SRIHARI HANUMANDAS TOTALA VS. HEMANT VITHAL KAMAT & ORS.

[CIVIL APPEAL NO. 4665 OF 2021]

DR JUSTICE DHANANJAYA Y CHANDRACHUD

AUGUST 9, 2021

LAW POINTS

• Whether a Suit is barred by law, must be determined from the statements in the plaint and not from Written Statement.
• Plea of Res Judicata is beyond the scope of Order 7 Rule 11 (d)CPC, since an adjudication of the plea of res judicata requires consideration of the pleadings, issues and decision in the previous suit

FACTS

Ms. Leela Vithal Kamat was the title holder of the suit property. On her death on 16 May 1996, the property was mutated in the names of her legal heirs – the first respondent and his brother, the same was later mortgaged to Karnataka State Finance Corporation (KSFC) as security against a loan. KSFC auctioned the suit property since the loan amount was unpaid and the property was purchased by the Appellant. However, the respondent did not handover possession of the suit property to      the      Appellant.      The       appellant       filed       a       suit       for       possession. On the other hand, the respondent instituted a suit challenging the sale  deed executed by KSFC in appellant’s favour on the ground that KSFC had no right to put the property for sale. The Trial Judge decreed that first respondent and his brother in the suit to hand over vacant and peaceful possession of the suit property to the Appellant. The Respondent appealed against this judgment of the trial court. However, the Karnataka High Court affirmed the trial court’s judgment. Pursuant to the judgment of the High Court, the appellant who has purchased the suit property from the third respondent, filed an application for rejection of plaint under Order 7 Rule 11 of the CPC on the grounds of (i) non-payment of court fee; (ii) non-disclosure of cause of action; and (iii) the suit being barred by res judicata. It was contended that the suit instituted by the first respondent was barred by res judicata as the grounds relating to the validity of the sale deed and the issue of title were raised in the previous suit. The appellant urged that after the judgment of the Trial Court, which had been affirmed by the High Court, the rights of the parties  cannot  be further adjudicated and re-litigated upon. Pursuant to the dismissal of the revision petition by the High Court, the appellant has approached the Supreme Court challenging the order of the High Court.

DECISION OF TRIAL COURT ON APPLICATION UNDER O. 7 R. 11

The application under Order 7 Rule 11 was dismissed by the Trial Judge on 1 July 2019 for the following reasons:

• With respect to non-payment of the court fee, according to Order 7 Rule 11(c), a plaint would only be rejected if the plaint is written on a paper that is insufficiently stamped, and the court requires the plaintiff to supply the requisite stamp paper within a time fixed and despite such an order, the plaintiff fails to do so. In this case, no such order was passed by the court;

• The cause of action had been specifically pleaded by the first respondent in paragraph 5 of the Plaint and

• In order to reject a plaint for the suit being barred by any law under Order 7 Rule 11(d), the court needs to be guided by the averments in the plaint and  not  the defence taken. The grounds taken by the appellant – that the issues raised had been decided by the decree of the Trial Court and affirmed on appeal by the High Court – were the defence of the appellant. Thus, these cannot be taken into account while rejecting a plaint under Order 7 Rule 11 of the CPC. Moreover, the  issue  as  to whether the suit is barred by res judicata cannot be decided in an Order 7 Rule 11 application but has to be decided in the suit.

DECISION OF HIGH COURT ON APPLICATION UNDER O. 7 R. 11

The High Court dismissed the appeal upholding the reasoning of the Trial Court on all the three grounds raised in the Order 7 Rule 11 application. On the ground of res judicata, the High Court placed reliance on the decision of this Court in Soumitra Kumar Sen v. Shyamal Kumar Sen, and observed that the learned Trial Judge correctly came to the conclusion that the application filed under Order 7 Rule 11(d) on the ground of res judicata could not be decided merely by looking into the averments in the plaint.

In the view of the High Court, a plaint could be rejected under Order 7 Rule 11 only if it was not maintainable on the basis of the averments contained in the plaint. In the present application, such a determination would require  the  production  of  pleadings, the issues framed and the judgment in the  previous  suit,  to  compare  it  with  the present suit. This exercise, the High Court held, could not be undertaken merely by looking into the plaint averments as held in Soumitra Kumar Sen (supra).

RELEVANT PROVISIONS

• Order 7 Rule 11 of the CPC reads as follows:

“11. Rejection of plaint- The plaint shall be rejected in the following cases:

• where it does not disclose a cause of action;

• where the relief claimed is undervalued, and the plaintiff, on being required by the Court to correct the valuation within a time to be fixed by the Court, fails to do so;

• where the relief claimed is properly valued, but the plaint is returned upon paper insufficiently stamped, and the plaintiff, on being required by the Court to supply the requisite stamp-paper within a time to be fixed by the Court, fails to do so;

• where the suit appears from the statement in the plaint to be barred by any law; [(e) where it is not filed in duplicate;]

[(f) where the plaintiff fails to comply with the provisions of rule 9:]

[Provided that the time fixed by the Court for the correction of the valuation or supplying of the requisite stamp-paper shall not be extended unless the Court, for reasons to be recorded, is satisfied that the plaintiff was prevented by any cause of an exceptional nature from correcting the valuation or supplying the requisite stamp- paper, as the case may be, within the time fixed by the Court and that  refusal to extend such time would cause grave injustice to the plaintiff.]”

