Friday, 31 July 2020

Whether the court should reject plaint if the issue of limitation is a mixed question of law and fact?

 It is clear from a perusal of the aforesaid judgment that the policy of the section 14 of the Limitation Act is to afford protection to a litigant when he institutes a proceeding in a wrong court provided this act was done in good faith and bona fide. The section has to be interpreted liberally in a manner to advance the cause of justice rather than to abort the proceedings. The plaintiff has to establish the fact that the prior proceedings have been instituted/prosecuted in good faith and due diligence. This is obviously a question of fact which the plaintiff has to prove.

 I may note that usually the issue of limitation is a mixed question of law and fact. What defendant No. 1 seeks is an adjudication of the issue of limitation at the initial stage itself before even an opportunity has been given to the plaintiff to show that it was prosecuting the litigation before the Bombay High Court with due diligence and in good faith.{Para 22}


24. While considering an application under Order 7 Rule 11 CPC only averments made in the plaint are to be looked at and the accompanying documents. Reference in this context may be had to the judgment of this court in the case of Tilak Raj Bhagat vs. Ranjit Kaur wherein this court held as follows:-

"6. It may be worthwhile to mention here that while considering an application under Order 7 Rule 11 CPC, the Court has to look at the averments made in the plaint by taking the same as correct on its face value as also the documents filed in support thereof. Neither defence of the defendant nor averments made in the application have to be given any weightage. Plaint has to be read as a whole together with the documents filed by the plaintiff."

28. Hence, for the purpose of considering an application under Order 7 Rule 11 CPC only the averments made in the plaint have to be taken presuming them to be correct on the face of it along with the documents filed in support of the plaint. It is only in cases where the averments in the plaint itself indicate the cause of action to be barred by limitation that the plaint can be rejected at the initial stage. This must be on a mere ex facie reading of the plaint.
 As noted above, every act of the plaintiff in filing a suit in a court other than the court which as per the Agreement has exclusive jurisdiction, does not necessarily imply that the act was done without due diligence or in good faith. It would be for the plaintiff to lead evidence on this aspect. What the defendant want is that the defence of the defendant be taken into account and the plaint be dismissed without giving an opportunity to the plaintiff to lead evidence to show that the reason for pursuing the matter before the Bombay High Court was bona fide and with due diligence. This plea is clearly not permissible. On a ex-facie reading of the plaint it cannot be said that it is barred by limitation.

IN THE HIGH COURT OF DELHI

CS (OS) 105/2018

Decided On: 15.06.2020

Modtech Furniture Private Ltd.  Vs.  NCUBE Planning Design Private Limited and Ors.

Hon'ble Judges/Coram:
Jayant Nath, J.
Citation: MANU/DE/1236/2020



IA No.11130/2018 (Under Order 7 Rule 11 CPC)

1. This is an application under Order 7 Rule 11 of CPC for rejection of the plaint.

2. I may first look at the averments in the plaint. The suit is filed by the plaintiff seeking a decree against the defendants for a sum of Rs. 2,39,48,743/- plus pendent-lite and future interest. The case of the plaintiff is that the suit has been filed for recovery of an amount along with interest on account of Civil and Interior work done by the plaintiff under work order dated 15.1.2013 executed between the plaintiff and defendant No. 1. Under the work order the plaintiff was to carry out work at the premises of defendant No. 2 in Andheri (East), Mumbai. The defendant No. 2 had given the contract to defendant No. 1 who with the consent and knowledge of defendant No. 2 assigned the work to the plaintiff.

3. The plaintiff states that it has carried out and completed the work without any complaint of quality. The plaintiff submitted an invoice dated 23.12.2013 for Rs. 5,07,39,863.85 inclusive of taxes. A sum of Rs. 3,31,30,493/- was paid by defendant No. 1 leaving behind a sum of Rs. 1,76,09,370/-. It is pleaded that defendant No. 1 by letter dated 6.1.2014 has confirmed that a sum of Rs. 1,15,20,586 remains outstanding which excludes retention amount of Rs. 50,73,987/- and TDS amount of Rs. 10,14,797/- aggregating to Rs. 1,76,09,370/-.

