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Engineering Investments P. Ltd. Vs. Bharath Heavy Electricals Ltd., Madras and anr. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai High Court
Decided On
Case NumberT.C.M.P. No. 14133 and C.M.P. No. 14134 of 1981
Judge
Reported inAIR1983Mad1
ActsCode of Civil Procedure (CPC), 1908 - Sections 24(1)
AppellantEngineering Investments P. Ltd.
RespondentBharath Heavy Electricals Ltd., Madras and anr.
Advocates:V.P. Raman, Adv. for ;A.S. Kailasam and ;R.Thiagarajan, Advs.;B.T. Seshadri, Adv.
Cases ReferredKondayya v. Official Receiver
Excerpt:
.....and to avoid conflict of decisions court enabled to decide matters simultaneously - petition allowed as prayed for. - - 3. in an elaborate counter-affidavit, first respondent would plan (complain? had been considered in more than one decision and rights inter se between them, having been well settled, it cannot be said that on the pleadings found in the plaint, the scope of the enforceability of the bank guarantees, involves any public importance, which necessities an appeal being withdrawn to the file of this court and to be disposed of by it. therefore, such an enablement would be within the scope of the law, particularly when there is no statutory prohibition of the same learned judges of the court exercise several categories of jurisdictions, during the course of the day in..........civil p.c. for withdrawing the appeal in a.s. no.297 of 1981 on the file of the principal judge, city civil court for declaration that the bank guarantees executed by the second respondent -bank herein, is illegal ,void and unenforceable and for consequential injunction restraining first respondent from enforcing the four bank guarantees executed by second respondent in favour of first respondent. the suit was dismissed resulting in the filing of a.s. no.297 of 1981 ,as against it. c.m.p. no.1176 of 1981 was filed for interim injunction, which was granted.2. earlier to institution of o.s. no. 5101 0f 1981 , petitioner filed c.s. no. 316 of 1980 for recovery of a sum of rs. 7,02,500/- and for declaring that the order passed by the first respondent on 9-5-1980 is illegal and not binding.....
Judgment:
ORDER

1. Petition is filled under Section 24(1)(b)(i) of the Civil P.C. for withdrawing the appeal in A.S. No.297 of 1981 on the file of the Principal Judge, City Civil Court for declaration that the Bank Guarantees executed by the second respondent -Bank herein, is illegal ,void and unenforceable and for consequential injunction restraining first respondent from enforcing the four bank guarantees executed by second respondent in favour of first respondent. The Suit was dismissed resulting in the filing of A.S. No.297 of 1981 ,as against it. C.M.P. No.1176 of 1981 was filed for interim injunction, which was granted.

2. Earlier to institution of O.S. No. 5101 0f 1981 , petitioner filed C.S. No. 316 of 1980 for recovery of a sum of Rs. 7,02,500/- and for declaring that the order passed by the first respondent on 9-5-1980 is illegal and not binding and for consequential injuction against it and from enforcing or recovering the amounts covered by the four bank guarantees given by the second respondent herein. Application No. 576 of 1980 was filed in the said suit to restrain the respondent from enforcing bank guarantees and initially interim injuction was granted, butt later on withdrawn, on the filing of O.S. No.5101 of 1981 in the City Civil Court , Madras. It is therefore contended that common questions of law, facts and issues arise for consideration, both in C. S. No. 316 of 1980 and A. S. No. 297 of 1981 and since, substatial question of law of public importance require to be decided in the appeal, and to avoid conflict of decisions, this is eminently a fit matter, where the appeal requires to be withdrawn and heard and disposed of by this Court. Application No. 4074 of 1981 was filed in C. S. 316 of 1980 for amendment of plaint and the amendments having been allowed the petitioner has the right to question even the letter of intent dated 14/ 17-10-77, and also about the validity of the termination dated 9-5-1980. Further Application No. 4112 of 1981 filed under clause 13 of the Letters Patent in the suit, had to be withdrawn, since the Court felt that it would have no jurisdiction to transfer an appeal to the Original Side of this Court.

