IMPORTANT POINTS
Cause of action, power of attorney, incorporation by reference, exercise of power under Order VII, rule 11, and non-joinder of necessary party.

Headnote:(a) Code of Civil Procedure, 1908 – Order VII, Rule 11 – Power under Order VII Rule 11 of the Code can be exercised at any stage of the suit either before registering the plaint or after the issuance of summons to the defendants or at any time before the conclusion of the trial – Matter is to be decided only on the plaint averments and pleas taken in written statement are irrelevant. (Para 6)
        (2003) 1 SCC 557; (1998) 7 SCC 184; (2006) 3 SCC 100; (1977) 4 SCC 467 – Relied upon
        (1982) 3 SCC 487 – Dstinguished
        (b) Code of Civil Procedure, 1908 – Order VII, Rule 11 – Cause of action – 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 – It is necessary for the plaintiff to aver and prove all material facts. (Paras 9 and 10)
        (1989) 2 SCC 163; (1994) 6 SCC 322 – Relied upon
        (c) Code of Civil Procedure, 1908 – Order VII, rule 14 – Incorporation by reference – A document sued upon and its terms only referred to in the plaint, gets incorporated by reference in the plaint. (Para 13)
        (1989) 4 SCC 482; (1996) 1 SCC 169 – Relied upon
        (d) Power of attorney – Elements thereof restated. (Para 14)
        (2012) 1 SCC 656 – Relied upon
        (e) Code of Civil Procedure, 1908 – Order VII, rule 6 – Date of agreement attracting bar of limitation – Plaint must conform to Order VII Rule 6 – Grounds for exemption need to be specifically pleaded. (Para 15)
        (f) Specific Relief Act, 1963 – Section 20 – Jurisdiction to grant specific performance is discretionary. (Para 16)
        (2008) 7 SCC 310 – Relied upon
        1937 Madras Weekly Notes 1158; 1976(1) Madras Law Journal 243 – Cited with approval
        (g) Code of Civil Procedure, 1908 – Order VII Rule 11 – Plea as to the non-joinder of the party must be taken before the trial court -However, a party against whom no relief is claimed in the application is not a necessary party. (Paras 17 and 18)
        (2000) 3 SCC 699 – Relied upon
       Facts of the case:
        This case relates to specific performance of agreement for sale and interpretation of Order VII Rule 11, CPC.
       Finding of the Court:
        The impugned order of the Division Bench of the High Court is erroneous.

Judgement Key Points

Case Summary: Church of Christ Charitable Trust & Educational Charitable Society v. M/s Ponniamman Educational Trust (Civil Appeal No. 4841 of 2012, decided on 03-07-2012) (!) (!)

The Supreme Court allowed the appeal by the plaintiff in the original suit (Church of Christ Charitable Trust & Educational Charitable Society, 1st defendant/appellant) against the Madras High Court's Division Bench order dated 16.08.2011, restoring the single Judge's order dated 25.01.2006 rejecting the plaint under Order VII Rule 11 CPC solely against the 1st defendant. (!) (!) (!) (!)

Key Facts: (!) (!) (!) (!) (!)
- On 07.01.1990, the appellant (owner) entered an agreement for sale of property at Door No. 35, Lock Street, Kottur, Chennai, with the 2nd defendant (S. Velayutham), receiving Rs. 5 lakhs advance, completion conditional on clearances within 6 months. (!)
- On 19.10.1990, appellant granted a registered power of attorney (PoA) to 2nd defendant for statutory representations only; revoked on 15.10.1991 and cancelled the agreement on 19.11.1991. (!)
- Respondent (sister concern linked to prior litigant) claimed a 04.08.2001 MoU/agreement with 2nd defendant as "agreement holder and PoA agent" of appellant for remaining property (28 grounds, 1952 sq.ft.), filed C.S. No. 115/2005 for specific performance against both defendants, without producing PoA or prior agreements, vaguely alleging 2nd defendant's authority in plaint para 4. (!) (!)
- Appellant filed O.A. No. 3560/2005 for plaint rejection; single Judge allowed it against 1st defendant, rejected respondent's injunction/amendment applications; Division Bench reversed rejection. (!) (!)

Issues: Whether plaint disclosed cause of action against 1st defendant, justifying rejection under Order VII Rule 11(a)/(d). (!) (!)

