2020 (3) TMI 1452 - HC - Indian Laws

Rejection of two applications filed under Order 7 Rule 11 of the Code of Civil Procedure - suit for specific performance of contract and permanent injunction - whether acceptance of contentions raised on behalf of the revision applicants would lead to rejection of plaint in part or rejection of the plaint as a whole only against the revision applicants before this Court? HELD THAT - A perusal of the plaint in the present case and the agreement filed along with the plaint clearly shows that even as per the pleadings in the plaint and the clauses of the agreement in question the parties to the agreement were only the plaintiff and the defendants other than the revision applicants who had filed the applications for rejection of plaint as against them. There is no dispute about the fact that respondent No. 1 i.e. the original plaintiff entered into the said agreement only with the original defendant Nos. 3 10 11 and 19. It is an admitted position that other than the aforesaid defendants none of the defendants were party to the said agreement dated 30/06/2016. The agreement could therefore be specifically enforceable only against those defendants who were party to the said agreement. There can be no doubt about the same - In the present case the sole respondent has obviously not made any such statements in respect of the revision applicants because even as per the agreement on which he relies it is evident that the said agreement was executed between him and only original defendant Nos. 3 10 11 and 19. Thus there is absolute lack of pleadings and in fact no material to show that any agreement in the present case could be specifically enforced as against the revision applicants. In the impugned order the Court below has accepted this position and at one place it has found that the revision applicants were not signatories to the agreement and therefore the agreement could not be enforceable against them and it would be inequitable to enforce specific performance of such contract. The Court below went to the extent of observing that it was almost a practice of fraud on the revision applicants in the present case that the agreement was null and void as against the revision applicants and the suit could therefore not be decreed against them. It was also observed that it could be safely held that there was no cause of action as against the revision applicants - the Court below held that the application for rejection of plaint filed by the revision applicants could not be granted because the rejection of the plaint had to be as a whole and the plaint could not be split only to be rejected as against the revision applicants. It is significant that the revision applicants are not seeking rejection of plaint qua a particular portion of the plaint or qua any relief sought in the plaint but they are seeking rejection of the plaint as a whole as against them. It is significant that in the plaint the sole respondent has sought relief of direction to the defendants to accept the balance consideration in terms of the aforesaid agreement and to execute sale deed further seeking a direction that if the defendants fail to do so the same be directed to be executed through the Court and a permanent injunction is sought against the defendants to the effect that they should not sell the land to any other person - the Court below could not have rejected the applications filed by the revision applicants at Exhibits-83 and 101 after having accepted the contentions of the revision applicants only on the ground that acceptance of their prayers would amount to splitting of the plaint and rejecting the same partially which could not be permitted. The impugned order passed by the Court below is quashed and set aside - Revision application allowed.

Summary

Issues Involved:
1. Rejection of plaint under Order 7 Rule 11 of the Code of Civil Procedure.
2. Specific performance of contract and permanent injunction.
3. Interpretation and applicability of precedents from the Supreme Court.

Issue-wise Detailed Analysis:

1. Rejection of plaint under Order 7 Rule 11 of the Code of Civil Procedure:
The appellants filed applications under Order 7 Rule 11 seeking rejection of the plaint against them, arguing that they were not parties to the agreement dated 30/06/2016, and hence, there was no cause of action against them. The Court below initially found that the agreement was not enforceable against the appellants as they were not signatories and that the respondent had no cause of action against them. However, the Court below rejected the applications, stating that the rejection of the plaint in piecemeal was not permissible and that the plaint could only be rejected as a whole.

2. Specific performance of contract and permanent injunction:
The respondent filed a suit for specific performance and permanent injunction, claiming that an agreement for the sale of agricultural lands was executed by four original defendants, who later sold the property to a third party. The respondent alleged readiness and willingness to perform his part of the contract. The appellants contended that since they were not parties to the agreement, the suit for specific performance could not proceed against them.

3. Interpretation and applicability of precedents from the Supreme Court:
The appellants relied on the Supreme Court judgment in Church of Christ Charitable Trust & Educational Charitable Society v. Ponniamman Educational Trust, which held that a plaint could be rejected against some defendants if there was no cause of action against them. The Court noted conflicting judgments from co-equal benches of the Supreme Court, including Sejal Glass Limited v. Navilan Merchants (P) Ltd. and Madhav Prasad Aggarwal v. Axis Bank Ltd., which held that a plaint could not be rejected in part. The Court followed the earlier judgment in Church of Christ Charitable Trust, as it was binding unless explained by subsequent judgments.

Detailed Analysis:

Rejection of plaint under Order 7 Rule 11:
The Court found that the appellants were not signatories to the agreement and thus, the agreement was not enforceable against them. The Court below had accepted this position but rejected the applications for rejection of the plaint, reasoning that the plaint could not be rejected in piecemeal. However, the High Court observed that the appellants were seeking rejection of the plaint as a whole against them, not partially, and hence, the rejection of the plaint against the appellants was justified.

Specific performance of contract and permanent injunction:
The agreement for sale was executed only by four defendants, and the respondent sought specific performance against all defendants, including the appellants who were not parties to the agreement. The Court noted that specific performance could only be enforced against the signatories to the agreement. The rule of pleadings required specific details of the agreement, which the respondent failed to provide concerning the appellants. Therefore, the Court held that the suit could not be decreed against the appellants.

Interpretation and applicability of precedents:
The Court followed the precedent set by the Supreme Court in Church of Christ Charitable Trust, which allowed rejection of the plaint against some defendants if there was no cause of action against them. The subsequent judgments in Sejal Glass Limited and Madhav Prasad Aggarwal did not reference or explain the earlier judgment, leading the Court to follow the binding precedent of Church of Christ Charitable Trust. The Court emphasized that the appellants were seeking rejection of the plaint as a whole against them, aligning with the precedent.

Conclusion:
The High Court allowed the revision applications, quashing the impugned order and rejecting the plaint against the appellants. The Court clarified that the rejection of the plaint against the appellants did not amount to piecemeal rejection but was a rejection of the plaint as a whole against them. The decision was based on the binding precedent of the Supreme Court and the lack of cause of action against the appellants.