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2024 DIGILAW 898 (SC)

Bhagya Estate Ventures Pvt. Ltd. v. Narne Estates Pvt. Ltd.

2024-09-11

PAMIDIGHANTAM SRI NARASIMHA, PRASANNA B.VARALE, VIKRAM NATH

body2024
ORDER : 1. The appellant is the plaintiff in a suit for specific performance of contract. The respondents are the defendants. After exchange of pleadings, the Trial Court framed the issues. The parties, both the plaintiffs and the defendants, led their evidence, and the suit was ripe for hearing the final arguments. At this stage, which was after about 10 years of the institution of the suit, the defendant-respondents filed an application under Order VII Rule 11 of the Code of Civil Procedure, 1908 1 [CPC] for rejection of the plaint under clauses (a) and (d) thereof. The appellants filed objections to the same, the Trial Court by order dated 14.12.2018 rejected the said application. Aggrieved by the same, the defendant-respondents preferred Revision before the High Court which has since been allowed by the impugned order dated 07.01.2020. As a result of the same, the plaint of the plaintiff-appellant stood rejected. 2. Aggrieved by the impugned order dated 07.01.2020, the plaintiff is in appeal. 3. It would be worthwhile to mention here that as a consequence of the rejection of the plaint by the High Court vide order dated 07.01.2020, the High Court dismissed four Revisions filed by the defendant-respondents before the High Court being CRP Nos. 2800, 2861, 4195 and 4206 of 2018 as infructuous vide order dated 23.07.2021. Aggrieved by the impugned order dated 07.01.2020, the plaintiff is in appeal. 4. The Trial Court while rejecting the application under Order VII Rule 11 CPC had majorly taken into consideration the conduct of the defendants and had recorded specific findings that there was a deliberate attempt on the part of the defendants to delay the disposal of the suit. The Trial Court had also noticed that the application under Order VII Rule 11 CPC could be entertained at any stage of the suit but despite the same, it was of the view that in view of the fact that the parties had already led their evidence and the suit was at the stage of hearing of final arguments, there was no justification to entertain the application under Order VII Rule 11 CPC. 5. 5. The High Court was of the view that the Trial Court had dismissed the application on the ground that it had been filed at the stage of final arguments in the suit and had not decided the said application on merits as to whether the plaint disclosed any cause of action or not. In such circumstances, the remedy open to the High Court was to remit the matter back to the Trial Court for consideration on merits, instead, it proceeded to allow the application under Order VII Rule 11 CPC and reject the plaint. 6. Since the High Court has held that the dismissal of respondents’ application goes against the law and that it is provided under the relevant provision that the application can be filed at any stage of the trial, even at the stage of arguments, it is imperative that we look at the provision as provided under the CPC: “ORDER VII Plaint 11. Rejection of plaint - The plaint shall be rejected in the following cases: (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 returned 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 to comply with the provisions of rule 9: Provided that the time fixed by the Court for the correction of the valuation or supplying of the requisite stamp-paper shall not be extended unless the Court, for reasons to be recorded, is satisfied that the plaintiff was prevented by any cause of an exceptional nature from correcting the valuation or supplying the requisite stamp-paper, as the case may be, within the time fixed by the Court and that refusal to extend such time would cause grave injustice to the plaintiff.” 7. The only issue which arises for consideration before this Court is the stage at which an application seeking rejection of plaint can be filed and entertained. The provision in itself does not specify any stage or limitation regarding the filing of the application, but the law has been laid down by this Court in Saleem Bhai and Others v. State of Maharashtra and Others, (2003) 1 SCC 557 that an application under Order VII Rule 11, CPC can be filed at any stage - before registering the plaint or after the issuance of summons to the defendants or at any time before the conclusion of the trial. This has been reiterated by this Court in several cases over the course of time. 8. Even though the above position of law is well settled but considering the increase in frivolous litigation, it becomes necessary for us to delve into and reiterate the purpose of this provision, in order to understand and test whether this position of law fulfills the objective of Order VII Rule 11 and serves the purpose of justice. This Court had delved into the purpose behind the idea of rejection of plaint/petition in the case of Azhar Hussain v. Rajiv Gandhi, 