HON'BLE MR. JUSTICE G.S.SISTANI G.S.SISTANI, J (ORAL)
2014:DHC:6131
civilappeal_dismissedSignificant
AI Summary
The Delhi High Court held that the plaint cannot be rejected under Order VII Rule 11 CPC merely due to absence of the owner's signature on the agreement to sell when there is sufficient material showing consent, and the suit discloses a cause of action.
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CS(OS)No.1214/2013 HIGH COURT OF DELHI CS(OS) 1214/2013
JUDGMENT
dated 17.11.2014 PARAG JAIN ..... Plaintiff Through: Mr.A.K. Singhla, Sr. Advocate with Mr.Sudhir Sukhija and Mr.Rama Shankar, Advs
versus
RAJNI JAIN & ORS ..... Defendant Through: Mr.Tarkeshwar Nath and Mr.Sanjay Kathuria, Advocates for defendants no.5 & 6 Mr.Rakesh Kumar, Advocate for defendant no.4 Mr.Sanjay Abbot and Mr.Ankit Aggarwal, Advocate for the defendants no.1 and 2
CORAM:
HON'BLE MR. JUSTICE G.S.SISTANI G.S.SISTANI, J (ORAL)
I.A. 17117/2013
1. This is an application filed by the defendant nos.[1] & 2 under Order VII Rule 11 CPC for rejection of the plaint.
2. Before the rival submissions of the parties are considered, it would be useful to notice some relevant facts, which have led to the filing of the present suit. As per the plaint, defendant no.1 is the owner of the property bearing No.E-142, Preet Vihar, Delhi, constructed on a plot of land measuring 192 sq. yrds., comprising of ground floor and the first floor (herein after referred to as suit property). Defendant no.2 is the husband of defendant no.1 and defendant no.3 is the tenant of the first floor. Defendant no.4 is the sister-in-law of the defendants no.1 and 2. 2014:DHC:6131 Defendant nos.[1] and 2 approached the plaintiff through the property dealer for sale of the said property.
3. As per the plaint, defendants no.1 and 2 represented to the plaintiffs that the defendant no.1 is the sole and absolute owner of the suit property based on a registered gift deed dated 3.10.2012 executed by the father of defendant no.1 in her favour. It is the case of the plaintiff that after negotiations, the total sale consideration was fixed at Rs.3.15 crores, out of which Rs.35.0 lacs was paid in cash, Rs.25.0 lacs was paid by means of a cheque and Rs.65.0 lacs was payable by 17.2.2013 and the balance amount was payable by 15.4.2013. An agreement to sell dated 08.02.2013 was signed between the parties, wherein defendants no.1 and 2 acknowledged the payment of Rs.35.0 lacs.
4. Counsel for the defendants submits that the present suit is not maintainable as it lacks cause of action, as there is no document which has been signed between the plaintiffs and the defendant no.1, who is admittedly the owner of the suit property. Reliance is placed on the original agreement to sell which has been placed on record wherein at the place, mentioned for first party/seller, is lying blank. It is submitted that since the agreement is not signed by the owner i.e. defendant no.1, the present suit is liable to be dismissed.
5. Counsel for the plaintiff, however, submits that the husband of the defendant no.1, defendant no.2, had signed on the agreement to sell dated 08.02.2013 on her behalf. The defendant no.1 (wife) was fully aware of the sale transaction and the cheque in the sum of Rs.25.0 lacs was drawn in her favour, though, the said cheque was returned due to technical reasons, and on account of the RBI guidelines and when the plaintiff learned of the same he made a transfer of Rs.25.0 lacs through RTGS in the account of the defendant no.1, particulars of which were provided by defendant no.1, but this payment could also not be cleared on account of certain lapses as well. Counsel also submits that the plaint cannot be rejected, at this stage, as the plaint has to be read as a whole, which would show that the defendant no.2 has acted on behalf of his wife with her knowledge and consent. Counsel also submits that a legal notice was issued to the defendants by registered AD post. The postal receipts and acknowledgments have been placed on record to show that the legal notices were received by defendant nos.[1] and 2, but no reply was sent.
