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Judgment
Ram Surat Ram (Maurya), J.—Heard Sri Prabhu Narain Srivastava, for the petitioners and Sri Ajay Kumar Singh, for the respondents.
This petition has been filed for setting aside the order of District Judge 20.04.2016, dismissing appeal of the petitioners, against order of Additional Civil Judge (J.D.) dated 12.02.2016, summoning Hemant C. Maheshwari (owner of plaintiff-1) for recording his statement under Order 10, Rule 2 C.P.C. and deferring hearing of application for interim injunction, filed in the suit.
Mirzapur Electric Supply Company Ltd. and others (the petitioners) filed a suit (registered as O.S. No. 334 of 2015) for permanent injunction, restraining the respondents, from interfering in their possession, digging earth, raising construction or selling disputed land, described as plots 560/1 (area 7 biswa), 561 (area 15 biswa, 15 dhur), 565/1 (area 1 bigha, 1 biswa, 15 dhur), 566 (area 8 biswa), 567/1 (area 6 biswa, 10 dhur), 568 (area 18.5 dhur), 575-m (area 2 biswa, .5 dhur), 576 (area 1 biswa), 577 (area 3 biswa), 578 (area 5 biswa, 7 dhur), 584 (area 5 biswa, 14 dhur), 585 (area 2 biswa, 11 dhur) 586 (area 12 biswa) (total 13 plots, area 3 bigha, 10 biswa 13 dhur) of village Bathuwa, tappa-84, pargana Kantit, district Mirzapur. The plaintiffs took plea that disputed land was purchased by Mirzapur Electric Supply Company Ltd. from Bengal Stone Company, through sale deed dated 05.08.1930. Ramji Lal Maheshwari, his wife Smt. Kamla Maheshwari and his son Hemant C. Maheshwari were share holders in Mirzapur Electric Supply Company Ltd. At present Ramji Lal Maheshwari, Smt. Kamla Maheshwari have died and entire property of the company was inherited by Hemant C. Maheshwari. Hemant C. Maheshwari executed a Power of Attorney in favour of Neeraj Agrawal (plaintiff-4) for looking after the disputed property as well as its litigations. Hemant C. Maheshwari also executed a sale deed dated 15.12.2014 of the disputed land in favour of Kausal Kumar, Vinay Kumar Agrawal and Neeraj Agrawal (plaintiffs-2 to 4) and they are in possession over disputed land. The defendants have no concern with disputed land. On 29.03.2015, the defendant along with JCB Machine and their labourers came on the spot and tried to take possession over disputed land but due to resistance they failed. They are illegally threatening to take possession over disputed land without any right. On these allegations, suit has been filed on 31.03.2015. Along with the plaint, an application for interim injunction has also been filed.
Civil Judge (JD), issued notice in the application for interim injunction, under Order 39, Rule 3 C.P.C. Respondent-1 contested the suit and application for interim injunction and filed its written statement in suit, objection in application for interim injunction on 02.07.2015. The respondents pleaded that Smt. Elen Septon was owner of the disputed land. She granted a patta dated 05.08.1930 to Bengal Stone Company, who committed default in payment of lease rent as such patta was cancelled. Thereafter, disputed land was sold to Mirzapur Electric Supply Company Ltd. Business of Mirzapur Electric Supply Company Ltd. was closed as such this company sold a part of the disputed land to E Septon and Company in 1955 and remaining in 1965. E Septon and Company took loan from Central Bank of India, mortgaging plots 55 (area 18 biswa), 56 (area 1 biswa), 57/1 (area 5 biswa), 58/1 (area 3 biswa) and 58/2 (area 2 biswa), (total area 2 bigha 8 biswa), of village Mirzapur Kalan, tappa-84, pargana Kantit, district Mirzapur. (purchased in 1955) and plots 567/2 (area 5 dhur), 568 (area 7 biswa 3 dhur), 569/2 (area 11 biswa), 570/2 (area 2 biswa), 571 (area 4 biswa), 573 (area 2 biswa), 574 (area 10 biswa), 575 (area 8 biswa, 9 dhur), 578 (area 8 biswa, 13 dhur), 579 (area 11 biswa), 582 (area 8 dhur), 583 (area 9 biswa) and 585 (area 4 biswa, 10 dhur) (total area 3 bigha, 18 biswa 18 dhur) of village Mirzapur Kalan and Bathuwa, tappa-84, pargana