Telangana High Court
Kosanapu Sarojini Devi Rao vs Gorry Saroja on 14 August, 2024
Author: K. Lakshman
Bench: K. Lakshman
HON'BLE SRI JUSTICE K. LAKSHMAN
CIVIL REVISION PETITION No.1494 OF 2024
ORDER:
Heard Mr. Ravindra Babu, learned counsel for the petitioner. Despite service of notices, there was no representation on behalf of the respondents.
2. The petitioner herein is defendant No.1 and respondent No.2 herein is defendant No.2 while respondent No.1 is the plaintiff in O.S. No.446 of 2021 pending on the file of learned Principal Junior Civil Judge-cum-Judicial Magistrate of First Class at Huzurabad.
3. Respondent No.1 herein has filed the aforesaid suit O.S. No.446 of 2021 for specific performance of agreement of sale dated 10.04.1990 against the petitioner herein and respondent No.2 in respect of property bearing house No.17-10 comprised of 1000 square feet in an extent of 645.33 square yards, situated at Jammikunta Road, Huzurabad Town, Karimnagar District.
4. While so, the petitioner herein - defendant No.1 filed an Interlocutory Application vide I.A. No.931 of 2023 in O.S. No.446 of 2021 under Order - VII, Rule - 11 of CPC to reject the plaint on the following grounds:
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i) Respondent No.1 alleges that the property sold to her by the husband of the petitioner, the original owner under an unregistered document which lacks legal validity;
ii) The period of limitation for filing the suit is three years.
The suit agreement of sale is dated 10.01.1990, whereas, the suit is filed on 27.12.2021. Thus, the suit is hopelessly barred by limitation;
iii) The petitioner filed a suit vide O.S. No.55 of 2022 in respect of the very same property to grant perpetual injunction and for declaration of title; and
iv) The alternative claim made in the suit pertains to the refund of entire sale consideration of Rs.16.00 lakhs with annual interest @ 24% compounded quarterly from January, 1990 till December, 2021, which comes to Rs.1,32,21,111/. The pecuniary jurisdiction of trial Court i.e., Principal Junior Civil Judge, is limited to Rs.20.00 lakhs only. Therefore, the trial Court has no pecuniary jurisdiction to try the suit;
5. Respondent No.1 filed counter opposing the said petition contending that the suit is well within the limitation and Principal 3 KL,J CRP No.1494 of 2024 Junior Civil Judge has jurisdiction to try the suit. The grounds on which defendant No.1 filed a petition under Order - VII, Rule - 11 of CPC are triable issues.
6. The learned trial Court, vide order dated 19.12.2023 dismissed the said petition observing thus:
i. The executant of the agreement of sale is the resident United States, and there is no time fixed for performance of contract; ii. Contents of plaint would show that respondent No.1 made repeated requests to the husband of the petitioner to execute necessary sale document, but the petitioner prolonged the same. There is no averment as to refusal of execution of sale deed in the plaint. Further, the suit property was delivered to respondent No.1 and she constructed a compound wall by demolishing a dismantled house to the knowledge of the petitioner. Since time is not the essence of contract and long gap between the payments of part consideration does not necessarily mean that there was breach of contract. In view of the same, whether or not the suit is barred by limitation cannot be decided in the present petition as it is a mixed question of fact and law and requires a full-fledged trial. 4
KL,J CRP No.1494 of 2024 iii. As regards to pecuniary jurisdiction, as per agreement of sale, there are no terms in respect of the refund of sale consideration in case of breach of contract and interest payable in case of non- performance of contract. Thus, the interest claimed @ 24% per annum on Rs.16,00,000/- is not accrued interest as per the terms of the contract. Therefore, it is for the trial Court to decide about the amount of interest to be awarded if the prayer of refund of amount paid is allowed and no court fee is said to be payable on the interest sought at this stage. The trial Court is well within its jurisdiction to order payment of deficit Court fee at subsequent stage of the suit. According to the trial Court, the court fee paid on the total sale consideration is sufficient.
7. Challenging the said order dated 19.12.2023 the petition filed the present revision contending as follows:
i) The trial Court erred in arriving at a finding regarding pecuniary jurisdiction as the claim exceeds the jurisdiction of the Court, which is limited to Rs.20.00 lakhs, making the plaint liable for rejection; 5
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ii) There is no cause of action to file the suit and the same was not considered by the trial Court;
iii) The trial Court erred in misinterpreting the principle laid
down by the Hon'ble Supreme Court in T.
