Tuesday, 2 July 2019

Right to court to reject plaint Vs Right to court to strike off pleading

 We do not deem it necessary to elaborate on all other
arguments as we are inclined to accept the objection of the
appellant(s) that the relief of rejection of plaint in exercise of
powers under Order 7 Rule 11(d) of CPC cannot be pursued only
in respect of one of the defendant(s). In other words, the plaint
has to be rejected as a whole or not at all, in exercise of power
Order 7 Rule 11 (d) of CPC. Indeed, the learned Single Judge
rejected this objection raised by the appellant(s) by relying on
the decision of the Division Bench of the same High Court.
However, we find that the decision of this Court in the case of
Sejal Glass Limited (supra) is directly on the point. In that
case, an application was filed by the defendant(s) under Order 7 Rule 11(d) of CPC stating that the plaint disclosed no cause of
action. The civil court held that the plaint is to be bifurcated as
it did not disclose any cause of action against the director’s

defendant(s) 2 to 4 therein. On that basis, the High Court had
opined that the suit can continue against defendant No.1company
alone. The question considered by this Court was
whether such a course is open to the civil court in exercise of
powers under Order 7 Rule 11(d) of CPC. The Court answered
the said question in the negative by adverting to several
decisions on the point which had consistently held that the
plaint can either be rejected as a whole or not at all. The Court
held that it is not permissible to reject plaint qua any particular
portion of a plaint including against some of the defendant(s)
and continue the same against the others. In no uncertain terms
the Court has held that if the plaint survives against certain
defendant(s) and/or properties, Order 7 Rule 11(d) of CPC will
have no application at all, and the suit as a whole must then
proceed to trial.


13. Indubitably, the plaint can and must be rejected in exercise
of powers under Order 7 Rule 11(d) of CPC on account of noncompliance
of mandatory requirements or being replete with any
institutional deficiency at the time of presentation of the plaint,
ascribable to clauses (a) to (f) of Rule 11 of Order 7 of CPC. In
other words, the plaint as presented must proceed as a whole or
can be rejected as a whole but not in part. In that sense, the
relief claimed by respondent No.1 in the notice of motion(s)
which commended to the High Court, is clearly a jurisdictional
error. The fact that one or some of the reliefs claimed against
respondent No.1 in the concerned suit is barred by Section 34 of
2002 Act or otherwise, such objection can be raised by invoking
other remedies including under Order 6 Rule 16 of CPC at the
appropriate stage. 

REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. ……….. OF 2019
(Arising out of SLP (C) No.31579 of 2018)

Madhav Prasad Aggarwal Vs Axis Bank Ltd. 
A.M. Khanwilkar, J.
Dated:July 01, 2019.

Leave granted.
2. These appeals take exception to the common judgment and
order passed by the High Court of Judicature at Bombay
(Ordinary Original Civil Jurisdiction) in Appeal Nos.360, 361, 362
and Commercial Appeal No.172 of 2017 dated 26th October,
2018, whereby the notice of motion(s) filed by respondent No.12
Axis Bank Ltd. (one of the defendant in the suits filed by the
respective appellant(s)) came to be allowed and as a result of
which, the suit filed by the concerned appellant(s) had been
dismissed as against respondent No.1Axis
Bank Ltd., by
invoking the provisions of Order 7 Rule 11(d) of the Civil
Procedure Code (for short “CPC”).
3. The appellant(s) being the original plaintiff(s) in the
respective suit(s) wanted to purchase flats in a project known as
‘Orbit Heaven’ (for short “the project”) being developed by Orbit
Corporation Ltd. (In Liq.) (for short “The builder”), at Nepean
Sea Road in Mumbai and in furtherance thereof parted with
huge amounts of money to the builder ranging in several crores
although the construction of the project was under way. The
appellant(s) had started paying installments towards the
consideration of the concerned flats from 2009. Admittedly, no
registered agreement/document for purchase of concerned flats
has been executed in favour of respective appellant(s). The
appellant(s), however, would rely on the correspondence and
including the letter of allotment issued by the builder in respect
of concerned flats to
assert that there was an agreement

