Supreme Court sets aside Bombay High Court's plaint rejection, warns against routine trial stays

A Judgment Missing the Error: Revisional Jurisdiction Misapplied

The Supreme Court on August 19 set aside a 117-page judgment of the Bombay High Court 's Nagpur Bench that had rejected a plaint under Order VII Rule 11 of the Civil Procedure Code (CPC) . The Court held that the High Court exceeded its revisional jurisdiction under Section 115 CPC and effectively "donned the hat of the trial court." The bench of Justice Dipankar Datta and Justice Satish Chandra Sharma also deprecated the routine practice of granting stays of trial while entertaining revision applications against interlocutory orders .

The case arose from a suit filed by Madhav Vidarbha Estate Pvt. Ltd. and International Asset Reconstruction Company Pvt. Ltd. (IARCPL) seeking declarations that two sale deeds—executed in 2015 and 2017—were null and void, and that the defendants were in illegal possession of the suit property. The plaintiff also sought damages and compensation. The defendants, Praharsh Corporation Pvt. Ltd. and Sawan Nandkumar Bhatewara, filed applications under Order VII Rule 11 CPC for rejection of the plaint on grounds of no cause of action and bar under Sections 11 and 47 CPC. The trial court dismissed these applications, holding that issues of res judicata and limitation should be decided at trial. The High Court, in revision, reversed that decision and rejected the plaint.

‘Donning the Hat of the Trial Court’: The Fundamental Error

The Supreme Court noted that the High Court’s judgment contained "complete absence of any discussion on one question in particular: where and/or how did the Trial Court err while rejecting the applications under Order VII Rule 11, CPC?" Despite no error being identified by the respondents’ counsel, the High Court proceeded to analyze facts and documents beyond the plaint. "If the identity of the court were undisclosed, bare reading of the judgment would unmistakably and inevitably lead a reader to the conclusion that it is a judgment of the original court rejecting a plaint," the Court observed.

Relying on Shiv Shakti Coop. Housing Society v. Swaraj Developers , the Court reiterated that revisional jurisdiction under Section 115 CPC is supervisory, not appellate. "A right of appeal carries with it a right of rehearing on law as well as fact… The power of hearing revision is generally given to a superior court so that it may satisfy itself that a particular case has been decided according to law. The right there is confined to jurisdiction and jurisdiction alone," the judgment quoted.

The Court also referred to the 14th Law Commission Report of 1958 , which had noted that many revision applications were "lacking in substance and are filed with the sole object of delaying the proceedings." The Court observed that despite such concerns being raised seven decades ago, "the situation has only turned from bad to worse."

Stay of Trial: A Routine Practice Deprecated

The trial in the suit had been stayed by the High Court and subsequently by the Supreme Court , resulting in 34 adjournments over seven years. The Court expressed disapproval of this practice: "Unless the high courts, on an examination deeper than prima facie , arrive at a finding that continuation of the trial would seriously and irreparably prejudice the outcome of the revision or adversely affect the parties, stay of the trial ought to be eschewed."

The Court also expressed concern over the disproportionate judicial time spent on the revision. "The High Court expended enormous judicial time in authoring a lengthy judgment, albeit on an unworthy issue. The same time could have well been devoted to a deserving lis ," it remarked.

The Revival of the Suit and the Road Ahead

The Supreme Court allowed the appeals, set aside the impugned judgment, and revived the suit before the trial court. It granted the defendants eight weeks to file their written statements and directed the trial court to frame issues within six weeks thereafter. The Court declined to fix a timeline for conclusion of trial but urged early disposal without unnecessary adjournments. All issues of fact and law were left open, and the trial court was instructed to proceed uninfluenced by any observations made by the Supreme Court or the High Court.