M/S Ashirwad Developers And Promoters vs Ramji Dass And Others
2025 Latest Caselaw 927 HP

Himachal Pradesh High Court

M/S Ashirwad Developers And Promoters vs Ramji Dass And Others on 16 May, 2025

Neutral Citation No. ( 2025:HHC:14208

IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA

FAO (OS)No. 17 of 2024 Reserved on 20.03.2025 Pronounced on: 16.05.2025

M/s Ashirwad Developers and Promoters .....Appellant Vs. Ramji Dass and others ...Respondents

Coram:

The Hon'ble Mr. Justice G.S. Sandhawalia, Chief Justice. The Hon'ble Mr. Justice Ranjan Sharma, Judge.

Whether approved for reporting?

For the Appellant : Mr. Ajay Sharma, Senior Advocate with Ms. Kavita Kajal, Advocate.

For the respondents: Mr. R.K. Bawa, Senior Advocate with Mr. Jeevesh Sharma, Advocate, for respondent No.1.

G.S. Sandhawalia, Chief Justice.

The present appeal has been filed

challenging the order of the learned Single Judge

whereby he has dismissed the application under Order

7 Rule 11 of the Code of Civil Procedure (hereinafter

referred to as "CPC" for short) filed by the

appellant/defendant No.12 in Civil Suit No. 33 of 2023,

on 25.06.2024.

2. The learned Single Judge, while dismissing

the application, which arose out of the said order,

noticed that the plaintiff Ramji Dass had filed a suit

for specific performance of an agreement/

memorandum of understanding dated 30.09.2018,

executed between the parties and defendants No. 1 to

11 had executed a registered partnership deed dated

22.10.2005 which constituted a partnership firm,

namely, M/s Ashirwad Developers and Promoters, the

present appellant herein. The said partnership deed

had been registered in the office of the Deputy

Registrar of the Firm at Solan, H.P. on 21.12.2005 and

accordingly, the partners had obtained the certificate

of registration dated 19.01.2006 bearing registration

No.125 with Himachal Pradesh Housing and Urban

Development Authority and the Town and Country

Planner had issued 'No Objection Certificate' in favour

of the firm for permitting it to purchase the land under

Section 118 of the HP Tenancy and Land Reforms Act,

1972. The land measuring 72-13 bighas situated in

Mauza Katha, Tehsil Nalagarh District Solan, HP was

accordingly purchased and vide letter dated

30.10.2007, permission to purchase the land had been

grated in the year 2008. The memorandum of

understanding thus had been reached between the

plaintiff and three other persons and the shares of

defendants Nos. 1 to 11 were purchased for

Rs.8,30,00,000/- which was to be paid in three phases.

The plaintiff was also to pay a sum of Rs.1,54,00,000/-

towards deficiency in the Court fee, i.e, sale deeds

dated 26.04.2008 and 28.04.2008, for release which

were impounded due to the said deficiency of the

stamp duty. The remaining amount of

Rs.6,76,00,000/- was to be paid in three phases as per

the agreement and a sum of Rs.1,10,00,000/- was to

be paid till 30.09.2018 to defendants No. 1 to 11.

Defendants No. 2 to 4, 6, 7, 9 and 11 surrendered

and transferred 64% share in favour of the plaintiff. An

amount of Rs.1,90,00,000/- was paid until December,

2019 by way of several bank drafts and the plaintiff

further paid Rs.1,00,00,000/-, on different dates and

thus an amount of Rs.4,00,00,000/- was paid to

defendants No. 1 to 11 till December, 2019.

