Citation Codes

Equivalent Citations

citation codes

Case Number

A.P.O.T No. 157 of 2000; G.A No. 795 of 2000 and C.S No. 376 of 1999

Judges

Vinod Kumar Gupta
Moloy Kumar Basu, JJ.

Acts

Article 54 of the Schedule to the Limitation Act
Order VII Rule 11 of the Code of Civil Procedure.
Order 7 Rule 11 of the Code of Civil Procedure,
ORDER 7 RULE 11 CIVIL PROCEDURE CODE
Clause (d) of Rule 11 of Order 7 of the CPC
Order 7 Rule 11, Clause(d) of the CPC
Clause (d) of Rule 11 of Order 7 CPC
Order 7 Rule 11(d) of the CPC
Indian Partnership Act, 1932
Order 7 Rule 11(d) CPC
Order 7 Rule 11

See more information ...

Smart Summary

Structured Summary of the Dictated Order (Appeal under Clause 15 of the Letters Patent)

Factual and Procedural Background

This appeal under Clause 15 of the Letters Patent challenges a judgment dated 27th January 2000 of a learned single Judge in Civil Suit No. 376 of 1999. The learned single Judge had refused the defendant/appellant's prayer to reject the plaint under Order VII Rule 11 of the Code of Civil Procedure (CPC), holding that the issue of limitation was not a ground for rejection of a plaint under that provision.

The parties had entered into a Development Agreement dated 19th January 1983: the respondent, Popal & Kotech Property (a partnership firm), agreed to build and develop property owned by the appellant, State Bank of India Staff Association. Clause 13 of the Agreement required that after construction was completed and two Chartered Engineers issued Final Completion Certificates, the respondent would call upon the appellant by notice to execute and register a lease in favour of the respondent (or its nominee) in respect of the second, third, fourth and fifth floors and the roof (the "demised premises"). Clause 13 provided that if the lease was not executed and registered within 90 days of receipt of the notice, the builders (respondent) could let the demised premises and appropriate rents, issues and profits.

It is admitted that the building was completed in 1984. The plaint states that on 4th November 1984 the respondent sent the Clause 13 notice calling on the appellant to execute the lease deed; para 5 of the plaint mentions handing over of certain floors on 31st January 1985 and retention of the demised premises by the respondent. No lease deed was ever executed. The suit was filed in 1999 and sought multiple reliefs, the central relief being specific performance of the Development Agreement (clause 16/18), along with declarations, injunctions, accounts, monetary claims and alternate reliefs.

The appellant moved under Order VII Rule 11(d) CPC to reject the plaint on the ground it was barred by limitation. The trial Judge dismissed that application, holding that being "barred by law" in Order VII Rule 11 did not include the Limitation Act. The defendant/appellant appealed to this Court under Clause 15 of the Letters Patent.

Legal Issues Presented

Whether an order refusing to reject a plaint under Order VII Rule 11 CPC is an appealable "judgment" within the meaning of Clause 15 of the Letters Patent (i.e., whether this appeal is maintainable).
Whether Clause (d) of Rule 11 of Order VII CPC — which permits rejection where the "suit is barred by any law" — includes the law of limitation (the Limitation Act) so as to permit rejection of a plaint on the face of it when limitation is apparent from the plaint.
Whether, on the facts disclosed by the plaint (notice dated 4th November 1984 and contract clause prescribing 90 days for performance), the suit for specific performance and related claims was barred by limitation when filed in 1999.

Arguments of the Parties

Appellant's Arguments (State Bank of India Staff Association)

The appellant applied under Order VII Rule 11(d) CPC for rejection of the plaint on the ground that the suit was barred by limitation, as apparent from the plaint itself.
The appellant contended that the suit had been filed well beyond the limitation period applicable to the claims (including specific performance) and therefore, the plaint ought to be rejected.

