Badal and Others vs Niranjan Proptech and Others

Anil Kumar, J.

IA No. 8459/2008 in CS(OS) No. 1030/2008

This is an application by the defendants under Order VII Rule 11(a), (b) and (d) read with Section 151 of the Code of Civil Procedure, 1908 seeking rejection of the plaint.

The applicants/defendants have contended that the plaintiffs have filed the above noted suit for declaration that the Sale Deed dated 21st September, 2007 executed by defendant No. 2 as an Attorney of the plaintiff in favour of defendant No. 1 is void and illegal and seeking cancellation of the same and also seeking declaration that the Agreement to Sell dated 31st January, 2005 executed between the plaintiffs and defendant No. 3 was void and ineffective and the cancellation of the said Agreement to Sell and that the Power of Attorney dated 31st January, 2005 executed by the plaintiffs in favour of defendant No. 2 being void and ineffective and cancellation of the same and perpetual injunction restraining the defendants from dispossessing the plaintiffs from the suit land measuring 9 Bighas and 18 Biswas and 12 Biswanis out of the agricultural land/property forming part of Mustatil No. 60, Kila No. 4/3 [1-12], 7 [4-8], 8 [4-16], 12 [4-9], 13 Min. [4-2], 18 Min. [1-4], 23 Min. [0-12], 26 Min. [0-5], 28 [0-17], situated in the Revenue estate of Village Bijwasan, Tehsil Vasant Vihar, New Delhi or creating any third party interest over the same.

The applicants/defendants have contended that the plaintiffs. case is that they were the owners of suit land and entered into an Agreement to Sell dated 31st January, 2005 with defendant No. 3 for a total consideration of Rs. 15,10,000/- and the Agreement to sell was registered being Registration No. 1304 in Book No. 1, Volume No. 1804 on pages No. 125 to 130, registered with the Sub-Registrar IX, New Delhi. It is also contended that the plaintiffs had executed a General Power of Attorney and Special Power of Attorney dated 31st January, 2005 in favour of defendant No. 2. The Special Power of Attorney was also registered with the Sub-Registrar IX and the General Power of Attorney was also registered with the Sub-Registrar IX. It is pleaded that in part performance of the Agreement to Sell dated 31st January, 2005, plaintiffs were given an amount of Rs. 15,00,000/-

The applicants/defendants have contended that in the suit filed by the plaintiffs it is alleged that the plaintiffs were not entitled/capable of transferring the suit land in view of Section 33 of the Delhi Land Reforms Act, 1954 and, therefore, the plaintiffs have allegedly revoked the Power of Attorney dated 31st January, 2005 vide Deed of Revocation dated 10th April, 2007 and a notice dated 15th April, 2007.

The applicants/defendants have sought rejection of the plaint on the ground that the plaint is devoid of cause of action against defendant No. 1 because the plaintiffs have nowhere stated that they have not received or are yet to receive the balance of Rs. 10,000/- in terms of Agreement to Sell. It is contended that the plaintiffs had handed over the suit land to defendant No. 3 and possession letter dated 4th February, 2005 had been issued in favour of defendant No. 3 and since the date of possession i.e. 4th February, 2005, plaintiffs have relinquished their rights to possession of the suit land and defendant No. 3 had been enjoying the peaceful and vacant possession over the land, It is asserted that the plaintiffs were left with no right or claim or interest on the suit land.

Rejection of the plaint is also sought on the ground that under Clause 4 of the Agreement to Sell dated 31st January, 2005, the plaintiffs had to apply and obtain requisite "No Objection Certificate" u/s 8 of Delhi Land (Restriction on Transfer) Act, 1972 and to check out the impediment under the Delhi Land Reforms Act, 1954. It is asserted that on receipt of ''No Objection'' from the requisite authorities, the plaintiffs had to execute the sale deed in respect of the demised land in favor of the beneficiaries or the nominees of the defendant No. 3. The plaintiffs allegedly had applied for requisite permission before the concerned Additional District Magistrate for ''No Objection'' which was granted vide No. 3929 dated 6th September, 2007 and thereafter, the sale deeds were executed on 21st September, 2007 within the period of validity as permitted by the competent authority. It is alleged that the act of execution of the Deed of Revocation within the period of such validity is a clear act of fraud and dishonesty on the part of the plaintiffs to deprive the legitimate rights of defendant No. 1. It is contended that there is no legal defect in the Sale Deed dated 21st September, 2007.

