CALCUTTA HIGH COURT
Lort-Williams, J., Lord Williams, J.
Naskarpara Jute Mills Co. Ltd. - Appellant
Versus
Nirmal Kumar Jain - Respondent
Decided On : 10-12-1940
Arbitration Clause - Jurisdiction - Section 10, Civil P. C - Injunction - Gaming and Wagering Transactions - Collusion and Conspiracy
Fact of the Case:
The plaintiffs sold hessian cloth to the defendant through a broker. The defendant failed to take delivery of some cloth, leading to a dispute. The defendant filed a suit in Bihar, alleging gaming and wagering transactions and collusion. The plaintiffs sought an injunction to restrain the defendant from proceeding with the Bihar suit.
Finding of the Court:
The court found that the balance of convenience favored deciding all issues in the Calcutta Court. It allowed the plaintiffs' petition and granted an injunction restraining the defendant from proceeding with the Bihar suit.
Issues: Jurisdiction, Gaming and Wagering Transactions, Collusion and Conspiracy
Ratio Decidendi: The court has jurisdiction to issue injunctions restraining a defendant from litigating in another court on the grounds of convenience. The matter in issue must be directly and substantially in issue in both suits for Section 10, Civil P. C to apply.
Final Decision: The plaintiffs' petition was allowed, and an injunction was granted restraining the defendant from proceeding with the Bihar suit. The defendant's petition was dismissed.
ORDER
Lort-Williams, J. - This is a petition by the plaintiffs, the Naskarpara Jute Mills Co. Ltd., against the defendant, Nirmal Kumar Jain, in suit No. 2053 of 1940. In that suit the plaintiffs allege that by an agreement dated 24th November 1939 the plaintiffs, through their managing agents, Messrs. The Howrah Trading Co. Ltd., sold to the defendant certain hessian cloth through the agency of Basani Lal Masudi, acting as broker for both parties. The defendant failed to take delivery of some of the cloth which was subsequently sold by the plaintiffs who claim the difference between the contract and the market price. The written contract of sale contained an arbitration clause. The plaintiffs allege that in order to avoid payment and to defeat the arbitration proceedings, defendant has filed a suit in the Court of the Subordinate Judge at Arrah in Bihar, being title suit No. 34 of 1940. They allege that the defendant at all material times resided in Calcutta and carried on business there and had his office within the jurisdiction.
2. The broker also resides within the jurisdiction, and the contract notes were passed by him to the parties in Calcutta. In the Arrah suit, the defendant, Nirmal Kumar Jain, has sued the Howrah Trading Co. Ltd., the Naskarpara Jute Mills Co. Ltd., and one Jaganath Das Jain, for a declaration inter alia that the contract to which I have referred is void. He alleges that prior to the making of that contract, the Howrah Trading Co. Ltd., and the Naskarpara Jute Mills Co. Ltd., sent their munib to Arrah and induced the plaintiff to agree to enter into contract transactions by way of gaming and wagering with the defendant, for the purchase and sale of hessian cloth, that it was agreed that performance of such contracts of purchase and sale would not be demanded by either party, and that no delivery would be given or asked for, but that the contracts would be settled by payments of difference, and that transactions were to commence in November 1939. Further he alleges that Jaganath Das Jain, defendant 3, was attached to his office and was friendly with the first two defendants and the broker, Basant Lal Masudi, that all three defendants in collusion with the broker without the knowledge or consent of the plaintiff, brought into existence the contract of 24th November 1939, between the plaintiffs on the one side and the Howrah Trading Co. Ltd., and the Naskarpara Jute Mills Co. Ltd., on the other. Then he goes on to allege that at the time Jaganath Das Jain entered into that contract, and throughout, the parties never intended that anything more than differences should be paid, and that the transaction was a wagering transaction and had not been consciously ratified by the plaintiff.
3. Further, he alleges that he resides and has his head office in Arrah where defendant 3, Jaganath Das Jain, has his residence, and the alleged head agreement, namely the agreement alleged to have been made prior to the contract of 24th November 1989, was made within the jurisdiction of the Arrah Court. The plaintiffs in the present suit, the Naskarpara Jute Mills Co. Ltd., therefore allege that their suit in this Court is more comprehensive than the suit filed at Arrah, and ask for an injunction restraining the defendant, Nirmal Kumar Jain, from proceeding with the Arrah suit. The defendant has not filed any affidavit in opposition to this petition, but there is another petition before me, filed by the defendant, Nirmal Kumar Jain, in the present suit in which he asks for stay of this suit on the ground that the Arrah suit is more comprehensive and that the matters in issue in the two suits are the same. On his behalf reference has been made to Section 10, Civil P. C, and the point has again been raised that this Court has no jurisdiction to issue an injunction restraining the defendant in a suit before this Court from proceeding with a suit in another Court if the provisions of Section 10 apply. I need only draw attention to
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