Gujarat High Court
Bhadreshkumar Bipinchandra Sheth vs Rajnikant Manubhai Patel on 20 July, 2021
Author: J.B.Pardiwala
Bench: J.B.Pardiwala, Vaibhavi D. Nanavati
C/FA/254/2020 JUDGMENT DATED: 20/07/2021
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/FIRST APPEAL NO. 254 of 2020
With
CIVIL APPLICATION (FOR STAY) NO. 1 of 2020
In R/FIRST APPEAL NO. 254 of 2020
With
R/CROSS OBJECTION NO. 44 of 2021
In
FIRST APPEAL NO. 254 of 2020
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE J.B.PARDIWALA
and
HONOURABLE MS. JUSTICE VAIBHAVI D. NANAVATI
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1 Whether Reporters of Local Papers may be allowed to YES
see the judgment ?
2 To be referred to the Reporter or not ? YES
3 Whether their Lordships wish to see the fair copy of the NO
judgment ?
4 Whether this case involves a substantial question of NO
law as to the interpretation of the Constitution of India
or any order made thereunder ?
CIRCULATE THIS JUDGEMENT IN THE SUBORDINATE
JUDICIARY.
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BHADRESHKUMAR BIPINCHANDRA SHETH
Versus
RAJNIKANT MANUBHAI PATEL
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Appearance:
MS TRUSHA K PATEL(2434) for the Appellant(s) No. 1
MR ARCHITA M PRAJAPATI(8241) for the Defendant(s) No. 1,2,3,4,5,6
MR MP PRAJAPATI(677) for the Defendant(s) No. 1,2,3,4,5,6
MR YATIN SONI(868) for the Defendant(s) No. 7,7.1,7.2
==========================================================
CORAM:HONOURABLE MR. JUSTICE J.B.PARDIWALA
and
HONOURABLE MS. JUSTICE VAIBHAVI D. NANAVATI
Page 1 of 39
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C/FA/254/2020 JUDGMENT DATED: 20/07/2021
Date : 20/07/2021
ORAL JUDGMENT
(PER : HONOURABLE MR. JUSTICE J.B.PARDIWALA) 1 This First Appeal is at the instance of the original plaintiff and is directed against the judgement and decree passed by the Additional Senior Civil Judge, Sanand dated 5 th December 1990 below Exhibit : 21 in the Special Civil Suit No.111 of 2018, by which the plaint came to be rejected under the provisions of Order VII Rule 11 (d) of the Code of Civil Procedure.
2 The facts giving rise to this appeal may be summarized as under:
3 The appellant herein is the original plaintiff. The respondents Nos.1 to 6 are the original owners of the suit property. The respondent No.7 is the original defendant No.7 and the purchaser of the suit property from the erstwhile owners i.e. the defendants Nos.1 to 6 respectively.
4 The appellant - original plaintiff instituted the Special Civil Suit No.111 of 2018 in the Court of the Principal Senior Civil Judge, Sanand for specific performance of an oral contract, cancellation of the sale deed executed by the original owners in favour of the defendant Nos.7 and permanent injunction. It is the case of the appellant - original plaintiff that the defendants Nos.1 to 6 are the lawful owners of the land bearing survey No.2135/2 situated at Sanand, District : Ahmedabad. This parcel of land is of restricted tenure, hit by the provisions of Section 43 of the Bombay Tenancy Act. According to the plaintiff, he entered into negotiations with the original owners for the purchase of the land bearing survey No.2135/2. According to the plaintiff, he entered into an Page 2 of 39 Downloaded on : Sun Aug 22 02:12:17 IST 2021 C/FA/254/2020 JUDGMENT DATED: 20/07/2021 oral contract with the owners for purchase of a part of the survey No.2135/2 at the rate of Rs.5,100/- per sq. yard for a total sale consideration of Rs.3,30,14,850/- (Rupees Three Crore Thirty Lakh Fourteen Thousand Eight Hundred Fifty only). It was understood between the plaintiff and the original owners that the original owners would take the necessary steps to get the land converted to old tenure. According to the plaintiff, he paid Rs.1,16,00,000/- (Rupees One Crore Sixteen Lakh only) to the original owners. Some amount was paid by way of cheques and some in cash. This payment was made to the original owners by the plaintiff between 2012 and 2014. The plaintiff has also placed vouchers duly signed by the owners acknowledging the receipt of the money towards the sale consideration. As the original owners were not able to get the land converted to old tenure, it was agreed between the parties that the original owners would sell one another parcel of land owned by them i.e. the survey No.1686 after obtaining the necessary N.A. permission from the competent authority in accordance with law. It is the case of the plaintiff that it was understood between the parties that the sale consideration of Rs.1,16,00,000/- (Rupees One Crore Sixteen Lakh only) paid by the plaintiff for the survey No.2135/2 would be treated as the earnest money for the purchase of the survey No.1686. According to the plaintiff, he entered into an oral agreement with the original owners i.e. the defendants Nos.1 to 6 to purchase the survey No.1686 in place of survey No.2135/2. The purchase price was fixed at the rate of Rs.81,00,000/- (Rupees Eighty One Lakh only) per Vigha (2378 sq. mtrs.), which comes to Rs.2,35,71,000/- (Rupees Two Crore Thirty Five Lakh Seventy One Thousand only). It is the case of the plaintiff that Rs.1,16,00,000/- (Rupees One Crore Sixteen Lakh only) was to be adjusted towards the total sale consideration of Rs.2,35,71,000/- (Rupees Two Crore Thirty Five Lakh Seventy One Thousand only).
Page 3 of 39 Downloaded on : Sun Aug 22 02:12:17 IST 2021C/FA/254/2020 JUDGMENT DATED: 20/07/2021 5 According to the plaintiff, he was always ready and willing to
perform his part of the contract. However, one fine day i.e. on 29 th May 2017, he read a public notice issued by the defendants Nos.1 to 6 through an advocate in a daily newspaper "Sandesh" seeking title clearance certificate. No sooner the plaintiff read the notice, then he immediately gave a reply in the form of objections dated 8 th June 2017. According to the plaintiff, he kept on requesting the defendants Nos.1 to 6 to accept the balance sale consideration of Rs.1,19,71,000/- (Rupees One Crore Nineteen Lakh Seventy one Thousand only) and execute the sale deed, however, the defendants Nos.1 to 6 declined to do so.
6 In such circumstances referred to above, the appellant - original plaintiff instituted the Special Civil Suit No.111 of 2018.
7 It appears that the original owners i.e. the defendants Nos.1 to 6 transferred the suit land in favour of the defendant No.7 by executing a sale deed. The defendant No.7 seems to be developing the land as on date.
8 The defendants, on receipt of the summons, appeared before the Court below and preferred an application Exhibit : 21 seeking to reject the plaint on two counts: (1) cause of action and (2) suit barred by law i.e. Order VII Rule 11(a) and (d) respectively of the C.P.C.
9 The application Exhibit 21 reads thus:
"Subject : application to reject plaint under Order 7, Rule 11(a) and (d) of the Code of Civil Procedure.Page 4 of 39 Downloaded on : Sun Aug 22 02:12:17 IST 2021
C/FA/254/2020 JUDGMENT DATED: 20/07/2021 We, the defendants, by present application state as under:
1. The plaintiff has filed a suit for the cancellation of sale deed in the backdrop of the transaction with the defendants no.1 to 6 in respect of the land bearing survey number 2135/2. In addition to the same the plaintiff has averred about payment of money (sale consideration) in respect of the s.no. 2135/2 and he has filed a suit by making incorrect statements seeking specific performance of an oral agreement / contract stating that in lieu of the transaction qua s. no.2135/2, an oral agreement / contract for the sale qua s. no.1686 was arrived at.
2. We, the defendants have filed a composite written statement today and the true and proper facts are stated therein in our defense.
3. As per the say of the plaintiff, the R. S. Nos.2135/2 and 1686 respectively were, in the year 2012, New Tenure lands and as per Section 43 of the Bombay Tenancy Act, without prior permission of the Collector, the owners have no right to sell and the same can be sold only after obtaining the prior permission of Collector. As per say of the plaintiff, the Collector had not granted any prior permission to the plaintiff or defendants no.1 to 6 for giving effect to the oral contract.
Such permission was not applied for by the plaintiff and defendants no.1 to 6. In such circumstances, the plaintiff has no cause of action to file the suit and even as per the law, the alleged contract is void and the same cannot be acted upon.
