Allowed

Anil Kumar Dalal v. State of Odisha

Orissa HC2 Aug 2024CRP/10/2022

Case brief

AI extract

What is this about?

The High Court dismissed a civil revision petition challenging an order rejecting a plaint under Order VII Rule 11 CPC. The Court held that the suit, filed in 2011 concerning a contract from 2006, was time-barred as the plaint disclosed no cause of action beyond 22.12.2006. The Court ruled that the absence of a subsequent date to raise the demand precluded the suit from falling within the limitation period, making rejection under Rule 11(d) appropriate.

What did the court decide?

The civil revision petition is allowed. The order dated 30.03.2022 passed in Civil Suit No.173 of 2011 by the Additional Senior Civil Judge is set aside, and the plaint is rejected under Order VII Rule 11(d) of the CPC.

Anil Kumar Dalal Vs State of Odisha — Contract and Commercial Disputes | Orissa HC (2024)

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ORISSA HIGH COURT : CUTTACK

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CRP No.10 of 2022

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In the matter of an Application under Section 115 of the Code of Civil Procedure, 1908

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Anil Kumar Dalal Aged about 62 years Son of Late Netrananda Dalal Resident of Podapara (Boudh), P.O./P.S./District: Boudh … Petitioner (Defendant before the trial Court)

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-VERSUS-

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State of Odisha, Represented through the Executive Engineer, National Highway Division, P.O./P.S./District: Bolangir …

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Opposite Party (Plaintiff before the trial Court)

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Counsel appeared for the parties:

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For the Petitioner : M/s. Amit Prasad Bose, D.J. Sahoo and A. Pattnaik, Advocates

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For the Opposite Party : Mr. Sailaza Nandan Das, Additional Standing Counsel

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P R E S E N T:

HONOURABLE MR. JUSTICE MURAHARI SRI RAMAN

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Date of Hearing : 22.07.2024 :: Date of Judgment : 02.08.2024

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JUDGMENT

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MURAHARI SRI RAMAN, J.—

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THE CHALLENGE:

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Questioning the propriety of Order dated 30.03.2022 passed by the Additional Senior Civil Judge, Balangir in suit being C.S. No.173 of 2011, rejecting the petition under Order VII, Rule 11 of the Code of Civil Procedure, 1908 (“CPC”, for short) filed by the Petitioner-Defendant before the learned Trial Court, this Civil Revision Petition has been filed under Section 115 with the following prayer(s):

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“The Petitioner, therefore, prays that Your Lordship’s may graciously be pleased to admit the writ and call for the records from the opposite parties and after hearing the parties set aside the order dated 30.03.2022 and thus allow the petition under Annexure-4.

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And for this act of kindness the petitioner shall, as in duty bound ever pray.”

THE FACTS:

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2. The facts as adumbrated by the petitioner-defendant in the revision petition reveal that the suit, being C.S. No.173 of 2011, was filed for recovery of cost of repair undertaken by the Government and penalty imposed on left out balance work in terms of clause 2(b) of amendment to F-2 Agreement for non-performance of the contract to the tune of Rs.10,30,110/- with pendente lite and future interest.

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2.1. The plaint discloses cause of action arose on 09.03.2006, i.e ., the date on which F-2 Agreement was executed and on 22.12.2006, when the petitionerdefendant was called upon to deposit an amount of Rs.10,30,110/-. Objecting to maintainability of suit, the petitioner-defendant filed a petition under clause (a) and clause (b) of Rule 11 of Order VII on the ground that as the suit has been filed in the year 2011 disclosing cause of action to have arisen in the year 2006, the suit is barred by limitation, in view of Part-II— SUITS RELATING TO CONTRACTS, First Division— Suits of the Schedule appended to the Limitation Act, 1963.

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2.2. The petitioner contended that the suit for recovery of money should have been filed within three years from 22.12.2006, which is apparently shown in the plaint to be the last date of cause of action that arose.

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2.3. The Additional Senior Civil Judge, Balangir, relying on the decisions in the case of Hardesh Ores Pvt. Ltd. Vrs. Hede and Company, 2007 (II) OLR (SC) 613 = (2007) 6 SCR 608 = (2007) 5 SCC 614 and Satyananda Sahoo Vrs. Ratikanta Panda, 1996 (II) OLR 402 = AIR 1997 Ori 67 = 82 (1996) CLT 653 held that plaint can be decided on the ground of limitation in the course of trial of the suit as the question of limitation is mixed question of law and fact. Such question does require analysis on the basis on the evidence of the parties and observed that,

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“It is the duty of the plaintiff to bring facts to record to prove that the suit is filed within limitation. The Court to give opportunity to the plaintiff to explain the same. The defendant has no role at all. So, from the discussion mentioned above, it is empathetically stated that the contention of the defendant, so far rejection of the plaint are not coming under the provision of the Order 7, Rule 11 of the CPC, thus the petition is liable to be rejected.”

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2.4. The petitioner-defendant being aggrieved has preferred this revision petition.

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HEARING OF THE CIVIL REVISION:

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3. Since vide Order dated 10.11.2022, this Court has granted stay of further proceeding in the suit i.e., C.S. No.173 of 2011 pending in the Court of Additional Senior Civil Judge, Balangir, on consent the matter has been taken up for final hearing.

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3.1. Heard Sri Amit Prasad Bose, learned Counsel for the petitioner-defendant and Sri Sailaza Nandan Das, learned Additional Standing Counsel for the opposite party-plaintiff.

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3.2. Hearing being concluded on 22.07.2024, the matter is kept reserved for preparation of Judgment and delivery thereof.

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ARGUMENTS OF COUNSEL FOR THE RESPECTIVE PARTIES:

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4. Sri Amit Prasad Bose, learned counsel for the petitioner in the course of hearing submitted and reiterated in the written note of submission that in view of Satyananda Sahoo Vrs. Ratikanta Panda, 1996 (II) OLR 402 = AIR 1997 Ori 67 = 82 (1996) CLT 653, as referred to in the impugned order and relied on by the learned trial Court, this Court is vested with jurisdiction to examine “carefully the contents and averments in the plaint in order to find out if the same is barred by limitation”. Hence, he submitted that on plain reading of the plaint it transpires that the last date on which cause of action arose is found mentioned in the plaint as 22.12.2006, i.e., when the defendant was called upon to deposit the said amount”. As is apparent from the year of filing of the suit, which bears C.S. No.173 of 2011, is indicative of the fact that the same was filed in 2011 before the Court of Civil Judge (Senior Division), Balangir. Thus,

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the Additional Senior Civil Judge, Balangir committed manifest error in transgressing his jurisdiction and seeking to proceed with the suit. Having not applied judicious mind while considering the petition under clauses (a) and (d) of Order VII, Rule 11 of the Code of Civil Procedure, 1908, said Court fell in grave error of law.

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4.1. To buttress his argument that in absence of any specific provision contained in the Limitation Act, Article 137 thereof would come into play in order to ascertain whether the suit is hit by law of limitation, Sri Amit Prasad Bose, learned counsel for the petitioner placed reliance on the judgment dated 25.07.2022 rendered by this Court in Batakrushna Sahoo Vrs. Commissioner, Consolidation, Odisha, Bhubaneswar and others, W.P.(C) No.4602 of 2016 and the judgment dated 13.03.2019 of the Hon’ble Supreme Court of India in Raghwendra Sharan Singh Vrs. Ram Prasanna Singh (Dead) by LRs, Civil Appeal No.2960 (arising out of SLP(C) No.20068 of 2013), reported at (2019) 4 SCR 1069 .

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4.2. Taking aid of requirement of disclosure of particulars as envisaged in clause (e) of Rule 1 of Order VII that “the plaint shall contain” inter alia “the facts constituting the cause of action and when it arose”, Sri Amit Prasad Bose, learned Advocate has made strenuous attempt to impress upon this Court that clever drafting of the

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plaintiff would not protect the opposite party to agitate the cause of action in the suit. He, therefore, would submit that the expression “subsequent dates” as mentioned in paragraph 7 of the plaint would not enlarge the scope of the trial Court to proceed to examine the fact so as to support the plaintiff to demonstrate that the suit was filed within three years from 22.12.2006 cited to be the last date when the petitioner-defendant was called upon to make payment.

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4.3. Sri Amit Prasad Bose, learned Advocate with his erudition drew attention of this Court to Rule 14 of Order VII to contend that the learned Additional Senior Civil Judge failed to appreciate that the plaint is silent about the disclosure of material particulars. He argued that the plaint, though mentions about “subsequent dates”, no date is specifically mentioned in none of the contents of the plaint with respect to repairs and penalty being imposed and communicated to the petitioner. Such clever drafting would not shelter the suit to proceed.

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5. Per contra, Sri Sailaza Nandan Das, learned Additional Standing Counsel for the State-opposite party refuting the contentions of learned counsel for the petitioner, vehemently argued that paragraph 7 of the plaint is very clear that the last date of cause of action is not 22.12.2006, but it is the date when the opposite party

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was called upon by the petitioner-plaintiff to make payment of the cost repairs incurred by the Government on account of abandonment of work by the petitioner.

