ORDER REJECTING THE PLAINT – APPEALABLE?

Rejection of plaint

Order VII, Rule 11 of the Civil Procedure Code, provides the grounds for the rejection of the plaint as detailed below-

• where it does not disclose a cause of action;
• where the relief claimed is undervalued, and the plaintiff, on being required by the Court to correct the valuation within a time to be fixed by the Court, fails to do so;
• where the relief claimed is properly valued, but the plaint is written upon paper insufficiently stamped, and the plaintiff, on being required by the Court to supply the requisite stamp-paper within a time to be fixed by the Court, fails to do so;
• where the suit appears from the statement in the plaint to be barred by any law:
• where it is not filed in duplicate;
• where the plaintiff fails to comply with the provision of rule 9.

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 for 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.

Case law

In MITC Rolling Mills Private Limited And Anr. Versus M/s. Renuka Realtors And Ors. - 2025 (11) TMI 767 - Supreme Court, the appellant filed the present appeal challenging the order of High Court, in its judgment dated 17.02.2025 which disposed the appeal filed by the appellant before the High Court, Bombay as non-maintainable under Section 13(1A) of Commercial Courts Act, 2015. 

The appellant filed a commercial suit for seeking a recovery of Rs.2.52 crores which includes the cost of the materials supplied along with interest.  The respondents filed an application under Order VII Rule 11 of Civil Procedure Code, with the prayer to reject the plaint since the appellant had not taken the Pre-Institution Mediation and Settlement under Section 12A of the Commercial Courts Act.  The trial court accepted the application and rejected the plaint vide their order dated 10.11.2022.  At that time the appellant filed an IA seeking exemption from pre-institution mediation.

Since the plaint is rejected, the appellant filed an appeal before the High Court under Section 13(1A) raising various grounds for the consideration of the High Court.  The High Court dismissed the appeal on the ground that since the plaint does not come within the ambit of Order XLIII of the Civil Procedure Code and the same cannot be challenged under Section 13(1A) of the Commercial Courts Act. 

The appellant made a reference to Section 2(2) of the Civil Procedure Code which defines the term ‘decree’.  The term ‘decree’ is defined as 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-

• any adjudication from which an appeal lies as an appeal from an order; or
• any order of dismissal for default.

The appellant submitted the following before the Supreme Court-

• The expression ‘decree’ means a formal expression of an adjudication which conclusively determines the rights of the parties and includes within its ambit the rejection of a plaint.
• An order passed under Order VII Rule 11 of the Civil Procedure Code rejecting the plaint is deemed to be a decree as the same is a final adjudication of the lis before the concerned Court.
• The appeal preferred under Section 13(1A) of the Commercial Courts Act, 2015 was maintainable and the High Court committed a grave error in holding otherwise.
• The impugned judgment is ex facie unsustainable in law and the present appeal deserves to be accepted.

The respondent contended that the appeal deserves to be dismissed as the impugned judgment is in consonance with the settled legal position and does not warrant any interference by this Court in exercise of jurisdiction under Article 136 of the Constitution of India.

The Supreme Court considered the submissions of the parties to the appeal and also considered the documents on record.  The Supreme Court, based on the facts and circumstances of the case, considered the issue to be decided in the present appeal as to whether an order rejecting the plaint under Order VII, Rule 11 of Civil Procedure Code is appealable under Section 13(1A) of the Commercial Courts Act.

The Supreme Court observed that an order rejecting the plaint under Order VII Rule 11 Code of Civil Procedure decided list finally and amount to a decree under Section 2(2) of the Civil Procedure Code.  The Supreme Court relied on its own order in SHAMSHER SINGH Versus RAJINDER PRASHAD & ORS. - 1973 (8) TMI 173 - Supreme Court in which plaint was rejected under Order VII Rule 11(b) for not being properly valued for purposes of court-fees and jurisdiction.  Such an order amounts to a decree under Section 2(2), and there is a right of appeal open to the plaintiff.

The Supreme Court analysed the provisions of Section 13(1A) of the Commercial Courts Act.  The Supreme Court observed that the said section contains two parts.  The main provision contemplated appeals against ‘judgments’ and ‘orders.’  The proviso to Section 13(1A) operating as an exception, must be construed harmoniously with the main provision and not in derogation thereof.  Where the language of the main provision is plain and unambiguous, the proviso cannot be invoked to curtail or whittle down the scope of the principal enactment, save and except where such exclusion is clearly and expressly contemplated.  The proviso merely restricts appeals against interlocutory orders to those specifically enumerated under Order XLIII Civil Procedure Code and Section 37 of the Arbitration and Conciliation Act, 1996.

The plaintiff who is aggrieved of the order rejecting the plaint under Order VII Rule 11 Civil Procedure Code cannot be left remediless or compelled to institute a fresh suit for availing such a challenge.  The Supreme Court quashed the impugned order.  The Supreme Court held that the appeal preferred by the appellant-company in the High Court is held to be maintainable and hence, restored to its file and original number.  The Supreme Court directed the High Court to consider and decide the same on merits, in accordance with law.