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2022 Supreme(P&H) 2234

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
Anil Kshetarpal, J.
Kewal Singh & Anr. – Appellants
Versus
Chander Shekhar Aggarwal & Ors. – Respondents
RSA-597-2021 (O&M)
Decided On : 20-04-2022

Advocates appeared:
Mr. Puneet Bali, Senior Advocate with Mr. Uday Agnihotri, for the Appellant; Mr. Gaurav Chopra, Senior Advocate with Mr. Reshabh Bajaj, Advocate, Mr. Gorangg Gupta, Advocate and Mr. Dhruv Sood, Advocate for Respondent No.1. Mr. Abhimanyu Tewari, Advocate with Mr. Harshit Jain, Advocate for Respondents No.2 and 3. Mr. D. V.Sharma, Senior Advocate with Mr. Vaneet Soni, Advocate and Mr. Tushar Sharma, Advocate for Respondents No.6, 7 and 9. Mr. Piyush Aggarwal, Advocate for Respondent No.10.

The main legal point established in the judgment is that the rejection of a plaint under Order 7 Rule 11 CPC should be based on the grounds mentioned under the rule, and the suit should not be barred by law. The court emphasized the importance of examining the plaint based on the specific grounds provided in the rule.

Headnote:

CPC - Rejection of Plaint - Order 7 Rule 11 - [CPC] - [Order 7 Rule 11 (a and d)] - The court examined the plaint under Order 7 Rule 11 CPC and found that the rejection of the plaint was erroneous as it did not fall within the grounds mentioned under Order 7 Rule 11 CPC. The court also found that the suit was not barred by law and that the plaintiffs had a cause of action to file the suit. The court allowed the appeal, set aside the orders passed by the lower courts, and remitted the matter back to the trial court to proceed in accordance with the law.

Fact of the Case:

The plaintiffs filed a suit for grant of decree of permanent injunction based on an agreement to sell. The defendants were accused of defrauding the plaintiffs, and the suit sought to restrain the defendants from alienating or creating any third party interest in the suit property.

Finding of the Court:

The court found that the rejection of the plaint was erroneous as it did not fall within the grounds mentioned under Order 7 Rule 11 CPC. The court also found that the suit was not barred by law and that the plaintiffs had a cause of action to file the suit.

Issues: The main issue was whether the rejection of the plaint under Order 7 Rule 11 CPC was justified and whether the suit was barred by law.

Ratio Decidendi: The court held that the rejection of the plaint was erroneous as it did not fall within the grounds mentioned under Order 7 Rule 11 CPC. The court also found that the suit was not barred by law and that the plaintiffs had a cause of action to file the suit.

Final Decision: The appeal was allowed, the orders passed by the lower courts were set aside, and the matter was remitted back to the trial court to proceed in accordance with the law.

JUDGMENT

Anil Kshetarpal, J. - Questioning the correctness of the judgments passed by the courts below, while rejecting their plaint under Order 7 Rule 11 Code of Civil Procedure, 1908 (hereinafter referred to as 'CPC'), the plaintiffs have filed this Regular Second Appeal. At the outset, it is important to note that the issue which arises for consideration before this Court is

    'Is it appropriate for the court to reject a plaint on the grounds which are beyond the scope of Order 7 Rule 11 CPC?."

    2. On 15.09.2021, learned senior counsel representing the appellants contended that the appellants are prepared to amend the suit to include the relief of specific performance and pay ad valorem court fee.

    3. The plaintiffs filed the suit for grant of decree of permanent injunction on the basis of an agreement to sell dated 24.02.2020 executed by defendant no.1 in their favour with respect of 140 acres of land on payment of Rs.3.59 crores as earnest money (through RTGS transactions) out of total sale consideration of Rs. 169.75 crores.

    4. Defendant no.1 Chander Shekhar Aggarwal is stated to have entered into an agreement to sell with the plaintiffs. The relevant terms of the agreement to sell read as under:-

      (i) That the VENDOR has received a Sum of Rs. 3,59,00,000/- (Rupees Three Crore Fifty Nine Lac only) as an advance/earnest money from the VENDEE through RTGS against the Agreement details are annexed as Annexure 2.

      (ii) The balance amount of Rs. 166,16,00,000/- (Rupees One Hundred Sixty Six Crore and Sixteen Lac Only) of the said Land shall be paid by the VENDEE to the VENDOR at the time of registration of sale deed of the said Land before the concerned Sub-Registrar.

      (iii) That the VENDEE shall get a minimum of 70 Acres i.e. half of the total land registered within a time period of 3 months from the day of production ofthe mutation/ownership on the name of VENDOR

      (iv) The VENDEE has agreed to get the registration done of the remaining Land within a time period of 6 months from the day of production of the mutation on the name of VENDOR.

      (v) The VENDEE is empowered to get the property registered or get the sale complete in part or full, either in his/her own name or in the name of his/her nominee/s or in the name of any other person for which the VENDOR shall have no objection.

      (vi) All the expenses in respect of registration of sale deed/attorney documents, stamp duty, registration charges, and other Misc. expenses shall be borne by the VENDEE.

      (vii) The property to be transferred/sold under this agreement is free from all encumbrances, sale, mortgage, loan, dispute, litigation, gift court attachment, etc. and the VENDOR shall give the peaceful vacant physical possession of the said property to the VENDEE at the time of registration of sale deed. All the outstanding dues such as of water, electricity, sewer, ete. installed in the said property shall be cleared/paid by the VENDOR up to the date of registration of sale deed/attorney documents etc.

      (viii) That the VENDEE shall be liable to get registered sale deed in his/her own name or in the name of any nominee or in the name of any other person within stipulated period.

      (ix) That in case the VENDOR violate to the terms and conditions of this Agreement to Sell or refused to sign Sale Deed within stipulated period then the VENDEE shall be entitled to get registered sale deed through court of law or SPECIFIC PERFORMANCE OF CONTRACT BY COURT OF LAW at the cost and expenses of the VENDOR. IN ADDITION AS THE VENDOR IS HAVING 99 YEARS RIGHTS ON THE SAID LAND"ALL RIGHTS AND POSSESSION OF LAND WILL BE GIVEN TO VENDEE."

      5. It is being asserted that defendant no.1, in collusion with defendant no.2 to 9, has defrauded the plaintiffs. When the plaintiffs confronted defendant no.1, he delivered possession of 20 acres of land on the National Highway, out of the total land agreed to be sold and assured the plaintiffs that defendant no. 2 to 9 are not only known to him but they work under his directions and the

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