Arivandandam v. T.V. Satyapal; and
iv) The agreement of sale in question is an unregistered one
and it violates public policy. As per Section - 23 of the Indian Contract Act, 1872, such an agreement renders unenforceable.
8. In view of the aforesaid rival contentions, it is apposite to refer to the purport of Order - VII, Rule - 11 of CPC. It deals with 'rejection of plaint' and the same is extracted 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 is undervalued, and the plaintiff, on being required by the Court to correct the valuation within a time to be fixed by the Court, fails to do so;
(c) where the relief claimed is properly valued, but the plaint is returned upon paper insufficiently stamped, and the plaintiff, on being required by the 6 KL,J CRP No.1494 of 2024 Court to supply the requisite stamp-paper within a time to be fixed by the Court, fails to do so;
(d) where the suit appears from the statement in the plaint to be barred by any law;
(e) where it is not filed in duplicate;
(f) where the plaintiff fails to comply with the provisions of rule 9:
Provided that the time fixed by the Court for the correction of the valuation or supplying of the requisite stamp-paper shall not be extended unless the Court, for reasons to be recorded, is satisfied that the plaintiff was prevented by any cause of an exceptional nature from correcting the valuation or supplying the requisite stamp-paper, as the case may be, within the time fixed by the Court and that refusal to extend such time would cause grave injustice to the plaintiff."
9. The Hon'ble Supreme Court in Dahiben v. Arvindbhai Kalyanji Bhanusali (GAJRA) 1 had on occasion to deal with the object of Order - VII, Rule - 11 (a) and (d) of CPC and rejection of plaint and also nature of enquiry to be made by the Court while deciding an application filed under Order - VII, Rule - 11 (a) of CPC. In the said case, the defendant filed an application under Order - VII, Rule - 11 (a) and (d) to reject the plaint on the ground that the suit was 1 . (2020) 7 SCC 366 7 KL,J CRP No.1494 of 2024 barred by limitation and no cause of action has been disclosed in the plaint. In the said case, sale deed was executed on 02.07.2009 and the suit was filed on 15.12.2014. The cause of action as per the averments of the plaint therein had arisen when defendant No.1 therein 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 filed on 15.12.2014, which was barred by limitation. Considering the said facts, the trial Court rejected the plaint filed by the plaintiff by allowing the application filed under Order - VII, Rule - 11 (d). The High Court confirmed the said order passed by the trial Court. On consideration of the said facts and also purport of Order - VII, Rule - 11 of CPC, the Apex court held that in view of Order - VII, Rule - 11 of CPC, documents filed along with plaint are to be taken into consideration for deciding the application under Order - VII, Rule - 11 (a) of CPC. When a document referred to in the plaint, forms the basis of the plaint, it should be treated as a part of the plaint. In exercise of power under Order - VII, Rule - 11 of CPC, Court would determine if the assertions made in the plaint are contrary to statutory law, or judicial dicta, for deciding whether a case for 8 KL,J CRP No.1494 of 2024 rejecting the plaint at the threshold is made out. At this stage, the pleas taken by the defendant in the written statement and application for rejection of the plaint on the merits, would be irrelevant, and cannot be adverted to, or taken into consideration.
i) The Apex Court further held that the test for exercising the power under Order - 7 Rule - 11 of CPC 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.
ii) The Apex Court also relied on the principle laid down by it in decision in Liverpool & London S.P. & I Asson. Ltd. v. M.V. Sea Success I 2, wherein it was held that 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.
iii) The Apex Court considered the principle laid down by it in 2 . (2004) 9 SCC 512 9 KL,J CRP No.1494 of 2024 Hardesh Ores (P) Ltd. v. Hede & Co. 3, to the effect 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. The said principle was also reiterated in D. Ramachandran v. R.V. Janakiraman 4.
iv) The Apex Court also held that 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 - 7 Rule - 11 CPC. The power under Order - 7 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. The said principle was also laid down by the Apex Court in Saleem Bhai v. State of Maharashtra5.
