Padmavati Tradelink Ltd. vs Standard Chartered Bank & Ors.

ANIRUDDHA ROY, J.:

CS-COM/297/2024 [OLD No. CS/159/2021] (hereinafter, the instant suit) had been filed by the owner of the property. IA No. GA-COM/9/2025 (hereinafter, the first application) has been filed by defendant no.4. IA No. GA-COM/11/2026 (hereinafter, the second application) has been filed by defendant no.3.

Both the said applications filed by the two applicants have been filed under Section 10 of the Code of Civil Procedure (hereinafter, the Code) praying for stay of the instant suit.

Since both the applications arose out of the same suit with an identical prayer relating to the self-same property and involving common questions of law, by consent of parties, both the applications have been taken up for consideration together and through the present composite judgment, the said two applications are finally decided.

The inescapable facts are only stated.

The plaint case, in brief, is narrated hereinafter :

In the above facts and circumstances the defendant no.4 has filed the said First Application praying for stay of the second suit in view of the pendency of the said previous suit along with other consequential reliefs.

Similarly, the defendant no.3 has also filed the said Second Application with an identical prayer for stay of the second suit.

Parties have filed and exchanged their respective affidavits. Parties have also filed their written notes.

Mr. Altamash Alim learned Advocate appearing for the defendant no.4/applicant at the outset has placed both the plaints and the reliefs claimed thereunder extensively. He submits that the matter in issue in the second suit, which is the subsequent suit, is directly and substantially in issue in the said previous suit. He submits that the defendant no.4 claims litigating under the same title which is pending adjudication in the previous suit.

Mr. Altamash Alim learned Advocate appearing for the defendant no.4/applicant submits that the defendant no.2 had purchased portion of the Third Floor, inter alia, LOT-A and the property appertaining thereto from the plaintiff on February 6, 2018 and March 9, 2018. The defendant no.4 had purchased a portion of LOT-A from the defendant no.2 on October 15, 2018 by way of registered conveyance upon making payment of the consideration mentioned therein. The agreement dated February 06, 2018 is the deed based on which defendant no.4 has purchased a portion from the defendant no.2 which is recorded in the deed dated October 15, 2018. If the deed dated February 06, 2018 executed by the plaintiff in favour of the defendant no.2, does not exist then consequentially the deed of conveyance dated October 15, 2018 executed by the defendant no.2 in favour of the defendant no.4 shall not exist and the defendant no.4 in effect would loose its valuable right, title and interest over the property.

Referring to the said three deeds of conveyance, two being executed in favour of the defendant no.2 by the plaintiff and the one being executed in favour of the defendant no.4 by the defendant no.2, Mr. Altamash Alim submits that the defendant no.4 has assumed and acquired a valid right and title from defendant no.2 which in turn assumed the title from the plaintiff flowed in favour of defendant no.4. He further submits that there are several disputes and differences about LOT-A on account of the interpretation of conveyance dated February 6, 2018 and the alleged claim on account of unpaid money, which resulted the plaintiff to file the previous suit against the defendant no.2 and the defendant no.1 herein.

With specific reference to the reliefs claimed by the plaintiff in the previous suit, learned Advocate for the defendant no.4 submits that the plaintiff had claimed delivery up and cancellation of the deeds of conveyance dated February 6, 2018 and March 9, 2018 executed by the plaintiff in favour of the defendant no.2. He specifically refers to prayer (h) from the previous plaint.

Mr. Altamash Alim, learned Advocate then submits that if the said prayer (h) in the previous suit is allowed, automatically the conveyance executed by the defendant no.2 in favour of the defendant no.4 would be of no effect or further effect and would be rendered void. The plaintiff ought to have filed a comprehensive suit, if at all and not the two separate suits in their present from where the issue in the second suit is identically same and/or substantially same with that of the previous suit.

Learned Advocate for the defendant no.4 then refers to prayers from the second suit where the plaintiff has made a monetary claim coupled with cancellation of the conveyance dated October 21, 2018 and February 06, 2018 along with other prayers. Learned Advocate then refers to prayers (a), (b), (o) and (p) from the second suit.