4. According to the contract act, if the contract is not in consonance with the Registration Act, then the same cannot be enforced. For this, the State of Gujarat has amended the Registration Act by inserting Section 17(AA) after the provisions of Section 18(1)(a); and the explanation given after Section 18(2) has also stood deleted. In such circumstances, the contract which is not registered as per the provisions Page 5 of 39 Downloaded on : Sun Aug 22 02:12:17 IST 2021 C/FA/254/2020 JUDGMENT DATED: 20/07/2021 of Section 17(1)(a) cannot be enforced. Considering the same, the plaintiff has no cause of action to file the suit. Further, in view of above referred legal provisions, the suit is barred. Hence, the plaint be rejected in view of the provisions of Order 7 Rule 11(a) and (d) respectively of the CPC.
5. Hence it is prayed that -
(A) The plaint be rejected under Order 7 Rule 11(a) and (d) of the CPC;
(B) Award the special compensatory cost to the defendants (C) Grant any other and further prayers."
10 The Court below adjudicated the application Exhibit : 21 and vide the impugned order dated 5 th December 2019 allowed the same and thereby rejected the plaint on the ground that the suit filed by the appellant - original plaintiff is barred by law. In other words, the Court below took the view that a suit for specific performance based on an oral contract is not maintainable in law.
11 The impugned order passed by the Court below reads thus:
"ORDER BELOW APPLICATION EXH. 21, FILED BY THE DEFENDANTS UNDER ORDER 7 RULE 11(A) AND (D) OF THE CPC (1) Read the application u/Or.7, R.11 of CPC, filed by the defendants.
Read the reply vide ye exh.25, by the plaintiff and the record of the case. Also heard the Ld. Advocates for the defendants and plaintiff.
(2) The brief facts of the application filed by the defendants are as under:
Page 6 of 39 Downloaded on : Sun Aug 22 02:12:17 IST 2021C/FA/254/2020 JUDGMENT DATED: 20/07/2021 S. nos. 2135/2 and 1686 respectively were, in the year 2012, of New Tenure and with restrictions of section 43 of tenancy act. It can only be sold after obtaining the prior permission of the Collector. The Collector has not granted prior permission to the plaintiff or defendants no. 1 to 6 to enter into such oral agreement. In such circumstances, the so- called oral contract is, a nullity and illegal. Even under the law, the so- called oral contract, in respect of a new tenure land, is void. In view of section 17(1) (a) of the Registration Act, the unregistered contract or agreement to sell is illegal and hence the suit is barred and hence the present application is filed U/0.7, R.11, seeking rejection of plaint.
(3) Against the application of Order-7, Rules 11, the plaintiff has submitted a written reply vide exh. 25 stating that the facts Stated by the defendants in the application under Order-7, Rules-11 of CPC are not correct. The plaintiff sticks to all the averments made in the plaint. Out of the submissions in paras 1 to 6 of the application, the submissions except in respect of the record are incorrect. And hence, the defendants pray to reject the application.
(4) In this matter, vide exh. 28, written arguments have been presented by the defendants, which have been read out. As none remained present to make submissions on behalf of the plaintiff, his right to arguments was closed.
(5) The present application has been given as per CPC Order-7, Rules11 which, if taken into consideration, is as under.
"The Plaint shall be rejected in the following cases:
(a) Where it does not disclose a cause of action;Page 7 of 39 Downloaded on : Sun Aug 22 02:12:17 IST 2021
C/FA/254/2020 JUDGMENT DATED: 20/07/2021
(b) Where the relief claimed is undervalued and the plaintiff on being required by the court to correct the valuation within a time to be fixed by the court fails to do so;
(c) Where the relief claimed is properly valued but the plaint is written upon paper Insufficiently stamped and the plaintiff, on being required by the court to supply the requisite stamp paper within a time to be fixed by the court fails to do so
(d) Where the suit appears from the statement in the plaint to be barred by any law
(e) Where it is not filed in duplicate
(f) Where the plaintiff fails comply with the provision of Rule 9.
Provided that the time fixed by the court for the correction of the valuation or supplying of the requisite stamp papers shall not be extended unless the court for reasons to be recorded is satisfied that the plaintiff was prevented by any cause of an exceptional nature from correcting the valuation or supplying the requisite stamp papers , as the case may be within the time fixed by the court and that refusal to extend such time could case grave injustice to the plaintiff."
Thus, to examine as to whether the present application falls within the scope of CPC Order-7, rule-11 for rejection of plaint Application, first of all, it may be noted that while deciding the application filed under Order 7, Rule - 11 of the CPC, only the plaint can be considered no other documents can be considered and only on reading the plaint, the application of u/Order-7, Rules-11 should be decided.
Page 8 of 39 Downloaded on : Sun Aug 22 02:12:17 IST 2021C/FA/254/2020 JUDGMENT DATED: 20/07/2021 (6) The present application is filed by the defendants U/O.7, R.11(d) on the ground that the contract, as stated in plaint, is unregistered and in view of S.17(1) (A) of Registration Act, the same is required to be cancelled. Considering the plaintiff's plaint, in respect of the defendant's submission, the plaintiff has filed the present suit for specific performance and cancellation of registered sale deed and permanent injunction. As stated in para-4 of the plaint, the Land bearing S.no. 2135/2 had been decided to be sold to the plaintiff by a oral contract. And then the defendants no.1 agreed to sell the suit property i.e. S.no. 1686 instead of land bearing s.no. 2315/2, for Rs. 1,16,00,000/ - After reading the entire plaint of the plaintiff, the plaintiff's entire case appears to be based on the oral contract as stated in the plaint. In this regard, taking into account section 17 of the Registration Act 1908, it is mandatory to have any document registered for transfer of immovable property. In addition, taking into account the proviso to Section 49 of the Registration Act, it is stated that an unregistered document can be accepted as evidence in a suit for specific performance. But no unregistered agreement or document has been submitted by the plaintiff which he claims to have entered into with the defendants regarding the disputed property in the present suit and the suit has been filed only on the basis of oral agreement in which case the plaintiff cannot avail the benefits of proviso to section 49. The date on which the oral agreement was made is also not disclosed by the plaintiff in the plaint and his entire suit has been filed solely on the basis of the oral agreement and on that basis cancellation of the registered sale deed made by the defendants is sought. As per the provisions of Registration Act the suit is S.17 of the barred, and hence the following order is made.
ORDER Therefore, the application of the CPC Order-7 Rule-11 (d) plaintiff under submitted by the defendants for dismissal of suit of the Page 9 of 39 Downloaded on : Sun Aug 22 02:12:17 IST 2021 C/FA/254/2020 JUDGMENT DATED: 20/07/2021 plaintiff is granted and the plaint of plaintiff's suit SP. C. Suit No. 111/12 is ordered to be rejected.
No order is made regarding cost.
The order was read out in open court today, on December 5, 2015."
12 Being dissatisfied with the aforesaid impugned order passed by the Court below, the appellant - original plaintiff is here before this Court with the present appeal.
SUBMISSIONS ON BEHALF OF THE APPELLANT - ORIGINAL PLAINTIFF:
13 Ms. Trusha Patel, the learned counsel appearing for the appellant
- original plaintiff vehemently submitted that the Court below committed a serious error in passing the impugned order. She would submit that the plaint could not have been rejected on the ground that the suit is barred by law. She would submit that it is a settled position of law that a suit for specific performance based on an oral contract is maintainable in law.
14 In such circumstances referred to above, Ms. Patel prays that there being merit in her appeal, the same be allowed and the impugned order be quashed and set aside.
SUBMISSIONS ON BEHALF OF THE RESPONDENT NO.7
(ORIGINAL DEFENDANT NO.7) / PURCHASER OF THE SUIT
PROPERTY:
15 Mr. Yatin Soni, the learned counsel appearing for the respondent
No.7 vehemently submitted that no error, not to speak of any error of Page 10 of 39 Downloaded on : Sun Aug 22 02:12:17 IST 2021 C/FA/254/2020 JUDGMENT DATED: 20/07/2021 law could be said to have been committed by the Court below in rejecting the plaint. He would submit that the entire suit filed by the plaintiff could be termed as frivolous. Mr. Soni invited the attention of this Court to the cross objections filed by him. According to Mr. Soni, the plaint should also have been rejected on the ground that it does not disclose a cause of action. Therefore, according to Mr. Soni, the plaint should have been rejected under the provisions of Order VII Rule 11(a) also. Mr. Soni would submit that the suit is also barred by limitation. He would vehemently argue that the institution of suit is nothing, but an abuse of the process of law by clever drafting without actual and genuine cause of action against the defendants. Mr. Soni would submit that it is the duty of the Court to reject the plaint of the present type as permitting any person to file such frivolous suit would be nothing, but an abuse of the process of law. Therefore, according to Mr. Soni, whether any application for rejection of plaint is filed or not, it is the obligation on the part of the concerned Court to look into the plaint and satisfy itself whether the suit is barred by law or discloses a cause of action or not.
