Gujarat High Court
Vrundavan Cooperative Housing Society ... vs Vrundavan Development Corporation on 5 July, 2024
Author: Biren Vaishnav
Bench: Biren Vaishnav
NEUTRAL CITATION
C/FA/2779/2018 CAV JUDGMENT DATED: 05/07/2024
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/FIRST APPEAL NO. 2779 of 2018
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE BIREN VAISHNAV
and
HONOURABLE MS. JUSTICE NISHA M. THAKORE
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1 Whether Reporters of Local Papers may be allowed NO
to see the judgment ?
2 To be referred to the Reporter or not ? YES
3 Whether their Lordships wish to see the fair copy NO
of the judgment ?
4 Whether this case involves a substantial question NO
of law as to the interpretation of the Constitution
of India or any order made thereunder ?
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VRUNDAVAN COOPERATIVE HOUSING SOCIETY LIMITED THRU.
ALPESHBHAI CHIMANBHAI PATEL
Versus
VRUNDAVAN DEVELOPMENT CORPORATION & ORS.
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Appearance:
MR MEHUL SHAH, SENIOR ADVOCATE WITH MR VIMAL A
PUROHIT(5049) for the Appellant(s) No. 1
MR RM CHAKWAWALA(1519) for the Appellant(s) No. 1
MR MEHUL SHARAD SHAH(773) for the Defendant(s) No. 3.2,3.3,3.4,3.5,3.6
SERVED BY PUBLICATION IN NEWS for the Defendant(s) No. 1,2
MR ANSHIN DESAI, SENIOR ADVOCATE WITH MR SHRINEEL M
SHAH(9374) for the Defendant(s) No. 4
UNSERVED EXPIRED (N) for the Defendant(s) No. 3.1
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CORAM:HONOURABLE MR. JUSTICE BIREN VAISHNAV
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NEUTRAL CITATION
C/FA/2779/2018 CAV JUDGMENT DATED: 05/07/2024
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and
HONOURABLE MS. JUSTICE NISHA M. THAKORE
Date : 05/07/2024
CAV JUDGMENT
(PER : HONOURABLE MR. JUSTICE BIREN VAISHNAV)
1. This appeal, under Section 96 of the Civil Procedure Code, 1908, has been filed by the original plaintiff on being aggrieved by the order dated 21.03.2018 passed in Regular Civil Suit No. 3 of 2018 by the learned Principal Senior Civil Judge, Kalol whereby the civil court has refused to admit/accept the suit filed by the appellant.
2. Facts indicate that the appellant - plaintiff filed Civil Suit No. 3 of 2018 on 20.01.2018. The suit was for a declaration that the agreement to sell entered into by the defendants no. 3.1 to 3.6 on 27.11.1980 be enforced by accepting an amount of Rs.64,400/- and the plaintiff thereby be given possession of the land. It was also prayed for by the plaintiff that the sale deed between the defendants no. 3.1 to 3.6 and 4 dated 08.10.2010 be Page 2 of 56 Downloaded on : Fri Jul 05 23:29:32 IST 2024 NEUTRAL CITATION C/FA/2779/2018 CAV JUDGMENT DATED: 05/07/2024 undefined declared as null and void.
2.1 The case of the plaintiff therefore in the plaint before the trial court was that the plaintiff was a registered cooperative society which had the objective of making residential homes. An agreement to sell on a Rs.10/- stamp paper was carried out between the plaintiff and one Ishwarbhai Shivrambhai Patel and it was agreed that an amount of Rs.1,74,200/- was paid being 75% of the consideration and in accordance with the conditions of the agreement to sell there was no time limit for entering into a sale deed. It was the further case of the plaintiff that the land was converted into an old tenure land in November 2007. On 29.09.2009 and thereafter on 05.07.2012, the defendants were requested to enter into a sale deed and the plaintiff was ready and willing to pay the remaining amount of Rs.64,400/- and even after a final letter dated 02.02.2015, since the plaintiff came to know in December 2016 that a registered sale deed was already entered into between defendants no. 3.1 to 3.6 Page 3 of 56 Downloaded on : Fri Jul 05 23:29:32 IST 2024 NEUTRAL CITATION C/FA/2779/2018 CAV JUDGMENT DATED: 05/07/2024 undefined with the defendant no. 4 and on obtaining of the copy of the sale deed on 06.12.2016, and after issuance of a notice through their advocate on 04.09.2017, the present suit was filed.
2.2 The trial court on 20.01.2018 passed an order that the suit be posted for hearing on the question of limitation and be heard on 22.01.2018. On a preliminary hearing, the trial court by an order dated 21.03.2018 opined that the suit was for a declaration that an agreement to sell dated 27.11.1980 be enforced. The suit was filed on 20.01.2018. The land was already sold to the plaintiff to defendant no. 4 by a registered sale deed of 08.10.2010. The suit therefore prima facie was beyond the period of limitation. The suit therefore was not entitled to being registered and the trial court accordingly refused to register the suit. This order of the trial court is under challenge before us.
3. Mr. Mehul Shah, learned Senior Advocate appearing with Mr. Vimal Purohit, learned advocate for the Page 4 of 56 Downloaded on : Fri Jul 05 23:29:32 IST 2024 NEUTRAL CITATION C/FA/2779/2018 CAV JUDGMENT DATED: 05/07/2024 undefined appellant would submit that the non suiting of the plaintiff in the manner that it was done is bad. Reading of the order, would indicate that the suit was dismissed without assigning cogent and substantial reasonings which amounts to denial of substantial justice.
3.1 Mr. Shah would submit that no reasons were assigned for dismissal of the suit. Perusal of the order of the trial court would indicate that based on two dates i.e. 27.11.1980 and 08.10.2010, the suit was refused to be registered which could not have been done.
3.2 Mr. Shah would further submit that what is evident from reading of the order is that when the suit was presented on 20.01.2018, the trial court made an endorsement of fixing a date for the hearing on the question of limitation. After hearing only the advocate for the plaintiff and based on a cursory perusal of the plaint, the trial court without asking for a notice and the perception of the other side dismissed the suit which it could not.
Page 5 of 56 Downloaded on : Fri Jul 05 23:29:32 IST 2024NEUTRAL CITATION C/FA/2779/2018 CAV JUDGMENT DATED: 05/07/2024 undefined 3.3 Mr. Shah, learned Senior Advocate would take us to Order IV of CPC and submit that institution of suits is a ministerial act. The suit is instituted by presentation of a plaint. It has to comply with the rules contained in Order VI and Order VII of CPC. Evidently, the plaint was in compliance of Order VI as it contained pleadings stating material facts. A clear cause of action was disclosed and when the question of limitation was to be examined in light of the evidence that could have been produced before it, it was incumbent upon the trial court to entertain and examine the issue of limitation which was a matter to be examined by leading evidence. Reading Order VII Rule 11, Mr. Shah would submit that under the provisions of the order, a plaint can be rejected where it does not disclose a cause of action, that it is undervalued, that the suit appears to be barred by any law etc. In the facts of the case, if the trial court was of the opinion that the suit was barred by law, it could not have without ascertaining that question based on evidence produced by Page 6 of 56 Downloaded on : Fri Jul 05 23:29:32 IST 2024 NEUTRAL CITATION C/FA/2779/2018 CAV JUDGMENT DATED: 05/07/2024 undefined the parties, dismiss the suit without a thorough judicial examination. Mere prima facie opinion cannot serve as a reason for dismissing the suit even without registering it.
The court should have issued notice.
3.4 Relying on the documents produced with the paper book, Mr. Shah would submit that even these documents were not examined by the trial court. He would take us through the notice issued by the Vrindavan Cooperative Housing Society on 05.07.2012 and the letter dated 02.02.2015 which clearly indicated that the plaintiff was alive to the cause. A registered notice was issued through a lawyer and therefore without examining the issue of limitation by leading of evidence, the suit could not have been summarily rejected without registration.
3.5 Mr. Shah would also place reliance on the provisions of the Civil Manual to submit that institution of suits by presentation of plaints is a ministerial act.
3.6 With regard to the provisions of Article 54 of the Page 7 of 56 Downloaded on : Fri Jul 05 23:29:32 IST 2024 NEUTRAL CITATION C/FA/2779/2018 CAV JUDGMENT DATED: 05/07/2024 undefined Limitation Act, Mr. Shah would submit that the article is divided into two parts. The first part of the article deals with the fixation of period of limitation as three years from the date fixed for the performance or if no such date is fixed when the plaintiff has notice of the refusal to perform. He would submit that the date fixed for performance does not mean a period of certain days or months but a specific calendar date fixed for the performance of the agreement to sell. He would therefore submit that if a specific calendar date is not mentioned, it is the second part of the article which would apply where the period of limitation would start from the date of notice of refusal of performance. He would submit therefore that in the present case since no date was fixed in the agreement to sell, it would be the second part of the article which would apply i.e. where the time would start when the plaintiff has refused to perform which was never clear until 2018.
