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Court Can Suo Motu Reject A Plaint Under Order VII Rule 11 CPC : Supreme Court

Ashok KM
17 Aug 2022 9:53 AM GMT
Court Can Suo Motu Reject A Plaint Under Order VII Rule 11 CPC : Supreme Court
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The Supreme Court observed that a Court has power to reject a plaint suo motu invoking its powers under Order VII Rule 11 of the Code of Civil Procedure, 1908.

The Court has to hear the plaintiff before it invokes this power, the bench of Justices KM Joseph and Hrishikesh Roy added, noticing that Order VII Rule 11 does not provide that the court is to discharge its duty of rejecting the plaint only on an application.

The bench made these observations in its judgment holding that Section 12A of the the Commercial Courts Act, 2015 is mandatory and that any suit instituted violating the mandate of Section 12A must be visited with rejection of the plaint under Order VII Rule 11. Section 12A deals with pre-Institution Mediation and Settlement. It provides that 'a suit, which does not contemplate any urgent interim relief under this Act, shall not be instituted unless the plaintiff exhausts the remedy of pre institution mediation in accordance with such manner and procedure as may be prescribed by rules made by the Central Government.'

"In a clear case, where on allegations in the suit, it is found that the suit is barred by any law, as would be the case, where the plaintiff in a suit under the Act does not plead circumstances to take his case out of the requirement of Section 12A, the plaint should be rejected without issuing summons", the court held in this context.

One of the issues which arose in this case was whether the power under Order VII Rule 11 is to be exercised only on an application by the defendant and the stage at which it can be exercised?

In this regard, the bench noted the observations made in Patasibai and Others v. Ratanlal (1990) 2 SCC 42. It observed:

(A) A suit is commenced by presentation of a plaint. The date of the presentation in terms of Section 3(2) of the Limitation Act is the date of presentation for the purpose of the said Act. By virtue of Order IV Rule 1 (3), institution of the plaint, however, is complete only when the plaint is in conformity with the requirement of Order VI and Order VII.

(B) When the court decides the question as to issue of summons under Order V Rule 1, what the court must consider is whether a suit has been duly instituted.

(C) Order VII Rule 11 does not provide that the court is to discharge its duty of rejecting the plaint only on an application. Order VII Rule 11 is, in fact, silent about any such requirement. Since summon is to be issued in a duly instituted suit, in a case where the plaint is barred under Order VII Rule 11(d), the stage begins at that time when the court can reject the plaint under Order VII Rule 11. No doubt it would take a clear case where the court is satisfied. The Court has to hear the plaintiff before it invokes its power besides giving reasons under Order VII Rule 12. In a clear case, where on allegations in the suit, it is found that the suit is barred by any law, as would be the case, where the plaintiff in a suit under the Act does not plead circumstances to take his case out of the requirement of Section 12A, the plaint should be rejected without issuing summons. Undoubtedly, on issuing summons it will be always open to the defendant to make an application as well under Order VII Rule 11. In other words, the power under Order VII Rule 11 is available to the court to be exercised suo motu.

The court also referred to the judgment in Madiraju Venkata Ramana Raju v. Peddireddigari Ramachandra Reddy (2018) 14 SCC 1.


Case details

Patil Automation Private Limited vs Rakheja Engineers Private Limited | 2022 LiveLaw (SC) 678 | 17 August 2022 | SLP(C) 14697 of 2021 | Justices KM Joseph and Hrishikesh Roy

Counsel: Sr. Adv Sanjeev Anand , Adv Ayush Negi, Adv Sharath Chandran, Adv Saket Sikri

Headnotes

Commercial Courts Act, 2015 ; Section 12A - Pre-institution mediation declared to be mandatory- any suit instituted violating the mandate of Section 12A must be visited with rejection of the plaint under Order VII Rule 11. This power can be exercised even suo moto by the court- Declaration with effect from 22.08.2022 (Paragraph 84)

Commercial Courts Act, 2015- Pre-institution mediation - Section 12A not a procedural provision- Exhausting pre-institution mediation by the plaintiff, with all the benefits that may accrue to the parties and, more importantly, the justice delivery system as a whole, would make Section 12A not a mere procedural provision. The design and scope of the Act, as amended in 2018, by which Section 12A was inserted, would make it clear that Parliament intended to give it a mandatory flavour (Para 43)

Commercial Courts Act, 2015- Mediation lightens the load of the judges- Section 12A contemplated only for a class of suits not requiring urgent relief- suits which contemplate urgent interim relief, the Law-giver has carefully vouch-safed immediate access to justice as contemplated ordinarily through the courts. The carving out of a class of suits and selecting them for compulsory mediation, harmonises with the attainment of the object of the law. The load on the Judges is lightened. They can concentrate on matters where urgent interim relief is contemplated and, on other matters, which already crowd their dockets (Para 54)

Code of Civil Procedure, 1908 ; Order VII Rule 11 - Order VII Rule 11 does not provide that the court is to discharge its duty of rejecting the plaint only on an application - The power under Order VII Rule 11 is available to the court to be exercised suo motu - It would take a clear case where the court is satisfied. The Court has to hear the plaintiff before it invokes its power besides giving reasons under Order VII Rule 12. (Para 68)

Commercial Courts Act, 2015 ; Section 12A - Code of Civil Procedure, 1908 ; Order VII Rule 11 - In a clear case, where on allegations in the suit, it is found that the suit is barred by any law, as would be the case, where the plaintiff in a suit under the Act does not plead circumstances to take his case out of the requirement of Section 12A, the plaint should be rejected without issuing summons. (Para 68)

Mediation - Concerns regarding dearth of trained and skilled mediators and lack of infrastructure - Knowledge of the laws, which are the subject matter of the suits under the Act, is indispensable for a Mediator to effectively discharge his duties. His role is supreme and it is largely shaped by his own knowledge of the law that governs commercial cases - The effective participation of the bar which must be adequately remunerated for its service will assist in mediation evolving. The concerned High Court may also undertake periodic exercise to establish a panel of trained mediators in District and Taluka levels as per need. (Para 74)

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