Final Order 1

Order Details: Notice of Motion
Pdf Text: Notice of Motion No.1511/2019 ..1.. In S.C. Suit No.993/2016
IN THE CITY CIVIL COURT FOR GREATER BOMBAY
AT BOMBAY.
NOTICE OF MOTION NO. 1511 OF 2019
IN
S.C. SUIT NO. 993 OF 2016
CNR NO :- MHCC01-003998-2019
Mr. Hussain Ismail Satkut,
Age : 76 Years, Occ.: Retired,
Residing At : Room No. 304,
A Wing, Ruby Apartments,
Sector 23, Seawoods,
Navi Mumbai - 400 706. ...Plaintiff
Versus
M/s. Avarsekar & Sons Pvt. Ltd.,
Having Office At : 101-B,
Vaibhav Apartment, Old Prabhdevi Road,
Mumbai - 400 025.
And Its Office At : 1252,
Pushpanjali Apartment, 1st Floor,
Old Prabhdevi Road, Mumbai - 400 025. ...Defendant
Appearance :-
Mr. B. L. Mangale, Advocate for the Plaintiff.
Mr. P. D. Gandhy, Advocate for defendant.
CORAM : HIS HONOUR JUDGE
SHRI AJIT N. MARE (C.R.No.3)
DATE : 26TH FEBRUARY, 2021.
ORAL ORDER
By this notice of motion, the defendant has sought stay to
the proceedings of this case under Section 10 of CPC in view of
pendency of Arbitration proceedings before the Hon’ble High Court filed
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under Section 34 of the Arbitration and Conciliation Act, 1996
(hereinafter referred as, “The Act of 1996”).
2. It is the defendant’s case that, the present suit is filed to
declare an agreement dated 09.04.2008 and allotment letter dated
07.04.2008 as valid and subsisting. The plaintiff’s claim is based on an
agreement which has reference to the development agreement dated
19.08.2005. A dispute arose in respect of said development agreement
which was referred to the arbitrator. The arbitrator has passed an
award dated 11.12.2014. Being aggrieved by said award Mr. Umar
Abdul Gani along with the plaintiff and others has filed Arbitration
Petition No. 561/2015 against the defendant. The development
agreement is the subject matter of present suit, which is directly and
substantially in question in the Arbitration Petition which arises out of
the development agreement. The decision on the development
agreement will determine the outcome of the present suit. There is
likelihood of contradictory orders being passed, if both proceedings are
permitted to be continued. The Arbitration Petition is prior in the time
to the present suit and hence suit needs to be stayed.
3. Notice of motion is opposed by the plaintiff contending
that, Arbitration Petition No. 561/2015 is filed by Mr. Umar Abdul Gani
and others including the plaintiff, but not in own individual rights and it
is filed in the capacity of the heirs of Late Mr. Noor Mohd. Satkut. The
agreement of which specific performance is sought, and the allotment
letter are neither directly nor substantially in question in said
Arbitration Petition. The Arbitration Petition is arising out of the
development agreement and the decision on the development
agreement will not determine the outcome of this suit. The decision of
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this suit depends entirely on the validity of allotment letter dated
07.04.2008 and agreement dated 09.04.2008. The consideration of
above deeds has been passed directly from the plaintiff to the defendant
and the defendant has acted upon the same. Even, if the, Arbitration
proceedings are decided in favour of the petitioners therein, present
proceeding or suit will not become infructuous as the plaintiff will still
be entitled to amend the plaint and seek damages from the defendant.
The defendant has resisted the termination of development agreement
since beginning till date. The development agreement has been held
not to be terminated properly and therefore there is no cause of action
for filing present notice of motion. There is no likelihood of contrary
orders being passed, if both the proceedings proceed simultaneously.
The suit is at the stage of hearing of notice of motion and hence at this
stage it cannot be stayed. The matters in issue in the Arbitration
Petition and in present suit are neither directly nor substantially the
same. Arbitration Petition is not a suit to attract the provisions of
Section 10. Arbitration Petition and present suit are neither between
the same parties not between the parties litigating under the same title.
The letter of allotment and agreement dated 09.04.2008 are not the
subject matter of the arbitration proceedings and therefore by no stage
of imagination same relief as sought in present suit can be granted in
Arbitration Petition.
4. Perused. Heard.
5. Before considering the submissions advanced, it is
necessary to mention what the plaint asserts.