1986 (Supp) SCC 315 and observed that: “12. Learned counsel for the petitioner has next argued that in any event the powers to reject an election petition summarily under the provisions of the Code of Civil Procedure should not be exercised at the threshold. In substance, the argument is that the court must proceed with the trial, record the evidence, and only after the trial of the election petition is concluded that the powers under the Code of Civil Procedure for dealing appropriately with the defective petition which does not disclose cause of action should be exercised. With respect to the learned counsel, it is an argument which it is difficult to comprehend. The whole purpose of conferment of such powers is to ensure that a litigation which is meaningless and bound to prove abortive should not be permitted to occupy the time of the court and exercise the mind of the respondent. The sword of Damocles need not be kept hanging over his head unnecessarily without point or purpose. Even in an ordinary civil litigation the court readily exercises the power to reject a plaint if it does not disclose any cause of action. The sword of Damocles need not be kept hanging over his head unnecessarily without point or purpose. Even in an ordinary civil litigation the court readily exercises the power to reject a plaint if it does not disclose any cause of action. Or the power to direct the concerned party to strike out unnecessary, scandalous, frivolous or vexatious parts of the pleadings. Or such pleadings which are likely to cause embarrassment or delay the fair trial of the action or which is otherwise an abuse of the process of law. An order directing a party to strike out a part of the pleading would result in the termination of the case arising in the context of the said pleading. The courts in exercise of the powers under the Code of Civil Procedure can also treat any point going to the root of the matter such as one pertaining to jurisdiction or maintainability as a preliminary point and can dismiss a suit without proceeding to record evidence and hear elaborate arguments in the context of such evidence, if the court is satisfied that the action would terminate in view of the merits of the preliminary point of objection. The contention that even if the election petition is liable to be dismissed ultimately it should be so dismissed only after recording evidence is a thoroughly misconceived and untenable argument. The powers in this behalf are meant to be exercised to serve the purpose for which the same have been conferred on the competent court so that the litigation comes to an end at the earliest and the concerned litigants are relieved of the psychological burden of the litigation so as to be free to follow their ordinary pursuits and discharge their duties. And so that they can adjust their affairs on the footing that the litigation will not make demands on their time or resources, will not impede their future work, and they are free to undertake and fulfil other commitments. Such being the position in regard to matter pertaining to ordinary civil litigation, there is greater reason for taking the same view in regard to matters pertaining to elections. Such being the position in regard to matter pertaining to ordinary civil litigation, there is greater reason for taking the same view in regard to matters pertaining to elections. So long as the sword of Damocles of the election petition remains hanging an elected member of the legislature would not feel sufficiently free to devote his whole-hearted attention to matters of public importance which clamour for his attention in his capacity as an elected representative of the concerned constituency. The time and attention demanded by his elected office will have to be diverted to matters pertaining to the contest of the election petition. Instead of being engaged in a campaign to relieve the distress of the people in general and of the residents of his constituency who voted him into office, and instead of resolving their problems, he would be engaged in campaign to establish that he has in fact been duly elected. Instead of discharging his functions as the elected representative of the people, he will be engaged in a struggle to establish that he is indeed such a representative, notwithstanding the fact that he has in fact won the verdict and the confidence of the electorate at the polls. He will have not only to win the vote of the people but also to win the vote of the court in a long drawn out litigation before he can wholeheartedly engage himself in discharging the trust reposed in him by the electorate. The pendency of the election petition would also act as hindrance if he be entrusted with some public office in his elected capacity. He may even have occasion to deal with the representatives of foreign powers who may wonder whether he will eventually succeed and hesitate to deal with him. The fact that an election petition calling into question his election is pending may, in a given