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5.1. He would submit that the cause of action as spelt out in paragraph 7 of the suit clarifies the position that the date 22.12.2006 is the date when the petitioner was called upon to make good the expenditure incurred towards repairs undertaken due to non-execution of the work as per agreement. This apart, other recital(s) of the plaint is also to be looked into while ascertaining the limitation aspect. Contents of the plaint would depict that the petitioner is required to make payment not only towards expenditure incurred towards repairs, but also is liable for deposit of penalty in terms of F-2 Agreement, which fact can be determined by the Court on the basis of evidence produced. In the trial only it can be ascertain whether the suit is barred by limitation as the stage of penalty arose after accomplishment of execution of balance work that is left out by the defendant in defiance of covenant of contract. Therefore, it cannot be construed from the recitals of the plaint that the last date of cause of action is 22.12.2006 and the petition under Order VII, Rule 11 is premature.

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5.2. To countenance his submission, Sri Sailaza Nandan Das, learned Additional Standing Counsel has taken this Court to the following paragraphs of the plaint:

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“***

2. That the defendant was awarded a contract for “Periodical repair from 227/10 to 239/0 and from 245/0 to 249/0 N.H. No.224” at an estimated cost of Rs.96,51,671/- (Rupees Ninety Six Lakhs Fifty One Thousand Six Hundred and Seventy One). An agreement for the purpose was entered into between the parties in Agreement No.108 F-2 of 2005-06 on 09.03.2006, the agreement inter-alia, stipulates that the date of commencement of the work should be 09.03.2006 and the date of completion should be 08.02.2007. It was further stipulated that the Contractor shall compensate the Government for any delay or failure in completion of the work. The amended clauses 2(b) of the contract agreement specially lays down that ‘20% of the left over work shall be realized from the Contractor as penalty’ if the defendant fails to complete the contract. Accordingly, the defendant was issued with the work order.

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3. That, the defendant Contractor could not complete the awarded work in the stipulated time and left the work incomplete by this time he had completed work of total value of Rs.15,09,224/- leaving a balance work value of Rs.81,42,337/-. Due to such nonexecution of the work the said agreement was rescinded under clause 2(b) of the F-2 agreement by Letter No.WR-III-P/R-T/14/05-14100 dt.6.12.2006 of the Chief Engineer, N.Hs. Odisha, Bhubaneswar with stipulation of recovery of the agreed penalty of the rate of 20% of the left over work value, that is Rs.10,30,110/-. The fact of rescission of contract was intimated to the defendant by the plaintiff in its letter No.4310 dated 18.12.2006. He was also

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asked to deposit the said amount with the plaintiff, as per statement of accounts given below:

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1.	Agreement value of the work vide Agrt No.108 F-2 of 2005-06	Rs. 96,51,671.00
2.	Gross value of work done as per Final Measurement vide M.B. No.2992, P-28	Rs. 15,09,224.00
3.	Value of balance left over work	Rs. 81,42,447.00
4.	Penalty under amendment clause 2(b) of F-2 Agreement i.e. @20% of the left out balance of work	Rs. 16,28,489.00
5.	Cost of repair under taken by Department	Rs. 38,468.00
6.	Total dues recoverable from the Agency	Rs. 16,66,957.00
7.	The following dues of the Agency is with the Department which can be adjusted against claim vide item-6 above.
(i)	Security deposit of 1^stRunning Accounts bill paid	Rs. 53,252.00
(ii)	Security deposit out of 2^ndR.A. Bill	Rs. 22,209.00
(iii)	*Net amount of Final Bill payable* *to Contractor* *(Not yet paid)*	Rs. 3,68,186.00
(iv)	E.M.D. and I.S.D. available against the Agreement	Rs. 1,93,200.00
		Rs. 6,36,847.00
8.	Net amount to be recovered by Money suit
	(Rs.16,66,957.00 – Rs.6,36,847.00)	Rs. 10,30,110.00

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4. That, however, the defendant has failed to deposit the said balance amount of Rs.10,30,110.00 which he owes to the plaintiff as per the agreement entered in to between the plaintiff and the defendant.

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5. That, since the defendant abandoned the work and the work of repairing the N.H. is of emergent nature for smooth plying of traffic. The plaintiff had to affect repairs costing Rs.38,468/-. The defendant is also bound and liable to pay this amount to the plaintiff.

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6. That, thus defendant is liable and bound to pay the sum of Rs.10,30,110/- as stated above in para-3.

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7. That, the cause of action for this suit arose on 9.3.2006 when the F-2 agreement was executed on 9.3.2006 and 18.12.2006 vide letter No.4310 and 22.12.2006 when the defendant was called upon to deposit the said amount and on subsequent dates .”

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5.3. Sri Sailaza Nandan Das, learned Additional Standing Counsel urged that the aforesaid contents of the plaint clearly manifest that the execution of work was required to be accomplished by 08.02.2007 as per Agreement No.108— F-2 of 2005-06 executed on 09.03.2006 between the parties. It is apparent from the pleading that since the defendant abandoned the work further repairing work was undertaken in order to make the National Highway ready for smooth plying of vehicles and make it free for flow of traffic for which the Government in State of Odisha incurred certain expenditure which the petitioner-defendant was liable to pay. Therefore, prima facie, the cause of action did not end within three years from 22.12.2006, in view of PartII of Schedule appended to the Limitation Act, 1963.

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5.4. It is, thus, submitted that from the statement of accounts as set forth in paragraph 3 of the plaint, it is abundantly unambiguous that “final bill” has not yet been settled with the defendant-contractor till the date of

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filing of the suit. On the facts, it is contended that the right to recover by way of suit did survive.

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5.5. Furthermore, learned Additional Standing Counsel forcefully contended that apart from expenditure stated to have been incurred, the suit was filed for recovery of the amount of penalty imposed in terms of Clause 2(b) of F-2 Agreement, i.e ., @ 20% of the left over (balance) work. Therefore, he would wish to contend that the facts narrated in the plaint specify that the suit has been filed within the period of limitation as contemplated in Part-II of the Schedule appended to the Limitation Act, 1963.

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5.6. Thus, the learned Additional Standing Counsel opposing the invocation of power under Section 115, CPC, submitted that in view of legal position as set forth in Popat and Kotecha Property Vrs. State Bank of India Staff Association, (2007) 7 SCC 510, which supports the stand of the opposite party-plaintiff , the order dated 30.03.2022 passed by the learned Additional Senior Civil Judge, Balangir in Civil Suit No.173 of 2011 does not warrant intervention at this stage.

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ANALYSIS AND DISCUSSION:

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6. Before the learned Additional Senior Civil Judge, Balangir the consideration was a petition under Order VII, Rule 11 (a) and (b) of the CPC with a prayer to reject the plaint in Civil Suit No.173 of 2011. The first

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objection raised by the learned Additional Standing Counsel that though the learned counsel for the petitioner attacked the Order of the learned trial Court on the ground of limitation in terms of Order VII, Rule 11(d), the petition reveals the same inasmuch as the petitioner has been filed under Order VII, Rule 11(b).

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6.1. For ready reference the petition under Order VII, Rule 11 as filed by the petitioner and enclosed to this revision petition as Annexure-4 is reproduced herein below:

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“In the matter of a petition under Order VII, Rule 11(a) and (b) CPC to reject the plaint.

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The above named defendant begs to submit as follows:

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1. That the defendant has filed his written statement in the suit and specifically pleaded that the suit is not maintainable and the plaint is also liable to be rejected.

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2. That in plain paragraph No.7 the plaintiff has specifically pleaded the cause of action to be on 09.03.2006, 18.12.2006 and 22.12.2006 and on ‘subsequent dates’. But no subsequent dates are given or pleaded in the plaint.

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3. That the present suit is filed on 2011 after four years.

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4. That the limitation period is three years to file the suit as per Part-II of Schedule of the Limitation Act, 1963 in a suit relating to contract. The present suit is filed after one year of the prescribed limitation and hence is

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liable to be dismissed. Further no explanation for such delay is also given in the plaint.

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5. That only an illusory cause of action is given in the plaint. Specific cause of actions against the defendant are not pleaded in the plaint enabling the defendant to explain the situation/allegation or take a proper stand of defense. Without proper and specific cause of action in the plaint it is liable to be rejected.

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6. That the defendant will be prejudiced if the plaint is not rejected at this stage of the suit as he is to fight the litigation for no good/legal grounds.

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In view of the above it is therefore submitted that the Hon’ble Court may be pleased to reject the plaint at this stage of the suit for the ends of justice,

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And for this act of kindness the defendant shall ever pray.”

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6.2. It is emanated from the plaint that though the petitioner-defendant has mentioned the petition was filed mentioning clauses (a) and (b) of Order VII, Rule 11, this Court is required to take into consideration the substance of it. Quoting wrong provision would not take away the right to agitate the true perspective of the claim of the petitioner.