3. In an elaborate counter-affidavit, first respondent would plan (complain?) that A. S. No. 297 of 1981 pending in City Civil Court, Madras, is the outcome of an abuse of process of Court and mainly intended to protract the proceedings, since after filing the suit in the High Court, there was no justification for filing of a similar suit in the City Civil Court. Mainly because the petitioner could not secure injunction in this Court, he had resorted to this device. The application filed in this Court was withdrawn only after securing interim injection in the City Civil Court. When first respondent is entitled to get under the Bank Guarantees, a sum of Rs. 5,40,000/- and the recovery having been stalled by the proceedings during the past two years, it is causing untoward loss, to first respondent. The issues relating to four bank guarantees and their validity and their enforceability do not arise for consideration in the suit pending in this Court, wherein only the validity of the termination of the contract is the main issue. Therefore, common issues in the two proceedings relating to the four bank guarantees, do not arise for consideration. There was no need for the petitioner to institute a suit in the City Civil Court after having instituted the suit in this Court. The main attempt is to delay the realisation of the amounts covered by the bank guarantees. There is no justification made out for transfer of the appeal to the file of this Court.

4. In reply affidavit, it is reiterated that Application No. 4073 of 1981 was filed in C. S. No. 316 of 1980, for amending the plaint and the amendments having been carried out, an issue necessarily relating to the four guarantees will have to be framed, which would relate to the same transactions which are involved between the same parties in C. S. No. 316 of 1980. To avoid multipli city of proceedings, the appeal has to be transferred to the file of this Court.

5. Mr. V. P. Raman, learned counsel for the petitioner mainly rests his arguments only on two grounds, they being (1) the enforcement of four Bank guarantees, involves a matter of public importance and (2) to avoid multiplicity of proceedings between the same parties, who have been agitating over the same transactions in more than one Court, this application has to be ordered.

6. So far as the first point is concerned, the circumstances under which it can be invoked, and the rights inter se between the principal debtor, the surety and creditor; had been considered in more than one decision and rights inter se between them, having been well settled, it cannot be said that on the pleadings found in the plaint, the scope of the enforceability of the bank guarantees, involves any public importance, which necessities an appeal being withdrawn to the file of this Court and to be disposed of by it.

7. Presently the appeal is pending before a Court of competent jurisdiction, and as against the decision, if any rendered by it, there is scope for filing a second appeal to this Court on substantial questions of law. Hence, it cannot be said that the appeal involves such questions of law which cannot be decided by the City Civil Court, and hence this is not a matter where it can be claimed that the appeal pending before City Civil Court involves questions of law of public importance which have to be decided only by the High Court at this stage itself.

8. The next contention is, when the same parties are involved over the same transactions in more than one Court, to avoid conflict of decisions, it is necessary to transfer the appeal.

9. Mr. V. P. Raman, learned counsel for the petitioner would ask only for the appeal to be heard by this Court and not for the appeal and the suit to be heard together. It was then pointed out to him that if conflict of decisions are to be avoided, and if that is one of the grounds on which the petitioner seeks for the relief of transfer, he could only ask for the appeal and the suit to be heard together. Since this Court was not for sustaining the first claim made that the matter involves questions of public importance; if at all conflict of decisions is to be avoided, it can be achieved only by the appeal and the suit being heard and disposed of together. No doubt as pointed out by Mr. B. T. Seshadri, learned counsel for the respondent, by asking for stay of trial of the suit in the High Court, a decision can be secured in the appeal at an early date, and if still aggrieved, by instituting a second appeal in this Court, a binding decision can be secured. It would virtually decide the suit. But when a party to a proceeding, has the right to institute more than one suit, for different or overlapping reliefs what requires to be considered is, in the existing circumstances whether conflict of decisions would set in or should they be compelled to take the decision only in one Court.

10. Under Section 24, C. P. C., even the Court on it's own, can transfer the proceedings to avoid conflict of decision. Since one of the parties has already moved this Court by a petition under Section 24, C. P. C., and now that it is amply made out that petitioner is instituting proceedings in different Courts over the same transactions, it would be inadmissible to allow the City Civil Court to hear and dispose of the appeal, when more or less identical issues relating to the same transactions between same parties are involved in the suit, already filed in the Original Side of this Court even though, later on, in the event of a second appeal filed, there would be an occasion for this Court to have it heard and disposed of along with the suit, pending on the original side. Therefore, it would be inadvisable to allow, the interregnum, a decision to be rendered, which may result in conflicting decisions and different steps being taken to enforce the decree. At this juncture, one cannot visualise as to what would be the nature of decree that could be passed by different Courts between the same parties relating to the same transaction. No doubt it is contended that the four bank guarantees are not involved in the suit pending in the High Court, Even so, they having been issued for the same transactions which are involved in the said suit, it is desirable to bring all the parties to face one and the same Court in order to avoid complications to be set in.

