Holding

The revisional court was within its jurisdiction under the Orissa amendment to Section 115 CPC to reject the plaint, and the plaint was barred because the declaratory reliefs sought would frustrate the defendant’s right to prosecute under the Negotiable Instruments Act.

Summary

The plaintiff, a mining company, sued the defendant for a declaration that a Rs 56‑lakh cheque, given as security under a memorandum of understanding, was not payable because the defendant failed to protect the plaintiff’s port licence. The defendant filed an application under Order VII Rule 11 CPC seeking rejection of the plaint, arguing that the suit was barred under the Specific Relief Act and that the reliefs sought would frustrate the defendant’s right to prosecute under Section 138 of the Negotiable Instruments Act. The trial court dismissed the application, but the revisional (District) Court reversed that order and rejected the plaint. The High Court set aside the revisional order, prompting the present appeal. The Supreme Court held that, under the Orissa amendment to Section 115 CPC, the revisional court was empowered to vary or reverse an order that would finally dispose of the suit, and that the declaratory reliefs sought were barred as they amounted to an injunction against criminal prosecution. Consequently, the plaint was rightly rejected and the High Court’s order was set aside.

Issues considered

The scope of jurisdiction of a revisional court under Section 115 of the CPC as amended by the Orissa Act, particularly whether it can reject a plaint via Order VII Rule 11.
Whether a suit seeking only declaratory reliefs is barred under Section 34 of the Specific Relief Act when the plaintiff could have sought further relief.
Whether the declaratory reliefs sought effectively constitute an injunction restraining the defendant from instituting criminal proceedings under Section 138 of the Negotiable Instruments Act, violating Section 41 of the Specific Relief Act.
Whether the High Court erred in setting aside the revisional court’s order and remanding the matter.

Legislation cited

Code of Civil Procedure, 1908s. 115, s. 96
Negotiable Instruments Act, 1881s. 118, s. 138
Specific Relief Act, 1963s. 34, s. 41

Subjects

Order VII Rule 11Section 115 CPCOrissa amendmentSpecific Relief ActNegotiable Instruments Actdeclaratory reliefrevisional jurisdictioncheque dishonourcivil procedureplaint rejection

Judgment

1100 [2022] REPORTS
SUPREME COURT 14 S.C.R. 1100 [2022] 14 S.C.R.

A M/S FROST INTERNATIONAL LIMITED
v.
M/S MILAN DEVELOPERS AND BUILDERS (P) LIMITED &
ANR.
(Civil Appeal No. 1689 of 2022)
B
APRIL 01, 2022
[M. R. SHAH AND B. V. NAGARATHNA, JJ.]
Code of Civil Procedure, 1908 : ss. 96, 115 and Or.VII r.11 -
Negotiable Instruments Act - ss. 118, 138 - Specific Relief Act - ss.
C 34, 41 – Suit for declaration – Rejection of plaint - Respondent
no.1 engaged in business of exporting iron ore from Paradeep Port,
had a plot on licence from Paradeep Port Trust Authority for carrying
its business - Respondent no.1 and appellant entered into a
Cooperation Agreement, however, as per respondent no.1, it was
not given effect – Thereafter, appellant filed a complaint against
D
respondent no.1 with Paradeep Port Trust Authority for violating
terms and conditions of his license – Parties then entered into a
Memorandum of understanding agreeing the appellant would take
steps to protect the license of the plot given to the respondent no.1
from cancellation and that the respondent no.1 would issue a cheque
E for Rs.56 lakhs in favour of appellant and the same would remain
in the custody of the respondent no.2 as security, which is equivalent
to the cost of 3876 MT of iron ore, and if the appellant succeeded
in protecting the licence from being cancelled then respondent no.
1 would supply iron ore fines to appellant - Accordingly cheque
was given to the respondent no.2 as security, however, the appellant
F
took no step to save the license of the plot and the license was
cancelled, and the cheque of Rs.56 lakhs was handed over to
appellant, who presented the same for encashment and it got
dishonoured – Appellant issued notice u/s. 138 of N.I. Act to the
respondent no. 1 – Respondent no.1 then filed suit for declaration
G against the appellant and the respondent no. 2 that the cheque which
was dishonoured was handed over by him to respondent no.2 as a
security and that appellant had not acquired any right over the
said cheque as the respondent no.1 had no liability to discharge in
favour of appellant – Appellant then filed an application u/Or. VII
Rule 11seeking rejection of the plaint – Dismissed by trial court,
H
1100
M/S FROST INTERNATIONAL LIMITED v. M/S MILAN 1101
DEVELOPERS AND BUILDERS (P) LTD.

