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2004 DIGILAW 961 (BOM)

Vassudev G. Quenim v. Bandekar Brothers Pvt. Ltd.

2004-07-31

S.A.BOBDE

body2004
JUDGMENT S.A. BOBDE, J. 1. Rule. By consent heard forthwith. 2. By this writ petition, the plaintiff in Special Civil Suit No. 1 of 2003 i.e. Vassudev G. Quenim, challenges the impugned order dated 7.4.2004 passed by the Civil Judge, Senior, Division, at Bicholim, Goa. By the impugned order, the learned trial Court has stayed the petitioner's Special Civil Suit. No.1 of 2003/A. 3. The petitioner Vassudev G. Quenim has filed this suit against respondent No.1, Bandekar Brothers Pvt. Ltd. (BBPL), a Company incorporated under the Companies Act, 1956 and Respondent No.2 Vassantran Metha & Co. Pvt. Ltd. (VMCPL), also a Company incorporated under the Companies Act, 1956. This suit is for recovery of a sum of Rs. 67,43,333.70 inclusive of interest said to be payable to the plaintiff jointly and severally by the defendants at the foot of a mutual open and current account as 31.3.2000. This suit has been stayed. 4. Earlier the following suits have been instituted by the respondents against the petitioner:- (a) Special Civil Suit No. 7 of 2000 instituted by BBPL on 8.2.2000. This is a suit instituted for recovery of a sum of Rs. 67,97,385.50 with interest thereon allegedly due to BBPL on account of hire charges of machinery hired by the petitioner. This suit is based on account for the period from 1990 to June, 1999. In this suit, the petitioner has made a counter claim on 10.3.2000. By this counter claim the petitioner has claimed an amount of Rs. 1,20,83,079.44 with interest thereon, on account of the value of ore allegedly sold by the petitioner to respondent No.1 for the period from April, 1998 to June, 1999. (b) Special Civil Suit No. 8 of 2000 instituted by VMCPL against the petitioner for recovery of sum of Rs. 5,45,190.83 with interest thereon, on account of hire charges. The suit is based on an account claimed to be a current account by the respondent for the period from December, 1995 to March, 1999. In this suit, the petitioner has made a counter claim for the value of a are sold to respondent No.2 for the period from 19.2.1996 to 3.6.1997 of the value of Rs. 71,03,759.07 with interest thereon. This suit is instituted on 17.2.2000 and the counter claim is instituted on 7.7.2000. (c) Special Civil Suit No. 14 of 2000 instituted by BBPL on 31.3.2000 for Rs. 71,03,759.07 with interest thereon. This suit is instituted on 17.2.2000 and the counter claim is instituted on 7.7.2000. (c) Special Civil Suit No. 14 of 2000 instituted by BBPL on 31.3.2000 for Rs. 1,61,12,450/- with interest thereon on account of a loan of cargo allegedly made by BBPL to the petitioner and for the value of the are allegedly exchanged by BBPL with the petitioner. These transactions are said to be of November, 1996 and November, 1997. (d) Special Civil Suit No. 21 of 2000 instituted by BBPL for Rs. 2,97,58,668.49 with interest thereon for the value of are allegedly not returned to BBPL in pursuance of the exchange transactions for the period from December, 1996 to April, 1999. In the last two suits mentioned above, there is no counter claim. 5. The petitioner filed the present suit being Special Civil Suit No.1 of 2003/A on 7.1.2003 for Rs. 67,43,333.70 i.e. for Rs. 53,09,711.67 with interest thereon. This suit is said to be a comprehensive suit for an amount under the foot of a mutual open and current account being the close of the financial accounting year 1.4.1999 to 31.3.2000. The petitioner has stated in the suit that he had omitted to refer to all the transaction regarding supplies of iron are in the counter claims already filed. 6. It appears that appeals from order of temporary injunction came to this Court and were disposed of on 11.5.2001 and this Court directed the learned trial Court to expedite all the four suits and decide the same within a period of one year from the date of dismissal of the CMA. According to the last extension obtained jointly, the time has been extended upto 20.8.2004. The learned Counsel for the petitioner states that the evidence is not complete and some more witnesses on their behalf are yet to be examined. Admittedly, an application for framing additional issues filed by the respondent BBPL is pending. 7. On 22.10.2003, BBPL respondent No.1 filed an application under Section 10 of the Code of Civil Procedure for stay of the suit. The petitioner filed his reply to that application and filed another application for consolidation of Special Civil Suit No.1 of 2003 along with four earlier suits bearing Special Civil Suits No. 7, 8, 14 and 21 of 2000. 8. The petitioner filed his reply to that application and filed another application for consolidation of Special Civil Suit No.1 of 2003 along with four earlier suits bearing Special Civil Suits No. 7, 8, 14 and 21 of 2000. 