between them and the builder in respect of the earmarked flat(s)
mentioned therein and which had statutory protection.
4. The respondent No.1bank
gave loan facility to builder
against the project only around year 2013, aggregating to
principal sum of Rupees 150 Crores in respect of which a
mortgage deed is said to have been executed between the builder
and the bank. That transaction came to the notice of the
concerned plaintiff(s) only after publication of a public notice on
13th September, 2016 in Economic Times, informing the general
public that the said project (Orbit Heaven) has been mortgaged.
The sum and substance of the assertion made by the
appellant(s) is that the appellant(s) were kept in the dark whilst
the mortgage transaction was executed between the builder and
the bank whereunder their rights have been unilaterally
jeopardised, to receive possession of the concerned flats
earmarked in the allotment letter(s) and in respect of which the
concerned appellant(s) have paid substantial contribution and
the aggregate contribution of all the plaintiff(s) would be much
more than the loan amount given by the bank to the builder in
terms of the mortgage deed for the entire project. In this
backdrop, the concerned appellant(s) had asked for reliefs not
4
only against the builder but also concerned parties joined as
defendant(s) in the suit(s) filed by them and including
respondent No.1bank.
5. The reliefs claimed by the concerned appellant(s) in separate
suit(s) filed by them are more or less similar. We may presently
refer to the reliefs claimed in suit No.8 of 2017 filed by Padma
Ashok Bhatt (appellant in civil appeal arising from SLP (C)
No.30900 of 2018), the same read thus:
“The Plaintiff therefore prays:
(a) That the Defendant No.1 be ordered and decreed to
complete the Flat Nos.2302 and 2402 in the Project
“Orbit Haven” situate at Darabshaw Lane, Nepean Sea
Road, Mumbai400036
as per the agreement being
letter of confirmation dated 16th April 2009 and
receipts executed by Defendant No.1 in favour of the
Plaintiff and hand over the possession of Flat
Nos.2302 and 2402 to the Plaintiff and that the
Defendant No.1 and Defendant No.15 be jointly and/or
severally be ordered and directed to comply with all
the obligations under Maharashtra Ownership Flats
Act including, but not limited to, (i) the execution of
the Agreement in terms of Section 4 of Maharashtra
Ownership Flats Act, (ii) completing the building as per
the sanction plan as sanctioned by Municipal
Corporation of Greater Mumbai, (iii) to delivery vacant
and peaceful possession of the respective flats, (iv) to
form the Society or body of the Corporation as
provided under Maharashtra Ownership Flats Act and
to convey the land along with the building in favour of
the Society or body of Corporation as per Maharashtra
Ownership Flats Act.
(b) That the Plaintiff is also entitled for a declaration that
there is no legal, valid enforceable lien, charge or
mortgage in favour of Defendant No.15 in respect of
the building or any part thereof known as Orbit Haven,

situated at Darabshaw Lane, Napeansea Road,
Mumbai400036;
(c) The Defendant No.1 be also ordered and directed to
disclose all their assets, properties including the
personal properties of the Directors and its sister
concern particularly M/s Apex Hotel Enterprise Pvt.
Ltd. on Affidavit before this Hon’ble Court, within the
period of two weeks or such other time as this Hon’ble
Court may deem fit and proper;
(d) This Hon’ble Court be pleased to pass an order of
injunction restraining the Defendant No.1 from in any
manner creating any third party rights in respect of all
the properties that may be disclosed by the Defendant
No.1, pursuant to the orders of this Hon’ble Court on
Affidavit;
(e) The Plaintiff is also entitled for an order and direction
that the Defendant No.1 be ordered and directed to
give clear and marketable title in respect of flat being
Flat Nos.2302 and 2402 and the building Orbit Haven,
situated at Darabshaw Lane, Napeansea Road,
Mumbai400036
and to enter into and register the
Agreement as provided under the provisions of
Maharashtra Ownership Flats Act;
(f) The Defendant No.1 be also ordered and directed to
indemnify the Plaintiff in respect of all claims, charges
that may be made by anybody in respect of Flat
Nos.2302 and 2402 at Orbit Haven, situated at
Darabshaw Lane, Napeansea Road, Mumbai400036
and keep the same indemnified till the registration of
the Agreement and Conveyance of the land in favour of
the Society that may be formed;
(f1) Without prejudice to the reliefs as claimed
hereinabove and in the alternative and in the event
this Hon’ble Court comes to the conclusion that the
specific performance of the suit flat cannot or ought
not to be granted, in such an event, the Plaintiff is
entitled for refund of the amount of Rs.9,23,50,000/(
Rupees Nine Crores Twenty Three Lakhs Fifty
Thousand Only) paid by the Plaintiff to Defendant No.1
along with interest thereon @12% from the date of
payment till repayment and cost.

