Sean Dushyant Manchanda & Anr. v. Rabia Manchanda & Ors.

13. In connection with the argument based on estoppel, learned counsel for the defendants cited the following judgments:a. In Bhargavi Constructions vs. Kothakapu Muthyam Reddy[2], the Supreme Court held that the scope of Order VII Rule 11(d) of the CPC, to reject a plaint on the ground that it is “barred by law”, is not confined to statutory prohibitions alone, but extends also to bars imposed by judicial decisions. b. Mumbai International Airport (P) Ltd. vs. Golden Chariot Airport[3] holds that the doctrine of election of causes of action and the doctrine of approbate/ reprobate are really species of estoppel. Learned Senior Counsel submitted that this would constitute a legal bar, albeit not statutory, to the plaintiffs’ suit. In the said judgment, the Supreme Court posed the following questions:-

The Court relied upon various English and Indian judgments for the proposition that a party having chosen a remedy, and taken the benefit of orders passed thereunder, cannot thereafter take an inconsistent plea[4]. c. The Division Bench of this Court, in Asha Sharma vs. Sanimiya Vanijiya P. Ltd.[5] affirmed the judgment of a learned Single Judge, dismissing a suit under Order VII Rule 11(d) of the CPC on the ground of estoppel by pleading and acquiescence. The learned Single Judge expressed the principle in the following terms 6:-

19. The Supreme Court held, in Jai Narain Parasrampura (Dead) and Others v. Pushpa Devi Saraf and Others (2006) 7 SCC 756 that: “While applying the procedural law like principle of estoppel or acquiescence, the court would be concerned with the conduct of a party for determination as to whether he can be permitted to take a different stand in a subsequent proceeding, unless there exists a statutory interdict.” The court also held: “The doctrine of estoppel by acquiescence was not restricted to cases where the representor was aware both of what his strict rights were and that the representee was acting on the belief that those rights would not be enforced against him. Instead, the court was required to ascertain whether in the particular circumstances, it would be unconscionable for a party to be permitted to deny that which, knowingly or unknowingly, he had allowed or encouraged another to assume to his detriment. Accordingly, the principle would apply if at the time the expectation was encouraged.” All these principles were reiterated and applied in Deewan Singh v. Rajendra Prasad Ardevi 2007 (10) SCC 528. xxxx xxxx xxxx

22. In the decision reported as N.V. Srinivasa Murthy v. Mariyamma (2005) 5 SCC 548, while adverting to the T. Arivandandam v. T.V. Satyapal 1977 (4) SCC 467 it was held: “This is a fit case not only for rejecting the plaint but imposing exemplary costs on the appellant on the observations of this Court in the case of T. Arivandandam v. T.V. Satyapal: “The trial court must remember that if on a meaningful - not formal - reading of the plaint it is manifestly vexatious and meritless in the sense of not disclosing a clear right to sue, it should exercise its power under Order 7 Rule 11 CPC taking care to see that the ground mentioned therein is fulfilled. If clever drafting has created the illusion of a cause of action, the court must nip it in the bud at the first hearing by examining the party searchingly under Order 10 CPC. An activist judge is the answer to irresponsible law suits. The trial courts would insist imperatively on examining the party at the first hearing so that bogus litigation can be shot down at the earliest stage. The Penal Code is also resourceful enough to meet such men (Chapter 11) and must be triggered against them.”

23. The previous pleadings adverted to above, by this Court, clearly estop the plaintiffs from disputing the validity of the documents, impugned in these proceedings. Though the suit alleges fraud, the elements and basis of such fraud are tell tale and vague. The suit is a disguised attempt to attack the title to something which the vendor herself did not dispute in her lifetime; the plaintiffs elected in their pleadings, in the revision, not to challenge these documents. Therefore, the suit is not maintainable on the principle of estoppel by pleading, and acquiescence.”7 The Division Bench[8] affirmed this view, holding as follows:-