3.7 Mr. Shah would also therefore submit that the Page 8 of 56 Downloaded on : Fri Jul 05 23:29:32 IST 2024 NEUTRAL CITATION C/FA/2779/2018 CAV JUDGMENT DATED: 05/07/2024 undefined knowledge of refusal to perform an obligation is a question of fact which can only be decided by leading evidence including the evidence on examination of witnesses. In absence of a clear denial to perform by the defendant, or a finding to that effect, the order of the trial court was bad.
3.8 Mr. Shah would submit that time was never the essence of the agreement to sell and even otherwise such an issue could only be established through a detailed examination and barring a plaint, without examination of such issue, even without registering was grossly illegal.
He would submit that unless and until a clear right to sue accrues, the period of limitation does not commence. A right to sue before 2018 was a triable issue. The principle of deemed knowledge cannot apply and unless it is disproved by leading evidence, the trial court could not have rejected the plaint without registering it. In support of his submissions, Mr. Shah would rely on the following decisions:
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(a) Ahmadsahab Abdul Mulla vs. Bibijan and Others reported in (2009) 5 SCC 462;
(b) Madina Begum and Another vs. Shiv Murti Prasad Pandey and Others reported in (2016) 15 SCC 322;
(c) Ahmadsahab Abdul Mulla vs. Bibijan and Others reported in (2009) 5 SCC 462;
(d) Salim D. Agboatwala and Ors. vs. Shamalji Oddhavji Thakkar and Ors. reported in AIR 2021 SC 5212.
(e) Urvashiben and Anr. vs. Krishnakant Manuprasad Trivedi. reported in 2019 (13) SCC 372
(f) Daya Singh and Anr. vs. Gurdev Singh (Dead) by LRS and Ors. reported in AIR 2010 SC 3240.
(g) Panchanan Dhara vs. Monmatha Nath Maity.
reported in 2006 (5) SCC 340.
(h) Bahadurbhai Laljibhai Malhotra vs. Ambalal Joitaram Heir of Joitaram Ranchhoddas and Ors.
reported in 2015 (3) GLR 2760.
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(i) Chhotanben and Anr. vs. Kiritbhai alkrushnabhai Thakkar and Ors. reported n AIR 2018 SC 2447.
4. Mr. Anshin Desai, learned Senior Counsel appearing with Mr. Shrineel Shah, learned advocate appearing for the respondent no. 4 would submit that reading of the plaint would indicate that apparently the suit is time barred. He would invite our attention to paragraph no.
12 on page 10 of the plaint and submit that the plaintiff states that the cause of action to the agreement to sell dated 27.11.2018 had occurred by executing a power of attorney on 09.06.1982. That a registered sale deed was entered into between the defendants no. 3 and 4 on 08.10.2010, came to the knowledge of the plaintiff as stated in the paragraph only on 06.12.2016 to which a notice was given on 04.09.2017. This was nothing but a craftily drafted plaint for setting aside a banakhat which was 38 years hence and a sale deed entered into between the defendant no. 3 and the present defendant which was Page 11 of 56 Downloaded on : Fri Jul 05 23:29:32 IST 2024 NEUTRAL CITATION C/FA/2779/2018 CAV JUDGMENT DATED: 05/07/2024 undefined 8 years before the suit. No fault can be found with the order of the trial court in rejecting the plaint without registering it solely based on these two dates. Inviting the court's attention to the prayers made in the suit, he would submit that the principal relief was for setting aside an agreement to sell the deed of 1980 which document was not on record. It was the second prayer which was to set aside the sale deed dated 08.10.2010 after a period of eight years.
4.1 Mr. Desai would invite our attention to the document dated 17.01.1981 produced by the appellant in the paper book and submit that reading of the document would indicate that it was a document on a Rs.10/- stamp paper by the proposed society. Even reading the document would indicate that it was clear therefrom that after obtaining a title clearance certificate, the sale deed had to be executed. Time therefore is the essence of the contract. He would rely on a decision of the Apex Court in the case of Alagammal and Others vs. Ganesan and Page 12 of 56 Downloaded on : Fri Jul 05 23:29:32 IST 2024 NEUTRAL CITATION C/FA/2779/2018 CAV JUDGMENT DATED: 05/07/2024 undefined Another reported in (2024) 3 SCC 232 where it is held that time is the essence of contract. He would submit that even otherwise, reading the agreement would indicate that the sale was barred by the provisions of Section 43 of the Tenancy Act and in light of the decision of the Full Bench passed by this court in Second Appeal No. 208 of 2021 on 12.01.2024 in the case of Decd Shaikh Iamalbhai Hushainbhai vs. Vankar Ambalal Dhanabhai, no specific performance of the agreement could be sought. The suit was instituted after 38 years of the so called agreement to sell. He would submit that the present defendant had purchased the land before 14 years from today in the year 2010 and eight years prior to the institution of the suit by paying a sale consideration of Rs.72 lakhs. The suit arises out of a fictitious cause of action brought in by stating that a notice is issued after 37 years on 04.09.2017 to make believe that the starting time of limitation is the date.
4.2 Mr. Desai would refute the contention of Mr. Shah, Page 13 of 56 Downloaded on : Fri Jul 05 23:29:32 IST 2024 NEUTRAL CITATION C/FA/2779/2018 CAV JUDGMENT DATED: 05/07/2024 undefined learned Senior Advocate that the order could not have been passed in the manner in which it was. Placing reliance on the Civil Manual, especially Rules 7, 8 & 10, he would submit that if after examining the plaint on its presentation and if it is found that he deserves rejection under Order VII Rule 11, the matter can be referred to the judge for orders.
4.3 Mr. Desai would submit that the suit was completely vexatious and frivolous and keeping such suit pending on the file of the court would only add to docket explosion.
It would be a sheer wastage of judicial time and such litigation has to be nipped in the bud. In support of his submissions, he relied on the following decisions:
(A) Saleem Bhai And Ors. vs. State Of Maharashtra And Ors reported in (2003) 1 SCC 557;
(B) Dilboo (Smt)(Dead) By Lrs And Ors. vs. Dhanraji (Smt) (Dead) And Others reported in (2000) 7 SCC 702;Page 14 of 56 Downloaded on : Fri Jul 05 23:29:32 IST 2024
NEUTRAL CITATION C/FA/2779/2018 CAV JUDGMENT DATED: 05/07/2024 undefined (C) Dahiben vs. Arvindbhai Kalyanji Bhanusali (Gajra) Dead Through Legal Representatives And Other reported in (2020) 7 SCC 366;
(D) Whiteswan Buildon Llp vs. Thakor Praveenji Mangaji reported in 2022(4)GLH 390;
(E) Shantilal Shakarbhai Patel Since Deceased vs. Dal Sukbhai (Deceased) reported in 2023(2) GLH 740;
(F) Church Of Christ Charitable Trust vs. E Ponniamman Educational Trust reported in 2012 (8) SCC 706;
(G) Laxmiben Mafatlal Patel vs. Jayantibhen Mafatbhai Patel & Ors dated 15/10/2018 rendered in Second Appeal No. 273 of 2017.
(H) Ashvinbhai Ashabhai Patel vs. Udesinh Bhailal Padhiyar reported in 2023(3) GLD 276;
(I) Ramji Mandir Narsinhji vs. Narsinh Nagar@ Tekri Coop Housing Soc. Ltd reported in 1979 GLR 801;
(J) Chitrakut Dham Co-operative Housing Society Page 15 of 56 Downloaded on : Fri Jul 05 23:29:32 IST 2024 NEUTRAL CITATION C/FA/2779/2018 CAV JUDGMENT DATED: 05/07/2024 undefined ltd., Mahuva vs. Kharak Haribhai Ravjibhai Bhalariya and Ors. reported in 2010(1) GLR 430.
5. Having considered the submissions made by the learned Senior Advocates for the respective parties, what we need to consider is whether the trial court was right in ousting the plaintiff at the threshold by holding that it was not a suit which deserved admission and therefore the suit was not admitted. Was the trial court right in its approach in exercising this power and that whether it was in accordance with the procedure envisaged under the Civil Procedure Code.
5.1 Perusal of the plaint as a whole as it is and on a plain reading of it would indicate that it was the case of the plaintiff society that it had entered into an agreement to sell on a Rs.10/- stamp paper on 27.11.1980 for a parcel of land which the defendant no. 3 had agreed to sell. On 27.09.2009, according to the plaintiff, a request was made that a sale deed be entered into and letters Page 16 of 56 Downloaded on : Fri Jul 05 23:29:32 IST 2024 NEUTRAL CITATION C/FA/2779/2018 CAV JUDGMENT DATED: 05/07/2024 undefined were written on 05.07.2012 and 02.02.2015. According to the plaintiff, the defendant no. 3 already sold the land to defendant no. 4 in the year 2010 i.e. by a registered sale deed in October 2010 and a notice was issued through the advocate in the year 2017. Reading the cause of action and prayers in the plaint would indicate that essentially the suit was for enforcement of an agreement to sell dated 27.11.1980.
6. The question before us is whether the appellant's plaint, as submitted by learned Senior Advocate Mr. Shah, deserved a fair examination of the claim together with the documents produced and whether it was open for the trial court to reject the plaint without proper registration and admission based on a prima facie view of limitation. We may refer to the Civil Manual particularly Rules 8 to 10 of the Manual.
