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Ashok Kumar Yadav v. Noble Designs Pvt. Ltd.
Factual and Procedural Background
The plaintiff and defendant in CS No. 318 of 2004 entered into an agreement for sale dated September 14, 2001, concerning certain land in Patna. Clause 17 of the agreement required the plaintiff to execute an irrevocable general power of attorney to the defendant, governed by the agreement’s terms. The defendant filed title suit No. 271 of 2004 in Patna for specific performance of the sale contract, alleging the plaintiff’s failure to fulfill obligations. The plaintiff, in turn, filed CS No. 318 of 2004 in Calcutta, claiming the agreement for sale had been determined and the power of attorney was void. The defendant then filed an application under Section 10 of the Code of Civil Procedure, 1908, seeking a stay of the Calcutta suit on the ground that the matter was directly and substantially in issue in the Patna suit.
Legal Issues Presented
- Whether the matter in issue in the Calcutta suit is directly and substantially in issue in the Patna suit for the purposes of Section 10 of the Code of Civil Procedure, 1908.
- Whether the trial of the Calcutta suit should be stayed pending the disposal of the Patna suit.
- Whether absolute identity of parties and prior filing of written statement are necessary conditions for granting a stay under Section 10.
Arguments of the Parties
Defendant's Arguments
- The issue in the Calcutta suit—whether the agreement for sale stood determined—is directly and wholly in issue in the Patna suit, which seeks specific performance of the same agreement.
- Absolute identity of parties in both suits is not required for a Section 10 stay; a plaintiff in a subsequent suit may add or omit parties compared to the earlier suit.
- The Section 10 application can be filed before filing the written statement, and the absence of a written statement does not affect the application’s maintainability.
- Relied on various precedents, including the Supreme Court decision in National Institute of Mental Health & Neurosciences v. C. Parameshwar (AIR 2005 SC 242), to support the proposition that the matter in issue must be identical or substantially similar for a Section 10 stay.
Plaintiff's Arguments
- While the issue of whether the agreement for sale stood determined is in both suits, the whole subject-matter of the Calcutta suit is not directly and substantially in issue in the Patna suit.
- Suggested that the matter in issue must involve absolute identity of the whole subject-matter, relying on the same Supreme Court authority cited by the defendant.
- The difference in parties and the timing of the Section 10 application were not strongly contested by the plaintiff’s counsel.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| National Institute of Mental Health & Neurosciences v. C. Parameshwar, AIR 2005 SC 242 | Requirement of absolute identity of the whole subject-matter for Section 10 application; defining "matter in issue." | Both parties relied heavily on this decision; the court used it to analyze identity of subject-matter and matter in issue. |
| Vallabh Das v. Madanlal, AIR 1970 SC 987 | Interpretation of "matter in issue" and principles relating to Section 10 stays. | Relied on by plaintiff’s counsel to argue for strict identity of subject-matter. |
| Shaw Wallace & Company Limited v. Bholanath Madanlal Sherawala, AIR 1975 Cal 411 | Legal principles on res judicata and Section 10 applications. | Used to support plaintiff’s contention on scope of matter in issue. |
| Adhish Chandra Sinha v. Hindusthan Gas and Industries Limited, AIR 1985 Cal 154 | Clarification on matter in issue and identity of suits. | Supported plaintiff’s argument on subject-matter identity. |
| Pukhraj D. Jain v. G. Gopalakrishna, AIR 2004 SC 3504 | Definition of matter in issue and application of Section 10. | Relied upon by plaintiff’s counsel in framing the legal issue. |
| Heinz Italia v. Dabur India Limited, AIR 2005 Cal 89 | Principles governing Section 10 and stay of suits. | Supported plaintiff’s position on matter in issue. |
| Shorab Modi v. Mansata Film Distributor, AIR 1957 Cal 727 | Principles on identity of parties and suits for Section 10. | Relied on by defendant to argue against necessity of absolute party identity. |
| Mathura Prasad v. Dossibai, AIR 1971 SC 2355 | Definition of "matter in issue" as entire controversy between parties. | Adopted by the court to clarify the scope of matter in issue for Section 10. |
| A.G Industries v. Rishabh Manufacturers, AIR 1972 Cal 128 | Legal test for Section 10 applications. | Used by defendant’s counsel to support stay application. |
| Challapalli Sugars Ltd. v. Swadeshi Sugar Supply Pvt. Ltd., AIR 1983 Cal 199 | Application of Section 10 and identity of issues. | Relied upon by defendant to argue for stay. |
Court's Reasoning and Analysis
The court analyzed whether the matter in issue in the Calcutta suit was directly and substantially in issue in the Patna suit, focusing on the legal definition of "matter in issue" as the whole subject-matter or entire controversy between the parties. The court noted that the Patna suit concerned the validity and enforceability of the agreement for sale, which was the foundation of the power of attorney at issue in the Calcutta suit. Since the power of attorney was dependent on the agreement, its validity could not exist independently.
