Gujarat High Court

Poonam Kishor Dhongani vs Atik Bhinesh Desai on 11 February, 2021

Bench: Biren Vaishnav

         C/CRA/284/2019                                   CAVJUDGMENT




                 IN THEHIGHCOURTOF GUJARATAT AHMEDABAD

                    R/CIVILREVISIONAPPLICATIONNo. 284 of 2019
                                     With
                    R/CIVILREVISIONAPPLICATIONNo. 285 of 2019
                                     With
                    R/CIVILREVISIONAPPLICATIONNo. 286 of 2019

FORAPPROVALANDSIGNATURE:

HONOURABLEMR. JUSTICEBIRENVAISHNAV
========================================================================

1 Whether Reporters of Local Papers may be allowed to see No the judgment ?

2 To be referred to the Reporter or not ? No

3 Whether their Lordships wish to see the fair copy of the No judgment ?

4 Whether this case involves a substantial question of law as No to the interpretation of the Constitution of India or any order made thereunder ?

======================================================================== POONAM KISHOR DHONGANI Versus ATIK BHINESH DESAI ======================================================================== Appearance:

MR SP MAJMUDAR(3456) for the Applicant(s) No. 1 SHASHVATA U SHUKLA(8069) for the Applicant(s) No. 1 MR UDAYAN P VYAS(1302) for the Opponent(s) No. 1 NOTICE SERVED BY DS(5) for the Opponent(s) No. 2,3,4 ======================================================================== CORAM: HONOURABLE MR. JUSTICE BIREN VAISHNAV Date : 11/02/2021

1. All these revision applications have

been filed by the original defendant

No.4 in Special Civil Suit Nos.624/2014,

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625/2014 and 626/2014 wherein their

applications under Order VII - Rule 11

of the Code of Civil Procedure, 1908

were rejected by the 17th Addl. Senior

Civil Judge, Vadodara by an order dated

6.2.2019 passed below Exh.15 in the

respective suits.

2. Facts in brief are as under (For the

purposes of the facts, facts from

Civil Revision Application No.284/2019

are considered):

* The applicant was the original

defendant No.4. The respondent No.1 had

filed Special Civil Suit No.624 of 2014

before the Court of 17th Addl. Senior

Civil Judge, Baroda against the present

applicant and other three defendants. It

was the case of the plaintiff that the

suit land was of the original ownership of

one Jayesh Natvarlal Patel, respondent

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No.3 herein. According to the plaintiff,

respondent No.1 herein, he and Jayesh

Patel had entered into a partnership in

the name of Satya Developers. The

development agreement was entered into.

The case of the plaintiff was that the

respondent No.2 during the course of

partnership, keeping the plaintiff

respondent No.1 in the dark, executed

certain documents, did not manage the

partnership properly though he was engaged

as a partner due to his proficiency and

accounting etc and therefore committed

breach of trust in the partnership firm.

The case of the plaintiff in the suit was

that though the partnership was entered

into on 14.12.2017 for development of

several projects on the land in question

including the suit project, without the

consent of the plaintiff - respondent

No.1, respondent No.2 unauthorizedly

executed a registered sale deed dated

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18.5.2011 by which he sold flat 1/A, on

the First Floor of `A' Wing to the

defendant No.4, the applicant of the Civil

Revision Application.

* It was the further case of the

plaintiff on the reading of the plaint

that since a fraud was committed by the

defendant No.2 Respondent No.1 partner

Jayesh Patel, assignment deeds were

entered into by and between the plaintiff

- respondent No.1 and the respondent No.2

- Jayesh Patel, wherein by virtue of those

deed of assignments dated 12.1.2012,

22.4.2013, 21.6.2013 and 22.7.2013, the

respondent No.2 - defendant No.2 partner

had agreed that he would get the sale deed

nullified. Since he did not adhere to

these deeds of assignment, a notice was

issued on 8.2.2014 and on having failed to

do so, the plaintiff respondent No.1 in

the CRA was constrained to file the

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present suit on 4.12.2014. On filing of

