Monday, 29 June 2020

Whether court can reject plaint if plaintiff has not given specific date on which cause of action for filing of suit has accrued?

In view of Marwah’s categorical assertion that he acquired knowledge of the registration only in September 2012, it cannot be said that the contents of the plaint disclose that the suit is barred by limitation. I am fortified in this conclusion by the judgment in Chhotanben (supra), which also concerned a suit for cancellation of a registered sale deed. The Supreme Court emphasized the importance of the plaintiffs’ assertion regarding the date of the knowledge of the sale deed under challenge.

16. Mr. Jain attempted to distinguish the judgment in Chhotanben on the ground that the plaintiffs in that case had denied execution of the challenged document and taken the plea of fraudulently obtained thumb impressions. The absence of such a plea in the present case, is not, in my view, germane. The plaintiff’s assertion regarding the date of knowledge of the impugned transaction has been held to be sufficient to require trial. On that question, the nature of the plea and the merits of the plaintiff’s challenge are irrelevant. At this stage, the question before the Court is squarely covered by the reasoning in Chhotanben.
17. Mr. Jain also argued that unlike the specific date of knowledge pleaded by the plaintiffs in Chhotanben, in the present case, Marwah has not specified the date of knowledge. The averments in paragraphs 15 and 32 of the plaint clearly identify Marwah’s date of knowledge as the middle of September 2012. The lack of a specific date does not in my view disentitle Marwah to an opportunity to prove his case. Mr. Jain’s arguments regarding the effect of Explanation 1 to Section 3 of the Transfer of Property Act, 1882, and the date of purchase of the stamp paper by Marwah for obtaining a certified copy of the impugned deed are matters which would, consistent with the aforesaid judgments, have to be reserved to be decided at the appropriate stage of the suit, and cannot be decided in this application.
18. On Mr. Jain’s alternative argument regarding the disclosure of a cause of action also, the application cannot succeed. Marwah has clearly pleaded that the purported sale deed was not to be registered or relied upon, and that the registration itself was fraudulent. It cannot be said that he would not be entitled to relief even if these  assertions are ultimately found to be correct. This is the high standard which must be met for a defendant to succeed in an application under Order VII Rule 11 of the CPC.

 IN THE HIGH COURT OF DELHI AT NEW DELHI

Pronounced on: 28th May, 2020
 I.A. 23898/2015 in CS (OS) 1948/2015

JASMEET SINGH MARWAH Vs NUWAY ORGANIC NATURALS INDIA LTD 

CORAM:
 MR. JUSTICE PRATEEK JALAN


1. This is an application under Order VII Rule 11 of the Code of Civil Procedure, 1908 (hereinafter, “CPC”) by the defendant Nos. 1 and 2 seeking rejection of the plaint. The applicants contend that the suit is barred by limitation, that it does not disclose a cause of action, and that it has been filed in abuse of process of court.
FACTS
2. As the determination of an application for rejection of a plaint requires an examination of the case led by the plaintiff, the contents of the plaint are summarised below:

(a) The plaintiff, Mr. Jasmeet Singh Marwah (hereinafter, “Marwah”), claims to be the owner of a farmhouse constructed on agricultural land measuring 9 bighas 3 biswas in Khasra No. 1364 (4-7) and 1365 (4-16), in Village Chattarpur, Tehsil Mehrauli, New Delhi (hereinafter, “the suit property”). He claims to have purchased the suit property by way of a registered sale deed dated 13.05.1992 and to have been in possession thereof at all times since. The suit property is also recorded in his name by the revenue authorities and the South Delhi Municipal Corporation.
(b) The suit arises out of a purported sale deed dated 02.12.1998 executed by Marwah in favour of defendant Nos. 1 and 2 (hereinafter, “the impugned deed”). The principal reliefs sought in the suit are a declaration that the impugned deed is void, a decree for cancellation thereof, and related permanent and mandatory injunctions.
(c) Marwah has arrayed five defendants. Defendant Nos. 1 and 2 (the applicants in this application) are a registered company by the name of M/s Nuway Organic Naturals India Limited (hereinafter, “Nuway”) and its Managing Director - Mr. Manminder Singh (hereinafter, “Manminder”). Nuway is named as the purchaser in the impugned deed. Defendant No.3 is the wife of Manminder’s deceased brother, late Mr. Dilvinder Singh Narang (hereinafter, “Dilvinder”). Defendant Nos. 4 and 5 are the concerned governmental authorities, which would be