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6.3. Mentioning of a wrong provision or non-mentioning of any provision of law would, by itself, be not sufficient to take away the jurisdiction of a Court, if it is otherwise vested it in law. While exercising its power, the Court

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will merely consider whether it has the source to exercise such power or not. Refer, J. Kumaradasan Nair Vrs. Iric Sohan, (2009) 3 SCR 238 = (2009) 12 SCC 175; M.P. Steel Corporation Vrs. CCE, (2015) 7 SCR 291 = 2015 INSC 346 .

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6.4. If an authority has a power under law merely because while exercising that power the source of power is not specifically referred to or a reference is made to a wrong provision of law, that by itself does not vitiate the exercise of power so long as the power does exit and can be traced to a source available in law. Quoting wrong provisions would not invalidate the order passed by the authority, if it is shown that such order could be passed under the provisions of the statute. Reference may be had to N. Mani Vrs. Sangeetha Theatre, (2004) 12 SCC 278; Kedar Shashikant Deshpande Vrs. Bhor Municipal Council, (2011) 2 SCC 654 .

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6.5. In contrast to what is objected to by the learned Additional Standing Counsel, the impugned Order dated 30.03.2022 reflects that the learned Additional Senior Civil Judge proceeded to decide the issue raised by the petitioner-defendant on the basis of clause (a) and clause (d) of Rule 11 of Order VII.

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6.6. In the light of ratio of above judgments, the argument advanced by the learned Additional Standing Counsel

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that the petitioner is not entitled to agitate its plea stemming on clause (d) read with clause (a) of Rule 11 of Order VII is repelled.

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7. It is the submission of the learned counsel for the petitioner that the plaint does not disclose the material particulars or material fact to show that the cause of action to sue continued beyond 22.12.2006 so that the suit could be maintainable under clause (d) of Rule 11 of Order VII. Per contra , the learned Additional Standing Counsel contended that the plaint is clear to the effect that the amount of penalty and expenditure incurred by the Government, which events were subsequent to abandonment of work, are sought to be recovered from the petitioner-contractor in terms of amended Clause 2(b) of F-2 Agreement.

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7.1. This Court has, therefore, taken excursion of the plaint. The dates on which cause of action arose have been enumerated in paragraph 7 of the plaint; nowhere is there any indication of any subsequent date. Though the plaintiff has stated to have initiated actions against the petitioner-defendant subsequent to 22.12.2006, this Court does not find any date beyond 22.12.2006. Analysing the plaint it is found that the opposite partyplaintiff has mentioned about non-finalisation of bill and maintenance of measurement book. Further, the plaint is silent about the period during which the repair to the

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National Highway was undertaken. Rather in the plaint it has been clearly mentioned that, “The fact of rescission-of contract was intimated to the defendant by the plaintiff in its Letter No.4310, dated 18.12.2006, He was also asked to deposit the said amount with the plaintiff, as per statement of accounts given below.” There is no indication of specific dates with regard to subsequent action which unequivocally clarifies the position that the specific amount which was to be recovered from the defendant was within the knowledge of the Government on 18.12.2006, when demand to pay the sum of penalty and expenditure towards repairs was made. Only date, i.e., 22.12.2006 has been clearly mentioned to indicate the cause of action for filing the suit by specifically making assertion that on this date the defendant was called upon to deposit the amount. As has been contended by Sri Amit Prasad Bose, such clever drafting in order to stretch the period of limitation so as to bring the filing of suit for recovery of money within period stipulated under the Limitation Act, 1963 is impermissible.

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7.2. In T. Arivandandam Vrs. T.V. Satyapal, (1978) 1 SCR 742, it has been made clear that,

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“*** 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 VII, Rule 11, CPC taking care to see

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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 X, CPC. An activist Judge is the answer to irresponsible law suits. The trial court should insist imperatively on examining the party at the first bearing so that bogus litigation can be shot down at the earliest stage. The Penal Code (Ch. XI) is also resourceful enough to meet such men, and must be triggered against them. In this case, the learned Judge to his cost realised what George Bernard Shaw remarked on the assassination of Mahatma Gandhi ‘It is dangerous to be too good’.”

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7.3. In Hardesh Ores Pvt. Ltd. Vrs. Hede and Company, 2007 (II) OLR (SC) 613 = (2007) 6 SCR 608 = (2007) 5 SCC 614 it has been observed thus:

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“21. The language of Order VII, Rule 11, CPC is quite clear and unambiguous. The plaint can be rejected on the ground of limitation only where the suit appears from the statement in the plaint to be barred by any law. Mr. Nariman did not dispute that ‘law’ within the meaning of clause (d) of Order VII, Rule 11 must include the law of limitation as well. It is well settled that whether a plaint discloses a cause of action is essentially a question of fact, but whether it does or does not must be found out from reading the plaint itself. For the said purpose the averments made in the plaint in their entirety must be held to be correct. The test is whether the averments made in the plaint if taken to be correct in their entirety a decree would be passed. The averments made in the plaint as a whole have to be seen to find out whether clause (d) of Rule 11

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of Order VII is applicable. It is not permissible to cull out a sentence or a passage and to read it out of the context in isolation. Although it is the substance and not merely the form that has to be looked into, the pleading has to be construed as it stands without addition or subtraction of words or change of its apparent grammatical sense. As observed earlier, the language of clause (d) is quite clear but if any authority is required, one may usefully refer to the judgments of this court in Liverpool and London S.P. & I Association Ltd. Vrs. M.V. Sea Success I and Anr., (2004) 9 SCC 512 = (2003) Supp. (5) SCR 851 = 2003 INSC 659 and Popat and Kotecha Property Vrs. State Bank of India Staff Association, (2005) 7 SCC 510.”

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7.4. Thus is the remarks made in Satyananda Sahoo Vrs. Ratikanta Panda, 1996 (II) OLR 402 = AIR 1997 Ori 67 = 82 (1996) CLT 653 :

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“20. It is worth-mentioning here that the plaintiff must have a cause of action to sue and the same must have arisen within the prescribed period of limitation. Both the concepts are in a way inseparable. If the cause of action on a meaningful reading of the entire plaint does not disclose a clear right to sue and creates an illusion of cause of action, it should be nipped in the bud. Similarly, if a cause of action giving rise to a grievance is no more remediable because of prescript of the law of limitation, the plaintiff cannot approach a court of law.

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21. The effect of Mr. Panda is that a clear right to sue or the cause of action has to be found out on a meaningful reading of the plaint and while doing so it is also obligatory on the part of the court to find out if the case can be adjudication or the same has become no more adjudicate being barred by limitation. Emphasis has been laid by Mr. Panda that a plaintiff cannot create a mirage and clothe his lis in such a manner to persuade a court to entertain a vexatious litigation and the court has to exercise its jurisdiction to scrutinise the plaint in its entirety, whether the suit has been filed within the period of limitation or not; and whether the cause of action is revealed on a meaningful manifestation of the plaint or not. If, after uncurtaining and undraping the plaint and scanning the averments in their conceptual eventuality it is found that a clear cause of action not only exists but survives to be adjudicated in a court of law without being hit by the prescription of limitation, the court should admit the suit, otherwise law has to take its own course. ***”

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7.5. In Dahiben Vrs. Arvindbhai Kalyanji Bhanusali, (2020) 5 SCR 694 the object behind Order VII, Rule 11 has been discussed as follows:

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“12. We have heard the learned Counsel for the parties, perused the plaint and documents filed therewith, as also the written submissions filed on behalf of the parties.

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12.1 We will first briefly touch upon the law applicable for deciding an application under Order VII Rule 11 CPC, which reads as under:

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‘11. Rejection of plaint.–

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The plaint shall be rejected in the following cases:

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(a) where it does not disclose a cause of action;

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(b) where the relief claimed in 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;

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(c) where the relief claimed is properly valued but the plaint is written 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;

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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) where it is not filed in duplicate;

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(f) where the plaintiff fails to comply with the provisions of Rule 9:

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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 prevent by any cause of exceptional nature for correction the valuation or supplying the requisite stamp-

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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.”

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The remedy under Order VII Rule 11 is 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.

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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.

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In Azhar Hussain Vrs. Rajiv Gandhi, 1986 Supp. SCC 315 this Court held that the whole purpose of conferment of powers under this provision is to ensure that a litigation which is meaningless, and bound to prove abortive, should not be permitted to waste judicial time of the Court, in the following words:

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‘12. *** The whole purpose of conferment of such power 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

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be kept hanging over his head unnecessarily without point or purpose. Even if an ordinary civil litigation, the Court readily exercises the power to reject a plaint, if it does not disclose any cause of action.’

¶153

12.2 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.

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12.3 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.