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6. According to the plaintiff, Mr. Noor Mohd. Satkut and 5
others were the Co-Lessees bearing CTS No. 197 (part) and 189 (part).
They entered into two separate development agreements with the
defendant on 19.08.2005. The defendant agreed to construct
rehabilitation buildings for the tenants or occupants as well as the free
sale building. The defendant completed construction of 9 rehabilitation
buildings, but construction of free sale building did not commence. The
plaintiff was occupying Room No. 17. While executing development
agreement, the defendant orally agreed to construct 4 shops and two
flats for Mr. Noor Mohd. Satkut or his nominees in free sale building, in
addition to the consideration payable under the development
agreement. The defendant agreed to provide the plaintiff permanent
alternate accommodation of one premises in free sale building and also
agreed to pay compensation @ rate of Rs.7,500/- per month till
handing over possession of new premises. On 07.04.2008 the
defendant issued a letter of allotment to the plaintiff mentioning terms
of allotment of new premises vide letter dated 09.04.2008. It
confirmed the receipt of the names of nominees and address of the
nominees of Mr. Noor Mohd. Satkut for new 4 shops and two flats. It
also forwarded demand draft of Rs.40,00,000/- for registration of stamp
duty and other expenses payable in future on the agreement to be
executed in respect of said shops and flats. Mr. Noor Mohd. Satkut, the
plaintiff and the defendant entered into and tri-party agreement dated
09.04.2008 vide which defendant agreed to provide new premises in
free sale building and to pay the compensation @ rate of Rs.7,500/-.
Accordingly, the plaintiff handed over vacant and peaceful possession of
old premises to the defendant. The defendant commenced paying of
compensation as agreed but stopped to pay after March, 2011. Wide
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letter dated 09.12.2011 the plaintiff called upon the defendant to
execute an appropriate agreement and register the same in accordance
with Clause 12 of earlier agreement dated 09.04.2008. Due to non-
compliance of terms and conditions of development agreement Mr.
Noor Mohd. Satkut and other Co-Lessees, addressed a notice dated
09.12.2011 to the defendant and informed termination of both the
development agreements. The defendant denied the contentions in
termination notice. The defendant filed Arbitration Petition No.
290/2012 before the Hon’ble High Court under Section 9 of the Act of
1996 as well as an Arbitration Petition No. 57/2012 under Section 11 of
the Act of 1996. The Hon’ble High Court appointed Mr. Ketan Parekh as
sole Arbitrator. The other Co-Lessees also filed an Arbitration Petition
against the defendant under Section 9 of the Act of 1996. The Hon’ble
High Court disposed of said Arbitration Petition along with the
Arbitration Petition No. 290/2012. The plaintiff addressed another
notice dated 09.12.2011. The defendant claimed breach of suit
agreement dated 09.04.2008. The defendant replied the same and
denied execution of allotment letter and agreement dated 09.04.2008.
Mr. Noor Mohd. Satkut died intestate on 30.07.2013 leaving behind him
the plaintiff and others as his legal heirs. His wife Mrs. Raziya also died
on 21.04.2014 leaving behind her the plaintiff and others as their legal
heirs. The Sole Arbitrator Mr. Ketan Parrkh passed an award dated
11.12.2014 holding that, the development agreement was not validly
terminated and ordered specific performance of development
agreement. He also ordered the defendant to pay monthly
compensation, arrears, damages and costs. The defendant challenged
said award vide Arbitration Petition No. 684/2015 which he had
voluntarily withdrew on 24.04.2015. The Co-Lessees also filed an
Arbitration Petition No. 567/2015 under Section 34 of the Act of 1996
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challenging the award. Said petition is pending for final disposal before
the Hon’ble High Court. The outcome of said proceedings is uncertain
and it is not known whether the Hon’ble High Court will upheld the
termination of notice. The limitation for filing present suit is running
out and hence the suit is filed subject to the outcome of aforesaid
Arbitration Petition. The allotment letter and suit agreement are
binding on defendant. The plaintiff has performed her part and was &
is ready & willing to perform remaining obligations of the agreement.
The defendant is however not fulfilling its part and hence a declaration
about validity and subsisting of agreement dated 09.04.2008 and
allotment letter dated 07.04.2008 is required. The relief of specific
performance is also sought coupled with recovery of arrears of
compensation.