the suit, the present applicant who was

the original defendant preferred an

application under Order 7, Rule 11(a) of

CPC on 21.1.2015 contending that the flat

was sold by the defendant No.2,

admittedly, by the plaintiff to the

applicant, defendant No.4 for a sale

consideration of Rs.16,00,000/ on

18.5.2011. The defendant No.4 - applicant

was in the exclusive ownership and

occupation of the property. Admittedly,

even according to the plaintiff, the

partnership was dissolved on 12.1.2012,

post the sale of the flat in favour of the

defendant No.1. It was, therefore, the

case of the applicant herein that the deed

of assignment of which specific

performance was sought, were in collusion

with the defendant Nos.1 to 3. It was the

further case of the applicant of the order

7 - Rule 11 application, the present civil

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revision applicant since what was prayed

for was to set aside the sale deed dated

18.5.2011, as per Article 59 of the

Limitation Act, the suit ought to have

been filed on 17.5.2014, whereas, the suit

was filed by the plaintiff on 3.12.2014,

beyond a period of three years, and

therefore the suit was barred by

limitation and the plaint ought to be

rejected.

* By the impugned order dated 6.2.2019,

the learned Judge rejected the application

under Order VII - Rule 11 of the CPC

observing that though the registered sale

deed is of 18.5.2011, the plaintiff came

to know about the fact on 12.1.2012, the

suit was filed on 4.12.2014 within a

period of three years and, therefore the

suit could not be held to be time barred.

The learned Judge further observed that

whether the sale deed was executed by the

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defendant No.2 under the authority was a

fact that could only be decided by leading

evidence and accordingly, the application

was rejected.

3. Mr. S.P. Majmudar, learned counsel has

appeared for the applicant and

submitted as under:

* Mr. Majumdar would submit that

admittedly from the averments made in

thereof, it was admittedly a case

where what was challenged was the sale

deed which was registered sale deed on

18.5.2011. It was a settled position

of law that from the date of

knowledge, the period of limitation

would begin to run as the date of

registration was deemed knowledge. He

would further submit that a mere vague

allegation of fraud was made in the

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plaint which did not absolve the

plaintiff of coming out of the period

of limitation and, therefore, the suit

was admittedly time barred. He would

further submit that the order of the

learned Judge holding that it was a

matter of evidence, was unwarranted.

He would also submit that merely by

mentioning the word "fraud" in the

plaint, the issue would not become

triable particularly when there were

no averments made with respect to the

fraud being played and the plaint

being vague, vexatious, engineered and

cleverly drafted, ought to have been

rejected.

* In support of his submissions, Mr.

Majmudar relied on the decision in the

case of Raghwendra Sharan Singh v. Ram

Prasanna Singh (Dead) by LRs reported

in 2019 SCC Online SC 372. He would

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rely on paragraph Nos.2830 of the

judgment to indicate that even it is

held by the Supreme Court that when

admittedly the suit when the document

that was challenged, was registered

document, a suit filed beyond the

period of limitation ought to have

been rejected.

* He would also rely on the decision of

the Supreme Court in the case of Dilboo

(Smt) (Dead) by LRs v. Dhanraji (Smt.)

(Dead) reported in 2000(7) SCC 702 ,

paragraph 20 thereof in support of his

submission that in absence of any averment

of proof to show that the suit is within

time, it is the plaintiff who would fail.

According to Mr. Majumdar whenever a

document is registered the date of

registration becomes the date of deemed

knowledge. The party cannot be allowed to

extend the limitation by merely claiming

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that he had no knowledge. He would submit

that this decision of the Supreme Court

has been followed in the case of Kanjibhai

Bhagwanjibhai Patel v. Nanduben Shamjibhai

Sorathiya reported in 2013(1) GLR 51 . He

also relied on a decision of Becharbhai

Jhavebhai Patel v. Jashbhai Shivabhai

Patel reported in 2013(1) GLR 398 . Mr.

Majmudar would also rely on the decision

in the case of Mohanbhai Maganbhai Patel

v. Miral Vallabhbhai Surani reported in

2016 SCC Online Guj. 8146 , wherein, in

paragraph Nos.9.3 and 9.4, the Court had

considered the decisions in the case of

Kanjibhai Bhagwanjibhai Patel (Supra),

Becharbhai Jhavebhai Patel and Dilboo

(Smt) (Dead) by LRs (Supra) holding that

the date of knowledge of the registered

sale deed, was the date on which the

limitation would begin to run.

