Supreme Court of India
SEJAL GLASS LTD.versusNAVILAN MERCHANTS PVT. LTD.
- Citation
- 2017 INSC 783
- Decided
- 21 August 2017
- Disposal
- Disposed off
- Bench
- R F NARIMAN
Holding
A plaint may be rejected under Order VII Rule 11 only in its entirety; if it survives against any defendant or property, the suit must proceed, and any partial striking must be effected under Order VI Rule 16, which did not apply here.
Summary
Sejal Glass Ltd. filed a civil suit seeking a money decree and recovery of TDS from Navilan Merchants Pvt. Ltd. and its directors. The defendants moved an application under Order VII Rule 11 of the CPC, claiming the plaint disclosed no cause of action against the directors and seeking bifurcation of the suit. The trial court rejected the plaint against the directors while allowing it to proceed against the company, and barred the defendants from filing written statements. The Supreme Court held that Order VII Rule 11 applies only to the plaint as a whole and cannot be used for partial rejection; any partial striking must be done under Order VI Rule 16, which was inapplicable as no ground for striking existed. Consequently, the impugned order was set aside and the defendants were given time to file their written statements, allowing the suit to continue in its entirety.
Issues considered
- Can Order VII Rule 11 of the CPC be invoked to reject only a part of a plaint against certain defendants while the suit proceeds against others?
- Whether Order VI Rule 16 is the appropriate provision for striking out pleadings against specific defendants in the present case.
- Whether Order XIV Rule 2 can be employed to decide a preliminary issue before the filing of written statements.
- Whether the trial court erred in bifurcating the plaint and denying the defendants the right to file written statements.
Legislation cited
- Code of Civil Procedure, 1908s. Order VII Rule 11, s. Order VI Rule 16, s. Order XIV Rule 2, s. Section 80
- Commercial Courts Act
Subjects
Order VII Rule 11plaint rejectionpartial rejectionCPCOrder VI Rule 16striking out pleadingspreliminary issuejurisdictioncivil suitbifurcation of plaint
Judgment
[2017] 7 S.C.R. 557
SEJAL GLASS LTD. A
v.
NAVILAN MERCHANTS PVT. LTD.
(Civil Appeal No. I 0802 of 2017)
B
AUGUST 21, 2017
[R. F. NARIMAN AND SANJAY KISHAN KAUL, JJ.I
Code of Civil Procedure, 1908 - Or. 7, r.11 -Application filed
under Or.7, r.11 - Trial court held that the plaint is to be bifurcated C
as it discloses no cause of action against the directors i.e.
Defendants 2 to 4 but the suit is to continue against the defendant
. no.I-company - Correctness of - Held: it is settled law that the
plaint as a whole alone can be rejected under Or. 7, r.11 - if the
plaint survives against certain defendants and/or properties, Or. 7,
r.11 will have no application at all, and the suit as a whole must D
then proceed to trial - if only a portion of the plaint, as opposed to
the plaint as a whole is to be struck out, Or. 6, r.16 of the CPC
would apply - it is clear that Or.6, r.16 would not apply in the facts
of the instant case - There is no plea or averment to the effect that,
as against the Directors, pleadings should be struck out on the E
ground that they are unnecessary, scandalous, frivolous, vexatious
or that they may otherwise tend to prejudice, embarrass or delay
the fair trial of the suit or that it is otherwise an abuse of the process
of the Court - impugned order is set aside - Defendant granted
time to file written statement.
F
Disposing of the appeal, the Court
HELD: 1. Order VII rule 11 refers to the "plaint" which
necessarily means the plaint as a whole. It is only where the
plaint as a whole does not disclose a cause of action that Order
VII Rule 11 springs into being and interdicts a suit from G
proceeding. It is settled law that the plaint as a whole alone
can be rejected under Order VII Rule 11. If the plaint survives
against certain defendants and/or properties, Order VII Rule 11
will have no application at all, and the suit as a whole must then
proceed to trial. [Paras 5, 6, 10) (560-F, G; 562-H]