Learned Advocate for the defendant no.4 has then referred to Section 10 of the Code and submits that the provisions laid down thereunder is not restricted only between/amongst the same parties in two suits, rather it is extended to any and every person who claims litigating under the same title. He submits that the expression “same party” is not at all a consideration while dealing with a Section 10 application as plaintiff may choose to add several parties to mislead the Court and imply clever drafting to avoid rigour of Section 10 of the Code. In support, he has placed reliance on a decision In the matter of : AIR 2006 Cal 2972.

Learned Advocate for the defendant no.4 submits that his client has obtained the property from the defendant no.2 under a registered conveyance dated October 15, 2018 who in turn had obtained title from the plaintiff under the registered conveyance dated February 6, 2018 and the title has successfully passed upon the defendant no.4. Defendant no.4 purchased well within the caveat prescribed under Section 10 of the Code and as such there is no such impediment upon the defendant no.4 in maintaining the Section 10 application.

Mr. Altamash Alim, learned Advocate appearing for defendant no.4 further submits that the issue of a non-party to the previous suit can maintain an application under Section 10 of the Code is no more res integra. Reliance has been placed on the following decisions :-

On the expression “same parties” learned Advocate Mr. Altamash Alim submits that it would mean the parties between whom the matter substantially in issue has arisen and has been decided. The complete identity either of the subject-matter or the parties are not required. The purport and intent behind the two suits are to be looked into. For the purpose of Section 10 application there may not be a complete identity of party or complete identity of the subject-matter. Such a situation would promote an unscrupulous or dishonest litigant like the plaintiff herein to avoid the provisions under Section 10 of the Code and to permit to file consecutive suits which may be with identical issues. Thus, there is no bar in law for non-party to maintain a Section 10 application and pray for stay of the subsequent suit.

The expression “same title” used in Section 10 of the Code would mean that the liability for one to file an application is when the dispute of the entire area and not a portion of it. The defendant no.2 had purchased LOT-A on the Third Floor from the plaintiff. Defendant no.4 had purchased a portion from the defendant no.2, however, that does not make any difference because common areas are part of the ownership of defendant no.2 which is also a subject-matter in the second suit. Defendant no.4 assumes and derives title from the chain of title flowing down from the plaintiff to the defendant no.4. The phase same title used in Section 10 of the Code does not make a distinction which the plaintiff had asserted. It is settled that even a portion of land would construe and/or come within the phase same title. Reliance has been placed in a decision In the matter of: Abdul Gani and Anr. vs. Nabendra Kishore Roy & Ors., reported at 33 CWN Cal 876.

Learned Advocate further submits that in a case where whole title is in issue in a previous suit, the same cannot be agitated in a subsequent suit. Applying the same principle, the phase same title cannot be allowed to be given a restrictive interpretation rather the same should be considered in the light of the entire section. As such, even a portion of the title would construct same title, entitling the defendant no.4, in the facts of this case, to maintain the Section 10 application.

Mr. Altamash Alim further submits that the plaintiff before filing the instant suit had duly cancelled the conveyance dated February 06, 2018 by way of a letter. The plaintiff had also asked for possession of the premises from the defendant no.2 since the relevant conveyance stand cancelled by the defendant no.2. As per the plaintiff, the previous suit has been primarily filed seeking declaration that the area of the defendant no.2, which in turn includes the area of the defendant no.4 is restricted to LOT-A and does not include the open space including chiller plant and others are not the common subject-matter in both the suits. The plaintiff has sought for correction in the conveyance and prayed for prayer (h), as quoted above, in the previous suit, which has already been obtained by the plaintiff would it had cancelled the conveyance dated February 6, 2018. The natural outcome of the prayer is recovery of possession by the plaintiff which would include the possession of the defendant no.4. The plaintiff had not necessitated to make the prayer in the previous suit had it its prayers been restricted to declaration of area as has been submitted by the plaintiff before this Court. Till date, the plaintiff has not given up prayer (h) in the previous suit. In the second suit being the instant suit, the plaintiff has also asked for delivery up and cancellation of the same deeds as sought for in the previous suit. In case, the trial of the instant suit is allowed to be proceeded then there will be an anomalous situation which would lead to absurdity and multiplicity of judicial pronouncement.

