P.V. GURU RAJ REDDY REP. BY GPA LAXMI NARAYAN REDDY & ANR.versusP. NEERADHA REDDY & ORS. ETC.

                        [2015) 1 S.C.R. 1108


A   P.V. GURU RAJ REDDY REP. BY GPA LAXMI NARAYAN
                     REDDY & ANR.
                                   v.
               P. NEERADHA REDDY & ORS. ETC.
                  (Civil Appeal No. 5254 of 2006)
B
                        FEBRUARY 13, 2015

        [RANJAN GOGOi AND PRAFULLA C. PANT, JJ.]

C        Code of Civil Procedure, 1908: Or. 7, r. 11 - Exercise of
  power under, scope - Discussed - In the instant case, suits
  filed for declaration of title and possession - Plaintiffs case
  was that they were living abroad and entrusted the defendants
  the task of purchasing immovable property for them and when
D they visited India, they came to know that the defendants
  purchased the property in the name of defendant no.3 and 4
  - Immediately thereafter the plaintiff filed suit for declaration
  of title and possession - Defendants contested the suit on the
  ground of limitation and filed application for rejection of plaint
E - Trial court dismissed the application - High Court set aside
  the order of trial court - Held: Both the suits were filed well
  within three years of the date of knowledge, as claimed by the
  plaintiffs, of the fact that the property had not been transferred
  in their name by the defendants - The said averments made
F in the plaint are accepted as correct for the purposes of
  consideration of the application u!Or. 7 r. 11 filed by the
  defendants - The averrnents in the plaint did not disclose that
  the suits were barred by limitation so- as to justify rejection of
  the plaint u!Or. 7 r. 11.
G
         Disposing of the appeal, the Court

        HELD: Rejection of plaint under Order VII rule 11 of

H                                1108
P.V. GURU RAJ REDDY REP. BY GPA LAXMI NARAYAN 1109
         REDDY v. P. NEERADHA REDDY

the CPC is a drastic power conferred in the court to A
terminate a civil action at the threshold. It is the
averments in the plaint that has to be read as a whole to
find out whether it discloses a cause of action or whether
the suit is barred under any law. At the stage of exercise
of power under Order VII rule 11, the stand of the B
defendants in the written statement or in the application
for rejection of the plaint is wholly immaterial. It is only if
the averments in the plaint ex facie do not disclose a
cause of action or on a reading thereof the suit appears C
to be barred under any law the plaint can be rejected. In
all other situations, the claims will have to be adjudicated
in the course of the trial. In the present i;ase, reading the
plaint as a whole and proceeding on the basis that the
averments made therein are correct, which is what the D
Court is required to do, it cannot be said that the said
pleadings ex facie discloses that the suit is barred by
limitation or is barred under any other provision of law.
The claim of the plaintiffs with regard to the knowledge
of the essential facts giving rise to the cause of action as E
pleaded will have to be accepted as correct. Both the
suits were filed in July 2002 which was well within three
years of the date of knowledge, as claimed by the
plaintiffs, of the fact that the property had not been
transferred in the name of plaintiff No.2 by the defendants F
Nos. 1 and 2. The said averments made in the plaint have
to be accepted as correct for the purposes of
consideration of the application under Order VII rule 11
filed by the defendants Nos. 1 and 2. [Paras 5, 6, 9) [1111-
G-H; 1112-A-D; 1114-C]                                          G

     CIVIL APPELLATE JURISDICTION: Civil Appeal No.5254
of 2006.

    From the Judgment and Order dated 26.06.2003 of the · H
    1110     SUPREME COURT REPORTS                [2015] 1 S.C.R.


A   High Court of Judicature, Andhra Pradesh at Hyderabad in Civil
    Revision Petition No. 1398 of 2003.

        K. Radhakrishna, Promila for the Appellants.

        R. Venkataramani, G. N. Reddy, Pramod Reddy, M.
8
    Balashivudu, Yashraj Singh Bundela, Neelam Singh, Chandan
    Kumar, Anil Kumar Tandale, K. Maruthi Rao, K. Radha, Anjani
    Aiyagari for the Respondents.

