S. 21 CPC | Subsequent Suit Seeking Further Reliefs Has To Be Stayed If There Is 'Identity Of Matter' In Previous Litigation: Delhi High Court

The Delhi High Court recently delved into an issue relating to staying of subsequent suit under Section 10 of the Civil Procedure Code, 1908 where there is identity of matter with previous litigation.

Section 10 CPC stipulates that no Court shall proceed with the trial of any suit in which the matter in issue is also directly and substantially in issue in a previously instituted suit between the same parties, in the same or any other Court in India.

Justice Asha Menon remarked that the fundamental test that is to be applied to determine whether Section 10 was applicable or not, is to see whether, on the final decision being reached in the first suit, such decision would operate as res-judicata in the subsequent suit. She observed,

"Where there was "identity of matter" in both the suits i.e., the whole of the subject matter in both the proceedings were identical, even if further reliefs were claimed in the subsequent suit, it would be immaterial and the second suit would necessarily have to be stayed."

Background

Plaintiff H.S. Sahni filed a suit as the sole proprietor of M/s M.K. Auto Sales Corporation against Mukul Singhal and Gaurav Singhal, the partners of M/s M.G. Cables (India).

The plaintiff claims that since 1986 he has been in the manufacture of automobile parts under the trade name of M/s Auto Sales Corporation. The plaintiff applied for registration of his trademarks' M.G.' and 'M.G.I.' stating 'user' since 1989, since the plaintiff "s firm had obtained Sales Tax registration in that year. Over the years, the public has begun to identify the trademarks with the goods and services of the plaintiff and his firm.

It was alleged that the defendants are manufacturing and marketing, and selling identical products as the plaintiff under the impugned trademark 'M.G. Cable' and the trade name 'M.G. Cables (India).' The trademark and tradename are nearly identical/deceptively similar to the plaintiff's marks.

Therefore, the plaintiff sought protection from infringement of these trademarks and a restraint order against the defendants from using the impugned trademark and trade name or any other mark or trademark nearly identical/deceptively similar to the plaintiff's trademark in any product or service, especially identical products.

The defendant pointed out that contended that the present suit was barred and not maintainable and was liable to be stayed, inasmuch as the prior suit filed by the defendants related to the same issue, in which certain directions had been issued by the Trial Court and against which appeals were pending.

Findings by the Court

In answering whether the present suit is liable to be stayed under Section 10 of the C.P.C., the Court relied on the apex court decision in Aspi Jal & Anr. Vs. Khushroo Rustom Dadyburjor. In the said case, the Supreme Court has reiterated that the negative expression in Section 10 C.P.C. makes the provision mandatory. The Court in which the subsequent suit has been filed is prohibited from proceeding with the trial of that suit.

The Court noted that the decision of Supreme Court in Aspi (Supra) reaffirmed that the basic purpose and the underlying object of Section 10 of the Code are to prevent the courts of concurrent jurisdiction from simultaneously entertaining and adjudicating upon two parallel litigations in respect of the same cause of action, same subject matter and the same relief.

It observed that the objective is to avoid the possibility of contradictory vessels by two courts regarding the same relief and to protect the defendant from a multiplicity of proceedings.

On the perusal of the prayers of both the suits, the Court noted that it reflects that both sides claim a right to their respective trademark, alleging that the other side was using a deceptively similar trademark.

Therefore, it is clear that the first suit's subject matter and this suit are the same. It held,

"The concurrent trials will lead not only to the multiplicity of litigation but also to the possibility of contrary decisions where in one suit, one party is allowed to use its trademarks and in the second suit, the same party is injuncted from using the same."

In view of the settled law in relation to the applicability of Section 10 of the CPC, there is no doubt that this suit has to be stayed, it ordered.

Case Title: H.S. Sahni v. Mukul Singhal & Ors.

Citation: 2022 LiveLaw (Del) 127

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