2021 (9) TMI 1513 - SC - Indian Laws

Supreme Court Restores Suit, Emphasizes Detailed Examination of Claims

Salim D. Agboatwala and Ors. Versus Shamalji Oddhavji Thakkar and Ors.

The Supreme Court allowed the appeal, set aside the judgments of the trial court and the High Court, and restored the suit to file. The Court emphasized ... Rejection of plaint under Order VII Rule 11(d) of the Code of Civil Procedure, 1908 - rejection on the ground that the suit filed in the year 1987 challenging the action of the competent authorities under the Act carried out way back in 1963 and 1964 was hopelessly barred by limitation - bar under Section 85 of the Act on the jurisdiction of Civil Court. Rejection of plaint on the ground of limitation - HELD THAT:- The Plaintiffs assert in no uncertain terms that notices were never ordered to them nor served on them. Therefore, the answer to the issue regarding limitation, will depend upon the evidence with regard to the issuance and service of notice and the knowledge of the Plaintiffs. Hence, the Trial Court as well as the High Court were not right in rejecting the plaint on the ground of limitation, especially in the facts and circumstances of this case. As observed by this Court in P.V. GURU RAJ REDDY AND ORS. VERSUS P. NEERADHA REDDY AND ORS. [2015 (2) TMI 1363 - SUPREME COURT], the rejection of plaint Under Order VII Rule 11 is a drastic power conferred on the Court to terminate a civil action at the threshold. Therefore, the conditions precedent to the exercise of the power are stringent and it is especially so when rejection of plaint is sought on the ground of limitation. When a Plaintiff claims that he gained knowledge of the essential facts giving rise to the cause of action only at a particular point of time, the same has to be accepted at the stage of considering the application Under Order VII Rule 11. The City Civil Court as well as the High Court refused to follow the procedure prescribed by Section 85-A of the Act, on the short ground that the same could be invoked only in cases where the issues covered by the Act have not already been settled, decided or dealt with by an authority competent under the Act to do so. Supporting the view taken by the Trial Court and the High Court, it is contended by Mr. Aniruddha Joshi, learned Counsel for some of the contesting Respondents that as against the orders passed Under Section 32-G and 32-M, an alternative remedy of appeal is provided under Clauses (mb) and (n) of Sub-section (1) of Section 74 of the Act. The Collector is the appellate authority Under Section 74. The Civil Court was obliged to see at least whether the appointment of a Receiver for the administration of the Estate of a deceased person would actually fall within the mandate of Clause(d) of Sub-section(1) of Section 88-B. The Trial Court as well as the High Court were clearly in error in rejecting the plaint Under Order VII Rule 11(d) - Appeal allowed. Issues Involved:1. Rejection of plaint under Order VII Rule 11(d) of the Code of Civil Procedure, 1908.2. Limitation period for filing the suit.3. Jurisdiction of Civil Court under Section 85 of the Maharashtra Tenancy and Agricultural Lands Act, 1948.4. Constructive notice and actual notice.5. Fraud and collusion allegations.Detailed Analysis:1. Rejection of Plaint under Order VII Rule 11(d) of the Code of Civil Procedure, 1908:The trial court rejected the plaint under Order VII Rule 11(d) of the Code of Civil Procedure, 1908, and this decision was confirmed by the High Court. The Supreme Court emphasized that the rejection of a plaint under this rule is a drastic power that should be exercised cautiously. It held that the conditions precedent to exercising this power are stringent, especially when the rejection is sought on the ground of limitation. The Supreme Court found that the trial court and the High Court erred in rejecting the plaint without adequately considering the plaintiffs' claims of fraud and lack of notice.2. Limitation Period for Filing the Suit:The key issue was whether the suit filed in 1987 was barred by limitation, given that the impugned orders were from 1963 and 1954. The plaintiffs argued that they only became aware of the transactions after inspecting the records in 1987. The Supreme Court noted that limitation is a mixed question of fact and law and that a party who gains knowledge of proceedings later is entitled to approach the court. The Court held that the issue of limitation should be determined based on evidence regarding the issuance and service of notice and the plaintiffs' knowledge, making it a triable issue rather than grounds for rejection at the threshold.3. Jurisdiction of Civil Court under Section 85 of the Maharashtra Tenancy and Agricultural Lands Act, 1948:The defendants argued that Section 85 of the Act barred the jurisdiction of the Civil Court. The Supreme Court analyzed Section 85 and Section 85-A of the Act, which provide a procedure for Civil Courts to follow when issues within the jurisdiction of the Act arise. The Court held that the bar under Section 85 is not absolute due to Section 85-A, which allows Civil Courts to refer issues to the competent authority under the Act for determination. The trial court and the High Court failed to follow this procedure, leading to an erroneous rejection of the plaint.4. Constructive Notice and Actual Notice:The defendants contended that the plaintiffs had constructive notice of the proceedings under Section 32-G and the sale certificate under Section 32-M. The Supreme Court rejected this argument, stating that the plea of constructive notice cannot be accepted at the stage of considering an application under Order VII Rule 11. The Court emphasized that the plea of constructive notice appeared to be a subsequent invention and that the plaintiffs' assertion of no notice needed to be evaluated based on evidence.5. Fraud and Collusion Allegations:The plaintiffs alleged that the proceedings before the Agricultural Lands Tribunal and subsequent sales were collusive and fraudulent, conducted without their knowledge. The Supreme Court highlighted that issues of fraud and collusion cannot be determined by appellate or revisional authorities under the Act. These allegations required a thorough examination by the Civil Court, further justifying the restoration of the suit for trial.Conclusion:The Supreme Court allowed the appeal, set aside the judgments of the trial court and the High Court, and restored the suit to file. The Court emphasized the need for a detailed examination of the plaintiffs' claims, including the issues of limitation, jurisdiction, and allegations of fraud and collusion. The decision underscores the importance of a cautious and thorough approach when considering the rejection of a plaint under Order VII Rule 11(d) of the Code of Civil Procedure, 1908.