DAHIBEN versus ARVINDBHAI KALYANJI BHANUSALI (GAJRA) (D) THR LRS & ORS. on 9 July 2020

[2020] 5 S.C.R. 694

SUPREME COURT REPORTS

[2020] 5 S.C.R.

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DAHIBEN

v.

ARVINDBHAI KALYANJI BHANUSALI

(GAJRA) (D) THR LRS & ORS.

B(Civil Appeal No. 9519 of 2019)

JULY 09, 2020

[L. NAGESWARA RAO AND INDU MALHOTRA, JJ.]

Code of Civil Procedure, 1908 – Or.VII, r. 11 (a) & (d) –CRejection of plaint, if suit is barred by Limitation and does notdisclose cause of action – The plaintiffs sold the suit property torespondent no.1-purchaser vide registered sale deed dated02.07.2009 – The respondent had issued 36 cheques forRs.1,74,02,000/- towards payment of the sale consideration in favourof the plaintiffs, the details of which were set out in the sale deedDdated 02.07.2009 – The respondent no.1 subsequently sold the suitproperty to respondent nos.2 and 3 vide registered sale deed dated01.04.2013 – In 2014, the plaintiffs filed a suit against therespondent no.1 and also impleaded respondent nos.2 & 3 asdefendants and sought cancellation of the sale deed datedE02.07.2009 as the sale consideration fixed was not paid in entiretyby respondent no.1 – It was alleged that respondent no.1 had paidonly Rs. 40,000/- through 6 cheques and remaining 30 cheques forRs. 1,73,62,000 were ‘bogus’ cheques – Respondent Nos. 2 & 3filed an application for rejection of plaint u/or.VII,r.11(a) & (d) ofthe CPC contending that the suit filed by the plaintiffs was barredFby limitation and no cause of action was disclosed in the plaint –The Trial Court on perusal of the registered sale deed dated02.07.2009 noted that the plaintiffs had in fact accepted andacknowledged the payment of the full sale consideration fromrespondent no.1, through cheques which were issued prior to theGexecution of the sale deed – The Trial Court held that period oflimitation for filing the suit was 3 years from the date of executionof the sale deed dated 02.07.2009, however, the suit was filed on15.12.2014, which was barred by limitation – The High Courtaffirmed the findings of the Trial Court and held that the suit wasbarred by Limitation – On appeal, held: In the Sale Deed datedH

02.07.2009, the plaintiffs had expressly and unequivocallyacknowledged that the entire sale consideration was ‘paid’ bydefendant no. 1/respondent no. 1 herein to the plaintiffs – Theconduct of the plaintiffs in not taking recourse to legal action forover a period of 5 and ½ years from the execution of the Sale Deedin 2009, for payment of the balance sale consideration, also reflectsthat the institution of the present suit was an after-thought – Theplaintiffs by clever drafting of the plaint, attempted to make out anillusory cause of action and bring the suit within the period oflimitation – The plaintiffs deliberately did not mention the date ofthe registered sale deed dated 02.07.2009 in the prayer, since itwould have become evident that suit was barred by limitation – Theomission was made to mislead the Court – Thus, plaintiffs failed todischarge the onus of proof that the suit was filed within the periodof limitation – Besides, in view of the law laid down by the SupremeCourt, even if averments of the plaintiffs are taken to be true thatthe entire sale consideration was not paid, it could not be a groundfor cancellation of the sale deed – The Plaintiffs may have otherremedies in law for recovery of the balance consideration, but couldnot be granted the relief of cancellation of the registered Sale Deed– Thus, the plaint was rightly rejected by the Trial Court u/Or. VII,r.11 CPC.

Dismissing the appeal, the Court

Conclusion

Dismissing the appeal, the Court

HELD: 1. If the case made out in the Plaint is to be believed,it would mean that almost 99% of the sale consideration i.e.Rs.1,73,62,000 allegedly remained unpaid throughout. It is,however inconceivable that if the payments had remained unpaid,the Plaintiffs would have remained completely silent for a periodof over 5 and ½ years, without even issuing a legal notice forpayment of the unpaid sale consideration, or instituting anyproceeding for recovery of the amount, till the filing of the presentsuit in December 2014. [Para 15.2][712-D-E]

2.1 In Vidyadhar v. Manikrao & Anr. this Court held thatthe words “price paid or promised or part paid and part promised”indicates that actual payment of the whole of the price at the timeof the execution of the Sale Deed is not a sine qua non forcompletion of the sale. Even if the whole of the price is not paid, ABC

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Abut the document is executed, and thereafter registered, the salewould be complete, and the title would pass on to the transfereeunder the transaction. The non-payment of a part of the sale pricewould not affect the validity of the sale. Once the title in theproperty has already passed, even if the balance sale considerationis not paid, the sale could not be invalidated on this ground. InBorder to constitute a “sale”, the parties must intend to transferthe ownership of the property, on the agreement to pay the priceeither in praesenti, or in future. The intention is to be gatheredfrom the recitals of the sale deed, the conduct of the parties, andthe evidence on record. [Para 15.3][713-B-E]

C2.2 In view of the law laid down by this Court, even if theaverments of the Plaintiffs are taken to be true, that the entiresale consideration had not in fact been paid, it could not be aground for cancellation of the Sale Deed. The Plaintiffs may haveother remedies in law for recovery of the balance consideration, Dbut could not be granted the relief of cancellation of the registeredSale Deed. [Para 15.3][713-F-G]

3. This Court finds that the suit filed by the Plaintiffs isvexatious, meritless, and does not disclose a right to sue. Theplaint is liable to be rejected under Order VII Rule 11 (a). [ParaE15.3][713-G-H]

