INDIAN BANK Vs. MAHARASHTRA STATE COOPERATIVE MARKETING FEDERATION LIMITED

JUDGEMENT

(1.) Leave granted.

(2.) The question which arises for consideration in these appeals is whether the bar to proceed with the trial of subseqently 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.

(3.) The respondent Federation applied to the appellant Bank on 5-6-1989 to open an Irrevocable Letter of Credit for a sum of Rs. 3,78,90,000/- in favour of M/s. Shankar Rice Mills. Pursuant to that request the Bank opened an Irrevocable Letter of Credit on 6-6-1989. The agreed arrangement was that the documents drawn under the said Letter of Credit when tendered to the appellant Bank were to be forwarded to the Federation for their acceptance and thereafter the Bank had to make payments to M/s. Shankar Rice Mills on behalf of the Federation. On 6-2-1992 the Bank filed Summary Suit No. 500 of 1992 in the Bombay High Court under Order 37 of the Code against the Federation for obtaining a decree for Rs. 4,96,58,160/- alleging that the said amount has become recoverable under the said Letter of Credit. The Bank took out summons for judgment (No. 278 of 1992). The Federation appeared before the Court and took out Notice of Motion seeking stay of the summary suit on the ground that it has already instituted a suit being Suit No. 400 of 1992 against the Bank for recovery of Rs. 3,70,52,217.88 prior to the filing of the summary suit.