Gujarat High Court
Manglaben Maganlal Modi vs Jitendrabhai Bhikhabhai Patel on 2 August, 2021
Author: J.B.Pardiwala
Bench: J.B.Pardiwala, Vaibhavi D. Nanavati
C/FA/1021/2021 ORDER DATED: 02/08/2021
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/FIRST APPEAL NO. 1021 of 2021
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MANGLABEN MAGANLAL MODI
Versus
JITENDRABHAI BHIKHABHAI PATEL
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Appearance:
MR JV VAGHELA(5809) for the Appellant(s) No. 1,2,3,4,5
for the Defendant(s) No. 10
NOTICE SERVED(4) for the Defendant(s) No. 1,2,3
VMP LEGAL(7210) for the Defendant(s) No. 4,5,6,7,8,9
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CORAM:HONOURABLE MR. JUSTICE J.B.PARDIWALA
and
HONOURABLE MS. JUSTICE VAIBHAVI D. NANAVATI
Date : 02/08/2021
ORAL ORDER
(PER : HONOURABLE MR. JUSTICE J.B.PARDIWALA) 1 This appeal under Section 96 of the Code of Civil Procedure is at the instance of the original plaintiffs and is directed against the judgement and order passed by the 5th Additional Senior Civil Judge, Gandhinagar dated 22nd February 2019 below Exhibit : 19 in the Special Civil Suit No.6 of 2016 instituted by the original plaintiffs (appellants herein) rejecting the plaint on the ground that the suit is barred by law of limitation.
2 The facts giving rise to this appeal may be summarised as under:
3 For the sake of convenience, we shall refer to the appellants as the original plaintiffs, the respondents Nos.3 to 9 as the purchasers of the suit property (defendants Nos.3 to 9), the respondent No.1 as the power of attorney (defendant No.1) and the respondent No.2 as the confirming Page 1 of 19 Downloaded on : Wed Aug 04 23:41:20 IST 2021 C/FA/1021/2021 ORDER DATED: 02/08/2021 party (defendant No.2).
4 The subject matter of dispute is a parcel of land bearing revenue block / survey No.459 situated at village : Sargasan, District :
Gandhinagar. It appears that the original plaintiffs were the owners of the suit property i.e. the survey No.459. It is not in dispute that the original plaintiffs, in their capacity as the owners of the suit land, had executed an irrevocable general power of attorney in favour of the defendant No.1 dated 11th May 2006. We may refer to paras 1 and 7 of the power of attorney as under:
"(1) That the agricultural land of old tenure bearing Survey No.459 is situated in the Sim of mauje village Sargasan of Taluka-Gandhinagar District sub District-Gandhinagar. The aforesaid land is known as "Ambawadiyu" farm. The area of the said land is about 1 Hector 57 are 83 Square meter. Husband of No.1 and father of No. 2 to 5, Maganlal Dahyabhai Modi, has purchased the aforesaid land on 20-11-1967 through a registered sale deed No.1782. He has died on 28/7/1995 at Mumbai and after his death, we the below signatories being his heirs, possessed the said land. We have been residing at Mumbai since long, therefore, we cannot look after our said land and could not maintain its daily administration therefore, the need arises to appoint a Power Of Attorney for looking after the said land. Therefore, today we have appointed Jitendrabhai Bhikhabhai Patel, aged about 34 years, residing at 33, Kamalkunj Society, Shahibaugh, Ahmedabad-380004 as our POA who is trustworthy and reliable to us. We appoint him our POA by assigning him irrevocable power. The said POA can conduct administration of our aforementioned agricultural land of Gandhinagar and we are not required to cancel this Power of Attorney in any circumstances. Moreover, in case, any of us dies, this Power of Attorney shall remain in force even for the heirs of the deceased. We have Page 2 of 19 Downloaded on : Wed Aug 04 23:41:20 IST 2021 C/FA/1021/2021 ORDER DATED: 02/08/2021 entrusted powers to our POA to perform below mentioned tasks through this power of attorney."
"(7) We have executed an agreement to sale with Shri Mahendrabhai Bholidas Patel, Ahmedabad for giving the aforesaid land on sale.
