Delhi High Court
Sunil Kapoor vs Himmat Singh & Ors on 22 September, 2008
Equivalent citations: AIR 2009 (NOC) 69 (DEL.), 2009 (1) AJHAR (NOC) 348 (DEL.) 2009 AIHC (NOC) 383 (DEL.), 2009 AIHC (NOC) 383 (DEL.), 2009 AIHC (NOC) 383 (DEL.) 2009 (1) AJHAR (NOC) 348 (DEL.), 2009 (1) AJHAR (NOC) 348 (DEL.)
Author: Hima Kohli
Bench: Hima Kohli
* IN THE HIGH COURT OF DELHI AT NEW DELHI + I.A.No.8235/2004 (u/O 7 R-11 of CPC) in CS(OS) 1018/2004 Date of decision : 22.9.2008 IN THE MATTER OF SUNIL KAPOOR ..... Plaintiff Through : Mr. Akshay Makhija, Adv. versus HIMMAT SINGH & ORS ..... Defendants Through : Mr. Sanjiv Kakra, Adv. CORAM * HON'BLE MS.JUSTICE HIMA KOHLI 1. Whether Reporters of Local papers may be allowed to see the Judgment? Yes 2. To be referred to the Reporter or not? Yes 3. Whether the judgment should be reported in the Digest? Yes. HIMA KOHLI, J. (O R A L) 1. The present application is filed by the defendants praying inter alia for rejection of the plaint filed by the plaintiff on the ground that the suit is without any cause of action and is liable to be rejected CS(OS) No.1018 of 2004 Page 1 of 16 under Order 7 Rule 11 of the CPC. 2. Briefly stated, the facts of the case are that the plaintiff has filed the present suit for specific performance of a verbal contract of sale/ agreement to sell dated 23.2.2004, for sale of a portion of the property bearing No.N-246, Greater Kailash Part-I, New Delhi-110 048, for total sale consideration of Rs.80,00,000/-. 3. Counsel for the applicants/defendants states that the present suit filed by the plaintiff is not maintainable as no cause of action has arisen in favour of the plaintiff and against the defendants for warranting the filing of the present suit. He submits that no agreement to sell either oral or written has ever been entered into between the parties. He further states that no concluded contract had been agreed upon or entered into between the parties, capable of being specifically enforced and no cause of action has arisen in favour of the plaintiff and against the defendants for filing the present suit. 4. Counsel for the applicants/defendants submits that a perusal of the token receipt dated 23.2.2004, on which the plaintiff relies, reveals that it is a document executed by the defendant No.1 evidencing receipt of Rs.2,00,000/- and that as per the said receipt, it was agreed that the agreement to sell shall be entered into within two CS(OS) No.1018 of 2004 Page 2 of 16 months after discussing the details of the terms and conditions and the price. He states that the detailed terms and conditions of the contract were yet to be finalized and as such, no contract had concluded between the parties. He further submits that the said receipt cannot be construed as a valid enforceable document/agreement to sell or contract of sale, for want of definite terms and conditions which are necessary for construing an agreement to sell. He, therefore, states that the present suit is hit by the provisions of Section 29 of the Indian Contract Act, 1872, which stipulates that the agreement, meaning of which is not certain or capable of being made certain, is void. In view of the above, he submits that the present application is liable to be allowed. In support of his contentions, he relies on the following judgments : 1. Mayawanti vs. Kaushalya Devi, (1990) 3 SCC 1 ; and 2. High Way Farms vs. Chinta Ram & Ors., 2000 (56) DRJ (Suppl.) 201. 5. Per contra, counsel for the plaintiff disputes the aforesaid position and emphasizes that the suit instituted by the plaintiff is maintainable and the same is not hit by the provisions of Order 7 Rule CS(OS) No.1018 of 2004 Page 3 of 16 11(a) of the CPC. He submits that a perusal of the plaint along with the relevant documents filed on the record establish that a cause of action has arisen in favour of the plaintiff and against the defendants. He further reiterates that for the purposes of deciding the present application, the Court is bound to examine only the pleadings on the record and the documents in its support. In this regard, he draws the attention of this Court to paras 1 & 2 of the plaint, wherein the plaintiff has stated that he entered into an oral agreement to sell with the defendant on 23.2.2004 for sale of a part of suit premises. The total price of the suit premises has been stated to be of Rs.80,00,000/- and advance payment of Rs.2,00,000/- paid by the plaintiff to defendant No.1, is referred to in para 2 of the plaint. Execution of receipt by the defendant No.1 is also referred to in para 2 of the application. 6. Counsel for the plaintiff states that in para 11 of the plaint, he has referred to the fact that on 8.5.2004, the defendant No.2 admitted receipt of a total sum of Rs.8,00,000/- lacs from the plaintiff out of which Rs.6,04,000/- was received in cash on the said date and Rs.1,96,000/- was acknowledged as adjustment of the amount received in excess of the rent payable by the plaintiff to the defendants. Thus, it was stated that while including the sum of Rs.2,00,000/- received by CS(OS) No.1018 of 2004 Page 4 of 16 the defendants on 23.2.2004, a total sum of Rs.10,00,000/- was payable by the plaintiff to the defendants towards sale consideration, thus, leaving a sum of Rs.70,00,000/- as payable against the total sale consideration of Rs.80,00,000/-. 