9911796707
TMI Blog2022 (4) TMI 195X X X X Extracts X X X X X X X X Extracts X X X X ..... allowing the application filed under Order VII Rule 11 of CPC. The High Court was not right in observing that the revisional court had exceeded its jurisdiction and it could not have allowed the application filed under Order VII Rule 11 of CPC and thereby reversed the order of the trial court and finally disposed of the suit. In fact, the High Court has failed to appreciate the second proviso to Section 115 of CPC (Orissa amendment) in its true perspective. The revisional court, being the High Court or the District Court, as the case may be, can reverse an order which would finally dispose of the suit or other proceeding - the High Court was not justified in setting aside the said order and remanding the matter to the revisional court (District Court) to consider afresh, the application filed by defendant no.1/appellant herein under Order VII Rule 11 of CPC seeking rejection of the plaint. Whether, the revisional court (District Court) was justified in allowing the application filed under Order VII Rule 11 of CPC and thereby rejecting the plaint filed by the plaintiff/respondent no.1 herein? - HELD THAT:- In Sopan Sukhdeo Sable and Ors. vs. Assistant Charity Commissioner a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Port Trust Authority. In the instant case, on a reading paragraph 13 of the plaint, it is evident that cheque issued had been dishonoured and defendant no.1 had issued notice under Section 138 of N.I. Act on 10th June, 2009, to the plaintiff and its Managing Director replied to the same through their advocate on 23rd June, 2009. Therefore, it is evident that the plaintiff by seeking the aforesaid reliefs is in substance frustrating the right of defendant no.1 to take steps under the provisions of N.I. Act for releasing the amount of cheque issued by the plaintiff to defendant no.1 for a sum of ₹ 56 lakhs by filing a civil suit and/or by initiating a criminal prosecution. In other words, by seeking such a declaration that the cheque was issued as a security and that the same was illegally handed over by defendant no.2 to defendant no.1 in violation of the terms and conditions of the MoU, the plaintiff in substance is making an attempt to frustrate proceedings being initiated under Section 138 of the N.I. Act or for recovery of the amount by filing a civil suit. While the plaintiff has certain grievances arising from the MoU, against the defendants which may give rise to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... security; (ii) Let it be declared that the said cheque has been illegally handed over by the defendant no.2 to the defendant no.1 by violating term and condition of the memorandum of understanding dated 17.01.2009; (iii) Let it be declared that the plaintiff is not liable to give delivery of 3876 MT of iron ore fines to the defendant no.1 nor the cheque amount since the defendant no.1 has failed to save the plaintiff s plot from cancellation; (iv) Let the cost of the suit be decreed in favour of the plaintiff and against the defendants; (v) Let any other decree/decrees be passed in favour of the plaintiff to which the plaintiff is entitled to under law and equity. 4. According to the plaintiff, which is a Private Limited Company, incorporated under the provisions of the Companies Act, 1956, it is engaged in the business of export of iron ore from Paradeep Port while defendant no.1 is also a Company incorporated under the provisions of the Companies Act, 1956, having its registered office at Kanpur, Uttar Pradesh, and also having its Branch at Kolkata in West Bengal. Defendant no.1 carries on business at Paradeep Port, Orissa in supplying and exporting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons that defendant no.1 would take steps to protect the licence of the plot given to the plaintiff from cancellation in seven days time and it was further agreed that defendant no.1 would give a cheque of ₹ 21.50 lakhs to the plaintiff towards the outstanding dues to the plaintiff. Similarly, the plaintiff would issue a cheque for ₹ 56 lakhs in favour of defendant no.1 and the same would remain in the custody of Sri Dilip Das, Advocate defendant no.2 as security, which is equivalent to the cost of 3876 MT of iron ore. The plaintiff would supply 3786 MT of iron ore fines to defendant no.1 if defendant no.1 succeeded in protecting the licence of the said plot of the plaintiff from being cancelled. Accordingly, plaintiff furnished a cheque for ₹ 56 lakhs in favour of defendant no.1 and handed over the same to Sri Dilip Das, Advocate defendant no.2 in the suit, as security. Defendant no.2 wrote a letter to the Managing Director of the plaintiff on 20th January, 2009 intimating therein that both cheques would be in his custody and the cheque drawn by the plaintiff amounting to ₹ 56 lakhs would not be handed over to defendant no.1 unless defendant no.1 fulfilled ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dues for which a cheque was issued on 17th January, 2009 which was also kept with defendant no.2 and in respect of which the plaintiff reserved its right to initiate appropriate proceeding for recovery of the said amount from defendant no.1. There were further correspondences between the parties and ultimately the aforementioned suit was filed by the plaintiff against the defendants. 