Bombay High Court
Merit Magnum Constructions vs Nand Kumar Anant Vaity on 15 October, 2013
Bench: Dr. D.Y. Chandrachud, M.S. Sonak
DSS app 443.13.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
APPEAL NO.443 OF 2013
IN
NOTICE OF MOTION NO.1716 OF 2010
IN
NOTICE OF MOTION NO.3679 OF 2007
IN
SUIT NO.2715 OF 2007
Merit Magnum Constructions )
(formerly known as Vimal Buildings) )
a Partnership Firm, registered under )
the Indian Partnership Act, 1932, )
having its office at Samrudhi, )
Office Floor, Plot No.157, 18th
ig )
Road, Near Ambedkar Garden )
Next to SBI, Chembur (E), )
Mumbai-400 071 ) ...Appellant/
(Original Plaintiff)
Vs.
1. Nand Kumar Anant Vaity )
2. Madhukar A. Vaity )
3. Rajendra A. Vaity )
4. Jayshree K. Parelekar )
5. Prakash K. Vaity )
6. Vinod K. Vaity )
7. Rekha W. Koli )
8. Ravindra K. Vaity )
9. Rajani R. Vaity )
10. Suchitra R. Koli )
11. Alka P. Fernandes )
12. Rajan R. Vaity )
13. Sangita R. Vaity )
14. Suraj R. Vaity )
15. Bhavika R. Vaity )
16. Joshila R. Vaity )
17. Kamalakar G. Vaity )
18. Deepali D. Patil )
19. Radha N. Vaity )
20. Kishore N. Vaity )
21. Kamal N. Vaity )
22. Pravin N Vaity )
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DSS app 443.13.doc
23. Hiraji S. Vaity )
24. Venu W. Vaity )
25. Manda V. Pokale )
26. Vilas W. Vaity )
27. Rajendra W. Vaity )
28. Hiraji S. Vaity )
29. Kusum H. Vaity )
30. Sham H. Vaity )
31. Vinod H. Vaity )
32. Shirish H. Vaity )
33. Sulbha H. Vaity )
34. Lellabhai D. Keni )
35. Pramila J. Keni )
36. Shakuntala V. Keni )
37. Vinod J. Vaity )
38. Sunil J. Vaity ig )
39. Jayant N. Vaity )
All of Mumbai Indian Inhabitants )
R/o. Vaity Wadi, Village Deonar )
Sion-Trombay Road, Opp. Metal Box)
Deonar, Mumbai, 400 088 )
40. M/s. Shree Anjanaya Estates )
a partnership Firm, registered under )
Indian Partnership Act, 1932 )
having its office at Gr. Floor, )
Niketan Building, Opp. Chembur )
Station, Chembur, Mumbai-71. )
40A. Prabhakar P. Shetty )
40B. Mohan Subramanium )
40C. Shyamlal P. Shetty )
40D. Krishnakumar Subramaniam )
All are adult of Mumbai, Inhabitant )
and are partners of Defendant No.40)
and having their office at Gr. Floor )
Niketan Building, Opp. Chembur )
Station, Chembur, Mumbai-71 )
41. Deonar Industrial Premises )
Cooperative Society Ltd., having )
its office at 14 Majithia Industrial )
Estate, Waman Tukaram Patil Marg )
Deonar, Mumbai-88 ) ...Respondents/
(Original Defendants)
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DSS app 443.13.doc
....
Ms. Prachi with Ms Manorama Mohanty and Mr. Gunjan Shah i/b S.K.
Srivastav & Co. for the Appellant.
Mr. Gaurav Sethi for Respondent No.40.
Mr. Ponvel Nadarajan, Secretary of Respondent No.41 in person.
....
CORAM : DR.D.Y.CHANDRACHUD, AND
M.S.SONAK, JJ.
Judgment reserved on : 10 October 2013
Judgment pronounced on: 15 October 2013
JUDGMENT : (PER M.S.SONAK,J.)
1.
Admit. With the consent of the learned Counsel, the appeal is taken
up for hearing and final disposal.