16 In such circumstances referred to above, Mr. Soni prays that there being no merit in the appeal, the same be dismissed.
ANALYSIS: 17 Having heard the learned counsel appearing for the parties and
having gone through the materials on record, the only question that falls for our consideration is whether the Court below committed any error in passing the impugned order.
18 Before adverting to the rival submissions canvassed on either side, we reproduce the entire plaint as under:
Page 11 of 39 Downloaded on : Sun Aug 22 02:12:17 IST 2021C/FA/254/2020 JUDGMENT DATED: 20/07/2021 "Suit for specific performance and cancellation of registered document and permanent injunction.
Claim valued at rs.3,74,12,002/-
The facts of the suit filed by the plaintiff are that:
1. I am residing with my family at the address enumerated above. I do business related to agriculture and land.
2. The land bearing block/survey no.1686 admeasuring 1-15-34 i.e. 11534 sq.mtrs. Paiki 6920 sq.mtrs is a non-agriculture land (for residential purpose) land situated at Sanand, District Ahmedabad. It was owned by the defendants no.1-6 and the same was running in their names in the revenue record. The said land is referred to herein after as the "disputed land" or the "suit land".
3. It is stated to the Hon'ble Court that the defendants no.1-6 are the owners of one another parcel of land bearing R.S.no.2135/2 admeasuring H-Are-Sq.mtrs. 1-08-25 i.e. 10825 sq.mtrs. having akar of Rs.7.37 paisa of village : Sanand, Registration sub district and Taluka :
Sanand and district : Ahmedabad; which was a restricted tenure land. The same is running in the name of the defendants no.1-6 in the government, semi-government and revenue record. Which is herein after referred to as "said S.no.2135/2" herein after.
4. The plaintiff further states that, as the defendants no.1 to 6 wanted to sell the land bearing S.no.2135/2 to the plaintiff, they contacted the plaintiff and as the plaintiff liked half of the S.no.2135/2, the plaintiff agreed to purchase the same and the negotiations in respect of rate undertook amongst the plaintiff and the defendants no.1 to 6; and on conclusion of negotiation, half of the S.no. 2135/2 was, by Page 12 of 39 Downloaded on : Sun Aug 22 02:12:17 IST 2021 C/FA/254/2020 JUDGMENT DATED: 20/07/2021 oral contract, decided to be purchased at the rate of Rs. 5100/- sq.yrd.
i.e. total consideration of Rs. 3,30,14,850/(Rupees three crores, thirty lacs fourteen thousand and eight hundred and fifty); with the condition to get it converted in to old tenure. To which the defendants no. 1 to 6 agreed. By said oral contract, the defendants no. 1 to 6 agreed to sell half of S.no. 2135/2 to the plaintiff and the contract was entered in to. Thereafter, the plaintiff paid Rs. 1,16,00,000/- (Rupees one crore sixteen lacs) by cheque and in cash, in installments during the period between Yr. 2012 and 2014 for half of S.no. 2135/2; for which the vouchers were signed by the defendants no. 1-6. The same is recovered by the defendants no. 1 to 6. Thus, the plaintiff had preferential right to purchase the land bearing S.no. 2135/2. However, it was the responsibility of the defendants no. 1-6 to get the land converted in to Old tenure from restricted tenure. But, the defendants did not do anything and an injunction was also granted by the Collector and on 24/5/2013, a notice was issued to the defendant no.1; hence, the defendant no.1 informed the plaintiff that it is not possible to sell the land bearing S.no. 2135/2, as the proceedings were pending before the High Court. Hence, instead of S.no. 2135/2, the defendants no. 1 to 6 agreed to sell suit land i.e. S.no. 1686 after getting the land converted to NA for residential purpose, and it was agreed that the consideration of Rs. 1,16,00,000/- paid for S.no. 2135/2, be considered as earnest money and consideration for purchasing S.no. 1686 and the same be given set off. Thus, the plaintiff agreed to purchase s.no. 1686 in place of half of S.no. 2135/2. As agreed between the plaintiff and the defendants no. 1 to 6, the sale price was fixed at the rate of Rs. 81,00,000/- (Rupees eighty one lakhs) per vigha (2378 sq.mtrs.); which comes to total Rs. 2,35,71,000/(Two crores thirty five lakhs and seventy one thousand). Out of that,the plaintiff had already paid Rs. 1,16,00,000/- to the defendants no. 1 to 6 towards consideration. Hence, the plaintiff has preferential right to purchase the suit land i.e. Page 13 of 39 Downloaded on : Sun Aug 22 02:12:17 IST 2021 C/FA/254/2020 JUDGMENT DATED: 20/07/2021 s.no. 1686. The plaintiff was always ready and willing to perform his part of contract.
5. It is further stated to the Hon'ble Court that, as per above referred details, though the plaintiff had preferential right to purchase the suit land i.e. s.no. 1686, and though the defendants no. 1 to 6 had accepted Rs. 1,16,00,000/- from the plaintiff, the defendants no. 1 to 6 backed out from the conditions of the contract and were trying to sell out S.no. 1686 to the third parties. In that regard, the defendants no. 1 to 6 had, on 29.5.2017 issued a notice in "Sandesh" news paper through advocates: Dinesh N Parmar and Pravin P Prajapati; seeking title clearance certificate. Against the same, on 8.6.17, the plaintiffs had sent objections through RPAD to the defendant no.1 through his lawyers: Dinesh N Parmar and Pravin P Prajapati. Said objections were received and served to them. Despite that, till today, there is no response from the defendant no.1 and his lawyer. Thereafter, on 23.6.17, the plaintiff approached the defendants no. 1 to 6 and requested to accept remaining consideration of Rs. 1,19,71,000/- from the plaintiff and execute the sale deed. At that time, the defendants no. 1 to 6 got angry and threatened the plaintiff that they would sell out S.no. 1686 to the third party and the plaintiff should forget about the amount of Rs. 1,16,00,000/- paid by the plaintiff. Thus, the defendants no. 1 to 6 are trying to sell out S.no. 1686 to the third parties. Hence, as a last resort, the plaintiff filed RCS 72/2017 before the Hon'ble Court against the defendants no. 1 to 6. Though the said suit was pending, the defendants no. 1 to 6, on 19.7.17, executed a registered sale deed in favour of the defendant no.7, which is illegal and void ab initio. Said illegal sale deed is registered with sub-registrar's office of Sanand at sr.no. 6652 on 19.7.17. Thereafter, the defendants no. 1 to 6 filed their written statement in RCS 72/17. In their written statement, they have not mentioned anything about the above referred illegal sale deed. This Page 14 of 39 Downloaded on : Sun Aug 22 02:12:17 IST 2021 C/FA/254/2020 JUDGMENT DATED: 20/07/2021 prima facie shows that the defendants in collusion with each. other, hatched conspiracy and after pocketing Rs. 1,16,00,000/-, are malafide not executing sale deed in favour of the plaintiff. Thereafter, the plaintiff had filed Application vide Exh. 15 on 30/6/2018 in RCS 72/2017 invoking Or. 23, R.1 of CPC seeking permission to withdraw the suit with a view to file fresh suit. The Hon'ble Court had, on 4.8.2018 passed order below exh.15. The defendants of this suit are trying to illegally sell the suit land to the third parties; and _ hence, the unknown persons come on land and shows the land. Hence, it has necessitated to file the present suit for specific performance on basis of preferential rights of the plaintiff and for cancellation of the sale deed executed in favour of the defendant no.7.
