Madras High Court
SATHIADEV
Engineering Investments - Appellant
Versus
Bharat Heavy Electricals Ltd., Madras - Respondent
Decided On : 02/15/1982
CIVIL PROCEDURE CODE - SECTION 24 - TRANSFER OF APPEAL - CONFLICT OF DECISIONS - AVOIDANCE - JURISDICTION - ORIGINAL SIDE OF HIGH COURT - HEARING OF APPEAL AND SUIT TOGETHER - SCOPE OF SECTION 24, C.P.C. - ENFORCEABILITY OF BANK GUARANTEES - COMMON ISSUES - RE-CASTING OF ISSUES - ABUSE OF PROCESS OF COURT - MULTIPLICITY OF PROCEEDINGS - INTERESTS OF JUSTICE - BALANCE OF CONVENIENCE.
Fact of the Case:
Petitioner filed a suit in the City Civil Court for a declaration that the bank guarantees executed by the second respondent-Bank are illegal, void, and unenforceable, and for an injunction restraining the first respondent from enforcing the four bank guarantees. The suit was dismissed, resulting in an appeal to the Principal Judge, City Civil Court, Madras. Meanwhile, the petitioner filed another suit in the High Court for recovery of a sum of money and for a declaration that the order passed by the first respondent terminating the contract is illegal and not binding. An application was filed in the High Court suit for an interim injunction, which was initially granted but later withdrawn on the filing of the suit in the City Civil Court.
Finding of the Court:
The court held that the enforceability of the bank guarantees was a common issue in both the suit pending in the High Court and the appeal pending in the City Civil Court. It also found that there was a likelihood of conflict of decisions if the appeal and the suit were heard separately. Therefore, the court ordered the transfer of the appeal to the file of the High Court for a joint hearing with the suit.
Issues: 1. Whether the High Court has jurisdiction under Section 24, C.P.C. to direct an appeal and a suit to be heard and disposed of together? 2. Whether the enforceability of bank guarantees is a common issue in the suit pending in the High Court and the appeal pending in the City Civil Court? 3. Whether there is a likelihood of conflict of decisions if the appeal and the suit are heard separately?
Ratio Decidendi: 1. Section 24, C.P.C. confers a wide amplitude of exercise of powers by the Court, and the words "competent to try or dispose of the matter" would include each and every Court within the jurisdiction of the superior Court empowered to deal with such execution proceedings. 2. The enforceability of the bank guarantees was a common issue in both the suit pending in the High Court and the appeal pending in the City Civil Court, as evidenced by the reliefs claimed and averments made in the plaint in the High Court suit. 3. There was a likelihood of conflict of decisions if the appeal and the suit were heard separately, as the appeal court could potentially render a decision on the enforceability of the bank guarantees that was different from the decision of the trial court in the suit.
Final Decision: The court ordered the transfer of the appeal to the file of the High Court for a joint hearing with the suit.
ORDER :- Petition is filed under Section 24 (1) (b) (i) of the Civil P.C. for withdrawing the appeal in A.S. No. 297 of 1981 on the file of the Principal Judge, City Civil Court, Madras to the file of this Court. It is claimed by the petitioner that O.S. No. 5101 of 1981 was filed in the City Civil Court for declaration that the Bank Guarantees executed by the second respondent-Bank herein, is illegal, void and unenforceable and for consequential injunction restraining first respondent from enforcing the four bank guarantees executed by second respondent in favour at first respondent. The suit was dismissed resulting in the filing of A.S. No.297 of 1981, as against it. C.M.P. No.1176 of 1981 was filed for interim injunction, which was granted.
2. Earlier to institution of O.S. No.5101 of 1981, petitioner filed C.S. No. 316 of 1980 for recovery of a sum of Rs. 7,02,500/- and for declaring that the order passed by the first respondent on 9-5-1980 is illegal and not binding and for consequential injunction against it and from enforcing or recovering the amounts covered by the four bank guarantees given by the second respondent herein. Application No.576 of 1980 was filed in the said suit to restrain the respondent from enforcing bank guarantees and initially interim injunction was granted, but later on withdrawn on the filing of O.S. No.5101 of 1981 in the City Civil Court, Madras. It is therefore contended that common questions of law, facts and issues arise for consideration, both in C.S. No. 316 of 1980 and A.S. No. 297 of 1981 and since, substantial question of law of public importance require to be decided in the appeal, and to avoid conflict of decisions, this is eminently a fit matter, where the appeal requires to be withdrawn and heard and disposed of by this Court. Application No. 4074 of 1981 was filed in C.S. 316 of 1980 for amendment of plaint and the amendments having been allowed, the petitioner has the right to question even the letter of intent dated 14/17-10-77, and also about the validity of the termination dated 9-5-1980. Further Application No. 4112 at 1981 filed under clause 13 of the Letters Patent in the suit, had to be withdrawn, since the Court felt that it would have no jurisdiction to transfer an appeal to the Original Side of this Court.
3. In an elaborate counter-affidavit, first respondent would plan (complain ?) that A.S. No. 297 of 1981 pending in City Civil Court, Madras, is the outcome of an abuse of process of Court and mainly intended to protract the proceedings, since after filing the suit in the High Court, there was no justification for filing of a similar suit in the City Civil Court. Mainly because the petitioner could not secure injunction in this Court, he had resorted to this device. The application filed in this Court was withdrawn only after securing interim injunction in the City Civil Court. When first respondent is entitled to get under the Bank Guarantees, a sum of Rs. 5,40,000/- and the recovery having been stalled by the proceedings during the past two years, it is causing untoward loss, to first respondent. The issues relating to four bank guarantees and their validity and their enforceability do not arise for consideration in the suit pending in this Court, wherein only the validity of the termination of the contract is the main issue. Therefore, common issues in the two proceedings relating to the four bank guarantees, do not arise for consideration. There was no need for the petitioner to institute a suit in the City Civil Court after having instituted the suit in this court. The main attempt is to delay the realisation of the amounts covered by the bank guarantees. There is no justification made out for transfer of the appeal to the file of this court.
4. In reply affidavit, it is reiterated that Application No. 4073 of 1981 was filed in C.S. No. 316 of 1980, for amending the plaint and the amendments having been carried out, an issue necessarily relating to the fou
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