Karnataka High Court
Hindustan Construction Company ... vs The Bengaluru Water Supply And Sewerage ... on 24 July, 2023
Author: Ravi V Hosmani
Bench: Ravi V Hosmani
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NC: 2023:KHC:25706
WP No. 53652 of 2017
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 24TH DAY OF JULY, 2023
BEFORE
THE HON'BLE MR JUSTICE RAVI V HOSMANI
WRIT PETITION NO.53652 OF 2017 (GM-CPC)
BETWEEN:
HINDUSTAN CONSTRUCTION
COMPANY LIMITED,
HAVING ITS OFFICE AT HINCON HOUSE,
LBS MARG, VIKHROLI (WEST),
MUMBAI-400 083,
REP. BY DEPUTY GENERAL MANAGER (LEGAL)
ATUL KASTUREY.
...PETITIONER
(BY SRI. Mahesh A.S., ADVOCATE)
AND:
THE BENGALURU WATER SUPPLY
AND SEWERAGE BOARD,
CAUVERY BHAVAN,
BENGALURU-560 001,
REP. BY ITS SECRETARY.
...RESPONDENT
(BY SRI. K.B. MONESH KUMAR, ADVOCATE)
Digitally signed by
GEETHAKUMARI THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF THE
PARLATTAYA S
Location: High Court CONSTITUTION OF INDIA PRAYING TO CALL FOR THE RECORDS OF
of Karnataka
O.S.NO.7389/1996 ON THE FILE OF THE XXX ADDITIONAL CITY
CIVIL AND SESSIONS JUDGE BENGALURU CITY [CCH 31]; SET
ASIDE THE IMPUGNED ORDER DATED 11.9.2017 IN
O.S.NO.7389/1996 PASSED ON I.A.U/S.10 OF CPC BY THE XXX
ADDITIONAL CITY CIVIL AND SESSIONS JUDGE BENGALURU VIDE
ANNEXURE-E AND ETC.,
THIS PETITION, COMING ON FOR DICTATING ORDERS, THIS
DAY, THE COURT MADE THE FOLLOWING:
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NC: 2023:KHC:25706
WP No. 53652 of 2017
ORDER
This petition is filed challenging order dated 11.09.2017 passed by XXX Addl. City Civil & Sessions Judge, Bengaluru City (CCH-31) on I.A. filed under Section 10 of CPC in O.S.no.7389/1996.
2. Shri Mahesh A.S., learned counsel for petitioner submitted that petitioner was defendant in O.S.no.7389/1996 filed by respondent-plaintiff for recovery of sum of Rs.3,77,89,754/- against defendant.
3. It was submitted that said suit was filed on ground that in pursuance of tender notification issued by plaintiff-Board for construction of secondary treatment plan in 'V-Valley' including civil, mechanical works and supply, erection, testing and commissioning of sewerage treatment plant, defendant had submitted successful bid for amount of Rs.567 lakhs. As per plaintiff, work was to be completed within 30 months. But, defendant failed to complete work and on other hand, went on making untenable claims etc., leading to termination of tender agreement and getting it completed from another contractor. And as tender work was on cost and risk, plaintiff had filed suit -3- NC: 2023:KHC:25706 WP No. 53652 of 2017 for recovery of additional amount spent for completion of work, damages etc.
4. It was submitted that said suit was filed after plaintiff herein had entered appearance in Suit.no.4446/1993 filed by defendant herein before High Court of Bombay for recovery of certain amounts due from Board etc. It was submitted that since, instant suit filed was with regard to same subject matter and in between same parties, subsequent suit could not be proceeded with in view of bar under Section 10 of CPC. Therefore, defendant filed I.A. under Section 10 of CPC for stay of further proceedings in O.S.no.7389/1996. In affidavit filed in support of application, it was clearly stated that defendant had filed Suit no.4446/1993 against plaintiffs herein before High Court of Bombay for recovery of Rs.3,03,40,721/- with interest etc. and that when said matter was set down for admission and denial of documents, defendant therein filed present suit. It was stated that as both suits were between same persons, claiming under same agreement and for similar reliefs, present suit being subsequent was required to be stayed under Section 10 of CPC. Rejection of said application by Civil Court under impugned order on observation that reliefs -4- NC: 2023:KHC:25706 WP No. 53652 of 2017 sought in both suits were different and distinct and requirements of Section 10 of CPC were not satisfied would be unsustainable.