CAUSE OF ACTION:
6. The cause of action to file the present suit has arisen as the land bearing S.no. 1686 admeasuring H.Are. Sq.mtrs. 1-15-34 i.e. 11534 Sq.mtrs . having Akar Rs. 8 -00, of village: Sanand, Registration sub- district and Taluka: Sanand, District: Ahmedabad of restricted tenure was owned by and running in the Semi -Government, Government and revenue record in name of the defendants no. 1 to 6, and as the land bearing S.no. 2135/2 admeasuring H.Are. Sq.mtrs. 1-08-25 i.e. 10825 Sq.mtrs. having Akar Rs. 8-00, of Village: Sanand, Registration sub- district and Taluka: Sanand, District: Ahmedabad of restricted tenure owned by and running in Semi-Government, Government and revenue record in the names of defendants no. 1 to 6, and as the land bearing S.no. 1686 admeasuring H.Are. Sq.mtrs. 1-15-34 i.e. 11534 Sq.mtrs. having Akar Rs. 8-00 of Village: Sanand, Registration sub-district and Taluka: Sanand, District: Ahmedabad of new tenure land belonged to and running in Semi-Government, Government and revenue record in name of defendants no. 1 to 6 wanted to sell half of S.no. 2135/2 to the plaintiff, defendants no. 1 to 6 contacted the plaintiff, and as and when Page 15 of 39 Downloaded on : Sun Aug 22 02:12:17 IST 2021 C/FA/254/2020 JUDGMENT DATED: 20/07/2021 the plaintiff liked half of S.no. 2135/2, the plaintiff agreed to purchase it and when negotiations took place qua sale price of half of S.no.2135/2 between plaintiff and defendants no. 1 to 6 and when the plaintiff, by oral contract, agreed to purchase half of S.no.2135/2 paiki at the rate of Rs. 5100/- Sq.mtr. i.e. total consideration Rs.3,30,14,850/- after getting the land converted to Old Tenure from restricted tenure, which was agreed by the defendants no. 1 to 6 and when the defendants no.1 to 6 agreed to sell half of S.no. 2135/2 to the plaintiff and when the defendants no. 1 to 6 accepted Rs. 1,16,00,000/- by issuing vouchers, and when the preferential rights to purchase half of S.no. 2135/2 accrued, and the responsibility to get the land converted into Old Tenure was on the shoulders of defendants and as defendants no. 1 to 6 did not do anything to seek the permission and when the collector granted injunction and when on 24.5.2013, a notice was served to the defendant no.1 and when defendant no.1 informed the plaintiff that due to pendency of proceedings before the High Court, the sale of S.no. 2135/2 was not possible and agreed to sell S.no. 1686 in lieu of S.no. 2135/2and when they stated that the consideration paid qua half of S.no. 2135/2 be considered as consideration of S.no. 1686, and when the plaintiff agreed to purchase S.no. 1686 instead of S.no. 2135/2 and when the plaintiff has preferential right to purchase S.no. 1686 and when the plaintiff was always ready and willing to perform our part of contract, and when despite plaintiff's preferential rights to purchase S.no. 1686, and though the defendants no. 1 to 6 have accepted consideration and earnest money of Rs. 1,16,00,000/- from plaintiff, the defendants backed out from performance and indulged in to attempts to sell out to the third party and when a public notice dtd. 29/5/2017 for title clearance certificate was published in Sandesh news paper through Advocate Mr. Dinesh N Parmar and Pravin P Prajapati and when the plaintiff raised objections against the same and when the same was served to Advocate Mr. Dinesh N Parmar and Pravin P Page 16 of 39 Downloaded on : Sun Aug 22 02:12:17 IST 2021 C/FA/254/2020 JUDGMENT DATED: 20/07/2021 Prajapati on 8/6/2017 and still no reply is given till date and when on 23.6.2017, the plaintiff contacted the defendants no. 1 to 6 personally and when the plaintiff requested to accept remaining consideration of Rs. 1,19,71,000/- and execute sale deed in favour of the plaintiff and as at that time the defendants got angry and when defendants threatened the plaintiffs to sell out land to third party and that' the plaintiff should forget about payment of Rs. 1,16,00,000/- made by him and as the defendants no. 1 to 6 are trying to sell out the land to the third party and when the plaintiff filed RCS 72/2017 before your hounour to restrict the defendants from entering in to illegal sale, and despite pendency of suit the defendants no. 1 to 6 executed a null and void sale deed in favour of the defendnat no.7 on 19.7.17 and when the said sale deed got registered vide No. 6652 before the Sub Registrar, Sanand and when the defendants no. 1 to 6 filed their written statement in RCS 72/2017 and when they did not utter a single word about illegal sale deed and when the plaintiff had, vide exh.16, filed purshis dated 30.6.2018 to withdraw the suit 72/2017 on condition to file fresh suit as per Order 23, R.1 and as the Court granted permission to withdraw and when the court passed an order below exh.15 and as the defendants are, in connivance with each other trying to sell out the property to the third party and as in that regard the defendants brings unknown persons on the suit land and as the land is situate within territorial jurisdiction of your honour and the same is filed as your honour has jurisdiction to admit, conduct and dispose of the suit.
7. The plaintiff has a strong prima facie case, balance of convenience is not in favour of the defendants but is in favour of the plaintiff. If the defendants sale out the property to the third party, the plaintiffs would have to bare irreparable loss. And if the injunction as prayed for by the plaintiff is granted, no prejudice is likely to be caused to the defendants. Otherwise, the plaintiffs would have to bare Page 17 of 39 Downloaded on : Sun Aug 22 02:12:17 IST 2021 C/FA/254/2020 JUDGMENT DATED: 20/07/2021 irreparable loss.
8. Hence, by filing the present suit, the following prayers are sought:
(1) Declare that though the defendants no. 1 to 6 have pocketed Rs.
1,16,00,000/- towards the consideration from the plaintiff, qua the land bearing S.no. 1686 admeasuring H.Are.Sq.mtrs. 1-15-34 i.e. 11534 Sq.mtrs. paiki land admeasuring 6920 Sq.mtrs of District: Ahmedabad, Registration Sub-district and Taluka: Sanand village: Sanand which is converted into NA, they have, illegally executed a registered sale deed no. 6652 on 19.7.17 in favour of the defendant no.7; which is null and void ab initio, illegal, without consideration and against the provisions of the Transfer of Property Act and the Contract Act and hence is not binding to the plaintiff; and the same be cancelled and set aside and a judgment and decree to that effect be passed in favour of the plaintiff and against the defendants;
(2) Direct the defendants no. 1 to 6 to accept the balance sale consideration of Rs.1,19,71,000/- and execute the registered sale deed in favour of the plaintiff qua the land bearing S.no. 1686 admeasuring H.Are.Sq.mtrs. 1-15-34 i.e. 11534 Sq.mtrs. paiki land admeasuring 6920 Sq.mtrs of District: Ahmedabad, Registration Sub-district and Taluka: Sanand village: Sanand which is converted into NA. If the defendants no. 1 to 6 fail to execute registered sale deed, Alternatively Direct the Court commissioner to execute the registered sale deed on behalf of the defendant no.1 to 6 in favour of the plaintiff.
(3) Grant permanent injunction against the defendants and their Page 18 of 39 Downloaded on : Sun Aug 22 02:12:17 IST 2021 C/FA/254/2020 JUDGMENT DATED: 20/07/2021 servants, agents, persons, successors and Power of Attorney holder and in favour of the plaintiff against the transfer or assignment in favour of any person, firm, institute, company etc, change in revenue record, creation of any charge over the suit land by mortgaging the property to bank, financial institution, company or any co-operative society; construction of any nature, creation of third party rights, qua land bearing Sno. 1686 admeasuring H.Are.Sq.mtrs. 115-34 i.e. 11534 Sq.mtrs. paiki land admeasuring 6920 Sq.mtrs of District: Ahmedabad, Registration Sub-district and Taluka: Sanand village: Sanand which is converted in to NA, (4) Looking to the over all facts of the case, any other and further relief as deemed fit by the hon'ble Court may be granted."
