The apex court held only appeal is maintainable under section 96 CPC: SC

The definition of “decree” in Section 2(2) “shall be deemed to include the rejection of a plaint”. Hence, the order of the Trial Court rejecting the plaint is subject to a first appeal under Section 96 of the CPC. The writ petition filed by the appellant was liable to be rejected on that ground. ,, (Para 12)

SAYYED AYAZ ALI VS PRAKASH G GOYAL & ORS.

Civil Appeal Nos 2401-2402 of 2021 @ SLP (C) Nos. 29975-29976 of 2018

Decided on 20th July, 2021

The Supreme Court bench consisting of Justice Dr Dhananjaya Y Chandrachud and Justice M.R. Shah dismissed the writ petition and upheld the ground that the order rejecting the plaint operates as a decree within the meaning of Section 2(2) of the CPC, the appellant is at liberty to take recourse to the remedy against the rejection of the plaint as prescribed by the CPC.

These appeals arise from a judgment of a Single Judge at the Nagpur Bench of the High Court of Judicature at Bombay. The appellant is the plaintiff in a suit instituted before the Civil Judge, Senior Division at Nagpur. The first respondent filed an application at Exhibit-50 for the rejection of the plaint on the ground that it was barred under clauses (b) and (d) of Order 7 Rule 11 of the Code of Civil Procedure 1908 (“CPC”). The Fifth Joint Civil Judge, Junior Division, Nagpur allowed the application. However, while doing so, the appellant was “directed to seek proper relief and pay court fee thereon within 15 days, otherwise appropriate order will be passed”. This order of the Trial Judge, insofar as it permitted the appellant to carry out an amendment for seeking appropriate reliefs was assailed before the High Court in a Civil Revision Application No 124 of 2017 by Defendants 1A to D and Defendant No 2 (Respondent Nos 1 to 5 to these proceedings). The appellant instituted a Writ Petition1 under Article 227 of the Constitution for challenging the order of the Trial Judge allowing the application under Order 7 Rule 11 of the CPC. The High Court decided both the civil revision application and the writ petition by a common judgment.

The Single Judge 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 civil revision was allowed on this basis. The writ petition filed by the appellant was held to be an “after thought and belated” and no relief was granted to the appellant in the writ proceedings. That is how the proceedings have reached this Court. The appellant is essentially aggrieved by the decision of the Trial Court and the High Court to allow the application under Order 7 Rule 11(d) of the CPC. (Para 2)

In the present case arise out of the application under Order 7 Rule 11, it would be necessary to set out in brief the contents of the plaint. Parties would be referred to on the basis of their respective positions in the suit. The plaintiff claims that he came into contact with the third defendant who is a financial broker. The plaintiff claims to have been placed in exclusive possession of the entire suit property and it is his case that the names of the first and second defendants were incorporated in the sale deed only for security for the repayment of the loan.

The first and second defendants are alleged to have conspired with Defendants 3 to 5 to commit criminal acts against the plaintiff with the help of the local police. Crime No 475 of 2012 was registered on 28 November 2012 under Sections 143, 147, 447 and 427 of the Indian Penal Code. According to the plaintiff, during the pendency of the suit, a compromise was arrived with the first and second defendants. It has been alleged that though certain amounts were paid to the first and second defendants pursuant to the compromise, they have refused to execute a sale deed in return and have recovered an amount of Rs. 50 lacs from the plaintiff under the garb of a compromise. (Para 5)

After the institution of the suit on 26 November 2012, an application was filed on behalf of the second defendant for the rejection of the plaint under clauses b and d of Rule 11 of Order 7 of the CPC. The rejection was sought on the ground that the plaintiff has admitted the execution of sale deeds in favour of the first and second defendants. Despite this, no declaration of invalidity has been sought in regard to the sale deeds. The submission was that the plaintiff did not seek the cancellation of the sale deeds on the ground that they were executed only as a security for the loan transaction. Further, no declaration was sought by the plaintiff to the effect that the sale deeds did not confer any right, title or interest on the defendants. As a result of this, the suit would be barred by Section 34 of the Specific Relief Act 1963.

The application under Order 7 Rule 11 was rejected by the Trial Judge on 1 August 2017. The Trial Judge observed that the plaintiff has claimed a declaration simpliciter that the act of the defendants in entering upon the suit property on 24 November 2012 is illegal, besides which a permanent injunction has been sought to protect the possession of the plaintiff. The Trial Judge held that the plaintiff having failed to seek a declaration that the sale deeds were executed only as a security for the loan transaction, the suit is not maintainable in view of the provisions of the Section 34 of the Specific Relief Act.

The High Court while exercising its revisional jurisdiction accepted the plea of the first and second defendants that the Trial Judge, having allowed the application Order 7 Rule 11(d), was not justified in granting to the appellant-plaintiff liberty to amend the plaint by seeking appropriate reliefs and paying the court fee. (Para 13)

Under the proviso, the time so fixed shall not be extended unless the court, for reasons to be recorded, is satisfied that the plaintiff was prevented by a cause of an exceptional nature from complying within the time fixed by the court and that a refusal to extend time would cause grave injustice to the plaintiff. The proviso evidently 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 Rule 11(d).

For the above reasons, we affirm the judgment of the Single Judge of the High Court:

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

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

Since the dismissal of the writ petition has been upheld on the ground that the order rejecting the plaint operates as a decree within the meaning of Section 2(2) of the CPC, the appellant is at liberty to take recourse to the remedy against the rejection of the plaint as prescribed by the CPC. (Para 14)

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