"8. The next step is the examination of the plaint in order to determine whether it should be
(a) admitted; or
(b)rejected (Order VII, rule 11), or Page 17 of 56 Downloaded on : Fri Jul 05 23:29:32 IST 2024 NEUTRAL CITATION C/FA/2779/2018 CAV JUDGMENT DATED: 05/07/2024 undefined
(c) returned for presentation to the proper Court (Order VII, rule 10); or
(d) returned for amendment on the ground that it is not framed as required by law.
This examination should be particularly directed to ascertaining
(i) whether the forms provided in appendix A of the Code are followed as far as is reasonably possible (Order VI, rule 3);
(ii) whether the plaint is properly signed (Order VI. Rule 14):
(iii) whether it is duly verified (Order VI. Rule 15);
(iv) whether it complies with the requirements of Order VII. Rules 2, 4 and 6;
(v) whether it is properly stamped,
(vi) whether the provisions of section 135 H (1) of the Bombay Land Revenue Code, V of 1879, are complied with;
or the extract from the Property Register Card is produced or not where the suit is in respect of immoveable property bearing City Survey No.;
(vii) whether the provisions of Order II, rules 4 and 5 are infringed;
(viii) whether the necessary Court fee stamps or the necessary postal charges for the service of the summons on the defendant have been affixed to it;
(ix) whether the document or documents on which the plaintiff sues or the documents in his possession or power are produced along along with the plaint;
(x) whether the certificate required by the Pensions Act, XXIII of 1871, is produced in suits to which that Act appears to apply;
(xi) whether the provisions of rules 2 and 4 of Order III as to the production of a power of attorney and Vakalatnama with the plaint are Page 18 of 56 Downloaded on : Fri Jul 05 23:29:32 IST 2024 NEUTRAL CITATION C/FA/2779/2018 CAV JUDGMENT DATED: 05/07/2024 undefined complied with or not;
(xii) whether the plaintiff has filed with the plaint a memo in writing giving an address which service of notice or summons or other process may be made on him;
(xiii) whether a certificate of the Charity Commissioner is filed or not in a suit filed under the Bombay Public Trusts Act as required by section 51(1) of that Act.
9. While examining the plaint; it is also necessary to (a) verify the list of documents produced along with the plaint; (b) ascertain the correctness of the concise statements, if any (Order VII rule 9); and
(c) compare with the original any copy of account book produced under Order VII, rule 17 and mark the relevant entries therein.
The Officer should also see that for every Indian date mentioned in the plaint, the corresponding date according to the Gregorian Calender has been given.
10. If the Officer examining the plaint finds that it complies with all the requirements and is correct in all respects, he should make the endorsement on the plaint "Examined, and ordered to be registered" with the date and his signature. If he thinks that the Plaint should be returned for amendment or for presentation to the proper Court, or be rejected under Order VII, rule 11, he should refer the matter to the Judge for orders."
6.1 Reading the above rules of the manual would indicate that after a presentation of the plaint under Page 19 of 56 Downloaded on : Fri Jul 05 23:29:32 IST 2024 NEUTRAL CITATION C/FA/2779/2018 CAV JUDGMENT DATED: 05/07/2024 undefined Order 4, Rule 1, the next step is the examination of the plaint in order to determine whether it should be admitted, rejected, returned for presentation to the proper court or returned for amendment on the ground that it is not framed as required by law. Therefore, whether it should be rejected under Order VII Rule 11 of CPC is a step in the examination of the plaint. In accordance with Rule 10 of the Manual, if the officer finds that the plaint has to be rejected under Order VII Rule 11 of CPC, he should refer the matter to the judge for orders.
6.2 The chronology after filing of the plaint on 20.01.2018, and the remarks made on the same date of posting it on 22.01.2018 for orders indicates compliance of these procedural aspects. Coming then to the provisions of Order VII Rule 11, which provides the cases under which the plaint can be rejected, reading of Order VII, Rule 11 would indicate that clause (d) thereof states that where the suit appears from the statement in the Page 20 of 56 Downloaded on : Fri Jul 05 23:29:32 IST 2024 NEUTRAL CITATION C/FA/2779/2018 CAV JUDGMENT DATED: 05/07/2024 undefined plaint to be barred by law, it can be rejected. The trial court as is evident from the order has rejected the plaint on the ground of a prima facie view that the suit is time barred.
6.3 The question therefore at the cost of reiteration is whether when it was apparent on reading of the plaint that it was so time barred did it deserve a thorough judicial examination. Essentially, we cannot find fault with the observations of the trial court and therefore the submission of Mr. Shah, learned Senior Counsel that the trial court got impressed by the two dates i.e. 27.11.1980 and 08.10.2010 cannot be accepted. Obviously, when the plaint is read as a whole, in context of the prayers made thereto, the first point of time when the cause of action according to the plaintiff arose was in the year 1980 which subsequently got transformed into giving the plaintiff a cause of action when a registered sale deed was executed between the defendant no. 3 and 4 on 08.10.2010. The document i.e. the unregistered Page 21 of 56 Downloaded on : Fri Jul 05 23:29:32 IST 2024 NEUTRAL CITATION C/FA/2779/2018 CAV JUDGMENT DATED: 05/07/2024 undefined agreement to sell dated 27.11.1980 is not even on the record.
7. That brings us to the essential question that whether prima facie view of the court that the suit was time barred was just and proper. Article 54 of the Limitation Act, which reads as under provides for two exigencies.
It provides that a suit for specific performance has to be brought within a period of three years from the date fixed for the performance or if no such date is fixed, when the plaintiff has noticed the performance is refused. The counsel for the appellant placed reliance on the decision of the Apex Court in the case of Salim Agboatwala (supra) to submit that limitation being a mixed question of fact and law and when no date is fixed as is evident from the facts of present case for execution of a sale deed, the period of limitation has to be counted in accordance with the second limb of the article i.e. from the period of the date on which it came to the notice of plaintiff that performance is refused.
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8. We will deal with this submission together with the submission made by learned Senior Advocate for the appellant wherein it was stated that time is not the essence of the contract in case of immovable properties for which reliance was placed on the decision referred to earlier and the decision of the Apex Court in the case of Panchanan Dhara (supra). It is in this context that we need to see the document dated 17.01.1981 which is produced by the plaintiff from the paper book wherein clause 3 specifically provides that a sale deed shall be executed within the time of 12 months. Obviously, therefore, time was the essence of the contract. It has been held by the Apex Court in the case of Alagammal (supra) that in case of an agreement to sell relating to immovable property, it will not be reasonable to say that because no time is specified could it be in the discretion of the court to deny relief. The concept of time not being the essence of the contract was evolved when prices were stable. Paras 35 & 36 of the decision read as under:
Page 23 of 56 Downloaded on : Fri Jul 05 23:29:32 IST 2024NEUTRAL CITATION C/FA/2779/2018 CAV JUDGMENT DATED: 05/07/2024 undefined "35. The ratio laid down in K.S. Vidyanadam (supra) which had a similar factual matrix squarely applies in the facts and circumstances of the present case, on the issue that time was the essence of contract and even if time is not the essence of the agreement, in the event that there is no reference of any existence of any tenant in the building and it is mentioned that within a period of six months, the plaintiffs should purchase the stamp paper and pay the balance consideration whereupon the defendants will execute the Sale Deed, there is not a single letter or notice from the plaintiffs to the defendants calling upon them to the tenant to vacate and get the Sale Deed executed within time. Further, the Legal Notice was issued after two and a half years from expiry of the time period in K.S. Vidyanadam (supra), whereas in the present case, the Legal Notice has been issued after more than six and a half years.
36. The relevant paragraphs from K.S. Vidyanadam (supra) read as under:
'10.It has been consistently held by the courts in India, following certain early English decisions, that in the case of agreement of sale relating to immovable property, time is not of the essence of the contract unless specifically provided to that effect. The period of limitation prescribed by the Limitation Act for filing a suit is three years. From these two circumstances, it does not follow that any and every suit for specific performance of the agreement (which does not provide specifically that time is of the essence of the contract) should be decreed provided it is Page 24 of 56 Downloaded on : Fri Jul 05 23:29:32 IST 2024 NEUTRAL CITATION C/FA/2779/2018 CAV JUDGMENT DATED: 05/07/2024 undefined filed within the period of limitation notwithstanding the time-limits stipulated in the agreement for doing one or the other thing by one or the other party. That would amount to saying that the time-limits prescribed by the parties in the agreement have no significance or value and that they mean nothing. Would it be reasonable to say that because time is not made the essence of the contract, the time-limit(s) specified in the agreement have no relevance and can be ignored with impunity? It would also mean denying the discretion vested in the court by both Sections 10 and
20. As held by a Constitution Bench of this Court in Chand Rani v. Kamal Rani [(1993) 1 SCC 519]: (SCC p. 528, para 25) "... it is clear that in the case of sale of immovable property there is no presumption as to time being the essence of the contract. Even if it is not of the essence of the contract, the Court may infer that it is to be performed in a reasonable time if the conditions are (evident?): (1) from the express terms of the contract; (2) from the nature of the property; and (3) from the surrounding circumstances, for example, the object of making the contract."
