6
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment reserved on :24.01.2013
Judgment delivered on :04.02.2013
FAO(OS) NO.233/2010
INDIAN CITY PROPERTIES LTD. AND ORS. .......Appellants
Through: Mr. Ravinder Sethi, Sr. Adv with
Mr.Sanjay Gupta, Mr. Ateev
Mathur and Ms. Mamta Mehra,
Advs.
Versus
VIMLA SINGH & ORS. .....Respondents
Through: Mr. Amitabh Chaturvedi and
Mr.Azeem Samuel, Advs for R-1
to R-3.
Mr. B.V. Niren, CGSC with Mr.
Prasouk Jain, Adv for R-4/UOI.
None for R-5.
CORAM:
HON'BLE MR. JUSTICE SANJAY KISHAN KAUL
HON'BLE MS. JUSTICE INDERMEET KAUR
INDERMEET KAUR, J.
1 The application filed by defendant No.2/Indian City Properties
Limited (hereinafter referred to as the ,,appellant) under Order 7 Rule
11 of the Code of Civil Procedure (hereinafter referred to as the ,,Code)
has been dismissed by the impugned order.
FAO (OS) No. 233/2010 Page 1 of 15
2 The present suit was a suit for declaration, possession, permanent
and mandatory injunction. It was filed on behalf of three plaintiffs i.e.
the two children and the widow of late C.P. Singh.
3. The case as set up by the plaintiffs is that late Sh. C.P.Singh was
the owner of property No. 124, Queens Way now known as 124,
Janpath, New Delhi (hereinafter referred to as the ,,suit property). He
remained the owner and in possession of the suit property till his death
on 31.12.1984. The plaintiffs are the surviving legal heirs of deceased
and have inherited all rights, title and interest of late C.P. Singh (who
had died intestate) including the suit property. It was only around 22-
23.07.1994 that the plaintiffs were informed by one of their lawyers
handling their legal matters that there was some case relating to their
father and the NDMC pending in the High Court which led to inquiries
to be made by the plaintiffs who pursuant to these inquiries learnt that
the suit property had been acquired by their late father in his lifetime;
further inquiry effected on 27.02.1995 from the L & DO revealed that
Sh.M.L.Ahuja (original defendant No.1) had been dealing as an attorney
of late C.P. Singh and on 17.08.1957, the suit property had been
registered by the appellant in favour of the appellant. The fact of the
FAO (OS) No. 233/2010 Page 2 of 15
death of late C.P. Singh had been intentionally suppressed from the L &
DO who had effected this registered lease deed in favour of the
appellant in the absence of this knowledge. Para 4 of the plaint
specifically avers that it was only at that time that these facts came to
their knowledge which included the fact that C.P. Singh had acquired
rights of ownership in the suit property and he had remained in
possession of the suit property till the time of his death on 31.12.1984.
Legal notice dated 14.02.1996 was sent to defendant No. 1 to which he
had replied vide a reply dated 23.02.1996. Further averments in the
plaint being that the defence set up by the defendants in the reply was
that C.P. Singh in his lifetime had sold his interest in the suit property to
the appellant and the lease deed dated 05.08.1957 had been signed on
behalf of C.P. Singh and Company (a partnership) by I.S. Anand who
was acting on behalf of C.P. Singh and Company. Paras 8.4 & 8.8 of
the plaint are relevant. They are bordered on the submission that no
request was ever made by C.P. Singh in his lifetime to get the lease deed
effected in favour of the appellant; there was no partnership firm by the
name of C.P. Singh and Company; the question of C.P. Singh having
sold his interest in the suit property to the appellant did not arise; a fraud
FAO (OS) No. 233/2010 Page 3 of 15
has been played by defendants No.1 to 4 upon C.P. Singh and in
pursuance of this fraudulent claim this partnership appears to have been
formulated under the name of C.P. Singh and Company; it was a sham
and nothing but a collusion between the defendants; there was no
question of assignment of any right by the partnership firm in favour of
the appellant; defendant No. 1 was not authorized to act as an agent qua
the suit property. All these acts of the defendants were on account of
mis-representations made by them; being wrongful and malafide; the
whole objective of the defendants was to perpetuate a fraud.
