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2023 Supreme(P&H) 887

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
Karamjit Singh, J.
Arun Wadhwa and another - Petitioners - Appellant
Versus
M/s Chandan Textiles and others - Respondents - Respondent
CR-1331 of 2022
Decided On : 24-11-2023

Advocates appeared:
Mr. Arun Singal, Advocate, for the petitioners.
Mr. Abhinav Sood, Advocate for Mr. Vikram Singh, Advocate, for the respondents.

Headnote:

Order 7 Rule 11 CPC - Rejection of Plaint - [BUSINESS TRANSACTIONS] - [Order 7 Rule 11 CPC] - The court discussed the provisions of Order 7 Rule 11 CPC and emphasized that in order to reject a plaint, the court needs to be guided only by the averments in the plaint and not by the defence taken by the defendants. The court highlighted that the transactions in question were directly made by the plaintiff with a sole proprietorship firm and there was no contract between the petitioners and the plaintiff. The court concluded that the petitioners were neither necessary nor proper party for the purpose of proper adjudication of the suit and there was no cause of action to file the suit against the petitioners. The court allowed the application filed by the petitioners under Order 7 Rule 11 CPC to reject the plaint against them.

Fact of the Case:

The plaintiff filed a suit for permanent injunction and recovery of a certain amount against the defendants. The defendants, specifically defendants No.3 and 4, filed an application seeking rejection of the plaint under Order 7 Rule 11 CPC, stating that they had no concern with the business transactions mentioned in the plaint.

Finding of the Court:

The court found that the transactions in question were directly made by the plaintiff with a sole proprietorship firm and there was no contract between the petitioners and the plaintiff. The court concluded that the petitioners were neither necessary nor proper party for the purpose of proper adjudication of the suit and there was no cause of action to file the suit against the petitioners.

Issues: The main issue was whether the plaint should be rejected under Order 7 Rule 11 CPC based on the lack of cause of action against the petitioners.

Ratio Decidendi: The court emphasized that in order to reject a plaint, the court needs to be guided only by the averments in the plaint and not by the defence taken by the defendants. The court highlighted that the transactions in question were directly made by the plaintiff with a sole proprietorship firm and there was no contract between the petitioners and the plaintiff.

Final Decision: The court allowed the application filed by the petitioners under Order 7 Rule 11 CPC to reject the plaint against them. The impugned order was set aside and the trial Court was directed to proceed further against defendants No.1 and 2 in accordance with law.

KARAMJIT SINGH, J.

This revision petition has been filed by petitioners/defendants No.3 and 4 against order dated 17.3.2022 (Annexure P-4) passed by the Court of Civil Judge, Junior Division, Panipat whereby an application filed by the petitioners under Order 7 Rule 11 read with Section 151 CPC, has been rejected.

2. Brief facts of the case are that respondent No.1/plaintiff filed suit for permanent injunction restraining the defendants from alienating the suit property and further, suit for recovery of Rs.18,91,005/- along with future interest from the defendants. In the plaint, the plaintiff took the plea that both the parties are into business of handloom products; that defendant No.1 M/s Anand Handloom Industries is a sole proprietorship firm and defendant No.2-Anand Wadhwa is its sole proprietor. Defendant No.3-Arun Wadhwa is Managing Incharge and defendant No.4-Anil Wadhwa is manager of the said firm; that in August, 2019, defendant No.2 approached the plaintiff for purchase of handloom products in the name of defendant No.1 and the deal was settled. The goods worth Rs. 60,38,413/- were delivered to defendant No.1 through various invoices from 22.8.2019 to 8.3.2020. Defendants No.2 to 4 received and acknowledged the said goods by putting their signatures on various invoices. Part payment was made by the defendants from time to time but the amount of Rs. 18,91,005/- remained due and the defendants failed to make payment of the said amount despite service of legal notice dated 12.4.2021. Consequently, the suit for recovery of the aforesaid amount and for permanent injunction was filed by the plaintiff against the defendants.

3. Notice of the suit was issued to the defendants and they put in their appearance in the learned trial Court and defendants No.3 and 4 filed an application under Order 7 Rule 11 CPC seeking rejection of the plaint.

4. In the aforesaid application filed under Order 7 Rule 11 CPC, defendants No.3 and 4 took the plea that they are having no concern with defendant No.1-firm and its business and that they are having no business transactions with the plaintiff and that defendants No.3 and 4 are not liable to pay any amount to the plaintiff; that the plaintiff wrongly mentioned in the plaint that defendant No.3 is Managing Incharge and defendant No.4 is Manager of defendant No.1 and they conduct day to day business of the said firm. So, prayer is made that the plaint be rejected as per provisions of Order 7 Rule 11 CPC.

5. The said application was contested by the plaintiff.

6. Learned trial Court dismissed the said application vide impugned order Annexure P-4. Being aggrieved the petitioners have filed the present revision petition.

7. I have heard the counsel for the parties.

8. Counsel for the petitioners/defendants No.3 and 4 has inter alia contended that no doubt, defendants No.3 and 4 are sons of defendant No.2 but they are having no concern with the business of defendant No.1- proprietorship firm which is owned by defendant No.2. It has been further contended that the petitioners are unnecessarily dragged into the present litigation by the plaintiff-respondent No.1 and the petitioners have nothing to do with the alleged transactions, if any, which had taken place between the plaintiff-respondent No.1 and defendants No.1 and 2/respondents No.2 and 3. Counsel for the petitioners has further contended that thus, the plaint qua both the petitioners deserves to be rejected as it does not disclose a cause of action against them.

9. On the other hand, counsel for the plaintiff-respondent No.1, while supporting the impugned order, has inter alia contended that for the purpose of disposal of application under Order 7 Rule 11 CPC, only pleadings made in the plaint itself have to be considered at this stage. He has further contended that as per the averments made in the plaint, petitioner No.1 being Managing Incharge and petitioner No.2 being Manager along with defendant No.2 received and acknowledged the goods under i

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