HIMALAYA COTTON GINNING & OIL INDUSTIRES v. UCO BANK
1997-04-03
SURINDER SARUP
body1997
DigiLaw.ai
JUDGMENT Surinder Sarup, J.: This revision petition is directed against the order of the court of Mr. R.C. Sharma, Senior Sub Judge, Solan where by he has accepted the application of the defendants-respondents under Section 10 read it with Section 151 and has stayed the suit of the plaintiff-petitioner till the decision of a civil suit pending between the parties in this court. 2. The facts giving rise to this petition are that the plaintiffs have filed a suit for redemption and declaration on the pleadings that the plaintiff No. 1-firm secured a term a loan of Rs. 1,26,000/-in the year 1979 from the defendant bank and also made cash credit limit of Rs 70,00U/- which was subsequently enhanced to Rs.2,00,000/- in the year 1980 and to Rs.3,00r000/- in the year 1981. The amount of term loan was payable with interest at the rate of 9.5% per annum simple interest and the cash credit limit was payable with interest at the rate of 11% per annum simple interest as agreed to between the parties. It was alleged that the bank initially had been charging the agreed rate of interest but subsequently without the consent of the plaintiffs and arbitrarily, the defendants enhanced the rate of interest with respect to the said two facilities. 3. In order to obtain relief, the plaintiff filed civil suit No. 131/1 of 1988 in the court of Sub Judge, (III), Simila for declaration and mandatory injunction. That suit was withdrawn as the defendant -bank agreed to charge the agreed rate of interest. After the withdrawal of the said suit, a meeting was held on 14th November 1991 at Shimla between plaintiff No.2 and the defendant -bank where it was agreed that the defendants would only charge interest at the rate of 9.5% on term loan and 11%on cash credit limit and the plaintiffs would liquidate the outstanding amount by 31st December 1991. It has also been pleaded that the plaintiffs deposited a sum of Rs. 3,00,000/- in the term loan account in the year 1991 which was to be adjusted towards the principal account. The plaintiffs have paid a total sum of Rs.8.31.500/- in both the accounts but on 18th June. 1993 they received a letter from the defendant informing them that the interest at the rate of 23.55% per annum with quarterly rests would be charged prior to 2nd March.
The plaintiffs have paid a total sum of Rs.8.31.500/- in both the accounts but on 18th June. 1993 they received a letter from the defendant informing them that the interest at the rate of 23.55% per annum with quarterly rests would be charged prior to 2nd March. 1992 and at the rate of 23.55% per annum with quarterly rests after 1st March 1.993. Thai increase has been alleged to be illegal arbitrary etc. and not binding on the plaintiffs because the defendant bank is liable to receive or charge the rate of interest as per circular date 24th January 1979 and agreement between the parties. According to the plaintiff, the defendants have not supplied the statement of account to the plaintiffs to enable them to liquidate their liability, if any. It has further been pleaded that the said term loan has been secured by simple mortgage of property consisting of plot No. 10, Sector -1, Parwanoo and the building constructed thereon. That mortgage is alleged to have been effected on 1 lth January 1979 in favour of the defendants. The whole mortgage money has been paid to the defendant-bank and that if the court finds that any sum will be due to the defendant on the mortgage by calculating the simple rate of interest at the rate of 9.5%, the plaintiffs are ready and willing to pay the same. The plaintiffs have asked the defendants to render true accounts and to give statement of account but without avail. Hence the suit. 4. During the pungency of the suit, the defendants moved an application under Section 10 read with Section 151 of the Code of Civil Procedure on the ground that the subject matter of the suit is the loan facility availed by the plaintiffs from the defendant-bank in the shape of term loan and cash credit limit since 1979 and the plaintiffs have challenged the rate of interest being charged and claimed by the bank and has also claimed a decree of redemption of the mortgaged property which is collateral security held by the bank in said two loans and further that the plaintiffs have claimed a decree for rendition of accounts in respect of the two loans. It has been pleaded that the bank has already filed a civil suit under Order 7, Rules 1 and 2 and under Order34, Rules 1.
It has been pleaded that the bank has already filed a civil suit under Order 7, Rules 1 and 2 and under Order34, Rules 1. 4 and 14 read with Section 26 of the Code of Civil Procedure for recovery of Rs. l l,93,596.08P against the plaintiffs in this court i.e. the High Court, it has been pleaded that the defendant-bank in the said suit has sought to recover the amount due, amongst others’ by sale of the mortgaged property i.e. the land and building on plot No. 10. Sector I Parwanoo. It has been averred that the matter in issue in the present suit is also directly and substantially in issue in the suit filed by the defendant -bank in the High Court and. therefore, it has been prayed that the suit in the court of Senior Sub Judge, Solan is liable to be stayed. It has also been pleaded that in the facts and circumstances of the case. the said court has inherent powers to stay the suit pending decision of recover, suit filed by the defendant bank in the High Court as the same is necessary for the ends of justice and to prevent the abuse of the process of the court. 5. In their reply the plaintiffs have opposed the application and raised a preliminary objection that the application under Section 10 is neither competent nor maintainable under the law unless the defendant-Bank files written statement and that the provisions of Section 10 CPC cannot be invoked by way of an application and it can only be invoked by way of defence in the written Statement The application has been alleged to be malafide and a rank abuse of the process of the court. U has been alleged that inspite of last opportunity having been granted to the defendant-bank, it has failed to file the written statement and therefore; the defence of the defendant is liable to struck off. It has been averred that the present plaintiffs have not received any summons trom the High Court and the defendants -applicants have intentionally not disclosed the alleged number of suit and the date of its institution and next date of hearing in the High Court. The present suit was filed on 15th July 1993 and, therefore, the same cannot be stayed because the alleged suit filed m the High Court is not a previous, y instituted suit.