11. Realising this position, the petitioner, has asked for the transfer of the appeal to the file of this Court to be heard along with the pending suit. Counsel for the respondents would oppose such a joint hearing by claiming that there is no provision made in Section 24, C. P. C. for an appeal and a suit to be heard together. This leads on, to consider the decisions rendered, on the scope of Section 24, C. P. C., which are to the following effect:

12. In Srigangam Municipality v. Palaniswami Pillai, : AIR1951Mad807 , a Division Bench of this Court held that 'in our opinion there is nothing in the language of S. 24, C. P. C, to indicate on which side of this Court the application should be made ......' (at pp. 807-808)

'According to us, the correct position is that, an application under S. 24, C. P. C., should be made to this Court as such, in the same manner as it might be made to the District Court, and disposed of by any Judge of this Court deputed by the Chief Justice to hear such applications'.

13. In Purna Chandra v. Samanta : AIR1953Ori46 it was held that 'where there are two suits which raise certain common questions of fact and law, having a substantial bearing on the decision of each of the cases, it is obviously desirable that they should be tried at the same place and by the same Judge. This course is necessary in order to avoid multiplicity in the trial of the same issues and conflict of decisions, when such a situation arises, the Court has to consider the balance of convenience, having regard to all the circumstances of the two suits'.

14. In Karuppiah Ambalam v. Ayya Nadar, : AIR1965Mad435 . while dealing with the scope of Section 24, C. P. C., it was reiterated that even execution proceedings also can be transferred under Section 24 in exercise of the general power of superintendence over subordinate Courts and for furthering the interests of justice. Section 24, C. P. C., confers a wide amplitude of exercise of powers by Court and the words 'competent to try or dispose of the matter' would include each and every Court within the jurisdiction of the superior Court empowered to deal with such execution proceedings.

15. In N. Ram Mohan v. J. Kasthuri AIR 1976 Mad 271 : 89 Mad LW 92, this Court held that the High Court can transfer a suit from the subordinate Court to the High Court in general and later on taken up by original side of this Court for trial and disposal, according to law. In this case, the petition was filed to the High Court and heard and disposed of in it's appellate side.

16. Yet another decision, placed before Court is the one reported in Gen. Council, Church of India v. Niranjan : AIR1971Cal471 , wherein it was held that S. 24, C. P. C. applies to the original side of the Court, and the power conferred under Section 24 has not been taken away by the City Civil Court Act.

17. In Kondayya v. Official Receiver, Nellore : AIR1951Mad676 it was held that in respect of insolvency proceedings, arising under the provincial Insolvency Act, they cannot be transferred to the High Court and disposed of in the original side, because such a jurisdiction is not conferred upon it. It was also held that an order refusing to transfer is not a judgment within the meaning of Cl. 15 of Latters Patent and therefore it is not open to appeal.

18. Learned counsel for the petitioner also refers to the orders passed by this Court in and by which W. P. No. 774 of 1980 and C. S. 199 of 1978 were directed to be heard together.

19. The main objection taken by Mr. B. T. Seshadir, learned counsel for the respondents, by relying upon the decision in Kondayya v. Official Receiver, Nellore : AIR1951Mad676 is that, there is no jurisdiction conferred on this Court under Sec. 24, C. P. C. to direct an appeal and a suit to be heard and disposed of, even if conflict of decisions are to set in by separate hearings. He would rather stress more on the factual position that common issues do not arise for consideration and the enforceability of the Bank guarantees, is not a point which comes up for consideration in the suit filed in this Court and that issues framed in C. S. No. 316 of 1980, nowhere make any reference to the enforceability of the Bank guarantees, and when identical issues are not to come up for consideration, it will be one of the grounds for refusing joint hearing.

20. To find out whether similar points come up for consideration or not when the plaint is looked at, it discloses a specific relief asked for by the plaintiff, in para 20 (b) to the effect that it wants a declaration that order dated 9-5-1980 terminating the contract is illegal, and void and 'for the consequential injunction restraining the defendant from enforcing or recovering the amounts covered under the Bank guarantees from M/s. Canara Bank, Villivakkam, Madras'. In para 17,

'Unless and until that was established, the defendant cannot call upon the Bankers to pay the amount due under the guarantees'.