        The Judgment of the Court was tfelivered by
c
        RANJAN GOGOi, J. 1. This appeal seeks to challenge two
  separate though largely similar orders both dated 26th June,
  2003 passed by the High Court of Andhra Pradesh at
  Hyderabad in Civil Revision Petition Nos.1398 and 1399 of
D 2003. By the aforesaid orders, the High Court, in reversal of
  the order of the learned trial judge, has allowed the applications
  filed by the defendants under Order VII rule 11 of the Code of
  Civil Procedure, 1908 (hereinafter referred to as "the CPC").
  Aggrieved, the plaintiffs are before us in this appeal.
E
        2. Original Suit Nos. 71 and 72 of 2002 were filed by the
  plaintiffs (appellants herein) for declaration of title and
  possession. The case of the plaintiffs in both the suits were
  more or less similar. According to the plaintiffs as they were
F living abroad they had reposed trust and faith in defendants
  Nos.1 and 2 who are their close relatives (sister and brother-
  in-law of plaintiff No.1) to purchase immovable property in
  Hyderabad in the name of the plaintiff No.2. According to the
  plaintiffs, they had made funds available to the defendants Nos.
G 1 and 2 for the said purpose and had entirely relied on them.
      3. The specific case of the plaintiffs in Original Suit No.71
  of 2002 is to the effect that the property belonging to one
  Professor N.S. Iyengar was identified for purchase and an
H agreement was drawn up with the said person. According to
 P.V. GURU RAJ REDDY REP. BY GPA LAXMI NARAYAN 1111
 REDDY v. P. NEERADHA REDDY [RANJAN GOGOi, J.]

the plaintiffs, they were informed by the defendants that              A
Professor Iyengar has resiled from the agreement which
required filing a suit for specific performance. According to the
plaintiffs when they visited Hyderabad in November/December
1999, they could notice some construction activity in the plot
belonging to Professor Iyengar. It is at that point of time that       B
they had made enquiries and could come to know that though
the suit for specific performance filed by the defendants was
decreed, the sale deed was executed in the name of the
defendant No.4 who is the brother-in-law of the defendant No.1.
It is thereafter that the suit being Original Suit No.71 of 2002       C
was filed.

     4. Insofar as Original Suit No.72 of 2002 is concerned, the
plaintiffs' case is that the property belonging to one Professor
B. Ramchander Rao was identified for purchase. Though the              D
defendant Nos.1 and 2 informed the plaintiffs that the needful
was done, it transpired that the said property was purchased
on 31.8.1979 jointly in the name of plaintiff No.2 and the
defendant No.3, who is the son of defendant No.1. According
                                                                       E
to the plaintiffs immediately after they came to know of the said
facts, they had issued a legal notice on 20.12.1999 and on
receipt of the reply to the said notice which contained an
unequivocal denial of the plaintiffs' claim, the suit being Original
Suit No.72 of 2002 was filed. Both the suits were filed in July,       F
2002.

       5. Rejection .of the plaint under Order VII rule 11 of the
CPC is a drastic power conferred in the court to terminate a
civil action at the threshold. Th~ conditions precedent to the         G
exercise of power under Order VII rule 11, therefore, are
stringent and have been consistently held to be so by the Court.
It is the averments in the plaint that has to be read as a whole
to find out whether it discloses a cause of action or whether
the suit is barred under any law. At the stage of exercise of          H
    1112      SUPREME COURT REPORTS                   [2015] 1 S.C.R.


A   power under Order '.'II rule 11, the stand of the defendants in
    the written statement or in the application for rejection of the
    plaint is wholly immaterial. It is only if the averments in the plaint
    ex facie do not disclose a cause of action or· on a reading
    thereof the suit appears to be barred under any law the plaint
B . can be rejected. In all other situations, the claims will have to
    be adjudicated in the course of the trial.

        6. In the present case, reading the plaint as a whole and
  proceeding on the basis that the averments made therein are
C correct, which is what the Court is required to do, it cannot be
  said that the said pleadings ex facie discloses that the suit is
  barred by limitation or is barred under any other provision of
  law. The claim of the plaintiffs with regard to the knowledge of
  the essential facts giving rise to the cause of action as pleaded
D will have to be accepted as correct. At the stage of
  consideration of the application under Order VII rule 11 the stand
  of the defendants in th:i written statement would be altogether
  irrelevant.