6. Counsel for the applicants / defendants justifies the reply not having been issued, as he submits that the time for making payment by the plaintiff had already come to an end.
7. I have heard counsel for the parties and given my thoughtful consideration to the matter. It would be useful to reproduce Order VII Rule 11 of the Code of Civil Procedure:
“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 comply with the provision of Rule 9.”
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8. It is settled law that while considering an application under Order VII Rule 11 CPC, the plaint is to be read as a whole and it is only upon meaningful reading of the plaint, if the court comes to the conclusion that the plaint lacks cause of action that the same is to be rejected. The power to reject the plaint is to be exercised cautiously and judiciously and not lightly.
9. In support of his argument that the plaintiff has failed to produce any document on record signed by the defendant no.1, counsel for the applicants / defendants relies upon Church of Christ Charitable Trust and Educational Charitable Trust and Educational Charitable Society Vs. Ponniamman Educational Trust reported at (2012) 8 SCC 706 and more particularly paragraphs 16 & 17, which read as under:
“16. Mr. K. Parasaran, learned senior counsel by taking us through Form Nos. 47 and 48 of Appendix A of the Code which relate to suit for specific performance submitted that inasmuch as those forms are statutory in nature with regard to the claim filed for the relief for specific performance, the Court has to be satisfied that the plaint discloses a cause of action. In view of Order VII Rule 11(a) and 11(d), the Court has to satisfy that the plaint discloses a cause of action and does not appear to be barred by any law. The statutory forms require the date of agreement to be mentioned to reflect that it does not appear to be barred by limitation. In addition to the same, in a suit for specific performance, there should be an agreement by the defendant or by a person duly authorized by a power of attorney executed in his favour by the owner. 17. In the case on hand, the plaintiff-respondent to get a decree for specific performance has to prove that there is a subsisting agreement in his favour and the second defendant has the necessary authority under the power of attorney. Order VII Rule 14 mandates that the plaintiff has to produce the documents on which the cause of action is based, therefore, he has to produce the power of attorney when the plaint is presented by him and if he is not in possession of the same, he has to state as to in whose possession it is. In the case on hand, only the agreement between the plaintiff and the second defendant has been filed along with the plaint under
Order VII Rule 14(1). As rightly pointed out by the learned senior counsel for the appellant, if he is not in possession of the power of attorney, it being a registered document, he should have filed a registration copy of the same. There is no such explanation even for not filing the registration copy of the power of attorney. Under Order VII Rule 14(2) instead of explaining in whose custody the power of attorney is, the plaintiff has simply stated 'Nil'. It clearly shows non-compliance of Order VII Rule 14(2).”
10. In the above said case, plaintiff had failed to produce the Power of Attorney on record and the plaintiff had failed to satisfy the court that the power of attorney holder had the power to enter into an agreement to sell with the purchaser, therefore the plaint was rejected.
11. Counsel for the applicants / defendants also relies on a Single Judge Judgment passed in Ganpathi Infrabuild Pvt. Ltd. Vs. Sudarshana Duggal & Anr [CS(OS)No.1801/2011], decided on 24.05.2012 and more particularly paragraph 9, which is reproduced below:
“9. It appears that no collaboration agreement came into existence though parties had been negotiating in this regard. Plaintiff has itself placed on record a draft Collaboration Agreement. This Collaboration Agreement appears to has been prepared by the plaintiff but was not executed by and between the parties. Draft Collaboration Agreement placed on record by the plaintiff itself clearly indicates that parties were intending to enter into a Collaboration Agreement but somehow the deal could not be matured. This fact also indicates that the “Receipt‟ is a merely an acknowledgment on the part of defendant against the amount paid by the plaintiff to defendant during the negotiations and the same cannot be termed as “Agreement”, sufficient enough to bind the parties with regard to development of the property in question. Thus, the receipt, not being an Agreement, cannot be specifically enforced and the suit is without any cause of action, inasmuch as, is frivolous and vexatious.”