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***

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12.7 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. Vrs. M.V. Sea Success I & Anr., (2004) 9 SCC 512 which reads as:

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‘139. Whether a plaint discloses a cause of action or not is essentially a question of fact. But whether it does or does not must be found out from reading the plaint itself. For the said purpose, the averments made in the plaint in their entirety must be held to be correct. The test is as to whether if the averments made in the plaint are taken to be correct in their entirety, a decree would be passed. ’

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In Hardesh Ores (P.) Ltd. Vrs. Hede & Co., (2007) 5 SCC 614 the Court further held that 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. [D. Ramachandran Vrs. R.V. Janakiraman, (1999) 3 SCC 267; See also Vijay Pratap Singh Vrs. Dukh Haran Nath Singh, AIR 1962 SC 941].

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12.8 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.

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12.9 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, as held by this Court in the judgment of Saleem Bhai Vrs. State of Maharashtra. (2003) 1 SCC 557.

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The plea that once issues are framed, the matter must necessarily go to trial was repelled by this Court in Azhar Hussain (supra).

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12.10 The provision of Order VII Rule 11 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

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Court finds that the plaint 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 plaint. ”

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7.6. It is clear that in order to consider Order VII, Rule 11, the Court has to look into the averments in the plaint and the same can be exercised by the trial court at any stage of the suit. It is also clear that the averments in the written statement are immaterial and it is the duty of the Court to scrutinise the averments/pleas in the plaint. At that stage, the pleas taken by the defendant in the written statement are wholly irrelevant and the matter is to be decided only on the version of the plaintiff as contained in the plaint. Regard may be had to Raptakos Brett & Co. Ltd. Vrs. Ganesh Property, (1998) 7 SCC 184 and Mayar (H.K.) Ltd. Vrs. Vessel M.V. Fortune Express, (2006) 3 SCC 100 .

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7.7. In the case of Madanuri Sri Rama Chandra Murthy Vrs. Syed Jalal, (2017) 13 SCC 174 the question fell for consideration was whether the suit is barred by any law, would always depend upon the facts and circumstances of each case. The averments in the written statement as well as the contentions of the defendant are wholly immaterial while considering the prayer of the defendant for rejection of the plaint. Even when the allegations made in the plaint are taken to be correct as a whole on their face value, if they show that the suit is barred by

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any law, or do not disclose cause of action, the application for rejection of plaint can be entertained and the power under Order VII, Rule 11 CPC can be exercised.

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7.8. In Urvashiben Vrs. Krishnakant Manuprasad Trivedi, (2018) 13 SCR 1242 it has been observed that the merits and demerits of the matter cannot be gone into while deciding an application filed under Order VII, Rule 11 , CPC and held that:

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“11. It is fairly well settled that, so far as the issue of limitation is concerned, it is a mixed question of fact and law. It is true that limitation can be the ground for rejection of plaint in exercise of powers under O.VII, R.11(d) of the CPC. Equally, it is well settled that for the purpose of deciding application filed under O.VII, R.11 only averments stated in the plaint alone can be looked into, merits and demerits of the matter and the allegations by the parties cannot be gone into. Article 54 of the Limitation Act, 1963 prescribes the limitation of three years, for suits for specific performance. ***

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12. From a reading of the aforesaid Article, it is clear that when the date is fixed for performance, limitation is three years from such date. If no such date is fixed, the period of three years is to be computed from the date when the plaintiff, has notice of refusal. When rejection of plaint is sought in an application filed under O.VII R.11, same is to be considered from the facts of each case, looking at the averments made in the plaint, for the purpose of

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adjudicating such application. As averred in the plaint, it is the case of the plaintiff that even after payment of the entire consideration amount registration of the document was not made and prolonged on some grounds and ultimately when he had visited the site on 25.05.2017 he had come to know that the same land was sold to third parties and appellants have refused performance of contract. In such event, it is a matter for trial to record correctness or otherwise of such allegation made in the plaint. In the suits for specific performance falling in the second limb of the Article, period of three years is to be counted from the date when it had come to the notice of the plaintiff that performance is refused by the defendants. For the purpose of cause of action and limitation when it is pleaded that when he had visited the site on 25.05.2017 he had come to know that the sale was made in favour of third parties and the appellants have refused to execute the Sale Deed in which event same is a case for adjudication after trial but not a case for rejection of plaint under O.VII, R.11(d) of CPC.”

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7.9. The Hon’ble Supreme Court of India in the case of Nusli Neville Wadia Vrs. Ivory Properties, (2019) 15 SCR 795, it has been discussed as:

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“In Re: Mixed question of law and fact and Order VII, Rule 11 CPC.—

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57. A Three-Judge Bench of this Court in Major S.S. Khanna Vrs. Brig. F.J. Dhillon, AIR 1964 SC 497, has held that jurisdiction to try issues of law apart from the issues of fact may be exercised by the

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Court if the whole suit may be disposed on the issue of law alone, but the Code confers no jurisdiction upon the Court to try a suit on the mixed issue of law and facts as preliminary issues.

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58. In Narne Rama Murthy Vrs. Ravula Somasundaram & Ors. (2005) 6 SCC 614, this Court has held that even if it is apparent from the plaint averment only, that suit is barred by limitation, it can be tried as a preliminary issue even in the absence of plea of limitation raised by the defendants. However, in cases where the question of limitation is a mixed question of fact and law and suit does not appear to be barred by limitation on the face of it, then the facts necessary to prove limitation, which have been pleaded have to be proved, on issues raised and decided on evidence. However, in our considered opinion question of limitation, in no case, can be said to be a question of jurisdiction of the Court in the context it has been used in Section 9A CPC.

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59. In Satti Paradesi Samadhi and Pillayar Temple Vrs. M. Sankuntala (Dead) through Legal Representatives and others, (2015) 5 SCC 674, it has been observed that issue of limitation requiring an inquiry into the facts, cannot be tried as a preliminary issue. The mixed questions of law and facts cannot be decided as a preliminary issue.

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60. In Ramdayal Umraomal Vrs. Pannalal Jagannathji, 1979 M.P.L.J. 736, a Full Bench of Madhya Pradesh High Court has observed that under Order XIV Rule 2, mixed questions of law and fact requiring recording of evidence cannot be tried as a

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preliminary issue. The issue of jurisdiction can be tried as a preliminary issue when it is an issue of law requiring no evidence to be adduced. ***

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61. In Vaish Aggarwal Panchayat Vrs. Inder Kumar and others, AIR 2015 SC 3357, the question came up for consideration of rejection of the plaint under Order VII, Rule 11 on the ground that same being barred by limitation. Mere ex facie reading of the plaint, it could not be held that the suit was barred by time. The question of limitation becomes a mixed question of facts and law and cannot be decided as a preliminary issue as the framing of issues and taking evidence was necessary.

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62. In our opinion, it cannot be laid down as proposition of law under Order VII Rule 11(d) that plaint cannot be rejected as barred by limitation. It can be said that it is permissible to do so mainly in a case where the plaint averment itself indicate the cause of action to be barred by limitation and no further evidence is required to adjudicate the issue.

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63. In Hareendran and others Vrs. Sukumaran and others, (2018) 14 SCC 187, this Court has laid down that question of limitation in the case being mixed question of law and facts, could not have been decided as preliminary issue. The provision under which a plaint can be rejected is provided in Order VII, Rule 11(d). The language used in Order VII Rule 11 is where averments made in plaint does not disclose a cause of action; relief claimed is undervalued, and the plaint is not corrected in spite of the direction of the Court; plaint is insufficiently stamped, and in spite of Court’s order the plaintiff

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has failed to supply the requisite stamp duty; where the suit appears from the statement in the plaint to be barred by any law; where it is not filed in duplicate; and where plaintiff fails to comply with the provisions of Rule 9. What is of significance under Order VII Rule 11 is that from the averments of plaint itself the suit is barred by any law and it would include limitation also including bar created by any other law for the time being in force. For the rejection of plaint, averments made by the defendant in the written statement or otherwise cannot be seen, only the averments of the plaint are material and can be taken into consideration and no other evidence.

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64. The question concerning Order VII, Rule 11 came up for consideration in Ramesh B. Desai Vrs. Bipin Vadilal Mehta, (2006) 5 SCC 638, as to the determination of the question of limitation as a preliminary issue. The Court observed that the starting point of limitation has to be ascertained on facts in every case. A plea of limitation cannot be decided as an abstract principle of law divorced from the facts for rejection of the plaint under Order VII Rule 11(d). In the case of a disputed question of fact, the question of limitation cannot be decided as a preliminary issue without a decision on facts based on the evidence that has to be adduced by the parties. The Court has no jurisdiction under Order XIV Rule 2 to decide a mixed question of law and facts as a preliminary issue. Following observations have been made:

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‘13. Sub-rule (2) of Order 14 Rule 2 CPC lays down that where issues both of law and fact arise in

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the same suit, and the court is of the opinion that the case or any part thereof may be disposed of on an issue of law only, it may try that issue first if that issue relates to:

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(a) the jurisdiction of the court, or

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(b) a bar to the suit created by any law for the time being in force.