4. Mr. Udayan P. Vyas, learned counsel

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appearing for the original plaintiffs

would invite the attention of the Court

to para 19 of the plaint on page 24 to

submit that it was specifically stated

in the plaint that the cause of action

had arisen on 22.4.2013, when a

registered assignment deed was entered

into between the plaintiff and the

defendant Nos.1, 2 and 3 and prior

thereto on 12.1.2012 and thereafter on

21.6.2013 and 22.7.2013 by which the

defendant Nos.1, 2 and 3 had

specifically entered into an assignment

deed by which they had assured the

plaintiff that they would get the

registered sale deed which was a subject

matter of challenge in the plaint,

cancelled. Therefore, Mr. Vyas would

submit that the prayer in the suit was

not only for cancellation of the

registered sale deed dated 18.5.2011 but

also was for specific performance of an

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assignment agreement entered into on

22.7.2013. He would invite the attention

of the Court to page 109 of the paper

book and submit that that deed of

assignment / kabulatnama was entered

into on 22.7.2013 visàvis the

defendant No.4 of special civil suit

No.624, 625 and 626 of 2014.

5. Mr.Udayan P. Vyas would rely on the

decision in the case of Madhav Prasad

Agrawal v. Axis Bank Limited reported in

2019(7)SCC 158, paras 10 to 14 and

submit that the plaint has to be either

rejected as a whole or not at all. It

cannot be a case where a part of the

plaint is to be rejected and a part is

to be accepted. He would submit that

defendant No.4 had come forth to file an

application under Order VII Rule 11 and,

therefore, the learned trial Judge was

right in rejecting the application.

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6. Having considered the submissions made

by learned advocates for the respective

parties, perusal of a plaint would

indicate that it is the case of the

plaintiff before the trial Court that he

had entered into a partnership with the

defendant No.2 for setting up a scheme.

Having found that the defendant No.2 /

respondent No.2 in the CRA had committed

a breach of trust inasmuch as the

partnership accounts were not being

given, he walked out of the partnership

on 12.1.2012. It was at this stage that

he was made aware that the defendant

No.2 as a partner had entered into a

registered sale deed on 18.5.2011 in

favour of the defendant No.4 by which he

had sold one of the flats of the 36

flats, which property came to the share

of the plaintiff by way of his release

from the partnership. The case of the

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plaintiff therefore was that the sale

deed dated 2011 was entered into by the

defendant No.2 partner with the

defendant No.4 / applicant of this CRA

without his knowledge and was

fraudulent. The plaint did not stop

there. Further as is evident from

reading para 19 of the plaint in the

cause of action, it is evident that it

is the case of the plaintiff that the

defendant Nos.1 to 3 thereafter entered

into Kabulatnama dated 22.7.2013 with

the plaintiff agreeing that they would

ensure that the registered sale deed

dated 18.5.2011 would stand cancelled

and they would take appropriate steps to

do so. That is evident from the reading

the contents of the document at page

109. Since that was not done, the

plaintiff was constrained to issue a

notice on 8.2.2014 and, thereafter filed

a suit on 4.12.2014.

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7. It is under these circumstances that the

learned Judge while rejecting the

application under Order VII Rule 11 came

to the conclusion that the suit was

filed within the period of limitation of

three years from the date of knowledge

of 12.1.2012, as a suit was filed on

4.12.2014. The date of suit as the date

of limitation would therefore in the

perception of the applicant being

17.5.2014 was incorrect. In addition

thereto, apart from setting aside the

sale deed since it was for specific

performance of the kabulatnama of 2013,

the suit was not time barred.

8. As far as the decisions relied upon by

Mr. Majmudar is concerned, as is evident

from the of Raghwendra Sharan Singh

(Supra), the Supreme Court was

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considering a challenge to the gift deed

22 years after the gift deed was made.

As far as the decision in Dilboo

(Supra), Kanjibhai Bhagwanjibhai Patel

(Supra) and Becharbhai Jhavebhai Patel

(Supra) is concerned, there can be no

dispute on the proposition of law that

the date of knowledge is deemed to be

from the date of registration of the

sale deed but in the present case, when

it has come to the knowledge of the

plaintiff on 12.1.2012 and also

particularly when it is his case that

the plaint is not only for cancellation

of the sale deed but for specific

performance of deed of assignment of

2013, it cannot be said to be a case of

clever drafting and / or vague pleadings

on the question of fraud. The suit

therefore cannot be dismissed or the

plaint cannot be rejected under Order 7

Rule 11 (d) of the Code.