The present suit was filed on 15th July 1993 and, therefore, the same cannot be stayed because the alleged suit filed m the High Court is not a previous, y instituted suit. 6. The learned court below has passed the impugned order by holding that the present suit though has been instituted earlier has got to be stayed under Section 151 CPC to prevent the abuse of the process of the court. While coming to this conclusion the learned court below has relied on certain reported cases i.e. Subho Ram Kalita vs. Dharameshwar Das Koch, AIR 1987 Oauhati 73, Jado Raivs. Onkar Prasad, AIR 1975 Allahabad 413 and Gurdiai Singh vs Auckland House School. AIR 1977 HP. 38. 7. I have heard the learned counsel for the parties at length and after giving my thoughtful consideration to the respective contentions advanced on their behalf I am of the view that there is no illegality, impropriety or lack of jurisdiction in the impugned order whatsoever so as to warrant interference with it by way of this present revision petition. Reasons follow hereinafter. 8. It has been submitted by the learned counsel for the petitioner that Section 10 of the Code of Civil Procedure envisages that no court shall proceed with the trial of any suit in which the matter in issue is also directly and substantially is issue in a previously instituted suit between the same parties. In the present case whereas the previously instituted suit was filed in the court of Senior Sub Judge, Solan, the subsequent suit has been filed in this court. Hence, it is not open to this court to grant relief in the first suit conversely, the court of Senior Sub Judge, Solan Cannot grant relief in the subsequent suit which is a suit for recovery while the first suit is for redemption of mortgage. On the other hand, the learned counsel for the defendant has re-iterated the reasons given in the impugned order in support thereof. 9. The ratio of the above three authorities may now be briefly noticed. In Gurdiai Singhs case (supra) it has been held that Section 10 of the Code did not apply to the case but a stay should be granted under the Courts inherent powers under Section 151 of the code in the interest of justice.
9. The ratio of the above three authorities may now be briefly noticed. In Gurdiai Singhs case (supra) it has been held that Section 10 of the Code did not apply to the case but a stay should be granted under the Courts inherent powers under Section 151 of the code in the interest of justice. U has been further held that the refusal to say courts jurisdiction and a revision petition against the order of refusal lies -under Section 115 of the Code. This ruling is fully applicable to the facts of the present case where the circumstances justify passing of the impugned order, in exercise of its inherent power under Section 151 C.P.C. by the learned court below. 10. In Jado Rais case (supra), it has been held that in a situation where Section 10 is not applicable, the court in which a suit is pending has a jurisdiction to stay the proceedings and to await the decision in another suit pending in a different court. Of course the court would take into consideration various aspects of the matter e.g. convenience of the parties, the implication and the effect of the judgment in the other suit upon the controversies involved in the suit pending before the court which chooses to say its proceeding. It is not possible to exhaust those aspects and circumstances nor is it desirable to do so. In other words it was held that the court has the inherent powers to grant stay in appropriate cases under Section 151 C.P.C. To that extent, the ratio of this judgment also applies to the present case. 11. In Subho Ram s case (supra), it has been laid down that under those circumstances where the requirements of Section 10 C.P C. are not satisfied, recourse to Section 151 C.P.C. is permissible/or staying a suit or for injunction a plaintiff from proceedings with the case, provided the court is satisfied that such a recourse in necessary for the ends of justice or to prevent abuse of the process of the court, and it is not volatile of any express and specific provision of the C.P.C. or any other law applicable to the case m be stayed or injected. The ratio of this ruling is also fully applicable to the present case. 12.
The ratio of this ruling is also fully applicable to the present case. 12. independent of the ratio of the above three rulings of three different High Court which has already held to be fully applicable to the present case, it will be seen that in the grounds of the revision petition itself it has been pleaded that it is a well settled proposition of law that if a case is not covered by Section 10 of C.P.C. stay can be ordered under Section 151 C.P.C. In other words, the plaintiffs themselves arc aware of the legal position and, therefore, in an unguarded moment they have let the cat out of the bag. 13. In the present case having already held that the matter in issue in two suits is substantially the same, interest of justice requires that in order to prevent the abuse of process of the .court and also to secure the ends of justice, the proceedings in the earlier suit filed by the plaintiffs should remain stayed. 14. The reasons given in the impugned order are unexceptionable and do not disclose any material irregularity or illegality much less any error of jurisdiction while passing the impugned order by the learned lower court. For the reason recorded above, this revision petition fails and is dismissed but due to the legal points and issues involved which are of a ticklish nature, there will be no order as to costs. . -