12. The aforesaid case is also not applicable to the facts of the case at hand as the said matter is related to the collaboration agreement and only a draft agreement was placed before the court. The court was of the view that in the absence of any formal agreement mere receipt of money would not bind the parties.
13. In my view, the case of Church of Christ Charitable Trust (Supra) is also not applicable to the facts of the present case, as in the case at hand, defendant no.2 is none-else but the husband of the defendant no.1, who is a lady and it is not unusual for a husband to act on behalf of his life partner in the Indian society. It may also be considered that the agreement to sell acknowledges Rs.35.0 lacs paid in cash and handing over of a cheque in the sum of Rs.25.0 lacs by the plaintiff. In case the seller had no knowledge about the sale, she would not have presented the cheque for encashment, though admittedly this cheque was returned unpaid.
14. A reading of Order VII Rule 11 CPC makes it abundantly clear that while deciding an application under Order VII Rule 11 CPC, the court is not required to take into consideration the defence set up by the defendant in his written statement. The question whether plaint discloses any cause of action, is to be decided by looking into the averments contained in the plaint itself. Further at the time of consideration of the application under order VII Rule 11 the CPC, the Court must not weigh the strength and weaknesses in the case of the plaintiff. The assertions made in the plaint must be assumed to be correct and the Court must not take into consideration the allegations made by the defendant in the written statement. While deciding the application the Court cannot keep into consideration whether the plaintiff may ultimately succeed or not. The Court is not to go into the correctness or falsity of the allegation and triable issues cannot be decided at the threshold. It will be useful to reproduce the observations of the Supreme Court in the case of Mayar [H.K.] Ltd. & Ors. Vs. Owners & Parties, Vessel M.V. Fortune Express & Ors. reported at AIR 2006 SC 1828:
"11. From the aforesaid, it is apparent that the plaint cannot be rejected on the basis of the allegations made by the defendant in his written statement or in an application for rejection of the plaint. The Court has to read the entire plaint as a whole to find out whether it discloses a cause of action and if it does, then the plaint cannot be rejected by the Court exercising the powers under Order VII, Rule 11 of the Code. Essentially, whether the plaint discloses a cause of action, is a question of fact which has to be gathered on the basis of the averments made in the plaint in its entirely taking those averments to be correct. A cause of action is a bundle of facts which are required to be proved for obtaining relief and for the said purpose, the material facts are required to be stated but not the evidence except in certain cases where the pleadings relied on are in regard to misrepresentation, fraud, willful default, undue influence or of the same nature. So long as the plaint discloses some cause of action which requires determination by the court, mere fact that in the option of the Judge the plaintiff may not succeed cannot be a ground for rejection of the plaint. In the present case, the averments made in the plaint, as has been noticed by us, do disclose the cause of action and, therefore, the High Court has rightly said that the powers under Order VII, Rule 11 of the Code cannot be exercised for rejection of the suit filed by the plaintiff-appellants."
15. In this case the plaintiff claims to have paid Rs.35.0 lacs to the defendant no.1 in cash and also handed over a cheque in the sum of Rs.25.0 lacs to her which she presented, but the same was not encashed on account of technical reasons. In my view these are all triable issues and on a meaningful reading of the plaint it can be seen that the plaint discloses no cause of action and it cannot be decided in the application under Order 7 Rule 11 CPC. Therefore, a case for rejection of plaint is not made out.
16. Accordingly, the application is dismissed. CS(OS) 1214/2013
17. Let the amended plaint be detached from part-II of the Court file and be placed in part-I.
18. At this stage, counsel for the parties suggest that the matter may be placed before the Delhi High Court Mediation & Conciliation Centre on 24.11.2014 at 4:00 p.m. Ordered accordingly.
19. List the matter before the Joint Registrar for completion of pleadings and for admission /denial of documents on 5.1.2015.
20. List the matter before Court on 19.2.2015 for framing of issues. Parties shall bring suggested issues to Court on the next date of hearing. G.S.SISTANI, J NOVEMBER 17, 2014 ssn/pdf
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