with liberty to the plaintiffs to proceed with their above suit in so far as it concerned the plaintiffs' two claims of rs. 5000/ and rs. 582/-. the costs of the notice of motion were made costs in the cause.2. the relevant facts are as follows:3. in march 1963 the plaintiffs sold and the defendants purchased from the plaintiffs hoe rotary printing machine for the price of rs 2,50,000. originally, the defendants had executed in favour of the plaintiffs' bankers a.....
Judgment:

K.K. Desai, J.

1. This is the plaintiff's appeal from the order dated March 30, 1966, passed by Mr. Justice Mody on the defendants' Notice of Motion dated February 11, 1966, whereby the Summary Suit No.4 of 1966 was stayed pending the hearing and final disposal of the defendants' Suit No. 2270 of 1965 in the High Court at Calcutta with liberty to the plaintiffs to proceed with their above suit in so far as it concerned the plaintiffs' two claims of Rs. 5000/ and Rs. 582/-. The costs of the Notice of Motion were made costs in the cause.

2. The relevant facts are as follows:

3. In March 1963 the plaintiffs sold and the defendants purchased from the plaintiffs Hoe Rotary Printing Machine for the price of Rs 2,50,000. Originally, the defendants had executed in favour of the plaintiffs' Bankers a demand promissory note thereunder promising to pay the said price along with interest at 71/2 per cent per annum. The plaintiffs demanded payment of the price repeatedly by correspondence which forms part of the annexures to the plaint. The promissory note executed in favour of the plaintiffs' Bankers was in August 1964 substituted by a demand promissory note for the above sum of Rs. 2,50,000 and interest at 71/2 % per annum directly in favour of the plaintiffs. That promissory note was antedated May 30, 1963, and a copy of that promissory note is Ex. D to the plaint. The defendants paid three respective amounts of Rupees 2,000 each respectively on June 15, October 29 and December 31, 1964, to the plaintiffs towards interest payable in respect of the above price. On December 11, 1964, the plaintiffs sold and delivered three Inter-Type Machines of the value of Rs. 5,000 to the defendants. In March 1965, at the instance of the defendants the plaintiffs deputed their employee one P. M. Rajgopalan from Bombay to Calcutta in connection with the working of the machinery and thereby incurred the expense of Rs. 582. The defendants paid further amount of Rs. 2,000 for interest on March 29, 1965. They further paid a sum of Rs. 1,00,000 towards the debt of the price and the promissory note on August 12, 1965. In spite of repeated demands made in correspondence, the defendants failed to make further payments. As the defendants failed to make further payments, the plaintiffs ultimately filed the above Suit No.4 of 1966 on the Original Side of this Court for recovering the aggregate sum of Rupees 1,92,684.72 in respect of the price of the machineries delivered and the expense of Rs. 582 incurred. The plaintiffs claimed interest at the rate of 71/2 per cent per annum from December 16, 1965.

4. In December 1965 the defendants filed their Suit No. 2270 of 1965 in the High Court at Calcutta. The defendants thereafter proceeded to take out the Notice of Motion dated February 11, 1966, for stay of the trial of the plaintiffs' above suit until the disposal of the defendants' suit at Calcutta. By an ex parte application made on February 10, 1966, the defendants obtained an order of an interim stay of the plaintiffs' suit pending the hearing of their Notice of Motion. The defendants had filed their appearance in the plaintiffs' suit and but for the above ad interim injunction the plaintiffs would have in accordance with the rules governing summary suits proceeded to take out a summons for judgment in connection with the claim made in the suit. Ordinarily, the defendants would have on such summons for judgment by affidavit in reply shown cause and indicated their defence to the suit and applied for leave to defend the suit. The plaintiffs were prevented from taking out the summons for judgment because the defendants had obtained ad interim injunction as mentioned above. The plaintiffs filed their affidavit in reply on the defendants' Notice of Motion on February 5, 1966 and took out a Notice of Motion dated March 8, 1966, claiming that pending the hearing of the plaintiffs' suit the defendants should be restrained by an order of injunction from proceeding with their Calcutta suit. Both the Notices of Motion came to be disposed of by Mr. Justice Mody by a common judgment delivered on March 30, 1966.

