Bombay High Court
Sheela Ram Vidhani And Anr vs S.K.Trading Company And 5 Or.S on 19 June, 2021
Equivalent citations: AIRONLINE 2021 BOM 1682
Bench: S. J. Kathawalla, Vinay Joshi
1 / 29 APP-27-2020 Final Order.odt
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
APPEAL NO. 27 OF 2020
IN
NOTICE OF MOTION (L) NO. 2515 OF 2016
IN
SUIT NO. 187 OF 1993
1. Sheela Ram Vidhani
of Bombay Indian Inhabitant
residing at 6th Floor, Vidhani Cottage, 244,
Walkeshwar Road,Malabar Hill,
Bombay - 400 006.
2. Jayant Gopaldas Farsswani of
Bombay Indian Inhabitant residing at Garodia
Place, 90, Feet Road,
Ghatkopar (East), Mumbai - 400 086 .... Appellants
(Orig. Plaintiffs)
Versus
1. M/s S. K. Trading Company
a partnership firm carrying on business at 111,
Embassy Apartments, 46, Nepean Sea Road,
Bombay - 400 036.
2. Mrs. Santosh Prakash Mehra
(since deceased)
2(a) Sunil Kumar Mehra of
Bombay Indian Inhabitant residing at 111-B,
Embassy Apartments, 46,
Napean Sea Road, Mumbai - 400 026
2(b) Sunita Rajesh Bhasin,
20/1, Bhasin Ville, Rafi Ahmed Kidwai Road,
Wadala, Mumbai - 400 031.
SSP
::: Uploaded on - 19/06/2021 ::: Downloaded on - 19/06/2021 23:57:25 :::
2 / 29 APP-27-2020 Final Order.odt
2(c) Madhu Pravin Kapur,
6-3-596/63/8/17, Navin Nagar,
Erra Manzil, Hyderabad - 500 004.
all being the heirs and legal representatives of
Defendant No. 2. since deceased.
3. Kevalkumari Jagdish Mehra
Nos. 2 and 3 both of Bombay Indian
inhabitants both residing at 111 Embassy
Apartments, 46, Nepean Sea Road, Bombay 400
036 (since deceased)
4. M/s. Suniti Prints
a partnership firm carrying on business at Viegas
Wadi, Mehra Compound, Bhagoji Keer Marg,
Pitambar Lane, Bombay - 400 016.
5. Suniti Sunil Mehra
6. Vivek Jagdish Mehra
Both having their address at Viegas
Wadi, Mehra Compound Bhagoji Keer Marg,
Pitambar Lane, Bombay - 400 016. .... Respondents
(Orig. Defendants)
.........
Ms. Sonal alongwith Ms. Spardha Sharma and Ms. Shruti Maniar instructed by
Solomon & Co. for the Appellants.
Ms. Bhairavi Pathak alongwith Ms. Urvi Shah instructed by I. R. Joshi & Co. for
Respondents Nos. 1 to 3.
Mr. S. U. Kamdar, Senior Advocate alongwith Mr. Chirag Kamdar, Ms. Vedangi
Tulzapurkar and Ms. Nanki Grewal instructed by Wadia Ghandy & Co. for
Respondent Nos. 4 to 6.
.........
CORAM : S. J. KATHAWALLA AND
VINAY JOSHI, JJ.
RESERVED ON : 12th MARCH, 2021
PRONOUNCED ON : 19th JUNE, 2021
(Through video-conferencing)
SSP
::: Uploaded on - 19/06/2021 ::: Downloaded on - 19/06/2021 23:57:25 :::
3 / 29 APP-27-2020 Final Order.odt
ORAL JUDGMENT : ( PER S.J. KATHAWALLA & VINAY JOSHI, JJ. )
1. ADMIT. Heard finally with the consent of the Learned Counsels appearing for the respective parties.
2. The Appellants who are Plaintiffs in the Suit, have challenged the legality of the Order dated 14.01.2019 passed in Notice of Motion No. 2515/16 filed in Suit No. 187 of 1993 ("Impugned Order"), whereby the Learned Single Judge allowed the Notice of Motion, thereby rejecting the plaint against Defendant Nos. 4 to 6 for want of a cause of action under Order VII Rule 11(a) of the Code of Civil Procedure ("Code").
For the sake of convenience, the Parties shall hereinafter be referred to as per their original status in the Suit i.e. the Appellants will be referred to as the Plaintiffs, Respondent Nos. 1 to 3 will be referred to as Defendant Nos. 1 to 3 and Respondent Nos. 4 to 6 will be referred to as Defendant Nos. 4 to 6.
3. The facts in brief are :
3.1. Defendant No.1 - M/s S.K. Trading Company, was a Partnership Firm in which Defendant Nos. 2 and 3 were Partners. Defendant No. 1 owns a property admeasuring 1714 square yards which is described at Exhibit A annexed to the plaint ("Suit Property"). Defendant Nos. 1 to 3 agreed to sell the Suit Property to the Plaintiffs for a consideration of Rs. 43,00,000/-, pursuant to which an Agreement to Sell was executed on 07.12.1985 ("Agreement to Sell").
SSP ::: Uploaded on - 19/06/2021 ::: Downloaded on - 19/06/2021 23:57:25 ::: 4 / 29 APP-27-2020 Final Order.odt 3.2. Defendant No. 4 - M/s Suniti Prints, was a Partnership Firm of which Defendant Nos. 5 and 6 were Partners. The Suit Property was occupied by several tenants. Defendant No. 4 was one of the tenants in occupation of approximately 500 square yards of the Suit Property. Defendant Nos. 5 and 6 were closely related to Defendant Nos. 2 and 3.
