CASE DETAILS
| Bench A.M. KHANWILKAR J. AJAY RASTOGI J. | Case no. (2019) 7 SCC 158 | Acts/law Arbitration Act, 1996 |
INTRODUCTION:
This case Madhav Prasad Aggarwal vs. Axis Bank Ltd deals with a batch of appeals that was filed against the order of the Bombay High Court whereby an application under order 7 rule 11 was filed by the respondent for rejection of plaint only against himself was allowed by the division bench consequently suit was dismissed.
FACTS:
Appellant wanted to purchase a flat for which he had paid huge amount in installments to the builders as a consideration for flat, admittedly no registered document was executed for the said purchase of flat. There was only a letter of allotment to affirm the said purchase which was issued by the builders concerning flats.
Respondent no. 1 which is a bank gave loan to the builders from whom appellant was purchasing the said flat and builders said to have been executed a mortgage deed concerning the said flats. Appellant came to know the same form newspaper publication and he asserted that appellant was kept in dark as said mortgage was concealed from which affects their rights.
ISSUES:
- Whether the plaint can be rejected only against one defendant or it must be rejected as whole?
Suit:
Appellant filed a suit and prayed for the completion of flats in furtherance of the law and to handover possession to appellant. Also prayed against respondent no. 1 to disclose their assets moreover pass a restrainment order for not creating third party interest.
Respondent no. 1 filed an application under order 7 rule 11 for the rejection of plaint on the ground that suit against R1 is barred by section 34 of Security & reconstruction of financial assets & enforcement of security Act, 2002.
HIGH COURT: (rejection of plaint in part)
The said application of the respondent no. 1 under order 7 rule11 case be dismissed by Ld. Single judge of the High court on the ground that there is no bar under law to entertain the said civil suit except those matters which should be determined by the DRT (Debt recovery tribunal Act). Court further held that present case falls with the exception to above section 34.
Dismissal order of Ld. Single judge was impugned before the division bench and said application was allowed thereby evaluated that averment made in the plaint do not corroborate that there was fraud on the part of bank and the builder against the appellant.
SUPREME COURT:
Appellant aggrieved by the order of division bench filed appeal in Supreme Court wherein court relied on Selja Glass ltd. vs. Navilan Merchants (p) Ltd. (2018) 11 SCC 780 for determination of the issue concerning the dismissal of plaint against 1 defendant is viable and legally permissible or not.
In the aforesaid referred case court considered that whether this course is open to the court in exerciser of power under order 7 rule 11 to reject the plaint against few defendants and continue against rest. Court answered it negatively thereby opined that it is not permissible to reject qua particular portion of plaint a plaint should be rejected either whole or not at all.
The court found the arguments advanced on behalf of appellant more persuasive that an application under order 7 rule 11 can reject the plaint whole or not at all.
RATION & FINDING:
Paragraph no. 12 and 14 of the case in hand court concluded as under:
…the plaint as presented must proceed as a whole or can be rejected as a whole but not in part… The fact that one or some of the reliefs claimed against Respondent 1 in the suit concerned is barred by Section 34 of the 2002 Act or otherwise, such objection can be raised by invoking other remedies including under Order 6 Rule 16 CPC at the appropriate stage. That can be considered by the Court on its own merits and in accordance with law….
14. A fortiori, these appeals must succeed on the sole ground that the principal relief claimed in the notice of motion filed by Respondent 1 to reject the plaint only qua the said respondent and which commended to the High Court, is replete with jurisdictional error. Such a relief “cannot be entertained” in exercise of power under Order 7 Rule 11(d) CPC. That power is limited to rejection of the plaint as a whole or not at all.
The impugned order of division bench was set aside and the order of ld. Single judge was restored and therefore there was no rejection of plaint under order 7 rule 11 of CPC which was claimed by the respondent no. 1.