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RAVINDER KUMAR vs M/S GIGANTIC IMPEX PVT LTD

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* IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on: 13th February, 2024.
Date of decision: 3rd April, 2024

+ CS(OS) 3337/2014 and I.A. 25435/2015
SHRI RAVINDER KUMAR ….. Plaintiff
Through: Mr. Ravi Gupta, Senior Adv. Along with Mr. Rajesh Bansal & Ms. Muskaan Mehra, Advs. (M: 9971097279)
versus

M/S GIGANTIC IMPEX PVT LTD ….. Defendant
Through: Ms. Maneesha Dhir, Mr. Karan Batura, Ms. Karishma Malani, Advs. (M: 9001994141)
WITH
+ CS(OS) 3338/2014 and I.A. 5443/2015
SHRI RAMESH KUMAR ….. Plaintiff
Through: Mr. Ravi Gupta, Senior Adv. Along with Mr. Rajesh Bansal & Ms. Muskaan Mehra, Advs.
versus

M/S GIGANTIC IMPEX PVT LTD ….. Defendant
Through: Ms. Maneesha Dhir, Mr. Karan Batura, Ms. Karishma Malani, Advs.
AND
+ CS(OS) 2524/2015 and I.A.2915/2017
SH. MANOJ KUMAR ….. Plaintiff
Through: Mr. Ravi Gupta, Senior Adv. Along with Mr. Rajesh Bansal & Ms. Muskaan Mehra, Advs.
versus

M/S ZEST HIGHTECH PVT. LTD ….. Defendant
Through: Ms. Maneesha Dhir, Mr. Karan Batura, Ms. Karishma Malani, Advs.
CORAM:
JUSTICE PRATHIBA M. SINGH

JUDGMENT

Prathiba M. Singh, J.
1. This hearing has been done through hybrid mode.
I.A. 25435/2015 (u/O VII Rule 11 CPC) in CS(OS) 3337/2014
I.A. 5443/2015 (u/O VII Rule 11 CPC) in CS(OS) 3338/2014
I.A. 2915/2015 (u/O VII Rule 11 CPC) in CS(OS) 2524/2015

Background
2. These three suits have been filed seeking declaration and cancellation of sale deeds in respect of three parcels of land. The details of the said lands are as under:
Three portions of the Land comprising in Khata/Khatoni No.21/25, bearing Khasra No.11/7/2 (12-17), 20/1/2 (17-19), 2/2/2 (1-9), 24/22/2(1-19), 25/21(4-12), 33/6 (4-9), 16/1 (1-9), 25/2 (3-2), 34/1(4-12), 2(4-16), 9(4-16), 10(4-16), 11 (4-16), 12 (4-16), 19 (4-16), 20 (4-16), 21 (4-16), 22 (4-16), 23/1 (1-0), 26 (0-12), 36/1 (4-16), 2 (4-16), 3 (4-16), 8 (1-18), 9 (4-16), 10 (4-16), 37/5/2 (2-10), 6/1 (1-12), 15/2 (0-14), 16/1 (1-0), 105/84(1-1), 138(3-11), 141/1(0-5), situated in the Revenue Estate of Village Pandwala Kalan, New Delhi. The particulars of the three suits are:

S. No
Suit
Area of the Property
1
In CS(OS) 3337/2014

Area of land total measuring 133 bighas 03 biswas – property of Sh. Ravinder Kumar
2
In CS(OS) 3338/2014
Area of land total measuring 121 bighas 15 biswas – property of Sh. Ramesh Kumar
3
In CS(OS) 2524/2015
Area of land total measuring 131 Bighas 04 Biswas-property of Sh. Manoj Kumar

