Appeal against rejection of plaint under Order VII Rule 11 CPC. Court held plaint not time-barred on face and declined to extend Rule 3-A CPC analogously to consumer forum orders. Appeal dismissed.
Appeal dismissed; interim stay extended for six weeks.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
apeal472
1
ssp
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
APPEAL NO.472 OF 2014 IN
NOTICE OF MOTION NO.31 OF 2013 IN
SUIT NO.2894 OF 2011.
Bhagwanji Kanji Mistry
and another...Appellants
vs.
New Purshottam Nagar Co-op
Housing Society Limited and others...Respondents
Mr.Ravi Kadam, Sr.Advocate a/w Dr. Birendra Saraf
a/w Ms.Pooja Kshirsagar i/b I.C. Legal for the
appellants
Mr. V.A.Thorat, Sr.Advocate a/w Mr. Pravin
Samdani,Sr. Advocate a/w Mr. Niranjan Waghela i/b
M/s Pandya & Co for the respondent no.1
Mr.Gaurav Joshi, Sr.Advocate i/b Mr.Aditya Chitale
for the respondent no.5
CORAM : A.S.OKA, & P.D.NAIK,JJ.
DATE : APRIL 4 & 5, 2016
ORAL JUDGMENT: (PER A.S.OKA,J.)
1The submissions of the learned counsel for the
parties were heard on the earlier date. Today, the
Appeal is fixed for dictation of the Judgment.
2By this Appeal, the challenge is to the
Judgment and Order dated 6th March 2014 passed by the
learned Single Judge. The present appeal is
preferred by the original defendant Nos.1 and 2. A
Notice of Motion was taken out by the defendant No.2
under Rule 11 of Order VII of the Code of Civil
Procedure,1908 (for short `the said Code'). The
2 apeal472
prayer made in the Notice of Motion was for
rejection of the plaint. With a view to appreciate
the submissions made by the learned senior counsel
representing the contesting parties, it will be
necessary to make a reference to the substantive
prayers in the plaint. The prayers containing
substantive reliefs are prayers (a) to (k) which
read thus:
“(a)That this Hon'ble Court do declare that
the Consent Terms dated 18.8.2006 being
Exhibit `N' hereto null and void ab initio,
of no legal effect and conferring no rights
in favour of the Defendant Nos.1 to 3;
(b) That this Hon'ble Court do declare that
the Consent Terms dated 18.8.2006, being
Exhibit `N' hereto terminated, of no legal
effect and confer no rights in favour of
Defendant Nos.1 to 3;
(c)That the Defendants be ordered and
directed by this Hon'ble Court to deliver up
for cancellation the Consent Terms dated
18.8.2006, being Exhibit `N' hereto;
(d) That this Hon'ble Court do declare that
the Order dated 24.8.2006 passed by the
Hon'ble Consumer Disputes Redressal Forum,
South Mumbai District, Mumbai, being Exhibit
`O' hereto, a nullity and void, of no legal
effect and confer no rights in favour of
Defendant Nos.1 to 3;
(e)That this Hon'ble Court do declare that
the Plaintiff is entitled for conveyance of
3 apeal472
the property, described at Exhibit `B'
hereto, from Defendant Nos.1 to 3;
(f)That this Hon'ble Court do direct
Defendant Nos.1 to 3 to convey the property,
described at Exhibit `B' hereto to the
plaintiffs;
(g)That this Hon'ble Court do declare that
Defendant Nos.1 to 3 are not entitled to
develop the property described at Exhibit `B'
hereto;
(h)That this Hon'ble Court do declare that
theSanctionedplan,Intimationof
Disapproval(I.O.D.),Commencement
Certificate and pursuant thereto further
sanctions,permissionsandapprovals
corresponding to I.O.D. u/no. CE/1781/WS …
dated 2nd June 2004 cancelled;
(i)That this Hon'ble Court do declare that
Defendant Nos.1 to 3 have no right to utilize
the FSI, additional FSI available by way of
TDR or by any other means, in respect of the
land component area corresponding to the
construction of the Plaintiff's building of
Ground floor plus 7 upper floors, i.e a built
up area of about 2163 sq meters or make
changes in the common areas and facilities,
including the compound, parking areas, the
children's play ground area and Recretional
Ground;
(j)That this Hon'ble Court do direct
Defendant No.4 not to grant, sanction, permit
or approve any proposal to develop or change
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4
the layout of the property, described at
Exhibit `B' hereto, in any way whatsoever,
without the written permission of the
plaintiff;
(k)That this Hon'ble Court by a permanent
order and injunction do restrain Defendant
Nos.1 to 3 their managers, contractors,
agents, workers and persons from in any
manner constructing on the property,
described at Exhibit `B' hereto.”
