Dahiben vs Arvindbhai Kalyanji Bhanusali

 

         The landmark judgment of the Supreme Court of India on the legality of rejection of plaint under Order VII Rule 11.

        The Hon’ble Supreme Court dismissed the Civil Appeal of the appellant with cost of Rs. 1,00,000 (One Lakh) payable to the Respondent nos. 2 and 3.

                        

                
FACT

        The fact is that the plaintiff/appellant sold a property to Respondent no.1 vide registered Sale Deed dated 2.07.2009 in consideration of Rs. 1,74,02,000/- . The respondent no. 1/purchaser issued 36 cheques towards payment of sale consideration in favour of seller/plaintiff/appellant during the period of 7.07.2008 to 2.07.2009, prior to execution of Sale Deed. Then, the buyer/respondent no. 1 subsequently sold the property to other respondents in consideration of Rs. 2,01,00,000 vide registered Sale Deed, dated 1.04.2013.

        The appellant then file Special Civil Suit in 2014 against the purchaser and subsequent purchaser(respondent nos. 2 and 3) praying for cancellation of Sale Deed of 2009 and declaring the Sale Deed as illegal, void and ineffective and not binding on them on the ground that the sale consideration had not been paid fully by respondent no. 1. And also prayed for restoration of physical possession back to plaintiff/appellant.

        The subsequent buyer filed an application for rejection of plaint under Order VII  Rule 11 (a) and (d) of Code of Civil Procedure, 908 contending that the suit filed by plaintiff was barred by limitation and no cause of action had been disclosed in the plaint.

        It is pertinent to note here that plaintiff had admitted, Sale Deed was executed on 2.07.2009 in favour of Respondent no. 1 before the Sub-Registrar, Surat. The only dispute raised was that the plaintiff had not received a part of the sale consideration (the plaintiff received only Rs. 40,000/- out of sale consideration).

        It was submitted by respondents if the Sale Deed was challenged, then the suit ought to have been filed within three years i.e, on or before 2.07.2012.

        It was also submitted that plaintiff had participated in the proceedings before the Revenue Officer for transfer of the suit property in the revenue records in favour of respondent no. 1.

JUDGMENT OF TRIAL COURT

        The Trial Court carried out analysis on the averments of the plaintiff in detail. After going through averments and on the basis of settled position of law, the Court allowed the application of the respondent nos. 2 and 3 under Order VII Rule 11 (d), CPC.

        The Trial Court held that the period of limitation for filing the suit was 3 years from the date of execution of Sale Deed as per Article 58 and 58 of the Limitation Act, 1963.

        The Trial Court also held that the plaintiff ought to have filed complaint or proceedings initiating for recovery of the unpaid sale consideration and there was nothing on record to show that the plaintiffs had made complaint for a period of over 5 years.

        Aggrieved by the judgment of Trial Court, the plaintiffs filed First Appeal before the High Court of Gujarat At Ahmedabad.

        The High Court too was of the view that the suit could not be permitted to be continued because the suit in respect of the Sale Deed was held to be barred by law of limitation. The High Court rightly affirmed the findings of the Trial Court.

        Hence the appellant filed Civil Appeal before the Supreme Court. The Court said that the remedy under Order VII Rule 11 is an independent and special remedy, wherein the Court is empowered to summarily dismiss a suit at the threshold, without proceeding to record evidence, conducting a trial, on the basis of the evidence adduced, if it is satisfied that the action should be terminated on any of the ground contained in the provision.

         It was also said “ the underlying object of Order VII Rule 11 (a) is  that if in a suit, no cause of action is disclosed, or the suit is barred by limitation under Rule 11 (d), the Court would not permit the plaintiff to unnecessarily protract the proceedings in the suit. In such a case, it would be necessary to put an end to the sham litigation, so that further judicial time is not wasted”.

        The Court referred to Azhar Hussain vs. Rajiv Gandhi (1986) followed in Manvendrasinhji Ranjitsinhji Jadeja v. Vijaykunverba, 1998 SCC OnLine Guj 281 : (1998) 2 GLH 823] this Court held that the whole purpose of conferment of powers under this provision is to ensure that a litigation which is meaningless, and bound to prove abortive, should not be permitted to waste judicial time of the Court.