3. CS(OS) 3337/2014 and CS(OS) 3338/2014 have been filed by Ravinder Kumar and Ramesh Kumar, respectively, seeking cancellation of the sale deed dated 12th September, 2013, and a permanent injunction restraining M/s Gigantic Impex Pvt. Ltd. from interfering with the suit property i.e., land situated at Revenue Estate of Village, Pandwala Kalan, New Delhi as provided in paragraph 1 of the plaint.
4. On the other hand, CS(OS) 2524/2015 has been filed by Manoj Kumar, seeking cancellation of the sale deed dated 12th September, 2013, and a permanent injunction restraining Zest Hightech Pvt. Ltd. from interfering with the suit property i.e., land situated at Revenue Estate of Village, Pandwala Kalan, New Delhi as provided in paragraph 1 of the plaint.
5. The Plaintiffs in the suit are Sh. Ravinder Kumar, Sh. Ramesh Kumar and Sh. Manoj Kumar. The Defendants in these suits are M/s Gigantic Impex Pvt. Ltd. and Zest Hightech Pvt. Ltd.
6. These cases pertain to a dispute over the ownership and sale of various portions of the land of the suit property in the three suits i.e., first portion admeasuring 133 bighas 03 biswas in CS(OS) 3337/2014, second portion measuring 121 bighas 15 biswas in CS(OS) 3338/2014 and third portion 131 bighas 04 biswas in CS(OS) 2524/2015. The suit property situated in the Revenue Estate of Village Pandwala Kalan, New Delhi is stated to be jointly owned by the Plaintiffs as co-sharers.
7. In the suits it is alleged by the Plaintiffs that despite the absence of a legal partition among the co-sharers, the Defendants’ (i.e., M/s Gigantic Impex Pvt. Ltd. in CS(OS) 3337/2014, CS(OS) 3338/2014 and Zest Hightech Pvt. Ltd in CS(OS) 2524/2015) representative, along with the Plaintiffs’ relatives, expressed interest in purchasing the lands at the rate of Rs.4,10,00,000/- per acre. Subsequently, negotiations took place regarding the sale consideration, culminating in an agreement where the Defendants agreed to purchase the land at a specified price per acre, out of which, Rs.53,00,000/- per acre shall be paid vide cheque/bank draft as it is the market price fixed by the Govt. of NCT of Delhi and remaining consideration amount shall be paid in cash. The negotiations are claimed to have taken place at the residence of the Plaintiffs.
8. It is alleged that the Plaintiffs, influenced by the assurances of the Defendants’ representative and the involvement of relatives, agreed to transfer their respective portions of the land, by signing some documents purportedly for obtaining a ‘No Objection Certificate’ required for registration of the sale deed. However, the Plaintiffs later discovered that the post-dated cheques provided by the two Defendant companies bounced due to insufficient funds. It is stated that despite repeated requests and assurances from the two Defendant companies to fulfil the payment obligations, the respective Defendants failed to do so, continuously delaying and avoiding payment while attempting to negotiate with other parties for the sale of the land.
9. The Plaintiffs assert that the sale deeds which were executed by the respective Defendant companies were fraudulent, as it was done without consideration, in violation of statutory provisions, and with the intention to deprive the Plaintiffs of their rightful ownership of the land. As a result, the Plaintiffs inter alia seek cancellation of the sale deeds, permanent injunction against the Defendant companies from interfering with the joint possession of the various portions of land, and costs for the suit, arguing that the actions by the said two Defendant companies have cast a cloud over the Plaintiffs title to their respective share of the lands.
10. The sale deeds executed on 12th September, 2013 are not in dispute between the parties. However, what is disputed is the fact that the sale consideration was received by the Plaintiffs- Ravinder Kumar, Ramesh Kumar and Manoj Kumar. The total sale consideration as stated in the sale deeds in the suits is as under:
Suit No.
Total sale consideration as per sale deed
CS(OS) 3337/2014
Rs.13 crores
CS(OS) 3338/2014
Rs.13 crores
CS(OS) 2524/2015
Rs.13 crores

11. The total amount that has been received by the Plaintiffs is under dispute. The Plaintiffs’ case in CS(OS) 2524/2015 is that a sum of Rs. 9 crores has been received but no amount has been received in the other two suits. However, the Defendants’ case is that apart from the Rs. 9 crores, a sum of Rs.1 crore each has been paid in CS(OS) 3337/2014 and 3338/2014.
12. Be that as it may, the admitted position is that the total sale consideration has not been paid to the Plaintiffs.
13. It is submitted by the ld. Counsels for the parties that the possession of the suit properties is with the Plaintiffs.
14. The Defendants press the present application under Order VII Rule 11 of CPC, seeking rejection of plaint in all the three suits.

