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THE NATIONAL UNIVERSITY

OF

ADVANCED

LEGAL STUDIES, KOCHI

LAW OF CIVIL PROCEDURE AND LIMITATION PROJECT


STAY

OF

SUIT

UNDER

CIVIL PROCEDURE CODE

Course: 5 year B.A. LL.B. (Hons.)

-LAW OF CIVIL PROCEDURE AND LIMITATION PROJECT- | 1

TABLE OF CONTENTS

I.

INTRODUCTION.................................................................................- 1 -

II. INGREDIENTS OF THE SECTION.........................................................- 1 III. SUIT...................................................................................................- 1 IV. DIRECTLY AND SUBSTANTIALLY SAME SUBJECT MATTER...................- 2 V. SAME PARTIES...................................................................................- 2 VI. STAY OF PROCEEDINGS.....................................................................- 2 VII. STAGE OF APPLCATION......................................................................- 3 VIII. MISCALLANEOUS..............................................................................- 3 IX. IMPORTANT CASE LAWS.....................................................................- 4 A.

Indian

Bank

v.

Maharashtra

State

Cooperative

Marketing

Federation Ltd..............................................................................................................- 4 B.

M/s. Gupte Cardiac Care Centre and Anr v. Olympic Pharma Care

Pvt. Ltd............................................................................................................................- 5 C.

Aspi Jal And Anr v. Khushroo Rustom Dadyburjor................................- 5 -

D............

National Institute of Mental Health and Neuro Sciences v. C.

Parameshwara........................................................................................- 6 E.

Laxmi Fruit Co. v. Gainda Ram & Co.........................................................- 7 -

F.

Sagar Shamsher Jang Bahadur Rana v. The Union Of India And Ors.-

8X. CONCLUSION.....................................................................................- 9 -

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I.

INTRODUCTION

Section 10 of the Civil Procedure Code imposes a duty on the court to stay
the proceedings when a similar matter is pending in another court. It does
not operate as a bar to the institution of the subsequent suit. It is only the
trial of the suit that is not to be proceeded with. 1 However it is to be noted
that this section enacts merely a rule of procedure and a decree therefore
passed in contravention of it is not a nullity and cannot be disregarded in
execution proceedings.2 The basic object of the provision is to save the
parties from multiplicity of proceedings and to avoid courts exercising
concurrent jurisdiction which may result in conflicting decisions. 3 It
incorporates the principle of res sub judis distinct from res judicata.

II.

INGREDIENTS OF THE SECTION

To attract section 10 the following conditions must remain present. 1)


There must be two suits, one instituted previously and the other
subsequently. 2) The matter in issue in the subsequent suit must be
directly and substantially the same as like that of the previous suit. 3) The
suits must be between the same parties or their successors or
representatives in interest litigating in both the suits under the same title
4) The previously instituted suit must be pending in the same court or in
any other court in India or in any court beyond the limits of India
established or continued by the Central Government or before the
Supreme Court. 5) The court in which the previous suit is instituted should
be competent to grant relief in that suit as well as in the subsequent suit.
1 Maharastra State Co-op Mktg Federation Ltd v Indian Bank, AIR 1997
Bom 186
2 Sheopat Ravi v Warak Chand, AIR 1919 Lah 294
3 National Institute of M H & NS v. C Parameshwara, AIR 2005 SC 242

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III.

SUIT

The word suit is intended to mean a civil proceeding instituted by


presenting a plaint.4 It cannot apply to proceedings of other nature
instituted under any other statute. 5 For example in company proceedings,
no plaint is presented and hence, it cannot be regarded as a proceeding
based on a suit.6

IV.

DIRECTLY AND SUBSTANTIALLY SAME SUBJECT MATTER

For the application of the section not only that the matter in issue in the
second suit should also be directly and substantially in issue in the first
suit, but that the second suit must be for the same relief as that claimed
in the first suit.7 However the fundamental test is whether the final
decision in the former suit would operate as res judicata in the subsequent
suit.8 Matters in issue in both the suit need not be identical. It is enough, if
they are substantially the same.9

V.

SAME PARTIES

For determining whether the matter in issue in the subsequently instituted


suit is directly and substantially in issue in the previously instituted suit
absolute identity of the parties in both the suits is not a consideration. 10 It
is sufficient if there is a sufficient identity of parties and in such a case
4 O 4, r 1 of the Code of Civil Procedure
5 National Institute of M H & NS v. C Parameshwara, AIR 2005 SC 242
6 SD Dhandapani v Branch Manager Indian Overseas Bank, AIR 2002 Mad
442
7 Raja Ransgit Singha v Bhagabutty (1990) 7 Cal WN 720
8 Shri Ram Tiwary v Bholi Devi, AIR 1994 Pat 76
9 Mehta Gandhi & Associates v Shree Pipes Ltd, AIR 1990 Del 139

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mere addition or absence of parties provided the substantial issue has not
changed does not preclude the power of court under this section.