3. Three other individuals, namely, Rajesh

Kumar Jain, Rajesh Kumar Goel and Rajesh Jain paid

Rs.33,42,500/- and remaining amount of

Rs.3,66,57,500/- was paid by the plaintiff alone. The

sale deeds were also got released by the plaintiff and

the amount of deficiency of Court fee was also paid by

the plaintiff and mutation of the land was attested in

favour of defendant No. 12/present appellant. Post

dated cheques were also issued to the tune of

Rs.4,30,00,000/- in favour of the partners of the firm

by the defendant which were not encashed by the

defendants. Three other individuals filed suit for

recovery of Rs.45,44,800/- which was compromised as

withdrawn behind the back of the plaintiff as he was

not party to the suit. Resultantly, he prayed for

induction as partner of the firm and steps were to be

taken for reconstitution of the partnership firm and

that defendants No. 2 to 4, 6, 7, 9 and 11 having a

65% share in the Firm had retired after the settlement

of their accounts and plaintiff and three other persons

were to be added as new partners in the partnership

Deed. The defendants No. 1,5, 8 and 10 would have

36% share, while the remaining 64% would be held by

the plaintiff and other persons. It has been further

averred that the possession of the land was also

delivered to the plaintiff but defendants No. 1 to 11

threatened to change its nature and raised

construction over the suit land and dispossessed the

plaintiff from the said land and filed civil suit, seeking

permanent prohibitory injunction which was

subsequently withdrawn.

4. While rejecting the application for rejection

of the plaint, filed under Order 7 Rule 11 of CPC, the

learned Single Judge noticed that application was filed

by defendants No. 2 and 12 seeking rejection of the

plaint. Thus, the present appeal arises out of the

rejection order in OMP (M) No.596 of 2023, filed by

defendants No. 2 and 12.

5. It is pertinent to notice that defendant No. 2

had earlier joined hands with another defendant No. 6

and challenged the rejection order of the same date of

25.6.2024 which had also decided OMP (M) No. 636 of

2023 filed by defendants No. 1,3 to 11. The said order

has already been upheld by the co-ordinate Bench in

FAO (OS) No.6 of 2024. The Co-ordinate Bench, while

noticing this fact on 12.11.2024 asked the Counsel for

the appellant to justify the maintainability of the

appeal and faced with the situation, learned Senior

Counsel for the appellant has submitted that

defendant No. 12 has separate right to challenge the

said order on different grounds and also that the

learned Single Judge failed to consider the said issue

and the fact that the suit was barred by limitation

having been filed on 04.05.2023. The limitation had

expired in the year 2022, as the last payment as per

the memorandum was made on 25.09.2019.

Resultantly, reliance was placed on the judgment of

the this Court in Indresh Dhiman vs. Hindustan

Times and others 2019 (3) Civil Court Cases 214,

of a single Judge which was a case of defamation and

the limitation being of one year for damages from the

date of publication would have no applicability.

6. Earlier, Suit bearing No. 106/2022 had been

filed in the Court of Civil Judge, Nalagarh for

permanent prohibitory injunction and the same had

been dismissed as withdrawn on 22.03.2023 and the

present appellant was not party to the earlier

litigation. Resultantly, reliance on the judgment of

Apex Court in Vurimi Pullarao vs. Vemari

Vyankata Radharani (2020) 14 SCC 110 to

contend that no leave of the Court had been taken

and therefore, subsequent suit is barred would be of

no relevance as the said Court had no jurisdiction to

entertain the present suit. Reliance has also been

placed upon the judgment of the Apex Court in

Lakhbir Singh vs. Arun Kumar Khanna AIR 2015

(NOC) 165 (Del.) to put forward the said proposition

that the suit for specific performance of agreement to

sell was barred since the suit for permanent

prohibitory injunction had been filed would also have

no bearing on the facts of the case in hand. While

placing reliance upon the judgment in Virgo

Industries (Eng.) Pvt. Ltd. vs. Venturetech

Solutions Pvt. Ltd. (2013) 1 SCC 625, it was held

that multiplicity of litigation cannot be resorted to on

the same cause of action but the second round of

litigation was launched after 4 years in the said case,

whereas the permanent injunction suit being

withdrawn, the present suit was filed immediately in a

Court having jurisdiction. Similarly, reliance was

placed on N.Ravindran v. V.Ramachandran AIR 2017

Madras 136 that once there was reference in the

plaint itself regarding the filing of the suit, the Court

was not powerless to examine the averments with

reference to the plaintiff's documents and there was

permission to claim the relief of specific performance

on an earlier occasion. Therefore, the second suit was

held not to be maintainable, while holding that the

issue of limitation is a mixed question of facts and

law, and both the litigation were in Courts of

competent jurisdiction.