5. In support of their Notice of Motion the defendants by their affidavit and arguments contended that the plaintiffs' suit was instituted on January 10, 1966. That is the allegation in paragraph 2 of the affidavit in support made by DilipSen Gupta on February 5, 1966. The defendants pointed out by diverse allegations that the matter in issue in the plaintiffs' suit was directly and substantially in issue in the defendants' suit pending in the High Court of Calcutta which had jurisdiction to grant the relief claimed in the suit. By their affidavit in reply, the plaintiffs denied that the Calcutta suit was instituted prior to the institution of their suit. They denied that the Calcutta suit was instituted on December 23, 1965. As regards their own suit the plaintiffs pointed out in paragraph l 0 of the affidavit in reply the following facts:

'The plaint x x x was signed and declared x x x on 20th December 1965, along with petition for leave under clause l 2 of the Letters Patent. Leave under clause 12 was granted x x x on 22-12-1965 and the plaint was lodged on the same day. The Courts were closed on 24-12-1965 and reopened on 10-1-1966. The Prothonotary and Senior Master appears to have admitted the plaint on the reopening of the Courts on l 0th January 1966 and the suit is taken as filed on 10-1-1966.'

As regards the defendants' suit, they stated: 'It appears that the plaint in the Calcutta suit was declared on 23rd December 1965. Leave under Clause 12 of the Letters Patent is also asked for in the said suit. There is nothing to show whether leave under Clause 12 of the Letters Patent was granted and if so when.' At the hearing on behalf of the plaintiffs, it was not contended that the defendants' suit was not filed in the High Court of Calcutta on December 23, 1965. In that connection, the learned Judge has stated that:

'There is no dispute that the said Calcutta Suit No. 2270 of 1965 was filed on 23rd December 1965.'

As regards their own suit, the plaintiffs appear to have stated that their suit must be deemed to have been filed on December 24, 1965. In that connection, the learned Judge recorded: 'There is now no dispute that the present suit must be deemed to have been filed on the 24th of December 1965.' Apparently, it was not contended before the learned Judge that the Plaintiffs' suit could be considered as having been filed at any time prior to December 24, 1965. Having regard to the statements and contentions made as above before him, as regards the question whether the defendants' suit was previously instituted, the learned Judge held: 'It is, therefore, clear as a question of fact, that the Calcutta suit was filed one day earlier than the present suit'.

6. The learned Judge negatived the contention that the matters in issue in the Bombay suit were not substantially the same as those in the Calcutta suit. The plaintiffs' contention was that their claims for the price of Rs. 5,000 in respect of three Inter-Type Machines and for Rs. 582 being the expenses incurred for deputing P. M. Rajagopalan to Calcutta were not subject-matter of the Calcutta suit. In the result, the Court should hold that the matters in issue in the Bombay suit were not substantially the same as those in the Calcutta suit. The learned Judge held that the two claims on the basis whereof the above contention was being advanced by the plaintiffs were triable in this Court. They were subject-matter of separate causes of action, but the rest of the claims in the suit were matters in issue in the defendants' suit at Calcutta and arose as a separate cause of action from the other two claims and were liable to be stayed under Section 10 of the Code of Civil Procedure. The plaintiffs' contention that the defendants could not appear and take out a Notice of Motion for stay unless they had obtained leave to defend in accordance with the procedure prescribed for summary suits was negatived by the learned Judge. The learned Judge held that leave of the Court was required only for the purpose of defending the suit. The application for stay of the suit did not amount to an application or a step in the nature of defending the suit. Having made the above findings on the Notice of Motion of the defendants, the learned Judge granted stay to the extent already mentioned above. The learned Judge has dealt with the contentions made by the parties on the Notice of Motion of the Plaintiffs for injunction against the defendants from proceeding with the Calcutta suit. We are not concerned with that part of the judgment in this appeal.

7. On behalf of the plaintiffs, the following contentions are made:

(1) 'The plaintiffs' suit in this Court was previously instituted suit. The contention was that the plantiffs' suit must be held to have been instituted when the plaintiffs presented on December 20, 1965, their petition for leave under Clause 12 of the Letters Patent along with the plaint in this suit.

(2) Under Section 10 of the Code of Civil Procedure the direction is that the Court in which a subsequent suit is filed should not proceed, to a trial thereof. In summary suit having regard to the procedure prescribed in respect thereof, 'the trial' does not commence in any event until after defendant obtains leave to defend. In this case, the question of trial of the suit had not arisen because the defendants had not obtained leave to defend. The order for stay was, therefore, not correct,

(3) Partial stay of a part of the suit cannot be granted under Section 10. As the plaintiffs' - claims for Rs. 5,000 and Rs. 582 were not liable to be stayed, the other part of the plaintiffs' claim was not liable to be stayed.