8. On receipt of the summons sent by the trial court, defendant no.1 appeared and filed an application under Order VII Rule 11 of CPC seeking rejection of the plaint on the ground that the suit was not maintainable being barred under the provisions of the Specific Relief Act, 1963 (for short, the SR Act ) and secondly, the suit was frivolous and instituted as a subterfuge to defeat the legitimate claim of defendant no.1 without having any right to sue. Objection was filed to the said application by the plaintiff. The said application was considered by the trial court and dismissed by refusing to reject the plaint. 9. Being aggrieved, defendant no.1 preferred C.R.P. No.5 of 2012 before the Court of District Judge, Khurda at Bhubaneswar under Section 115 of the CPC. By order dated 20th March, 201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the trial court to do so. While adverting to Section 115 of the CPC [vide Orissa Act 26 of 1991, Section 2 (w.e.f. 7th November, 1991)], learned counsel for the appellant contended that when the trial court failed to exercise jurisdiction vested in it and refused to reject the plaint by allowing the application filed under Order VII Rule 11 of the CPC by the appellant herein, the revisional court rightly allowed the said revision and rejected the plaint which finally disposed of the suit in terms of the second proviso to the said Section. It was contended that the High Court has not taken into consideration the Orissa amendment and has further misconstrued the object and import of Section 115 of the CPC vis vis the provisions of the revisional court and has erroneously set aside the order of the revisional court rejecting the plaint and remanding the matter to the revisional court for fresh consideration. 12. Drawing our attention to the order of the High Court, it was contended that the said order is contrary to Section 115 of CPC (Orissa amendment) and hence the impugned order may be set aside and the order of the revisional authority may be restored. It was contended by l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the revisional court for fresh consideration with an observation that the revisional court may, in turn, remand the matter to the trial court if necessary. This was on the premise that the revisional court had exceeded the jurisdiction vested in it by acting illegally in allowing the application filed under Order VII Rule 11 of CPC. 17. In order to consider the correctness of the impugned order passed by the High Court, it would be useful to refer to Section 115 of the CPC as well as the Orissa Amendment. For immediate reference, the same are extracted as under: 115. Revision - (1) The High Court may call for the record of any case which has been decided by any Court subordinate to such High Court and in which no appeal lies thereto, and if such subordinate Court appears- (a) to have exercised a jurisdiction not vested in it by law, or (b) to have failed to exercise a jurisdiction so vested, or (c) to have acted in the exercise of its jurisdiction illegally or with material irregularity, the High Court may make such order in the case as it thinks fit: Provided that the High Court shall not, under this Section, vary or reverse any order made, or any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion In this Section, the expression 'any case which has been decided' includes any order deciding an issue in the course of a suit or other proceeding . 18. On a perusal of the same it is noted that the Orissa amendment differs from the main Section 115 of CPC in the following ways: (i) Firstly, the main Section 115 deals with revisional powers of the High Court only, whereas, Section 115 of CPC (Orissa amendment) confers the power of revision not only on the High Court but also on the District Court which may call for the record of any case which has been decided by any court subordinate to the High Court or the District Court, as the case may be, and in which no appeal lies thereto, if such subordinate court appears (a) to have exercised a jurisdiction not vested in it by law; or (b) to have failed to exercise a jurisdiction, so vested; or (c) to have acted in the exercise