14. Learned Senior Counsel for the defendants also cited the following judgments to argue that a plaint filed in abuse of process can be rejected on that ground alone:a. In Sopan Sukhdeo Sable vs. Assistant Charity Commissioner12, the Supreme Court reiterated that the power under Order VII Rule 11 of the CPC can be exercised at any stage of the suit, based upon a holistic and meaningful reading of the plaint. For this purpose, the pleas taken by defendant in the written statement would, however, not be looked into. Upon consideration of the authorities, the Court held as follows:-

c. In Dahiben vs. Arvindbhai Kalyanji Bhanusali15 the Supreme Court emphasized the duty of the Court to cut short manifestly vexatious and meaningless litigation at the stage of Order VII Rule 11 of the CPC, for which purpose the Court can look not only at the plaint but also at the documents filed with it. The following observations of the Court are relevant for the purposes of the present suit:- “23.8. Having regard to Order 7 Rule 14 CPC, the documents filed along with the plaint, are required to be taken into consideration for deciding the application under Order 7 Rule 11(a). When a document referred to in the plaint, forms the basis of the plaint, it should be treated as a part of the plaint.

23.9. In exercise of power under this provision, the court would determine if the assertions made in the plaint are contrary to statutory law, or judicial dicta, for deciding whether a case for rejecting the plaint at the threshold is made out.

23.12. In Hardesh Ores (P) Ltd. v. Hede & Co. [(2007) 5 SCC 614] the Court further held that it is not permissible to cull out a sentence or a passage, and to read it in isolation. It is the substance, and not merely the form, which has to be looked into. The plaint has to be construed as it stands, without addition or subtraction of words. If the allegations in the plaint prima facie show a cause of action, the court cannot embark upon an enquiry whether the allegations are true in fact. D. Ramachandran v. R.V. Janakiraman [(1999) 3 SCC 267; See also Vijay Pratap Singh v. Dukh Haran Nath Singh, AIR 1962 SC 941].

23.13. If on a meaningful reading of the plaint, it is found that the suit is manifestly vexatious and without any merit, and does not disclose a right to sue, the court would be justified in exercising the power under Order 7 Rule 11 CPC.

23.14. The power under Order 7 Rule 11 CPC may be exercised by the court at any stage of the suit, either before registering the plaint, or after issuing summons to the defendant, or before conclusion of the trial, as held by this Court in the judgment of Saleem Bhai v. State of Maharashtra [(2003) 1 SCC 557]. The plea that once issues are framed, the matter must necessarily go to trial was repelled by this Court in Azhar Hussain case [1986 Supp SCC 315].

23.15. The provision of Order 7 Rule 11 is mandatory in nature. It states that the plaint “shall” be rejected if any of the grounds specified in clauses (a) to (e) are made out. If the court finds that the plaint does not disclose a cause of action, or that the suit is barred by any law, the court has no option, but to reject the plaint.”16

15. Learned counsel for the plaintiffs, on the other hand, submitted that a plea based on Order II Rule 2 of the CPC and acquiescence ought not to be decided under Order VII Rule 11 of the CPC but at the final hearing of the suit. Learned counsel submitted that, until the pleadings in both suits are read in evidence, the Court cannot determine the question of identity of causes of action. For this purpose, she cited the following judgments:a. In Soumitra Kumar Sen vs. Shyamal Kumar Sen17, the Supreme Court affirmed a judgment of the Trial Court and the High Court dismissing an application under Order VII Rule 11 of the CPC on the grounds of res judicata. The order of the Trial Court, extracted in paragraph 6 of the judgment of the Supreme Court, shows that a conclusion on this aspect required reference to the defences taken in the written statement and did not emanate from a reading of the plaint. The Supreme Court affirmed this view18. Learned counsel emphasised that the Court has approved the dictum of the High Court to the effect that the principle of res judicata raises a mixed question of fact and law for which rejection of a plaint is inappropriate. b. Reliance was placed upon Anwari Bibi vs. Khairatan Bibi & Ors.19, wherein the Patna High Court found that the question of acquiescence, waiver, etc., upon which the defendants sought