5. It was submitted that while defendant was seeking relief in Suit no.4446/1993 on ground that tender agreement between parties was frustrated due to default on part of plaintiff herein entitling claim for damages, plaintiff herein was alleging that defendant committed default of terms of tender agreement giving rise for claiming damages. Drawing attention of this Court to various assertions and prayers in respective plaints, it was sought to be contended that breach of terms of tender agreement was attributable to plaintiffs. As subject matter of both suits was directly and substantially same and in between same parties, present suit being subsequent suit, was required to be stayed.
6. It was submitted that reasons assigned by trial Court for rejecting application namely that prayer sought in respective suits were different and cause of action was also different would be contrary to record and therefore illegal. Further even reason assigned that application was filed belatedly, would also not be justified as provision of Section 10 -5- NC: 2023:KHC:25706 WP No. 53652 of 2017 of CPC was not directory, but mandatory. Even on ground that several adjournments were taken would not be justification for rejection of application.
7. In support of his submissions, learned counsel relied upon following decisions:
i) M/s Arjies Aluminum Udyog Vs. Sudhir Batra, New Delhi, reported in 1997 SCC OnLine Delhi 125, for proposition that it is not identity of main issue or all issues but identity of matter in issue that would be determining test for application of Section 10 of CPC. Decision in one suit must non-suit other suit would be the question that would win whether matter in issue in two suits is directly and substantially same.
ii) ASPI Jal And Another Vs. Khushroo Rustom Dadyburjor, reported in 2013 (4) SCC 333, for proposition that it was not essential that entire subject matter in controversy must be same between previous and subsequent suit.
8. On other hand, Sri Monish Kumar, learned counsel for respondent sought to support impugned order. It was submitted that though suit filed by defendant was earlier, in year 1993, there was no substantial progress therein, while present suit was at stage of arguments, when application under consideration came to be filed. It was highlighted that -6- NC: 2023:KHC:25706 WP No. 53652 of 2017 defendant in present case had entered appearance in year 1998 and application under Section 10 was filed after more than fifteen years. It was further submitted that slow progress in suit at Bombay and filing of application at belated stage, would only indicate that intension of defendant was to dilate proceedings and not bonafide. Therefore, application filed belatedly was rightly rejected.
9. It was submitted that in view of rejection of interim application for injunction against invocation of bank guarantee and against proceeding for completion of balance work through some other contractor having been rejected by High Court of Bombay, prayers sought in that regard in earlier suit had been rendered infructuous. Therefore, matter in issue in two suits was on longer substantially and materially same.
10. It was further submitted that no part of cause of action accrued at Bombay as tender work was to be carried out at Bangalore, tender agreement was signed by parties at Bangalore and even alleged breach occurred at Bangalore. Therefore, Court at Bombay did not have territorial jurisdiction over subject matter of suit. Even an issue regarding said aspect -7- NC: 2023:KHC:25706 WP No. 53652 of 2017 was framed for consideration. Under such circumstances, present application would be unsustainable.
11. It was submitted that prayer in present suit was for money decree against defendant, whereas prayer in suit filed by defendant before High Court of Bombay was for damages, declaration and injunction etc. Therefore, when reliefs sought in two suits were different, rejection of application was justified.
12. Further, reliance on ASPI JAL's case (supra) would not be appropriate as Hon'ble Court in paragraph no.11 had clarified that if answer to question whether plaintiff could get same relief in subsequent suit if earlier suit were dismissed, would be in affirmative, subsequent suit could not be stayed. It was submitted that, even if defendant's suit before High Court of Bombay, were to be dismissed, same would not bar grant of relief to plaintiff herein.
