Calcutta High Court
Rajeev Maheshwari & Ors vs Shashank Kocher & Ors on 17 December, 2020
Author: Arindam Mukherjee
Bench: Arindam Mukherjee
in THE HigH coUrT aT calcUTTa
orDinary original civil JUriSDicTion
original SiDE
Present:
THE HON'BLE JUSTICE ARINDAM MUKHERJEE
GA No.2592 of 2015
With
CS 195 of 2010
RAJEEV MAHESHWARI & ORS.
Vs.
SHASHANK KOCHER & ORS.
For the Plaintiff : Mr. Hirak Kumar Mitra, Sr. Adv.
Mr. Aniruddha Roy,
Mrs. N. Roy,
Mrs. D. Chatterjee,
Mr. S. Mitra,
Ms. A. Chatterjee
...... Advocates
For the Defendant : Mr. Jishnu Saha, Sr. Adv.,
Mr. A. Roy Chowdhury
...... Advocates
Heard on : 21.11.2019, 25.11.2019, 29.11.2019,
05.12.2019, 10.12.2019, 19.12.2019
and 18.09.2020.
Judgment on : 17th December, 2020.
Arindam Mukherjee, J:
1) This is an application inter alia for rejection of the plaint and/or
dismissal of the suit and in the alternative for framing of a preliminary issue
G.A. 2592 of 2015
as to the maintainability of the suit in view of two orders respectively dated
5th September, 2007 and 13th March, 2012 passed subsequent to the filing of
the suit made by the defendants No.1 and 2. Ordinarily, an application for
rejection of plaint and/or dismissal of the suit filed in this Court under the
provisions of Chapter VI Rule 11 (12) of the Original Side Rules of this Court
is decided on the principles of Order 7 Rule 11 of the Code of Civil Procedure
1908 by looking into the averments made in the plaint and documents
annexed thereto. In the instant case the suit has been filed in 1995. The
plaint has fallen for scrutiny on several earlier rounds of the instant litigation.
When this Court did not think it fit to reject the plaint or dismiss the suit.
This instant application appears to be based on the subsequent events or
post suit developments. Relying upon judgment reported in 2004 (11) SCC
168 [Shipping Corporation of India Ltd. versus Machado Brothers & Ors.] it is
submitted that in view of subsequent events the original proceedings have
become infructuous and it is the duty of the Court to take such action as is
necessary in interest of justice which includes disposing of the infructuous
litigation applying provisions of section 151 of the Code of Civil Procedure,
1908, read with the provisions of Order 7 Rue 11 thereof. I am, therefore,
required to consider the impact of the two orders referred to hereinabove
along with the subsequent events while deciding the instant application.
(A) The plaint case is as follows:-
1.One Mohanlal Maheswari and one Mohanlal Kocher, carried on business in partnership with equal share under the name and style of Bharat Page 2 of 26 G.A. 2592 of 2015 Industries and Commercial Corporation, in terms of a partnership deed dated 23rd December, 1972.
2. Mohanlal Maheshwari died on 17th December, 1984. The plaintiff No.1 (Rajeev Maheshwari), plaintiff No.2 (Rahul Maheshwari) and plaintiff No.3 (Ranjan Maheshwari) are the three sons of the said Mohanlal Maheshwari. The plaintiffs are the only heirs and legal representatives of the said Mohanlal Maheshwari.
3. The defendant No.1 (Shashank Kocher) and defendant No.2 (Mayank Kocher) and original defendant No.3 (Mrigank Kocher) three are the sons of the said Mohanlal Kocher who dies intestate on or about 6th March, 1992. Defendant No.3(a) (Anita Kocher) and 3(b) (Sharan Kocher) are the heirs of one Mrigank Kocher, since deceased. Defendant No.4 (Kishan Mimani) is the assignee of the purported Agreement for Sale of Mohanlal Kocher's purported 50 per cent share in the dissolved partnership firm viz. M/S. Bharat Industries and Commercial Corporation.
4. Mohanlal Kocher, dies on 6th March, 1992. Prior to his death by an agreement for sale dated 26th December, 1990 sold his 50% share to one Om Prakash. The said Om Prakash by a deed said to have assigned his right under the agreement dated 26th December, 1990 to Kishan Mimani, the defendant No.4. The said defendant No.4 has filed a suit inter alia for specific performance of his agreement being CS 510 of 1993 which appears to be pending at a pre-trial state.
5. In August, 1984 when both Mohanlal Maheshwari and Mohanlal Kocher were alive, they referred their disputes arising in respect of the Page 3 of 26 G.A. 2592 of 2015 partnership to Arbitration by each appointing an arbitrator and P. Tewari being appointed as Umpire. Nothing further happened as Mohanlal Maheshwari died on 17th December, 1984.