8. On behalf of the defendants, each of these contentions was denied. It was further contended that an order granting stay was not a judgment within the meaning of Clause 15 of the Letters Patent and the above order was, therefore, not appealable. It was also contended that the plaintiffs had approached the Supreme Court for special leave to appeal in respect of the above order by Special Leave to Appeal Petition No.736 of 1966. In the matter of that petition the defendants had appeared as caveators. The Supreme Court had rejected that petition by its order dated August 16, 1966. The plaintiffs had accordingly no right of appeal.

9. In Connection with the first contention that the plaintiffs' suit was previously instituted, Mr. Diwan has repeatedly drawn our attention to the facts alleged on behalf of the plaintiffs in paragraph 10 of the affidavit in reply, which we have already quoted above. He has emphasised that the plaintiffs had approached this Court for obtaining leave under Clause 12 of the Letters Patent by a petition signed and declared on December 20, 1965. The Plaintiffs had along with that petition produced the plaint in this suit for examination thereof by the Court for consideration of the petition for leave under Clause 12. He has in that connection relied upon the statement in paragraph of the petition for leave that 'the said plaint is lodged in the office of the Prothonotary and Senior Master of this x x x Court for admission'. He has insisted that without submission of the plaint in connection with the leave application the plaintiffs could not have obtained an order dated December 22, 1 965, whereby leave under Clause l 2 had been granted. His insistence was that when the plaintiffs submitted the plaint along with the leave application the plaintiffs had duly presented the plaint to this Court and had accordingly instituted the suit within the meaning of the provisions in Order VI Rule l of the Code of Civil Procedure as discussed in the case of Ramgopal v. Ramsarup 36 B. L. R. 84 = AIR 1934 Bom 91. He pointed out that in that case the observations of Beaumont. C. J.. were to the effect that presentation of the plaint for obtaining leave under Clause 12 of the Letters Patent amounted to institution of suit. He further argued that this very case had been followed by the High Court at Calcutta in the case of Suprokash Chandra v. Amullya Chandra (1940) 44 CWN 604. He relied upon the decision in the case of Heerendranath Datta v. Dheerendranath Niyogi ILR (1935) Cal l115 where also the Court had held that presentation of the plaint to a Court was equivalent to institution of suit in Court. In this very connection, he referred to the case of Raisuddin v. Basti Sugar Mills, Ltd. Basti. where, in connection with a pauper suit, the Court held that the same must be held to have been instituted at the date when the pauper petition was presented.

