TaxTMI 
TaxTMI 
2021 (6) TMI 1151
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....of Motion No. 2515/16 filed in Suit No. 187 of 1993 ("Impugned Order"), whereby the Learned Single Judge allowed the Notice of Motion, thereby rejecting the plaint against Defendant Nos. 4 to 6 for want of a cause of action under Order VII Rule 11(a) of the Code of Civil Procedure ("Code"). For the sake of convenience, the Parties shall hereinafter be referred to as per their original status in the Suit i.e. the Appellants will be referred to as the Plaintiffs, Respondent Nos. 1 to 3 will be referred to as Defendant Nos. 1 to 3 and Respondent Nos. 4 to 6 will be referred to as Defendant Nos. 4 to 6. 3. The facts in brief are : 3.1. Defendant No.1 - M/s S.K. Trading Company, was a Partnership Firm in which Defendant Nos. 2 and 3 were Partners. Defendant No. 1 owns a property admeasuring 1714 square yards which is described at Exhibit A annexed to the plaint ("Suit Property"). Defendant Nos. 1 to 3 agreed to sell the Suit Property to the Plaintiffs for a consideration of Rs. 43,00,000/-, pursuant to which an Agreement to Sell was executed on 07.12.1985 ("Agreement to Sell"). 3.2. Defendant No. 4 - M/s Suniti Prints, was a Partnership Firm of which Defendant Nos. 5 and 6 were....
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....ndants be ordered and decreed to specifically perform the Agreement dated 7th December 1985 Exhibit "A" to the plaint, and that the Defendants be directed to hand over vacant and peaceful possession to the plaintiff of the said property as the said agreement; (c) That in the alternative prayer (b) above, this Hon'ble Court be pleased to order and decree that the Defendants do pay to the Plaintiffs a sum of Rs. 1,55,25,000/- as per the particulars set out in Exhibit "F" to the plaint along with interest at the rate of 21% per annum compounded quarterly thereon from the date of filing of the suit until payment and/or realization thereof; (d) That this Hon'ble Court declare that the repayment of the amount of Rs. 19,25,000/- together with interest at the rate of 21% per annum compounded quarterly from the date of filing of the suit till payment and/or realization be pleased to order and decree and be duly secured by a valid and subsisting charge on the said property (described in Exh.A hereto) with structures standing thereon and that the said charge be enforced by an under the directions of this Hon'ble Court by sale of the same and the net sale proceeds thereof be ....
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.... all defendants can together seek rejection of the plaint is without foundation and does not commend itself. 5. Appearing for the Plaintiffs, Ms. Sonal, Learned Counsel submitted that the plaint cannot be rejected against some of the Defendants. According to her, in case of rejection, a suit can only be rejected as a whole against all the defendants and not against some of the Defendants. She further contended that the Learned Single Judge failed to appreciate that the captioned Suit clearly discloses a cause of action against Defendant Nos. 4 to 6. Relying on Section 19(c) of the Specific Relief Act, 1963, the Learned Counsel Ms. Sonal submitted that Section 19(c) of the Specific Relief Act, 1963, enables the Plaintiffs to implead Defendant Nos. 4 to 6 in the Captioned Suit since they are claiming title / rights in the property. Lastly, she submitted that the Learned Single Judge failed to appreciate that the Appellants have also prayed for an alternate relief of refund of monies which were directly paid by them to Defendant Nos. 4 to 6 (prayer clause 'd'), and on this count the Suit to that extent would be maintainable. 6. To counter the submissions made on behalf of the Pl....
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....provisions of Order VII Rule 11(d) of the Code, contending that the Suit is barred by the provisions of law. Initially, the Learned Single Judge of this Court was of the view that the Suit is not barred under law, and accordingly dismissed the Notice of Motion. In appeal, the Division Bench of this Court took a contrary view holding that the prayer made against the defendant, Axis Bank Ltd. was barred under the law, and by allowing the appeal, dismissed the Suit against Axis Bank Ltd. Being aggrieved, the plaintiffs therein approached the Supreme Court. It was urged that the plaint cannot be rejected only against one of the defendants, however, it can be rejected as a whole. The Supreme Court held that it is not permissible to reject a plaint qua any particular portion of a plaint including against some of the defendants and continue the same against the others. The Supreme Court by citing its earlier decision in the case of Sejal Glass Ltd vs. Navilan Merchants (P) Ltd. ((2018) 11 SCC 780), expressed that the plaint can either be rejected as a whole, or not at all. It is not permissible to reject a plaint qua some of the defendants and continue the same against others. Ultimately,....
