SAYYED AYAZ ALI versus PRAKASH G GOYAL & ORS. on 20 July 2021

1. These appeals arise from a judgment of a Single Judge at theNagpur Bench of the High Court of Judicature at Bombay.

2. The appellant is the plaintiff in a suit instituted before the CivilJudge, Senior Division at Nagpur. The first respondent filed an applicationat Exhibit-50 for the rejection of the plaint on the ground that it wasbarred under clauses (b) and (d) of Order 7 Rule 11 of the Code of CivilProcedure 1908 (“CPC”). The Fifth Joint Civil Judge, Junior Division,Nagpur allowed the application. However, while doing so, the appellantwas “directed to seek proper relief and pay court fee thereon within 15days, otherwise appropriate order will be passed”. This order of theTrial Judge, insofar as it permitted the appellant to carry out an amendmentfor seeking appropriate reliefs was assailed before the High Court in aCivil Revision Application No 124 of 2017 by Defendants 1A to D andDefendant No 2 (Respondent Nos 1 to 5 to these proceedings). Theappellant instituted a Writ Petition[1] under Article 227 of the Constitutionfor challenging the order of the Trial Judge allowing the application underOrder 7 Rule 11 of the CPC. The High Court decided both the civilrevision application and the writ petition by a common judgment. TheSingle Judge held that since the plaint was rejected under Order 7 Rule11(d) there was no occasion to direct that an amendment be made to theplaint. The civil revision was allowed on this basis. The writ petition filedby the appellant was held to be an “after thought and belated” and norelief was granted to the appellant in the writ proceedings. That is howthe proceedings have reached this Court. The appellant is essentiallyaggrieved by the decision of the Trial Court and the High Court to allowthe application under Order 7 Rule 11(d) of the CPC.

3. Since the controversies in the present case arise out of theapplication under Order 7 Rule 11, it would be necessary to set out inbrief the contents of the plaint. Parties would be referred to on the basisof their respective positions in the suit. The plaintiff claims that he cameinto contact with the third defendant who is a financial broker. The thirddefendant is alleged to have arranged a loan of Rs 7 lacs with interest at5 per cent month subject on the plaintiff executing an agreement andblank documents as security for the loan. Against the loan of Rs 7 lacs,the plaintiff is alleged to have executed an agreement dated 3 April 2012in favour of the nominees of the third defendant and executed documents BC

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Awhich were blank. Thereafter, it is alleged that the plaintiff needed anadditional finance of Rs 22 lacs and the third defendant took the plaintiffto the first defendant. The first defendant is alleged to have agreed togive a loan of Rs 22 lacs on the condition that the plaintiff executed asale deed in respect of land of Mauza: Kanholi towards security forrepayment of the loan. The amount was paid over on 11 May 2012 andBwas to carry interest of 5 per cent per month and in consideration, theplaintiff is alleged to have executed documents including a sale deeddated 11 May 2012. In the meantime, the fourth defendant is alleged tohave expressed the desire to sell plot Nos 23-A, 29, 34, 35-A, 24, 25, 26,27 and 28 admeasuring 25.009 sq. ft. out of land bearing Khasra No 82/C3 Mauza: Gorewada. P.R. No 9, Tah: and District Nagpur. This propertyhas been referred to as the suit property. The fourth defendant is allegedto have shown an agreement dated 22 March 2011 in his favour. Theplaintiff is alleged to have been shown certain documents between ShoabAsad, Murtuja Khan and Shashikant Grihanirman Sahakari Sanstha. Afternegotiation, it is stated that the plaintiff agreed to purchase the suitDproperty at Rs 1950 per sq. ft., out of which the plaintiff agreed to payRs 1400 per sq. ft. to Shashikant Grihanirman Sahakari Sanstha and Rs550 per sq. ft. to the fourth defendant. Since the plaintiff did not havefunds for the purchase of the property, it is alleged that he met the firstdefendant through the third defendant and sought a loan for the amount.EThe third defendant is alleged to have agreed to a loan of Rs 1.5 croressubject to the deduction of the earlier loans of Rs 7 lacs and Rs 22 lacstogether with interest. According to the plaintiff, it was however a conditionthat the sale deed of Plot No 23A and 24 would be executed directly inthe name of the first defendant and second defendant towards securityfor the repayment of the loan and the sale deed for Plot Nos 25 to 29, 34Fand 34A would be executed in the joint names of the first and seconddefendants and the plaintiff. The plaintiff is alleged to have entered intoan agreement for the purchase of the suit property on 15 June 2012. Theamount alleged to have been paid for the loan was obtained by the plaintifffrom the first defendant. The sale deed for plot Nos 23A and 24 wasGexecuted and registered on 27 June 2012 in the names of the first andsecond defendants, while the sale deed for the remaining plots wasexecuted in the joint names of the first and second defendants and theplaintiff. The plaintiff claims to have been placed in exclusive possessionof the entire suit property and it is his case that the names of the first andsecond defendants were incorporated in the sale deed only for securityHfor the repayment of the loan.