4. The cause of action has been depicted in para 13. It reads herein
as under:-
"13. That the cause of action accrued to the Plaintiff in or about Jan/Feb.1995,
when the Plaintiffs for the first time came to know about the fraud perpetrated as
stated by Defendants No.1 to 4 and on or about February 1995, when the Plaintiffs
pursuant to their Advocate's visit to the L & D.O. Office came to know for the first
time that Defendant No.6 had on account of fraud, mistake, misrepresentation and
on account of suppression of material facts by the Defendants executed the
perpetual lease dated 5.8.1957.
5 The following are the prayers made in the plaint:-
a) "Declare the Plaintiffs as the legal heirs of late Shri C.P.Singh and the legal
owner and beneficiary of the leasehold rights relating to the suit property
FAO (OS) No. 233/2010 Page 4 of 15
and in terms of annexures 1 and II hereto and no other person and in
particular, the Defendant Nos.1 to 5 cannot claim any right adverse and
contrary to the rights of the Plaintiffs and the Plaintiffs alone are entitled to
the suit property and consequential relief of possession of suit property
bearing No.124, Janpath, New Delhi in favour of Plaintiffs and against the
Defendants;
b) Declare that the perpetual lease dated 5.8.1957 executed by Defendant No.5
in favour of Defendant No.4 is illegal and void and that it does not confer
any rights, title or interest in Defendant No.4 and/or in favour of its
partners; calling up the original documents, adjudging them as null and void
and to cancel the same;
c) Declare that the alleged partnership entered into between the late Shri
C.P.Singh and Defendant No.1 to 4 or any of them was illegal, void,
fraudulent, fictitious, having been entered into with the illegal and unlawful
objectives and for purposes of perpetuating a fraud on defendant No.5,
various statutes and the exchequer and is thus not binding on the plaintiff or
Defendant No.5.
d) Declare that any sale/assignment of rights in the suit property or the alleged
partnership by Late Shri C.P.Singh whereby legal rights and interest in the
suit property were sought to be created directly or indirectly in favour of
Defendants No.1 to 4, or any of them is illegal and bad in law.
e) Declare that Defendant No.2 has no rights, title or interest in the suit
property;
f) Declare that the Defendant No.3 has no right to act agent of late Sh.
C.P.Singh or otherwise in the name of M/s C.P.Singh & Co.
g) Declare that the legal possession of the property vests in the plaintiffs;
h) Direct the defendant Nos.1 to 4 to render accounts and to make over to the
plaintiffs the mesne profits and all benefits earned or derived by them in
connection with the suit property;
FAO (OS) No. 233/2010 Page 5 of 15
i) Issue a permanent and mandatory injunction restraining the defendants No.1
4 their nominees, agents and assigns:-
i) From the use and enjoyment of the said property in any
manner whatsoever;
ii) From creating any third party interests in the said suit
property;
iii) From representing themselves to be the legal owners, occupiers
or users of the suit property;
iv) From acting as attorneys of Late Sh.C.P.Singh.
v) From interfering in the plaintiff's rights of free ingress/egress, use
and enjoyment of the suit property as the lawful owners thereof. "
6 It is in this background that the averments and pleas made in the
plaint have to be tested for deciding the application under Order 7 Rule
11 of the Code filed by the appellant who had sought a rejection of the
plaint on two grounds i.e.
(a) there is no cause of action and
(b) it is barred by limitation.
7 The submission of the learned senior counsel for the appellant
being that the present suit has been filed in the year 1997 by virtue of
which the legal heirs of C.P. Singh seek to establish a title in the suit
property qua a registered lease deed which had been executed on
FAO (OS) No. 233/2010 Page 6 of 15
05.08.1957; C.P. Singh was admittedly alive till 31.12.1984 and he
himself not having challenged this lease deed during his lifetime and the
plaintiffs only stepping into the shoes of deceased C.P. Singh and
having no better right or title than the deceased, cannot claim the reliefs
now sought for in the plaint. No cause of action has been disclosed in
the plaint; further submission being that under Article 58 of First
Schedule of the Indian Limitation Act, 1963, a period of three years is
prescribed for obtaining a declaration and which period has to be
computed from the date when the right to sue accrues and the present
suit having been filed more than four decades later after the registration
of the lease deed on 17.08.1957 is clearly time barred. Additional
submission being that the statement of the legal heirs of C.P. Singh i.e.
his widow and daughter recorded under Order 10 of the Code also
establishes that they were well aware of the alleged interest of C.P.
