Manmohan, J.

I.A. No. 12583/2016

1. Present application has been filed by the defendant under Section 10 of the Code of Civil Procedure (hereinafter referred to as CPC) seeking stay of the present suit. The application is premised on the fact that the defendant herein has filed a prior suit before the Bombay High Court being Suit No. 370/2015 and the issues in the said suit as well as the present suit are directly or substantially the same and can be dealt with in the Bombay suit in its entirety.

2. Mr. Ashim Sood, learned counsel for defendant stated that in the Bombay suit, the defendant has sought reimbursement of payments made by it to the plaintiff during the period August, 2011 to June, 2013 (hereinafter referred to as period) under an ongoing and running commercial arrangement whereby the plaintiff would transport the defendants goods from a central warehouse to specific retail outlets of the defendant. According to him, the arrangements had two facets:- (i) Octroi paid by the plaintiff on behalf of the defendant was reimbursed by the defendant along with a service fee upon an octroi invoice being raised; and (ii) the defendant would pay transportation charges for the goods moved upon a Stock Transfer Invoice (hereinafter referred to as STIs) being raised. He stated that these payments were made on running and ongoing basis upon the invoices being raised.

3. According to him, the defendant in the Bombay suit had impugned all the invoices i.e. the octroi invoices and STIs raised by the plaintiff during the period and has prayed for grant of relief in the nature of reimbursement and rendition of accounts.

4. Mr. Ashim Sood, pointed out that the present suit pertains to six invoices raised by the plaintiff on the defendant i.e. four octroi invoices and two STIs under the same commercial arrangement. He emphasised that all these invoices were raised during the said period.

5. Learned counsel for the defendant-applicant contended that these invoices are a subset of the universe of invoices impugned in the Bombay suit. Therefore, according to him, the question that whether any amount is due and payable to the plaintiff herein can and will be ascertained in the Bombay suit.

6. Per contra, Mr. Ravi Gupta, learned senior counsel for plaintiff stated that the present suit has been filed for recovery of transportation charges for the transportation of goods. He stated that as the invoice dated 04th June, 2013 for Rs. 46,49,481/- and invoice dated 21st June, 2013 for Rs. 19,05,753/- remained unpaid, the plaintiff vide e-mail dated 05th July, 2013 requested the defendant to release the admitted outstanding amount of Rs. 87,37,638/-.

7. Learned senior counsel for the plaintiff contended that the suit filed by the defendant herein before the High Court of Bombay is not for recovery of transportation charges, but for recovery of octroi charges. He emphasised that the Bombay High Court suit only seeks rendition of accounts qua the invoices that stood paid and in no manner can be interpreted to include the invoices dated 04th June, 2013 and 21st June, 2013.

8. Mr. Ravi Gupta submitted that the matter in issue in Bombay suit is not directly or substantially same nor the whole of the subject matter in both the suits is identical. He pointed out that a Coordinate Bench of the Court in ITC Hotels Ltd. & Ors. v. ABP Pvt. Ltd. & Ors., 2017(161) DRJ 512 has held that inherent powers of the Court cannot be invoked to grant stay of a proceeding and a suit can be stayed only when the conditions prescribed in Section 10 CPC are satisfied. Thus, according to him present suit is not liable to be stayed.

9. In rejoinder, Mr. Ashim Sood, learned counsel for defendant-applicant stated that it is incorrect for the plaintiff to state that the two STIs do not form a part of the lis in the Bombay suit. According to him, the Bombay suit clearly makes a reference to these STIs. He emphasised that though the defendant made a reference to the plaintiffs e-mail and letter in the Bombay suit asking for money due to it under the invoices dated 04th June, 2013 and 21st June, 2013, yet the defendant had clarified that no money was due to the plaintiff. In support of his contention, he relied upon paras 21(b) and (c) of the plaint which are reproduced hereinbelow:-

"21(b). Defendant No. 3, relying on the above letter wrongly sent by the Plaintiff, addressed an email dated March 30, 2014 to the Plaintiff on behalf of Defendant No. 1 asking for the monies, purportedly due from the Plaintiff to Defendant No. 1. Hereto annexed and marked as Exhibit P is a copy of the above email dated March 30, 2014.