4. It is further stated that the defendant No. 1 has admitted outstanding amount payable to the plaintiff through correspondence on email and fixed the schedule of payment for the balance amount from January 2014 by email dated 14.1.2014. The plaintiff by its letter dated 5.2.2014 gave its consent to the agreed schedule. Defendant No. 1 has failed to abide by the agreed schedule. It is claimed that the defendants have in collusion withheld the legitimate dues of the plaintiff. Despite several requests and reminders the defendants have failed to pay the balance due. Hence, a legal notice dated 1.5.2014 was sent to the defendants. Reply was received from the counsel for both the defendants who have admitted that the plaintiff has completed its work. Despite admission, defendants kept shifting the blame on each other.

5. It is further claimed that the plaintiff filed a Summary Suit against the defendants before the High Court of Bombay in October 2015. The suit was filed in Mumbai as the work order was executed by the plaintiff and defendant No. 1 in Mumbai. It is stated that on account of the express jurisdiction clause in the work order the High Court of Bombay vide order dated 3.10.2016 returned the plaint to the plaintiff to be filed in an appropriate Court in Delhi. Hence, the present suit.

6. I may note that this suit was filed as a Summary Suit under Order 37 CPC. This court on 28.2.2018 granted leave to defend to the defendants. This court also noted that the contract was only between the plaintiff and defendant No. 1 whereas the plaintiff seeks its claim jointly and severally against both the defendants. The court hence noted that the suit does not fall within the requirements of Order 37 CPC and granted unconditional leave to defend to the defendants. I may also note that the defendant No. 1 had filed IA No. 10034/2017 under section 8 of the Arbitration and Conciliation Act, 1996. The said application was also dismissed on the said date.

7. Defendant has now filed the present application under Order 7 Rule 11 CPC for rejection of the plaint. In the application it is pleaded that the suit is barred by limitation as the cause of action last arose on 23.12.2013 when the invoice was generated. It is claimed that the copy of the invoice was not filed along with the suit but was filed along with the additional documents. It is also pleaded that the communications dated 6.1.2014 and 14.1.2014 do not extend the limitation period as the admission is conditional. It is further pleaded that the suit was returned by order dated 3.10.2016 by the Bombay High Court. It is further pleaded that the plaintiff ought to have filed an application under section 14 of the Limitation Act, 1963 to claim the benefit of section 14 of the Limitation Act. Crucial aspects have not been pleaded and so the plaintiff is not entitled to the benefit of section 14 of the Limitation Act.

8. It is further claimed in the application that the plaintiffs have not filed a copy of the leave to defend application of defendant No. 1 filed before the Bombay High Court. An objection had been clearly raised in the said application that the Delhi Courts have exclusive jurisdiction as per the work order. However, despite this objection it is claimed that the plaintiff ignored the same and did not follow the correct course for filing the suit in this court after withdrawing the suit from the Bombay High Court diligently.

9. The plaintiffs have filed a reply to the above application. It is claimed that the work order was executed in Mumbai. The plaintiff and defendants have their place of business in Mumbai and hence the present suit was filed in the Bombay High Court on 17.10.2015 which was well within the limitation period. The suit was filed with due diligence and in good faith because the contract was executed in Mumbai. The work was also carried out in Mumbai. However, on account of an exclusive jurisdiction clause stated in the work order the Bombay High Court vide its order dated 3.10.2016 returned the plaint to be filed in appropriate court. This suit was filed on or around 12.05.2017 in this court. It is also stated that the plaintiff has already filed an application under section 14 of the Limitation Act and it is clear that the suit is not barred by limitation.