required to implement any order that may be passed in Marwah’s favour.
(d) The case made out in the plaint is that Dilvinder was a business associate of Marwah’s father, and advanced a cash loan of ₹75 lakhs to Marwah in August 2003. The loan was to be repaid in 10 years and did not carry interest. In the event Marwah was unable to pay as agreed, the default was to be compensated by payment of 12% per annum of the sum in default. The sale deed dated 13.05.1992, by which Marwah had acquired title of the suit property, was entrusted to Dilvinder in connection with the aforesaid loan. Marwah claims that at Dilvinder’s request, and in order to avoid the consequences prescribed in Punjab Money Lenders Act, 1938, the impugned deed was drawn up on stamp paper. According to him, the purported sale deed was of an unspecified date in December 1998 and drawn up in favour of M/s Mohindra Papers Limited (as Nuway was then known). However, he asserts that Dilvinder assured him that the said document would neither be registered nor acted upon once the loan amount was repaid. Marwah asserts that he signed the document in good faith on the assurance that it was not to be acted upon and on his belief that the document of December 1998 would not be registered as it was signed by him only in the middle of 2004.
(e) Marwah claims to have repaid a sum of ₹50 lakhs to Dilvinder between August 2008 and 11.08.2012, when Dilvinder died. The plaint discloses that he thereafter

approached Dilvinder’s wife and offered to pay the balance sum of ₹25 lakhs, but was referred to Manminder, who was then looking into the family’s affairs. Marwah claims that it is only thereafter he learnt that the purported sale deed signed by him had been registered, and that defendant Nos.1 and 2 were asserting consequent title to the suit property.
(f) Marwah pleads that an inspection of the register maintained by the concerned Sub-Registrar relating to the entry of the purported sale deed revealed interpolations and alterations. Copies of the purported entries in the register have been disclosed in the suit and several grounds have been advanced to support Marwah’s case of a forged, fabricated and antedated registration.
(g) As attempts to settle the matter amicably did not succeed, the parties exchanged correspondence through their respective counsel, and Marwah also lodged a complaint with the concerned police station on 02.04.2015.
3. Pleadings in the suit have been completed by the parties, but a discussion thereof is necessary for the purposes of disposal of an application under Order VII Rule 11 of the CPC.
SUBMISSIONS
4. In support of the present application, Mr. S. K. Jain, learned counsel for defendant Nos.1 and 2, first raised the ground of limitation. He pointed out at the outset that the impugned deed was admittedly signed by Marwah. Mr. Jain submitted that Explanation 1 to Section 3 of the Transfer of the Property Act, 1882 provides for deemed knowledge of a registered document. He also submitted that the documents filed by Marwah himself demonstrate that Marwah had applied for a certified copy of the impugned sale deed on stamp paper, which was purchased on 04.05.2012. Consequently, according to Mr. Jain, the suit filed on 08.07.2015 was beyond the period of limitation of three years, even reckoned from the date when the stamp paper was bought by Marwah.
5. Mr. Jain further argued that the plaint is entirely vague in material particulars and proceeds on the footing that Marwah had taken a cash loan of ₹75 lakhs from Dilvinder, well above the permissible amount. He argued that Dilvinder was neither a shareholder nor a director of Nuway and in fact had nothing to do with the company, belying Marwah’s case that the impugned deed was intended to provide any kind of comfort in relation to the loan transaction. In any event, Marwah’s case, according to Mr. Jain, proceeds solely on the basis of a transaction between him and Dilvinder, which cannot affect Nuway’s entitlement to the suit property under the registered sale deed. Mr. Jain has also drawn my attention to the judgment of this Court dated 05.10.2016 in Crl. M.C. 3748/2016 (Jasmeet Singh Marwah vs. State of NCT of Delhi & Ors.) wherein the Court has rejected Marwah’s petition against dismissal of his criminal complaint.
6. In support of the aforesaid arguments, Mr. Jain cited the judgments of the Supreme Court in Church of Christ Charitable Trust and Educational Charitable Society vs. Ponniamman Educational Trust, (2012) 8 SCC 706 and Kusheshwar Prasad Singh vs. State of Bihar, (2007) 11 SCC 447 as well as the judgment of this Court in T. Muralidhar vs. PVR Murthy, (2015) 217 DLT 79 (DB).
7. Mr. M. Dutta, learned counsel for Marwah resisted the application on all the aforesaid grounds. As far as the question of limitation is concerned, Mr. Dutta argued that Marwah discovered the registration of the impugned sale deed only in September 2012, and the suit filed on 08.07.2015 was therefore, within time. He relied upon the judgment of the Supreme Court in Chhotanben and Anr. vs. Kiritbhai Jalkrushnabhai Thakkar & Ors., (2018) 6 SCC 422, to submit that the question of limitation itself is a triable issue upon which the present plaint ought not to be rejected. Although Mr. Dutta did not dispute the suggestion that Marwah had admitted his signature and photograph on the impugned sale deed, he argued that the plaint clearly made out the case that the subsequent registration of the document was fraudulent, antedated and contrary to the understanding between Marwah and Dilvinder. He submitted that, in an application under Order VII Rule 11 of the CPC, the Court is entitled only to examine the plaintiff’s case as made out in the plaint and neither the supporting evidence, nor the defence put forward by the defendant. In support, Mr. Dutta cited the judgments of the Supreme Court in Popat and Kotecha Property vs. State Bank of India Staff Association, (2005) 7 SCC 510, C. Natrajan vs. Ashim Bai, (2007) 14 SCC 183 and Kamala & Ors. vs. K.T. Eshwara Sa & Ors., (2008) 12 SCC 661. Mr. Dutta therefore urged that the present application does not satisfy the requirements of Order VII Rule 11 of the CPC.