3.3. Under the Agreement to Sell, the mode of payment of consideration was fixed between the parties thereto. One of the conditions was that the Plaintiffs (Purchasers) were to initially pay a sum of Rs. 8,00,000/- directly to the tenant of Defendant No.1 i.e. to Defendant No. 4, for acquiring alternate accommodation. 3.4. It is the Plaintiffs' case that, the Vendors (Defendant Nos. 1 to 3) had contracted with their tenant / Defendant No. 4, to vacate the tenanted premises in exchange for a lump-sum payment of Rs.28,00,000/-. It was agreed at the request of Defendant Nos. 1 to 3, that this amount of Rs.28,00,000/- shall be paid directly by the Plaintiffs to Defendant No.4. Out of this amount, Rs.8,00,000/- was to be paid in advance to Defendant No. 4 and the balance amount was to be paid at the time of handing over peaceful possession. The remaining consideration was to be paid to the owners i.e. to Defendant Nos. 1 to 3.
3.5. The Plaintiffs have paid partial consideration of Rs.6,15,000/- to the Vendors (Defendant Nos. 1 to 3) and at the request of the Vendors, Rs.13,10,000/- directly to Defendant No. 4 (tenant).
SSP ::: Uploaded on - 19/06/2021 ::: Downloaded on - 19/06/2021 23:57:25 ::: 5 / 29 APP-27-2020 Final Order.odt 3.6. It is contended that the Plaintiffs were ready and willing to pay the balance consideration, however, the Vendors refused to perform their part of the contract. Particularly, the Vendors refused to state as to when Defendant No.4 (tenant) would be in a position to vacate part of the Suit Property. Finally, the Plaintiffs issued a legal notice calling upon the Vendors to perform their obligation by accepting part consideration, however, to no avail.
3.7. The Plaintiffs therefore filed the above Suit before this Court seeking specific performance of the Agreement to Sell dated 07.12.1985 and in the alternative, for refund of the earnest amount and for damages. The reliefs sought in the Suit are reproduced hereunder :
"(a) That this Hon'ble Court be pleased to declare that the Agreement dated 7th December, 1985, (Exhibit B to the Plaint) is a valid, subsisting and binding agreement between the plaintiff and the 1st Defendant including the 4th Defendants;
(b) That the Defendants be ordered and decreed to specifically perform the Agreement dated 7th December 1985 Exhibit "A" to the plaint, and that the Defendants be directed to hand over vacant and peaceful possession to the plaintiff of the said property as the said agreement;
(c) That in the alternative prayer (b) above, this Hon'ble Court be pleased to order and decree that the Defendants do pay to the Plaintiffs a sum of Rs. 1,55,25,000/- as per the particulars set out in Exhibit "F" to the plaint along with interest at the rate of 21% per annum compounded quarterly thereon from the date of filing of the suit until payment and/or realization thereof;
SSP ::: Uploaded on - 19/06/2021 ::: Downloaded on - 19/06/2021 23:57:25 ::: 6 / 29 APP-27-2020 Final Order.odt
(d) That this Hon'ble Court declare that the repayment of the amount of Rs. 19,25,000/- together with interest at the rate of 21% per annum compounded quarterly from the date of filing of the suit till payment and/or realization be pleased to order and decree and be duly secured by a valid and subsisting charge on the said property (described in Exh.A hereto) with structures standing thereon and that the said charge be enforced by an under the directions of this Hon'ble Court by sale of the same and the net sale proceeds thereof be paid over to the plaintiffs in or towards the satisfaction of their claims against the Defendants and in the event of there being any deficiency liberty be reserved and granted to the Plaintiffs to apply for and to obtain a personal decree against the Defendants to the extent thereof;
(e) That pending the hearing and final disposal of the suit ......
(f) That pending the hearing and final disposal of the suit ......
(g) That pending the hearing and final disposal of the suit ...... 3.8. In the Particulars of Claim (Exhibit 'F' / 'G' to the Plaint - page No. 109 of the Appeal paper-book), an amount of Rs. 1,55,25,000/- is claimed against the Defendants towards damages (prayer clause 'c') and a refund of Rs. 19,25,000/- (i.e. Rs. 6,15,000/- paid to Defendant Nos. 1 to 3 and Rs. 13,10,000/- paid directly to the Defendant No. 4 / tenant at the request of Defendant Nos. 1 to 3) is claimed from the Defendants by the Plaintiff (prayer clause 'd').
4. All the Defendants contested the Suit by filing their respective written statements. Based on rival contentions, the Learned Single Judge has settled the SSP ::: Uploaded on - 19/06/2021 ::: Downloaded on - 19/06/2021 23:57:25 ::: 7 / 29 APP-27-2020 Final Order.odt issues. Moreover, some additional issues have also been framed. Parties have filed their Affidavit of Documents and Evidence. Defendant Nos. 4 to 6 thereafter took out Notice of Motion No.2515/16 for rejection of plaint against them for want of cause of action in terms of Order VII Rule 11(a) of the Code. The Learned Single Judge by the Impugned Order allowed the Notice of Motion, with the following findings :
i) Possession of a tenanted premises cannot be sought by an outsider who has made payment to a tenant of the landlord in the guise of specific performance.
ii) In fact, even if the Plaintiffs succeed in the Suit and get into the shoes of the landlord, they are required to seek eviction and possession of the premises occupied by a tenant by pursuing their remedy under the Maharashtra Rent Control Act, 1999 from the Small Causes Court.
iii) The reference to the equivalent of the old Section 19(c) of the earlier Specific Relief Act will not hold good after the advent of a special statute governing landlord / tenant relations, plus now containing a Statutory jurisdictional bar.
iv) The submission that one of several defendants cannot seek a rejection of the entire plaint against them, but that only all defendants can together seek rejection of the plaint is without foundation and does not commend itself.