Ibid.; paragraph 8. Order dated 14.09.2016 in Civil Revision No. 121 of 2016 [MANU/BH/1432/2016]. rejection of a plaint, required examination of the defence and held that the matter required trail on evidence. c. The judgment in Gurbux Singh vs. Bhooralal20 was cited in support of the contention that the bar under Order II Rule 2 of the CPC can be examined only after the pleadings in the two suits in question are placed in evidence. The Court found that in that case, the pleadings in the earlier suit were not placed in evidence in the subsequent suit and, therefore, held that Order II Rule 2 of the CPC could not be applied. To the same effect are the judgment of the Supreme Court in Kunjan Nair Sivaraman Nair vs. Narayanan Nair21 and two judgments of this Court – Suresh Kakkar vs. Mahender Nath Kakkar22 and Maya Devi vs. Rajeshwar23. d. In R.S. Muthuswamy Gounder vs. A. Annamalai24, the Madras High Court held that the question of acquiescence would arise only if an act is done by a party with full knowledge of his rights. Learned counsel submitted that, in the present case, the 2012 suit was filed when the plaintiff was ignorant of his rights and could not constitute acquiescence. e. It was submitted that in Canara Bank vs. Canara Sales Corpn.25 also, the Supreme Court held that a plea of acquiescence would AIR 1964 SC 1810.

(2008) 105 DRJ 211.

AIR 1981 Madras 220. AIR 1987 SC 1603. arise only if a party remained silent about a matter after knowing the truth of the matter. f. On the question of estoppel, the judgment of the Nagpur High Court in Govindsa Marotisa vs. Ismail26 was referred to, to the following effect:-

Learned counsel emphasised that pleas of acquiescence and estoppel require a finding that a person has assented to violation of rights of which he/she is aware. She also submitted, relying upon Moolji Sicca AIR 1950 Nagpur 22. & Co. vs. Ramjan Ali27, that a plea of fraud, such as taken by the plaintiffs in the present case, negates a claim of estoppel by the party against whom fraud is alleged. She relied upon Abdul Kader Chaudhury vs. Upendra Lal Barua28 to submit that the question of acquiescence cannot arise by mere silence unless the person concerned is under a duty to speak.

16. For the purpose of the present case, the following principles laid down in these judgments are of relevance:-

17. The first submission which requires consideration is whether the pleas raised by the defendants, which are admittedly based on a comparison of the plaintiffs’ case in the 2012 suit and in the present suit, can at all be considered at this stage. The judgments cited on behalf of the plaintiffs — Gurbux Singh29, Kunjan Nair Sivaraman Nair30 and Soumitra Kumar Sen31 of the Supreme Court, and Suresh Supra (note 20). Supra (note 21). Supra (note 17). Kakkar32 and Maya Devi33 of this Court — all suggest that a plaint cannot be rejected on such a ground without the pleadings in the earlier suit being placed in evidence. For this reason, the course suggested in Soumitra Kumar Sen34 is that, instead of rejecting a plaint under Order VII Rule 11 of the CPC on grounds of res judicata or Order II Rule 2 of the CPC, it would be appropriate to frame a preliminary issue to be tried on evidence.

18. However, there is a crucial distinction between this line of decisions and the present case, which is that the plaint in the 2012 suit has been placed in evidence by the plaintiffs themselves. In Gurbux Singh35, the Court has categorically recorded that the pleadings in the earlier suit in question were not placed in evidence. It is for this reason that the Court found that the identity of causes of action in the two suits had not been proved. The judgment in Kunjan Nair Sivaraman Nair36 follows paragraph 6 of Gurbux Singh37. In Soumitra Kumar Sen38 also, it is clear that the pleadings in the earlier proceedings were not placed before the Court. Suresh Kakkar39, which has been followed in Maya Devi40, establishes the same factual position in that case. Supra (note 22). Supra (note 23). Supra (note 17). Supra (note 20); paragraph 6. Supra (note 17); paragraph 12. Supra (note 22); paragraph 8. Supra (note 23).

19. These judgments must be seen in the light of the settled legal position that the Court is not entitled to look into the written statement and defendants’ documents at the stage of an application under Order VII Rule 11 of the CPC. In Gurbux Singh41 and Kunjan Nair Sivaraman Nair42 the issue was not of the stage at which such a decision could be taken because those cases had concluded on trial. Be that as it may, they establish that these legal bars can be considered only if the pleadings in the prior suit are in evidence. Where the plaintiffs have themselves placed the requisite pleadings on record, the documents come within the scope of consideration, even under Order VII Rule 11 of the CPC. I am, therefore, of the view that the defendants’ contentions can be examined at this stage, while adhering to the fundamental principle that only the plaint and documents filed by the plaintiff can be looked at. ii. Analysis of pleadings in both suits.