In other words, the court should look at all the relevant circumstances including the time-limit(s) specified in the agreement and determine whether its discretion to grant specific performance should be exercised. Now in the case of urban properties in India, Page 25 of 56 Downloaded on : Fri Jul 05 23:29:32 IST 2024 NEUTRAL CITATION C/FA/2779/2018 CAV JUDGMENT DATED: 05/07/2024 undefined it is well-known that their prices have been going up sharply over the last few decades -- particularly after 1973 It is a well-known fact that the steep rise in the price of oil following the 1973 Arab-Israeli war set in inflationary trends all over the world. Particularly affected were countries like who import bulk of their requirement of oil.]. In this case, the suit property is the house property situated in Madurai, which is one of the major cities of Tamil Nadu. The suit agreement was in December 1978 and the six months' period specified therein for completing the sale expired with 15-6-1979. The suit notice was issued by the plaintiff only on 11-7-1981, i.e., more than two years after the expiry of six months' period. The question is what was the plaintiff doing in this interval of more than two years? The plaintiff says that he has been calling upon Defendants 1 to 3 to get the tenant vacated and execute the sale deed and that the defendants were postponing the same representing that the tenant is not vacating the building. The defendants have denied this story. According to them, the plaintiff never moved in the matter and never called upon them to execute the sale deed. The trial court has accepted the defendants' story whereas the High Court has accepted the plaintiff's story. Let us first consider whose story is more probable and acceptable. For this purpose, we may first turn to the terms of the agreement. In the agreement of sale, there is no reference to the existence of any tenant in the building. What it says is that within the period of six months, the plaintiff should purchase the stamp papers and pay the balance consideration whereupon the Page 26 of 56 Downloaded on : Fri Jul 05 23:29:32 IST 2024 NEUTRAL CITATION C/FA/2779/2018 CAV JUDGMENT DATED: 05/07/2024 undefined defendants will execute the sale deed and that prior to the registration of the sale deed, the defendants shall vacate and deliver possession of the suit house to the plaintiff. There is not a single letter or notice from the plaintiff to the defendants calling upon them to get the tenant vacated and get the sale deed executed until he issued the suit notice on 11-7-1981. It is not the plaintiff's case that within six months', he purchased the stamp papers and offered to pay the balance consideration. The defendants' case is that the tenant is their own relation, that he is ready to vacate at any point of time and that the very fact that the plaintiff has in his suit notice offered to purchase the house with the tenant itself shows that the story put forward by him is false. The tenant has been examined by the defendant as DW 2. He stated that soon after the agreement, he was searching for a house but could not secure one. Meanwhile (i.e., on the expiry of six months from the date of agreement), he stated, the defendants told him that since the plaintiff has abandoned the agreement, he need not vacate. It is equally an admitted fact that between 15- 12-1978 and 11-7-1981, the plaintiff has purchased two other properties. The defendants' consistent refrain has been that the prices of house properties in Madurai have been rising fast, that within the said interval of 2 1/2 years, the prices went up three times and that only because of the said circumstance has the plaintiff (who had earlier abandoned any idea of going forward with the purchase of the suit property) turned round and demanded specific performance. Having regard to the above circumstances Page 27 of 56 Downloaded on : Fri Jul 05 23:29:32 IST 2024 NEUTRAL CITATION C/FA/2779/2018 CAV JUDGMENT DATED: 05/07/2024 undefined and the oral evidence of the parties, we are inclined to accept the case put forward by Defendants 1 to 3. We reject the story put forward by the plaintiff that during the said period of 2 1/2 years, he has been repeatedly asking the defendants to get the tenant vacated and execute the sale deed and that they were asking for time on the ground that tenant was not vacating. The above finding means that from 15-12-1978 till 11-7-1981, i.e., for a period of more than 2 1/2 years, the plaintiff was sitting quiet without taking any steps to perform his part of the contract under the agreement though the agreement specified a period of six months within which he was expected to purchase stamp papers, tender the balance amount and call upon the defendants to execute the sale deed and deliver possession of the property. We are inclined to accept the defendants' case that the values of the house property in Madurai town were rising fast and this must have induced the plaintiff to wake up after 2 1/2 years and demand specific performance.
11. Shri Sivasubramaniam cited the decision of the Madras High Court in S.V. Sankaralinga Nadar v. P.T.S. Ratnaswami Nadar [AIR 1952 Mad 389 : (1952) 1 MLJ 44] holding that mere rise in prices is no ground for denying the specific performance. With great respect, we are unable to agree if the said decision is understood as saying that the said factor is not at all to be taken into account while exercising the discretion vested in the court by law. We cannot be oblivious to the reality -- and the reality is constant and continuous rise in the values of urban Page 28 of 56 Downloaded on : Fri Jul 05 23:29:32 IST 2024 NEUTRAL CITATION C/FA/2779/2018 CAV JUDGMENT DATED: 05/07/2024 undefined properties -- fuelled by large-scale migration of people from rural areas to urban centres and by inflation. Take this very case. The plaintiff had agreed to pay the balance consideration, purchase the stamp papers and ask for the execution of sale deed and delivery of possession within six months. He did nothing of the sort. The agreement expressly provides that if the plaintiff fails in performing his part of the contract, the defendants are entitled to forfeit the earnest money of Rs 5000 and that if the defendants fail to perform their part of the contract, they are liable to pay double the said amount. Except paying the small amount of Rs 5000 (as against the total consideration of Rs 60,000) the plaintiff did nothing until he issued the suit notice 2 1/2 years after the agreement. Indeed, we are inclined to think that the rigor of the rule evolved by courts that time is not of the essence of the contract in the case of immovable properties -- evolved in times when prices and values were stable and inflation was unknown -- requires to be relaxed, if not modified, particularly in the case of urban immovable properties. It is high time, we do so. The learned counsel for the plaintiff says that when the parties entered into the contract, they knew that prices are rising; hence, he says, rise in prices cannot be a ground for denying specific performance. May be, the parties knew of the said circumstance but they have also specified six months as the period within which the transaction should be completed. The said time-limit may not amount to making time the essence of the contract but it must yet have some meaning. Not for nothing could such Page 29 of 56 Downloaded on : Fri Jul 05 23:29:32 IST 2024 NEUTRAL CITATION C/FA/2779/2018 CAV JUDGMENT DATED: 05/07/2024 undefined time-limit would have been prescribed. Can it be stated as a rule of law or rule of prudence that where time is not made the essence of the contract, all stipulations of time provided in the contract have no significance or meaning or that they are as good as non- existent? All this only means that while exercising its discretion, the court should also bear in mind that when the parties prescribe certain time-limit(s) for taking steps by one or the other party, it must have some significance and that the said time-limit(s) cannot be ignored altogether on the ground that time has not been made the essence of the contract (relating to immovable properties).
xxx
13. In the case before us, it is not mere delay. It is a case of total inaction on the part of the plaintiff for 2 1/2 years in clear violation of the terms of agreement which required him to pay the balance, purchase the stamp papers and then ask for execution of sale deed within six months. Further, the delay is coupled with substantial rise in prices --
according to the defendants, three times
-- between the date of agreement and the date of suit notice. The delay has brought about a situation where it would be inequitable to give the relief of specific performance to the plaintiff.' (Emphasis supplied) 8.1 Even if the second limb of the argument of learned Senior Counsel for the appellant that the subsequent or Page 30 of 56 Downloaded on : Fri Jul 05 23:29:32 IST 2024 NEUTRAL CITATION C/FA/2779/2018 CAV JUDGMENT DATED: 05/07/2024 undefined the second part of Article 54 would apply as no date was fixed in the agreement to sell and that the period of limitation would start when the plaintiff had noticed that performance is refused, in the facts of the case, on a plain reading of the plaint would indicate that the plaint does not talk about any refusal. It is at this stage of our consideration that we need to examine whether the plaint as it is read is a proceeding which needs to be nipped in the bud as stated by the several decisions of the Apex Court.
8.2 In the case of Church Of Christ Charitable Trust (supra), the Apex Court while referring to a decision of Saleem Bhai (supra) observed that under Order VII Rule 11 of CPC, the court can look into the relevant facts and in exercise of its powers under Order VII Rule 11 CPC, at any stage of the suit, even before registering the plaint, can come to a conclusion that the suit need not be registered. There is no procedural irregularity touching the exercise of its jurisdiction. Paragraphs no. 11 and 25 Page 31 of 56 Downloaded on : Fri Jul 05 23:29:32 IST 2024 NEUTRAL CITATION C/FA/2779/2018 CAV JUDGMENT DATED: 05/07/2024 undefined of Church Of Christ Charitable Trust (supra) read as under :
"11. This position was explained by this Court in Saleem Bhai & Ors. vs. State of Maharashtra and Others, (2003) 1 SCC 557, in which, while considering Order VII Rule 11 of the Code, it was held as under:
"9. A perusal of Order VII Rule 11 CPC makes it clear that the relevant facts which need to be looked into for deciding an application thereunder are the averments in the plaint. The trial court can exercise the power under Order VII Rule 11 CPC at any stage of the suit
-- before registering the plaint or after issuing summons to the defendant at any time before the conclusion of the trial. For the purposes of deciding an application under clauses (a) and (d) of Rule 11 of Order VII CPC, the averments in the plaint are germane; the pleas taken by the defendant in the written statement would be wholly irrelevant at that stage, therefore, a direction to file the written statement without deciding the application under Order VII Rule 11 CPC cannot but be procedural irregularity touching the exercise of jurisdiction by the trial court......."
