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TMI Blog2001 (9) TMI 995X X X X Extracts X X X X X X X X Extracts X X X X ..... r/matters in issue should be substantially the same in the two suits; ( b )The previously instituted suit should be pending in the same Court in which the subsequent suit is brought or in another court in India having jurisdiction to grant the relief claimed; and ( c )The two suits should be between the same parties or their representatives and these parties should be litigating in the two suits under the same title." 3. It is these principles that are being pressed besides section 151 of the Code of Civil Procedure in the facts of the case. 4. Maxwell Securities (P.) Ltd. (the plaintiff) had filed a civil suit for a declaration and permanent injunction for declaring that all decisions and action and conduct of the defendants (National Stock Exchange of India Ltd.) including the issuance of the circular dated 17-4-1997 and the letter of 26-6-1997 interfering with the rights of the plaintiff and restraining the free dealings of the share in the suits are arbitrary, capricious and illegal and for restraining the defendants from taking any other or further action on basis thereof. It has been alleged that plaintiff is a trading and clearing member of the defendants since ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. When the plaintiff came to know on 12-6-1997 about circular of 7-4-1997 by the defendants which vide the letter of 12-6-1997 asked the defendants to withdraw the circular immediately. The same had not been done. The defendants are threatening to not only detain the shares but also dispose of the said 6,000 shares. It is alleged that defendants have no right, little, claim or interest in the said shares and the plaintiff was absolutely right to deal with the same in any manner it liked. Even the principles of natural justice, equity and good conscious have been ignored. Plaintiff asserts that defendant cannot clothe themselves with totally arbitrary power which is capable of vicious discrimination and on basis of these facts the above said relief has been filed. 6. This civil suit had been filed in the district court and has since been withdrawn and taken on the file of this court and registered as Suit No. 578 of 1998. The said suit has been instituted prior to Suit No. 1413 of 1997. 7. Suit No. 1413 of 1997 has been instituted by National Stock Exchange of India and National Securities Clearing Corpn. Ltd. (the respondent) against the plaintiff and others seeking ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntiff acknowledge its liability to pay and assured that it was making arrangement for the funds. In the meantime, the plaintiff continued to trade on defendant No. 1 from 5-3-1997 to 11-3-1997 designated as settlement No. 1997010. It placed various orders for purchase and sale of various securities. As a result of those transactions defendants assert that plaintiff became liable to pay to defendant No. 2 a sum of Rs. 9,10,54,209.00. The plaintiff failed to pay the obligation as a result of trading in the 9th settlement of 11-3-1997. Since the plaintiff failed to bring in funds within the stipulated time. The securities also failed to bring in delay margin amounts totalling Rs. 88,40,000 towards settlement No. N 1997010. 8. On the failure of the plaintiff to pay the amounts due on account of the deeds executed in settlement No. 1997009 and despite written and oral reminders failed to pay the margin. On 17-3-1997 under the powers vested in it by bye-law No. 16 and regulation 10.9 defendant No. 2 sold the shares purchased by the plaintiff in settlement No. 1997009 which was withheld by it. After adjusting the sale proceedings of Rs. 9,21,36,770 of the sale of the said shares, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the earlier suit which is not material but the civil suit should have been heard and finally decided between the parties. The matter in issue should be directly and substantial in issue in that decision between the parties which had come into being. If the cause of action in the subsequently instituted suit is different in that event the earlier instituted suit will not be a bar for continuation of the subsequently instituted suit. 12. In the case of Mohinder Singh Jubbalv. Grindlays Bank Ltd. AIR 1982 Punj. Har. 295 the previous instituted suit for recovery of loan on basis of goods pledged with the bank and the subsequent suit was filed on basis of the mortgage created by the defendants for payment of the loan advances. It was held that rigours of section 10 are not attracted. A Division Bench of the Calcutta High Court in the case of Shaw Wallace Co. Ltd. v. Bholanath Madanlal Sherawala AIR 1975 Cal. 411 also had the occasion to deal with the same controversy pertaining to the expression matter in issue . The answer was provided in the following words : "13. One of the most essential conditions of section 10 is that the matter in issue in the later suit which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... defendants 1 and 2 are also seeking custody of the shares, the relief is moulded differently, some of the parties are not identical. 15. It is settled principle of law that merely because there are additional parties will not restrict the provision of section 10 inter se between the parties with which we are presently concerned. It is obvious that the main controversy is pertaining to the same shares and the same circular and the letter. Incidentally if some of the parties are different that will not by itself restrict the court from acting under section 10. In case the plaintiff succeeds in the suit and the circular and the letter for sake or argument are set aside, the necessary effect would be that it will reflect on the actions of the defendants 1 and 2 and what they are claiming in the subsequently instituted suit. It is certainly in that view of the matter would operate as res judicata and in strict sense, therefore, merely because the defendants are claiming custody of the shares or the reliefs are moulded and couched in a different language will not make material difference. In that view of the matter indeed section 10 would come into play. 16. However, the main ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Court, there is no question of implying any powers outside the limits of the Code...." 20. However it went on to consider the controversy as to when the suits are transferred to the other court. Thereupon the Supreme Court held that two suits with respect to similar reliefs could be tried in the other court or that they could be tried together. The findings in this regard of the Supreme Court are : ". . . . . . Further, section 22 of the Code provides for the transfer of a suit to another Court when a suit which could be instituted in any one or two or more Courts is instituted in one of such Court. In view of the provisions of this section, it was open to the respondent to apply for the transfer of the suit at Asansol to the Indore Court and, if the suit had been transferred to the Indore Court, the two suits could have been tied together. It is clear, therefore, that the legislature had contemplated the contingency of two suits with respect to similar reliefs being instituted and of the institution of a suit in one Court when it could also be instituted in another Court and it be preferable, for certain reasons, that the suit be tried in that other Court." Therefore, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t will avoid multiplicity of suits and eliminate chances of conflicting decisions on the same point." (p. 342) 24. This Court in the case of Vijay Kumar v. Manohar Lal AIR 1979 Delhi 1 also while dealing with a similar situation concluded that subsequently instituted could be consolidated and inherent power in give fact could be utilised in this regard. The Gujarat High Court in the case of Sohal Engg. Works, Bhandup Bombay v. RustamJehangir Vakil Mills Co. Ltd. AIR 1981 Guj. 110 also concluded that when there are two suits between the parties and common question arise between the same parties, the court has inherent powers to direct the two suits to be tried together. Same was the view expressed by the Orissa High Court in the case of Dr. Guru Prasad Mohan ty v. Bijoy Kumar Das AIR 1984 Ori. 209 and of late by this Court again in the case of Sardar Prithpal Singh Sabharwal v. Jagjit Singh Sabharwal 1996 III AD (Delhi) 281, it was held that when similar matter is involved it would be appropriate to consolidate the two suits. 25. Once again travelling back to the facts of the case it is patent that basically parties are the same. Though the main dispute is pe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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