2020 Supreme(SC) 442

SUPREME COURT OF INDIA
L. Nageswara Rao, Indu Malhotra, JJ.
DAHIBEN – Appellant
Versus
ARVINDBHAI KALYANJI BHANUSALI (GAJRA)(D) THR LRS & ORS. – Respondents
Civil Appeal No. 9519 of 2019 (Arising out of SLP (Civil) No. 11618 of 2017)
Decided on : 09-07-2020

IMPORTANT POINTS
(1) Power under Order VII Rule 11 CPC may be exercised by Court at any stage of suit, either before registering plaint, or after issuing summons to defendant, or before conclusion of trial – Provision of Order VII Rule 11 is mandatory in nature.
(2) Non-payment of a part of sale price would not affect validity of sale – Once title in property has already passed, even if balance sale consideration is not paid, sale could not be invalidated on this ground.

Headnote:

(A) Civil Procedure Code, 1908 – Order VII Rule 11 – Rejection of plaint – Underlying object of Order VII Rule 11 (a) is that if in a suit, no cause of action is disclosed, or suit is barred by limitation under Rule 11 (d), Court would not permit plaintiff to unnecessarily protract proceedings in suit – In such a case, it would be necessary to put an end to sham litigation, so that further judicial time is not wasted – Under Order VII Rule 11, duty is cast on Court to determine whether plaint discloses a cause of action by scrutinizing averments in plaint, read in conjunction with documents relied upon or whether suit is barred by any law – Court would determine if assertions made in plaint are contrary to statutory law, or judicial dicta, for deciding whether a case for rejecting plaint at threshold is made out – Test for exercising power under Order VII Rule 11 is that if averments made in plaint are taken in entirety, in conjunction with documents relied upon, would the same result in a decree being passed – If on a meaningful reading of plaint, it is found that suit is manifestly vexatious and without any merit and does not disclose right to sue, court would be justified in exercising power under Order VII Rule 11 CPC – Power under Order VII Rule 11 CPC may be exercised by Court at any stage of suit, either before registering plaint, or after issuing summons to defendant, or before conclusion of trial – Provision of Order VII Rule 11 is mandatory in nature. (Paras 12.1, 12.3, 12.5, 12.7 to 12.10)

(B) Civil Procedure Code, 1908 – Order VII Rule 11(d) – Limitation Act, 1963 – Articles 58 and 59 – Transfer of Property Act, 1882 – Section 54 – Rejection of plaint – Bar of limitation – Suit challenging validity of sale-deed – Period of limitation prescribed under Articles 58 and 59 of 1963 Act is three years, which commences from date when right to sue first accrues – Price constitutes an essential ingredient of transaction of sale – Non-payment of a part of sale price would not affect validity of sale – Once title in property has already passed, even if balance sale consideration is not paid, sale could not be invalidated on this ground – In order to constitute a “sale”, parties must intend to transfer ownership of property, on agreement to pay price either in praesenti, or in future – Intention is to be gathered from recitals of sale deed, conduct of parties, and evidence on record – Even if averments of Plaintiffs are taken to be true, that entire sale consideration had not in fact been paid, it could not be a ground for cancellation of Sale Deed – Plaintiffs may have other remedies in law for recovery of balance consideration, but could not be granted relief of cancellation of registered Sale Deed – Suit filed by Plaintiffs is vexatious, meritless and does not disclose right to sue – Plaint is liable to be rejected under Order VII Rule 11 (a) – Plea taken by Plaintiffs is to create an illusory cause of action so as to overcome period of limitation – Conduct of Plaintiffs in not taking recourse to legal action for over a period of 5 and ½ years from execution of Sale Deed in 2009, for payment of balance sale consideration, also reflects that institution of present suit is an after-thought – Present case is a classic case, where plaintiffs by clever drafting of plaint, attempted to make out an illusory cause of action, and bring suit within period of limitation – Trial Court has rightly exercised power under Order VII Rule 11 CPC – Civil Appeal dismissed with costs of Rs. 1,00,000/- payable by Appellant to Respondents. (Paras 15.3, 15.4, 15.5, 15.7 and 16)

Facts of the case:

Present Civil Appeal has been filed to challenge impugned Judgment and Order dated 19.10.2016 passed by a Division Bench of the Gujarat High Court, which affirmed Order of the Trial Court, allowing the application filed by Defendant Nos. 2 and 3/Respondent Nos. 2 and 3 herein under Order VII Rule 11(d), CPC holding that the suit filed by Appellant and Respondent Nos. 9 to 13 herein (Plaintiffs) was barred by limitation.

Findings of Court:

Delay of over 5 and ½ years after the alleged cause of action arose in 2009, shows that the suit was clearly barred by limitation as per Article 59 of Limitation Act, 1963. The suit was instituted on 15.12.2014, even though alleged cause of action arose in 2009, when the last cheque was delivered to Plaintiffs. Plaintiffs have failed to discharge the onus of proof that the suit was filed within the period of limitation. The plaint is therefore, liable to be rejected under Order VII Rule 11 (d) of CPC.

Result : Appeal dismissed with costs.