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C. Raman and Co. and ors. Vs. Modern Motor Works - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtPunjab and Haryana High Court
Decided On
Case NumberCivil Revn. No. 1321 of 1971
Judge
Reported inAIR1973P& H454
ActsIndian Partnership Act; Code of Civil Procedure (CPC), 1908 - Sections 10 and 151
AppellantC. Raman and Co. and ors.
RespondentModern Motor Works
Cases Referred and Luxmi Bank Ltd. v. Hari Kissan
Excerpt:
.....nag 403, besides durgaprasad's case, ilr 61 cal 670=(air 1935 cal 1). 12. after considering the pros and cons of the matter and the conduct of the plaintiffs in filing the ludhiana suit long after the bombay suit, it appears to me that the interests of justice would be best served by staying the ludhiana suit......so far as the first two items are concerned, they are the counter-claims that arise vis-a-vis the suit filed by the plaintiff-firm in bombay, i.e., c. raman and co., and these matters will also get settled when accounting between the parties as to what is due from one to the other takes place. it, therefore, appears that substantially the claims in both the suits are the same.9. in jai hind iron mart v. tulsiram bhagwandas, air 1953 bom 117, chagla, c. j. and gajendragadkar, j., (as he then was), while dealing with section 10 observed as follows:--'section 10 does not contemplate an identity of issues between the two suits, nor does it require that the matter in issue in the two suits should be entirely the same or identical. what the section requires is that the matter in issue in the.....
Judgment:
ORDER

1. This petition for revision is directed against the decision of the Subordinate Judge 1st Class, Ludhiana, rejecting the application of the defendants under Section 10 read with Section 151 of the Code of Civil Procedure for stay of the suit.

2. Messrs. C. Raman and Company a partnership firm registered under the Indian Partnership Act and having its registered office at 79, Apollo Street, Bombay, filed a suit against Messrs. Modern Motor Works, a partnership firm having its office at G. T. Road, Ludhiana, and its two partners, J. N. Gupta and R. N. Gupta. This suit was filed as far back as 15th November, 1968, and the defendants filed a written statement in the Bombay High Court. In this suit claim was made for recovery of Rs. 74,656/80 with future interest on Rs. 70,630.98 at the rate of 9% per annum from the date of the suit till judgment and thereafter at the rate of 6% per annum till payment.

3. In the plaint in the suit, it is stated that in pursuance of an agreement dated 26th August, 1961, entered into with Ex-Cello India Ltd., C. Raman and Company, the plaintiffs, acted as the sole selling agents for propeller shafts and spare parts manufactured by the said company. According to the plaintiffs, prior to 1964, they were selling to the defendants as dealers and traders automobile parts and from 1964 onwards the plaintiffs also started selling to the defendants propeller shafts manufactured by Ex-Cello India Ltd. In May, 1965, negotiations took place between the plaintiffs and the defendants for the appointment of the defendants as the distributors of the said propeller shafts and spare parts manufactured by the said concern for the territory of the north zone comprising of Delhi, Punjab, Himachal Pradesh and Jammu and Kashmir. On 26th May, 1965, the plaintiffs appointed the defendants in Bombay as distributors of the said propeller shafts and spare parts, manufactured by Ex-Cello India Ltd. Under this agreement, the defendants placed orders with the plaintiffs from time tot time and supplied the same to the Delhi Office as well as the Ludhiana office of the defendants-firm. As according to the plaintiffs, certain accounts were not cleared by the defendants, the plaintiffs, by their letter dated 29th August, 1967 informed the defendants that from 31st August, 1967, the distributorship agreement for the said propeller shafts and spare parts would stand terminated. As the disputes between the plaintiffs and the defendants were not settled the plaintiffs filed a suit in the Bombay High Court.