According to the said agreement to sale, our said Power of Attorney has to execute the registered sale deed on his name or on the name suggested by him of the agricultural land and shall have to affix signatures before the Sub-Registrar."
5 The power of attorney (defendant No.1) executed a registered sale deed 27th September 2010 in favour of the purchasers (defendants Nos.3 to 9 respectively) and the same came to be registered in the office of the Sub-Registrar on 18th August 2011 vide registration No.9752.
6 It is the case of the original plaintiffs that the power of attorney i.e. the defendant No.1 misused the power and proceeded to execute the sale deed in favour of the defendants Nos.3 to 9 making the defendant No.2 as the confirming party. According to the plaintiffs, the power attorney was not supposed to transfer the suit land in any manner and the power was given only to manage the suit property.
7 In such circumstances referred to above, the plaintiffs instituted the Special Civil Suit No.6 of 2016 in the Court of the Principal Senior Civil Judge, Gandhinagar praying for the following reliefs:
"(A) To pass an order and award the decree declaring the sale deed of the land mentioned in para-2 of the Plaint situated in the outskirts of Sargasan village, district- sub-district: Gandhinagar registered vide Entry No.9752 void as the same is false, illegal, without consideration, Page 3 of 19 Downloaded on : Wed Aug 04 23:41:20 IST 2021 C/FA/1021/2021 ORDER DATED: 02/08/2021 inoperative and without possession because the Defendant No.1, taking disadvantage of the power of attorney deed executed by the Plaintiff, sold the suit land to the Defendant No.3 to 9.
(B) To pass an order of permanent injunction in favour of me-the Plaintiff and against the Defendants restraining them or their servant, agent or any other person from transferring the suit land in favour of any third party.
(C) To grant any other appropriate relief which may deem fit to Your Honour looking to the facts of this Suit.
(D) Kindly grant the cost of this Suit in favour of me-the Plaintiff from the Defendants of this Suit."
8 The defendants on receiving the summons issued by the Court below appeared and filed application Exhibit : 19 with a prayer to reject the plaint under the provisions of Order VII Rule 11(d) of the C.P.C. i.e. on the ground that the suit is barred by law of limitation.
9 The application Exhibit : 19 filed by the defendants Nos.3 to 9 (the purchasers) was adjudicated by the Court below and vide order dated 22nd February 2019 allowed the same and rejected the plaint on the ground that the suit was barred by law of limitation.
10 Being dissatisfied with the order passed by the Court below rejecting the plaint, the original plaintiffs are here before this Court with the present appeal.
11 Mr. J. V. Vaghela, the learned counsel appearing for the plaintiffs Page 4 of 19 Downloaded on : Wed Aug 04 23:41:20 IST 2021 C/FA/1021/2021 ORDER DATED: 02/08/2021
vehemently submitted that the Court below committed a serious error in rejecting the plaint on the ground that the suit is barred by limitation. Mr. Vaghela would submit that the plea of limitation would be a mixed question of law and fact and ordinarily, the plaint should not be rejected on the ground that the suit is barred by the law of limitation. Mr. Vaghela would submit inviting the attention of this Court to the plaint, more particularly, that part of the plaint where the cause of action has been pleaded that it is only when the entry No.5388 came to be mutated in the record of rights on 24th June 2014 i.e. the plaintiffs came to know about the registration of the sale deed bearing No.9752. Mr. Vaghela would submit that the period of limitation to file a suit for cancellation of sale deed would reckon from the date of knowledge of such sale deed being executed and that would be only some time in June 2014.
12 Mr. Vaghela would submit that in such circumstances, the suit could be said to have been filed within three years as provided under Article 59 of the Limitation Act.
13 In such circumstances referred to above, Mr. Vaghela prays that there being merit in his appeal, the same be allowed and the impugned order be quashed and set aside.