5. Appearing for the Plaintiffs, Ms. Sonal, Learned Counsel submitted that the plaint cannot be rejected against some of the Defendants. According to her, in case of rejection, a suit can only be rejected as a whole against all the defendants and not SSP ::: Uploaded on - 19/06/2021 ::: Downloaded on - 19/06/2021 23:57:25 ::: 8 / 29 APP-27-2020 Final Order.odt against some of the Defendants. She further contended that the Learned Single Judge failed to appreciate that the captioned Suit clearly discloses a cause of action against Defendant Nos. 4 to 6. Relying on Section 19(c) of the Specific Relief Act, 1963, the Learned Counsel Ms. Sonal submitted that Section 19(c) of the Specific Relief Act, 1963, enables the Plaintiffs to implead Defendant Nos. 4 to 6 in the Captioned Suit since they are claiming title / rights in the property. Lastly, she submitted that the Learned Single Judge failed to appreciate that the Appellants have also prayed for an alternate relief of refund of monies which were directly paid by them to Defendant Nos. 4 to 6 (prayer clause 'd'), and on this count the Suit to that extent would be maintainable.
6. To counter the submissions made on behalf of the Plaintiffs, the Learned Senior Advocate Shri S.U. Kamdar representing the Defendant Nos. 4 to 6 submitted that there is no legal embargo on rejecting a plaint against some of the defendants for want of a cause of action. Further, that Defendant Nos. 4 to 6 are strangers to the Agreement to Sell dated 07.12.1985, based on which the captioned Suit for specific performance has been filed. It was contended that Defendant Nos. 4 to 6, not being parties to the Agreement to Sell, are neither necessary, nor proper parties to the Suit. Furthermore, Defendant Nos. 4 to 6 being tenants of part of the Suit Property, are entitled to statutory protection under the appropriate rent control legislation. Moreover, a suit for recovery of possession against the defendants / tenants is not SSP ::: Uploaded on - 19/06/2021 ::: Downloaded on - 19/06/2021 23:57:25 ::: 9 / 29 APP-27-2020 Final Order.odt maintainable in an ordinary Civil Court, in terms of Section 33 of the Maharashtra Rent Control Act, 1999. Possession of tenanted property has to be recovered only through a suit instituted under the appropriate rent laws before the Court of competent jurisdiction i.e. in the Court of Small Causes, Mumbai.
7. Both sides have made exhaustive submissions and also filed written notes of arguments. Both Learned Counsels have relied on several decisions. However, we deem it appropriate to only refer to a few of them which we find relevant and necessary. On the basis of our assessment of the respective submissions, two principal contentions emerge for determination:
i. Whether a plaint can be rejected against some of the Defendants; and ii. Whether the plaint does not disclose cause of action against Defendant Nos. 4 to 6, thereby warranting rejection against them in terms of Order VII Rule 11(a) of the Code.
8. As regards the contention of the Plaintiffs that the Learned Single Judge erred in rejecting the Plaint against some of the Defendants, and that a suit can only be rejected as a whole against all the defendants and not against some of the defendants, Ms. Sonal Learned Advocate for the Appellants placed reliance on the decision of the Supreme Court in the case of Madhav Prasad Aggrawal and another vs. Axis Bank Limited and another1. The facts of the case are, that in a Suit instituted under the original civil jurisdiction of this Court, one of the Defendants therein viz. Axis Bank 1 (2019) 7 SCC 158 SSP ::: Uploaded on - 19/06/2021 ::: Downloaded on - 19/06/2021 23:57:25 ::: 10 / 29 APP-27-2020 Final Order.odt Ltd. took out a Notice of Motion for rejection of plaint by invoking the provisions of Order VII Rule 11(d) of the Code, contending that the Suit is barred by the provisions of law. Initially, the Learned Single Judge of this Court was of the view that the Suit is not barred under law, and accordingly dismissed the Notice of Motion. In appeal, the Division Bench of this Court took a contrary view holding that the prayer made against the defendant, Axis Bank Ltd. was barred under the law, and by allowing the appeal, dismissed the Suit against Axis Bank Ltd. Being aggrieved, the plaintiffs therein approached the Supreme Court. It was urged that the plaint cannot be rejected only against one of the defendants, however, it can be rejected as a whole. The Supreme Court held that it is not permissible to reject a plaint qua any particular portion of a plaint including against some of the defendants and continue the same against the others. The Supreme Court by citing its earlier decision in the case of Sejal Glass Ltd vs. Navilan Merchants (P) Ltd.2, expressed that the plaint can either be rejected as a whole, or not at all. It is not permissible to reject a plaint qua some of the defendants and continue the same against others. Ultimately, the order of rejection of plaint against one of the defendants Axis Bank, was reversed.
9. Learned Senior Counsel Shri Kamdar for Respondent Nos. 4 to 6 by placing reliance on the decision in Church of Christ Charitable Trust and Education Charitable Society vs. Ponniamman Educational Trust 3, submitted that prior to the 2 (2018) 11 SCC 780 3 (2012) 8 SCC 706 SSP ::: Uploaded on - 19/06/2021 ::: Downloaded on - 19/06/2021 23:57:25 ::: 11 / 29 APP-27-2020 Final Order.odt decision in Madhav Aggrawal's case (supra), the Supreme Court had ruled that a plaint as a whole can be rejected against some of the defendants in terms of Order VII Rule 11 of the Code. He submitted that the decision in the case of Church of Christ (supra), delivered by a co-equal bench, being prior to the decision in Madhav Aggrawal's case (supra) would govern the field. In support of the aforesaid contention, he relied on the decision of the Supreme Court in the case of Sundeep Kumar Bafna vs. State of Maharashtra and another4.