8. Without prejudice to this contention, Mr. Dutta submitted that the extracts of the peshi register maintained in the office of concerned Sub-Registrar (which have been placed on record in the documents filed by Marwah) ex facie demonstrate that the registration of the impugned document is dubious. According to him, it is only the entry relating to the purported registration of the impugned document that is missing from the peshi register, having been apparently obliterated by damage caused to the register.
9. In rejoinder, Mr. Jain distinguished the judgment in Chhotanben (supra) on the ground that the plaintiffs in that case had not admitted execution of the sale deed and had asserted that the thumb impressions affixed thereon were fraudulent. He also submitted that in Chhotanben, the point of limitation was required to be sent to trial as the plaintiffs had asserted a specific date upon which they claimed to have acquired knowledge of the impugned sale deed, unlike the present case where these material details are altogether absent from the plaint. Mr. Jain lastly drew my attention to paragraph 15 of the judgment in Popat and Kotecha Property (supra), wherein the Supreme Court has emphasized the difference between a real cause of action and an illusory one.
ANALYSIS
10. Order VII Rule 11 of the CPC provides as follows:-
“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 Court, fails to do so;
(c) where the relief claimed is properly valued, but the plaint is returned upon paper insufficiently stamped, and the plaintiff, on being required by the Court to supply the requisite stamp-paper within a time to be fixed by the Court, fails to do so;
(d) where the suit appears from the statement in the plaint to be barred by any law;
(e) where it is not filed in duplicate;
(f) where the plaintiff fails to comply with the provisions of rule 9.
[Provided that the time fixed by the Court for the correction of the valuation or supplying of the requisite stamp-paper shall not be extended unless the Court, for reasons to be recorded, is satisfied that the plaintiff was prevented by any cause of an exceptional nature from correcting the valuation or supplying the requisite stamp-paper, as the case may be, within the time fixed by the Court and that refusal to extend such time would cause grave injustice to the plaintiff.]”
11. The principles governing the scope of the aforesaid provision are now well established. The first principle is that the contents of the plaint alone are required to be examined. Neither the defence nor the evidence comes into play at this stage. In the present case, the defendants have invoked clauses (a) and (d) of Order VII Rule 11, contending that the plaint does not disclose a cause of action and that the suit appears from the statements in the plaint to be barred by law. It is clear from the statutory formulation of both these clauses that the Court must examine whether, on a meaningful reading of the plaint itself, it can be concluded that the suit suffers from a legal infirmity. The plaint has to be tested on a demurrer - if, even assuming all its contents to be true, the suit would be barred or would not be decreed, the Court can summarily reject it, but not otherwise.
12. Several judgments of the Supreme Court, including those cited by learned counsel for the parties, establish these principles beyond doubt. The most recent of those judgments is Chhotanben (supra) wherein the Court was, like in the present case, concerned with a challenge to a registered sale deed and an application for rejection of the plaint on the ground that the suit was barred by limitation. Reversing the judgment of the High Court to the contrary, the Supreme Court held inter alia as follows:-
“14. After having cogitated over the averments in the plaint and the reasons recorded by the trial court as well as the High Court, we have no manner of doubt that the High Court committed manifest error in reversing the view taken by the trial court that the factum of suit being barred by limitation, was a triable issue in the fact situation of the present case. We say so because the appellant-plaintiffs have asserted that until 2013 they had no knowledge whatsoever about the execution of the registered sale deed concerning their ancestral property. Further, they have denied the thumb impressions on the registered sale deed as belonging to them and have alleged forgery and impersonation. In the context of totality of averments in the plaint and the reliefs claimed, which of the articles from amongst Articles 56, 58, 59, 65 or 110 or any other article of the Limitation Act will apply to the facts of the present case, may have to be considered at the appropriate stage.
15. What is relevant for answering the matter in issue in the context of the application under Order 7 Rule 11(d) CPC, is to examine the averments in the plaint. The plaint is required to be read as a whole. The defence available to the defendants or the plea taken by them in the written statement or any application filed by them, cannot be the basis to decide the application under Order 7 Rule 11(d). Only the averments in the plaint are germane. It is common ground that the registered sale deed is dated 18-10-1996. The limitation to challenge the registered sale deed ordinarily would start running from the date on which the sale deed was registered. However, the specific case of the appellant-plaintiffs is that until 2013 they had no knowledge whatsoever regarding execution of such sale deed by their brothers, original Defendants 1 and 2, in favour of Jaikrishnabhai Prabhudas Thakkar or Defendants 3 to 6. They acquired that knowledge on 26-12-2012 and immediately took steps to obtain a certified copy of the registered sale deed and on receipt thereof they realised the fraud played on them by their brothers concerning the ancestral property and two days prior to the filing of the suit, had approached their brothers (original Defendants 1 and 2) calling upon them to stop interfering with their possession and to partition the property and provide exclusive possession of half (½) portion of the land so designated towards their share. However, when they realised that the original Defendants 1 and 2 would not pay any heed to their request, they had no other option but to approach the court of law and filed the subject suit within two days therefrom. According to the appellants, the suit has been filed within time after acquiring the knowledge about the execution of the registered sale deed. In this context, the trial court opined that it was a triable issue and declined to accept the application filed by Respondent 1-Defendant 5 for rejection of the plaint under Order 7 Rule 11(d). That view commends to us.”
(Emphasis supplied)