(f2) It be declared that the payment of the amount as
stated in prayer (f1) stands validly charged on the land
and in the flat Nos.2302 and 2402.
(f3) In the event of failure to pay the amount as stated
in prayer (f1), directions be issued for enforcement of
the Plaintiff’s charge upon the suit plot of land and
Flat Nos.2302 and 2402.
(f4) In addition to the amount as prayed in prayer (f1)
the Defendant be also ordered and decreed to pay
damages of Rs.15,00,00,000/(
Rupees Fifteen Crores
Only) to the Plaintiff.
(g) This Hon’ble Court be pleased to appoint Court
Receiver, High Court, Bombay, as Receiver under all
powers under Order XL Rule 1 of Code of Civil
Procedure, in respect of suit building Orbit Haven and
the Plot of Land being Plot No.12, 8, Darabshaw Road,
Off Nepean Sea Road, admeasuring 1105.00 square
yards i.e. 923.92 sq. mtrs. Or thereabouts and
registered with Collector of Land Revenue under
Collector’s Old Nos.573 and 104A and Collector’s New
Nos.2736 and 11317 old Survey No.48 and New
Survey Nos.3 and 4/7139 and Cadastral Survey
Nos.8/593 of Malabar Hill and Cumballa Hill Division
bearing Municipal Ward No.D3326
(4) and Street
No.76(a), to do following things and/or such other
things as this Hon’ble Court may deem fit and proper:i.
To take complete charge of the said building;
ii. To call for the balance money from the Flat
Purchasers as mentioned in Exhibit ‘E’, being
Plaintiff and Defendant Nos.2 to 14;
iii. To execute the Agreement for and on behalf of
Defendant No.1 with the Plaintiff as provided
under the provisions of MOFA on payment of
stamp duty, registration charges and all other
incidental charges to be paid by the Plaintiff;
iv. To pay all requisite fees to Municipal
Corporation of Greater Mumbai as may be
required for further progress of the work;
v. To appoint the existing Architect, who are the
Architect to complete the said Project;
vi. To appoint the existing Contractor of the said
building, to complete the work;
vii. To appoint the existing Structural Engineer who
have already been the Structural Engineer of the
said Project;
7
viii. To pay all fees/charges in respect of the
aforesaid persons;
ix. To regularly submit report to this Hon’ble Court
with regard to the progress and any other
measures that may be required for completion of
the Project;
x. To make all application to Corporation and all
other SemiGovernment
Authorities as may be
required for completing the said building Orbit
Haven.
xi. After completion of the Project, to apply for
Occupancy Certificate and Completion
Certificate.
xii. To hand over the flats after completion to the
Plaintiff.
(h) Interim and adinterim
in terms of prayers (c) to (g) be
granted;
(i) Cost of the suit be provided;
(j) Such further and other reliefs as the nature and
circumstances of the case may require be granted.”
6. The respondent No.1bank
(defendant No.15) appeared in
the concerned suit and filed a notice of motion for identical
relief, as claimed in notice of motion No.1206 of 2017 in suit
No.8 of 2017. The relief claimed in the subject notice of motion(s)
was limited to reject the plaint qua respondent No.1 herein, in
exercise of powers under Order 7 Rule 11(d) of CPC on the
ground that the suit(s) against the said respondent would be
barred by provisions of Section 34 of The Securitisation and
Reconstruction of Financial Assets and Enforcement of Security
Interest Act, 2002 (for short “2002 Act”). The reliefs claimed in

notice of motion No.1206 of 2017 in suit No.8 of 2017, read
thus:
“(a) That the plaint in suit no.8 of 2017 be
rejected qua the applicant/defendant No.15;
(b) that pending the hearing and final disposal of
the Notice of Motion the suit be stayed;
(c) that pending the hearing and final disposal of
the notice of motion the statusquo
granted vide dated
3rd March, 2017, of this Hon’ble Court be vacated;
(d) for adinterim
relief in terms of prayers (b) and
(c) above;
(e) for such further and other relief as the nature
and circumstances of the case may require; and
(f) costs.”
(emphasis supplied)
As aforementioned, the reliefs claimed in the plaint and the
notice of motion in the respective suit(s) which are the subject
matter of the present set of appeals are similar, albeit with minor
variation. That, however, need not detain us from considering
the common question which has arisen for our consideration in
the present appeals.
7. Be that as it may, the notice of motion(s) in the concerned
appeals came to be dismissed by the learned Single Judge of the
High Court by a common judgment dated 26th July, 2017, on the
finding that there was no bar from entertaining civil suit(s) in
respect of any other matter which is outside the scope of matters