Rejection of the plaint is also sought on the ground that after over three years of the Agreement to Sell, the plea of the plaintiffs that they did not have the knowledge about the restrictions over land transfer imposed by Section 33 of the Delhi Land Reforms Act, 1954 is nothing but a clear attempt to deprive the defendant No. 1 of the rightful and lawful ownership of the suit land only with an intention to sell the suit land for a much higher prices, as the prices in that sector of real estate have gone up manifold and, therefore, the plaintiffs are not entitled for the relief of decree of declaration and cancellation of Sale Deed dated 21st September, 2007.

Rejection of the plaint is also sought relying on Clause 5 of the Agreement to Sell dated 31st January, 2005 contemplating that the entire sale consideration has been received by the plaintiffs and the Power of Attorneys, General and Special dated 31st January, 2005 could not be revoked after two and a half years of the receipt of the sale consideration by executing a Deed of Revocation which is also not registered. Rejection is also sought on the ground that merely sending a notice of revocation of the Power of Attorney does not entail revocation of Power of Attorneys, General and Special which were executed in favor of the defendants.

The applicants/defendants have also sought rejection of the plaint on the ground that Order VII Rule 11 of the Code of Civil Procedure, 1908 envisages a restriction on the institution of frivolous and vexatious suits so that no man gets the benefit of his own wrongs. In the circumstances, it is asserted that the plaint does not disclose cause of action and it is liable to be rejected. Rejection of the plaint is also sought on the ground that it is barred by limitation. It is contended that Agreement to Sell which was executed on 31st January, 2005 cannot be cancelled by instituting a suit on 22nd May, 2008, after three years from the date of execution.

The applicants/defendants have also asserted that the plaintiffs have misled this Court and have made false averments that they had not given the possession of the suit land and are still enjoying the possessory rights over the suit land. It is contended that the plaintiffs have suppressed the material facts. It is also asserted that the Deed of Revocation is vague as the plaintiffs had executed two Power of Attorneys, Special and General and the Deed of Revocation does not specify as to which Attorney or Attorneys have been cancelled.

The applicants/defendants have also sought rejection of the plaint on the ground that the suit is nothing but an attempt to provide a legal blanket to otherwise unlawful and illegal and nefarious designs of the plaintiffs as allegedly the Power of Attorneys in favour of the defendants have been revoked only on account of Section 33 of Delhi Land Reforms Act, 1954. In the circumstances, it is contended that the suit is barred under provisions of Order VII Rule 11(a) CPC as it does not disclose any cause of action.

The applicants/defendants have also sought rejection of the plaint on the ground that the plaintiffs are seeking declaration and cancellation of Agreement to Sell and the Sale Deed, however, ad valorem court fees has been paid only on one document and in the circumstances, it is claimed that the suit has not been properly valued properly for the purpose of court fees and jurisdiction and appropriate court fees has not been paid.

The application is contested by the plaintiffs/non-applicants. The plaintiffs have contended that the application is nothing but a dilatory tactics by the defendants to avoid filing the written statement and proceeding with the matter. It is asserted that the defendants know that the transactions between the plaintiffs and the defendants, wherein Agreement to sell was executed and consequent thereof the sale deeds were executed, were in violation of Section 33 of the Land Reforms Act. It is also contended that the plea of defendant No. 1 that the possession has been taken is false to the knowledge of defendants. The plaintiffs have relied on the photographs filed with the plaint showing that they are in actual and physical possession of the suit land.