7. Mr. R.K. Bawa, learned Senior Counsel, on

the other hand, rebutted the said argument that

Article 54 of the Limitation Act, 1963 as such

prescribes the period of limitation of three years, if

there is a date fixed for the performance or if no such

date is fixed when the plaintiff has notice that the

performance has been refused. It is accordingly

contended that the dispute was only of 36% shares on

the partnership and therefore, there cannot be any

bar as the suit was filed rightly within limitation on

04.05.2023, when the defendants had been

approached in August, 2022 with the request to pay

balance amount of consideration. Thereafter in

October and November, 2022, they had threatened to

change the nature and character of the land in

question. Lastly, when they had illegally started

plotting of the land in January, 2023 and there was

refusal to perform the agreement dated 30.09.2018,

the cause of action then arose.

8. Accordingly, he referred to Section 2(a) of

the Indian Partnership Act, 1932, regarding the act of

a firm with reference to act or omission by all partners

to contend that once the earlier appeal had been

dismissed and defendant No. 2 was also a party in the

said appeal, the principle of res judicata would apply

Accordingly, he placed reliance on Mathura Prasad

Bajoo Jaiswal and others vs. Dossibai N.B.

Jeejeebhoy (1970) 1 SCC 613, in support of his

argument. Similarly, reliance was placed on the

judgment in Pondicherry Khadi & Village

Industries Board vs. P. Kulothangan and

another (2004) 1 SCC 68 that the earlier Court

ought to have competency to adjudicate upon the

dispute and whether it was the same subject matter

as such to contend that it was only a suit for

permanent prohibitory injunction. Similarly, reliance

was placed on M. Nagabhushana vs. State of

Karnataka and others (2011) 3 SCC 408 that once

co-defendant No. 2 had unsuccessfully challenged the

said common order and being partners of the present

appellant, the present appeal was only an abuse of

the process of the Court and therefore, exemplary

cost should be imposed.

9. While falling back on Kaushik

Cooperative Building Society vs. N.

Parvathamma and others (2017) 13 SCC 138, the

principle of public policy to achieve the finality of

litigation as such was pressed that the defendants as

such could not play with the Court while challenging a

common order. It was accordingly contended that

plaint has not been placed on record and therefore,

cause of action for Solan Court could not be assessed

and it is a mixed question of facts and law that Court

at Solan did not have jurisdiction and neither the

parties were same as the present appellant was never

defendant in the earlier suit.

Reasoning given by the learned Single Judge.

10. While keeping in view the principle of

exercise of jurisdiction and keeping in mind the

judgments of the Apex Court in Eldeco Housing &

Industries Ltd. vs. Ashok Vidyarthi 2023 SCC

OnLine SC 1612, it was held that the rejection is

normally to be done to put an end to the sham

litigation and there has to be a cause of action and

the power conferred on the Court to terminate civil

action under the provisions of Order 7 Rule 11 are

drastic one and have to be strictly adhered to.

11. While addressing the issue of the objection

raised by defendants No. 1, 3 to 11 that jurisdiction

was barred and the commercial Court could have

jurisdiction, the same was rebutted by falling back

upon the judgment of the Apex Court in Vodafone

International Holdings BV vs. Union of India

(2012) 6 SCC 613 that it was not a dispute between

the company and the share holders' agreement

would not apply. Similarly, while placing reliance

upon the judgment in P. Siva Mohan Reddy Vs.

K.R. K. Reddy 2023 SCC Online TS 1337, a

distinction was made from the Joint Venture

Agreements to the agreements of the partnership

agreements on the ground that it was only a one

venture whereas the partnership was a larger

concept. Resultantly, the objection that it was a

commercial dispute, was repelled while also placing

reliance upon the judgment of the Apex Court in

Ambalal Sarabhai Enterprises Ltd. vs. K.S.

Infraspace LLP (2020) 15 SCC 585 to come to the

conclusion that the definition of the Commercial

Courts has to be strictly construed. The dispute being

of partnership as such and the right inter se the

specific performance of the memorandum of

understanding was then gone into and the fact that

earlier suit was only an injunction suit and the

arguments put forth were rejected on the ground that

the pleadings of the earlier suit had even not been

filed, therefore, the burden as such to establish the

same was on the applicant having taken such

objection.

