First Appeal No.190 of 2008

2nd May, 2014

Petitioner Counsel: Shri. A.D. BHOBE
Respondent Counsel: Shri. SHIVAN DESSAI, Mr. SANMAN KENY, Shri. S. VAHIDULLA
Other Counsel: Shri. J. GODINHO

Cases Cited:
State of Orissa Vs. Klockner and Company & Ors., AIR 1996 SC 2140 [Para 5,8]
M/s. Raptakos Brett & Co. Ltd. Vs. Ganesh Property, AIR 1998 SC 3085 [Para 5]
Liverpool & London S.P. & I Association Ltd. Vs. M.V. Sea Success I & Anr., 2005(4) ALL MR 17=(2004) 9 SCC 512 [Para 5,6,9,10]
T. Arivandandam Vs. T.V. Satyapal & Anr., (1977) 4 SCC 467 [Para 6,10]
I.T.C. Ltd. Vs. Debts Recovery Appellate Tribunal & Ors., (1998) 2 SCC 70 [Para 6,10]
Sopan Sukhdeo Sable & Ors. Vs. Assistant Charity Commissioner & Ors., 2004(5) ALL MR 360 (S.C.) =AIR 2004 SC 1801 [Para 6,10]

JUDGMENT

JUDGMENT :- The only point which arises in this appeal for consideration is :-

Whether the plaint can be rejected under Order VII, Rule 11(a) of the Code of Civil Procedure, on the ground that the plaintiff has no cause of action.

2. Heard Shri A. D. Bhobe, learned Advocate for the appellants, Shri. Shivan Dessai, learned Advocate for the respondents No.1,2,4 and 5, and Shri. S. Vahidulla, learned Government Advocate for the respondents No.6 to 8 and examined the record with the assistance of the learned Advocates.

3. The appellant had filed the suit praying for a decree for permanent injunction and mandatory injunction against the respondents No.1 to 5. The respondents No.1 to 4 had filed an application under Order VII, Rule 11 of the Code of Civil Procedure, praying for rejection of the plaint on the following grounds :

(i) There is no cause of action in favour of the plaintiff in the absence of any privity of contract spelt or brought out in the plaint.

(ii) That the original defendants No.6 to 9 have been impleaded as parties to the suit without any reason, only to bring it within the jurisdiction of the Court in which the suit was filed.

(iii) That the suit was under-valued.

4. The learned trial Judge, by the impugned order, concluded that there is no cause of action in favour of the appellant-original plaintiff and that the suit was under-valued. The learned trial Judge rejected the plaint on the ground that the appellant-original plaintiff had no cause of action to maintain and prosecute the civil suit. The appellant being aggrieved by the above mentioned order passed by the learned trial Judge, has filed this appeal.

5. Shri A. D. Bhobe, learned Advocate for the appellant has submitted that the trial Court has committed an error in rejecting the plaint on the ground that the appellant-original plaintiff has no cause of action in its favour. According to the learned Advocate for the appellant-original plaintiff, the plaint cannot be rejected under Order VII, Rule 11(a) of the Code of Civil Procedure on the ground that there is no cause of action in favour of the plaintiff. The learned Advocate has submitted that the provisions of Order VII, Rule 11(a) of the Code of Civil Procedure contemplate the rejection of the plaint only if the plaint does not disclose any cause of action. In support of his submissions, he relied on the following Judgments :

(1)AIR 1996 Supreme Court 2140, in the case of State of Orissa vs. Klockner and Company and others;

(2)AIR 1998 Supreme Court 3085, in the case of M/s. Raptakos Brett & Co. Ltd., vs. Ganesh Property, and

(3)(2004) 9 SCC 512 : [2005(4) ALL MR 17], in the case of Liverpool & London S.P. & I Association Ltd. vs. M.V. Sea Success I and another.

6. Shri Shivan Dessai, learned Advocate for the respondents has submitted that the learned trial Judge has properly considered the facts of the case and after appreciating the pleadings in the plaint, has properly come to the conclusion that the plaintiff has no cause of action in its favour and, therefore, the impugned order is proper. The learned Advocate for the respondents has submitted that the trial Court while considering the application under Order VII, Rule 11(a) of the Code of Civil Procedure is enjoined with a duty to examine that the plaint discloses clear right to sue, and it is not manifestly vexatious and meritless. The learned Advocate has submitted that the trial Court has to see whether the plaint is cleverly drafted to create the illusion of a cause of action and if it is found accordingly, then the illegality has to be nipped in the bud. In support of this submission, he relied on the judgment reported in (1977) 4 SCC 467, in the case of T. Arivandandam vs. T.V. Satyapal and another.

The submission on behalf of the respondent No.4 is that there is no privity of contract between the appellant-original plaintiff and the respondents No.1 to 5 and the original plaintiff has created an illusion by crafty pleadings which has been properly seen by the learned trial Judge and consequently the order rejecting the plaint under Order VII, Rule 11(a) of the Code of Civil Procedure is proper and does not require any interference.