The non-applicants/plaintiffs have contended that the Agreement to sell dated 31st January, 2005 contemplated that the possession of the land shall be handed over later on and in fact the possession was never handed over by the plaintiffs to the defendants. It is contended that for consideration whether the plaint is liable to be rejected or not, the pleas raised by the plaintiffs only have to be taken into consideration and not the defense raised by the defendants. In the circumstances, it is contended that there are no grounds to reject the plaint as the plaint discloses the cause of action and the Agreement to Sell and the Sale Deed being the same transaction, the court fees is not to be paid separately for cancellation of Agreement to Sell and the Sale Deed. It is pleaded that on the basis of the pleadings it is apparent that the total land holding of the plaintiffs was more than what was sold to the defendants and consequently the transaction between the plaintiffs and defendants is hit by Section 33 of Delhi Land Reforms Act and the suit for declaration and cancellation of documents, agreement to sell and sale deed is maintainable and is not liable to be rejected.

This cannot be disputed that plaintiffs in the plaint have alleged that they are owners and in possession of agricultural land measuring 22 Bighas and 5 Bighas comprised in Mustatil No. 60, Kila No. 4/3 [1- 12], 7 [4-8], 8 [4-16], 12 [4-9], 13 Min. [4-2], 18 Min. [1-4], 23 Min. [0- 12], 26 Min. [0-5], 28 [0-17], situated in the Revenue estate of Village Bijwasan, Tehsil Vasant Vihar, New Delhi. From the plaint, it is also apparent that the Agreement to Sell with the defendants was for 9 Bighas, 12 Biswas and 12 Biswanis, out of total 22 Bighas and 5 Biswas which was agreed to be sold to the defendant No. 3 for a total sale consideration of Rs. 15,10,000/- and out of this amount, an amount of Rs. 15,00,000/- was paid by defendants to the plaintiffs as earnest money. The plaintiffs have also alleged that they agreed to sell a part of the balance portion of the agricultural land to Sh. Abhay Aggarwal S/o Shri M.C. Aggarwal and Shri Sudhir Kumar Makkar S/o Shri A.N. Makkar by another Agreement to Sell dated 31st January, 2005 for a total sale consideration of Rs. 22,60,000/-.

The plaintiffs have categorically pleaded that since their land holdings was less than 8 standard acres, they could not sell part of the land, as the same was in violation of Section 33 of the Delhi Land Reforms Act, 1954 and it was not known to the plaintiffs at the time of the execution of the Agreement to Sell.

Section 33 of the Delhi Land Reforms Act, 1954 is as under:

Restrictions on the transfers by a Bhumidhar. - No Bhumidhar shall have the right to transfer by sale or gift or otherwise any land to any person, other than a religious or charitable institution or any person in charge of any such Bhoodan movement, as the Chief Commissioner may, by notification in the Official Gazette, specify , where as a result of the transfer, the transferor shall be left with less than eight standard acres in the Union Territory of Delhi:

Provided that the Chief Commissioner may exempt from the operation of this section, the transfer of any land made before the 1st day of December, 1958, if the land covered by such transfer does not exceed one acre in area and is used or intended to be used for purposes other than those mentioned in Clause (13) of Section 3.

(2) Nothing contained in Sub-section (1) shall preclude the transfer of land by a Bhumidhar who holds less than eight standard acres of land, if such transfer is of the entire land held by him; Provided that such Bhumidhar may transfer a part of such land to any religious or charitable institution or other person referred to in Sub-section (1)

Explanation � For the purposes of this section, a religious or charitable institution shall mean an institution established for a religious purpose or a charitable purpose, as the case may be.

In the circumstances, it is contended that the transfer in favor of defendants is void and immediately coming to know about it, a notice dated 15th April, 2007 was sent after General Power of Attorneys were revoked by a Deed of Revocation dated 10th April, 2007.

The plaintiffs have also contended that they offered to pay back the earnest money/sale consideration, however, the defendants refused to accept the same and the defendant No. 2 acting fraudulently, executed the sale deeds in favour of defendant No. 1 and the said fact came to the knowledge of the plaintiffs in April, 2008. It is contended that at the time of execution of the Agreement to Sell dated 31st January, 2005, the possession of the property was not given to the Attorney, defendant No. 3 and, therefore, when the Sale Deed dated 21st September, 2007 was executed by defendant No. 2 in favour of defendant No. 1, the possession could not be transferred to the defendant No. 1. The plaintiffs have valued the suit for purpose of declaration for the Sale Deed dated 21st September, 2007 being void executed by defendant No. 2 in favour of defendant No. 1 at Rs. 37,77,000/- and ad valorem court fees have been paid thereof.