6. The partnership according to the plaintiffs stood dissolved with effect from 17th December, 1984 upon the death of Mohanlal Maheshwari. Though the plaintiff No.1 and defendant No.2 made some infructuous attempts in 1985 to wind up the partnership business but nothing ultimately came and as such according to the plaintiffs the claim of the defendants, if any, for accounts and share of the profit arising out of or concerning the partnership business came to an end with expiry of three years from 17th December, 1984 when the partnership stood dissolved, therefore, the same is barred by limitation.
7. The defendants have admitted to be in possession of the properties and assets of the dissolved partnership in adverse exclusion of the defendants. The plaintiffs, therefore, has inter alia claimed a declaration that the defendants have no right, title or interest in respect of the dissolved partnership.
8. It is further stated that the defendants No.1 and 2 and Mrigank Kocher, since deceased in 1995 had filed an application under the provisions of section 20 of the Arbitration Act, 1940 as also an application under section 41 of the said Act. In the section 20 application (being numbered as Special Suit No.9 of 1995) by an order dated 5th September, 1995 direction for filing of the arbitration agreement was given. In an appeal being Appeal No.472 of Page 4 of 26 G.A. 2592 of 2015 2007 preferred against the order dated 5th September, 1995 the said order was stayed. The appeal was pending at the time when the suit was initiated.
(B) Facts subsequent to the filing of the suit:-
1. The appeal being APO No.472 of 2007 arising out of the order dated 5th September, 2007 passed in Special Suit No.9 of 1995 was decided on 13th March, 2012 by partially modifying the order dated 5th September, 2007. The modification was to the extent that Mimani's (defendant No.4) rights should be excepted matter in the arbitration since Mimani is not a party to the arbitration agreements.
2. By an order dated 2nd May, 2011 the above suit was dismissed by referring all disputes being the subject matter of the suit to arbitration. Two separate appeals were preferred against the said order dated 2nd May, 2011 -
one by Mimani being APO 198 of 2011 and the other by Kochers being APO 199 of 2011. Both the appeals were allowed by an order dated 23rd December, 2011 by setting aside the order dated 2nd May, 2011. C.S 510 of 1993 (filed by Mimani for specific performance) and the instant suit were also directed to be heard analogously
3. A further application under section 20 of the 1940 Act being AP 493 of 2012 on being filed an order was passed on 11th October, 2012 appointing the nominee of the Kocher defendants so that the arbitrator already appointed by the Maheshwaris' (plaintiffs) and the said nominee could appoint an Umpire within a time frame to constitute the arbitral tribunal to adjudicate upon the disputes.
Page 5 of 26
G.A. 2592 of 2015
4. Challenging the order dated 11th October, 2012 two separate appeal were filed - one by the Mimani (APOTS 28 of 2012) and the other by Maheshwari (APOT 527 of 2012). Both the appeals were dismissed by an order dated 11th December, 2012.
5. Prior to the dismissal of the two appeals, the arbitrators held a meeting on 8th December, 2012 and appointed an Umpire.
6. After dismissal of the two appeals, there was no embargo on the Maheshwari to proceed with the arbitration but by excluding the excepted matters as held in the order dated 13th March, 2012.
7. The plaintiffs (Maheshwari's) thereafter filed a suit being C.S 328 of 2013. The Maheshwari also filed an interlocutory application in the said suit inter alia to restrain the Kochers' from proceeding with the arbitration. The said application being GA 2826 of 2013 was dismissed by an order dated 7th November, 2014.
8. The arbitration proceedings as appears, did not proceed much further before the Arbitral Tribunal constituted in terms of the order dated 11th October, 2012 due to the death of one of the arbitrators during the pendency and the other owing to his ill health having renounced his office.
9. By an order dated 10th February, 2017 an Arbitral Tribunal was constituted with a Single arbitrator with a direction upon him to conclude the proceedings within a time frame. This order was carried in appeal by the Kocher's but same being APO 83 of 2017 was dismissed by an order dated 31st July, 2017. The special Leave Petition filed challenging the order dated Page 6 of 26 G.A. 2592 of 2015 31st July, 2017 was disposed of by an order dated 5th August, 2019 without interfering with the order of the Division Bench of this Court but the time to complete the arbitration proceedings was extended for a period of six months from 21st August, 2019.
10. After the hearing of the instant application was concluded but prior to the judgment being delivered, the Arbitral Tribunal has passed its award on 28th January, 2020. The award has been placed on record by a separate application being GA No.7 of 2020 filed by the Maheshwari. By an order dated 18th September, 2020 the said award was taken on record for the purpose of the deciding the instant application.
11. The learned Sole Arbitrator in his award dated 28th January, 2020 has terminated the arbitral proceedings by holding that the reliefs claimed in the arbitration are covered by the reliefs claimed in CS 510 of 1993 and CS No.195 of 2010 (the instant suit). Till the said award is set aside the same remains valid and binding.