Kantit, district Mirzapur. (purchased in 1955 and 1965). E Septon and Company failed to repay the loan as such Central Bank of India took proceeding for realization of dues under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 in which disputed property were attached and auctioned by Debt Recovery Tribunal, Allahabad. Defendant-1 was highest bidder in this auction. The auction was confirmed in spite of objection of plaintiff-1. After issuance of sale certificate, possession over disputed land was delivered to defendant-1. However, defendant-2, who was employee of defendant-1, got sale certificate dated 13.02.2012 prepared in his name. Defendant-1, therefore, filed O.S. No. 169 of 2014 against defendant-2, in which the parties entered into compromise and title and possession of defendant-1 was admitted. The suit was decreed in terms of compromise on 21.08.2014. Now the disputed property has been recorded in the name of defendant-1. Defendant-1 also filed O.S. No. 52 of 2015 for cancellation of sale deed dated 15.12.2014, executed by plaintiff-1 in favour of plaintiffs-2 to 4, as Hendant C Maheshwari had no right over the property in dispute, which is also pending. Plaintiff-1 filed O.S. No. 65 of 2015 against the defendants, in which apart from disputed land plot No. 584 (area 5 biswa) was also included, in which no interim injunction has been granted. Later on plaint was rejected under Order 7, Rule 11 C.P.C. Due to pendency of O.S. No. 52 of 2015, this suit i.e. O.S. No. 334 of 2015 is liable to be stayed under Section 10 C.P.C. Valuation of disputed property in more than 50 lakhs, Civil Judge (JD) has no jurisdiction to try the suit and plaint is liable to be rejected under Order 7, Rule 11 C.P.C. The plaintiffs are neither owner nor in possession of disputed property, no interim injunction can be granted to them.
When disposal of application for interim injunction was delayed, the petitioners filed a petition (registered as MATTERS UNDER ARTICLE 227 No.- 5271 of 2015), which was disposed of by order dated 16.09.2015, directing trail court to decide injunction application expeditiously without granting unnecessary adjournment to the parties. Additional Civil Judge (J.D.), by his dated 24.12.2015, directed the parties to maintain status quo till next date. On 05.01.2016, case was adjourned but interim injunction was not extended. Additional Civil Judge (J.D.) by order dated 12.02.2016, summoned Hemant C. Maheshwari (owner of plaintiff-1) for recording his statement under Order 10, Rule 2 C.P.C. The petitioner filed an appeal (registered as Misc. Civil Appeal No. 9 of 2016) from aforesaid order. The appeal was heard by District Judge, who by order dated 20.04.2014, dismissed the appeal. Hence this petition has been filed.
The counsel for the petitioners submitted that the application for interim injunction was filed along with suit on 31.03.2015. When disposal of application for interim injunction was delayed, the petitioners filed a petition (registered as MATTERS UNDER ARTICLE 227 No.- 5271 of 2015), which was disposed of by order dated 16.09.2015, directing trail court to decide injunction application expeditiously without granting unnecessary adjournment to the parties. Even then trial court has failed to pass order on the application for interim injunction and adjourning the case on frivolous grounds. Trial Court by order dated 12.02.2016, summoned Hemant C. Maheshwari (owner of plaintiff-1) for recording his statement under Order 10, Rule 2 C.P.C., although it was a subsequent stage of the suit. Under Order 39, Rule 1 C.P.C., the application for interim injunction can be decided on the affidavits of the parties. Trial court has adopted illegal procedure and indirectly, helping the defendants, in violation of the order of this Court. The Court will be closed due to summer vacation as such interim protection is liable to be granted by this Court till disposal of the application for interim injunction as trial court has failed to perform its duty and also committing contempt.