10. In reply, Mr. Nariman for the defendants has contended that the true construction of the provisions in Section 10 of the Code of Civil Procedure is that two live suits must be on the record of two competent Courts. That was according to him the effect of the word 'pending' contained in Section 10. A suit to be held to be previously instituted within the meaning of that section must be a suit which is 'admitted' on the file of a Court of competent jurisdiction and not merely a suit in respect whereof a plaint might have been previously presented. The contention was that mere presentation or lodging of the plaint for examination was not relevant to ascertain the fact about the date of institution of a suit in an inquiry under Section 10. The result of this contention, according to him, was that the plaintiffs' suit must be held to have been instituted and/or filed on January 10, l966. His further and more emphatic contention was that the argument on behalf of the plaintiffs that their suit was filed on December 20, 1965, was contrary to all arguments advanced and concession made in the trial Court. He emphasised that having regard to the contention made on behalf of the defendants in their affidavit that the plaintiffs' suit should be considered as having been filed on January 10, 1966, a very serious question about the date when the plaintiffs suit was instituted had arisen. On that question the plaintiffs had not contended that their suit had been filed on December 20, 1965, when the petition for leave under Clause 12 had been filed or on December 22, 1965, when such leave was granted, but arguments were advanced on the footing of a concession that the suit was instituted and must be 'deemed' to have been instituted when on December 24, 1965, after payment of Court-fees on that day the plaintiffs had lodged the plaint in the office of the Court. He has in that connection very strongly relied upon the learned Judge's statement in his judgment that 'there is now no dispute that the present suit must be deemed to have been filed on the 24th of December 1965.' He has contended that if on behalf of the plaintiffs the contention that their suit was instituted on December 20 had been made the defendants would have contested that question of fact and would have by leading evidence proved all details as to how the plaint was dealt with between December 20 and 24, on which last date the Court-fee stamps were for the first time affixed to the plaint. He has pointed out the fact that the docket of the plaint is annexed after the Court-fee stamps were included on December 24. Admittedly, these stamp papers did not form part of the plaint that was forwarded to the Court along with the petition for leave under Clause 12. He has relied upon the endorsement showing cancellation of the stamp papers on December 24, 1965. He has in that connection relied upon the endorsement made by the office of the Court that the plaint was 'lodged' at '3 p.m.' on December 24. In this very connection he has also pointed out that the practice of the Court is that a lodging register mentioning particulars of the date and time when plaints are lodged is maintained in the Prothonotary's office. The relevant entries in that register would show that the plaint in the plain-tiffs' suit was for the first time presented for lodging at 3 p.m. on December 24. He has referred us to the endorsement 'admitted' on the plaint and registers like suit register maintained by the office of the Court in connection with all suits. He has submitted that the question about the date of the institution of the suit was allowed by the Plaintiffs to be decided by the trial Court on a concession that though the suit had been 'admitted' on January 10, 1966, since the plaint was 'lodged' on December 24, 1965, the Suit must be 'deemed' to have been instituted on that day. In his submission, having regard to what has been observed in several authorities including the observations of the Privy Council in Diwanchand v. Weld & Co. the concession of fact that the plaintiffs made as above cannot be permitted to be withdrawn except in special circumstances and without strong and adequate reasons. His further submission was that if the plaintiffs had insisted that their suit was instituted on December 22, oral evidence would have been recorded between the parties and the defendants would have had opportunity to cross-examine the evidence tendered on behalf of the plaintiffs. The contention now made on behalf of the plaintiffs related to a question of fact and cannot be allowed to be raised as the defendants did not have any opportunity to cross-examine the evidence that might have been tendered on behalf of the plaintiffs. In connection with the word 'deemed' used in the sentence quoted above from the learned Judge's judgment, he pointed out that in the case of Dharamsi Chemical Co. v. Ochhavlal 29 Bom LR 981 = AIR 1927 Bom 480, Blackwell, J., held that a suit must be deemed to have been instituted when a plaint is 'lodged' for examination under the Rules of the Original Side of this Court. It was for that reason that in spite of the fact that the plaintiffs' suit was admitted on January 10, 1966, the concession of the plaintiffs was recorded by stating that the present suit must be deemed to have been filed on December 24, 1965. In connection with the case of 36 Bom LR 84=AIR 1934 Bom 91 his submission was that the observations in that case must be confined to the question of the date of institution of suit arising under (Section 3 of) the Indian Limitation Act. In that connection he has relied upon the provisions in Sections 5 and 40 of the Court-fees Act and pointed out that a document not bearing proper stamp fees would always have to be considered as not valid and such as could not be received by Court or by any public officer. He has for that reason submitted that in no event the plaint in the present suit could be a valid document before the Court-fee stamps were cancelled on December 24, 1965. The earliest date when the plaintiffs' suit could be held to have been instituted would, therefore, never be prior to December 24, 1965.

11. Now, in this connection, it is true that in the case of 36 Bom LR 84= AIR 1934 Bom 91 one of the questions which arose for decision was 'when was the suit instituted within the meaning of Section 3 of the Indian Limitation Act? The plaint in that case was handed over to an officer in the Prothonotary's office on May 25, 1932. On the face of the plaint it was apparent that leave to sue was required under Clause 12 of the Letters Patent. On behalf of the appellants it was contended that in such a case the plaint could not be presented except to a Judge who was the only person who could give leave to sue under the Letters Patent and that the presentation of the plaint to the proper officer in the Prothonotary's office did not amount to institution of the suit where leave to sue was required under Clause 12. Dealing with that contention, Beaumont, C. J., observed:

'x x x x, and the clause provides in effect that until leave is granted the Court shall not receive, try or determnie the suit. But, I think, that the argument of the appellant really involves a confusion between 'presentation of the plaint' and 'admission or receipt of the suit'. To my mind, the plaint, even where leave is required, is presented when it is handed over by the plaintiff or his agent to the proper officer in the Prothonotary's office. If leave is required, the plaint must be submitted to the Chamber Judge and leave obtained from him under clause 12 of the Letters Patent. When that leave is obtained the officer in the Prothonotary's office must see that the plaint is in order and admit it under Order IV, Rule 2, and he cannot admit the plaint until the leave of the Judge has been obtained. But, to my mind, the obtaining of the leave of the Judge and the admission of the plaint does not affect in any way the presentation of the plaint for the purposes of the Indian Limitation Act.'

Now, these observations of the learned Chief Justice have been followed in the case of (1940) CWN 604. It is, therefore, contended on behalf of the plaintiffs that in this case the observations of the learned Chief Justice are wholly applicable. There can be no dispute that the plaint was signed and declared on December 20, 1965. The petition for leave under Clause 12 was presented on December 20, 1965. Along with the petition the plaint was forwarded to the Court so that after examining the same leave could be granted to the plaintiffs.