(C) Submission of the parties:-
1. The applicants (Kocher's) submit that the suit has become infructuous in view of the post suit orders and subsequent events and as such the plaint should be rejected and/or suit be dismissed with an alienative prayer to frame a preliminary issue as to its maintainability owing to the subsequent events and post suit orders. The applicants have placed the orders referred to hereinabove and the judgment reported in Shipping Corporation (supra) to conclude the suit should be dismissed.Page 7 of 26
G.A. 2592 of 2015
3. The plaintiffs (Maheshwari's) opposing the application say that the suit is maintainable and has not become infructuous even after passing of the several orders referred to hereinabove. Emphasis in particular have been laid on the Division Bench orders respectively dated 23rd December, 2011 and 13th March, 2012 wherein the rights for and against the Mimani (defendant No.4) has been carved out of the arbitration proceedings and holding that the suit is maintainable orders passed subsequent to the order dated 13th March, 2012 are referred to for a further submission that this Court has never felt in the earlier rounds of the litigation between the parties including Mimani that the plaint is required to be rejected or suit to be dismissed.
The applicants have further referred to the following judgments:-
(a) AIR 1977 SC 2421 : 1977 (4) SCC 467 [T. ARIVANDANDAM Vs. T. V. SATYAPAL AND ANOTHER] para 5 and 6 "5. We have not the slightest hesitation on condemning the petitioner for the gross abuse of the process of the court repeatedly and unrepentantly resorted to. From the statement of the facts found in the judgment of the High Court, it is perfectly plain that the suit now pending before the First Munsif's Court, Bangalore, is a flagrant misuse of the mercies of the law in receiving plaints. The learned Munsif must remember that if on a meaningful - not formal -
reading of the plaint it is manifestly vexatious, and meritless, in the sense of not disclosing a clear right to sue, he should exercise his power under Order VII, Rule 11, C.P.C. taking care to see that the ground mentioned therein is fulfilled. And, if clever drafting has created the illusion of a cause of action, nip it in the bud at the first hearing by Page 8 of 26 G.A. 2592 of 2015 examining the party searchingly under Order X, C.P.C. An activist Judge is the answer to irresponsible law suits. The trial Courts would insist imperatively on examining the party at the first hearing so that bogus litigation can be shot down at the earliest stage. The Penal Code is also resourceful enough to meet such men, (Cr. XI) and must be triggerted against them. In this case, the learned Judge to his cost realised what George Bernard Shaw remarked on the assassination of Mahatma Gandhi:
"It is dangerous to be too good."
6. The trial Court in this case will remind itself of Section 35- A, C.P.C. and take deterrent action if it is satisfied that the litigation was inspired by vexatious motives and altogether groundless. In any view, that suit has no survival value and should be disposed of forthwith after giving an immediate hearing to the parties concerned".
(b) AIR 1983 Raj 1 [RANJEET MAL Vs. POONAM CHAND AND ANOTHER] (paragraphs 3 and 4):-
"3. Learned counsel for the defendant petitioner urges that the plaint should not be read in a formal manner but it should be read along with the law on the subject and that a perusal of the provisions of the Rajasthan Urban Areas (Sub- Division, Reconstitution and Improvement of Plots) Rules, 1975 would make it clear that the open spaces left after sub- division vested in the Urban Improvement Trust and that in view of the said provisions of law, the plaint did not disclose any cause of action for filing the suit, because the correct legal position was that the land in dispute did not belong to the plaintiff. Learned counsel placed reliance on the decision of a learned single Judge of the Delhi High Court in Shakti Sugars Ltd. v. Union of India, AIR 1981 Delhi 212. In that Page 9 of 26 G.A. 2592 of 2015 case the question was as to whether the State Trading Corporation was the agent of the Central Government, by reason of which the latter was liable for breach of contract committed by the former. It was urged on behalf of the Union of India that the plaint did not disclose any cause of action against the Union of India and the suit should be dismissed against it. The learned single Judge referred to the decision of their Lordships of the Supreme Court in T. Arivandandam v. Satyapal, AIR 1977 SC 2421 and held that it is to be seen if "actually according to law" the contention contained in the plaint that the defendant was an agent of the Union of India was justified or not and mere allegation of the plaintiff was not enough. With great respect to the learned Judge, I am unable to agree with the view taken in Shakti Sugar's case, because at the stage of deciding the question as to whether the plaint should be rejected under Clause (a) of Order VII, Rule 11, C.P.C., the Court is required to find out from the pleadings of the plaintiff as to whether any cause of action was disclosed from the allegations contained in the plaint. If a legal question is raised by the defendant in his written statement disputing the claim of the plaintiff and if the same is to be decided at that stage, then it would be pre-judging the matter, which should form the subject matter of an issue, as a proposition of law asserted by one party and denied by the other. With utmost respect to the learned Judge, I would humbly say that their Lordships of the Supreme Court in Arivandandam's case laid down that there should be a meaningful reading of the plaint and not a formal reading thereof. What their Lordships desired to emphasise in that case was that the plaintiff merely by a camouflage cannot maintain a suit, if according to the substance of the allegations made in the plaint no cause of action worth the name was disclosed and fruitless litigation Page 10 of 26 G.A. 2592 of 2015 should not be permitted. The 'meaningful reading of the plaint', in my humble view, would not amount to probing into the allegations made in the plaint on the basis of the pleas raised by the defendant in his defence and then finally deciding the questions of law which are in dispute between the parties. Whether the plaintiff's case is "actually"
maintainable according to law or not, cannot fall within the ambit of 'a meaningful reading of the plaint".