The court rejected the need for absolute identity of parties and confirmed that a Section 10 application could be filed even before the written statement. It held that the whole controversy in both suits was essentially the same: whether the agreement for sale stood determined, which would affect the validity of the power of attorney. Consequently, the court found the matter in issue in the Calcutta suit to be directly and substantially in issue in the Patna suit.
The court concluded that proceeding with the Calcutta suit would be academic and useless until the Patna suit was decided, justifying a stay under Section 10.
Holding and Implications
The Section 10 application is allowed, and the trial of the Calcutta suit is stayed pending the disposal of the Patna suit.
The direct effect is that no further proceedings shall occur in the Calcutta suit until the Patna suit is decided. The court did not order costs and did not set any new precedent beyond applying established principles to the facts. The decision prevents multiplicity of litigation and judicial inefficiency by avoiding concurrent trials on essentially the same controversy.
1. The sole defendant in CS No. 318 of 2004 has taken out this application (GA 1729 of 2005) under S. 10 of the Code of Civil Procedure, 1908 for an order staying all further proceedings in the suit.
2. The plaintiff and the defendant, in CS No. 318 of 2004, entered into an agreement for sale dated September 14, 2001. The agreement was with respect to certain land located in Patna. In terms of Cl. 17 of that agreement the plaintiff was to execute and give an irrevocable general power of attorney to the defendant, and that power was to be governed by the provisions of that agreement. The terms and conditions of the agreement were to prevail in case of conflict between the power and the agreement.
3. Alleging that the members of the Hindu undivided family of which the plaintiff was the Karta, failed and neglected to carry out their obligations in terms of the agreement for sale, the defendant, as plaintiff, filed title suit No. 271 of 2004 in the Court of the first subordinate Judge in Patna; it filed that suit on July 24, 2004. It impleaded one Manvendra Singh as the second set defendant in that suit. It prayed for a decree for specific performance of contract for sale of the land. The first set defendant in that suit filed their written statement on April 25, 2005. That suit is pending decision.
4. On December 8, 2004 CS No. 318 of 2004 was filed in this Court by the first defendant in the Patna suit; the Calcutta suit was filed by him in the capacity of the Karta of the Hindu undivided family. He alleged that since the defendant failed and neglected to discharge its obligation in terms of the agreement, the agreement for sale stood determined, and as a result the power of attorney executed in terms of Cl. 17 of the agreement stood cancelled. He also alleged that for non-registration the power of attorney concerned was invalid and void. He prayed for a decree declaring the power of attorney as void and cancelled. On June 6, 2005 the defendant took out the present application under S. 10.
5. Counsel for the parties have debated on the question whether the matter in issue in the Calcutta suit is directly and substantially in issue in the Patna suit. According to counsel for the defendant, the matter in issue in the Calcutta suit is whether the agreement for sale had stood determined, and hence it is directly and wholly in issue in the Patna suit where his client prayed for a decree for specific performance of the contract arising out of that agreement. According to counsel for the plaintiff though the issue whether the agreement for sale stood determined is directly in issue in both the suits, it cannot be said that the matter in issue, meaning thereby the whole subject-matter of the Calcutta suit, is directly and substantially in issue in the Patna suit.
6. For this he places strong reliance on the Apex Court decision in National Institute of Mental Health & Neurosciences v. C. Parameshwar, (2005) 2 SCC 256 : (AIR 2005 SC 242). His contention is that unless there is absolute identity of the whole subject-matter, it cannot be said that the matter in issue in the Calcutta suit is directly and substantially in issue in the Patna suit, in support of his contention he has also relied on the decisions in Vallabh Das v. Madanlal, AIR 1970 SC 987, Shaw Wallace & Company Limited v. Bholanath Madanlal Sherawala, AIR 1975 Cal 411, Adhish Chandra Sinha v. Hindusthan Gas and Industries Limited, 88 CWN 949 : (AIR 1985 Cal 154), Pukhraj D. Jain v. G. Gopalakrishna, (2004) 7 SCC 251 : (AIR 2004 SC 3504) and Heinz Italia v. Dabur India Limited, AIR 2005 Cal 89.
