Muneer Sait vs Vilanghat Xavier Jose

Aravind Kumar, J.—Heard Sri. Ravi B. Naik, learned Senior Counsel appearing for petitioner and Sri Tomy Sebastian, learned Senior counsel appearing for respondent.

An application filed under Order VII Rule 11(a) and (d) read with section 151 of C.P.C. by defendant seeking rejection of plaint on the ground that (i) cause of action alleged in the suit is illusory or in other words there is no cause of action and as such suit is barred and one without cause of action, and; (ii) that it is barred by law namely that when the plaintiff is relying upon agreement of sale and having produced the copy of said agreement by way of secondary evidence trial court could not rely upon such secondary evidence, since 7th defendant had produced the original during the proceedings pending before trial court and as such trial court had determined the duty and penalty payable under the said agreement by plaintiff and for reasons best known said order was recalled and shifted the burden of payment of duty and penalty on 7th defendant which is erroneous and even otherwise when primary evidence is available on record secondary evidence cannot be looked into and as such suit in question was barred under Evidence Act and plaint liable to be rejected. On these grounds application for rejection of plaint was filed. Said application was resisted to by the plaintiff by filing objections and trial court after considering rival contentions has rejected the application by observing that none of the parties namely plaintiff and defendant No. 7 have paid duty and penalty as ordered by it and plaintiff had already tendered secondary evidence and contention now raised by 7th defendant as to whether such secondary evidence is admissible or not is a mixed question of law and fact and only after full fledged trial and hearing the parties to the suit on merits and also after considering the related documents the validity or otherwise of the document dated 12.01.2005 (agreement of sale) and the relevancy of secondary evidence can be examined or to be considered.

Having heard the learned advocates appearing for the parties and on perusal of the order under challenge as also pleadings of the parties Judgment of the Apex court in the case of T. Arivandandam Vs. T.V. Satyapal and Another, requires to be noticed whereunder Hon''ble Apex Court has broadly laid down the contours for rejection of a plaint. It has been held therein, where a false and vexatious claim has been laid, and if on a meaningful and purposeful reading of the plaint it would not disclose any cause of action or such cause of action pleaded is manifestly vexatious or meritless, in the sense of not disclosing a clear right to sue, then the vigilant Judge should exercise his power under Order VII Rule 11 of C.P.C. to reject the plaint. Despite a clever drafting of the plaint by creating a illusory cause of action it has been held that to ensure that such vexatious plea or the claim made thereunder is nipped at the bud plaint is liable to be rejected. It has been held by the Apex Court in the said Judgment at paragraph 5 as under:

"5. We have not the slightest xxx receiving plaints. The learned Munsiff 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 O. VII R.11, C.P.C. taking care to see that the ground mentioned therein is fulfilled. And, if clear, 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 X C.P.C. 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 xxx to be too good."

Keeping said principle laid down by Hon''ble Apex Court in mind when the facts on hand are examined it would clearly indicate that plaintiff in the instant case has filed a suit for specific performance of agreement of sale dated 12.01.2005 and at paragraph 28 cause of action pleaded was as follows:

"28. The cause of action for the suit arose on 12.01.2005, i.e., date of agreement to sell, and subsequently on all the dates of demands and requests made from time to time and finally by issuing the legal notice on 07.06.2005 and subsequently on all the dates and hence the suit is well in time. The Defendants 1 to 6 and defendant No. 7, 8 and 9 are residing at Bangalore, and the suit schedule property is situated within the jurisdiction of this Hon''ble Court. Hence this Hon''ble Court has got jurisdiction to entertain the suit".

This Court and Hon''ble Apex Court have consistently held that for exercise of power under Order VII Rule 11 it is only the plaint averments which requires to be looked into without any addition or subtraction. Any amount of plea raised in the written statement would not be a ground to consider the prayer for rejection of plaint under Order VII Rule 11 or in other words a plaint cannot be rejected on the basis of allegations made by the defendant in his written statement. It has also been held merely because in the opinion of the court plaintiff is not likely to succeed in the suit cannot be a ground to reject the plaint. For this principle, Judgment of Hon''ble Apex Court in the case of Mayar (H.K.) Ltd. and Others Vs. Owners and Parties, Vessel M.V. Fortune Express and Others, and Ramesh B. Desai and Others Vs. Bipin Vadilal Mehta and Others, paragraphs 13, 15, 16 and 19 can be looked up and they read as under:

The plea raised by the contesting respondents is in fact a plea of demurrer. Demurrer is an act of objecting or taking exception or a protest. It is a pleading by a party to a legal action that assumes the truth of the matter alleged by the opposite party and sets up that it is insufficient in law to sustain his claim or that there is some other defect on the face of the pleadings constituting a legal reason why the opposite party should not be allowed to proceed further. In O.N. Bhatnagar Vs. Smt. Rukibai Narsindas and Others, (para 9) it was held that the appellant having raised a plea in the nature of demurrer, the question of jurisdiction had to be determined with advertence to the allegations contained in the statement of claim made by respondent 1 under Section 91(1) of the Act and those allegations must be taken to be true. In Roop Lal Sathi Vs. Nachhattar Singh, (para 24), it was observed that a preliminary objection that the election petition is not in conformity with Section 83(1)(a) of the Act i.e. it does not contain the concise statement of the material facts on which the petitioner relies, is but a plea in the nature of demurrer and in deciding the question the Court has to assume for this purpose that the averments contained in the election petition are true. Reiterating the same principle in Abdulla Bin Ali and Others Vs. Galappa and Others, , it was said that there is no denying the fact that the allegations made in plaint decide the forum and the jurisdiction does not depend upon the defence taken by the defendants in the written statement. In Exphar SA and Another Vs. Eupharma Laboratories Ltd. and Another, (para 9), it was ruled that where an objection to jurisdiction is raised by way of demurrer and not at the trial, the objection must proceed on the basis that the facts as pleaded by the initiator of the impugned proceedings are true. The submission in order to succeed must show that granted those facts the court does not have jurisdiction as a matter of law. In this case the decision of the High Court on the point of the jurisdiction was set aside as the High Court had examined the written statement filed by the respondents in which it was claimed that the goods were not at all sold within the territorial jurisdiction of Delhi High Court and also that the respondent No. 2 did not carry out business within the jurisdiction of the said High Court. Following the same principle in Indian Mineral and Chemicals Co. and Others Vs. Deutsche Bank, (paras 10 and 11), it was observed that the assertions in a plaint must be assumed to be true for the purpose of determining whether leave is liable to be revoked on the point of demurrer.

Paragraphs 14 and 21 of the Company Petition read as under:-

"14. Even the action on the part of respondent Nos. 2 and 3 to use company''s funds would amount to fraud on the statute. They have clearly played fraud on Section 77 of the Act and it is also settled law that the party who has committed fraud could not be allowed to retain the fruits of the fraudulent action perpetrated by them. On this principle also status quo ante should be restored so that respondent Nos. 2 and 3 do not get benefit of the fraud played upon the statute."

"21. The petitioners further say that though the share transfers were effected in the year 1982, the petitioners could not have detected the fraud earlier, but they came to know about the fraud in detail when the specific criminal complaint was filed by some interested persons, the office bearers of the Union of the Company before the Criminal Court at Narol and they came to know by or about in the month of May, 1987. Hereto annexed and marked Annexure I is the copy of the said complaint. Thereafter they enquired into the matter and collected whatever additional material available. Petition No. 1 gave notice dated 14.6.1987. However, respondents 2 to 11 wasted too much time in correspondence and thereafter this petition is filed immediately."

The case set up by the petitioners in the Company Petition is that they had absolutely no knowledge of the alleged utilization of the funds of the Company for purchase of shares by Bipinbhai and they came to know about it by or about in the month of May, 1987 when a criminal complaint was filed by some office bearers of the union of the Company and thereafter petitioner No. 1 gave notice dated 14.6.1987. As mentioned earlier two cheques of Rs. 10 lacs and 5 lacs were given on 13.11.1982 and another cheque of Rs. 5 lacs was given on 25.11.1982 by M/s. Sayaji Industries Ltd. to M/s. Santosh Starch Products and on the same day M/s. Santosh Starch Products gave Rs. 20 lacs through cheques to Bipinbhai and his family members. Thereafter, Bipinbhai purchased 8,600 shares of the Company M/s. Sayaji Industries Ltd. and became its Managing Director on 18.11.1982. Though we should not be understood as recording any finding on this point, but in the natural course of events or at least it looks quite probable that the petitioners in the company petition-; who are small shareholders of the Company, may not have come to know about the aforesaid transactions.

A plea of limitation cannot be decided as an abstract principle of law divorced from facts as in every case the starting point of limitation has to be ascertained which is entirely a question of fact. A plea of limitation is a mixed question of law and fact. The question whether the words "barred by law" occurring in Order VII Rule 11(d) CPC would also include the ground that it is barred by law of limitation has been recently considered by a two Judge Bench of this Court to which one of us was a member (Ashok Bhan J.) in Civil Appeal No. 4539 of 2003 (Balasaria Construction Pvt. Ltd. vs. Hanuman Seva Trust and others) decided on 8.11.2005 and it was held:-

"After hearing counsel for the parties, going through the plaint, application under Order 7, Rule 11(d) CPC and the judgments of the trial court and the High Court, we are of the opinion that the present suit could not be dismissed as barred by limitation without proper pleadings, framing of an issue of limitation and taking of evidence. Question of limitation is a mixed question of law and fact. Ex facie in the present case on the reading of the paint it cannot be held that the suit is barred by time."

This principle would be equally applicable to a Company Petition. Therefore, unless it becomes apparent from the reading of the Company Petition that the same is barred by limitation the petition cannot be rejected under Order VII, Rule 11(d) CPC.