4. In T. Arivandandam V. Satyapal, reported in AIR 1977 SC 2421 case, their Lordships, of the Supreme Court observed as under (at page 2423):-
"If on a meaningful-not formal-reading of the plaint it is manifestly vexatious, and merit-less, 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 clear (clever) drafting has created the illusion of a cause of action, nip it in the bud at the first hearing by examining the party searchingly under Order X, C.P.C."
The observations of their Lordships in the aforesaid case clearly bring out the scope of the provisions of Clause (1) of Order VII, Rule 11, C.P.C. and the question as to whether the plaint discloses a clear right to sue or not must be decided on the basis of the substance of the allegations made in the plaint or by examining the plaintiff under Order X, C.P.C. The Court should not be led away merely by the manner or form in which the plaint is drafted and it should bestow its attention to the substance of the allegations made therein and it is on this account that their Lordships of the Supreme Court observed that there should be meaningful and not a formal reading of the plaint. There is nothing in the observations of their Lordships of the Supreme Court Page 11 of 26 G.A. 2592 of 2015 in Arivandandam's case to the effect that all questions of law raised by the defendant about the maintainability of the suit should be considered at the stage of deciding the question as to whether the plaint disclosed a cause of action. All legal questions raised by either party and denied by the other should be made subject matter of issues. It may be that the legal issues may be tried by the Court before proceeding with the trial of issues, in respect of which evidence was to be recorded. But at the initial stage, of deciding as to whether the suit should be rejected under any one of the clauses of Order VII, Rule 11, C.P.C. or not, it does not appear to be the intention of the law makers that the questions as to whether 'actually' according to law the suit was maintainable or not should be decided at that stage. Such questions should be decided after thorough consideration of legal issues involved in the case. What is to be determined by the Court at the stage of deciding as to whether the plaint discloses any cause of action or not, is to find out from the allegations of the plaint itself as to whether a bogus, wholly vexatious or frivolous litigation was sought to be initiated under the garb of ingenious drafting of the plaint and to guard against the mischief of a litigant misusing the process of the Court, by entering into a false litigation, merely for the purpose of harassing the other party and obtaining undue advantage of the process of the Court by adopting tactics and in starting sham and shady actions. Their Lordships in Arinvadandam's case expressed themselves strongly against unrighteous chain litigation leading, to ex parte injunction orders which tended to give rise to gamble in litigation into easy Courts. It was also observed that a Judge should not succumb to ex parte pressure in unmerited cases as it would tend to devolve the judicial process. But their Lordships did not intend to enlarge Page 12 of 26 G.A. 2592 of 2015 the scope of the provisions of Order VII, Rule 11, C.P.C. so as to authorise the Court to decide at that stage all questions of law, whose determination was necessary in the suit, to conclude the 'actual' right or claim of one party or the other.
(c) AIR 1998 SC 634 : 1998 (2) SCC 70 [I.T.C. LTD. VS. DEBTS RECOVERY APPELLATE TRIBUNAL AND OTHERS] paragraph 13 and 16:-
13. We may state that in the context of Order 7 Rule 11 CPC, a contention that once issues have been framed, the matter has necessarily to go to trial has been clearly rejected by this Court in Azhar Hussain v. Rajiv Gandhi [1986 Supp SCC 315] (SCC p. 324) as follows: (SCC para 12) "In substance, the argument is that the court must proceed with the trial, record the evidence, and only after the trial ...
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...." The abovesaid judgment which related to an election petition is clearly applicable to suits also and was followed in Samar Singh v. Kedar Nath [1987 Supp SCC 663] . We therefore hold that the fact that issues have been framed in the suit cannot come in the way of consideration of this application filed by the appellant under Order 7 Rule 11 CPC.