4. The defendants filed their written statement in the Bombay suit and controverted the allegations of the plaintiffs and pleaded that on accounts being taken between the plaintiffs and the defendants it will be found that the plaintiffs are indebted to the defendants to a large extent, for recovery of which t he defendants proposed to file a separate suit. An indication was given in the written statement about the amounts that are alleged to be due by the plaintiffs to the defendants. In view of their statement that they will file a suit to recover the amount due to them, the defendants filed a suit on 31st August, 1970, in the Ludhiana Court. Besides the plaintiffs, they impleaded Messrs. Ex-Cello India Ltd., Bombay, as one of the defendants and the other two defendants, besides Messrs. C. Raman and Co., are the partners of the said company.

5. The suit in the Ludhiana Court was for recovery of Rs. 1,82,414/- and the break of this amount is as follows:--

1. Amount of outstanding claims/bills of the plaintiffs as detailed in Annexure 'A' of this plaint.

Rs, 9,223.16

2. Amount refundable to the plaintiffs on account of prices of Ex-Cello Products charged in excess than the fixed prices as per details given in Annexure 'B' of this Suit:

Rs. 40,876.00

3. Amount claimed as compensation by way of damages suffered by the plaintiffs in respect of stocks of Ex-Cello Products held by the plaintiffs on 31-8-1967 by way of difference in the old rates prevailing on the date of termination of plaintiffs' Zonal Distributorship/agency and the new rates reduced immediately after the termination of plaintiffs' distributorship occasioned to the plaintiffs in consequence of abrupt termination of their Distributorship.

Rs. 82,316.00

4. Compensation by may of damages on account of abrupt termination of plaintiffs' Distributorship by defendant No. 2 (C. Raman and Co.) without any prior notice.

Rs. 50,000.00

6. The present petition for revision has been filed against the order of the trial Court refusing to stay the Ludhiana suit.

7. The learned counsel for C. Raman and Co., urges that the written statement in the Bombay High Court is virtually the plaint in the Ludhiana suit. However, the crux of the matter is that the basis of the claim by C. Raman and Co., in the Bombay suit and by Messrs. Modern Motor Works in the Ludhiana suit is the distributorship agreement. The question whether the distributorship agreement has been validly terminated or not, is a matter in issue in the Bombay suit and that is again a matter in issue in the Ludhiana Suit. In one sense, the contention of the learned counsel for the respondents is correct that there is no complete identity of the subject matter in dispute in both the suits. But then if the legal position is, as is contended for by the learned counsel for the respondents, that there must be complete identity of the subject matter before Section 10 of the Code of Civil Procedure will come into play the petition must fail. But if that is not the requirement of Section 10, the petition must succeed.

8. In every case before Section 10 is applied, one has to see what is the substratum of the dispute. i.e., the substance of the matter has to be seen and not its form. It is, however, well settled that additional reliefs will not take out the case from the ambit of Section 10, but if the two matters are so divergently opposed to one another that it cannot be said that the matter in dispute is substantially the same, Section 10 will not apply. It has been held in Durgaprasad v. Kantichandra Mukherji, ILR 61 Cal 670=(AIR 1935 Cal 1) that 'Section 10 of the Civil P. C. does not prevent the Court, in its discretion from staying the proceedings in a subsequently instituted suit at a stage earlier than the actual trial. If it is satisfactorily demonstrated that the second suit is 'parallel' to the first suit, then the best course for everybody concerned would be put a stay upon, or arrest altogether, the second suit, at the earliest possible moment. The test whether previously instituted suit and a subsequently instituted suit are 'parallel' is that if the first was determined, the matters raised in the second suit would be respondent judicata by reason of the decision of the prior suit.' If this test is applied, it will be clear that items Nos. 3 and 4 of the claim in the Ludhiana suit would fall if the Bombay High Court holds that the distributorship agreement was validly terminated, and so far as the first two items are concerned, they are the counter-claims that arise vis-a-vis the suit filed by the plaintiff-firm in Bombay, i.e., C. Raman and Co., and these matters will also get settled when accounting between the parties as to what is due from one to the other takes place. It, therefore, appears that substantially the claims in both the suits are the same.