13. Heard learned counsel and perused writ petition record.
14. From above submission, it is not in dispute that Suit no.4446/1993 filed by defendant herein before High Court of Bombay was prior to O.S.no.7389/1996 filed by plaintiff herein -8- NC: 2023:KHC:25706 WP No. 53652 of 2017 before Civil Court at Bangalore. There is no dispute that both suits are between same parties only.
15. While defendant - petitioner contends that since both suits were between same parties in relation to very same subject matter namely tender agreement dated 12.11.1986, ingredients of Section 10 of CPC, were satisfied and application deserved consideration and therefore rejection of same by trial Court was contrary to law calling for interference; respondent - plaintiff contends that while relief claimed by plaintiff in present suit was only for damages, defendant in Suit no.4446/1993 filed before High Court of Bombay had sought other reliefs than damages and therefore, subject matter of suits were not directly and substantially same and hence, rejection of application was justified.
16. Insofar as scope and applicability of Section 10 of CPC, Hon'ble Supreme Court in ASPI JAL's case (supra) held as follows:
"9. Section 10 of the Code which is relevant for the purpose reads as follows:
"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 -9- NC: 2023:KHC:25706 WP No. 53652 of 2017 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 having 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."
From a plain reading of the aforesaid provision, it is evident that where a suit is instituted in a court to which provisions of the Code apply, it shall not proceed with the trial of another suit in which the matter in issue is also directly and substantially in issue in a previously instituted suit between the same parties. For application of the provisions of Section 10 of the Code, it is further required that the Court in which the previous suit is pending is competent to grant the relief claimed. 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. The view which we have taken finds support from a decision of this Court in National Institute of Mental Health & Neuro Sciences v. C. Parameshwara [(2005) 2 SCC 256] in which it has been held as follows: (SCC pp. 259-60, para 8)
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NC: 2023:KHC:25706 WP No. 53652 of 2017 "8. The object underlying Section 10 is to prevent courts of concurrent jurisdiction from simultaneously trying two parallel suits in respect of the same matter in issue. The object underlying Section 10 is to avoid two parallel trials on the same issue by two courts and to avoid recording of conflicting findings on issues which are directly and substantially in issue in previously instituted suit. The language of Section 10 suggests that it is referable to a suit instituted in the civil court and it cannot apply to proceedings of other nature instituted under any other statute. The object of Section 10 is to prevent courts of concurrent jurisdiction from simultaneously trying two parallel suits between the same parties in respect of the same matter in issue. The fundamental test to attract Section 10 is, whether on final decision being reached in the previous suit, such decision would operate as res judicata in the subsequent suit. Section 10 applies only in cases where the whole of the subject-matter in both the suits is identical. The key words in Section 10 are 'the matter in issue is directly and substantially in issue' in the previous instituted suit. The words 'directly and substantially in issue' are used in contradistinction to the words 'incidentally or collaterally in issue'. 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 in both the proceedings is identical."
17. Further, Hon'ble Supreme Court in Pukhraj D. Jain v/s G. Gopalakrishna, reported in (2004) 7 SCC 251, has held in pars 4 as follows:
"... ... The proceedings in the trial of a suit have to be conducted in accordance with provisions of the Code of Civil Procedure. Section 10 CPC no doubt lays down that 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
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NC: 2023:KHC:25706 WP No. 53652 of 2017 them claim litigating under the same title where such suit is pending in the same or any other court in India having jurisdiction to grant the relief claimed. However, mere filing of an application under Section 10 CPC does not in any manner put an embargo on the power of the court to examine the merits of the matter. The object of the section is to prevent courts of concurrent jurisdiction from simultaneously trying two parallel suits in respect of the same matter in issue. The section enacts merely a rule of procedure and a decree passed in contravention thereof is not a nullity. It is not for a litigant to dictate to the court as to how the proceedings should be conducted, it is for the court to decide what will be the best course to be adopted for expeditious disposal of the case. In a given case the stay of proceedings of later suit may be necessary in order to avoid multiplicity of proceedings and harassment of parties. However, where a subsequently instituted suit can be decided on purely legal points without taking evidence, it is always open to the court to decide the relevant issues and not to keep the suit pending which has been instituted with an oblique motive and to cause harassment to the other side."
