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Suit No. 465 of 1974, decided on 4th November 1975.

Civil Procedure Code (V of 1908)

-- S. 10-Plaintiff's suit for recovery of loan advanced to defendants (borrowers of loan and guarantors) filed at K and defendants' suit against plaintiff filed at L praying for declaration and permanent injunction that defendants' demand regarding repayment of loan in lump sum was void and unjustified - Contention that matter- in controversy being substantially in issue in suit for declaration filed at L, suit at K was liable to be stayed-Held: Subject-matter of suit not identical in entirety-Suit filed at L could not decide liability of guarantors and many allied matters-Not only identity of subject matter different in two suits but parties and even relief claimed in two suits totally different-Party could not by merely filing a declaratory suit valued at a small sum get indefinitely stayed recovery of loan involving a very large amount on plea of a common issue being involved in two suits.

The matters in issue in the two suits are not identical in entirety and the former suit filed cannot decide the liability of the guaran tors and many such allied matters. Even the subject-matter of the suits is not the same as what has been sought in the former suit is a declaration that demand of the repayment of the loan in lump-sum is null and void. There is thus neither identity of the subject-matter nor the parties and even the reliefs claimed are totally different. By merely filing a declaratory suit valued at Rs. 1,000 a stay for recovery of a loan amount of more than Rs. 52,00,000 cannot be got stayed indefinitely on the plea of there being a common issue in the two suits.

Sohrab Merwanji Modi and another v. Mansata Film Distributors and another A I R 1957 Cal. 727; L. Nem Kumar Agarwal v. Nem Kumar and another A I R 1958 All. 207; A I R 1962 S C 199; Muhammad Younas v. Nargis Sultana P L D 1970 Lah. 41; Kassamali Alibhoy v. Shaikh Abdul Sattar P L D 1966 Kar. 13; Durgaprasad v. Kantichandra Mukerji A I R 1935 Cal. 1; Nigar Pictures v. United Brothers P L D 1970 Kar. 770; Janana De Malucho Textile Mills Ltd., Kohat v. Waqar Ahmed Chaudhry P L D 1972 S C 34; Jamini Kanta Roy Chowdhury and others v. Aswini Kumar Haldar and others P L D 1961 Dacca 344; Ch. Muhammad Afzal v. Mst. Sardar Begum and others P L D 1949 Lah. 16; I. D. P. B. v. Nishat Chemical Industries Suit No. 460 of 1974 and Burmah Eastern Ltd. v. Burmah Eastern Employees' Union and others P L D 1967 Dacca 190 ref.

A. K. Brohi for Plaintiffs.

Haq Nawaz Raja for Respondents Nos. 1 to 6.

Namazie for Respondent No. 7 (in Civil Miscellaneous Appeal No. 1335 of 1975).

Date of hearings 22nd October 1975.

This is an application under section 10 of the C. P. C. filed on behalf of the defendants for stay of the present suit on the ground that defendant No. 1 has already filed Suit No. 455/1 of 1974 in the Court of Senior Civil Judge, Lahore for a declaration and since the matter in issue in the present suit is directly and substantially in issue in the previously instituted suit at Lahore, proceedings in the present suit be stayed.

2. The facts in brief are that in the present suit filed on 2-11-1474 Pakistan International Credit and Investment Corporation Limited, Karachi advanced to defendant No. 1, Modern Embroidery & Textile Mills Ltd., Lahore a loan in foreign currency amounting to Deutche Marks 1050 000 at 7 %. per annum payable in 26 half-yearly instalments. Defendant No. 2, a subsidiary of defendant No. 1, and defendants 3 to 7 guaranteed the repayment of this loan to the plaintiff: Defendant No. 1 also deposited with the plaintiff at Karachi documents of title creating equitable mortgage of their properties and the obligations were also to be discharged at Karachi as per para. 37 of the plaint and memorandum of deposit of title deed's accompaniment H'. The plaintiffs accordingly filed this suit in Karachi for recovery of Rs. 5,2,18,263.68 against defendants Nos. 1 to 7.