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.... decision on the application of the per incuriam rule is of great importance, since without it, certainty of law, consistency of rulings and comity of Courts would become a costly casualty. A decision or judgment can be per incuriam any provision in a statute, rule or regulation, which was not brought to the notice of the Court. A decision or judgment can also be per incuriam if it is not possible to reconcile its ratio with that of a previously pronounced judgment of a Co-equal or Larger Bench; or if the decision of a High Court is not in consonance with the views of this Court. It must immediately be clarified that the per incuriam rule is strictly and correctly applicable to the ratio decidendi and not to obiter dicta. It is often encountered in High Courts that two or more mutually irreconcilable decisions of the Supreme Court are cited at the Bar. We think that the inviolable recourse is to apply the earliest view as the succeeding ones would fall in the category of per incuriam." 11. In view of the foregoing settled position, we are of the view that the earlier decision rendered by the Supreme Court in the case of Church of Christ (supra) needs to be followed which has lai....
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....der VII Rule 11 of the Code, the averments in the plaint are germane; the pleas taken by the defendant in the written statement would be wholly irrelevant at that stage. 11. In I.T.C. Ltd. v. Debts Recovery Appellate Tribunal and Ors. (1998 (2) SCC 70) it was held that the basic question to be decided while dealing with an application filed under Order VII Rule 11 of the Code is whether a real cause of action has been set out in the plaint or something purely illusory has been stated with a view to get out of Order VII Rule 11 of the Code. 12. The trial Court must remember that if on a meaningful and not formal reading of the plaint it is manifestly vexatious and meritless in the sense of not disclosing a clear right to sue, it should exercise the power under Order VII Rule 11 of the Code taking care to see that the ground mentioned therein is fulfilled. If clever drafting has created the illusion of a cause of action, it has to be nipped in the bud at the first hearing by examining the party searchingly under Order X of the Code. (See T. Arivandandam v. T.V. Satyapal and Anr. (1977 (4) SCC 467). 13. It is trite law that not any particular plea has to be ....
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....ction should be terminated on any of the grounds contained in this provision. 23.3 The underlying object of Order VII Rule 11 (a) is that if in a suit, no cause of action is disclosed, or the suit is barred by limitation under Rule 11 (d), the Court would not permit the plaintiff to unnecessarily protract the proceedings in the suit. In such a case, it would be necessary to put an end to the sham litigation, so that further judicial time is not wasted. 23.4 In Azhar Hussain v. Rajiv Gandhi this Court held that the whole purpose of conferment of powers under this provision is to ensure that a litigation which is meaningless, and bound to prove abortive, should not be permitted to waste judicial time of the court, in the following words: "12. ...The whole purpose of conferment of such power is to ensure that a litigation which is meaningless, and bound to prove abortive should not be permitted to occupy the time of the Court, and exercise the mind of the respondent. The sword of Damocles need not be kept hanging over his head unnecessarily without point or purpose. Even if an ordinary civil litigation, the Court readily exercises the power to reject a plain....
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....efendant in the suit. To respond to this submission, Learned Counsel Ms. Sonal submitted that the said decision has no application in view of the peculiar facts of this case. She has relied on the decision of the Supreme Court in the case of Sumtibai and others vs. Paras Finance Co. (2007) 10 SCC 82, wherein the Supreme Court has explained the decision rendered in the case of Kasturi (supra). In its decision in Sumtibai (supra), the Supreme Court has distinguished the decision rendered in Kasturi's case (supra) by explaining that the said decision can only be understood to mean that a third party cannot be impleaded in a suit for specific performance if he has no semblance of title in the property in dispute. The Supreme Court held that it is settled that every judgment must be governed and qualified by the particular facts of the case in which such expressions are to be found and that a slight difference in facts may make a lot of difference in the precedential value of a decision. In the case at hand, though Defendant Nos. 4 to 6 were not parties to the contract / Agreement to Sell, as per the Plaintiffs' case, partial consideration was directly paid to them which has been claime....
