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REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 9519 OF 20 19
(Arising out of SLP (Civil) No. 11618 of 201 7 ) DAHIBEN … Appellant versus ARVINDBHAI KALYANJI BHANUSALI (GAJRA)(D) THR LRS & ORS. … Respondents J U D G M E N T INDU MALHOTRA, J.
- The present Civil Appeal has been filed to challenge the impugned Judgment and Order dated 19. 10 .2016 passed by a Division Bench of the Gujarat High Court, which affirmed the Order of the Trial Court, allowing the application filed by Defendant Nos. 2 and 3/Respondent Nos. 2 and 3 herein under Order VII Rule 11(d), CPC holding that the suit filed by the Appellant and Respondent Nos. 9 to 13 herein (hereinafter referred to as the “Plaintiffs”) was barred by limitation.
- The subject-matter of the present proceedings pertains to a plot of agricultural land of old tenure, admeasuring approximately
8701 sq. mtrs. in Revenue Survey No. 610, Block No.573 situated in village Mota Varachha, Sub-District Surat (hereinafter referred to as the “suit property”) which was in the ownership of the Plaintiffs.
- The land was under restrictive tenure as per Section 73AA of the Land Revenue Code. The Plaintiffs filed an application dated 13.05.2008 before the Collector, Surat to obtain permission for selling the suit property to Respondent No.1/Defendant No.1, which was non-irrigated, and stated that they had no objection to the sale of the suit property.
- The Collector vide Order dated 19.06. 2009 , after carrying out verification of the title of the Plaintiffs, permitted sale of the suit property, and fixed the sale price of the suit property as per the jantri issued by the State Government @ Rs. 2000 /- per sq. mtr., which would work out to Rs. 1,74,02,000/-. The Collector granted permission for the sale subject to the terms and conditions contained in Section 73AA of the Land Revenue Code. It was stipulated that the purchaser shall make the payment by cheque, and reference of the payment shall be made in the Sale Deed.
thumb impression on the Sale Deed dated 02.07.2009. The Sale Deed was obtained without payment of full consideration. The Respondent No.1 had paid only Rs. 40,000 through 6 cheques, and remaining 30 cheques for Rs.1,73,62,000 were “bogus” cheques. The Plaintiffs prayed for cancellation of the Sale Deed dated 02.07.2009, and also prayed that the subsequent Sale Deed dated 01.04.2013 be declared as illegal, void and ineffective; and, the physical possession of the suit property be restored to the Plaintiffs.
- Respondent Nos. 2 and 3 filed an Application for Rejection of the Plaint under Order VII Rule 11 (a) and (d) of the CPC, contending that the suit filed by the Plaintiffs was barred by limitation, and that no cause of action had been disclosed in the plaint. It was inter alia submitted that the Plaintiffs had admitted the execution of the Sale Deed dated 02.07.2009 in favour of Respondent No.1 before the Sub-Registrar, Surat. The only dispute now sought to be raised was that they had not received a part of the sale consideration. This plea was denied as being incorrect.
It was further submitted that if the Sale Deed dated 02.07.2009 was being challenged, then the suit ought to have been filed within three years i.e. on or before 02.07.2012. It was further submitted that pursuant to the execution of the registered Sale Deed dated 02.07.2009, the Plaintiffs had participated in the proceedings before the Revenue Officer for transfer of the suit property in the revenue records in favour of Respondent No.1. On that basis, the suit property had been transferred to Respondent No.1 vide Hakk Patrak Entry No. 6517 dated 24.07.2009. Before certifying the said entry, notice under Section 135D of the Land Revenue Code had been duly served on the Plaintiffs, and ever since, Respondent No. 1 had been paying the land revenue on the suit property, and taking the produce therefrom. Respondent Nos. 2 and 3 further submitted that they had purchased the suit property from Respondent No.1 after verifying the title, and inspecting the revenue records. The Respondent No. had sold the suit property vide a registered Sale Deed dated 01.04.2013, on payment of valuable consideration of Rs. 2,01,00,000/-. Pursuant thereto, the suit property was transferred in the name of Respondent Nos. 2 and 3 in the revenue records.
