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S.D Dhandapani v. The Branch Manager Indian Overseas Bank .
Factual and Procedural Background
The respondent/plaintiff filed a suit (O.S No. 58 of 1992) for recovery of money. During the pendency of this suit, the petitioner/defendant filed an application (I.A No. 299 of 1993) under Section 10 of the Civil Procedure Code (CPC) seeking a stay on the proceedings of the suit until the final adjudication of a company petition (No. 80 of 1991) pending before the same Court. The application for stay was dismissed, leading the petitioner to file this Civil Revision Petition challenging that order.
Legal Issues Presented
- Whether Section 10 of the CPC applies to stay the suit proceedings when a company petition is pending before the Court.
- Whether the company petition can be considered a "suit" under the meaning of Section 10, CPC.
- The effect of the transfer of the suit to the Debt Recovery Tribunal on the jurisdiction of the civil and company courts.
Arguments of the Parties
The opinion does not contain a detailed account of the parties' legal arguments.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Punjab National Bank v. Gajendra Singh, 2001 (1) Civ LR 431 (Raj) | Interpretation of Section 10, CPC regarding applicability to non-suit proceedings | Supported the view that company proceedings are not suits and thus Section 10 CPC is not applicable to stay suit proceedings. |
| Vastra Vyopar Sangh Ltd. v. Shyam Sunder Lal Patodia, AIR 1970 Raj 91 | Same principle regarding the meaning of 'suit' under Section 10, CPC | Reinforced the interpretation that company proceedings do not amount to suits for the purpose of Section 10 CPC. |
| Ladu Lal Jain v. Manager, Bank of Baroda, 1997 DNJ (Raj) 260 | Clarification on the scope of Section 10, CPC | Further supported the exclusion of company petitions from the ambit of 'suit' under Section 10 CPC. |
| Allahabad Bank v. Canara Bank, (2000) 4 SCC 406 : AIR 2000 SC 1535 | Jurisdictional exclusivity of Debt Recovery Tribunal | Established that once a suit is transferred to the Debt Recovery Tribunal, the jurisdiction of civil and company courts is ousted. |
Court's Reasoning and Analysis
The Court analyzed the applicability of Section 10 CPC, which prohibits proceeding with a suit if the matter is directly and substantially in issue in a previously instituted suit between the same parties. The Court emphasized the importance of the term "suit," noting that under Order 4, Rule 1, CPC, a suit must be instituted by presenting a plaint. Company proceedings do not involve a plaint and thus are not suits within the meaning of Section 10 CPC. Consequently, the Court held that Section 10 CPC cannot be invoked to stay the suit pending recovery of money on the ground that a company petition is pending.
Furthermore, the Court noted that the suit has been transferred to the Debt Recovery Tribunal, whose jurisdiction is exclusive as per the Supreme Court ruling in Allahabad Bank v. Canara Bank. This ousts the jurisdiction of the civil and company courts over the suit.
Based on these legal principles and precedents, the Court found no merit in the Civil Revision Petition and dismissed it along with the connected application.
Holding and Implications
The Civil Revision Petition is dismissed.
The direct effect of this decision is that the application for stay under Section 10 CPC was rightly dismissed, affirming that company petitions do not constitute suits for the purpose of Section 10. Moreover, the transfer of the suit to the Debt Recovery Tribunal excludes the jurisdiction of civil and company courts. No new precedent was established; the decision reaffirms existing legal principles regarding the scope of Section 10 CPC and the exclusive jurisdiction of Debt Recovery Tribunals.
1. The petitioner is the defendant.
2. The respondent/plaintiff filed a suit in O.S No. 58 of 1992 for recovery of money. During the pendency of the suit, the petitioner/defendant filed an application in I.A No. 299 of 1993 under Section 10, CPC for stay of the proceedings of the suit until final adjudication in company petition No. 80 of 1991 pending on the file of this Court. The said application was dismissed. Hence, this Civil Revision Petition. I heard the learned counsel for the petitioner and the respondent and also gone through the impugned order.
3. At the outset, I shall state that Section 10, CPC would not at all apply in this case, because the company petition pending before this Court cannot be termed to be a suit and therefore, Section 10, CPC cannot be invoked by the Court, in which the suit for recovery of money is pending, to stay the proceedings of the suit.
4. As per Section 10, CPC, no Court shall 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 between the same parties.
5. The word ‘suit’ is important for our purpose. As per the provisions of Order 4, Rule 1, CPC every suit shall be instituted by presenting a plaint to the Court or such officer as it appoints in its behalf. Therefore, the word ‘suit’ ordinarily means a civil proceeding instituted by presenting a plaint.
6. In a company proceedings, no plaint is presented and hence, it cannot be regarded as a proceeding based on a suit.
7. Therefore, when the proceedings are not based on a suit, they cannot be regarded as a trial of a suit and hence, the suit for recovery of money is pending before the trial Court could not be stayed.
8. This is very clear from the reading of Section 10 C.P.C While interpreting the said Section, the Rajasthan High Court gave the same ruling in Punjab National Bank v. Gajendra Singh (2001 (1) Civ LR 431 (Raj)); Jaipur Vastra Vyopar Sangh Ltd. v. Shyam Sunder Lal Patodia (AIR 1970 Raj 91); and Ladu Lal Jain v. Manager, Bank of Baroda (1997 DNJ (Raj) 260).
9. It is now submitted that he said suit has been transferred to the Debt Recovery Tribunal. As held by the Supreme Court in Allahabad Bank v. Canara Bank ((2000) 4 SCC 406 : AIR 2000 SC 1535), the jurisdiction of the Debt Recovery Tribunal is exclusive and as such, the jurisdiction of civil Court or Company Court is ousted.
10. In view of the above ruling, there is no merit in this Civil Revision Petition and accordingly, the same is dismissed. Consequently, C.M.P No. 855 of 1997 stands dismissed.
11. Petition dismissed.
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