INDIAN BANK V. MAHARASHTRA STATE CO-OPERATIVE MARKETING FEDERATION LTD.
Bench: Justice S.C. Agrawal. And Justice G.T. Nanavati
Issue:
Whether the bar to proceed with trial against a subsequently suit under Section 10 of CPC applicable to a summary suit under Order 37 of CPC?
Facts:
• The respondent had applied to the appellant Bank to open an irrevocable Letter of Credit for Rs 3,78,90,000 in favour of M/s Shankar Rice mills. On 6-6-1989, the bank opened the same. The agreement was the documents drawn under LoC when tendered to the Bank has to be given to the Federation for their acceptance and then the Bank has to make payments to the mills on behalf of the federation.
• On 6-2-1992, the bank filed summary suit in Bombay HC against the Federation for the recovery of Rs. 4,96,59,160 under the Loc. The federation had seeked stay on the summary suit as it has already filed a suit against the bank for recovery of Rs. 3,70,52,217 prior to the filing of the summary suit.
• The single learned Judge held that the concept of trial is only applicable to regular suit under Section 10, CPC and summary suit weren’t required to be stayed. An appeal was filed against the order and the division bench allowed the appeal & held that Section 10 applies to summary suits also.
• An appeal against the decision has been filed by the appellant in SC.
Appellant’s contentions:
• It was contended that the objective of separate provision of summary suits would be frustrated if Section 10 is applied to summary suits.
Respondent’s contentions :
• The contention raised was that the word’ trial’ in Section 10 doesn’t have a narrow meaning and would apply to summary suits as observed by the division bench of HC.
Judgement:
The Supreme Court allowed the appeal. The impugned judgement of the division bench of HC was set aside and the order of the single learned Judge was restored. It was held that the objective of the prohibition in Section 10 is to prevent the courts from trying two parallel suits at the same time. It is not a bar to institute a suit. The meaning of the word ‘trial in any suit’ has to be in consonance to Order 37,CPC. Therefore, the bar to proceed with trial under Section 10 is not applicable on summary suits.