After noticing the earlier judgments of the Supreme Court including Church of Christ Charitable Trust (supra) cited by Mr. Jain, the Court came to the following conclusion:-
“19. In the present case, we find that the appellant-plaintiffs have asserted that the suit was filed immediately after getting knowledge about the fraudulent sale deed executed by original Defendants 1 and 2 by keeping them in the dark about such execution and within two days from the refusal by the original Defendants 1 and 2 to refrain from obstructing the peaceful enjoyment of use and possession of the ancestral property of the appellants. We affirm the view taken by the trial court that the issue regarding the suit being barred by limitation in the facts of the present case, is a triable issue and for which reason the plaint cannot be rejected at the threshold in exercise of the power under Order 7 Rule 11(d) CPC.”
(Emphasis supplied)
13. Both parties have placed reliance upon the judgment in Popat and Kotecha Property (supra), wherein the Court held as follows:-
“10. Clause (d) of Order 7 Rule 7 speaks of suit, as appears from the statement in the plaint to be barred by any law. Disputed questions cannot be decided at the time of considering an application filed under Order 7 Rule 11 CPC. Clause (d) of Rule 11 of Order 7 applies in those cases only where the statement made by the plaintiff in the plaint, without any doubt or dispute shows that the suit is barred by any law in force.
xxxx xxxx xxxx
14. In Saleem Bhai v. State of Maharashtra [(2003) 1 SCC 557] it was held with reference to Order 7 Rule 11 of the Code that the relevant facts which need to be looked into for deciding an application thereunder are the averments in the plaint. The trial court can exercise the power at any stage of the suit — before registering the plaint or after issuing summons to the defendant at any time before the conclusion of the trial. For the purposes of deciding an application under clauses (a) and (d) of Order 7 Rule 11 of the Code, the averments in the plaint are the germane; the pleas taken by the defendant in the written statement would be wholly irrelevant at that stage.
15. In I.T.C. Ltd. v. Debts Recovery Appellate Tribunal [(1998) 2 SCC 70] it was held that the basic question to be decided while dealing with an application filed under Order 7 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 7 Rule 11 of the Code.
xxxx xxxx xxxx
19. There cannot be any compartmentalisation, dissection, segregation and inversions of the language of various paragraphs in the plaint. If such a course is adopted it would run counter to the cardinal canon of interpretation according to which a pleading has to be read as a whole to ascertain its true import. It is not permissible to cull out a sentence or a passage and to read it out of the context in isolation. Although it is the substance and not merely the form that has to be looked into, the pleading has to be construed as it stands without addition or subtraction of words or change of its apparent grammatical sense. The intention of the party concerned is to be gathered primarily from the tenor and terms of his pleadings taken as a whole. At the same time it should be borne in mind that no pedantic approach should be adopted to defeat justice on hair-splitting technicalities.”
(Emphasis supplied)
This judgment has been noticed and followed in C. Natrajan (supra) and Kamala (supra).