The Court held in the following words : 
“12. … The whole purpose of conferment of such powers is to ensure that a litigation which is meaningless, and bound to prove abortive should not be permitted to occupy the time of the court, and exercise the mind of the respondent. The sword of Damocles need not be kept hanging over his head unnecessarily without point or purpose. Even in an ordinary civil litigation, the Court readily exercises the power to reject a plaint, if it does not disclose any cause of action.”

 
23.5. The power conferred on the court to terminate a civil action is, however, a drastic one, and the conditions enumerated in Order 7 Rule 11 are required to be strictly adhered to.
 
23.6. Under Order 7 Rule 11, a duty is cast on the court to determine whether the plaint discloses a cause of action by scrutinising the averments in the plaint [Liverpool & London S.P. & I Assn. Ltd. v. M.V. Sea Success I, (2004) 9 SCC 512] , read in conjunction with the documents relied upon, or whether the suit is barred by any law.
 
23.9. In exercise of power under this provision, the Court would determine if the assertions made in the plaint are contrary to statutory law, or judicial dicta, for deciding whether a case for rejecting the plaint at the threshold is made out.
 
23.10. At this stage, the pleas taken by the defendant in the written statement and application for rejection of the plaint on the merits, would be irrelevant, and cannot be adverted to, or taken into consideration. [Sopan Sukhdeo Sable v. Charity Commr., (2004) 3 SCC 137]
 
23.11. The test for exercising the power under Order 7 Rule 11 is that if the averments made in the plaint are taken in entirety, in conjunction with the documents relied upon, would the same result in a decree being passed. This test was laid down in Liverpool & London S.P. & I Assn. Ltd. v. M.V. Sea Success I, (2004) 9 SCC 512] which reads as : (SCC p. 562, para 139)
 
“139. Whether a plaint discloses a cause of action or not is essentially a question of fact. But whether it does or does not must be found out from reading the plaint itself. For the said purpose, the averments made in the plaint in their entirety must be held to be correct. The test is as to whether if the averments made in the plaint are taken to be correct in their entirety, a decree would be passed.”
 
23.12. In Hardesh Ores (P) Ltd. v. Hede & Co., (2007) 5 SCC 614 the Court further held that it is not permissible to cull out a sentence or a passage, and to read it in isolation. It is the substance, and not merely the form, which has to be looked into. The plaint has to be construed as it stands, without addition or subtraction of words. If the allegations in the plaint prima facie show a cause of action, the court cannot embark upon an enquiry whether the allegations are true in fact. D. Ramachandran v. R.V. Janakiraman [D. Ramachandran v. R.V. Janakiraman, (1999) 3 SCC 267; Vijay Pratap Singh v. Dukh Haran Nath Singh, AIR 1962 SC 941.
 
23.13. If on a meaningful reading of the plaint, it is found that the suit is manifestly vexatious and without any merit, and does not disclose a right to sue, the court would be justified in exercising the power under Order 7 Rule 11 CPC.
 
23.14. The power under Order 7 Rule 11 CPC may be exercised by the court at any stage of the suit, either before registering the plaint, or after issuing summons to the defendant, or before conclusion of the trial, as held by this Court in the judgment of Saleem Bhai v. State of Maharashtra, (2003) 1 SCC 557 . The plea that once issues are framed, the matter must necessarily go to trial was repelled by this Court in Azhar Hussain case. Followed in Manvendrasinhji Ranjitsinhji Jadeja v. Vijaykunverba, 1998 SCC OnLine Guj 281 : (1998) 2 GLH 823].
23.15. The provision of Order 7 Rule 11 is mandatory in nature. It states that the plaint “shall” be rejected if any of the grounds specified in clauses (a) to (e) are made out. If the court finds that the plaint does not disclose a cause of action, or that the suit is barred by any law, the court has no option, but to reject the plaint”

Hence, upon analysis, findings and observation of the previous decisions, the Hon’ble Apex Court affirmed the decision of the Trial Court and High Court.

        The Hon’ble also termed the present case as a classic case, because the plaintiffs by clever drafting of the plaint, attempted to make out an illusionary cause of action, and bring the suit within the period of limitation. This is because the plaintiffs deliberately did not mention the date of registered Sale Deed dated 02.07.2009 executed by them in favour of Respondent no. 1, since it would be evident that the suit was barred by limitation.
 
Justice L Nageshwara Rao and Justice Indu Malhotra
Date of Judgment: July 09, 2020