10. I have heard learned counsel for the parties. Learned counsel for the defendants have vehemently argued that under section 14 of the Limitation Act, in computing the period of limitation the time during which the plaintiff was persecuting with due diligence in good faith in court the matter which on defect of jurisdiction the said court is unable to entertain, the time spent in prosecuting the said matter in that court is excluded. It is pleaded that in the present case there was a clear jurisdiction clause in the work order which stipulated that the Courts in Delhi would have exclusive jurisdiction. Despite existence of such a clause the plaintiff chose to file the suit in Bombay High Court which shows lack of good faith and due diligence. Learned counsel for the defendant No. 1 has relied upon judgment of the Division Bench of this court in M/s. K.G. Khosla and Co. vs. The Trustees of the Port of Bombay, MANU/DE/0086/1970 : (1972) 8 DLT 92; judgment of a co-ordinate Bench of this court in the case of Ved Prakash Sharma vs. Dapinder Pal Singh and Ors., MANU/DE/2774/2012 : (2012) 193 DLT 453 and judgment of the Kerala High Court in the case of Mac-N-Hom Systems vs. Vaidya Ratnam P.S. Varrier's Aryavaidyasala Kottakkal, MANU/KE/0498/2003 : AIR 2004 Ker 91 to contend that for taking benefit of section 14(1) of the Limitation Act the plaintiff would have to show that it was prosecuting the proceedings before the Bombay High Court with due diligence. It is claimed that to a person trained in law it would be quite obvious that the territorial jurisdiction vests with this court and not with the Bombay High Court. Further, despite objection raised by the defendant before Bombay High Court the plaintiff did not take diligent steps. Further, the suit was withdrawn on 3.10.2016. The present suit was filed before this court on or around 12.5.2017 i.e., after a delay of about seven months. Reliance is also placed on judgment of a co-ordinate Bench of this court in the case of Ashwani Sharma vs. Kanta Sharma, MANU/DE/0160/2017 : (2017) 161 DRJ 390. Hence, it is pleaded that the suit is clearly barred by limitation.

11. Learned counsel for defendant No. 2 has supported the case of defendant No. 1.

12. Learned counsel for the plaintiff relies upon a judgment of the Supreme Court in Consolidated Engineering Enterprises vs. Principal Secretary, Irrigation Department & Ors., MANU/SC/7460/2008 : (2008) 7 SCC 169 to contend that in the facts of this case the plaintiff would be entitled to the benefit of section 14 of the Limitation Act.

13. Section 14(1) of the Limitation Act, 1963 reads as follows:-

"14. Exclusion of time of proceedings bona fide in court without jurisdiction.- (1) In computing the period of limitation for any suit the time during which the plaintiff has been prosecuting with due diligence another civil proceeding, whether in a court of first instance or of appeal or revision, against the defendant shall be excluded, where the proceeding relates to the same matter in issue and is prosecuted in good faith in a court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it."

14. The relevant clause of the work order issued to the plaintiff by defendant No. 1 being clause 69 reads as follows:-

"69. Jurisdiction

The parties to this contract agreement unequivocally agree that the courts at N.C.T. of Delhi alone shall have jurisdiction to entertain and try any dispute and/or difference arising out of or in connection with the terms of this deed and other related documents, if any."

15. The suit was filed in the Bombay High Court on 17.10.2015 which was well within the limitation period as the last invoice had been raised on 16.12.2013. The plaint was returned by the Bombay High Court by orders dated 3.10.2016. The said order reads as follows:-

"1. In this summary suit the plaintiffs are claiming a sum of Rs. 1,76,00,000/- plus interest. By a letter dated 6.1.2014 the defendants have admitted their liability to the extent of Rs. 1,15,20,588/-.

2. The counsel for the defendants pointed out that the work order entered into between the defendant no. 1 and the plaintiffs has an express jurisdiction clause where the parties have unequivocally agreed that the Courts at N.C.T. at Delhi alone shall have jurisdiction to entertain, try dispute and/or difference arising out of or in connection with the terms of this Deed and other related documents if any.