VI.

STAY OF PROCEEDINGS

An order under this section can be passed at any stage of the suit.
Generally it is the subsequent suit which will be stayed. Nevertheless
factors such as which is the place where most of the evidence is available,
convenience of the parties and witnesses, which one of the two places is
more convenient to access and attend and so on may persuade the court
to direct a transfer of case in departure from the above rule by invoking
discretionary jurisdiction for ends of justice provided under Section 25 of
CPC.11 But only the appellate court having supervisory jurisdiction can
exercise this power.

VII.

STAGE OF APPLCATION

Normally, the application under this section is to be decided after filing of


the written statement which enables the court to ascertain whether the
matter in issue in both the suits is directly and substantially the same or
not. However, that does not mean that the court has no jurisdiction to
entertain the application prior to filing of the written statement.12

VIII. MISCALLANEOUS
Section 10 does not prevent the court in taking steps such as passing of
interlocutory orders to keep the stayed proceedings alive. 13 In a summary
10 Ashok Kumar Yadav v Noble Designs Pvt Ltd, AIR 2006 Cal 237
11 GC Care Centre and Hospital v OP Care Pvt Ltd, AIR 2004 SC 2339
12 Shri Ram Tiwary v Bholi Devi, AIR 1994 Pat 76.
13 Rameshwar v Fifth Addl Disrict Judge, Basti, AIR 1999 All 1

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suit special procedure is provided in O 37. 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 unto the stage of hearing the summons for judgment and passing
the judgment in favour of the plaintiff if: (i) the defendant has not applied
for leave to defend, or if such application has been made and refused; or
if, (ii) the defendant who is permitted to defend fails to comply with the
conditions on which the leave to defend is granted.14
In cases not covered by the provisions of s 10 of the Code of Civil
Procedure in terms, the court may, in very exceptional circumstances,
stay a suit under s 151 invoking the inherent jurisdiction of the court to
make orders ex debito justitiae but, the court cannot overlook the wellsettled principle of law governing the stay of suits.15 More appropriate
action would be consolidating the cases as section does not bar the power
of the court to consolidate for the purpose of hearing an earlier suit and a
later suit.16

IX.

IMPORTANT CASE LAWS

A. Indian Bank v. Maharashtra State Cooperative Marketing


Federation Ltd17
Bench: Two judge bench

14 Indian Bank v Maharashtra State Co-op Mktg Federation Ltd, (1998) 5


SCC 69.
15 See O 39, r 1
16 Gupta v East Asiatic Co, AIR 1960 All 184
17 (1998) 5 SCC 69

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Facts of the Case: Appellant filed Summary in the Bombay High Court
under Order 37 of the Code against the Respondent for obtaining a decree
for Rs.49, 659,160. The Respondent appeared before the Court and took
out Notice of Motion seeking stay of the summary suit on the ground that
it has already instituted a suit against the Bank for recovery of Rs. 3, 70,
52,217.88 prior to the filing of the summary suit. Single Judge of the
Bombay High Court, who heard the summons for judgment and the Notice
of Motion, held that the concept of trial as contained in Section 10 of the
Code is applicable only to a regular/ ordinary suit and not to a summary
suit filed under Order 37 of the Code and, therefore, further proceedings
under Summary Suit were not required to be stayed. Division Bench set
aside the judgment holding that the term trial is used in a wider sense.
Hence this SLP was filed.
Point of Law: Rule 2 of Order 37 enables the plaintiff to institute a
summary suit in certain cases. In classes of suits where adopting
summary procedure for deciding them is permissible the defendant has to
file an appearance within 190 days of the service of summons and apply
for leave to defend the suit. 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.
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
Decision: High Court can proceed under the summary procedure up to
the stage as mentioned above. Therefore, the Appeal was allowed.