7. While referring to the receipts dated 23.2.2004, 8.5.2004 and 8.7.2004, counsel for the plaintiff submits that as the defendants denied the document dated 8.5.2004, whereunder receipt of Rs.8,00,000/- was mentioned against the signatures of the defendant No.2 and the document dated 8.7.2004, stated to be executed by defendant No.2, the said documents were directed to be sent to the CFSL, which returned a report in favour of the plaintiff confirming that the signatory of the said documents is defendant No.2 herself. He further states that the defendant No.1 admits having signed the token receipt dated 23.2.2004, for a sum of Rs.2,00,000/-. At this stage, counsel for the defendants, while admitting having signed the token receipt, states that his clients deny the date and the signatures of the witness shown at serial No.2 thereon. 8. The object of the aforesaid provision 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 CS(OS) No.1018 of 2004 Page 5 of 16 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 this 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) 7 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 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." 9. On the same lines, the observations made by the Supreme Court in the case of Samar Singh vs. Kedar Nath, 1987 Supple. SCC 663 are as under : "Para 4 : In substance, the argument is that the court must proceed with the trial, record of evidence, and only after the trial CS(OS) No.1018 of 2004 Page 6 of 16 of the election petition is concluded that the powers under the Code of Civil Procedure for dealing appropriately with the defective petition which does not disclose cause of action should be exercised. With respect to the learned counsel, it is an argument which is difficult to comprehend. The whole purpose of conferment of such powers is to ensure that a litigation which is meaningless and bound to prove abortive should not be permitted to occupy the time of the court and exercise the mind of the respondent." 10. In the present case, the defendant has invoked the provisions of Order 7 Rule 11(a) of the CPC to state that the plaint is liable to be rejected as it does not disclose a cause of action. 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 as (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, CS(OS) No.1018 of 2004 Page 7 of 16 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 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 )" (emphasis added) CS(OS) No.1018 of 2004 Page 8 of 16 11. In the case of Union of India vs. Adani Exports Ltd. reported as 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." (emphasis added) 12. 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 essentially a question of fact. But whether it does or does not, must be found out from reading the plaint CS(OS) No.1018 of 2004 Page 9 of 16 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 CPC 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. 13. So long as the plaint discloses some cause of action or raise some question fit to be decided merely the case is weak or not likely to succeed ultimately cannot be a ground for rejecting it. The court must satisfy itself during the course of a preliminary examination of the plaint that the averments made in the plaint if accepted as true would CS(OS) No.1018 of 2004 Page 10 of 16 entitle the plaintiff to the relief as he claims and no elaborate enquiry into doubtful or complicated questions of law or fact is required for the said purpose, and nor can the court embark upon such an enquiry to establish whether the plaintiff would ultimately succeed in being granted relief prayed for (Refer : Vijai Pratap Singh vs. Dukh Haran Nath Singh, AIR 1962 SC 941). 14. Examining the plaint in the present case in the light of the aforesaid guidance, one finds that the plaintiff has based its case on an oral agreement to sell dated 23.2.2004. He refers to the token received of the same date issued by the defendant No.1 for a sum of Rs.2,00,000/-. Averments are made in the plaint with regard to the details of the property stated to have been agreed to be sold by the defendants to the plaintiff along with the total sale consideration. It is the case of the plaintiff that it was already in occupation of the portion of the property agreed to be purchased from the defendants as a tenet therein and a fresh lease deed was executed between the parties for the period 1.11.2002 to 31.10.2005 @ Rs.4,000/- per month. It is further stated that the defendants were receiving additional amounts from the plaintiff from time to time with the understanding that the excess amounts will be adjusted towards the sale consideration after CS(OS) No.1018 of 2004 Page 11 of 16 adjusting the rental payable. It is stated by the plaintiff that as the defendant was in financial difficulties, they decided to sell the portion of the suit premises under the occupation of plaintiff which resulted in the oral agreement to sell followed by the receipt dated 23.2.2004 documents dated 8.5.2004 and 8.7.2004. 