4. The conduct of the Plaintiffs in not taking recourse tolegal action for over a period of 5 and ½ years from the executionof the Sale Deed in 2009, for payment of the balance saleconsideration, also reflects that the institution of the present suitFis an after-thought. The Plaintiffs apparently filed the suit afterthe property was further sold by Respondent No.1 to RespondentNos. 2 and 3, to cast a doubt on the title of Respondent No.1 tothe suit property. [Para 15.5][715-C-D]

5. The present case is a classic case, where the plaintiffsGby clever drafting of the plaint, attempted to make out an illusorycause of action, and bring the suit within the period of limitation.The Plaintiffs deliberately did not mention the date of theregistered Sale Deed dated 02.07.2009 executed by them infavour of Respondent No.1, since it would be evident that thesuit was barred by limitation. The prayer however mentions theH

date of the subsequent Sale Deed i.e. 01.04.2013 when the suitproperty was further sold by Respondent No.1 to RespondentNos. 2 & 3. The omission of the date of execution of the SaleDeed on 02.07.2009 in the prayer clause, was done deliberatelyand knowingly, so as to mislead the Court on the issue of limitation.[Para 15.7][716-B; F-H]

6. The delay of over 5 and ½ years after the alleged causeof action arose in 2009, shows that the suit was clearly barred bylimitation as per Article 59 of the Limitation Act, 1963. The suitwas instituted on 15.12.2014, even though the alleged cause ofaction arose in 2009, when the last cheque was delivered to thePlaintiffs. The Plaintiffs have failed to discharge the onus of proofthat the suit was filed within the period of limitation. The plaint istherefore, liable to be rejected under Order VII Rule 11 (d) ofCPC. [Para 15.8][717-A-B]

Azhar Hussain v. Rajiv (1986) Suppl. SCC 315 : [1986]2 SCR 782; Liverpool & London S.P. & I Assn. Ltd. v.M.V. Sea Success I & Anr. (2004) 9 SCC 512 : [2003] 5Suppl. SCR 851; Swamy Atmanand v. Sri RamakrishnaTapovanam (2005) 10 SCC 51 : [2005] 3 SCR 556; T.Arivandandam v. T.V. Satyapal & Anr. (1977) 4 SCC467 : [1978] 1 SCR 742 – relied on.

Maharaj Shri Manvendrasinhji Jadeja v. RajmataVijaykunverba w/o Late Maharaja Mahedrasinhji(1998) 2 GLH 823; Sopan Sukhdeo Sable v. AssistantCharity Commissioner (2004) 3 SCC 137 : [2004] 1SCR 1004; Hardesh Ores (P.) Ltd. v. Hede & Co. (2007)5 SCC 614 : [2007] 6 SCR 608; D. Ramachandran v.R.V. Janakiraman (1999) 3 SCC 267 : [1999] 1 SCR983; Vijay Pratap Singh v. DukhHaran Nath Singh AIR1962 SC 941 : [1962] Suppl. SCR 675; Saleem Bhai v.State of Maharashtra (2003) 1 SCC 557 : [2002] 5Suppl. SCR 491; I.T.C. Ltd. v. Debt Recovery AppellateTribunal(1998) 2 SCC 170; Madanuri SriRamachandra Murthy v. Syed Jalal (2017) 13 SCC 174: [2017] 5 SCR 294; Khatri Hotels Pvt. Ltd. & Anr. v.Union of India & Anr. (2011) 9 SCC 126 : [2011] 15

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[2020] 5 S.C.R.

FCIVIL APPELLATE JURISDICTION: Civil Appeal No. 9519of 2019.

From the Judgment and Order dated 19.10.2016 of the High Courtof Gujarat at Ahmedabad in First Appeal No. 2324 of 2016.

Harin P. Raval, Sr. Adv., Gaurav Agrawal, Nipun Saxena, KartikeyGKanojiya, Ms. Sukanya Singh, Advs. for the Appellant.

Nakul Dewan, Sr. Adv., Pradhuman Gohil, Ms. Taruna Singh Gohil,Ms. Ranu Purohit, Shiva P., Sambit Nanda, Praveen Kumar Rai, HemalKiritkumar Sheth, P.S. Sudheer, Rishi Maheshwari, Ms. Mayuri NayyarChawla, Ms. Anne Mathew, Bharat Sood, Ms. Shruti Jose, Advs. forHthe Respondents.

The Judgment of the Court was delivered by INDU MALHOTRA, J.

1. The present Civil Appealhas been filed to challenge the impugnedJudgment and Order dated 19.10.2016 passedby a Division Bench ofthe Gujarat High Court, which affirmed the Order of the Trial Court,allowing the application filed by Defendant Nos. 2 and 3/RespondentNos. 2 and 3 herein under Order VII Rule 11(d), CPC holding that thesuit filed by the Appellant and Respondent Nos. 9 to 13 herein(hereinafterreferred to as the “Plaintiffs”) was barred by limitation.

2. The subject-matter of the present proceedings pertains to aplot of agricultural land of old tenure, admeasuring approximately 8701sq.mtrs. in Revenue Survey No.610, Block No.573 situated in villageMotaVarachha, Sub-District Surat (hereinafter referred to as the “suitproperty”) which was in the ownership of the Plaintiffs.

3. The land was under restrictive tenure as per Section 73AA ofthe Land Revenue Code. The Plaintiffs filed an application dated13.05.2008 before the Collector, Surat to obtain permission for sellingthe suit property to Respondent No.1/Defendant No.1, which was non-irrigated, and stated that they had no objection to the sale of the suitproperty.