Singh in the suit property after his death but they chose not to file the
suit till 1997 which clearly precludes them from doing so not having
crossed the hurdle of limitation. Last submission being that in terms of
Section 3 of the Transfer of Property Act, 1882 C.P. Singh is presumed
to have notice of the fact of the registration of the lease deed of the suit
FAO (OS) No. 233/2010 Page 7 of 15
property on 17.08.1957 which is evident from a plain reading of
Explanation 1 of Section 3; the plaintiffs being the legal heirs of C.P.
Singh are clearly precluded from setting up a claim four decades later.
8 To support their arguments, reliance has been placed upon 1998
(2) SCC 70 ITC Vs. DRAT, 1987 Suppl. SCC 663 Samar Singh Vs.
Kedar Nath, 2004 (3) SCC 137 Sopan Sukhdeo Sable & Ors Vs.
Assistant Charity Commissioner, 1977 (4) SCC 467 T.R. Aravindam Vs.
T.V. Satyapal, 2002 (10) SCC 501 Raj Narain Sarin Vs. Laxmi Devi &
Others, JT 2011 (10) SC 541 Khatri Hotels Private Ltd. and Anr. Vs.
Union of India, (1974) 1 SCC 242 Nagindas Ramdas Vs. Dalpatram
Ichharam, (2007) 5 SCC 614 Hardesh Ores (P) Ltd. Vs Hede and Co.,
(2005) 5 SCC 548 N.V. Srinivasa Murthy & Ors. Vs. Mariyamma &
Orsu and (2006) 6 SCC 207 Om Prakash Shrivastava Vs. Union of
India; submission being that the impugned order has failed to appreciate
both the legal and the factual position in the correct perspective; the
plaint being devoid of cause of action and barred by limitation was
liable to be rejected.
FAO (OS) No. 233/2010 Page 8 of 15
9 Counter arguments have been addressed by the learned counsel
for the respondents. Submission being that it is only the averments made
in the plaint and documents annexed thereto which have to be seen at
the time of dealing with an application under Order 7 Rule 11 of the
Code and the defence sought to be set up by the defendants cannot be
looked into.
10 Record has been perused; arguments have been appreciated.
11 There is no dispute about the settled legal proposition that it is
only the averments made in the plaint and the accompanying documents
which can be gone into for the purpose of dealing with an application
under Order 7 Rule 11 of the Code. The statements of plaintiff No. 1 and
plaintiff No. 2 recorded under Order 10 of the Code can also be seen for
this limited purpose. In T.R. Aravindam (supra), the Apex Court while
dealing with powers of the Court under Order 7 Rule 11 of the Code had
noted that where the meaningful reading of the plaint disclosed that the
suit which had been filed was in fact vexatious and meritless; it being a
case of clever drafting creating an illusory cause, it must be nipped in
the bud by the Court at the first hearing by examining the party under
FAO (OS) No. 233/2010 Page 9 of 15
Order 10 of the Code in order that such a bogus litigation can be shot
down at its earliest stage. This position has been reiterated by a Bench of
this Court in Sanjay Kaushish Vs. D.C. Kaushish and others AIR (1992)
Delhi 118.
12 Record shows that the present suit has been filed by the plaintiffs
on 06.01.1997; in the year 1999 i.e. almost two years later, the present
application under Order 7 Rule 11 of the Code came to be filed. Matter
did not progress very much; on 11.08.2008, the statement of the
plaintiffs was directed to be recorded under Order 10 of the Code.
These statements have been perused. The submission of the learned
senior counsel for the appellant that the statement of Vimla Singh
(widow of C.P. Singh) evidences the fact that the legal heirs of C.P.
Singh learnt about his interest in the suit property immediately after his
death is not borne out. That portion of the statement relied upon by the
learned senior counsel reads as under:-
My son did not find any paper or records relating to this property after the
death of Mr. C.P.Singh, but he came across some papers after couple of years (2-3
years)
FAO (OS) No. 233/2010 Page 10 of 15
This statement of Vimla Singh does not help the case of the
appellant. It only records that her son came across certain papers after 2-
3 years of the death of her husband but these papers did not relate to the
suit property.
13 For deciding the controversy in the present case Sub Clause (a)
and Sub Clause (d) of Order 7 Rule 11 of the Code have been pressed.