16. The question is whether a real cause of action has been set out in the plaint or something purely illusory has been Page 13 of 26 G.A. 2592 of 2015 stated with a view to get out of Order 7 Rule 11 CPC. Clever drafting creating illusions of cause of action are not permitted in law and a clear right to sue should be shown in the plaint. (See T. Arivandandam v. T.V. Satyapal [(1977) 4 SCC 467].
(d) 2002 (10) SCC 501 [RAJ NARAIN SARIN (DEAD) THROUGH LRS. AND OTHERS VS. LAXMI DEVI AND OTHER] paragraph 8:-
"8. On an analysis of the plaint, apart from there being a mere bald statement that the sale deed has nothing to do with the rest of the area i.e. 6 bighas 13 biswas and the bungalows built thereon which stand to be owned and possessed by the plaintiff and prior to him by Munni Lal, there is no other averment tracing the title for 6 bighas and 13 biswas. Admittedly, several portions of the plot stood demarcated as being 3 bighas 13 biswas and the other being 6 bighas 13 biswas; whereas there is no dispute as regards 3 bighas 13 biswas but the conferment of title on to the plaintiff as regards 6 bighas 13 biswas is not available in the plaint itself. The plaint is totally silent on that score, though, however, the existence of the deed of sale noticed above stands accepted by the plaintiff. The litigation, in our view, cannot but be termed to be utterly vexatious and abuse of the process of court, more so by reason of the fact that the deed of sale being executed as early as 1941 stands unassailed for a period of over 50 years. The decision of this Court in T. Arivandandam [(1977) 4 SCC 467 : AIR 1977 SC 2421] has its due application and having regard to the decision as noticed above and upon consideration of the relevant provisions as engrafted in the Code itself, we have no hesitation in accepting the order of the learned Additional District Judge. The High Court Page 14 of 26 G.A. 2592 of 2015 obviously fell into a manifest error and as such this appeal is allowed. The order of the High Court stands set aside. The order of the learned Additional District Judge stands restored. No order as to costs.
(e) 2008 (10) SCC 97 [ABDUL GAFUR AND ANOTHER VS. STATE OF UTTARAKHAND AND OTHERS] paragraphs 20 and 21:-
"20. Having considered the matter in the light of the aforestated legal position, we are of the opinion that the impugned order cannot be sustained. It is true that under Section 24 of the Code, the High Court has jurisdiction to suo motu withdraw a suit or appeal, pending in any court subordinate to it, to its file and adjudicate itself on the issues involved therein and dispose of the same. Unless the High Court decides to transfer the suit or the appeal, as the case may be, to some other court or the same court, it is obliged to try, adjudicate and dispose of the same. It needs little emphasis that the High Court is competent to dispose of the suit on preliminary issues, as contemplated in Order 14 Rules 1 and 2 of the Code, which may include the issues with regard to maintainability of the suit. If the High Court is convinced that the plaint read as a whole does not disclose any cause of action, it may reject the plaint in terms of Order 7 Rule 11 of the Code. As a matter of fact, as observed by V.R. Krishna Iyer, J., in T. Arivandandam [(1977) 4 SCC 467] , 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, the court should exercise its power under the said provision. And if clever drafting has created an illusion of a cause of action, it should be nipped in the bud at the first hearing by examining the party searchingly under Order 10 CPC. Nonetheless, the fact Page 15 of 26 G.A. 2592 of 2015 remains that the suit has to be disposed of either by the High Court or by the courts subordinate to it in a meaningful manner as per the procedure prescribed in the Code and not on one's own whims".
"21. In the instant case, as noted above, vide order dated 20-3-2007, the High Court transferred the two suits and the appeals to itself. On being served with a copy of the said order, the appellants immediately moved an application for recall of the said order. In the said application, it was pointed out that in the appeals, preferred by the Hospital against the interim injunction granted by the Civil Judge, arguments had been heard by the District Judge and order was to be pronounced on 26-3-2007 but in the meanwhile on 20-3-2007, the High Court passed the order withdrawing the appeals to itself".
(f) 2004 (3) SCC 137 [SOPAN SUKHDEO SABLE V. ASSTT. CHARITY COMMR ] paragraphs 11, 12, 17 20 and 22:-
"11. In I.T.C. Ltd. v. Debts Recovery Appellate Tribunal [(1998) 2 SCC 70] it was held that the basic question to be decided while dealing with an application filed under Order 7 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 7 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 7 Rule 11 of the Code taking care to see that the ground mentioned therein is fulfilled. If clever drafting has created the illusion Page 16 of 26 G.A. 2592 of 2015 of a cause of action, it has to be nipped in the bud at the first hearing by examining the party searchingly under Order 10 of the Code. (See T. Arivandandam v. T.V. Satyapal [(1977) 4 SCC 467] ."
