SOHAL ENGINEERING WORKS Vs. RUSTOM JAHANGIR VAKIL MILLS COMPANY LIMITED

JUDGEMENT

(1.) By this application the original defendant challenges the order passed by the learned Judge in the City Civil Court (Seventh Court) Ahmedabad whereby he instead of staying the subsequently instituted suit under sec. 10 of the Code of Civil Procedure directed that the subsequently instituted suit should be tried and decided along with the previously instituied suit. The facts giving rise to the present Revision Application in a nutshell are as under:

(2.) The plaintiff Rustom Jehangir Vakil Mills Company Limited placed an order with the defendant for the manufacture of three roll calendar machines to be erected and installed at the defendants cost at its factory on or before 31/03/1974. The Sales Manager of the defendant firm accepted the order at Ahmedabad and received a cheque for advance payment from the plaintiff Company. Under the contract the price was fixed at Rs. 3 10 0 less 5 per cent discount. The advance payment was made to the extent of 30 per cent of the price that is Rs. 88 350 The order was confirmed in writing on 13/11/1973. Thereafter in the month of January 1974 the plaintiff Company inquired about the progress in the manufacture of the machnes. The machines were not manufactured according to the time schedule and could not be delivered to the plaintiff Company upto 31/03/1974 and hence the defendant firm sought extension of time. The plaintiff Company agreed to the extension of time without prejudice to its right to claim additional discount for the defendants failure to deliver the machines on or before the deadline. It appears that thereafter the defendant firm by its letter dated 15/09/1974 informed the plaintiff Company that the machines were ready for inspection and dispatch and asked for payment of Rs. 3 21000 less the advance payment of Rs. 88 350 within eight days from the receipt of the invoice. The plaintiffs were also informed that if they failed to make payment and take delivery of the machines within eight days from the date of invoice the machines shall be diverted to some other party and the plaintiffs will have to wait for another six months for the machines and would also be required to pay according to the prevailing rates. Immediately on receipt of this letter the Sales Manager and Accountant of the defendant firm was contacted and was informed that it did not behove the defendant firm to act in this high handed manner more so after the plaintiff Company had agreed to the extension of time. The negotiations were not fruitful and therefore the plaintiff Company apprehending that the defendant firm may divert the machines as threatened by its letter filed suit No. 2558 of 1974 to restrain the defendant firm its partners and employees from diverting the three roll calendar machines manufactured for the plaintiff Company to any third party. In this suit the defendant firm entered an appearance and filed a contesting written statement at Exhibit 13. It appears that during the pendency of this suit as the machines were not delivered to the plaintiff Company another Suit No. 3429 of 1976 was filed on the basis of the very same contract to recover an amount of Rs. 4 0 0 by way of damages with 17 per cent per annum interest and costs from the defendant firm. The defendant firm has contested this suit by its written statement Exhibit 14. While these two suits were pending in the City Civil Court at Ahmedabad it appears that in the subsequently instituted suit a Chamber Summons was taken out by the plaintiff Company Exhibit 15 for an order or direction that both the suits be consolidated and evidence be recorded in either of the two suits. Initially the learned Judge in the City Civil Court passed an order of amalgamation of the two suits in the absence of the learned advocate for the defendant firm. However subsequently the learned advocate for the defendant firm appeared and gave an application Exhibit 35 to set aside the exparte order and to dispose of the Chamber Summons on merits after giving him an opportunity to contest the same. The learned Judge in the City Civil Court heard the learned advocate for the defendant firm and ultimately passed the very same order directing the amalgamation of the two suits which were pending before him between the same parties. It may also be mentioned that on the very same day the defendant firm had taken out a Chamber Summons praying that the subsequently instituted suit be stayed under sec. 10 of the Code of Civil Procedure. The learned trial Judge rejected that application made at a belated stage on the ground that since he had acceded to the plaintiffs request for consolidating the two suits there was no question of staying the subsequently instituted suit. These orders passed by the learned trial Judge are the subject matter of challenge in this Revision Application.

(3.) Both the suits have been instituted by the opponent herein and they are against the petitioner firm. They arise out of the very same contract for the manufacture and supply of three roll calendar machines by the defendant firm. The first suit was instituted by the plaintiff Company as it was apprehended that the defendant firm was likely to divert the three roll calendar machines manufactured in pursuance of the contract between the parties to a third party instead of delivering and installing them at the premises of the plaintiff Company 35 per the contract. The three roll calendar machines it appears are not easily available in the market and as the plaintiff apprehended that they will have to wait for a considerably long time if the machines are diverted as threatened by the defendant firm the plaintiff Company instituted Suit No. 2558 of 1974 with a view to preventing or restraining the defendant firm from carrying out the threat. By instituting the said suit the plaintiff Company desired to prevent the defendant firm from committing the threatened breach of the contract. The subsequent Suit No. 3479 of 1976 was instituted when it was realised that notwithstanding the injunction granted by the Court in the previously instituted suit the defendant firm was not ready and willing to perform its part of the contract and hence there was no option for the plaintiff Company but to claim damages for nonperformance of the contract from the defendant firm. The amount of damages worked out by the plaintiff Company came to Rs. 5 75 258 the claim was restricted to Rs. 4 0 0 the relief clause of the suit. It is therfore clear from the aforesaid facts that both the suits arose out of the very same contract. In the first suit the plaintiff came to Court contending that there was a subsistng contract and that it was apprehended that the defendant firm a party to the contract was likely to commit a breach of the contract. To restrain the defendant firm from so doing the plaintiff Company instituted the suit for an injunction not to divert the machines to a third party. The subsequently instituted suit is based on the allegation that the defendant firm has failed to honour its commitments under the contract and as the plaintiff Company cannot wait indefinitely for the due performance of the contract by the defendant firm it is entitled to damages from the latter for nonperformance of the contract. According to the plaintiff Company the estimated damages work out to Rs. 5 75 258 but they have chosen to restrict the claim to Rs. 4 0 0 only. It is therefore clear that the reliefs claimed in the two suits by the plaintiff Company arise out of the contract reached by the parties as pleaded in respective plaints. In both the suits therefore the plaintiff Company will have to prove the contract as pleaded in the plaints if the same becomes necessary having regard to the contentions taken in the respective written statements filed by the defendant firm. In the previously instituted suit the question to be considered by the Court will be whether in the facts and circumstnces of the case there was a reasonable apprehension of the defendants committing a breach of the contract and if yes whether the plaintiff Company was entitled to restrain it from so doing. In the subsenquently instituted suit the question which will arise the consideration will be whether the defendant has been guilty of nonperformance of the contract and if yes whether the plaintiff Company is entitled to claim charges for failure of the defendant firm to perform the contract. In the subsequently instituted suit evidence regarding the quantum of damages will also have to be led by the plaintiff Company.