Shri Dessai has pointed out from the impugned order the considerations by the learned trial Judge of the factual aspects in paragraph 16 of the impugned order. The learned Advocate for the respondents has submitted that the learned trial Judge has not committed any error in concluding that the appellant-original plaintiff- Society is not the owner of any plot or part of the suit property and the appellant-original plaintiff-Society has no cause of action to file any suit for redressal of the grievances of its members.

The learned Advocate for the respondents has submitted that the clause "does not disclose a cause of action" will also include the consideration by the Court as to whether the cause of action as disclosed in the plaint is genuine or an illusion of cause of action is created. Shri Dessai has relied on the judgments reported in:

(i) (1998) 2 SCC 70 in the case of I.T.C. Limited v/s. Debts Recovery Appellate Tribunal and others, and

(ii) AIR 2004 SC 1801 : [2004(5) ALL MR 360 (S.C.)] in the case of Sopan Sukhdeo Sable an ors. vs. Assistant Charity Commissioner and ors..

The learned Advocate relying on the judgment reported in (2004) 9 SCC 512 : [2005(4) ALL MR 17] in the case of Liverpool & London S.P. & I Association Ltd. vs. M.V. Sea Success I and another has submitted that the idea underlying Order VII, Rule 11 (a) of the Code of Civil Procedure is that when no cause of action is disclosed, the Courts will not unnecessarily protract the hearing of a suit and the Courts would interpret the provisions in such a manner so as to save expenses, achieve expedition and avoid the Court's resources being used up on cases which would serve no useful purpose.

7. Shri Vahidulla, learned Govt. Advocate appearing for the respondents No.6 to 8 has submitted that the respondents No.6 to 8 are formal parties.

8. After hearing the learned Advocates for the respective parties and considering their submissions, in my view, the impugned order is unsustainable in law. The Honourable Supreme Court in the case of State of Orissa vs. Klockner and Company and others, (supra) has upheld the reasonings of the High Court of Orissa in para 24. Para 24 reads thus :

"24. Now coming to Special Leave Petition (C) No. 19846/95, this petition is filed against the judgment and order of the High Court of Orissa at Cuttack in First Appeal No. 14/95 dated 12.5.95. By the Order under appeal, the High Court has reversed the Order of the learned Subordinate Judge, Bhubaneswar dated 26.3.94, by which the learned Subordinate Judge accepting an application filed under Order 7 Rule 11 CPC., rejected the plaint in title suit No. 231/92 filed by the first respondent in Special Leave Petition. The learned Single Judge of the High Court while reversing the Order of the learned Subordinate Judge observed as follows:

"In the present case on a fair reading of the petition filed by defendant No. 1 under Order 7, Rule 11 of CPC. it is clear that the case of the applicant is that the plaintiff has no cause of action to file the suit. It is not specifically pleaded by the applicant that the plaint does not disclose any cause of action. The learned trial Judge has also not recorded any specific finding to this effect. From the discussions in the Order it appears that the learned trial Judge has not maintained the distinction between the plea that there was no cause of action for the suit and the plea that plaint does not disclose a cause of action. No specific reason or ground is stated in the order in support of the finding that the plaint is to be rejected under Order 7, Rule 11(a). From the averments in the plaint, it is clear that the plaintiff has pleaded a cause of action for filing the suit seeking the reliefs stated in it. That is not to say that the plaintiff has cause of action to file the suit for the reliefs sought that question is to be determined on the basis of materials (other than the plaint) which may be produced by the parties at appropriate stage in the suit. For the limited purpose of determining the question whether the suit is to be wiped out under Order 7, Rule 11(1) or not the averments in the plaint are only to be looked into. The position noted above is also clear from the petition filed by defendant No. 1 under Order 7, Rule 11 in which the thrust of the case pleaded is that on the stipulations in the agreement of 20.4.82 the plaintiff is not entitled to file a suit seeking any of the reliefs stated in the plaint.

10. .

11. .

12. .."

After hearing the learned Counsel on both sides and after carefully perusing the relevant pleadings, we do not think that the High Court has committed any error in rejecting the application of the appellant under Order 7 Rule 11. We accept the view taken by the High Court and consequently find no case for interference."

The present case is thus covered by the law laid down by the Honourable Supreme Court.

9. Further more, the submissions made by Shri Bhobe, learned Advocate for the appellants are supported by the judgment of the Honourable Supreme Court in the case of Liverpool & London S.P. & I Association Ltd. vs. M.V. Sea Success I and another, [2005(4) ALL MR 17] (supra). The relevant paragraphs of the said Judgment are as follows :

"139. Whether a plaint discloses a cause of action or not 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. The test is as to whether if the averments made in the plaint are taken to be correct in their entirety, a decree would be passed.

146. It may be true that Order 7 Rule 11(a) although authorises the court to reject a plaint on failure on the part of the plaintiff to disclose a cause of action but the same would not mean that the averments made therein or a document upon which reliance has been placed although discloses a cause of action, the plaint would be rejected on the ground that such averments are not sufficient to prove the facts stated therein for the purpose of obtaining reliefs claimed in the suit. The approach adopted by the High Court, in this behalf, in our opinion, is not correct.