9. In Jai Hind Iron Mart v. Tulsiram Bhagwandas, AIR 1953 Bom 117, Chagla, C. J. and Gajendragadkar, J., (as he then was), while dealing with Section 10 observed as follows:--

'Section 10 does not contemplate an identity of issues between the two suits, nor does it require that the matter in issue in the two suits should be entirely the same or identical. what the section requires is that the matter in issue in the two suits should be directly and substantially the same, and proper effect must be given to the language used by the Legislature in Section 10 that the identity required is a substantial identity. There must be an identity of the subject matter, the field of controversy between the parties in the two suits must also be the same but the identity contemplated and the field of controversy contemplated should not be identical and the same in every particular, but the identity and the field of controversy must be substantially the same.'

This view is again in absolute accord with the view taken by the Calcutta High Court in Durgaprasad's case ILR 61 Cal 670=(AIR 1935 Cal 1).

10. The learned counsel for the respondents has urged that the basic requirements of Section 10 is that there must be complete identity of the subject-matter in both the suits and as in the present case, there is no such identity Section 10 will not apply. For his contention, he relies upon Roshan Din v. Mt. Malan Bibi, AIR 1938 Lah 502; Bharat Nidhi Ltd. Delhi v. Shadi Lal, AIR 1954 Punj 114 and Golwala Preme Chand Bhai Kali Dass Allayawadi v. Kundan Lal Ram Lal, 1966-68 Pun LR 172. These decisions are distinguishable and do not deal with a situation as has arisen in the present case. Where there are different and independent transactions between the parties, a suit qua one transaction cannot be stayed when a suit qua second transaction is filed. That was the case in Golwala's case. In Bharat Nidhi's case again the suits were for two different periods, and in Roshan Din's case, the suit related to two different periods for recovery of rent and it was held that in such circumstances Section 10 would not apply. As already said, none of these cases has any bearing so far as the facts of the present case are concerned.

11. The present case is more in line with the decision of the Calcutta High Court in Shorab Merwanji Modi v. Mansata Film Distributors, AIR 1957 Cal 727, where Chakravartti, C. J., who spoke for the Court, observed:--

'In my view the principal matter in issue in the Calcutta suit is directly and substantially in issue in the Bombay suit, which is a suit previously instituted and than an unnecessary publication of proceedings with the possibility of conflicting decisions being rendered will occur, if the Calcutta suit is not stayed.' While dealing with Section 10, the learned Judge observed:-- 'It is true that the section speaks of 'same parties', but it has been held that the 'same parties' mean 'the parties as between whom the matter substantially in issue has arisen and has to be decided.' Complete identity of either the subject-matter or the parties is not required.'

The learned Chief Justice relied on Wahid-un-Nessa Bibi v. Zamin Ali Shah, ILR 42 All 290; Jai Hind Iron Mart's case AIR 1953 Bom 117=ILR (1953) Bom 416 and Luxmi Bank Ltd. v. Hari Kissan, ILR (1948) Nag 403, besides Durgaprasad's case, ILR 61 Cal 670=(AIR 1935 Cal 1).

12. After considering the pros and cons of the matter and the conduct of the plaintiffs in filing the Ludhiana suit long after the Bombay suit, it appears to me that the interests of justice would be best served by staying the Ludhiana suit. The Bombay suit was filed as far back on 15th November, 1968. The written statement was filed by the defendants in that suit on 12th November, 1969 and the Ludhiana suit was filed on 31st August 1970, it seems, as a counter blast to the Bombay suit.

13. For the reasons recorded above, I allow this petition, quash the order of the learned Subordinate Judge and direct that the Ludhiana suit be stayed till the Bombay suit is disposed of. The petitioner will be entitled to its costs.

14. Petition allowed.


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