10. We have gone through the decision in the case of Church of Christ (supra) rendered by the two Hon'ble Judges of the Supreme Court wherein, it is ruled that a plaint as a whole can be rejected against some of the defendants. The latter decision in Madhav Aggrawal's case (supra) was also rendered by two Hon'ble Judges of the Supreme Court, and therein the earlier decision in the case of Church of Christ (supra) was not considered. In this context, we have gone through the decision in the case of Sundeep Kummar Bafna (supra) wherein the Supreme Court has observed that the decision rendered by a co-equal bench or larger bench, earlier in time, would prevail. Relevant observations in this regard, are as follows:-
"17. The Constitution Bench in Union of India Vs. Raghubir Singh, (1989) 2 SCC 754 has come to the conclusion extracted below :(SC pp 777-78, para 27) "27..........It is in order to guard against the possibility of inconsistent decisions on points of law 4 (2014) 16 SCC 623 SSP ::: Uploaded on - 19/06/2021 ::: Downloaded on - 19/06/2021 23:57:25 ::: 12 / 29 APP-27-2020 Final Order.odt by different Division Benches that the rule has been evolved, in order to promote consistency and certainty in the development of the law and its contemporary status, that the statement of the law by a Division Bench is considered binding on a Division Bench of the same or lesser number of Judges. This principle has been followed in India by several generations of Judges."
"19. It cannot be over-emphasised that the discipline demanded by a precedent or the disqualification or diminution of a decision on the application of the per incuriam rule is of great importance, since without it, certainty of law, consistency of rulings and comity of Courts would become a costly casualty. A decision or judgment can be per incuriam any provision in a statute, rule or regulation, which was not brought to the notice of the Court. A decision or judgment can also be per incuriam if it is not possible to reconcile its ratio with that of a previously pronounced judgment of a Co-equal or Larger Bench; or if the decision of a High Court is not in consonance with the views of this Court. It must immediately be clarified that the per incuriam rule is strictly and correctly applicable to the ratio decidendi and not to obiter dicta. It is often encountered in High Courts that two or more mutually irreconcilable decisions of the Supreme Court are cited at the Bar. We think that the inviolable recourse is to apply the earliest view as the succeeding ones would fall in the category of per incuriam."
11. In view of the foregoing settled position, we are of the view that the earlier decision rendered by the Supreme Court in the case of Church of Christ (supra) needs to be followed which has laid down that the plaint as a whole can be rejected against some of the defendants. The Learned Single Judge was therefore correct in SSP ::: Uploaded on - 19/06/2021 ::: Downloaded on - 19/06/2021 23:57:25 ::: 13 / 29 APP-27-2020 Final Order.odt holding that there is no legal embargo on rejecting the plaint as a whole against some of the defendants, and we also do hold accordingly.
12. Before proceeding with the next point of determination viz. Whether the plaint does not disclose cause of action against Defendant Nos. 4 to 6 warranting rejection against them, in terms of Order VII Rule 11(a) of the Code, it would be apposite to note that the Notice of Motion taken out by Defendant Nos. 4 to 6, resorts only to Order VII Rule 11(a) of the Code. Though a feeble attempt was made by these Defendants to contend that there is a jurisdictional bar on entertaining the claim of possession, this was not canvassed as a ground for rejection of plaint in terms of Order VII Rule 11(d) of the Code. In that context, we have gone through the reliefs claimed in the Notice of Motion which are reproduced hereunder :
"(a) that this Hon'ble Court be pleased to reject the Plaint filed by the Plaintiffs and in the alternative be pleased to dismiss this suit under Order 7 Rule 11 of the Code of Civil Procedure, 1908 for want of cause of action against Defendants No. 4 to 6 and mis-joinder of parties;" (emphasis supplied)
13. Besides that, in the entire Notice of Motion, Defendant Nos. 4 to 6 nowhere seek rejection of the plaint under Order VII Rule 11 (d) of the Code, claiming that the captioned Suit is barred by any law.
14. After noting the above, we now refer to the decision of the Supreme Court in the case of Sopan Sukhdeo Sable and others vs. Assistant Charity Commissioner and SSP ::: Uploaded on - 19/06/2021 ::: Downloaded on - 19/06/2021 23:57:25 ::: 14 / 29 APP-27-2020 Final Order.odt others5, which has discussed in detail the law governing rejection of plaint in terms of Order VII Rule 11 of the Code. The relevant portion is extracted below :
"10. In Saleem Bhai v. State of Maharashtra and Ors. (2003 (1) SCC 557) it was held with reference to Order VII Rule 11 of the Code that the relevant facts which need to be looked into for deciding an application thereunder are the averments in the plaint. The trial Court can exercise the power at any stage of the suit - before registering the plaint or after issuing summons to the defendant at any time before the conclusion of the trial. For the purposes of deciding an application under clauses (a) and (d) of Order VII Rule 11 of the Code, the averments in the plaint are germane; the pleas taken by the defendant in the written statement would be wholly irrelevant at that stage.
11. In I.T.C. Ltd. v. Debts Recovery Appellate Tribunal and Ors. (1998 (2) SCC 70) it was held that the basic question to be decided while dealing with an application filed under Order VII Rule 11 of the Code is whether a real cause of action has been set out in the plaint or something purely illusory has been stated with a view to get out of Order VII Rule 11 of the Code.