It is clear that in order to consider Order VII Rule 11, the Court has to look into the averments in the plaint and the same can be exercised by the trial Court at any stage of the suit. It is also clear that the averments in the written statement are Page 32 of 56 Downloaded on : Fri Jul 05 23:29:32 IST 2024 NEUTRAL CITATION C/FA/2779/2018 CAV JUDGMENT DATED: 05/07/2024 undefined immaterial and it is the duty of the Court to scrutinize the averments/pleas in the plaint. In other words, what needs to be looked into in deciding such an application are the averments in the plaint. At that stage, the pleas taken by the defendant in the written statement are wholly irrelevant and the matter is to be decided only on the plaint averments. These principles have been reiterated in Raptakos Brett & Co. Ltd. vs. Ganesh Property (1998) 7 SCC 184 and Mayar (H.K.) Ltd. and Others vs. Owners & Parties, Vessel M.V. Fortune Express and Others (2006) 3 SCC 100."
8.3 In the case of Dilboo (supra), the Apex Court in paragraph no. 20 held that in absence of any averment or a proof to show that there was no knowledge of the document having been registered, the plaintiff's suit ought to fail. Paragraph no. 20 of the decision reads as under:
"20. This Suit was governed by the Limitation Act of 1948. Arts. 134 and 148 read as follows:
When the
134. To recover Twelve transfer possession years becomes known of immovable to the plaintiff:
property conveyed or Page 33 of 56 Downloaded on : Fri Jul 05 23:29:32 IST 2024 NEUTRAL CITATION C/FA/2779/2018 CAV JUDGMENT DATED: 05/07/2024 undefined bequeathed in trust or mortgaged and afterwards transferred by the trustee 1 or mortgagee for a valuable consideration When the right
148. Against a Sixty to mortgagee to years redeem or to redeem or to recover possession recover possession accrues of immovable property :
mortgaged."
Thus a Suit for redemption of mortgage could be filed within 60 years. But if the mortgagee had created an interest in excess of the right enjoyed by him then to recover possession against the third party the Suit had to be filed within 12 years of the transfer becoming known to the Plaintiff. The rational in cutting down the period of 60 years to 12 years is clear. The 60 years period is granted as a mortgagee always remains a mortgagee and thus Page 34 of 56 Downloaded on : Fri Jul 05 23:29:32 IST 2024 NEUTRAL CITATION C/FA/2779/2018 CAV JUDGMENT DATED: 05/07/2024 undefined the rights remain the same. However when an interest in excess of the interest of the mortgagee is created then the third party is not claiming under the mortgagee. The position of such a person could not be worse than that of a rank trespasser who was in open and hostile possession. As the title of the rank trespasser would get perfected by adverse possession on expiry of 12 years so also the title of such transferee would get perfected after 12 years. The period of 12 years has to run from the date of knowledge by the Plaintiff of such transfer. It is always for the party who files the Suit to show that the Suit is within time. Thus in cases where the suit is filed beyond the period of 12 years, the Plaintiff would have to aver and then prove that the Suit is within 12 years of his/her knowledge. In the absence of any averment or proof, to show that the suit is within time, it is the Plaintiff who would fail. Whenever a document is registered the date of registration becomes the date of deemed knowledge. In other cases where a fact could be discovered by due diligence then deemed knowledge would be attributed to the Plaintiff because a party cannot be allowed to extend period of limitation by merely claiming that he had no knowledge."
9. We have for the benefit of this court, a decision rendered by this court in Second Appeal No. 273 of 2017 in the case of Laxmiben Mafatlal Patel (supra) where the court has examined extensively the provisions of Order VII Rule 11 CPC and the law thereto and found that an activist judge is an answer to irresponsible law suits.
Page 35 of 56 Downloaded on : Fri Jul 05 23:29:32 IST 2024NEUTRAL CITATION C/FA/2779/2018 CAV JUDGMENT DATED: 05/07/2024 undefined Referring to several decisions of the Apex Court, this court has held that when it is found on a meaningful and not a formal reading of the plaint, that it is manifest that the plaint is vexatious or meritless in the sense of not disclosing a clear right to sue, the trial court should exercise its power under Order VII Rule 11 of CPC. The court has the power to act at the threshold when it is satisfied that it is a fit case for exercise of such power.
While dealing with the position of law, as is evident from the decision in second appeal, the position of law as explained reads as under:
26 It is a settled rule of law that the plea of rejection of plaint is founded on the "PLEA OF DEMURRER". A person raising such plea in law has to take the facts as stated by the opponent as correct. Despite tentative admission of such correctness, the plaint does not disclose a complete or even partial cause of action or the relief claimed is barred by law and thus, the plaint is liable to be rejected within the provisions of Order VII, Rule 11 of the Code of Civil Procedure. Plain language of this rule shows that for determination of an application under this provision, the Court has to look into the plaint. This concept has been extended by judicial pronouncement of various Courts so as to take within its ambit even the documents filed by the plaintiff along with plaint or subsequent thereto but prior to the hearing of such application. It would be Page 36 of 56 Downloaded on : Fri Jul 05 23:29:32 IST 2024 NEUTRAL CITATION C/FA/2779/2018 CAV JUDGMENT DATED: 05/07/2024 undefined more so where the documents have been referred to in the plaint itself. But the defence raised by the defendants in his written statement or the documents filed along therewith certainly falls beyond the zone of consideration, where an application for rejection of a plaint is being considered by the Court. The language of the rule does not admit any scope for doubt that the written statement filed by the defendant cannot be referred or relied upon by the applicants for decision of such application. Whether the plaint discloses any cause of action or not, is a question founded on the basic cause of action pleaded by the plaintiff in his plaint. It must thus necessarily be construed that language of Rule 1 is circumscribed by the limitation of reading the plaint at best with its supporting documents. [See : ABN - AMRO Bank vs. PUPDA, AIR 2000 P & H 44].
27 A Full Bench of the Punjab and Haryana High Court in the case of Harnam Singh v. Surjit Singh, AIR 1984 Punj and Hary 126, held as under:
"It is well settled that a cause of action means every fact which, if traversed, would be necessary for the plaintiff to prove in order to support the right to a judgment in his favour. In other words, it is a bundle of facts which taken with the law applicable to them gives the plaintiff a right to relief against the tenant. Negatively it does not comprise the evidence necessary to prove the bundle of facts and equally has no relation whatsoever to the defence, which may be set up by the defendant nor does it depend on the character of the relief prayed for by the plaintiff."
28 The well accepted canons of civil jurisprudence makes a clear distinction between "plaintiff has no cause of action" and "the plaint does not disclose cause of action" in the earlier part, there is complete absence of a right to sue. While in the latter, the right to sue Page 37 of 56 Downloaded on : Fri Jul 05 23:29:32 IST 2024 NEUTRAL CITATION C/FA/2779/2018 CAV JUDGMENT DATED: 05/07/2024 undefined may exist, but it is not well founded on the basis of the averments made in the plaint. The plaint lacks essential and material particulars which would give an effective cause of action to the plaintiff. Where on the face of it, the plaint does not disclose any cause of action, the plaint may be liable to be rejected, but where the parties are to produce oral and documentary evidence to substantiate and support their cause of action and relief claimed for in the plaint, the Court has to consider the entire material placed on record and the suit would be liable to be decided on merit.
29 The above distinction was clearly stated by a Full Bench of Allahabad High Court in the case of Jagannath Prasad vs. Smt. Chandrawati [AIR 1970 All 309 (FB)].
30 In the case of State of Orissa vs. Klockner and Company, AIR 1996 SC 2140, the Supreme Court while approving the following view taken by the learned single Judge of the High Court dismissed the Special Leave Petition.
"From the discussions in the order it appears that the learned trial Judge has not maintained the distinction between the plea that there was no cause of action for the suit and the plea that the plaint does not disclose a cause of action. No specific reason or ground is stated in the order in support of the finding that the plaint is to be rejected under Order 7, Rule 11(a). From the averments in the plaint, it is clear that the plaintiff has pleaded a cause of action for filing the suit seeking the reliefs stated in it. That is not to say that the plaintiff has cause of action to file the suit for the reliefs sought that question is to be determined on the basis of materials (other than the plaint) which may be produced by the parties at appropriate stage in the suit. For the limited purpose of determining the question whether the suit is to be wiped out under Order 7, Rule 11(1) or not the averments in the plaint are only to be looked into. The position noted above is Page 38 of 56 Downloaded on : Fri Jul 05 23:29:32 IST 2024 NEUTRAL CITATION C/FA/2779/2018 CAV JUDGMENT DATED: 05/07/2024 undefined also clear from the petition filed by defendant No. 1 under Order 7, Rule 11 in which the thrust of the case pleaded is that on the stipulations in the agreement of 2041982 the plaintiff is not entitled to file a suit seeking any of the reliefs stated in the plaint."