H
557
558 SUPREME COURT REPORTS [2017] 7 S.C.R.
A 2. If only a portion of the plaint, as opposed to the plaint as
a whole is to be struck out, Order VI Rule 16 of the CPC would
apply. It is clear that Order VI Rule 16 would not apply in the
facts of the present case. There is no plea or averment to the
effect that, as against the Directors, pleadings should be struck
out on the ground that they are unnecessary, scandalous,
B
frivolous, vexatious or that they may otherwise tend to prejudice,
embarrass or delay the fair trial of the suit or that it is otherwise
an abuse of the process of the Court. [Para 111 1563-A, DI
3. The Court is vested with a discretion under Order XIV
C Rule 2 to deal with an issue of law, which it may try as a preliminary
issue if it relates to the jurisdiction of the Court, or is a bar to the
suit created for the time being in force. Obviously, this provision
would apply after issues are struck i.e. after a written statement
is filed. This provision is not applicable in this case. The
impugned judgment is set aside and the defendants in the suit
D are granted time to file their written statement after which the
suit will proceed to be tried. [Paras 13, 141 [564-A-CI
Maqsud Ahmad v. Mathra Datt & Co. A.LR. 1936
Lahore 1021; Bansi Lal v. Som Parkash A.l.R. 1952
Punjab 38; (Sree Rajah) Venkata Rangiah Appa Rao
E Bahadur and another v. Secretary of State and others
A.l.R. 1931 Madras 175; Ka/epu Pala Subrahmanyan
v. Tiguti Venkata Peddiraju and others A.I.R. 1971 A.P.
313 - referred to.
F Case Law Reference
A.LR. 1936 Lahore 1021 referred to Para6
A.I.R. 1952 Punjab 38 referred fo Para 7
A.I.R. 1931 Madras 175 referred to Paras
G
A.I.R. 1971 A.P. 313 referred to Para 9
CIVIL APPELLATE JURISDICTlON: Civil Appeal No. I 0802
of2017.
H
SEJAL GLASS LTD. v. NAVILAN MERCHANTS PVT. LTD. 559
From the final Judgment and Order dated 07.09.2016 passed by A
the High Court of Delhi at New Delhi in I.A. No. 9930 of2016 in CS
(COMM) No. 330 of2016
WITH
Civil Appeal No. 10803 of2017. B
Mukul Gupta, Sr. Adv. Garvesh Kabra, Mrs. Pooja Kabra,
Mrs. Nikita Kabra Jaju, Sibo Sankar Mishra, Vibhor Garg, Tushar Gupta;
Sumit Mishra, Niranjan Sahu, Advs. for the appearing parties .
. The Judgment of the Court was delivered by
c
R. F. NARIMAN, J. 1. Delay condoned.
2. Leave granted.
3. The respondent filed a Civil Suit being CS (Comm) No. 330 of
· 2016 in April, 2016 praying for the following reliefs: D
"a) Pass a Money Decree in a sum ofRs.1,44,01,365/-with further
interest both future and pendente lite@ 18% p.a. in favour of the
Plaintiff & against the defendants, jointly & severally, till its
complete realization along with cost of the present proceedings;
E .
b) Direct the Defendants to furnish TDS Certificates for the
deduction made by them or pay further amounts 'towards non-
payment ofTDS from 31/03/14 which they were liable to pay to
the concerned authority along with further interest & penalty
towards non-payment of TDS"
F
4. An application dated 08.07.2016 was filed by the Defendant(s)
under Order Vll Rule 11 stating that the plaint disclosed no cause of
action. By the impugned judgment dated 07.09.2016, it has been held
that the plaint is to be bifurcated - it discloses no cause of action against
. the Directors i.e. Defendant Nos. 2 to 4 but the suit is to continue against
the Defendant No. I-Company. It has further been held that the defendant, G
in any case, is barred from filing a written statement in the suit as he has
taken inordinate time to do so.
