R. Srinivasan vs Southern Petrochemical Industries Corporation Ltd.

A. Thangamant, J.—Application by way of Judge''s summons under Order XIV, Rule 8 of the Original Side Rules for stay of proceedings in

C.S. No. 539 of 1989 pending disposal of the original suit No. 9630 of 1986 on the file of the City Civil Court, Madras.

The applicant is the defendant in the present suit. In his affidavit he states that the present suit No. 539 of 1989 has been instituted against him

for the recovery of sums due in respect of the Housing loan granted to him. Plaintiff has also sought to foreclose the Housing loan under the pretext

that the defendant has left the plaintiff Organisation. As per the plaint averments, cause of action for the above suit arises as this defendant has left

the Organisation. Whereas the defendant has not left the Organisation. He is a permanent employee of the plaintiff-Corporation since 1972. He has

filed O.S. No. 9630 of 1986 on the file of the City Civil Court, Madras challenging notice of termination dated 1.10.1986 issued to him. The

matter in issue in that suit also directly and substantially in issue in the present action. Hence this application to stay the proceedings u/s 10 of the

Code of Civil Procedure.

The respondent/plaintiff pleads in the counter that the present suit is one for recover of Housing Loan which was availed by the defendant and

since his service was terminated and he left the Organisation without clearing the outstanding amount. The applicant has filed O.S. No. 9630 of

1986 against the present respondent in the City Civil Court. That suit has been dismissed and the applicant has preferred an appeal in A.S No.

138 of 1991 on the file of the City Civil Court. Since the matter in issue in the present suit is not directly and substantially in issue in that suit, there

is no scope for staying the suit u/s 10 of the Code Civil Procedure.

In the reply affidavit the applicant/defendant has assailed at length the averments in the counter affidavit.

The point for determination is whether the proceedings in C.S, No. 539 of 1989 on the file of this Court has be to stayed till the disposal of O.S

No. 9630 of 1986 on the file of City Civil Court, Madras.

The Point:-The present applicant R. Srinivasan was working as a Project Engineer (Chemical) in the respondent Company M/s. Southern

Petrochemical Industries Corporation Limited.

A reading of the plaint in the earlier suit would indicate that he has instituted that action for declaration that the notice of termination issued by the

respondent Company on 1-10-1986 is illegal and that the enquiry proceedings initiated by the Company against him are illegal, void and opposed

to public policy and that the Enquiry Officer cannot proceed with the enquiry and for consequential permanent injunction restraining the respondent

Company from proceeding with the enquiry or action as contemplated by them. Whereas the present suit C.S. No.539 of 1989 is by the

Company against R. Srinivasan for recovery of Rs. 1,54,688.84 with interest on the allegation that a sum of Rs. 1,08,000/- was advanced to the

petitioner as Housing Loan to repay it within a period of 20 years or before retirement/release of the petitioner from the services of the respondent

Company whichever is earlier and that so far the petitioner has paid only a sum of Rs. 14,060/- towards discharge of that loan. In the written

statement the applicant herein does not dispute the borrowing. The averments therein are to the effect that on O.S. No. 9630 of 1986 he has

challenged the notice of termination dated 1-10-1986 and the same was the subject matter of the suit in O.S No. 9630 of 1986. Since that suit

was dismissed he has preferred A.S. No. 138 of 1991 on the file of the City Civil Court, Madras and the subject matter of that appeal was also

the notice of termination dated 1-10-1986. There is no dispute that proceedings in appeal are only a continuation of the suit instituted in the first

Court. The written statement in C.S. No. 539 of 1989 further alleges that the applicant continues to be a regular employee of the Company and as

such is entitled to repay the loan in instalments with interest at 9% per annum. So the only issue that arises for consideration in C.S. No. 539 of

1989 is the liability of the present applicant to pay the suit amount in instalments within a period of 20 years and at 9% per annum instead of 18%

per annum claimed in the plaint. Whereas the issue involved in the earlier suit relates to the validity of the termination notice. Si it cannot be said that

the issue directly and substantially in issue is the same in both suits,

The Learned Counsel for the applicant cited the decision in Rana v. Union of India reported in AIR 1979 Del 118 and C. Raman and Co. and

Others Vs. Modern Motor Works, , and argued that the matter directly and substantially in issue in both the suits herein is the same and hence the

later suit has to be stayed u/s 10,C.RC. In the first decision a Single Judge of the Delhi High Court has held that the words ""matter in issue"" in

Section 10 of the CPC mean all disputed material questions in the subsequent suit which are directly and substantially in question in the previous

suit. They do not mean entire subject matter in issue in the two suits. In the second decision a single Judge of the Punjab and Haryana High Court

found that on the facts therein the subsequent suit was filed as a counter blast to the previous suit and the matter in issue was the same in both the

suits. Evidently these two decisions cannot help the applicant in any manner. In fact, as per the decision in Sagar Shamsher Jang Bahadur Rana and

Another Vs. The Union of India and Others, , in order to invoke Section 10 C.P.C. all disputed material questions must be directly and

substantially in issue in both the suits. And we have already seen that all the direct and substantial disputes in the earlier suit do not arise for

consideration in the later suit.

