Case Note & Summary
The petitioner, Goodwill Realtors and Properties Pvt. Ltd., filed a Civil Writ Petition under Article 227 of the Constitution of India challenging an order dated 30th January 2021 passed by the City Civil Court, Mumbai, rejecting the plaint in a suit for specific performance filed by the respondents (original plaintiffs) against the petitioner and others. The respondents had filed a suit for specific performance of an agreement to sell dated 21st October 2005, alleging that the defendants agreed to sell certain immovable property to them. The petitioner-defendant filed an application under Order 7 Rule 11(d) of the Code of Civil Procedure, 1908 (CPC) seeking rejection of the plaint on two grounds: first, that the suit was barred by limitation as the agreement was of 2005 and the suit was filed in 2016; second, that the agreement was void under Section 23 of the Indian Contract Act, 1872 as it was opposed to public policy. The trial court allowed the application and rejected the plaint. The High Court set aside the trial court's order, holding that the plaint cannot be rejected under Order 7 Rule 11(d) CPC when the suit is within limitation based on the plaintiff's averments. The court noted that the plaint specifically pleaded that the defendants refused to perform the agreement on 15th January 2016, and the suit was filed on 14th March 2016, within three years from the date of refusal, thus within limitation under Article 54 of the Limitation Act, 1963. Regarding the ground of void agreement under Section 23 of the Indian Contract Act, 1872, the court held that this is a mixed question of law and fact which requires trial and cannot be decided at the stage of rejection of plaint. The court emphasized that while considering an application under Order 7 Rule 11 CPC, the court must read the plaint as a whole and cannot go beyond the averments in the plaint. The defenses of the defendant cannot be considered at this stage. Accordingly, the writ petition was dismissed, and the trial court was directed to proceed with the suit in accordance with law.
Headnote
A) Civil Procedure - Rejection of Plaint - Order 7 Rule 11(d) CPC - Limitation - The court held that for rejection of plaint under Order 7 Rule 11(d) CPC, the court must look only at the plaint averments and the relief sought; if the plaint discloses a cause of action within limitation, the plaint cannot be rejected. The suit for specific performance was filed within three years from the date of refusal as pleaded, hence not barred by limitation (Paras 6-8). B) Contract Law - Void Agreement - Section 23 Indian Contract Act, 1872 - The court held that the question whether an agreement is void for being opposed to public policy or for any other reason under Section 23 of the Indian Contract Act, 1872 is a mixed question of law and fact which cannot be decided at the stage of rejection of plaint under Order 7 Rule 11 CPC. The trial court must examine evidence before deciding such an issue (Paras 9-11). C) Civil Procedure - Rejection of Plaint - Order 7 Rule 11 CPC - Scope - The court reiterated that while considering an application under Order 7 Rule 11 CPC, the court must read the plaint as a whole and cannot go beyond the averments in the plaint. Defenses of the defendant cannot be considered at this stage (Paras 6-8).
Issue of Consideration
Whether the plaint in a suit for specific performance of an agreement to sell can be rejected under Order 7 Rule 11(d) of the Code of Civil Procedure, 1908 on the ground that the suit is barred by limitation or that the agreement is void under Section 23 of the Indian Contract Act, 1872.
Final Decision
The High Court set aside the order of the City Civil Court dated 30th January 2021 and dismissed the writ petition. The trial court was directed to proceed with the suit in accordance with law.
Law Points
- Order 7 Rule 11 CPC
- Section 23 Indian Contract Act
- 1872
- Limitation Act
- 1963
- Specific Relief Act