4. The Collector vide Order dated 19.06.2009, after carrying outverification of the title of the Plaintiffs, permitted sale of the suit property,and fixed the sale price of the suit property as per the jantri issued bythe State Government @ Rs.2000/- per sq.mtr., which would work outto Rs.1,74,02,000/-. The Collector granted permission for the sale subjectto the terms and conditions contained in Section 73AA of the LandRevenue Code. It was stipulated that the purchaser shall make thepayment by cheque, and reference of the payment shall be made in theSale Deed.

5. After obtaining permission from the Collector, the Plaintiffssold the suit property to Respondent No.1 herein vide registered SaleDeed dated 02.07.2009.

Respondent No.1 - purchaser issued 36 cheques forRs.1,74,02,000 towards payment of the sale consideration in favour ofthe Plaintiffs, the details of which were set out in the registered SaleDeed dated 02.07.2009.

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A6. The Respondent No.1 subsequently sold the suit property toRespondent Nos. 2 and 3 herein vide registered Sale Deed dated01.04.2013, for a sale consideration of Rs.2,01,00,000/-.

7. On 15.12.2014, the Plaintiffs filed Special Civil Suit No.718/2014 before the Principal Civil Judge, Surat against the original purchaserBi.e. Respondent No. 1, and also impleaded the subsequent purchasersi.e. Respondent Nos. 2 and 3 as defendants. It was inter alia prayedthat the Sale Deed dated 02.07.2009 be cancelled and declared as beingillegal, void, ineffective and not binding on them, on the ground that thesale consideration fixed by the Collector,had not been paid in entirety byRespondent No. 1.C

The Plaintiffs contended that they were totally illiterate, and werenot able to read and write, and were only able to put their thumb impressionon the Sale Deed dated 02.07.2009. The Sale Deed was obtained withoutpayment of full consideration. The Respondent No.1 had paid onlyRs. 40,000 through 6 cheques, and remaining 30 cheques for Rs.1,73,62,000Dwere “bogus” cheques. The Plaintiffs prayed for cancellation of theSale Deed dated 02.07.2009, and also prayed that the subsequent SaleDeed dated 01.04.2013 be declared as illegal, void and ineffective; and,thephysical possession of the suit property be restored to the Plaintiffs.

8. Respondent Nos.2 and 3 filed an Application for Rejection ofEthe Plaint under Order VII Rule 11 (a) and (d) of the CPC, contendingthat the suit filed by the Plaintiffs was barred by limitation, and that nocause of action had been disclosed in the plaint.

It was inter alia submitted that the Plaintiffs had admitted theexecution of the Sale Deed dated 02.07.2009 in favour of RespondentFNo.1 before the Sub-Registrar, Surat. The only dispute now sought to beraised was that they had not received a part of the sale consideration.This plea was denied as being incorrect.

It was further submitted that if the Sale Deed dated 02.07.2009was being challenged, then the suit ought to have been filed within threeGyears i.e. on or before 02.07.2012.

It was further submitted that pursuant to the execution of theregistered Sale Deed dated 02.07.2009, the Plaintiffs had participated inthe proceedings before the Revenue Officer for transfer of the suitproperty in the revenue records in favour of Respondent No.1. On thatH

basis, the suit property had been transferred to Respondent No.1 videHakk Patrak Entry No. 6517 dated 24.07.2009. Before certifying thesaid entry, notice under Section 135D of the Land Revenue Code hadbeen duly served on the Plaintiffs, and ever since, Respondent No. 1had been paying the land revenue on the suit property, and taking theproduce therefrom.

Respondent Nos. 2 and 3 further submitted that they had purchasedthe suit property from Respondent No.1 after verifying the title, andinspecting the revenue records. The Respondent No.1 had sold the suitproperty vide a registered Sale Deed dated 01.04.2013, on payment ofvaluable consideration of Rs. 2,01,00,000/-. Pursuant thereto, the suitproperty was transferred in the name of Respondent Nos. 2 and 3 in therevenue records.

It was further submitted that the Plaintiffs, with a view to misleadthe Court, had deliberately filed copies of the 7/12 extracts dated20.07.2009, which was prior to the mutation being effected in the nameof Respondent No.1. It was submitted that the suit was devoid of anymerit, and clearly time-barred, and liable to be rejected.

9. The Trial Court carried out a detailed analysis of the avermentsin the plaint alongwith the documents filed with the plaint, including theregistered Sale Deed dated 02.07.2009, executed by the Plaintiffs. Theundisputed facts which emerged from the averments in the plaint wasthat the suit property was of restrictive tenure under Section 73AA ofthe Land Revenue Code. Since the Plaintiffs were in dire need of money,and wanted to sell the suit property to Respondent No. 1, they had filedan application before the Collector, Surat on 13.05.2008 to obtainpermission for sale of the suit property. The Collector vide Order dated19.06.2009 granted permission to the Plaintiffs and fixed the sale priceat Rs. 1,74,02,000/- which was to be paid through cheques. It wascontended in the plaint that the Respondent No. 1 had in fact paid onlyRs. 40,000/-, and false cheques of Rs. 1,73,62,000/- were issued, whichremained unpaid.

On a perusal of the registered Sale Deed dated 02.07.2009,[marked as Exhibit 3/9] it was noted that the Plaintiffs had in fact acceptedand acknowledged the payment of the full sale consideration fromRespondent No.1, through cheques which were issued prior to theexecution of the Sale Deed, during the period 07.07.2008 to 02.07.2009.

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AAs per the Plaintiffs, the Sale Deed was executed on 02.07.2009in favour of Respondent No.1, which was registered before the Officeof the Sub-Registrar, for which the Plaintiffs would have remainedpersonally present.The transaction having been executed through aregistered document, was in the public domain, and in the knowledge ofthe Plaintiffs right from the beginning.B

The Trial Court noted that there was no averment in the plaintthat the cheques had not been received by them. Once the chequeswere received by them, in the normal course, they would have presentedthe cheques for encashment within 6 months.The Court held that hadthe Plaintiffs not been able to encash 30 cheques, a complaint ought toChave been filed, or proceedings initiated for recovery of the unpaid saleconsideration. There was however, nothing on record to show that thePlaintiffs had made any complaint in this regard for a period of over 5years.