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9. Even when the question of law is

considered as held in the decision in

the case of Madhav Prasad Agrawal

(Supra) of which para 1014 are

reproduced hereunder, what is evident is

that the plaint was based on twin counts

(a) cancellation of sale deed and (2)

for specific performance.

            10. We         do       not         deem       it
            necessary to        elaborate         on      all
            other arguments as                 we         are
            inclined      to     accept      the objection
            of        the appellant(s)            that the
            relief      of    rejection        of      plaint
            in    exercise      of powers under Order 7

Rule 11(d) of CPC cannot be pursued only in respect of one of the defendant(s). In other words, the plaint has to be rejected as a whole or not at all, in exercise of power Order 7 Rule 11 (d) of CPC. Indeed, the learned Single Judge rejected this objection raised by the appellant(s) by relying on the decision of the Division Bench of the same High Court.

However, we find that the decision of this Court in the case of Sejal Glass Limited (supra) is directly on the point. In that case, an application was filed by the defendant(s) under Order 7 Rule 11(d) of CPC stating that the plaint disclosed no cause of action. The civil

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court held that the plaint is to be bifurcated as it did not disclose any cause of action against the director's 14 defendant(s) 2 to 4 therein. On that basis, the High Court had opined that the suit can continue against defendant No.1 company alone. The question considered by this Court was whether such a course is open to the civil court in exercise of powers under Order 7 Rule 11(d) of CPC. The Court answered the said question in the negative by adverting to several decisions on the point which had consistently held that the plaint can either be rejected as a whole or not at all. The Court held that it is not permissible to reject plaint qua any particular portion of a plaint including against some of the defendant(s) and continue the same against the others. In no uncertain terms the Court has held that if the plaint survives against certain defendant(s) and/or properties, Order 7 Rule 11(d) of CPC will have no application at all, and the suit as a whole must then proceed to trial.

11. In view of this settled legal position we may now turn to the nature of reliefs claimed by respondent No.1 in the notice of motion considered by the Single Judge in the first instance and then the Division Bench of the High Court of Bombay. The principal or singular substantive relief is to reject the plaint only qua the applicant/respondent No.1 herein. No more and no less.

12. Indubitably, the plaint can and must be rejected in exercise of powers under Order 7 Rule 11(d) of CPC on account of non compliance of mandatory requirements or being replete with any institutional deficiency at the time of

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presentation of the plaint, ascribable to clauses (a) to (f) of Rule 11 of Order 7 of CPC. In other words, the plaint as presented must proceed as a whole or can be rejected as a whole but not in part. In that sense, the relief claimed by respondent No.1 in the notice of motion(s) which commended to the High Court, is clearly a jurisdictional error. The fact that one or some of the reliefs claimed against respondent No.1 in the concerned suit is barred by Section 34 of 2002 Act or otherwise, such objection can be raised by invoking other remedies including under Order 6 Rule 16 of CPC at the appropriate stage. That can be considered by the Court on its own merits and in accordance with law. Although, the High Court has examined those matters in the impugned judgment the same, in our opinion, should stand effaced and we order accordingly.

13. Resultantly, we do not wish to dilate on the argument of the appellant(s) about the inapplicability of the judgments taken into 16 account by the Division Bench of the High Court or for that matter the correctness of the dictum in the concerned judgment on the principle underlying the exposition in Nahar Industrial Enterprises Limited Vs. Hong Kong and Shanghai Banking Corporation7 to the effect that the DRT and also the appellate authority cannot pass a decree nor it is open to it to enter upon determination in respect of matters beyond the scope of power or jurisdiction endowed in terms of Section 17 of the 2002 Act. We leave all questions open to be decided afresh on its own merits in accordance with law.

14. A fortiori, these appeals must succeed on the sole ground that the

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principal relief claimed in the notice of motion filed by respondent No.1 to reject the plaint only qua the said respondent and which commended to the High Court, is replete with jurisdictional error. Such a relief "cannot be entertained" in exercise of power under Order 7 Rule 11(d) of CPC. That power is limited to rejection of the plaint as a whole or not at all."

10. The plaint as held by the Supreme Court

cannot be bifurcated and rejected in

part and proceed further for the other.

The Court held that it is not

permissible to reject a plaint qua any

particular portion of a plaint including

against some of the defendants and

continue the same against others. If the

application Order VII Rule 11 of the

defendant No.4 in the present case has

to be accepted then it would amount to

suit proceedings against defendant Nos.1