Indian Bank v. Maharashtra State Co-operative Marketing Fed. Ltd. (AIR 1998 SC 1952)

Facts:

Bank filed Summary Suit in the Bombay High Court under Order 37 of the Code against the Federation for obtaining a decree for Rs. 4,96,59,160 alleging that the said amount has become recoverable under a Letter of Credit. The Bank took out summons for judgment. The Federation 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 being Suit against the Bank for recovery of Rs. 3,70,52,217.88 prior to the filing of the summary suit.

Issue:

Whether the bar to proceed with trial of subsequently instituted suit, contained in Sec.10 is applicable to summary suit filed under Order 37 of the Code.

Observation:

The word “trial” in Section 10, in its widest sense would include all the proceedings from the stage of institution of a plaint in a civil case to the stage of final determination by a judgments and a decree of the Court.

However, 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 Sec. 10 is not used in its widest sense.

Considering the objects of both the provisions i.e. Sec. 10 and O. 37, wider interpretation of the word “trial” is not called for. The word ‘trial’ in Sec. 10 in the context of summary suit cannot be interpreted to mean the entire proceedings starting with the institution of the suit by lodging a plaint. In a summary suit the ‘trial’ really begins after the Court/Judge grants leave to the defendants to contest the suit. Therefore, the Court/Judge dealing with the summary suit can proceed up to the stage of hearing the summons for judgement and passing the judgement 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:

The bar to proceed with trial of subsequently instituted suit, contained in Sec. 10 is not applicable to summary suit filed under Order 37 of the CPC.