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The provisions of this Rule came up for consideration before this Court in Major S.S. Khanna Vrs. Brig. F.J. Dillon, AIR 1964 SC 497 and it was held as under:

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‘Under Order 14 Rule 2, Code of Civil Procedure where issues both of law and fact arise in the same suit, and the court is of the opinion that the case or any part thereof may be disposed of on the issues of law only, it shall try those issues first, and for that purpose may, if it thinks fit, postpone the settlement of the issues of fact until after the issues of law have been determined. The jurisdiction to try issues of law apart from the issues of fact may be exercised only where in the opinion of the court the whole suit may be disposed of on the issues of law alone, but the Code confers no jurisdiction upon the court to try a suit on mixed issues of law and fact as preliminary issues. Normally all the issues in a suit should be tried by the court; not to do so, especially when the decision on issues even of law depend upon the decision of issues of fact, would result in a lopsided trial of the suit.’

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Though there has been a slight amendment in the language of Order 14 Rule 2 CPC by the amending Act, 1976 but the principle enunciated in the above-quoted decision still holds good and there can be no departure from the principle that the Code confers no jurisdiction upon the court to try a suit on mixed issues of law and fact as a preliminary issue and where the decision on issue of law depends upon decision of fact, it cannot be tried as a preliminary issue.”

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65.(a) Reliance has been placed on various decisions, under Order VII Rule 11(d) in which expression has been used that plaint has to be rejected if any law bars it as per the averments made in the plaint. In Raghwendra Sharan Singh Vrs. Ram Prasanna Singh (Dead) by Lrs., AIR 2019 SC 1430, it was held as under:

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‘7. Applying the law laid down by this Court in the aforesaid decisions on exercise of powers under Order 7 Rule 11 of the CPC to the facts of the case in hand and the averments in the plaint, we are of the opinion that both the Courts below have materially erred in not rejecting the plaint in exercise of powers under Order 7 Rule 11 of the CPC. It is required to be noted that it is not in dispute that the original Plaintiff himself executed the gift deed along with his brother. The deed of gift was a registered gift deed. The execution of the gift deed is not disputed by the Plaintiff. It is the case of the Plaintiff that the gift deed was a showy deed of gift, and therefore the same is not binding on him. However, it is required to

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be noted that for approximately 22 years, neither the Plaintiff nor his brother (who died on 15.12.2002) claimed at any point of time that the gift deed was showy deed of gift. One of the executants of the gift deed— brother of the Plaintiff during his lifetime never claimed that the gift deed was a showy deed of gift. It was the Appellant herein-original Defendant who filed the suit in the year 2001 for partition, and the said suit was filed against his brothers to which the Plaintiff was joined as Defendant No.10. It appears that the summon of the suit filed by the Defendant being T.S. (Partition) Suit No. 203 of 2001 was served upon the Defendant No. 10—Plaintiff herein in the year 2001 itself. Despite the same, he instituted the present suit in the year 2003. Even from the averments in the plaint, it appears that during these 22 years i.e., the period from 1981 till 2001/2003, the suit property was mortgaged by the Appellant herein-original Defendant and the mortgage deed was executed by the Defendant. Therefore, considering the averments in the plaint and the bundle of facts stated in the plaint, we are of the opinion that by clever drafting the Plaintiff has tried to bring the suit within the period of limitation which, otherwise, is barred by law of limitation. Therefore, considering the decisions of this Court in the case of T. Arivandandam (AIR 1977 SC 2421) (supra) and others, as stated above, and as the suit is clearly barred by law of limitation, the plaint is required to be rejected in exercise of powers under Order 7 Rule 11 of the CPC.’

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65.(b) In N.V. Srinivasa Murthy Vrs. Mariyamma (Dead) by proposed LRs., (2005) 5 SCC 548, this Court observed as under:

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‘16. The High Court does not seem to be right in rejecting the plaint on the ground that it does not disclose any “cause of action.” In our view, the trial court was right in coming to the conclusion that accepting all averments in the plaint, the suit seems to be barred by limitation. On critical examination of the plaint as discussed by us above, the suit seems to be clearly barred on the facts stated in the plaint itself. The suit as framed is prima facie barred by the law of limitation, provisions of the Specific Relief Act as also under Order 2 Rule 2 of the Code of Civil Procedure.’

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65.(c) This Court in Suman Devi Vrs. Manisha Devi & others, (2018) 9 SCC 808, observed as under:

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‘10. The Haryana Panchayati Raj Act, 1994 is a complete code for the presentation of election petitions. The statute has mandated that an election petition must be filed within a period of 30 days of the date of the declaration of results. This period cannot be extended. The provision of Section 14 of the Limitation Act, 1963 would clearly stand excluded. The legislature having made a specific provision, any election petition which fails to comply with the statute is liable to be dismissed. The High Court has failed to notice both the binding judgments of this Court and its own precedents on the subject, to which we have referred. The first respondent filed an election petition in the

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first instance to which there was an objection to maintainability under Order 7 Rule 11 CPC. Confronted with the objection under Order 7 Rule 11, the first respondent obviated a decision thereon by withdrawing the election petition. The grant of liberty to file a fresh election petition cannot obviate the bar of limitation. The fresh election petition filed by the first respondent was beyond the statutory period of 30 days and was hence liable to be rejected.’

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The decisions described above under Order VII Rule 11, CPC do not advance the submissions raised on behalf of respondents. In case averments in the plaint indicate that suit is barred, it is liable to be rejected before the stage of Section 9A of CPC comes. Thus, the stage at which Order VII Rule 11(d) has to be applied, is at the threshold and the scope of Section 9A is somewhat limited and different. Though the scope of rejection of plaint under Order VII Rule 11(d) is broad enough which includes rejection of the plaint in case any law bars it, however, only the averments in the plaint have to be seen, nevertheless Section 9A is limited in its operation as to the jurisdiction of the Court to entertain a suit. ”

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7.10. In Balasaria Construction (P) Ltd. Vrs. Hanuman Seva Trust, (2006) 5 SCC 658 and Chhotanben Vrs. Kiritbhai Jalkrushnabhai Thakkar, (2018) 6 SCC 422 it has been held that issue of limitation, being a mixed question of fact and law, is to be decided only after evidence is

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adduced. However, in the case of Biswanath Banik Vrs. Sulanga Bose, (2022) 3 SCR 302 it is held,

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“Now, so far as the issue whether the suit can be said to be barred by limitation or not, at this stage, what is required to be considered is the averments in the plaint Only in a case where on the face of it, it is seen that the suit is barred by limitation, then and then only a plaint can be rejected under Order VII Rule 11(d) CPC on the ground of limitation. At this stage what is required to be considered is the averments in the plaint. For the aforesaid purpose, the Court has to consider and read the averments in the plaint as a whole. As observed and held by this Court in the case of Ram Prakash Gupta Vrs. Rajiv Kumar Gupta, (2007) 10 SCC 59 = (2007) 10 SCR 520, rejection of a plaint under Order VII, Rule 11(d), CPC by reading only few lines and passages and ignoring the other relevant parts of the plaint is impermissible. In the said decision, in paragraph 21, it is observed and held as under:

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‘21. As observed earlier, before passing an order in an application filed for rejection of the plaint under Order 7, Rule 11(d), it is but proper to verify the entire plaint averments. The abovementioned materials clearly show that the decree passed in Suit No. 183 of 1974 came to the knowledge of the plaintiff in the year 1986, when Suit No. 424 of 1989 titled Assema Architect Vrs. Ram Prakash was filed in which a copy of the earlier decree was placed on record and thereafter he took steps at the earliest and filed the suit for declaration and in the alternative for possession. It is not in dispute that as per Article 59 of the Limitation Act, 1963, a suit ought to have been filed within a period of three

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years from the date of the knowledge. The knowledge mentioned in the plaint cannot be termed as inadequate and incomplete as observed by the High Court. While deciding the application under Order 7, Rule 11, few lines or passage should not be read in isolation and the pleadings have to be read as a whole to ascertain its true import. We are of the view that both the trial court as well as the High Court failed to advert to the relevant averments as stated in the plaint.’ ***”

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7.11. In ITC Ltd. Vrs. Debts Recovery Appellate Tribunal, (1998) 2 SCC 70, it is observed as under:

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“16. The question is whether a real cause of action has been set out in the plaint or something purely illusory has been stated with a view to get out of Order VII Rule 11 CPC. Clever drafting creating illusions of cause of action are not permitted in law and clear right to sue should be shown in the plaint. ”

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7.12. Pertinent may be to refer to Kum Geetha Vrs. Nanjundaswamy, (2023) 14 SCR 153 = 2023 INSC 964 , wherein it has been succinctly said that,

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“7. In simple terms, the true test is first to read the plaint meaningfully and as a whole, taking it to be true. Upon such reading, if the plaint discloses a cause of action, then the application under Order VII Rule 11 of the CPC must fail. To put it negatively, where it does not disclose a cause of action, the plaint shall be rejected.”