They read as under:
11. Rejection of plaint
The plaint shall be rejected in the following cases:--
(a) where it does not disclose a cause of action;
(b) xxxxxxxxxxxxx
(c) xxxxxxxxxxxxx
(d) where the suit appears from the statement in the plaint to be barred by any law;
14 The averments made in the plaint disclose that it was only around
22-23.07.1984 that the plaintiffs were informed by one of their lawyers
handling their cases about some pending litigation about their father
which led them to make further inquiries and on 27.02.1995 it was learnt
that C.P. Singh had an interest in the suit property which had been
FAO (OS) No. 233/2010 Page 11 of 15
subsequently transferred in favour of the appellant; legal notice had been
sent to the defendants to which a reply has been received on 23.02.1996
which revealed certain other facts which were to the effect that the lease
deed had not been signed by C.P. Singh but had been signed by I.S.
Anand on behalf of C.P. Singh and Company. Submission of the learned
senior counsel for the appellant that since C.P. Singh in his lifetime (up
to 31.12.1984) did not take any action seeking invalidation of the lease
deed dated 05.08.1957 and the legal heirs having no better right than
C.P. Singh himself, the plaint is liable to be rejected on the ground of
limitation is negatived by the aforenoted averments as noted in the
plaint. There is no doubt to the legal proposition that the legal heirs of
C.P. Singh would have no better title than C.P. Singh himself but the
whole plaint is bordered on the submission that C.P. Singh was himself
unaware of what had happened behind his back; the defendants had
played a fraud upon him; there was no partnership between C.P. Singh
and the defendants; defendant No.1 was not his authorized agent; the
fact about the death of C.P. Singh was never brought to the notice of the
L & DO at the time when the L & DO was registering the lease deed on
FAO (OS) No. 233/2010 Page 12 of 15
17.08.1957 and it did not bear the signatures of C.P. Singh but bore the
signatures of a person by the name of I.S. Anand.
15 The cause of action and the question of limitation vis-a-vis the
applicability of Article 58 have to be read in the light of the aforenoted
pleadings.
16 So long as the claim discloses some cause of action or raises some
questions fit to be decided by a Court, the fact that the case is not likely
to succeed would not be a ground for striking it out. [see: JT (2003) SC
218 Liverpool and London S.P. and I Asson. Ltd.Vs. M.V. Sea Success I
and Anr.] The question of limitation also being a mixed question of fact
and law (in view of the averments made in the plaint), there can be no
ground for the rejection of the plaint at this stage.
17 Section 3 of the Transfer of Property Act is wholly inapplicable as
that proposition would bind a party against whom the transaction
relating to the immoveable property has been effected; the plea set up by
the plaintiffs in the instant case is that the lease deed was never signed
by their father and the Authority registering it even did not have
knowledge about the factum of the death of C.P. Singh.
FAO (OS) No. 233/2010 Page 13 of 15
18 The judgments relied upon by the learned counsel for the
appellants are also all distinguishable; having been pronounced in their
peculiar facts and circumstances. There is no doubt about the legal
proposition that where the plaint discloses no cause of action and it is a
case of a mere clever drafting, it is the bounden duty of the Court to
examine it fully and provisions of Order 7 Rule 11 of the Code not
being a mere empty formality, the plaint in the absence of a cause of
action is liable to be rejected. So also the legal proposition that where
the plaint is barred by a legal provision and amounts to an abuse of the
process of the Court, the prayer made under Order 7 Rule 11 should be
granted.
19 However none of these cases would be applicable to the instant
factual scenario. In (1999) 1 SCR 983 Dr. Ramachandran Vs. R.V.
Janakiraman and Others, the Apex Court had held that the Court cannot
dissect the pleadings into several parts and consider whether each one of
them discloses a cause of action or not. The Court at this stage is not
required to make an elaborate inquiry into complicated question of law
and facts.
FAO (OS) No. 233/2010 Page 14 of 15
20 On a conspectus of the aforenoted facts, the impugned order in no
manner suffers from any infirmity.
21 We are further informed that the trial is in progress and the
evidence of the plaintiffs is underway. In fact on an application filed by
the appellant, the lease deed (dated 05.08.1957) had been sent for an
opinion of handwriting expert.
22 The appeal is without any merit; it is accordingly dismissed.
INDERMEET KAUR, J.
SANJAY KISHAN KAUL, J.
FEBRUARY 04, 2013
A
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