21. The relief claimed and averment made in the plaint, would suffice to reject the claim of Mr. B. T. Seshadri, that in the suit pending in the High Court, to relief regarding the Bank guarantees, is prayed for. Merely because the issues hitherto framed do not refer to such a relief asked for, it does not mean that an identical issue as involved in the appeal is not also involved in the suit. It is always open for the Court to recast the issues, when the matter is taken up for trial. Petitioner states that he intends to take the necessary steps for recasting the issues. Whatever may be the course that may be adopted hitherto, it is clear that, even in the suit already filed in the High Court, the enforceability of the Bank guarantees is one of the main reliefs prayed for and which will have to be decided.

22. Merely because a party had indulged in instituting identical proceedings in two different Courts, it should not result in Courts being driven to a situation wherein conflicting decisions would be rendered. No doubt as contended by Mr. B. T. Seshadri, it is the making of the petitioner, but when it has resorted to a step which would ultimately result in undesirable results, the Court must be more concerned with uniformity of decisions rather than being concerned as to who had created this situation. It might have indulged in abusing process of Court, obviously to achieve different results in different Courts. When it is stated that petitioner is scheming for diversifying proceedings and guilty of generating multiplicity of proceedings, it is the respondent which should look forward to the petitioner being contained and cornered in one Court. In stead, it is for separate hearings! But, once the matter comes to the knowledge of this Court, it has to take stock of the situation and prevent a decision being rendered in the appellate Court, at a time when a substantial suit is pending disposal in the original side, in respect of a similar matter.

The abuse of process resorted to, of which respondents are complaining, would be avoided, on both matters being heard in the same Court. Further prolongation of proceedings, would also be prevented. Otherwise, on the appeal pending in the City Civil Court, being allowed to be heard, it will result in a second appeal being filed in this Court and once again the possibility of conflicting decisions being rendered in this Court itself in different jurisdictions would arise. Therefore, if as desired by the respondents, the matter is to be disposed of by the City Civil Court, what is most desirable to be avoided in the circumstances of the case in the interests of justice, would not be achieved. Hence, even though, it is the petitioner who has come before Court seeking for a particular relief, which is not conducive to the interests of justice, this order is passed under Section 24, C. P. C. for a joint hearing.

23. Mr. Seshadri would state that there can be no opposition raised to the proposition that this Court has jurisdiction to withdraw an appeal to the file of this Court for being heard and disposed of under Sec. 24, Civil P. C., but the vital objection taken by him is that the first appeal cannot be heard with the suit. On this point taken, in S. 24, C. P. C., as such, there is no provision made for the hearing of a suit and an appeal together. Therefore, the decision in : AIR1951Mad676 cited by Mr. B. T. Seshadri, has no application to the facts and circumstances of this case, because it was a case wherein a proceeding which arose under the provincial Insolvency Act was sought to be transferred to this Court, which has no jurisdiction to hear such a matter.

24. Hence, when it is quite apparent that there is every likelihood of conflict of decisions arising, the appeal, pending in the City Civil Court, has to be transferred to the file is the administrative function exercised by the learned Judge can exercise appellate or original jurisdiction, based on the posting of cases. There is no inhibition or prohibition in law to/against the same Judge to exercise both appellate and original jurisdiction, in respect of a matter where the same parties are involved and more or less identical issues arising for consideration. In the larger interests of justice and equity and to avoid conflict of decisions, of which the Court is more concerned, than that of the litigants; even if there are certain procedural defects, they can be cured. Therefore, such an enablement would be within the scope of the law, particularly when there is no statutory prohibition of the same learned Judges of the Court exercise several categories of jurisdictions, during the course of the day in the disposal of the cases, like Special-Original Jurisdiction pertaining to proceedings instituted under Article 226 of the Constitution; Appellate, Original, Insolvency, Criminal, Company cases jurisdictions etc.

25. Whether the same Judge at the same time can club more than one jurisdiction and dispose of the matter is the only objection of the respondents. When the enablement is thus made out, for the same Judge to exercise any category of jurisdiction, by administrative exercise of powers of the Honourable Chief Justice, the matter are to be posted together. It would only result in advancement of justice, which is the only concern of the Courts irrespective of whatever may be the scheming methods adopted by litigants to diversify proceedings.

26. As for balance of convenience, which is one of the relevant factors, both the litigants are within the limits of the city and represented by the same counsel, and therefore respondents cannot plead that by a transfer of the appeal, it would be put to any financial hardship or other difficulties.

27. Therefore the petition is ordered as prayed for.

Ordered accordingly.


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