Rajdhani Flour Mills Ltd. vs Uttam Agro Foods (India) Pvt. Ltd.
2002 Latest Caselaw 1920 Del

JUDGMENT

S.K. Agarwal, J.

1. This order will dispose of defendant's application under Section 10 of the Code of Civil Procedure, 1908 (for short "CPC") for stay of the suit on the ground that the matter in issue is directly and substantially in issue in the previously instituted suit between the same parties. For the sake of convenience, parties are here-in-after referred to as 'plaintiff' & 'defendant'.

2. Facts necessary for the disposal of this application are that on 31st July, 2001 plaintiff instituted a suit for recovery of Rs. 31,77,976.71 pleading therein that in October, 2000 on the basis of sample shown by the representative of defendant company plaintiff orally placed an order for supply of 450 MTs of grams with the defendant through its representative. The payment of the goods to be supplied by the defendant company was agreed to be made after ten days from the date of delivery/loading as per practice prevailing in the market of Mumbai. In third week of October, 2000, the plaintiff placed another order with the defendant company through defendant's sales representative at Delhi on the existing terms and conditions for supply of 1500 MTs Canadian Chick-peas (New Crop) @ Rs. 1511/- as per the approved sample. The defendant vide fax message dated 27th October, 2000 confirmed the order. The plaintiff received 20 containers between 1st November, 2000 to 25th November, 2000. The quantity and quality of the goods was not as per orders. The plaintiff received only 422.72 MTs of goods, and 5 to 10% of goods were damaged. When this fact was brought to the notice of defendant, they reduced the price by Rs. 100/- per quintal as against plaintiff's demand of Rs. 200 per quintal. The plaintiff paid a sum of Rs. 51,00,000/- to defendant company against the bill for Rs. 64,20,379.20 including railway freight. The balance amount was agreed to be settled with the defendant company after the arrival of goods against the second order of 1500 MTs of Canadian Chick-peas (New Crop.). On 9th November, 2000 the defendant company without assigning any reason cancelled the order for supply of 1500 MTs Canadian Chick-peas (New Crop) because of spurt in price of grams in the market. The plaintiff called upon the defendant to honour the agreement or in the alternative plaintiff would be compelled to buy the goods from the open market at the risk and cost of defendant company. It is alleged that the plaintiff had purchased 1500 MTs. grams from open market at Delhi and spent a sum of Rs. 2,74,92,976.71, thereby, incurred loss of Rs.31,77,976.71 on account of illegal and arbitrary cancellation of order by the defendant. The plaintiff has also given details of earlier suit filed by the defendant for recovery of Rs. 28,80,100/- against the plaintiff on 21st November, 2000 pending in the court of Civil Judge, Senior Division, Panvel (Maharashtra) which is being contested by the plaintiff. The relief sought in this suit is as under:

"It is, therefore, prayed that a decree for recovery of Rs. 31,77,976.71 (Rupees thirty one lakhs seventy seven thousand nine hundred seventy six and paise seventy one only) on account of damages/compensation with costs and interests pendente-lite and future @ 24% from the date of institution of the suit till realization of the decreetal amount may please be passed in favor of the plaintiff company and against the defendant company.

Any other order as deemed fit and proper in the circumstances of the case be also passed in favor of plaintiff company and against the defendant company."