12. In this connection, Mr. Nariman is right that the observations of the learned Chief Justice were made with reference to the provisions in the Explanation to Section 3 of the Indian Limitation Act which were noticed in the Judgment. The Explanation provided: 'A suit is instituted, in ordinary cases, when the plaint is presented to the proper officer'. It is, therefore, true that the learned Chief Justice was in the above decision only considering the question as to what should be considered the date of institution of a suit having regard to the provisions in Section 3 of the Indian Limitation Act Mr. Nariman has further pointed out from records that in the case of 36 Bom LR 84=AIR 1934 Bom 91 oral evidence was tendered before Mr. Justice Blackwell in the trial Court for proving facts about the manner in which the plaint was dealt with. He has, therefore, insisted that the decision of the learned Chief Justice was on the basis of findings of facts made by Mr. Justice Blackwell in the trial Court. He has, therefore, insisted that if opportunity had been afforded to the defendants, they would have proved that in this case the plaint was not 'lodged' as in the case of 36 Bom LR 84=AIR 1934 Bom 91 on the date when the petition for leave under Clause 12 was instituted. He insists that in the case of 36 Bom LR 84=AIR 1934 Bom 91 the plaint had been 'lodged' in Court even before leave under Clause 12 had been granted. In this connection, both sides have attempted to discuss before us the practice that has been followed in the office of the Prothonotary since 1954 when for the first time ad valorem Court-fees became payable in respect of suits and claims instituted in the High Court. Mr. Diwan read to us a notice that had been put up by the Prothonotary's office as to when Court-fee stamps need be affixed to the plaint when leave under Clause 12 was necessary. Admittedly, before 1954, i.e. when ad valorem Court-fees were not payable in respect of suits and claims to be instituted in the High Court, a separate petition for leave under Clause 12 of the Letters Patent was never filed. Appllcation for leave under Clause 12 was made in the original plaint, itself and 'leave granted' was endorsed on the plaint itself by Court. The plaint was ordinarily 'lodged' even before the question of leave under Clause 12 was considered. It is clear from the record of this suit that in connection with a petition for leave under Clause 12 the office of the Court is now willing to receive the (draft) plaint in an intended suit without Court-fee stamps annexed to it. We are unable to ascertain as to how the parties deal with a plaint in respect whereof leave under Clause 12 is refused. We are not aware as to in what manner plaints in respect whereof leave under Clause 12 is granted are dealt with. Apparently, in respect of claims in such a plaint, the Court-fee stamps would have to be affixed subsequent to the date of the order granting the leave under Clause 12 if the plaint does not carry such affixed stamps. How and when an Attorney of the plaintiffs will affix such stamps and whether even after leave is granted he has not the liberty not to institute suits has not been ascertained. This situation arose because on behalf of the plaintiffs it was not insisted before the learned Judge that their suit had been instituted by presentation of the plaint along with the petition for leave under Clause 12 of the Letters Patent. The reason why the learned Judge stated in the judgment that 'there is now no dispute that the present suit must be deemed to have been filed on the 24th of December 1965' was that the plaintiffs being aware of the Rules 100 to 105 of the Original Side Rules relating to the institution of suit and the fact that the plaint was 'lodged' at '3 p.m.' on 24th December, did not argue that the plaint was duly presented to any of the officers of the Court prior to December 24, 1985. The above Rules relate to institution of suits in this Court. Rule 100 refers to the manner and method of preparation of plaint and in that connection provides that particulars as required under Order VII, rules l to 8, of the Code of Civil Procedure should be included in the plaint, Rules 102 and 103 relate to the manner of verification of the plaint and appearance of Attorneys, Rules 104 and 105 provide:

'104. All plaints shall, except in cases of special urgency be lodged with the Assistant Master x x x x for examination, x x x x previous to their being presented to the Judge, and the plaintiff or his Attorney shall attend next morning before the Judge.'

'105. The plaint and documents therewith, when so lodged, shall be properly stamped with uncancelled stamps ready for filing.'

