L.M. Techno-Build Private ... vs Pranati Ghosh & Others
2022 Latest Caselaw 6335 Cal

                     IN THE HIGH COURT AT CALCUTTA
                              Civil Appellate Jurisdiction
                                 APPELLATE SIDE

Present:

The Hon'ble Justice Tapabrata Chakraborty
                 &
The Hon'ble Justice Raja Basu Chowdhury

                                   FA 154 of 2022
                                         with
                                IA No.: CAN 1 of 2020

                          L.M. Techno-Build Private Limited
                                      - versus -
                               Pranati Ghosh & Others


For the Appellant         :       Mr. Amales Ray,
                                  Ms. Mousumi Bhowal,
                                  Mr. Aman Gupta,
                                  Mr. Somraj Paul,
                                  Mr. Ishan Bhattacharya.


For the Respondent
Nos. 1 to 6               :       Mr. Saptansu Basu, Sr. Adv.,
                                  Mr. Aninda Bhattacharya.



Hearing is concluded on   :       22nd August, 2022.



Judgment On               :       7th September, 2022.




Raja Basu Chowdhury, J.

1. This appeal has been filed challenging the judgment dated 12th

February, 2020 passed by the Civil Judge, (Senior Division), Islampur, Uttar

Dinajpur in Title Suit No. 16/2015. By the aforesaid judgment, the learned

judge has dismissed the suit by invoking its power under Order VII Rule 11

(d) of the Code of Civil Procedure, 1908 (in short, CPC). In connection with

the aforesaid appeal an injunction application being CAN No. 1 of 2020 has

also been filed. When the aforesaid injunction application came up for

hearing, by consent of the parties, we had proceeded to hear out the appeal

as also the application for injunction.

2. The brief facts of the case are that the plaintiff which is company

incorporated under the provisions of Companies Act, 1956 has filed a suit

inter alia claiming a decree for specific performance of an agreement for sale

dated 6th November, 2012 and injunction.

3. The plaintiff claims the defendant nos. 1 to 6 to be absolute owners of

the suit property. The defendant nos. 7 and 8 had acted as felicitators in

connection with sale of the suit property comprising of 33 kathas of bastu

land lying and situated at Mouza Islampur, District North Dinajpur, more

particularly described in the schedule of the plaint. The plaintiff had

inspected the suit property and had thereafter agreed to purchase the same

for and at a consideration of Rs. 70,00,000/-, on the terms more fully

appearing in the agreement for sale executed on 6th November 2012. The

plaintiff claims to have paid Rs. 60,00,000/- to the defendant nos. 1 to 6 as

per particulars given in the plaint. The plaintiff has also pleaded its

readiness and willingness to comply with the terms of agreement for sale.

Since the defendants have not come forward to execute the conveyance

despite request, the balance consideration Rs. 10,00,000/- remains unpaid.

The plaintiff is willing to make payment of the said sum. The aforesaid suit

has been filed sometimes in the year 2015.

4. The defendant nos. 1 and 3 to 6 have jointly filed a written statement.

5. Records reveal, that on 12th July, 2019 the defendant nos. 1 to 6

jointly filed an application under Order VII Rule 11(d) of CPC, inter alia,

claiming in paragraph 4 and 5 thereof that the director of the plaintiff

without any board resolution had filed suit and that the said defendants had

been able to ascertain from authentic source that the plaintiff company is no

more in existence and as such is a non-existing juristic body who cannot

proceed with the suit. Directors of the plaintiff company lose their identity

and becomes a non-existing company, hence the application for dismissal of

the suit. The said application was contested by the plaintiff by filing written

objection. By judgment and order dated 12th February, 2020 which partakes

the character of a deemed decree the aforesaid suit has been dismissed by

holding inter alia that the suit is primarily based on an agreement for sale,

the same being insufficiently stamped cannot be considered unless it is

properly impounded as per Stamp Act, 1899, and as such is barred by law.

