2005 (8) TMI 691 - SC - Indian Laws

Appeal Success: Suit Not Time-Barred, Sent Back to Trial Court for Further Evidence Consideration.

Popat and Kotecha Property Versus State Bank of India Staff Association

The SC allowed the appeal, overturning the Division Bench's decision to reject the plaint under Order VII Rule 11(d) CPC. It held that the Division Bench ... Challenged the judgment passed by the High Court - rejection of the plaint in terms of Order VII Rule 11 (d) of the Code of Civil Procedure, 1908 (’CPC’) - suit barred by limitation - Claim related to execution of the lease deed - Prayer in the plaint was to pass a decree - Period beyond 51 years from the date of agreement in 1983 and not for any period prior to that - HELD THAT:- The real object of Order VII Rule 11 of the Code is to keep out of courts irresponsible law suits. Therefore, the Order X of the Code is a tool in the hands of the Courts by resorting to which and by searching examination of the party in case the Court is prima facie of the view that the suit is an abuse of the process of the court in the sense that it is a bogus and irresponsible litigation, the jurisdiction under Order VII Rule 11 of the Code can be exercised. Rule 11 of Order VII lays down an independent remedy made available to the defendant to challenge the maintainability of the suit itself, irrespective of his right to contest the same on merits. The law ostensibly does not contemplate at any stage when the objections can be raised, and also does not say in express terms about the filing of a written statement. Instead, the word ’shall’ is used clearly implying thereby that it casts a duty on the Court to perform its obligations in rejecting the plaint when the same is hit by any of the infirmities provided in the four clauses of Rule 11, even without intervention of the defendant. In any event, rejection of the plaint under Rule 11 does not preclude the plaintiffs from presenting a fresh plaint in terms of Rule 13. When the averments in the plaint are considered in the background of the principles set out in Sopan Sukhdeo [2004 (1) TMI 726 - SUPREME COURT], the inevitable conclusion is that the Division Bench was not right in holding that Order VII Rule 11 CPC was applicable to the facts of the case. Diverse claims were made and the Division Bench was wrong in proceeding with the assumption that only the non-execution of lease deed was the basic issue. Even if it is accepted that the other claims were relatable to it they have independent existence. Whether the collection of amounts by the respondent was for a period beyond 51 years need evidence to be adduced. It is not a case where the suit from statement in the plaint can be said to be barred by law. The statement in the plaint without addition or subtraction must show that is barred by any law to attract application of Order VII Rule 11. This is not so in the present case. We do not intend to go into various claims in detail as disputed questions in relation to the issue of limitation are involved. The appeal is accordingly allowed with no order as to costs. We make it clear that we have not expressed any opinion on the merits of the case which shall be gone into in accordance with law by the Trial Court. Issues Involved:1. Legality of the rejection of the plaint under Order VII Rule 11(d) of the Code of Civil Procedure, 1908 (CPC).2. Whether the suit was barred by limitation under the Indian Limitation Act, 1963.Detailed Analysis:1. Legality of the Rejection of the Plaint under Order VII Rule 11(d) of CPC:The appellant challenged the Division Bench of the Calcutta High Court's judgment, which held that the plaint was to be rejected under Order VII Rule 11(d) of the CPC because the suit was barred by limitation. The Single Judge had earlier held that this provision was not applicable to the facts of the case, but the Division Bench set aside this order.The appellant and respondent had an agreement dated 19th January 1983 for the appellant to develop the respondent's property. The appellant claimed the building was completed in 1984 and requested the respondent to execute a lease deed, which was never done. The suit filed in July 1990 included several prayers, such as a declaration of entitlement to rent, a perpetual injunction, damages, and specific performance of the agreement.The respondent filed an application under Order VII Rule 11 CPC for rejection of the plaint, arguing that the suit was barred by limitation. The Single Judge dismissed this application, but the Division Bench found that the suit was filed beyond the limitation period, focusing on the non-execution of the lease deed as the central issue.2. Whether the Suit was Barred by Limitation:The appellant argued that the Division Bench erred by focusing solely on the lease deed execution, ignoring other reliefs like claims for damages and unauthorized collections. The appellant contended that the suit was not barred by limitation as the respondent had acknowledged the appellant's claim, thus extending the limitation period.The respondent countered that all claims were related to the non-execution of the lease deed and were thus barred by limitation. They argued that the collections were for periods beyond 51 years from the agreement date, and any acknowledgment beyond the prescribed limitation period did not extend the limitation.The Supreme Court emphasized that the period of limitation is founded on public policy to ensure prompt legal remedies and prevent dilatory tactics. It noted that rules of limitation are meant to see that parties seek their remedy promptly and that every legal remedy must have a legislatively fixed period.Order VII Rule 11(d) applies only when the statement in the plaint shows the suit is barred by any law. The Court referred to several precedents, emphasizing that the plaint must be read as a whole to determine if it discloses a cause of action. If the plaint is manifestly vexatious and meritless, it can be rejected under Order VII Rule 11.In this case, the Supreme Court found that the Division Bench wrongly assumed that the non-execution of the lease deed was the sole issue. The diverse claims made by the appellant had independent existence, and whether the collections were for periods beyond 51 years required evidence. The suit could not be said to be barred by law based on the plaint's statements alone.Conclusion:The Supreme Court allowed the appeal, holding that the Division Bench erred in applying Order VII Rule 11 CPC. The case involved disputed questions regarding limitation, which required evidence. The Court did not express any opinion on the merits, leaving it to the Trial Court to decide in accordance with the law. The appeal was allowed with no order as to costs.