3 As the prayer made before the learned Single
Judge was a very limited prayer for rejection of the
plaint, it is not necessary to go into the various
factual details of the case in as much as for
considering the prayer for rejection of the plaint,
the defence of the defendants is not to be
considered and only the averments made in the plaint
and the documents forming part of the plaint are to
be looked into.
4The learned senior counsel appearing for the
appellants has raised various contentions. He
submits that the rejection of plaint was sought by
invoking clause (d) of Rule 11 of Order VII of the
said Code. His first submission is based on the
provisions of the Consumer Protection Act,1986 (for
short `the said Act of 1986'). He pointed out the
scheme of the provisions of the said Act of 1986.
He invited our attention to the remedies provided
under the said Act of 1986 and the scope of
jurisdiction of the various Authorities under the
5 apeal472
said Act of 1986. He would urge that a remedy is
provided under the said Act of 1986 for challenging
the orders of the District Forum before the State
Commission which is headed by a retired Judge of the
High Court. He pointed out that further remedy of a
revision is provided before the National Commission
which is headed by a person who is or has been a
Judge of the Supreme Court. He pointed out section
24 of the said Act of 1986 by pointing out that the
orders of the District Forum or the orders which
may be made by the State Commission or the National
Commission are final, if no appeal is preferred
against such orders. His submission is that in view
of the said provision of section 24 which confers
finality on the orders of the District Forum and in
view of the availability of remedies under the said
Act of 1986, there is an implied bar to the suit
filed by the plaintiffs. He submitted that the
challenge in the suit is to the consent terms
admittedly filed between the contesting parties
before the District Forum and the order passed
thereunder. He submitted that Rule 3-A of Order
XXIII of the said Code also creates a bar to the
present suit. He pointed out the material averments
made in the plaint as regards the cause of action.
He submitted that the case made out in the plaint is
that when on 26th July 2010, the defendant No.2 filed
an affidavit in reply to the execution application
filed by the plaintiffs that the plaintiffs realised
that a fraud was played upon them by the defendants.
He pointed out that the contention of the plaintiffs
seems to be that the fact that there
6 apeal472
was a restraint order passed by this Court in Suit
No.1906 of 2006 on 13th July 2006 was never brought
to the notice of the plaintiffs. He pointed out
that according to the case of the plaintiffs, they
became aware of the so called fraud on 26th July
2010. He invited our attention to the letter dated
2ndApril 2007 which is addressed to the
Chairman/Secretary of the plaintiffs by Shri Ashwin
Mehta in which there is a specific reference to the
injunction granted by this Court in Suit No.9906 of
2006. He pointed out that the said letter dated 2nd
April 2007 is annexed to the reply filed by the
opposite party before the said Consumer Disputes
Redressal Forum and that a copy of the said
affidavit in reply is annexed to the plaint. He
submitted that the said letter will clearly show
that as of April 2007, the plaintiffs had full
knowledge of the ad-interim injunction granted by
this Court in the aforesaid suit. He, would,
therefore submit that going by the contents of the
documents which are annexed to the plaint, the suit
for declaration filed in October 2010 on the face of
it was barred by limitation. He relied upon the
decision of the Division Bench of this Court dated
5th March 2012 in the case of Sachin C. Shah and
another Vs. Hemant D. Shah and others1. He
submitted that for the purpose of deciding an
application for the rejection of Plaint under Rule
11 of Order VII of the said Code, annexures to the
plaint are also required to be considered. On this
aspect , he also relied upon another decision of the
1 Appeal (L) No.747 of 2011 decided on 5-3-2012
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7
Apex Court in the case of Liverpool & London S.P. &
I Association Limited Vs. M.V.SEA Success I and
another2 and especially paragraph 142 which holds
that even the documents annexed to the plaint and
the documents filed along with the plaint are are
required to be considered for the purpose of
disposal of an application under Rule 11 of Order
VII of the said Code. In support of the plea of the
bar of limitation, he also invited our attention to
the averments made by the plaintiffs in interim
application filed before the Apex Court vide
No.29880 of 2015.