3. In view of the above, the counsel for the plaintiffs requests that the plaint be returned to the plaintiffs to be filed in the appropriate court at NCT of Delhi. Registry is directed to return the plaint and summons for judgment to the plaintiffs on application being made by the Advocate for the plaintiffs."

16. The suit was thereafter filed on or around 12.5.2017 before this court.

17. According to the defendant, plaintiff in these facts is not entitled to any extension of limitation under section 14 of the Limitation Act. This is so as the plaintiff has not acted in good faith and with due diligence in view of the facts of the case. I may now look at the judgments relied upon by learned counsel for defendant No. 1. In M/s. K.G. Khosla and Co. vs. The Trustees of the Port of Bombay (supra) the matter had been adjudicated upon by the Division Bench pursuant to a decree passed against the defendant. In those facts the Division Bench held as follows:-

"(10) To claim the benefit of section 14(1), the respondents have to show that they were prosecuting "with due diligence" another civil proceeding on the same cause of action "in good faith" in a Court which, from defect of jurisdiction, was unable to entertain it. The respondents have thus to satisfy two conditions, namely:- (1) of good faith and (2) of due diligence.

....

....

(14) We are unable to see, therefore, anything either in the pleadings or in the evidence of the parties which would throw any doubt on the validity of the condition in the contract that a suit arising out of it had to be instituted at Delhi. In view of this clear agreement we are unable to see how the respondents could at all think that the Bombay Court had any jurisdiction to try the suit. The burden of proof was, therefore, heavy on the respondents to show that they acted in good faith in filing the suit in the Court at Bombay. The question of good faith in the present case is fortunately easy to decide. The decision does not depend on any evidence as to what was going on in the mind of the officers or the legal advisers of the respondents. For, the law was absolutely clear that the Court at Bombay had no jurisdiction. Neither the officers nor the legal advisers of the respondents could, therefore, have any reason to think otherwise. The legal position was so much beyond doubt that neither any officer nor any legal adviser of the respondents made any attempt to show that they had any reason to think that the Court at Bombay had any semblance of jurisdiction. It is significant to note that the interrogatories submitted by the respondents' counsel at Delhi for the examination on commission of Shri S.R. Vakil, Solicitor and Legal Adviser of the respondents pointedly asked Question No, 17 as follows:

" CAN you assign any reason or reasons for the filing of the suit by the plaintiffs at Bombay?".

When Shri S.R. Vakil was examined as a witness, this question was not put to him by the respondents' counsel. Shri Vakil merely stated as follows at page 110:

"In filing the suit in Bombay, the plaintiffs acted on bona fide legal advice and there was no negligence or lack of good faith or due diligence on the part of the plaintiffs in prosecuting the claim".

(15) Shri Vakil was apparently himself the Legal Adviser of the respondents. It is strange that he should himself say that the respondents acted on legal advice. Such language could be very well understood from the client but not from the Legal Adviser himself. It was the duty of Shri Vakil as a Legal Adviser of the respondents to come forward to explain how the suit came to be filed at Bombay when the law so clearly pointed out that only the Delhi Court had the jurisdiction to try the suit. Shri Vakil apparently realized that no good reason could be given by him for filing the suit at Bombay. He, therefore, did not try to give any such reason. Shri Parmanand Valiram Thadhani who dealt with this contract on behalf of the respondents was also examined on commission. He merely stated at page 101 as follows:

"WE had to file the suit in Bombay City Civil Court as we were advised by our legal advisers that the Bombay City Civil Court had jurisdiction in the matter".

........

(20) The appellant took the objection to the local jurisdiction of the Bombay Civil Court immediately after the suit was filed at Bombay. The respondents refused to concede the validity of the objection and went on perversely litigating in the Bombay Court. This was utter negligence on the part of the respondents. It cannot be said, therefore, that the prosecution of the suit at Bombay by the respondents was made with "due diligence".

