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Judgment
M.M. Punchhi, J
An application u/s 10 of the CPC Code, was dismissed by Shri M.L. Malhotra, Sub Judge 1st Class, Hoshiarpur, in a civil suit pending between the parties. This petition for revision is against that order.
The necessary facts to appreciate the claim of the Defendant-Petitioner in that regard art these Messrs Mahavir Spinning Mills Limited, Hoshiarpur is the Plaintiff in the instant case and for reference would be termed hereafter as the Hoshiarpur Company''. Messrs Dewas Textile Mills Private Limited, Indore, is the Defendant and would henceforth be termed as the Indore Company. The remaining two Defendants are preformed Defendants and do not figure in the controversy. It appears that the parties had business dealings. Their dealings went into rough weather. Stately an agreement dated 16th August, 1980, was executed by them to resolve their differences, settle their outstanding accounts and pay compensation. That agreement was executed between the parties at Indore. Apparently, the business was resumed between the parties and then again their affairs went into rough weather. Details of their disputes are not required to be mentioned herein as this petition can be disposed of without them. Now, the Indore Company on 28th March, 1983, instituted a civil suit in the Court of the seventh Additional Judge, Indore, against the Hoshiarpur Company. The claim was for a declaration that the entire settlement under the agreement dated 16th August, 1980, was illegal and without consideration and that it be declared as void and a nullity In the alternative, it was for specific performance requiring the Hoshiarpur Company and the other Defendant there into specifically perform their part of the agreement. Further still, certain sums of money were claimed.
Nearly a maunder, on 29th April, 1983 the Hoshiarpur Company filed a civil suit for recovery of money to the tune of Rs. 2,35,027/- against the Indore Company, on the plea that these sums were due on account of business transactions
In defence of the Hoshiarpur suit, the Indore Company raised the plea that the agreement dated 16th August, 1980, was result of a fraud practiced by the Hoshiarpur Company in collusion with Messrs Arihant Fabrics Limited and that it bad filed a civil suit at the Indore Court for a declaration that the said agreement was vitiated by fraud and had in the alternative required specific performance of that part of the agreement which the Hoshiarpur Company was require-ed to fulfil and still in the alternative certain sums of money and compensation, interest etc A copy of the plain filed in the Indore Court was appended as part of the written statement.
In defence of the suit at Indore the Hoshiarpur Company challenged the jurisdiction of the Indore Court on the basis that on account of a printed clause on the reverie of the contract orders, the jurisdiction was only that of the Hoshiarpur Courts and further that the Hoshiarpur Company had filed suits for recovery of money before the Hoshiarpur Court Particular attention was invited to the term on the printed contract orders which read at follows:
Jurisdiction
The contract shall be deemed to have been made at Hoshiarpur and the supplies and payment of the bills shall be deemed to have been agreed to effected at/from Hoshiarpur.
All disputes arising out of this contract shall be subject to the jurisdiction of Courts only.
Supportive of its claim, the Hoshiarpur Company also drew Attention of the Indore Court that Clause 7 of the agreement dated 16th August, 1980, also mentioned "That this agreement shall not in any way affect the jurisdiction clause already agreed to by the parties while contracting for the supply of goods" This was pressed into service to contended that the Hoshiarpur Court alone had the jurisdiction to decided whether the agreement dated 16th August, 1980, was vitiated by fraud etc.
In this situation, as has been stated at the Bar, the Hoshiarpur Court, amongst others, framed the following issues which are relevant for our purpose:
Whether Defendant No. 1 entered into a compromise with the terms and conditions as mentioned in paragraphs 6 and 7 of the plaint ? OPD.
If issue No. 2 is proved in the affirmative, whether the agreement was the result of fraud and misrepresentation ? OPD. Additional issue No. 1.
whether Defendant No. 1 has filed suit No. 11 of 1983 in the Civil Court at Indore regarding the same subject matter of the present suit. If so, its effect ? OPD.
The trial Judge when asked to stay the Hoshiarpur suit was mainly impressed by the argument that when in the agreement dated 16th August 1980, jurisdiction had been preserved under Clause 7 as or before, the Hoshiarpur Court was one of the Court which could assume jurisdiction to consider the validity of the agreement. The plea of the Indore Company that the aforesaid Clause 7 only related to jurisdiction regulated in the original contract orders and not the territorial jurisdiction of the Court in which the agreement was executed, did not find favour with the trial Judge The learned Judge also took the view that the Hoshiarpur Court was to decide the dispute relating to the compliance of the terms of the compromise, after it was entered into, and which matter could only be decided by that Court For these reasons, he opined that the relief''s sought in both the suits were not the same and the Hoshiarpur suit, in addition to the legality of the compromise, also involved the dispute of providing of goods in compliance with the terms of the agreement. He, therefore, rejected the application u/s 10 of the CPC of the Indore Company, giving rise to this petition.
I have heard the learned Counsel for the parties at length. In point of time indisputably, the Indore suit was filed first. Now Section 10 of the CPC says that no court shall proceed with the trial of any suit in which the matter in issue is a so directly and substantially in issue in a previously instituted suit between the same parties, or between parts under whom they or any of them claim litigating under the same title where such suit is pending in the same or in any other Court in India having jurisdiction to gram the relief claimed, or in any Court beyond the limits of India established or constituted by the Central Government and having like jurisdiction, or before the Supreme Court Besides the time factor, undisputable both the suits have been instituted between the same parties. Now the matter directly and substantially in issue in both the suite, so far as it relates to the validity of the agreement dated 16th August, 1980, certainly comes to surface. It is in the offensive form in the Indore Court by the Indore Company that the said agreement is vitiated by fraud etc. and the same is in a defensive form in the Hoshiarpur Court which has given rise to suitable issues at culled out in the earlier part of the judgment The plea of the Respondent that Clause 7 of the agreement, which agreement undisputable was executed at Indore, excluding the jurisdiction of Indore Court, is untenable, for, if the agreement is vitiated by fraud etc as claimed by the Indore Company, then Clause 7, which is a part thereof, would also meet the same fate and cannot he held to remain singularly valid and initiated by any fraud etc Clause 7 of the agreement sustain it the agreement a$ such sustains. It is unnecessary for this Court to determine the remaining scope of Clause 7, as to in which circumstances it would apply to the matter of contracting for the supply of goods. That question has to be settled only in the event if the said agreement gets the seal of validity At least this portion of both the suits, that is, with regard to the validity of the agreement, is directly and substantially in issue in both the suits. Since the Indore suit was filed first in point of time, that alone u/s 10 of the CPC can be allowed to proceed with it and not the Hoshiarpur Court which has to stay its hands to determine that question.
It need also be mentioned here that if the Indore Company cannot prove, which in the nature of things it is required to prove, that the agreement was vitiated by fraud etc. then the business dealings between the parties which have given rise to the respective suits would have to go on in their own way, for, at present, as it seems to me, neither party has filed a counter claim in any of the suits for which suits have been filed in the respective Courts. Those, for the present, do not seem to be matters which are directly and substantially in issue in both the suits, for, each party in that regard is on to blow its owa trumpet.
For the view above taken, the Hoshiarpur suit is stayed, only for the time being, that is, till the issue regarding the validity of the agreement is settled by the Indore Court. It is the hope and expectancy of this Court that for the mutual regard which courts have for one another, that Court would treat the said issue as a preliminary one and dispose it of as expeditiously as possible Once the relevant issue or issues get decided, then the respective suits shall proceed on their due course.
This petition is thus partially accepted without any order as to costs.