19 The object of the provisions of Order VII Rule 11 of the C.P.C. is to keep out irresponsible law suits. In a way, it is to be used as a handy tool by the courts to segregate the grain from the chaff, on a purely prima facie examination of the statements made in the plaint. The purpose of the said exercise is to ensure that a plaint which is on the face of it vexatious and meritless and does not disclose a clear right to sue when require to be thrown out at the threshold so that unnecessary harassment and expense of the defendant is spared. In regard reference may be made to the case reported as Liverpool & London S.P. & I. Association Ltd. vs. M.V. Sea Success I & Anr., (2004) 9 SCC 512, relevant extract of which is reproduced hereinbelow :
"Para 133: The idea underlying Order 7 Rule 11(a) is that when no cause of action is disclosed, the courts will not unnecessarily protect the hearing of a suit. Having regard to the changes in the legislative policy as adumbrated by the amendments carried out in the Code of Civil Procedure, the courts would interpret the provisions in such a manner so as to save expenses, achieve expedition and avoid the court's Page 19 of 39 Downloaded on : Sun Aug 22 02:12:17 IST 2021 C/FA/254/2020 JUDGMENT DATED: 20/07/2021 resources being used up on cases which will serve no useful purpose. A legislation which in the opinion of the court is doomed to fail would not further be allowed to be used as device to harass a litigant."
20 In the case on hand, the defendants in their application Exhibit : 21 have invoked both Order VII Rule 11(a) as well as (d). However, there are no pleadings in the application Exhibit : 21 so far as Order VII Rule 11(a) is concerned. The pleadings, in the application Exhibit : 21, are confined only to the question whether the suit for specific performance of contract based on an oral agreement of sale is maintainable or not. However, in the course of the hearing of this First Appeal, a lot was argued even on the issue of the cause of action. It appears that the Court below has not rejected the plaint for want of cause of action and that is the reason why Mr. Soni has filed cross objection.
21 While determining, as to what would constitute cause of action, the Supreme Court in the case of Om Prakash Srivastava vs. Union of India, reported in (2006) 6 SCC 207, observed as below:
"Para 12. The expression "cause of action" has acquired a judicially settled meaning. In the restricted sense "cause of action" means the circumstances forming the infraction of the right or the immediate occasion for the reaction. In the wider sense, it means the necessary conditions for the maintenance of the suit, including not only the infraction of the right, but also the infraction coupled with the right itself. Compendiously, as noted above, the expression means every fact, which it would be necessary for the plaintiff to prove, if traversed, in order to support his right to the judgment of the court. Every fact, which is necessary to be proved, as distinguished from every piece of evidence, which is necessary to prove each fact, comprises in "cause of action." (See Rajasthan High Court Advocates' Assn. v. Union of India (2001) 2 SCC 294) "Para 13. The expression "cause of action" has sometimes been employed to convey the restricted idea of facts or circumstances which constitute either the infringement or the basis of a right and no more.
In a wider and more comprehensive sense, it has been used to denote Page 20 of 39 Downloaded on : Sun Aug 22 02:12:17 IST 2021 C/FA/254/2020 JUDGMENT DATED: 20/07/2021 the whole bundle of material facts, which a plaintiff must prove in order to succeed. These are all those essential facts without the proof of which the plaintiff must fail in his suit." (See Gurdit Singh v. Munsha Singh, (1977) 1 SCC 791).
"Para 14. The expression "cause of action" is generally understood to mean a situation or state of facts that entitles a party to maintain an action in a court or a tribunal; a group of operative facts giving rise to one or more bases of suing; a factual situation that entitles one person to obtain a remedy in court from another person (see Black's Law Dictionary). In Stroud's Judicial Dictionary a "cause of action" is stated to be the entire set of facts that gives rise to an enforceable claim; the phrase comprises every fact, which if traversed, the plaintiff must prove in order to obtain judgment. In Words and Phrases (4th Edn.) the meaning attributed to the phrase "cause of action" in common legal parlance is existence of those facts, which give a party a right to judicial interference on his behalf." (See Navinchandra N. Majithia v. State of Maharashtra, (2000) 7 SCC 640 )
22 In the case of Union of India vs. Adani Exports Ltd., reported in AIR 2002 SC 126, the Supreme Court observed as under :
"10. ...Cause of action as understood in civil proceedings means every fact which, if traversed, would be necessary for the plaintiff to prove in order to support his right to a judgment of the Court. It is the bundle of facts which taken with the law applicable to them, gives the plaintiff a right to relief against the defendant. Each and every fact pleaded in the writ petition does not ipso facto lead to the conclusion that those facts give rise to a cause of action within the court's territorial jurisdiction unless those facts pleaded are such which have a nexus or relevance with the lis that is involved in the case. Facts which have no bearing with the lis or dispute involved in the case, do not give rise to a cause of action so as to confer territorial jurisdiction on the court concerned."
23 Thus, it is apparent from the aforesaid judicial pronouncements that while examining the expressing cause of action, the court ought to look at the factual situation that gives rise to an enforceable claim. For the said purpose, the material facts are required to be stated. As observed by the Supreme Court in the case of Liverpool & London S.P. & I Assn. Ltd. (supra) whether a plaint discloses a cause of action or not is Page 21 of 39 Downloaded on : Sun Aug 22 02:12:17 IST 2021 C/FA/254/2020 JUDGMENT DATED: 20/07/2021 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. Although the Order 7 Rule 11(a) of the C.P.C. authorizes the court to reject a plaint on failure on part of the plaintiff to disclose a cause of action but the same would not mean that the averments made therein or document upon which reliance has been placed although discloses a cause of action, the plaint would be rejected on the ground that such averments which are not sufficient to prove the facts stated therein for the purpose of obtaining the reliefs claimed in the suit. The court must assume that the submissions in the plaint are true and has to find out if they disclose a cause of action or a triable issue. For the said purpose, the defence taken by the defendant in its written statement cannot be probed. Nor can the court dissect the pleading into several parts and consider whether each of them disclose a cause of action (Refer : D. Ramachandran vs. R. V. Janakiraman, (1999) 3 SCC 267).
24 It is true that the rejection of the plaint under Order 7 Rule 11 of the C.P.C. is a drastic power conferred in the court to terminate a civil action at the threshold. The conditions precedent for the exercise of powers under Order 7 Rule 11, therefore, are stringent and have been consistently held to be so by the Supreme Court. It is the averments in the plaint that have to be read as a whole to find out, whether it discloses a cause of action or whether the suit is barred under any law. At the stage of exercise of powers under Order 7 Rule 11, the stand of the defendants in the written-statement or in the plaint for rejection of the plaint is wholly immaterial. It is only if the averments in the plaint ex-facie do not disclose a cause of action or on a reading thereof the suit appears to be barred under any law that the plaint can be rejected. In all situations, the claims will have to be adjudicated in the course of the Page 22 of 39 Downloaded on : Sun Aug 22 02:12:17 IST 2021 C/FA/254/2020 JUDGMENT DATED: 20/07/2021 trial. When we say 'averments in the plaint', it would embrace the documentary evidence also relied upon by the plaintiffs. It is a settled position of law that for the purpose of considering an application seeking rejection of plaint, the court can look into the accompanying documents relied upon by the plaintiffs. It is equally well-settled that a frivolous civil action should be terminated at the threshold. The civil court should not be permitted to adjudicate upon a frivolous suit instituted with clever drafting of the plaint. If clever drafting has created an illusion of the cause of action, then it is the duty of the court to nip it in the bud at the first hearing.
25 We are of the view that the plaint could not have been rejected on the ground assigned in the impugned order. It appears that the Court below is labouring under a serious misconception of law that the suit for specific performance of contract based on an oral agreement for sale is "barred by law".
BARRED BY LAW: 26 In the Black's law Dictionary the meaning of "law" is given as below:
"`law': "...... The aggregate of legislation, judicial precedents, and accepted legal principles; the body of authoritative grounds of judicial and administrative action; esp., the body of rules, standards, and principles that the courts of a particular jurisdiction apply in deciding controversies brought before them the law of the land...."
In view of the above, the word "law" cannot be confined only to mean the enacted law contained in a statute, framed by the legislature.
Page 23 of 39 Downloaded on : Sun Aug 22 02:12:17 IST 2021C/FA/254/2020 JUDGMENT DATED: 20/07/2021 27 A learned Single Judge of this Court in the case of Hermes
Marines Limited vs. Capeshore Maritime [Civil Application (OJ) No.144 of 2016 in Admiralty Suit No.10 of 2016 decided on 22 nd April 2016] has explained the phrase "barred by law" in context of Order VII Rule 11(d) C.P.C. We quote the relevant observations:
"49. It has been vehemently argued by Mr. Bharat T. Rao, learned counsel for the plaintiff that the submission on behalf of the applicant, that the plaint is liable to be rejected under Order 7, Rule 11 (d) may not be accepted, as clause (d) of Rule 11 refers to the plaint being barred by any 'law'. According to him, this means only the law laid down by a statute and not by the Court in a judgment, as a result of judicial interpretation.