7. Advocate for defendant submitted that, present suit is a suit
for specific performance filed in accordance with the provisions of The
Maharashtra Ownership of Flats (Regulation of the Promotion,
Construction, Sale, Management and Transfer) Act, 1963, (hereinafter
referred as, “The MOFA Act”) and not for refund of the amount. The
plaint refers to the development agreement executed in favour of the
defendant. The plaintiff has relied on agreement dated 09.04.2008. Its
copy is part of the plaint. Perusal of said agreement reveals that, the
suit agreement dated 09.04.2008 is the outcome of development
agreements dated 29.08.2005 executed by the Lessees in favour of the
defendant. The development agreements were sought to be terminated
by the Lessees which was challenged by the defendant. The dispute was
referred to the arbitrator, who by his award has declared that, the
development agreements are valid and subsisting. The Lessees however
have filed an Arbitration Petition before the Hon’ble High Court
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challenging said award bearing Arbitration Petition No. 567/2015. The
said Arbitration Petition is still pending before the Hon’ble High Court.
The decision in the Arbitration Petition has a bearing on the merits of
this case, as if, the Arbitration Agreements are held properly terminated,
no question arises for the defendant performing any obligation under
said development agreements. Consequently, the present suit will be
rendered infructuous. According to him, an Appeal filed under Section
34 of the Act of 1996 attracts the definition of the suit within the
meaning of Section 10 of CPC. The Arbitration Petition No. 567/2015 is
earlier in point of time. The Arbitrator is also a Court. The Arbitration
Petition is pending before the Hon’ble High Court, which is the ‘Court’
within the meaning of Section 10 of CPC. Therefore, according to him,
the proceeding of present suit needs to be stayed. He also submitted
that, an appeal is nothing but continuation of a suit and thus provisions
of Section 10 are squarely attracted in this case. He further submits
that, the dispute raised in Arbitration Petition and the decision therein
will decide the fate of this suit. In such circumstances, according to
him, when the subject matter of the Arbitration Petition and present suit
are materially identical the same can given rise to similar issues, present
suit needs to be stayed under section 10 of CPC. In support of his
submission, he relied on Judgment dated 05.05.1998 of the Hon’ble
Supreme Court between Indian Bank V/s. Maharashtra State Co-
Operative Marketing Federation Limited, Sagar Shamsher Jang Bahadur
Rana and Ors. V/s. The Union of India and Ors, AIR 1979 Delhi 118,
and Judgment dated 10.05.2012 of the Hon’ble Kolkata High Court in
Appeal No. C.O. 2842/2011 between Steel Authority of India Limited V/
s. Pilani Investment and Industries Cor. Ltd.
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8. On the other hand, advocate for plaintiff submitted that,
agreement dated 09.04.2008 has no reference to MOFA. The award
passed by the Sole Arbitrator is placed on record. The challenge to
award by the defendant is withdrawn by him. Though the Arbitration
Petition by the Lessees and their Legal Representatives is pending for
adjudication. He submits that, the provisions of Section 10 of CPC
contemplate pendency of two suits. According to him, an Arbitration
Petition is not falling within the definition of ‘suit’ as required by
Section 10 of CPC. He submits that, the jurisdiction of the Hon’ble High
Court in Arbitration Petition and the jurisdiction of this Court in a Civil
Suit is not concurrent jurisdiction as expected by provisions of Section
10 of CPC. He further submits that, the dispute raised in the Arbitration
Petition and the dispute covered by present suit are entirely different
and in such scenario the suit cannot be stayed. He also submits that,
the capacity in which the plaintiff is prosecuting his remedies in the
Arbitration Petition and present suit are also different and therefore the
Arbitration Petition and the suit is not between a same party.
9. Advocate for the plaintiff relied on Usha Rani and Others
V/s. M/s. Indermal & Sons and others, AIR 1988 RAJASTHAN 223,
British Indian Corporation Ltd. V/s. M/s. Rashtraco Freight Carriers, JT
1996 (5) S.C. 662, M/s. Sadguru Constructions & Anr. V/s. Smt.
Jaimeet Kaur Nirmansingh Sial & Ors., 2006 (2) ALL MR 394, Manohar
Lal Chopra V/s. Rai Bahadur Rao Raja Seth Hiralal, AIR 1962 Supreme
Court 527 (V 49 C 80), National Institution of Mental Health & Neuro
Sciences, (2005) 2 Supreme Court Cases 256, Pukhraj D. Jain V/s. G.
