TaxTMI 
TaxTMI 
2012 (7) TMI 1029
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.... Kottur, Chennai entered into an Agreement for Sale of the property in favour of one S. Velayutham - 2nd defendant in the suit on the condition that the transaction should be completed within 6 months after obtaining clearance from Income Tax and other departments and also received an amount of Rs. 5 lakhs as an advance. On 19.10.1990, the 1st defendant-Society executed a registered power of attorney in favour of the 2nd defendant limited for the purpose of empowering him to represent the Society before the statutory authorities. On 15.10.1991, the 1st defendant-Society revoked the registered power of attorney executed in favour of the 2nd defendant by a registered document alleging various reasons. On 19.11.1991, as the 2nd defendant failed to comply with the commitments made, the 1st defendant-Society cancelled the agreement for sale dated 07.01.1990. (b) Questioning the said cancellation, the 2nd defendant instituted C.S. No. 1576 of 1991 against the 1st defendant-Society before the High Court of Madras for specific performance of the agreement dated 07.01.1990. In the said suit, an injunction was granted restraining the 1st defendant-Society from alienating the property. In ....
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....ecial leave petition before this Court. 4) Heard Mr. K. Parasaran and Mr. Ranjit Kumar, learned senior counsel for the appellant and Mr. Mukul Rohatgi, learned senior counsel for the respondent. Points for consideration: 5) The points for consideration in this appeal are: a) whether the learned single Judge of the High Court was justified in ordering rejection of the plaint insofar as the first defendant (appellant herein) is concerned; and b) whether the Division Bench of the High Court was right in reversing the said decision? 6) Since the appellant herein, as the first defendant before the trial Judge, filed application under Order VII Rule 11 of the Code for rejection of the plaint on the ground that it does not show any cause of action against him, at the foremost, it is useful to refer the relevant provision: Order VII Rule 11 of the Code: "11. Rejection of plaint- The plaint shall be rejected in the following cases:- (a) where it does not disclose a cause of action; (b) where the relief claimed is undervalued, and the plaintiff, on being required by the Court to correct the valuation within a time to be fixed by the....
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....der VII CPC, the averments in the plaint are germane; the pleas taken by the defendant in the written statement would be wholly irrelevant at that stage, therefore, a direction to file the written statement without deciding the application under Order VII Rule 11 CPC cannot but be procedural irregularity touching the exercise of jurisdiction by the trial court......." It is clear that in order to consider Order VII Rule 11, the Court has to look into the averments in the plaint and the same can be exercised by the trial Court at any stage of the suit. It is also clear that the averments in the written statement are immaterial and it is the duty of the Court to scrutinize the averments/pleas in the plaint. In other words, what needs to be looked into in deciding such an application are the averments in the plaint. At that stage, the pleas taken by the defendant in the written statement are wholly irrelevant and the matter is to be decided only on the plaint averments. These principles have been reiterated in Raptakos Brett & Co. Ltd. vs. Ganesh Property (1998) 7 SCC 184 and Mayar (H.K.) Ltd. and Others vs. Owners & Parties, Vessel M.V. Fortune Express and Others (2006) 3 SCC 100.....
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....ction means every fact, which if traversed, it would be necessary for the plaintiff to prove in order to support his right to a judgment of the court. In other words, it is a bundle of facts which taken with the law applicable to them gives the plaintiff a right to relief against the defendant. It must include some act done by the defendant since in the absence of such an act no cause of action can possibly accrue. It is not limited to the actual infringement of the right sued on but includes all the material facts on which it is founded. It does not comprise evidence necessary to prove such facts, but every fact necessary for the plaintiff to prove to enable him to obtain a decree. Everything which if not proved would give the defendant a right to immediate judgment must be part of the cause of action. But it has no relation whatever to the defence which may be set up by the defendant nor does it depend upon the character of the relief prayed for by the plaintiff." 10) It is useful to refer the judgment in Bloom Dekor Ltd. vs. Subhash Himatlal Desai & Ors. (1994) 6 SCC 322, wherein a three Judge Bench of this Court held as under: "28. By "cause of action" it is meant e....
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.... 14(2) instead of explaining in whose custody the power of attorney is, the plaintiff has simply stated 'Nil'. It clearly shows non-compliance of Order VII Rule 14(2). 13) In the light of the controversy, we have gone through all the averments in the plaint. In paragraph 4 of the plaint, it is alleged that the 2nd defendant as agreement holder of the 1st defendant and also as the registered power of attorney holder of the 1st defendant executed the agreement of sale. In spite of our best efforts, we could not find any particulars showing as to the documents which are referred to as "agreement holder". We are satisfied that neither the documents were filed along with the plaint nor the terms thereof have been set out in the plaint. The abovementioned two documents were to be treated as part of the plaint as being the part of the cause of action. It is settled law that where a document is sued upon and its terms are not set out in the plaint but referred to in the plaint, the said document gets incorporated by reference in the plaint. This position has been reiterated in U.S. Sasidharan vs. K. Karunakaran and Another (1989) 4 SCC 482 and Manohar Joshi vs. Nitin Bhaurao Patil and A....
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....t Actas also the Powers of Attorney Act is valid. A power of attorney, we have noticed hereinbefore, is executed by the donor so as to enable the donee to act on his behalf. Except in cases where power of attorney is coupled with interest, it is revocable. The donee in exercise of his power under such power of attorney only acts in place of the donor subject of course to the powers granted to him by reason thereof. He cannot use the power of attorney for his own benefit. He acts in a fiduciary capacity. Any act of infidelity or breach of trust is a matter between the donor and the donee." An attorney-holder may however execute a deed of conveyance in exercise of the power granted under the power of attorney and convey title on behalf of the grantor." 15) It is clear that from the date the power of attorney is executed by the principal in favour of the agent and by virtue of the terms the agent derives a right to use his name and all acts, deeds and things done by him are subject to the limitations contained in the said deed. It is further clear that the power of attorney holder executed a deed of conveyance in exercise of the power granted under it and conveys title on behalf of....
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....int. The stand taken by the appellant, who has filed the application for rejection of the plaint, is sustainable and acceptable. We have already adverted to the averments in the plaint and we have held that the plaint has not shown a complete cause of action of privity of contract between the plaintiff and the first defendant or on behalf of the 1st defendant. To reject the plaint even before registration of the plaint on one or more grounds mentioned in Order VII Rule 11 of the Code, the other defendants need not necessarily be heard at all as it does not affect their rights. As a matter of fact, this Court in Saleem Bhai (supra) held that the plaint can be rejected even before the issuance of summons. This Court has taken a view that the trial Court can exercise its power under Order VII Rule 11of the Code at any stage of the suit i.e. before registering the plaint or after issuance of summons to the defendants or at any time before the conclusion of the trial. We respectfully agree with the said view and reiterate the same. On the other hand, when the plaintiff itself persists in not impleading a necessary party in spite of objection, the consequences of non-joinder may follow. ....