Concealed fraud and limitation: plaint cannot be rejected under Order VII Rule 11 when discovery of fraud is pleaded.

In concealed fraud claims, limitation under Article 59 of the Limitation Act begins when the fraud is discovered, or could with reasonable diligence have been discovered, under Section 17. At the Order VII Rule 11 stage, the court considers only the plaint and accompanying documents, so the defendant's version cannot be used to reject the suit as time-barred where the pleadings disclose a triable issue. The later production of the original transfer deeds also supplied a fresh cause of action, so the earlier withdrawal of the company petition did not trigger the bars under Order XXIII Rule 1, Section 11, or Order II Rule 2 of the Code of Civil Procedure. The plaint was therefore allowed to proceed to trial.

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Issues: Whether the plaint was liable to rejection under Order VII Rule 11 of the Code of Civil Procedure, 1908 on the grounds of limitation and the bars under Order II Rule 2, Section 11 and Order XXIII Rule 1 of the Code of Civil Procedure, 1908.

Analysis: The plaint disclosed that the plaintiff initially knew that its name was missing from the company records, but the alleged fraud in the execution of the transfer deeds was not revealed until the original transfer deeds were produced and the stamp inquiry responses were received. In a case of concealed fraud, limitation under Article 59 of the Limitation Act, 1963 is governed by Section 17 of that Act and begins when the fraud is discovered or could with reasonable diligence have been discovered. At the stage of Order VII Rule 11, only the plaint and the documents filed with it can be examined, and the defendant's version cannot be considered. On the pleaded facts, the suit could not be rejected as time-barred without trial. The subsequent production of transfer deeds also furnished a fresh cause of action, so the earlier withdrawal of the company petition did not bar the suit under Order XXIII Rule 1, Section 11 or Order II Rule 2 of the Code of Civil Procedure, 1908.

Conclusion: The plaint was not liable to rejection and the application failed.

Final Conclusion: The suit was permitted to proceed to trial, and the threshold objections based on limitation and procedural bars were negatived.

Ratio Decidendi: In cases of concealed fraud, limitation begins from discovery of the fraud or the point when it could with reasonable diligence have been discovered, and a plaint cannot be rejected under Order VII Rule 11 on such a plea if the pleaded facts disclose a triable issue.

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