Submissions
15. According to the Defendants, in view of Section 55(4)(b) of the Transfer of Property Act, 1882 (hereinafter, ‘the Act’), the only relief that the Plaintiffs are entitled to, is of payment of money and interest thereof, which is unpaid. Mr. Karan Batura, ld. Counsel for the Defendants, relies upon the decision of the Supreme Court of India in Kaliaperumal v. Rajagopal, (2009) 4 SCC 193. It is his submission that once there are registered sale deeds, the suits would not be maintainable.
16. On the other hand, Mr. Ravi Gupta, ld. Senior Counsel for the Plaintiffs submits that since the possession of the suit land is with the Plaintiffs, Section 55(4)(b) of the Act would not be applicable. Moreover, he relies upon the same decision of Kaliaperumal (supra) to argue that the intention of the parties has to be deciphered from the sale deed. Furthermore, for the said intention to be deciphered, oral evidence would be required to be led. It is also the submission on behalf of ld. Sr. Counsel that the conduct of the parties would have to be looked into.
17. While the matters were being heard, a proposal was made by the ld. Sr. Counsel that the Plaintiffs are willing to return the entire amount along with interest to the Defendants. Parties were to seek instructions on this aspect.
18. With respect to the said proposition, ld. Counsel for the Defendants submit that the only counter offer that the Defendants are willing to make is that in respect of one parcel of land qua for which Rs. 9 crores stands paid, the transfer of the said property may be effected subject to payment of additional Rs. 2 crores by the Defendants to the Plaintiff. The remaining two parcels of land may be released.
19. However, the said proposals were not acceptable to the Plaintiffs. Thus, there is no possibility of amicable resolution and settlement in the matter.

