Bank Vs. Maharasthra State Co-Operative Marketing Federation Ltd.  INSC
279 (5 May 1998)
Agrawal. G.T. Nanavati Nanavati. J.
5TH DAY OF MAY, 1998 Present:
Mr. Justice S.C. Agrawal Hon'ble Mr. Justice G.T. Nanavati Sameer Parekh, Ms. Bina
Madhavan, P.H. Parekh, Advs. for the appellant D.M. Nargolkar, Adv. for the
following Judgment of the Court was delivered:
question which arises for consideration in these appeals is whether the bar to proceed
with the trial of subsequently instituted suit, contained in section 10 of the
Code of Civil Procedure, 1908(hereinafter referred to as the 'Code') is
applicable to summary suit filed under Order 37 of the Code.
respondent Federation applied tot he appellant bank on 5.6.1989 to open
Irrevocable Letter of Credit for a sum of Rs.3,78,90,000/- in favour of M/s. Shankar
to that request the Bank opened an Irrevocable Letter of Credit on leave to the
Federation to defend the suit conditionally upon the Federation depositing Rs.
4 crores in the Court. The summons for judgment was disposed of accordingly and
the Notice of Motion was dismissed.
by the order of the learned Single Judge in summons for judgment the Federation
filed Appeal No.953 of 1994 before the Division Bench of the High Court; and,
against the order passed on Notice of Motion it preferred Appeal No.954 of
1994. The Division Bench was of the view that the word 'trial' in section 10
has not been used in a narrow sense and would mean entire proceedings after the
defendant enters his appearance, held that section 10 of the Code applies to a
summary suit also. It also held that the summary suit filed by the Bank being a
subsequently instituted suit was required to be stayed. It allowed both the appeals,
set aside the orders passed by the learned Single Judge and stayed the summary
suit till the disposal of the prior suit filed by the Federation.
submission of the learned counsel for the appellant was that the view taken by
the learned Single Judge was correct and Division Bench has committed an error
of law in taking a contrary view. It was his contention that if section 10 is
made applicable to summary suit also the very object of making a separate provision
for summary suits will be frustrated. The learned counsel for the respondent,
on the other hand, supported the view taken by the Division Bench.
10 of the Code prohibits the court from proceeding with the trial of any suit
in which the matter in issue is also directly and substantially in issue in a
previously instituted suit provided other conditions mentioned in the section
are also satisfied. The word 'trial' is no doubt of a very wide import as
pointed out by the High Court. In legal parlance it means a judicial
examination and determination of the issue in civil or criminal court by a
competent Tribunal. According to Webster Comprehensive Dictionary,
International Edition, it means the examination, before a tribunal having
assigned jurisdiction, of the facts or law involved in an issue in order to
determine that issue. According to Stroud's Judicial Dictionary (5th Edition),
a 'trial' is the conclusion, by a competent tribunal, of question in issue in
legal proceedings, whether civil or criminal. Thus in its widest sense it would
include all the proceedings right from the stage of institution of a plaint in
a civil case to the stage of final determination by a judgment and decree of
the Court. Whether the widest meaning should be given to the word 'trial' or
that it should be construed narrowly must necessarily depend upon the nature
and object of the provision and the context in which it used.
the word "trial" in section 10 will have to be interpreted and
construed keeping in mind the object and nature of that provision and the
prohibition to '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'.
The object of the prohibition contained in section 10 is to prevent the courts
of concurrent jurisdiction from simultaneously trying two parallel suits and
also to avoid inconsistent findings on the matters in issue. The provision is
in the nature of a rule of procedure and does not affect the jurisdiction of
the court to entertain and deal with the later suit nor does it create any
substantive right in the matters. It is not a bar to the institution of a suit.
It has been construed by the courts as not a bar to the passing of
interlocutory orders such as an order for consolidation of the later suit with
earlier suit, or appointment of a Receiver or an injunction or attachment
before judgment. The course of action which the court has to follow according
to section 10 is not to proceed with the 'trial' of the suit but that does not
mean that it cannot deal with the subsequent suit any more or for any other
purpose. In view of the object and nature of the provision and the fairly
settled legal position with respect to passing of interlocutory orders it has
to be stated that the word 'trial' in Section 10 is not used in its widest
provision contained in section 10 is a general provision applicable to all
categories of cases. The provisions contained in Order 37 apply to certain
classes of suits. One provides a bar against proceedings with the trial of a
suit, the other provides for granting of quick relief.
these provisions have to be interpreted harmoniously so that the objects of
both are not frustrated. This being the correct approach and as the question
that has arisen for consideration in this appeal is whether the bar to proceed
with the trial of subsequently instituted suit contained in section 10 of the
Code is applicable to a summary suit filed under Order 37 of the Code, the
words 'trial of any suit' will have to be construed in the context of the
provisions of Order 37 of the Code. Rule 2 of order 37 enables the plaintiff to
institute a summary suit in certain cases. On such a suit being filed the
defendant is required to be served with a copy of the plaint and summons in the
prescribed form. Within 10 days of service the defendant has to enter an
appearance. Within the prescribed time the defendant has to apply for leave to
defend the suit and leave to defend may be granted to him unconditionally or
upon such terms as may appear to the Court or Judge to be just. if the
defendant has not applied for leave to defend, or if such an application has
been made and refused, the plaintiff becomes entitled to judgment forthwith. If
the conditions on which leave was granted are not complied with by the
defendant then also the plaintiff becomes entitled to judgment forthwith.
Sub-rule (7) of Order 37 provides that save as provided by that order the
procedure in summary suits shall be the same as the procedure in suits
instituted in the ordinary manner. Thus in classes of suits where adopting
summary procedure for deciding them is permissible the defendant has to file an
appearance within 10 days of the service of summons and apply for leave to defend
the suit. If the defendant does not enter his appearance as required or fails
to obtain leave the allegations in the plaint are deemed to be admitted and
straightaway a decree can be passed in favour of the plaintiff. The stage of
determination of the matter in issue will arise in a summary suit only after
the defendant obtains leave. The trial would really begin only after leave is
granted to the defendant.
clearly appears to be the scheme of summary procedure as provided by Order 37
of the Code.
the objects of both the provisions, i.e., Section 10 and Order 37 wider
interpretation of the word 'trial' is not called for. We are of the opinion
that the word 'trial' in section 10, in the context of a summary suit, cannot
be interpreted to mean the entire proceedings starting with institution of the
suit by lodging a plaint.
summary suit the 'trial' really begins after the Court or the Judge grants
leave to the defendant to contest the suit. Therefore, the Court or the Judge
dealing with the summary suit can proceed up to the stage of hearing the
summons for judgment and passing the judgment in favour of the plaintiff if (a)
the defendant has not applied for leave to defend or if such application has
been made and refused or if(b) the defendant who is permitted to defend fails
to comply with the conditions on which leave to defend is granted.
opinion, the Division Bench of the Bombay High Court was in error in taking a
different view. It had relied upon the decision of this Court in Harish Chandra
vs.Triloki Singh (AIR 1957 SC 444 = 1957 SCR 370). That was a case arising
under the Representation of People's Act and, therefore, it was not proper to
apply the interpretation of word 'trial' in that case while interpreting
section 10 in the context of Order 37 of the Code.
therefore, allow these appeals, set aside the impugned judgment of the Division
Bench of the High Court and restore the order passed by the learned Single
Judge. In view of the facts and circumstances of the case, we make no order as