Mr. Altamash Alim submits that in case the previous suit is allowed to be proceeded with and prayer (h) is granted, then prayers in the second suit will automatically be granted and it would have an effect of res judicata in the second suit. In the event prayer (h) in the previous suit is allowed, prayers (o) and (p) are not allowed in the second suit then the situation will be so absurd that it will give birth to a complicated situation. The plaintiff would claim res judicata in view of grant of prayer (h) in the previous suit so far as the second suit is concerned.

Referring to prayer (h) from the previous suit, learned Advocate for the defendant no.4 submits that if the said prayer is allowed it would operate as res judicata in the instant second suit and therefore, the issue in the instant second suit would be directly and substantially be same with that of the previous suit. Prayer h in the previous suit if is allowed, would automatically non-suit the defendant no.4 in the instant suit. In the light of the above, defendant no.4 submits that the instant Section 10 application should be allowed.

Mr. Rohit Banerjee, learned Advocate appearing for the defendant no.3 being the applicant in the second application has submitted that the defendant no.3 is identically situated and similarly placed with the defendant no.4. Mr. Banerjee has adopted the entire submissions made on behalf of the defendant no.4.

He has also prayed for identical relief in his application and prays for stay of the instant suit.

Mr. Tilak Kumar Bose, learned Senior Advocate appearing for the plaintiff, at the outset, has referred to both the plaints, the averments and reliefs made therein. He submits that in the previous suit admittedly, defendant no.4 is not a party. It is a suit filed by the plaintiff against the defendant nos. 1 and 2 herein. Subject-matter of the previous suit relates to built up area measuring 16389 sq. ft. on the Third Floor of the property which was sold and conveyed in two lots – LOT-A and LOT-B under two separate deeds of conveyance dated February 6, 2018 and March 9, 2018. Under the said conveyance dated February 6, 2018 LOT-A comprised an area of 12292 sq. ft. more less super built-up which forms the covered area of a portion of Third Floor of the property. Under the deed of conveyance dated March 9, 2018, LOT-B comprising an area of 4097 sq. ft. more or less super built-up which forms the covered area of a portion of Third Floor of the property.

Learned Senior Advocate, Mr. Tilak Kumar Bose submits the specific case of the plaintiff in the previous suit against the defendant no.2 is that the open terrace and roof on the Third Floor of the property, were never conveyed to defendant no.2. The plaintiff has only sold and transferred built-up area on the Third Floor of the property to defendant no.2 concluding the open area, where Air Conditioning chiller plant, satellite disc-antenna and other equipment are installed. In this fact situation, the previous suit had been filed with the leave under Order II Rule 2 of Code. The reliefs are restricted to the open terrace and roof on the Third Floor of the property. He submits that prayer (h) in the previous suit is an incidental relief which is depends on other reliefs. The issues framed in the previous suit by an order dated June 19, 2023 by the Coordinate Bench, would clearly show that the issues in the second suit are not identical or same with that of the previous suit.

Mr. Tilak Kumar Bose, learned Senior Advocate appearing for the plaintiff then submits, on a comparative reading of the issues in the two suits would show that by nature and character they are totally different. Defendant no.2 is a party in both the suits and has filed its written statement. Defendant no.2 has not filed any application for stay of the trial in the second suit. He submits that defendant nos.3 and 4 who are not the parties in the previous suit but the parties in the second suit had chosen to file their respective application under Section 10 of the Code without filing their written statements. Both the defendant nos.3 and 4 seek to claim right under the defendant no.2, have consciously chosen not to file written statement but to file Section 10 applications.