We, Therefore, hold that the respondents are not entitled to exclude the time spent by them in the City Civil Court at Bombay under section 14(1) of the Limitation Act. Consequently the institution of the suit in the Court at Delhi was hopelessly barred by time as the suit was instituted far beyond the period of three years which was the period of limitation prescribed for such a suit by Article 115 of the Limitation Act."

18. A co-ordinate Bench of this Court in Ashwani Sharma vs. Kanta Sharma (supra) held as follows:-

"27. Even if it were to be believed that the Court in which the plaintiff earlier instituted the suit, from defect of jurisdiction, was unable to entertain it, the defendant in its written statement verified on 29th August, 2007 made the plaintiff aware of the said defect. The plaintiff claims to have become further aware of the same from the order dated 1st August, 2011. The only explanation as to why the plaintiff immediately thereafter not withdraw that suit as ultimately done on 22nd September, 2016 and continued to flog the said suit for nine/five years thereafter is that the plaintiff was acting on advise of his advocate. The said conduct of the plaintiff shows total lack of good faith in prosecuting the suit. A litigant cannot so defeat limitation by placing the blame on the advocate, who is not before the court. It is not the case of the plaintiff that he has protested to the said advocate or took any action. Rather, the plaintiff while filing this suit was not even aware that he was required to invoke Section 14 of the Limitation Act and seems to have been under impression that because liberty had been granted, he could invoke the jurisdiction of this court and this suit would be in continuation of earlier suit. Application under Section 14 of Limitation Act, as aforesaid, has been filed only after attention being drawn thereto.

28. It has been held in Rabindra Nath Samuel Dawson v. Sivakasi MANU/SC/0465/1972 : (1973) 3 SCC 381, that continuing to prosecute the suit in a Court unable to entertain it from defect of jurisdiction inspite of objection by the defendant negates good faith. Recently, in M.P. Steel Corporation v. Commissioner of Central Excise MANU/SC/0484/2015 : (2015) 7 SCC 58 it has been held that the party who invokes Section 14 should not be guilty of negligence, lapse or inaction and there should be no pretended mistake intentionally made with a view to delaying the proceedings or harassing the opposite party.

29. It thus but has to be held that the suit claim is also barred by time."

19. What follows from the above two judgments relied upon by learned counsel for the defendant is that it is a question of fact to be determined on the evidence led by the parties as to whether the plaintiff has been able to show due diligence and good faith in prosecuting the matter on the same cause of action in another court. In both the matters noted above, the court came to a conclusion that the action of the plaintiff lacks bona fide and was not done with due diligence in reference to the facts of the case. There is no universal rule established that wherever under the terms of the Contract a particular court is stated to have exclusive jurisdiction to adjudicate the dispute arising out of the contract, then institution of suit in a court other than the stipulated court of exclusive jurisdiction would deprive the plaintiff of the benefit of section 14 of the Limitation Act.

20. I may in this context look at the judgment relied upon by learned counsel for the plaintiff. In the case of Consolidated Engineering Enterprises vs. Principal Secretary, Irrigation Department & Ors. (supra) the court held as follows:-

"24. We may notice that in similar circumstances the Division Bench of this Court in State of Goa v. Western Builders [MANU/SC/2967/2006 : (2006) 6 SCC 239] has taken a similar view. As observed earlier the intention of the legislature in enacting Section 14 of the Act is to give relief to a litigant who had approached the wrong forum. No canon of construction of a statute is more firmly established than this that the purpose of interpretation is to give effect to the intention underlying the statute. The interpretation of Section 14 has to be liberal. The language of beneficial provision contained in Section 14 of the Limitation Act must be construed liberally so as to suppress the mischief and advance its object. Therefore, it is held that the provisions of Section 14 of the Limitation Act are applicable to an application submitted under Section 34 of the Act of 1996 for setting aside an arbitral award.

.........