12. The trial Court must remember that if on a meaningful and not formal reading of the plaint it is manifestly vexatious and meritless in the sense of not disclosing a clear right to sue, it should exercise the power under Order VII Rule 11 of the Code taking care to see that the ground mentioned therein is fulfilled. If clever drafting has 5 (2004) 3 SCC 137 SSP ::: Uploaded on - 19/06/2021 ::: Downloaded on - 19/06/2021 23:57:25 :::
15 / 29 APP-27-2020 Final Order.odt created the illusion of a cause of action, it has to be nipped in the bud at the first hearing by examining the party searchingly under Order X of the Code. (See T. Arivandandam v. T.V. Satyapal and Anr. (1977 (4) SCC 467).
13. It is trite law that not any particular plea has to be considered, and the whole plaint has to be read. As was observed by this Court in Roop Lal Sathi v. Nachhattar Singh Gill (1982 (3) SCC 487), only a part of the plaint cannot be rejected and if no cause of action is disclosed, the plaint as a whole must be rejected.
14. In Raptakos Brett & Co. Ltd. v. Ganesh Property (1998 (7) SCC 184) it was observed that the averments in the plaint as a whole have to be seen to find out whether clause (d) of Rule 11 of Order VII was applicable."
15. We may now advert to the decision of this Court in the case of Gopal Shrinivasan Vs. National Spot Exchange Limited6. The Division Bench of this Court has in paragraph 31 observed as under :
"31. ........The averments in the plaint are required to be seen in their entirety to find out the real cause of action. The Court would consider whether on a meaningful reading of the plaint, the plaint is manifestly vexatious and merit less so as to not disclose a clear right to sue, only in such a situation power under Order 7 Rule 11 of the Code can be exercised by the Court to reject the plaint against the defendants. It is a settled law that there cannot be a 6 (2016) 4 Bom CR 492 SSP ::: Uploaded on - 19/06/2021 ::: Downloaded on - 19/06/2021 23:57:25 :::
16 / 29 APP-27-2020 Final Order.odt compartmentalization, dissection, segregation and inversion and language of the various paragraphs in the plaint nor is it permissible to cull out a sentence or passage and to consider the same in isolation. It is the substance and not merely the form which is required to be looked into. The pleadings are required to be construed as it stands without additions or subtractions or words or change of its apparent grammatical sense. The tenor and the sentence of the pleadings is required to be seen as a whole. (See Sopan vs. Assistant Charity Commissioner, Air Supreme Court 2004 page 180)"
16. The Learned Senior Counsel for the Defendants invited our attention to the recent decision of the Supreme Court in the case of Dahiben vs. Arvindbhai Kalyanji Bhanusali (Gajra) dead through legal representatives and others 7, the relevant observations are reproduced hereunder :
"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 7 (2020) 7 SCC 366, 2018(5) ALL MR 217 SSP ::: Uploaded on - 19/06/2021 ::: Downloaded on - 19/06/2021 23:57:25 :::
17 / 29 APP-27-2020 Final Order.odt judicial time is not wasted.
23.4 In Azhar Hussain v. Rajiv Gandhi 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 plaint, read in conjunction with the documents relied upon, or whether the suit is barred by any law."
17. In light of the aforementioned settled position, we are required to examine the averments in the plaint in its entirety to find out the real cause of action. What amounts to 'cause of action' is well settled by the Supreme Court in its various SSP ::: Uploaded on - 19/06/2021 ::: Downloaded on - 19/06/2021 23:57:25 ::: 18 / 29 APP-27-2020 Final Order.odt decisions. In this regard, we refer to the decision of the Supreme Court in the case of A.B.C. Laminart (P) Ltd. vs. A. P. Agencies8, wherein the meaning of the expression "cause of action" is explained as under :
"12. A cause of action means every fact, which if traversed, it would be necessary for the plaintiff to prove in order to support his right to a judgment of the Court. In other words, it is a bundle of facts which taken with the law applicable to them gives the plaintiff a right to relief against the defendant. It must include some act done by the defendant since in the absence of such an act no cause of action can possibly accrue. It is not limited to the actual infringement of the right sued on but includes all the material facts on which it is founded. It does not comprise evidence necessary to prove such facts, but every fact necessary for the plaintiff to prove to enable him to obtain a decree. Everything which if not proved would give the defendant a right to immediate judgment must be part of the cause of action. But it has no relation whatever to the defence which may be set up by the defendant nor does it depend upon the character of the relief prayed for by the plaintiff."
18. Relying on the decision of the Supreme Court in the case of Kasturi vs. Iyyaperumal and other9, the Learned Senior Counsel Shri Kamdar, in support of his contention that the Plaint discloses no cause of action against the Defendant Nos. 4 to 6 argued that in a Suit for specific performance of a contract for sale, a stranger or third party to the contract cannot be added as a defendant in the suit. To respond to 8 (1989) 2 SCC 163 9 (2005) 6 SCC 733 SSP ::: Uploaded on - 19/06/2021 ::: Downloaded on - 19/06/2021 23:57:25 ::: 19 / 29 APP-27-2020 Final Order.odt this submission, Learned Counsel Ms. Sonal submitted that the said decision has no application in view of the peculiar facts of this case. She has relied on the decision of the Supreme Court in the case of Sumtibai and others vs. Paras Finance Co.10, wherein the Supreme Court has explained the decision rendered in the case of Kasturi (supra). In its decision in Sumtibai (supra), the Supreme Court has distinguished the decision rendered in Kasturi's case (supra) by explaining that the said decision can only be understood to mean that a third party cannot be impleaded in a suit for specific performance if he has no semblance of title in the property in dispute. The Supreme Court held that it is settled that every judgment must be governed and qualified by the particular facts of the case in which such expressions are to be found and that a slight difference in facts may make a lot of difference in the precedential value of a decision. In the case at hand, though Defendant Nos. 4 to 6 were not parties to the contract / Agreement to Sell, as per the Plaintiffs' case, partial consideration was directly paid to them which has been claimed by way of alternate relief. Therefore, in our view this case being different in facts, the ratio laid down in the case of Kasturi (supra) would be of no assistance.