case, act as a psychological fetter and may not permit him to act with full freedom. Even if he is made of stern mettle, the constraint introduced by the pendency of an election petition may have some impact on his subconscious mind without his ever being or becoming aware of it. Even if he is made of stern mettle, the constraint introduced by the pendency of an election petition may have some impact on his subconscious mind without his ever being or becoming aware of it. Under the circumstances, there is greater reason why in a democratic set-up, in regard to a matter pertaining to an elected representative of the people which is likely to inhibit him in the discharge of his duties towards the nation, the controversy is set at rest at the earliest, if the facts of the case and the law so warrant. Since the court has the power to act at the threshold the power must be exercised at the threshold itself in case the court is satisfied that it is a fit case for the exercise of such power and that exercise of such powers is warranted under the relevant provisions of law. To wind up the dialogue, to contend that the powers to dismiss or reject an election petition or pass appropriate orders should not be exercised except at the stage of final judgment after recording the evidence even if the facts of the case warrant exercise of such powers, at the threshold, is to contend that the legislature conferred these powers without point or purpose, and we must close our mental eye to the presence of the powers which should be treated as non-existent. The court cannot accede to such a proposition. The submission urged by the learned counsel for the petitioner in this behalf must therefore be firmly repelled.” (Emphasis is mine) 9. Even though the above judgment dealt with an election petition, however, the purpose behind the law regarding rejection of a petition or a plaint remains uniform. This purpose has been discussed and laid out in another judgment of this Court in T. Arivandandam v. T.V. Satyapal, (1977) 4 SCC 467 wherein it was observed that: “5. We have not the slightest hesitation in condemning the petitioner for the gross abuse of the process of the court repeatedly and unrepentently resorted to. From the statement of the facts found in the judgment of the High Court, it is perfectly plain that the suit now pending before the First Munsif's Court, Bangalore, is a flagrant misuse of the mercies of the law in receiving plaints. From the statement of the facts found in the judgment of the High Court, it is perfectly plain that the suit now pending before the First Munsif's Court, Bangalore, is a flagrant misuse of the mercies of the law in receiving plaints. The learned Munsif must remember that if on a meaningful - not formal - reading of the plaint it is manifestly vexatious, and meritless, in the sense of not disclosing a clear right to sue, he should exercise his power under Order 7, Rule 11 CPC taking care to see that the ground mentioned therein is fulfilled. And, if clever drafting has created the illusion of a cause of action, nip it in the bud at the first hearing by examining the party searchingly under Order 10, CPC. An activist Judge is the answer to irresponsible law suits. The trial courts would insist imperatively on examining the party at the first hearing so that bogus litigation can be shot down at the earliest stage. The Penal Code is also resourceful enough to meet such men, (Cr. XI) and must be triggered against them.” (Emphasis is mine) 10. Thus, the principle underlying the provisions for rejection of plaint/petition is that the courts must attempt to recognise and reject a plaint at the outset which is defective for any of the reasons enumerated in Order VII Rule 11 CPC or any similar provision. The aim while undertaking such an exercise remains to put a nip in the bud to litigation that is otherwise lacking the essential ingredients of a proper plaint. 11. This Court in another judgment dealing with the same issue also made an observation regarding the subsistence of the right to seek rejection of the plaint. In Samar Singh v. Kedar Nath, 1987 Supp SCC 663 this Court was of the opinion that: “7........Normally, when a suit is instituted the court is to satisfy itself that the suit is maintainable and it disclosed cause of action and only thereafter the court may issue summons to the defendants but merely because the summons are issued, the defendants' right to raise preliminary objection for rejection of the plaint on the ground that it disclosed no cause of action is not affected. If a plaint or an election petition does not disclose any cause of action, it does not stand to reason as to why the defendant or the respondent should incur costs and waste public time in producing evidence when the proceedings can be disposed of on the preliminary objection.....” 12. The above position holds good as we are not of the opinion that issuance of summons shall foreclose the right of the defendant to seek rejection of plaint; but the focal issue for consideration is that till when and for how long can this right of the defendant survive? 