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B. M/s. Gupte Cardiac Care Centre and Hospital v. Olympic


Pharma Care Pvt. Ltd18
Bench: Two judge bench
Facts of the case: Hospital sued manufacturer and Olympic Pharma
Care Pvt. Ltd, dealer of medical equipment vide Special Civil Suit in the
Court of Civil Judge at Nashik on 20.12.2001. Dealer has filed a suit
against the hospital in the High Court of Delhi on 10.1.2002 for
outstanding sum on the equipment. Dealer has sought to transfer the
case to Delhi and Hospital to Nashik in this transfer petition.
Point of Law: Vide Section 10 of the CPC, the trial of the latter suit, shall
be liable to be stayed. Discretionary jurisdiction can be exercised under
Section 25 of the Code and the only consideration which is relevant is
expediency for ends of justice which would in this case would include
factors such as which will be which is the place where most of the
evidence is available, convenience of the parties and witnesses, which
one of the two places is more convenient to access and attend and so on.
Decision: Departure from ordinary rule under Section 10 is not warranted
by the facts of the present case. Therefore, suit at Delhi was transferred to
the Court at Nashik.
C. Aspi Jal And Anr v. Khushroo Rustom Dadyburjor19

Bench: Two judge bench

Facts of the case: The plaintiffs were owners of the building of which the
defendant had occupied one of its flats as tenants. The plaintiff filed 3
18 (2004) 6 SCC 756
19 (2013) 4 SCC 333

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suits. First suit: suit for eviction from the tenanted premises against the
defendant before the Small Causes Court on the ground of bona fide
requirement

for

self-occupation

and

acquisition

of

alternate

accommodation by the defendant. Second Suit: another suit before Small


Causes Court for eviction of the defendant on the ground of non-user for
several years before the institution of the suit. Third Suit: during the
pendency of the above two suits, filed another suit for eviction of the
defendant on the ground of non-user for a continuous period of not less
than six months immediately prior to the institution of the suit. Application
filed for stay of hearing of the third suit till final disposal of the first and
second suits was accepted by trial court. The legal counsel on behalf of
appellants filed a Special leave petition at the Supreme Court stating that
matter in issue in the third suit is substantially different than the first two
suits.
Point of Law: In the case, many matters in issue were common,
including the issue as to whether the plaintiffs are entitled to recovery of
possession of the suit premises, but for application of Section 10 of the
Code, the entire subject-matter of the two suits must be the same. This
provision did not apply where few of the matters in issue are common and
will apply only when the entire subject matter in controversy is same. In
other words, the matter provision of Section 10 of the Code was not
attracted in the facts and circumstances of the case.
Decision: Leave was granted and parties were given the liberty to make
a prayer before the trial court if all suits could be heard together.

D. National Institute of Mental Health and Neuro Sciences v. C.


Parameshwara20
Bench: Two judge bench
20 AIR 2005 SC 242

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Facts of the case: Respondent charged with misappropriation of drugs


by his employer (the appellant). Director of Institute issued a show cause
notice stating that he was satisfied with the enquiry conducted by the
officer and opportunity was to be given to respondent for a hearing. Reply
was submitted however he was removed from service. Aggrieved
respondent moved labour court which held that he should be reinstated.
Appellant filed a writ petition. Respondent sought stay of suit till disposal
of writ petition which was dismissed by City Civil Judge, Bangalore.
Respondent then filed a Civil Revision Petition which was opposed by the
Appellant on the ground of non-applicability of Section 10 CPC to the facts
of the present case. The High Court stayed the said civil suit and directed
expeditious disposal of the writ petition filed by the appellant within three
months; that in the event of the High Court failing to dispose of the said
writ petition within three months, liberty was given to the appellant to
proceed with the suit up to the stage of final orders. However, the registry
was directed not to draw-up the final decree, in case the appellant
succeeds, till the writ petition filed by the appellant is fully heard and
disposed of by the High Court. Hence, this civil appeal was filed.
Point of Law: According to the SC, the High Court had erred in directing
the trial Court not to proceed with the drawing up of the decree. Both the
proceedings operated in different domains. The subject matter of the two
proceedings is almost entirely distinct and different. The cause of action of
the two proceedings is also distinct and different. The cause of action in
filing the said suit is the loss suffered by the appellant on account of the
shortage of drugs. On the other hand, in the writ petition, the
management has challenged the award of the Labour Court granting
reinstatement of the respondent 10. Section 10 CPC is referable to a suit
instituted in a civil Court, The proceedings before the Labour Court cannot
be equated with the proceedings before the Civil Court. They are not the
Courts of concurrent jurisdiction. In the circumstances, Section 10 CPC has
no application to the facts of this case.