12. The issue of limitation has also been dealt

with by placing reliance in Hardesh Ores (P) Ltd. Vs

Hede and Co. (2007) 5 SCC 614 that the sum and

substance has to be looked into and the test was to

see the full averment in the plaint whether a decree

could be passed while also placing reliance in Nusli

Neville Wadia vs. Ivory Properties and others

(2020) 6 SCC 557 and Sayed Mohd. Salie Labbai

Vs. Mohd. Hanifa (1976) 4 SCC 780, and is a

mixed question of facts and law.

13. Thus, while placing reliance on the

averments, as noticed in the plaint, as to the cause of

action had accrued only in November, 2022 when the

illegal plotting of the land had started, the application

under Order 7 Rule 11 CPC was held not liable to be

allowed and the plaint could not be rejected and the

case was put up for admission and denial of the

documents.

14. The factual matrix having been clarified as

above and keeping in view the nature of the dispute,

we are of the considered opinion that there is no

much merit in the appeal firstly and the same is liable

to be dismissed on account of the fact that defendants

are a close set of persons. Defendant No.12, the

present appellant which is a partnership firm is sued

through Roshan Lal Jindal who himself was arrayed as

defendant No. 1 being son of Birkha Ram Jindal.

Defendants No. 3, 4 and 5 are also sons of Birkha Ram

Jindal and thus, brothers of Roshan Lal Jindal who has

now filed the present appeal and has similar interest

as the other partners who had been arrayed as

defendants No. 2 to 11 in the suit. It is pertinent to

notice that the present application for rejection of

plaint was filed by the appellant and defendant No.2,

namely, Pradeep Aggarwal, son of Om Prakash and

the later along with his father defendant No. 6 Om

Prakash Aggarwal had preferred to file FAO (OS) 6 of

2024 and in sum and substance challenged the

decision of the learned Single Judge passed in OMP

(M) No. 636 of 2023 and impliedly also the present

OMP (M) No. 596 of 2023, having preferred the same

together. The order passed by the Co-ordinate Bench

while upholding the said order though on the ground

whether it was a commercial dispute or not was

rejected on 21.08.2024. The relevant portion reads as

under:

"15. It is apparent from the judgment that a joint venture is similar and closely akin to a partnership but is not a partnership. Admittedly, in the present case, the association of defendants No.1 to 11 is a partnership; hence, the same will not be covered by a Joint Venture Agreement. Further, the Joint Venture Agreement is for carrying out a single business enterprise or some specific adventure; however, in the present case, the partnership has to carry out the work of development of the property and building/construction work, which is not confined to one venture but is general in nature. Thus, the term Joint Venture Agreement will also not apply to it.

16. In the present case, as per the plaint, the property was to be purchased and was to be developed. It was laid down by Gujarat High Court in Vasu Healthcare Pvt. Ltd. Vs. Gujarat Akruti TCG Biotech Ltd. AIR 2017 Gujarat 153 that "used" must mean "actually used" or "being used" and not "likely to be used". It was observed:-

"Therefore, if the dispute falls within any of clause 2(c) the dispute can be said to be a "commercial dispute" for which the Commercial Court would have jurisdiction. It is required to be noted that before the learned Commercial Court, the

original plaintiff relied upon sections 2(c)(i), 2(c)(ii) and 2(c) (xx) of the Commercial Courts Act only. Learned Counsel appearing on behalf of the original plaintiff has candidly admitted and/or conceded that the case shall not fall within clause 2(c)(i); 2(c)(ii) or 2(c)(xx) of the Commercial Courts Act. It is required to be noted that before the learned Commercial Court, it was never the case on behalf of the original plaintiff that the case would fall within section 2(c)

(vii) of the learned Commercial Court. Despite the above, we have considered on merits whether even considering section 2(c)(vii) of the Commercial Courts Act, the dispute between the parties can be said to be a "commercial dispute" within the definition of section 2(c) of the Commercial Courts Act or not? Considering section 2(c)(vii), "commercial dispute"

