SUPREME COURT REITERATES THAT PLAINTIFF CANNOT RECTIFY THE DEFECTS IF A PLAINT GETS REJECTED

A Two Judge Bench of the Hon’ble #SupremeCourt of India comprising of Justices Dr Dhananjaya Y Chandrachud and M R Shah passed a #Judgment dated 20-07-2021 in the case of Sayyed Ayaz Ali v. Prakash G Goyal & Ors.  (Civil Appeal Nos 2401-2402 of 2021 @ SLP (C) Nos. 29975-29976 of 2018) and affirmed that  where the #rejection of the #plaint takes place under Order 7 Rule 11(d) of the Code of Civil Procedure, 1908 (#CPC) there would be no question of granting time to the Plaintiff to #rectify the #defects in the plaint.

In the present case, the Appellant-Plaintiff had purchased a suit property by obtaining loans from Defendant 1 and Defendant 2. The condition for obtaining the loans was that the sale deed for plot No. 23A and 24 would be executed and registered in the names of the Defendants and the sale deeds for the remaining plots would be in the joint names of the first and the second defendants and the Plaintiff. The case of the Plaintiff was that the exclusive possession of the entire suit property belonged to him and that the name of the first and second defendants was incorporated in the sale deed only for security for the repayment of the loan. The Plaintiff alleged that the Defendants had illegally assaulted him and interfered with the peaceful possession of the suit property of the Plaintiff. It was argued before the Court that certain amounts were paid to the first as well as the second defendants in pursuance to a compromise, however, they refused to execute a sale deed and recovered an amount of Rs. 50 lacs from him.

Thereafter, when the suit was instituted by the Appellant-Plaintiff before the Trial Court, it was rejected under Clauses (b) and (d) of Order 7 Rule 11 of the CPC. The ground for rejection was that the Plaintiff had admitted the execution of sale deeds in favour of the first and second defendants.

Despite this, no declaration of invalidity had been sought in regard to the sale deeds as 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. Furthermore, 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. Hence, the suit would be barred by Section 34 of the Specific Relief Act 1963.

The important question that arose for the consideration of the Court was that although the Trial Court had allowed the Application filed by Defendant 1 under clauses (b) and (d) of Order 7 Rule 11 of the CPC, 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”.

The application under Order 7 Rule 11 was rejected by the Trial Judge on 1-08-2017. Aggrieved by this Order, the Defendants filed a civil revision application before the High Court of Judicature at Bombay. On 11-09-2017 and 23-07-2018, the Appellant instituted a Writ Petition challenging the order of the Trial Judge allowing the application The High Court vide Order dated 14-09-2018, held the following:

1. “On a reading of the plaint, it is clear that the sale deeds were executed in the names of the first and second defendants with regard to plot Nos 23A and 24;
2. Sale deeds were executed in respect of the plot Nos 25 to 29, 34 and 34A in the joint names of the plaintiffs together with the first and second defendants;
3. According to the plaintiff, these sale deeds in the name of the first and second defendants were a security for the repayment of the loan;
4. It was necessary for the plaintiff to seek a declaration that the sale deeds were executed merely as a security for the repayment of the loan and a failure to seek such a declaration would come within the purview of the proviso to Section 34 of the Specific Relief Act 1963;
5. The Trial Court having allowed the application under Order 7 Rule 11(d) of the CPC committed an error in granting time to the plaintiff to amend the plaint to seek proper relief and pay court fees. Where the rejection of the plaint takes place under Order 7 Rule 11(d), there would be no question of granting time to the plaintiff to rectify the defects in the plaint. Where the suit appears from the statements in the plaint to be barred by any law, the defects are not curable; and
6. The challenge by the plaintiff to the order rejecting the plaint under Order 7 Rule 11(d) is without substance.”

Proviso of Order 7 Rule 11 provides that,

“Provided that the time fixed by the Court for the correction of the valuation or supplying of the requisite stamp-paper shall not be extended unless the Court, for reasons to be recorded, is satisfied that the plaintiff was prevented by any cause of an exceptional nature from correcting the valuation or supplying the requisite stamp-paper, as the case may be, within the time fixed by the Court and that refusal to extend such time would cause grave injustice to the plaintiff.”

Taking into consideration, the arguments advanced by the Parties to the dispute, the Bench opined that proviso of Order 7 Rule 11 deals with a situation where time has been fixed by the Court for the correction of the valuation or for supplying of the requisite stamp paper and that it evidently covers the cases falling within the ambit of clauses (b) and (c) but has no application to a rejection of a plaint under Order 7 Rule 11(d) and that in such circumstances, the High Court was justified in stating that the direction issued by the Trial Court was not in consonance with law.

Accordingly, the Apex Court affirmed the Judgment of the 14-09-2018 and rejected the Writ Petition.

Suchitra Upadhyay

Associate

The Indian Lawyer & Allied Services