Introduction

This case deals with the bar on the trial of a subsequently instituted suit under Section 10 of the Code of Civil Procedure, 1908 (CPC) that can be applied to the summary suit under Order 37 of CPC.

Facts

• The bank initiated a summary suit under Order 37 of CPC against the Federation, seeking a decree of Rs 4,96,59,160, alleging that this amount was recoverable through a Letter of Credit.
• The Federation argued that the suit was not permissible since it had already filed a lawsuit against the bank for the recovery of the amount before the summary suit was initiated and hence Res Sub Judice covered under Section 10 of CPC is applicable of summary suit.
• A judge from the Bombay High Court, in a single learned judgment, determined that the principle of trial under Section 10 applies solely to regular suits and not to summary suits filed under Order 37 of CPC.
• Dissatisfied with this decision, the Federation appealed to the Division Bench of the High Court.
• The Division Bench took a different stance, interpreting the term 'trial' in Section 10 more broadly.
• It concluded that 'trial' encompasses the entire proceedings that follow after the defendant enters appearance, extending the application of Section 10 to summary suits as well.
• An appeal was then filed before the SC against the order of Division Bench of the Bombay HC.

Issues Involved

Whether there is bar under Section 10 of the Civil Procedure that is not applicable on the summary suit?

Observations

• The court noted that the purpose of the restriction outlined in Section 10 is to prevent simultaneous jurisdiction from adjudicating two parallel lawsuits, thereby avoiding conflicting conclusions on the disputed issues.
• Additionally, the court discussed both provisions, stating that Section 10 is a broad provision, however Order 37 is only applicable to certain types of suits.
• While one prohibits the continuation of a suit's trial, the other facilitates the expedited provision of relief.
• The court emphasized the need for a harmonious interpretation of both provisions to prevent frustration of their respective objectives.
• Considering the aims of Section 10 and Order 37, the court asserted that a broad interpretation of the term 'trial' is unnecessary.
• The court opined that, in the context of a summary suit, the term 'trial' should not encompass the entire legal proceedings from the filing of the complaint but should commence specifically after the court or judge grants permission to the defendant to contest the suit.
• Therefore, the Court or the Judge dealing with the summary suit can proceed up to the stage of hearing the summons for judgment and passing the judgment in favour of the plaintiff if
  • (a) the defendant has not applied for leave to defend or if such application has been made and refused or if
  • (b) the defendant who is permitted to defend fails to comply with the conditions on which leave to defend is granted.

Conclusion

• The Court finally set aside the order of the Division Bench of the HC and held that the learned single judge was correct.
• Hence the SC allowed the appeal.

Notes

Section 10 of CPC: Stay of Suit -

• No Court shall proceed with the trial of any suit in which the matter in issue is also directly and substantially in issue in a previously instituted suit between the same parties, or between parties under whom they or any of them claim litigating under the same title where such suit is pending in the same or any other Court in India have jurisdiction to grant the relief claimed, or in any Court beyond the limits of India established or continued by the Central Government and having like jurisdiction, or before the Supreme Court.
• Explanation - The pendency of a suit in a foreign Court does not preclude the Courts in India from trying a suit founded on the same cause of action.