8. On 7.4.2004, the learned trial Judge passed the impugned order and stayed the petitioner's suit being Special Civil Suit No.1 of 2003. It is this order which is impugned in the present petition. A perusal of the order of the learned trial Court shows that the trial Court has stayed the suit for the following reasons:- That the nature of all these suits is identical, all of them being suits for recovery of monies. After referring to the pleadings and the dispute, between the parties, the trial Court has observed, vide para (10), that the petitioner has claimed a sum of Rs. 1,25,99,619/- over and above the counter claim in Special Civil Suits No.7 and 8 of 2000, after taking into account the very supplies allegedly made in counter claims in Special Civil Suit. Lastly the trial Court has observed that the issue whether the account on which the earlier suits are based is mutual, open and current account between the parties is an issue in the previous suits and a decision in those suits would operate as res-judicata in the subsequent suit and, therefore, the present suit is liable to be stayed under Section 10 of the Code of Civil Procedure. As regards the purpose of Section 10, the observations of the trial Court are largely correct. The object of that section is to avoid and prevent Courts of concurrent jurisdiction from simultaneously entertaining and adjudicating upon two parallel litigations between two or more parties where the matter in issue is substantially the same. 9. Mr. Nadkarni, the learned Counsel for the petitioner submitted that the matter in the present Suit No.1 of 2003 is not directly and substantially in issue in the former suits filed by the respondent against the petitioner, primarily in view of the fact that in the present Suit No.1 of 2003 that the petitioner has claimed the value for 40,701.47 Dry Metric Tonnes (DMT) ore supply to the respondent during the period from 1.7.1997 to 24.3.1998. The learned Counsel further submitted that the value or the price of 32,977.126 DMT is also claimed in the present suit. The learned Counsel further submitted that the value or the price of 32,977.126 DMT is also claimed in the present suit. He, however, accepted the fact that of this, 27,573.780 WMT have been claimed in the counter claim to Special Civil Suit No.8 of 2000 and, therefore, only an additional 6,800 DMT is claimed for the first time in this suit another item claimed in this suit i.e. value of 48,296.518 DMT is admittedly claimed in an earlier counter claim. It is, therefore, submitted that in view of what is exclusively claimed in this Civil Suit the subject matter of this suit is not directly and substantially in issue in any former suit and. therefore, this suit ought not to have been stayed. 10. This contention is contested by Mr. Pereira, the learned Counsel for the respondent who has referred to various pleadings of the petitioner in his written statement and the counter claim in Suit No.7 of 2000. The learned Counsel for the respondent submitted that the counter claims are based on a letter dated 8.1.2000 which is said to contain the entire claim of the petitioner for the period from 1995-96 to 30.6.1997 and, therefore, the value for 40,701.47 DMT must be also taken to have been claimed. The learned Counsel, in particular, relies on the following pleadings in para (1) of the written statement and the counter claim of the petitioner in Special Civil Suit No.7 of 2000, which reads as follows:- "It is stated that for the period commencing from 1.4.1997 to 30.6.1999, defendant sold various quantities of Iron Ore, the quantity an value whereof are as set out here-below:- Year Quantity delivered Value receivable WMTS DMTS 1988 35541.320 33527.416 1,29,80,602.00 1999-2000 15875.480 147.69.102 58,47,194.00 (Till 30.6.1999) 51416.800 48296.518 1,88,27,796.00 According to the learned Counsel, therefore, the amount now claimed by the petitioner for 40701.47 DMT which is said to have been exclusively claimed in the present Suit No. 1 of 2003, would be covered by the pleadings reproduced above which make a claim for the period from 1.4.1997 to 3.6.1999. Mr. Nadkarni the learned Counsel for the petitioner points out that the date 1.4.1997 is a mistake and should be read as 1.4.1998. In support thereof, he submitted that the table reproduced below the pleadings shows that it is intended to be April, 1998, prima facie this submission seems to be correct. 11. Mr. Mr. Nadkarni the learned Counsel for the petitioner points out that the date 1.4.1997 is a mistake and should be read as 1.4.1998. In support thereof, he submitted that the table reproduced below the pleadings shows that it is intended to be April, 1998, prima facie this submission seems to be correct. 11. Mr. Pereira, the learned Counsel for the respondents strongly contended that the petitioners have already made a claim in any case for the period from 1.4.1995 to 30.6.1997 also vide para (8) of the counter claim in Special Civil Suit No.8 of 2000 and. therefore ought not to be allowed to raise the same claim in the present suit. In any case, since the claim for the said period is directly and substantially in issue in Special Civil Suit No.8 of 2000 which is a former suit, the learned trial Court was right in granting stay under Section 10 of the Code of Civil Procedure. 