• Section 11 of CPC which defines res judicata:

“11. Res judicata.-No Court shall try any suit or issue in which the matter directly and substantially in issue has been directly and substantially in issue in a former suit between the same parties, or between parties under whom they or any of them claim, litigating under the same title, in a Court competent to try  such  subsequent suit or the suit in which such issue has been subsequently  raised,  and  has  been heard and finally decided by such Court.

OBSERVATIONS OF HON’BLE SUPREME COURT

Whether Res Judicata can be the ground for Rejection of the Plaint

The position was explained by this Court in Saleem Bhai v. State of Maharashtra (2003) SC, in which, while considering Order 7 Rule 11 of the Code, it was held as under:

“A perusal of Order 7 Rule 11 CPC makes it clear that the  relevant  facts which need to be looked into for deciding an application thereunder are the averments in the plaint. The trial court can exercise the power under Order 7 Rule 11 CPC at any stage of the suit-before registering the plaint or after issuing summons to the defendant at any time before the conclusion of the trial. For the purposes of deciding  an application under clauses (a) and (d) of Rule 11 of Order 7 CPC, the averments in the plaint are germane; the pleas taken by the defendant in the written statement would be wholly irrelevant at that stage, therefore, a direction to file the written statement without deciding the application under Order 7 Rule 11 CPC cannot  but  be procedural irregularity touching the exercise of jurisdiction by the trial court.”

It is clear that in order to consider Order 7 Rule 11, the court has to look into the averments in the plaint and the same can be exercised by the trial court at any stage of the suit. It is also clear that the averments in the written statement are immaterial and it is the duty of the Court to scrutinize the averments/pleas in the plaint. These principles have been reiterated in Raptakos Brett & Co. Ltd. v. Ganesh Property (1998) SC and Mayar (H.K.) Ltd. v. Vessel M.V. Fortune Express [(2006) SC]

Similarly,  in  Soumitra  Kumar  Sen  (supra),  an  application  was  moved  under  Order  7 Rule 11 of the CPC claiming rejection of the plaint on the ground that the suit was barred by res judicata. The Trial Judge dismissed the application and the judgement of the Trial Court was affirmed in revision by the High Court holding that in a case like this, though recourse to Order 7 Rule 11 CPC by the appellant was not appropriate, at the same time, the trial court may, after framing the  issues, take up the issues which pertain to the maintainability of the suit and decide the same in the first instance. In this manner the appellant, or for that matter the parties, can be absolved of unnecessary agony of prolonged proceedings, in case the appellant is ultimately found to be correct in his submissions.

In the recent decision of the Court in Shakti Bhog Food Industries Ltd. v. Central Bank of India and Another 2020 SC, a three Judge bench of the Court, speaking though Justice AM Khanwilkar, while dealing with the rejection of a plaint under Order 7 Rule 11 by the Trial  Court, on the ground that it was barred by limitation held that what needs to be looked into in deciding such an application are the averments in the plaint. At that stage, the pleas taken by the defendant in the written statement are wholly irrelevant and the matter is to be decided only on the plaint averment.

On a perusal of the above authorities, the guiding principles for deciding an application under Order 7 Rule 11(d) can be summarized as follows:

• To reject a plaint on the ground that the suit is barred by any law, only the averments in the plaint will have to be referred to.
• The defence made by the defendant in the suit must not be considered while deciding the merits of the application

• To determine whether a suit is barred by res judicata, it is necessary that (i) the ‘previous suit’ is decided, (ii) the issues in the subsequent suit were directly and substantially in issue in the former suit; (iii) the former suit was between the  same parties or parties through whom they claim, litigating under the same title; and (iv) that these issues were adjudicated and finally decided by a court competent to try the subsequent suit and

• Since an adjudication of the plea of res judicata requires consideration of the pleadings, issues and decision in the ‘previous suit’, such a plea will be beyond the scope of Order 7 Rule 11 (d), where only the statements in the plaint will have to be perused.

In the present case, the plaint, on the face of it, does not disclose any fact that may lead us to the conclusion that it deserves to be rejected on the ground that it is barred by principles of res judicata. The High Court and the Trial Court were correct in their approach in holding, that to decide on the arguments raised by the appellant, the court would have to go beyond the averments in the plaint. An application under Order 7 Rule 11 must be decided within the four corners of the plaint. The Trial court and High Court were correct in rejecting the application under order 7 Rule 11(d).

DECISION- The appeal is hereby dismissed by holding that the plaint was not liable to be rejected under Order 7 Rule 11(d) and affirm the findings of the Trial Court and the High Court. The Court expressed no opinion on whether the subsequent suit is barred by the principles of res judicata. The Additional Civil Judge, Belgaum shall consider whether a preliminary issue should be framed under Order XIV, and if so, decide it within a period of 3 months of raising the preliminary issue. The application under Order 7 Rule 11 of the CPC shall stand dismissed. There shall be no orders as to costs.