5He submitted that even assuming that there are
allegations fraud, the Authorities under the said
Act of 1986 have all the incidental and ancillary
powers under which they can go into the aspect of
alleged fraud. Moreover, he pointed out that in
view of the consent terms, the complaint filed by
the plaintiffs was disposed of but there is no order
passed in terms of the consent terms. He relied
upon the decision of the Apex Court in the case of
Chief Executive Officer and Vice Chairman, Gujarat
Maritime Board vs. Haji Daud Haji Harun Abu and
others3. He also invited our attention to the
decision of the Apex Court in the case of the United
India Insurance Co. Ltd. vs. Rajendra Singh and
others4. He urged that no Court or the Tribunal is
powerless to recall its own order If it is vitiated
2 (2004) 9 SCC 5143 (1996) 11 SCC 234 (2000) 3 SCC 5818 apeal472
by fraud or misrepresentation. He relied upon
another decision of the Apex Court in the case of
Income Tax Officer, Cannanore vs. M.K.Mohammed
Kunhi5 and in particular what is held by the Apex
Court in paragraphs 6 and 9. He submitted that the
Authorities under the said Act of 1986 can always
exercise powers to recall its orders. He also
relied upon the decision of the Division Bench of
this Court in the case of Arenja Industries Limited
and another Vs. Jagdish C. Shah and others6. He
relied upon the observations made in paragraph 12 of
the said decision. He also relied upon well known
decision of the Apex Court in the case of Dhulabhai
vs. State of Madhya Pradesh and another7. He also
relied upon the decision of the Apex Court in the
case of Nivedita Sharma vs. Cellular Operators
Association of India and others8 and submitted that
in view of the law laid down by the Apex Court, the
plaintiffs will have to exhaust the remedies under
the provisions of the said Act of 1986 and implied
bar of the jurisdiction of the Civil Court is
attracted. He submitted that if the plaint and the
annexures to the plaint are read as a whole, this is
a clear case where the power of rejection of the
Plaint ought to have been exercised as the suit was
time barred and even otherwise, the jurisdiction of
the Civil Court was barred.
6 The learned senior counsel representing the6 2011 (6) Bombay Cases Reporter 216AIR 1969 SC 78(2011) 14 SCC 3379 apeal472
original plaintiffs invited our attention to the
prayers made in the plaint. He pointed out that
only first four prayers are as regards consent terms
filed before the District Forum. He pointed out
that clauses (e) to (k) are essentially for
enforcing rights of the plaintiffs or its members
under the Maharashtra Ownership Flats (Regulation of
the Promotion of Construction, Sale, Management and
Transfer) Act,1963 (for short `the MOFA Act'). He
invited our attention to the decision of the learned
Single Judge of this Court in the case of Export
Credit Guarantee Corporation of India Limited vs.
Mr.T. Mathew and others9. He submitted that the
power under Rule 11 of Order VII cannot be exercised
for rejecting the plaint on the ground that the
same is barred by limitation. He relied upon the
finding recorded by the learned Single Judge and
urged that the learned Single Judge has rightly
followed the earlier decision of this Court in the
case of Western Coalfields Limited vs. Shri
Chandraprakash K. Khare10. He submitted that the
learned Single Judge has referred to the provisions
of Rule 13 of Order VII of the said Code which
provide that even if the plaint is rejected, a fresh
suit can be filed. He submitted that if it is
accepted that the plaint can be rejected in exercise
of power under Rule 11 of Order VII of the said Code
on the ground of bar of limitation, by virtue of
Rule 13 of Order VII, a fresh suit will have to be
entertained. He also invited our attention to the
9
2014 (4) All M.R. 135
10 2010 (2) All M.R. 713
10 apeal472
well known decision of the Apex Court in the case of
Mardia Chemicals Limited vs. Union of India and
others11. He submitted that in view of the fact
that the dispute before the District Forum was not
disposed of in terms of the consent terms, the Civil
Court can always go into the question whether the
consent terms are null and void.
7The learned senior counsel for the defendants
submitted that the learned Single Judge in the case
of Export Credit Guarantee Corporation of India
Limited has not correctly read Rule 13 of Order
VII. His submission is that Rule 13 of Order VII
does not mean that a fresh suit can be maintained
after rejection of the plaint on all grounds . He
submitted that in some of the cases covered by Rule
11 of Order VII, the plaint can be rejected for want
of technical compliance such as non payment of Court
fees or the failure to file the plaint in duplicate.
His submission is that the view taken by the learned
Single Judge does not lay down the correct
proposition of law.