14. Applying these principles to the present case, I am unable to accept the contention that the plaint is required to be rejected at the threshold. As far as the question of limitation is concerned, it is clear from the judgments in Popat and Kotecha Property (paragraph 10) and C. Natrajan (paragraph 8) that the contents of the plaint would be determinative of this issue. The relevant averments in the plaint regarding Marwah’s knowledge of the registration of the impugned deed are contained in paragraphs 15, 16 and 32, which are set out as follows:-
“15. That the Plaintiff, finding the behavior and activities of Defendant No. 2 unusual, called him sometime in mid-September, 2012 and confronted him for his unusual behavior. Defendant No. 2 shouted back at the Plaintiff and claimed that the transaction was one of sale and that there was a Sale Deed in favour of Defendant No. 1 of the land/property.
16. The plaintiff was shocked at this disclosure and made enquiries and after great difficulty, was shocked to find that the purported sale indenture of 2004 which was not to be acted upon and had to be destroyed, had been illegally shown as registered and that too, antedated, when even loan transaction had not taken place. There was never any sale transaction. The document had been fraudulently shown registered in the office of the Sub Registrar, Defendant No. 5. The Plaintiff took inspection of the register maintained in the office of the Sub Registrar and it unfolded the fraud, fabrication etc. There were fraudulent alterations/interpolations and fabrication of the records. The original book-B Peshi Register (the register where entry is made and numbers etc. are assigned), had been tampered with and that the entry qua the entry of purported sale deed had been washed off and defaced unrecognizably. It was clear that some other document,
which had been presented and registered at the said entry, had been erased and the registration number etc., have been fraudulently assigned to the purported Sale Deed.
xxxx xxxx xxxx
32. That the cause of action accrued in favour of the Plaintiff and against the Defendants as detailed in the plaint. It had accrued when Mr. Dilvinder Singh Narang received the installments of the advanced amount as detailed in the plaint. It further arose when the Plaintiff called upon Defendant Nos. 2 & 3 to receive the balance amount and return the title deeds etc. The Plaintiff for the first time came to know of the said fraudulent actions of collusion by the Defendants and others on or around September, 2012 when fraudulent registration etc. was detected. It also accrued when Defendant No. 2 met the Plaintiff and was confronted with the fraud etc. and meetings took place and refused to see reason. It also accrued in June 2015 when some property agents made enquiries as detailed above. The purported instrument (purported Sale Deed) is outstanding in records with manipulated and maneuvered registration. The cause of action is a continuing one.”
(Emphasis supplied)
15. In view of Marwah’s categorical assertion that he acquired knowledge of the registration only in September 2012, it cannot be said that the contents of the plaint disclose that the suit is barred by limitation. I am fortified in this conclusion by the judgment in Chhotanben (supra), which also concerned a suit for cancellation of a registered sale deed. The Supreme Court emphasized the importance of the plaintiffs’ assertion regarding the date of the knowledge of the sale deed under challenge.