4. The plaintiff claims to have commenced development on theland and to have purchased an adjoining plot bearing no 9A on 28September 2012. According to the plaintiff, on 26 September 2012, thefirst and third defendants came to the suit property and demanded therepayment of the interest on the loan of Rs 1.5 crores. The plaintiff isalleged to have made certain payments on 8 September 2012 and tohave furnished postdated cheques towards the interest for the monthsof November and December 2012. The plaintiff alleged that he completedthe work of leveling the plots. On 24 November 2012, the third, fourthand fifth defendants are alleged to have entered the suit property alongwith thirty unknown persons and to have demanded the payment of Rs.1.50 crores within two days. The police, it is alleged, did not take anyaction on the complaint registered by the plaintiff.

5. The first and second defendants are alleged to have conspiredwith Defendants 3 to 5 to commit criminal acts against the plaintiff withthe help of the local police. Crime No 475 of 2012 was registered on 28November 2012 under Sections 143, 147, 447 and 427 of the IndianPenal Code. According to the plaintiff, during the pendency of the suit, acompromise was arrived with the first and second defendants. It hasbeen alleged that though certain amounts were paid to the first and seconddefendants pursuant to the compromise, they have refused to execute asale deed in return and have recovered an amount of Rs. 50 lacs fromthe plaintiff under the garb of a compromise.

The reliefs which have been sought in the suit are as follows:

“1. declare that the acts of the defendants no.3 to 5 to enter intothe suit property on 24-11-2012 and to beat/assault and to interferewith the peaceful possession of the plaintiff is criminal, illegal,arbitrary and without any authority.

2. Pass decree for permanent perpetual injunction againstdefendants, their agents servants and the person acting on theirbehalf, thereby restraining them from interfering with the peacefulpossession of the plaintiff over the suit property and fromdispossessing the plaintiff from the suit property in any manner ofwhatsoever nature permanently in the interest of justice.”

6. After the institution of the suit on 26 November 2012, anapplication was filed on behalf of the second defendant for the rejectionof the plaint under clauses b and d of Rule 11 of Order 7 of the CPC.

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AThe rejection was sought on the ground that the plaintiff has admittedthe execution of sale deeds in favour of the first and second defendants.Despite this, no declaration of invalidity has been sought in regard to thesale deeds. The submission was that the plaintiff did not seek thecancellation of the sale deeds on the ground that they were executedonly as a security for the loan transaction. Further, no declaration wasBsought by the plaintiff to the effect that the sale deeds did not confer anyright, title or interest on the defendants. As a result of this, the suit wouldbe barred by Section 34 of the Specific Relief Act 1963.

