Plaint Cannot Be Wholly Rejected Under Order VII Rule 11 CPC If One Cause Of Action Survives; Sale Deeds Post-Revocation Of Unregistered PoA Raise Triable Issues: Supreme Court - 2025-05-25

Supreme Court: Plaint Cannot Be Entirely Rejected if At Least One Cause of Action is Triable

New Delhi: The Supreme Court, in a significant ruling, has reiterated that a plaint cannot be rejected in its entirety under Order VII Rule 11 of the Code of Civil Procedure, 1908 (CPC) if at least one of the causes of action pleaded is triable. The bench, comprising Justice J B Pardiwala and Justice R Mahadevan , set aside a Rajasthan High Court order that had rejected a plaint concerning a property dispute, emphasizing that serious triable issues arose from sale deeds executed after the revocation of an unregistered Power of Attorney (PoA).

The judgment was delivered in the case of VINOD INFRA DEVELOPERS LTD . vs MAHAVEER LUNIA (Civil Appeal No. 7109/2025) .

Background of the Dispute

Vinod Infra Developers Ltd. (appellant) claimed ownership of agricultural land in Jodhpur, purchased in 2013. In 2014, the appellant took a loan of Rs. 7.5 crores from Mahaveer Lunia (Respondent No.1). Concurrently, the appellant's Board authorized its Managing Director and Respondent No.1 to sell the subject property. An unregistered power of attorney and an agreement to sell were executed in favour of Respondent No.1.

The appellant contended this arrangement was security for the loan, effectively a mortgage. In May 2022, after Respondent No.1 allegedly failed to respond to a loan settlement offer, the appellant's Board revoked the authority granted to Respondent No.1, and the PoA was formally revoked on May 27, 2022. Despite this, Respondent No.1 executed sale deeds in July 2022 (registered on July 19, 2022) in his own favour and for Respondent Nos. 2 to 4.

Aggrieved, Vinod Infra filed a civil suit seeking declaration, possession, and permanent injunction. The trial court dismissed an application by the respondents to reject the plaint under Order VII Rule 11 CPC. However, the Rajasthan High Court, in revision, allowed the application and rejected the plaint, leading to the present appeal before the Supreme Court.

Arguments Presented

Appellant (Vinod Infra Developers Ltd.) argued: * The High Court erred, as the plaint disclosed triable issues, especially concerning the validity of sale deeds executed after PoA revocation. * The suit was based on distinct causes of action: the nature of the 2014 agreement (alleged mortgage) and the subsequent sale deeds. * Sale deeds executed after PoA revocation are legally non-existent ( non-est ). * The unregistered agreement to sell and PoA are inadmissible for transferring title under the Registration Act, 1908 . * Title disputes are adjudicated by civil courts, not revenue authorities. * Citing * Central Bank of India v. Prabha Jain [2025 INSC 95] *, if one cause of action survives, the entire plaint must be tried.

Respondents ( Mahaveer Lunia & Ors.) contended: * Documents clearly indicated a sale, not a mortgage; the mortgage claim was an afterthought. * The suit was an abuse of judicial process. * The matter pertained to khatedari rights, falling under the exclusive jurisdiction of revenue courts as per the Rajasthan Tenancy Act, 1955. * Improper pleadings and insufficient court fees rendered the suit non-maintainable.

Supreme Court's Analysis and Reasoning

The Supreme Court meticulously examined the scope of Order VII Rule 11 CPC, reiterating that a plaint can be rejected only if it prima facie fails to disclose a cause of action or is barred by law, based solely on the plaint's averments.

On Unregistered Documents and Revoked PoA: The Court emphasized the legal position concerning unregistered documents. It noted, "Admittedly, the appellant is the owner of the subject property... As per the settled law, in the absence of registration, such documents do not confer valid authority to transfer title." The judgment extensively quoted Sections 17 and 49 of the Registration Act, 1908 , and Section 54 of the Transfer of Property Act, 1882 , citing landmark cases like S. Kaladevi v. V.R. Somasundaram , Suraj Lamp & Industries (P) Ltd. v. State of Haryana , and M.S. Ananthamurthy v. J. Manjula . The Court stated: > "it is abundantly clear that the unregistered agreement to sell dated 24.05.2014 cannot, under any circumstance, create or convey any right, title or interest in favour of Respondent No.1 under Section 54 of the Transfer of Property Act, 1882 . The subsequent revocation of authority further nullifies any claim to title based on such documents."

The Court also highlighted that the PoA and agreement to sell (executed in 2014) were never registered within the four-month period mandated by Section 23 of the Registration Act.

On Multiple Causes of Action: Crucially, the Supreme Court found fault with the High Court's approach to the appellant's distinct causes of action. > "However, the High Court erred in treating the second cause of action – pertaining to the sale deeds registered on 19.07.2022 – as merely “academic”, and proceeded to reject the plaint in its entirety without undertaking a judicial examination of this distinct issue."

Relying on * Central Bank of India v. Prabha Jain [2025 INSC 95] *, the Court underscored: > "...a plaint cannot be rejected in its entirety merely because one of the prayers or reliefs sought is legally untenable, so long as other reliefs are maintainable and based on independent causes of action... Hence, even if one relief survives, the plaint cannot be rejected under Order VII, Rule 11 of the CPC."

Jurisdiction and Other Issues: * Civil vs. Revenue Court: The Court affirmed that issues of title, ownership, and validity of sale deeds are civil matters, triable exclusively by a civil court. "Revenue entries are administrative in nature and intended only for fiscal purposes." * Insufficient Court Fee: Citing Tajender Singh Ghambhir v. Gurpreet Singh , the Court noted that a plaintiff must be given an opportunity to rectify deficient court fees before a plaint can be rejected on that ground. * Factual Disputes: Contentions by respondents regarding notarized PoA, consent letters, possession, etc., were deemed matters for trial, not for resolution at the Order VII Rule 11 stage.

Decision and Implications

The Supreme Court allowed the appeal, setting aside the High Court's order and restoring the trial court's decision to proceed with the suit. The bench directed the trial court to take the plaint on file and proceed in accordance with the law, uninfluenced by any observations made in the Supreme Court's judgment (which were for the limited purpose of deciding the Order VII Rule 11 application).

This judgment reinforces the principle that the power to reject a plaint at the threshold is to be exercised sparingly and only within the strict confines of Order VII Rule 11 CPC. It also clarifies that if a plaint contains multiple causes of action, the entire plaint cannot be dismissed if even one of them presents a triable issue. The ruling is particularly significant for cases involving property transactions based on unregistered or subsequently revoked instruments of authority.