The Plaintiffs also failed to produce the returned cheques, theirDpassbooks, bank statements, or any other document to support theiraverments in the plaint.

A notice for transfer of the suit property in the revenue recordsunder Section 135D was served on the Plaintiffs, to which no objectionwas raised. The name of Respondent No. 1 was entered into the revenueErecords, which was certified by the Revenue Officer.

The Trial Court held that the period of limitation for filing the suitwas 3 years from the date of execution of the Sale Deed dated 02.07.2009.The suit was filed on 15.12.2014. The cause of action as per the avermentsin the plaint had arisen when the Defendant No.1/Respondent No.1 hadissued ‘false’ or ‘bogus’ cheques to the Plaintiffs in 2009. The suit forFcancellation of the Sale Deed dated 02.07.2009 could have been filed by2012, as per Articles 58 and 59 of the Limitation Act, 1963.The suit washowever filed on 15.12.2014, which was barred by limitation.

The suit property was subsequently sold by Respondent No.1 toRespondent Nos. 2 and 3 by a registered Sale Deed dated 01.04.2013.GBefore purchasing the suit property, the Respondent Nos. 2 and 3 hadissued a public notice on 14.08.2012. The Plaintiffs did not raise anyobjection to the same.

The Trial Court, on the basis of the settled position in law, heldthat the suit of the Plaintiffs was barred by limitation, and allowed theHapplication under Order VII Rule 11(d) CPC.

10. Aggrieved by the Judgment dated 12.08.2016 passed by theSr. Civil Judge, Surat, the Plaintiffs filed First Appeal No.2324/2016 beforethe High Court of Gujarat at Ahmedabad.

The Division Bench of the High Court took note of the fact thatthe Plaintiffs did not deny having executed the registered Sale Deeddated 02.07.2009 in favour of Respondent No.1. In the said Sale Deed,it was specifically admitted and acknowledged by the Plaintiffs that theyhad received the full sale consideration. The Sale Deed contained thecomplete particulars with respect to the payment of sale considerationby Respondent No. 1 through 36 cheques, the particulars of which wererecorded therein. Since the execution of the Sale Deed was not disputed,and the conveyance was duly registered in the presence of the Plaintiffsbefore the Sub-Registrar, the Sale Deed could not be declared to bevoid, illegal, or ineffective.

The suit property was subsequently sold by Respondent No. 1 infavour of Respondent Nos. 2 and 3 vide registered Sale Deed dated01.04.2013 for a sale consideration of Rs. 2,01,00,000/-. RespondentNos. 2 and 3 were bona fide purchasers for valuable consideration.

The present suit for cancellation of the Sale Deed was filed bythe Plaintiffs after a period of over 5 years after the execution of theSale Deed dated 02.07.2009, and 1 year after the execution of the SaleDeed dated 01.04.2013 by Respondent No.1. It was noted that prior tothe institution of the suit on 15.12.2014, at no point of time did the Plaintiffsraise any grievance whatsoever,of not having received the full saleconsideration mentioned in the Sale Deed dated 02.07.2009. It was forthe first time that such an allegation was made after over 5 years fromthe date of execution of the Sale Deed dated 02.07.2009.

Since the suit in respect of the Sale Deed dated 02.07.2009 washeld to be barred by law of limitation, the High Court was of the viewthat the suit could not be permitted to be continued even with respect tothe subsequent Sale Deed dated 01.04.2013. The Plaintiffs had not raisedany allegation against Respondent Nos. 2 and 3, and there was no privityof contract between the Plaintiffs and Respondent Nos. 2 and 3.

The High Court rightly affirmed the findings of the Trial Court,and held that the suit was barred by limitation, since it was filed beyondthe period of limitation of three years.

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A11. Aggrieved by the impugned Judgment and Order dated12.08.2016 passed by the High Court, the original Plaintiff No.1 hasfiled the present Civil Appeal.

12. We have heard the learned Counsel for the parties, perusedthe plaint and documents filed therewith, as also the written submissionsBfiled on behalf of the parties.

12.1We will first briefly touch upon the law applicable fordeciding an application under Order VII Rule 11CPC, whichreads as under:

“11. Rejection of plaint.– The plaint shallbe rejectedin the following cases:–

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(a) where it does not disclose a cause of action; (b) where the relief claimed in undervalued, and theplaintiff, on being required by the Court to correct thevaluation within a time to be fixed by the Court, fails todo so; D

(c) where the relief claimed is properly valued but theplaint is written upon paper insufficiently stamped, andthe plaintiff, on being required by the Court to supplythe requisite stamp-paper within a time to be fixed bythe Court, fails to do so; E

(d) where the suit appears from the statement in theplaint to be barred by any law; (e) where it is not filed in duplicate;

(f) where the plaintiff fails to comply with the provisionsof rule 9

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Provided that the time fixed by the Court for thecorrection of the valuation or supplying of the requisitestamp-paper shall not be extended unless the Court,for reasons to be recorded, is satisfied that the plaintiffwas prevent by any cause of exceptional nature forcorrection the valuation or supplying the requisitestamp-paper, as the case may be, within the time fixedby the Court and that refusal to extend such time wouldcause grave injustice to the plaintiff.”

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The remedy under Order VII Rule 11 is an independent and specialremedy, wherein the Court is empowered to summarily dismiss a suit atthe threshold, without proceeding to record evidence, and conducting atrial, on the basis of the evidence adduced, if it is satisfied that the actionshould be terminated on any of the grounds contained in this provision.