Respondent's Arguments / Preliminary Objection (Popal & Kotech Property)

At the outset, the respondent (through Mr. Sarkar) raised a preliminary objection to the maintainability of the appeal under Clause 15 of the Letters Patent, contending that the order refusing to reject the plaint was not a "judgment" within the meaning of Clause 15 and therefore not appealable.
To support that preliminary objection the respondent relied on two authorities cited in the opinion (see Precedents Cited below).
The learned single Judge's position (as reflected in his judgment) was that the expression "barred by any law" in Order VII Rule 11 did not include the operation of the Limitation Act; this position formed the basis of the respondent's success at trial.
During the appeal, Mr. Sarkar later proposed that the appellate Court itself decide the limitation issue rather than remitting to the trial Judge; this proposal was accepted by the appellant's counsel and the Court proceeded to hear the parties on limitation.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Shipping Corporation of India Limited v. West Bengal Small Industries Corporation (report reference in the opinion: 95 CWN 1172 (2))	Cited to support the preliminary objection that an order merely refusing to reject a plaint under Order VII Rule 11 CPC may not be appealable under Clause 15 of the Letters Patent.	The Court considered this authority as part of the broad proposition that an appeal ordinarily does not lie from an order merely refusing to reject a plaint. However, the Court held that in the present case the order did adjudicate upon a definite right of the defendant (on whether limitation falls within "barred by any law") and therefore the order amounted to a "judgment" within Clause 15 and the appeal was maintainable. Thus the authority was considered and distinguished on the facts of the present case.
Shah Baboolal Khimji v. Javaben (AIR 1981 SC 1786)	Cited to support the same preliminary objection regarding the non-maintainability of an appeal against an order refusing to reject a plaint.	The Court treated this authority similarly: acknowledging the general legal proposition it supports, but holding that the present order was a judgment for Clause 15 purposes because the trial Judge adjudicated an important right of the defendant. The Court therefore distinguished or limited the precedential effect insofar as the facts and the adjudication in this case differ.

Court's Reasoning and Analysis

The Court's analysis proceeded in two main stages: (A) maintainability of the appeal under Clause 15; and (B) the substantive limitation question under Order VII Rule 11(d) CPC and the Limitation Act.

A. Maintainability under Clause 15 of the Letters Patent

The Court noted the established, broad proposition of law that an appeal against an order merely refusing to reject a plaint under Order VII Rule 11 CPC is generally not maintainable under Clause 15.
However, the Court examined the order under appeal and found that the learned single Judge had done more than merely refuse procedural relief: he adjudicated upon a particular right of the defendant, namely by holding that the expression "barred by any law" in Order VII Rule 11(d) did not include the Limitation Act. That was a definite finding on an important question affecting the defendant's right to have the suit dismissed.
Because the order under appeal contained a definite adjudication on this substantive point, the Court held the order amounted to a "judgment" within the meaning of Clause 15 of the Letters Patent and therefore the appeal was maintainable. The precedents cited for non-maintainability were considered but the present order was distinguished on the ground that it decided substantive rights rather than merely procedural refusal.

B. Substantive Question: Does Order VII Rule 11(d) include the Law of Limitation; and is the suit barred?

The Court turned to Clause (d) of Rule 11 of Order VII CPC which permits rejection of the plaint where "the suit appears from the statement in the plaint to be barred by any law". The Court reasoned that the term "any law" is broad and, on its plain language, includes the Limitation Act; there is nothing in Clause (d) to indicate an intention to exclude the law of limitation.
The Court held that where, on the face of the plaint, the defendant shows the suit is barred by limitation (i.e., filed beyond the period prescribed in the Limitation Act), the defendant is entitled to maintain an application under Order VII Rule 11(d) and the Court must decide that application by examining whether the plaint discloses a time-barred claim.
The Court then applied facts from the plaint to limitation law: Article 54 of the Schedule to the Limitation Act prescribes a three-year period for suits for specific performance, the limitation starting from the date fixed for performance of the contract or, if none fixed, when the plaintiff has notice that performance is refused.
Clause 13 of the Development Agreement fixed a 90-day period for the appellant to perform (i.e., to execute the lease on receipt of the respondent's notice). The plaint records the respondent's notice dated 4th November 1984; the Court treated the 90-day period as commencing upon receipt of that notice and expiring in the first quarter of 1985 (even allowing for some days in receipt). Three years from that starting point would expire in the first quarter of 1988.
Since the suit was filed in 1999, the Court concluded the claim for specific performance (and all primary, main, additional or alternative reliefs that depended upon execution of the lease deed) was time-barred. The Court observed that the other reliefs also revolved around the execution of the lease and, in respect of all claims, the maximum limitation period under the Schedule (Articles 54, 55, 57, 58 or residuary Article 113) would be three years; accordingly, limitation commenced in 1984/early 1985 and expired well before the 1999 suit.
On this basis, the Court found that the learned single Judge erred in refusing to reject the plaint under Order VII Rule 11(d) and that the appellant was entitled to rejection of the plaint for being barred by limitation as apparent on the face of the plaint.

