InCivil Appeal No. 7891 of 2023 -SC- Supreme Court reinforces principle that no evidence or merits can be examined at the stage of deciding Order VII Rule 11 application under CPC
Justice Vikram Nath & Justice Rajesh Bindal [30-11-2023]

Read Order: Eldeco Housing and Industries Limited V. Ashok Vidyarthi and Others

Chahat Varma

New Delhi, December 4, 2023: The Supreme Court has reaffirmed the principle that no amount of evidence or merits of the controversy can be examined at the stage of deciding an application under Order VII Rule 11 of the Code of Civil Procedure (CPC).

In the case at hand, the plaintiff/appellant, Eldeco Housing and Industries Limited, had appealed against the order, passed by the Allahabad High Court. This order pertained to a Review Application. The High Court's decision had upheld the application filed by respondent No. 1, Ashok Vidyarthi, the defendant, before the Trial Court under Order VII Rule 11(d) of the CPC. Consequently, the Trial Court had allowed the application, leading to the dismissal of the suit filed by the appellant.

The factual background of the case was that an MoU was executed on 31.08.1998 between the appellant and respondent No. 1 concerning the sale of a property, acknowledging a pending litigation among the family members of respondent No. 1. The MoU specified that the sale deed would be registered after the resolution of the litigation and the vendor's rights were determined. Upon learning that respondent No. 1 intended to sell the property to third parties, the appellant filed a suit for injunction, seeking a restraint on the transfer or encumbrance of the property. However, the suit was dismissed as respondent No. 1 denied any intention to sell the property or create third-party interests.

Subsequently, the appellant was not informed about the status of the family members' litigation by respondent No. 1. When the appellant discovered respondent No. 1's intent to dispose of the property without updating them on the litigation's resolution, a suit for specific performance was filed to enforce the MoU dated 31.08.1998. In response, respondent No. 1 filed an application under Order VII Rule 11(d) CPC for the rejection of the plaint on the grounds of the suit being barred by law under Order II Rule 2 CPC.

The Trial Court initially rejected the application, and the High Court dismissed the revision filed against this order. However, the respondent No. 1 subsequently filed a Review Application, which was granted by the High Court, leading to the allowance of the application filed under Order VII Rule 11(d) CPC and the rejection of the appellant's suit.

The division bench of Justice Vikram Nath and Justice Rajesh Bindal examined the decision rendered in Kamala and others v. K.T. Eshwara Sa and others [LQ/SC/2008/1019], wherein thecourt had opined that for invoking clause (d) of Order VII Rule 11 CPC, only the averments in the plaint would be relevant. For this purpose, there cannot be any addition or subtraction. No amount of evidence can be looked into. The issue on merits of the matter would not be within the realm of the Court at that stage. The Court at that stage would not consider any evidence or enter a disputed question of fact of law.

The bench further, relying on the principles outlined in Dahiben v. Arvindbhai Kalyanji Bhanusali [LQ/SC/2020/554], emphasized that the remedy under Order VII Rule 11 is an independent and special one, empowering the court to summarily dismiss a suit if it finds no cause of action or if the suit is time-barred. The bench stressed that the power under this rule is drastic and must strictly adhere to specified conditions. It highlighted the court's duty to scrutinize the plaint's averments and documents at the initial stage. The bench also highlighted the mandatory nature of Order VII Rule 11, allowing its exercise at any stage of the suit, and clarified that if the plaint doesn't disclose a cause of action, rejection is imperative.

The bench emphasized that the documents referred to by the respondent in support of rejecting the plaint could not be considered at this stage. These documents were not part of the record filed along with the plaint. The respondent's stance, presented in the application under Order VII Rule 11 CPC, was that the mentioned documents were crucial for rejecting the plaint. The Court asserted that, at the stage of deciding the application under Order VII Rule 11 CPC, no evidence or merits of the controversy could be examined.

As a result, the Court concluded that the High Court's order in the Review Application, upholding the rejection of the plaint, should be set aside and the Trial Court was directed to proceed with the suit.

Accordingly, the present appeal was allowed.