50. In this regard, reference may be made to Black's law Dictionary, wherein the meaning of 'law' is given as below:
'law': "...... The aggregate of legislation, judicial precedents, and accepted legal principles; the body of authoritative grounds of judicial and administrative action; esp., the body of rules, standards, and principles that the courts of a particular jurisdiction apply in deciding controversies brought before them (the law of the land) ...."
51. In the view of this Court, 'law' cannot be confined only to mean the enacted law contained in a statute, framed by the legislature. The scope and amplitude of the word 'law' is much wider than that and takes within its sweep the binding precedents of the Supreme Court, being the highest Court in the country. When one speaks to law, one refers to all that is legally binding upon the courts and citizens. Judgments of the courts have interpreted various provisions of the statutes and the result of the interpretation is the law laid down by judicial precedent. The word 'law' connotes judgemade law as much as statute-law. The final judicial interpretation of any provision of a statute by a Court, especially the Apex Court or the final determination of any issue arising before it is very much 'law'. The law expounded by the Supreme Court is binding on all courts of the country under Article 141 of the Constitution of India. A pronouncement or determination on any legal issue decided by the Supreme Court becomes the law of the land.
52. A Division Bench of the High Court of Allahabad has, in the case of Virender Kumar Dixit v. State of U.P. 2014(9) ADJ 1506, succinctly and aptly stated thus:
Page 24 of 39 Downloaded on : Sun Aug 22 02:12:17 IST 2021C/FA/254/2020 JUDGMENT DATED: 20/07/2021 "15. Law includes not only legislative enactments but also judicial precedents. An authoritative judgment of the courts including higher judiciary is also law."
53. In light of the above discussion, in the considered view of this Court, it cannot be said that the term "barred by any law" occurring in clause (d) of Rule 11 Order 7 of the Code, ought to be read to mean only the law codified in a legislative enactment and not the law laid down by the courts in judicial precedents. The judicial precedent of the Supreme Court in Liverpool & London (supra) has been followed by the decision of the Division Bench in Croft Sales (supra). It is, therefore the law, as of today, which is that the Geneva Convention of 1999 cannot be made applicable to a contract that does not involve public law character. Such a contract would not give rise to a maritime claim. As discussed earlier, the word 'law' as occurring in Order 7, Rule 11 (d) would also mean judicial precedent. If the judicial precedent bars any action, that would be the law."
28 We may start with the decision of the Privy Council in the case of Shankarlal Narayandas Mundade vs. New Mofussil Company Limited (in liquidation) and others reported in ILR 1946 Bom 694. In the said case, Lord DU PARCQ, speaking for the Bench, observed that an oral contract is valid, binding and enforceable. The Privy Council held that a suit for specific performance based on an oral contract is maintainable in law. This view of the Privy Council was followed by the Supreme Court in Kollipara Sriramulu vs. T. Aswatha Narayana reported in AIR 1968 SC 1028. This decision of the Privy Council has also been referred to and relied upon by the Supreme Court in K. Nanjappa (dead) by legal representatives vs. R. A. Hameed alias Ameersab (dead) by legal representatives and another reported in (2016) 1 SCC 762, wherein the Supreme Court observed as under:
"21. There is no dispute that even a decree for specific performance can be granted on the basis of oral contract. Lord Du Parcq in a case Shankarlal Narayandas Mundade vs. New Mofussil Company Limited (AIR 1946 Privy Council) 97 observed, while deciding a suit Page 25 of 39 Downloaded on : Sun Aug 22 02:12:17 IST 2021 C/FA/254/2020 JUDGMENT DATED: 20/07/2021 for specific performance, that an oral contract is valid, binding and enforceable. A decree for specific performance could be passed on the basis of oral agreement. This view of a Privy Council was followed by this Court in the case of Koillipara Sriramulu vs. T. Aswatha Narayana, AIR 1968 SC 1028, and held that an oral agreement with a reference to a future formal contract will not prevent a binding bargain between the parties.
22. However, in a case where the plaintiff come forward to seek a decree for specific performance of contract of sale of immoveable property on the basis of an oral agreement or a written contract, heavy burden lies on the plaintiff to prove that there was consensus ad idem between the parties for the concluded agreement for sale of immoveable property. Whether there was such a concluded contract or not would be a question of fact to be determined in the facts and circumstances of each individual case. It has to be established by the plaintiffs that vital and fundamental terms for sale of immoveable property were concluded between the parties."
29 The Supreme Court, while considering the provisions of Section 54 of the Transfer of Property Act with regard to the specific performance of oral agreement of sale sought in the case of Brij Mohan and others vs. Sugra Begum and others reported in (1990) 4 SCC 147 at paragraph 20 has held as under:
"20. We have given our careful consideration to the arguments advanced by Learned Counsel for the parties and have thoroughly perused the record. We agree with the contention of the Learned counsel for the appellants to the extent that there is no requirement of law that an agreement or contract of sale of immovable property should only be in writing. However, in a case where the plaintiffs come forward to seek a decree for specific performance of contract of sale of immovable property on the basis of an oral agreement alone, heavy burden lies on the plaintiffs to prove that there was consensus ad-idem between the parties for a concluded oral agreement for sale of immovable property.
Whether there was such a concluded oral contract or not would be a question of fact to be determined in the facts and circumstances of each individual case. It has to be established by the plaintiffs that vital and fundamental terms for sale of immovable property were concluded between the parties orally and a written agreement if any to be Page 26 of 39 Downloaded on : Sun Aug 22 02:12:17 IST 2021 C/FA/254/2020 JUDGMENT DATED: 20/07/2021 executed subsequently would only be a formal agreement incorporating such terms which had already been settled and concluded in the oral agreement."
30 The Supreme Court in the case of Alka Bose vs. Parmatma Devi and others [Civil Appeal No. 6197 of 2000] has succinctly explained how the oral agreements are valid. The Supreme Court in no uncertain terms has observed that a sale agreement can be oral also and valid. It is not necessary that the agreement should be written. What is more important is that it should be within the ambit of Section 10 of the Indian Contract Act. All oral and written agreements will be valid if they fulfill the conditions specified in Section 10.
31 The Delhi High Court in the case of Sheela Gehlot vs. Sonu Kochar and others reported in 2006(92) DRJ 498 has observed that the oral agreements are valid and enforceable.
32 The Andhra Pradesh High Court in the case of Y. V. Narasimha Sarma vs. Soorampalli Appalaraju reported in 1988 Civil (A.P) Court Appeal No. 887 of 1982 held that it is not necessary that a contract should be in writing only. An oral agreement is also valid.
33 Order VII Rule 11 of the Code provides for rejection of plaint, clause (d) whereof specifies "where the suit appears from the statement in the plaint to be barred by any law".
34 Order VII Rule 11(d) of the Code has limited application. It must be shown that the suit is barred under any law. Such a conclusion must be drawn from the averments made in the plaint. The Court should be very careful to see that the different clauses in Order VII Rule 11 are not Page 27 of 39 Downloaded on : Sun Aug 22 02:12:17 IST 2021 C/FA/254/2020 JUDGMENT DATED: 20/07/2021 mixed up. Whereas in a given case, an application for rejection of the plaint may be filed on more than one ground specified in the various sub-clauses thereof, a clear finding to that effect must be arrived at. What would be relevant for invoking clause (d) of Order VII Rule 11 of the Code is the averments made in the plaint. For that purpose, there cannot be any addition or subtraction.
35 For the purpose of invoking Order VII Rule 11(d) of the Code, no amount of evidence can be looked into. The issues on merit of the matter which may arise between the parties would not be within the realm of the court at that stage. All issues shall not be the subject matter of an order under the said provision.
36 Thus, in view of the aforesaid settled position of law, the Court below could be said to have committed a serious error in rejecting the plaint on the ground that a suit for specific performance of contract based on an oral agreement is not maintainable in law. As discussed above, a suit based on an oral agreement is maintainable in law. The only aspect that needs to be kept in mind is that in a suit for specific performance based on an oral contract, the plaintiff has to prove that there was consensus ad idem between the parties for the concluded agreement for sale of immovable property. In this regard, heavy burden lies on the plaintiff. However, these are the questions which the Court will have to go into at the time of trial.