required to be determined by the Debt Recovery Tribunal (for
short “DRT”) constituted under 2002 Act. The learned Single
Judge held that the facts of the present case clearly indicate that
the cause of action and the reliefs claimed by the concerned
plaintiff(s) fell within the excepted category and the bar under
Section 34 read with Section 17 of 2002 Act would be no
impediment in adjudicating the subject matter of the concerned
suit. The learned Single Judge referred to decisions of this Court
in Mardia Chemicals Ltd. and Ors. Vs. Union of India and
Ors.1, Jagdish Singh Vs. Heeralal and Ors.2 and of High
Courts in State Bank of India Vs. Smt. Jigishaben B.
Sanghvi and Ors.3 and Arasa Kumar Vs. Nauammal4.
However, the learned Single Judge rejected the
argument/objection raised by the appellant(s) that it is
impermissible to reject the plaint only against one of the
defendant(s), in exercise of power under Order 7 Rule 11(d) of
CPC by relying on the decision of the Division Bench of the same
High Court in M.V. “Sea Success I” Vs. Liverpool and London
1 (2004) 4 SCC 311
2 (2014) 1 SCC 479
3 2011 (3) Bom. C. R. 187
4 II (2015) BC 127

Steamship Protection and Indemnity Association Ltd. and
Ors.5 As the notice of motion moved by respondent No.1bank
came to be dismissed, respondent No.1 carried the matter in
appeal before the Division Bench by way of separate five appeals
in the concerned suit. All these appeals came to be allowed by
the Division Bench vide impugned judgment.
8. The impugned judgment has reversed the opinion of the
learned Single Judge that bar under Section 34 will not come in
the way of the appellants/plaintiffs. The Division Bench also
opined that the averments in the concerned plaint do not spell
out the case of fraud committed by the bank and/or the builder.
As a result of which, the Court held that the suit(s) instituted by
the appellant(s) did not come within the excepted category
predicated in Mardia Chemicals Ltd. (supra) and thus the
plaint against respondent No.1bank
was not maintainable,
being barred by Section 34 of the 2002 Act.
9. Feeling aggrieved, out of the five plaintiff(s) only four of them
have chosen to file the present appeals. They have assailed every
reason assigned by the Division Bench both on facts and the
5 AIR 2002 BOMBAY 151
11
law. It is urged that the plaint cannot be rejected only against
one of the defendant(s) but it could be rejected as a whole. To
buttress this contention reliance has been placed on Sejal
Glass Limited Vs. Navilan Merchants Private Limited6.
According to the appellant(s), even otherwise the decisions
considered by the High Court to hold against the appellant(s)
that the suit(s) filed by them were barred by Section 34 of 2002
Act were in applicable to the fact situation of the present case
being a case of third party claiming right under an agreement
which has the statutory protection under the provisions of The
Maharashtra Ownership Flats (Regulation of the Promotion of
Construction, Sale, Management and Transfer) Act, 1963 (for
short “1963 Act”). The appellant(s) would also urge that the bar
under Section 34 has no bearing on the subject matter of the
suit filed by the respective appellant(s) and the nature of reliefs
claimed by them including against respondent No.1bank.
The
presence of respondent No.1 in the said suit would be proper,
even if not a necessary party. It is urged that the impugned
judgment cannot be countenanced.
6 (2018) 11 SCC 780
12
10. Per contra, respondent No.1bank
would urge that the
Division Bench was justified in allowing the notice of motion filed
by respondent No.1bank
to reject the plaint qua the bank being
barred by Section 34 of the 2002 Act. According to the said
respondent, the appellant(s) are not genuine home buyers but
are investors of developers i.e. Orbit Corporation Ltd. (In Liq.).
Due to the close acquaintance/business relationship, the
concerned appellant(s) took commercial unsecured risk by
purportedly investing huge amount under the guise of
purchasing flats and entered into transactions which were
contrary to the provisions of 1963 Act. Thus, the appellant(s)
cannot claim any right merely on the basis of a selfserving
allotment letter pertaining to the concerned flat, purportedly
given by the builder. Noticeably, contends learned counsel for
respondent No.1 that the averments in the plaint(s) regarding
allegation of fraud played upon the appellant(s) are vague and
general. The same are baseless and unsubstantiated. Rather, no
case can be culled out from the averments in the plaint so as to
hold that the suit filed by the concerned appellant(s) comes
within the excepted category predicated in Mardia Chemicals