13. It is amply clear that the purpose behind such a provision is to ensure that the plaints or petitions which are defective, for any of the reasons enumerated, shall not be allowed to proceed further and shall be put to an end before they progress to an advanced stage. When such is the purpose, we fail to understand as to how an application for rejection of a plaint can be entertained at a stage where written submission has already been filed, evidence has been led and the trial has substantially reached the stage of final arguments, as in the present case. This would rather go completely against the objective of the provision and would effectively not serve the purpose which it intended to. 14. Moreover, when the proceedings have reached such an advanced stage of trial and the Court has gone through the merits of the case, it is fair to presume that the Court has already applied its mind to the substantive submissions and cannot make a prima facie conclusion about a plaint being improper at the outset or not. Also, it is a settled position of law that when the court is considering an application under Order VII Rule 11, it must only peruse and consider the averments in the plaint to check whether the plaint is defective for any of the reasons provided under the rule or is a proper plaint. Also, it is a settled position of law that when the court is considering an application under Order VII Rule 11, it must only peruse and consider the averments in the plaint to check whether the plaint is defective for any of the reasons provided under the rule or is a proper plaint. Since the plaint is the only material to be considered while deciding an application seeking rejection of plaint, then in a case where plaint has been registered, written submission has been filed, evidence has been recorded, and the parties are ready for final arguments, it is only natural that some form of bias or opinion regarding the merits of the case would crop up in the mind of the court. In such a scenario, looking at the plaint in isolation and deciding the rejection application based solely on prima facie reading of the plaint would not be possible. At this point, the trial has rather fructified to a stage where the dismissal of a suit on merits is a more appropriate course of action instead of rejecting a plaint at the outset which should have been done at a preliminary stage. 15. It is already a clarified position of law that without disposing of an application under Order VII Rule 11, CPC, the court cannot proceed with the trial. When this is the position of law and the purpose of the provision is also settled, then, we see no reason for the right of the defendant to raise such a plea at a far belated stage such as final arguments or nearing conclusion of the trial. Allowing such pleas to be raised after the trial has proceeded so far would not only defeat the intent of the provision but would also go against the principle of equity and would lead to wastage of the court resources. Additionally, allowing such rights to survive till eternity only act as a catalyst for the defendant to misuse the provision to prolong or delay the trial and abuse the process of law. 16. Additionally, allowing such rights to survive till eternity only act as a catalyst for the defendant to misuse the provision to prolong or delay the trial and abuse the process of law. 16. Having considered the facts and circumstances of the present case, and in particular, having noticed the conduct of the defendant-respondents as recorded by the Trial Court and also the fact that full trial had already been concluded as both the parties had already closed their evidence and the matter was ripe for final arguments, consideration of the application under Order VII Rule 11 was rightly declined by the Trial Court. The High Court erred in allowing the same and rejecting the plaint. 17. Accordingly, we allow the appeal, set aside the impugned order and further direct that the trial shall proceed from the stage where it was before the rejection of the plaint. Since the suit is pending for almost 16 years, the Trial Court is directed to decide the same within a period of three months from the date of a certified copy of the order is filed before the Trial Court, and it goes without saying that both the parties shall extend full cooperation in disposal of the suit. 18. As the impugned order dated 07.01.2020 has been set aside and the suit is now to proceed, the four Civil Revisions which were dismissed as infructuous on 03.07.2021, details of which have already been mentioned above on account of the impugned order dated 07.01.2020 can now be heard by the High Court. It would be open for the parties to apply before the High Court by an appropriate application annexing copy of this order to revive the Civil Revisions and the said applications would be considered by the High Court on their own merits.