7. The application under Order 7 Rule 11 was rejected by theTrial Judge on 1 August 2017. The Trial Judge observed that the plaintiffChas claimed a declaration simpliciter that the act of the defendants inentering upon the suit property on 24 November 2012 is illegal, besideswhich a permanent injunction has been sought to protect the possessionof the plaintiff. The Trial Judge held that the plaintiff having failed toseek a declaration that the sale deeds were executed only as a securityDfor the loan transaction, the suit is not maintainable in view of theprovisions of the Section 34 of the Specific Relief Act. The Trial Judgeheld:

“14 …as discussed above, the plaintiff neither sought relief ofcancellation of alleged sale deeds nor for declaration that the allegedEsale deeds were executed for security purpose and not its realsense. Therefore, I am of the view that present applicationdeserves to be allowed. However, as discussed above, the plaintiffis ready to pay the requisite court fee thereon. Therefore, I givemy finding point No. l affirmative and so far as, point No.2 isconcerned, I pass following order.F

ORDER

1] Application is allowed.

2] The plaintiff is directed to seek proper relief and pay court feethereon within 15 days, otherwise, appropriate order will beGpassed.”

8. Aggrieved by the order of the Trial Judge, granting liberty tothe plaintiff –appellant to amend the plaint despite allowing the applicationunder Order 7 Rule 11, Defendant Nos 1-a to 1-d and Defendant No 2(Respondent Nos 2-5 and Respondent No 1 before this Court) filed aHcivil revision application before the High Court. On 11 September 2017

and 23 July 2018, the appellant instituted a writ petition challenging theorder of the Trial Judge allowing the application (Exhibit 50) of DefendantNo 2 under Order 7 Rule 11. The High Court by its judgment and orderdated 14 September 2018 held that:

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(i) On a reading of the plaint, it is clear that the sale deedswere executed in the names of the first and secondBdefendants with regard to plot Nos 23A and 24;

(ii) Sale deeds were executed in respect of the plot Nos 25 to29, 34 and 34A in the joint names of the plaintiffs togetherwith the first and second defendants; C

(iii) According to the plaintiff, these sale deeds in the name ofthe first and second defendants were a security for therepayment of the loan;

(iv) It was necessary for the plaintiff to seek a declaration thatthe sale deeds were executed merely as a security for therepayment of the loan and a failure to seek such a declarationDwould come within the purview of the proviso to Section 34of the Specific Relief Act 1963;

(v) The Trial Court having allowed the application under Order7 Rule 11(d) of the CPC committed an error in grantingtime to the plaintiff to amend the plaint to seek proper reliefand pay court fees. Where the rejection of the plaint takesplace under Order 7 Rule 11(d), there would be no questionof granting time to the plaintiff to rectify the defects in theplaint. Where the suit appears from the statements in theplaint to be barred by any law, the defects are not curable;and E

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(vi) The challenge by the plaintiff to the order rejecting the plaintunder Order 7 Rule 11(d) is without substance. The orderon Exhibit-50 was passed on 1 August 2017. On the basisof the order, the plaintiff sought an amendment of the plaintunder Order 6 Rule 17 on 14 August 2017 by seeking adeclaration in respect of the sale deeds. The order underExhibit- 50 was challenged in a civil revision application on12 September 2017 and the plaintiff was served bysubstituted service in April 2018 and it was only on 24 July2018 that the plaintiff sought to challenge the order under G

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AExhibit-50. Consequently, the challenge is belated and is anafterthought.

9. Mr Vinay Navare, learned Senior Counsel appearing on behalfof the appellant-plaintiff submitted that the High Court has erroneouslyupheld the finding of the Trial Judge that the application under Order 7BRule 11 of the CPC had to be allowed. Under Order 7 Rule 11(d), aplaint shall be rejected “where the suit appears from the statements inthe plaint to be barred by any law”. The appellant has sought a declarationagainst the third, fourth and fifth defendants in regard to their act ofentering upon the property on 24 November 2012 and interfering withthe peaceful possession of the plaintiff. An injunction has been soughtCagainst all the defendants restraining them from interfering with thepeaceful possession of the plaintiff over the suit property. Section 34[2]of the Specific Relief Act indicates that

(i) A person entitled to any legal character or to any right as toany property may institute a suit against any person denyingDor interested to deny his title to such character or right;

(ii) The court may in its discretion make a declaration that theplaintiff is so entitled and the plaintiff need not in such a suitask for further relief; and E(iii)Under the proviso, no court shall make any such declarationwhere the plaintiff being able to seek further relief than amere declaration of title omits to do so.