37 We are not impressed by the vociferous submissions of Mr. Soni as regards the cause of action. We have discussed in details how the cause of action should be looked into while deciding the application seeking rejection of plaint. The plaintiff has averred in his plaint in details as Page 28 of 39 Downloaded on : Sun Aug 22 02:12:17 IST 2021 C/FA/254/2020 JUDGMENT DATED: 20/07/2021 regards the cause of action. Having regard to the averments in the plaint referred to above, the inevitable conclusion is that no case is made out by the defendants that Order VII Rule 11 of the C.P.C. is applicable to the facts of the case. It is difficult for us to say that a real cause of action has not been set out in the plaint or something purely illusory has been stated with a view to get out of Order VII Rule 11 of the Code. Plaint cannot be rejected just because the defendants say that the suit is frivolous or without any cause of action. For all defendants, the suit would be frivolous and not maintainable in law.
38 Recently, the Supreme Court of India in the case of Dahiben v. Arvindbhai Kalyanji Bhanusali [(2020) SCC online SC 562], while dealing with an appeal against an order allowing rejection of a suit at the threshold, had the occasion to consider various precedents, discussing the intent and purpose of Order VII Rule 11, while setting out the principles in relation to the same. We may clarify that the decision of Dahiben (supra) as such is not relevant for the purpose of deciding the present appeal, however, we deem fit to discuss the same only for the general guidance of the Court below.
FACTUAL MATRIX In the aforesaid case, a plot of agricultural land was sold by the Plaintiff to the Respondent No. 1, by executing a registered sale deed dated July 02, 2009. The sale consideration was paid for by the Respondent No.1 by issuing 36 different cheques in favor of the Plaintiff. Having purchased the Land from the Plaintiff, the Respondent No. 1 subsequently sold the Land to certain third parties being the Respondent Nos. 2 and 3 respectively.
Page 29 of 39 Downloaded on : Sun Aug 22 02:12:17 IST 2021C/FA/254/2020 JUDGMENT DATED: 20/07/2021 The Plaintiff, in December of 2014, more than five years after the execution of the Sale Deed, instituted a suit before the Principal Civil Judge, Surat on the grounds that the sale consideration for the Land had not been paid in its entirely by Respondent No.1 and inter alia praying that the Sale Deed be declared void, illegal and ineffective. Respondent Nos. 2 and 3 were impleaded in the Suit, as the Land had already been sold to them and was in their possession at the time of institution of the Suit.
The Respondents Nos. 2 and 3 respectively filed an application seeking rejection of the plaint under Order VII Rule 11(a) and (d) of the CPC, contending that the Suit filed by the Plaintiff was barred by limitation and that no cause of action was made out in the plaint.
The Trial Court allowed the application and rejected the plaint at the threshold on the ground that the suit was barred by limitation. The Plaintiff filed an appeal before this High Court, which in turn upheld the order of the Trial Court. Accordingly, the Plaintiff came before the Supreme Court impugning the order passed by this Court.
The Object and Purpose of Order VII Rule 11:
While dealing with the appeal before it, the Supreme Court considered various precedents on the underlying object of Order VII Rule
11. It observed that if no cause of action is disclosed in the plaint or if the suit is barred by limitation, the court would not permit protraction of the proceedings. In such a case, it would be necessary to put an end to the sham litigation, so that further judicial time is not wasted. Placing reliance on Azhar Hussain v. Rajiv Gandhi [1986 Supp CC 315], it opined that the entire purpose of conferment of such powers under Order VII Rule 11 is to ensure that a litigation, which is meaningless, Page 30 of 39 Downloaded on : Sun Aug 22 02:12:17 IST 2021 C/FA/254/2020 JUDGMENT DATED: 20/07/2021 and bound to prove abortive should not be permitted to occupy the time of the courts, and exercise the mind of the respondent.
The Determining Test:
The Supreme Court clarified that the Courts, while dealing with such an application seeking rejection of a plaint, ought to determine whether the plaint discloses a cause of action by scrutinising the averments in the plaint, read in conjunction with the documents relied upon. In this regard, it also clarified that while making such a determination, the Courts would have to disregard the pleas taken by the defendant in the written statement and application for rejection of the plaint on merit. Hence, the Supreme Court clarified that while determining any application filed under Order VII Rule 11, the Courts should restrict itself to the plaint and should not go into the detail facts as provided under the written statement or even the application filed under Order VII Rule 11.
The Supreme Court reiterated the test laid down in Liverpool and London S.P. and I Association Ltd. v. M.V. Sea Success [(2004) 9 SCC 512], which inter alia provides that whether the plaint discloses a cause of action or not is essentially a question of fact. However, whether it does or does not must be found from the reading of the plaint itself during which the averments made in the plaint in their entirety must be held to be correct. In other words, the plaint must be construed as it stands, without addition or subtraction of words.
On the Suit being barred by limitation The Supreme Court observed that the sale was concluded upon the execution of the Sale Deed in 2009, wherein it was also recorded that the Plaintiff had received 36 cheques, covering the entire Page 31 of 39 Downloaded on : Sun Aug 22 02:12:17 IST 2021 C/FA/254/2020 JUDGMENT DATED: 20/07/2021 consideration for the Land and that the Plaintiff had various opportunities to challenge the Sale Deed on the ground of non-receipt of full consideration. There was no explanation provided as to why the Plaintiff remained completely silent for a period of five and a half years, without even issuing a legal notice. It found that the conduct of the Plaintiff in not taking recourse to legal action for over five year from the execution of the Sale Deed in 2009 was indicative of the fact that the institution of the Suit was merely an afterthought.
While interpreting Articles 58 and 59 respectively of the Limitation Act, 1963, the Supreme Court relied on Khatri Hotels Private Limited v. Union of India [(2011) 9 SCC 126] to reiterate that the period of limitation would begin to run from the date when the first right to sue accrues. Accordingly, it observed that since the Suit was filed much after the expiry of three years when the first right to sue occurred, it found the Suit to be barred by limitation.
On the Plaint being manifestly vexatious and without merit The Supreme Court found that the plea taken by the Plaintiff that he learned of the alleged fraud only in 2014, upon receipt of the index of the Sale Deed, was wholly misconceived since the receipt of the index would not constitute the cause of action for filing of the suit. It also observed that the Plaintiff had deliberately not mentioned the date of execution and registration of the Sale Deed. Accordingly, it held the present to be a case where the Plaintiffs by clever drafting of the plaint, attempted to make out an illusory cause of action in order to bring the suit within limitation and hence deserved to be rejected at the threshold. In coming to such conclusion, the Supreme Court observed that if on a meaningful reading of the plaint, it is found that the plaint is manifestly Page 32 of 39 Downloaded on : Sun Aug 22 02:12:17 IST 2021 C/FA/254/2020 JUDGMENT DATED: 20/07/2021 vexatious and without any merit, and does not disclose a right to sue, courts would be justified in exercising power under Order VII Rule 11.
Through the aforesaid judgment, the Supreme Court has emphasised that judicial time is precious, and that Courts are duty bound to reject vexatious plaints to avoid wastage of judicial time. It has clarified that the power of the courts under Order VII Rule 11 are mandatory in nature and may be exercised at any stage of the suit, either before registering the plaint, or after issuing summons to the defendant, or before conclusion of the trial. However, it has also clarified that the power conferred under Order VII Rule 11 is a drastic one and that the requirements enumerated therein should be strictly adhered to. In this case, the Supreme Court upheld the orders of the lower courts, rejecting the plaint at the threshold since it found that the institution of the Suit by the Plaintiff was clearly an abuse of the process of the court and was bereft of any merit.
39 However, the aforesaid discussion is not the end of the matter. We are sorry to observe that a big blunder has been committed not only by the Court below, but also by the defendants. At many places in the plaint, we find statements to the effect that the suit land bearing survey No.1686 is a new tenure land (restricted tenure land). It appears that the application Exhibit : 21 filed by the defendants under Order VII Rule 11 is also on the basis that the suit land being of a restricted tenure, the parties could not have entered into an oral agreement for sale without the prior permission of the competent authority under Section 43 of the Bombay Tenancy Act and such invalid oral agreement cannot be enforced. This appears to be the tenor and the true purport of the application Exhibit : 21. However, the Court instead of addressing Page 33 of 39 Downloaded on : Sun Aug 22 02:12:17 IST 2021 C/FA/254/2020 JUDGMENT DATED: 20/07/2021 itself on the core issue whether a suit for specific performance of contract based on an oral agreement to sale with respect to a restricted tenure land hit by Section 43 of the Bombay Tenancy Act is barred by law, rather proceeded on the footing that the suit for specific performance based on an oral agreement is not maintainable. We have explained in details that the suit for specific performance based on an oral agreement is maintainable in law, however, the core issue has not been answered by the Court below. In such circumstances, we are of the view that we should remit the matter to the Court below for fresh consideration of Exhibit : 21 keeping in mind the core issue which the Court below should have addressed itself as referred to above.