31 The Supreme Court, in T. Arivandandam (supra), has observed something very important and which should not be lost sight of while deciding a matter arising under the provisions of Order VII Rule 11 and 10 of the C.P.C. I may quote the relevant observations as under:
"5. We have not the slightest hesitation in condemning the petitioner for the gross abuse of the process of the court repeatedly and unrepentantly resorted to. From the statement of the facts found in the judgment of the High Court, it is perfectly plain that the suit now pending before the First Munsif's Court Bangalore, is a flagrant misuse of the mercies of the law in receiving plaints. The learned Munsif must remember that if on a meaningful not formal reading of the plaint it is manifestly vexatious, and meritless, in the sense of not disclosing a clear right to sue, he should exercise his power under O. VII R. 11, C. P. C. taking care to see that the ground mentioned therein is fulfilled. And, if clever drafting has created the illusion of a cause of action, nip it in the bud at the first hearing by examining the party searchingly under O. X. C.P.C. An activist Judge is the answer to irresponsible law suits. The trial Courts would insist imperatively on examining the party at the first hearing so that bogus litigation can be shot down at the earliest stage. The Penal Code is also resourceful enough to meet such men, (Ch. XI) and must be triggered against them. In this case, the learned Judge to his cost realised what George Bernard Shaw remarked on the assassination of Mahatma Gandhi.Page 39 of 56 Downloaded on : Fri Jul 05 23:29:32 IST 2024
NEUTRAL CITATION C/FA/2779/2018 CAV JUDGMENT DATED: 05/07/2024 undefined "It is dangerous to be too good.""
6. The trial Court in this case will remind itself of S. 35A, C. P. C. and take deterrent action if it is satisfied that the litigation was inspired by vexatious motives and altogether groundless. In any view, that suit has no survival value and should be disposed of forthwith after giving an immediate hearing to the parties concerned."
32 Thus, if a meaningful - not formal reading of the plaint, it is manifestly vexatious, and meritless, in the sense of not disclosing a clear right to sue, the Trial Court should exercise its power under Order VII Rule 11, C.P.C. taking care to see that the grounds mentioned therein is fulfilled. If a clever drafting like one in the case on hand has created the illusion of a cause of action, it has to be nipped in the bud at the first hearing by examining the party searchingly under Order 10 of the C.P.C. In my view, the aforesaid observations are squarely applicable to the conduct of the plaintiff herein.
33 The Delhi High Court in M/s. Sakthi Sugars Limited vs. Union of India, AIR 1981 Delhi 212 relying upon the aforesaid observations of the Supreme Court held thus : (Para 12) "12. But the law in this respect is laid down by the Supreme Court in T. Arivandandam v. T.V. Satyapal, AIR 1977 SC 2421. It is laid down that if on a meaningful and not formal reading of a plaint it is manifest that the plaint is vexatious or meritless in the sense of not disclosing a clear right to sue trial Court should exercise its power under Order VII, Rule 11. Code of Civil Procedure, and should reject the plaint. So it is meaningful reading of the plaint which is required. It is to be seen if actually according to Page 40 of 56 Downloaded on : Fri Jul 05 23:29:32 IST 2024 NEUTRAL CITATION C/FA/2779/2018 CAV JUDGMENT DATED: 05/07/2024 undefined law. On the allegations contained in the plaint, defendant No.2 was agent of the Union of India or not . Mere formal allegation of the plaintiff that defendant No.2 was agent of the Union of India is not to be accepted. In view of the Supreme Court authority, it is the duty of the Court to probe whether allegations made in the plaint make defendant No.2 as agent and the Union of India as the principal according to law. I have already held that according to law defendant No.2 was not agent of the Union of India and that being so plaint does not disclose any cause of action against the latter."
34 The Supreme Court in Azhar Hussein vs. Rajiv Gandhi, 1986 (supp) SCC 315 : (AIR 1986 SC 1253), though while dealing with the question relating to rejection of an election petition with reference to Order VII, Rule 11, CPC held that the purpose of conferment of power of rejection of plaint 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 the concerned litigants are relieved of the psychological burden of the litigation. The Apex Court observed that since the Court has the power to act at the threshold, the power must be exercised at the threshold itself in case the Court is satisfied that it is a fit case for the exercise of such power.
35 The Supreme Court in ITC Limited (supra), while referring to its earlier judgment in T. Arinandandam (supra) observed, "the question is whether a real cause of action has been set out in the plaint or something purely illusory has been stated with a view to get out of Order 7, Rule 11, CPC. Clever drafting creating illusions of cause of action are not permitted in law and a clear right to sue should be shown in the plaint."
36 In Mohan Rawale vs. Damodar Tatyaba, (1994) 2 SCC 392 : (1994 AIR SCW 2028), the Supreme Court Page 41 of 56 Downloaded on : Fri Jul 05 23:29:32 IST 2024 NEUTRAL CITATION C/FA/2779/2018 CAV JUDGMENT DATED: 05/07/2024 undefined held that if some cause of action is disclosed, a pleading cannot be struck out merely because the case is weak and not likely to succeed. The Supreme Court drew distinction between the "material facts" and "full particulars" with reference to the provisions of Section 83 (1)
(a) and (b) of the Representation of the People Act, 1951 and further held that the distinction between "material facts" and "full particulars" is not sharp, but is one of degree. The material facts are those which party relies upon and which, if he does not prove, he fails at that time.
37 In William vs. Wiloox (1838 (8) Ad and El 331), Lord Denman, C.J. said thus :
"It is an elementary rule in pleading that, when a state of facts is relied it is enough to allege it simply, without setting out the subordinate facts which are the means of providing it, or the evidence sustaining the allegations."
41 The scope of Order VII, Rule 7, C.P.C. has been elaborately considered in Sopan Sukhdeo Sable vs. Asstt. Charity Commissioner, (2004) 3 SCC 137 :
(AIR 2004 SC 1801), wherein the Supreme Court held as under:
"10. In Saleem Bhai v. State of Maharashtra ((2003) 1 SCC 557) : (AIR 2003 SC 759) it was held with reference to Order 7 Rule 11 of the Code that the relevant facts which need to be looked into for deciding an application thereunder are the averments in the plaint. The trial court can exercise the power at any stage of the suit before registering the plaint or after issuing summons to the defendant at any time before the conclusion of the trial. For the purposes of deciding an application under clauses
(a) and (d) of Order 7 Rule 11 of the Code, the Page 42 of 56 Downloaded on : Fri Jul 05 23:29:32 IST 2024 NEUTRAL CITATION C/FA/2779/2018 CAV JUDGMENT DATED: 05/07/2024 undefined averments in the plaint are germane: the pleas taken by the defendant in the written statement would be wholly irrelevant at that stage."
42 The above Sopan Sukhdeo Sable case, (2004) 3 SCC 137 : (AIR 2004 SC 1801) has been referred to in the subsequent judgment Popat and Kotecha Property vs. State Bank of India Staff Assn., (2005) 7 SCC 510. As held by the Supreme Court in Popat and Kotecha Property vs. State Bank of India Staff Assn., (2005) 7 SCC 510), the real object of Order VII, Rule 11 of the Code is to keep out of courts irresponsible suits. Therefore, Order 10 of the Code is a tool in the hands of the courts by resorting to which and by searching examination of the party in case the court is prima facie of the view that the suit is an abuse of the process of the court in the sense that it is a bogus and irresponsible litigation, the jurisdiction under Order 7, Rule 11 of the Code can be exercised.
43 In Balasaria Construction (P) Ltd. v. Hanuman Seva Trust, (2006) 5 SCC 658, the Supreme Court considered the question whether words ".... barred by law...." in Rule 11(d) would also include bar by the law of limitation. Referring to various judgments and conflict of views, the Supreme Court held as under:
"4. This case was argued at length on 3082005. Counsel appearing for the appellant had relied upon a judgment of this Court in N.V. Srinivasa Murthy v. Mariyamma (2005) 5 SCC 548 : (AIR 2005 SC 2897) for the proposition that a plaint could be rejected if the suit is ex facie barred by limitation. As against this, counsel for the respondents relied upon a later judgment of this Court in Popat and Kotecha Property v. SBI Staff Assn.(2005) 7 SCC 510. in respect of the proposition that Order 7, Rule 11(d) was not applicable in a case where a question has to be decided on the basis of fact that the suit was barred by limitation. The point as to whether the Page 43 of 56 Downloaded on : Fri Jul 05 23:29:32 IST 2024 NEUTRAL CITATION C/FA/2779/2018 CAV JUDGMENT DATED: 05/07/2024 undefined words barred by law occurring in Order 7 Rule 11(d) CPC would include the suit being barred by limitation was not specifically dealt with in either of these two judgments, cited above. But this point has been specifically dealt with by the different High Courts in Mohan Lal Sukhadia University v. Priya Soloman AIR 1999 Raj 102, Khaja Quthubullah v. Govt.