The learned Counsel for the defendants/applicants has relied on a copy of Khasra Girdawari filed on behalf of the plaintiffs for year 2006- 07 contending that the entire land shown in the said Khasra Girdawari was sold to them except in 60/18 comprising 3 Bighas and 12 Biswas being Banzar land which vested in the Gaon Sabha, which is apparent from the Khasra Girdawari. Consequently, it is contended that the plaintiffs had sold their entire land holdings and, therefore, the transaction between the parties was not barred u/s 33 of the Delhi Land Reforms Act, 1954 and therefore, the plaint is liable to be rejected.

Rejection of plaint is a serious matter as it non suits the plaintiff and kills the cause of action and consequently it cannot be ordered cursorily without satisfying the requirements of the said provision. Order VII Rule 11 contemplates that a plaint can be rejected where the plaint does not disclose a cause of action or where the relief claimed is undervalued or where the relief claimed is properly valued but the plaint is written upon an insufficiently stamped paper or where the suit appears from the statement in the plaint to be barred by any law. In ascertaining whether the plaint discloses cause of action and that the suit has been properly valued or not, the pleas raised in the plaint only have to be considered. For this purpose the defense which is raised by the defendants is not to be considered on merits nor is the court competent to make an elaborate enquiry into doubtful or complicated question of law. The mere fact that the case is weak and not likely to succeed is no ground for striking it out on the ground that it does not disclose cause of action or inferring that the plaint has not been properly valued.

The purported failure of the pleadings to disclose a cause of action is distinct from the absence of full particulars. The court has not to see whether the claim made by the plaintiff is likely to succeed. It has merely to satisfy itself that the allegations made in the plaint, if accepted as true, would entitle the plaintiff to the relief he claims. So long as the plaint discloses some cause of action or raises some questions fit to be decided by a judge, the plaint is not to be rejected. If accepting the allegations made in the plaint are accepted as true and still no case is made out for granting relief, no cause of action would be shown and the plaint must be rejected. But in ascertaining whether the plaint shows cause of action the court does not enter upon a trial of the issues affecting the merits of the claim made by the plaintiff. It cannot take into consideration the defenses which the defendant may raise upon the merits; nor is the court competent to make an elaborate enquiry into doubtful or complicated questions of law or fact.

The effect of dismissal of suit is altogether different and distinct from the effect of rejection of the plaint. In case plaint is rejected under Order 7 Rule 11, CPC, filing of a fresh plaint in respect of the same cause of action is specifically, permitted under Order VII Rule 13, CPC. Altogether different consequence follows in the event of dismissal of suit, which has the effect of precluding the plaintiff from filing a fresh suit on the same cause of action.

Rejection of plaint takes away the very basis of the suit rendering as if there was no suit at all or that no suit was instituted. Order of dismissal of suit while recognizing the existence of a suit indicates its termination. In D. Ramachandran Vs. R.V. Janakiraman and Others, , the Apex Court had held that the effect of dismissal of a suit is altogether different and distinct from the effect of rejection of the plaint. For considering whether the plaint discloses cause of action or not, the pleas and documents of the defendants are not to be considered. The apex court had held as under:

