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Balasaria Construction (P) Ltd. v. Hanuman Seva Trust And Others
Factual and Procedural Background
The plaintiff-respondents instituted a civil suit seeking a declaration that (i) the State acquisition of “Schedule ‘B’ property” in L.A. Case No. XI/16 of 1965-66 and (ii) a sale-deed dated 11-9-1975 concerning “Schedule ‘D’ property” executed by Defendant 5 in favour of Arjun Singh (predecessor of Defendants 13–17) were illegal, void and the product of fraud. They also applied for an injunction under Order 39 Rules 1 & 2 CPC to restrain Defendants 13–18 from alienating or altering the Schedule ‘D’ property.
Defendant 18 (the present appellant) did not file a written statement but moved an application under Order 7 Rule 11 read with Section 151 CPC to have the plaint rejected as time-barred. The trial court dismissed that application. The appellant’s revision (C.O. No. 1512 of 2002) was also dismissed by a learned Single Judge of the High Court, who affirmed the trial court’s conclusion though on different reasoning.
Challenging the High Court’s order, the appellant obtained special leave to appeal to the Supreme Court. During hearing on 30-8-2005, conflicting Supreme Court decisions on the point were cited, leading to a reference to a larger Bench. The three-Judge Bench, however, treated the referred question as academic on the facts of this case and remitted the matter for decision on merits. The present order records that decision.
Legal Issues Presented
- Whether, on the face of the plaint, the suit is barred by limitation so as to justify rejection under Order 7 Rule 11(d) CPC.
- More broadly, whether the expression “barred by law” in Order 7 Rule 11(d) CPC encompasses a plea that the suit is barred by the law of limitation.
Arguments of the Parties
Appellant’s Arguments
- Invoked N.V. Srinivasa Murthy v. Mariyamma (2005) 5 SCC 548 to contend that a plaint can be rejected when the suit is ex facie barred by limitation.
- Urged that the Schedule ‘D’ reliefs were clearly time-barred and no evidence was necessary to determine the bar.
Respondents’ Arguments
- Relied on Popat & Kotecha Property v. State Bank of India Staff Assn. (2005) 7 SCC 510 to submit that Order 7 Rule 11(d) cannot be invoked where limitation turns on disputed facts requiring evidence.
- Emphasised that limitation is a mixed question of law and fact; therefore the plaint could not be rejected at the threshold.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| N.V. Srinivasa Murthy v. Mariyamma, (2005) 5 SCC 548 | Supports rejection of plaint where suit appears ex facie time-barred. | Cited by appellant; Court noted apparent conflict with later authority and ultimately did not rely on it to reject the plaint. |
| Popat & Kotecha Property v. State Bank of India Staff Assn., (2005) 7 SCC 510 | Order 7 Rule 11(d) inapplicable when limitation depends on factual determination. | Quotation from para 25 adopted; reinforced conclusion that plaint could not be rejected solely on limitation. |
| Sopan Sukhdeo Sable v. Charity Commissioner, (2004) 3 SCC 137 | Plaint must itself show the bar of law for Order 7 Rule 11 to apply. | Relied upon indirectly (through Popat & Kotecha) to emphasise the threshold test. |
| Mohan Lal Sukhadia University v. Priya Soloman, AIR 1999 Raj 102 | Order 7 Rule 11(d) does not extend to limitation defences. | Listed as illustrative High Court view consistent with Supreme Court’s ultimate conclusion. |
| Khaja Quthubullah v. State of A.P., AIR 1995 AP 43 | Same principle as above. | Referred to as supporting authority; no further discussion. |
| Vedapalli Suryanarayana v. Poosarla Venkata Sanker Suryanarayana, (1980) 1 An LT 488 | Same principle as above. | Cited cumulatively; supports respondents’ position. |
| Arjan Singh v. Union of India, AIR 1987 Del 165 | Same principle as above. | Cited; aligned with the view finally accepted. |
| Jugolinija Rajia Jugoslavija v. Fab Leathers Ltd., AIR 1985 Cal 193 | Contrary view: limitation can ground a rejection under Order 7 Rule 11(d). | Court noted it as contrary High Court authority not followed. |
| National Insurance Co. Ltd. v. Navrom Constantza, AIR 1988 Cal 155 | Same contrary view. | Identified but not adopted. |
| J. Patel & Co. v. National Federation of Industrial Coop. Ltd., AIR 1996 Cal 253 | Same contrary view. | Identified but not adopted. |
| State Bank of India Staff Assn. v. Popat & Kotecha Property, (2001) 2 Cal LT 34 | Same contrary view later reversed by Supreme Court. | Noted as set aside in Popat & Kotecha; underscored current position. |
Court's Reasoning and Analysis
After reviewing the plaint, the application under Order 7 Rule 11(d) and the prior orders of the trial court and High Court, the Supreme Court reasoned as follows:
- Nature of the limitation defence: Limitation is ordinarily a mixed question of law and fact requiring proper pleadings, framing of issues and evidence. A suit can be dismissed at the threshold only when the plaint itself, without “addition or subtraction”, demonstrates the bar.