18. Further, in Indian Bank v/s Maharashtra State Coop. Marketing Federation Ltd., reported in (1998) 5 SCC 69, it is held:
"7. Section 10 of the Code prohibits the court from proceeding with the trial of any suit in which the matter in issue is also directly and substantially in issue in a previously instituted suit provided other conditions mentioned in the section are also satisfied. The word "trial" is no doubt of a very wide import as pointed out by the High Court. In legal parlance it means a judicial examination and determination of the issue in civil or criminal court by a competent Tribunal. According to Webster's Comprehensive Dictionary, International Edition, it means the examination, before a tribunal having assigned jurisdiction, of the facts or law involved in an issue in order to determine that issue. According to Stroud's Judicial Dictionary (5th Edn.), a "trial" is the conclusion, by a competent tribunal, of questions in issue in legal proceedings, whether civil or criminal. Thus in its
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NC: 2023:KHC:25706 WP No. 53652 of 2017 widest sense it would include all the proceedings right from the stage of institution of a plaint in a civil case to the stage of final determination by a judgment and decree of the court. Whether the widest meaning should be given to the word "trial" or that it should be construed narrowly must necessarily depend upon the nature and object of the provision and the context in which it is used.
8. Therefore, the word "trial" in Section 10 will have to be interpreted and construed keeping in mind the object and nature of that provision and the prohibition to "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". The object of the prohibition contained in Section 10 is to prevent the courts of concurrent jurisdiction from simultaneously trying two parallel suits and also to avoid inconsistent findings on the matters in issue. The provision is in the nature of a rule of procedure and does not affect the jurisdiction of the court to entertain and deal with the latter suit nor does it create any substantive right in the matters. It is not a bar to the institution of a suit. It has been construed by the courts as not a bar to the passing of interlocutory orders such as an order for consolidation of the latter suit with the earlier suit, or appointment of a receiver or an injunction or attachment before judgment. The course of action which the court has to follow according to Section 10 is not to proceed with the "trial"
of the suit but that does not mean that it cannot deal with the subsequent suit any more or for any other purpose. In view of the object and nature of the provision and the fairly settled legal position with respect to passing of interlocutory orders it has to be stated that the word "trial" in Section 10 is not used in its widest sense".
19. And High Court of Bombay in Raj Systems Pvt. Ltd. v/s Mahanagar Co-Op. Bank Ltd., reported in 2020 SCC OnLine Bom 25, held as follows:
"36. Since the lis centers around application of section 10 of the Code of Civil Procedure, it would be
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NC: 2023:KHC:25706 WP No. 53652 of 2017 apposite to advert to the said provision at the outset. For ready reference, section 10 is extracted hereunder:
"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 having 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."
37. From a careful perusal of section 10, it is seen that it starts with a negative injunction by saying that 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 having jurisdiction to grant the relief claimed, the remaining portion of the said section not being relevant for the present case. Thus, for applicability of section 10 what is required is that firstly, there must be two suits between the same parties or between parties, either of the parties or both the parties litigating under the same title; secondly, one suit must be previously instituted and the second subsequently; and thirdly, the matter in issue in the subsequent suit is also directly and substantially in issue in the previously instituted suit. If these conditions are fulfilled, then the Court in which the subsequent suit is instituted shall not proceed with the trial of the subsequent suit.