means a dispute arising out of the agreements relating to immovable property used exclusively in trade or commerce. As observed hereinabove, at the time of filing of the suit and even so pleaded in the plaint, the immovable property/plots the agreements between the parties cannot be said to be agreements relating to immovable property used exclusively in trade or commerce. As per the agreement between the party after getting the plots on lease from the GIDC, the same was required to be thereafter developed by the original defendant No. 1 and after providing all infrastructural facilities and sub-plotting, the same is required to be given to other persons like the original plaintiff. It is the case on behalf of the original plaintiff that the original defendant No. 1 has failed to provide any infrastructural facilities and develop the plots and therefore, a civil suit for specific performance of the agreement has been filed. There are other alternative prayers also. Therefore, it cannot be said that the agreement is as such relating to immovable property used exclusively in trade or commerce. It is the case on behalf of the original plaintiff that as in clause (vii) of section 2(c), the phraseology used is not "actually used" or "being used" and therefore, even if at present the plot is not used and even if it is likely to be used even in future, in that case also, section 2(c)(vii) shall be applicable and therefore, the Commercial Court would have jurisdiction. The aforesaid has no substance. As per the cardinal principle of law, while interpreting a particular statute or provision, the literal and strict interpretation has to be applied. It may be noted that important words used in the relevant provisions are "immovable property used exclusively in trade or commerce". If the submission on behalf of the original plaintiff is accepted in that case it would be adding something in the statute which is not there in the statute, which is not permissible. On a plain reading of the relevant clause, it is clear that the expression "used" must mean "actually used" or "being used". If the intention of the legislature was to expand the scope, in that case, the phraseology used would have been different as for example, "likely to be used" or "to be used". The word "used" denotes "actually used" and it cannot be said to be either "ready for use" "likely to be used"; or "to be used". A similar view has been taken by the Bombay High Court (Nagpur Bench) in the case of Dinesh Kumar

Gulabchand Agrawal (Supra) and it is observed and held that the word "used" denotes "actually used" and not merely "ready for use". It is reported that SLP against the said decision has been dismissed by the Hon'ble Supreme Court."

17. This judgment was approved by the Hon'ble Supreme Court in Ambalal Sarabhai Enterprises Ltd. v. K.S. Infraspace LLP, (2020) 15 SCC 585: 2019 SCC OnLine SC 1311, wherein it was observed:-

"12. Though we are informed that the said decision is assailed before this Court in a special leave petition we are inclined to agree with the view expressed therein. This is for the reason that this Court while examining the issue relating to exclusive land use, though in a different context has laid emphasis on the present user of the land either for agriculture or non-agriculture purposes being relevant. In that regard, the decision relied on by the learned Senior Advocate for the respondent in Federation of A.P. Chambers of Commerce & Industry v. State of A.P. [Federation of A.P. Chambers of Commerce & Industry v. State of A.P., (2000) 6 SCC 550] is noticed, wherein it is observed as under: (SCC pp. 552-53, paras 6 & 9) "6. Section 3 of the said Act speaks of "land is used for any industrial purpose", "land is used for any commercial purpose" and "land is used for any other non-agricultural purpose". The emphasis is on the words "is used". For the purposes of levy of assessment on non-agricultural lands at the rate specified in the Schedule for land used for industrial purposes, therefore, there has to be a finding as a fact that the land is in fact in praesenti in use for an industrial purpose. The same would apply to a commercial purpose or any other non-agricultural purpose.

***

9. We are in no doubt whatever, therefore, that it is only land which is actually in use for an industrial purpose as defined in the said Act that can be assessed to non- agricultural assessment at the rate specified for land used for industrial purposes. The wider meaning given to the word "used" in the judgment under challenge is untenable. Having regard to the fact that the said Act is a taxing statute, no court is justified in imputing to the legislature an intention that it has not clearly expressed in the language it has employed." (emphasis supplied)

18. The Hon'ble Supreme Court further held that the provisions of the Commercial Courts Act are to be strictly construed because if these are widely construed, every dispute which is not a commercial dispute will have to be filed before it and that

would defeat the very purpose of establishing the Commercial Courts. It was observed: -

