Plaint To Be Rejected If No Cause Of Action Is Made Out Or If Relief Sought Cannot Be Granted Under Law: Supreme Court

A Bench of the Supreme Court comprising Justice L. Nageswara Rao and Justice BR Gavai has reiterated that a plaint should be rejected at its threshold if it does not disclose cause of action under Order VII Rule 11 of the Civil Procedure Code (CPC) or if relief, as claimed in the plaint, cannot be granted in law, to avoid sham litigation so the judicial time is not wasted.

Citing a judgment in the case of Dahiben v. Arvindbhai Kalyanji Bhanusali (Gajra) Dead Through Legal Representatives and Others, the Bench held that the power conferred on the court to terminate a civil action is a drastic one, and the conditions enumerated under Order VII Rule 11 of CPC are required to be strictly adhered to. However, under Order VII Rule 11 of CPC, the duty is cast upon the court to determine whether the plaint discloses a cause of action, by scrutinizing the averments in the plaint, read in conjunction with the documents relied upon, or whether the suit is barred by any law.

"The underlying object of Order VII Rule 11 of CPC is that when a plaint does not disclose a cause of action, the court would not permit the plaintiff to unnecessarily protract the proceedings. It has been held that in such a case, it will be necessary to put an end to the sham litigation so that further judicial time is not wasted."

Facts of the case

A partnership firm namely 'Soorajmull Nagarmull' was constituted under a Deed of Partnership dated December 6, 1943. All the partners died during passage of time and sons of some of the original partners instituted a suit before the Calcutta High Court against legal heirs of other original partners of the partnership firm seeking dissolution of partnership and rights on the assets of the firm. The defendants filed two applications in the suit seeking dismissal of the suit, or in the alternative, rejection of the plaint on the ground that the plaint does not disclose any cause of action, and the relief as claimed in the plaint could not be granted and it was liable to be rejected as it was filed beyond period of limitation.

The Single-Judge of the High Court rejected the pleas, but the Division Bench allowed it by holding that the cause of action pleaded and the reliefs claimed are not recognized by the law of the land. Such a suit should not be kept alive to go to trial.

Senior Counsel Gopal Jain appeared for the appellants, submitted that the Division Bench has grossly erred in allowing the appeals and reversing the well reasoned judgment and order passed by the Single Judge who after reading the averments in the plaint, had rightly come to the conclusion that the plaint discloses cause of action, and as such, could not be rejected under Order VII Rule 11 of CPC. The Division Bench has almost conducted a mini­-trial to find out as to whether the relief as claimed in the plaint could be granted or not. Such an exercise is impermissible while considering an application under Order VII Rule 11 of CPC. The power conferred on the court to terminate a civil action is a drastic one and it can't be routinely exercised. For finding out as to whether the cause of action exists or not, it is necessary to read the averments made in the plaint in their entirety and not in piecemeal.

For one defendant, Senior Counsel Dr. AM Singhvi  and for the others, Senior Counsel K.V. Viswanathan and Gopal Sankaranarayanan submitted that if the averments made in the plaint were read in juxtaposition with the provisions of Sections 40, 42, 43, 44 and 48 of the Indian Partnership Act, 1932 read with clauses in the Partnership Deed dated 6th December 1943, it would reveal that none of the reliefs, as claimed in the plaint, could be granted. As per Section 40 of the said Act, a firm can be dissolved only with the consent of all the partners or in accordance with the contract between the partners. Though under Section 42 of the said Act, a firm could be dissolved on the death of a partner, however, this is subjected to a contract between the partners.

He further submitted that, a perusal of clause 4 of the Partnership Deed dated 6th December 1943 would show that it specifically provides that upon the death of any partner, the partnership shall not be automatically dissolved. As such, the submission in that regard is without merit. Section 44 of the Act provides that the dissolution of the firm could be maintained on the ground specified therein, only if the suit is at the instance of the partners. Admittedly the plaintiffs were not the partners, and as such, the suit at their instance was not tenable.

After hearing the parties, the Bench referred to precedents to hold that the court has to find out as to whether in the background of the facts, the relief, as claimed in the plaint, can be granted to the plaintiff. If the court finds that none of the reliefs sought in the plaint can be granted to the plaintiff under the law and such a suit should be thrown out at the threshold.

Citing the judgment in case of T. Arivandandam v. T.V. Satyapal and Another, the Bench noted that, "reading of the averments made in the plaint should not only be formal but also meaningful. A suit has to be nipped in the bud at the first hearing itself If clever drafting has created the illusion of a cause of action, and it would show that the pleadings are manifestly vexatious and meritless, in the sense of not disclosing a clear right to sue, then the court should exercise its power under Order VII Rule 11 of CPC."

The Bench dismissed the appeals by holding that, "We are in agreement with the Division Bench of the Calcutta High Court which, upon an elaborate scrutiny of the averments made in the plaint, the reliefs claimed therein, the provisions of the said Act and the clauses of the Partnership Deed, came to the conclusion that the reliefs as sought in the plaint, cannot be granted."

Case Title - Rajendra Bajoria and Others Vs Hemant Kumar Jalan and Others