39. Supreme Court noted that the object underlying section 10 is to prevent Courts of concurrent jurisdiction from simultaneously trying two parallel suits in respect
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NC: 2023:KHC:25706 WP No. 53652 of 2017 of the same matter in issue; the object is to avoid two parallel trials on the same issue by two Courts and to avoid recording of conflicting findings on issues which are directly and substantially in issue in the previously instituted suit. Supreme Court further observed that language of section 10 was suggestive that it is referable to a suit instituted in the Civil Court and it cannot apply to proceedings of other nature instituted under any other statute. The fundamental test to attract section 10 is whether on final decision being reached in the previous suit, such decision would operate as res judicata in the subsequent suit, section 10 applies only in cases where the whole of the subject matter in both the suits is identical; the whole of the subject matter in both the proceedings should be identical. It was held thus:
"8. The object underlying section 10 is to prevent Courts of concurrent jurisdiction from simultaneously trying two parallel suits in respect of the same matter in issue. The object underlying section 10 is to avoid two parallel trials on the same issue by two Courts and to avoid recording of conflicting findings on issues which are directly and substantially in issue in previously instituted suit. The language of section 10 suggests that it is referable to a suit instituted in the Civil Court and it cannot apply to proceedings of other nature instituted under any other statute. The object of section 10 is to prevent Courts of concurrent jurisdiction from simultaneously trying two parallel suits between the same parties in respect of the same matter in issue. The fundamental test to attract section 10 is, whether on final decision being reached in the previous suit, such decision would operate as res-judicata in the subsequent suit, section 10 applies only in cases where the whole of the subject matter in both the suits is identical. The key words in section 10 are "the matter in issue is directly and substantially in issue" in the previously instituted suit. The words "directly and substantially in issue" are used in contradistinction to the words "incidentally or collaterally in issue". Therefore, section 10 would apply only if there is identity of the matter in issue in both the suits, meaning thereby, that the
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NC: 2023:KHC:25706 WP No. 53652 of 2017 whole of subject matter in both the proceedings is identical."
20. Likewise, High Court of Calcutta has in Challapalli Sugars Ltd. v/s Swadeshi Sugar Supply Pvt. Ltd., reported in 1982 SCC OnLine Cal 157, held:
"7. In the matter of staying the suit under Section 10 the main consideration for the Court is whether or not the matter in issue in the subsequent suit which is sought to be stayed is directly and substantially in issue in the previously instituted suit. Admittedly the parties in both the suits are the same and both the Courts have unlimited pecuniary jurisdiction so as to try and entertain the two suits. The point involved is what is the subject matter in controversy between the parties in the two suits. The Division Bench in Bepin Behari Mazumdar v. Jogendra Chandra Bose, (1916) 24 Cal LJ 514: (AIR 1917 Cal 248), was of the view that the expression 'matter in issue' in S. 10 has reference to the entire subject in controversy between the parties. It was observed that the object of Sec. 10 is to prevent the Courts of concurrent jurisdiction from simultaneously trying two parallel suits in respect of the same matter in issue."
21. From above decisions, factors that require consideration for invocation of Section 10 of CPC, are that subject matter of subsequent suit should be directly and substantially in issue in earlier; both suits should be between same parties and both suits should be pending. And determining factor would be whether decision in earlier suit would non-suit subsequent suit.
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NC: 2023:KHC:25706 WP No. 53652 of 2017
22. In order to determine whether subject matter of both suits are directly and substantially same, reference to prayers sought in both suits as well as issues framed therein would be required. They are extracted for ready reference.
23. Prayer: in O.S.No.7389/1996:
"Wherefore, plaintiff prays that this Hon'ble Court be pleased to pass a judgment and decree for Rs.3,77,89,754.00 (Rupees three crores seventy seven lakhs, eighty nine thousand seven hundred and fifty four only), against the defendant directing him to pay the aforesaid decree amount of Rs.3,77,89,754.00 (Rupees three crores seventy seven lakhs, eighty nine thousand seven hundred and fifty four only) with court costs, and current interest from the date of the suit of the date of realization and such other relief as deems fit to grant in the circumstances of the case, in the interest of justice."
24. Prayer in Suit no.4446/1993:
a. That defendant no.1 be ordered and decreed to pay to plaintiff a sum of Rs.3,03,40,721.14 as per statement of particulars of claim Exhibit "II" hereto with further interest on principal amount of Rs.3,03,40,721.14 at rate of 22.5 percent and/or realization.
b. that this Hon'ble Court be pleased to declare:
i. that said three letters all dated 09th November, 1993 Exhibit "F" thereto purporting to invoke/encash to Bank guarantees are illegal and unenforceable in law:
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NC: 2023:KHC:25706 WP No. 53652 of 2017 ii. that defendant no.1 is not entitled to award balance work to an third party:
iii. that purported rejection of plaintiffs claims is illegal and unsustainable.