14 On the other hand, this appeal has been vehemently opposed by Mr. Vimal Patel, the learned counsel appearing for the purchasers of the suit property i.e. the original defendants Nos.3 to 9. He would submit that no error, not to speak of any error of law could be said to have been committed by the Court below in rejecting the plaint on the ground that the suit is barred by law of limitation. Mr. Patel invited the attention of this court to one of the documents figuring in the list of documents provided by the plaintiffs marked 3/13 with the plaint. In other words, Page 5 of 19 Downloaded on : Wed Aug 04 23:41:20 IST 2021 C/FA/1021/2021 ORDER DATED: 02/08/2021 the document upon which the Mr. Patel seeks to rely is the very same document upon which the plaintiffs also seek to rely and the same has been furnished along with the plaint. This document marked 3/13 is an order passed by the Mamlatdar in the RTS Case No.156 of 2014. By relying upon this document, Mr. Patel would submit that the plaintiffs had knowledge about the disputed sale deed since 2011. If the period of limitation is to be counted from 2011 in accordance with Article 59 of the Limitation Act, then definitely, the suit filed in the year 2016 would be time barred.
15 Mr. Patel seeks to rely upon a recent pronouncement of the Supreme Court in the case of Dahiben vs. Arvindbhai Kalyanji Bhanusali reported in (2020) 7 SCC 366, more particularly, the observations as contained in paras 23.1 to 26.
16 In such circumstances referred to above, Mr. Patel prays that there being no merit in the appeal, the same be dismissed.
17 The other respondents although served with the notice issued by this Court, yet have chosen not to remain present before this Court either in person or through an advocate and oppose this appeal.
18 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.
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 Page 6 of 19 Downloaded on : Wed Aug 04 23:41:20 IST 2021 C/FA/1021/2021 ORDER DATED: 02/08/2021 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 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 The document marked 3/13 contains an extract of the order passed by the Mamlatdar with respect to the Kacha entry No.4700 which was mutated on 6th September 2011 on the strength of the sale deed in favour of the purchasers. We quote the relevant part of the said document as under:
"...The aforementioned sale deed has been executed on the basis of the power of attorney. It appears that change entry no.4700 is admitted on 06/09/2011 prior to the aforesaid sale deed. Upon receiving objection application against that, the then Mamlatdar has noted that "Upon examining the papers, it appears that possession holders on record have submitted objection applications by stating that the sale executed through power of attorney was made without their consent, hence the aforesaid entry was disputed at e-dhara center. Upon producing for inspection and looking at the copy of the registered sale deed executed Page 7 of 19 Downloaded on : Wed Aug 04 23:41:20 IST 2021 C/FA/1021/2021 ORDER DATED: 02/08/2021 on 01/08/2011, the power of attorney, on the basis of POA executed before Notary on 11/05/06, has done the sale process and its registration process appears to be done on 18/08/11. But meanwhile, the evidences of cancellation of registered sale deed no.1651 dated 22/05/1984 mentioned in the other right of the property and latest status of the Revenue Civil Suit No.96/07 were not submitted. Moreover, as per the Tenancy Act, the orders of disposed tenancy case No.29/07 dated 01/07/09 and the Tenancy Case No.5/08 dated 15/01/09 are subject to revision and order as per page no.8-34, para- 16 and cancelled sale deed was not submitted, therefore this entry can not be certified until enough evidences are submitted by the applicant requesting the entry along with declaration stating that Court case is not under trial and no injunction order is passed and procedure for appeal revision is not pending or going on. Therefore, taking into account aforesaid observations with respect to the other right of this property, order is passed to cancel this entry at preliminary stage, as it is made without sufficient evidences, without entering into the merits of objection application..."
21 Thus, it appears from the aforesaid that when the purchasers went for the first time to get their names mutated in the revenue records on the strength of the disputed sale deed, at that point of time, a kacha entry bearing No.4700 was mutated in the revenue records on 6 th September 2011. The plaintiffs came to know about the same and they appeared before the Mamlatdar and opposed the said Kacha entry bearing No.4700 on the ground that the sale deed had been executed by the power of attorney misusing the power and contrary to the object for which the power was given. It appears that ultimately, the Kacha entry No.4700 came to be cancelled not on the basis of the objection raised by the plaintiffs, but on other grounds. However, the fact remains that the plaintiffs came to know for the first time about the sale deed executed by Page 8 of 19 Downloaded on : Wed Aug 04 23:41:20 IST 2021 C/FA/1021/2021 ORDER DATED: 02/08/2021 the power of attorney in favour of the purchasers in the year 2011.
22 In the cause of action pleaded in the plaint, the plaintiffs have very conveniently not said a word about the dispute which they had raised in connection with entry No.4700 referred to above.