In reply to the aforesaid arguments, the counsel for the respondent submitted that business of Mirzapur Electric Supply Company Ltd. was closed about in 1950 as such this company sold a part of the disputed land to E Septon & Company in 1955 and remaining in 1965. E Septon and Company took loan from Central Bank of India, mortgaging disputed land. E Septon and Company failed to repay the loan as such Central Bank of India took proceeding for realization of dues under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, in which disputed property were attached and auctioned by Debt Recovery Tribunal, Allahabad. Defendant-1 was highest bidder in this auction. The auction was confirmed in spite of objection of the plaintiff. After issuance of sale certificate, possession over disputed land was delivered to defendant-1. However, defendant-2, who was employee of defendant-1, got sale certificate dated 13.02.2012 prepared in his name. Defendant-1, therefore, filed O.S. No. 169 of 2014 against defendant-2, in which the parties entered into compromise and title and possession of defendant- 1 was admitted. The suit was decreed in terms of compromise on 21.08.2014. Now the disputed property has been recorded in the name of defendant-1. Defendant-1 also filed O.S. No. 52 of 2015 for cancellation of sale deed dated 15.12.2014, executed by plaintiff-1 in favour of plaintiffs-2 to 4, as Hendant C Maheshwari had no right over the property in dispute, which is also pending. Plaintiff-1 filed O.S. No. 65 of 2015 against the defendants, in which apart from disputed land plot No. 584 (area 5 biswa) was also included, which was rejected under Order 7, Rule 11 C.P.C. Due to pendency of O.S. No. 52 of 2015, this suit i.e. O.S. No. 334 of 2015 is liable to be stayed under Section 10 C.P.C. Valuation of disputed property in more than 50 lakhs, Civil Judge (JR) has no jurisdiction to try the suit. The suit is also barred under Section 34 of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The plaint is liable to be rejected under Order 7, Rule 11 C.P.C. Mirzapur Electric Supply Company Ltd. has already been dissolved on 14.12.2010. Entire property of the company was already purchased by E. Seption Company in 1955 and 1965. Hendant C Maheshwari had no right over the property in dispute. He relied upon Division Bench of this Court in Arun Kumar Tiwari v. Smt. Deepa Sharma, 2006 (1) ARC 717 and Single Judge in Bus Tata Taxi Tempo Driver and Owners Kalyan Samiti v. State of U.P., 2008 (1) ARC 133 and Matter Under Article 227 No. 3621 of 2016 Meena Devi v. Board of Revenue U.P., (decided on 20.05.2016) in which it has been held that application under Order 7, Rule 11 C.P.C. ought to have been decided first, before proceeding in the suit. He also relied upon judgement of Supreme Court in Jagdish Singh v. Heera Lal, AIR 2014 SC 371, in which it has been held that in case borrower failed to discharge his liability, then bank can take measure under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. Jurisdiction of civil court is barred under Section 34 of this Act. He also relied upon judgement of Supreme Court in Mrs. Bacha F. Guzdar, Bombay v. Commissioner of Income Tax, AIR 1955 SC 74 and M/S Pierce Leslie and Co. Ltd. v. Miss Violet Ouchterlong Wapshare, AIR 1969 SC 843, in which it has been held that after dissolution of company shareholders or creditor cannot maintain any action for recovery of its assets.
I have considered the arguments of the counsel for the parties and examined the record. The court can reject the plaint threshold on the conditions mentioned under Order 7, Rule 11 CPC, which reads as under:
"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 papers 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 from correcting the valuation or supplying the requisite stamp papers, 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."
Supreme Court in Azhar Hussain v. Rajiv Gandhi, AIR 1986 SC 1253, held that whole purpose of conferment of such powers is to ensure that a litigation which is meaningless and bound to prove abortive should not be permitted to occupy the time of the court and exercise the mind of the respondent. The sword of Damocles need not be kept hanging over his head unnecessarily without point or purpose. Even in an ordinary civil litigation the court readily exercises the power to reject a plaint if it does not disclose any cause of action. It is clear that if the allegations are vexatious and meritless and not disclosing a clear right or material(s) to sue, it is the duty of the trial Judge to exercise his power under Order 7, Rule 11 .