iv. that purported rescission of contract is bad, illegal, unenforceable and of no consequence in law.
v. that defendant no.1 is not entitled to carry out balance works through any other agency except plaintiff.
vi. that in any event defendant no.1 is not entitled to claim from plaintiff any sum towards alleged expenses incurred by them for carrying out balance works.
c. that pending hearing and final disposal of petition:
i) defendant no.1 be restrained by an order and injunction of this Hon'ble Court from making any demand upon defendant no.2 and/or defendant no.3 under the Bank Guarantees (Exhibits "G", "P" and "U" hereto), and/or acting in furtherance of its letters dated 9.11.1993 (Exhibit "FF" hereto) and/or from receiving and/or realizing any amount whatsoever under the said Bank guarantees:
ii) defendant no.1 be restrained by an order and injunction of this Hon'ble Court from carrying out and/or awarding the balance works to any person other than the plaintiff herein:
iii) defendant no.2 be restrained by an order and injunction of this Hon'ble Court from making any payment to defendant no.1 and/or its servants and
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NC: 2023:KHC:25706 WP No. 53652 of 2017 agents in respect of Bank guarantee Exhibit "G" hereto and/or acting in furtherance of the letter of demand dated 9th November, 1993 Exhibit "FF"
hereto.
iv) that defendant no.3 be restrained by an order and injunction of this Hon'ble Court from making any payment to defendant no.1 and/or its servants and agents in respect of Bank Guarantees Exhibits "P" and "U" hereto and/or acting in furtherance of the letters of demand dated 9th November, 1993 Exhibit "FF" hereto issued by defendant no.1 etc.
25. In O.S. No.7389/96 : Issues framed are:
1. Does plaintiff prove that it incurred loss of Rs.3,62,50,000/- to get unfinished work done?
2. Does it further, prove that defendant failed to return cement worth Rs.5,04,504/-?
3. Does it further prove that defendant is due Rs.10,35,250/- towards non return of steel?
4. Whether suit claim is barred by limitation?
5. If plaintiff entitled to suit claim?
6. What relief?
Additional Issues framed on 18.07.2012:
1. Does defendant prove that they could not perform their part of contract for reasons stated in written statement?
2. Does defendant further prove that in view of extension of time to perform part of contract rendered by plaintiff, original contract is redundant and not enforceable one?
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3. Whether defendant proves that they could not complete their part of contract due to failure of plaintiff to perform its part of contract and for reasons that plaintiff failed to clear bills submitted by defendant as pleaded in written statement?
4. Whether defendant further prove that due to default in payment of Rs.75 Lakhs by plaintiff as agreed in their letter dated 4.8.1992 constitute breach of contract by plaintiff and due to escalation of prices and non-payment of additional charges by plaintiff, they could not perform their part of contract?
5. Whether defendant further proves that they are not liable to pay suit claim due to unilateral decision to give balance of work to third party [Beardsell] at an enormous cost by plaintiff?
26. Issues in Suit no.4446/1993 (Bombay High Court):
i. Whether this Court has jurisdiction to try, entertain and dispose of Suit?
ii. Whether progress of work under Suit Agreement was delayed due to reasons attributable to defendant no.1 as set on in Suit Plaint by plaintiff?
iii. If answer to Issue No.2 is in affirmative, whether plaintiff was entitled to extension of time in completion of work under Suit Agreement and whether plaintiff was entitled to amounts as billed to Defendants by plaintiff for work done?
iv. Whether plaintiff was unable to perform its part of Suit Agreement due to reasons set out in paragraph 5 of Suit Plaint?
v. Whether plaintiff was unable to complete work due to uncooperative attitude of defendant
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NC: 2023:KHC:25706 WP No. 53652 of 2017 no.1 and defendant no.1's failure to release requisite funds as agreed?
vi. Whether defendant no.1 proves that plaintiff siphoned off money advanced to plaintiff under Bank Guarantees and did not utilize if for carrying out work for which such amounts were advanced?
