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IN THE HIGH COURT OF ALLAHABAD
MANISH KUMAR NIGAM, J.
Saurabh Kalani - Petitioner
Versus
Stressed Asset Stabilisation Fund and Others - Respondents
Writ - C No. 35362 of 2023
Decided On : 06-02-2024
Limitation - Writ Petition - Order VII Rule 11 of C.P.C - 11 CPC, 6 CPC, 3(1) of the Indian Limitation Act - The court discussed the provisions of Order VII Rule 11 of the Code of Civil Procedure (CPC) and the principles established by various Supreme Court cases regarding the rejection of plaints based on limitation. The court emphasized that the decision to reject a plaint based on limitation should be made solely based on the averments in the plaint and not on the defense presented by the defendant. The court also highlighted the duty of the court to consider the issue of limitation on its own, even if not raised by the parties.
Fact of the Case:
The writ petition challenged the rejection of the petitioner's application under Order VII Rule 11 of C.P.C. by the Debts Recovery Tribunal, Jabalpur, and the appellate order by the Debts Recovery Appellate Tribunal, Allahabad. The case involved a financial assistance granted to a company, with the petitioner as the guarantor, and the issue of limitation in the Original Application filed by the respondent.
Finding of the Court:
The court found that the rejection of the petitioner's application under Order VII Rule 11 of CPC was justified as the Original Application did not ex facie disclose that it was barred by limitation. The court emphasized that the decision to reject a plaint based on limitation should be made solely based on the averments in the plaint and not on the defense presented by the defendant. The court also highlighted the duty of the court to consider the issue of limitation on its own, even if not raised by the parties.
Issues: The issues involved the rejection of the petitioner's application under Order VII Rule 11 of CPC, the consideration of limitation in the Original Application, and the impact of the appellate order by the Debts Recovery Appellate Tribunal, Allahabad.
Ratio Decidendi: The court's decision was based on the principles established by various Supreme Court cases, emphasizing that the decision to reject a plaint based on limitation should be made solely based on the averments in the plaint and not on the defense presented by the defendant. The court also highlighted the duty of the court to consider the issue of limitation on its own, even if not raised by the parties.
Final Decision: The petition was disposed of with the direction to the Debts Recovery Tribunal, Jabalpur, to comply with the directions issued by the Debts Recovery Appellate Tribunal, Allahabad.
JUDGMENT :
1. Heard learned counsel for the parties and perused the record.
2. This writ petition has been filed challenging the order dated 18.11.2022 passed in Original Application No. 729 of 2016 (Stressed Asset Stabilisation Fund Vs. M/s Gilt Pack Ltd. And others) by which, application of the petitioner under Order VII Rule 11 of C.P.C. has been rejected by the Debts Recovery Tribunal, Jabalpur (hereinafter referred to as ‘D.R.T. Jabalpur’). The appellate order dated 3.1.2023 in Appeal No.1140 of 2022 (Saurabh Kalani Vs. Stressed Asset Stabilization Fund and others) passed by the Debts Recovery Appellate Tribunal, Allahabad (hereinafter referred to as ‘D.R.A.T., Allahabad’) is also under challenge.
3. Brief facts of the case are that respondent No.1 - Stressed Asset Stabilisation Fund is the assignee of the original lendor IDBI. IDBI granted the financial assistance to the tune of Rs. 7.60 crores to respondent No.2 – Gilt Pack Ltd. Company during the year 1994 -1996. Petitioner is the guarantor to the aforesaid financial assistance granted to the Company on the basis of Deed of Guarantee dated 24.3.1994, 16.11.1994 and 26.9.1996. The Original Application No.729 of 2016 has been filed by respondent No.1 before the D.R.T. Jabalpur in the year 2016. Petitioner has been arrayed as opposite party no. 3 in the aforesaid Original Application. Relief claimed in Original Application is that defendants No.1 to 3 be ordered to pay the applicant a sum of Rs.394,41,00,970/- towards the loan as on 1.7.2016 together with further interest thereon on contractual rates w.e.f. 1.7.2016 and for other reliefs. In the aforesaid proceedings, petitioner moved an application under Order VII Rule 11 of CPC on the ground that Original Application has been filed after a lapse of 19 years from the date of execution of Deed of Guarantee executed by the petitioner and the claim of respondent No.1 is barred by time and, therefore, the Original Application be rejected. Respondent No.1 contested the application and filed objection to the application filed by petitioner. The application of petitioner has been rejected by the D.R.T. Jabalpur by its order dated 18.10.2022. Against the order dated 18.11.2022, petitioner preferred an appeal being Appeal No.1140 of 2022 (Saurabh Kalani Vs. Stressed Asset Stabilization Fund and others) before the D.R.A.T. Allahabad. The D.R.A.T. Allahabad, by its order dated 3.1.2023, has disposed of the appeal permitting the appellant-petitioner to raise his contentions/grievances whatever he has, with regard to the maintainability of Original Application in view of limitation and if such an application is filed by the appellant-petitioner before the Tribunal below, the same shall be considered at the time of final hearing of the said Original Application and has refused to entertain the appeal as the matter is pending before the concerned Tribunal and all the issues are yet to be adjudicated on merits.
4. It has been contended by learned counsel for the petitioner that D.R.A.T. has though permitted the petitioner to raise his grievances as to the issue of maintainability of the Original Application on the ground of limitation and has also directed for consideration of same at the time of final hearing of Original Application but has not set aside the order passed by the DRT Jabalpur by which application filed by the petitioner under Order VII Rule 11 of CPC, has been rejected by the D.R.T. Jabalpur holding that Original Application is not barred by limitation. It has been further contended by learned counsel for the petitioner that unless the order passed by Debts Recovery Tribunal is set aside holding that the Original Application is not barred by limitation, the same will operate as res judicata when the matter will be considered by Debts Recovery Tribunal in pursuance to the directions given by the D.R.A.T. Contentions are also raised by learned counsel appearing for the petitioner on merits against the findings recorded by the
The court established that the issue of limitation is a mixed question of law and fact, necessitating a full trial to resolve, rather than dismissal at the application stage.
The court ruled that a plaint cannot be rejected summarily under Order VII Rule 11 CPC without determining if it discloses a cause of action, especially when limitation is a mixed question of law and....
Rejection of plaint – Whether suit is barred by any law must be determined from statements in plaint and it is not open to decide the issue on the basis of any other material including written statem....
The limitation for cancellation suits begins from the time the plaintiff becomes aware of the grounds for cancellation, not from the date of the instrument's execution.
A cause of action based on an approved bill resets limitation; rejection of plaint under Rule 11 is unwarranted where factual disputes exist.
The question of limitation is a mixed question of law and fact and cannot be decided based solely on the averments in the plaint. The court emphasized that such issues require evidence and should be ....
The court held that applications for plaint rejection on grounds like limitation and res judicata necessitate detailed examination during trial; objections cannot be resolved solely from the plaint.
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