Mr. Tilak Kumar Bose, learned Senior Advocate appearing for the plaintiff then has referred to the third conveyance, as referred to above and submits that prima facie it is evident that the defendant nos.3 and 4 must have noticed the parent deed of conveyance dated February 6, 2018 under which, LOT-A –Third Floor covered built up area measuring about 12292 sq. ft. was sold and conveyed by the plaintiff to the defendant no.2, at the time of execution of the conveyance with the defendant no.2 dated October 15, 2018. He has referred, inter alia, clauses 18, 19 and 20 from the conveyance deed dated October 15, 2018 at pages 354 to 355 of the plaint – volume III. Thus, defendant no.4 is bound by the covenant mentioned in the deed under which it is claiming title.

Mr. Tilak Kumar Bose, further submits that defendant no.4 has allegedly purchased 425.18 sq. ft. super built up area on the Third Floor of the property, which is a miniscule portion of the covered constructed area under LOT-A as would be evident from the schedule at page 367 of the plaint being part of the conveyance dated October 15, 2018. He further submits that the defendant no.4 is not connected or claiming to have any interest with regard to the open area covering the roof and terrace on the Third Floor which is the issue involved in the previous suit.

Referring to Section 10 of the Code, Mr. Tilak Kumar Bose learned Senior Advocate submits that four tests are required to be satisfied to apply the said provision, which are, inter alia :-

Mr. Tilak Kumar Bose, learned Senior Advocate for the plaintiff then submits the foundation of Section 10 is that no person should be vexed towards for the same issue which is akin to the principle of res judicata. The defendant no.4 or 3 has no locus to maintain the said first application since, they are not parties in the previous suit and also such application is not maintainable under Section 10 when the same party, namely, defendant no.2 is impleaded in the second suit and has filed its written statement and consciously chosen not to file an application praying for stay of the second suit. In support, Mr. Bose has cited few decisions which are reproduced herein with their respective proposition :-

While dealing with the judgments relied upon by the defendant no.4, In the matter of: Shorab Merwanji and Anr., (Supra) Mr. Tilak Kumar Bose, learned Senior Advocate for the plaintiff submits that the said suit was between the same parties and issues were same. Existence of additional parties did not make any difference, as additional party did not apply under Section 10 of the Code.

While dealing with the judgment In the matter of: Challapalli Sugar Ltd., (Supra) Mr. Tilak Kumar Bose submits that parties in the Andhra Suit and Calcutta Suit were common. The same goods were involved. No additional party was involved. Hence, the suit was stayed. It was held that subject-matter of controversy was the same which arose from the same contract and same transaction. The issue involved whether property had passed or not was the common issue in both the suits.

While dealing with the judgment In the matter of: Abdul Gani and Anr. (Supra) Mr. Tilak Kumar Bose, learned Senior Advocate submits that it was a case on the principle of res judicata under Section 11 of the Code. The expression “litigating under same title” will come into operation only when a third party who was not a party in the first suit is a party in the second suit and the original party is not impleaded in the second suit.

While concluding his submission, Mr. Tilak Kumar Bose, learned Senior Advocate submits that the issue pertaining to conditional conveyances, charge, under Section 55 (4)(b) of Transfer of Property Act, 1882 has been created in favour of the plaintiff, since the defendant no.2 has not paid the consideration in full as agreed. Hence, the plaintiff is entitled to delivery up and cancellation of the conditional conveyances executed by it in favour of the defendant no.2.

In reply, Mr. Altamash Alim learned Advocate appearing for the defendant no.4/applicant has specifically submitted that even though defendant no.4 or 3 were not parties in the previous suit, since defendant no.4 and 3 have received their right and title from defendant no.2 who is a party in the first suit, the defendant no.4 has been after being impleaded in the second suit is litigating under the same title. Therefore, if the right, title and interest of the defendant no.2 in the first suit, is declared to be void, it will automatically and in effect would affect the right, title and interest of the defendant no.4.

After considering the rival contentions of the parties and on perusal of the materials on record, it appears to this Court that, admittedly, the defendant no.4/applicant or the defendant no.3/applicant are not impleaded in the previous suit. The previous suit had been instituted by the plaintiff against the defendant nos.1 and 2 herein only.