23 We shall now look into the decision of the Supreme Court in the case of Dahiben (supra). We may quote the relevant observations as under:
"23.1 We will first briefly touch upon the law applicable for deciding an application under Order VII Rule 11 CPC, which reads as under:
"11. Rejection of plaint.- The plaint shall be rejected in the following cases:-
(a) where it does not disclose a cause of action;
(b) where the relief claimed in 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 to comply with the provisions of Rule 9:
Provided that the time fixed by the Court for the correction of the valuation or supplying of the requisite stamp-paper shall not be extended unless the Court, for reasons to be recorded, is satisfied that the plaintiff was prevent by any cause of exceptional nature for correction the valuation or supplying the requisite stamp-paper, as the case may be, within the time fixed by the Court and that refusal to extend such time would cause grave injustice to the plaintiff." (emphasis supplied) Page 9 of 19 Downloaded on : Wed Aug 04 23:41:20 IST 2021 C/FA/1021/2021 ORDER DATED: 02/08/2021 23.2 The remedy under Order VII Rule 11 is an independent and special remedy, wherein the Court is empowered to summarily dismiss a suit at the threshold, without proceeding to record evidence, and conducting a trial, on the basis of the evidence adduced, if it is satisfied that the action should be terminated on any of the grounds contained in this provision.
23.3 The underlying object of Order VII Rule 11 (a) is that if in a suit, no cause of action is disclosed, or the suit is barred by limitation under Rule 11 (d), the Court would not permit the plaintiff to unnecessarily protract the proceedings in the suit. In such a case, it would be necessary to put an end to the sham litigation, so that further judicial time is not wasted.
23.4 In Azhar Hussain v. Rajiv Gandhi [1986 Supp SCC 315] this Court held that the whole purpose of conferment of powers under this provision is to ensure that a litigation which is meaningless, and bound to prove abortive, should not be permitted to waste judicial time of the court, in the following words :
"12. ...The whole purpose of conferment of such power is to ensure that a litigation which is meaningless, and bound to prove abortive should not be permitted to occupy the time of the Court, and exercise the mind of the respondent. The sword of Damocles need not be kept hanging over his head unnecessarily without point or purpose. Even if an ordinary civil litigation, the Court readily exercises the power to reject a plaint, if it does not disclose any cause of action."
23.5 The power conferred on the court to terminate a civil action is, however, a drastic one, and the conditions enumerated in Order VII Rule 11 are required to be strictly adhered to.
23.6 Under Order VII Rule 11, a duty is cast on the Court to determine whether the plaint discloses a cause of action by scrutinizing the averments in the plaint2, read in conjunction with the documents relied upon, or whether the suit is barred by any law.
23.7 Order VII Rule 14(1) provides for production of documents, on which the plaintiff places reliance in his suit, which reads as under :
"14: Production of document on which plaintiff sues or relies.-
(1)Where a plaintiff sues upon a document or relies upon document in his possession or power in support of his claim, he shall enter such documents in a list, and shall produce it in Court when the plaint is presented by him and shall, at the same time deliver the document and a copy thereof, to be filed with the Page 10 of 19 Downloaded on : Wed Aug 04 23:41:20 IST 2021 C/FA/1021/2021 ORDER DATED: 02/08/2021 plaint.
(2) Where any such document is not in the possession or power of the plaintiff, he shall, wherever possible, state in whose possession or power it is.
(3) A document which ought to be produced in Court by the plaintiff when the plaint is presented, or to be entered in the list to be added or annexed to the plaint but is not produced or entered accordingly, shall not, without the leave of the Court, be received in evidence on his behalf at the hearing of the suit.
(4) Nothing in this rule shall apply to document produced for the cross examination of the plaintiff's witnesses, or, handed over to a witness merely to refresh his memory." (emphasis supplied) 23.8 Having regard to Order VII Rule 14 CPC, the documents filed alongwith the plaint, are required to be taken into consideration for deciding the application under Order VII Rule 11 (a). When a document referred to in the plaint, forms the basis of the plaint, it should be treated as a part of the plaint.
