2023 Supreme(Cal) 1562
IN THE HIGH COURT OF CALCUTTA
SHAMPA SARKAR, J.
Surina Impex Private Limited - Petitioner
Versus
One Plus Fashions Private Limited - Respondent
C.O. 1604 of 2022 With CAN 1 of 2023 With CAN 2 of 2023
Decided on : 17-07-2023
Advocate Appeared:
For the Appellant : Mr. Jayanta Sengupta, Ms. Shebatte Dutta, Mr. Aditya Gooptu and Mr. Rahul Auddy
Headnote:(A) Code of Civil Procedure, 1908 - Order 7, Rule 11 and Section 238 of the Insolvency and Bankruptcy Code - Rejection of plaint - Defendant claimed suit was barred by insolvency proceedings, yet the learned court found that plaint disclosed a cause of action and did not mention ongoing liquidation - Court affirmed that rejection under Order 7(11)(d) requires ex facie bar which was absent. (Paras 3, 6, 10)
(B) Court’s Role - The court emphasized that only the plaint and accompanying documents are to be considered in applications under Order 7, Rule 11 and that the defendant's defense cannot be assessed at this stage. (Paras 8, 9)
Facts of the case:
The petitioner challenged an order rejecting the application for rejecting the plaint on grounds of ongoing liquidation proceedings initiated in 2020 against the defendant. The learned court noted the plaint did not disclose such proceedings.
Findings of Court:
The plaint, not disclosing liquidation proceedings, was not ex facie barred by law hence the application was justly refused.
Issues: Main issues included whether the suit was barred under the Insolvency and Bankruptcy Code and whether the plaint disclosed a valid cause of action.
Ratio Decidendi: The court ruled that the presence of liquidation proceedings must be apparent in the plaint for a rejection under Order 7(11)(d), which was absent in this case; therefore, it upheld the lower court's decision to reject the application for plaint rejection.
Result: Revisional application dismissed.
| Table of Content |
|---|
| 1. procedure for serving parties and representation in court. (Para 2 , 3) |
| 2. conditions for rejection of plaint under insolvency code. (Para 4 , 5) |
| 3. requirements for acceptance of the plaint and grounds for rejection. (Para 6 , 7) |
| 4. legal interpretations of order 7, rule 11 of cpc. (Para 8 , 9) |
| 5. plaint discloses cause of action despite liquidation proceedings. (Para 10 , 11) |
| 6. dismissing revisional application and expediting the trial process. (Para 12 , 13 , 14 , 15) |
JUDGMENT :
Shampa Sarkar, J. - Despite service none appears on behalf of the opposite party.
2. The learned advocate appearing on behalf of the opposite party in the court below has been served. The opposite party has also been served by e- mail. The affidavits of service have been filed in court, indicating that steps have been taken to serve the opposite party as also the learned Advocate. The matter is taken up for hearing.
3. The petitioner has challenged the order dated May 21, 2022, passed by the learned Civil Judge (Junior Division), 1st Court, Alipore in Title Suit No. 152 of 2021. By the order impugned, the learned court rejected the application filed by the defendant/petitioner under Order 7, Rule 11 of the Code of Civil Procedure. The defendant in the suit, prayed for rejection of the plaint on the ground that liquidation proceedings against the defendant had commenced from February 11, 2020. On the basis of an order passed by the learned National Company Law Tribunal, Kolkata Bench, one Mr. Sanjai Kumr Gupta had been appointed as a liquidator and the defendant was being represented by the liquidator. That the property had vested in the liquidator and in terms of section 33 of the Insolvency and Bankruptcy Code, no suit or proceeding could be instituted by or against the corporate debtor after a liquidation order had been passed. According to the petitioner the plaintiff was well aware of such liquidation process and the appointment of the liquidator. Hence, the suit against the corporate debtor was bad in law.
4. Reference has been made to Section 238 of the Code, in order to establish that the Insolvency and Bankruptcy Code would have an overriding effect over all laws, including the laws of tenancy.
5. On the ground of the suit being barred under the Insolvency and Bankruptcy Code, the application for rejection of the plaint was filed. The learned court upon considering the rival contentions of the parties, rejected the application. The court held that a plaint could be rejected for non-disclosure of cause of action, under valuation of the reliefs or when the suit was barred by law.
6. Upon a meaningful reading of the plaint, the learned court below found the averments in the plaint did not mention about the initiation of the liquidation proceeding and appointment of the liquidator. As the requirement of the plaint being ex facie barred by law was not satisfied by the defendant, the application was rejected.
7. The law is well-settled. At the time of deciding an application under Order 7, Rule 11 of the Code of Civil Procedure, the plaint and the documents filed with the plaint can only be looked into. The submissions of the defendant with regard to the liquidation proceeding, the appointment of the liquidator and the liquidator having stepped into the shoes of the defendant were absent in the plaint. The suit was simpliciter one for declaration of tenancy and permanent injunction.
8. In the decision of Kamala and ors. v. K.T. Eshwara Sa and ors. , reported in (2008) 12 SCC 661, the Hon'ble Apex Court held as follows:-
"21. Order 7, Rule 11 (d) of the Code has limited application. It must be shown that the suit is barred under any law. Such a conclusion must be drawn from the averments made in the plaint. Different clauses in Order 7, Rule 11, in our opinion, should not be mixed up. Whereas in a given case, an application for rejection of the plaint may be filed on more than one ground specified in various sub-clauses thereof, a clear fin