20. In this light, the next task is to analyse the case of the plaintiff in the two suits, so as to determine whether they are inconsistent, as suggested by the defendants.

21. It is SDM’s case that, as a child, he lived in the front portion of the suit property with his parents. His parents divorced when he was about eleven years old and he has lived in the United States since

1984. Although he has not visited India very frequently since moving to the United States, he continued to share a good relationship with his father who, in fact, also set up an education fund for SDM’s daughter (plaintiff No. 2 herein). In both suits, SDM asserts that the suit property was at all times HUF property and was managed by ADM as karta for the benefit of all the coparceners. To this extent, the narrative in both suits is on the same lines.

22. In the 2012 suit, SDM challenged ADM’s marriage to RM and adoption of a child as well as his will. He asserted a claim to the HUF property which he knew had been sold and proceeds whereof were partially lying in the banks and financial institutions which were made party to the suit. Significantly, the plaint of the 2012 suit demonstrates SDM’s knowledge that the property had been redeveloped and that third parties were living there.

23. It may also be noted that the reliefs claimed in the 2012 suit were in respect of the proceeds of sale and not in respect of the property itself. In fact, although SDM claims to have known of the existence of tenants in the property, even during ADM’s lifetime, no attempt was made to assert any right to the property or any income derived therefrom prior to 2012.

24. The present suit was filed after SDM was granted partial relief in the 2012 suit, to the extent of release of some of the alleged HUF assets. At this stage, he also applied for amendment of the 2012 suit.

25. In the present suit, the case now run is of a fraudulent disposal of HUF property by ADM in favour of DS and in favour of third parties – defendant Nos. 5(a) to 5(e) (through Saluja). In this suit, the plaintiffs continue to assert that the suit property was always HUF property, and do not suggest that this was not known to SDM at any stage. The plea of a fraudulent alienation of property, contrary to ADM’s responsibility as karta of the HUF, and without SDM’s consent, is a new plea purportedly based upon documents unearthed by SDM after the filing of the 2012 suit. The plea regarding discovery of these documents during the period January to March, 2014 is that SDM then became aware of the nature of the transactions entered into by ADM i.e. that he had entered into a Collaboration Agreement with Saluja and relinquished some of his rights in favour of DS.

26. A reading of paragraphs 8, 11 and 12 of the present suit (as amended) makes it clear that the cause of action now pleaded is based upon this change in circumstances:-

12. Although several attempts were made by the Plaintiff No.1 to get discovery of the documents in relation to the HUF Property at 3/10, Shanti Niketan, the Defendants in the said Suit did not cooperate. Meanwhile, certain interim orders were passed by the Hon'ble Court in the said Suit thereby protecting the monies which were lying in the Bank Account HUF of late A.D. Manchanda. The Plaintiff No.1 seeks to refer to and rely upon the said Suit as well as the proceedings, order sheets, and documents of the said Suit for the purposes of the present suit as well. It is important to point out that the stand which the Plaintiff No.1 took as the basis of his earlier Suit being CS (OS) No. 2933 of 2012 was due to the deception exercised by Defendant No. 2 and late A.D. Manchanda. Both persons did not inform the Plaintiff No. 1 of the Collaboration Agreement with Defendant No. 3. The information provided by these persons was accepted by the Plaintiff No. 1 in good faith. It is only after his father's death and when the Plaintiff No. 1 attempted to settle his father's affairs that he was informed by Defendant NO. 2, that his father had sold off the Shanti Niketan Property and some part of the Sale proceeds were deposited with Citi Bank. That the Plaintiff No.1 had no occasion and reason to disbelieve his father's sister, Defendant No.2. Thus the Plaintiff No.1 proceeded on this basis and sought orders pertaining to the bank accounts and movable properties. The Defendant No. 2 however refused to share the particulars of the sale, i.e. when the property was sold, the manner of the sale, to whom the property was sold, the consideration for the sale, the documents executed, etc. The Plaintiff No.1 thereafter kept asking his aunt i.e. Defendant No. 2 to produce the documents to enable him to verify the particulars of the so called sale without success.”