3 . (2007) 5 SCC 614 4 . (1999) 3 SCC 267 5 . (2003) 1 SCC 557 10 KL,J CRP No.1494 of 2024
v) In Azhar Hussain v. Rajiv Gandhi 6, the Apex Court further held that the plea that once issues are framed, the matter must necessarily go to trial.
vi) The provision of Order - 7 Rule - 11 of CPC is mandatory in nature. It states that the plaint "shall" be rejected if any of the grounds specified in clauses (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.
"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.
vii) In ITC Ltd. v. Debts Recovery Appellate Tribunal7, the Apex Court held that law cannot permit clever drafting which creates illusions of a cause of action. What is required is that a clear right must be made out in the plaint.
6
. 1986 Supp. SCC 315 7 . (1998) 2 SCC 70 11 KL,J CRP No.1494 of 2024
viii) The Apex Court further held that if, however, by clever drafting of the plaint, it has created the illusion of a cause of action, it should be nipped in the bud, so that bogus litigation will end at the earliest stage. The Court must be vigilant against any camouflage or suppression, and determine whether the litigation is utterly vexatious, and an abuse of the process of Court as held by the Apex Court in Madanuri Sri Rama Chandra Murthy v. Syed Jalal8.
ix) The Limitation Act, 1963, prescribes a time-limit for the institution of all suits, appeals, and applications. Section 2(j) defines the expression "period of limitation" to mean the period of limitation prescribed in the Schedule for suits, appeals or applications. Section - 3 lays down that every suit instituted after the prescribed period, shall be dismissed even though limitation 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.
x) As per Article - 58 of the Limitation Act, suit for declaration has to be filed within three (03) years when the right to sue first accrues. Article - 59 says suit to cancel or set aside an instrument or decree or for the rescission of a contract shall be filed within three 8 . (2017) 13 SCC 174 12 KL,J CRP No.1494 of 2024 (03) 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. Therefore, the present suit for partition and to declare the sale deed bearing document No.9058 of 2006, dated 26.06.2006 as null and void has to be filed within three (03) years when the facts entitling the plaintiff to have instrument has become known to her.
xi) In Khatri Hotels (P) Ltd. v. Union of India 9, the Apex 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 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 accrues.
xii) In State of Punjab v. Gurdev Singh10, a three-Judge Bench of the Apex Court 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 9 . (2011) 9 SCC 126 10 . (1991) 4 SCC 1 13 KL,J CRP No.1494 of 2024 "right to sue" mean 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.
xiii) In Rajendra Bajoria v. Hemant Kumar Jalan11, the Apex Court relying on the principle laid down by it in Dahiben1 held that when the Court is of the view just by reading the plaint alone and assuming the averments made in the plaint to be correct that none of the reliefs claimed can be granted in law since the plaintiffs are not entitled to claim such reliefs, the Court should reject the plaint as disclosing no cause of action. The reliefs claimed in a plaint flow from and are the culmination of the cause of action pleaded in the plaint. The cause of action pleaded and the prayers made in a plaint are inextricably intertwined.
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. (2022) 12 SCC 641 14 KL,J CRP No.1494 of 2024
10. In the light of the above and the principle laid down in the aforesaid decisions, coming to the case on hand, respondent No.1 herein has filed a suit, vide O.S. No.446 of 2021 against the petitioner and respondent No.2 herein seeking specific performance basing on the agreement of sale dated 10.04.1990 executed by the husband of the petitioner herein. In the said agreement of sale dated 10.04.1990, the total sale consideration agreed is Rs.16,80,000/-. Respondent No.1 herein being the Vendee, having agreed the said sale consideration, paid an amount of Rs.2,50,000/- on 18.01.1989; Rs.3,50,000/- on 10.05.1989 and Rs.4,00,000/- on 10.04.1990. Thus, in all, respondent No.1 - plaintiff had paid an amount of Rs.10,00,000/- leaving balance sale consideration of Rs.6,80,000/-.
11. They have further agreed that respondent No.1 shall pay balance sale consideration at the time of registration. The husband of the petitioner delivered vacant possession of the schedule property to respondent No.1 herein on 10.04.1990 stating that she is at liberty to enjoy the schedule property without any objection from anybody including legal heirs, successors-in-interest, agents, representatives and assignees and nominees of the Vendor i.e., husband of the 15 KL,J CRP No.1494 of 2024 petitioner herein. The husband of the petitioner and his legal heirs undertook to execute and register sale deed in favour of respondent No.1 herein as and when called upon by respondent No.1 herein. In the said agreement of sale, it is further stated that "It was mutually agreed between the parties that since Vendor is NRI the Vendee is at liberty to arrange payment of balance consideration whenever the Vendor visits India and keep some minimum balance for payment at the time of registration." It is further agreed that "It is also hereby clarified that time is not essence of the contract and Vendee can call upon the Vendor or his legal heirs to execute and register sale deed whenever she desires."
