1977 PLP 166 (SCMR)

MUHAMMAD GUL, J.‑This appeal by special leave of this Court arises out 'of an application made by the appellants herein under section 10 of the Code of Civil Procedure in Suit No. 383 of 1970 by the respondent herein in the High Court at Karachi. 'The appellant No. 1 herein is a private limited Company engaged in the business of manufacturing sweets and confectionary in Islamabad. By an agreement dated 1‑2‑1969 it appointed the respondent with its head office at Karachi as its sole selling agent for its products. It appears that shortly after the above agreement, appellant No. 1 was in financial straits and therefore secured a loan of Rs. 1,50,000 from the respondent The loan was agreed to be repaid by monthly instalments of Rs, 25,000 as per arrangement set out in a letter dated 25‑8‑1969 which was confirmed by a subsequent letter dated 28‑8‑1969. By way of collateral security appellant, 2 and 3 pledged their shares of the nominal value of Rs. 2,00,000 in the share capital of appellant No.

1. On 4‑9‑1969 the respondent wrote to the appellants that unless the entire loan was repaid by 30‑6‑1970, the pledged shares with the respondent as collateral security for the loan shall be transferable to the respondent on its request. Subsequent to the above intimation, the agreement of agency between appellant 1 and the respondent was terminated, on 21‑11‑1969. By means of a letter of even date appellant 1 undertook to give a bank guarantee to the respondent to cover certain payments due to the respondent including the amount of the aforesaid loan. These undertakings were however, not fulfilled. No bank guarantee as promised, was furnished. This led to a further dispute between the parties culminating in the institution of Suit No. 383 of 1970 on 3‑9‑1970 by the respondent against the three appellants, for the recovery of Rs. 1,62,949.61 on account of said loan and interest charges. It seems however, that the appellants in anticipation of the suit by the respondent, earlier filed a suit in the Court of Senior Civil Judge, Rawalpindi in which the appellants claimed the following relief, namely:‑‑ (1) That it be declared that the respondent herein is not entitled it the bank guarantee in respect of the value of stocks lying with the respond ent as the selling agent of the appellant No. 1 and for the loan of Rs. 1,50,000. (2) that the respondent be restrained by injunction from demanding the bank guarantee from the appellants and from selling and distribut ing the manufactured products of the appellants and lying with respondent; and (3) a preliminary decree for accounts against the respondent with regard to the stocks lying with the respondents and a decree for damages. It appears that on the basis of their earlier suit at Rawalpindi, the appellants applied under section 10 of the Code of Civil Procedure in the High Court at Karachi for the stay of proceedings in the suit for the recovery of Rs. 1,62,949.61. A learned Single Judge by order dated 11‑5‑1971 refused the appellants' request for the stay of the suit on the ground that the rival claims in the two counter‑suits between the parties were entirely different and therefore, the provisions of section 10 are not at all attracted. On a Letters Patent Appeal being filed, the above view was upheld by a Division Bench of the High Court by its judgment dated 10‑5‑1972. Leave was granted in the case because of divergence in the judicial opinion on the legal question which also appeared to be of first impression so far as this Court was concerned. We have heard at some length Mr. M. Fazlur Rehman, in support of this appeal but we found it without substance. A plain reading of section 10, C. P. C. makes it abundantly clear that an essential condition for the application of the section is that the matter in issue in the subsequent suit is "also directly and substantially in issue in the previously instituted suit between the same parties." It may be true that the two suits are between the same parties but that is by all. There is no similarity between the matters directly and substantially in issue in the two suits. The causes of action in the two suits are entirely different. In the suit instituted by the respondent in the High Court at Karachi the relief claimed is about the recovery of loan with interest due thereon on a default by appellant No. 1 to pay the monthly instalments. Indeed, the respondent had nut asked for any bank guarantee for the repayment of loan. The view taken by the High Court therefore, is unassailable. There is thus no merit in this appeal and is hereby dismissed with costs. Appeal dismissed.