Full Text
HIGH COURT OF DELHI
Date of order : 12th December 2022
M/S H.QR.P. LIMITED & ORS ..... Plaintiffs
Through: Counsel for plaintiffs (appearance not given)
Through: Mr. Amandeep Singh, Advocate for D-6,10, 11, 12, 20 to 22, 24 to
CHANDRA DHARI SINGH, J (Oral)
ORDER
1. By way of this application, the defendants no. 11, 12, 20 to 22, 26 to 28 (hereinafter referred to as the ‘applicants’) prays for the stay of the captioned suit, in accordance with Section 10 of the Code of Civil Procedure, 1908 (hereinafter referred to as ‘the Code’) inter alia with the following reliefs: “It is prayed that this Hon'ble Court is pleased to stay the present suit qua defendants No. 11, 12, 20 to 22 and 26 to
28. Any other order as may be deemed fit and proper in the facts and circumstances of the case, may also be passed in favour of said defendants.”
2. The applicants by way of the present application have taken a plea that the captioned suit is leading to multiplicity of the proceedings between the parties, as the issues involved in the captioned suit are also directly and substantially in issue, in various previously instituted suits between the same parties or between parties litigating under the same title.
3. For elaborating their plea so made by way of the instant application, the applicants have given the following details of the various suits pending between the parties:
(i) The Defendant No.11 J.J. International Private Limited had previously filed Company Petition No.255/2010 against plaintiff No-1 in which it had claimed Rs.2,75,06,870.64 outstanding up to the end of January 2009. In respect of that claim defendant No-11 had filed complete statement of account in that petition.
(ii) That defendant No.12 had previously filed a suit for recovery bearing No. CS (OS) 3057/2011 on the basis of a loan given to plaintiff No.1 during the period 01.02.2007 to 16.07.2009.
(iii) M/s Acme Resources Limited defendant No.20 had previously filed a case bearing C.C No.16/01/10 regarding loan of Rs. Five crores advanced by it to plaintiff No.1 in May, 2008 which is the subject matter of the said Complaint filed under Section 138 of the Negotiable Instruments Act,
1881.
(iv) M/s Abhipra Capital Limited defendant No.21 had previously filed a Company Petition 476/2009, in respect of loan of Rs. 25,000,00/- (Twenty Five Lacs) advanced by it to plaintiff No.1 through cheque in November 2006 which was repayable with interest @ 18% p.a.
(v) M/s Bathla and Company Pvt. Ltd. Defendant No. 22 had previously filed a Company Petition 477/2009, against plaintiff No.1 in respect of Loan of Rs. 10,00,000/- (Ten Lacs) advanced by it to plaintiff No.1 on 25th November 2006.
(vi) Shri Kanwal Kant Chagti defendant No.26 had previously filed a suit No-CS(OS) 822/2011 in the High Court of Delhi in respect of loan of Rs. 49,07,663/- advanced by it to plaintiff No.1 out of which some money was repaid by plaintiff No.1 and the balance being Rs-39,80,416.80/for which said suit is pending.
(vii) Shri Gulshan Rai (since deceased) defendant No.27 had previously filed a suit No.CS(OS) 824/2011 in High Court of Delhi which is pending regarding money advanced to plaintiff No.1 during the period March 2007 to October 2008 as Share Application money amounting to Rs.1,10,00,000/- ( Rupees One Crore Ten Lacs) for which said suit is still pending.
(viii) M/s Upper India Trading Company (Delhi) Private
Limited (defendant No.28) had previously filed a suit No. CS(OS) 823/2011 in the High Court of Delhi regarding loan advanced by it to plaintiff No.1 during November and December 2007 for which said suit is still pending.
4. Learned counsel for the applicants has further submitted that on a perusal of the pleadings of the previously instituted cases as have been delineated above, it would transpire that they raise the same question of controversy as the one raised in the instant suit, filed by the plaintiffs.
5. Per Contra, learned counsel appearing on behalf of the Respondent/Plaintiff has vehemently argued that the instant application is nothing but a design to delay the captioned suit to reach a logical culmination. It is further submitted that instant application under Section 10 is sans any merit as the parties in the previously instituted suits and the captioned suit are different and it is also argued that the real controversy in the previously instituted suits are not matter directly and substantially in issue in the captioned suit.
6. I have heard learned counsels appearing on behalf of both the parties and have given thoughtful consideration to the submissions advanced.
7. For the purpose of adjudication, Section 10 of the Code is reproduced below: “Section 10- 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.”
8. From a bare reading of Section 10, the following essentials are necessary to be satisfied in order to bring home the plea of Section 10:
1. There must be a previously instituted suit pending in India.
2. The matter in issue in the subsequent suit must also be a matter directly and substantially in issue in a previously instituted.