Holding and Implications

Core Holding: The appeal is allowed; the judgment of the learned single Judge dated 27th January 2000 is set aside; the plaint is rejected under Order VII Rule 11(d) of the CPC on the ground that the suit is barred by limitation.

Direct Consequences and Orders:

The plaint is rejected because the suit is held to be barred by limitation.
All interim orders passed in the suit are vacated immediately and forthwith.
There will be no order as to costs.
The respondent's oral prayer for stay of the operation of this judgment was declined.
All parties are to act on a signed xerox copy of the dictated order on the usual undertaking.

Implications beyond the parties: The Court expressly held that the phrase "barred by any law" in Order VII Rule 11(d) includes the operation of the Limitation Act and that where limitation is apparent on the face of the plaint the Court may reject the plaint. The opinion does not, in express terms, state whether it is intended to be a precedent beyond the decision to allow this appeal; the immediate effect is the dismissal of the plaint and vacation of interim orders in the present suit.

Show full summary ...

State Bank Of India Staff Association v. Popal & Kotech Property

Dictated Order

The Court: This appeal under Clause 15 of the Letters Patent is directed against a judgment dated 27th January 2000 passed by the learned single Judge of this Court in Civil Suit No. 376 of 1999.

2. By the aforesaid judgment the learned single Judge has refused the prayer of the appellant/defendant for rejection of the plaint in terms of Order VII Rule 11 of the Code of Civil Procedure. The contention of the appellant that the plaint be rejected because the suit is barred by limitation has been negatived by the learned single Judge in the judgment under appeal by holding that the limitation as an issue is not relevant for rejecting a plaint under Order VII Rule 11 of the Code of Civil Procedure. The following observation forming the basis of refusal to reject the plaint on the aforesaid ground is apposite; we quote as under:—

“With regard to the point raiced by Mr. Chatterjee that the suit is barred by law under Order 7 Rule 11 of the Code of Civil Procedure, in my view, the phrase “suit is barred” means barred by the Statutes. The prescribed period stipulated in the Limitation Act, in my view, is not bar to filing suit. Remedy may be barred. Therefore, whether the relief or remedy claimed or claimed in the suit is barred or not can be decided at the time of the trial of the suit as a preliminary issue.”

3. The brief facts regarding the filing of the appeal may be stated as herein below.

4. The respondent Popal & Kotech Property, a Firm registered under the Indian Partnership Act, 1932 and the appellant State Bank of India Staff Association entered into an agreement on 19th January, 1983 whereby the respondent agreed to build and develop the property owned by the appellant. A detailed agreement was, accordingly, executed on 19th January 1983 between the parties which, inter alia, provided for regulating the relationship between the Owner and the Builder/Promoter. Para 13 of the Agreement, which is at the core of the subject matter of the present appeal, stipulated that after the construction of the entire building is completed and two Chartered Engineers issue the Final Completion Certificate, the respondent shall by a notice to the appellant call upon the appellant to execute and register a lease in favour of the respondent or its nominee whereby a lease of the second floor, third floor, fourth floor, fifth floor and the roof (collectively described as the demised premises) was to be granted. This clause Contained detailed stipulations regarding the grant of the said lease. We reproduce Clause 13 of the aforesaid Agreement which reads thus:—