8We have given careful consideration to the
submissions. We have already quoted the prayers
made in the plaint. As far as prayer clauses (a) to
(d) are concerned, the same are in relation to the
consent terms filed before the District Forum and
the order passed on 24th August 2006 on the dispute
in which consent terms were filed. The prayers (e)
to (l) appear to be independent prayers. Prayer
11 AIR 2004 SC 2371
apeal472
11
clause (e) is for a declaration that the appellant
is entitled to conveyance from the defendants in
view of the provisions of the MOFA Act. The prayer
(f) is for a decree directing the execution of
conveyance. Prayer (g) appears to a prayer
consequential to the prayer clauses (e) and (f). By
way of consequential relief, the plaintiffs have
challenged the IOD granted to the defendants on 2nd
June 2004 and have prayed for a declaration that the
defendants have no right to utilise the FSI
available by way of TDR in respect of the land
component area corresponding to the construction
of the Plaintiff's building of Ground floor plus 7
upper floors, i.e a built up area of about 2163 sq
meters or make changes in the common areas and
facilities, including the compound, parking areas,
the children's play ground area and Recretional
Ground. Prayer (j) is for injunction against the
defendant No.4 from granting, sanctioning,
permitting or approving any proposal to the develop
or change the lay out of the property. Prayer (k)
is for a consequential perpetual injunction
restraining the defendants from in any manner
carrying on construction on the suit property. Thus,
only first four prayers contain a challenge to the
consent terms before the District Forum and the
order passed by the Forum on the ground that the
same are vitiated by fraud and are nullity. The
other prayers are founded on the alleged rights
claimed under MOFA.
9One of the contentions raised by the learned
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12
Senior Counsel appearing for the defendants is that
principles analogous to Rule 3A of Order XXIII of
the said Code will apply and therefore, there is an
implied bar which is attracted to the suit.
10As far as the contention raised by the learned
senior counsel for the appellants on the basis of
the principles analogous Rule 3A of Order 23 of the
said Code is concerned, it will be necessary to make
a reference to the decision of the Apex Court in the
case of A.A.Gopalakrishnan vs. Cochin Devaswom Board
and others12. The Apex Court in paragraph 11 while
dealing with the issue of Rule 3A of Order XXIII of
the said Code held thus:
“11...Order 23 Rule 3 CPC deals with
compromise of suits. Rule 3-A provides that
no suit shall lie to set aside a decree on
the ground that the compromise on which the
decree is based was not lawful. We are of
the considered view that thebar contained in
Rule 3-A will not come in the way of the High
Court examining the validity of a compromise
decree, when allegations of fraud/collusion
are made against the statutory authority
which entered into such compromise. While it
is true that decrees of civil Courts which
have attained finality should not be
interfered with lightly challenge to such
compromise decrees by an aggrieved devotee,
who was not a party to the suit, cannot be
12 (2007) 7 SCC 482
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13
rejected, where fraud/collusion on the part
of officers of a statutory board is made out.
Further, when the High Court by order dated
9.9.1998 had directed the Board to take
possession of Sy. No.1042/2 immediately from
Respondents 3 and 4 in CDB No.3 of 1996, in a
complaint by another devotee, it was improper
for the Board to enter into a settlement with
Respondents 2 and 3, giving up the right,
title and interest in Sy.No.1042/2, without
the permission of the court which passed such
order. Viewed from any angle, the compromise
decree cannot be sustained and is liable to
be set aside.”
(emphasis added)
11In the case of Horil vs Keshav13, the Apex Court
considered the issue of applicability of Rule 3-A of
Order XIII in relation to a decree passed by the
Authorities under the U.P Zamindari and Land Reforms
Act,1950. The challenge was to the compromise decree
in a suit filed under the said Act on the ground of
fraud. In paragraphs 10 to 14, the Apex Court held
thus:
“ 10. In Banwari Lal v. Chando Devi [(1993) 1 SCC 581] this Court examined the provisions of Order 23 Rule 3-A in some detail and in the light of the amendments introduced in the Code and in para 7 of the judgment came to hold as follows: (SCC p. 585)
“7. By adding the proviso along with an Explanation the purpose and the object of the amending Act appears to be to compel the party challenging the compromise to question the same before the court which had recorded the compromise in question. That court was enjoined to decide the controversy whether the parties have arrived at an adjustment in a lawful manner. The
13 (2012)5SCC 525
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14
Explanation made it clear that an agreement or a compromise which is void or voidable under the Contract Act shall not be deemed to be lawful within the meaning of the said rule. Having introduced the proviso along with the Explanation in Rule 3 in order to avoid multiplicity of suit and prolonged litigation, a specific bar was prescribed by Rule 3-A in respect of institution of a separate suit for setting aside a decree on the basis of a compromise saying: ‘ 3-A.Bar to suit .—No suit shall lie to set aside a decree on the ground that the compromise on which the decree is based was not lawful.’”
