Important Point – Plaint can be rejected on the ground that it does not disclose cause of action.

Sanjeev Kumar, J.

This Revision Petition filed under Section 115 of the Code of Civil Procedure, 1977 is directed against the Order dated 30.07.2018 passed by the learned City Judge, Jammu (hereinafter referred to as the trial Court) in a Civil Suit titled Golden Globe Fitness Pvt. Ltd. v. F2Fun and Fitness (India) Private Ltd. and another whereby the application moved by the petitioner under Order 7 Rule 11 of the Code of Civil Procedure (CPC for short) for rejection of the plaint has been dismissed. The petitioner herein was defendant No.1 in the trial Court, and the respondent No.1 herein was the plaintiff, who had filed the suit against the petitioner and respondent No.2 herein. To avoid confusion, the parties are hereinafter referred to as “the defendant No.1” and “the plaintiff”. The facts, in nutshell, which have given rise to the filing of this Revision Petition are:-

2. The plaintiff a Private Limited Company incorporated under the Companies Act, 1956 through its Managing Director filed a suit before the trial Court inter alia for a decree of declaration that the grant of Gold’s Gym sub franchisee by the defendant No.1 on behalf of the defendant No.2 (respondent No.2 herein) in favour of the plaintiff was irrevocable and perpetual with consequential relief of Permanent Prohibitory Injunction against the defendant No.1 from terminating/disturbing/infringing sub franchisee of plaintiff Gold’s Gym. As is apparent from the plaint, suit was founded on an oral mutual agreement entered into between the defendant No.1 and the plaintiff. The plaintiff, in his plaint, averred that the sub-franchisee of Gold’s Gym was granted by the defendant No.1 on behalf of the defendant No.2 to the plaintiff pursuant to an oral agreement in terms whereof a sum of Rs.30,00,000/- was paid as premium in advance. The plaintiff, in the plaint, further claimed that the pursuant to the understanding arrived at between him and the defendant No.1, the plaintiff mobilized all his resources and established a Gym at Bahu Plaza, Jammu after investing about three crores. It was also claimed that apart from the premium of Rs.30,00,000/-, the defendant No.1 was also entitled to receive a normal monthly royalty payable by the plaintiff for the first three years from its commission. In nutshell, the case as set up by the defendant No.1 in the plaint was that sub franchisee was granted to the plaintiff subject to the terms and conditions which were not reduced into writing in the shape of any legally valid and binding document but were acted upon by the parties by their conduct. An oral contract, in essence, was set up by the plaintiff. The plaintiff also contends that it was served with a communication dated 14.03.2014 purportedly issued by some concern, namely, Gold’s Gym India whereby the plaintiff was intimated that by not honouring the commitment of the payment of royalty it had committed breach of contract. The plaintiff claimed to have sent a Legal Notice on 03.04.2014 to the respondent No.2 (defendant No.2 in the suit) in which the plaintiff claimed to have exposed dubious and culpable business practices of the defendant No.1 with the connivance of respondent No.2 (defendant No.2 in the suit). This annoyed the defendants and in pursuance of which the defendant No.2 through its Vice President Marketing threatened the termination of the plaintiff’s sub franchisee granted by the defendant No.1 on behalf of the respondent No.2 (defendant No.2 in the suit). This gave a cause of action to the plaintiff to file the suit against the defendant No.1 and the respondent No.2 (defendant No.2 in the suit). This is the case set up by the plaintiff in his plaint.

3. The suit was entertained and the defendant No.1 and the respondent No.2 (defendant No.2 in the suit) were summoned to appear and file written statement to the plaint filed by the plaintiff. The defendant No.1 filed an application in terms of the Order 7 Rule 11 read with Section 151 CPC for reject