“Clause 13 : That after completion of the construction of the entire building in accordance with the final sanctioned/renewed plan in respect thereof and after obtaining the final completion certificates from the said two Chartered Engineers relating to the construction of the building the Builders shall by a notice to the Association call upon the Association (as Lesser) to execute and register a Deed of Lease in favour of the Builders or their nominee or nominees (as Lessee) granting a lease of the said Second floor, third floor, Fourth floor, fifth floor and the roof thereon (hereinafter collectively referred to as ‘the demised premises’ of the building at the costs of and incidental charges to the execution and registration of the said Deed of Lease to be provided by the Lessee for a term of 51 years from the date of execution of such Deed of Lease taking into account the position and circumstances existing concerning the demises premises, at the time of execution of the said deed of Lease and upon into inter alia the terms, conditions and covenants hereinafter mentioned in Clause 16 hereof, such Lease and the terms referred to in clause (if hereof forming inter alia the basic consideration of the arrangement between the Association and Builders touching and concerning the construction of the said building on the said land of the Association in terms of this Agreement provided always that if for any reason the said Deed of Lease required to be executed and registered is not or cannot be so made within a period of 90 days from the date of the receipt of the such notice from the Builders then and in that event the builders shall have the full right and power to deal with the demises premises or any part thereof by letting but the same or any part there of in such manner and on such terms and conditions as the Builders might think in their absolute discretion to be fit, convenient and to appropriate the rents, issues and profits thereof exclusively to their own use benefits and enjoyment.”

5. It is the admitted case of the respondent that the entire building was completed in the year 1984. Even though the plaint does not specifically indicate the exact date of the completion of the entire building, in para 5 of the plaint it is stated that on 31st January 1985 the respondent handed over the possession of the basement, ground floor and the first floor to the appellant and retained the possession of the dismissed premises with itself. In para 6 of the plaint it is stated that the respondent wrote a letter on 4th November 1984 in terms of Clause 13 (supra) calling upon the appellant to execute the Lease Deed in favour of the respondent or its nominee.

6. The admitted case of the appellant is that no Lease Deed was ever executed in respect of the demises premises. The suit was filed in the year 1999 and the following reliefs were claimed in the suit.

“(a) Declaration that the plaintiff alone is entitled to let out the ground floor, 2nd, 3rd, 4th, 5th floor and the roof of the said premises shortly referred to have as the ‘Builders Block’ and realise all rents, issues and profits therefrom without any interference by the defendant;

(b) Perpetual injunction restraining the defendant from executing any lease or other documents in favour of persons in occupation of any portion of the builders block referred to in prayer (a) or in relation to any part or portion of the said block in consideration of any sum or from realising any rent issues or profit therefrom incumbent or otherwise deal with and exercise any control or dominance over the same.

(c) Decree for Rs. 18,84,500/- (Rupees Eighteen lacs Eightyfour Thousand Five hundred) only as pleaded in paragraphs 18 and 25 of this, plaint;

(d) Alternatively, an account of what is due and payable to the plaintiff by the defendant in respect of all dealings and transactions by the defendant with the person or persons in occupation of the builders block of the said premises and a decree for such sum as may be found due and payable after taking such account;

(e) All further proper accounts enquiries and directions;

(f) Decree for specific performance of the Development Agreement dated 19th January, 1983 be granted against the defendant in terms of clause 16 of the said Agreement requiring the defendant to execute Deed of Lease for a period of 51 years on terms and conditions contained in the said Clause;

(g) Mandatory injunction directing the defendant to execute register Deed of Lease, in favour of the plaintiff and/or its nominee or nominees in terms of Clause 18 of the Development Agreement dated 19th January, 1983 in respect of the Builders Block, being the 2nd, 3rd, 4th, 5th floor and roof as referred to above;

(h) In the event of the defendant failing to execute, register and deliver Deed of Lease, the Registrar, Original Side of this Hon'ble Court be directed to settle execute and register necessary Deed of Lease in respect of the Builders Block as referred to above for and on behalf of the defendant;

(i) Decree for Rs. 80 lacs as damages as mentioned in paragraph 12 above in addition to a decree for specific performance;

(j) Alternatively, an enquiry, into loss and damage suffered by the plaintiff and a decree for such sum as may be found due and payable upon such enquiry;

(k) In the event decree for specific performance as prayed for cannot be granted, a decree for damages in terms of specific performance be granted against the defendant at such rate or rates and on such basis as this Hon'ble Court may deem fit and proper;

(l) Costs;

(m) Further or other reliefs;”

7. The appellant filed an application under Order 7 Rule 11 of the Civil Procedure Code praying for rejection of the plaint on the ground that the suit, as was apparent from the statement contained in the plaint itself, was barred by limitation in the sense that the suit was filed beyond the limitation period prescribed under the Limitation Act. The learned trial Judge, as noticed at the outset, refused the said prayer of the appellant and dismissed the application under Order 7 Rule 11 by holding that the expression ‘barred by any law’ as occurring therein did not include the operation of the Limitation Act.

