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Rejection Of Plaint Under Order VII Rule 11 CPC [Explainer]

Akshita Saxena
1 April 2020 4:18 AM GMT
Rejection Of Plaint Under Order VII Rule 11 CPC [Explainer]
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The filing of a plaint is a sine qua non for institution of a suit. It is basically a statement of claims, treated as a repository of facts by the court. Thus, every court is obligated to analyze the plaint, and decide whether it is fit to be admitted or not.

Rule 11 under Order 7 of Code of Civil Procedure delineates certain grounds under which the court "shall" reject a plaint. These are:

(a) where it does not disclose a cause of action;

(b) where the relief claimed is undervalued, and the plaintiff, on being required by the court to correct the valuation within a time to be fixed by the court, fails to do so;

(c) where the relief claimed is properly valued, but the plaint is written upon paper insufficiently stamped, and the plaintiff, on being required by the court to supply the requisite stamp paper within a time to be fixed by the Court, fails to do so;

(d) where the suit appears from the statement in the plaint to be barred by any law;

(e) where it is not filed in duplicate;

(f) where the plaintiff fails comply with the provision of Rule 9 (which specifies the procedure after admission of the plaint).

  • At what stage can plaint be rejected?

    If found to be deficient of any of the above mentioned factors, a plaint may be rejected by the court of its own motion or upon filing of an application in that behalf by the opposite party, at any stage of the proceedings, before conclusion of trial.

    The position was settled by the Apex Court in Sopan Sukhdeo Sable & Ors. v. Assistant Charity Commissioner & Ors., (2004) 3 SCC 137, whereby it observed,

    "The trial Court can exercise the power at any stage of the suit - before registering the plaint or after issuing summons to the defendant at any time before the conclusion of the trial. For the purposes of deciding an application under clauses (a) and (d) of Order VII Rule 11 of the Code, the averments in the plaint are the germane; the pleas taken by the defendant in the written statement would be wholly irrelevant at that stage."

    Further, it has been time and again held that once an application seeking rejection of plaint is moved by the respondent, it is essential to decide upon the application before proceeding further and that the Respondent cannot be compelled to file a written statement until such application is disposed of.

    "There is no point or sense in proceeding with the trial of the case, in case the plaint is only to be rejected at the threshold. Therefore, the defendant is entitled to file the application for rejection before filing his written statement. In case, the application is rejected, the defendant is entitled to file his written statement thereafter. But once an application for rejection is filed, the court has to dispose of the same before proceeding with the trial," the top court recently held in RK Roja v. US Rayudu & Anr., (2016) 14 SCC 275.

    It must be noted however that an order of rejection of plaint is a deemed decree, as defined under Section 2(2) of the Code. It is thus an appealable order.

    Effect of rejection of plaint on limitation

    An order of rejection of a plaint does not preclude a party from presenting a fresh plaint, in respect of the same cause of action, as per Rule 13 of Order 7. It is merely an order, indicating that the rejected plaint does not meet the requisite "standards".

    Thus, while computing the limitation for such plaints when filed afresh, the courts might extend the benefit of "bonafide litigation" under Section 14 of the Limitation Act, and the time wasted thereon, before the plaint was rejected, will be excluded. There is a decision from the Calcutta HC on this point. In that case, the plaint was rejected after the suit was found to be non-maintainable; but the HC declared the period of prosecution of the civil suit as period exempted under Section 14 Limitation Act (Anjan Choudhury v Anandneer Co-operative Registered Housing Society and others AIR 1990 Cal 380).

    Can Plaint be rejected in part?

    No, a plaint can either be rejected as a whole or not at all, held the top court in Sejal Glass Limited v. Navilan Merchants Private Limited, AIR 2017 SC 4477.

    In the said case, Justice RF Nariman had held that the word "plaint", as used in Rule 11 "necessarily means the plaint as a whole" and that if only a portion of the plaint, as opposed to the plaint as a whole is to be struck out, Order VI Rule 16 of the CPC, which relates to striking out pleadings, would apply.

    The court also clarified that where the plaint is barred qua one defendant but maintainable vis-à-vis others, the plaint cannot and should not be rejected as a whole. "In all such cases, if the plaint survives against certain defendants and/or properties, Order VII Rule 11 will have no application at all, and the suit as a whole must then proceed to trial," it held.

    The position was thereafter reaffirmed last year, by a division bench of the Supreme Court in Madhav Prasad Aggarwal v. Axis Bank.

    In the said case, Axis Bank being one of the Respondents filed a Notice of Motion under Order 7 Rule 11(d) of CPC, on the ground that the suit against it was barred under Section 34 of SARFAESI Act.