The underlying object of Order VII Rule 11 (a) is that if in a suit,no cause of action is disclosed, or the suit is barred by limitation underRule 11 (d), the Court would not permit the plaintiff to unnecessarilyprotract the proceedings in the suit. In such a case, it would be necessaryto put an end to the sham litigation, so that further judicial time is notwasted.

In Azhar Hussain v. Rajiv Gandhi[1 ]this Court held that the wholepurpose of conferment of powers under this provision is to ensure that alitigation which is meaningless, and bound to prove abortive, should notbe permitted to waste judicial time of the court, in the following words :

“12. …The whole purpose of conferment of such power is toensure that a litigation which is meaningless, and bound toprove abortive should not be permitted to occupy the time ofthe Court, and exercise the mind of the respondent. The swordof Damocles need not be kept hanging over his headunnecessarily without point or purpose. Even if an ordinarycivil litigation, the Court readily exercises the power to rejecta plaint, if it does not disclose any cause of action.”

12.2The power conferred on the court to terminate a civil actionis, however,a drastic one, and the conditions enumerated inOrder VII Rule 11 are required to be strictly adhered to.

12.3Under Order VII Rule 11, a duty is cast on the Court todetermine whether the plaint discloses a cause of action byscrutinizing the averments in the plaint[2], read in conjunctionwith the documents relied upon, or whether the suit is barredby any law.

1 1986 Supp. SCC 315

Followed in Maharaj Shri Manvendrasinhji Jadeja v. Rajmata Vijaykunverba w/o LateMaharaja Mahedrasinhji, (1998) 2 GLH 823

2Liverpool & London S.P. & I Assn. Ltd. v. M.V. Sea Success I & Anr., (2004) 9 SCC512.

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A12.4Order VII Rule 14(1) provides for production of documents,on which the plaintiff places reliance in his suit, which readsas under :

“Order 7 Rule 14: Production of document on which–plaintiff sues or relies.

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(1) Where a plaintiff sues upon a document or relies upondocument in his possession or power in support of hisclaim, he shall enter such documents in a list, and shallproduce it in Court when the plaint is presented by himand shall, at the same time deliver the document and aCcopy thereof, to be filed with the plaint.

(2) Where any such document is not in the possession orpower of the plaintiff, he shall, wherever possible, statein whose possession or power it is.

(3) A document which ought to be produced in Court bythe plaintiff when the plaint is presented, or to be enteredin the list to be added or annexed to the plaint but isnot produced or entered accordingly, shall not, withoutthe leave of the Court, be received in evidence on hisbehalf at the hearing of the suit.

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(4) Nothing in this rule shall apply to document producedfor the cross examination of the plaintiff’s witnesses,or, handed over to a witness merely to refresh hismemory.”

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Having regard to Order VII Rule 14 CPC, thedocuments filed alongwith the plaint, are required to be takeninto consideration for deciding the application under OrderVII Rule 11 (a). When a document referred to in the plaint,forms the basis of the plaint, it should be treated as a partof the plaint.

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12.5In exercise of power under this provision, the Court woulddetermine if the assertions made in the plaint are contraryto statutory law, or judicial dicta, for deciding whether acase for rejecting the plaint at the threshold is made out.

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12.6At this stage, the pleas taken by the defendant in the writtenAstatement and application for rejection of the plaint on themerits,would be irrelevant, and cannot be adverted to, ortaken into consideration.[3]

12.7The test for exercising the power under Order VII Rule 11is that if the averments made in the plaint are taken inBentirety, in conjunction with the documents relied upon, wouldthe same result in a decree being passed. This test was laiddown in Liverpool & London S.P. & I Assn. Ltd. v. M.V.Sea Success I&Anr.,[4] which reads as :

“139. Whether a plaint discloses a cause of action orCnot is essentially a question of fact. But whether it doesor does not must be found out from reading the plaintitself. For the said purpose, the averments made in theplaint in their entirety must be held to be correct. Thetest is as to whether if the averments made in the plaintDare taken to be correct in their entirety, a decree wouldbe passed.” In Hardesh Ores (P.) Ltd. v. Hede & Co.[[5]] the Courtfurther held that it is not permissible to cull out a sentenceor a passage, and to read it in isolation. It is the substance,E

In Hardesh Ores (P.) Ltd. v. Hede & Co.[[5]] the Courtfurther held that it is not permissible to cull out a sentenceor a passage, and to read it in isolation. It is the substance,and not merely the form, which has to be looked into. Theplaint has to be construed as it stands, without addition orsubtraction of words. If the allegations in the plaint primafacie show a cause of action, the court cannot embark uponan enquiry whether the allegations are true in fact.[6]

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12.8If on a meaningful reading of the plaint, it is found that thesuit is manifestly vexatious and without any merit, and doesnot disclose a right to sue, the court would be justified inexercising the power under Order VII Rule 11 CPC.

12.9The power under Order VII Rule 11 CPC may be exercisedby the Court at any stage of the suit, either before registering G

3 Sopan Sukhdeo Sable v. Assistant Charity Commissioner, (2004) 3 SCC 137

4 (2004) 9 SCC 512.

5 (2007) 5 SCC 614.

6 D. Ramachandran v. R.V. Janakiraman, (1999) 3 SCC 267; See also Vijay PratapSingh v. Dukh Haran Nath Singh, AIR 1962 SC 941.

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Athe plaint, or after issuing summons to the defendant, orbefore conclusion of the trial, as held by this Court in thejudgment of Saleem Bhai v. State of Maharashtra.[7 ]Theplea that once issues are framed, the matter must necessarilygo to trial was repelled by this Court in Azhar Hussain(supra).B

12.10 The provision of Order VII Rule 11 is mandatory in nature.It states that the plaint “shall” be rejected if any of thegrounds specified in clause (a) to (e) are made out. If theCourt finds that the plaint does not disclose a cause of action,or that the suit is barred by any law, the Court has no option,Cbut to reject the plaint.