It is sufficient to state that the plaintiffs admitted before the trial Court that in accordance with Rule 104 the plaint was 'lodged' with the appropriate officer for the first time at 3 p.m. on December 24 and that it was on that very day that the plaintiffs had annexed the uncancelled stamp to the plaint. Mr. Diwan, however, with intent to have the principles in the case of 36 Bom LR 84=AIR 1934 Bom 91 applied to the plaintiffs' suit contends that the concession that was made on behalf of the plaintiffs to the learned Judge was a concession of law and not of fact and that such a concession is ordinarily held to be not binding on a party. He, therefore, submits that we should decide this appeal on the footing that the plaintiffs had in fact duly presented and lodged the plaint in this suit on December 20, along with the petition for leave under Clause 12 of the Letters Patent. Having regard to what has been discussed above, we are not prepared to accept the contention that the concession that was made on behalf of the plaintiffs was a concession on a point of law. It is clear to us that the concession regarding the date of the institution of the plaintiffs' suit that was made before the learned Judge was in respect of a question of fact, i.e., the date on which the plaintiffs lodged the plaint in this suit in accordance with the provisions in Rules 104 and 105. In fact, having regard to the facts stated on behalf of the plaintiffs it would be impossible to hold that the plaint in this case was 'lodged' in Court at any time before December 24, 1965. In our view, if the plaintiffs wanted to contend that they had duly 'lodged' the plaint in Court on December 20, 1965, along with the petition for leave under Clause 12 of the Letters Patent, they ought to have raised such a contention before the learned Judge and ought to have proved the same by leading sufficient evidence in that connection. This appeal, under the circumstances, is liable to be disposed of on the footing that the concession made on behalf of the plaintiffs before the trial Court is binding on them and that the plaint in the suit was 'lodged' in Court for the first time in accordance with the provisions in Rules 104 and 105 on December 24, 1965. In the result, the finding of the learned Judge that the suit must be deemed to have been filed on December 24, 1965, binds the parties.

13. As we have come to the above conclusion, we do not find it necessary to discuss in detail the contentions made on behalf of the parties as regards the true construction and effect of the provisions in Sections 5 and 40 of the Court-fees Act. It is sufficient to state that Mr. Nariman contended that the plaint that was submitted along with the petition for leave under Clause 12 of the Letters Patent having not been duly stamped with Court-fees was not a valid plaint. In his submission, the plaint was never valid before the Court-fee stamps were annexed to the plaint for cancellation on December 24, 1965. In that connection reference was made by both the parties to the provisions in Section 149 of the Code of Civil Procedure and discussion in diverse authorities on that section. Having regard to the above finding, it is unnecessary to discuss these authorities.

14. The second contention made on behalf of the plaintiffs was that the defendants were not entitled to take out the above Notice of Motion before obtaining leave to defend. In that connection, Mr Diwan argued that under Section 10 of the Code the direction to Court is not to proceed with the trial of any suit. Relying upon the scheme of Order XXXVII of the Code and observations in the cases of Symon and Co. v. Palmer's Stores (1903), Ltd., (1912)1 KB 259 and Dewanchand and Sons v. Dora Few : AIR1953Bom80 , he contended that trial in a summary suit never commences in any event until and after a defendant obtains leave to defend. In that very connection, relying upon the observations in the case of Sennaji Kapurchand v. Pannaji Devichand ILR 46 Bom 431=AIR 1922 Bom 276 and other authorities, he had pointed out that interlocutory orders are permitted to be made in suits ordered to be stayed. On the basis of these authorities, he contends that the plaintiffs had a right to issue a summons for judgment and unless the defendants at the hearing of such summons had been given leave to defend the trial of the plaintiffs' suit could not commence. The contention is that the scheme of Order XXXVI l is that the plaintiffs were entitled to a judgment without any trial if the defendants did not obtain leave to defend. The submission on the above footing is that before considering the above Notice of Motion, the learned Judge should have permitted the plaintiffs to have issued summons for judgment and considered the question about granting or refusing to the defendants leave to defend. The reply of Mr. Nariman on behalf of the defendants is that the above Notice of Motion claiming stay of the plaintiffs suit does not raise defence to the plaintiffs' suit at all. The provisions in Section 10 are mandatory and obligatory and in the result whenever facts to which the provisions of Section 10 may be applicable are disclosed to or brought before a Court, it would be oblicatory to order stay of suit. He further contends that the scheme of Order XXXVII now enables a defendant to file his appearance without obtaining leave in that connection. The scheme of Order XXXVII which previously prevented a defendant from appearing without obtaining leave has now been amended. In that connection, he relies upon the observations made in Krishnanath Balkrishna v. Ram Ratan (1966) 68 Bom LR 407 and Jagannath Murlidhar V. Rupchand : (1954)56BOMLR916 . In the last referred case, on behalf of the plaintiff, it was contended that in the summary suit that was before the Court the defendant was not entitled to take out a Notice of Motion for recording a compromise because he had not obtained leave to defend. The contention was negatived after noticing that the marginal note to Order XXXVII Rule 3 was 'Defendant showing defence on merits to have leave to appear'. Tendolkar J., however, held that under Order XXIII Rule 3 it was obligatory on the Court if an agreement of compromise was proved at any time before passing a decree to record the agreement and to proceed to pass a decree in terms of such an agreement. He observed that where a defendant seeks to have a compromise recorded he is not defending a suit on merits and it was not necessary for a defendant in a summary suit to obtain leave to defend for the purpose of taking out a Notice of Motion for recording a lawful compromise. In the case of (1966) 68 Bom LR 407, Mody, J., pointed out that the decision in the case of Pestonji v. Jamshedji : AIR1926Bom250 was given in 1925 'and what applied then were the provisions of O. XXXVII, R. 3, of the Civil Procedure Code. Under O. XXXVII R. 3, it was not open to a defendant not only to defend the suit but even to appear in the suit except with the leave of the Court.' He then referred to the amendments made in the scheme of Order XXXVII by this Court by exercising powers under Section 122 of the Civil Procedure Code and observed that after the amendments it was not necessary for the defendant to obtain the leave of the Court for filing his appearance although it continued to be necessary for him to obtain leave of the Court to defend the suit. In connection with the application before him made on behalf of the defendant for instalments, he held that the defendant was not applying for being heard in his defence and was making an application on the footing that the decree may be passed as applied for by the plaintiffs but that decree be made payable by instalments. It is sufficient to state that in our view, having regard to the scheme of Order XXXVII as amended by this Court, it is now not necessary for a defendant to obtain leave to appeal in a summary suit. He can also make applications which do not raise a defence to the suit without obtaining leave to defend. It is also clear that when ordering a suit to be stayed under the provisions of Section 10 the questions that the Court decides are not those of merits of claim and defence between the parties. The Court has to ascertain if a previously instituted suit is pending in a Court of competent jurisdiction and whether the matter in issue in the subsequently instituted suit is directly and substantially in issue in the previously instituted suit. Mr. Nariman is right in relying upon the observations of the High Court at Allahabad in the case of Ramrichpal Singh v. Dayanand Sarup AIR l 955 All 309, where Malik, C. J., observed: 'To my mind a plea under S. 10, Civil P. C. does not constitute a defence to the suit x x'. It is clear that Mr. Diwan is not right when he contends that by claiming stay of the plaintiffs' suit by the above Notice of Motion the defendants were raising defence to the suit.