"17. Keeping in view the aforesaid principles, the reliefs sought for in the suit as quoted supra have to be considered. The real object of Order 7 Rule 11 of the Code is to keep out of courts irresponsible law suits. Therefore, Order 10 of the Code is a tool in the hands of the courts by resorting to which and by a searching examination of the party, in case the court is prima facie of the view that the suit is an abuse of the process of the court, in the sense that it is a bogus and irresponsible litigation, the jurisdiction under Order 7 Rule 11 of the Code can be exercised."
"20. There is distinction between "material facts" and "particulars". The words "material facts" show that the facts necessary to formulate a complete cause of action must be stated. Omission of a single material fact leads to an incomplete cause of action and the statement or plaint becomes bad. The distinction which has been made between "material facts" and "particulars" was brought by Scott, L.J. in Bruce v. Odhams Press Ltd. [(1936) 1 KB 697 : (1936) 1 All ER 287 (CA)] in the following passage: (All ER p. 294) "The cardinal provision in Rule 4 is that the statement of claim must state the material facts. The word 'material' means necessary for the purpose of formulating a complete cause of action; and if any one 'material' statement is omitted, the statement of claim is bad; it is 'demurrable' in the old phraseology, and in the new is liable to be 'struck out' under R.S.C. Order 25 Rule 4 (see Philipps v. Philipps [(1878) 4 QBD 127] ); or 'a further and better statement of claim' may be ordered under Rule 7.Page 17 of 26
G.A. 2592 of 2015 The function of 'particulars' under Rule 6 is quite different. They are not to be used in order to fill material gaps in a demurrable statement of claim -- gaps which ought to have been filled by appropriate statements of the various material facts which together constitute the plaintiff's cause of action. The use of particulars is intended to meet a further and quite separate requirement of pleading, imposed in fairness and justice to the defendant. Their function is to fill in the picture of the plaintiff's cause of action with information sufficiently detailed to put the defendant on his guard as to the case he had to meet and to enable him to prepare for trial."
The dictum of Scott, L.J. in Bruce case [(1936) 1 KB 697 :
(1936) 1 All ER 287 (CA)] has been quoted with approval by this Court in Samant N. Balkrishna v. George Fernandez [(1969) 3 SCC 238] and the distinction between "material facts" and "particulars" was brought out in the following terms: (SCC p. 250, para 29) "The word 'material' shows that the facts necessary to formulate a complete cause of action must be stated.
Omission of a single material fact leads to an incomplete cause of action and the statement of claim becomes bad. The function of particulars is to present as full a picture of the cause of action with such further information in detail as to make the opposite party understand the case he will have to meet."
Rule 11 of Order 7 lays down an independent remedy made available to the defendant to challenge the maintainability of the suit itself, irrespective of his right to contest the same on merits. The law ostensibly does not contemplate at any stage when the objections can be raised, and also does not say in express terms about the filing of a written statement. Instead, the word "shall" is used, clearly implying thereby Page 18 of 26 G.A. 2592 of 2015 that it casts a duty on the court to perform its obligations in rejecting the plaint when the same is hit by any of the infirmities provided in the four clauses of Rule 11, even without intervention of the defendant. In any event, rejection of the plaint under Rule 11 does not preclude the plaintiffs from presenting a fresh plaint in terms of Rule 13."
"22. Under Order 2 Rule 1 of the Code which contains provisions of mandatory nature, the requirement is that the plaintiffs are duty-bound to claim the entire relief. The suit has to be so framed as to afford ground for final decision upon the subjects in dispute and to prevent further litigation concerning them. Rule 2 further enjoins on the plaintiff to include the whole of the claim which the plaintiff is entitled to make in respect of the cause of action. If the plaintiff omits to sue or intentionally relinquishes any portion of his claim, it is not permissible for him to sue in respect of the portion so omitted or relinquished afterwards. If the plaintiffs as contended by Mr Mohta want to relinquish some reliefs, prayer in that regard shall be made before the trial court. A reading of the plaint and the reliefs along with the contents of the plaint goes to show that the main dispute relates to the question of continuance of tenancy and the period of tenancy. They are in essence unrelated with the other reliefs regarding enquiry into the affairs of the Trust. Such enquiries can only be undertaken under Section 50 of the Act. For instituting a suit of the nature specified in Section 50, prior consent of the Charity Commissioner is necessary under Section 51. To that extent Mr Savant is right that the reliefs relatable to Section 50 would require a prior consent in terms of Section 51. If the plaintiffs give up those reliefs claimed in accordance with law, the question would be whether a cause of action for the residual claims/reliefs warrants continuance of the suit. The nature of the dispute Page 19 of 26 G.A. 2592 of 2015 is to be resolved by the civil court. The question of tenancy cannot be decided under Section 50 of the Act. Section 51 is applicable only to suits which are filed by a person having interest in the trust. A tenant of the trust does not fall within the category of a person having an interest in the trust. Except relief in para (D) of the plaint, the other reliefs could be claimed before and can be considered and adjudicated by the civil courts and the bar or impediment in Sections 50 and 51 of the Act will have no relevance or application to the other reliefs. That being so, Sections 50 and 51 of the Act would not have any application to that part of the relief which relates to question of tenancy, the term of tenancy and the period of tenancy. The inevitable conclusion therefore is that courts below were not justified in directing rejection of the plaint. However, the adjudication in the suit would be restricted to the question of tenancy, terms of tenancy and the period of tenancy only. For the rest of the reliefs, the plaintiffs shall be permitted within a month from today to make such application as warranted in law for relinquishing and/or giving up claim for other reliefs."