2. This Appeal is directed against a judgment and order dated 10 June
2013 as modified by an order dated 17 June 2013 1, rejecting the plaint
under Order 7 Rule 11 (d) of the Civil Procedure Code in respect of one of
two properties involved in the suit.
3. The Appellant is the original Plaintiff. Respondent Nos.1 to 41 are
the original Defendants. Accordingly, the parties shall be referred to by
their respective position in the plaint.
4. The Plaintiff instituted Suit No.2715 of 2007, inter alia against
Defendant Nos.1 to 39 (hereinafter referred to as Vaitys'), M/s. Shree
Anjaneya Estates-Defendant No.40, which is a Partnership Firm
1 Notice of Motion No.1716 of 2010 in Suit No.2715 of 2007
DSS app 443.13.doc
represented by four partners, Defendant Nos.40A, 40B, 40C and 40D and
Deonar Industrial Premises Cooperative Housing Society Limited,
Defendant No.41, seeking inter alia following reliefs:
(a) Declaration that Defendant Nos.1 to 39 are owners in
respect of the first property ;
(b) Declaration that Defendant No.41 has no right, title or
interest in the first property ;
(c) Perpetual injunction against Defendant Nos.40A to 40D
and Defendant No.41 from alienating or taking over possession
of the first property ;
(d) Declaration that agreement dated 27 November 2003 in
respect of the first and second property is valid, subsisting and
binding upon Defendant Nos.1 to 40;
(e) For a decree directing Defendant Nos.1 to 40 to
specifically perform agreement dated 27 November 2003;
5. Besides aforesaid, the suit seeks reliefs in respect of second
property described under Exhibit-A-2, as also relief of damages in the
alternative.
6. The subject matter of the plaint is two properties described in
Exhibit-A-1 and Exhibit-A-2 to the plaint. Since the plaint has been
DSS app 443.13.doc
rejected in respect of the property described in Exhibit-A-1 ("the first
property"), reference is made to the gist of the pleadings concerning the
said property:
(a) By agreements dated 29 April 1979 and 24 October
1981, members of the Vaity family (some of whom were then
minors) agreed to sell the first property to 17 persons who were
promoters of Defendant No.41 which is a Society, which was
eventually incorporated in the year 1987;
(b)
The Vaitys (including minors) issued a Power of Attorney
in favour of three promoters of the Society on 24 October 1981;
(c) Acting on the basis of the Power of Attorney dated 24
October 1981, the three constituted attorneys executed a Deed
of Conveyance dated 18 August 1989 purporting to convey the
first property to Defendant No.41-Society ;
(d) The two agreements of 1979 and 1981 stipulated that the
vendors shall obtain the sanction from the High Court with
regard to the sale of the shares of the minors. However, no
such sanction was obtained;
(e) On the date of the execution of the Conveyance namely
18 August 1989, vendor Nos.22,24,25 and 41 (Vaitys) had
expired and consequently the Power of Attorney dated 24
October 1981 stood revoked. On the basis of such a Power of
DSS app 443.13.doc
Attorney, no conveyance could have executed;
(f) The Vaitys by a Declaration-cum-Deed of Cancellation
dated 18 December 1995 duly registered with the Sub-
Registrar, declared the Conveyance dated 18 August 1989 as
cancelled or avoided the same as being 'non est';
(g) On 4 October 2002, the Vaitys entered into an
agreement for development of the first property with Defendant
No.40 and executed a Power of Attorney in favour of the
partners of Defendant No.40;
(h) By an agreement dated 27 November 2003, Defendant
No.40 assigned rights in respect of the first property in favour
of the Plaintiff. In pursuance of the agreement, the Plaintiff
entered into possession of the first property, made investments
to the extent of Rs.7.40 Crores, constructed a sample flat and
issued letters of allotment to 84 purchaser (which allotments
have subsequently been recalled on account of disputes);
(i) The factum of Plaintiff's possession is recorded by the
Receiver in his report dated 8 December 2003 appointed in a
liquidation proceeding concerning Defendant No.41- Society;
(j) On 27 June 2007, one of the partners of Defendant
No.40 made demands for consideration in excess of the
agreed amount and upon refusal made attempts to interfere
DSS app 443.13.doc
with the Plaintiff's possession of the suit property ;
(k) Taking advantage of the situation, there is an
apprehension that Defendant No.41 may create third party
rights in the first property or attempt to take possession of the
same; and
(l) Hence, the suit and reliefs as aforesaid in respect of the
first property.