11. It was further held in Banwari Lal [(1993) 1 SCC 581] in paras 13 and 14 as follows: (SCC pp. 588-89)
“13. When the amending Act introduced a proviso along with an Explanation to Rule 3 of Order 23 saying that where it is alleged by one party and denied by the other that an adjustment or satisfaction has been arrived at, ‘the court shall decide the question’, the court before which a petition of compromise is filed and which has recorded such compromise, has to decide the question whether an adjustment or satisfaction had been arrived at on basis of any lawful agreement. To make the enquiry in respect of validity of the agreement or the compromise more comprehensive, the Explanation to the proviso says that an agreement or compromise ‘which is void or voidable under the Contract Act …’ shall not be deemed to be lawful within the meaning of the said Rule. In view of the proviso read with the Explanation, a court which had entertained the petition of compromise has to examine whether the compromise was void or voidable under the Contract Act. Even Rule 1( m) of Order 43 has been deleted under which an appeal was maintainable against an order recording a compromise. As such a party challenging a compromise can file a petition under proviso to Rule 3 of Order 23, or an appeal under Section 96(1) of the Code, in which he can now question the validity of the compromise in view of Rule 1-A of Order 43 of the Code. 14. … The court before which it is alleged by one of the parties to the alleged compromise that no such compromise had been entered between the parties that court has to decide whether the agreement or compromise in question was lawful and not void or voidable under the Contract Act. If the agreement or the compromise itself is fraudulent then it shall be deemed to be void within the meaning of the Explanation to the proviso to Rule 3 and as such not lawful. The learned Subordinate Judge was perfectly justified in entertaining the application filed on behalf of the appellant and considering the question as to whether there had been a lawful agreement or compromise on the basis of which the court could have recorded such agreement or compromise on 272-1991. Having come to the conclusion on the material produced that the compromise was not lawful within the meaning of Rule 3, there was no option left except to recall that order.”
12. I n the light of the decision in Banwari Lal[(1993) 1 SCC 581] it would prima facie appear that the High Court was right in holding that the appellant's suit was hit by the provisions of Order 23 Rule 3-A and was not maintainable. But the significant distinguishing feature in this case is that the compromise decree which is alleged to be fraudulent and which is sought to be declared as nullity was passed not by a civil court but by a Revenue Court in a suit under Section 176 of the U.P. Zamindari Abolition and Land Reforms Act, 1950 (hereinafter “the Act”). 13. Section 331 of the Act bars the jurisdiction of the civil court and provides that a suit under the Act can be entertained by no court other than that the courts specified in Schedule II to the Act. A reference to
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15
Schedule II would show that the court of original jurisdiction for a suit under Section 176 of the Act for division of a holding of a bhumidhar is the Assistant Collector, First Class and the courts of first appeal and second appeal are the Commissioner and the Board of Revenue respectively. Section 341 of the Act, of course, provides that unless otherwise expressly provided by or under the Act, the provisions of the Court Fees Act, 1870; the Code of Civil Procedure, 1908 and the Limitation Act, 1963, including Section 5 thereof would apply to the proceedings under the Act.
14. Though the provisions of the Code of Civil Procedure have been made applicable to the proceedings under the Act but that would not make the authorities specified under Schedule II to the Act as “court” under the Code and those authorities shall continue to be “courts” of limited and restricted jurisdiction.
15. We are of the view that the Revenue Courts are neither equipped nor competent to effectively adjudicate on allegations of fraud that have overtones of criminality and the courts really skilled and experienced to try such issues are the courts constituted under the Code of Civil Procedure.”
(emphasis added)
12Therefore, we are unable to accept the
contention raised by the learned senior counsel for
the defendants that the provisions analogous to
Rule 3-A of Order XIII of the said Code will apply.
The Authorities under the said Act of 1986 cannot
decide the issue of fraud.
13As far as the bar of limitation is concerned,
before we deal with submissions canvassed by the
learned counsel for the plaintiffs on the issue
whether plaint can be rejected under Rule 11 of
Order VII of the said Code, we must note that even
according to the case of the defendants, if the
averments made in the plaint from paragraph 37
onwards are correct, the suit will be within
16 apeal472
limitation. Only ground on which the bar of
limitation is pleaded is by virtue of the letter
dated 2nd April 2007 addressed by Shri Ashwin Mehta
to the office bearers of the Plaintiffs- Co-
operative Housing Society. We must note that the
said letter is annexed to the affidavit in reply
filed by the defendants in execution application
filed for executing the order passed in the
complaint. In that sense, the said letter dated 2nd
April 2007 is not the document of the plaintiffs or
the document relied upon the plaintiffs. It is the
contention raised by the defendants in the said
affidavit in reply filed before the Authority under
the said Act of 1986 that the letter dated 2nd April
2007 allegedly addressed to the Secretary and
Chairman of the said Society shows that the
plaintiffs had knowledge about the interim order
passed in the year 2007 in Suit No.1906 of 2006. It
is not the case made out by the plaintiffs in the
plaint that the letter dated 2nd April 2007 was
received either by the Chairman or the Secretary of
the plaintiffs. There are no averments made in the
plaint as regards the receipt of the letter dated
2nd April 2007. As stated earlier, the said letter
is annexed to the reply filed by the defendants to
the execution application. For the purposes of
considering the prayer for rejection of the plaint,
the Court will have to proceed on the footing that
the averments made in the plaint are correct. Though
the said reply is annexed to the plaint, it is a
document of the defendants. Today, there is no
material on record to show that the letter dated 2nd
17 apeal472
April 2007 was served upon the plaintiffs. No
document showing the service of the letter is
annexed to the said affidavit-in-reply of the
defendants which is annexed to the plaint. Hence,
for deciding the prayer for rejection of the plaint,
the said letter will have to be kept out of
consideration. Going by the averments made in the
plaint and in particular the averments regarding the
date of knowledge of the alleged fraud, there cannot
be any dispute that the plaint cannot be rejected on
the basis of the bar of limitation .
