G.T.NANAVATI, S.C.AGRAWAL
Indian Bank – Appellant
Versus
Maharashtra State Co-operative Marketing Federation LTD. – Respondent
What is the scope of the bar to proceed with the "trial" under Section 10 CPC in relation to a summary suit under Order 37 CPC? What is the interpretation of the word "trial" in Section 10 CPC when applied to summary suits filed under Order 37? What are the conditions under which a later summary suit must be stayed in light of an earlier suit, and how should orders such as leave to defend and interlocutory relief be treated?
Key Points: - (!) Section 10 CPC prohibits proceeding with the trial of a suit where the matter in issue is also directly and substantially in issue in a previously instituted suit. - (!) The object of Section 10 is to prevent concurrent trials and inconsistent findings; it is a procedural rule, not a substantive bar to instituting a suit. - (!) Order 37 (summary suits) provides a fast-track procedure with leave to defend; the stage of determination arises after leave to defend is granted. - (!) In the context of a summary suit, the word "trial" should not be interpreted in its widest sense; it begins after leave to defend is granted. - (!) The Division Bench’s interpretation that Section 10 applies to summary suits was reversed; the Court held that the word "trial" in Section 10, for summary suits, is limited to the stage after leave to defend is granted. - (!) The judgment restores the Single Judge’s order and sets aside the Division Bench’s stay of the summary suit. - (!) Appeal allowed; judgment of the Division Bench set aside; order of the Single Judge restored. - (!) - (!) Facts: Bank filed summary suit; Federation had prior suit; issue was whether Section 10 applies to summary suits. - (!) - (!) Explanation of procedure under Order 37 and how leave to defend affects timing of "trial."
Judgment
Nanavati, J.-Leave granted.
2. The question which arises for consideration in these appeals is whether the bar to proceed with the trial of subsequently instituted suit, contained in Section 10 of the Code of Civil Procedure, 1908 (hereinafter referred to as the ‘Code’) is applicable to summary suit filed under Order 37 of the Code.
3. The respondent Federation applied to the appellant Bank on 5.6.1989 to open an Irrevocable Letter of Credit for a sum of Rs. 3,78,90,000/- in favour of M/s. Shankar Rice Mills. Pursuant to that request the Bank opened an Irrevocable Letter of Credit on 6.6.1989. The agreed arrangement was that the documents drawn under the said Letter of Credit when tendered to the appellant Bank were to be forwarded to the Federation for their acceptance and thereafter the Bank had to make payments to M/s. Shankar Rice Mills on behalf of the Federation. On 6.2.1992 the Bank filed Summary Suit No. 500 of 1992 in the Bombay High Court under Order 37 of the Code against the Federation for obtaining a decree for Rs. 4,96,59,160/- alleging that the said amount has become recoverable under the said Letter of Credit. The Bank took out summons for judgment (No. 278
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