of A.P. AIR 1995 AP 43, Vedapalli Suryanarayana v. Poosarla Venkata Sanker Suryanarayana (1980) 1 An LT 488 : (1980) 1 APLJ 173 (HC), Arjan Singh v. Union of India AIR 1987 Del 165, wherein it has been held that the plaint under Order 7 Rule 11(d) cannot be rejected on the ground that it is barred by limitation. According to these judgments the suit has to be barred by a provision of law to come within the meaning of Order 7 Rule 11 CPC. A contrary view has been taken in Jugolinija Rajia Jugoslavija v. Fab Leathers Ltd. AIR 1985 Cal 193, National Insurance Co. Ltd. v. Navrom Constantza AIR 1988 Cal 155, J. Patel and Co. v. National Federation of Industrial Co.op.Ltd. AIR 1996 Cal 25 and State Bank of India Staff Assn. v. Popat and Kotecha Property (2001) 2 Cal LT 34. The last judgment was the subjectmatter of challenge in Popat and Kotecha Property v. SBI Staff Assn.(2005) 7 SCC 510. This Court set aside the judgment and held in para 25 as under: (SCC P.517) "25. When the averments in the plaint are considered in the background of the principles set out in Sopan Sukhdeo case (2004) 3 SCC 137 : (AIR 2004 SC 1801) the inevitable conclusion is that the Division Bench was not right in holding that Order 7, Rule 11, CPC was applicable to the facts of the case. Diverse claims were made and the Division Bench was wrong in proceeding Page 44 of 56 Downloaded on : Fri Jul 05 23:29:32 IST 2024 NEUTRAL CITATION C/FA/2779/2018 CAV JUDGMENT DATED: 05/07/2024 undefined with the assumption that only the non-
execution of lease deed was the basic issue. Even if it is accepted that the other claims were relatable to it they have independent existence. Whether the collection of amounts by the respondent was for a period beyond 51 years needs evidence to be adduced. It is not a case where the suit from statement in the plaint can be said to be barred by law. The statement in the plaint without addition or subtraction must show that it is barred by any law to attract application of Order 7 Rule 11. This is not so in the present case."
5. Noticing the conflict between the various High Courts and the apparent conflict of opinion expressed by this Court in N.V. Srinivasa Murthy v. Mariyamma (2005) 5 SCC 548 : (AIR 2005 SC 2897) and Popat and Kotecha Property v. State Bank of India Staff Assn.(2005) 7 SCC 510 the Bench referred the following question of law for consideration to a larger Bench:
"Whether the words "barred by law"
under Order 7, Rule 11(d) would also include the ground that it is barred by the law of limitation. In Balasaria Construction (P) Ltd. v. Hanuman Seva Trust,(2006) 5 SCC 662, keeping in view the importance of question and the conflict of opinion, the Supreme Court referred the matter to a larger Bench.""
44 However, it appears from what has been observed in para 6 by the Supreme Court in Balasaria Construction (supra) that as the question referred to the Larger Bench became academic, the case was, therefore, sent back to the Bench for disposal on merits based on the facts of the case. Para 6 in Balasaria Construction (supra) reads as under:Page 45 of 56 Downloaded on : Fri Jul 05 23:29:32 IST 2024
NEUTRAL CITATION C/FA/2779/2018 CAV JUDGMENT DATED: 05/07/2024 undefined "...... It is not the case of either side that as an absolute proposition an application under Order 7 Rule 11 (d) can never be based on the law of limitation. Both sides state that the impugned judgment is based on the facts of this particular case and the question whether or not an application under Order 7 Rule 11(d) could be based on law of limitation was not raised and has not been dealt with. Both sides further state that the decision in this case will depend upon the facts of this case."
45 Order VII Rule 11 of the C.P.C. casts a duty upon the Court to reject the plaint if the circumstances indicates therein are found to be existing. It cannot be the law that this power of the Court would be curtailed in any manner even if the Court proceeds with the suit to some length, without application of mind, on this point. The rule itself does not indicate anywhere that the power is to be exercised upon an application or, if such an application is filed, it should be at a particular stage. I may only add that an action under Order VII Rule 11 of the C.P.C. does not await an application by any party. It is the duty of the Court to reject the plaint if reasons, therefore, are found to be existing from a reading of the plaint itself and other documents relied upon by the plaintiff and annexed with the plaint. 46 In the aforesaid context, I may refer to and rely upon a decision of the Allahabad High Court in the case of ITC Limited vs. Rakesh Srivastava reported in AIR 1997 Allahabad 323, wherein it has been observed as under:
"8...Order 7, Rule 11, C.P.C. casts a duty on the Court and it cannot be left to the event of an objection in this respect to be raised by one party. It is the duty of the civil Court, from the contents of the plaint, to find it there was any disclosure of a cause of action or if at all it was barred under the provisions of any law. The defendant could, at Page 46 of 56 Downloaded on : Fri Jul 05 23:29:32 IST 2024 NEUTRAL CITATION C/FA/2779/2018 CAV JUDGMENT DATED: 05/07/2024 undefined best, assist the Court to indicate that how these clauses (a) and (d) would apply."
"10. I shall engage myself now on the true import of Order 7, Rule 11, C.P.C. This order deals with the plaint and the rules herein speak about the particulars that are to be contained in a plaint, how the plaintiffs and the defendants are to be described and how a ground of exemption from limitation law is to be pleaded and how the reliefs are to be framed. In the context of this back ground of Order 7 the provisions of Rule thereunder ought to be looked into. Thus, Rule 11 speaks of rejection of the plaint and requires that the plaint shall be rejected where it does not disclose a cause of action. The plaint shall also be rejected where the suit appears from the statement in the plaint to be barred by any law. To decide whether the plaint discloses a cause of action or not, the Court is to look into only the allegations in the plaint and as such allegations should be assumed at that stage to be correct and only thereupon the Court is to see if the assertions did disclose a cause of action or not. The facts necessary to be proved for claiming the reliefs ought to be stated in the plaint although the evidence may not be pleaded. The very language of Order 7, Rule 11, C.P.C. indicates that the provisions are mandatory. The only condition is that the defendant's case is not to be looked into at this stage. The plaint is to stand or fall on its own merits or demerits without any reference to the defendant's case. The absence of cause of action is not the sole ground for rejection of a plaint, there are three other grounds also as mentioned in Order 7, Rule 11, C.P.C. The provisions of Order 7, Rule 11(a) have been indicated above where the plaint is to be rejected on the ground of absence of a disclosure of cause of action. The plaint is liable to be rejected also when from the plaint Page 47 of 56 Downloaded on : Fri Jul 05 23:29:32 IST 2024 NEUTRAL CITATION C/FA/2779/2018 CAV JUDGMENT DATED: 05/07/2024 undefined averments the suit is found prima facie not maintainable being barred under any law..."
49 I have to my advantage a Division Bench decision of this Court in the case of Chandrakant Kantilal Jhaveri and another vs. Madhuriben Gautambhai and another reported in AIR 2011 Gujarat 27, wherein the Division Bench has observed as under:
"6. The aforesaid shows that if it is found that the plaint does not disclose the cause of action, the Court has no option but to reject the plaint. But for deciding such aspects of cause of action, the Court should take into consideration the averments made in the plaint for, the purpose of deciding the question as to whether the averment made in the plaint discloses the cause of action or not and while doing so, it cannot be said that the Court is precluded from applying the statutory provisions or case law to the averments made in the plaint. If the assertion made in the plaint is contrary to the statutory law or case law, it cannot be considered as the valid cause of action."
"8. Under these circumstances, if there is no details whatsoever for any alleged fraud or collusion by the defendants, it can be said that the provisions of Order VII, Rule 11 of the Civil Procedure Code would apply. The pertinent aspect is that if the averments stated in the plaint is considered as it, it does not disclose any cause of action for the prayers made in the suit."
"We find that here also, except again and again using the word "collusion" and "fraud" in the plaint, no details have been given nor it is demonstrated in the manner in which any prejudice in law by breach of any rights in law Page 48 of 56 Downloaded on : Fri Jul 05 23:29:32 IST 2024 NEUTRAL CITATION C/FA/2779/2018 CAV JUDGMENT DATED: 05/07/2024 undefined has been caused resulting into valid cause of action."
"15A. It was submitted by the learned counsel for the appellant Mr. Gandhi that the plaint can be rejected under Order VII, Rule 11 of the Civil Procedure Code only when the suit is barred by any statutory provisions.
16. It is true that the same is one of the requirements as provided under Order VII, Rule 11, clause (d) of the Civil Procedure Code, but thereby it cannot be said that the suit if does not disclose the cause of action. Order VII, Rule 11 of the Civil Procedure Code will have no applicability and the reason being that the clause expressly provides for disclosure of the cause of action."