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Decision: High Courts Judgement was set aside. Special leave was
granted
E. Laxmi Fruit Co. v. Gainda Ram & Co21
Bench: Single Bench
Facts of the Case: Plaintiff filed a suit on 19.08.80 against the
respondent for rendition of account at Dabwali. Subsequently, respondent
filed a suit for recovery of a sum of Rs. 8301.15 against the petitioner in
Delhi. Trial court of Delhi refused to stay the suit finding that the two suits
are of different subject matter. Petitioner has filed the present revision
petitioner against that order.
Point of Law: Cause of action in the two suits may be different and the
matters in issue in the two suits may be substantially the same. For stay
of suit under Section 10 of the Code it is not necessary that the two cases
should be identical and it is enough if the matters in issue in both are
substantially same.
Decision: If the respondent succeeds in proving that the accounts were
settled the petitioner's suit at Dabwali may fail and consequently the
respondent may be entitled to a decree for money against the petitioner
in the suit at Delhi. In case it is held that the accounts were not rendered,
the respondent may be directed to render accounts in the suit at Dabwali
and the respondent will have to prove the various allegations contained in
the suit at Delhi.
Thus the substantial issue in the suit at Delhi is: whether the accounts
between the parties stood settled? This question is also directly and
substantially in issue between the parties in the suit at Dabwali. Court in
Dabwali is competent to decide on the issue at Delhi. Therefore, Revision
petition allowed.

21 1983 (4) DRJ 221

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10

F. Sagar Shamsher Jang Bahadur Rana v. The Union Of India


And Ors22
Bench: Single Bench
Facts of the Case: Defendant No.2, Mr. Dhawan executed a mortgage in
favour of the plaintiffs by depositing the title deeds of property X vide a
memorandum dated 18 May 1964. The said property though was in his
wife, defendant No.3 name, he executed the mortgage using power of
attorney issued by her. Plaintiffs filed suit No. 425 of 1966 for recovery of
arrears in the repayment. Defendant No.3 filed suit No. 346 of 1968
claiming that she is the exclusive owner of the property. Plaintiffs filed
another suit numbered 37 of 1969 seeking declaration that they are the
mortgagees of the property. All these three suits were decided together by
the court. Appeals are pending in the same. Now plaintiffs have filed this
suit seeking the repayment of the whole due amount from Defendant No.2
and 3.
Point of Law: Words matter in issue in section 10 of the Code of Civil
Procedure means all disputed material questions in the subsequent suit
which are directly and substantially in question in the previous suit. It
does not mean entire subject-matter in issue in the two suits.
Decision: In the present suit filed by the plaintiffs the amount of
mortgage money claimed is different than the amount of mortgage money
claimed in the previous suit; but in all other respects the questions in
dispute in the present suit are the same, which were in dispute in the
previous one. Therefore the matter was stayed till the disposal of the
pending appeals.

22 AIR 1979 Delhi 118

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X.

11

CONCLUSION

The rule of res judicata is readily distinguished from the rule in s 10 for the
latter relates to a res sub judice, that is, a matter which is pending judicial
inquiry; while the rule in the present section relates to res judicata that is,
a matter adjudicated upon or a matter on which the judgment has been
pronounced. Section 10 bars the trial of a suit in which the matter directly
and substantially in issue is pending adjudication in a previous suit. The
present section bars the trial of a suit or an issue in which the matter
directly and substantially in issue has already been adjudicated upon in a
previous suit. Moreover, public policy requires that there should be an end
of litigation. The question whether the decision is correct or erroneous has
no bearing on the question whether it operates or does not operate as res
judicata;23 otherwise, every decision would be impugned as erroneous and
there would be no finality.24 While s 10 relates to res sub judice, that is, a
matter which is pending a judicial adjudication, s 11 relates to res
judicata, that is to say, a matter already adjudicated upon by a competent
court. Whereas s 10 bars the trial of a suit in which the matter directly and
substantially in issue is pending adjudication in a previous suit, section 11
bars the trial of a suit or an issue in which the matter directly and
substantially in issue has already been adjudicated upon in a former suit.
The object of both the sections is similar, namely, to protect the parties
from being vexed twice, for the trial of the same cause and to achieve the
public policy that there should be an end of litigation. Therefore, one of
the objects of s 10 is to prevent competent courts of
concurrent jurisdiction from having to try parallel suits in respect of the
same matter in issue, and thereby to pave the way for the application of
23 Tarini Charan v Kedar Nath AIR 1928 Cal 777, (1928) 33 Cal WN 126
(FB); Mohanlal v Benoy Krishna AIR 1953 SC 65, [1953] SCR 377; MSM
Sarma v Sri Krishna Sinha AIR 1960 SC 1186, [1961] SCR 96
24 Behari v Majid (1901) ILR 24 All 138; Phundo v Jangi Nath (1893) ILR 15
All 327

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12

the rule of res judicata contained in the next following section. So, what
the court has really to see is if the decision of the matter directly and
substantially in issue in the former suit will or will not lead to the decision
of the matter directly and substantially in issue in the subsequent suit,
and if it is satisfied that it will, then it must stay the trial of the subsequent
suit and await the decision in the former suit.25

25 Fulchand Motilal v Manhar Lal AIR 1973 Pat 196; See also Radhika Konel
Parekh v Konel Parekh AIR 1993 Mad 90

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