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....lord against a tenant for recovery of possession. We are not inclined to accept this submission. Admittedly, Defendant Nos. 4 to 6 are tenants. Essentially, the Plaintiffs have claimed possession of a tenanted premises. Defendant Nos. 4 to 6 being tenants, have statutory protection. 22. Notwithstanding the aforesaid, Ms. Sonal argued that though the Suit is for specific performance against the Vendors, an alternate relief for refund of earnest money and for damages has been claimed against Defendant Nos. 4 to 6. On this count, she emphasized that an ordinary Civil Court has jurisdiction to entertain a prayer for refund of the earnest amount which was directly paid to Defendant Nos. 4 to 6. 23. We shall now examine whether the Plaint contains sufficient pleadings to establish a cause of action to claim refund of the earnest amount from Defendant Nos. 4 to 6. 24. We have closely examined the Plaint so as to ascertain whether the Plaint discloses a cause of action against Defendants Nos. 4 to 6. On close scrutiny, we find it relevant to quote certain pleadings from the Plaint which relate to Defendant Nos. 4 to 6. The relevant portions of the Plaint have been extracted below ....
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....ollowing amount:- Amount (Rs) Date 5,00,000/- 20.05.1987 4,50,000/- 03.06.1987 3,35,000/- 15.06.1987 25,000/- 25.02.1988 13,10,000/- and the 4th Defendants have accepted the same pursuant to the said agreement to enable the 4th Defendant to obtain and/or acquire alternate accommodation. As can be seen these amounts were far in excess of the plaintiffs' obligations under the said agreement and were made at the 1st defendant's request and accepted by the 4th Defendant towards the amount due for alternate accommodation. Paragraph 8 (At page No. 52) ...........Significantly no answer was received from the 4th Defendant with regard to the letter addressed to it by the plaintiffs Advocate dated 14th August 1991, significantly the 4th defendant never even offered to return the amounts received by them from the plaintiffs aggregating to Rs. 13,10,000/- nor did they reply to the plaintiffs' letter dated 14.09.1991." 25. Admittedly, Defendant Nos. 4 to 6 were not parties to the contract i.e. the Agreement to Sell. We have examined the Plaint with a view to find out whether it contains pleadings in support of the alterna....
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.... reliefs claimed in the Suit also assume significance. The same are already reproduced in paragraph 3.7 hereinabove. It is clear from the reliefs sought by the Appellants (Original Plaintiffs), that the Suit was principally for specific performance of contract and for possession. As noted above, we are not concerned with the principal relief, but with the alternate reliefs claimed under prayers (c) and (d), as reproduced above. Under prayer (c), the Plaintiffs have claimed damages to the tune of Rs. 1,55,25,000/- as detailed in Exhibit F / G to the Plaint (Page No. 109 of the Appeal paper book) from all the Defendants. Whether Defendant Nos. 4 to 6 can be held liable to pay damages will depend on the merits of the case. However, a bare reading of the Plaint conveys that damages are also claimed from Defendants Nos. 4 to 6, which is relevant. 30. Prayer clause (d) of the Plaint is also relevant for the purposes of the present Appeal. The Plaintiffs have specifically claimed a refund of earnest amount of Rs. 19,25,000/-, along with interest from the Defendants. It is true that this claim has not been bifurcated between the two sets of Defendants. However, there are specific pleadi....
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....l defendants, the fact that every defendant is not interested in all the reliefs claimed in the suit, does not imply a misjoinder of the defendants. On this count therefore, Defendant Nos. 4 to 6 's arguments in respect of misjoinder cannot be accepted. 32. The matter can be viewed from another angle as well. Under the scheme of Order II Rule 2 of the Code, it is necessary that parties must claim all the reliefs as available to them at the time of filing of the suit. Any intentional omission debars a second suit on the same cause of action. A plaintiff is not required to file a separate suit for other reliefs, where the other reliefs flow from the same cause of action. The relief of specific performance and the alternative claim of refund of earnest amount emanate from the same cause of action, and therefore a second suit for recovery of money may be untenable if filed by the Plaintiffs against Defendant Nos. 4 to 6. This factor has also been taken into account by us. 33. In the Impugned Order, the Learned Single Judge has observed that payments made by an outsider to a landlord's tenant, will not give rise to a cause of action for possession under the guise of specific perfo....