To ascertain the scope and construction of the relevant provisions for staying the subsequent suit, Section 10 of the Code is quoted below: -

On a meaningful and harmonious reading of the provisions laid down under Section 10 of the Code, this Court finds that the essential tests for stay of the subsequent suit are :

The object underlying Section 10 of the Code is to avoid two parallel trials on the same issue of two Courts of concurrent jurisdiction or in two distinct separate suits even before the same Court and to avoid recording of conflicting findings on the issues which are directly or substantially in issue in a previously instituted suit. Mere filing of an application under Section 10 does not in any manner cause an impediment or put an embargo on the power of the Court to examine the merits of the matter. For application of the provisions under Section 10 of the Code, it is essential that the Court in which previous suit is pending is competent to grant relief claimed. The use of the negative expression at the inception of Section 10 that 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 subsequent suit, if the conditions laid down under Section 10 of the Code are satisfied. The key expression in Section 10, the matter in issue is directly and substantially in issue in the previously instituted suit is to be seen in the light of the tests 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.

The second important test is whether parties to both the suits are same and even if not same whether a party in the second suit is litigating under the same title in the first suit, parties are litigating. This is to pin down the plaintiff to one litigation so as to avoid the possibility of conflict of judicial pronouncement by two Courts in respect of the same or substantially same issue and to protect the defendant from multiplicity of judicial proceeding.

On a close scrutiny of both the plaints and the reliefs claimed therein, in the facts of this case, it appears to this Court that the subject-matter of the previous suit is the built-up area measuring about 16389 sq. ft. on the Third Floor of the property which was sold and conveyed in two Lots – LOT-A and LOT-B under two separate deeds of conveyance dated February 06, 2018 and March 09, 2018 by the plaintiff in favour of the defendant no.2.

The subsequent plaint case in the previous suit filed by the plaintiff against the defendant no.2 is that the open terrace and roof on the Third Floor of the said property, which were never conveyed to defendant no.2 The plaintiff had only sold, transferred and conveyed the built-up area of Third Floor of the property to defendant no.2 excluding the open area. The plaintiff has further contended that the defendant no.2 has not paid the entire purchase price to the plaintiff, hence, by operation of Section 55(4) (b) of the Transfer of Property Act, 1882, the absolute right, title and interest had not been passed in favour of the defendant no.2.

The specific case of the defendant no.4 in the application that it has allegedly purchased 425.018 sq. ft. super built-up area from the defendant no.2 on the Third Floor under an alleged conveyance dated October 15, 2018. The defendant no.4 further has contended that the defendant no.2 had conveyed the title in favour of the defendant no.4 on the strength of the conveyance dated February 06, 2018 executed by the plaintiff in favour of the defendant no.2.

On a plain, meaningful and comparative reading of both the plaints, this Court finds that in the previous suit the plaintiff has, inter alia, sought for correction of some portion of the conveyance with a declaration that no right, title or interest was conveyed by the plaintiff in favour of the defendant no.2 insofar open area is concerned. Plaintiff has further contended that the transfer of title by the plaintiff in favour of the defendant no.2 is not complete as the defendant no.2 has not paid the full consideration amount, hence, in the second suit the plaintiff has claimed consequential reliefs against the defendant no.2 along with the defendant nos.3 and 4, who claimed to be alleged purchasers under the defendant no.2. Therefore, on a parallel reading of the two plaints and the reliefs claimed thereunder, this Court is of the considered view that the issues relating to defendant no.4 or 3 in the second suit is not an issue or not substantially in issue with that of the previous suit. In any event, if the previous suit is decreed, the decree cannot operate as res judicata against the defendant nos.3 or 4, as they are not parties to the previous suit. Therefore, an independent trial in the second suit is required against the defendant nos.3 and 4.