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7.13. In Eldeco Housing and Industries Limited Vrs. Ashok Vidyarthi, (2023) 16 SCR 872 = 2023 INSC 1043, it has been laid down as follows:

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“17. In Kamala Vrs. K.T. Eshwara Sa and others, (2008) 12 SCC 661 this Court opined that for invoking clause (d) of Order VII, Rule 11, C.P.C., only the averments in the plaint would be relevant. For this purpose, there cannot be any addition or subtraction. No amount of evidence can be looked into. The issue on merits of the matter would not be within the realm of the Court at that stage. The Court at that stage would not consider any evidence or enter a disputed question of fact of law. Relevant paragraphs thereof are extracted below:

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‘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.

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22. For the purpose of invoking Order 7 Rule 11(d) of the Code, no amount of evidence can be looked into. The issues on merit of the matter which may arise between the parties would not be within the realm of the court at that stage. All issues shall not be the subject�matter of an order under the said provision.

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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.

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24. It is one thing to say that the averments made in the plaint on their face discloses no cause of action, but it is another thing to say that although the same discloses a cause of action, the same is barred by a law.

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25. The decisions rendered by this Court as also by various High Courts are not uniform in this behalf. But, then the broad principle which can be culled out therefrom is that the court at that stage would not consider any evidence or enter into a disputed question of fact or law. In the event, the jurisdiction of the court is found to be barred by any law, meaning thereby, the subject-matter thereof, the application for rejection of plaint should be entertained.”

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18. Similar was the view expressed in Shakti Bhog Food Industries Ltd. Vrs. Central Bank of India and another, (2020) 17 SCC 260 = 2020: INSC:413 and Srihari Hanumandas Totala Vrs. Hemant Vithal Kamat and others, (2021) 9 SCC 99 = 2011: INSC:387.”

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7.14. In Srihari Hanumandas Totala Vrs. Hemant Vithal Kamat, (2021) 8 SCR 387 the guiding principles have been propounded as follows:

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“20. On a perusal of the above authorities, the guiding principles for deciding an application under Order 7 Rule 11(d) can be summarized as follows:

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(i) To reject a plaint on the ground that the suit is barred by any law, only the averments in the plaint will have to be referred to;

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(ii) The defense made by the defendant in the suit must not be considered while deciding the merits of the application;

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(iii) To determine whether a suit is barred by res judicata, it is necessary that:

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(i) the ‘previous suit’ is decided,

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(ii) the issues in the subsequent suit were directly and substantially in issue in the former suit;

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(iii) the former suit was between the same parties or parties through whom they claim, litigating under the same title; and

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(iv) that these issues were adjudicated and finally decided by a court competent to try the subsequent suit; and

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(v) Since an adjudication of the plea of res judicata requires consideration of the pleadings, issues and decision in the ‘previous suit’, such a plea will be beyond the scope of Order 7 Rule 11(d), where only the statements in the plaint will have to be perused.”

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7.15. The petitioner in the petition under Order VII, Rule 11 has specified that the suit is barred by limitation as per Part-II of Schedule appended to the Limitation .

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7.16. In Krishna Kumar Sharma Vrs. Rajesh Kumar Sharma, (2009) 4 SCR 1223 , the scope of Article 137 of the Limitation Act has been laid down as follows:

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“5. In The Kerala State Electricity Board, Trivandrum Vrs. T.P. Kunhaliumma, (1976) 4 SCC 634 it was inter alia observed as follows:

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‘18. The alteration of the division as well as the change in the collocation of words in Article 137 of the Limitation Act, 1963 compared with Article 181 of the 1908 Limitation Act shows that applications contemplated under Article 137 are not applications confined to the Code of Civil Procedure. In the 1908 Limitation Act there was no division between applications in specified cases and other applications as in the 1963 Limitation Act. The words “any other application” under Article 137 cannot be said

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on the principle of ejusdem generis to be applications under the Civil Procedure Code other than those mentioned in Part I of the third division. Any other application under Article 137 would be petition or any application under any Act. But it has to be an application to a Court for the reason that Sections 4 and 5 of the 1963 Limitation Act speak of expiry of prescribed period when court is closed and extension of prescribed period if applicant or the appellant satisfies the Court that he had sufficient cause for not preferring the appeal or making the application during such period.

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22. The conclusion we reach is that Article 137 of the 1963 Limitation Act will apply to any petition or application filed under any Act to a civil court. With respect we differ from the view taken by the two-judge bench of this Court in Athani Municipal Council case and hold that Article 137 of the 1963 Limitation Act is not confined to applications contemplated by or under the Code of Civil Procedure. The petition in the present case was to the District Judge as a court. The petition was one contemplated by the Telegraph Act for judicial decision. The petition is an application falling within the scope of Article 137 of the 1963 Limitation Act.’

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In terms of the aforesaid judgment any application to Civil Court under the Act is covered by Article 137. The application is made in terms of Section 264 of the Act to the District Judge. Section 2(bb) of the Act defines the District Judge to be Judge of Principal Civil Court.

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6. Further in S.S. Rathore Vrs. State of M.P., (1989) 4 SCC 582 it was inter alia stated as follows:

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‘5. Appellant’s counsel placed before us the residuary Article 113 and had referred to a few decisions of some High Courts where in a situation as here reliance was placed on that article. It is unnecessary to refer to those decisions as on the authority of the judgment of this Court in the case of Pierce Leslie & Co. Ltd. Vrs. Violet Ouchterlony Wapshare it must be held that Article 113 of the Act of 1963, corresponding to Article 120 of the old Act, is a general one and would apply to suits to which no other article in the schedule applies.’ ***”

¶276

7.17. While interpreting Articles 58 and 59 respectively of the Limitation Act, 1963, the Supreme Court relied on Khatri Hotels Private Limited Vrs. Union of India, (2011) 9 SCC 126 to reiterate that the period of limitation would begin to run from the date when the first right to sue accrues. Accordingly, it is observed that since the Suit was filed much after the expiry of three years when the first right to sue occurred, it found the Suit to be barred by limitation.

¶277

7.18. Having diligently considered the impugned Order, it is perceived that the learned Additional Senior Civil Judge, Balangir has dealt with the question whether on the ground of limitation the plaint could be rejected. From a bare reading of the contents of the plaint as a whole it is apparent that the plaintiff has raised demand by Letter

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dated 18.12.2006 vide paragraph 3 of the plaint. Material fact is lacking in the pleading as to when further action against the defendant was taken and nothing is placed on record to suggest that the defendant had refuted such demand within three years prior to filing of the suit in the year 2011.

¶281

7.19. Another significant aspect which requires to be considered is that the plaintiff admitted in the plaint vide paragraph 2 that, “the agreement inter alia stipulates that the date of commencement of the work, should be 09.03.2006 and the date of completion should be 08.02.2007.” When this fact is read juxtaposed with the averment at paragraph 3 of the plaint that the contract with the defendant was rescinded and demand for making good the expenditure towards repairs and payment of penalty was made vide Letter dated 18.12.2006, there is no doubt in mind that the cause of action for filing suit arose within three years from this date. Since the suit has been filed in the year 2011, in view of legal position as discussed above would suggest that when the suit is clearly barred by law, this Court is, therefore, inclined to interfere with the impugned Order passed by the Additional Senior Civil Judge, Balangir inasmuch as mere use of expression “subsequent dates” without specifying dates when cause of action subsisted

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within three years prior to filing of suit would not come to the aid of the plaintiff.

¶285

7.20. The language of Order VII, Rule 11, CPC is quite clear and unambiguous which suggests that the plaint can be rejected on the ground of limitation. Clause (d) thereof empowers the Court to reject the plaint if the suit appears from the statement in the plaint to be barred by any “law”, which includes the law of limitation. In Popat and Katecha Property Vrs. State Bank of India Staff Association, (2005) Supp.2 SCR 1030 , it has been analysed as follows:

¶286

“The period of limitation is founded on public policy, its aim being to secure the quiet of the community, to suppress fraud and perjury, to quicken diligence and to prevent oppression. The statute i.e. Limitation Act is founded on the most salutary principle of general and public policy and incorporates a principle of great benefit to the community. It has, with great propriety, been termed a statute of repose, peace and justice. The statute in one common discourages litigation by burying receptacle all the accumulations of past times which are unexplained and have not from lapse of time become inexplicable. It has been said by John Voet, with singular felicity, that controversies are limited to a fixed period of time, lest they should be immortal while men are mortal. (Also See France B. Martins Vrs. Mafalda Maria, (1996) 6 SCC 627).

¶287

Bar of limitation does not obstruct the execution. It bars the remedy. (See V. Subba Rao Vrs. Secretary to Govt.

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Panchayat Raj and Rural Development, Govt. of A.P., (1996) 7 SCC 626).