7.
By an order dated 9 June 2008, the plaintiff has been granted
interim relief for protection of its possession in respect of the first property.
8. Defendant No.41 took out a Notice of Motion No.1716 of 2010 in the
suit, inter alia seeking the following reliefs:
(a) The order dated 9 June 2008, by which interim reliefs
had been granted to the Plaintiff be varied under Order 39
Rule 4 of the CPC.;
(b) A preliminary issue under Section 9A of the CPC, be
framed and decided in relation to the jurisdiction of the Court
and the maintainability of the suit; and
(c) That plaint, as filed, be rejected under the provisions of
Order 7 Rule 11 (d) of the CPC.
9. By a judgment and order dated 10 June 2013, (as corrected by an
DSS app 443.13.doc
order dated 17 June 2013) the learned Single Judge rejected the plaint
insofar as the first property is concerned, but directed Defendant No.41 to
file a written statement with regard to the other issues raised in the plaint.
In view of the order of rejection, the learned Single Judge did not consider
the other reliefs sought in the Notice of Motion.
10. In the impugned judgment and order, the learned Single Judge has
held as follows:
(a) By a registered Conveyance dated 18 August 1989, the
Vaitys sold, and conveyed the first property to Defendant
No.41 -Society;
(b) The Deed of Declaration-cum-Cancellation dated 18
December 1995 executed by the Vaitys being unilateral,
cannot affect the title of Defendant No.41;
(c) As the declaration dated 18 December 1995 makes a
specific reference to the Conveyance dated 18 August 1989,
the Vaitys' cannot claim ignorance about the Conveyance
dated 18 August 1989, by which their title to the first property
stood divested;
(d) The agreement of 2002 between the Vaitys and
Defendant No.40 and the agreement of 2003 between
Defendant No.40 and the plaintiff can create no rights in favour
of either of them, as by then, the Vaitys had ceased to have
DSS app 443.13.doc
any rights in respect of the first property;
(e) The limitation to seek any relief in respect of the
Conveyance dated 18 August 1989 in terms of Article 59 of the
Limitation Act expired either in the year 1992 or at least 1998,
since in terms of the Declaration dated 18 December 1995,
Vaitys had knowledge about the Conveyance dated 18 August
1989 by the said date; and
(f) Accordingly, the plaint deserves to be rejected in respect
of the first property, since it is barred by the law of limitation.
11. Ms. Prachi, Learned Counsel appearing for the Appellant has
questioned the impugned judgment and order on the following grounds:
(a) It is impermissible to reject a part of the plaint under
Order 7 Rule 11 of the CPC;
(b) For the purpose of deciding an application under Order 7
Rule 11 of CPC, only the averments in the plaint are relevant
and germane. Pleas taken in defence are wholly irrelevant at
that stage. For exercise of powers under Order 7 Rule 11 (d) of
CPC, the suit must be demonstrated to be barred upon the
statements in the plaint;
(c) Assuming that the 'bar of limitation' is "law" for purposes
of deciding an application under Order 7 Rule 11(d) of CPC,
where the issue of limitation is a mixed question of law and fact
DSS app 443.13.doc
as in the present case, the plaint cannot be rejected under
Order 7 Rule 11 (d) of the CPC; and
(d) In passing the impugned judgment and order, the learned
Single Judge has virtually delved into the merits of the defence
pleas raised by Defendant No4.1 and proceeded to return
findings thereon. This is impermissible at the stage of deciding
an application under Order 7 Rule 11 of CPC;
Upon the aforesaid grounds and based on precedents to which a
reference shall be made hereafter, Learned Counsel contended that the
impugned judgment and order is liable to be interfered with in appeal.
