Order VII Rule 11 CPC | Plaint Must Be Meaningfully Read To See If Statutory Bar Is Veiled By Clever Drafting: Supreme Court

In a significant ruling on the scope of Order VII Rule 11 CPC, the Supreme Court has held the trial courts must undertake a "meaningful and wholesome" reading of the plaint to see if a statutory bar has been concealed by way of clever drafting.The Court also held that a plaint is liable to be rejected if there is a material suppression of fact."Courts below must curtail frivolous suits which are barred by law, and cases where the cause of action disclosed is illusory, by piercing the veil of clever drafting and giving a meaningful and wholesome reading to the plaint and accompanying documents, preferably at the earliest stage of the suit," the Court stated.Here, the Court rejected a plaint on two counts - the bar under the Prohibition of Benami Transactions Act was sought to be concealed by structuring the suit as one based on a Will. Secondly, the plaintiff suppressed that he was a person accused of the murder of the testator.The Court emphasized that courts must distinguish between a genuine cause of action and an illusory one created through clever drafting. It held that the substance of the plaint, and not merely its form or language, must govern the inquiry under Order VII Rule 11 CPC."If, by clever drafting a fictional cause of action is created to veil a bar under law, it is imperative for the Court to reject the plaint," the Court observed.The Court clarified that while disputed questions of fact ordinarily cannot be decided at the threshold stage, the Courts are nevertheless entitled to examine whether the very foundation of the pleaded claim is legally sustainable. “Once the plaint is presented for institution, and before it is admitted, it is the duty of the trial Court to verify the contents of the plaint and ensure that all legal requirements are satisfied before admitting the plaint. A trial Court cannot mechanically admit the plaint and register the suit. Admission of the plaint cannot be a mechanical process by which the note of the Registry is merely endorsed by the Court. If, at the stage of admission of the plaint, the trial Court, upon a meaningful reading of the plaint, comes to the conclusion that the plaint is liable to be rejected, it shall reject the plaint. It is not necessary for the trial Court to wait for the defendant to enter appearance and seek rejection of the plaint. Once the Court finds that the suit is frivolous, without jurisdiction, instituted without compliance with prerequisites, fails to disclose a real cause of action, suppresses material facts, or is barred by law but couched in clever drafting to create an illusion of a cause of action, it must reject the plaint with costs.”, the court observed. Background A bench of Justice J.B. Pardiwala and Justice R. Mahadevan was dealing with a case in which the respondent-plaintiff instituted a suit seeking a declaration of title and ownership over the disputed property on the basis of a Will allegedly executed by one K. Raghunath in his favour. However, it was alleged that the plaintiff had suppressed the material fact that K. Raghunath was merely an ostensible owner, as the property had in fact been purchased by the plaintiff in Raghunath's name, thereby rendering the transaction hit by the provisions of the Prohibition of Benami Property Transactions Act, 1988 (“Benami Act”). The suppression of facts regarding the transaction being hit by the Benami Act was taken a ground by the Appellant-defendant in their application seeking a rejection of the plaint under Order VII Rule 11(d) CPC. The Appellant-defendant claimed that the plaint is liable to rejected at the threshold as it was barred by law i.e., Benami Act.The plaintiff claimed that the suit was founded upon a Will executed in his favour by Raghunath, and not on the basis of the benami transaction.The trial court allowed the Appellant-defendant's rejection plea, prompting the Respondent-plaintiff to move to the High Court by filing a Regular First Appeal. The High Court decision to overturn the trial court's decision led to the filing of an instant appeal before the Supreme Court by the Appellant-Defendant. Decision Setting aside the High Court's decision, the judgment authored by Justice Mahadevan restored the trial court's decision to reject the plaint at the threshold, as the suit was essentially based on an illegal benami transaction, which was sought to be veiled as a right based on Will.The Court rejected the plaintiff's contention that while considering an application for rejection of the plaint, only the averments in the plaint and the documents filed along with the plaint can be looked into. The Court meant that when the bar under law, though not specifically pleaded or suppressed by the plaintiff, can be implied from the meaningful reading of the plaint. “What is implied in Order VII is a meaningful reading of the plaint, because the bar under law may be either express or by necessary implication.”, the court said.Principles on Order VII Rule 11The...

Order VII Rule 11 CPC | Plaint Must Be Meaningfully Read To See If Statutory Bar Is Veiled By Clever Drafting: Supreme Court

Yash Mittal

The Court also summarised the principles relating to Order VII Rule 11 Code of Civil Procedure.

This is a premium content
Available exclusively to
Our subscribers

INR 1099+GST

Tags

Order VII Rule 11 CPC | Plaint Must Be Meaningfully Read To See If Statutory Bar Is Veiled By Clever Drafting: Supreme Court

Yash Mittal

The Court also summarised the principles relating to Order VII Rule 11 Code of Civil Procedure.

This is a premium content Available exclusively to Our subscribers

INR 1099+GST

Tags

This is a premium content
Available exclusively to
Our subscribers