13. “Cause of action” means every fact which would be necessaryfor the plaintiff to prove, if traversed, in order to support his right tojudgment. It consists of a bundle of material facts, which are necessaryfor the plaintiff to prove in order to entitle him to the reliefs claimed inDthe suit.

In Swamy Atmanand v. Sri Ramakrishna Tapovanam[8] this Courtheld :

“24. A cause of action, thus, means every fact, which ifEtraversed, it would be necessary for the plaintiff to proveanorder to support his right to a judgment of the court. In otherwords, it is a bundle of facts, which taken with the lawapplicable to them gives the plaintiff a right to relief againstthe defendant. It must include some act done by the defendantsince in the absence of such an act, no cause of action canFpossibly accrue. It is not limited to the actual infringement ofthe right sued on but includes all the material facts on whichit is founded”

In T. Arivandandamv. T.V. Satyapal & Anr.[9 ]this Court held thatGwhile considering an application under Order VII Rule 11 CPC what is 7 (2003) 1 SCC 557.8 (2005) 10 SCC 51.H9 (1977) 4 SCC 467.

required to be decided is whether the plaint discloses a real cause ofaction, or something purely illusory, in the following words : - ‘‘5. …The learned Munsiff must remember that if on a––meaningful not formal reading of the plaint it is manifestlyvexatious, and meritless, in the sense of not disclosing a clearright to sue, he should exercise his power under O. VII, R. 11,C.P.C.taking care to see that the ground mentioned therein isfulfilled. And, if clever drafting has created the illusion of a”cause of action, nip it in the bud at the first hearing …

Subsequently, in I.T.C. Ltd. v. Debt Recovery AppellateTribunal,[10] this Court held that law cannot permit clever drafting whichcreates illusions of a cause of action. What is required is that a clearright must be made out in the plaint.

If, however, by clever drafting of the plaint, it has created theillusion of a cause of action, this Court in Madanuri Sri RamachandraMurthy v. Syed Jalal[11 ]held that it should be nipped in the bud, so thatbogus litigation will end at the earliest stage.

The Court must be vigilant against any camouflage orsuppression, and determine whether the litigation is utterly vexatious,and an abuse of the process of the court.

14. The Limitation Act, 1963 prescribes a time-limit for theinstitution of all suits, appeals, and applications. Section 2(j) defines theexpression “period of limitation” to mean the period of limitation prescribedin the Schedule for suits, appeals or applications. Section 3 lays downthat every suit instituted after the prescribed period, shall be dismissedeven though limitation may not have been set up as a defence. If a suitis not covered by any specific article, then it would fall within the residuaryarticle.

Articles 58 and 59 of the Schedule to the 1963 Act, prescribe theperiod of limitation for filing a suit where a declaration is sought, orcancellation of an instrument, or rescission of a contract, which reads asunder :

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The period of limitation prescribed under Articles 58 and 59 of the1963 Act is three years, which commences from the date when the rightto sue first accrues.C

In Khatri Hotels Pvt. Ltd. & Anr. v. Union of India & Anr.,[12]this Court held that the use of the word ‘first’ between the words ‘sue’and ‘accrued’, would mean that if a suit is based on multiple causes ofaction, the period of limitation will begin to run from the date when theright to sue first accrues. That is, if there are successive violations of theDright, it would not give rise to a fresh cause of action, and the suit will beliable to be dismissed, if it is beyond the period of limitation counted fromthe date when the right to sue first accrued.

A three-Judge Bench of this Court in State of Punjab v. GurdevSingh,[13 ]held that the Court must examine the plaint and determine whenEthe right to sue first accrued to the plaintiff, and whether on the assumedfacts, the plaint is within time. The words “right to sue” means the rightto seek relief by means of legal proceedings. The right to sue accruesonly when the cause of action arises. The suit must be instituted whenthe right asserted in the suit is infringed, or when there is a clear andFunequivocal threat to infringe such right by the defendant against whomthe suit is instituted.

Order VII Rule 11(d) provides that where a suit appears from theaverments in the plaint to be barred by any law, the plaint shall be rejected.

15. Analysis and FindingsGWe have carefully perused the averments in the plaint read withthe documents relied upon.

15.1On a reading of the plaint and the documents relied upon, itis clear that the Plaintiffs have admitted the execution of 12 (2011) 9 SCC 126.H13 (1991) 4 SCC 1.

the registered Sale Deed dated 02.07.2009 in favour ofDefendant No.1/Respondent No.1 herein.

Para 5 of the plaint reads as :

“(5) …Thus, subject of the aforesaid terms the plaintiffshad executed sale deed selling the suit property to theopponent no.1 vide sale deed dated 02/07/2009 bearing”Sr.No. 5158…

The case made out in the Plaint is that even thoughthey had executed the registeredSale Deed dated02.07.2009 for a sale consideration of Rs.1,74,02,000,anamount of only Rs.40,000 was paid to them. The remaining31 cheques mentioned in the Sale Deed, which covered thebalance amount of Rs.1,73,62,000 were alleged to be“bogus” or “false”, and allegedly remained unpaid.

We find the averments in the Plaint completelycontrary to the recitals in the Sale Deed dated 02.07.2009,which was admittedly executed by the Plaintiffs in favourof Respondent No.1. In the Sale Deed, the Plaintiffs haveexpressly and unequivocally acknowledged that the entiresale consideration was “paid” by Defendant No.1/Respondent No.1 herein to the Plaintiffs.

