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HIGH COURT OF CALCUTTA
CHAKRABARTI, SARMA SARKAR
SHORAB MERWANJI MODI - Appellant
Versus
MANSATA FILM DISTRIBUTORS - Respondent
A. F. O. O. 80 Of 1955
Decided On : MARCH 01, 1957
CIVIL PROCEDURE CODE - Section 10 - Stay of suit - Order refusing to stay a suit under Section 10 of the Code is appealable under Clause 15 of the Letters Patent - Order refusing to revoke leave granted under Clause 12 of the Letters Patent is also appealable - Order refusing to grant an injunction restraining further prosecution of a suit is not appealable - Suit for recovery of money with interest or, in the alternative, damages - Defendant's plea of fraudulent misrepresentation vitiating the agreements and rendering them void - Plaintiff's denial of misrepresentation and plea of termination of contracts - Defendant's institution of a suit in Calcutta for refund of moneys paid and damages - Plaintiff's institution of a suit in Bombay for recovery of money or damages - Defendant's application for injunction restraining further prosecution of Bombay suit - Plaintiff's application for revocation of leave granted under Clause 12 of the Letters Patent and, alternatively, for stay of Calcutta suit under Section 10 of the Code - Dismissal of both applications by trial Judge - Appeals by both parties.
Fact of the Case:
The plaintiff, a cinema-actor and producer of films, entered into two agreements with the defendant, a Calcutta firm carrying on the business of exhibiting and distributing films, for the distribution rights of three motion pictures to be produced by him. The agreements provided that, in addition to other remedies, the producer would have the right to terminate the agreement summarily and forfeit all sums paid to him by the distributors in the case of breach or non-performance of any of the conditions or in the case of default in making the stipulated payments or submitting statements of accounts. The plaintiff also wrote two letters to the defendant authorising them to pay all moneys payable to him under the agreements to a third party. The defendant paid two instalments of the money due under the agreements, but failed to pay the third instalment. The plaintiff thereupon terminated the agreements and notified forfeiture of all moneys paid by the defendant. The plaintiff then instituted a suit in the Bombay High Court for the recovery of the third instalment or, in the alternative, damages. The defendant instituted a suit in the Calcutta High Court for a refund of the moneys paid under the agreements and damages for loss of profits. The defendant applied for an injunction restraining the plaintiff from proceeding with the Bombay suit. The plaintiff applied for revocation of the leave granted under Clause 12 of the Letters Patent and, alternatively, for a stay of the Calcutta suit under Section 10 of the Civil Procedure Code. The trial Judge dismissed both applications.
Finding of the Court:
The Court held that the order refusing to stay the Calcutta suit under Section 10 of the Code was appealable under Clause 15 of the Letters Patent, as it affected the merits of the controversy between the parties by determining a right or liability. The Court also held that the order refusing to revoke the leave granted under Clause 12 of the Letters Patent was appealable, as it had the effect of giving a jurisdiction to the Court which it otherwise would not have and it determined a right between the parties, viz., the right to sue in a particular Court and to compel the defendants who are not within its jurisdiction, to come in and defend the suit, or if they do not, to make them liable to have a decree passed against them in their absence. The Court further held that the order refusing to grant an injunction restraining further prosecution of the Bombay suit was not appealable, as there was no ground whatsoever for treating the earlier suit of the plaintiff as a mala fide suit.
Issues: Whether an order refusing to stay a suit under Section 10 of the Civil Procedure Code is appealable under Clause 15 of the Letters Patent? Whether an order refusing to revoke leave granted under Clause 12 of the Letters Patent is appealable? Whether an order refusing to grant an injunction restraining further prosecution of a suit is appealable?
Ratio Decidendi: An order refusing to stay a suit under Section 10 of the Civil Procedure Code is appealable under Clause 15 of the Letters Patent, as it affects the merits of the controversy between the parties by determining a right or liability. An order refusing to revoke leave granted under Clause 12 of the Letters Patent is appealable, as it has the effect of giving a jurisdiction to the Court which it otherwise would not have and it determines a right between the parties, viz., the right to sue in a particular Court and to compel the defendants who are not within its jurisdiction, to come in and defend the suit, or if they do not, to make them liable to have a decree passed against them in their absence. An order refusing to grant an injunction restraining further prosecution of a suit is not appealable, as it does not affect the merits of the controversy between the parties or determine any right or liability.