7. Counsel for the defendant has relied on the decisions in Shorab Modi v. Mansata Film Distributor, AIR 1957 Cal 727, Mathura Prasad v. Dossibai, AIR 1971 SC 2355, A.G Industries v. Rishabh Manufacturers, AIR 1972 Cal 128, and Challapalli Sugars Ltd.… v. Swadeshi Sugar Supply Pvt. Ltd.…., AIR 1983 Cal 199. He has also relied on the same Apex Court decision in National Institute of Mental Health & Neurosciences (AIR 2005 SC 242) that has been strongly relied on by counsel for the plaintiff.
8. The contentions that parties in both the suits are not absolutely same and that the defendant has taken out the S. 10 application before filing its written statement in the suit have not been very seriously pressed by counsel for the plaintiff. On the strength of the authorities (noted before) counsel for the defendant has argued that in a S. 10 application the test is not whether parties in the suits are identical in every respect. His argument is that in the subsequent suit the plaintiff who is a party in the previously instituted suit may choose to jettison a person who is a party in the previously instituted suit. He says that the plaintiff in the subsequently instituted suit may also add a person in his suit, though such person is not a party in the previously instituted suit.
9. I fully agree with him that for determining whether the matter in issue in the subsequently instituted suit is directly and substantially in issue in the previously instituted suit absolute identity of the parties in both the suits is not a consideration. By this I say that if the parties in the previously instituted suit are parties in the subsequently instituted suit, then any aggrieved party can take out an application under S. 10 seeking stay of trial of the subsequently instituted suit on the ground that the matter in issue in it is directly and substantially in issue in the previously instituted suit.
10. I also agree with him that for maintaining an application under S. 10 the defendant in the suit concerned need not first file his written statement; the S. 10 application can be taken out, as has been done in the present case, even before filing the written statement. It is to be noted here that in its S. 10 application the defendant has asserted that case made out in its plaint in the Patna suit would be its case in the written statement in the Calcutta suit. Hence in any view of the matter the aspect of filing written statement loses significance.
11. The hotly debated point is whether the matter in issue in the Calcutta suit is directly and substantially in issue in the Patna suit. In my view, for answering the question in the present case, it will not be necessary to discuss the authorities cited to me in detail. There is no dispute regarding the proposition that the expression “matter in issue” shall mean (as said by the Apex Court in Mathura Prasad) (AIR 1971 SC 2355). “The right litigated between the parties, i.e, the facts on which the right is claimed or denied and the law applicable to the determination of that issue.” In other words, the expression means the whole subject-matter; that is to say, the entire controversy between the parties. In my view, if the present case is tested by applying this proposition, it cannot be held that the matter in issue in the Calcutta suit (the subsequently instituted suit) is directly and substantially in issue in the Patna suit (the previously instituted suit).
12. The subject-matter of the Patna suit is the agreement for sale on the basis whereof the defendant in the Calcutta suit, as plaintiff there, prayed for a decree for specific performance of contract. The power of attorney originated from that agreement. In the absence of the agreement the power of attorney simply becomes non-est; it will not have any independent existence. That is to say, unless the agreement exists, the power of attorney cannot survive. So the question of validity of the agreement is the whole controversy between the parties in the Patna suit. I have no hesitation in saying that the same controversy is the whole subject-matter of the Calcutta suit. The decree for declaration that the power of attorney stood cancelled has been sought on the ground that the sale agreement stood cancelled. The power of attorney was not an instrument capable of existence once severed from the agreement for sale, it was born out of Cl. 17 of the agreement.
13. The whole controversy in the Calcutta suit is whether it stood cancelled consequent upon determination of the agreement, as claimed by the plaintiff. Thus it cannot be said that the whole subject-matter of the Calcutta suit is not identical with the subject-matter of the Patna suit. The controversy between the parties being one and the same, I am unable to hold that the matter in issue in the Calcutta suit is not directly and substantially in issue in the Patna suit. In my opinion, the decision in the Patna suit will make the Calcutta suit absolutely useless and academic. Nothing of any substance will remain for decision in the Calcutta suit.
14. For these reasons I hold that the trial of Calcutta suit should remain stayed, and that the S. 10 application should be allowed. I accordingly allow the application, and order that till the disposal of the Patna suit trial of the Calcutta suit shall remain stayed.
15. There shall be no order for costs in the application.
16. All parties shall act on a signed xerox copy of this dictated order and also on an urgent certified xerox copy thereof, both to be supplied on the usual undertakings.
Application allowed.
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