2025 (11) TMI 767 - SC - Indian Laws

Order VII Rule 11 CPC rejection of plaint is final and appealable under Section 13(1A) CCA, 2015

MITC Rolling Mills Private Limited And Anr. Versus M/s. Renuka Realtors And Ors.

SC held that an order rejecting a plaint under Order VII Rule 11 CPC is final and tantamount to a decree, and therefore appealable under Section 13(1A) of ... Dismissal of appeal by High Court on the ground of being not maintainable - order rejecting the plaint under Order VII Rule 11 of the CPC is appealable under Section 13(1A) of the CCA, 2015 or not - HELD THAT:- There cannot be any two views on the aspect that an order rejecting the plaint under Order VII Rule 11 CPC decides the lis finally and would tantamount to a decree within the meaning of Section 2(2) CPC. Reference in this regard may be made to a decision of this Court in Shamsher Singh v. Rajinder Prashad [1973 (8) TMI 173 - SUPREME COURT], wherein a plaint was rejected under Order VII Rule 11(b) for not being properly valued for purposes of court-fees and jurisdiction. There is also no cavil with the proposition that a decree passed by a Commercial Court at the level of a District Judge exercising original civil jurisdiction or, as the case may be, the Commercial Division of a High Court would ordinarily be appealable before the High Court under Section 13(1A) of the CCA, 2015, read with the applicable provisions of the CPC. Section 13(1A) of the CCA, 2015, is in two distinct parts. The main provision contemplates appeals against ‘judgments’ and ‘orders’ of the Commercial Court to the Commercial Appellate Division of the High Court. The proviso, 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 CPC and Section 37 of the Arbitration and Conciliation Act, 1996. Consequently, only such interlocutory orders as are expressly specified therein would be amenable to an appeal under the proviso; orders not so enumerated would not fall within the restricted fold of the proviso. The plaintiff who is aggrieved of the order rejecting the plaint under Order VII Rule 11 CPC cannot be left remediless or compelled to institute a fresh suit for availing such a challenge. The impugned order does not stand to scrutiny and is hereby quashed and set aside. 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 High Court shall consider and decide the same on merits, in accordance with law. Appeal allowed. ISSUES PRESENTED AND CONSIDERED 1. Whether an order rejecting the plaint under Order VII Rule 11 of the Code of Civil Procedure, 1908 is appealable to the Commercial Appellate Division of the High Court under Section 13(1A) of the Commercial Courts Act, 2015. 2. Whether the proviso to Section 13(1A) (restricting appeals in respect of interlocutory orders to those specifically enumerated under Order XLIII CPC and Section 37 of the Arbitration and Conciliation Act, 1996) operates to exclude orders rejecting a plaint under Order VII Rule 11 from the scope of appeals envisaged by the main provision. 3. The relevance and effect of the definition of 'decree' in Section 2(2) CPC - specifically whether rejection of a plaint is a decree - on the maintainability of appeals under Section 13(1A) CCA, 2015. 4. Whether precedent(s) holding that orders rejecting certain applications under Order VII are not appealable (as in the decision relied upon by respondents) are applicable to an order rejecting a plaint under Order VII Rule 11. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Appealability of an Order Rejecting the Plaint under Order VII Rule 11 to the Commercial Appellate Division under Section 13(1A) CCA, 2015 Legal framework: Section 13(1A) of the CCA, 2015 provides that any person aggrieved by the judgment or order of a Commercial Court at the level of District Judge exercising original civil jurisdiction may appeal to the Commercial Appellate Division of the High Court within sixty days; the proviso limits appeals against interlocutory orders to those specifically enumerated under Order XLIII CPC and Section 37 of the Arbitration and Conciliation Act. Precedent treatment: The Court recognised established authority that a rejection of a plaint under Order VII Rule 11 amounts to a decree under Section 2(2) CPC (citing Shamsher Singh v. Rajinder Prashad). Interpretation and reasoning: The Court analysed Section 13(1A) as comprising two distinct parts - a main provision (allowing appeals from judgments and orders) and a proviso (restricting appeals in respect of interlocutory orders). The main provision's plain language must be given full effect and the proviso should be construed harmoniously without curtailing the main provision except where exclusion is clearly expressed. Since an order rejecting a plaint under Order VII Rule 11 conclusively determines the lis and constitutes a decree within Section 2(2) CPC, it falls within the principal ambit of appeals against 'judgments or orders' under Section 13(1A), and is not an interlocutory order excluded by the proviso. Ratio vs. Obiter: Ratio - An order rejecting the plaint under Order VII Rule 11 is a decree within Section 2(2) CPC and therefore falls within the scope of appeals under the main provision of Section 13(1A) CCA, 2015. Obiter - Observations on the proper construction of the proviso as a limiting provision are explanatory but support the ratio. Conclusion: The Court concluded that an order rejecting the plaint under Order VII Rule 11 is appealable under Section 13(1A) of the CCA, 2015 and the appeal before the High Court was maintainable. Issue 2 - Effect of the Proviso to Section 13(1A) (Order XLIII Enumeration) on Orders Rejecting the Plaint Legal framework: The proviso to Section 13(1A) restricts appeals against interlocutory orders to those specifically listed in Order XLIII CPC and Section 37 Arbitration Act; the proviso must be read in harmony with, and not in derogation of, the main provision. Precedent treatment: Reliance was placed by respondents on a High Court decision (affirmed by a three-Judge Bench order) which held that orders rejecting certain applications under Order VII Rule 10 or Order VII Rule 11(d) are not enumerated in Order XLIII and hence not appealable under the proviso. Interpretation and reasoning: The Court distinguished that precedent because the prior decision concerned orders rejecting applications under Order VII Rule 10 or Rule 11(d) (applications to return or for rejection of certain documents), not an order rejecting the plaint itself under Order VII Rule 11. The proviso enumerates specific interlocutory orders; it does not operate to exclude from appeal those adjudications which are final in nature and constitute decrees under Section 2(2) CPC. Thus, the proviso does not apply to final orders rejecting the plaint. Ratio vs. Obiter: Ratio - The proviso cannot be read to exclude final adjudications that are decrees (such as rejection of plaint) from the main grant of appeal in Section 13(1A). Obiter - Distinguishment of the earlier decision is explanatory and contextual. Conclusion: The proviso does not preclude appeals against orders rejecting the plaint under Order VII Rule 11 where such orders amount to decrees; therefore the appeal under Section 13(1A) is not barred by the proviso. Issue 3 - Role of the Definition of 'Decree' in Section 2(2) CPC and Its Impact on Appealability Legal framework: Section 2(2) CPC defines 'decree' as the formal expression of an adjudication conclusively determining rights, and expressly states that it shall be deemed to include the rejection of a plaint. Precedent treatment: The Court relied on consistent authority holding that a plaint rejection under Order VII Rule 11 is a decree and hence ordinarily appealable. Interpretation and reasoning: Given the express inclusion of plaint rejection within the statutory definition of 'decree', such an order conclusively decides the lis and cannot be treated as mere interlocutory determination. Consequently, appeals against such decrees fall within the ordinary appellate scheme (subject to any clear statutory exclusion), including the appeal remedy created by Section 13(1A) CCA, 2015. Ratio vs. Obiter: Ratio - The statutory definition in Section 2(2) CPC determinatively establishes that rejection of plaint is a decree, which governs appealability under Section 13(1A). Obiter - The Court's remark that plaintiffs should not be left remediless is contextual guidance. Conclusion: The definition of 'decree' in Section 2(2) CPC supports the conclusion that an order rejecting a plaint is appealable under Section 13(1A) CCA, 2015. Issue 4 - Applicability of Precedent Holding Non-Appealability of Orders Rejecting Applications under Order VII to Orders Rejecting the Plaint Legal framework: Distinction between different species of orders under Order VII (e.g., orders rejecting applications under Rule 10/11(d) vs. orders rejecting the plaint under Rule 11). Precedent treatment: The Court examined the decision relied upon by respondents (holding that an order rejecting applications under Order VII Rule 10 and Order VII Rule 11(d) is not enumerated under Order XLIII and therefore not appealable under the proviso) and found it distinguishable. Interpretation and reasoning: The Court reasoned that the earlier decision dealt with rejection of certain applications and not with rejection of the plaint itself; hence its ratio does not apply to cases where the order amounts to a decree under Section 2(2) CPC. The proper remedy for orders not falling within Order XLIII may be revision or writ, but that does not affect the appealability of final decrees constituted by plaint rejection. Ratio vs. Obiter: Ratio - Precedent concerning non-appealability of orders rejecting certain applications under Order VII does not control cases of plaint rejection which are decrees. Obiter - Guidance on alternative remedies (revision/Article 227) for orders not enumerated in Order XLIII. Conclusion: The precedent relied upon is distinguishable and does not preclude appeals against orders rejecting the plaint under Order VII Rule 11 where such orders are decrees. Final Disposition (Legal Conclusion from the Court) The Court held that an order rejecting the plaint under Order VII Rule 11 CPC is a decree within Section 2(2) CPC and therefore an appeal under Section 13(1A) of the CCA, 2015 is maintainable; the impugned judgment dismissing the appeal as not maintainable was quashed and set aside, and the appeal was restored to the High Court for consideration on merits in accordance with law. The Court further noted that plaintiffs should not be left remediless and that alternative remedies for non-enumerated interlocutory orders remain available where appropriate.