14If the argument that the letter dated 2nd April
2007 which is annexed to the affidavit-in-reply of
the Appellants is to be relied upon for considering
the prayer for rejection of plaint, by that logic,
even the contents of the affidavit-in-reply will
have to be relied upon as a copy thereof has been
annexed to the plaint. The correctness and the
service of letter dated 2nd April 2007 is yet to be
proved.
15Thus, the said letter cannot be relied upon for
throwing out the suit at this stage only on the
ground of bar of limitation. Going by the averments
made in the plaint starting from paragraph 36, the
suit for declaration filed by the Plaintiffs was
well within limitation.
16Now we turn to the submissions made by the
learned Senior Counsel appearing for the Plaintiffs
on the basis of the decision of learned Single Judge
in the case of Export Credit Guarantee Corporation
18 apeal472
of India Limited Vs. Mr.T.Mathew and others. What
is relied upon is mainly the discussion in
paragraphs 57 and 58. Paragraph 58 reads thus :
"58.A perusal of section 3 of Limitation
Act clearly indicates that every suit
filed after prescribed period has to be
dismissed subject however to provisions
contained in sections 4 to 24 of the
Limitation Act, 1963, even if limitation
has not been set up as a defence. In so
far as remedy under Order 7 Rule 11 of the
CPC, 1908 is concerned, if the conditions
set out therein are satisfied, suit cannot
be dismissed but only plaint can be
rejected. Under Order 7 Rule 13 of the
CPC, even if plaint is rejected, fresh
suit can be filed whereas if suit is
dismissed on the ground of limitation, no
fresh suit can be filed in respect of such
time barred claim. In my view both the
provisions thus operate in different
field. Plaint therefore cannot be
rejected under Order 7 Rule 11 of CPC on
the ground of limitation. If according to
the defendant no.3, suit is barred by
limitation, such issue can be raised by
defendant no.3 in the affidavit-in-reply
or in the written statement and such issue
if raised can be tried by this Court as a
preliminary issue."
(emphasis added)
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19
17 At this stage reference will have to be made
to the decision of the Apex Court in the case of
Vaish Aggarwal Panchayat Vs. Inder Kumar and
others14. The case before the Apex Court arose out
of a suit for specific performance. In the suit, a
prayer was made for rejection of the plaint under
Rule 11 Order VII of the Code on various grounds
including bar of limitation. Paragraphs 12 to 15 of
the said decision are material, which read thus :
“ 12. In this regard the pronouncement in Kamala v. K.T. Eshwara SA6 would be seemly. In the said case while dealing with the principle engrafted under Order VII Rule 11(d) C.P.C., the Court has held thus:-
“21. Order 7 Rule 11(d) of the Code has limited application. It must be shown that the suit is barred under any law. Such a conclusion must be drawn from the averments made in the plaint. Different clauses in Order 7 Rule 11, in our opinion, should not be mixed up. Whereas in a given case, an application for rejection of the plaint may be filed on more than one ground specified in various sub-clauses thereof, a clear finding to that effect must be arrived at. What would be relevant for invoking clause (d) of Order 7 Rule 11 of the Code are the averments made in the plaint. For that purpose, there cannot be any addition or subtraction. Absence of jurisdiction on the part of a court can be invoked at different stages and under different provisions of the Code. Order 7 Rule 11 of the Code is one, Order 14 Rule 2 is another.
13. After so stating, while proceeding to deal with the concept of resjudicata, the Court opined:-
“23. The principles of res judicata, when attracted, would bar another suit in view of Section 12 of the Code. The question involving a mixed question of law and fact which may require not only examination of the plaint but also other evidence and the order passed in the earlier suit may be taken up either as a preliminary issue or at the final hearing, but, the said question cannot be determined at that stage.