"13. The learned Senior Advocate for the appellant would, however, contend that a strict interpretation as in the case of taxing statutes would not be appropriate in the instant case where the issue relates to jurisdiction. In that regard, the learned Senior Advocate has referred to the Statement of Objects and Reasons with which the Commercial Courts Act, 2015 is enacted so as to provide speedy disposal of high- value commercial disputes so as to create a positive image to the investors world about the independent and responsive Indian legal system. Hence, he contends that a purposive interpretation be made. It is contended that a wider purport and meaning is to be assigned while entertaining the suit and considering the dispute to be a commercial dispute. Having taken note of the submission we feel that the very purpose for which the CC Act of 2015 has been enacted would be defeated if every other suit merely because it is filed before the Commercial Court is entertained. This is for the reason that the suits which are not actually relating to commercial dispute but being filed merely because of the high value and with the intention of seeking early disposal would only clog the system and block the way for the genuine commercial disputes which may have to be entertained by the Commercial Courts as intended by the lawmakers. In commercial disputes, as defined a special procedure is provided for a class of litigation and a strict procedure will have to be followed to entertain only that class of litigation in that jurisdiction. If the same is strictly interpreted it is not as if those excluded will be non-suited without any remedy. The excluded class of litigation will in any event be entertained in the ordinary civil courts wherein the remedy has always existed. 14. In that view it is also necessary to carefully examine and entertain only disputes which actually answer the definition "commercial disputes" as provided under the Act. In the instant case, as already taken note neither the agreement between the parties refers to the nature of the immovable property being exclusively used for trade or commerce as on the date of the agreement nor is there any pleading to that effect in the plaint. Further, the very relief sought in the suit is for the execution of the mortgage deed which is in the nature of the specific performance of the terms of the Memorandum of Understanding without reference to the nature of the use of the immovable property in trade or commerce as on the date of the suit. Therefore, if all these aspects are kept in view, we are of the opinion that in the present facts, the High Court was justified in its conclusion arrived through the order dated 1-3-2019 [K.S. Infraspace LLP v. Ambalal Sarabhai Enterprises Ltd., 2019 SCC OnLine Guj 1926] impugned herein. The Commercial Court shall therefore return the plaint indicating a date for its presentation before the Court having jurisdiction."

19. Therefore, the submission that the words "arising out of" are to be widely construed cannot be accepted.

20. Section 2(i)(xv) deals with the partnership agreement and if this term is strictly construed, it can only mean an existing partnership agreement and not a partnership agreement that is likely to be made in future. Such an interpretation will be as per the judgment of Gujarat High in Vasu Healthcare (supra), as approved by the Hon'ble Supreme Court, wherein the agreement related to immovable property used exclusively in trade or commerce was defined to mean the property being used and not likely to be used.

21. The memorandum of understanding is regarding the transfer of shares by some of the partners in favour of the plaintiff and other persons on receipt of the money. Therefore, the Memorandum of Understanding is regarding a future partnership that would come into existence after the terms and conditions of the memorandum are completed and is not covered under the partnership agreement."

15. Thus, we are of the considered opinion that

a co-defendant No.2 having got the order passed in

OMP (M) No. 596 of 2023 also as such upheld, the

present appeal would have to suffer the same fate of

the earlier Appeal being (FAO (OS) No. 6 of 2024).

Parties to the suit as such cannot be permitted to play

hide and seek with the Court by filing separate

applications through separate defendants who had

same interest and had sought same relief by filing

application for rejection of plaint by filing separate

OMPs and would be bound by the earlier rejection in

the present circumstances being closely related. The

reliance upon the judgment of the Apex Court

regarding such kind of vexatious litigation in

M. Nagabhushana's case (supra) is thus well

justified as there has to be a principle of constructive

res judicata which is meant to prevent the abuse of

process of Court.

16. The present appellant as such was initially

raising the issue of jurisdiction and maintainability

along with defendant No. 2, who thereafter chose to

challenge the said order by filing separate appeal

which has already been dismissed on merits. In such

circumstances, we are of the considered opinion that

though plaintiff as such cannot be put to another

round of litigation as such at the hands of his co-

defendants. The fundamental principle of res judicata

would come into play as there has to be honesty and

a fair administration of justice and to prevent abuse in

the matter of accessing Court for agitating on issues

which have become final between the parties.

Reference can be made to the observations made by

the Apex Court in M. Nagabhushana vs. State of

Karnataka and others (2011) 3 SCC 408. Para 13

of the said judgment reads as under:

"13.That principle of finality of litigation is based on high principle of public policy. In the absence of such a principle great oppression might result under the colour and pretence of law in as much as there will be no end of litigation and a rich and malicious litigant will succeed in infinitely vexing his opponent by repetitive suits and actions. This may compel the weaker party to relinquish his right. The doctrine of res Judicata has been evolved to prevent such an anarchy. That is why it is perceived that the plea of res Judicata is not a technical doctrine but a fundamental principle which sustains the Rule of Law in ensuring finality in litigation. This principle seeks to promote honesty and a fair administration of justice and to prevent abuse in the matter of accessing Court for agitating on issues which have become final between the parties."

