Remedy Against Appellate Court's Order Affirming/Reversing Trial Court's Order Rejecting A Plaint: Allahabad HC Explains

The Allahabad High Court held that where an order rejecting a plaint under Order VII Rule 11 of Code of Civil Procedure is affirmed in appeal, it would be subject to a further remedy of second appeal under Section 100.

But, if the appellate court reverses the order of rejection of the plaint, the remedy would be to file an 'appeal against an order' under Order XLIII Rule 1(u) CPC, the court said. In the latter situation, the court said that the Appellate Court order cannot be held to be a 'decree' amenable to a second appeal under Section 100 of the Code. 

The Court was considering the objection raised by the Stamp Reporter with regard to the maintainability of the second appeal.

The Bench of Justice Yogendra Kumar Srivastava permitted the conversion of the appeal under Section 100 into an 'appeal against an order' under Section 104, in conjunction with Order XLIII Rule 1(u), while observing thus: "Putting it succinctly, it may be stated as a legal proposition that where an order rejecting a plaint under Order VII Rule 11 is affirmed in appeal, it would be subject to a further remedy of second appeal under Section 100, alternatively, if the appellate court reverses the order of rejection of the plaint, the remedy would be to file an 'appeal against an order' under Order XLIII Rule 1(u)."

Advocate Tarun Agrawal appeared for the Appellant and Senior Advocate Rahul Sripat appeared for the Respondent.

The appeal was filed to contest the Appellate Court's judgment, which overturned the trial court's order rejecting the plaint. The disagreement centred around a 1986 gift deed and a subsequent 1987 deed. The defendant, invoking the bar of limitation, sought the rejection of the plaint under Order VII Rule 11(d), a move upheld by the trial court. The appeal against this decision was allowed by the Appellate Court, setting aside the rejection of the plaint. The Appellate Court directed the Trial Court to restore the suit, invite objections, address limitation issues, and make decisions on all framed issues. Dissatisfied with this outcome, the defendant initiated an appeal under Section 100 of the Code.

To understand the dispute, the Court examined the relevant statutory provisions of the Civil Procedure Code, 1908 (CPC). It also considered a Notification dated April 27, 1957, published in the U.P. Gazette on June 1, 1957, which introduced amendments in the First Schedule of the Code of Civil Procedure, 1908. The Court highlighted that Section 2(2) of the CPC defines the term 'decree,' explicitly including the rejection of the plaint. The deeming clause in Section 2(2) treats the order as a 'decree,' making it appealable under Section 96 as an appeal from an original decree.

The Court emphasized that an order rejecting a plaint, even though not deciding on merits, is considered a 'decree' due to its impactful denial of sought relief and dismissal of the suit. The inclusion of a deeming clause in Section 2(2) serves to provide a comprehensive description, treating the rejection of a plaint as a 'decree' with finality.

Regarding Order VII Rule 11, the Court stressed its stringent prerequisites for rejection of the plaint, where only the averments in the plaint are considered. The rejection of a plaint is deemed a 'decree' under Section 2(2), making it appealable under Section 96. The Court distinguished between an order rejecting a plaint and an adjudication on merits. While the former does not decide conclusively on all issues, it extinguishes the plaintiff's right to pursue the case, making it a 'deemed decree' with binding effects.

In this case, the trial court, citing the bar of limitation, rejected the plaint under Order VII Rule 11. Despite not being framed as an issue, this order determined the limitation issue, invoking the deeming clause under Section 2(2). The trial court's order was deemed a 'decree,' and appealed under Section 96 and allowed, forming the basis for this appeal.

The Court noted that had the appeal been dismissed, it would have amounted to a 'decree' conclusively determining the parties' rights. However, in this situation, where the appeal was allowed, the question arose whether the order could be considered a 'decree' under Section 2(2) or an order of remand under Order XLI Rule 23. The Court observed that the Appellate Court's order, directing re-registration and comprehensive adjudication, did not conclusively determine the parties' rights and was not a 'decree.' The question then was whether it should be treated as an order of remand under Order XLI Rule 23.

“A close reading of the provisions of the Code would lead to an inference that the remedies available under the Code would be the following:

(i) where the order is a 'decree' as defined under Section 2(2) of the Code, it would be subject to an appeal under Section 96, with a further remedy of a second appeal under Section 100 of the Code;

(ii) where the order is not a 'decree' but is an order of the nature as described under Section 104 read with Rule 1 of Order XLIII, it would be subject to an appeal as an appeal from an order under Section 104 read with Order XLIII Rule 1 of the Code, without any provision for a further second appeal.

(iii) where the order is neither a 'decree' nor an 'appealable order' as specified under Section 104 read with Order XLIII Rule 1, it may be subject to a revision under Section 115, subject to fulfilment of the requirements of the section”.

The Court explained the scenarios for remand under the Allahabad Amendment, emphasizing that the first appellate court, when reversing a decree based on a preliminary point, must remand the case. It rejected the notion that rejection of an application under Order VII Rule 11 at the appellate stage automatically restores the suit without a specific remand order.

“The position which emerges from the foregoing discussion, in regard to the remedies available against an order passed in an appeal arising out of an order rejecting a plaint under Order VII Rule 11 of the Code, may thus be summarised in the following manner:

I. In a case where the application under Order VII Rule 11 has been allowed by the trial court and as a consequence the suit has been dismissed, and the said order is affirmed in appeal, the order of the first appellate court assumes the character of a 'decree' in terms of Section 2(2) of the Code, and a second appeal under Section 100 would lie against such a decree.

II. Alternatively, where in an appeal filed against an order of the trial court rejecting the plaint under Order VII Rule 11, the first appellate court reverses the order thereby restoring the suit to be tried on merits, it would in effect be an order of remand referable to Order XLI Rule 23, and would be subject to an appeal under Order XLIII Rule 1(u)”.

Regarding the remedies available under the CPC, the Court outlined distinct avenues based on the nature of the order: Decree Appeal (Section 96 and Section 100), Appeal from an Order (Section 104 and Order XLIII Rule 1(u)), and Revision (Section 115). Notably, a second appeal is available against a 'decree,' but not against an order in an appeal under Section 104 read with Order XLIII Rule 1(u).

Applying these principles, the Court concluded that the order reversed by the trial court and directing restoration of the suit was a 'remand order' under Order XLI Rule 23. Consequently, the remedy available was an 'appeal from an order' under Section 104 read with Order XLIII Rule 1(u), not a second appeal under Section 100.

The Court permitted the appellant to convert the appeal under Section 100 into an 'appeal against an order' under Section 104 read with Order XLIII Rule 1(u) and granted one week to file a new memorandum of appeal. The office was directed to re-register the appeal accordingly.

Accordingly, the Court listed the matter for afresh consideration before the appropriate bench on January 30, 2024.

Cause Title: Shrivatsa Goswami v Anant Prasad Singh And Another

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