151. In ascertaining whether the plaint shows a cause of action, the court is not required to make an elaborate enquiry into doubtful or complicated questions of law or fact. By the statute the jurisdiction of the court is restricted to ascertaining whether on the allegations a cause of action is shown...."

10. As far as the the Judgment of the Honourable Supreme Court in the case of Sopan Sukhdeo Sable an ors. vs. Assistant Charity Commissioner and ors., [2004(5) ALL MR 360 (S.C.)] (supra), relied upon on behalf of the respondents No.1,2, 4 and 5 is concerned, in that case an application under Order VII, Rule 11 of the Code of Civil Procedure was filed on the ground that Section 80 of the Bombay Public Trusts Act, 1950 creates a bar for adjudication of the suit by the Civil Court. Thus, the case was not under Order VII, Rule 11(a) of the Code of Civil Procedure.

In the case of I.T.C. Limited v/s. Debts Recovery Appellate Tribunal and others (supra), the Honourable Supreme Court has considered the case of rejection of the plaint on the ground that there was no cause of action against the defendants in that suit. The relevant paragraph in that Judgment is paragraph 10, which reads thus :

"10. Learned counsel for the appellant-Company, Shri Soli J. Sorabjee, contended that the Court was entitled to reject the plaint under Order 7 Rule 11 CPC at any stage of the suit even if the issues were framed and even if the matter was posted for evidence. Learned counsel also contended that it is well settled that in regard to payment under Bank Guarantees or irrevocable Letters of Credit, the contract between the sellers (appellant) and the Bank was independent of the contract between the buyers and sellers in respect of the goods and that the Bank had no authority to refuse payment on the ground of any alleged breach of contract by the sellers in their contract with the buyers. The only exceptions which have been recognised by the courts were cases of fraud or irretrievable injury. In the case of those exceptions, the buyer could seek an injunction against the Bank before the Bank paid money to the sellers. No such injunction was sought by the buyers. Further, the exceptions relating to forgery or fraud and misrepresentation recognised by the courts relate to forgery or fraudulent presentation of the documents tendered to the Bank. The case on hand did not come within the said exceptions and, therefore, there was no cause of action against the appellant. Learned counsel also contended, that merely because the word fraud or misrepresentation were used in the plaint, the Bank could not claim that the said allegations have to be accepted as true for purposes of Order 7 Rule 11 CPC." (emphasis supplied)

The Judgment in the case of T. Arivandandam vs. T.V. Satyapal and another (supra), is again given in the facts of that case which showed that after the decree for eviction was granted by the Court, maintained upto the High Court and time of six months to vacate the premises was sought by the judgment-debtor and the benefit was enjoyed and the Court's generosity was exploited to the full, the son of the judgment-debtor had filed the suit, praying for a declaration that the decree of eviction passed in the earlier suit was obtained by fraud and collusion. In these glaring facts, the Honourable Supreme Court has rendered the above Judgment.

Similarly, the reliance placed by Shri Dessai, learned Advocate for the respondents No.1,2,4 and 5 on paragraph Nos.132 and 133 of the judgment in the case of Liverpool & London S.P. & I Association Ltd. vs. M.V. Sea Success I and another, [2005(4) ALL MR 17] (supra), are also not of any assistance to the respondents No.1 to 5.

11. In view of the above, the appeal is allowed. The impugned order is set aside. The application filed by the respondents-defendants No.01 to 05 under Order VII, Rule 11 of the Code of Civil Procedure is rejected. The matter is remitted to the trial court for adjudication on merits, according to law. In the circumstances, the parties to bear their own costs.

12. Civil Application at Stamp No.1189/2014 dated 23.4.2014 has been filed by one Ms. Eugenia Rodrigues, resident of Tonca, Caranzalem, praying that she may be impleaded as party respondent in the appeal. This application is filed on or about 23rd April, 2014, after the appeal was partly heard. The hearing of the appeal had started on 4th April, 2014 and then it was shown as part-heard on the Board.

The applicant/intervenor has not given justifiable reasons to consider her application. The applicant/intervenor has not explained as to why she has not taken any steps to get herself impleaded before the trial Court. In view of the facts on the record, I find that there is no substance in the application. The application is rejected at this stage. However, the applicant/intervenor is at liberty to move an appropriate application before the trial Court, if so advised and, if an application is filed by the applicant/intervenor, it shall be considered by the trial Court according to law.

13. At this stage, Shri Bhobe, learned Advocate for the appellant, Shri A. Gaonkar, learned Advocate holding for Shri Shivan Dessai, for the respondents No.1,2,4 and 5, Shri Sagar Dhargalkar, learned Additional Govt. Advocate for respondents No.6 to 8 jointly request that a date for appearance before the trial Court may be given. (The record shows that respondent No.3 is dead). The parties shall appear before the District Judge-I, Mapusa on 2nd July, 2014 at 10.00 a.m.

Appeal allowed.