Gopalakrishna, AIR 2004 SUPREME COURT 3504 and Vrinda V/s.
Indira Devi, LEX (KER) 1994 1 26.
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10. Before going to consider the facts of this case, the legal
position needs to be considered.
11. In British Indian Corporation Ltd.’s case, the Hon’ble
Supreme Court has observed that,
“5. Section 10 of CPC envisages that 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
of 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.”
12. In National Institution of Mental Health & Neuro Sciences’s
case, the Hon’ble Supreme Court has observed that,
“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
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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 contra-
distinction 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 subject
matter in both the proceedings is identical.”
13. Considering the observations in the authorities, cited
supra,
thus in order to apply the provision of Section 10 of CPC, it is necessary
that following conditions should exist:
1. The matter in issue in later suit shall also be
directly and substantially in issue in a previously
instituted suit.
2. Both the suits shall be between the same parties
or between the parties under whom they or any
of them claim litigating under the same title.
3. The Court in which earlier suit is pending must
have jurisdiction to grant the relief claimed in
subsequent suit.
4. The whole of the subject matter in both the
proceedings should be identified.
5. When the suit cannot be stayed under Section
10 of CPC, provisions of Section 151 of CPC
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cannot be invoked to stay the proceedings of a
suit.
14. Presuming that all other parameters required to attract the
provisions of Section 10 of CPC, are fulfilled, it has to be seen whether
whole of the subject matter in both the proceedings is same or identical.
15. Arbitration Petition No. 567/2015 is apparently filed by the
Co-Lessees the plaintiff being legal heirs of one of the Co-Lessees. Only
the plaintiff is not part to said Arbitration Petition. The Arbitration
Petition is challenging the award passed by the Sole Arbitrator. Copy of
said award is part and parcel of the plaint. Perusal of the copy of award
reveals that, Sole Arbitrator has framed issues for consideration which
are reflected in the award itself. Bare perusal of the issues framed by
the Sole Arbitrator reveal that, no issues in respect of agreement dated
09.04.2008 and allotment letter dated 07.04.2008 is framed by the
Arbitrator. This is so, as the dispute as to present agreement dated
09.04.2008 and allotment letter dated 07.04.2008 was not the subject
matter of the Arbitration Proceedings before the Sole Arbitrator.
16. In present case, the defendant has not yet filed written
statement and by an order of this Court is proceeded without written
statement. Thus, in question of framing issue under Order 14 of CPC
will not arise in present case. However, the points for consideration
before this Court would be relating to existence, validity and
enforceability of agreement dated 09.04.2008 and allotment letter
dated 07.04.2008, the readiness and willingness of the plaintiff to
perform the part of the agreement and the entitlement of the plaintiff to
the relief sought.
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17. Thus, it is clear that, the issues raised in present plaint are
neither substantially nor directly in issue in the Arbitration Petition No.
567/2015. No doubt the decision in the Arbitration Petition has same
bearing on the outcome of this suit. This is so, as if, the decision in
Arbitration Petition goes against the defendant, the defendant may have
a legal excuse to avoid the specific performance of agreement dated
09.04.2008 and allotment letter dated 07.04.2008. However, it does
not mean that the provisions of Section 10 of CPC are attracted in this
case, as the subject matters in both the proceedings are different.
18. I have gone through Sagar Shamsher Jang Bahadur Rana’s
case. Advocate for defendant has claimed that, the arbitration petition
before the Hon’ble High Court is in the form of appeal and an appeal is
continuation of the suit and so present suit can be stayed.
19. In the authority, cited
supra, the facts reveal that, the first
appeals filed under Section 96 of CPC were pending which were arising
out of Civil Suit and that’s why it was observed by Hon’ble Delhi High
Court that, such first appeal is continuation of the suit. Such are not
the facts in this case. Hence, the authority, cited
supra, will not help the
defendant.
20. In Steel Authority of India Limited’s case, the Hon’ble
Kolkata High Court has laid down the conditions for attracting the
provisions of Section 10 of CPC. In the present case, the most
important ingredient of similarity of the subject matters in both the
proceedings is not made out. Consequently, the defendant cannot seek
any help from the authority, cited
supra.
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21. Advocate for defendant relying on Indian Bank’s case
submitted that, suit will also mean legal proceeding before a tribunal.
Therefore, he submitted that, the Arbitration Proceedings will also be a
suit within the meaning of Section 10 of CPC.