31. To attract the provisions of Section 14 of the Limitation Act, five conditions enumerated in the earlier part of this judgment have to co-exist. There is no manner of doubt that the section deserves to be construed liberally. Due diligence and caution are essential prerequisites for attracting Section 14. Due diligence cannot be measured by any absolute standards. Due diligence is a measure of prudence or activity expected from and ordinarily exercised by a reasonable and prudent person under the particular circumstances. The time during which a court holds up a case while it is discovering that it ought to have been presented in another court, must be excluded, as the delay of the court cannot affect the due diligence of the party. Section 14 requires that the prior proceeding should have been prosecuted in good faith and with due diligence. The definition of good faith as found in Section 2(h) of the Limitation Act would indicate that nothing shall be deemed to be in good faith which is not done with due care and attention. It is true that Section 14 will not help a party who is guilty of negligence, lapse or inaction. However, there can be no hard-and-fast rule as to what amounts to good faith. It is a matter to be decided on the facts of each case. It will, in almost every case be more or less a question of degree. The mere filing of an application in wrong court would not prima facie show want of good faith. There must be no pretended mistake intentionally made with a view to delaying the proceedings or harassing the opposite party. In the light of these principles, the question will have to be considered whether the appellant had prosecuted the matter in other courts with due diligence and in good faith."

21. It is clear from a perusal of the aforesaid judgment that the policy of the section 14 of the Limitation Act is to afford protection to a litigant when he institutes a proceeding in a wrong court provided this act was done in good faith and bona fide. The section has to be interpreted liberally in a manner to advance the cause of justice rather than to abort the proceedings. The plaintiff has to establish the fact that the prior proceedings have been instituted/prosecuted in good faith and due diligence. This is obviously a question of fact which the plaintiff has to prove.

22. I may note that usually the issue of limitation is a mixed question of law and fact. What defendant No. 1 seeks is an adjudication of the issue of limitation at the initial stage itself before even an opportunity has been given to the plaintiff to show that it was prosecuting the litigation before the Bombay High Court with due diligence and in good faith.

23. In this context reference may be had to Order 7 Rule 11 CPC which reads 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 written 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 form 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.]"

24. While considering an application under Order 7 Rule 11 CPC only averments made in the plaint are to be looked at and the accompanying documents. Reference in this context may be had to the judgment of this court in the case of Tilak Raj Bhagat vs. Ranjit Kaur wherein this court held as follows:-

"6. It may be worthwhile to mention here that while considering an application under Order 7 Rule 11 CPC, the Court has to look at the averments made in the plaint by taking the same as correct on its face value as also the documents filed in support thereof. Neither defence of the defendant nor averments made in the application have to be given any weightage. Plaint has to be read as a whole together with the documents filed by the plaintiff."

25. To the same effect are the judgments of the Division Bench of this Court in the case of Indian City Properties Ltd. Vs. Vimla Singh & Ors. MANU/DE/0331/2013 : (2013) 198 DLT 432 and in the case of Inspiration Clothes & U vs. Collby International Ltd., MANU/DE/1315/2000 : (2000) 88 DLT 769.

26. Reference may also be had to the judgment of the Supreme Court in the case of Hardesh Ores Pvt. Ltd. v. Hede and Company MANU/SC/7671/2007 : (2007) 5 SCC 614 wherein the court noted as follows:

"25. The language of Order 7 Rule 11 CPC is quite clear and unambiguous. The plaint can be rejected on the ground of limitation only where the suit appears from the statement in the plaint to be barred by any law. Mr. Nariman did not dispute that "law" within the meaning of clause (d) of Order 7 Rule 11 must include the law of limitation as well. It is well settled that whether a plaint discloses a cause of action is essentially a question of fact, but whether it does or does not must be found out from reading the plaint itself. For the said purpose the averments made in the plaint, in their entirety must be held to be correct."