Clauses 3 and 4 of the Sale Deed are extractedhereinbelow for ready reference : - “Since the full amount of consideration of the sale asdecided above, has since been paid by you the Vendeesto we the Vendors of this sale deed, for which we theVendors of this sale deed acknowledge the same so, weor our descendants, guardian or legal heirs is to takeany dispute or objection in future that such amount isnot received, or is received less, and if we do so then,the same shall be void by this deed and, if any loss ordamage occurs due to the same then, we the Vendors ofthis sale deed and descendants, guardians, legal heirsof we the vendors are liable to the pay the same to youthe vendees or your descendants, guardian, legal heirsand you can recover the same by court proceedings.

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(4) We the party of Second part i.e. Vendors of the saledeed since received full consideration on the abovefacts, the physical possession, occupancy of the landor the property mentioned in this sale deed has beenhanded over to you the Vendee of this sale deed, andthat has been occupied and taken in possession of theland or property mentioned in this sale deed by you theVendee of this sale deed by coming at the site andtherefore, we the Vendors of this sale deed have not toraise any dispute in the future that the possession ofthe land or the property has not been handed over toyou. …”

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The Sale Deed records that the 36 cheques coveringthe entire sale consideration of Rs.1,74,02,000 were “paid”to the Plaintiffs, during the period between 07.07.2008 toD02.07.2009.

15.2If the case made out in the Plaint is to be believed, it wouldmean that almost 99% of the sale consideration i.e.Rs.1,73,62,000 allegedly remained unpaid throughout. It is,however inconceivable that if the payments had remainedunpaid, the Plaintiffs would have remained completely silentfor a period of over 5 and ½ years, without even issuing alegal notice for payment of the unpaid sale consideration,or instituting any proceeding for recovery of the amount, tillthe filing of the present suit in December 2014.

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F15.3The Plaintiffs have made out a case of alleged non-paymentof a part of the sale consideration in the Plaint, and prayedfor the relief of cancellation of the Sale Deed on this ground.

Section 54 of the Transfer of Property Act, 1882 providesas under :

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“54. ‘Sale’ defined.—‘Sale’ is a transfer of ownershipin exchange for a price paid or promised or part-paidand part-promised.”

The definition of “sale” indicates that there must bea transfer of ownership from one person to another i.e.

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transfer of all rights and interest in the property, which waspossessed by the transferor to the transferee. The transferorcannot retain any part of the interest or right in the property,or else it would not be a sale. The definition further indicatesthat the transfer of ownership has to be made for a “pricepaid or promised or part paid and part promised”. Pricethus constitutes an essential ingredient of the transaction ofsale.

In Vidyadhar v. Manikrao & Anr.[14] this Court heldthat the words “price paid or promised or part paid and partpromised” indicates that actual payment of the whole ofthe price at the time of the execution of the Sale Deed isnot a sine qua non for completion of the sale. Even if thewhole of the price is not paid, but the document is executed,and thereafter registered, the sale would be complete, andthe title would pass on to the transferee under thetransaction. The non-payment of a part of the sale pricewould not affect the validity of the sale. Once the title inthe property has already passed, even if the balance saleconsideration is not paid, the sale could not be invalidatedon this ground. In order to constitute a “sale”, the partiesmust intend to transfer the ownership of the property, on the agreement to pay the price either in praesenti, or infuture. The intention is to be gathered from the recitals ofthe sale deed, the conduct of the parties, and the evidenceon record.

In view of the law laid down by this Court, even ifthe averments of the Plaintiffs are taken to be true, that theentire sale consideration had not in fact been paid, it couldnot be a ground for cancellation of the Sale Deed. ThePlaintiffs may have other remedies in law for recovery ofthe balance consideration, but could not be granted the reliefof cancellation of the registered Sale Deed.

We find that the suit filed by the Plaintiffs is vexatious,meritless, and does not disclose a right to sue. The plaint isliable to be rejected under Order VII Rule 11 (a).

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15.4The Plaintiffs have averred in the plaint that the period oflimitation commenced on 21.11.2014, when they obtained acopy of the index of the Sale Deed dated 02.07.2009, anddiscovered the alleged fraud committed by Defendant No.1.

The relevant extract from the plaint in this regard is setout hereinbelow :–

“(7) … Not only that but also, on obtaining the copy ofthe index of the sale deed of the acts committed by theOpponent No.1, 4, 5 and on obtaining the certified copyof the sale deed, we the plaintiffs could come to knowon 21-11-2014 that, the Opponent No.1 had in collusionwith Opponent No.4, 5 mentioned the false chequesstated below in the so called sale deed with intention tocommit fraud and no any consents of we the plaintiffshave also been obtained in that regard.The said chequeshave not been received to we the plaintiffs or no anyamounts of the said cheques have been credited inaccounts of we the plaintiffs. Thus, the cheques whichhave been mentioned in the agreement caused to havebeen executed by the Opponent No.1, the false chequeshave been mentioned of the said amounts. Not only thatbut also, the agricultural land under the suit had beensold by the Opponent No.1 to the Opponent No.2Dillipbhai Gordhanbhai Sonani and the OpponentNo.3, Laljibhai Gordhanbhai Sonani on 1-4-2013 for-Rs.2,01,00,000/ as if the said sale deed was havingclear title deeds. On taking out the copy of the saidsale deed with seal and signature on 21-11-2014, it couldcome to the knowledge of we the plaintiffs. We theplaintiffs have not done any signature or witness onthe said agreement.The said agreement is not bindingto we the plaintiffs. Since the said agreement is sincenull, void and invalid as well as illegal, therefore, noany Court fee stamp duty is required to be paid by wethe plaintiff on the said agreement and for that we theplaintiffs rely upon the judgment of the Supreme Courtin A.I.R.2010, Supreme Court, Page No. 2807. …”

DAHIBEN v. ARVINDBHAI KALYANJI BHANUSALI(GAJRA) (D) THR LRS. & ORS. [INDU MALHOTRA, J.]