E       7. In Original Suit No.71 of 2002, the plaintiffs had averred
  that it is only in November/December 1999 when they came to
  India that they could come to know that the property of Professor
  Iyengar was sold to somebody else. Thereafter, they had issued
  a legal notice on 3.12.1999. The plaintiffs have further averred
F that it is only from the reply of the said notice that they could
  come to know of the true facts and the conduct of the
  defendants in conspiring to cheat. the plaintiffs. Thereafter,
  according to the plaintiffs after obtaining the copy of the decree
G of specific performance passed in O.S. No.24/1985 and the
  judgment of the Appeal Court in A.S. 215/87 as well as the
  judgment of the High Court dated 13.1.1995, the suit in question
  was filed, inter alia, for:

           "(a) For a declaration that the Plaintiff has title over the
H
 \                    ~
P.V. GURU RAJ REDDY REP. BY GPA LAXMI NARAYAN 1113
REDDY v. P. NEERADHA REDDY [RANJAN GOGOi, J.]

             schedule property and for possession of the suit          A
             schedule property from the defendants.

     (b)     For cancellation of the judgment and decree passed
             in O.S. 24/85 on the file of the Court of the Principal
             Subordinate Judge, Ranga Reddy District at                B
             Saroornagar regarding the schedule property.

     (c)     For permanent injunction restraining the defendants,
             their men and others on their behalf from further
             alienating the schedule property in favour of any         c
             other person.

      (d)    For costs."

     8. Similarly' in Original Suit No. 72 of 2002, according to
the plaintiffs, they could come to know of the sale deed dated         D
31.8.1979 executed in favour of the plaintiff No.2 and the
defendant No.3 only in the year 1999 immediately whereafter
they had issued the legal notice dated 20.12.1999. According
to the plaintiff~ it is only subsequently that they came to know
                                                                       E
of sale of half of the scheduled property in favour of the
defendant No.5. Accordingly they had filed the Original Suit
No.72 of 2002 claiming the following reliefs:

      "(a)   For a declaration that the schedule property is the
                                                                       F
             property of the 2nd plaintiff and for possession of
             the suit schedule property from the defendants to
             the 2nd plaintiff.

      (b)    For cancellation of the sale deed, dt. 31.8.1979
             jointly executed in the name of the 2nd plaintiff and     G
             the 3rd defendant, so far as the 3rd defendant is
             concerned.

      (c)    For cancellation of the sale deed, dated                      ·J-:
             10.02.1999, executed in the name of the 5th               H
         1114         SUPREME COURT REPORTS              (2015] 1 S.C.R.


     A                 defendant.

                (d)    For permanent injunction restraining the defendants,
                       their men and others on their behalf from further
                       alienating the schedule property in favour of other
     B                 persons.

                (e)    For costs."

             9. Both the suits were filed in July 2002 which is well within
       three years of the date of knowledge, as claimed by the
     C plaintiffs, of the fact that the property had not been transferred
       in the name of plaintiff No.2 by the defendants Nos. 1 and 2.
       The aforesaid averments made in the plaint will have to be
       accepted as correct for the purposes of consideration of the
     0 application under Order VII rule 11 filed by the defendants Nos.
       1 and 2. If that be so, the averments in the plaint would not
       disclose that either of the suits is barred by limitation so as to
       justify rejection of the plaint under Order VII rule 11 of the CPC.

     E       10. There is yet another issue framed by the High Court
         as Question No.3 which is in the following terms:

                "      3. Whether the claims made in the suit, as
                       appearing in the statement in the plaint, are hit by
                       the provisions of the Benami Transactions
     F                 (Prohibition) Act, 1983?"

            11. While in Civil Revision Petition No.1398 of 2003 the
       saip issue was decided in favour of the plaintiffs, in Civil
       Revision Petition No.1399 of 2003 the same was decided
     G against the plaintiffs. The finding of the High Court in this regard
       proceeds on the basis that the plaintiffs had admitted in the
       plaint that the property purchased in the name of the defendant
       No.3 belonged to the plaintiffs. Therefore the provisions of
'I   H Benami Transactions (Prohibition) Act, 1988 would apply. We
P.V. GURU RAJ REDDY REP. BY GPA LAX.Ml NARAYAN 1115
REDDY v. P. NEERADHA REDDY [RANJAN GOGOi, J.]

fail to see how the aforesaid view of the High Court can be         A
sustained. The suits in question were not filed for recovery of
any property held in benami by the defendants. Rather, the suit
was for declaration of plaintiffs' title and for recovery of
possession from the defendants, as already noted.
                                                                    B
     12. For the aforesaid reasons, the order of the High Court
dated 26th June, 2003 has to be reversed. We, accordingly,
do so and allow this appeal and direct the learned trial Court
to hear and decide both the suits i.e. Original Suit No.71 of
2002 and Original Suit No. 72 of 2002 on merits at an early         C
date.

     13. The appeal is disposed of in the above terms.

Devika Gujral                                 Appeal disposed of.   D




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