    Setting aside the High Court's order that allowed the motion, the Supreme Court held,

    "Indubitably, the plaint can and must be rejected in exercise of powers under Order 7 Rule 11(d) of CPC on account of noncompliance of mandatory requirements or being replete with any institutional deficiency at the time of presentation of the plaint, ascribable to clauses (a) to (f) of Rule 11 of Order 7 of CPC. In other words, the plaint as presented must proceed as a whole or can be rejected as a whole but not in part. In that sense, the relief claimed by respondent No.1 in the notice of motion(s) which commended to the High Court, is clearly a jurisdictional error. The fact that one or some of the reliefs claimed against respondent No.1 in the concerned suit is barred by Section 34 of 2002 Act or otherwise, such objection can be raised by invoking other remedies including under Order 6 Rule 16 of CPC at the appropriate stage."

    Important grounds of rejection

    1. Plaint does not disclose cause of action

    Cause of action, though not defined in CPC, is a "bundle of facts" necessary to give the plaintiff a "right to relief" (See Church of Christ Charitable Trust and Educational Charitable Society v. Ponniamman Educational Trust, AIR 2012 SC 3912). Thus, cause of action may be constituted by instances of breach of a contract, any civil injury (actionable in a court of law), non-payment of dues, etc.

    Non-disclosure of cause of action is a valid ground for rejection of plaint; however, to exercise its powers under this ground, the court must be satisfied that even if all the facts disclosed in the plaint were true, the Plaintiff will not be entitled to any relief (Hardesh Ores Pvt. Ltd v. M/S. Hede And Company (2006) 5 SCC 658).

    A landmark ruling on this subject is in the case of T. Arivandanam v. T.V. Satyapal & Anr., 1978 SCR (1) 742, whereby it was held that if the plaint is manifestly vexatious, meritless and groundless, in the sense that it does not disclose a "clear right to sue", it would be right and proper to exercise power under Order VII Rule 11 of CPC. "A mere contemplation or possibility that a right may be infringed without any legitimate basis for that right, would not be sufficient to hold that the plaint discloses a cause of action.[i]"

    Adding to this, in 1988 a division bench of the top court observed that entirety of the averments in the plaint have to be taken into account while considering a plea seeking rejection of plaint. While disposing of a case titled, Raptakos Brett & Co.Ltd. v. Ganesh Property, (1998 (7) SCC 184), the bench observed,

    "There cannot be any compartmentalization, dissection, segregation and inversions of the language of various paragraphs in the plaint. If such a course is adopted it would run counter to the cardinal canon of interpretation according to which a pleading has to be read as a whole to ascertain its true import. It is not permissible to cull out a sentence or a passage and to read it out of the context in isolation. Although it is the substance and not merely the form that has to be looked into, the pleading has to be construed as it stands without addition or subtraction or words or change of its apparent grammatical sense. The intention of the party concerned is to be gathered primarily from the tenor and terms of his pleadings taken as a whole. At the same time it should be borne in mind that no pedantic approach should be adopted to defeat justice on hair- splitting technicalities."

    Another important factor to be kept in mind while determining whether the plaint discloses a cause of action or not, is that averments in plaint alone are relevant. No other filings can be considered for establishing the same.

    In Saleem Bhai & Ors. v. State Of Maharashtra & Ors., (2003) 1 SCC 557, it was held that "For the purposes of deciding an application under clauses (a) and (d) of Rule 11 of Order VII C.P.C. the averments in the plaint are germane; the pleas taken by the defendant in the written statement would be wholly irrelevant at that stage…"

    The position was recently reiterated by the High Court of Himachal Pradesh in Savita Sharma & Ors. v. Master Abeer Singh & Ors. as under,

    "when a case of this nature comes to a Court it is not proper to allow the application [for rejection of plaint] only on mere asking, the Court has to examine the pleadings made in the plaint read with the conditions set out in Order 7 Rule 11 of the CPC referred to supra, otherwise, it will result into miscarriage of justice."

    2. Suit is Undervalued

    Sub-rule (b) under Rule 11 of Order VII stipulates that if the relief being claimed by the Plaintiff is undervalued, the court may prescribe some time for the claim to be corrected. If the Plaintiff fails to comply with the same, the plaint may then be rejected.

    This provision is essential for the purposes of the Court Fees Act, so as to ensure that the Plaintiff does not undervalue the suit only to escape from payment of adequate court fees.

    In Meenakshi Sundaram Chettiar v. Venkatachalam Chettiar, 1979 SCR (3) 385, the Supreme Court had held that sub-rule (b) "casts a duty on the Court to reject the plaint when the relief claimed is undervalued. If on the materials available before it the Court is satisfied that the value of relief as estimated by the plaintiff in a suit for accounts is undervalued the plaint is liable to be rejected. It is therefore necessary that the plaintiff should take care that the valuation is adequate and reasonable taking into account the circumstances of the case."

