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2025 Supreme(Online)(Mad) 63235

IN THE HIGH COURT OF JUDICATURE AT MADRAS
Dr.G. Jayachandran, J
Shikha Malhotra – Appellant
Versus
M/s.Amarneedi Realtors (P) Limited – Respondent
A.S.No. 34 of 2022



Advocates:
For the Appellants/Petitioners: Mr.G.Karthikeyan, M/s.Prahalad K.Bhat
For the Respondents: Mr.S.Sundaresan

The rejection of a plaint under Order VII Rule 11 C.P.C requires a thorough examination of the cause of action; dismissal without proper testing of claims is erroneous.

Headnote:(A) Code of Civil Procedure, 1908 - Order VII Rule 11 - Suit for bare injunction - Appellants challenged the rejection of their plaint for injunction under Order VII Rule 11 - Court emphasized that rejection should only occur if there is no cause of action - Plaintiffs had a prima facie cause of action for injunction, warranting trial on the merits. (Paras 7, 8)

(B) The trial Court's reasoning for rejection was found to misinterpret the provisions of Order VII Rule 11 - The lower court should not predict the future course of litigation while evaluating the maintainability of the suit. (Paras 7, 8)

Facts of the case:
The appellants filed for an injunction against the respondents concerning possession of property under a Joint Development Agreement, which the appellants claim was breached. The suit was initially dismissed for not establishing a cause of action. However, there were contentions regarding the agreement's enforceability and actions of both parties.

Findings of Court:
The appellate Court found the dismissal based on misconceptions regarding the nature of the injunction suit and allowed the appeal, restoring the injunction suit for a full trial on its merits.

Issues: Whether the trial Court erred in rejecting the plaint under Order VII Rule 11 C.P.C without allowing the parties to substantiate their claims through evidence?

Ratio Decidendi: The court held that a cause of action for seeking an injunction was established on prima facie grounds, emphasizing the necessity of allowing the case to be tested in trial.

Result: Appeal allowed, matter restored for trial.

Judgement Key Points
  • Suit filed by partners of M/s.Sathya Surendra Developers (Shikha Malhotra and Harsh Malhotra) in individual and firm capacity for bare injunction against M/s.Amarneedi Realtors (P) Ltd. and others to restrain entry and interference with plaintiffs' possession of scheduled immovable property. (!)
  • Tripartite Joint Development Agreement (JDA) dated 27.05.2011 and supplementary agreement dated 25.06.2011 entered between plaintiffs' firm, another developer firm (with Arun Malhotra and Shikha Malhotra as partners), and first defendant; defendant advanced Rs.15 crores in installments for demolition of existing structure and construction of multi-storied building. (!) [1]
  • Plaintiffs alleged breach of JDA terms, rescinded agreement, revoked license, and regained possession; defendants allegedly re-entered by force, prompting injunction suit. (!) [1][2]
  • Defendants filed application under Order VII Rule 11 CPC for rejection of plaint; transferred to City Civil Court, where trial court allowed rejection after examining agreement merits, documents, delays (e.g., demolition in 2018), poor drafting, and plaintiffs' non-performance. (!) [3][4]
  • Appellants argued trial court erred by prematurely deciding enforceability of JDA and supplementary agreement without evidence, ignoring prima facie cause of action for injunction. (!) [4][5]
  • Respondents contended trial court properly examined documents showing defendants' entry rights under JDA, Rs.15 crores payment, prejudice from injunction, plaintiffs' delays, and unilateral termination without compensation, rendering bare injunction unsustainable. (!)
  • Appellate court held trial court misunderstood Order VII Rule 11 CPC scope: rejection only for no cause of action or legal bar (e.g., limitation, res judicata), not to predict future litigation outcomes, dismiss on merits, or assume further suits for specific performance/damages. (!) [8]
  • Prima facie cause of action for injunction established from plaint averments; merits (e.g., JDA validity, breach, termination) to be tested at trial after written statement. (!) [8]
  • Appeal allowed; plaint rejection set aside as legally erroneous; suit restored for trial on merits with priority and expeditious disposal due to 9-year pendency; no costs. (!) (!)

Table of Content
1. establishment of sole proprietorship claim. (Para 1 , 2 , 3)
2. arguments on nature and enforceability of agreements. (Para 4 , 5 , 6)
3. court's view on procedural issues and merits. (Para 7)
4. final ruling based on understanding of procedural law. (Para 8)
5. restoration for trial with expedited consideration. (Para 9)

J U D G M E N T

The suit for bare injunction was filed by Shikha Malhotra and Harsh Malhotra who are the partners of the Firm by name M/s.Sathya Surendra Developers. The suit is laid by the partners in their individual name as well as in the name of the partnership Firm. It is a bare injunction suit filed against one M/s.Amarneedi Realtors Private Limited and Jaggannathan. The plaint reads to the effect that the plaintiffs are the partners of the Firm, Satya Surendra Developers and are in exclusive use of occupation and possession of the immovable property, morefully described in the Schedule. The first defendant Company which is a property developer entered into an agreement with the plaintiffs along with another developer, by name, M/s.Satya Surendra Developers, incidentally, a partnership Firm consisting of Arun Malhotra and Shikha Malhotra as its partners. The said Arun Malhotra is the husband of Shikha Malhotra. In pursuant to the tripartite agreement, a sum of Rs.15 Crores in two installments has been passed based on specific agreement that the structure in the suit property be demolished and a multi-

stored building will be constructed as per the terms of the agreement.

2. It is alleged that the terms of the agreement have not been put into effect and there was a breach and therefore, the agreement being rescinded, the possession was taken back by the plaintiffs. The license granted to the defendants was cancelled. Despite that, by force, the defendants had entered into the suit property and hence, the suit for injunction restraining them from entering and /or remaining upon the suit property and/or from in any manner disturbing and interfering with the plaintiffs' possession of the suit property.

3. On receipt of the suit summons, the defendants have filed an application under Order VII Rule 11 C.P.C for rejection of plaint. Pending disposal of the application, the matter has been transferred to the City Civil Court for want of pecuniary jurisdiction. The learned VII Additional City Civil Judge has entertained the application filed under Order VII Rule 11 C.P.C and allowed the same after discussing the merits of the agreement and the other documents. The said order of rejecting the plaint is challenged in the appeal on the ground that despite disclosure of cause of action to maintain the suit for injunction, the trial Court ignoring the pleadings as found in the plaint had taken into consideration the irrelevant factors and rejected the plaint without examining the validity and legality of the Joint Development Agreement and subsequent termination of the agreement due to the failure on the part of the defendants to perform their part of the agreement.

4. The learned Senior Counsel appearing for the appellants specifically contended that the Court below without testing the document in the manner known to law had hurriedly concluded that the Joint Development Agreement dated 27.05.2011 and the supplement agreement dated 25.06.2011, are poorly drafted and had given room to disputes and doubts and had observed that the demolition of the old building was completed only in the year 2018 and therefore, the terms of the agreement to get CMDA approval for the building plan within one year are not pragmatic and the defendants cannot be blamed for the delay.

5. The learned Senior Counsel submitted that the above observations based on the terms of the agreement which has not been put to test by examining the parties to the agreement is contrary to law and the trial Court had erred in deciding the merits and enforceability of the agreement summarily without allowing the parties to prove their respective

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