3. Defendant No. 1, in the present suit had, however, instituted a suit being Suit No. 455/1 of 1974 in the Court of Senior Civil Judge, Lahore on or about 12th of July 1974 against two defendants only namely, P. I. C. I. C. Limited, Lahore & P. I. C. 1. C. Limited, Karachi. This suit was for a declaration and permanent injunction that the demand of the defendants regarding repayment of the loan was void and unjustified as it was for payment in a lump sum and as such it was beyond the control of the plaintiff to make the payment for various reasons. The plaintiff had valued this suit for a declaration at Rs. 1,000.

4. It has accordingly been argued by Mr. Haq Nawaz Raja on behalf of defendant No. 1 that the present suit for recovery of the loan amount in Pakistan rupees be stayed under section 10, C. P. C. as the matter in con troversy is substantially in issue in the suit for declaration filed before Senior Civil Judge, Lahore. Mr. Haq Nawaz Raja has, in this connection, referred to some decisions of Indian High Courts. The learned counsel has first referred to the case of Shorab Merwanji Modi and another v. Mansata Film Distributors and another (A I R 1957 Cal. 727), to show that the matter may be directly and substantially in issue though different reliefs may have been claimed in the two suits and the words "same parties" mean the parties as between whom the matter substantially in issue has arisen. Complete identity of either the subject-matter or the parties is not required. The learned counsel has then quoted L. Nem Kumar Agarwal v. Nem Kumar and another (A I R 1958 All. 207) on the same point that 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. The learned counsel has then pointed out that although in the agreement between the parties it was provided that any suit with regard to a dispute arising between the parties would not be operative as it would be against public policy, as no body could oust the jurisdiction of any Court or confer jurisdiction by mutual agreement.

5. It has on the other hand been pointed out by Mr. A. K. Brohi on behalf of the plaintiff that it is not the case of defendant No. I that the Court at Karachi has no jurisdiction and only the Court at Lahore has such jurisdiction. If it were so, the learned counsel would have filed an application not under section 10, C. P. C. for stay of proceedings, but he would have moved the Court for either return of the plaint or rejection of the plaint. The fact that the title deeds with regard to the equitable mortgage were deposited with the plaintiff at Karachi and the obligation under the contract had to be discharged at Karachi would also show that part of the cause of action had arisen at Karachi and this Court could, therefore, properly deal with this matter. Mr. Brohi has also pointed out that he is not relying on any clause in the contract that a suit arising out of any dispute would be filed at Karachi, as consent of the parties can neither invest nor divest a Court of its jurisdiction, as held in A I R 1962 S C 199. The learned counsel has then pointed out that section 10 of the C. P. C. has hardly any application to the facts of the present case. Not only should the matter in issue in both the suits be identical in its entirety, but even the reliefs claimed should be common and there should also be not only identity of the 'subject-matter' but also the parties' in both the suits. Various principles have been laid down from time to time for stay of suit under this section. In Muhammad Younas v. Nargis Sultana (P L D 1970 Lah. 41) Waheeduddin, C. J., as he then was, observed that it was not sufficient for stay of the subsequent suit that one of the several issues was common, and that an essential requirement of the section was the identity of entire subject-matter of the two suits. Every matter in dispute should be directly and substantially in issue in both the suits. Thus what is required is complete identity of the entire subject-matter in the two suits. In the present case, however, the present suit is for recovery of loan amount of Rs. 5,218,263.68 and it is a money suit, while the suit filed in Lahore is merely a declaratory suit valued at Rs. 1,000. The questions regarding repayment being guaranteed and the liability of the guarantors as also the equitable mortgage of properties created, does not come in the picture in the suit filed at Lahore. The main relief sought in that suit filed at Lahore is a declaration that the repayment of the amount should not be demanded in a lump sum'.