27. Reference may also be had to the judgment of the Supreme Court in the case of Nusli Neville Wadia v. Ivory Properties & Ors. where it is held as follows:-

"73. A Three-Judge Bench of this Court in Major S.S. Khanna v. Brig. F.J. Dhillon, MANU/SC/0020/1963 : AIR 1964 SC 497, has held that jurisdiction to try issues of law apart from the issues of fact may be exercised by the Court if the whole suit may be disposed on the issue of law alone, but the Code confers no jurisdiction upon the Court to try a suit on the mixed issue of law and facts as preliminary issues.

74. In Narne Rama Murthy v. Ravula Somasundaram, MANU/SC/0492/2005 : (2005) 6 SCC 614, this Court has held that even if it is apparent from the plaint averment only, that suit is barred by limitation, it can be tried as a preliminary issue even in the absence of plea of limitation raised by the defendants. However, in cases where the question of limitation is a mixed question of fact and law and suit does not appear to be barred by limitation on the face of it, then the facts necessary to prove limitation, which have been pleaded have to be proved, on issues raised and decided on evidence. However, in our considered opinion question of limitation, in no case, can be said to be a question of jurisdiction of the Court in the context it has been used in Section 9A CPC.

75. In Satti Paradesi Samadhi and Pillayar Temple v. M. Sankuntala (Dead) through Legal Representatives, MANU/SC/0601/2014 : (2015) 5 SCC 674, it has been observed that issue of limitation requiring an inquiry into the facts, cannot be tried as a preliminary issue. The mixed questions of law and facts cannot be decided as a preliminary issue.

..

77. In Vaish Aggarwal Panchayat v. Inder Kumar, MANU/SC/0927/2015 : AIR 2015 SC 3357, the question came up for consideration of rejection of the plaint under Order VII Rule 11 on the ground that same being barred by limitation. Mere ex facie reading of the plaint, it could not be held that the suit was barred by time. The question of limitation becomes a mixed question of facts and law and cannot be decided as a preliminary issue as the framing of issues and taking evidence was necessary.

78. In our opinion, it cannot be laid down as proposition of law under Order VII Rule 11(d) that plaint cannot be rejected as barred by limitation. It can be said that it is permissible to do so mainly in a case where the plaint averment itself indicate the cause of action to be barred by limitation and no further evidence is required to adjudicate the issue."

28. Hence, for the purpose of considering an application under Order 7 Rule 11 CPC only the averments made in the plaint have to be taken presuming them to be correct on the face of it along with the documents filed in support of the plaint. It is only in cases where the averments in the plaint itself indicate the cause of action to be barred by limitation that the plaint can be rejected at the initial stage. This must be on a mere ex facie reading of the plaint.

29. The facts of the present case as narrated in the plaint show that the plaintiff had given the necessary facts about having filed the suit initially before the Bombay High Court. The same was allowed to be withdrawn on the plea that the plaint was to be filed in appropriate court in the territory of Delhi. The court accordingly directed return of the plaint. The suit was then filed in this court.

30. I also cannot help noticing that there are correspondence exchanged between the parties including a communication dated 6.1.2014 and 14.1.2014 where some acknowledgement of debt due has been made by defendant No. 1. In my opinion, on a reading of the plaint and the accompanying documents it cannot be said that the plaintiff has failed to plead the cause of action in his favour and the plaint is liable to be rejected at the threshold. As noted above, every act of the plaintiff in filing a suit in a court other than the court which as per the Agreement has exclusive jurisdiction, does not necessarily imply that the act was done without due diligence or in good faith. It would be for the plaintiff to lead evidence on this aspect. What the defendant want is that the defence of the defendant be taken into account and the plaint be dismissed without giving an opportunity to the plaintiff to lead evidence to show that the reason for pursuing the matter before the Bombay High Court was bona fide and with due diligence. This plea is clearly not permissible. On a ex-facie reading of the plaint it cannot be said that it is barred by limitation.

31. There is no merit in the present application and the same is dismissed.

CS(OS) 105/2018

List before Joint Registrar on 20.07.2020 for further proceedings.


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