19. Ms. Sonal, Learned Counsel for the Appellants, relied on Section 19(c) of the Specific Relief Act, 1963, and submitted that Section 19(c) enables the Plaintiffs to implead Defendant Nos. 4 to 6 in the Suit since they are claiming title / rights in the property. In our considered opinion, the scope of a suit for specific performance of an 10 (2007) 10 SCC 82 SSP ::: Uploaded on - 19/06/2021 ::: Downloaded on - 19/06/2021 23:57:25 ::: 20 / 29 APP-27-2020 Final Order.odt agreement to sell coupled with a prayer of possession, cannot be enlarged and the suit cannot be turned into an eviction suit against a tenant. The Plaintiffs can, after perfecting their title by obtaining a decree for specific performance, initiate appropriate proceedings against the tenants before the appropriate forum. The expression "under a title which might have been displaced by the defendant", occurring in Section 19(c) of the Specific Relief Act, 1963, must be understood as a title of a stranger defeasible at the instance of the vendor and would not encompass Defendant Nos. 4 to 6 who enjoy independent statutory protection against eviction. Therefore, in our opinion, the provisions of Section 19(c) would not aid the Plaintiffs' case.
20. Learned Senior Counsel Shri Kamdar, has vehemently argued that the Suit is essentially one for recovery of possession against a tenant, and hence not maintainable in the ordinary original jurisdiction of this Court. In other words, he submitted that the Suit being for specific performance of a contract, the tenants are not necessary parties, and hence there is no cause of action against them. He laid emphasis on Section 33 of the Maharashtra Rent Control Act, 1999. This section provides for particular classes of Courts to entertain and try suits or proceedings between landlords and tenants, relating to the recovery of rent or possession. According to him, since the Suit Property is situated in Brihanmumbai, the particular / specified Court is the 'Court of Small Causes, Mumbai'.
21. As opposed to the aforesaid submissions of Shri Kamdar, Ms. Sonal SSP ::: Uploaded on - 19/06/2021 ::: Downloaded on - 19/06/2021 23:57:25 ::: 21 / 29 APP-27-2020 Final Order.odt submitted that there can be no dispute about the aforesaid proposition. However, according to her, the Suit is not a suit by a landlord against a tenant for recovery of possession. She has captioned the suit as a mere suit for possession, and not a suit by a landlord against a tenant for recovery of possession. We are not inclined to accept this submission. Admittedly, Defendant Nos. 4 to 6 are tenants. Essentially, the Plaintiffs have claimed possession of a tenanted premises. Defendant Nos. 4 to 6 being tenants, have statutory protection.
22. Notwithstanding the aforesaid, Ms. Sonal argued that though the Suit is for specific performance against the Vendors, an alternate relief for refund of earnest money and for damages has been claimed against Defendant Nos. 4 to 6. On this count, she emphasized that an ordinary Civil Court has jurisdiction to entertain a prayer for refund of the earnest amount which was directly paid to Defendant Nos. 4 to 6.
23. We shall now examine whether the Plaint contains sufficient pleadings to establish a cause of action to claim refund of the earnest amount from Defendant Nos. 4 to 6.
24. We have closely examined the Plaint so as to ascertain whether the Plaint discloses a cause of action against Defendants Nos. 4 to 6. On close scrutiny, we find it relevant to quote certain pleadings from the Plaint which relate to Defendant Nos. 4 to
6. The relevant portions of the Plaint have been extracted below for ready reference : -
SSP ::: Uploaded on - 19/06/2021 ::: Downloaded on - 19/06/2021 23:57:25 ::: 22 / 29 APP-27-2020 Final Order.odt Paragraph 2 (At page No. 45) "2. The relevant clauses of the said agreement are as follows:-
"2(a) ........
(b) .......
(c) Rs. 8,00,000/- (Rupees eight lacs only) at the request of the
Vendors direct to the said tenant Messrs. Suniti Prints in order to enable them to negotiate and acquire alternative accommodation and towards part payment of the sum of Rs. 28 lakhs agreed to be paid to them;
Paragraph 2(5) (At page No. 47) ..... The vendors have already entered into an agreement with the said tenant i.e. M/s Suniti Prints for obtaining the vacant possession thereof providing an alternate accommodation in the vicinity of the said property or to pay a lumpsum amount of Rs. 28,00,000/- to enable the said tenant M/s Suniti Prints to purchase for themselves an alternate accommodation of their own choice. It will be the responsibility of the Vendors to give vacant possession of the said portions occupied by the said M/s. Suniti Prints.
Paragraph 2 (sub-paragraphs 6 and 7) (At page Nos. 47 and 48)
6. The purchasers shall at the request of the Vendors pay direct to the said tenant M/s Suniti Prints the said agreed amount of Rs. 28,00,000/- for and on behalf of the Vendors out of the total purchase price payable by the purchasers to the Vendors in respect of the sale of the above property out of which Rs. 8 lakhs will be paid in advance as may be requested by the Vendors and the balance against the said tenant M/s Suniti Prints handing over the peaceful and vacant possession of the said portions of the property in their possession and surrendering the tenancy rights in respect thereof to the Vendors.