Analysis
20. The applications under Order VII Rule 11 of CPC are accordingly being decided by this Court. The main issue that has been raised is that the suit itself is not maintainable in view of Section 55(4)(b) of the Act and the only relief that the Plaintiffs are entitled is for the unpaid consideration amount and for interest. Section 55(4)(b) of the Act reads as under:
“55. Rights and liabilities of buyer and seller.—In the absence of a contract to the contrary, the buyer and the seller of immoveable property respectively are subject to the liabilities, and have the rights, mentioned in the rules next following, or such of them as are applicable to the property sold:
(1) The seller is bound—
(a) to disclose to the buyer any material defect in the property [or in the seller’s title thereto] of which the seller is, and the buyer is not, aware, and which the buyer could not with ordinary care discover;
(b) to produce to the buyer on his request for examination all documents of title relating to the property which are in the seller’s possession or power;
(c) to answer to the best of his information all relevant questions put to him by the buyer in respect to the property or the title thereto;
(d) on payment or tender of the amount due in respect of the price, to execute a proper conveyance of the property when the buyer tenders it to him for execution at a proper time and place;
(e) between the date of the contract of sale and the delivery of the property, to take as much care of the property and all documents of title relating thereto which are in his possession as an owner of ordinary prudence would take of such property and documents;
(f) to give, on being so required, the buyer, or such person as he directs, such possession of the property as its nature admits;
(g) to pay all public charges and rent accrued due in respect of the property up to the date of the sale, the interest on all incumbrances on such property due on such date, and, except where the property is sold subject to incumbrances, to discharge all incumbrances on the property then existing.
(2) The seller shall be deemed to contract with the buyer that the interest which the seller professes to transfer to the buyer subsists and that he has power to transfer the same:
Provided that, where the sale is made by a person in a fiduciary character, he shall be deemed to contract with the buyer that the seller has done no act whereby the property is
incumbered or whereby he is hindered from transferring it.
The benefit of the contract mentioned in this rule shall be annexed to, and shall go with, the interest of the transferee as such, and may be enforced by every person in whom that interest is for the whole or any part thereof from time to time vested.
(3) Where the whole of the purchase-money has been paid to the seller, he is also bound to deliver to the buyer all documents of title relating to the property which are in the seller’s possession or power:
Provided that, (a) where the seller retains any part of the property comprised in such documents, he is entitled to retain them all, and, (b) where the whole of such property is sold to different buyers the buyers, of the lot of greatest value is entitled to such documents. But in case (a) the seller, and in case (b) the buyer, of the lot of greatest value, is bound, upon every reasonable request by the buyer, or by any of the other buyers, as the case may be, and at the cost of the person making the request, to produce the said documents and furnish such true copies thereof or extracts therefrom as he may require; and in the meantime, the seller, or the buyer of the lot of greatest value, as the case may be, shall keep the said documents safe, uncancelled and undefaced, unless prevented from so doing by fire or other inevitable accident.
(4) The seller is entitled—
(a) to the rents and profits of the property till the ownership thereof passes to the buyer;
(b) where the ownership of the property has passed to the buyer before payment of the whole of the purchase-money, to a charge upon the property in the hands of the buyer, [any transferee without consideration or any transferee with notice of the non-payment,] for the amount of the purchase-money, or any part thereof remaining unpaid, and for interest on such amount or part [from the date on which possession has been delivered].
(5) The buyer is bound—
(a) to disclose to the seller any fact as to the nature or extent of the seller’s interest in the property of which the buyer is aware, but of which he has reason to believe that the seller is not aware, and which materially increases the value of such interest;
(b) to pay or tender, at the time and place of completing the sale, the purchase-money to the seller or such person, as he directs: provided that, where the property is sold free from incumbrances, the buyer may retain out of the purchase-money the amount of any incumbrances on the property existing at the date of the sale, and shall pay the amount so retained to the persons entitled thereto;
(c) where the ownership of the property has passed to the buyer, to bear any loss arising from the destruction, injury or decrease in value of the property not caused by the seller;
(d) where the ownership of the property has passed to the buyer, as between himself and the seller, to pay all public charges and rent which may become payable in respect of the property, the principal moneys due on any incumbrances subject to which the property is sold, and the interest thereon afterwards accruing due.
(6) The buyer is entitled—
(a) where the ownership of the property has passed to him, to the benefit of any improvement in, or increase in value of, the property, and to the rents and profits thereof;
(b) unless he has improperly declined to accept delivery of the property, to a charge on the property, as against the seller and all persons claiming under him to the extent of the seller’s interest in the property, for the amount of any purchase-money properly paid by the buyer in anticipation of the delivery and for interest on such amount; and, when he properly declines to accept the delivery, also for the earnest (if any) and for the costs (if any) awarded to him of a suit to compel specific performance of the contract or to obtain a decree for its rescission.
An omission to make such disclosures as are mentioned in this section, paragraph (l), clause (a), and paragraph (5), clause (a), is fraudulent.”

21. A perusal of the said provision would show that one of the preconditions is that the possession ought to have been passed to the purchaser. In the present case, the admitted position is that the possession remains with the Plaintiff. Thus, the Clauses in the sale deed which state that the possession has been handed over, would be contrary to the actual facts. Moreover, in the decision of Kaliaperumal (supra) the Supreme Court considered the interpretation of Section 55(4)(b) of the Act and has held that once the registration of the sale deed takes place, normally, the ownership and title would pass however, the same has been held to be not an invariable rule. The relevant portions of the judgement are extracted below:
“15. The question posed for our consideration is whether title to the disputed properties passed to the appellant when the sale deed dated 26-6-1983 was registered on 26-10-1983, though admittedly no amount was paid towards consideration to the respondents.
16. Sale is defined as being a transfer of ownership for a price. In a sale there is an absolute transfer of all rights in the properties sold. No rights are left in the transferor. The price is fixed by the contract antecedent to the conveyance. Price is the essence of a contract of sale. There is only one mode of transfer by sale in regard to immovable property of the value of Rs 100 or more and that is by a registered instrument.
17. It is now well settled that payment of entire price is not a condition precedent for completion of the sale by passing of title, as Section 54 of the h Transfer of Property Act, 1882 (“the Act”, for short) defines “sale” as “a transfer of ownership in exchange for a price paid or promised or part-paid and part-promised”. If the intention of parties was that title should pass on execution and registration, title would pass to the purchaser even if the sale price or part thereof is not paid. In the event of non-payment of price (or balance price as the case may be) thereafter, the remedy of the vendor is only to sue for the balance price. He cannot avoid the sale. He is, however, entitled to a charge upon the property for the unpaid part of the sale price where the ownership of the property has passed to the buyer before payment of the entire price, under Section 55(4)(b) of the Act.
18. Normally, ownership and title to the property will pass to the purchaser on registration of the sale deed with effect from the date of execution of the sale deed. But this is not an invariable rule, as the true test of passing of property is the intention of parties. Though registration is prima facie proof of an intention to transfer the property, it is not proof of operative transfer if payment of consideration (price) is a condition precedent for passing of the property.
19. The answer to the question whether the parties intended that transfer of the ownership should be merely by execution and registration of the deed or whether they intended the transfer of the property to take place, only after receipt of the entire consideration, would depend on the intention of the parties. Such intention is primarily to be gathered and determined from the recitals of the sale deed. When the recitals are insufficient or ambiguous the surrounding circumstances and conduct of parties can be looked into for ascertaining the intention, subject to the limitations placed by Section 92 of the Evidence Act.”