(g) 2018 SCC Online 6331 [HEMANT KUMAR JALAN VS. RAJENDRA BAJORIA & ORS.] paragraphs 30 and 31:-
"30. As regards the contention of the defendants that the suit is barred by limitation, we have a doubt in our mind. Admittedly, the firm never stood dissolved. Hence, Art. 5 of the Schedule to the Limitation Act 1963 which pertains to a suit for accounts and a share of the profits of a dissolved partnership, shall not apply. The plaintiffs have argued that since accounts were never finalised, their cause of action continues. In our opinion, the plaintiffs have an arguable case on that score and it cannot be said that it appears from Page 20 of 26 G.A. 2592 of 2015 the statements made in the plaint that the suit is barred by limitation. One must keep in mind that the Court must be absolutely sure that a suit is barred by any law from the averments made in the plaint taking such averments to be correct before the Court can reject the plaint under O.7 R. 11(d) of the CPC. If there is any doubt in the mind of the Court, the benefit of doubt must be given to the plaintiffs. Further, it was held by the Hon'ble Apex Court in the case of C. Nataranjan v. Ashim Bai (supra) that applicability of one or other provision of the Limitation Act per se cannot be decisive for the purpose of determining the question as to whether the suit is barred under it or some other article contained in the Schedule to the said Act. In Balasaria Construction (P) Ltd. v. Hanuman Seva Trust, (2006) 5 SCC 658, the Apex Court observed that the question of limitation is a mixed question of law and fact and on the ground of limitation a plaint cannot be rejected under O. 7 R. 11(d) of the CPC. In Popat and Kotecha Property v. State Bank of India Staff Association, (2005) 7 SCC 510, the Apex Court observed that O. 7 R. 11(d) is not applicable in a case where a question has to be decided on the basis of fact that the suit is barred by limitation. There are conflicting views of various High Courts on the point as to whether or not the words 'barred by law' occurring in O. 7 R. 11(d) of the CPC would include the suit being barred by limitation. In view of the aforesaid, in our opinion, it will not be proper to reject the plaint in this suit on the ground that the suit is barred by limitation.
31. However, we are inclined to accept the submission made on behalf of the defendants that since none of the reliefs claimed in the plaint can be granted, the plaint ought to be rejected."Page 21 of 26
G.A. 2592 of 2015 These judgments are on the principle of Order 7 Rule 11 of the Code of Civil Procedure, 1908. There is no quarrel as to the ratio laid down in these judgments which over the years are now well settled. These judgements, therefore, are not required to be dealt with in details separately. However, the principles need to be considered and the ratio laid down therein are taken note of at the later part of the judgment while dealing with the case in details.
(D) Decision with reasons:-
1. The order dated 5th September, 2007 and 13 March, 2012 are orders passed in an application under section 20 of the 1940 Act numbered as Special Suit No.9 of 1995 and an appeal arising therefrom and not orders passed in the instant suit. The subsequent order dated 11th October, 2012 passed by the learned Single Judge also in another section 20 application and the common order dated 11th December, 2012 dismissing two separate appeals arising out of the order dated 11th October, 2012 are also orders not passed in the suit. However, at every state while considering the arbitrability of disputes between Maheshwaris and Kochers arising out of the partnership business the scope of the instant suit has fallen for consideration. After considering the scope of the disputes that are required to be referred to arbitration in view of the arbitration agreement contained as a clause in the partnership deed between the Maheshwaris' and Kochers' in the partnership to remain outside the arbitration primarily because Mimani is not a party to the arbitration agreement.
2. On the other hand the order dated 2nd May, 2011 dismissing the suit by referring all disputes being the subject matter of the suit to arbitration Page 22 of 26 G.A. 2592 of 2015 and the order dated 23rd December, 2011 passed in an appeal arising thereof are direct orders in the suit. By the judgment and order dated 23rd December, 2011 the order dated 2nd May, 2011 was set aside. The operative portion of the said judgment and order dated 23rd December, 2011 is reproduced hereunder:-
"Under those circumstances we are unable to accept the judgment and order of the learned Trial Judge.