17. Secondly, we are of the considered opinion

that the power which has to be exercised under Order

7 Rule 11 CPC is an extreme power and has to be

exercised with certain care and reliance can be placed

upon the law laid down by the Apex Court in a three

Judge Bench judgment in M/S Popat And Kotecha

Property vs Ashim Kumar Dey, (2005) 3 Civil

Court Cases 350. It was held in the said case that

disputed questions cannot be decided at the time of

considering an application under Order 7 Rule 11 CPC.

In the said case, the Division Bench had interfered

with the order of the learned Single Judge and

rejected the plaint. Resultantly, it was held that the

real object of the said provision is to keep out of the

Court irresponsible law suit and only if there is prima

facie view that the suit is abuse of the process of the

said power it has to be exercised. Resultantly, the

order of the Division Bench as such was interfered

with while dismissing the application and allowing the

suit to continue.

18. Similar view has also been taken by the

Apex Court in Church of Christ Charitable Trust &

Educational Charitable Society, represented by

its Chairman vs M/s Ponniamman Educational

Trust represented by its Chairperson/Managing

Trustee (2012) 8 SCC 706, wherein it was held that

the averments and pleadings taken in the plaint are to

be examined and the cause of action has to be seen

and if there is no such cause of action, the said power

has to be exercised. In the said case, the Division

Bench had interfered with the order of the rejection of

the plaint by the learned Single Judge wherein the

plaint had been rejected in so far as one of the

defendants. The interference was thus done that there

was no cause of action against the first defendant and

the suit could not proceed against him either for

specific performance or for the recovery of money. In

the present case the cause of action plainly arises as

the plaintiff is wanting to seek performance of the

MOU dated 30.09.2018 for constitution of the

partnership firm having taken active steps in

furtherance of his investment.

19. In Mayar (H.K.) Ltd. & Ors. Vs Owners &

Parties, Vessel M.V. Fortune Express & Ors

(2006) 3 SCC 100, it was held that suit as such has

to be vexatious before the rejection order is passed

and that if cause of action is arising which is a bundle

of facts, the rejection should not be done, while

placing reliance on the earlier judgment in M/S Popat

and Kotecha Property (supra). Paras 10 and 11 of

the said judgment reads as under:

"10.The aforesaid finding clearly indicates that the order of permanent stay of the suit was made by the Division Bench not because the plaint is liable to be rejected on the grounds that it falls within the parameters of Order VII Rule 11 of the Code or the suit is liable to be stayed in exercise of the powers under Section 10 of the Code or that the Court has passed an order under Order VI Rule 16 of the Code which has not been complied with. The Division Bench, in fact, has exercised the jurisdiction for stay of the suit as the plaintiffs did not disclose the forum selection clause whereby the Court at Calcutta had no jurisdiction to entertain the suit and further suppressed the fact that the claim in the suit shall be governed by the laws applicable in the Singapore Court and that plaintiffs have no case because the claim is in regard to deck cargo.