u/s 10 of Code of Civil Procedure, no Court shall proceed with the trial of any suit in which the matter in issue is also directly and substantially in

issue in a previously instituted suit between the same parties, or between parties under whom they or any of them claim litigating under the same

title where such suit is pending in the same or any other Court in India having jurisdiction to grant the relief claimed. This section does not

contemplate an identity of issues between the two suits, nor does it require that the matter in issue in the two suits should be entirely the same or

indentical. What the section requires is that the matter in issue in the two suits should directly and substantially the same, and proper effect must be

given to the language used by the legislature in Section 10 that the identity required is a substantial identity. There must be an identity of subject-

matter, the field of controversy between the parties in the two suits must also be the same, but the identity contemplated and the field of

controversy contemplated should not be identical and the field of controversy must be substantially the same. Where there are different and

independent transactions between the parties, a suit qua one transactions cannot be stayed when a suit qua second transaction is filed.

The Learned Counsel for the respondent has rightly argued that the key words in Section 10 are: ""the matter in issue is directly and substantially

in issue"" in the previously instituted suit. The words ""directly and substantially instituted in issue"" are used in contradistinction to the words

incidentally or collaterally in issue"". That means that Section 10 would apply only if there is identity of the matter in issue in both the suits meaning

thereby that the whole of the subject-matter in both the proceedings is identical and not merely one of the many issues which arises for

determination in the two suits. This is the view taken by a single Judge of Ahmadabad High Court in Sohal Engineering Works Vs. Rustam Jehangir

Vakil Mills Co. Ltd., . this Court has also laid down in Kuberan Nambudri v. Kuman Hair reported in 1925 (48) IU 251 that the expression

matter in issue"" in Section 10 of the CPC has reference to the entire subject in controversy between the parties and the mere fact that one of the

issues in two suits is common is not sufficient to attract the operation of Section 10 of the Code of the Civil Procedure. The question regarding the

validity of the termination of the applicant from the service of the respondent Company is only incidental to the main dispute in the present suit. As

we have already seen that the substantial question in dispute in this case relates to the rate of interest and the liability of the applicant herein to

repay the loan amount in instalments within a period of 20 years.

One test of the applicability of Section 10 to a particular case is whether on the final decision being reached in the previous suit, such decision

would operate as ''res judicata'' in the subsequent suit. What is essential is that there must be ''substantial identity between the matters in dispute

and partiec'' in the earlier and later suits, in Ram Narain Vs. Ram Swarup and Others, ), it was held that the object of the section is to prevent

courts of concurrent jurisdiction from simultaneously trying two parallel suit in respect of the same matter in issue"". Complete indentity of the

subject-matter is not necessary to attract the application of Section 10 and if a matter directly and substantially in issue in a previously instituted suit

is also directly and substantially in issue in a later suit, then u/s 10 the later suit shall be stayed. But any matter common to the two suits will not

attract the provisions of Section 10. The matter must be of substance so that its decision of the other suit. If it is satisfactorily demonstrated that the

second suit is parallel to the first suit, then the best course of everybody concerned would be to put a stay upon or arrest altogether the second suit

at the earliest possible moment. The test whether a previously - instituted suit and subsequently instituted suit are parallel is that if the first was

determined the matter raised in the second suit would be res judicata by reason of the decision of the prior suit, if this test is reached in the earlier

suit regarding the validity of termination of service would not operate as res judicata in the present suit to recover the housing loan,

The Learned Counsel for the applicant next argued that even if the requirements of Section 10 C.P.C. are not satisfied, the Court can stay the

proceedings in the later suit by invoking the inherent powers u/s 151, C.P.C. In support of his claim he relied on the decision in Jugometal Trg

Republike Vs. Rungta and Sons (Private) Ltd., . The Division Bench of the Calcutta High Court has only (aid down that on, the facts therein

though no case for stay of the suit u/s 10 of the CPC was made out, there should be a stay of the suit u/s 151 of the Code. A reading of the

decision would indicate that the situation therein warranted such a stay. However as it has been pointed put in Sohal Engineering Works Vs.

Rustam Jehangir Vakil Mills Co. Ltd., , from a reading Section 151 of the Code it is obvious that in the absence of specific provision in the Code

on the point, the Court has inherent power to make such orders as may be necessary for the ends of justice and to prevent the abuse of the

process of the Court. In Subho Ram Kalita (Deceased by L.R.s) and Others Vs. Dharmeswar Das Koch and Others, it was held that where the

requirements of Section 10, is permissible for staying a suit, provided the Court of justice or to prevent abuse of the process of the Court is

satisfied that such a recourse is necessary for the ends of justice or to prevent abuse of the process of the Court, and it is not violative of any

express and specific provision of the CPC or any other law applicable to the case to be stayed. A Division Bench of the Bombay High Court has

also held in Jai Hind Iron Mart Vs. Tulsiram Bhagwandas, that the inherent powers u/s 151 C.P.C. .are exercised when the Court is abuse of the

process of the court. In this case by no stretch of imagination it could be heard that there is an abuse of the process of the Court, on the part of the

company in instituting the later suit for recovery of the Housing Loan sanctioned to the applicant.

It is, therefore, seen that there is no scope for invoking either Section 10 or Section 151 of the CPC and stay the proceedings in the later suit.

In the result, the application is dismissed and in the circumstances without costs.