On a perusal of the registered Sale Deed dated 02.07.2009, [marked as Exhibit 3/9] it was noted that the Plaintiffs had in fact accepted and acknowledged the payment of the full sale consideration from Respondent No.1, through cheques which were issued prior to the execution of the Sale Deed, during the period 07.07.2008 to 02.07.2009. As per the Plaintiffs, the Sale Deed was executed on 02.07.2009 in favour of Respondent No.1, which was registered before the Office of the Sub-Registrar, for which the Plaintiffs would have remained personally present. The transaction having been executed through a registered document, was in the public domain, and in the knowledge of the Plaintiffs right from the beginning. The Trial Court noted that there was no averment in the plaint that the cheques had not been received by them. Once the cheques were received by them, in the normal course, they would have presented the cheques for encashment within 6 months. The Court held that had the Plaintiffs not been able to encash 30 cheques, a complaint ought to have been filed, or proceedings initiated for recovery of the unpaid sale consideration. There was however, nothing on record to show that the Plaintiffs had made any complaint in this regard for a period of over 5 years.
The Plaintiffs also failed to produce the returned cheques, their passbooks, bank statements, or any other document to support their averments in the plaint. A notice for transfer of the suit property in the revenue records under Section 135D was served on the Plaintiffs, to which no objection was raised. The name of Respondent No. 1 was entered into the revenue records, which was certified by the Revenue Officer. The Trial Court held that the period of limitation for filing the suit was 3 years from the date of execution of the Sale Deed dated 02.07.2009. The suit was filed on 15.12.2014. The cause of action as per the averments in the plaint had arisen when the Defendant No.1/Respondent No.1 had issued ‘false’ or ‘bogus’ cheques to the Plaintiffs in 2009. The suit for cancellation of the Sale Deed dated 02.07.2009 could have been filed by 2012, as per Articles 58 and 59 of the Limitation Act, 1963. The suit was however filed on 15.12.2014, which was barred by limitation. The suit property was subsequently sold by Respondent No. to Respondent Nos. 2 and 3 by a registered Sale Deed dated 01.04.2013. Before purchasing the suit property, the Respondent Nos. 2 and 3 had issued a public notice on 14.08.2012. The Plaintiffs did not raise any objection to the same.
Respondent Nos. 2 and 3 were bona fide purchasers for valuable consideration. The present suit for cancellation of the Sale Deed was filed by the Plaintiffs after a period of over 5 years after the execution of the Sale Deed dated 02.07.2009, and 1 year after the execution of the Sale Deed dated 01.04.2013 by Respondent No.1. It was noted that prior to the institution of the suit on 15.12.2014, at no point of time did the Plaintiffs raise any grievance whatsoever, of not having received the full sale consideration mentioned in the Sale Deed dated 02.07.2009. It was for the first time that such an allegation was made after over 5 years from the date of execution of the Sale Deed dated 02.07.2009. Since the suit in respect of the Sale Deed dated 02. 0 7. was held to be barred by law of limitation, the High Court was of the view that the suit could not be permitted to be continued even with respect to the subsequent Sale Deed dated 01.04.2013. The Plaintiffs had not raised any allegation against Respondent Nos. 2 and 3, and there was no privity of contract between the Plaintiffs and Respondent Nos. 2 and 3. The High Court rightly affirmed the findings of the Trial Court, and held that the suit was barred by limitation, since it was filed beyond the period of limitation of three years.
- Aggrieved by the impugned Judgment and Order dated 12.08.2016 passed by the High Court, the original Plaintiff No. has filed the present Civil Appeal.