5. In our view, the impugned judgment is wrong on principle. Order
VII Rule 11 qfthe Code of Civil Procedure, 1908 which reads as follows:
H
560 SUPREME COURT REPORTS (2017] 7 S.C.R.
A "11. Rejection ofplaint.- The plaint shall be rejected in the following
cases:-
(a) where it does not disclose a cause of action;
(b) where the relief claimed is undervalued, and the plaintiff, on
being required by the Court to correct the valuation within a time
B
to be fixed by the Court, fails to do so;
(c) where the relief claimed is properly valued but the plaint is
written upon paper insufficiently stamped, and the plaintiff, on
being required by the Court to supply the requisite stamp-paper
c within a time to be fixed by the Court, fails to do so;
(d) where the suit appears from the statement in the plaintto be
barred by any law;
(e) where it is not filed in duplicate;
D (t) 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
E satisfied that the plaintiff was prevented by any cause of an
exceptional nature for 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."
F What is important to remember is that the provision refers
to the "plaint" which necessarily means the plaint as a whole. It
is only where the plaint as a whole does not disclose a cause of
action that Order VII Rule 11 springs into being and interdicts a
suit from proceeding.
G 6. It is settled law that the plaint as a whole alone can be rejected
under Order VII Rule I l . In Maqsud Ahmad v. Mathra Datt & Co.,
A.LR. 1936 Lahore 1021 at 1022, the High Court held that a note
recorded by the trial Court did not amount to a rejection of the plaint as
a whole, as contemplated by the CPC, and, therefore, rejected a revision
petition in the following terms:-
H
SEJAL GLASS LTD. v. NAVILAN MERCHANTS PVT. LTD. 561
[ R. F. NARlMAN, J.]
"There is no provision in the Civil Procedure Code for the rejection A
of a plaint in part, and the note recorded by the trial Court does
not, therefore, amount to the rejection of the plaint as contemplated
in the Civil Procedure Code." ·
,. 7. Similarly, in Bansi Lal v. Som Parkash, A.I.R. 1952 Punjab 38
at 39, the High Court held:- B
"But the real question which arises in this appeal is whether there
can be a partial rejection of the plaint. Mr. Chiranjiva LalAggarwala
submits that a plaint can either be rejected ~s a wh01e or not at all,
and he has relied on a statement of the law given in Mulla's Civil
Procedure Code at page 612 where it is stated: "This rule (Order c
7, Rule 11) does not justify the rejection of any particular portion
of a plaint." In support of this statement the learned author h.as
relied on 'Raghubans Puri v. Jyotis Swarupa', 29 All 325, 'Appa
Rao v. Secretary of State', 54 Mad 416, and 'Maqsud Ahmad v.
Mathra Datt & Co.', AIR 1936 Lah 1021. In reply to this argument
Mr. Puri has submitted that it is really five suits which had all D
been combined in one and therefore in this particular case the
rejection of a part was nothing more than rejection of three plaints.
But the suit was brought on one plaint and not five suits were
brought. The law does not change merely because the plaintiff
chooses in one suit to combine several causes of action against E
several defendants which the law allows him. It still remains one
plaint and therefore rejection of the plaint must be as a whole and
not as to a part. I am therefore of the opinion that the learned
Senior Subordinate Judge was in error in upholding the rejection
as to a part and setting aside the rejection in regard to the other ·
part. This appeal which I am treating as a petition for revision F
must therefore be allowed and the rule made absolute, and I order
accordingly."
8. In (Sree Rajah) Venkata Rangiqh Appa Rao Bahadur and
another v. Secretary of State and others, A.LR. 1931 Madras 175 at
176, the Mach-as High Court held:- ' .G
"Referring to S. 54 of the old Civil Procedure Code, the learned
Judge states that that section only provides for the rejection of a
plaint in the event of any matters specified in· that section not
_being complied with and it does not justify the rejection of any
H
562 SUPREME COURT REPORTS [2017] 7 S.C.R.
A particular portion ofa plaint. S. 54 now corresponds to 0. 7, R.
11, Civil Procedure Code. The plain meaning of that rule seems to
be that if any of the defects mentioned therein is found to exist in
any case, the plaint shall be rejected as a whole. It does not imply
any reservation in the matter of the rejection of the plaint. Non-
compliance· with the requisites of S. 80, Civil Procedure Code,
B
was taken to be a ground covered by Cl. (d) of R. 11, above
referred to. Even if it should 'be taken that that clause does not
strictly apply to the present case, I must hold that the suits are
liable to dismissal on account ofnon-compliance with S. 80, Civil
Procedure Code."
c It was further found that if the suit was dismissed for want of
notice against the Government under Section 80 CPC, it cannot be allowed
to proceed against the other defendants for the reason that the
Government's right to resume inam lands, on the facts of that case,
stands unaffect~d, and that being so, the plaintiff's claim to recover
D possession of such lands· from other defendants would also fall to the
ground for the simple reason that they have no right then to resume
those inams. It was, therefore, held on the peculiar facts of that case
that for the reasons given the suit would fail as a whole.