The learned Court by concluding that the plaintiff had no locus to continue

with the suit, the suit being barred by law rejected the plaint by allowing the

application under Order VII Rule 11 of CPC.

6. Mr. Roy learned advocate, appearing in support of the instant appeal

impugns the above judgment on several grounds. He submits that while

hearing an application under Order VII Rule 11 of CPC, the Court is

concerned only with the statements made in the plaint. If from the

statements made in the plaint it does not appear that the suit is barred, the

plaint cannot be rejected. The instant suit was instituted in the year 2015.

The defendant nos. 1 and 3 to 6 are contesting the suit by filing a joint

written statement. No case as regards non-existence of the plaintiff company

has been made out in the written statement. In absence of pleadings no

issue could have been framed and the learned Court ought not to have

decided a preliminary issue against the plaintiff.

7. A challenge to the order of striking off the name of the plaintiff

company was pending at the stage when the application under Order VII

Rule 11 was filed. At present the name of the plaintiff company has been

restored. As to whether the company's name has been struck off or not

cannot form subject matter of an application under Order VII Rule 11 of

CPC. He says, the plaintiff company's name, has since been restored. The

application under Order VII Rule 11 of CPC was not filed praying for

rejection of the plaint on the ground that the agreement for sale is

unregistered or unstamped. Admissibility of a document can only be

considered when the same is tendered as evidence at the time of marking

the document as exhibit. Disclosure of a photocopy of a document with the

plaint does not attract the provisions of Stamp Act, 1899. The learned Judge

erred in dismissing the suit by adjudicating on a preliminary issue while

deciding an application under Order VII Rule 11. No such issue was framed,

no case for rejection of plaint has been made out. The order impugned

should be set aside and the plaint be restored.

8. In support of his above contention, he places reliance upon the cases

of Srihari Hanumandas Totala -Vs.- Hemant Vithal Kamat & Ors. reported

in (2021) 9 SCC 99; Biswajit Chakraborty -Vs.- Mira Sen Ray reported in

2002(2) CLJ 449.

9. Per Contra, Mr. Basu, Senior Advocate appearing for the respondent

nos. 1 to 6 has inter alia submitted that the very initiation of the

proceedings is bad as there was no authorization for filing the suit.

Admittedly when the application under order VII Rule 11 of CPC was filed,

the name of the plaintiff company had been struck off, the

plaintiff/respondent had acknowledged the same in their written objection

as well. The plaintiff company became a defunct company upon its name

being struck off. The Court had taken cognizance of the aforesaid fact. Even

if no application is filed for rejection of plaint, it is a duty of the Court to

dismiss frivolous suits as the Court cannot be burdened with luxurious

litigation. It is the statutory obligation of the Court to search, screen and

then, eliminate, vexatious or male fide litigation. In support of such

contention, he places reliance on the following cases; T. Arivandandam -Vs.-

T. V. Satyapal & Anr., AIR 1977 SC 2421:(1977) 4 SCC 467; Bijoy Nagar Tea

Company Ltd. -Vs.- Narsing Dasgupta & Ors., 2008 (1) CHN (HC) 97 and

Sopan Sukhdeo Sable & Ors. -Vs.- Assistant Charity Commission & Ors.,

(2004) 3 SCC 137.

10. He next submits, when a document forms the basis of a suit, the

court is obliged to examine the same and ascertain whether the claim can be

sustained on the basis thereof. If on scrutiny it is found that the claim

cannot be sustained on account of insufficiently stamped document, the

court should impound the same and reject the plaint, if the claim cannot be

otherwise sustained. In this case the suit is based on an agreement for sale

which is insufficiently stamped. It is thus the obligation of the Court to

impound the same. Since the plaintiff has objected to impounding the said

document, the claim cannot succeed.