- Evaluation of the present plaint: On a plain reading, the plaint did not disclose that the claims were time-barred. Therefore the statutory pre-condition for invoking Order 7 Rule 11(d) was absent.
- Impact of conflicting authorities: While acknowledging divergent High Court views and apparent disharmony between Srinivasa Murthy and Popat & Kotecha, the Court held that resolution of the abstract question was unnecessary because, on the facts, the limitation plea could not succeed at this preliminary stage.
- Disposition of High Court findings: Observations of the High Court touching the merits were set aside to ensure an unprejudiced trial; however, its ultimate conclusion refusing to reject the plaint was affirmed.
Holding and Implications
Holding: The appeal is DISPOSED OF; the plaint shall not be rejected under Order 7 Rule 11(d) CPC, and the stay on trial proceedings is vacated. The appellant may file a written statement within 30 days, and the trial court is directed to decide the suit expeditiously, preferably within one year.
Implications: The decision restores the suit to the trial court and underscores that a limitation defence, unless apparent on the face of the plaint, cannot ground a rejection under Order 7 Rule 11(d). No new legal precedent was formally laid down, but the ruling re-affirms the necessity of evidentiary inquiry when limitation is contested.
Order
1. The plaintiff-respondents, hereinafter referred to as the respondents, filed a suit for a declaration that the acquisition of Schedule ‘B’ property in LA Case No. XI/16 of 1965-66 was illegal and void. Another prayer made by them in the suit was that the sale deed dated 11-9-1975 in respect of Schedule ‘D’ property executed by Defendant 5 in favour of Arjun Singh, predecessor-in-interest of Defendants 13 to 17 was illegal and void having been executed without any title of ownership therein with the predetermined object of depriving the plaintiffs of the said property without any authority of law. It was also alleged that a fraud had been committed. An application was filed under Order 39 Rules 1 and 2 of the Code of Civil Procedure seeking injunction restraining Defendants 13 to 18 from changing the nature and character of Schedule ‘D’ property by alienating or transferring the same in any manner whatsoever and also from undertaking any construction thereon. Defendant 18 in the suit, the appellant herein, instead of filing the written statement filed an application under Order 7 Rule 11 read with Section 151 of the Code of Civil Procedure seeking rejection of the plaint which was termed as dismissal of the suit.
2. The trial court dismissed the application, aggrieved against which the appellant filed CO No. 1512 of 2002 which has been decided by the impugned order. The learned Single Judge, although did not agree with the reasoning given by the trial court, but upheld the conclusions arrived at by the trial court on different grounds. The learned Single Judge went on the merits of the dispute and dismissed the revision application.
