2019 (7) TMI 191 - SC - Indian Laws

Maintainability of suit - Order 7 Rule 11(d) of the Civil Procedure Code - HELD THAT - The appellant(s) cannot claim any right merely on the basis of a self serving allotment letter pertaining to the concerned flat, purportedly given by the builder. Noticeably, contends learned counsel for respondent No.1 that the averments in the plaint(s) regarding allegation of fraud played upon the appellant(s) are vague and general. The same are baseless and unsubstantiated. We do not deem it necessary to elaborate on all other arguments as we are inclined to accept the objection of the appellant(s) that the relief of rejection of plaint in exercise of powers under Order 7 Rule 11(d) of CPC cannot be pursued only in respect of one of the defendant(s). In other words, the plaint has to be rejected as a whole or not at all, in exercise of power Order 7 Rule 11 (d) of CPC. Indubitably, the plaint can and must be rejected in exercise of powers under Order 7 Rule 11(d) of CPC on account of noncompliance of mandatory requirements or being replete with any institutional deficiency at the time of presentation of the plaint, ascribable to clauses (a) to (f) of Rule 11 of Order 7 of CPC. In other words, the plaint as presented must proceed as a whole or can be rejected as a whole but not in part. In that sense, the relief claimed by respondent No.1 in the notice of motion(s) which commended to the High Court, is clearly a jurisdictional error. The fact that one or some of the reliefs claimed against respondent No.1 in the concerned suit is barred by Section 34 of 2002 Act or otherwise, such objection can be raised by invoking other remedies including under Order 6 Rule 16 of CPC at the appropriate stage. These appeals must succeed on the sole ground that the principal relief claimed in the notice of motion filed by respondent No.1 to reject the plaint only qua the said respondent and which commended to the High Court, is replete with jurisdictional error - appeal allowed.

Summary

Issues Involved:
1. Rejection of plaint under Order 7 Rule 11(d) of CPC.
2. Applicability of Section 34 of the SARFAESI Act, 2002.
3. Rights of plaintiffs under the Maharashtra Ownership Flats Act, 1963.
4. Jurisdictional error in partial rejection of plaint.

Issue-wise Detailed Analysis:

1. Rejection of plaint under Order 7 Rule 11(d) of CPC:
The primary issue revolves around the rejection of the plaint against Axis Bank Ltd. (respondent No.1) under Order 7 Rule 11(d) of the Civil Procedure Code (CPC). The High Court had allowed the notice of motion filed by Axis Bank, resulting in the dismissal of the suits filed by the appellants against the bank. The Supreme Court, however, emphasized that the plaint can only be rejected as a whole and not in part. The Court referred to the decision in Sejal Glass Limited vs. Navilan Merchants Private Limited, which established that a plaint must be rejected entirely or not at all. The Supreme Court concluded that the relief sought by Axis Bank to reject the plaint only against them constituted a jurisdictional error and could not be entertained under Order 7 Rule 11(d) of CPC.

2. Applicability of Section 34 of the SARFAESI Act, 2002:
Axis Bank argued that the suits filed by the appellants were barred under Section 34 of the SARFAESI Act, 2002, which restricts civil courts from entertaining matters that fall within the jurisdiction of the Debt Recovery Tribunal (DRT). The Division Bench of the High Court had reversed the Single Judge's decision, holding that the suits were indeed barred by Section 34. However, the Supreme Court did not delve into the applicability of Section 34 in detail, as it resolved the matter on the jurisdictional error related to the partial rejection of the plaint.

3. Rights of plaintiffs under the Maharashtra Ownership Flats Act, 1963:
The appellants contended that they had statutory protection under the Maharashtra Ownership Flats Act, 1963, based on their agreements with the builder, Orbit Corporation Ltd. They argued that their rights to the flats were jeopardized by the mortgage transaction between the builder and Axis Bank. The Supreme Court acknowledged the appellants' reliance on the statutory protection but did not make a definitive ruling on this issue, leaving it open for determination at a later stage.

4. Jurisdictional error in partial rejection of plaint:
The Supreme Court identified a jurisdictional error in the High Court's decision to reject the plaint only against Axis Bank. The Court reiterated that the plaint must be rejected as a whole or not at all, citing the decision in Sejal Glass Limited. The Supreme Court restored the Single Judge's order dismissing the notice of motion filed by Axis Bank, thereby allowing the suits to proceed against all defendants, including the bank.

Conclusion:
The Supreme Court allowed the appeals, setting aside the Division Bench's judgment and restoring the Single Judge's order. The notice of motion filed by Axis Bank to reject the plaint only against them was dismissed, with the Court emphasizing that such a relief cannot be entertained under Order 7 Rule 11(d) of CPC. The Court left open the questions regarding the applicability of Section 34 of the SARFAESI Act and the rights of the plaintiffs under the Maharashtra Ownership Flats Act for future determination.