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1953 Supreme(Bom) 168
IN THE HIGH COURT OF BOMBAY
Chagla, C.J. and Shah J.C. , J.
Appellants: Ram Bahadur Thakur and Co.
Vs.
Respondent: Devidayal (Sales) Ltd.
O.C.J. Appeal Nos. 48 and 49 of 1953
Decided On: 12.08.1953
Counsels:
For Appellant/Petitioner/Plaintiff: K.T. Desai and P.R. Vakil, Advs.
For Respondents/Defendant: Purshottam Tricumdas and H.M. Desai, Advs.
The Court has inherent powers under Section 151 of the Civil Procedure Code to prevent abuse of the process of the Court and to restrain a party from proceeding with a suit, even if the suit is a previously instituted suit within the meaning of Section 10 of the Civil Procedure Code.
Headnote:
CIVIL PROCEDURE CODE - SECTION 10 - STAY OF SUIT - INJUNCTION - ABUSE OF PROCESS - CONTRACTUAL OBLIGATION - JURISDICTION - INHERENT POWERS OF COURT - SECTION 151 - INTERPRETATION AND APPLICATION.
Fact of the Case:
A contract was entered into between the parties by which the appellants agreed to sell to the respondents 10,000 tons of Iron ore of Indian origin. The contract was made subject to the Bombay jurisdiction. A dispute arose between the parties, and the respondents filed a suit in the Bombay High Court. The appellants filed a suit in the Calcutta High Court, alleging breach of contract by the respondents. The respondents filed a notice of motion for an order restraining the appellants from proceeding with the suit filed by them in the Calcutta High Court.
Finding of the Court:
The Court held that the appellants' suit in the Calcutta High Court was vexatious and frivolous and constituted an abuse of the process of the Court. The Court also held that the appellants had violated their contractual obligation to have disputes arising out of the contract adjudicated upon by the Bombay Courts. The Court further held that Section 10 of the Civil Procedure Code did not apply in this case as the appellants' suit was not a previously instituted suit within the meaning of Section 10. The Court also held that the Court had inherent powers under Section 151 of the Civil Procedure Code to prevent abuse of the process of the Court and to restrain the appellants from proceeding with their suit in the Calcutta High Court.
Issues: 1. Whether Section 10 of the Civil Procedure Code applies to a suit which is vexatious and frivolous and constitutes an abuse of the process of the Court? 2. Whether a party can be restrained from proceeding with a suit which violates a contractual obligation to have disputes adjudicated upon by a particular Court? 3. Whether the Court has inherent powers under Section 151 of the Civil Procedure Code to prevent abuse of the process of the Court and to restrain a party from proceeding with a suit?
Ratio Decidendi: 1. Section 10 of the Civil Procedure Code does not apply to a suit which is vexatious and frivolous and constitutes an abuse of the process of the Court. 2. A party can be restrained from proceeding with a suit which violates a contractual obligation to have disputes adjudicated upon by a particular Court. 3. The Court has inherent powers under Section 151 of the Civil Procedure Code to prevent abuse of the process of the Court and to restrain a party from proceeding with a suit.
Final Decision: The Court dismissed both appeals and granted an injunction restraining the appellants from proceeding with the suit filed by them in the Calcutta High Court.
1. These are two appeals from two orders passed by Mr. Justice Coyajee. One is on a notice of motion taken out by the appellants, who are the defendants in a suit, filed in Bombay, being suit No. 284 of 1953, for an order under Section 10 of the Civil Procedure Code staying the suit on the ground that they had filed a previous suit on the same cause of action in the Calcutta High Court. The other is on a notice of motion taken out by the plaintiffs in suit No. 284 of 1953 for an order restraining the appellants and the defendants from proceeding with the suit which they had filed in the Calcutta High Court. Mr. Justice Coyajee dismissed the appellants notice of motion for stay, and on the notice of motion taken out by the respondents he made an order restraining the appellants from proceeding with the suit filed by them in the Calcutta High Court.
2. Now, a few facts might be stated. A contract was entered into between the parties by which the appellants agreed to sell to the respondents 10,000 tons of Iron ore of Indian origin. The formal contract is dated August 19, 1952, and the period of delivery stipulated in the contract is between the months of October 1952 to January 1953, i.e., 2,500 tons approximately every month, and one of the important provisions of the contract is that the contract is made subject to the Bombay jurisdiction. It is unnecessary to go into the correspondence which ensued between the parties subsequent to the execution of this contract, each party complaining of a breach of contract on the part of the other; but on December 8,1952, the respondents wrote to the appellants stating that if the appellants did not carry out one of the terms of the contract, they would consider it as a breach and would proceed against them as advised by their legal advisers.
This letter was followed up by a formal letter from the solicitors dated February 18, 1953. In this letter the solicitors intimated to the appellants that according to their clients the appellants had committed a breach of the contract and that they had suffered damages in the sum of Rs. 70,000 and they called upon the appellants to pay the said sum within eight days from the receipt of this letter. The appellants did not send any reply either to the letter of December 8, 1952, or to the letter of February 18, 1953. Instead they filed a suit in the Calcutta High Court on March 11, 1953, alleging that the respondents had committed a breach of the contract and claiming damages from them in the sum of Rs. 30,000.
The respondents filed the Bombay suit on March 18, 1953. Therefore it is clear that the Calcutta, suit is the previously instituted suit and there is no dispute that there is a substantial identity in the subject matter between the two suits filed in the Calcutta High Court and the Bombay High Court.
3. The contention raised before us by Mr. Desai is that in view of the fact that the Calcutta suit is the previously instituted suit, Section 10 of the Civil Procedure Code applies and it was obligatory upon this High Court to stay the Bombay suit which was the subsequently instituted suit. Mr. Desais contention is that inasmuch as the provisions of Section 10 are mandatory, it was not competent for the learned Judge below to depart from those provisions, not to stay the suit, and on the other hand prevent the appellants from proceeding with the suit which they had filed in the Calcutta High Court. The point raised by Mr. Desai is an extremely interesting and an extremely important one.
It has been the established practice in this Court for at least last 25 years known to the bar that injunctions have been issued by this Court restraining defendants from proceeding with the suits which they had filed, even though the suits filed by them were previously instituted suits and even though the subsequently filed suit was liable to be stayed under Section 10 of the Civil Procedure Code. This Court has proceeded on the basis that if a suit