22. The Supreme Court has also held that the true test would be to look at the intention of the parties. From the above, it is clear that the intention of the parties has to be seen though execution of a sale deed is prima facie proof of an intention to transfer.
23. In law, execution and registration of a sale deed usually passes on the title and the ownership. However, if it can be gleaned from the facts that the complete consideration has not been paid, possession has not been handed over and the parties did not intend to pass the title in the property, in that case, Section 55(4)(b) of the Act would not be applicable.
24. Further, in Vidyadhar v. Manikrao & Anr.(MANU/SC/0172/1999), the Supreme Court has observed in respect of whether a transaction constitute a sale or not as under:
“38. The real test is the intention of the parties. In order to constitute a “sale”, the parties must intend to transfer the ownership of the property and they must also intend that the price would be paid either in present or in future. The intention is to be gathered from the recital in the sale deed, conduct of the parties and the evidence on record.”

25. From the above, it is clear that the mere contents of the sale deed would not be sufficient but the intention of the parties and the evidence on record are also to be considered.
26. It is also the settled principle in law that whenever there is a dispute at question, the same cannot be considered in an application under Order 7 Rule 11 CPC as held in Popat and Kotecha Property v. State Bank of India Staff Association 2005 (7) SCC 510.
“19. There cannot be any compartmentalisation, dissection, segregation and inversions of the language of various paragraphs in the plaint. If such a course is adopted it would run counter to the cardinal canon of interpretation according to which a pleading has to be read as a whole to ascertain its true import. It is not permissible to cull out a sentence or a passage and to read it out of the context in isolation. Although it is the substance and not merely the form that has to be looked into, the pleading has to be construed as it stands without addition or subtraction of words or change of its apparent grammatical sense. The intention of the party concerned is to be gathered primarily from the tenor and terms of his pleadings taken as a whole. At the same time it should be borne in mind that no pedantic approach should be adopted to defeat justice on hair-splitting technicalities.
20. Keeping in view the aforesaid principles the reliefs sought for in the suit as quoted supra have to be considered. The real object of Order 7 Rule 11 of the Code is to keep out of courts irresponsible law suits. Therefore, Order 10 of the Code is a tool in the hands of the courts by resorting to which and by searching examination of the party in case the court is prima facie of the view that the suit is an abuse of the process of the court in the sense that it is a bogus and irresponsible litigation, the jurisdiction under Order 7 Rule 11 of the Code can be exercised.
21. Order 6 Rule 2(1) of the Code states the basic and cardinal rule of pleadings and declares that the pleading has to state material facts and not the evidence. It mandates that every pleading shall contain, and contain only, a statement in a concise form of the material facts on which the party pleading relies for his claim or defence, as the case may be, but not the evidence by which they are to be proved.
22. There is distinction between “material facts” and “particulars”. The words “material facts” show that the facts necessary to formulate a complete cause of action must be stated. Omission of a single material fact leads to an incomplete cause of action and the statement or plaint becomes bad. The distinction which has been made between “material facts” and “particulars” was brought by Scott, L.J. in Bruce v. Odhams Press Ltd.
23. Rule 11 of 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 paint in terms of Rule 13.”

