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PETITIONER: INDIAN BANK

       Vs.

RESPONDENT: MAHARASTHRA STATE CO-OPERATIVE MARKETING FEDERATION LTD.

DATE OF JUDGMENT:       05/05/1998

BENCH: S.C. AGRAWAL. G.T. NANAVATI

ACT:

HEADNOTE:

JUDGMENT:                   THE 5TH DAY OF MAY, 1998 Present:               Hon’ble 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 Respondents.                       J U D G M E N T The following Judgment of the Court was delivered: NANAVATI. J.      Leave granted.      The 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.      The 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 Rice Mills. Pursuant 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.      Aggrieved 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.      The submission of the learned counsel for the appellant

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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.      Section  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.      Therefore, 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 sense.      The 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. Both 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

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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. This clearly  appears to  be the scheme of summary procedure as provided by Order 37 of the Code.      Considering 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. In a  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.      In our  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.      We, 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 to costs.

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