of its jurisdiction illegally or with material irregularity. In such a case, the High Court or the District Court, as the case may be, may make such order in the case as it thinks fit. (ii) Secondly, subsection (2) of Section 115 of the main provision, states that the High Court shall not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SubSection 2 of Section 115 has been added which states that the High Court or District Court, as the case may be, shall not under this Section, vary or reverse any order including an order deciding an issue, made in the course of a suit or other proceeding, except where the order, if it has been made in favour of the party applying for revision, would finally dispose the suit or other proceeding. 20. Further, clause 1 of the second proviso of Section 115 has been omitted by the amendment made in the year 2010 and SubSection 3 has been added. This provision states that a revision shall not operate as a stay of suit or other proceeding before the Court except where such suit or other proceeding is stayed by the High Court or District Court, as the case may be. SubSection 1 of Section 115 is in pari materia with the Orissa Amendment of 1991 except its reference to the Orissa Amendment Act of 2010. For immediate reference, Section 115 of the CPC as per the 2010 amendment made (Orissa Amendment) is extracted as under: Amendment of Section 115. In the Code of Civil Procedure, 1908 (5 of 1908), for Section 115, the following Section shall be substituted, namely: 115. Revisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, as the case may be, can reverse an order which would finally dispose of the suit or other proceeding. That is exactly what has been done by the revisional court being the District Court in the petition being C.R.P. No.5 of 2012. 22. Hence, we find that the High Court was not justified in setting aside the said order and remanding the matter to the revisional court (District Court) to consider afresh, the application filed by defendant no.1/appellant herein under Order VII Rule 11 of CPC seeking rejection of the plaint. In fact, we would observe that exercise of jurisdiction by the revisional court in the instant case is in accordance with second proviso to Section 115 of CPC (Orissa amendment). In this regard, we could also usefully refer to the following decisions: (a) Gajendragadkar, CJ., in a judgment passed by the five Judges Bench of this Court in Pandurang Dhondi Chougule and Others vs. Maruti Hari Jadhav and Others [AIR 1966 SC 153] dealt with the question of jurisdiction under Section 115 CPC, as follows: 10. The provisions of Section 115 of the Code have been examined by judicial decisions on several occasions. While exercising its jurisdiction under Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection on their plain reading quite clearly do not cover the present case. It was not contended, as indeed it was not possible to contend, that the learned Additional District Judge had either exercised a jurisdiction not vested in him by law or had failed to exercise a jurisdiction so vested in him, in recording the order that the proceedings under reference be stayed till the decision of the appeal by the High Court in the proceedings for specific performance of the agreement in question. Clause (c) also does not seem to apply to the case in hand. The words illegally and with material irregularity as used in this clause do not cover either errors of fact or of law; they do not refer to the decision arrived at but merely to the manner in which it is reached. The errors contemplated by this clause may, in our view, relate either to breach of some provision of law or to material defects of procedure affecting the ultimate decision, and not to errors either of fact or of law, after the prescribed formalities have been complied with. Therefore, in the instant case the High Court was not right in holding that the revisional court had no jurisdiction to reject the plaint filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ;s Court, Bangalore, is a flagrant misuse of the mercies of the law in receiving plaints. The learned Munsif must remember that if on a meaningful - not formal - reading of the plaint it is manifestly vexatious, and meritless, in the sense of not disclosing a clear right to sue, he should exercise his power under Order 7, Rule 11 CPC taking care to see that the ground mentioned therein is fulfilled. And, if clever drafting has created the illusion of a cause of action, nip it in the bud at the first hearing by examining the party searchingly under Order 10, CPC. An activist Judge is the answer to irresponsible law suits. The trial courts would insist imperatively on examining the party at the first hearing so that bogus litigation can be shot down at