8. At the hearing of this appeal, at the very outset, a preliminary objection was raised about the maintainability of this appeal under Clause 15 of the Letters Patent on the ground that the order passed by the learned single Judge was not a “Judgment” within the meaning of clause 15 of the Letters Patent.

9. Mr. Sarkar, learned Advocate appearing for the respondent referred to following to judgments in support of his aforesaid preliminary objection regarding the non-maintainability of this appeal. (1) Shipping Corporation of India Limited v. West Bengal Small Industries Corporation reported in 95 CWN 1172 (2) Shah Baboolal Khimji v. Javaben reported in AIR 1981 SC 1786.

10. We have considered the aforesaid preliminary objection of Mr. Sarkar and we have also gone through the aforesaid Judgments cited by him. Whereas the broad proposition of law regarding the non-maintainability of an appeal against an order merely refusing to reject the plaint under Order 7 Rule 11 of the Civil Procedure Code cannot be disputed and to that extent, on an abstract question of law Mr. Sarkar appears to be right, in this particular case when we look to the order passed by the learned single Judge we find that he has adjudicated upon a particular right of the defendant by holding that the suit is not barred because the expression ‘barred by any law’ as occurring in Order 7 Rule 11 of the Civil Procedure Code did not include the operation of the Limitation Act. In other words, a right of the appellant defendant with respect to the maintainability of the suit, on an important question that the suit was barred by law of limitation and was thus liable to be dismissed on this ground has in fact been adjudicated upon by the learned single Judge in the order whereby he has refused to reject the plaint. The order refusing to reject the plaint per se therefore, may not be appealable, between an order like the present one where the learned trial Judge has returned a definite finding and has decided the issue that the provision of law as contained in Clause (d) of Rule 11 of Order 7 of the CPC cannot be made applicable and that this provision cannot be invoked to ask for the rejection of the plaint on the ground that the suit is barred by limitation is, in our opinion, a “Judgment” within the meaning and scope of Clause 15 of the Letters Patent and is thus appealable. Since the order under appeal has the potential of effecting the aforesaid valuable right of the appellant/defendant, it cannot be said that it does not amount to a “Judgment” within the meaning and scope of Clause 15 of the Letters Patent.

11. Having thus held that the order under Appeal would amount to a judgment within the meaning of Clause 15 of the Letters Patent, let us now proceed to consider as to whether Clause (d) of Rule 11 of Order 7 CPC relates to the applicability of the Law of Limitation when it talks about the suit being barred under any Law. Undoubtedly there is nothing in the language employed in Clause (d) (supra) which indicates the intention of the legislature to the contrary. When Clause (d) talks about the suit being barred under any Law, the expression ‘Law’ undoubtedly will include the law of Limitation also. If therefore a defendant brings to the notice of the Court that a particular suit, on a mere perusal of the plaint is barred by Law of Limitation because it has been filed beyond the period of limitation prescribed therefore in Limitation Act, he is entitled to maintain an application in terms of Order 7 Rule 11(d) CPC and if that happens it is the duty of the Court to take note of that application and on considering the aspect as to whether the suit is filed within the limitation period or not decide the application, based on the limitation aspect as has been projected in the application and return a finding, allowing or not allowing the application, as the case may be. In our opinion, the learned single Judge in the Judgment under Appeal has erred in taking a different view.

13. After we had indicated to Mr. Sarkar that we shall be inclined to disallow his contention regarding the non-maintainability of the appeal, Mr. Sarkar proposed that rather than sending the matter back to the learned single Judge, we should ourselves in this appeal decide the question of limitation and adjudicate upon the issue whether the suit is in fact barred by limitation or not.

14. The aforesaid suggestion of Mr. Sarkar was acceptable by the learned Advocate appearing for the appellant and based upon the aforesaid agreement of the parties, we proceeded to hear the parties on the question whether in fact the suit was barred by limitation or not.