12. Having considered the matter. I am of the view that Section 10 CPC would not cover a case such as the present one primarily on the ground that the entire matter in issue is not directly and substantially in issue in the former suits i.e. counter claims. Undoubtedly, the period in respect of which the claim for the value of 40701.47 DMT is made, is a period of respect of which a claim has been made by way of a counter claim by the petitioner in Special Civil Suit No.8 of 2000. However, it appears prima facie that the claim is not made in respect of 40.701 DMT. In other words, even if it appears that a claim is made for the same period in the earlier suits, the same item which is claimed in the present suit is not claimed earlier. 13. Mr. Pereira, the learned Counsel for the respondents submitted that it can be presumed that if a claim is made for a certain period, then the particular item which is claimed subsequently is also covered by the earlier claim. According to the Counsel, the subsequent claim would be barred by Order 2, Rule 2 CPC, since it could have been made earlier. I do not express anything on this aspect of the case i.e. whether the item now claimed is barred by Order 2, Rule 2. According to the Counsel, the subsequent claim would be barred by Order 2, Rule 2 CPC, since it could have been made earlier. I do not express anything on this aspect of the case i.e. whether the item now claimed is barred by Order 2, Rule 2. It is, however, quite a different thing to say that an item not claimed is itself directly and substantially in issue in the former suit merely because that claim in the former suit is for the same period. In any case, it is settled law that Section 10 prohibits a Court for trying a suit where the matter i.e. the whole matter is directly and substantially in issue in a previous suit. 14. A test was laid down by this Court in Jai Hind Iron Mart vs. Tulsiram Bhagwandas, reported in AIR 1953 Bombay 117 where Chagla C.J. speaking for the Bench observed that what the section required is that the matter in issue in the two suits should be directly and substantially the same and property effect must be given to the language used by the Legislature in Section 10 that the identity required is a substantial identity. The learned Chief Justice further observed that it is true that there must be an identity of the subject-matter, it is equally true that the field of controversy between the parties in the two suits must also be the same, though not in every particular. I am of the view that applying this principle, even if the period in the former suit is the same as the period during which the claim in the subsequent suit arise, if an item is wholly omitted from the former suit and is sought to be claimed in a subsequent suit, the subsequent suit would not be barred by the principle of res-judicata or by the principle embodied in Section 10, CPC. In other words, it cannot be said that the matter in issue in Special Suit No.1 of 2003 is also directly and subsequently in issue in previously instituted suit, unless the whole of the matter in the subsequent suit is also in issue in a former suit. In other words, it cannot be said that the matter in issue in Special Suit No.1 of 2003 is also directly and subsequently in issue in previously instituted suit, unless the whole of the matter in the subsequent suit is also in issue in a former suit. The Madras High Court in Velur Munuswami Mudaliar vs. Darwaja Raghupathi, AIR 1940 Madras 7, while construing Section 10 to be mandatory, pointed out that the expression the matter in issue referred to the entire subject-matter in dispute and not to one of the issue. 15. It is noteworthy that in Jai Hind Iron Mart vs. Tulsiram Bhagwandas, (supra) in the Bombay suit the respondents had sued on the same contract on the allegation that the appellant had sued on a contract dated 4.11.1951 and their case was that the contract was for a sale by them of 1898 tyres to the respondent. Their further contention was that even the tyres were not according to specifications and they contended that the respondents failed to take delivery of these tyres and, therefore, they sued for damages for non-acceptance. This was the suit filed in Calcutta. In the Bombay suit, the respondents had sued on the same contract, but their contention was that under this contract they had contracted to purchase only 1600 tyres and not 1898 tyres. Their further contention was that this 1600 tyres were not according to specifications, but were according to certain contract quality and their grievance in the Bombay suit was that the tyres that were delivered were not according to the contract quality and they were, therefore, entitled to receive certain amount. In this situation, this Court took a view that the subsequent suit at Bombay was liable to be stayed since the same contract was in issue in Calcutta suit and substantially the decision in Calcutta suit would put an end to the Bombay suit. This Court clarified that what was meant was that the decision in the Calcutta suit must operate as res-judicata in the Bombay suit. On an application of