Ltd. (supra). Respondent No.1 has supported the impugned
judgment of the Division Bench and would contend that the
bank is not a necessary or even a proper party to suit for specific
performance of the alleged agreement and including in relation
to alternative relief of damages claimed against the developers.
11. We do not deem it necessary to elaborate on all other
arguments as we are inclined to accept the objection of the
appellant(s) that the relief of rejection of plaint in exercise of
powers under Order 7 Rule 11(d) of CPC cannot be pursued only
in respect of one of the defendant(s). In other words, the plaint
has to be rejected as a whole or not at all, in exercise of power
Order 7 Rule 11 (d) of CPC. Indeed, the learned Single Judge
rejected this objection raised by the appellant(s) by relying on
the decision of the Division Bench of the same High Court.
However, we find that the decision of this Court in the case of
Sejal Glass Limited (supra) is directly on the point. In that
case, an application was filed by the defendant(s) under Order 7
Rule 11(d) of CPC stating that the plaint disclosed no cause of
action. The civil court held that the plaint is to be bifurcated as
it did not disclose any cause of action against the director’s

defendant(s) 2 to 4 therein. On that basis, the High Court had
opined that the suit can continue against defendant No.1company
alone. The question considered by this Court was
whether such a course is open to the civil court in exercise of
powers under Order 7 Rule 11(d) of CPC. The Court answered
the said question in the negative by adverting to several
decisions on the point which had consistently held that the
plaint can either be rejected as a whole or not at all. The Court
held that it is not permissible to reject plaint qua any particular
portion of a plaint including against some of the defendant(s)
and continue the same against the others. In no uncertain terms
the Court has held that if the plaint survives against certain
defendant(s) and/or properties, Order 7 Rule 11(d) of CPC will
have no application at all, and the suit as a whole must then
proceed to trial.
12. In view of this settled legal position we may now turn to the
nature of reliefs claimed by respondent No.1 in the notice of
motion considered by the Single Judge in the first instance and
then the Division Bench of the High Court of Bombay. The
principal or singular substantive relief is to reject the plaint only
qua the applicant/respondent No.1 herein. No more and no less.

13. Indubitably, the plaint can and must be rejected in exercise
of powers under Order 7 Rule 11(d) of CPC on account of noncompliance
of mandatory requirements or being replete with any
institutional deficiency at the time of presentation of the plaint,
ascribable to clauses (a) to (f) of Rule 11 of Order 7 of CPC. In
other words, the plaint as presented must proceed as a whole or
can be rejected as a whole but not in part. In that sense, the
relief claimed by respondent No.1 in the notice of motion(s)
which commended to the High Court, is clearly a jurisdictional
error. The fact that one or some of the reliefs claimed against
respondent No.1 in the concerned suit is barred by Section 34 of
2002 Act or otherwise, such objection can be raised by invoking
other remedies including under Order 6 Rule 16 of CPC at the
appropriate stage. That can be considered by the Court on its
own merits and in accordance with law. Although, the High
Court has examined those matters in the impugned judgment
the same, in our opinion, should stand effaced and we order
accordingly.
14. Resultantly, we do not wish to dilate on the argument of the
appellant(s) about the inapplicability of the judgments taken into

account by the Division Bench of the High Court or for that
matter the correctness of the dictum in the concerned judgment
on the principle underlying the exposition in Nahar Industrial
Enterprises Limited Vs. Hong Kong and Shanghai Banking
Corporation7 to the effect that the DRT and also the appellate
authority cannot pass a decree nor it is open to it to enter upon
determination in respect of matters beyond the scope of power or
jurisdiction endowed in terms of Section 17 of the 2002 Act. We
leave all questions open to be decided afresh on its own merits in
accordance with law.
15. A fortiori, these appeals must succeed on the sole ground
that the principal relief claimed in the notice of motion filed by
respondent No.1 to reject the plaint only qua the said
respondent and which commended to the High Court, is replete
with jurisdictional error. Such a relief “cannot be entertained” in
exercise of power under Order 7 Rule 11(d) of CPC. That power is
limited to rejection of the plaint as a whole or not at all.
16. In view of the above, these appeals are allowed. Resultantly,
the impugned judgment and order of the Division Bench of the
7 (2009) 8 SCC 646
17
High Court in the concerned appeals are setaside
and instead
the order of the learned Single Judge dismissing the notice of
motion(s) in the concerned suit(s), is restored. Thus, the notice of
motion taken out by respondent No.1 in the concerned suit(s)
are dismissed with liberty to respondent No.1, as
aforementioned. All pending interim applications are also
disposed of. No order as to costs.
……………………………..J
(A.M. Khanwilkar)
……………………………..J
(Ajay Rastogi)
New Delhi;
July 01, 2019.
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