1. Suit for permanent injunction and declaration regarding property possession where sale deeds were executed as security for loans — Rejection of plaint under Order 7 Rule 11 CPC. (Para 3 , 4 , 5 , 6 )
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2021 Supreme(SC) 369
SUPREME COURT OF INDIA
DHANANJAYA Y. CHANDRACHUD, M.R. SHAH, JJ.
SAYYED AYAZ ALI - APPELLANT
VERSUS
PRAKASH G. GOYAL & ORS. - RESPONDENTS
CIVIL APPEAL NOS 2401-2402 OF 2021 @ SLP (C) NOS. 29975-29976 OF 2018
Decided on : 20-07-2021
Important Points
IMPORTANT POINTS
The proviso of Order 7, Rule 11 evidently covers the cases falling within the ambit of clauses (b) and (c) and has no application to a rejection of a plaint under Order 7 Rule 11(d).
The proviso of Order 7, Rule 11 evidently covers the cases falling within the ambit of clauses (b) and (c) and has no application to a rejection of a plaint under Order 7 Rule 11(d).
Subject
Civil Law - Rejection of Plaint
Act Referred
Headnote
Code of Civil Procedure, 1908 – Order 7, Rule 11 (b) & (d) – Undervaluation – Rejection of Plaint – Application allowed with liberty to seek proper relief – Both the Plaintiff and Defendant assailed the order to Trial Court – High Court allowed the petition filed by Defendant – Hence this Appeal – Reaffirmed the view of High Court (Para 13)
Facts of the Case:
Plaintiff filed a suit before the civil judge. The defendant filed an application for the rejection of the plaint on the ground that it was barred under clauses (b) and (d) of Order 7 Rule 11 of the Code of Civil Procedure, 1908. The Trial Court allowed the application. However, while doing so, the plaintiff was “directed to seek proper relief and pay court fee thereon within 15 days, otherwise appropriate order will be passed”. This order of the Trial Judge, was assailed before the High Court in a Civil Revision by Defendants. The plaintiff also instituted a Writ Petition under Article 227 for challenging the order of the Trial Judge allowing the application. The High Court decided both the civil revision application and the writ petition by a common judgment. The Single Judge held that since the plaint was rejected under Order 7 Rule 11(d) there was no occasion to direct that an amendment be made to the plaint. The civil revision was allowed on this basis. The writ petition filed by the appellant was held to be an “after thought and belated” and no relief was granted to the appellant in the writ proceedings. Hence this appeal.
Findings of the Court:
The High Court is justified in coming to the conclusion that the further direction that was issued by the Trial Judge was not in consonance with law. The definition of “decree” in Section 2(2) “shall be deemed to include the rejection of a plaint”. Hence, the order of the Trial Court rejecting the plaint is subject to a first appeal under Section 96 of the CPC. The writ petition filed by the appellant was liable to be rejected on that ground.
Result: Affirmed the judgment of the High Court.
Legal Category Hierarchy
Advocates appeared:
For the Appellant(s) : Vinay Navare, Raju Dhoble, Kishor Ram Lambat, Kashmira Lambat, M/s. Lambat And Associates
For the Respondent(s):Prashant P. Kothari, Satyajit A Desai, Anagha S. Desai, Satya Kam Sharma, Advocates
For the Appellant(s) : Vinay Navare, Raju Dhoble, Kishor Ram Lambat, Kashmira Lambat, M/s. Lambat And Associates
For the Respondent(s):Prashant P. Kothari, Satyajit A Desai, Anagha S. Desai, Satya Kam Sharma, Advocates
Table of Contents
2. Whether failure to seek declaration regarding sale deeds as security bars the suit under Section 34, Specific Relief Act, and whether writ is maintainable against a decree. (Para 6 , 9 , 11 )
3. Rejection of a plaint constitutes a decree under Section 2(2) CPC, necessitating a first appeal; Order 7 Rule 11(d) does not permit amendments to cure legal bars. (Para 12 , 13 )
4. An order rejecting a plaint is a decree under Section 2(2) CPC; the proviso to Order 7 Rule 11 CPC applies only to clauses (b) and (c), not clause (d). (Para 12 , 13 )
5. Writ petition dismissed as the proper remedy is a first appeal; High Court's decision on the impermissibility of amending a plaint rejected under Order 7 Rule 11(d) affirmed. (Para 14 , 15 )