12. Thus, there is no time-line mentioned in the said agreement for payment of balance sale consideration. It is not in dispute that the husband of the petitioner was an NRI. It is also not in dispute that there is time gap in making payments. An amount of Rs.2,50,000/- was paid on 18.01.1989; Rs.3,50,000/- was paid on 10.05.1989 and Rs.4,00,000/- was paid on 10.04.1990 and, thereafter, an amount of Rs.6,00,000/- was paid on 07.03.2005. The balance sale consideration is only Rs.80,000/-. The plaintiff has filed the said agreement of sale 16 KL,J CRP No.1494 of 2024 dated 10.04.1990, original cash receipts, dated 10.05.1989, 10.04.1990 and 07.03.2005.
13. In the plaint, it is further stated that respondent No.1 - plaintiff demanded the husband of the petitioner many times to receive balance sale consideration of Rs.80,000/- and execute and register sale deed in her favour. The husband of the petitioner being an NRI postponed the same on one pretext or other. He died. Thereafter, respondent No.1 - plaintiff requested the petitioner being the sole legal heir to receive balance sale consideration of Rs.80,000/- to execute and register a sale deed in her favour in respect of the suit schedule property. She has also postponed the same. Thus, there are specific averments in the plaint. Accordingly, respondent No.1 sought the relief of specific performance of the said agreement of sale, or in alternative, direct the petitioner to refund the entire sale consideration of Rs.16,00,000/- together with interest @ 24% per annum from 10.04.1990 till the date of payment. Interest is not the contractual obligation. It is the discretion of the trial Court whether to grant or not. Therefore, the contention of the petitioner - defendant No.1 that the trial Court lacks pecuniary jurisdiction is unsustainable. 17
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14. As discussed above, there is no time specified to receive balance sale consideration and execute and register a sale deed in favour of respondent No.1 - plaintiff. On the other hand, in the agreement of sale, dated 10.04.1990 itself, the husband of the petitioner and respondent No.1 herein specifically agreed that time is not the essence of contract.
15. The trial Court while dealing with an application under Order - VII, Rule - 11 of CPC has to consider the pleadings of the plaint and the documents filed along with the plaint. While deciding an application under Order - VII, Rule - 11 of CPC, the pleas taken by the defendant in written statement and application for rejection of plaint on merits cannot be irrelevant and cannot be adverted or taken into consideration.
16. In the light of the aforesaid principle, both the trial Court and this Court has to consider the contents of the plaint and the documents filed along with the plaint under Order - VII, Rule - 14 of CPC. The contents of written statement and averments of the petition filed by the defendant under Order - VII, Rule - 11 of CPC are irrelevant to decide a petition under Order - VII, Rule - 11 of CPC. 18
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17. It is relevant to note that respondent No.2 - defendant No.2 is also claiming that he purchased the subject property from the husband of the petitioner for a total sale consideration of Rs.5,00,000/- and after receiving the entire sale consideration executed an un- registered sale deed dated 30.01.1993 on Rs.100/- non-judicial stamp paper. The physical possession was also delivered. Thereafter, he has constructed compound wall etc. Therefore, the contents of the written statement and petition filed under Order - VII, Rule - 11 of CPC cannot be considered while deciding the petition under Order - VII, Rule - 11 of CPC. On consideration of the said aspects only, vide impugned order dated 19.12.2023 in I.A. No.931 of 2023 in O.S. No.446 of 2021, learned trial Court dismissed I.A. No.931 of 2023. There is no error in it. It is a reasoned order and well-founded and it does not deserve any interference by this Court in the present revision. Thus, the revision fails and the same is liable to be dismissed.
18. The present Civil Revision Petition is accordingly dismissed. In the circumstances of the case, there shall be no order as to costs.
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KL,J CRP No.1494 of 2024 As a sequel thereto, miscellaneous petitions, if any, pending in this revision shall stand closed.
_________________ K. LAKSHMAN, J 14th August, 2024 Mgr