    The top court further noted that in suit for accounts, a Plaintiff may not able to ascertain the exact amount for the purpose of valuation of the suit. In this regard it clarified,

    "In coming to the conclusion that the suit is undervalued the court will have to take into account that in a suit for accounts the plaintiff is not obliged to state the exact amount which would result after the taking of the accounts. If he cannot estimate the exact amount he can put a tentative valuation upon the suit for accounts which is adequate and reasonable. The plaintiff cannot arbitrarily and deliberately undervalue the relief."

    3. Plaint insufficiently Stamped

    Sub-rule (c) under Rule 11 of Order VII clearly stipulates that if a plaint has been written on a paper which has not been duly stamped and authorized, the court may prescribe some to time make good the deficiency. If the Plaintiff fails to comply with the same, the plaint may then be rejected.

    This again, is essential for the reasons for the court fees under the Court Fee Act, 1870.

    Pertinently, this provision does not refer to insufficiency of stamp duty on any of the documents that are subject matter of the case. For instance, in a suit for recovery of money in Sh. Ramesh Chand v. Sh. Harish Bhardwaj, the Delhi High Court dismissed the Defendant's application for rejection of plaint, moved on the grounds that the lease document on the basis of which the Plaintiff sought recovery was insufficiently stamped. The High Court held,

    "The defendant has merely averred that the lease agreement is insufficiently stamped, however, he has not averred as to how much is the sufficient stamp duty and what is the difference between the actual stamp duty and the paid stamp duty. Moreover, the defendant is required to lead evidence to prove that insufficient stamp duty has been paid on the lease agreement and this fact cannot be decided at this stage on a mere perusal of bald averments. Accordingly, this ground is also not maintainable.

    Since, the suit is not apparently bad for want of cause of action or barred by law, it cannot be rejected under Order 7 Rule 11 CPC."

    Note: A person who is unable to, due to his financial status, afford the abovementioned court fees/ stamp paper, can apply as an "Indigent person" in accordance with Order 33 of CPC.

    4. Suit appears to be barred by any law

    Where a suit appears from the statement in the plaint to be barred by any law, it is liable to be rejected. This includes a bar created due to lapse of limitation period. However, if the question of limitation relates to the merits of the case, the same will be decided with other issues, and not at the outset.

    In Raghwendra Sharan Singh vs. Ram Prasanna Singh, the top court had unequivocally held that,

    "Considering the averments in the plaint if it is found that the suit is clearly barred by law of limitation, the same can be rejected in exercise of powers under Order 7 Rule 11(d) of the CPC."

    In that case, the plaintiff had tried to cover up the bar of limitation by 'clever drafting'. Condemning the same, the court said a plaintiff cannot be allowed to circumvent that provision by means of clever drafting so as to avoid mention of those circumstances, by which the suit is barred by law of limitation.

    "Considering the averments in the plaint and the bundle of facts stated in the plaint, we are of the opinion that by clever drafting the plaintiff has tried to bring the suit within the period of limitation which, otherwise, is barred by law of limitation. Therefore…as the suit is clearly barred by law of limitation, the plaint is required to be rejected in exercise of powers under Order 7 Rule 11 of the CPC," the court had held.

    Likewise, failure to meet the pre-requisites for filing a suit, such as service of notice as per Section 80 of the CPC, 3 months prior to institution of a suit against the government, is also a ground for rejection.

    Note: Institution of a suit before a civil court is also barred by certain special statues, such as the Consumer Protection Act, the IBC, SARFAESI, Act etc., since these matters fall within the purview of dedicated tribunals. However, in such a scenario, the plaint is not rejected for being barred by law but is rather returned under Order 7 Rule 10, for presentation before a forum of competent jurisdiction.

    Are false cause of action, fraud, misrepresentation or abuse of process of court, etc. grounds for rejection?

    Suppression of facts, misrepresentation, fraud or even abuse of process of court, are not inculcated as grounds for rejection of plaint under Order VII Rule 11 CPC.

    In R. Arumugam v. Pr. Palanisamy, one of the original Defendants had argued before the Madras High Court that the grounds listed under the said Rule are not exhaustive and the above mentioned grounds should also be considered while hearing an application for rejection of plaint.

    Declining this argument, the High Court held that it is a settled law that only the contents of the plaint are relevant at the time of hearing an application under Order 7 Rule 11. For determination of fraud, misrepresentation, etc. however, the court will have to travel beyond the scope of the plaint, and look into the written statement, evidence, etc. Thus, the questions of fraud, misrepresentation, etc. are preliminary issues that are subject matter of trial.

    "The mere suppression of fact alone shall not be the ground for holding that the plaint lacks pleadings regarding cause of action. When a plaint contains clear pleadings spelling out the cause of action, the question whether such a cause of action is true or not cannot be the scope of enquiry in an application under Order VII Rule 11 CPC. Whether there is any suppression of material facts, can be ascertained only from the pleadings made in the written statement and the evidence to be adduced by the parties. This court holds that suppression of material facts alone shall not entitle a defendant to have the plaint rejected as one lacking in cause of action under Order VII Rule 11 CPC," the court said.

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