12. On the other hand, Mr. Ponvel Nadarajan, Secretary of Defendant
No.41, who appeared in person defended the impugned judgment and
order by submitting :
(a) Defendant No.41 is only concerned with the first property
described in Exhibit-A-1 and the rejection of the plaint qua the
said property, virtually amounts to a rejection of the plaint qua
Defendant No.1, which is permissible under Order 7 Rule 11 of
the CPC.; and
(b) The findings returned by the learned Single Judge are
based upon averments in the plaint and the documents
annexed thereto. The Declaration dated 18 December 1995
DSS app 443.13.doc
being unilateral neither cancels the Conveyance dated 18
August 1989 nor in any manner affects the title of Defendant
No.41 to the first property. The minors were represented by
their natural guardians and the Conveyance at the highest was
voidable at the instance of the minors. The minors, however,
upon attaining majority have not taken out any proceedings to
avoid the Conveyance and the period of limitation for such
purpose has also expired. The period of limitation to question
the Deed of Conveyance dated 18 August 1989 or to lay any
claim to the first property has expired. This is evident from
reading the plaint and the documents accompanying the same.
13. Mr. Ponvel Nandarajan, Secretary of Defendant No.41, placed
reliance upon the decision of the Supreme Court in the case of Church of
Christ Charitable Trust and Educational Charitable Society V.
Ponniamman Education Trust2 and K.S. Dhondy vs. Her Majesty the
Queen of Netherlands & anr.3 to contend that rejection of a plaint against
one of the Defendants in the suit is permissible under Order 7 Rule 11 of
CPC.
14. For appreciating the rival contentions, a reference should be made
to some of the precedents dealing with the scope of the enquiry at the
2 (2012) 8 Supreme Court Cases 706
3 2013(3) ALL MR 506
DSS app 443.13.doc
stage of deciding an application under Order 7 Rule 11 of CPC.
15. In Roop Lal Sathi Vs. Nachhattar Singh Gill 4, the Supreme Court
held that where the plaint discloses no cause of action, it is obligatory
upon the Court to reject the plaint as a whole under Order 7 Rule 11 (a) of
the Code, but the rule does not justify the rejection of any particular
portion of the plaint. In D. Ramachandran Vs. R.V. Janakiraman 5, the
Supreme Court held that Rule 11 of Order 7 enjoins the Court to reject the
plaint where it does not disclose a cause of action. However, there is no
question of striking out any portion of the pleading under this Rule.
Further, that it was held to be elementary that under Order 7 Rule 11(a),
the court cannot dissect the pleading into several parts and consider
whether each one of them discloses a cause of action. Under the Rule,
there cannot be a partial rejection of the plaint. Again in Sopan Sukhdeo
Sable Vs. Assistant Charity Commissioner6, the Supreme Court held that
Order 7 Rule 11 does not justify the rejection of any particular portion of
the plaint. It is trite law that it is not any particular plea which has to be
considered, and the whole plaint has to be read. There cannot be any
compartmentalisation, dissection, segregation and inversion 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
4 (1982)3Supreme Court Cases 487
5 (1999) 3 Supreme Court Cases 267
6 (2004) 3 Supreme Court Cases 137
DSS app 443.13.doc
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
context in isolation. Although it is the substance and not merely the form
that has to be looked into, the pleadings have to be construed as they
stand without addition or subtraction of words or a change of its apparent
grammatical sense. The intention of the party concerned is to be gathered
primarily from the tenor and terms of its pleadings taken as a whole. At the
same time it should be borne in mind that pedantic approach should not
be adopted to defeat justice on hair-splitting technicalities.