But in present case, trial court is not adopting correct procedure for deciding application under Order 7, Rule 11 C.P.C., due to which unreasonable delay in disposal of the application has occurred and he has failed to comply the order of this Court dated 16.09.2015. For the purpose of trial court, principles laid down by Supreme Court in various judgements are given. In T. Arivandandam v. T.V. Satyapal, (1977) 4 SCC 467 held that the learned Munsif 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, he should exercise his power under Order 7, Rule 11 CPC taking care to see that the ground mentioned therein is fulfilled. And, if clever drafting has created the illusion of a cause of action, 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 XI) and must be triggered against them." The law has been settled by this Court in various decisions that while considering an application under Order 7, Rule 11 CPC, the court has to examine the averments in the plaint and the pleas taken by the defendant in the written statement would be irrelevant
Supreme Court in Saleem Bhai v. State of Maharashtra, (2003) 1 SCC 557, held that a perusal of Order 7, Rule 11 CPC makes it clear that the relevant facts which need to be looked into for deciding an application thereunder are the averments in the plaint. The trial court can exercise the power under Order 7, Rule 11 CPC at any stage of the suit, before registering the plaint or after issuing summons to the defendant at any time before the conclusion of the trial. For the purposes of deciding an application under clauses (a) and (d) of Rule 11 Order 7 CPC, the averments in the plaint are germane; the pleas taken by the defendant in the written statement would be wholly irrelevant at that stage.
Again in Sopan Sukhdeo Sable v. Asstt. Charity Commr., (2004) 3 SCC 137, held that Rule 11 Order 7 lays down an independent remedy made available to the defendant to challenge the maintainability of the suit itself, irrespective of his right to contest the same on merits. The law ostensibly does not contemplate at any stage when the objections can be raised, and also does not say in express terms about the filing of a written statement. Instead, the word "shall" is used, clearly implying thereby that it casts a duty on the court to perform its obligations in rejecting the plaint when the same is hit by any of the infirmities provided in the four clauses of Rule 11, even without intervention of the defendant. In any event, rejection of the plaint under Rule 11 does not preclude the plaintiffs from presenting a fresh plaint in terms of Rule 13.
In Popat and Kotecha Property v. State Bank of India Staff Assn., (2005) 7 SCC 510, held that disputed questions cannot be decided at the time of considering an application filed under Order 7, Rule 11 CPC. Clause (d) of Rule 11 Order 7 applies in those cases only where the statement made by the plaintiff in the plaint, without any doubt or dispute shows that the suit is barred by any law in force.
In Mayar (H.K.) Ltd. v. Owners & Parties, Vessel M.V. Fortune Express, (2006) 3 SCC 100, held that 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 7, 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 entirety 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, wilful default, undue influence or of the same nature. So long as the plaint discloses some cause of action which requires determination by the court, the mere fact that in the opinion of the Judge the plaintiff may not succeed cannot be a ground for rejection of the plaint.
In Church of Christ Charitable Trust & Educational Charitable Society v. Ponniamman Educational Trust, (2012) 8 SCC 706, held that it is clear that in order to consider Order 7, Rule 11 , the court has to look into the averments in the plaint and the same can be exercised by the trial court at any stage of the suit. It is also clear that the averments in the written statement are immaterial and it is the duty of the Court to scrutinise the averments/pleas in the plaint. In other words, what needs to be looked into in deciding such an application are the averments in the plaint. At that stage, the pleas taken by the defendant in the written statement are wholly irrelevant and the matter is to be decided only on the plaint averments. These principles have been reiterated in
In Bhau Ram v. Janak Singh, (2012) 8 SCC 701, held that in order to ascertain an answer for the above question, we have to consider whether the application under Order 7, Rule 11 CPC filed by the defendant can be decided merely on the basis of the plaint and whether the other materials filed by the defendant in support of the application can also be looked into. The trial court allowed the application of the appellant-Defendant 1 filed under Order 7, Rule 11 CPC on the ground that the plaint was barred under the provisions of Order 9 Rules 8 and 9 CPC and Order 23 Rules 1(3) and 1(4)(b) CPC. The said order of the trial court was set aside by the first appellate court on the ground that the trial court had taken the pleas from the written statement of the defendant which is not permissible under Order 7, Rule 11 CPC and the High Court in the second appeal confirmed the judgment of the first appellate court.