6. What is the appropriate legal remedy against an order rejecting a plaint under Order 7 Rule 11 of the CPC?
Since Section 2(2) of the CPC explicitly deems the rejection of a plaint to be a decree, the aggrieved party should pursue a regular first appeal under Section 96 of the CPC. (Para 12 )
7. Can a court grant a plaintiff time to amend a plaint after rejecting it under Order 7 Rule 11(d) of the CPC?
No. The proviso to Order 7 Rule 11, which allows for extensions of time to correct defects, applies only to clauses (b) and (c) regarding valuation and stamp paper, and has no application to rejections under clause (d). (Para 13 )
8. Is a writ petition maintainable when a statutory remedy of a first appeal is available against a decree?
The court held that because the rejection of a plaint operates as a decree, the writ petition was liable to be rejected in favor of the remedy prescribed by the CPC. (Para 12 )
JUDGMENT :
Dr. Dhananjaya Y. Chandrachud, J
1. These appeals arise from a judgment of a Single Judge at the Nagpur Bench of the High Court of Judicature at Bombay.
2. The appellant is the plaintiff in a suit instituted before the Civil Judge, Senior Division at Nagpur. The first respondent filed an application at Exhibit-50 for the rejection of the plaint on the ground that it was barred under clauses (b) and (d) of Order 7 Rule 11 of the Code of Civil Procedure 1908 (“CPC”). The Fifth Joint Civil Judge, Junior Division, Nagpur allowed the application. However, while doing so, the appellant was “directed to seek proper relief and pay court fee thereon within 15 days, otherwise appropriate order will be passed”. This order of the Trial Judge, insofar as it permitted the appellant to carry out an amendment for seeking appropriate reliefs was assailed before the High Court in a Civil Revision Application No 124 of 2017 by Defendants 1A to D and Defendant No 2 (Respondent Nos 1 to 5 to these proceedings). The appellant instituted a Writ Petition[(WP No 4508 of 2018)] under Article 227 of the Constitution for challenging the order of the Trial Judge allowing the application under Order 7 Rule 11 of the CPC. The High Court decided both the civil revision application and the writ petition by a common judgment. The Single Judge held that since the plaint was rejected under Order 7 Rule 11(d) there was no occasion to direct that an amendment be made to the plaint. The civil revision was allowed on this basis. The writ petition filed by the appellant was held to be an “after thought and belated” and no relief was granted to the appellant in the writ proceedings. That is how the proceedings have reached this Court. The appellant is essentially aggrieved by the decision of the Trial Court and the High Court to allow the application under Order 7 Rule 11(d) of the CPC.
3. Since the controversies in the present case arise out of the application under Order 7 Rule 11, it would be necessary to set out in brief the contents of the plaint. Parties would be referred to on the basis of their respective positions in the suit. The plaintiff claims that he came into contact with the third defendant who is a financial broker. The third defendant is alleged to have arranged a loan of Rs 7 lacs with interest at 5 per cent month subject on the plaintiff executing an agreement and blank documents as security for the loan. Against the loan of Rs 7 lacs, the plaintiff is alleged to have executed an agreement dated 3 April 2012 in favour of the nominees of the third defendant and executed documents which were blank. Thereafter, it is alleged that the plaintiff needed an additional finance of Rs 22 lacs and the third defendant took the plaintiff to the first defendant. The first defendant is alleged to have agreed to give a loan of Rs 22 lacs on the condition that the plaintiff executed a sale deed in respect of land of Mauza: Kanholi towards security for repayment of the loan. The amount was paid over on 11 May 2012 and was to carry interest of 5 per cent per month and in consideration, the plaintiff is alleged to have executed documents including a sale deed dated 11 May 2012. In the meantime, the fourth defendant is alleged to have expressed the desire to sell plot Nos 23-A, 29, 34, 35-A, 24, 25, 26, 27 and 28 admeasuring 25.009 sq. ft. out of land bearing Khasra No 82/3 Mauza: Gorewada. P.R. No 9, Tah: and District Nagpur. This property has been referred to as the suit property. The fourth defendant is alleged to have shown an agreement dated 22 March 2011 in his favour. The plaintiff is alleged to have been shown certain documents between Shoab Asad, Murtuja Khan and Shashikant Grihanirman Sahakari Sanstha. After negotiation, it is stated that the plaintiff agreed to purchase the suit property at Rs 1950 per sq. ft., out of which the plaintiff agreed to pay Rs 1400 per sq. ft. to Shashikant Grihanirman Sahakari Sanstha and Rs 550 per sq. ft. to the four