11. He next urges that in the modern-day, rejection of plaint can no

longer be limited to events or circumstances that prevailed at the time of

institution of the suit. A validly instituted suit may subsequently be barred

by reasons of legislative enactments. The factum of the name of the plaintiff

company being struck off from the Registrar of companies may be a

subsequent event but the same should not deter the Court from rejecting

the plaint by invoking the provisions of Order VII Rule 11 of CPC. The Court

rightly rejected the plaint and dismissed the suit. In support his contention,

he relies on the following reports; Mira Banki and Ors. -Vs.- Smita

Bhattacharya and Ors. reported in 2004(1) CHN 261 paragraph 9; Sumana

Venkatesh Nee Sur -Vs.- Susanta Kumar Sur & Ors., 2017 (3) CHN (CAL)

33.

12. We have considered the rival contentions of the parties. We have

taken note of the statements and averments made in the plaint. We have

also considered the application filed under Order VII Rule 11 of CPC and the

written objection thereto filed by the plaintiff.

13. As would appear from above the present appeal deals with rejection

of plaint by invoking powers under Order VII Rule 11 of CPC. The

circumstances under which a plaint can be rejected has been categorized

under Order VII Rule 11 of CPC. From a plain reading of the aforesaid

provision, it will be clear that an obligation is cast on the Court to reject a

plaint in case any of the conditions enumerated in Order VII Rule 11 of CPC

are met.

14. It is true that the Court ought not to permit a frivolous and vexatious

suit to continue, however, in deciding whether a suit is vexatious or

frivolous, while exercising its power under Order VII Rule 11 of CPC, the

Court should only be concerned with the plaint and the documents

appended thereto. If upon 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, the powers under Order VII Rule 11 of CPC should be

exercised. Mr. Basu has correctly pointed out that it is the duty of the Court

to reject the plaint when the same either does not disclose cause of action or

is otherwise barred by law or fulfills any of the conditions as enumerated in

Order VII Rule 11 of CPC. The case of T. Arivandandam -Vs.- T.V. Satyapal

& Anr. (supra) supports the above view. But it is to be borne in mind that

this Hon'ble Court and the Hon'ble Supreme Court in the case of Bijoynagar

Tea Company Ltd. -Vs.- Narsing Dasgupta & Ors. (supra) and Sopan

Sukhdeo Sable & Ors -Vs.- Assistant Charity Commission & Ors. (supra)

while holding that it was the obligation of the Court to dismiss a plaint by

exercising powers under Order VII Rule 11 inter alia made it clear that such

power needs to be exercised qua a meaningful reading of the entire plaint

and not otherwise. It thus naturally follows, for the Court to exercise power

under Order VII Rule 11, the conditions for order VII Rule 11 should be met

based on the statements made in the plaint itself and documents appended

thereto and not otherwise.

15. Although Mr. Basu appearing for the respondents has tried to

impress upon us by placing reliance on the judgment delivered in Sumana

Venkatesh Nee Sur -Vs.-Susanta Kumar Sur (supra) that subsequent events

can also be taken into consideration for dismissing a suit under Order VII

Rule 11 of CPC, we are not impressed with such submissions. In the

aforesaid report the learned Judge in paragraph 10, had proceeded to record

that a perfectly valid suit instituted with a plaint disclosing a cause of action

may be subsequently seen as barred by law or impermissible to be pursued

in a Civil Court by virtue of diverse recent statutes that promote

tribunalisation upon emasculating the Civil Court system.

16. It is however not the case of the parties that the plaint has been

rendered barred by law on account of any subsequent legislation. There is

no dispute as regards the proposition of law as laid down in the case of

Sumana Venkatesh Nee Sur -Vs.- Susanta Kumar Sur (supra) upon which

reliance has been placed by the respondents. However, it is well settled, that

a decision is an authority for what it decides and not what can logically be

deduced therefrom. The said judgment is distinguishable on facts and has

no manner of application in the present case. The same does not come in

aid of the respondents.