Undoubtedly, Order VI Rule 4 CPC requires that complete particulars of fraud shall be stated in the pleadings. The particulars of alleged fraud, which are required to be stated in the plaint, will depend upon the facts of each particular case and no abstract principle can be laid down in this regard. Where some transaction of money takes place to which ''A'', ''B'' and ''C are parties and payment is made by cheques, in normal circumstances a third party ''X'' may not get knowledge of the said transaction unless he is informed about it by someone who has knowledge of the transaction or he gets an opportunity to see the accounts of the concerned parties in the Bank. In such a case an assertion by ''X'' that he got no knowledge of the transaction when it took place and that he came to know about it subsequently through some proceedings in court cannot be said to be insufficient pleading for the purpose of Order VI Rule 4 CPC. In such a case ''X'' can only plead that he got no knowledge of the transaction and nothing more. Having regard to the circumstances of the case, we are of the opinion that the High Court was in error in holding that there was no proper pleading of fraud".

The grievance of the defendant is that plaintiff has alleged cause of action for filing the suit is based on an Agreement of sale dated 12.01.2005 and without said agreement on record he cannot stand to sustain his claim in the suit and disputedly plaintiff has produced said agreement by way of secondary evidence and got it marked as Exhibit P-3(a) (after noting the objections made by 7th defendant in whose custody the original agreement was and same had been produced before the jurisdictional investigating authorities) and now after obtaining it from the investigating authorities it came to be produced before the Civil Court and as such plaintiff has to pay duty and penalty without which he cannot proceed with his claim.

At the first instance trial court by order dated 17.06.2013 ordered that duty and penalty should be collected on the said agreement of sale dated 12.01.2005 by treating it as a conveyance (No. 20) as per Article 5(e) of Stamp Act. Subsequently on 16.07.2013 order passed on 17.06.2013 has been reviewed by trial court and an opportunity extended to plaintiff to pay duty and penalty since he is also a party to agreement of sale dated 12.01.2005 and also for the reason that plaintiff has solely based his claim for relief sought for in the plaint on said agreement of sale dated 12.01.2005. It was also made clear by trial court that if either of the parties namely plaintiff or defendant No. 7 did not pay duty and penalty suitable orders regarding impounding of said document and also order on merit of the suit would be passed. Despite such order none of the parties paid duty and penalty and as such trial court by order dated 25.10.2013 impounded the said document and a direction came to be issued to the registry to send the original agreement of sale dated 12.01.2005 to the jurisdictional Deputy Commissioner or to the concerned Registrar for collection of duty and penalty of Rs. 1,06,94,640/- from defendant No. 7 by retaining true copy of the same. This court would not express any opinion with regard to the orders passed in this regard and defendant No. 7 is at liberty to work out his remedy if so advised.

Be that as it may. Issue in this appeal would be as to whether non payment of stamp duty and penalty would be a ground for rejection of plaint under clause (d) of Order VII. For exercise of power under clause (d) of order VII Rule 11 plaint averments should expressly state that it is barred in law. As to whether in the instant case secondary evidence was permissible to be taken on record or not is an issue which requires to be looked into by trial court after considering the attendant documents and circumstances that is prevailing and ultimately if the trial court comes to a conclusion that plaintiff is not entitled to the relief sought for, it may dismiss the suit. However, that would not be a ground to reject the plaint at the threshold itself. It is one thing to say that there is no cause of action to the suit and another to say that cause of action pleaded in the plaint would not enable the plaintiff to obtain the relief sought for. It is this exercise which is to be undertaken by the trial court and find out as to whether cause of action alleged in the plaint would bar the plaintiff from seeking the relief. Trial court has found that it is a mixed question of law and fact and as held by Hon''ble Apex Court in the case of Kamala and Others Vs. K.T. Eshwara Sa and Others, that an issue of limitation cannot be decided as an abstract principle of law divorced from facts since it involves mixed question of fact and law, I am of the considered view even in the present case trial court has rightly held admissibility of secondary evidence is an issue which requires to be considered after full fledged trial and it would be mixed question of fact and law. As such there cannot be any infirmity found in the order passed by trial court calling for interference at the hands of this court. Revision Petition is hereby dismissed. Order passed on I.A. No. 22 by I Additional Senior Civil Judge, Bangalore Rural District, Bangalore in O.S. 2291/2006 dated 23.06.2014 is hereby affirmed and it is made clear that no opinion is expressed with regard to the claim of 7th defendant about admissibility of secondary evidence. Said issue is kept open to be adjudicated and decided by trial court.

Learned Senior Advocates appearing for the parties in chorus would submit that they would be satisfied if a direction is issued to trial court to expeditiously dispose of the suit and within a time frame. Hence, trial court is hereby directed to expeditiously dispose of the suit at any rate within an outer limit of six months from this date subject to both the parties co-operating with the trial court in disposing the suit. In the event of either of the parties were to seek for adjournment without satisfaction to the trial court it would be at liberty to impose costs on those parties who seek adjournment.