¶291

Rules of limitation are not meant to destroy the rights of parties. They are meant to see that parties do not resort to dilatory tactics, but seek their remedy promptly. The object of providing a legal remedy is to repair the damage caused by reason of legal injury. The law of limitation fixes a life span for such legal remedy for the redress of the legal injury so suffered. Time is precious and wasted time would never revisit. During the efflux of time, newer causes would sprout up necessitating newer persons to seek legal remedy by approaching the courts. So, a life span must be fixed for each remedy. Unending period for launching the remedy may lead to unending uncertainty and consequential anarchy. The law of limitation is thus founded on public policy. It is enshrined in the maxim interest reipublicae ut sit finis litium (it is for the general welfare that a period be put to litigation). The idea is that every legal remedy must be kept alive for legislatively fixed period of time. (See N. Balakrishanan Vrs. M Krishna Murthy, (1998) 7 SCC 123).

¶292

Clause (d) of Order VII, Rule 7 speaks of suit, as appears from the statement in the plaint to be barred by any law. Disputed questions cannot be decided at the time of considering an application filed under Order VII, Rule 11, CPC. Clause (d) of Rule 11 of Order VII applies in those cases only where the statement made by the plaintiff in the plaint, without any doubt or dispute shows that the suit is barred by any law in force.

¶293

***

¶294

It is trite law that not any particular plea has to be considered, and the whole plaint has to be read. As was

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observed by this Court in Roop Lal Sathi Vrs. Nachhattar Singh Gill, (1982) 3 SCC 487, only a part of the plaint cannot be rejected and if no cause of action is disclosed, the plaint as a whole must be rejected.

¶298

There cannot be any compartmentalization, dissection, segregation and inversions of the language of various paragraphs in the plaint. If such a course is adopted it would run counter to the cardinal canon of interpretation according to which a pleading has to be read as a whole to ascertain its true import. It is not permissible to cull out a sentence or a passage and to read it out of the context in isolation. Although it is the substance and not merely the form that has to be looked into, the pleading has to be construed as it stands without addition or subtraction of words or change of its apparent grammatical sense. The intention of the party concerned is to be gathered primarily from the tenor and terms of his pleadings taken as a whole. At the same time it should be borne in mind that no pedantic approach should be adopted to defeat justice on hair-splitting technicalities.

¶299

***

¶300

Order VI, Rule 2(1) of the Code states the basic, and cardinal rule of pleadings and declares that the pleading has to state material facts and not the evidence. It mandates that every pleading shall contain, and contain only, a statement in a concise form of the material facts on which the party pleading relies for his claim or defence, as the case may be, but not the evidence by which they are to be proved. There is distinction between ‘material facts’ and ‘particulars’. The words ‘material facts’ show that the facts necessary to formulate a complete cause of action must be stated. Omission of a single material fact leads to an incomplete

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cause of action and the statement or plaint becomes bad. The distinction which has been made between ‘material facts’ and ‘particulars’ was brought by Scott, L.J. in Bruce Vrs. Odhams Press Ltd., (1936) 1 KB 697.

¶304

Rule 11 of Order VII lays down an independent remedy made available to the defendant to challenge the maintainability of the suit itself, irrespective of his right to contest the same on merits. The law ostensibly does not contemplate at any stage when the objections can be raised, and also does not say in express terms about the filing of a written statement. Instead, the word ‘shall’ is used clearly implying thereby that it casts a duty on the Court to perform its obligations in rejecting the plaint when the same is hit by any of the infirmities provided in the four clauses of Rule 11, even without intervention of the defendant. In any event, rejection of the plaint under Rule 11 does not preclude the plaintiffs from presenting a fresh plaint in terms of Rule 13.”

¶305

7.21. In Dahiben Vrs. Arvindbhai Kalyanji Bhanusali, (2020) 5 SCR 694 , it has been explained that,

¶306

“13. ‘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.

¶307

In Swamy Atmanand Vrs. Sri Ramakrishna Tapovanam, (2005) 10 SCC 51 this Court held :

¶308

‘24. A cause of action, thus, means every fact, which if traversed, it would be necessary for the plaintiff to prove in order to support his

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right to a judgment of the court. In other words, it is a bundle of facts, which taken with the law applicable to them gives the plaintiff a right to relief against the defendant. It must include some act done by the defendant since in the absence of such an act, no cause of action can possibly accrue. It is not limited to the actual infringement of the right sued on but includes all the material facts on which it is founded .’ ***”

¶312

7.22. The Gujarat High Court vide Judgment dated 20.07.2021 in the case of Bhadreshkumar Bipinchandra Sheth Vrs. Rajnikant Manubhai Patel, R/First Appeal No. 254 of 2020, [Neutral Citation: 2021:GUJHC:26938-DB] has clarified the position with respect to “law” vis-à-vis “cause of action” and observed as follows:

¶313

“21. While determining, as to what would constitute cause of action, the Supreme Court in the case of Om Prakash Srivastava Vrs. Union of India, reported in (2006) 6 SCC 207, observed as below:

¶314

‘12. The expression ‘cause of action’ has acquired a judicially settled meaning. In the restricted sense ‘cause of action’ means the circumstances forming the infraction of the right or the immediate occasion for the reaction. In the wider sense, it means the necessary conditions for the maintenance of the suit, including not only the infraction of the right, but also the infraction coupled with the right itself. Compendiously, as noted above, the expression means every fact, which it would be necessary

¶315

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for the plaintiff to prove, if traversed, in order to support his right to the judgment of the court. Every fact, which is necessary to be proved, as distinguished from every piece of evidence, which is necessary to prove each fact, comprises in ‘cause of action’. (See Rajasthan High Court Advocates’ Association Vrs. Union of India, (2001) 2 SCC 294).

¶318

13. The expression ‘cause of action’ has sometimes been employed to convey the restricted idea of facts or circumstances which constitute either the infringement or the basis of a right and no more.

¶319

In a wider and more comprehensive sense, it has been used to denote the whole bundle of material facts, which a plaintiff must prove in order to succeed. These are all those essential facts without the proof of which the plaintiff must fail in his suit.’ (See Gurdit Singh Vrs. Munsha Singh, (1977) 1 SCC 791).

¶320

14. The expression ‘cause of action’ is generally understood to mean a situation or state of facts that entitles a party to maintain an action in a court or a tribunal; a group of operative facts giving rise to one or more bases of suing; a factual situation that entitles one person to obtain a remedy in court from another person (see Black’s Law Dictionary). In Stroud’s Judicial Dictionary a ‘cause of action’ is stated to be the entire set of facts that gives rise to an enforceable claim; the phrase comprises every fact, which if traversed, the plaintiff must prove in order to obtain judgment. In Words and

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Phrases (4th Edn.) the meaning attributed to the phrase ‘cause of action’ in common legal parlance is existence of those facts, which give a party a right to judicial interference on his behalf.’ (See Navinchandra N. Majithia Vrs. State of Maharashtra, (2000) 7 SCC 640 ).

¶324

22. In the case of Union of India Vrs. Adani Exports Ltd. reported in AIR 2002 SC 126, the Supreme Court observed as under:

¶325

‘10. *** Cause of action as understood in civil proceedings means every fact which, if traversed, would be necessary for the plaintiff to prove in order to support his right to a judgment of the Court. It is the bundle of facts which taken with the law applicable to them, gives the plaintiff a right to relief against the defendant. Each and every fact pleaded in the writ petition does not ipso facto lead to the conclusion that those facts give rise to a cause of action within the court's territorial jurisdiction unless those facts pleaded are such which have a nexus or relevance with the lis that is involved in the case. Facts which have no bearing with the lis or dispute involved in the case, do not give rise to a cause of action so as to confer territorial jurisdiction on the court concerned.’

¶326

23. Thus, it is apparent from the aforesaid judicial pronouncements that while examining the expressing cause of action, the court ought to look at the factual situation that gives rise to an enforceable claim. For the said purpose, the material facts are required to be stated. As observed by the Supreme

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Court in the case of Liverpool & London S.P.&I Association Ltd., (supra) whether a plaint discloses a cause of action or not is essentially a question of fact. But whether it does or does not, must be found out from reading the plaint itself. For the said purpose, the averments made in the plaint in their entirety must be held to be correct. Although the Order 7 Rule 11(a) of the CPC authorizes the court to reject a plaint on failure on part of the plaintiff to disclose a cause of action but the same would not mean that the averments made therein or document upon which reliance has been placed although discloses a cause of action, the plaint would be rejected on the ground that such averments which are not sufficient to prove the facts stated therein for the purpose of obtaining the reliefs claimed in the suit. The court must assume that the submissions in the plaint are true and has to find out if they disclose a cause of action or a triable issue. For the said purpose, the defence taken by the defendant in its written statement cannot be probed. Nor can the court dissect the pleading into several parts and consider whether each of them disclose a cause of action (Refer: D. Ramachandran Vrs. R.V. Janakiraman, (1999) 3 SCC 267).