CROSS OBJECTION NO.44 OF 2021: 40 We fail to understand why the respondent No.7 (purchaser) has
filed cross objections in the appeal filed by the plaintiff whose plaint has been rejected.
41 ORDER XLI RULE 22 OF THE CPC:
"Upon hearing, respondent may object to decree as if he had preferred a separate appeal - (1) Any respondent, though he may not have appealed from any part of the decree, may not only support the decree 19 but may also state that the finding against him in the Court below in respect of any issue ought to have been in his favour; and may also take any cross objection] to the decree which he could have taken by way of appeal:
Provided he has filed such objection in the Appellate Court within one month from the date of service on him or his pleader Page 34 of 39 Downloaded on : Sun Aug 22 02:12:17 IST 2021 C/FA/254/2020 JUDGMENT DATED: 20/07/2021 of notice of the day fixed for hearing the appeal, or within such further time as the Appellate Court may see fit to allow.
[Explanation.- A respondent aggrieved by a finding of the Court in the judgement on which the decree appealed against is based may, under this rule, file cross-objection in respect of the decree in so far as it is based on that finding, notwithstanding that by reason of the decision of the Court on any other finding which is sufficient for the decision of the suit, the decree, is, wholly or in part, in favour of that respondent.]"
42 ORDER XLI RULE 33 OF THE CPC - POWER OF COURT OF APPEAL:
"The Appellate Court shall have power to pass any decree and make any order which ought to have been passed or made and to pass or make such further or other decree or order as the case may require, and this power may be exercised by the Court notwithstanding that the appeal is as to part only of the decree and may be exercised in favour of all or any of the respondents or parties, although such respondents or parties may not have filed any appeal or objection, and may, where there have been decrees in cross-suits or where two or more decrees are passed in one suit, be exercised in respect of all or any of the decrees, although an appeal may not have been filed against such decrees:
Provided that the Appellate Court shall not make any order under section 35A, in pursuance of any objection on which the Court from whose decree the appeal is preferred has omitted or refused to make such order. Section 11 - Res judicata 19 Inserted Page 35 of 39 Downloaded on : Sun Aug 22 02:12:17 IST 2021 C/FA/254/2020 JUDGMENT DATED: 20/07/2021 by Central Act No. 104 of 1976 No Court shall try any suit or issue in which the matter directly and substantially in issue has been directly and substantially in issue in a former suit between the same parties, or between parties under whom they or any of them claim, litigating under the same title, in a Court competent to try such subsequent suit or the suit in which such issue has been subsequently raised, and has been heard and finally decided by such Court.
Explanation I - The expression "former suit" shall denote a suit which has been decided prior to the suit in question whether or not it was instituted prior thereto."
43 It is settled by catena of decisions that to be entitled to file an appeal the person must be one aggrieved by the decree. Unless a person is prejudicially or adversely affected by the decree he is not entitled to file an appeal. [See Phoolchand v. Gopal Lal [AIR 1967 SC 1470 :
(1967) 3 SCR 153] , Jatan Kumar Golcha v. Golcha Properties (P) Ltd.
[(1970) 3 SCC 573] and Ganga Bai v. Vijay Kumar [(1974) 2 SCC 393]]. No appeal lies against a mere finding. It is significant to note that both Sections 96 and 100 C.P.C. provide for an appeal against decree and not against judgment.
44 Any respondent though he may not have filed an appeal from any part of the decree may still support the decree to the extent to which it is already in his favour by laying challenge to a finding recorded in the impugned judgment against him. A party who has fully succeeded in the suit can and needs to neither prefer an appeal nor take any cross- objection though certain finding may be against him. Appeal and cross-
Page 36 of 39 Downloaded on : Sun Aug 22 02:12:17 IST 2021C/FA/254/2020 JUDGMENT DATED: 20/07/2021 objection - both are filed against decree and not against judgment and certainly not against any finding recorded in a judgment. This was the well-settled position of law under the unamended CPC.
45 The Supreme Court in the case of Banarsi and others vs. Ram Phal reported in 2003(2) SCR 22 while considering the amendments made in the Code in the year 1976, held that even under the amended provisions of Order XLI Rule 22 of the Code, a party in whose favour the decree stands in its entirety is neither entitled nor obliged to prefer any cross objections. However, by an amendment in Order XLI Rule 22 of the Code, it is permissible to file cross objections against the finding. The respondent may defend himself without filing any cross objections to the extent to which decree is in his favour. The Court held as under:
"10. The CPC amendment of 1976 has not materially or substantially altered the law except for a marginal difference. Even under the amended Order 41 Rule 22 sub-rule (1) a party in whose favour the decree stands in its entirety is neither entitled nor obliged to prefer any cross-objection. However, the insertion made in the text of sub-rule (1) makes it permissible to file a cross-objection against a finding. The difference which has resulted we will shortly state. A respondent may defend himself without filing any cross-objection to the extent to which decree is in his favour; however, if he proposes to attack any part of the decree he must take cross-objection. The amendment inserted by the 1976 amendment is clarificatory and also enabling and this may be made precise by analysing the provision. There may be three situations:
(i) The impugned decree is partly in favour of the appellant and partly in favour of the respondent.
(ii) The decree is entirely in favour of the respondent though an issue has been decided against the respondent.
(iii) The decree is entirely in favour of the respondent and all the issues have also been answered in favour of the respondent but there is a finding in the judgment which goes against the respondent.Page 37 of 39 Downloaded on : Sun Aug 22 02:12:17 IST 2021
C/FA/254/2020 JUDGMENT DATED: 20/07/2021
11. In the type of case (i) it was necessary for the respondent to file an appeal or take cross-objection against that part of the decree which is against him if he seeks to get rid of the same though that part of the decree which is in his favour he is entitled to support without taking any cross-objection. The law remains so post-amendment too.
In the type of cases (ii) and (iii) pre-amendment CPC did not entitle nor permit the respondent to take any cross-objection as he was not the person aggrieved by the decree. Under the amended CPC, read in the light of the explanation, though it is still not necessary for the respondent to take any cross-objection laying challenge to any finding adverse to him as the decree is entirely in his favour and he may support the decree without cross-objection; the amendment made in the text of sub-rule (1), read with the explanation newly inserted, gives him a right to take cross-objections to a finding recorded against him either while answering an issue or while dealing with an issue."
46 The case on hand, in our opinion, falls within the category (iii) referred to above. The decree has been entirely in favour of the respondents and all the issues have also been answered in favour of the respondent (defendants). In such circumstances, we are of the view that the cross objection filed by the defendant No.7 is thoroughly misconceived.
47 In the result, this appeal succeeds in part. The impugned judgement and decree passed by the Additional Senior Civil Judge, Sanand below Exhibit : 21 in the Special Civil Suit No.111 of 2018 is hereby quashed and set aside. The matter is remitted to the Court below for fresh consideration of the application Exhibit : 21, more particularly, on the question "whether a suit for specific performance based on an oral agreement for sale with respect to a restricted tenure land hit by Section 43 of the Bombay Tenancy Act is barred by law?" The Court below shall hear the parties once again and decide this issue in accordance with law. We clarify that we have otherwise not expressed Page 38 of 39 Downloaded on : Sun Aug 22 02:12:17 IST 2021 C/FA/254/2020 JUDGMENT DATED: 20/07/2021 any opinion on this core issue. It is for the Court below to look into the issue having regard to the averments made in the plaint and the position of law. The Court shall apply its independent mind and take an appropriate decision. Let such decision be taken within a period of four weeks from the date of receipt of the writ of this order. The First Appeal is, accordingly, disposed of. Consequently, the connected Civil Application for stay also stands disposed of.
48 The connected cross objection is ordered to be dismissed.
(J. B. PARDIWALA, J) (VAIBHAVI D. NANAVATI,J) CHANDRESH Page 39 of 39 Downloaded on : Sun Aug 22 02:12:17 IST 2021