27. I am of the view that the assertions now sought to be made in the present suit are indeed inconsistent with the 2012 suit. Even in the 2012 suit, SDM asserts rights on the basis that the suit property is HUF property and that the property has been alienated by ADM. However, he does not claim the property, but only the proceeds thereof. There is no suggestion in the unamended 2012 suit that the alienation was without SDM’s knowledge or consent. These revelations, even taken to be correct, cannot, in my view, justify a wholesale reimagination of the plaintiffs’ claims. Having sued for the proceeds of sale, and indeed obtained partial relief a few months prior to the filing of the present suit, the plaintiffs cannot now seek to reverse the series of transactions which resulted in those proceeds becoming available for them to claim.

28. The plaintiffs’ submission that the 2012 suit was for ADM’s share of the HUF property and the present suit is for SDM’s share therein is untenable for the following reasons:-

17.11.2014 passed on an amendment application filed by SDM. The amended plaint (which was amended on the basis of an application filed after SDM was in the knowledge of all the facts pleaded in the present suit) clearly asserts that the 2012 suit was based on the proceeds of the sale of the entire share of the HUF in the property. Reference in this connection may be made to paragraph 14 of the amended plaint:-

The claims in the 2012 suit, particularly prayer (iv), also show that it was for all HUF assets and not just the share of ADM:- “iv) Pass an Decree declaring that the Plaintiff and Defendant No. 8 are the only coparceners of the A.D. Manchanda (HUF) and entitled to all the assets of A.D. Manchanda (HUF) as set forth in the Scheduled Property;”

SDM proceeded on the basis that there was any distinction between his share and ADM’s share. The plaintiffs’ submissions were founded on this distinction, for which I find no basis in the pleadings, and indeed contrary indications as enumerated above. For the aforesaid reasons, I am of the view that a reading of the present plaint, and documents annexed therewith, shows that the claims of the plaintiffs are entirely inconsistent with the pleas in the 2012 suit. iii. Effect on the present suit.

29. What is the consequence of this analysis upon the fate of the present suit? The remedy sought by the defendants of rejection of plaint without trial is no doubt a drastic one. However, the judgments of the Supreme Court, inter alia in Sopan Sukhdeo Sable45, K. Akbar Ali46 and Dahiben47, emphasise the responsibility of the Court to thwart vexatious litigants. The judgment in Mumbai International Airport (P) Ltd.48, makes it clear that inconsistent pleas cannot be permitted. In Asha Sharma49, the Division Bench has held that such a plea — of “estoppel by pleadings” — can indeed be used to reject a plaint under Order VII Rule 11 of the CPC. The said judgment was sought to be distinguished on the basis that the case there was one of an admission in a pleading which was inconsistent with the case pleaded in a subsequent suit. I do not see any distinction on principle between the two situations. In the present case also, one has only to look at the pleading of the plaintiff in the 2012 suit to come to the conclusion that the plaintiff has elected to claim the proceeds of sale of the suit property, a position entirely at odds with the present claim for reversal of the very same sale.

30. The plaintiffs’ submissions on the applicability of the doctrine of acquiescence are also unmerited. SDM was clearly aware, even while filing the 2012 suit, that the suit property was HUF property, and that he had a share therein, which had been alienated. The precise manner of alienation or the modalities of the transactions into which his father entered were not material to his knowledge that he had legal rights and thus to his claim arising therefrom. The judgments cited by Supra (note 12). Supra (note 14). Supra (note 15). Supra (note 3). learned counsel for the plaintiffs hold that acquiescence can only apply if the party knows the facts and the legal basis upon which his claims arise. SDM clearly did.

31. Having regard to the above, I am of the view that the present case falls within the category of cases where the plaint ought to be rejected at the threshold on the grounds stipulated in Order VII Rule 11 of the CPC.

32. Having come to this conclusion on the basis aforesaid, I do not consider it necessary to adjudicate any other point raised by learned counsel for the parties.

D. CONCLUSION

33. For the aforesaid reasons, the applications are allowed and the plaint in CS(OS) 3277/2014 is rejected. CS(OS) 3277/2014 In view of the judgment in I.A. No. 8348/2015, I.A. NO. 16548/2015, I.A. No. 3310/2016 and I.A. No. 6799/2016, the suit stands dismissed. All interim orders stand vacated. All pending applications are disposed of.