15. Now, even if Mr. Diwan may be right that the trial in summary suit does not effectively commence unless a defendant obtains leave to defend and complies with the conditions imposed for such leave, in our view a defendant in a summary suit would be entitled to apply to the Court for stay of the subsequently in stituted suit, this is so because the true intent of the provisions in Section 10 is that common matters in issue in two suits should be ordinarily decided in a previously instituted suit. This would be the position even if the subsequently instituted suit may be a summary suit. Now, if the contention made by Mr. Diwan is accepted, a plaintiff in subsequently instituted summary suit where defendant is refused leave to defend or does not comply with conditions imposed for leave to defend would get a decree as prayed without any trial whatsoever. In our view, the scheme of Section 10 does not permit such a situation to arise. This would be so even if Mr. Diwan is right in his submission that trial in a summary suit only commences after the defendant obtains leave to defend. In our view, an application under Section 10 of the Code of Civil Procedure does not raise any defence on the merits of controversy between the parties and relates only to the question about the proper Court for decision of such issues. This second contention therefore fails.

16. As regards the third contention that the learned Judge should not have granted stay of the suit because he was unable to stay the suit in connection with the claims for Rs. 5,000 and Rs. 582 it is sufficient to state that the defendants have in fact paid to the plaintiffs the sum of Rs. 5,000 being the price of the three Inter-Type Machines and have informed as that without prejudice to all their contentions they are forwarding to the plaintiffs the sum of Rs. 582 in respect of expenses incurred by the plaintiffs deputing for P. M. Rajagopalan to Calcutta. The defendants do not intend to go to a trial in respect of these two items in the p1aintiffs' suit. The claim that will now survive in the plaintiffs' suit will only relate to the claim of the plaintiffs for the Hoe Rotary Printing Machine of the value of Rs. 2,50,000 and costs. That being the position on facts, it is not possible to accept Mr. Diwan's contention that the defendants' Motion is liable to be dismissed because only a partial order of stay can be issued.

17. As we have made findings on all the contentions made on behalf of the plaintiffs in favour of the defendants, we find it unnecessary to decide the correctness or otherwise of the preliminary objections made on behalf of the defendants.

