MANOHAR LAL CHOPRA V. RAI BAHADUR RAO RAJA SETH HIRALAL INSC 323; AIR 1962 SC 527; 1962 Suppl.SCR 450

Appeal by special leave from the judgment and order dated May 10, 1955, of the former Madhya Bharat High Court in Misc. Appeal No. 26 of 1954.

S. N. Andley, Rameshwar Nath and P. L. Vohra, for the appellant.

S. T. Desai, K. B. Bhatt and B. R. L. Iyengar, for the respondent.

1961. November 16. The Judgment of Wanchoo, Das Gupta and Dayal,JJ., was delivered by Dayal J. Shah J., delivered a separate Judgment. The appellant and respondent formed a partnership in Indore for coal mines and cement manufacturing but the partnership was dissolved in 1945. The appellant was obligated to account for all money contributed by the respondent, but only if the accounts were verified and audited. On September 29, 1945, the respondent sent a letter to the appellant requiring explanations about the colliery's accounts within 3 months. The notice claimed the accounts were improperly maintained and falsified which were causing wrongful loss and gain. The appellant denied the allegations and requested a meeting with the respondent within ten days from the letter. In 1948, the appellant filed a suit for recovery of Rs. 1,00,000/- from the respondent for his share in the partnership firm 'Diamond Industries'. The respondent filed a petition for stay of the suit, but this was rejected. In 1949, the respondent filed a Civil Original Suit No. 71, seeking a decree for Rs. 1,90,519-0-6 and further interest on settled accounts. The appellant was directed to provide true and full accounts of the partnership.Issues were struck on February 4, 1950. The first two issues are:

"1. Has this Court jurisdiction to entertain and try this suit? 2. Has the plaintiff rendered and satisfactorily explained the accounts of the partnership in terms of the deed of dissolution of partnership ?" In December 1951, the respondent applied in the Court at Asansol for the stay of that suit in the exercise of its inherent powers. The application was rejected on August 9, 1952. The learned Sub-Judge held:

"No act done or proceedings taken as of right in due course of law is 'an abuse of the process of the Court' simply because such proceeding is likely to embarass the other party." He therefore held that there could be no scope for acting under s. 151, Code of Civil Procedure, as s. 10 of that Code had no application to the suit, it having been instituted earlier than the suit at Indore. The High Court of Calcutta confirmed this order on May 7, 1953, and said:

"We do not think that, in the circumstance of these cases and on the materials on record, those orders ought to be revised. We would not make any other observation lest it might prejudice any of the parties." The appellant applied to the Indore Court for a stay on a suit filed by him in the Court at Asansol. The respondent opposed the application on three grounds: the court alone could decide disputes, the court at Asansol was not an internal court, and the two suits were of different nature. The application was rejected on July 5, 1951, and the High Court of Madhya Bharat confirmed the order on August 20, 1953. The respondent then applied under s. 151, Code of Civil Procedure on September 14, 1953, to restrain the appellant from continuing the proceedings in the suit filed by him in the Court at Asansol. It may be mentioned that the respondent did not state in his application that his application for the stay of the suit at Asansol had been finally dismissed by the High Court of Calcutta and that that Court had directed the trial Court to decide the issue of jurisdiction at an early date. The appellant, too, in his objection, did not specifically state that the order rejecting the respondents's stay application had been confirmed by the High Court at Calcutta and that that Court had directed for an early hearing of the issue of jurisdiction.

The learned Additional District Judge, Indore, issues interim injunction under O. XXXIX, Code of Civil Procedure, to the appellant restraining him from proceeding with his Asansol suit pending decision of the Indore suit, as the appellant was proceeding with the suit at Asansol in spite of the rejection of his application for the stay of the suit at Indore, and , as the appellant wanted to violate the provision in the deed of dissolution about the Indore Court being the proper forum for deciding the dispute between the parties. Against this order, the appellant went in appeal to the High Court of Judicature at Madhya Bharat, contending that the Additional District Judge erred in holding that he was competent to issue such an interim injunction to the appellant under O. XXXIX of the Code of Civil Procedure and that it was a fit case for the issue of such an injunction and that, considering the provisions of O. XXXIX, the order was without jurisdiction.

The High Court dismissed the appeal by its order dated May 10, 1955. The learned Judges agreed with the contention that O. XXXIX, r. 1 did not apply to the facts of the case. They, however, held that the order of injunction could be issued in the exercise of the inherent powers of the Court under s. 151, C.P.C. It is against this order that the appellant has preferred this appeal, by special leave.