- 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. 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: “ 11. Rejection of plaint.– The plaint shall be rejected in the following cases:– (a) where it does not disclose a cause of action ; (b) where the relief claimed 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; (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; (d) where the suit appears from the statement in the plaint to be barred by any law; (e) where it is not filed in duplicate; (f) where the plaintiff fails to comply with the provisions of rule 9 Provided that the time fixed by the Court for the correction of the valuation or supplying of the requisite stamp-paper shall not be extended unless the Court, for reasons to be recorded, is satisfied that the plaintiff was prevent by any cause of exceptional nature for correction the valuation or supplying the requisite stamp-paper, as the case may be, within the time fixed by the Court and that refusal to extend such time would cause grave injustice to the plaintiff.” (emphasis supplied)
permitted to waste judicial time of the court, in the following words : “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 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.” 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. 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^2 , read in conjunction with the documents relied upon, or whether the suit is barred by any law. 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 : “Order 7 Rule 14: Production of document on which plaintiff sues or relies.– (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 (^2) Liverpool & London S.P. & I Assn. Ltd. v. M.V. Sea Success I & Anr. , (2004) 9 SCC 512.
the same time deliver the document and a copy thereof, to be filed with the plaint. (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. (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. (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.” (emphasis supplied) 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. 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. 12.6 At this stage, the pleas taken by the defendant in the written statement and application for rejection of the plaint
cannot embark upon an enquiry whether the allegations are true in fact.^6 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. 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 v. State of Maharashtra.^7 The plea that once issues are framed, the matter must necessarily go to trial was repelled by this Court in Azhar Hussain (supra). 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 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. (^6) D. Ramachandran v. R.V. Janakiraman , (1999) 3 SCC 267; See also Vijay Pratap Singh v. Dukh Haran Nath Singh , AIR 1962 SC 941. (^7) (2003) 1 SCC 557.
- “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. In Swamy Atmanand v. Sri Ramakrishna Tapovanam^8 this Court held : “24. A cause of action, thus, means every fact, which if traversed, it would be necessary for the plaintiff to prove an order to support his 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” (emphasis supplied) In T. Arivandandam v. T.V. Satyapal & Anr.^9 this Court held that while considering an application under Order VII Rule 11 CPC what is required to be decided is whether the plaint discloses a real cause of action, or something purely illusory, in the following words : - “5. …The learned Munsiff must remember that if on a meaningful – not formal – reading of the plaint it is manifestly vexatious, and meritless, in the sense of not disclosing a clear right to sue, he should exercise his power under O. VII, R. 11, C.P.C. taking care to see that the ground mentioned therein is fulfilled. And, if clever drafting has (^8) (2005) 10 SCC 51. (^9) (1977) 4 SCC 467.
may not have been set up as a defence. If a suit is not covered by any specific article, then it would fall within the residuary article. Articles 58 and 59 of the Schedule to the 1963 Act, prescribe the period of limitation for filing a suit where a declaration is sought, or cancellation of an instrument, or rescission of a contract, which reads as under : Description of suit Period of limitation Time from which period begins to run
- To obtain any other declaration. Three years When the right to sue first accrues.
- To cancel or set aside an instrument or decree or for the rescission of a contract. Three years When the facts entitling the plaintiff to have the instrument or decree cancelled or set aside or the contract rescinded first become known to him. The period of limitation prescribed under Articles 58 and 59 of the 1963 Act is three years, which commences from the date when the right to sue first accrues. In Khatri Hotels Pvt. Ltd. & Anr. v. Union of India & Anr .,^12 this Court held that the use of the word ‘first’ between the words ‘sue’ and ‘accrued’, would mean that if a suit is based on multiple causes of action, the period of limitation will begin to run from the (^12) (2011) 9 SCC 126.
date when the right to sue first accrues. That is, if there are successive violations of the right, it would not give rise to a fresh cause of action, and the suit will be liable to be dismissed, if it is beyond the period of limitation counted from the date when the right to sue first accrued. A three-Judge Bench of this Court in State of Punjab v. Gurdev Singh ,^13 held that the Court must examine the plaint and determine when the right to sue first accrued to the plaintiff, and whether on the assumed facts, the plaint is within time. The words “right to sue” means the right to seek relief by means of legal proceedings. The right to sue accrues only when the cause of action arises. The suit must be instituted when the right asserted in the suit is infringed, or when there is a clear and unequivocal threat to infringe such right by the defendant against whom the suit is instituted. Order VII Rule 11(d) provides that where a suit appears from the averments in the plaint to be barred by any law, the plaint shall be rejected. (^13) (1991) 4 SCC 1.
