Calcutta High Court

Calcutta High Court: In an application challenging the dismissal of an application under Order VII Rule 11 of the Civil Procedure Code, 1908 (CPC) on the ground of being barred by law, lacked jurisdiction and being vexatious, a single-judge bench comprising of Ajoy Kumar Mukherjee,* J., dismissed the petitioner’s application under Article 227 of the Constitution of India, stating that the trial court’s decision was not manifestly unjust or illegal. The Court emphasised that the petitioner should have raised objections to the suit’s maintainability before the trial court, rather than directly approaching the High Court.

In the instant matter, the plaintiff participated in an auction held by the Debt Recovery Officer and offered Rs. 2.90 crores to purchase a property involved in a proceeding initiated by ICICI Bank against the secured debtor. The petitioner, NST Housing Development (P) Ltd., also participated in the auction and offered Rs. 2.30 crores for the same property. The plaintiff was declared the successful bidder but failed to pay the earnest money which led to declaration that the petitioner is successful bidder and the property was sold to the petitioners. The Debt Recovery Appellate Tribunal dismissed the secured debtor’s appeal, and possession of the property was delivered to the petitioner. The petitioner converted the property from ‘Shali’ land to ‘Bastu’ land, making it suitable for construction.

The plaintiff subsequently filed a suit, seeking permanent injunction and a declaration enforcing an alleged agreement for sale dated 21-12-2012. The petitioners filed an application under Order VII Rule 11 of the CPC, seeking rejection of the plaint, arguing various legal grounds including the suit being barred by law, lack of jurisdiction, and absence of cause of action. The lower court, vide order dated 05-02-2016, rejected the application under Order VII Rule 11, stating that it should only consider the averments in the plaint, not those in the written statement. Aggrieved by the impugned order rejection the Order VII Rule 11, the petitioner challenged the same contending that the suit is barred by law, lacked jurisdiction, and is vexatious. The main issue in the present application is whether the suit filed by the plaintiff maintainable or should be rejected under Order VII Rule 11 of the CPC.

The Court noted that the petitioner’s main grievance is related to the way of clever drafting, the plaintiff has tried to create an illusory cause of action for framing the suit. The Court stated that it is a well settled that Order VII Rule 11 of the CPC applies to plaints that do not disclose a cause of action, not those where the cause of action is alleged to be non-existent. The Court held that the lower court’s decision was not erroneous or illegal as it adhered to the principle of considering only the averments in the plaint while deciding on rejection under Order VII Rule 11 of the CPC.

“…the observation of the Trial Court that the Court while dealing with an application cannot go beyond the averments made in the plaint while deciding an application seeking rejection of plaint, is neither perverse nor illegal, since it is settled law from various judicial pronouncements that at the time of consideration of a prayer regarding rejection of plaint, only the averments made in the plaint is relevant.”

The Court emphasised that the Court’s jurisdiction under Article 227 of the Constitution of India should not be used as an appellate remedy and advised the petitioner to file a preliminary issue regarding the suit’s maintainability before the trial court for expedited resolution. The Court dismissed the application, allowing the plaintiff’s suit to proceed, but granted the petitioner the opportunity to challenge the maintainability of the suit before the lower court.

[N.S.T. Housing Development (P) Ltd. v. ICICI Bank Ltd., 2024 SCC OnLine Cal 2049, order dated 27-02-2024]

*Judgment by Justice Ajoy Kumar Mukherjee

Advocates who appeared in this case :

Mr. Shyamal Chakraborty, Mr. Debajyoti Mondal and Ms. Anjana Das, Counsel for the Petitioners

Mr. Sakya Sen and Mr. Manas Das, Counsel for the Opposite Party 3

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