Indian Bank Vs Maharashtra State Co-Operative Marketing Federation Ltd

Bench:
Justice S.C. Agrawal. and Justice G.T. Nanavati

Appellant:
Indian Bank

Respondent:
Maharashtra State Co-Operative Marketing Federation Ltd.

Issue

Whether the bar to proceed with the trial against a subsequent suit under Section 10 of Civil Procedure Code is applicable to a summary suit under Order 37 of Civil Procedure Code?

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 that the documents drawn under the LoC, when tendered to the bank, had to be given to the Federation for their acceptance and then the bank had to make payments to the Mills on behalf of the Federation.
• On 6-2-1992, the bank filed a summary suit in Bombay HC against the Federation for the recovery of Rs. 4,96,59,160 under the LoC. The Federation had pursued to stay on the summary suit as it had 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 suits under Section 10, CPC and summary suits 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 the High Court.

Relevant Paragraphs (Paragraph Numbers 7, 8 and 9 of the Original Judgement)

1. The word 'trial', in legal language, means the judicial examination and determination of an issue in civil or criminal court by a competent Tribunal. Generally, it is said to include all the proceedings, that is, from the institution of suit till the final judgement or decree. Whether the word 'trial' must be interpreted widely or narrowly must depend upon the nature and object of the provision and the context in which it is used.
2. Therefore, while interpreting the word 'trial' in relation to the provisions under Section 10 and Order 37 of the CPC, it is important that the two should be construed harmoniously in such a manner that the object of neither of the sections is frustrated.
3. In the opinion of the Court, the term 'trial' would not, altogether, mean the entire proceedings starting from the institution. In a summary suit the 'trial' really begins after the Court grants leave to the defendant to contest the suit.

Judgement

The Supreme Court allowed the appeal. The impugned judgement of the Division Bench of the High Court 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 of the Civil Procedure Code. Therefore, the bar to proceed with trial under Section 10 is not applicable on summary suits.

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