15. We have extracted in the earlier part of this Judgment the reliefs claimed by the respondent in the plaint. When one looks at all the reliefs, mainly, primarily, additionally or alternatively, one finds that the main trust of the respondent's case resolves upon the specific performance of the agreement dated 19th January, 1983. It is the admitted case of the respondent-plaintiff that the building in question was completed in the year 1984. It is the admitted case of the respondent also that on 4th November, 1984 the respondent for the first time sent a communication to the appellant in terms of clause 13 (supra) for execution of the appropriate lease deed with respect to the demised premises. Clause 13 undoubtedly stipulated that the aforesaid demand to the respondent was to be made by the appellant and that if within a period of 90 days from the date of receipt of the notice containing such demand the appellant did not act upon such demand, the respondent had the option, rather a right to deal with the demised premises or any part thereof by letting out the same in such a manner or on such terms and conditions as the respondent might think appropriate in its absolute discretion. Article 54 of the Schedule to the Limitation Act provides for a period of three years for instituting a suit for specific performance of the contract and this period starts running from the date fixed for the performance of the contract or if no such date is fixed, when the plaintiff has notice that the performance is refused. A bare reading of Clause 13 (supra) suggests that 90 days is the period prescribed in the contract for the performance as far as the appellant was concerned and looking to the averments contained in para 6 of the plaint this period of 90 days would commence from the date of the notice dated 4th November, 1984 was received by the appellant. 90 days, therefore, would expire from the date of receipt of this notice. That, according to us, should have happened sometime in the first quarter of the year 1985, even if we presume that some days might have been spent in the receipt of the notice sent on 4th November, 1984. Treating the period of limitation thus to start from first quarter of the year 1985, three years would expire in the first quarter of the year 1988. The suit has been filed as noticed above in the year 1999, so much on the limitation question regarding the relief for specific performance.

16. As we have noticed all other reliefs primarily, mainly, additionally or alternatively revolve around the question on dispute of execution of the lease deed by the appellant in favour of the respondent. Everything depended upon the execution of such lease deed. Undoubtedly, the plaintiff-respondent has based all its aforesaid claims around this nucleus, this focal point of the execution of the lease deed. That apart, whatever the nature of basis of the plaintiff's claims may be, three years period of limitation in respect of each individual claim is the maximum period under the Schedule of Limitation Act. Whether we apply Article 54 or Articles 55, 57 or 58 or that matter the residuary Article 113, limitation period in all cases would be three years and, from what we have said herein above we have absolutely no hesitation in holding that the starting point of limitation in respect of all claims would be either 4th November, 1984 or the expiry of 90 days therefrom, which we have indicated, takes us to the first quarter of the year 1985. That being the case, therefore, the suit of the respondent-plaintiff was barred by limitation on all Counts and the appellant was thus entitled to an order of rejection of the plaint in terms of Order 7 Rule 11(d) of the CPC We feel that the learned single Judge erred in law in refusing to reject the plaint on that ground.

17. Based on the aforesaid observations, therefore, we have no hesitation in setting aside the judgment of the learned single Judge. Accordingly, the judgment of the learned single Judge is set aside. The appeal is allowed. The plaint in terms of Order 7 Rule 11, Clause(d) of the CPC is rejected because the suit is held to be barred by limitation. All interim orders passed in the suit stand vacated immediately and forthwith.

There will be no order as to costs.

After this order was pronounced, Mr. Sarkar, learned Advocate appearing for the respondent made an oral prayer for staying the operation of this judgment. On consideration, we decline the prayer.

All parties are to act on a signed xerox copy of this dictated order on the usual undertaking.

Appeal allowed

State Bank Of India Staff Association v. Popal & Kotech Property

Structured Summary of the Dictated Order (Appeal under Clause 15 of the Letters Patent)

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Appellant's Arguments (State Bank of India Staff Association)

Respondent's Arguments / Preliminary Objection (Popal & Kotech Property)

Table of Precedents Cited

Court's Reasoning and Analysis

A. Maintainability under Clause 15 of the Letters Patent

B. Substantive Question: Does Order VII Rule 11(d) include the Law of Limitation; and is the suit barred?

Holding and Implications

State Bank Of India Staff Association v. Popal & Kotech Property

Comments