23.9 In exercise of power under this provision, the Court would determine if the assertions made in the plaint are contrary to statutory law, or judicial dicta, for deciding whether a case for rejecting the plaint at the threshold is made out.
23.10 At this stage, the pleas taken by the defendant in the written statement and application for rejection of the plaint on the merits, would be irrelevant, and cannot be adverted to, or taken into consideration.
23.11 The test for exercising the power under Order VII Rule 11 is that if the averments made in the plaint are taken in entirety, in conjunction with the documents relied upon, would the same result in a decree being passed. This test was laid down in Liverpool & London S.P. & I Assn. Ltd. v. M. V. Sea Success I & Anr., [(2004) 9 SCC 512] which reads as :
"139. Whether a plaint discloses a cause of action or not is essentially a question of fact. But whether it does or does not must be found out from reading the plaint itself. For the said purpose, the averments made in the plaint in their entirety must be held to be correct. The test is as to whether if the averments made in the plaint are taken to be correct in their entirety, a decree would be passed."
23.12 In Hardesh Ores (P.) Ltd. v. Hede & Co. [(2007) 5 SCC 614] the Page 11 of 19 Downloaded on : Wed Aug 04 23:41:20 IST 2021 C/FA/1021/2021 ORDER DATED: 02/08/2021 Court further held that it is not permissible to cull out a sentence or a passage, and to read it in isolation. It is the substance, and not merely the form, which has to be looked into. The plaint has to be construed as it stands, without addition or subtraction of words. If the allegations in the plaint prima facie show a cause of action, the court cannot embark upon an enquiry whether the allegations are true in fact. D. Ramachandran v. R.V. Janakiraman, (1999) 3 SCC 267.
23.13 If on a meaningful reading of the plaint, it is found that the suit is manifestly vexatious and without any merit, and does not disclose a right to sue, the court would be justified in exercising the power under Order VII Rule 11 CPC.
23.14 The power under Order VII Rule 11 CPC may be exercised by the Court at any stage of the suit, either before registering the plaint, or after issuing summons to the defendant, or before conclusion of the trial, as held by this Court in the judgment of Saleem Bhai v. State of Maharashtra [(2003) 1 SCC 557. The plea that once issues are framed, the matter must necessarily go to trial was repelled by this Court in Azhar Hussain (supra).
23.15 The provision of Order VII Rule 11 is mandatory in nature. It states that the plaint "shall" be rejected if any of the grounds specified in clause (a) to (e) are made out. If the Court finds that the plaint does not disclose a cause of action, or that the suit is barred by any law, the Court has no option, but to reject the plaint.
24 "Cause of action" means every fact which would be necessary for the plaintiff to prove, if traversed, in order to support his right to judgment. It consists of a bundle of material facts, which are necessary for the plaintiff to prove in order to entitle him to the reliefs claimed in the suit.
24.1 In Swamy Atmanand v. Sri Ramakrishna Tapovanam [(2005) 10 SCC 51] this Court held :
"24. A cause of action, thus, means every fact, which if traversed, it would be necessary for the plaintiff to prove an order to support his right to a judgment of the court. In other words, it is a bundle of facts, which taken with the law applicable to them gives the plaintiff a right to relief against the defendant. It must include some act done by the defendant since in the absence of such an act, no cause of action can possibly accrue. It is not limited to the actual infringement of the right sued on but includes all the material facts on which it is founded" (emphasis supplied) 24.2 In T. Arivandandam v. T.V. Satyapal & Anr. [(1977) 4 Page 12 of 19 Downloaded on : Wed Aug 04 23:41:20 IST 2021 C/FA/1021/2021 ORDER DATED: 02/08/2021 SCC 467] this Court held that while considering an application under Order VII Rule 11 CPC what is required to be decided is whether the plaint discloses a real cause of action, or something purely illusory, in the following words : -
"5. ...The learned Munsiff must remember that if on a meaningful - not formal - reading of the plaint it is manifestly vexatious, and meritless, in the sense of not disclosing a clear right to sue, he should exercise his power under O. VII, R. 11, C.P.C. taking care to see that the ground mentioned therein is fulfilled. And, if clever drafting has created the illusion of a cause of action, nip it in the bud at the first hearing ..." (emphasis supplied) 24.3 Subsequently, in I.T.C. Ltd. v. Debt Recovery Appellate Tribunal [(1998) 2 SCC 70] this Court held that law cannot permit clever drafting which creates illusions of a cause of action. What is required is that a clear right must be made out in the plaint.