The plea taken in the plaint that they learnt of thealleged fraud in 2014, on receipt of the index of the SaleDeed, is wholly misconceived, since the receipt of the indexwould not constitute the cause of action for filing the suit.

On a reading of the plaint, it is clear that the cause ofaction arose on the non-payment of the bulk of the saleconsideration, which event occurred in the year 2009. Theplea taken by the Plaintiffs is to create an illusory cause ofaction, so as to overcome the period of limitation. The plearaised is rejected as being meritless and devoid of any truth.

15.5The conduct of the Plaintiffs in not taking recourse to legalaction for over a period of 5 and ½ years from the executionof the Sale Deed in 2009, for payment of the balance saleconsideration, also reflects that the institution of the presentsuit is an after-thought. The Plaintiffs apparently filed thesuit after the property was further sold by Respondent No.1to Respondent Nos. 2 and 3, to cast a doubt on the title ofRespondent No.1 to the suit property.

15.6The Plaintiffs have placed reliance on the Order of theCollector dated 19.06.2009 with the plaint. The Orderreveals that the permission was granted subject to thefulfilment of certain conditions. Clause 4 of the permissionstates that :

“(4) The purchaser of the land/property, shall have tomake the payment of the price of the land by chequeand its reference shall require to be made in the SaleDeed.”

If the Plaintiffs had a genuine grievance of non-payment of the balance sale consideration, the Plaintiffscould have moved for revocation of the permission grantedby the Collector on 19.06.2009.

Clause 6 of the Order provided that :

“(6) On making violation of any of the aforesaid terms,the permission shall automatically be treated ascancelled and, separate proceeding shall be taken upfor the violation of the terms and conditions.”

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The Plaintiffs did not make any complaint whatsoeverto the Collector at any point of time. The conduct of thePlaintiffs is reflective of lack of bona fide.

15.7The present case is a classic case, where the plaintiffs byclever drafting of the plaint, attempted to make out an illusorycause of action, and bring the suit within the period oflimitation.

Prayer 1 of the plaint reads as :

“1) The suit property being agricultural land of oldtenure of Revenue Survey No.610 whose block Numberis 573 situated at village Mota Varachha, Sub-district :Surat city, Dis : Surat has been registered by theopponent No.1 of this case in office of the Sub-Registrar(Katar Gam) at Surat vide Serial No.5158 in book No.1.Since, the same is illegal, void, in-effective and sincethe amount of consideration is received by the plaintiffs,and by holding that it is not binding to the plaintiffsand to cancel the same, and since the sale deed asaforesaid suit property has been executed by theopponent No.1 to the opponent No.2,3, it is registeredin the office of Sub-registrar, Surat (Rander) on 01/04/2013 vide serial No.443 which is not binding to we theplaintiffs. Since, it is illegal, void, in-effective andtherefore, this Hon’ble Court may be pleased to cancelthe same and this Hon’ble Court may be pleased to sendthe Yadi in that regard to the Sub-registrar, Surat (KaratGam) and the Sub-Registrar (Rander) in regard to thecancellation of both the aforesaid documents.”

The Plaintiffs deliberately did not mention thedate of the registered Sale Deed dated 02.07.2009 executedby them in favour of Respondent No.1, since it would beevident that the suit was barred by limitation. The prayerhowever mentions the date of the subsequent Sale Deedi.e. 01.04.2013 when the suit property was further sold byRespondent No.1 to Respondent Nos. 2 & 3.

The omission of the date of execution of the SaleDeed on 02.07.2009 in the prayer clause, was donedeliberately and knowingly, so as to mislead the Court onthe issue of limitation.

15.8The delay of over 5 and½ years after the alleged cause ofaction arose in 2009,shows that the suit was clearly barredby limitation as per Article 59 of the Limitation Act, 1963.The suit was instituted on 15.12.2014, even though the allegedcause of action arose in 2009, when the last cheque wasdelivered to the Plaintiffs.

The Plaintiffs have failed to discharge the onus of proofthat the suit was filed within the period of limitation. Theplaint is therefore, liable to be rejected under Order VIIRule 11 (d) of CPC.

Reliance is placed on the recent judgment of this Courtrendered in Raghwendra Sharan Singh v. Ram PrasannaSingh (Dead) by LRs.[15] whereinthis Court held the suitwould be barred by limitation under Article 59 of theLimitation Act, if it was filed beyond three years of theexecution of the registered deed.

15.9The Plaintiffs have also prayed for cancellation of thesubsequent Sale Deed dated 01.04.2013 executed byRespondent No.1 in favour of Respondent Nos. 2 and 3;since the suit in respect of the 1[st] Sale Deed dated02.07.2009 is rejected both under clauses (a) and (d) ofOrder VII Rule 11, the prayer with respect to the 2[nd] SaleDeed dated 01.04.2003 cannot be entertained.

16. The present suit filed by the Plaintiffs is clearly an abuse ofthe process of the court, and bereft of any merit.

The Trial Court has rightly exercised the power under Order VIIRule 11 CPC, by allowing the application filed by Respondent Nos.2 &3, which was affirmed by the High Court.

In view of the aforesaid discussion, the present Civil Appeal isdismissed with costs of Rs. 1,00,000/- payable by the Appellant toRespondent Nos. 2 and 3, within a period of twelve weeks from the dateof this Judgment.

Pending applications, if any, are accordingly disposed of.

Ankit Gyan

Appeal dismissed.

15 Civil Appeal No.2960/2019 decided on 13.03.2019.

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