27. In the present case, the clauses in the sale deed clearly establish a relationship between the parties. However, the intention of the parties is not clearly established. The Clauses in the sale deeds are relevant and are extracted below:-
i) That in pursuance of this sale deed and against the total consideration of Rs. 13,00,00,000/- (Rupees Thirteen Crore only), the VENDOR doth hereby sell, convey assign and transfer his all rights, titles and interests in the aforesaid land (fully described above) together with all structures (pucca or otherwise), thereto alongwith his all rights, title and interest including Bumidari, cultivator rights to the VENDEE, absolutely and forever.
ii) That the VENDEE has paid the aforesaid consideration of 13,00,00,000/- (Rupees Thirteen Crore only) in the following manner:-

Amount
Ch/P.O. No.
Dated
Bank
Rs.5,00,00,000/-
399107
15.11.13
HDFC, HAUZ KHAS
Rs.5,00,00,000/-
399108
16.11.13
HDFC, HAUZ KHAS
Rs.3,00,00,000/-
399109
17.11.13
HDFC, HAUZ KHAS

In full and final payment to the VENDOR, and the legal receipt of the same is hereby admitted and acknowledged by the VENDOR in full and final payment towards the sale price of his rights, titles and interest in the aforesaid land.
iii). That the VENDOR hereby explicitly admits and declares that having received the aforesaid consideration in full and final payment now nothing is left due to be paid by the VENDEE to the VENDOR on account of sale consideration against the purchase of the said land as the aforesaid consideration represents the full and final consideration of the transaction.
vi). That with the execution of this sale deed all the rights, titles, Interest, claim or concern of the VENDOR has ceased and the VENDEE has stepped into the shoes of the VENDOR forever. The VENDEE shall henceforth enjoy the rights of absolute ownership without any interference of objection from the VENDOR or any one else.
v) That the VENDOR has handed over the actual and peaceful physical vacant possession of the said land unto the VENDEE on spot.”

