2018 (10) TMI 2010 - HC - Indian Laws

Rejection of plaint under the provisions of Order VII Rule 11 CPC - suit barred by time limitation or not - non-production of documents - HELD THAT - The material facts on which the plaintiff's cause of action would arise was duly placed on the record by the plaintiff. The material facts would depend upon the facts of each case and no rule of universal application can be laid. At any point of time, if it is declared by the plaintiff that agreement or any other relevant documents were not available or would be made available subsequently, or unable to produce the same would not meant that during the course of trial also, the plaintiff would not be in a position to produce the same. The suit cannot be rejected on the ground of non production of the documents. While considering application under Order VII Rule 11 CPC, the Court is not required to take into consideration the defence set up by the defendant in its written statement. The question whether the plaint discloses any cause of action is to be decided by looking at the averments contained in the plaint itself and not the defence set up in the written statement. What is to be seen is whether or not the meaningful reading of the plaint discloses cause of action. While considering the application, the strength or weakness of the case of the plaintiff is not to be seen. The Court should look at the plant and documents accompanying the plaint and not the defence of the defendant or the documents relied upon by the defendants. The cause of action is to be culled out on a conjoint reading of all the paragraphs of the plaint - It is not competent for the Court to go into the correctness or otherwise of all the allegations constituting the cause of action, correctness or otherwise of the allegations constituting the cause of action is beyond purview of Order VII Rule 11 a CPC where the allegations made in the plaint prima facie discloses cause of action, the plaint cannot be rejected. It is clear that in order to consider Order VII Rule 11 CPC, the Court has to look into the averments made in the plaint as a whole and the same can be exercised by the trial Court at any stage of the suit. It is also clear that the averments in the instant case Exh. 22 are immaterial and it is the duty of the Court to scrutinize the averments/pleadings in the plaint. The trial Court has overlooked these facts in deciding the application Exh. 22 and thereby ignored the averments made in the plaint. At this stage, the pleas taken by the defendant in its application Exh. 22 or raising of the dispute of non disclosure of cause of action in the plaint are wholly irrelevant, as the matter is to be decided only on the plain averments. There are no hesitation in reversing the view taken by the learned trial Judge by setting aside the impugned Order dated 17th March 2017 allowing the Application Exh. 22 moved by the respondent-original defendant under Order VII Rule 11 CPC, and thereby rejecting the plaint of the appellant-plaintiff. Appeal allowed.

Summary

Issues Involved:
1. Rejection of the plaint under Order VII Rule 11 CPC.
2. Whether the suit is barred by the law of limitation.
3. Whether the plaint discloses a cause of action.
4. The requirement of producing the contract/agreement between the parties.
5. The acknowledgment of debt and its implications under Section 18 of the Limitation Act, 1963, and Section 25 of the Contract Act.

Detailed Analysis:

1. Rejection of the plaint under Order VII Rule 11 CPC:
The appellant challenged the rejection of the plaint by the Commercial Court, Rajkot, under Order VII Rule 11 CPC. The trial court concluded that the plaint lacked necessary cause of action and failed to bring on record the contract between the parties. The appellate court, however, found that the trial court erroneously interpreted Order VII Rule 11 CPC by not properly appreciating the language used in the provision and the pleadings of the plaintiff.

2. Whether the suit is barred by the law of limitation:
The trial court initially held that the suit was not barred by limitation, citing acknowledgment of debt by the defendant. However, the appellate court scrutinized the letters cited by the plaintiff and determined that the acknowledgment of debt was conditional and not an unconditional promise to pay, thus not satisfying Section 25(3) of the Contract Act. Despite this, the appellate court concluded that whether the suit was barred by limitation was a mixed question of law and facts that should be determined at trial.

3. Whether the plaint discloses a cause of action:
The trial court rejected the plaint on the grounds of no cause of action. The appellate court disagreed, stating that the plaintiff had clearly pleaded the cause of action in the plaint, particularly in para 9, which detailed the failure of the defendant to pay dues and the subsequent actions taken by the plaintiff. The court emphasized that the cause of action should be determined from the plaint itself, not from the defenses raised by the defendant.

4. The requirement of producing the contract/agreement between the parties:
The trial court noted the absence of the contract between the parties as a reason for rejecting the plaint. The appellate court countered this by stating that non-production of documents at the initial stage does not preclude the plaintiff from producing them during the trial. The court held that the suit could not be rejected solely on the ground of non-production of the contract.

5. The acknowledgment of debt and its implications under Section 18 of the Limitation Act, 1963, and Section 25 of the Contract Act:
The trial court found that the defendant had acknowledged the debt, thereby extending the limitation period. The appellate court, however, clarified that the acknowledgment was conditional and did not constitute a promise to pay under Section 25(3) of the Contract Act. Despite this, the court held that the issue of limitation was a triable issue that should be resolved during the trial.

Conclusion:
The appellate court reversed the trial court's decision, setting aside the order that rejected the plaint. It restored the plaint to its original file and directed the Commercial Court, Rajkot, to proceed afresh in accordance with the law. The court also provided a stay on the trial court's proceedings until 15th November 2018 to allow the respondent to appeal.