Final Decision: Appeal No. 64 of 1955 was allowed in part. The order of the learned Judge, dated the 28th April 1953, in so far as, by it, he refused to stay the present Suit under Section 10 of the Code is set aside and it is directed that the suit be and do remain stayed so long as the Bombay suit, viz., Suit No. 1069/x of 1954, may remain pending. The rest of the order is upheld. Costs of this appeal, which will be half-costs, will be costs in the suit. Certified for two counsel. Appeal No. 80 of 1955 is dismissed with costs. The undertaking given by the Respondent No. 1 not to proceed with the Bombay suit will stand discharged. Certified for two counsel.
( 1 ) THERE are two appeals before us from a common judgment of P. B. Mukharji, J. , by which the learned Judge dismissed both of two applications which the parties had made before him against each other in a suit in which one of them is the plaintiff and the other the defendant. The applications were made in the following circumstances.
( 2 ) ON the 21st December 1953, an agreement was entered into at Bombay between one Shorab Merwanji Modi, a cinema-actor and producer of films of that place, carrying on business under the name and style of Minerva Movietone and Mansata Film Distributors, a Calcutta firm carrying on the business of exhibiting and distributing films. By the agree-men, Modi appointed- the firm, distributors for the territories of 'c. P. and C. I. Circuits', in respect of three motion pictures going to be produced by him immediately after the production of a film called 'jhansi-hi-Rani' had been completed. The appointment was for a period of seven years from the date of the delivery of the first censored print of each of the three pictures. Under the terms of the agreement, the distributors were to pay to the producer a certain sum in certain instalments and were to receive as their remuneration commission at certain rates. Clause 22 of the agreement provided that, in addition to other remedies, the producer would have the right to terminate the agreement summarily and forfeit all sums paid to him by the distributors in the case of breach or non-performance of any of the conditions or in the case of default in making the stipulated payments or submitting statements of accounts. Clause 28 of the agreement provided for the method by which the parties were to enforce their rights, if necessary. It said inter alia that if either party proceeded in a Court of Law, it must not do so at any place other than Bombay.
( 3 ) ON the same day, another- agreement was entered into by and between the same parties about the distribution rights of the same films on precisely the same terms and conditions, except that the area covered by this agreement was 'the Bengal Circuit' and that the consideration to be paid to the producer was a different sum.
( 4 ) TWO days later, on the 24th December 1953, the producer wrote two letters to the distributors by which he authorised them to pay all moneys payable to him under the agreements to Messrs. Kapurchand Limited, New Queen's Road, Bombay. On some date thereafter, the instalments by which the payments were to be made appear to have been varied by an agreement between the parties. On the 8th of May 1954, there was a letter from the distributors to the producer which referred to that agreement and set out the instalments newly agreed to. It appears that a sum of Rs. 5,78,750 was still payable by the distributors under the two agreements and that a sum was to be paid in eleven instalments of which the first three instalments of Rs. 60,000 each were to be paid on the 10th May 1954, the 15th June 1954 and the 15th July 1954, respectively. The producer admitted the new arrangement by endorsing his confirmation of the letter.
( 5 ) THE two instalments due on the 10th May 1954 and the 15th June 1954 were duly paid. Before the date of the next instalment arrived, the distributors addressed a letter to the producer on the 23rd June 1954. In the letter they stated that they had entered into the agreement on the representation made to them that one of the pictures would deal with a historical theme, another would deal with a social subject and the third would be a fantasy. They were, they said, under the impression that of the two of the coming productions of which they had come to know, 'waris' was a social picture and 'mirza Galib' a fantasy, but they had seen in one of the letter-heads of the producer that the third picture was going to be 'kundan'. They therefore wanted to know if 'kundan' would be a historical picture and if so, what historical event would be its subj
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