It has been urged that the proviso to Section 34 applies to asituation where a plaintiff has sought a mere declaration of title but omitsFto seek further or consequential relief. The submission is that in thepresent case, the suit has been instituted to protect the possession of theplaintiff simpliciter without claiming a declaration of title. Seeking a 2 “34. Discretion of court as to declaration of status or right-Any person entitled to anylegal character, or to any right as to any property, may institute a suit against anyGperson denying, or interested to deny, his title to such character or right, and the courtmay in its discretion make therein a declaration that he is so entitled, and the plaintiffneed not in such suit ask for any further relief: Provided that no court shall make anysuch declaration where the plaintiff, being able to seek further relief than a meredeclaration of title, omits to do so.Explanation.-A trustee of property is a “person interested to deny” a title adverse tothe title of someone who is not inexistence, and for whom, if in existence, he would beHa trustee.”

declaration of title is, according to the submission, not mandatory: whatthe proviso to Section 34 provides is that seeking a mere declaration oftitle without seeking further relief is impermissible. On these grounds, itis urged that the suit could not be held to be barred by Section 34 of theSpecific Relief Act. Learned counsel urged that whether the suit wouldbe maintainable in the absence of the plaintiff – appellant seeking adeclaration of title is a distinct question, but it cannot be held to be barredby any law within the meaning of Order 7 Rule 11(d).

The appellant instituted a writ petition before the High Court on23 July 2018, to challenge the order of the Trial Court allowing theapplication (Exhibit -50) for rejecting the plaint under Order 7 Rule 11.For clarity, it is necessary to extract the reliefs which were claimedbefore the High Court in the writ petition:

“1. …quash and set aside the order passed below Exh: 50(ANNEXURE-F) on 01/08/2017 in RCS No.4990/2012 (Sayyad-Vs.-Om Mittal and others) by the 5[th] Joint Civil Judge, JuniorDivision, Nagpur…

2. Reject the application at Exh: 50 filed RCS No.4990/2012(Sayyad -Vs.-Om Mittal and others) pending on the file of 5[th]Joint Civil Judge, Junior Division, in the interest of justice.”

10. The High Court has, in the course of its judgment, rejectedthe writ petition on the ground that it was “by way of an afterthoughtand belated”. This was on the premise that after the order of the TrialJudge dated 1 August 2017, the appellant filed an application under Order6 Rule 17 on 14 August 2017 in terms of the liberty granted by the TrialJudge for amending the plaint to seek a declaration in regard to the saledeeds in question. The first and second defendants to the suit challengedthe grant of the liberty by the Trial Judge by filing a revision applicationon 12 September 2017 and it was only on 24 July 2018 that the appellant– plaintiff sought to challenge the order rejecting the plaint under Order7 Rule 11(d).

11. Mr Pankaj Kothari, learned Counsel appearing on behalf ofthe respondents - defendants raised a preliminary objection to themaintainability of the writ petition on the ground that against the rejectionof the plaint, the remedy of the appellant was to file a regular first appealsince an order of rejection operates as a decree. It has been urged thatthe appellant, after having complied with the order of the Trial Court, AB

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Adeliberately filed a writ petition, instead of an appeal, to avoid the issueof limitation in filing an appeal. Mr Navare, learned Senior Counselcontested the submission by urging that since a civil revision applicationhad been filed by the first and second defendants before the High Court,the appellant- plaintiff was justified in seeking recourse to the writjurisdiction of the High Court. Moreover, he submitted that the availabilityBof a remedy of a first appeal under Section 96 of the CPC would notipso facto bar a recourse to the writ jurisdiction.