the earliest stage. The Penal Code is also resourceful enough to meet such men, (Cr. XI) and must be triggered against them. In this case, the learned Judge to his cost realised what George Bernard Shaw remarked on the assassination of Mahatma Gandhi: It is dangerous to be too good. b) In Azhar Hussain vs. Rajiv Gandhi [1986 Supp SCC 315], this Court discussed the very purpose of the power conferred under Order VII Rule 11 CPC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndra Murthy vs. Syed Jalal [(2017) 13 SCC 174], wherein it was held as under: 7. ..The averments of the plaint have to be read as a whole to find out whether the averments disclose a cause of action or whether the suit is barred by any law. It is needless to observe that the question as to whether the suit is barred by any law, would always depend upon the facts and circumstances of each case. The averments in the written statement as well as the contentions of the defendant are wholly immaterial while considering the prayer of the defendant for rejection of the plaint. Even when, the allegations made in the plaint are taken to be correct as a whole on their face value, if they show that the suit is barred by any law, or do not disclose cause of action, the application for rejection of plaint can be entertained and the power under Order VII Rule 11 of CPC can be exercised. If clever drafting of the plaint has created the illusion of a cause of action, the court will nip it in the bud at the earliest so that bogus litigation will end at the earlier stage. f) In Dahiben vs. Arvindbhai Kalyanji Bhanusali (Gajra) Dead through Legal Representatives and Others [(2020) 7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ument referred to in the plaint, forms the basis of the plaint, it should be treated as a part of the plaint. 23.9 In exercise of power under this provision, the Court would determine if the assertions made in the plaint are contrary to statutory law, or judicial dicta, for deciding whether a case for rejecting the plaint at the threshold is made out. 23.10 At this stage, the pleas taken by the defendant in the written statement and application for rejection of the plaint on the merits, would be irrelevant, and cannot be adverted to, or taken into consideration. g) In a recent judgment of Rajendra Bajoria and Others vs. Hemant Kumar Jalan and Others [ 2021 SCC Online SC 764], this Court while elucidating on the underlying object of Order VII Rule 11 CPC and considering various precedents of this Court, held as under : 20. It could thus be seen that this Court has held that the power conferred on the court to terminate a civil action is a drastic one, and the conditions enumerated under Order VII Rule 11 of CPC are required to be strictly adhered to. However, under Order VII Rule 11 of CPC, the duty is cast upon the court to determine whether the plaint disc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lity of saving the licence to plot No. RS4, issued in favour of the plaintiff by the Paradeep Port Trust Authority, from being cancelled. As a result, the plaintiff would continue to remain as the licensee of the Paradeep Port Trust Authority visavis the said plot. According to the plaintiff, defendant no.1 did not take any step to save licence of the plaintiff from cancellation and it was cancelled on the basis of the complaint made by defendant no.1 vide letter dated 18th February, 2009, by the Paradeep Port Trust Authority. Hence, the question of defendant no.2 handing over the cheque for ₹ 56 lakhs to defendant no.1 did not arise. Further, plaintiff was pressurized to either supply 3876 MT of iron ore fines to defendant no.1 or else defendant no.1 would present the cheque for encashment. Since plaintiff did not agree to the illegal demand of defendant no.1, the cheque for ₹ 56 lakhs which had been handed over by defendant no.2 to defendant no.1, was presented by defendant no.1 and it was dishonoured. According to the Plaintiff, defendant no.2 and defendant no.1 colluded with each other to make an illegal gain and defendant no.2 could not have handed over the cheque ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, the application is liable to be rejected. Thus, the main thrust of the application seeking rejection of the plaint is that apart from the fact that the plaint does not disclose a cause of action which has been negated by the revisional court and rightly so, plaintiff has sought only declaratory reliefs and has not sought further or consequential reliefs. In the circumstances, the suit is barred under the provisions of the SR Act. Section 34 of the SR Act reads as under: 34. Discretion of court as to declaration of status or right.