3. Aggrieved against the aforesaid order of the High Court the present appeal by way of special leave has been filed.
4. This case was argued at length on 30-8-2005. Counsel appearing for the appellant had relied upon a judgment of this Court in N.V Srinivasa Murthy v. Mariyamma (2005) 5 SCC 548 for the proposition that a plaint could be rejected if the suit is ex facie barred by limitation. As against this, counsel for the respondents relied upon a later judgment of this Court in Popat and Kotecha Property v. State Bank of India Staff Assn. (2005) 7 SCC 510 in respect of the proposition that Order 7 Rule 11(d) was not applicable in a case where a question has to be decided on the basis of fact that the suit was barred by limitation. The point as to whether the words “barred by law” occurring in Order 7 Rule 11(d) CPC would include the suit being “barred by limitation” was not specifically dealt with in either of these two judgments, cited above. But this point has been specifically dealt with by the different High Courts in Mohan Lal Sukhadia University v. Priya Soloman AIR 1999 Raj 102, Khaja Quthubullah v. Govt. of A.P AIR 1995 AP 43, Vedapalli Suryanarayana v. Poosarla Venkata Sanker Suryanarayana (1980) 1 An LT 488, (1980) 1 APLJ (HC) 173, Arjan Singh v. Union of India AIR 1987 Del 165 wherein it has been held that the plaint under Order 7 Rule 11(d) cannot be rejected on the ground that it is barred by limitation. According to these judgments the suit has to be barred by a provision of law to come within the meaning of Order 7 Rule 11 CPC. A contrary view has been taken in Jugolinija Rajia Jugoslavija v. Fab Leathers Ltd. AIR 1985 Cal 193, National Insurance Co. Ltd. v. Navrom Constantza AIR 1988 Cal 155, J. Patel & Co. v. National Federation of Industrial Coop. Ltd. AIR 1996 Cal 253 and State Bank of India Staff Assn. v. Popat & Kotecha Property (2001) 2 Cal LT 34. The last judgment was the subject-matter of challenge in Popat and Kotecha Property v. State Bank of India Staff Assn. (2005) 7 SCC 510 This Court set aside the judgment and held in para 25 as under:
“25. When the averments in the plaint are considered in the background of the principles set out in Sopan Sukhdeo case (2004) 3 SCC 137 the inevitable conclusion is that the Division Bench was not right in holding that Order 7 Rule 11 CPC was applicable to the facts of the case. Diverse claims were made and the Division Bench was wrong in proceeding with the assumption that only the non-execution of lease deed was the basic issue. Even if it is accepted that the other claims were relatable to it they have independent existence. Whether the collection of amounts by the respondent was for a period beyond 51 years needs evidence to be adduced. It is not a case where the suit from statement in the plaint can be said to be barred by law. The statement in the plaint without addition or subtraction must show that it is barred by any law to attract application of Order 7 Rule 11. This is not so in the present case.”
5. Noticing the conflict between the various High Courts and the apparent conflict of opinion expressed by this Court in N.V Srinivasa Murthy v. Mariyamma (2005) 5 SCC 548 and Popat and Kotecha Property v. State Bank of India Staff Assn. (2005) 7 SCC 510 the Bench referred the following question of law for consideration to a larger Bench:
“Whether the words ‘barred by law’ under Order 7 Rule 11(d) would also include the ground that it is barred by the law of limitation.”
6. Before the three-Judge Bench, counsel for both the parties stated as follows:
“…It is not the case of either side that as an absolute proposition an application under Order 7 and Rule 11(d) can never be based on the law of limitation. Both sides state that the impugned judgment is based on the facts of this particular case and the question whether or not an application under Order 7 Rule 11(d) could be based on law of limitation was not raised and has not been dealt with. Both sides further state that the decision in this case will depend upon the facts of this case.”
7. In view of the statement made by the counsel for the parties, the Bench held that the question referred to the larger Bench was academic so far as this case is concerned and accordingly declined to decide the question. The case was sent back to the Bench for disposal on merits based on the facts of the case.
8. After hearing counsel for the parties, going through the plaint, application under Order 7 Rule 11(d) CPC and the judgments of the trial court and the High Court, we are of the opinion that the present suit could not be dismissed as barred by limitation without proper pleadings, framing of an issue of limitation and taking of evidence. Question of limitation is a mixed question of law and fact. Ex facie in the present case on the reading of the plaint it cannot be held that the suit is barred by time. The findings recorded by the High Court touching upon the merits of the dispute are set aside but the conclusion arrived at by the High Court is affirmed. We agree with the view taken by the trial court that a plaint cannot be rejected under Order 7 Rule 11(d) of the Code of Civil Procedure.
9. The interim stay granted by this Court staying the further proceedings of the trial court is vacated. The parties are relegated to contest the suit. The appellant is permitted to file the written statement within thirty days from today. It shall be open to the appellant to raise any plea available to it under the law including the plea of limitation, maintainability of the suit, etc. The plaintiff-respondents would also be at liberty to file the replication to the written statement, if any, within fifteen days of receipt of the copy of the written statement. The trial court shall decide the points/issues raised in the suit without being influenced by any of the observations made in this order or that of the High Court or the trial court. Since the suit is pending for the last four years, the trial court is directed to dispose of the suit expeditiously, preferably within a period of one year from today.
10. The appeal is disposed of accordingly. No costs.
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