Learned Single Judge fell in error in placing reliance upon the material supplied by the defendant, which alone is sufficient to set aside the impugned order. Learned Single Judge instead of proceeding to reject the plaint dismissed the suit, which approach is also erroneous. The effect of dismissal of suit is altogether different and distinct from the effect of rejection of the plaint. In case plaint is rejected under Order 7 Rule 11, CPC, filing of a fresh plaint in respect of the same cause of action is specifically, permitted under Rule 13 of Order 7, CPC. Altogether different consequence follows in the event of dismissal of suit, which has the effect of precluding the plaintiff to file a fresh suit on the same cause of action. Rejection of plaint takes away the very basis of the suit rendering as if there was no suit at all or that no suit was instituted. Order of dismissal of suit while recognising the existence of a suit indicates its termination. While deciding the application under Order 7 Rule 11, CPC, learned Single Judge ought not and could not have dismissed the suit. Even in the decision of the Supreme Court in T. Arvindandam''s case (Supra), relied upon by learned Counsel for the appellant, it was held that if on a meaningful-not formal-reading of the plaint it is manifestly vexatious and merit-less, in the sense of not disclosing a clear right to sue, the Trial Court should exercise his power under Order 7 Rule 11, CPC taking care to see that the ground mentioned therein is fulfilled. In order to fulfill that ground bare allegation made in the plaint and documents filed therewith were required to be looked into, which in the instant case clearly disclosed at least a cause of action against the defendant that defendant was liable for damages for its acts of omission and commission. It would be an altogether different situation that the plaintiff might not ultimately succeed in obtaining a decree against the defendant or that Court might come to the conclusion that suit would not be maintainable against the defendant and that plaintiff had a cause of action only against defendant''s principal and its parent until in Hong Kong, but such aspect could not have been gone into at this stage. Three paragraphs of the plaint quoted above in our view do clearly disclose cause of action for the plaintiff to claim damages.

In Vijay Pratap Singh Vs. Dukh Haran Nath Singh and Another, , the Supreme Court had held at pages 943-44 as under:

By the express terms of Rule 11 Clause (a), the court is concerned to ascertain whether the allegations made in the petition show a cause of action. The court has not to see whether the claim made by the petitioner is likely to succeed: it has merely to satisfy itself that the allegations made in the petition, if accepted as true, would entitle the petitioner to the relief he claims. If accepting those allegations as true no case is made out for granting relief no cause of action would be shown and the petition must be rejected. But in ascertaining whether the petition shows a cause of action the court does not enter upon a trial of the issues affecting the merits of the claim made by the petitioner. It cannot take into consideration the defences which the defendant may raise upon the merits; nor is the court competent to make an elaborate enquiry into doubtful or complicated questions of law or fact. If the allegations in the petition, prima facie, show a cause of action, the court cannot embark upon an enquiry whether the allegations are true in fact, or whether the petitioner will succeed in the claims made by him.

According to the defendants, the plaint does not disclose cause of action and it is liable to be rejected. This cannot be disputed that the plaintiffs have categorically asserted that they are the owners of 22 Bighas and 5 Biswas of the land. The details of the Mustatil No. 60, Kila No. 4/3 [1-12], 7 [4-8], 8 [4-16], 12 [4-9], 13 Min. [4-2], 18 Min. [1- 4], 23 Min. [0-12], 26 Min. [0-5], 28 [0-17], situated in the Revenue estate of Village Bijwasan, Tehsil Vasant Vihar, New Delhi, are also given. This is also not disputed by the parties that only 9 Bighas, 18 Biswas and 12 Biswanis have been sold to the defendants. Even out of balance portion of the land of 22 Bighas and 5 Biswas, only a part has been sold to Sh. Abhay Aggarwal Aggarwal and Shri Sudhir Kumar Makkar by another Agreement to Sell dated 31st May, 2005.

In the circumstances, the plea of the plaintiffs is that his total land was 22 Bighas and 5 Biswas out of which a part of land measuring 9 Bighas, 18 Biswas and 12 Biswanis were sold to the defendants and a part of the balance land, not the entire balance land, was sold to other purchasers Sh. Abhay Aggarwal and Shri Sudhir Kumar Makkar and therefore, the transaction between the plaintiffs and defendant is hit by Section 33 of the Delhi Land Reforms Act.

A cause of action is a bundle of facts which are required to be pleaded and proved for the purpose of obtaining relief claimed in the suit. 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.

On perusal of the pleadings in the entirety, it is apparent that the plaintiffs. plea is the alleged transfer, transfer by Agreement to Sell dated 31st January, 2005 and the Sale Deed dated 21st September, 2007 are void in view of Section 33 of the Delhi Land Reforms Act, 1954. This also cannot be disputed that in the plaint it is alleged that plaintiffs landholding was more than what was sold to the defendants'' From the averments made in the plaint it is also apparent that after selling the land to the defendants, the landholding of the plaintiffs was less than eight standard acres. In the circumstances it cannot be held that the plaint does not disclose cause of action. Even on the basis of the copy of Khasra Girdawari which is filed by the plaintiffs, which does not reflect the entire land and only a portion of the land, which had been sold to defendants leaving a part of the land, which is allegedly vest with Gaon Sabha, it cannot be held that the entire land holding was sold by the plaintiffs to the defendants or the plaintiffs was left with more than eight standard acres of land. On this ground, therefore, the plaint cannot be rejected.