3. Such previously instituted suit must be between the same parties or between parties under whom they or any of them claim litigating under the same title.
4. The Court seized of the previously instituted suit must have the jurisdiction to grant the relief so claimed in that suit.
9. The policy behind Section 10 of the Code has been a subject of many judicial pronouncements and it is pertinent to refer some of them for the disposal of the instant application. In Aspi Jal & Anr. Vs Khushroo Rustom Dadyburjor, (2013) 4 SCC 333, the Hon’ble Supreme Court held as follows: “9...........The use of negative expression in Section 10, i.e. “no court shall proceed with the trial of any suit” makes the provision mandatory and the Court in which the subsequent suit has been filed is prohibited from proceeding with the trial of that suit if the conditions laid down in Section 10 of the Code are satisfied. The basic purpose and the underlying object of Section 10 of the Code is to prevent the Courts of concurrent jurisdiction from simultaneously entertaining and adjudicating upon two parallel litigations in respect of same cause of action, same subject matter and the same relief. This is to pin down the plaintiff to one litigation so as to avoid the possibility of contradictory verdicts by two courts in respect of the same relief and is aimed to protect the defendant from multiplicity of proceeding. ”
10. In Mental Health & Neuro Sciences vs. C. Parameshwara, (2005) 2 SCC 256, the Hon’ble Supreme Court held as follows:
11. Therefore, Section 10 would apply only if there is identity of the matter in issue in both the suits, meaning thereby, that the whole of the subject matter is the same in both the suits. Furthermore, it is clear that even if some issues in the subsequent suit overlap with a previously instituted suit, then also the Court is not bound to stay the trial of those particular issues in the subsequent suit because the language of Section 10 is very clear, as it deals with stay of suits and not stay of issues. But in a fit case, in peculiar facts and circumstances, the Court may exercise its inherent powers under Section 151 of the Code to stay the trial of such issues/suit so as to prevent multiplicity of proceedings.
12. On perusing the present application, the pleadings of the instant suit as well as the details of the previously instituted suit, I am of the firm opinion that the present application is misconceived and comes nowhere to satisfy the mandatory essentials of Section 10. The captioned suit has been filed for declaration, cancellation and injunction towards corporate fraud and misuse of powers and duties; as well as breach of trust against the defendants No.1 to 29. By way of the captioned suit the matters directly and substantially in issue are the various alleged transactions entered by the Defendant No.2 in the name of the plaintiff with the various other defendants in the present suit which the plaintiff has assailed as non est being a part of conspiracy to cheat the plaintiff company.
13. In Sajjadanashin Sayed Md.B.E. Edr.
(D) by Lrs. Vs. Musa Dadabhai Ummer & Ors., (2000) 3 SCC 350, the Hon’ble Supreme Court while relying on Mulla explained the meaning of „matters directly and substantially in issue‟ as follows:
14. From the perusal of the details delineated of the previously instituted suits, and by applying the tests to determine whether the matters in issue in the previous suits is also directly and substantially in issue, this Court is of the considered opinion that the issues raised in the captioned suit is not directly and substantially in issue in any of the previously instituted suit because: First, the suit filed by Defendant No.11 is recovery of a claim; the suit filed by the Defendant No. 12 is for recovery of a loan given to the plaintiff; similarly, the suits filed by the Defendant No.20, 21, 22, 26 and 27 are also for recovery of loans advanced to the plaintiff, respectively. Secondly, none of the previous suit require adjudication of the challenge raised to the validity of the alleged transactions entered into by Defendant No.2 in the name of plaintiff with the various defendants.
15. Another aspect which requires mention is that the previously instituted suits and the captioned suit is not between the same parties or parties under whom they or any of them claim litigating under the same title. A plea may be raised that the parties in the former suit and the captioned suit is common, even though all the parties are not the same and they have only inter-changed their position, and hence, this requisite of Section 10 is satisfied in the facts and circumstances of the present case. But such a plea cannot be sustained in the facts and circumstances of the present case because the addition of new parties have completely changed the matters directly and substantially in issue between the parties in respect of previously instituted suits and the subsequent suit; and also because the addition of new parties have substantially molded the real controversy between the parties which is the sine qua non to establish the plea of Res Sub Judice.
16. Before parting, it is also worthy to mention that Section 9 of the Act which is a gateway to the Code of Civil Procedure, does not mandate that the suits based on different causes of action have to be clubbed together, as it is an inherent right of a litigant to institute a fresh suit which is based on a fresh cause of action. This is also apparent from a combined reading of Rules 2 and 3 of Order II of the Code.
17. Accordingly, the instant application being devoid of any merit is dismissed.
18. The order be uploaded on the website forthwith. List on 23rd January, 2023.
(CHANDRA DHARI SINGH) JUDGE December 12, 2022. gs/mg Click here to check corrigendum, if any