Allowed

Uppala Sudhakar Rao v. Anumalasetty Lakshmi Kumari

Andhra Pradesh HC16 Dec 2022CRP/1252/2021

Case brief

AI extract

What is this about?

This High Court allowed a civil revision petition set aside an interlocutory order dismissing an application to reject a plaint. The court held that the plaintiff's claim regarding limitation was erroneous based on the plaint's failure to specify when the debt became due, violating the principles of Order VII Rule 11 CPC.

What did the court decide?

Civil Revision Petition allowed; Impugned order dated 09.04.2021 in I.A.No.304 of 2019 set aside; Prayers for rejection of plaint allowed.

Uppala Sudhakar Rao Vs Anumalasetty… — Contract and Commercial Disputes | Andhra Pradesh HC (2022)

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THE HON’BLE Ms. JUSTICE B. S. BHANUMATHI

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Civil Revision Petition No.1252 of 2021

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ORDER:

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This Civil Revision Petition is filed under Article 227 of the Constitution of India against the orders, dated 09.04.2021, of the learned Principal District Judge, Nellore, dismissing the application in I.A.No.304 of 2019 in O.S.No.142 of 2016 filed by the defendants 2 to 4 under Order VII Rule 11 (a) & (d) CPC requesting to reject the plaint.

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2. Heard Sri M. Chalapati Rao , learned counsel for the revision petitioners/defendants 2 to 4 and Sri Pavuluri Sreenivasulu , learned counsel for the respondent/plaintiff.

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3. The plaintiff filed the suit initially against the sole (1^st ) defendant for recovery of Rs.31,16,079/- with subsequent interest on Rs.20,99,784/- (rate of interest is not stated though calculated @ 18% per annum from the date of cheque, i.e., 03.04.2013 to 11.12.2015, the date before filing of the suit.)

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The case of the plaintiff is that the defendant is the brother of the plaintiff and doing business and used to borrow huge amounts from the plaintiff agreeing to repay with interest and thus he fell due for a sum of Rs.20,99,784/- as on 30.11.2012. In discharge of the said amount with interest, the defendant got (sic.) issued an

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account payee cheque bearing No.557695 for Rs.20,99,784/-, dt.14.12.2012 drawn on the State Bank of Hyderabad, Nellore Branch, Nellore, in favour of the plaintiff, but, on its presentation in HDFC Bank, the cheque was dishonoured on 05.03.2013 as ‘account closed’. The plaintiff got issued a notice, dt.03.04.2013 to the defendant and he got issued a reply notice to the plaintiff. The plaintiff filed C.C.1281 of 2014 before the Additional Judicial First Class Magistrate, Kavali against the defendant under Section 138 of the Negotiable Instruments Act, 1881, (later renumbered as transferred to another Court). Since the defendant did not pay the amount under the cheque, the suit was filed. The cause of action pleaded is that the defendant used to borrow since the year 2006.

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4 . The 1^st defendant is the husband of the 2^nd defendant and the father of the 3^rd and 4^th defendants. The 1^st defendant died on 12.06.2018 and on his death, defendants 2 to 4 are added as legal heirs.

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5 . In the light of the pleadings, the defendants 2 to 4 filed the petition in I.A.No.304 of 2019 under Order VII Rule 11 CPC to reject the plaint. They contend that Article 113 of the Limitation Act is quoted to sustain the admissibility of the suit. The period of limitation is three years which commences when the right to sue accrues. The right to sue does not depend on the date of issuance

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of cheque, when the date of alleged original borrowing was on 01.04.2008. Article 113 of the Limitation Act is not applicable. Section 25(3) of the Indian Contract Act is inapplicable to the facts of this case. Section 80 of the Negotiable Instruments Act does not come into play. Sections 18 and 19 of the Negotiable Instruments Act do not apply to save the suit from being barred bny limitation as the alleged issuance of cheque was not within 3 years from the year 2006 since when the defendant said to have borrowed. It is further stated that the plaintiff deliberately withheld filing of the certified copy of the judgment of acquittal in C.C.No.1281 of 2014.

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6 . The respondent/plaintiff filed counter denying the petition averments. It is further stated that during the pendency of the calendar case, the 1^st defendant died in a train accident. The allegations mentioned in the petition are stated to be baseless and the petition is filed only to harass the plaintiff. It is claimed that the suit is not barred by limitation and that there are no grounds to allow the petition and the petition is liable to be dismissed.

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7. At the time of hearing of the interlocutory application before

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the trial Court, no oral and documentary evidence was adduced. The trial Court framed the following points for consideration:

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Whether the plaint filed without cause of action and liable to be rejected or not.?

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Whether the suit is barred by limitation and dishonoured cheques come under the purview of the sections 19 to 20 of the Limitation Act 1963 or not?

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Whether the Article 113 of the Limitation Act applies or not?

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The trial Court observed that, having regard to the averments in the plaint, dismissed the application of the defendants holding that the debt relates to ‘30.11.2012’ and the cheque relates to ‘14.12.2012’, which is within three years from the date of debt and the plaint reveals cause of action for filing the suit.

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8 . Having been aggrieved by the said order, the defendants preferred the present revision reiterating the contentions which are referred to supra. Further, it was urged that the trial Court failed to note that under Order VII Rule 11(a) & (d) CPC, the plaint shall be rejected when it did not disclose a cause of action or where the suit appears from the plaint averments to be barred by limitation.

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9 . At the outset, learned counsel for the respondent/plaintiff submitted that there are batch of cases disposed of by the trial Court in two sets on two different dates and this set of three cases were dismissed but the other two were allowed on the subsequent date and against the said orders, the respondent has already taken steps to file appeal, but the same has not fructified so far and requested to dispose of these revision

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petitions along with those proposed appeals. However, this Court declines the said request, as each case is independently disposed of, and till now, no effective step has been taken, except raising the said issue when these matters are taken up for hearing. As such, his contention that the order passed in these revisions may have influence on the result of other appeals that may be filed is not acceptable, and therefore, the revision petition is taken up for hearing & disposal.