6. In Kassamali Alibhoy v. Shaikh Abdul Sattar (P L D 1966 Kar. 13) it was observed that section 10, C. P. C. for its application requires a previously instituted suit in which the matter in issue is also directly and substantially in issue in the subsequent suit, that parties in both the suits should be the same and it further requires that the Court in which suit is previously instituted should have jurisdiction to grant the relief claimed in a subsequent suit. Thus the essential requirement is that the second suit should be parallel to the first suit. Therefore, when a party claims interference of the Court to stop an action, it lies upon that party to show the Court that a multiplicity of action is vexatious and this burden entirely lies upon the party claiming the stay. For this purpose reliance was placed on Durgaprasad v. Kantichandra Mukerji (A I R 1935 Cal. 1) and Manohar Lal Chapra v. Rai Bahadur Ras Raja Seth Hiralal (AIR 1962 S C 527). In Nigar Pictures v. United Brothers (P L D 1970 Kar 77A) the same principles have been emphasised by Dorab Patel, J. that in order to obtain a stay of further proceedings in a suit, the defendants have to show that the question in issue and parties in two suits are the same. If the cause of action in two suits was different and the parties were also different no such stay could be ordered. In Janana De Malucho Textile Mills Ltd., Kohat v. Wagar Ahmad Chaudhry (P L D 1972 S C 34), the appellant had filed a suit in the Court of Senior Civil Judge, Kohat for recovery of Rs. 15,000 from the respondent. On a subsequent date, the respondent filed a suit in the Court of Civil Judge, Lyallpur for rendition of accounts against the appellant and recovery of such sums as may be found due to him. It was held that the two suits should be allowed to proceed on their own merits and that it was incorrect to restrain the appellant from proceeding with his suit filed at Kohat. In Jamini Kanta Roy Chowdhury and others v. Aswini Kumar Haldar and others (P L D 1961 Dacca 344) the same principle was reiterated that in order to attract the provisions of section 10, C. P. C. the entire subject-matter of the two suits should be the same. In a similar decision reported in Ch. Muhammad Afzal v. Mst. Sardar Begum and others (P L D 1949 Lah. 16) Cornelius, J. (as he then was) observed, that where the first suit was for mere declaration and the second suit further alleged that the plaintiff was 'mutawalli' of the waqf, the matter in issue in the second suit was not precisely the same as in the first suit and the mere fact that one or two issues were common to the two suits would not be sufficient for bringing the suit within the scope of section 10 of C. P. C. In a recent decision in the case of L D. P. B. v. Nishat Chemical Industries (Suit No. 460/741 my learned brother Fakhruddin, J. also observed that for stay under section 10, C. P. C. it was necessary that every matter in dispute should be directly and substantially in issue in the two suits; that it was not enough that the substantial issue, should be the same in both the suits, as held in some decisions of Indian High Courts. The decision of Waheeduddin Ahmad, C. J , in P L D 1970 Lah. 41, referred to earlier in this order, that there should be complete identity of the subject-matter was thus accepted as compared to some earlier Indian deci sions. A suit for declaration under section 42 of the Specific Relief Act is filed for determination of any legal character or any right as to any property and subject-matter of such a suit would be quite different from a suit for recovery of certain amount of money by way of repayment of a loan. As held in Burmah Eastern Ltd. v. Burmah Eastern Employees' Union and others (P L D 1967 Dacca 190), section 42 does not permit unrestricted right to have any declaration and the payment of any amount under a loan agreement could hardly form subject-matter of such a declaration.

7. I might state in conclusion that the matters in issue in the two suits are thus not identical in entirety and the former suit filed at Lahore cannot decide the liability of the guarantors and many such allied matters Even the subject-matter of the suits is not the same as what has been sought in the former suit is a declaration that demand of the repayment A of the loan in lump sum is null and void. There is thus neither identity of the subject-matter nor the parties and even the reliefs claimed are totally different. By merely filing a declaratory suit valued at Rs. 1,000 a stay for recovery of a loan amount of more than Rs. 52,00,000 cannot be got stayed indefinitely on the plea of there being a common issue in the two suits. The application for stay is accordingly rejected.

S. A. H. Application rejected.

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