¶330

24. It is true that the rejection of the plaint under Order VII, Rule 11 of the CPC is a drastic power conferred in the court to terminate a civil action at the threshold. The conditions precedent for the exercise of powers under Order VII Rule 11, therefore, are stringent and have been consistently held to be so by the Supreme Court. It is the averments in the plaint that have to be read as a whole to find out, whether it discloses a cause of action or whether the

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suit is barred under any law. At the stage of exercise of powers under Order VII Rule 11, the stand of the defendants in the written-statement or in the plaint for rejection of the plaint is wholly immaterial. It is only if the averments in the plaint ex-facie do not disclose a cause of action or on a reading thereof the suit appears to be barred under any law that the plaint can be rejected. In all situations, the claims will have to be adjudicated in the course of trial. When we say ‘averments in the plaint’, it would embrace the documentary evidence also relied upon by the plaintiffs. It is a settled position of law that for the purpose of considering an application seeking rejection of plaint, the court can look into the accompanying documents relied upon by the plaintiffs. It is equally well-settled that a frivolous civil action should be terminated at the threshold. The civil court should not be permitted to adjudicate upon a frivolous suit instituted with clever drafting of the plaint. If clever drafting has created an illusion of the cause of action, then it is the duty of the court to nip it in the bud at the first hearing. ***”

¶334

7.23. In the plaint of the present case, there is no mention of the cause of action by pleading material fact as to when the demand was raised and the same was last refused to be complied with by the defendant. Furthermore, as has already been noticed as per F-2 Agreement the work was required to be completed by 08.02.2007 and there is no pleading as to novation of contract by extending the terms of agreement. Rather it is the case of the plaintiff

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that the defendant has abandoned the work, meaning thereby that prior to said date the defendant had stopped work and the contract with the defendant came to an end. Thus, lacking material fact to indicate that the suit was filed within three years from the demand for recovery of penalty and expenditure being made, the suit, therefore, falls foul of clause (d) of Rule 11 of Order VII, CPC.

¶338

8. It is next contended by Sri Amit Prasad Bose, learned Advocate for the petitioner-defendant that at paragraph 10 of the plaint the opposite party-plaintiff has relied on following documents:

¶339

“10. The plaintiff, relies on the following documents;

¶340

i) Notification

¶341

ii) Rescission proposal of S.E. vide Letter No.7504 dt.01.12.206.

¶342

iii) Rescission proposal of C.E. N.Hs. (0), BBSR vide Letter No. 14100, dt.06.12.2006.

¶343

iv) Copy of F-2 Agreement.

¶344

v) Copy of Measurement Book.

¶345

vi) Copy of 1st Running & 2^nd Running Bill.

¶346

vi) Rescission proposal of E.E.N.H. Division, Sambalpur vide Letter No.4130, dt. 29.11.2006

¶347

vii) Copy of Letter No.4310, dt. 18.12.2006.”

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8.1. It is submitted that except these letter which without any ambiguity reflects that there is no iota of evidence produced by the plaintiff, though it is the custodian of record so far as recovery of demand from the defendant is concerned, that the demand has been made and refused by the petitioner-defendant at any point of time within three years prior to the date of filing of suit.

¶351

8.2. In Dahiben Vrs. Arvindbhai Kalyanji Bhanusali, (2020) 5 SCR 694 it has been observed as follows:

¶352

“12.4 Order VII Rule 14(1) provides for production of documents, on which the plaintiff places reliance in his suit, which reads as under:

¶353

‘Order VII Rule 14:

¶354

Production of document on which plaintiff sues or relies.—

¶355

(1) Where a plaintiff sues upon a document or relies upon document in his possession or power in support of his claim, he shall enter such documents in a list, and shall produce it in Court when the plaint is presented by him and shall, at the same time deliver the document and a copy thereof, to be filed with the plaint.

¶356

(2) Where any such document is not in the possession or power of the plaintiff, he shall, wherever possible, state in whose possession or power it is.

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(3) A document which ought to be produced in Court by the plaintiff when the plaint is presented, or to be entered in the list to be added or annexed to the plaint but is not produced or entered accordingly, shall not, without the leave of the Court, be received in evidence on his behalf at the hearing of the suit.

¶360

(4) Nothing in this rule shall apply to document produced for the cross examination of the plaintiff’s witnesses, or, handed over to a witness merely to refresh his memory.’

¶361

Having regard to Order VII Rule 14 CPC, 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.

¶362

12.5 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.”

¶363

8.3. In the case of Kamlesh Babu Vrs. Lajpat Rai Sharma, (2008) 6 SCR 653 , it has been held as under:

¶364

“21. It is no doubt true, as was pointed out by this Court in the case of Balasaria Construction {P) Ltd. Vrs. Hanuman Seva Trust and Ors. (2006) 5 SCC 658 and also in Narne Rama Murthy Vrs. Ravula Somasundram and Ors. (2005) 6 SCC 614, that if

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the plea of limitation is a mixed question of law and fact, the same cannot be raised at the appellate stage. We have no problem with the said proposition of law. What we are concerned with is whether the said proposition is applicable to the facts of this case. In this case the plea of limitation had been raised in the written statement and though no specific issue was framed in respect thereof, a decision was given thereupon by the learned Trial Court. Apart from Section 3(1) of the Limitation Act, even Order 7 Rule 11(d) of the Code of Civil Procedure casts a mandate upon the court to reject a plaint where the suit appears from the statement in the plaint to be barred by any law, in this case by the law of limitation. Further, as far back as in 1943, the Privy Council in the case of Lachhmi Sewak Sahu Vrs. Ram Rup Sahu & Ors., AIR 1944 Privy Council 24 held that a point of limitation is prima facie admissible even in the court of last resort, although it had not been taken in the lower courts.

¶368

22. The reasoning behind the said proposition is that certain questions relating to the jurisdiction of a Court, including limitation, goes to the very root of the Court’s jurisdiction to entertain and decide a matter, as otherwise, the decision rendered without jurisdiction will be a nullity. … Needless to say, if the suit is found to be so barred, the appeal is to be dismissed. If the suit is not found to be time-barred, the decision of the First Appellate Court on the other issues shall not be disturbed.”

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8.4. The documents relied on by the opposite party-plaintiff does not depict the last date of cause of action in order to ascertain from the pleading that before lapse of period of three years from the date of demand for payment, the suit was filed.

¶372

CONCLUSION:

¶373

9. Though the plea of limitation is always mixed question of law and facts, in the instance case, the entire perusal of the averments of plaint clearly depicts that the suit itself is barred by limitation. This Court is of the view that it is a fit case which falls within the ambit of Order VII, Rule 11(d) of the CPC for rejection of plaint. The law as delineated makes it crystal clear that where on the face of the plaint, a suit appears to be barred by any law, the Court shall dismiss the suit. But where it does not so appear, but requires further consideration or, in other words, if there be any doubt or if the Court is not sure and certain that the suit is barred by some law, the Court cannot reject the plaint under clause (d) of Order VII, Rule 11 of C.P.C.

¶374

9.1. Suffice it to observe in the present context that ‘having no cause of action’ is entirely different from ‘disclosing no cause of action’. While the former entails a detailed enquiry on merits, the latter only involves a plain reading of the plaint, upon taking the averments in the

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plaint to be sacrosanct. In this perspective, examining the plaint reveals that though the plaintiff has disclosed cause of action and disclosed “22.12.2006” as the last date, the suit being filed in the year 2011, there is no option but to hold that the same is hit by law of limitation, inasmuch as no “subsequent date” is found mentioned so as to ascertain whether there was any demand for payment made by the opposite party-plaintiff at any point of time after 08.02.2007, i.e., the date by which the work entrusted by the plaintiff in terms of F-2 Agreement was required to be completed. If the manner of approach as required to be adopted under Order VII, Rule 11 of the CPC, it is seen that the plaintiff has not sufficiently disclosed the cause of action vis-à-vis period within which the suit was to be filed from the date of cause of action. As has been held by the Hon’ble Supreme Court of India that by clever drafting the plaintiff cannot try to bring the suit within the period of limitation which, otherwise, is barred by law of limitation.

¶378

9.2. Therefore, this Court is of the view that there is no legal and valid cause of action in favour of the opposite partyplaintiff and against the petitioner-defendant. The plaintiff has abused the process of law by filing the frivolous suit. This Court, therefore, invokes the power under Order VII Rule 11 of the Code of Civil Procedure to

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reject the plaint by setting aside the Order dated 30.03.2022 passed in Civil Suit No.173 of 2011 by the Additional Senior Civil Judge, Balangir.

¶382

10. In fine, this Court finds merit in the revision petition and, accordingly, the civil revision petition is allowed, but in the circumstances, there shall be no order as to costs.

¶383

(MURAHARI SRI RAMAN) JUDGE

¶384

High Court of Orissa, Cuttack The 2^nd August, 2024//Laxmikant/Suchitra

¶385

Signature Not Verified

¶386

Digitally Signed Signed by: LAXMIKANT MOHAPATRA Designation: Senior Stenographer Reason: Authentication Location: HIGH COURT OF ORISSA, C UTT ACK Date: 02-Aug-2024 16:43:19

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Anil Kumar Dalal v. State of Odisha

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Anil Kumar Dalal v. State of Odisha

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