16. In Saleem Bhai v. State of Maharashtra7, it was held that the
averments in the plaint need to be looked into for deciding an application
under Order 7 Rule 11 of CPC. It is well settled that at the stage of
deciding an application under Order 7 Rule 11 of CPC, the pleadings have
to be construed as they stand without the addition or subtraction of words
or by changing their apparent grammatical sense. In I.T.C. Ltd. Vs. Debts
Recovery Appellate Tribunal8, and T. Arivandandam v. T.V. Satyapal9, the
Supreme Court held that the trial court must remember that if on a
meaningful and not formal reading of the plaint it is manifestly vexatious
and meritless in the sense of not disclosing a clear right to sue, it should
exercise the power under Order 7 Rule 11 of the Code taking care to see
7 (2003) 1 SCC 557
8 (1998) 2 SCC 70
9 (1977) 4 SCC 467
DSS app 443.13.doc
that the ground mentioned therein is fulfilled. If clever drafting has created
the illusion of a cause of action, it has to be nipped in the bud at the first
hearing by examining the party searchingly under Order 10 of the Code.
17. In view of these settled principles, it is clear that there can be no
rejection of only a part of the plaint as has been done in the present case.
The impugned judgment and order rejects the plaint only insofar as the
first property is concerned, and directs Defendant No.41 to file a written
statement in respect of the other claims and issues raised in the suit. This
is, in our view is impermissible under Order 7 Rule 11 of CPC.
18. In Church of Christ Charitable Trust and Educational Charitable
Society (supra), upon which considerable reliance was placed by Mr.
Ponvel Nandarajan, the Supreme Court has held that the plaint can, in a
given case, be rejected against one of the Defendants and proceeded
with, as against the other Defendants. The Supreme Court was concerned
with a case where no cause of action was disclosed against one of the
Defendants. Similarly, in K.S.Dhondy (supra) this Court rejected the plaint
as against the Queen of Netherlands, as no consent of the Central
Government had been obtained under Section 86(1) of CPC prior to
institution of the suit. However, the suit was permitted to be continued
against the Union of India, as on basis of the statements in the plaint, it
could not be concluded that the suit was barred by the law of limitation.
DSS app 443.13.doc
Therefore, the principle which was laid down in the two decisions is that in
a given case, rejection of a plaint as a whole against any one of the
Defendants may be permissible. However, from that it does not follow that
there can be rejection of only a part of a plaint or rejection qua one of the
properties, which may the subject matter of the suit. Such an exercise is
not contemplated under Order 7 Rule 11 of CPC. The impugned judgment
and order, inasmuch as it rejects the plaint in relation to the first property,
is therefore, erroneous and warrants interference.
19.
The Supreme Court in Balasaria Construction (P) Ltd Vs. Hanuman
Seva Trust and others10, noticed the conflict of opinion on the issue
whether the plaint can be rejected under Order 7 Rule 11 (d) of CPC on
the ground of the 'law of limitation' and in view of importance of the issue,
made a reference to a Bench of three Learned Judges. Before the three-
Judge Bench11, the reference was held as being academic insofar as the
case was concerned with the following observations:
"Both sides very fairly state that it is not the case of either side
that as an absolute proposition an application under Order VII
Rule 11(d) can never be based on the law of limitation. Both
sides state that the impugned Judgment is based on the facts
of this particular case and the question whether or not an
application under Order VII Rule 11 (d) could be based on law
1 0 (2006) 5 Supreme Court Cases 658
1 1 Civil Appeal No.4539 of 2003 decided on 19 October 2005
DSS app 443.13.doc
of limitation was not raised and has not been dealt with. Both
sides further state that the decision in this case will depend
upon the facts of this case."
20. From the aforesaid observations of the Supreme Court, it is clear
that there is no absolute proposition that a plaint can never be rejected
under Order 7 Rule 11 on the basis of the bar of limitation. This will
depend upon the facts and circumstances of each case. Where the issue
of limitation is a mixed question of law and fact or where a conclusion is
not discernible from the statements in the plaint that the suit is barred by
limitation, the plaint cannot be rejected by resort to Order 7 Rule 11 (d) of
CPC.