28. A perusal of the above clauses along with the plaint and written statement would show that the clauses in the sale deed and the undisputed factual position are contrary to each other:-
i) the entire sale consideration has actually not been received;
ii) that only legal receipt of the consideration has been mentioned in the agreement;
iii) that the possession of the suit land was not given to the transferee and the possession still remains with the transferor.
29. Clause (iii) of the said deed presumes that it is upon the receipt of the entire consideration in full payment that nothing would be left to be paid to the vendor. Factually, the absolute ownership in the opinion of this Court cannot be enjoyed without paying the full sale consideration. There is no explanation as to why physical possession continues to be with the Plaintiff despite Clause (v) of the sale deed. Thus, the intention of the parties for full sale upon receipt of full consideration has not clearly been established in the present case.
30. Further, it is noted that none of the grounds for rejection of plaint as laid down in Order VII Rule 11 of CPC have been satisfied in the present case. The Defendants argue that all three plaints are barred by the provisions of Section 55(4)(b) of the Act. In view of the clear contradictions between actual facts and the contents of the sale deed, the intention of the parties would need to be established by oral evidence. The conduct of the parties would also be required to be looked into.
31. The principles of Order VII Rule 11 of CPC have been repeatedly settled by the Supreme Court and have also been reiterated in Dahiben v. Arvindbhai Kalyanji Bhanusali, (2020) 7 SCC 366. The relevant portion of the said decision are set out below:
“23.2. The remedy under Order 7 Rule 11 is an independent and special remedy, wherein the court is empowered to summarily dismiss a suit at the threshold, without proceeding to record evidence, and conducting a trial, on the basis of the evidence adduced, if it is satisfied that the action should be terminated on any of the grounds contained in this provision.
23.3. The underlying object of Order 7 Rule 11(a) is that if in a suit, no cause of action is disclosed, or the suit is barred by limitation under Rule 11(d), the court would not permit the plaintiff to unnecessarily protract the proceedings in the suit. In such a case, it would be necessary to put an end to the sham litigation, so that further judicial time is not wasted.
23.4. In Azhar Hussain v. Rajiv Gandhi [Azhar Hussain v. Rajiv Gandhi, 1986 Supp SCC 315. Followed in Manvendrasinhji Ranjitsinhji Jadeja v. Vijaykunverba, 1998 SCC OnLine Guj 281 : (1998) 2 GLH 823] this Court held that the whole purpose of conferment of powers under this provision is to ensure that a litigation which is meaningless, and bound to prove abortive, should not be permitted to waste judicial time of the court, in the following words : (SCC p. 324, para 12)
“12. … The 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.”
23.5. The power conferred on the court to terminate a civil action is, however, a drastic one, and the conditions enumerated in Order 7 Rule 11 are required to be strictly adhered to.
23.6. Under Order 7 Rule 11, a duty is cast on the court to determine whether the plaint discloses a cause of action by scrutinising the averments in the plaint [Liverpool & London S.P. & I Assn. Ltd. v. M.V. Sea Success I, (2004) 9 SCC 512] , read in conjunction with the documents relied upon, or whether the suit is barred by any law.
xxx xxx xxx
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.
23.10. At this stage, the pleas taken by the defendant in the written statement and application for rejection of the plaint on the merits, would be irrelevant, and cannot be adverted to, or taken into consideration. [Sopan Sukhdeo Sable v. Charity Commr., (2004) 3 SCC 137]
23.11. The test for exercising the power under Order 7 Rule 11 is that if the averments made in the plaint are taken in entirety, in conjunction with the documents relied upon, would the same result in a decree being passed. This test was laid down in Liverpool & London S.P. & I Assn. Ltd. v. M.V. Sea Success I [Liverpool & London S.P. & I Assn. Ltd. v. M.V. Sea Success I, (2004) 9 SCC 512] which reads as : (SCC p. 562, para 139)
“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.”
23.12. In Hardesh Ores (P) Ltd. v. Hede & Co. [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 [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 [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 [Azhar Hussain v. Rajiv Gandhi, 1986 Supp SCC 315. Followed in Manvendrasinhji Ranjitsinhji Jadeja v. Vijaykunverba, 1998 SCC OnLine Guj 281 : (1998) 2 GLH 823].
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”

32. The Plaintiffs have also raised allegations of a fraud to the effect that non-payment of a substantial part of the sale consideration, is fraudulent conduct on behalf of the Defendants. The registrations of the sale deeds, as per the Plaintiffs, is alleged to be vitiated by fraud. When allegations of fraud are raised, evidence would require to be adduced.
33. In the facts of these cases, the Court has noticed that in respect of one parcel of land, a substantial amount of consideration has been paid. However, in respect of the remaining two portions, most of the sale consideration has not been paid. Even the cheques which were given have been dishonoured.
34. Under such circumstances, it would not be possible for this Court to hold that the complete ownership and title has, in fact passed, as possession is also admittedly with the Plaintiffs. The Recital to the contrary in the agreement is clearly an incorrect representation. When clauses in the agreement are contrary to actual facts, the agreement cannot be taken as a gospel truth.
35. Under these circumstances, this Court is of the opinion that there are disputed questions which have been raised and the intention of the parties would have to be looked after evidence has been led in these matters. The plaint cannot be rejected under Order VII Rule 11 CPC, 1908, taking the ground of Section 55(4)(b) of the Act at this stage. The proper course of action would be to frame an issue in this respect and permit the parties to lead evidence. The said issue of maintainability of the suits would then be decided after trial has been concluded.
36. At this stage, the merits of the averments are not analysed, except to state that the Plaintiffs have to discharge the burden of proving their case. No other grounds have been pressed under Order VII Rule 11 of CPC.
37. Thus, for all the above-mentioned reasons, the three suits cannot be rejected under the principles of Order VII Rule 11 of CPC. The applications are dismissed. The observations in this order shall not have a bearing on the final adjudication of the suits.
CS(OS) 3337/2014, CS(OS) 3338/2014, CS(OS) 2524/2015
38. List the suits for further proceedings on 12th July, 2024.

PRATHIBA M. SINGH
JUDGE
APRIL 03, 2024
Rahul/bh

CS(OS) 3337/2014 & connected matters Page 2 of 2