15. In para 13 of the plaint, it is stated that the two cheques for a sum of Rs.32,000/- were received in the manner as received earlier with the promise that they would be adjusted towards the sale consideration of the property after adjusting the rental payable by the plaintiff to the defendants. It is further narrated in the plaint that only after receipt of notices dated 22.7.2004 and 24.8.2004 did the plaintiff realize that the defendant was trying to avoid his obligations under the agreement to sell by receiving the balance sale consideration of Rs.69,76,000/- from the plaintiff resulting in filing of the present suit. 16. In para 24 of the plaint, the plaintiff has dealt with the cause of action for fling of the suit and stated that the same arose on 23.2.2004, the date when the verbal talks/negotiations for the sale of the suit property took place and pursuant thereto, a sum of Rs.2,00,000/- is stated to have been received by the defendants from CS(OS) No.1018 of 2004 Page 12 of 16 the plaintiff. It is further stated that the cause of action arose on 8.5.2004, when further a sum of Rs.8,00,000/- was received by the defendants form the plaintiff against the receipt dated 8.5.2004 executed by the defendant No.2 and further on 8.7.2004, when the defendants agreed that they will not charge the rental from the plaintiff w.e.f. 1.8.2004. It is further stated that the cause of action continue to accrue in favour of the plaintiff and against the defendants. The cause of action constitute a bundle of facts that form the basis for instituting the present suit. In each case, the peculiarity of the case has to be construed for the examination as to whether the cause of action has arisen in favour of a party instituting the suit or not. 17. In short, the allegations made in the plaint are that the plaintiff had entered into a formal agreement to sell with the defendants for sale of the part of the suit premises. The identity of the premises and the total sale consideration find mention in the documents in question. The emphasis laid by the counsel for the defendants on the terminology used in the documents dated 23.2.2004 to the effect that the detailed terms and conditions and price shall be discussed and agreement to sell shall be entered into within two months, is not sufficient to throw out the plaint at this stage. The plea CS(OS) No.1018 of 2004 Page 13 of 16 of the counsel for the defendant is that the receipt dated 23.2.2004 cannot be construed as a valid enforceable document and reference to Section 29 of the Indian Contract Act in this regard is not sufficient to non-suit the plaintiff without a full rest trial. It is not a case where this Court can conclude that the plaint is defected and does not disclose a cause of action so as to throw the same out under the provisions of Order VII Rule 11 of the CPC. It will be for the plaintiff to prove its cause on the basis of evidence at the time when the case is taken to trial. Such a question cannot be gone into at this stage. 18. Taking into consideration the averments made in the plaint by the plaintiff and the documents placed on the record and particularly, noting the fact that pursuant to the token receipt dated 23.2.2004, two other documents were executed on behalf of the defendants for the same premises, dated 8.5.2004 and 8.7.2004, the identity of the suit property is established, the price thereof is established and even the agreed date for registering the sale deed is indicated therein. 19. In these circumstances, it cannot be stated at this stage that the suit is liable to be thrown out as invalid on the basis of vague averments that no cause of action at all has arisen in favour of the CS(OS) No.1018 of 2004 Page 14 of 16 plaintiff and against the defendants. The plea raised on behalf of the defendants can be considered after the issues are framed and the parties are given an opportunity to lead evidence in respect of their case. 20. In the aforesaid circumstances, the prayer made in the present application is declined. 21. The application is disposed of. 22. It is however made clear that the observations made in the present application are limited to the disposal of the present application and the parties shall be at liberty to take all the pleas as may be available to them in law, at the time of framing of issues in the suit. HIMA KOHLI,J SEPTEMBER 22, 2008 sk/`ns' CS(OS) No.1018 of 2004 Page 15 of 16 33 * IN THE HIGH COURT OF DELHI AT NEW DELHI + CS(OS) 1018/2004 SUNIL KAPOOR ..... Plaintiff Through : Mr. Akshay Makhija, Adv. versus HIMMAT SINGH & ORS ..... Defendants Through : Mr. Sanjiv Kakra, Adv. CORAM: HON'BLE MS. JUSTICE HIMA KOHLI ORDER
% 22.09.2008 Counsels for the parties state that they have filed their original documents. Accordingly, list this matter before the Joint Registrar for admission/denial of documents on 14th January, 2009.
List before the Court on 17th February, 2009 for framing of issues.
HIMA KOHLI,J SEPTEMBER 22, 2008 sk CS(OS) No.1018 of 2004 Page 16 of 16