Supreme Court Clarifies Rejection of Plaint Under Order 7 Rule 11(d) CPC: Sayyed Ayaz Ali vs. Prakash G Goyal (20 July 2021)

Introduction

Date of the Judgment: 20 July 2021

Citation: 2021 INSC 472

Judges: Dr. Dhananjaya Y Chandrachud, J, M.R. Shah, J

Can a trial court, after rejecting a plaint under Order 7 Rule 11(d) of the Code of Civil Procedure, 1908 (CPC), grant the plaintiff time to amend the plaint? The Supreme Court of India addressed this question in a recent case, clarifying the proper procedure when a suit appears to be barred by law. The core issue revolved around whether a trial court could allow a plaintiff to amend a plaint after it had been rejected under Order 7 Rule 11(d) of the CPC. The Supreme Court bench, consisting of Justice Dr. Dhananjaya Y Chandrachud and Justice M.R. Shah, delivered the judgment.

Case Background

The appellant, Sayyed Ayaz Ali, filed a suit before the Civil Judge, Senior Division at Nagpur. The suit concerned a property dispute arising from a series of loan transactions and sale deeds. The plaintiff claimed that he had taken loans from the defendants, and as security, executed sale deeds for certain plots of land in favor of the defendants. The plaintiff alleged that the sale deeds were only meant as security for the loan and that he was in possession of the property. Subsequently, a dispute arose when the defendants allegedly interfered with his possession.

The plaintiff sought a declaration that the actions of some defendants in interfering with his possession were illegal and sought a permanent injunction to protect his possession. Crucially, the plaintiff did not seek a declaration that the sale deeds were invalid or that they were executed only as security for the loan.

Timeline

Course of Proceedings

The first respondent (defendant in the original suit) filed an application (Exhibit-50) to reject the plaint under Order 7 Rule 11(b) and (d) of the CPC, arguing that the suit was barred because the plaintiff had not sought the cancellation of the sale deeds, despite admitting their execution. The Trial Judge allowed the application, rejecting the plaint but also directed the plaintiff to seek proper relief by amending the plaint and paying court fees within 15 days.

The defendants challenged this order in a civil revision application before the High Court, arguing that once a plaint is rejected under Order 7 Rule 11(d), there is no provision to allow an amendment. The plaintiff also filed a writ petition challenging the rejection of the plaint. The High Court decided both matters in a common judgment, allowing the civil revision and dismissing the writ petition. The High Court held that since the plaint was rejected under Order 7 Rule 11(d), there was no occasion to direct that an amendment be made to the plaint. The High Court also held the writ petition to be an afterthought and belated.

Legal Framework

The case primarily revolves around Order 7 Rule 11 of the Code of Civil Procedure, 1908, which outlines the grounds for rejecting a plaint. Specifically, clause (d) of Order 7 Rule 11 states that a plaint shall be rejected “where the suit appears from the statement in the plaint to be barred by any law.”

The Supreme Court also considered Section 34 of the Specific Relief Act, 1963, which deals with declaratory decrees. Section 34 states:

“Any person entitled to any legal character, or to any right as to any property, may institute a suit against any person denying, or interested to deny, his title to such character or right, and the court may in its discretion make therein a declaration that he is so entitled, and the plaintiff need not in such suit ask for any further relief: Provided that no court shall make any such declaration where the plaintiff, being able to seek further relief than a mere declaration of title, omits to do so.”

The proviso to Section 34 of the Specific Relief Act, 1963, states that if a plaintiff is able to seek further relief beyond a mere declaration of title but omits to do so, the court shall not grant a declaration. This provision was crucial in determining whether the suit was barred by law.

Section 2(2) of the CPC defines a ‘decree’ as:

“(2) “decree” means the formal expression of an adjudication which, so far as regards the Court expressing it, conclusively determines the rights of the parties with regard to all or any of the matters in controversy in the suit and may be either preliminary or final. It shall be deemed to include the rejection of a plaint and the determination of any question within section 144, but shall not include — (a) any adjudication from which an appeal lies as an appeal from an order, or (b) any order of dismissal for default. Explanation. —A decree is preliminary when further proceedings have to be taken before the suit can be completely disposed of. It is final when such adjudication completely disposes of the suit. It may be partly preliminary and partly final;”

Order 7 Rule 13 of the CPC provides that the rejection of a plaint “on any of the grounds hereinbefore mentioned shall not of its own force preclude the plaintiff from presenting a fresh plaint in respect of the same cause of action”.

Arguments

Appellant’s Arguments:

• The appellant argued that the suit was primarily for the protection of possession and not for a declaration of title.
• The appellant contended that Section 34 of the Specific Relief Act, 1963, only bars a suit where a plaintiff seeks a mere declaration of title without seeking further relief.
• The appellant submitted that the suit was not barred by any law, and therefore, the plaint should not have been rejected under Order 7 Rule 11(d) of the CPC.
• The appellant argued that the High Court should have considered the writ petition on its merits, as the availability of an alternative remedy does not automatically bar the writ jurisdiction.