3. The suit pending in this court would be here-in-after be referred to as the "subsequent suit".

4. The defendant company had instituted a suit against plaintiff for recovery of Rs. 28,80,100/- on or about 21st November, 2000 in the court of Civil Judge, Senior Division, Panvel (Maharashtra) inter alia pleading that in October, 2000 it was orally agreed between them, at its Khalapur Factory and defendant over telephone that the plaintiff would purchase from the defendant grams as per order form time to time. The plaintiff would pay 15% price in advance of the value against each order rest of the terms would be as per the terms printed on the reverse of the invoice and that the parties would be governed by this contract, referred to as "Parent Contract". The plaintiff placed on order with the defendant for supply of 450 MTs of Canadian Chickpeas (goods) valued Rs. 69,83,100/- and initial advance of Rs. 11 lakhs was paid. The defendant supplied the goods. The goods were received on 1st November, 2000 at New Delhi. The plaintiff raised dispute regarding quality and quantity of the goods supplied and the rate charged. The plaintiff made part payment of Rs. 51,00,000/- and Rs. 18,53,100/- remained due and payable, in terms of invoice. The plaintiff placed another order of 1500 MTs of Canadian Chickpeas @ Rs. 1511/- per quintal of the value of Rs. 2.27 crores. The defendant confirmed this order (Second Order) by way of fax message dated 27th October, 2000. The defendant asked for the balance amount of the earlier order as well as 15% (Rs. 34,00,000/-) advanced against this order. The plaintiff declined to perform his part of the contract i.e. make advance payment, and insisted for the delivery of the goods under the second order. It is alleged that the plaintiff company committed breach of the parent contract. Therefore, vide letter dated 10th November, 2000, the defendant terminated the contract under the second order. It is also pleased that on account of termination of the second order the defendant suffered damages in the sum of Rs. 10,27,000/- for wrongful failure on the part of the defendant to pay the said advance of Rs. 34,00,000/- as per the terms of the parent agreement towards 15% advance under the second order. The relief claimed in this suit is as under:

"(a) the defendant be ordered and decreed to pay to the plaintiff the said sum of Rs. 18,53,100/- together with interest thereon at the rate of 18% per annum from the date of the Suit till payment or Realisation as per Particulars of Claim (Annexure "B" hereto);

(b) The defendant be ordered and decreed to pay damages to the plaintiff in the sum of Rs. 10,27,000/- as per the Particulars of Claim (Annexure "C"

hereto) at the rate of 18% per annum from the date of the Suit till realisation;

(c) the Defendant be ordered to pay to the plaintiff for the costs of the Suit; and

(d) Such other and further reliefs be granted as the nature and circumstances of the case may require."

5. The above suit shall be referred to here-in-after as the "previously instituted suit."

6. I have heard learned counsel for the parties and have been taken through the record.

7. Learned counsel for the defendant argued that the issues/disputes which arise for determination in the previously instituted suit, in respect of the same transaction between the same parties is pending adjudication in the court of competent jurisdiction at Panvel, Maharashtra. The plaintiff herein above who is a defendant in the previously instituted suit, has already filed the written statement. Evidence has been concluded and the matter is limited for final arguments, therefore, the "subsequent suit" before this court is liable to be stayed. Learned counsel for the plaintiff argued to the contrary.

8. Law in this regard is well settled. Section 10 CPC contemplates substantial identity of the matter in issue in the two suits. It is not the identity of the main issue or some of the issues, but the identity of the matter which is the determining test. The decision in one suit must non-suit the plaintiff in the other suit. Reference in this regard can be made to the decision of this court Arjies Aluminium Udyog v. Sudhir Batra, New Delhi wherein it was held:

"12. Section 10 of the CPC contemplates substantial identity of matter in issue in the two suits. It is not the identity of main issue or all issues but the identity of matter in issue which is the determining test. The decision in one suit must non-suit the other suit--this must be the phraseology of answer, to win the question whether the matter in issue in the two suits is directly and substantially the same."

Thus, the matter for determination in application for stay under Section 10 CPC is not what is the basis of the claim in two suits. In Arun General Industries Ltd. v. Rishabh Manufactures P. Ltd., it was held as under:

"The matter for determination in the case of an application for stay under Section 10 of the Code is not what the basis of the claim in the two suits is, but what is the matter is issue in the two suits."

9. Applying the above principles to the facts of this case, in the previously instituted suit at Panvel, Maharashtra, the defendant has prayed for a decree for damages against the plaintiff herein, in the sum of Rs. 10,27,000/- Along with interest for the alleged breach of contact for supply of 1500 MT of Canadian Chickenpeas @Rs. 1511/- per Qtl., confirmed by the defendant by fax message dated 27.10.2000. In this case, plaintiff is alleging breach of the same contract. The main issue involved in the above suit and the previously instituted suit is as to who is responsible for the breach of the second contract. Thus, the judgment in the previously instituted suit may non-suit the plaintiff in this case. In this view of the matter, the basic ingredients for applicability of Section 10, CPC stand satisfied.

For the foregoing reasons, the application is allowed. The suit is stayed with liberty to the parties to get the same revived after the decision in the previously instituted suit.