12. Section 2(2) of the CPC defines the expression ‘decree’ inthe following terms:C“(2) “decree” means the formal expression of an adjudicationwhich, so far as regards the Court expressing it, conclusivelydetermines the rights of the parties with regard to all or any of thematters in controversy in the suit and may be either preliminary orfinal. It shall be deemed to include the rejection of a plaint and thedetermination of any question within section 144, but shall notDinclude—

(a) any adjudication from which an appeal lies as an appeal froman order, or (b) any order of dismissal for default.

EExplanation.—A decree is preliminary when further proceedingshave to be taken before the suit can be completely disposed of. Itis final when such adjudication completely disposes of the suit. Itmay be partly preliminary and partly final;”

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

The definition of “decree” in Section 2(2) “shall be deemed toinclude the rejection of a plaint”. Hence, the order of the Trial CourtGrejecting the plaint is subject to a first appeal under Section 96 of theCPC. The writ petition filed by the appellant was liable to be rejected onthat ground. We therefore affirm the judgment of the High Court rejectingthe writ petition, though for the above reason leave it open to the appellantto pursue the remedy available in law.

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13. The High Court while exercising its revisional jurisdictionaccepted the plea of the first and second defendants that the Trial Judge,having allowed the application Order 7 Rule 11(d), was not justified ingranting to the appellant-plaintiff liberty to amend the plaint by seekingappropriate reliefs and paying the court fee. In this context, it is necessaryto advert to Order 7 Rule 11 which provides as follows:

“11. Rejection of plaint.— The plaint shall be rejected in thefollowing cases:—

(a) where it does not disclose a cause of action; (b) where the relief claimed is undervalued, and the plaintiff, onbeing required by the Court to correct the valuation within a timeto be fixed by the Court, fails to do so;

(c) where the relief claimed is properly valued, but the plaint isreturned upon paper insufficiently stamped, and the plaintiff, onbeing required by the Court to supply the requisite stamp-paperwithin a time to be fixed by the Court, fails to do so; (d) where the suit appears from the statement in the plaint to bebarred by any law; (e) where it is not filed in duplicate; (f) where the plaintiff fails to comply with the provisions of rule 9

[Provided that the time fixed by the Court for the correction ofthe valuation or supplying of the requisite stamp-paper shall notbe extended unless the Court, for reasons to be recorded, issatisfied that the plaintiff was prevented by any cause of anexceptional nature from correcting the valuation or supplying therequisite stamp-paper, as the case may be, within the time fixedby the Court and that refusal to extend such time would causegrave injustice to the plaintiff.]”

The proviso quoted above deals with a situation where time hasbeen fixed by the Court for the correction of the valuation or for supplyingof the requisite stamp paper. Under the proviso, the time so fixed shallnot be extended unless the court, for reasons to be recorded, is satisfiedthat the plaintiff was prevented by a cause of an exceptional naturefrom complying within the time fixed by the court and that a refusal toextend time would cause grave injustice to the plaintiff. The proviso A

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Aevidently covers the cases falling within the ambit of clauses (b) and (c)and has no application to a rejection of a plaint under Order 7 Rule11(d). In the circumstances, the High Court was justified in coming tothe conclusion that the further direction that was issued by the TrialJudge was not in consonance with law.

B14. For the above reasons, we affirm the judgment of the SingleJudge of the High Court:

(i) allowing the revision application filed by the first and seconddefendants; and

(ii) dismissing the writ petition filed by the appellant-plaintiff.

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Since the dismissal of the writ petition has been upheld on theground that the order rejecting the plaint operates as a decree within themeaning of Section 2(2) of the CPC, the appellant is at liberty to takerecourse to the remedy against the rejection of the plaint as prescribedby the CPC.

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15. The appeals shall stand disposed of in the above terms.

16. Pending application(s), if any, stand disposed of.

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Devika Gujral

Appeals disposed of.

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