9. However, in Kalepu Pala Subrahmanyan v. Tiguti Venkata
E Peddiraju and others, A.LR. 1971 A.P. 313, a single Judge referred to
AIR 1931 Madras 175, and then held that the suit was barred by time in
respect of only certain items of property and not in respect of others.
Despite this, it was held that since the plaint as a whole should have
been rejected, the baby was thrown out with the bathwater, and the
entirety of the plaint and not merely the properties against which the suit
F could not proceed (as it was barred by limitation), was rejected.
10. We are afraid that this is a misreading of the Madras High
Court judgment. It was only on the peculiar facts of that case that want
of Section 80 CPC against one defendant led to the rejection of the
plaint as a whole, as no cause of action would remain against the other
G defendants. This cannot elevate itself into a rule of law, that once a part
of a plaint cannot proceed, the other part also cannot proceed, and the
plaint as a whole must be rejected under Order VII Rule 11. In all such
cases, ifthe plaint survives against certain defendants and/or properties,
Order VII Rule 11 will have no application at all, and the suit as a whole
H must then proceed to trial.
SEJAL GLASS LTD. v. NAVILAN MERCHANTS PVT. LTD. 563
[ R. F. NARIMAN, J.]
11. If only a portion of the plaint, as opposed to the plaint as a A
whole is to be strnck out, Order VI Rule 16 of the CPC would apply.
Order VI Rule 16 states as follows:-
"16. Striking out pleadings.- The Court may at any stage of the
proceedings order to be struck out or amend~d any matter in any
pleading- B
a) which may be unnecessary, scandalous, frivolous or vexatious,
or
b) which may tend to prejudice, embarrass or delay the fair trial- .'
of the suit, or C
c) which is otherwise an abuse of the process of the Court."
It is clear that Order VI Rule 16 would not apply in the facts of
the present c'ase. There is no plea or averment to the effect that, as
against the Directors, pleadings should be strnck out on the ground that D
they are unnecessary, scandalous, frivolous, vexatious or that they may
_otherwise tend to prejudice, embarrass or delay the fair trial of the suit
or that it is otherwise an abuse of the process of the Court.
12. hi contrast to the ~bove provisions, which apply on a demrirrer,
.the provisions of Order_ XIV Rule 2, read as follows;
E
"2. Court to pronounce judgment on all issues.-(!) Notwithstanding
tµat a case may be disposed of on a preliminary issue, the Court
shall, subject to the provisions of sub-rnle (2), pronounce judgment
on all issues.
(2) Where issues both of law and of fact arise in the same suit, F
and the Court is of opinion that the case or any part thereof may
be disposed of on an issue of law only, it may try that issue first if
.that issue relates to-
(a) the jurisdiction of the Co11rt, or
G
(b) a bar to the suit created by any law forthe time being in force,
and for that purpose may, if it thinks fit, postpone the settlement
of the other issues until after that issue has been determined, and
may deal with the suit in accordance with the decision on that
issue."
H
564 SUPREME COURT REPORTS [2017] 7 S.C.R.
A 13. The Court is vested with a discretion under this order to deal
with an issue oflaw, which it may try as a preliminary issue if it relates
to the jurisdiction of the Court, or is a bar to the suit created for the time
being in force. Obviously, this provision would apply after issues are
struck i.e. after a written statement is filed. This provision again cannot
come to the rescue of learned counsel for the respondent.
B
14. This being the case, we set aside the impugned judgment and
grant the defendants in the suit a period of eight weeks from today
within which to file their written statement after which the suit will proceed
to be tried.
C 15. The appeals are disposed of accordingly.
16. The question oflaw, insofar as the Commercial Courts Act is
concerned, has not been touched by us and is consequently left open.
Devika Gujral Appeals disposed of
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