14 2015 SCC OnLine SC 751
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20
the court is found to be barred by any law, meaning thereby, the subjectmatter thereof, the application for rejection of plaint should be entertained.”
14. In this regard a reference to a three-Judge Bench decision in Balasaria Construction (P) Ltd. v. Hanuman Seva Trust7 and others would be frutiful. Be it noted the said case was referred to a larger Bench vide Balasaria Construction (P) Ltd. v. Hanuman Seva Trust8. The order of reference reads as follows:-
“4. This case was argued at length on 30-8-2005. Counsel appearing for the appellant had relied upon a judgment of this Court in N.V. Srinivasa Murthy v. Mariyamma9 for the proposition that a plaint could be rejected if the suit is ex facie barred by limitation. As against this, counsel for the respondents relied upon a later judgment of this Court in Popat and Kotecha Property v. State Bank of India Staff Assn.10 in respect of the proposition that Order 7 Rule 11(d) was not applicable in a case where a question has to be decided on the basis of fact that the suit was barred by limitation. The point as to whether the words “barred by law” occurring in Order 7 Rule 11(d) CPC would include the suit being “barred by limitation” was not specifically dealt with in either of these two judgments, cited above. But this point has been specifically dealt with by the different High Courts in Mohan Lal Sukhadia University v. Priya Soloman11, Khaja Quthubullah v. Govt. of A.P.12, Vedapalli Suryanarayana v. Poosarla Venkata Sanker Suryanarayana13, Arjan Singh v. Union of India14 wherein it has been held that the plaint under Order 7 Rule 11(d) cannot be rejected on the ground that it is barred by limitation. According to these judgments the suit has to be barred by a provision of law to come within the meaning of Order 7 Rule 11 CPC. A contrary view has been taken in Jugolinija Rajia Jugoslavija v. Fab Leathers Ltd.15, National Insurance Co. Ltd. v. Navrom Constantza16, J. Patel & Co. v. National Federation of Industrial Coop. Ltd.17 and State Bank of India Staff Assn. v.Popat & Kotecha Property. The last judgment was the subject-matter of challenge in Popat and Kotecha Propertyv. State Bank of India Staff Assn. This Court set aside the judgment and held in para 25 as under:
“25. When the averments in the plaint are considered in the background of the principles set out in Sopan Sukhdeo case18 the inevitable conclusion is that the Division Bench was not right in holding that Order 7 Rule 11 CPC was applicable to the facts of the case. Diverse claims were made and the Division Bench was wrong in proceeding with the assumption that only the nonexecution of lease deed was the basic issue. Even if it is accepted that the other claims were relatable to it they have independent existence. Whether the collection of amounts by the respondent was for a period beyond 51 years needs evidence to be adduced. It is not a case where the suit from statement in the plaint can be said to be barred by law. The statement in the plaint without addition or subtraction must show that it is barred by any law to attract application of Order 7 Rule 11. This is not so in the present case.”
“Whether the words ‘barred by law’ under Order 7 Rule 11(d) would also include the ground that it is barred by the law of limitation.””
15. The three-Judge Bench opined that there was no conflict of opinion and thereafter the matter came back to the Division Bench for adjudication. The Division Bench reproduced what has been stated by the three-Judge Bench. It is as under:-
“Before the three-Judge Bench, counsel for both the parties stated as follows:
“… It is not the case of either side that as an absolute proposition an application under Order 7 and Rule 11(d) can never be based on the law
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of limitation. Both sides state that the impugned judgment is based on the facts of this particular case and the question whether or not an application under Order 7 Rule 11(d) could be based on law of limitation was not raised and has not been dealt with. Both sides further state that the decision in this case will depend upon the facts of this case.”
(emphasis added)
18In paragraph 15, the Apex Court observed that
the three Judge Bench came to the conclusion that
there was no conflict of opinion on the question
whether the plaint could be rejected under Rule 11,
Order VII on the ground of limitation. Therefore,
the Apex Court has not laid down as an absolute
proposition of law that clause(d) of Rule 11 of
Order VII will not attracted if bar of limitation
is pressed into service.
19 Learned Single Judge in the case of Export Credit Guarantee Corporation of India Limited (supra) observed that in view of Section 3 of Limitation Act, 1963, a suit filed after prescribed period has to be dismissed. He has observed that under Rule 11 of Order VII, the plaint can be rejected and the suit cannot be dismissed. This observation is made in the context of Rule 13 of Order VII of the said Code. Clause-(d) of Rule 11 of Order VII applies to various categories of bars created by the statute. In a given case, if bar created by a statute is not invoked by taking recourse to Rule 11 of Order VII, if at the time of final hearing, the Court is satisfied that the bar is attracted, the suit can always be dismissed. But, if Rule 11 of Order VII is invoked, the plaint can
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22
be rejected. The rejection of plaint is also a
decree within the meaning of the said Code. We may
also make a reference to Rule 13 of Order VII of
Code, which reads thus :
“13. Where rejection of plaint does not
preclude presentation of fresh plaint.— The
rejection of the plaint on any of the grounds
hereinbefore mentioned shall not of its own
force preclude the plaintiff from presenting
a fresh plaint in respect of the same cause
of action.”
