2021 (8) TMI 592 - HC - Indian Laws

Appellate Court Reverses Trial Court Decision on Suit Rejection

KALPESHBHAI DANACHANDBHAI SHAH Versus ASHVINBHAI LALCHAND SHAH

The appellate court overturned the trial court's decision to reject the plaintiff's suit under Order 7 Rule 11(d) of the Civil Procedure Code. It held ... Dishonor of Cheque - misused of cheque by the defendants - rejection of plaint under the provisions of Order 7 Rule 11(d) of the Civil Procedure Code even before issuing summons to the defendants - partial rejection of plaint is permissible or not - plaintiff wants to seek a declaration that the cheques- in-question were drawn by him in favour of the defendants by way of security and such instruments be declared as void or voidable or without any lawful consideration - HELD THAT:- Order 7 Rule 11 (d) the Civil Procedure Code, the Court cannot dissect the pleading into several parts and consider whether each one of them discloses a cause of action. Under the Rule, there cannot be a partial rejection of the plaint. Punjab and Haryana High Court in the case of ABN AMRO Bank Vs. the Punjab urban Planning and Development Authority [1999 (7) TMI 700 - PUNJAB AND HARYANA HIGH COURT] has held that What evidence the plaintiff would lead to prove his case or what probable defence the defendant would raise is not the concern of Court at that initial stage of proceedings. Cause is the proper generic term. Its construction must and has to be decided keeping in mind the facts and circumstances of each case. The steps taken in the suits are proper in law and on facts of the case, they call for no need to retrace the order passed by the learned trial Court. Thus, the Court in no uncertain terms has held that there could be partial striking out of pleadings but not rejection of the plaint. To bring out the cause of action, a plaint must state the necessary conditions to maintain a suit. The merits of those conditions and/or terms is inconsequential at the stage for consideration of any application at the instance of the defendants for rejection of the plaint. What evidence the plaintiff would lead to prove his case or what probable defense the defendants would raised is not the concern of the Court at that initial stage of the proceedings. The Court below committed an error in rejecting the plaint at the very threshold i.e. even before issuing the summons - Suit is ordered to be restored to its original file. The Court shall now proceed to issue summons to the defendants and thereafter proceed in accordance with law - Appeal allowed. Issues Involved:1. Rejection of plaint under Order 7 Rule 11(d) of the Civil Procedure Code.2. Declaration of cheques as void.3. Perpetual injunction against initiating criminal proceedings under Section 138 of the Negotiable Instruments Act.4. Applicability of Sections 31 and 41(d) of the Specific Relief Act, 1963.Issue-wise Detailed Analysis:1. Rejection of plaint under Order 7 Rule 11(d) of the Civil Procedure Code:The plaintiff filed a Special Civil Suit seeking to declare certain cheques as void and to restrain the defendants from initiating criminal proceedings under Section 138 of the Negotiable Instruments Act. The trial court rejected the plaint under Order 7 Rule 11(d) even before issuing summons to the defendants. The appellate court noted that the trial court erred in rejecting the entire plaint by overlooking Section 31 of the Specific Relief Act, 1963, which allows for the cancellation of void or voidable instruments.2. Declaration of cheques as void:The plaintiff sought a declaration that the cheques issued to the defendants were void as they were given as security and were being misused. The appellate court observed that the relief of declaring the cheques as void falls under Section 31 of the Specific Relief Act, 1963, which allows a person to seek cancellation of an instrument if it is void or voidable and may cause serious injury if left outstanding. The court emphasized that the main relief of declaration is maintainable under Section 31 and should not have been rejected.3. Perpetual injunction against initiating criminal proceedings under Section 138 of the Negotiable Instruments Act:The plaintiff also sought a perpetual injunction to restrain the defendants from initiating criminal proceedings under Section 138 of the Negotiable Instruments Act. The trial court rejected this relief, citing Section 41(d) of the Specific Relief Act, 1963, which prohibits granting an injunction to restrain any person from instituting or prosecuting any proceeding in a criminal matter. The appellate court agreed that this specific relief is barred by law.4. Applicability of Sections 31 and 41(d) of the Specific Relief Act, 1963:The appellate court analyzed Sections 31 and 41(d) of the Specific Relief Act, 1963. Section 31 allows for the cancellation of void or voidable instruments, while Section 41(d) prohibits injunctions against criminal proceedings. The court held that the trial court incorrectly conflated the two sections and failed to recognize that the relief sought under Section 31 was maintainable. The court also referenced several judgments to support the interpretation that partial rejection of a plaint is not permissible under Order 7 Rule 11(d).Conclusion:The appellate court concluded that the trial court committed an error in rejecting the plaint at the threshold. The court allowed the appeal, quashed the impugned order, and restored the suit to its original file. The trial court was directed to issue summons to the defendants and proceed in accordance with the law. The appellate court clarified that the order would not affect the ongoing criminal proceedings under Section 138 of the Negotiable Instruments Act.