Section 10 CPC stay refused where civil suit and company petition involved distinct causes of action and reliefs.

A civil suit will not be stayed under Section 10 CPC merely because an earlier company petition under Sections 397 and 398 of the Companies Act, 1956 is pending where the two proceedings rest on different causes of action and seek different reliefs. The company petition concerned oppression and mismanagement, including a scheme and appointment of directors, while the suit involved separate reliefs against nominated directors. Proceedings under Section 397 were treated as a special code, so civil litigation cannot be used to bypass that statutory route. The stay application was refused.

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Issues: Whether proceedings in the civil suit should be stayed under Section 10 of the Code of Civil Procedure, 1908 in view of the earlier company petition under Sections 397 and 398 of the Companies Act, 1956; and whether the reliefs and controversy in the two proceedings were substantially the same.

Analysis: The application for stay was considered on the footing that the suit had been filed before the company petition. The Court found that the causes of action in the two matters were essentially different, the company proceeding being founded on oppression and mismanagement, with prayers for a scheme and appointment of directors, while the suit sought different reliefs against nominated directors. The Court also treated proceedings under Section 397 of the Companies Act, 1956 as a special code, and held that where the relief sought can be granted only in such company proceedings, the civil suit cannot be used to circumvent that statutory procedure.

Conclusion: The prayer for stay under Section 10 of the Code of Civil Procedure, 1908 was refused.

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