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10 . For the purpose of better appreciation, relevant portion of Order VII Rule 11 of the Code is excerpted herein below:

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“ 11. Rejection of plaint .— The plaint shall be rejected in

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the following cases:—(a) where it does not disclose a cause of action;

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(b) …. …. …. ….

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

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(e) …. …. …. ….

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(f) …. …. …. …… …………………. ………………………..”

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A perusal of the aforesaid provision would make it clear that a plaint is liable for rejection, if the suit is barred by any law or where it does not disclose a cause of action.

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11 . To examine the question as to whether the plaint is liable to be rejected or not, it is necessary to examine the plaint averments independently uninfluenced by the defence, because, while considering an application under Order VII Rule 11 CPC, the Court has to examine the averments in the plaint and the documents filed along with it only.

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12 . In United Insurance Co. v. C. R. Ramanatham,¹ this Court

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in paragraph 10 observed as under:

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“Under Order VII Rule 11 (d) a plaint must be rejected only if the averments therein explicitly disclose that the suit was barred by the provisions of any law, but not otherwise. The Court had no power to throw out the suit by rejecting the plaint at the threshold stage by examining and interpreting the provisions of law on which the suit is found. Neither the express language of clause (d) of Rule 11 nor its intendment clothes the Court with such a power. The words “where the suit appears to be barred by any law” are qualified by “the statement in the plaint”. What is explicitly mentioned in the plaint, therefore, must alone be the basis for the exercise of power under Order VII Rule 11 (d), but not the conclusions that may be interpretatively drawn on an examination of the statutory provisions alluded to in the plaint. Where there was no such explicit statement in the plaint the question whether there was any legal barricade to the suit must be tried as an issue at the appropriate stage and that by this procedure alone the interests of both the parties to the suit could be safeguarded.”

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1 1989 (1) ALT 190

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13 . The trial Court held in the operative portion of the order impugned as follows:

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“It is settled law that the plaint averments shall be the base to consider the application filed under Order VII Rule 11 C.P.C. The plain reading of the plaint itself reveals that the debt relates to 30.11.2012 and the cheque relates to 14.12.2012, which is within three years from the date of debt, and plaint reveals cause of action for filing the suit.”

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14 . Section 3 of the Limitation Act casts an obligation on Court to examine whether the suit, application and appeal is within the period limitation, irrespective of any defence taken in this regard. As the plaintiff says cause of issue of cheque is past liability for debts incurred since the year 2006, the liability supporting the cheque spreads over period commencing from 2006 long before issue of cheque in the year 2016. It is not known how much of such liability is within 3 years of issue of cheque to state that fresh period of limitation starts from the date of the cheque in respect of such amount of debt. Since period of limitation is counted by years, days/dates are important. Since no amount was paid under the cheque, it cannot even be considered as part payment under Section 19 of the Limitation Act and that too, it was not shown to be issued within a period three years from the date of the debt becomes due. Nowhere the plaintiff stated when the debt became due.

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Similarly, it cannot even be regarded as acknowledgment of debt within the period as required under Section 18 of the Limitation Act. In case of dishonor of the cheque, the original debt remains due for the recovery of which the period of limitation cannot be extended as discussed. Therefore, the above noted finding of the trial Court that the cause of action for the suit is within three years is erroneous.

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15 . Further, learned counsel for the respondent submitted that this Court, while exercising authority, under Article 227 of the constitution of India, cannot grant such relief.

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16 . In E. Peddi Reddy and Ors. Vs. State of Andhra Pradesh

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and Ors. ,² a Division Bench of this Court while dealing with Article 227 of the Constitution of India referred the decision of the Supreme Court and observed as follows:

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“16. In Surya Dev Rai v. Ram Chander Rai , the Supreme Court considered the impact of the amendment made in Section 115 C.P.C. on the power and jurisdiction of the High Court to entertain petitions under Articles 226 and/or 227 of the Constitution and observed:

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Article 227 of the Constitution confers on every High Court the power of superintendence over all Courts and Tribunals throughout the territories in relation to which it exercises jurisdiction excepting any Court or Tribunal constituted by or under any law relating to the armed forces. Without

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2 MANU/AP/1053/2007

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prejudice to the generality of such power the High Court has been conferred with certain specific powers by Clauses (2) and (3) of Article 227 with which we are not concerned here at. It is well settled that the power of superintendence so conferred on the High Court is administrative as well as judicial, and is capable of being invoked at the instance of any person aggrieved or may even be exercised suo motu. The paramount consideration behind vesting such wide power of superintendence in the High Court is paving the path of justice and removing any obstacles therein. The power under Article 227 is wider than the one conferred on the High Court by Article 226 in the sense that the power of superintendence is not subject to those technicalities of procedure or traditional fetters which are to be found in certiorari jurisdiction. Else the parameters invoking the exercise of power are almost similar.

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17 . Thus, the argument of the learned counsel cannot be accepted as when there is an apparent error on the face of the record, while exercising jurisdiction under Article 227 of the Constitution of India, an appropriate order can be passed.

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18 . In the result, the Civil Revision Petition is allowed by setting aside the order, dated 09.04.2021, passed in I.A.No.304 of 2019 is set aside, insofar as the result, while confirming the findings therein, and the petition in I.A.No.304 of 2019 is allowed, as prayed for.

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There shall be no order as to costs.

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Miscellaneous petitions pending, if any, shall stand closed.

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B. S. BHANUMATHI, J

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RAR