vii. Whether revocation/termination/cancellation of Suit Contract/Agreement by Defendant No.1 is fraudulent /wrongful /illegal and arbitrary?
viii. Whether rejection of plaintiff's claims by defendant no.1 was illegal, untenable and unsubstantiated in law?
ix. Whether invocation of Bank Guarantees by defendant no.1 was illegal and/or incorrect to knowledge of defendant no.1 and/or an attempt to defraud plaintiff as alleged in suit plaint?
x. Whether defendant no.1 is liable to pay amount of Rs.3,03,40,721.14/- to plaintiff along with interest as per particulars of claim? xi. Whether plaintiff is entitled to a declaration that defendant no.1's three letters dated 9th November, 1993 are illegal and unenforceable in law?
xii. Whether plaintiff entitled to a declaration that defendant no.1 is not entitled to award balance work under Suit Agreement to any third party?
xiii. Whether plaintiff is entitled to a declaration that purported rejection of plaintiff's claim by defendant no.1 is illegal and unsustainable? xiv. Whether plaintiff is entitled to the declaration that the purported recession of the Contract/Suit Agreement by the defendant no.1 is bad, illegal, unenforceable and of no consequence in law?
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NC: 2023:KHC:25706 WP No. 53652 of 2017 xv. Whether the plaintiff is entitled to the declaration that defendant no.1 is not entitled to carry out the balance works through any other agency except the plaintiff?
xvi. Whether the plaintiff is entitled to the declaration that in any event the defendant no.1 is not entitled to claim from the plaintiff any sums towards the alleged expenses incurred by them for carrying out the balance works?
xvii. What orders?
xviii. Whether the plaintiff is entitled to costs in the Suit?
27. From above extraction, it is seen that while plaintiff herein is seeking damages from defendant herein; relief sought for by present defendant in Suit no.4446/1993 filed by it before Bombay High Court is not only damages, but also declaration against enforcement of bank guarantee, against plaintiff herein awarding balance work to any third party, against rejection of claims, rescission of contract etc.
28. Issues framed in present suit (O.S.no.7389/1996) cast burden on present plaintiff to establish that it has incurred loss to get unfinished work executed through third party, that present defendant has failed to return cement worth Rs.5,04,504/- and steel worth Rs.10,35,250/-, suit is in time and it is entitled for relief; defendant is required to establish that it could not perform their part of contract for reasons
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NC: 2023:KHC:25706 WP No. 53652 of 2017 stated in written statement, that original contract has become redundant and unenforceable due to extension of time, that there was failure on part of plaintiff to perform its part, plaintiff committed default and defendant was not liable for suit claim.
29. Issues in suit filed by defendant (Suit no. 4446/1993) are directed towards examining whether High Court of Bombay had jurisdiction to try suit, whether progress of work was delayed due to reasons attributable to defendant no.1 (i.e. present plaintiff), if so, whether same entitled for extension of time for completion of work, whether plaintiff therein was entitled for declarations as sought for and whether it was entitled for relief etc.
30. Though common factor between two suits would be allegation of default committed by other party giving rise to respective claims, scope of suits would be to determine whether respective plaintiffs were entitled for damages/reliefs as sought for.