7. On the purchasers making a total payment of Rs. 32,05,000/- to the Vendors either to them directly or on their behalf to the said tenant M/s Suniti Prints but not exceeding a sum of Rs. 28,00,000/- to the said Tenant as the Vendors shall put the purchasers in vacant and peaceful possession of the said vacant portion of the property SSP ::: Uploaded on - 19/06/2021 ::: Downloaded on - 19/06/2021 23:57:25 ::: 23 / 29 APP-27-2020 Final Order.odt occupied by M/s Suniti Prints and in constructive possession of the portion occupied by the tenants of the chawls by attorning the said tenants of three chawls to the purchasers.
Paragraph 5 (At page No. 50) Thereafter at the request of the 1 st Defendant the Plaintiffs paid by cheque to the 4th Defendant the following amount:-
Amount (Rs) Date
5,00,000/- 20.05.1987
4,50,000/- 03.06.1987
3,35,000/- 15.06.1987
25,000/- 25.02.1988
13,10,000/-
and the 4th Defendants have accepted the same pursuant to the said agreement to enable the 4th Defendant to obtain and/or acquire alternate accommodation. As can be seen these amounts were far in excess of the plaintiffs' obligations under the said agreement and were made at the 1st defendant's request and accepted by the 4th Defendant towards the amount due for alternate accommodation.
Paragraph 8 (At page No. 52) ...........Significantly no answer was received from the 4 th Defendant with regard to the letter addressed to it by the plaintiffs Advocate dated 14th August 1991, significantly the 4th defendant never even offered to return the amounts received by them from the plaintiffs aggregating to Rs. 13,10,000/- nor did they reply to the plaintiffs' letter dated 14.09.1991."
25. Admittedly, Defendant Nos. 4 to 6 were not parties to the contract i.e. the Agreement to Sell. We have examined the Plaint with a view to find out whether it contains pleadings in support of the alternate relief of refund of earnest amount. In paragraph 2(c) of the Plaint, it is specifically pleaded that at the request of the SSP ::: Uploaded on - 19/06/2021 ::: Downloaded on - 19/06/2021 23:57:25 ::: 24 / 29 APP-27-2020 Final Order.odt Vendors, the Plaintiffs were to pay Rs. 8,00,000/- to Defendant No. 4. Paragraph 2(5) of the plaint is explanatory, which states the reason as to why the Plaintiffs were instructed to directly pay M/s. Suniti Prints, which was not a party to the contract. This paragraph conveys that Defendant No. 1, i.e. M/s. S. K. Trading Company (Vendor), has already entered into an agreement with Defendant No. 4 (tenant) for vacating the premises on a lump-sum payment of Rs. 28,00,000/-. Paragraph 2(6) of the Plaint says that the Plaintiffs (purchasers) have to directly pay an amount of Rs. 28,00,000/- to Defendant No. 4 on behalf of the Vendors as part of the consideration, in order to enable them to surrender the tenancy.
26. We find the pleadings in paragraph 5 of the plaint to be relevant. It is pleaded that the Plaintiffs have paid a total sum of Rs. 13,10,000/- to Defendant No. 4, at the request of Defendant No. 1 (Vendor). Moreover, it is pleaded that Defendant No. 4 had accepted this amount pursuant to the Agreement to Sell, to enable them to acquire alternate accommodation. Needless to say, the averments of the Plaint are to be taken as they stand. It is evident that there is a specific pleading that the Plaintiffs have directly paid an amount of Rs. 13,10,000/- to Defendant No. 4 in connection with the Agreement to Sell.
27. The pleading in paragraph 8 of the Plaint suggests that the Plaintiffs had corresponded with Defendant No. 4 about the transaction, however Defendant No. 4 neither replied, nor returned the amount of Rs. 13,10,000/- which it received. The SSP ::: Uploaded on - 19/06/2021 ::: Downloaded on - 19/06/2021 23:57:25 ::: 25 / 29 APP-27-2020 Final Order.odt Plaintiffs' case, that in pursuance of the contract they had paid Rs. 13,10,000/- directly to Defendant No. 4 who refused to return the same, is clearly borne out from this pleading. We therefore find sufficient pleadings in support of the Plaintiffs' alternate claim of refund of the earnest amount paid to Defendant No. 4, the tenant.
28. In view of the aforesaid pleadings, we are of the considered opinion that the Plaint discloses sufficient cause of action against Defendant Nos. 4 to 6. The pleadings are not a mere illusion of a cause of action. The Plaintiffs have demonstrated that they have a right to sue Defendant Nos. 4 to 6.
29. Besides the aforesaid pleadings, the reliefs claimed in the Suit also assume significance. The same are already reproduced in paragraph 3.7 hereinabove. It is clear from the reliefs sought by the Appellants (Original Plaintiffs), that the Suit was principally for specific performance of contract and for possession. As noted above, we are not concerned with the principal relief, but with the alternate reliefs claimed under prayers (c) and (d), as reproduced above. Under prayer (c), the Plaintiffs have claimed damages to the tune of Rs. 1,55,25,000/- as detailed in Exhibit F / G to the Plaint (Page No. 109 of the Appeal paper book) from all the Defendants. Whether Defendant Nos. 4 to 6 can be held liable to pay damages will depend on the merits of the case. However, a bare reading of the Plaint conveys that damages are also claimed from Defendants Nos. 4 to 6, which is relevant.