17. If an application for rejection of a plaint is made on the ground that

the name of the plaintiff company being struck off, from the Registrar of

companies, Court must acquire such satisfaction from the plaint and

document appended to the plaint. It is well settled that a defense of a

defendant, howsoever strong the same might be, is not sufficient for an

application under Order VII Rule 11 of CPC to succeed. It is also well settled

that while hearing an application for rejection of plaint, the statements

made in the plaint are to be taken at face value. It, however, cannot be

doubted that a document forming basis of the plaint when produced along

with the plaint can be taken into consideration for rejection of plaint under

Order VII Rule 11 of CPC. We find support from the judgment delivered in

the case of Srihari Hanumandas Totala -Vs.- Hemant Vithal Kamat & Ors.

(supra).

18. We may, however, hasten to add that simply because a document is

found to be inadmissible in evidence, the same may not disentitle the

plaintiff to final relief. We, however, do not wish to prejudge such issue at

this stage, as such stage has not arrived. In the instant case the defendant

alleges that the document forming basis of the plaint cannot entitle the

plaintiff to obtain a decree as the said document is inadmissible in evidence

by reasons of the provisions of the Indian Stamp Act, 1899. Mr. Basu has,

however, fairly submitted that in the event the document is impounded;

stamp duty/ penalty is paid, the same can be exhibited and considered by

the court.

19. From the judgment impugned it would appear that the learned Judge

has proceeded to conclude, that without impounding the

document/agreement dated 6th November 2012, the suit is barred and is not

maintainable. We are afraid that the view adopted by the learned Judge

cannot be accepted. In this case there was no bar for the plaintiff to institute

the suit with the agreement for sale dated 6th November, 2012. Sufficiency

or insufficiency of stamp on such document could have been only taken into

consideration by the learned Judge, once the same is tendered in evidence.

We have been able to ascertain that only a photocopy of the document has

been disclosed along with the plaint. The original has not come forward.

Without the original neither can the Court examine the document, nor can it

impound the same. No finding could have been rendered by the learned

Judge as regards sufficiency or insufficiency of the document unless the

same is produced, such stage has not come. We thus find ourselves in

agreement with the view adopted by this Court in the case of Biswajit

Chakraborty -Vs.- Mira Sen Ray (supra) as regards disclosure of photocopy

of a document along with an application for temporary injunction or plaint

is not enough to impound the same without production of the original. In

our view even if an agreement is made on an insufficiently stamped paper,

the provisions of Stamp Act, 1899 would apply for the purpose of

impounding the document but that would not make the suit, barred by law

or deter the Court from taking a prima facie view in favour of the plaintiff,

especially when the agreement has not been tendered in evidence. It is not

the stage to decide whether the document dated 6th November, 2012 would

be impounded or whether the plaintiff would or would not pay the

penalty/stamp duty. In any event a suit cannot be dismissed on such

ground especially under the provisions of under Order VII Rule 11 of CPC.

The defendant in order to succeed in an application filed under Order VII

Rule 11 of CPC must demonstrate that the suit is barred from the statement

made in the plaint itself and not otherwise. The case of Sri Hari

Hanumandas Totala (supra), supports the above view.

20. We find that the learned Judge while dealing with an application

under Order VII Rule 11 of CPC has proceeded to decide on a preliminary

issue and has given a finding against the plaintiff company. We have

ascertained from the advocates representing the parties that no such issue

have been framed far less argued. We are of the view that the aforesaid

order passed by learned Judge cannot be sustained, we accordingly set

aside the same and restore the suit to its original file and number.

21. Since we have proceeded to hear out the appeal itself and restored

the suit to its original number and since none of the parties have advanced

any arguments on the injunction application, we do not wish to decide upon

the injunction application. It shall be open to the plaintiff to apply before

the learned trial court, if so advised. With such observation, the application

being IA No.: CAN 1 of 2020, is disposed of.

22. Urgent Photostat copy of this judgment, if applied for, be given to the

parties, as expeditiously as possible, upon compliance of formalities in that

regard.

(Raja Basu Chowdhury, J.) (Tapabrata Chakraborty, J.)