24.4 If, however, by clever drafting of the plaint, it has created the illusion of a cause of action, this Court in Madanuri Sri Ramachandra Murthy v. Syed Jalal [(2017) 13 SCC 174] held that it should be nipped in the bud, so that bogus litigation will end at the earliest stage. The Court must be vigilant against any camouflage or suppression, and determine whether the litigation is utterly vexatious, and an abuse of the process of the court.
25 The Limitation Act, 1963 prescribes a time-limit for the institution of all suits, appeals, and applications. Section 2(j) defines the expression "period of limitation" to mean the period of limitation prescribed in the Schedule for suits, appeals or applications. Section 3 lays down that every suit instituted after the prescribed period, shall be dismissed even though limitation may not have been set up as a defence. If a suit is not covered by any specific article, then it would fall within the residuary article.
26 Articles 58 and 59 of the Schedule to the 1963 Act, prescribe the period of limitation for filing a suit where a declaration is sought, or cancellation of an instrument, or rescission of a contract, which reads as under :
Description of suit Period of limitation Time from which period begins to run
58. To obtain any other Three years When the right to sue declaration. first accrues.Page 13 of 19 Downloaded on : Wed Aug 04 23:41:20 IST 2021
C/FA/1021/2021 ORDER DATED: 02/08/2021
59. To cancel or set Three years When the facts entitling
aside an instrument or the plaintiff to have the
decree or for the instrument or decree
rescission of a contract. cancelled or set aside or
the contract rescinded
first become known to
him."
The period of limitation prescribed under Articles 58 and 59 of the 1963 Act is three years, which commences from the date when the right to sue first accrues."
24 We may explain the decision of the Supreme Court in the case of Dahiben (supra) more elaborately as under:
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.
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.
Page 14 of 19 Downloaded on : Wed Aug 04 23:41:20 IST 2021C/FA/1021/2021 ORDER DATED: 02/08/2021 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, 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 Page 15 of 19 Downloaded on : Wed Aug 04 23:41:20 IST 2021 C/FA/1021/2021 ORDER DATED: 02/08/2021 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 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.
Page 16 of 19 Downloaded on : Wed Aug 04 23:41:20 IST 2021C/FA/1021/2021 ORDER DATED: 02/08/2021 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 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, Page 17 of 19 Downloaded on : Wed Aug 04 23:41:20 IST 2021 C/FA/1021/2021 ORDER DATED: 02/08/2021 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.
25 We may also refer to the decision of the Supreme Court in the case of Dilboo (Dead) by Lrs. and others vs. Dhanraji (Dead) and others reported in AIR 2000 SC 3146, wherein the Supreme Court has observed as under:
"In the absence of any averment or proof, to show that the suit is within time, it is the Plaintiff who would fail. Whenever a document is registered the date of registration becomes the date of deemed knowledge. In other cases where a fact could be discovered by due diligence then deemed knowledge would be attributed to the Plaintiff because a party cannot be allowed to extend period of limitation by merely claiming that he had no knowledge."
26 It is true that ordinarily, the Court should be a little slow in rejecting the plaint on the ground that the same is barred by the law of limitation, as the plea of limitation as such could be said to be a mixed question of law and fact. However, when it is absolutely evident either from any statement made in the plaint or from the documents relied upon by the plaintiff that the suit is barred by the law of limitation, then, in such circumstances, the Court should not hesitate in rejecting the plaint.
27 In view of the aforesaid discussion, we have reached to the Page 18 of 19 Downloaded on : Wed Aug 04 23:41:20 IST 2021 C/FA/1021/2021 ORDER DATED: 02/08/2021
conclusion that the Court below committed no error in rejecting the plaint on the ground that the suit is hit by Article 59 of the Limitation Act.
28 In the result, this appeal fails and is hereby dismissed.
(J. B. PARDIWALA, J) (VAIBHAVI D. NANAVATI,J) CHANDRESH Page 19 of 19 Downloaded on : Wed Aug 04 23:41:20 IST 2021