21(c) The Plaintiff, on realizing the mistake, addressed another letter to Defendant No. 1 on April 9, 2014 recalling the above letter dated January 27, 2014. In this letter, the Plaintiff explained that the letter (January 27, 2014) was issued on account of an automated process, for audit purpose, for generation of letters to vendors and service providers of the Plaintiff. The letter was inadvertently sent to Defendant No. 1 since their name was (inadvertently) not removed from the Plaintiffs vendor list despite the termination of their services w.e.f. June 27, 2013. This letter was withdrawn, with no effect, and it was clarified to Defendant No. 1 that the Plaintiff continued to hold Defendant No. 1 liable for the fraud perpetuated by them and the consequent misappropriation of monies. Hereto annexed and marked as Exhibit O is a copy of the above letter dated April 9, 2014. Hereto annexed and marked as Exhibit O-1 is a copy of the courier receipt showing service of the above letter to the Defendant."

10. He also pointed out that the plaintiffs written statement in the Bombay suit adverts to the amounts in the invoices claimed in the present suit.

11. Having heard learned counsel for parties, this Court is of the view that it is first essential to analyse the purpose, scope and ambit of Section 10 CPC. Section 10 of the CPC is reproduced hereinbelow:-

"10. Stay of suit.-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, or between parties under whom they or any of them claim litigating under the same title where such suit is pending in the same or any other court in India having jurisdiction to grant the relief claimed, or in any court beyond the limits of India established or continued by the Central Government and having like jurisdiction, or before the Supreme Court."
12. Section 10 is definite and mandatory. The four essential conditions for the application of this section are; (1) that the matter in issue in the second suit is also directly and substantially in issue in the first suit; (2) that the parties in the second suit are the same or parties under whom they or any of them claim litigating under the same title; (3) that the court in which the first suit is instituted is competent to grant the relief claimed in the subsequently suit; and (4) that the previously instituted suit is pending (a) in the same court in which the subsequent suit is brought or (b) in any court in India, or (c) in any court beyond the limits of India established or continued by the Central Government or (d) before the Supreme Court.

13. The object of Section 10 CPC is to avoid conflict of judicial decisions by preventing courts of concurrent jurisdiction from simultaneously adjudicating upon two or more parallel suits in which the matter in issue is substantially the same. In fact, the fundamental test to attract Section 10 is whether on final decision being reached in the previous suit, such decision would operate as res judicata in the subsequent suit.

14. The Supreme Court in National Institute of Mental Health & Neuro Sciences v. C. Parameshwara, (2005) 2 SCC 256 [LQ/SC/2004/1412 ;] ">(2005) 2 SCC 256 [LQ/SC/2004/1412 ;] [LQ/SC/2004/1412 ;] has held as under:-

"8. The object underlying Section 10 is to prevent courts of concurrent jurisdiction from simultaneously trying two parallel suits in respect of the same matter in issue. The object underlying Section 10 is to avoid two parallel trials on the same issue by two courts and to avoid recording of conflicting findings on issues which are directly and substantially in issue in previously instituted suit. The language of Section 10 suggests that it is referable to a suit instituted in the civil court and it cannot apply to proceedings of other nature instituted under any other statute. The object of Section 10 is to prevent courts of concurrent jurisdiction from simultaneously trying two parallel suits between the same parties in respect of the same matter in issue. The fundamental test to attract Section 10 is, whether on final decision being reached in the previous suit, such decision would operate as res judicata in the subsequent suit. Section 10 applies only in cases where the whole of the subject-matter in both the suits is identical. The key words in Section 10 are "the matter in issue is directly and substantially in issue" in the previous instituted suit. The words "directly and substantially in issue" are used in contradistinction to the words "incidentally or collaterally in issue". Therefore, Section 10 would apply only if there is identity of the matter in issue in both the suits, meaning thereby, that the whole of the subject-matter in both the proceedings is identical."

(emphasis supplied)

15. Further, the Supreme Court in ASPI Jal and Anr. v. Khushroo Rustom Dadayburjor, (2013) 4 SCC 333 [LQ/SC/2013/379] has held as under:-

"9..........................

xxx xxx xxx

From a plain reading of the aforesaid provision, it is evident that where a suit is instituted in a court to which provisions of the Code apply, it shall not proceed with the trial of another suit in which the matter in issue is also directly and substantially in issue in a previously instituted suit between the same parties. For application of the provisions of Section 10 of the Code, it is further required that the Court in which the previous suit is pending is competent to grant the relief claimed. The use of negative expression in Section 10 i.e. "no court shall proceed with the trial of any suit" makes the provision mandatory and the court in which the subsequent suit has been filed is prohibited from proceeding with the trial of that suit if the conditions laid down in Section 10 of the Code are satisfied. The basic purpose and the underlying object of Section 10 of the Code is to prevent the courts of concurrent jurisdiction from simultaneously entertaining and adjudicating upon two parallel litigations in respect of same cause of action, same subject-matter and the same relief. This is to pin down the plaintiff to one litigation so as to avoid the possibility of contradictory verdicts by two courts in respect of the same relief and is aimed to protect the defendant from multiplicity of proceeding."