Court's Reasoning: (!) (!) (!) (!)
- Order VII Rule 11 permits rejection at any stage (pre-registration/post-summons/pre-trial) based solely on plaint averments; written statement pleas irrelevant. (!) (!) (!)
- Cause of action requires bundle of material facts (plaintiff's pleaded/provable averments giving right to relief, including defendant's act); plaint must aver/prove all essentials, conform to Forms 47/48 Appendix A (e.g., agreement date for limitation check under Order VII Rule 6). (!) (!) (!) (!) (!)
- Plaint deficient: No filed/incorporated prior "agreement holder" documents or PoA (Order VII Rule 14 violation, no explanation/custody details); vague para 4 reference insufficient; no dates for alleged prior agreements risking limitation bar (unpleaded exemption). (!) (!) (!) (!)
- PoA strictly construed; limited to statutory acts, lacked express authority for sale agreement/execution/admission before Registrar; revoked pre-2001 anyway. (!) (!) (!)
- Documents sued upon (not set out but referred) incorporate by reference into plaint. (!)
- Specific performance discretionary under Specific Relief Act Section 20. (!)
- Rejections: Non-joinder of 2nd defendant irrelevant (not necessary party; no relief claimed against him; objection untimely/not causing prejudice); no extraneous material reliance by single Judge; partial rejection valid (not barred herein). (!) (!) (!) (!)

Finding: Plaint failed statutory requirements, disclosed no privity/cause against 1st defendant; rejection proper. Appeal allowed with costs. (!) (!)

JUDGMENT

P. Sathasivam, J.

1) Leave granted.

2) This appeal is directed against the final judgment and order dated 16.08.2011 passed by the High Court of judicature at Madras in O.S.A. Nos.100-102 of 2006 whereby the Division Bench of the High Court while rejecting OSA Nos. 101 and 102 of 2006 allowed the appeal being OSA No. 100 of 2006 filed by the respondent herein in respect of the rejection of the plaint against the appellant herein (1st defendant in the suit) by the learned single Judge of the High Court.

3) Brief facts:

(a) On 07.01.1990, the appellant-Society (first defendant), the owner of the property situated at Door No. 35, Lock Street, Kottur, Chennai entered into an Agreement for Sale of the property in favour of one S. Velayutham - 2nd defendant in the suit on the condition that the transaction should be completed within 6 months after obtaining clearance from Income Tax and other departments and also received an amount of Rs. 5 lakhs as an advance. On 19.10.1990, the 1st defendant-Society executed a registered power of attorney in favour of the 2nd defendant limited for the purpose of empowering him to represent the Society before the statutory authorities. On 15.10.1991, the 1st defendant-Society revoked the registered power of attorney executed in favour of the 2nd defendant by a registered document alleging various reasons. On 19.11.1991, as the 2nd defendant failed to comply with the commitments made, the 1st defendant-Society cancelled the agreement for sale dated 07.01.1990.

(b) Questioning the said cancellation, the 2nd defendant instituted C.S. No. 1576 of 1991 against the 1st defendant-Society before the High Court of Madras for specific performance of the agreement dated 07.01.1990. In the said suit, an injunction was granted restraining the 1st defendant-Society from alienating the property. In the year 2006, the said suit was withdrawn by the 2nd defendant.

(c) M/s Karthik Granites Pvt. Ltd., a sister concern of the respondent herein filed C.S. No. 915 of 1994 on the file of the High Court for specific performance of the agreement to sell the larger extent of 56 grounds based on an alleged agreement entered into with the 2nd defendant which was dismissed as settled on the basis of the Memorandum of Understanding (MoU) dated 13.02.1997.

(d) Again on 04.08.2001, a Memorandum of Understanding (MoU) was entered into between the respondent herein and 2nd defendant in which 2nd defendant agreed to sell the remaining portion of the property, viz., 28 grounds and 1952 sq. ft. to the respondent, sister concern of M/s Karthik Granites Pvt. Ltd. as the agreement holder and power of attorney agent of the appellant. On 24.11.2004, the plaintiff-respondent herein filed C.S. No. 115 of 2005 for specific performance of the agreement dated 04.08.2001. The plaintiff- respondent also filed O.A. No. 132 of 2005 in the said suit praying for an interim injunction restraining the defendants from, in any way, dealing with or alienating the suit property pending disposal of the suit. The 1st defendant therein-the Society also filed Application No. 3560 of 2005 under Order VII Rule 11 of the Code of Civil Procedure, 1908 (for short “the Code”) praying for rejection of the plaint. On 18.01.2006, the plaintiff-respondent filed Application No.179 of 2006 for amendment of the plaint.

(e) The learned single Judge of the High Court rejected the plaint insofar as 1st defendant is concerned and directed that the suit can be proceeded against the 2nd defendant. The applications bearing Nos. O.A.No.132 of 2005 and 179 of 2006 filed by the plaintiff-respondent for interim injunction and amendment of the plaint were also rejected by the learned single Judge.

(f) Challenging the said orders, the plaintiff-respondent filed appeals before the Division Bench of the High Court. By impugned order dated 16.08.2011, the Division Bench while dismissing the appeals against the order rejecting the applications for amendment and for interim injunction,

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2012 Supreme(SC) 427

IMPORTANT POINTS Cause of action, power of attorney, incorporation by reference, exercise of power under Order VII, rule 11, and non-joinder of necessary party.

Cases Referred (12)

IMPORTANT POINTS
Cause of action, power of attorney, incorporation by reference, exercise of power under Order VII, rule 11, and non-joinder of necessary party.