21. In the present case upon a careful perusal of the plaint, we find that
on the basis of the statements/averments therein, it cannot be concluded
that the suit is barred by the law of limitation. The issue of limitation in the
present case, is a mixed question of law and fact necessitating evidence
for effective adjudication. In such a situation, the plaint could not have
been rejected by resort to the provisions of Order 7 Rule 11 (d) of CPC.
22. In the plaint, the Plaintiff has asserted that the Power of Attorney
dated 24 October 1981 was not issued for consideration; the conveyance
dated 18 August 1989 was executed on behalf of some minors and no
sanction from the High Court was obtained despite a specific stipulation in
DSS app 443.13.doc
that regard; the conveyance dated 18 August 1989 was executed by the
promoters of Defendant No.41 on the basis of the Power of Attorney dated
24 October 1981, despite the fact that on 18 August 1989, at least four of
the Vendors had expired and the Power of Attorney consequently stood
revoked. On the basis of such assertions/averments as well as others, the
Plaintiff has pleaded that the Conveyance dated 18 August 1989 is void
and/or void ab initio and that on the basis of such conveyance Vaitys were
never divested of their title to the first property, which continues to vest in
them. The Plaintiff has also pleaded possession in pursuance of the
agreements of 2002 and 2003 and an apprehension of dispossession.
Reference has also been made in the plaint to the report of the Receiver
with regard to the possession in respect of the first property.
23. In the light of such averments in the plaint, which shall have to be
accepted as correct only for the purposes of deciding the application
under Order 7 Rule 11 of CPC, this was not a fit case to reject the plaint as
being barred by the law of limitation by resort to Order 7 Rule 11 (d) of
CPC. The merits and de-merits of the defence pleas could not have been
gone into at the stage of deciding an application under Order 7 Rule 11 of
CPC. The issue of limitation at the highest was an arguable one. The
issue, however, raises mixed questions of law and fact.
24. In Prem Singh and others Vs. Birbal and others 12, the Supreme
1 2 (2006) 5 Supreme Court Cases 353
DSS app 443.13.doc
Court observed that when a document is void ab initio, a decree for setting
aside the same would not be necessary as the same is non est in the eyes
of law, as it would be a nullity. In the same judgment, it is held that Article
59 of the Limitation Act would apply where a document is prima-facie valid
and it would not apply to documents which are presumptively invalid.
Clearly, therefore, the issue of limitation in the present case was a mixed
question of law and fact. This is not a case where from the statements in
the plaint, it could be said that the suit is ex-facie barred by the law of
limitation. In paragraphs 24 and 24A of the plaint, the Plaintiff has pleaded
that it is in physical possession of the first property and it is only in view of
the order dated 8 May 2007 passed by the Cooperative Court that there
arose an apprehension that the Plaintiff's possession may be interfered
with, by Defendant No.41. In such a situation, the plaint could not have
been rejected by resort to Order 7 Rule 11 of C.P.C. The learned Single
Judge has delved into the merits of the matter and gone to the extent of
returning findings, which may have been permissible only after the parties
have gone to trial.
25. In the circumstances, the impugned judgment and order is liable to
be set aside and the same is hereby set aside.
26. However, Defendant No.41 in Notice of Motion No.1716 of 2010 had
applied for reliefs in prayer clauses (a) and (b) with regard to variation of
DSS app 443.13.doc
the injunction order dated 9 June 2008 and for framing of preliminary
issues, which were not adjudicated upon by the learned Single Judge. In
the circumstances, Notice of Motion No.1716 of 2010 is restored to the file
of the learned Single Judge for adjudication with regard to the said prayer
clauses and matters connected therewith.
27. We clarify that we have not expressed any view on the merits of the
issue as to whether the suit is barred by limitation. The observations are
for the limited purpose of deciding whether such aspects could have been
gone into at the stage of consideration of an application under Order 7
Rule 11 (d) of CPC.
28. The Appeal is accordingly allowed to the aforesaid extent. There
shall be no order as to costs.
(Dr. D.Y. Chandrachud, J.)
(M.S.Sonak, J.)