22. I have gone through the authority, cited
supra, wherein the
question before the Hon’ble Supreme Court 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’) is applicable to summary suit filed under Order 37 of the
Code.
23. The Hon’ble Supreme Court has answered said question as
under,
“We are 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 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.”
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24. Considering the facts and circumstances, before the Hon’ble
Supreme Court, therefore, I hold that, the authority, cited
supra is not
applicable to the present case, as the facts and circumstances are
different.
25. The plaintiff has relied on Usha Rani’s case, wherein
application under Section 20 of Arbitration Act, though registered as the
suit was not considered as ‘Suit’ within the meaning of Section 10 of
CPC. If, the same analogy is applied in this case, the arbitral award and
the Arbitration Petition arising therefrom will not become ‘suit’ within
the meaning of Section 10 of CPC.
26. In M/s. Sadguru Constructions’s case, the Hon’ble Bombay
High Court has observed that,
“21. The cause of action in both the suit is also
different. In the first suit cause of action which has
been sought to be established is by the mother for
her share and in the second suit cause of action is
sought to be established is by respondent No. 1 for
her own share. Once both are claiming their
individual shares it cannot be said that cause of
action in both the suits is identical.”
27. In this case also the causes of action in initiating the
Arbitration Proceedings and in filing present suit are quite different. In
view of this also the notice of motion is legally not tenable.
28. In Manohar Lal Chopra’s case, the Hon’ble Supreme Court
has held that,
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“39. The suit at Indore which had been instituted
later, could be stayed in view of s. 10 of the Code.
The provisions of that section are clear, definite and
mandatory. A Court in which a subsequent suit has
been filed is prohibited from proceeding with the
trial of that suit in certain specified circumstances.
When there is a special provision in the Code of
Civil Procedure for dealing with the contingencies
of two such suits being instituted, recourse to the
inherent powers under s. 151 is not justified.”
29. Similarly, in National Institution of Mental Health & Neuro
Sciences’s case, the Hon’ble Supreme Court has observed that,
“12. In the case of Manohar Lal Chopra v. Rai
Bahadur Rao Raja Seth Hiralal, it has been held that
inherent jurisdiction of the Court to make orders ex
debito justitiae is undoubtedly affirmed by Section
151 CPC, but that jurisdiction cannot be exercised
so as to nullify the provisions of the Code. Where
the Code deals expressly with a particular matter,
the provision should normally be regarded as
exhaustive. In the present case, as stated above,
Section 10 CPC has no application and
consequently, it was not open to the High Court to
bye-pass Section 10 CPC by invoking Section 151
CPC.”
30. In view of the ratio laid down by the Hon’ble Supreme
Court in the authorities, cited
supra, therefore, provisions of Section
151 of CPC cannot be invoked, if the notice of motion is not covered by
the provisions of Section 10 of CPC.
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31. I have gone through Pukhraj D. Jain’s case, the facts and
circumstances in the case before the Hon’ble Supreme Court is different
and the facts in present case. In the case before the Hon’ble Supreme
Court the question was whether the subsequently instituted suit can be
gone into, if it can be disposed of purely oo legal points without taking
evidence, such is not the situation in this case.
32. In Vrinda’s case, the Hon’ble Kerala High Court has
observed that, even if trial of the suit is stayed the Court will be entitled
to pass interlocutory orders in the nature of injunction etc.
33. In this case, since the motion itself is considered meritless,
the authority, cited
supra, is not attracted in this case.
34. Considering discussion in aforesaid paragraphs, therefore, I
hold that, the notice of motion is meritless. Hence, following order: -
ORDER
Notice of Motion No. 1511/2019 is dismissed
with costs.
(AJIT N. MARE)
Judge,
Date : 26.02.2021 City Civil Court, Gr. Mumbai.
Dictated On : 26.02.2021
Transcribed on : 01.03.2021
HHJ Signed on : 04.03.2021
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“CERTIFIED TO BE TRUE AND CORRECT COPY OF THE
ORIGINAL SIGNED ORDER.”
UPLOAD DATE TIME STENOGRAPHER NAME
04.03.2021 6.11 p.m. Mahendrasing D. Patil
(Stenographer (Grade-I)
Name of the Judge H.H.J. SHRI. AJIT. N. MARE
(Court Room No. 3)
Date of pronouncement of Order 26.02.2021
Order signed by P. O. on 04.03.2021
Order uploaded on 04.03.2021
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