51 On the cause of action, I have to my advantage a decision of the Supreme Court in the case of Church of Christ Charitable Trust and Educational Charitable Society represented by its Chairman vs. Ponniamman Educational Trust represented by its Chairperson / Managing Trustee, reported in (2012) 8 SCC 706, wherein the Supreme Court has observed in paras 12 to 18 as under:
"12. It is also useful to refer the judgment in T. Arivandandam v. T.V. Satyapal and Anr., (1977) 4 SCC 467 : (AIR 1977 SC 2421), wherein while considering the very same provision, i.e. Order VII, Rule 11 and the duty of the trial Court in considering such application, this Court has reminded the trial Judges with the following observation:
"5. ...The learned Munsif must remember that if on a meaningful for formal reading Page 49 of 56 Downloaded on : Fri Jul 05 23:29:32 IST 2024 NEUTRAL CITATION C/FA/2779/2018 CAV JUDGMENT DATED: 05/07/2024 undefined of the plaint it is manifestly vexatious, and meritless, in the sense of not disclosing a clear right to sue, he should exercise his power under Order VII, Rule 11, C.P.C. taking care to see that the ground mentioned therein is fulfilled. And if clever drafting has created the illusion of a cause of action nip it in the bud at the first hearing by examining the party searchingly under Order X, C.P.C. An activist Judge is the answer to irresponsible law suits. The trial Courts would insist imperatively on examining the party at the first hearing so that bogus litigation can be shot down at the earliest stage. The Penal Code is also resourceful enough to meet such men, (Cr.XI) and must be triggered against them"
It is clear that if the allegations are vexatious and meritless and not disclosing a clear right or material(s) to sue, it is the duty of the trial Judge to exercise his power under Order VII, Rule 11. If clever drafting has created the illusion of a cause of action as observed by Krishna Iyer J., in the above referred decision, it should be nipped in the bud at the first hearing by examining the parties under Order X of the Code.
Cause of action:
13. While scrutinizing the plaint averments, it is the bounden duty of the trial Court to ascertain the materials for cause of action. The cause of action is a bundle of facts which taken with the law applicable to them gives the plaintiff the right to relief against the defendant. Every fact which is necessary for the plaintiff to prove to enable him to get a decree should be set out in clear terms. It is worthwhile to find out the meaning of the words "cause of action". A cause of action must include some act done by the defendant Page 50 of 56 Downloaded on : Fri Jul 05 23:29:32 IST 2024 NEUTRAL CITATION C/FA/2779/2018 CAV JUDGMENT DATED: 05/07/2024 undefined since in the absence of such an act no cause of action can possibly accrue.
14. In A.B.C. Laminart Pvt. Ltd. and Anr. v. A.P. Agencies, Salem (1989) 2 SCC 163 : (AIR 1989 SC 1239), this Court explained the meaning of "cause of action" as follows:
"12. A cause of action means every fact, which if traversed, it would be necessary for the plaintiff to prove in order to support his right to a judgment of the court. In other words, it is a bundle of facts which taken with the law applicable to them gives the plaintiff a right to relief against the defendant. It must include some act done by the defendant since in the absence of such an act no cause of action can possibly accrue. It is not limited to the actual infringement of the right sued on but includes all the material facts on which it is founded. It does not comprise evidence necessary to prove such facts, but every fact necessary for the plaintiff to prove to enable him to obtain a decree. Everything which if not proved would give the defendant a right to immediate judgment must be part of the cause of action. But it has no relation whatever to the defence which may be set up by the defendant nor does it depend upon the character of the relief prayed for by the plaintiff."
15. It is useful to refer the judgment in Bloom Dekor Ltd. v. Subhash Himatlal Desai and Ors. (1994) 6 SCC 322, wherein a three Judge Bench of this Court held as under:
"28. By "cause of action" it is meant every fact, which, if traversed, it Page 51 of 56 Downloaded on : Fri Jul 05 23:29:32 IST 2024 NEUTRAL CITATION C/FA/2779/2018 CAV JUDGMENT DATED: 05/07/2024 undefined would be necessary for the plaintiff to prove in order to support his right to a judgment of the Court, (Cooke v. Gill, 1873 LR 8 CP 107). In other words, a bundle of facts which it is necessary for the plaintiff to prove in order to succeed in the suit."
It is mandatory that in order to get relief, the plaintiff has to aver all material facts. In other words, it is necessary for the plaintiff to aver and prove in order to succeed in the suit.
Forms 47 and 48 of Appendix A of the Code
16. Mr. K. Parasaran, learned senior counsel by taking us through Form Nos. 47 and 48 of Appendix A of the Code which relate to suit for specific performance submitted that inasmuch as those forms are statutory in nature with regard to the claim filed for the relief for specific performance, the Court has to be satisfied that the plaint discloses a cause of action. In view of Order VII, Rule 11(a) and 11(d), the Court has to satisfy that the plaint discloses a cause of action and does not appear to be barred by any law. The statutory forms require the date of agreement to be mentioned to reflect that it does not appear to be barred by limitation. In addition to the same, in a suit for specific performance, there should be an agreement by the defendant or by a person duly authorized by a power of attorney executed in his favour by the owner.
17. In the case on hand, the plaintiff- respondent to get a decree for specific performance has to prove that there is a Page 52 of 56 Downloaded on : Fri Jul 05 23:29:32 IST 2024 NEUTRAL CITATION C/FA/2779/2018 CAV JUDGMENT DATED: 05/07/2024 undefined subsisting agreement in his favour and the second defendant has the necessary authority under the power of attorney. Order VII, Rule 14 mandates that the plaintiff has to produce the documents on which the cause of action is based, therefore, he has to produce the power of attorney when the plaint is presented by him and if he is not in possession of the same, he has to state as to in whose possession it is. In the case on hand, only the agreement between the plaintiff and the second defendant has been filed along with the plaint under Order VII, Rule 14(1). As rightly pointed out by the learned senior counsel for the appellant, if he is not in possession of the power of attorney, it being a registered document, he should have filed a registration copy of the same. There is no such explanation even for not filing the registration copy of the power of attorney. Under Order VII, Rule 14(2) instead of explaining in whose custody the power of attorney is, the plaintiff has simply stated 'Nil'. It clearly shows noncompliance of Order VII, Rule 14(2).
18. In the light of the controversy, we have gone through all the averments in the plaint. In paragraph 4 of the plaint, it is alleged that the 2nd defendant as agreement holder of the 1st defendant and also as the registered power of attorney holder of the 1st defendant executed the agreement of sale. In spite of our best efforts, we could not find any particulars showing as to the documents which are referred to as "agreement holder". We are satisfied that neither the documents were filed along with the plaint Page 53 of 56 Downloaded on : Fri Jul 05 23:29:32 IST 2024 NEUTRAL CITATION C/FA/2779/2018 CAV JUDGMENT DATED: 05/07/2024 undefined nor the terms thereof have been set out in the plaint. The abovementioned two documents were to be treated as part of the plaint as being the part of the cause of action. It is settled law that where a document is sued upon and its terms are not set out in the plaint but referred to in the plaint, the said document gets incorporated by reference in the plaint. This position has been reiterated in U.S. Sasidharan v. K. Karunakaran and another (1989) 4 SCC 482 : (AIR 1990 SC
924) and Manohar Joshi v. Nitin Bhaurao Patil and another (1996) 1 SCC 169 : (AIR 1996 SC 796 : 1996 AIR SCW 145)."
The Supreme Court has further reminded the Trial Judges' of the observations in T. Arivandandam (supra) observing as under:
"It is clear that if the allegations are vexatious and meritless and not disclosing a clear right or material(s) to sue, it is the duty of the trial Judge to exercise his power under Order VII, Rule 11. If clever drafting has created the illusion of a cause of action as observed by Krishna Iyer J., in the above referred decision, it should be nipped in the bud at the first hearing by examining the parties under Order X of the Code."
9.1 In the above case, the court referred to another decision of the Apex Court in the case of Popat & Kotecha. Paragraph no. 19 of the decision reads as under:
"19. There cannot be any compartmentalization, Page 54 of 56 Downloaded on : Fri Jul 05 23:29:32 IST 2024 NEUTRAL CITATION C/FA/2779/2018 CAV JUDGMENT DATED: 05/07/2024 undefined dissection, segregation and inversions of the language of various paragraphs in the plaint. If such a course is adopted it would run counter to the cardinal canon of interpretation according to which a pleading has to be read as a whole to ascertain its true import. It is not permissible to cull out a sentence or a passage and to read it out of the context in isolation. Although it is the substance and not merely the form that has to be looked into, the pleading has to be construed as it stands without addition or subtraction of words or change of its apparent grammatical sense. The intention of the party concerned is to be gathered primarily from the tenor and terms of his pleadings taken as a whole. At the same time it should be borne in mind that no pedantic approach should be adopted to defeat justice on hair- splitting technicalities."
10. In light of the aforesaid, reading of the plaint in the facts of the present case, and gathering the intention of the parties, would indicate that essentially it was a suit brought for enforcement of an agreement to sell dated 27.11.1980 and the subsequent notices of 2012 and 2015 were mere crafty drafting manoeuvre. Once a sale deed with a subsequent purchaser was entered on 08.10.2010 and on a plain reading of the plaint based on these two dates, the court found that the suit was hopelessly time barred, the exercise of the trial court in refusing to Page 55 of 56 Downloaded on : Fri Jul 05 23:29:32 IST 2024 NEUTRAL CITATION C/FA/2779/2018 CAV JUDGMENT DATED: 05/07/2024 undefined register the suit cannot be faulted.
11. In view of the above, present appeal is dismissed.
(BIREN VAISHNAV, J) (NISHA M. THAKORE,J) DIVYA Page 56 of 56 Downloaded on : Fri Jul 05 23:29:32 IST 2024