16. Mr. Jain attempted to distinguish the judgment in Chhotanben on the ground that the plaintiffs in that case had denied execution of the challenged document and taken the plea of fraudulently obtained thumb impressions. The absence of such a plea in the present case, is not, in my view, germane. The plaintiff’s assertion regarding the date of knowledge of the impugned transaction has been held to be sufficient to require trial. On that question, the nature of the plea and the merits of the plaintiff’s challenge are irrelevant. At this stage, the question before the Court is squarely covered by the reasoning in Chhotanben.
17. Mr. Jain also argued that unlike the specific date of knowledge pleaded by the plaintiffs in Chhotanben, in the present case, Marwah has not specified the date of knowledge. The averments in paragraphs 15 and 32 of the plaint clearly identify Marwah’s date of knowledge as the middle of September 2012. The lack of a specific date does not in my view disentitle Marwah to an opportunity to prove his case. Mr. Jain’s arguments regarding the effect of Explanation 1 to Section 3 of the Transfer of Property Act, 1882, and the date of purchase of the stamp paper by Marwah for obtaining a certified copy of the impugned deed are matters which would, consistent with the aforesaid judgments, have to be reserved to be decided at the appropriate stage of the suit, and cannot be decided in this application.
18. On Mr. Jain’s alternative argument regarding the disclosure of a cause of action also, the application cannot succeed. Marwah has clearly pleaded that the purported sale deed was not to be registered or relied upon, and that the registration itself was fraudulent. It cannot be said that he would not be entitled to relief even if these  assertions are ultimately found to be correct. This is the high standard which must be met for a defendant to succeed in an application under Order VII Rule 11 of the CPC.
19. Mr. Jain placed reliance upon two further judgments in support of this contention. The judgment of the Supreme Court in Kusheshwar Prasad Singh (supra) (paragraphs 15 and 16) was cited for the proposition that no one can be permitted to take advantage of their own wrong. The argument of learned counsel was that Marwah cannot rely upon a transaction involving a substantial loan in cash. While the maxim upon which Mr. Jain relies does not admit of any doubt, his reliance in the present case is misconceived. The nature of the transaction pleaded by Marwah provides the context for the contention that the purported sale deed was not to be acted upon. Whether those facts are at all proven, and whether they have a bearing upon Marwah’s ultimate entitlement to relief, is something that would be inappropriate to adjudicate at this stage. The Division Bench judgment in T. Muralidhar (supra) was cited to support the argument that the lack of specificity of dates would lead to a conclusion that the plaint does not disclose a cause of action at all. The Division Bench in that case upheld the rejection of the plaint on several grounds, including the non-disclosure of a cause of action and the suit being barred by limitation. It has been noted that the plaint did not disclose the date, month or year of events, which form part of the cause of action or of the agreement upon which he relied. The Division Bench found that the lack of material pleadings made it impossible for the plaintiff to

make out a cause of action and also establish the bar of limitation. The plaint in the present suit does not suffer from similar vagueness. While some of the dates are stated approximately, that is not the same as saying that plaintiff has not disclosed the date, month or year of crucial events.
20. For the reasons aforesaid, I do not consider this to be a fit case for exercise of the Court’s jurisdiction under Order VII Rule 11 of the CPC.
CONCLUSION
21. In view of the aforesaid, the defendant Nos. 1 and 2 have failed to make out any ground for rejection of the plaint. The application is therefore dismissed. It is however made clear that the observations in this judgment are only for the purpose of the disposal of this application and will not prejudice the parties at the trial of the suit.
PRATEEK JALAN, J.
MAY 28, 2020

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