It is relevant to point out the findings of the trial court particularly with reference to Suit No. 424/1 of 99/97 which was dismissed for default had been restored by the trial court even at the time of filing of the application by the defendant under Order 7, Rule 11 CPC and it is also brought to our notice that the said proceedings are going on. In view of the same, the provisions of Order 9 Rules 8 and 9 CPC are not applicable to the said suit. Even otherwise, the reliefs sought in the suit (which was earlier dismissed for default) and in the present suit are with regard to different properties. For the same reasons, the provisions of Order 23 Rules 1(3) and 1(4)(b) CPC are not applicable.
For deciding the application for interim injunction, trial court has to examine materials relied upon by both the parties. It is admitted to the defendant that property in dispute was purchased by Mirzapur Electric Supply Company Ltd. in 1930. However, the defendant pleaded that Mirzapur Electric Supply Company Ltd. had failed to do its business as such disputed properties were sold to E Septon and Company in 1955 and remaining in 1965. E Septon and Company took loan from Central Bank of India, mortgaging disputed land. E Septon and Company failed to repay the loan as such Central Bank of India took proceeding for realization of dues under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 and The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. In which disputed property were attached and auctioned by Debt Recovery Tribunal, Allahabad. Defendant-1 was highest bidder in this auction. The auction was confirmed in spite of objection of the plaintiff. Jurisdiction of civil court is barred under Section 34 of the Act, 2002.
Before this Court no document has been filed to show that property in dispute was purchased by E Septon and Company in 1955 and 1965. No documents has been filed to show that Mirzapur Electric Supply Company Ltd. was dissolved on 14.12.2010 and what was term of dissolution. Various plots mentioned in the plaint are different to plots mentioned in written statement. Although it is alleged that area of disputed property as given in plaint and written statement was same. But it will be difficult to say that suit is barred under Section 34 of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, for the plots which are not covered in sale certificate dated 13.02.2012. All these facts are required to be examined by trial court while deciding application for interim injunction.
So far as pecuniary jurisdiction is concerned, Section 15 C.P.C. requires to file the suit before court of lowest grade. If prima facie valuation is not grossly incorrect, then trial court may decide application for interim injunction before determination of correct valuation after framing issue. Supreme Court in Nandita Bose v. Ratanlal Nahata, (1987) 3 SCC 705, held that under Section 15 of the Code every plaint should be instituted in the court of the lowest grade competent to try it. The principles which regulate the pecuniary jurisdiction of civil courts are well settled. Ordinarily, the valuation of a suit depends upon the reliefs claimed therein and the plaintiff''s valuation in his plaint determines the court in which it can be presented. It is also true that the plaintiff cannot invoke the jurisdiction of a court by either grossly over-valuing or grossly under-valuing a suit. In Tara Devi v. Sri Thakur Radha Krishna Maharaj, (1987) 4 SCC 69, held that the plaintiff is free to make his own estimation of the reliefs sought in the plaint and such valuation both for the purposes of court-fee and jurisdiction has to be ordinarily accepted. It is only in cases where it appears to the court on a consideration of the facts and circumstances of the case that the valuation is arbitrary, unreasonable and the plaint has been demonstratively undervalued, the court can examine the valuation and can revise the same. The plaintiff has valued the leasehold interest on the basis of the rent. Such a valuation, as has been rightly held by the courts below, is reasonable and the same is not demonstratively arbitrary nor there has been any deliberate underestimation of the reliefs.
So far as prayer before this Court to grant interim injunction till disposal of application for interim injunction by trial court is concerned, as the suit was filed on 31.03.2015 and more than one year has passed without there being any interim injunction (except for a short period) as such this Court is not inclined to grant interim injunction, on incomplete materials.
In view of aforesaid discussions, the petition succeeds and is allowed. The order District Judge 20.04.2016, is set aside. Trial Court is directed to decide application under Order 7, Rule 11 C.P.C. according to the principles as laid down by Supreme Court in various judgements, noted above, either on the next date fixed in the suit or for any reason the case is adjourned on that day then within two weeks thereafter. If trial court finds that plaint is not liable to be rejected and valuation of the suit is not grossly incorrect, he may decide application for interim injunction forth with as directed by order dated 16.09.2015.