The plaintiffs have also alleged that they have cancelled the Attorneys executed by the plaintiffs in favour of the defendants by a Deed of Revocation. The plea of the learned Counsel for the defendants that the Registered Deeds could not be revoked by a Deed of Revocation which does not disclose that all the Power of Attorneys had been cancelled and that the deed of revocation is not registered will also not entail rejection of the plaint. Even if the power of attorney in favor of the defendants have not been revoked, the suit will be maintainable and not liable for rejection, if the transaction between the plaintiffs and defendants is hit by provisions of Delhi Land Reform Act. The main relief in the plaint is that the conveyance executed by them in favour of defendants is hit by Section 33 of the Delhi Land Reforms Act, 1954 and after coming to know about the same, they offered entire sale consideration to the defendants. However, they refused to take it back and, therefore, the plaintiffs have also revoked the deeds by giving a notice and the present suit for declaration and cancellation has been filed. The plaint cannot be rejected on this ground that registered deeds executed in favor of defendants have been cancelled by a deed of revocation which is not registered and by sending a notice. The plaintiff has claimed declaration and cancellation of the conveyance deed executed in favor of defendant being hit by Section 33 of the Delhi Land Reforms Act in the plaint and therefore on the basis of defense put up by the defendants, the plaint cannot be rejected.

The learned Counsel for the applicants has also alleged that the suit is barred by time and therefore, the plaint is liable to be rejected. Agreement to Sell and Sale Deed by the defendants are part of the same transaction for the same property. The Sale Deed was executed on 21st September, 2007 and the suit for declaration and cancellation has been filed on 23rd May, 2008 which is within time. In the circumstances, prima facie the suit is not barred by time. On the basis of the pleas of the defendants/applicants that the suit is barred by time, the plaint cannot be rejected. Similarly, though the consideration which was agreed between the parties was Rs. 15,10,000/-, however, for the purpose of cancellation of the deeds, the suit has been valued by the plaintiffs at Rs. 37,77,000/-. Since the Agreement to Sell and the Sale Deed are part of the same transaction, whose cancellation is sought, therefore, for the purpose of cancellation and declaration the suit is valued at Rs. 37,70,000/- and the ad valorem court fees paid thereon, which is prima facie not deficient and cannot be a ground to direct the plaintiffs to pay the deficient court fees and on failure of the plaintiffs to pay the alleged deficient court fees, the plaint is not liable to be rejected. The plaint also cannot be rejected on the ground that the plaintiffs have received the entire sale consideration as it is not stated in the plaint that the plaintiffs have not received Rs. 10,000/- balance sale consideration. Merely on the basis of allegations made by the defendants it cannot be inferred that the suit of the plaintiffs is vexatious and frivolous and the plaintiffs shall not be entitled for the benefits of their own wrongs.

Therefore, in the facts and circumstances, the application for rejection of the plaint is without any legal basis and is misconceived and is, therefore, liable to be dismissed. The application is therefore, dismissed Parties are however left to bear their own costs.

CS(OS) No. 1030/2008

The learned Counsel for defendant No. 1 seeks time to file the written statement.

Written statement be filed within four weeks. Replication to the written statement, if any, shall be filed within four weeks thereafter. Issue summons to defendants No. 2 and 3 by ordinary process and registered A.D. post on plaintiffs'' taking steps within one week, returnable for 2nd July, 2009.

IA No. 6620/2008 in CS(OS) No. 1030/2008

Learned Counsel for defendant No. 1 seeks time to file the reply. Reply be filed within four weeks.

Issue notices to defendants No. 2 and 3 by ordinary process and registered A.D. post on plaintiffs'' taking steps within one week, returnable for 2nd July, 2009.