Respondents’ Arguments:

• The respondents argued that the plaintiff’s suit was barred by Section 34 of the Specific Relief Act, 1963, as the plaintiff had not sought a declaration that the sale deeds were invalid or were executed only as security for a loan.
• The respondents submitted that since the plaintiff admitted the execution of the sale deeds, it was necessary to seek a declaration of invalidity, and the failure to do so made the suit barred by law.
• The respondents contended that the High Court was correct in holding that the Trial Judge could not have granted time to amend the plaint after rejecting it under Order 7 Rule 11(d) of the CPC.
• The respondents raised a preliminary objection to the maintainability of the writ petition, arguing that a regular first appeal should have been filed against the rejection of the plaint, as it operates as a decree.

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame issues in a separate section. However, the core issues addressed by the Court were:

1. Whether the Trial Court was justified in rejecting the plaint under Order 7 Rule 11(d) of the CPC.
2. Whether the Trial Court could grant time to the plaintiff to amend the plaint after rejecting it under Order 7 Rule 11(d) of the CPC.
3. Whether the High Court was correct in dismissing the writ petition filed by the plaintiff.
4. Whether the suit was barred by Section 34 of the Specific Relief Act, 1963.

Treatment of the Issue by the Court

The following table demonstrates as to how the Court decided the issues:

Authorities

The Supreme Court did not explicitly cite any case laws or books in the judgment. The primary authorities considered by the court were:

Judgment

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

The Court interpreted and applied the provisions of the Code of Civil Procedure, 1908 and the Specific Relief Act, 1963 to arrive at its decision.

• Order 7 Rule 11(d), Code of Civil Procedure, 1908: The Court held that this provision was correctly applied by the Trial Judge to reject the plaint, as the suit appeared to be barred by Section 34 of the Specific Relief Act, 1963. The Court also clarified that once a plaint is rejected under this provision, there is no scope for granting time to amend the plaint.
• Section 34, Specific Relief Act, 1963: The Court interpreted this provision to mean that if a plaintiff is able to seek further relief than a mere declaration of title but omits to do so, the court shall not grant a declaration. The Court found that the plaintiff was able to seek a declaration of invalidity of the sale deeds but did not, and therefore, the suit was barred.
• Section 2(2), Code of Civil Procedure, 1908: The Court relied on this definition to hold that the rejection of a plaint operates as a decree, and therefore, a first appeal should have been filed instead of a writ petition.
• Order 7 Rule 13, Code of Civil Procedure, 1908: The Court referred to this provision to clarify that the rejection of a plaint does not preclude the plaintiff from filing a fresh plaint on the same cause of action.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily driven by a strict interpretation of the procedural and substantive laws involved. The Court emphasized the following points:

The Court’s reasoning was based on the following points:

• Procedural Compliance: The Court strictly adhered to the procedural requirements of Order 7 Rule 11(d) of the CPC, emphasizing that once a plaint is rejected under this provision, there is no scope for allowing an amendment.
• Substantive Law: The Court’s interpretation of Section 34 of the Specific Relief Act, 1963, was crucial. The Court focused on the proviso to Section 34, which bars a declaration if the plaintiff, being able to seek further relief, omits to do so.
• Alternative Remedy: The Court highlighted that a rejection of a plaint is deemed a decree under Section 2(2) of the CPC, and therefore, the proper remedy is a first appeal, not a writ petition.
• Clarity of Pleadings: The Court emphasized that the plaintiff’s failure to seek a declaration regarding the validity of the sale deeds was a critical flaw in the plaint, leading to the application of Section 34 of the Specific Relief Act, 1963.

Logical Reasoning:

Key Takeaways

The judgment has several practical implications:

• Strict Interpretation of Order 7 Rule 11(d): Once a plaint is rejected under Order 7 Rule 11(d) of the CPC, it cannot be amended. The court cannot grant time to the plaintiff to rectify the defects in the plaint.
• Importance of Seeking Proper Relief: Plaintiffs must carefully frame their suits and seek all necessary reliefs, including declarations, where applicable. Failure to do so can result in the suit being barred by law, particularly under Section 34 of the Specific Relief Act, 1963.
• Proper Remedy Against Rejection of Plaint: An order rejecting a plaint is a decree, and the proper remedy is to file a first appeal, not a writ petition.
• Clarity in Pleadings: The judgment emphasizes the importance of clear and comprehensive pleadings that address all relevant legal issues.

Directions

The Supreme Court directed that since the dismissal of the writ petition was upheld on the ground that the order rejecting the plaint operates as a decree, the appellant is at liberty to take recourse to the remedy against the rejection of the plaint as prescribed by the CPC.

Development of Law

The ratio decidendi of this case is that once a plaint is rejected under Order 7 Rule 11(d) of the Code of Civil Procedure, 1908, the court cannot grant time to amend the plaint. This clarifies the procedural aspect of Order 7 Rule 11(d). The Court also reiterated that the rejection of a plaint is a decree and the proper remedy is an appeal. This judgment reinforces the existing legal position regarding rejection of plaints and the requirements of Section 34 of the Specific Relief Act, 1963.

Conclusion

In conclusion, the Supreme Court upheld the High Court’s decision, clarifying that a plaint rejected under Order 7 Rule 11(d) of the CPC cannot be amended. The Court emphasized the importance of seeking all necessary reliefs in the plaint, particularly when dealing with property disputes involving sale deeds. The judgment underscores the procedural and substantive requirements for filing a civil suit, particularly in relation to Section 34 of the Specific Relief Act, 1963.