20We find that Rule 13 of Order VII is an
enabling provision. Clauses-b, c, e and f of Rule
11 of Order VII provide for rejection of plaint for
non compliance with the procedural requirements. An
unsuccessful plaintiff whose plaint has been
rejected on the said grounds, can invoke Rule 13 of
Order VII. Rule 13 of Order VII being an enabling
provision, cannot be construed to mean that when a
plaint is rejected by the Court by holding that the
bar of a statute is attracted, a fresh plaint on the
same cause of action can be instituted in the Civil
Court. Hence, we are of the view that in a given
case, if by taking the averments in the plaint as
correct, the suit appears to be clearly barred by
limitation, the plaint can be rejected under clause
(d) of Rule 11 of Order VII.
23 apeal472
21Though, in the facts of the case we are
satisfied that considering the averments made in the
plaint, the same cannot be rejected on the ground of
bar of limitation, the argument of learned Senior
Advocate appearing for the Plaintiffs based on the
view taken by learned Single Judge cannot be
accepted.
22We have already held that no statutory bar is
attracted as far as prayer clauses (a) to (d) are
concerned. As far as prayers (e) to (l) are
concerned, the same are essentially for enforcing
the rights of the Plaintiffs under MOFA.
23Therefore, for the reasons which we have
recorded earlier, we concur with the view taken by
the learned Single Judge in the impugned order.
Accordingly, we find no merit in the appeal and the
same is dismissed. We, however, make it clear that
the observations made by learned Single Judge as
well as by this Bench are only for the purposes of
examining the prayer for rejection of plaint and the
said observations cannot be considered to mean that
any final adjudication is made on the issue of bar
of limitation. No order as to costs.
24At this stage, learned counsel for the
Appellants seeks continuation of the ad-interim
relief granted by this Court on 27th April 2014.
The said prayer is opposed by learned Senior
Advocate appearing for the original Plaintiffs.
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24
This order of ad-interim relief has remained in
operation from 27th July 2014. Therefore, we direct
that for a period of six weeks from today, the stay
of further proceedings of the suit will continue to
operate till then.
3 issues framed by the court
Whether a plaint can be rejected under Rule 11(d) of Order VII CPC on the ground of bar of limitation when averments taken as correct show the suit is within time.
Whether the bar under Rule 3-A of Order XXIII CPC analogous to Rule 3-A of CPC applies to consent terms executed before a Consumer Disputes Redressal Forum involving allegations of fraud.
Whether a fresh suit can be filed after rejection of plaint under Rule 11 of Order VII CPC if the rejection is on statutory bars other than procedural defaults.
Colour shows how this judgement treated each authority
Sachin C. Shah and another Vs. Hemant D. Shah and othersReferred¶37
Liverpool & London S.P. & I Association Limited Vs. M.V.SEA Success I and anotherReferred¶37
Chief Executive Officer and Vice Chairman, Gujarat Maritime Board vs. Haji Daud Haji Harun Abu and othersExplained¶42
United India Insurance Co. Ltd. vs. Rajendra Singh and othersExplained¶42
Income Tax Officer, Cannanore vs. M.K.Mohammed KunhiExplained¶47
Dhulabhai vs. State of Madhya Pradesh and anotherExplained¶47
Nivedita Sharma vs. Cellular Operators Association of India and othersReferred¶47
Export Credit Guarantee Corporation of India Limited vs. Mr.T. Mathew and othersApplied¶61
Western Coalfields Limited vs. Shri Chandraprakash K. KhareApplied¶54
Mardia Chemicals Limited vs. Union of India and othersExplained¶58
A.A.Gopalakrishnan vs. Cochin Devaswom Board and othersExplained¶68
Horil vs KeshavDistinguished¶75
Banwari Lal v. Chando DeviExplained¶76
Vaish Aggarwal Panchayat Vs. Inder Kumar and othersApplied¶106
Kamala v. K.T. EshwaraExplained¶107
Balasaria Construction (P) Ltd. v. Hanuman Seva TrustExplained¶119
5 provisions across 4 enactments
Bhagwanji Kanji Mistry
New Purshottam Nagar Co-op Housing Society Limited
A.S. Oka
P.D. Naik
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court