30. Prayer clause (d) of the Plaint is also relevant for the purposes of the SSP ::: Uploaded on - 19/06/2021 ::: Downloaded on - 19/06/2021 23:57:25 ::: 26 / 29 APP-27-2020 Final Order.odt present Appeal. The Plaintiffs have specifically claimed a refund of earnest amount of Rs. 19,25,000/-, along with interest from the Defendants. It is true that this claim has not been bifurcated between the two sets of Defendants. However, there are specific pleadings that the Plaintiffs have paid Rs. 6,15,000/- to the first set of Defendants (Vendors) i.e. Defendant Nos. 1 to 3 and Rs. 13,10,000/- to the second set of Defendants, i.e. Defendant Nos. 4 to 6. It cannot be disputed that the Plaint has to be read as a whole. Even though there is no clear bifurcation of the earnest amount paid to the Defendants, the pleadings are sufficient to disclose the bifurcation of amount which were separately paid to both sets of Defendants. Certainly, the Plaintiffs have a right to claim a refund of the earnest amount, if the principal relief is declined, since the relief of specific performance is a discretionary one. A specific case has been made out that at the request of the Vendors (Defendant Nos. 1 to 3) an amount of Rs. 13,10,000/- has been directly paid to the tenants (Defendant Nos. 4 to 6). In that scenario, the claim for refund from Defendant Nos. 4 to 6 cannot be said to be illusory or a camouflage. Thus, we do see that the Plaintiffs have pleaded sufficient cause of action against Defendant Nos. 4 to 6 in context of the alternate claim of refund of the earnest amount. This would warrant the rejection of an application under Order VII Rule 11(a).
31. Though an attempt has been made to have the Suit dismissed for misjoinder, we do not accept such submission. As held by us herein above, the Plaint SSP ::: Uploaded on - 19/06/2021 ::: Downloaded on - 19/06/2021 23:57:25 ::: 27 / 29 APP-27-2020 Final Order.odt discloses sufficient cause of action against Defendant Nos. 4 to 6. In fact, Order I Rule 9 of the Code provides that there could be no dismissal of a suit on account of misjoinder, which is converse to the case of non-joinder. Order I Rule 3 of the Code permits the joining of all persons in a suit as defendants against whom a right to relief arises out of the same act or transaction, whether jointly or severally, or in the alternative. A reading of the entire Plaint as a whole discloses that as per the Plaintiffs' case, they paid some earnest amount directly to Defendant Nos. 4 to 6 out of the same transaction i.e. the Agreement to Sell. Therefore, the provisions of Order I Rule 3 of the Code enable the Plaintiffs to join Defendant Nos. 4 to 6 in this Suit. In terms of Order I Rule 5 of the Code, it shall not be necessary that every defendant shall be interested as to all the reliefs claimed in the suit against him. This Rule is to be read with Rule 3 above. In effect, it provides that where a suit is brought against several defendants, the fact that every defendant is not interested in all the reliefs claimed in the suit, does not imply a misjoinder of the defendants. On this count therefore, Defendant Nos. 4 to 6 's arguments in respect of misjoinder cannot be accepted.
32. The matter can be viewed from another angle as well. Under the scheme of Order II Rule 2 of the Code, it is necessary that parties must claim all the reliefs as available to them at the time of filing of the suit. Any intentional omission debars a second suit on the same cause of action. A plaintiff is not required to file a separate suit for other reliefs, where the other reliefs flow from the same cause of action. The SSP ::: Uploaded on - 19/06/2021 ::: Downloaded on - 19/06/2021 23:57:25 ::: 28 / 29 APP-27-2020 Final Order.odt relief of specific performance and the alternative claim of refund of earnest amount emanate from the same cause of action, and therefore a second suit for recovery of money may be untenable if filed by the Plaintiffs against Defendant Nos. 4 to 6. This factor has also been taken into account by us.
33. In the Impugned Order, the Learned Single Judge has observed that payments made by an outsider to a landlord's tenant, will not give rise to a cause of action for possession under the guise of specific performance. It is further observed that the relief is for possession from the tenant, and hence only the Court of Small Causes has exclusive jurisdiction, and this statutory position cannot be by-passed. Whilst this may be so, the Learned Single Judge has not at all considered the Plaintiff's alternate relief for refund of earnest amount and has therefore erred in rejecting the Plaint under Order VII Rule 11(a), i.e. for want of cause of action. This is the fundamental error in the Impugned Order. It was incumbent on the Learned Single Judge to have considered the Plaint and all the prayers therein as a whole.
34. Owing to the reasons aforesaid, we see no reason to non-suit the Plaintiff at this stage. There are sufficient averments against Defendant Nos.4 to 6 in the Plaint disclosing cause of action and the Suit ought to continue against them.
35. In conclusion, we hold that a plaint can be rejected as a whole against some of the defendants. We further hold that the Plaint in the present Suit discloses sufficient cause of action against Defendant Nos. 4 to 6 in context of the Plaintiff's SSP ::: Uploaded on - 19/06/2021 ::: Downloaded on - 19/06/2021 23:57:25 ::: 29 / 29 APP-27-2020 Final Order.odt alternate claim for refund of earnest amount. The Learned Single Judge ought to have considered the matter as a whole and ought not to have allowed the Notice of Motion. We accordingly set aside the Impugned Order dated 14.01.2019 passed in Notice of Motion No.2515/16 and hereby dismiss the Notice of Motion.
36. Appeal is accordingly allowed and disposed of. No order as to costs.
(VINAY JOSHI, J.) (S. J. KATHAWALLA, J.)
SSP
::: Uploaded on - 19/06/2021 ::: Downloaded on - 19/06/2021 23:57:25 :::