Indian Bank v. Maharashtra State Co.op Mktg. Federation Ltd.

AIR 1998 SC
1952: A Case Study on Res Sub Judice

Introduction
A Code of Civil Procedure is a rule book which explains all the procedures of the court that has
to be adhered to in civil matters. It comes under the procedural law. It is a body of law that sets
out the rules and standards that courts follow when adjudicating civil lawsuits. The Code of Civil
procedure plays a crucial and determining role in expediting the adjudication of civil disputes. A
Uniform procedure was made for application of a code of simple and uniform procedure
applicable to all the courts of the Country. Procedural law is not only handmaiden of justice but
plays important role in achieving justice then substantive law.
The object of Section 10 is to prevent the courts from simultaneously entertaining and
adjudicating upon two parallel litigations in respect of the same cause of action, the same subject
matter and the same relief.
There are some suits that are barred from being filed in a Court, for reasons apart from the
Courts lack of jurisdiction.
The Court can proceed with the trial of any suit if the subject matter of the suit is already in issue
in a previously instituted suit between the same parties. This is subject to the fact that the Court
in which the previous suit is pending is competent to grant the relief claimed.

Outline
The respondent Federation applied to the appellant bank on 5.6.1989 to open Irrevocable Letter
of Credit for a sum of Rs. 3,78,90,000 in favor of M/s. Shankar Rice Mills. Pursuant to that
request the Bank opened an Irrevocable Letter of Credit on leave to the Federation to defend the
suit conditionally upon the Federation depositing Rs. 4 crores in the Court. The summons for
judgment was disposed of accordingly and the Notice of Motion was dismissed.

Critical Review
Section 10 requires that a suit must be stayed if the matter directly and substantially in issue in it
is also directly and substantially in issue in a previous suit that is pending. The criterion for
deciding whether the subsequent suit be stayed or not is whether there is identity of the matters
directly and substantially in issue in the two suits; if there is, the subsequent suit must be stayed
and if there is not, it will not be stayed.
The object of this section is to prevent two courts of concurrent jurisdiction from simultaneously
trying two parallel suits in respect of the same matter in issue. It is to obviate conflict of
decisions of two contradictory decrees being passed in respect of the same subject-matter
between the same parties that the present section has been enacted.
Conditions for the applicability of section 10:
In order to attract the application of this section it is necessary that the following conditions must
be fulfilled:
(1) The matter in issue in the second suit must also be directly and substantially in issue in the
prior suit.
(2) The prior suit must be pending in the same court or in any court in India having jurisdiction
to grant the relief claimed.
(3) Where the previously instituted suit is pending in any court in India, etc. such court is of
competent jurisdiction to grant the relief claimed in the subsequent suit.
It may, however, also be noted that the term suit in this section includes appeal.
The words of section 10 are mandatory and the test to determine whether the matter in issue in
the second suit is also directly and substantially in issue in the previously instituted suit and
whether if the first suit is determined the matters raised in the second suit will be res Judicata by
reason of the decision in the prior suit. It is not necessary that the subject-matter and cause of
action should be the same. But what is essential is that there must be substantial identity between
the matters in dispute and parties in the earlier and later suits.

Key Contention
The question which arose for consideration in these appeals was whether the bar to proceed with
the trial of subsequently instituted suit, contained in section 10 of the Code of Civil Procedure,
1908(hereinafter referred to as the 'Code') was applicable to summary suit filed under Order 37
of the Code.
To do an in depth analysis of the Concept of Res Judicata and the general rule assigned to that.
The main objective of this project is to ascertain the meaning and importance of Doctrine of Res
Judicata.
Precedence applied
Harish Chandra v Triloki Singh, 1957 AIR 444, 1957 SCR 370
According to the Supreme Court, the Division Bench of the Bombay High Court was in error in
taking a different view. It had relied upon the decision of this Court in Harish Chandra vs. Triloki
Singh. That was a case arising under the Representation of People's Act and, therefore, it was not
proper to apply the interpretation of word 'trial' in that case while interpreting section 10 in the
context of Order 37 of the Code.
Judicial Principles
This case comes under Section 10 of the Code of Civil Procedure. This section contains the
concept of Res Subjudice. This means 'a right under judicial consideration'. In order to prevent
courts of concurrent jurisdiction from simultaneously trying two parallel suits in respect of the
same matter in issue, provisions are made in Sn.10 C.P.C. Such a matter is said to be 'Res
Subjudice' if the matter previously instituted is pending in another court of competent
jurisdiction.
What is barred is the second suit instituted. The second court should not proceed with the trial of
the suit if:
i)

The matter in issue is also directly and substantially in issue in a previously instituted
suit between the same parties.

ii)

ii) The previously instituted suit must be (a) in the same court in which the second,

iii)

suit is brought or (b) in any other court original or appellate.

iii) The previously instituted case must be pending in any of the courts as above or
Supreme Court competent to grant the relief.

Exception: If a suit is pending in a Foreign Court, the suit is not barred in India and hence, a suit
may be filed. The provisions in S. 10 are mandatory. It also applies to proceedings under Art 226
of the Constitution.

Also, Order 37 has been referred to in the case which defines a Summary suit.
The word trial in Section 10 in the context of summary suit cannot be interpreted to mean the
entire proceedings starting with institution of the suit by lodging a plaint. In a summary suit the
trial really begins after the Court or the judge grants leave to the defendant to contest the suit.
Therefore, the Court or the judge dealing with the summary suit can proceed up to the stage of
hearing the summons for judgment and passing the judgment in favor 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. What is barred is trying the suit, but the institution of suit or deciding
preliminary issues not barred by RES SUB JUDICE. Instead of staying one of the suits,
consolidation of suits is not disallowed by the courts using its inherent powers. (Provided both
the suits are within the jurisdiction of the court)

Ratio
The word trial is not used in its widest sense. The concept of trial is applicable only to a
regular/ordinary suit. It is not applicable to subsequently filed summary suit under Order
XXXVII. In summary suit trial begins after the court grants leave to the defendant to contest
the suit and it does not mean entire proceedings starting with institution of the suit by lodging a
plaint.

Considering the objects of both the provisions, i.e., Section 10 and Order 37 wider interpretation
of the word 'trial' is not called for. The judges were of the opinion that the word 'trial' in section
10, in the context of a summary suit, cannot be interpreted to mean the entire proceedings
starting with institution of the suit by lodging a plaint. In a summary suit the 'trial' really begins
after the Court or the Judge grants leave to the defendant to contest the suit. Therefore, the Court
or the Judge dealing with the summary suit can proceed up to the stage of hearing the summons
for judgment and passing the judgment in favor 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.