the test, the Court felt that test was satisfied because if once the Calcutta High Court had held what the contract was between the parties and what the terms of the contract were. This Court clarified that what was meant was that the decision in the Calcutta suit must operate as res-judicata in the Bombay suit. On an application of the test, the Court felt that test was satisfied because if once the Calcutta High Court had held what the contract was between the parties and what the terms of the contract were. the Bombay suit would effectively by put an end to because that decision would bind the parties and all that would be required to be done would be to give the necessary reliefs to the respondents in the Bombay suit if they had succeeded and those reliefs would flow from the decision of the Calcutta High Court and would be consequential upon the decision of the Calcutta Suit. Applying the reasoning to the present case it is clear that even if the counter claims filed by the petitioner were decreed, in respect of the period in question, the petitioner would not get value for 40,701.47 DMT for which he had made no claim in the earlier suits. The decision in the former suits, if in favour of the petitioner would not get him a decree for the value of 40,701.47 DMT. This is not to say that the objections of the respondents that such a claim is itself barred by Order 2, Rule 2 is baseless or unfounded. The respondents would be and are entitled to contend that the claim of 40,701.47 DMT is barred by Order 2, Rule 2, CPC or any other provision they may choose to invoke. 16. Mr. Pereira, the learned Counsel for the respondents submitted that the basis on which the counter claims are filed, is the letter dated 8.1.2000, so also the basis for the present suit is also the same letter. Therefore, according to the learned Counsel, the subject-matter of the present suit is directly and substantially in issue in the former suits. It is not possible to accept this contention, since it is not the sole basis. Whether the matter in issue is directly and substantially in issue in the former suits must be gathered from the prayers and the claim made in the former suit and the present suit. It is not possible to accept this contention, since it is not the sole basis. Whether the matter in issue is directly and substantially in issue in the former suits must be gathered from the prayers and the claim made in the former suit and the present suit. As I have observed, prima facie, the petitioner is right in contending that they have not made claim for 40,701.47 DMT in the former suits and I am of the view that the decision in the former suits would not operate as res-judicata and the petitioner would be entitled to and in fact are entitled to reagitate the claim for 40,701.47 DMT subject of course to the objection of the other side regarding Order 2, Rule 2, CPC. 17. In the circumstances, I am of the view that the trial Court has committed an error of law apparent on the face of the record in staying the petitioner's Special Civil Suit No.1 of 2003. In fact the trial Court has found that the nature of the suit is identical because they are suits for recovery of monies. That can hardly be a ground for applying Section 10. 18. The second reason given by the trial Court is equally untenable. The trial Court has observed that the present suit is liable to be stayed since the issue in the former suit is whether there was a mutual open and current account between the parties. If this issue was to decide in the previous suits, it would operate as res-judicata in the subsequent suit. This reason cannot be said to be valid. In that the trial Court seems to have lost sight of the fact that issue as to whether the account is mutual open and current account between the parties, has bearing on the question of limitation and whether the transactions were reciprocal or otherwise and do not lead to the conclusion that the matter in issue in the present suit is directly and substantially in issue In the former suits. 19. Moreover, it appears that if the petitioner's suit is stayed, he would have to inordinately wait for a claim not made by him earlier to be tried after the decision in the four suits filed against him by the respondents. 20. In the circumstances, the petition is allowed. The impugned order is set aside. 19. Moreover, it appears that if the petitioner's suit is stayed, he would have to inordinately wait for a claim not made by him earlier to be tried after the decision in the four suits filed against him by the respondents. 20. In the circumstances, the petition is allowed. The impugned order is set aside. The petitioner shall be entitled to apply to make such application for consolidation in accordance with law. The trial Court shall decide that application having regard to the stage of the trial and the witnesses that are being examined. Rules is made absolute. The impugned order is set aside. Having regard to the stage of the trial on the application of both the counsel, time to decide the suit is extended by a period of four months from 20.8.2004. Petition allowed.