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[Order VII Rule 11 CPC] If Plaint Does Not Disclose Cause Of Action Or Suit Is Barred By Any Law, The Court Has No Option But To Reject The Plaint: SC [Read Judgment]

9 July 2020 3:02 PM GMT
[Order VII Rule 11 CPC] If Plaint Does Not Disclose Cause Of Action Or Suit Is Barred By Any Law, The Court Has No Option But To Reject The Plaint: SC [Read Judgment]

"The provision of Order VII Rule 11 is mandatory in nature."

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In a judgment delivered today, the Supreme Court has observed that the provision of Order VII Rule 11 Code of Civil Procedure regarding 'Rejection of Plaint' is mandatory in nature.

"It states that the plaint "shall" be rejected if any of the grounds specified in clause (a) to (e) are made out. If the Court finds that the plaintiff does not disclose a cause of action, or that the suit is barred by any law, the Court has no option, but to reject the plaintiff.", the bench comprising Justices L. Nageswara Rao and Indu Malhotra said.

In this case, the Trial Court, had allowed the application filed by defendants under Order VII Rule 11(d), CPC holding that the suit filed by the Plaintiff was barred by limitation. The Suit was for cancellation of the sale deed (which was executed more than five years ago) on the ground that the sale consideration fixed by the Collector, had not been paid in entirety by the defendant. The period of limitation for a suit seeking a relief of cancellation of sale deed is three years, which commences from the date when the right to sue first accrues. 

In the appeal upholding the rejection of plaint by the Trial Court, the Apex Court bench has succinctly summarized the law applicable for deciding an application for Rejection of Plaint under Order VII Rule 11 CPC. It noted that this provision provides an independent and special remedy, wherein the Court is empowered to summarily dismiss a suit at the threshold, without proceeding to record evidence, and conducting a trial, on the basis of the evidence adduced, if it is satisfied that the action should be terminated on any of the grounds contained in this provision. It said:

"The underlying object of Order VII Rule 11 (a) is that if in a suit, no cause of action is disclosed, or the suit is barred by limitation under Rule 11 (d), the Court would not permit the plaintiff to unnecessarily protract the proceedings in the suit. In such a case, it would be necessary to put an end to the sham litigation, so that further judicial time is not wasted."

The Court made the following observations:

  1. The power conferred on the court to terminate a civil action is, however, a drastic one, and the conditions enumerated in Order VII Rule 11 are required to be strictly adhered to.
  2. Under Order VII Rule 11, a duty is cast on the Court to determine whether the plaint discloses a cause of action by scrutinizing the averments in the plaint, read in conjunction with the documents relied upon, or whether the suit is barred by any law.
  3. The documents filed alongwith the plaint, are required to be taken into consideration for deciding the application under Order VII Rule 11 (a). When a document referred to in the plaint, forms the basis of the plaint, it should be treated as a part of the plaint.
  4. In exercise of power under this provision, the Court would determine if the assertions made in the plaint are contrary to statutory law, or judicial dicta, for deciding whether a case for rejecting the plaint at the threshold is made out.
  5. At this stage, the pleas taken by the defendant in the written statement and application for rejection of the plaint on the merits, would be irrelevant, and cannot be adverted to, or taken into consideration.
  6. The test for exercising the power under Order VII Rule 11 is that if the averments made in the plaint are taken in entirety, in conjunction with the documents relied upon, would the same result in a decree being passed. This test was laid down in Liverpool & London S.P. & I Assn. Ltd. v. M.V.Sea Success I & Anr., (2004) 9 SCC 512.
  7. It is not permissible to cull out a sentence or a passage, and to read it in isolation. It is the substance, and not merely the form, which has to be looked into. The plaint has to be construed as it stands, without addition or subtraction of words. If the allegations in the plaint prima facie show a cause of action, the court cannot embark upon an enquiry whether the allegations are true in fact. Hardesh Ores (P.) Ltd. v. Hede & Co. (2007) 5 SCC 614.
  8. If on a meaningful reading of the plaint, it is found that the suit is manifestly vexatious and without any merit, and does not disclose a right to sue, the court would be justified in exercising the power under Order VII Rule 11 CPC.
  9. The power under Order VII Rule 11 CPC may be exercised by the Court at any stage of the suit, either before registering the plaint, or after issuing summons to the defendant, or before conclusion of the trial. Saleem Bhai v. State of Maharashtra 7 (2003) 1 SCC 557.
  10. "Cause of action" means every fact which would be necessary for the plaintiff to prove, if traversed, in order to support his right to judgment. It consists of a bundle of material facts, which are necessary for the plaintiff to prove in order to entitle him to the reliefs claimed in the suit.
  11. While considering an application under Order VII Rule 11 CPC what is required to be decided is whether the plaint discloses a real cause of action, or something purely illusory.
  12. Law cannot permit clever drafting which creates illusions of a cause of action. What is required is that a clear right must be made out in the plaint. I.T.C. Ltd. v. Debt Recovery Appellate Tribunal, (1998) 2 SCC 170.
  13. If, however, by clever drafting of the plaint, it has created the illusion of a cause of action, it should be nipped in the bud, so that bogus litigation will end at the earliest stage.  Madanuri Sri Ramachandra Murthy v. Syed Jalal.
  14. The Court must be vigilant against any camouflage or suppression, and determine whether the litigation is utterly vexatious, and an abuse of the process of the court. 

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

In facts of the case, the Court observed that the plaintiffs by clever drafting of the plaint, attempted to make out an illusory cause of action, and bring the suit within the period of limitation. It said that the Plaintiffs deliberately did not mention the date of the registered Sale Deed since it would make it evident that the suit was barred by limitation. Further, the court observed that non payment of a part of sale consideration is not a ground for cancellation of a registered Sale Deed.

The bench added that there was delay of over 5 and ½ years after the alleged cause of action arose in 2009, and therefore the suit was clearly barred by limitation as per Article 59 of the Limitation Act, 1963. Dismissing the appeal by imposing costs of Rs. 1 Lakh on appellant, the court observed that the conduct of the Plaintiffs in not taking recourse to legal action for over a period of 5 and ½ years from the execution of the Sale Deed in 2009, for payment of the balance sale consideration, also reflects that the institution of the present suit is an after-thought.

Case no.: CIVIL APPEAL NO. 9519 OF 2019
Coram: Justices L. Nageswara Rao and Indu Malhotra

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