It appears that Mimani has also filed a suit for specific performance. The Court is to consider the balance of convenience also while passing order of reference, while doing so in this case we hold that it is not a case where domestic forum would be appropriate as one of the parties to this suit would be deprived of having access to justice, but in the Court in this suit all parties are free to approach whatever way they like the Court for justice. In view of discussion as above we are unable to sustain the judgment and order of the learned Trial Judge passed under Section 8 of the Act. Accordingly we allow this appeal and set aside the judgment and order of the learned Trial Judge. We think that this suit as well as the suit filed by Mimani for specific performance of the agreement for sale ought to be heard analogously".
3. The order dated 23rd December, 2011 has achieved finality. This order read conjointly with the four matters passed in the arbitration applications and in the appeals arising therefrom leaves no room to hold that the suit as framed on being filed was found to be maintainable despite the Page 23 of 26 G.A. 2592 of 2015 arbitration agreement for the reasons recorded therein. The only scope of this application as I have indicated in the beginning is to whether the suit has effectively become infructuous with the subsequent post suit developments.
4. The reliefs claimed in the suit are as follows:-
"The plaintiffs therefore pray for leave under clause 12 of the Letters Patent 1865 and claim:-
a) Declaration that the defendants do not have any right, title or interest in respect of the dissolved partnership firm M/s.
Bharat Industries and Commercial Corporation including the assets mentioned in paragraph 10 above;
b) Permanent injunction restraining the defendants from claiming any right title or interest in the properties referred to in paragraph 10 hereinabove;
c) Injunction;
d) Costs;
e) Further and/or other reliefs;".
5. The plaintiffs (Maheshwaris) are, therefore, seeking a declaration and injunction in respect of the assets of the partnership as against the defendants which include Kochers' and Mimani. The Court while dealing with the reliefs has to come to a finding that the partnership under the name and style of M/S Bharat Industries and Commercial Corporation stood dissolved. The assets of the partnership has to be ascertained. The Court has to hold that assets mentioned in paragraph 10 of the plaint are partnership asset. The Court has to further hold that the right, title and interest of the Kochers Page 24 of 26 G.A. 2592 of 2015 in the partnership asset stood extinguished primarily on account of limitation as alleged by the plaintiffs. The connected issue will be the right of Mimani as an assignee of the right title and interest of Kochers in the said partnership.
6. The post suit subsequent events have neither rendered any of the above issues required to be adjudicated in the suit otiose nor such issues have been answered to render any further adjudication meaningless. So far as the arbitration is concerned the same has been clearly segregated from the issues required to be adjudicated in the suit. In the event there is an adjudication as to the rights inter se between the Kochers and the Maheshwaris' in the arbitration the same can be taken note of at the time of trial of the suit. As of now the learned Arbitrator has expressed his views. The award, unless crystallises as a deemed decree is open to changes. The Court at this state while adjudicating the instant application is neither bound nor required to consider the findings of the learned Arbitrator emanating out of a different proceedings.
7. The ratio that can be curled out of the judgments cited by the defendant/applicant are as follows:-
a) The plaint has to be given a meaningful reading and not a formal reading. On such reading if it is manifestly vexatious or meaningless i.e. it discloses no clear right to sue, the Court should exercise jurisdiction under Order 7 Rule 11 of CPC to reject the plaint.
b) The rejection of the plaint has to be on the basis of the averments made therein and not on the defence made out.Page 25 of 26
G.A. 2592 of 2015
c) The plaint can be rejected only on the grounds enumerated in Order 7 Rule 11 of the Code of Civil Procedure, 1908. If the plaint is based on documents the Court can look into such documents.
d) Averments in the plaint as a whole have to be seen to find out whether the suit is barred by any law.
e) The real object of Order 7 Rule 11 of CPC is to keep out of Courts irresponsible suits, bogus in nature.
8. On a meaningful reading of the plaint and considering it in the light of the principles laid down in the judgments cited at the bar, I find none of the provisions of Order 7 Rule 11 of the Code of Civil Procedure, 1908 is attracted in the instant case. The events and developments subsequent to the filing of the suit has also not rendered the suit infructuous for the Court to exercise jurisdiction under section 151 of the Code of Civil Procedure, 1908 to dismiss the suit.
9. In the facts and circumstances as aforesaid the application fails. Considering the chequered history of the matter and an application under Order 7 Rule 11 having been made as late as in August, 2015 when the suit was filed in 2010 and that the plaint had fallen for scrutiny in 2011, the application is dismissed with cost assessed at Rs.30,000/- payable by the applicants to the plaintiffs in equal proportion.
Urgent photostat certified copy of this judgment and order, if applied for, be supplied to the parties on priority basis after compliance with all necessary formalities.
(ARINDAM MUKHERJEE, J.) Page 26 of 26