11. Under Order VII Rule 11 of the Code, the Court has jurisdiction to reject the plaint where it does not disclose a cause of action, where the relief claimed is undervalued and the valuation is not corrected within a time as fixed by the Court, where insufficient court fee is paid and the additional court fee is not supplied within the period given by the Court, and where the suit appears from the statement in the plaint to be barred by any law. Rejection of the plaint in exercise of the powers under Order VII Rule 11 of the Code would be on consideration of the principles laid down by this Court. In T. Arivandandam vs. T.V. Satyapal and another, (1977) 4 SCC 467, this Court has held that if on 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 Court should exercise its power under Order VII Rule 11 of the Code taking care to see that the ground mentioned therein is fulfilled. In Roop Lal vs. Nachhattar Singh Gill, (1982) 3 SCC 487, this Court has 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 VII Rule 11 of the Code, but the rule does not justify the rejection of any particular portion of a plaint. Therefore, the High Court could not act under Order VII Rule 11(a) of the Code for striking down certain paragraphs nor the High Court could act under Order VI Rule 16 to strike out the paragraphs in absence of anything to show that the averments in those paragraphs are either unnecessary, frivolous or vexatious, or that they are such as may tend to prejudice, embarrass or delay the fair trial of the case, or constitute an abuse of the process of the court. In ITC Ltd. vs. Debts Recovery Appellate Tribunal, (1998) 2 SCC 70, it was held that the basic question to be decided while dealing with an application filed by the defendant under Order VII Rule 11 of the Code is to find out whether the real cause of action has been set out in the plaint or something illusory has been projected in the plaint with a view to get out of the said provision. In Saleem Bhai and others vs. State of Maharashtra and other (2003) 1 SCC 557, this Court has held that the trial court can exercise its powers under Order VII Rule 11 of the Code at any stage of the suit before registering the plaint or after issuing summons to the defendant at any time before the conclusion of the trial and for the said purpose the averments in the plaint are germane and the pleas taken by the defendant in the written statement would be wholly irrelevant at that stage. In Popat and Kotecha Property vs. State Bank of India Staff Association (2005) 7 SCC 510, this Court has culled out the legal ambit of Rule 11 of Order VII of the Code in these words :"

20. In the present case, as noticed, a large sum

of money had been allegedly received by the

defendants, in pursuance of the memorandum of

understanding, rejection of the plaint as such by the

defendants who are closely related in filing the

various applications thus can only be termed as abuse

of process of the Court to avoid the repayment.

Therefore, we do not feel that it is one of such cases

where the plaint is liable to be rejected in view of the

law referred to above. It is also settled principle of law

that law of limitation is a mixed question of facts and

law and reliance can be placed upon Hareendran

and others versus Sukumaran and others

(2018) 14 SCC 187, wherein the issues of limitation

and redemption were held to be wrongly decided as a

preliminary issue; by the Trial Court and the appeal

filed by the plaintiff was allowed. Therefore, the

arguments raised that the suit was filed after a period

of three years, is also without any basis as it would be

matter of evidence as such regarding pleadings which

have been set out in the civil suit wherein it has been

specifically mentioned that the amount was to be paid

in three phases and there was as such a compromise

inter se the parties and three persons as such had

received their amount as a refund.

21. The fact of possession having been handed

over and then taken back and plotting aspect and the

denial as such of the performance of the agreement

would thus be points which had to be adjudicated

upon in the main suit as such, and recourse to Order 7

Rule 11 CPC cannot be permitted.

22. In Dahiben vs. Arvindbhai Kalyanji

Bhanusali (Gajra) (2020) 7 SCC 366, it was held

that power under Order 7 Rule 11 of CPC as such

could be exercised by the Court at any stage. The

rejection only could have done if there was no

disclosure of cause of action and the suit was barred

by law. In the absence of the same, it was

accordingly argued that there was valid cause of

action and the plaintiff was only seeking to enforce

the memorandum as the huge amount of money out

of which of Rs.3,66,57,500/- was exclusively paid by

the plaintiff which the defendant wanted to swallow

and not stand by the memorandum as such whereby

plaintiff had secured 66% shares in the firm.

23. The earlier Civil suit was thus a suit for

permanent prohibitory injunction without impleading

the present appellant as such as party since the

controversy as such was different regarding the

interference, as noticed above, of the property. There

was no relief sought against the present appellant

regarding the Memorandum of Understanding which

could as such bar the second litigation, which is an

independent cause of action.

24. The Court at Solan would have no pecuniary

jurisdiction as such to try the present suit also and

therefore, the earlier suit as such would not stand in

the way of the plaintiffs/respondents.

25. Resultantly, keeping in view the above

discussion, we are of the considered opinion that filing

of different sets of appeals by the co-defendants as

such would only amount to abuse of process of Court

and the rights of the plaintiffs as such cannot be

scuttled by resorting to a short-cut method as such

which has been attempted by filing separate

applications by a co-defendants, who have the same

interest as such.

26. As such, we do not find any plausible reason

to interfere in the well reasoned order passed by the

learned Single Judge. Accordingly, the appeal is

dismissed along with pending applications, if any.

(G.S. Sandhawallia) Chief Justice

(Ranjan Sharma) Judge May 16, 2025.

(cm Thakur)