Inasmuch as, admittedly, the defendant nos.3 and 4 claimed their alleged right, title and interest in the property through the defendant no.2. The defendant no.2 is party in both the suits. Since the defendant no.2 is impleaded and present in the second suit, it cannot be construed or held that the defendant nos.3 and 4 are litigating under the same title with the alleged same title that of defendant no.2. Defendant no.2 has filed its written statement and has been contesting the suit with its own defense. Defendant nos.3 and 4 have not filed their written statement in the second suit. On an overall assessment of the facts and circumstances, this Court finds that neither the defendant nos.3 and 4 can be construed to be litigating under the same title of the defendant no.2 and moreover defendant nos.3 and 4 not being parties to the previous suit are disqualified to maintain their respective applications filed under Section 10 of the Code.

Inasmuch as the plea taken by the plaintiff that since the entire payment has not been made by the defendant no. 2 in favour of the plaintiff under the conditional conveyance, the portion of the property sought to be conveyed in favour of the defendant no. 2 has not been conveyed in favour of the defendant no. 2 by operation of Section 55(4)(b) of the Transferred of Property Act, as the title had not past, is also required to be gone into during the trial of the first suit and on the outcome of which the alleged right, title and interest of the defendant nos. 4 and 3 would depend. If such plea of the plaintiff is decided in the affirmative, then in absence of any title on the property in favour of the defendant no. 2, claims of the defendant nos. 4 and 3 would be rendered without any title on the property. Thus, until the title of the defendant no. 2 is clearly adjudicated upon, it cannot be said that the defendant nos. 4 or 3 are litigating on the same title of the defendant no. 2. This Court is therefore of the considered view that when the defendant no. 2 is a party in both the suits, the defendant nos. 4 or 3 would have no right to claim stay of the trial of the second suit. Moreso, when they are not parties in the previous suit.

In the matter of: ASPI JAL (Supra), the Hon’ble Supreme Court had observed as under:-

In the matter of: Bepin Behari Majumdar and others (supra), the Hon’ble Division Bench of this Court had observed as under: -

In the matter of: Adhish Chandra Sinha (supra), the Hon’ble Division Bench of this Court had observed as under: -

In the matter of: Mahadevappa (supra), the Co-ordinate Bench of this Court had observed as under :-

In the matter of: Siba Prasad Jash (supra), the Coordinate Bench of this Court had observed as under :-

In the matter of: Challapalli Sugar Ltd.(Supra), parties were common and same subject-matter was involved in both the suits. In the said judgment all the other judgment namely, AIR 1917 Cal 248, AIR 157 Cal and AIR 75 Cal 411 were considered. It was held that, the subject-matter in controversy was the same which arose from the same contract and same transaction, the ratio of the said judgment would not apply in the facts of this case.

In the matter of: Abdul Gani and Anr. (supra), the case was based on Section 11 of the Code i.e. res judicata in that case the plaintiffs in the second suit where the defendants in the first suit. Therefore, parties were common in both the suits, thus, the ratio of the judgment would not apply in the facts of the instant case.

In view of the forgoing reasons and discussions, this Court is of the firm and considered view that the defendant nos.4 or 3 are not qualified to maintain an application under Section 10 of the Code. The applicants/defendants firstly are not parties in the previous suit and secondly, they cannot claim to be litigating under the same title of the defendant no.2, who is a party in the previous suit. Both the applications are, therefore, devoid of any merit and are not maintainable.

The applicants/defendants have not filed their written statement. The applications filed by them are not only devoid of any merit but also frivolous, harassive and vexatious in nature and have been filed in abuse of the process of law and this Court.

The pendency of these two applications have delayed the trial of the suit.

Considering the nature of the suits, it is directed that both the previous and second suit henceforth shall be heard and considered in an analogous trial.

Accordingly, both the applications being IA No. GA-COM/9/2025 and IA No. GA-COM/11/2026 stand dismissed with cost assessed at Rs.25,000/- each to be paid by the defendant nos.4 and 3 respectively in favour of Calcutta High Legal Services Committee through a banker's instrument within a period of six weeks from date.

Defendant nos.4 and 3 shall provide copies of the money receipt showing payment of cost to the learned Advocate on record for the plaintiff.