Pawan Gupta vs Pritpal Singh Saluja
2010 Latest Caselaw 3550 Del

*     IN THE HIGH COURT OF DELHI AT NEW DELHI

+     FAO(OS) No.318/2010 & CM Nos.8249-51/2010

PAWAN GUPTA                          ...Appellant through
                                     Mr. D.K. Singh with
                                     Mr. Pradeep Shukla &
                                     Mr. Sanjay Kumar, Advs.

                   versus

PRITPAL SINGH SALUJA                 ......Respondent through
                                     None

%                              Date of Hearing : May 04, 2010

                               Date of Decision : July 30, 2010

      CORAM:
*     HON'BLE MR. JUSTICE VIKRAMAJIT SEN
      HON'BLE MR. JUSTICE A.K. PATHAK
      1. Whether reporters of local papers may be
         allowed to see the Judgment?                  No
      2. To be referred to the Reporter or not?        Yes
      3. Whether the Judgment should be reported
         in the Digest?                                Yes

VIKRAMAJIT SEN, J.

1. This Appeal arises from dismissal of an application bearing

IA No.2520/2010 filed under Order VII Rule 11 in CS(OS)

No.1054/2004. The Application was for dismissal of the Suit being

barred by law of limitation.

2. The said Suit is for recovery of amount of ` 20,20,311/- along

with interest. The Plaintiff in his Suit avers that he had extended

loans to the Defendant on various dates commencing from

17.07.1996 to 30.03.2000. All these amounts were paid by

cheques. The Defendant made some payments towards discharge

of his liability to the Plaintiff from 25.10.1997 till 06.05.1999. It is

stated that no payment was made after that date, however, the

Appellant offered to transfer his car bearing DL-1CG-0189 and

Chassis No.101964 and Engine No.001022 for a consideration of

` 5,60,000/- which amount was to be set off against the total loan

amount due. An Agreement to Sell for the said car was also

entered into by the parties on 28.08.2001 to transfer the

ownership of the same to the Plaintiff after getting it cleared from

the hypothecation made with the Citibank.

3. In this Suit, the pleadings are complete and the Issues have

been struck. It is at this stage that the Appellant filed his

Application for rejection of suit on the ground of the bar of

limitation as, according to the Defendant, the Suit has been filed

three years after the last payment made by the Plaintiff as averred

in the Plaint itself. He further states that the Agreement for the

sale of the car make no mention of any loan transaction and thus

cannot be construed as an acknowledgment.

4. The Defendant has objected to the Application firstly that it

has been filed at a belated stage and secondly that in light of a

specific Issue having been framed regarding the plea of limitation.

Reliance has been placed on behalf of the Plaintiff on ITC Limited

-vs- Debts Recovery Appellate Tribunal, AIR 1998 SC 634 where

their Lordships have opined ―that the fact that issues have been

framed in the suit cannot come in the way of consideration of this

application filed by the appellant under Order 7, Rule 11, CPC‖.

The learned Single Judge has held that the Plaint narrates a series

of transactions between the Plaintiff and Defendant No.1 by way of

advancing of loans and repayment by the Defendant. These

transactions and the relevant dates are reflected in the Books of

Account of the Plaintiff and are admissible under Section 34 of

Evidence Act, 1872 and on those premises the suit is within

limitation, and thus the Plaintiff has a right to prove his case in the

Trial, and he cannot be non-suited at a preliminary stage.

5. We are in complete agreement with the reasoning of the

learned Single Judge. The power vested in a Civil Court to reject a

plaint on a preliminary examination is very harsh and has to be

used with circumspection. In Abdul Gafur -vs- State of

Uttarakhand, (2008) 10 SCC 97 their Lordships have held that

every person has an inherent right to bring a civil suit to a Civil

Court unless specifically barred by any law. Their Lordships while

referring to another Judgment of Supreme Court, namely, Church

of North India -vs- Lavajabhai Ratanjibhai, (2005) 10 SCC 760

further held thus -

It is trite that the rule of pleadings postulates that a plaint must contain material facts. When the plaint read as a whole does not disclose material facts giving rise to a cause of action which can be entertained by a civil court, it may be rejected in terms of Order 7 Rule 11 of the Code. Similarly, a plea of bar to jurisdiction of a civil court has to be considered having regard to the

contentions raised in the plaint. For the said purpose, averments disclosing cause of action and the reliefs sought for therein must be considered in their entirety and the court would not be justified in determining the question, one way or the other, only having regard to the reliefs claimed dehors the factual averments made in the plaint.

6. We find it pertinent to mention, in the present context, the

provision of Code of Civil Procedure, 1908 (‗CPC' for short) which

provides for framing of preliminary issues. Order XIV Rule 2(2) of

CPC reads as follows:-

Where issues both of law and of fact arise in the same suit, and the Court is of 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--

(a) the jurisdiction of the Court, or

(b) a bar to the suit created by any law for the time being in force, and for that purpose may, if it thinks fit, postpone the settlement of the other issues until after that issue has been determined, and may deal with the suit in accordance with the decision on that issue.

7. Thus, an issue pertaining to lack of jurisdiction or the suit

being barred by any law, may be framed as a preliminary issue

only where evidence is not required to be recorded, that is, where

it is a pure question of law. Where these questions are questions of

both facts and law, the decision on these issues has to await at

least the reception of evidence in this regard. No doubt, it is true

and pragmatic for obvious reasons that when the Plaint on the face

of it is barred by any law, or when the Court finds no cause of

action being made out from the averments made in the plaint, or

when a cause of action is sought to be created by means of clever

drafting, the plaint must be rejected at the earliest. However, a

party cannot be muzzled at the outset where contentious and

triable issues have been raised in the pleadings.

8. In the present case, the Plaint alleges various loan

transactions at different points in time. Unless it is determined on

the basis of the evidence, which the Court is yet to receive, the

question of limitation cannot be answered by the Court. The Plaint,

as it stands, discloses a cause of action and is not patently barred

by any law. The reliance on ITC Limited is also misplaced. In the

said Judgment, the Hon'ble Supreme Court was vexed with a case

where the Plaint alleged ‗fraud' which was done to create a cause

of action and overcome the bar of Order VII Rule 11. After going

through the averments made in the Plaint, their Lordships were of

the view that ―the alleged non-movement of goods by the seller

could be due to variety of tenable or untenable reasons. The seller

may be in breach of the contract but that by itself does not permit

the Plaintiff to use the word ‗fraud' in the Plaint and get over the

Objections that may be raised by filing an application under Order

VII Rule 11.‖ In light of these facts, the Court held that an

application under Order VII Rule 11 may lie even at a stage where

issues are framed and the suit is proceeding for trail and also

allowed the Application for Rejection of Plaint.

9. In this case, no such ground has been made before the

Single Judge or before us that would require the court to reject the

Plaint before giving the Plaintiff an opportunity to prove his case at

trial. It has also been pointed out that the Appellant had filed a

similar application before the Trial Court bearing IA

No.11600/2006 which was dismissed as withdrawn. We are of the

opinion that the later Application, which is the subject matter of

the present Appeal, is filed reagitating the points taken in the

earlier Application to stall the Trial from proceeding. We are in

agreement with the observation of the learned Single Judge that

the subject Application is not only belated but is also actuated by

an ulterior motive to delay the disposal of the case.

10. Appeal is devoid of merits and is dismissed with costs of

`20,000/-. Pending applications are also dismissed.

                                            ( VIKRAMAJIT SEN )
                                                  JUDGE




                                            ( A.K. PATHAK )
July 30, 2010                                      JUDGE
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