-Any person entitled to any legal character, or to any right as to any property, may institute a suit against any person denying, or interested to deny, his title to such character or right, and the court may in its discretion make therein a declaration that he is so entitled, and the plaintiff need not in such suit ask for any further relief: Provided that no court shall make any such declaration where the plaintiff, being able to seek further relief than a mere declaration of title, omits to do so. Explanation.-A trustee of property is a person interested to deny a title adverse to the title of some one who is not in existence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ference could be made to Sections 118 (a) and 138 of N.I. Act, which reads as under: 118. Presumptions as to negotiable instruments. -Until the contrary is proved, the following presumptions shall be made:- (a) of consideration -that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration; XXX XXX XXX 138. Dishonour of cheque for insufficiency, etc., of funds in the account.-Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provision of this Act, be punished with impri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a holistic reading of the plaint and on consideration of the reliefs sought by the plaintiff, we find that the said reliefs are barred by law inasmuch as no plaintiff can be permitted to seek relief in a suit which would frustrate the defendants from initiating a prosecution against plaintiff or seeking any other remedy available in law. In fact, the attempt made by the plaintiff to seek such a declaratory relief is, in substance, to seek a relief of injunction against the defendants, particularly defendant no.1, but framed it in the nature of a declaratory relief. In other words, the plaintiff has sought an injunction against defendant no.1 from seeking remedies in law on account of the cheque issued by the plaintiff for a sum of ₹ 56 lakhs being dishonoured. 36. We may refer to Sections 41 (b) and (d) of SR Act which are extracted as under: 41. Injunction when refused. xxx (b) to restrain any person from instituting or prosecuting any proceeding in a Court not subordinate to that from which the injunction is sought; xxx xxx xxx (d) to restrain any person from instituting or prosecuting any proceeding in a criminal matter; In the above con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncerns the maintainability of the suit itself in terms of the Section 41(d) of the Specific Relief Act, 1963 ( SRA ) which reads as under: 41. An injunction cannot be granted . (d) to restrain any person from instituting or prosecuting any proceeding in a criminal matter. The law concerning the interpretation of Section 41(d) of the SRA is fairly well settled. It has been held In Re N.P. Essappa Chettiar AIR 1942 Mad. 756 and in Gauri Shanker v. District Board AIR 1947 All. 81 that a suit to restrain criminal proceedings being initiated is not maintainable. In Aristo Printers Pvt. Ltd. v. Purbanchal Trade Centre AIR 1992 Gau. 81 a Division Bench of the Gauhati High Court was dealing with a case where cheques issued by the plaintiff to the defendant had been dishonoured and notice had been issued to the defendant under Section 138 NI Act. The plaintiff then filed a suit to restrain the defendant from instituting proceedings under the NI Act. The Court referred to a judgment of the Hon'ble Supreme Court in State of Orissa v. Madan Gopal Rungta AIR 1952 SC 12 and Cotton Corporation of India Ltd. v. United Industrial Bank Ltd. AIR 1983 SC 1272 and held that an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 118(a) thereof. If the plaintiff is aggrieved on account of breach of the terms and conditions of the MoU committed by defendant no.1 then it could seek appropriate reliefs in accordance with law. Whether the plaintiff was not liable to issue the cheque for ₹ 56 lakhs to defendant no.1 under the terms of the MoU is a matter which has to be considered in an appropriate proceeding to be initiated by defendants on account of dishonour of the said cheque under Section 138 of the N.I. Act. The plaintiff can always prove that it had no legal liability or debt to be discharged visavis defendant no.1 under the terms of the MoU, if any proceeding is to be initiated by defendant no.1 on account of the dishonour of the said cheque. Further, if defendant no.1 is to seek any relief for the nonsupply of 3876 MT of iron ore fines by the plaintiff under the very same MoU then the plaintiff is entitled to take appropriate defences as are available in law. If the plaintiff has a grievance against the defendants and particularly defendant no.1, arising from the MoU, such prayers have not been sought by the plaintiff. Such reliefs could have been sought by the plaintiff inasmuch as there is ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