xxx xxx xxx

11. In the present case, the parties in all the three suits are one and the same and the court in which the first two suits have been instituted is competent to grant the relief claimed in the third suit. The only question which invites our adjudication is as to whether "the matter in issue is also directly and substantially in issue in previously instituted suits". The key words in Section 10 are "the matter in issue is directly and substantially in issue in a previously instituted suit". The test for applicability of Section 10 of the Code is whether on a final decision being reached in the previously instituted suit, such decision would operate as res judicata in the subsequent suit. To put it differently one may ask, can the plaintiff get the same relief in the subsequent suit, if the earlier suit has been dismissed In our opinion, if the answer is in the affirmative, the subsequent suit is not fit to be stayed. However, we hasten to add then when the matter in controversy is the same, it is immaterial what further relief is claimed in the subsequent suit.

(emphasis supplied)

16. In the present case, the learned senior counsel for plaintiff has admitted that the octroi invoices in issue in the present suit are also in issue in the Bombay suit. Thus, the only question to be determined is whether the two STIs in the present suit are also in issue in the Bombay suit.

17. In the opinion of this Court, the defendant-applicant has impugned all STIs issued during the said period in the Bombay suit. The defendant-applicant in Bombay suit has, in fact, disputed the factum of actual movements of goods by the plaintiff. The relevant paragraphs of the plaint are reproduced hereinbelow:-

"11. Not only this, during its internal investigations, the Plaintiff has learnt that some of the STIs which were submitted by Defendant No. 1 were incorrect and that no goods were actually transported against such stock transfer invoices and that these fraudulently prepared STIs appear to have been issued by Defendant No. 1 in order to claim an excessive payment from the Plaintiff against movements of goods that never actually took place. All of the above actions on the part of Defendant No. 1 have been conducted in order to unjustly enrich the proprietors of Defendant No. 1 i.e. Defendant Nos. 2 and 3 and have caused a wrongful loss to the Plaintiff. The Plaintiff is taking appropriate steps internally to ensure that the systems and processes are in place to avoid such incidents in future.

xxx xxx xxx

19. Apart from the above, the Plaintiff has paid huge amounts to the Defendants for alleged services provided by them when there was actually no movement of goods and Defendant No. 1 has provided incorrect and false stock transfer invoices and Octroi receipts only to extract more monies from the Plaintiff."

(emphasis supplied)

18. Keeping in view the aforesaid averments, this Court is of the view that the defendant has impugned the existence and validity of those two STIs as well. Thus, the two STIs in issue in the present suit are subject matter of trial in the Bombay suit.

19. Moreover, prayer (f) of the plaint reads as under:-

"(f) That the Defendants be directed to render detailed accounts of the invalid Octroi receipts and the STIs and amounts so received thereunder."

(emphasis supplied)

20. Consequently, this Court is of the opinion that the said prayer is not limited only to those invoices on which payments have been made, but includes all invoices that would be necessary to determine the accounts during the period including the two STIs in the present suit. The expression "amounts so received thereunder" is to be read as separate and not qualifying all the invoices for which rendition is sought.

21. This Court is further of the view that the prayers mentioned in paragraphs 31(a), (b) and (c) in the Bombay suit for payment of money to the defendant can only be granted after full rendition of accounts, at the end of which it will become clear as to which party is owed money and how much. This Court is of the opinion that to grant rendition of account, the Bombay High Court shall have to ascertain the amount due to or from the plaintiff and for this purpose, an account shall be taken. Consequently all octroi invoices and STIs raised during the period will have to be tried by the Bombay High Court through evidence as to the truth of their existence and their contents in order to determine what if anything is payable from the plaintiff to the defendant. If the Bombay High Court finds that any amount is due and payable to the defendant at the end of rendition of accounts, that will necessarily determine the issue in the present suit i.e. if any money is payable to the plaintiff under the impugned two STIs.

22. Consequently, the matter in issue in the present suit is directly and substantially in issue in the previously filed Bombay suit. If both the suits are permitted to proceed, there will be two parallel trials on the same issue by two Courts and there could be conflicting findings on identical issues.

23. Accordingly, this Court is of the view that determination of issues in the Bombay suit would operate as res judicata in the present suit including with respect to the two STIs. Since the ingredients of Section 10 CPC are satisfied, the present application is allowed and the present suit is stayed.