18. Mr. Nariman contended that the order granting stay cannot be held to be judgment within the meaning of Clause 15 of the Letters Patent and accordingly this appeal is not maintainable. In that connection he referred to Asrumati Debi v. Kumar Rupendra Deb Rajkot : [1953]4SCR1159 ; Elphinstone Etc. Mills v. Sondhi Sons : AIR1962Bom241 the unreported judgment of a Division Bench of this Court in the case of Shantiniketan Co-operative Housing Society Ltd. V. M/s. Oil Corporation of India (Pvt.) Ltd. in Appeal No. 45 of 1966 decided on September 5, 1966 (Bom.), the observations of the High Court of Madras in Central Brokers v. Ramnarayana Poddar and Co. : AIR1954Mad1057 and Sriramchandra v. Mahalakshmamma AIR 1957 AP 491 where the above Madras decision was followed. He submitted that inasmuch as by the order in appeal the suit of the plaintiffs has not been dismissed, the test of the final determination of the suit to render the order in appeal a 'judgment' is not satisfied. He contended that what would happen in the defendants' suit at Calcutta whether it would be duly prosecuted, whether it would be decided on some preliminary contentions, whether issues of merits or controversy between the parties would be satisfactorily decided and/or not decided at all and such questions have all remained open. The effect of the order of stay granted by the learned Judge, in his submission, has only the effect of an order of adjournment of the suit. He contended that if the Calcutta suit is not decided on merits, ultimately the plaintiffs' suit would be tried by this Court. The suit thus does not stand terminated. For these reasons, according to him, having regard to the observations of the Supreme Court in the case of : [1953]4SCR1159 and what has been held by the High Court of Madras in : AIR1954Mad1057 the order in appeal should be held to be not a judgment and appealable.

19. Mr. Diwan has relied upon the decisions of this Court in the cases of Jivanlal v. Pirojshaw : AIR1933Bom85 and Jai Hind Iron Mart v. Tulsiram : AIR1953Bom117 . The first case was an appeal from an order refusing stay of the suit under Section 10 of the Code. The appellant had contended that such an order was not a judgment within the meaning of Clause 15 of the Letters Patent. In their separate judgments Black-well, J., and Beaumont, C. J., negatived that contention. The learned Chief Justice observed:

'x x x x a decision of the Judge either to allow or to refuse a stay under that section is a decision, which in fact goes to the jurisdiction of the Court. If the ease is brought within S. 10, then the Court has no jurisdiction to proceed with the trial of this suit, so long as the earlier suit is pending; and when the earlier suit is determined, the matter in issue in this suit will probably be res judicata. Therefore, the decision of the Judge under S. 10 really determines the right of the plaintiffs to sue in this Court; and it seems to me that such a decision is a 'judgment' within cl.15, of the Letters Patent and the authorities under that clause, and that such a decision is not a mere order relating to procedure in the suit.'

Now, these observations of the learned Chief Justice have been referred to with approval by Chagla, C. J., in the next case referred to above. The very same is the effect of the observations of the High Court of Calcutta in the case of Shorab Modi v. Mansata Film Distributors : AIR1957Cal727 . As already stated, the question does not arise for adjudication in this appeal. It, however, requires to be stated that if we had to decide this question 'we would have been right in holding that we are bound by the observations made by the Division Bench of this Court in the above two Bombay cases.

20. As regards the contention that the plaintiff have lost the right to proceed with this Appeal because the petition to the Supreme Court for leave to appeal being petition No. 736 of 1966 has been dismissed, it is sufficient to state that the order produced before us does not contain the ground on which the leave application was rejected. It would be difficult, therefore, to proceed on the footing that the Supreme Court not only refused to grant leave but heard an appeal and dismissed the same on merits.

21. Though we have made findings against the plaintiffs, it requires to be stated that the learned Judge was right in finding that the defendants' suit at Calcutta is a vexatious suit. We agree with the reasoning of the learned Judge in arriving at that finding. Even on a cursory reading of the annexures to the plaint, it is clear that at material times the defendants had not raised any questions denying their liability to the plaintiffs for the price of the machinery mentioned in the plaint. On the contrary the defendants had executed promissory notes in that connection. The defendants had made payment of interest and also part payment of a sum of Rs. 100,000. It appears that having come to realise that because of their failure to make payment the plaintiffs were about to institute the above suit in this Court, the defendants forestalled them by filing the suit at Calcutta one day previous to the institution of this suit. Having regard to these facts, it appears to us that the defendants are not entitled to any costs of this appeal, though the appeal falls.

22. In the result, the appeal is dismissed. There will be no order as to costs.

23. Appeal dismissed.


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