31. Though principles underlying Section 10 of CPC would be to verify whether subject matter of earlier suit is directly and substantially in issue in subsequent suit, same cannot be invoked merely on ground that incidental issues
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NC: 2023:KHC:25706 WP No. 53652 of 2017 based on which suit relief was sought would be common. In Sohal Engineering Works, Bhandup, Bombay Vs. Rustam Jehangira Vakil Mills Co., Ltd., Ahmedabad reported in AIR 1980 Guj. 110, High Court of Gujarat while considering claims by parties to tender agreement under similar circumstances held as follows:
"13. On a plain reading of the contents of Section 10 of the Code, it is crystal clear that the object of the provision is to prevent Courts of concurrent jurisdiction from adjudicating upon parallel litigations between the same parties having the same matter in issue with a view to avoiding conflict of decisions. The policy of the law is that if the matter in issue in the two parallel suits is identical in the interest of judicial comity, the Court in which the subsequently instituted suit is pending shall stay the proceedings and allow the previously instituted suit to proceed. The key words in the Section are: "the matter in issue is directly and substantially in issue" in the previously instituted suit. The words "directly and substantially in issue" are used in contradistinction to the words "incidentally or collaterally in issue". That means that the Section 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 in both the proceedings is identical and not merely one of the many issues which arise for determination in the two suits. That, however, does not mean that all the issues must be identical, that is, the subject matter need not be the same in every particular. To that extent, Section 10 differs from Section 11 which engrafts the doctrine of res judicata. Under Section 11 even if one of the two issues is common to both the suits, the decision on that issue would operate as res judicata in any suit subsequently decided between the same parties so far as that issue is concerned. That is why the working test evolved by the Bombay High Court in the case of Trikamdas (AIR 1942 Bom 314) is that if by the decision in the previously instituted suit the subsequent suit would fail as a whole on the principle of res judicata, the subsequent suit must be stayed.
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NC: 2023:KHC:25706 WP No. 53652 of 2017
14. There can, therefore, be little doubt that Section 10 of the Code is mandatory in character. If the matter in issue in the subsequently instituted suit is directly and substantially in issue in the previously instituted suit, the Court is precluded from proceeding with the subsequently instituted suit. In that case it is imperative on the Court to stay the subsequently instituted suit and await the decision in the previously instituted suit. It is, however, a question of fact to be gathered from the pleadings of the two suits as to whether the matter in issue in the subsequently instituted suit is directly and substantially in issue in the previously instituted suit. In the present two suits the parties are the same and both the suits arise out of the very same contract. The scope of the first suit is, however, limited in that the endeavour of the plaintiff in that suit is to restrain the defendant from committing a breach of the contract. That suit, therefore, clearly arises under the contract. Once the contract is established and there is a reasonable apprehension of the contract being broken, the plaintiff is entitled to request the Court to restrain the defendant- firm from committing a breach of the contract. The subsequently instituted suit, however, proceeds on the basis that the defendant has been guilty of non- performance of the contract and, therefore, the plaintiff- company has become entitled to damages. The subsequently instituted suit also arises out of the very same contract, as its non-performance entitles the plaintiff-company to sue the defendant-firm in damages. In the first suit the question of breach of contract does not arise, but it is a suit based on an existing contract, which, it is apprehended, is about to be broken. The subsequent suit arises ex contractu as it proceeds on the basis that the defendant-firm has committed a breach of the contract and has, therefore, entitled the plaintiff- company to sue for damages. Therefore, the field of controversy of the two suits cannot be said to be identical because what the plaintiff will have to prove in the first suit is merely the existence of the contract and the alleged apprehension of breach thereof. In the subsequent suit the plaintiff will have to prove not only the existence of the contract but failure on the part of the defendant-firm to perform its part of the contract and to establish its right to claim damages from the defendant-firm and to prove the quantum of damages. Strictly speaking, therefore, the field of controversy of
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NC: 2023:KHC:25706 WP No. 53652 of 2017 the two suits cannot be said to be so identical that the decision of the former suit would conclude the subsequent suit on the doctrine of res judicata. Even if the plaintiff-company fails to prove in the former suit the alleged apprehension and the suit is dismissed on that ground, the subsequent suit based on actual breach of contract will still survive. I am, therefore, of the opinion that Mr. Zaveri is not right when he contends that in the facts and circumstances of the two suits, the subsequently instituted suit ought to have been stayed by the learned trial Judge".
32. It was observed that though respective suits were between same parties, on same agreement, merely on ground that one incidental issue was common would substantiate respective claims, Section 10 could not be invoked. Therefore, though issue whether default was committed by plaintiff or defendant herein giving rise to respective claims would be incidental in both suits, scope of respective suits would be whether plaintiff therein would be entitled for reliefs as sought for. Therefore, Section 10 would not be applicable. Indeed ratio of decisions relied upon would be undeniable. For above mentioned reason, order impugned cannot be faulted.
33. Consequently W.P.no.53652/2017 is dismissed.
Sd/-
JUDGE PSG