however, the revisional court set aside the order of the trial court A
and rejected the plaint – In writ petition, the High Court set aside
the order of the revisional court and remanded the matter holding
that the revisional court had exceeded its jurisdiction in rejecting
the plaint – On appeal, held : High Court was not right in holding
that the revisional court had exceeded its jurisdiction and it could
B
not have allowed the application filed under Order VII Rule 11 and
thereby reversed the order of the trial court and finally disposed of
the suit - High Court failed to appreciate the second proviso to s.
115 of CPC (Orissa amendment) in its true perspective - Revisional
court, being the High Court or the District Court, as the case may
be, can reverse an order which would finally dispose of the suit or C
other proceeding - Revisional court being the District Court, did
the same.
s.115 and Order VII Rule 11 - Specific Relief Act,1963 -
ss.34,41 - Negotiable Instruments Act - ss. 118, 138 - Revisional
court-District Court allowing the application filed u/ord. VII r 11 D
by the appellant and thereby rejecting the plaint filed by the
respondent no.1 – Justification of – Appellant’s case that respondent
no.2 has sought only declaratory that the cheque issued in the name
of the appellant was a security and the appellant had no right to
encash it and has not sought further or consequential reliefs, thus,
suit is barred under Specific Relief Act; and that the suit filed by the E
respondent no.1 is an attempt to frustrate the possibility of the
appellant initiating action under the provisions of the N.I. Act for
the dishonour of cheque - Held : Omission on the part of the
respondent no. 1 in praying for further consequential relief, would
become relevant only at the time of final adjudication of the suit - F
Right of appellant to prosecute the respondent no. 1 owing to the
dishonour of the cheque issued by the respondent no. 1 cannot be
frustrated by seeking a declaration that the said cheque was handed
over as a security – Such a declaration cannot be ex facie granted
as it would be contrary to the provisions of the N.I. Act and
particularly s.118(a) thereof – In these circumstances, while the G
respondent no. 1 has certain grievances arising from the MoU,
against the appellants which may give rise to seek appropriate
remedies in law, the declaratory reliefs sought in the plaint are barred
by law - Hence, the plaint is liable to be rejected in exercise of
jurisdiction u/Or. VII r. 11 CPC. H
1102 SUPREME COURT REPORTS [2022] 14 S.C.R.

A Order VII Rule 11 - Rejection of Plaint - Purpose/Object -
Discussed.
Allowing the appeal, the Court
Held : 1.1 It is noted that the Orissa amendment differs
from the main Section 115 of CPC. The first proviso to main Section
B 115 of CPC restricts the revisional power of the High Court
inasmuch as a revision is maintainable only if it is filed by a party
who is aggrieved by an order passed by the court subordinate to
the High Court on an order deciding an issue which, had it been
made in favour of the party applying for revision, would have finally
C disposed of the suit or other proceeding. But as per the second
proviso to Section 115 of CPC (Orissa amendment), the High
Court or the District Court, as the case may be, under the said
Section can vary or reverse any order including an order deciding
an issue, made in the course of a suit or other proceeding only if
the order if so varied or reversed would finally dispose of the
D suit or other proceeding or the order if allowed to stand would
occasion a failure of justice or cause irreparable injury to the
party against whom it was made. In other words, under Orissa
amendment to Section 115 of CPC, an express power is conferred
on the High Court or the District Court, as the case may be,
E being the revisional courts, to vary or reverse an order of the
court subordinate thereto only when it would finally dispose of
the suit or other proceedings or if the impugned order is allowed
to stand would occasion a failure of justice or cause irreparable
injury to the party against whom it was made. [Para 18][1117-B-
C; 1118-A-D]
F
1.2 It would also be pertinent to mention that the instant
suit was filed in the year 2009 and therefore the Orissa
amendment to Section 115 CPC vide Orissa Act 26 of
1991, Section 2, would be applicable. However, by Orissa Act 14
of 2010, Sub-Section 2, Section 115 was amended by the Orissa
G Legislature and second proviso to Section 115 has been amended
and Sub- Section 2 of Section 115 has been added which states
that the High Court or District Court, as the case may be, shall
not under this Section, vary or reverse any order including an
order deciding an issue, made in the course of a suit or other
H proceeding, except where the order, if it has been made in favour
M/S FROST INTERNATIONAL LIMITED v. M/S MILAN 1103
DEVELOPERS AND BUILDERS (P) LTD.

of the party applying for revision, would finally dispose the suit A
or other proceeding. Further, clause 1 of the second proviso
of Section 115 has been omitted by the amendment made in the
year 2010 and Sub-Section 3 has been added. This provision states
that a revision shall not operate as a stay of suit or other
proceeding before the Court except where such suit or other
B
proceeding is stayed by the High Court or District Court, as the
case may be. Sub-Section 1 of Section 115 is in pari materia with
the Orissa Amendment of 1991 except its reference to the Orissa
Amendment Act of 2010. [Paras 19, 20][1118-E-H; 1119-A]
1.3 The High Court was not right in observing that the
revisional court had exceeded its jurisdiction and it could not C
have allowed the application filed under Order VII Rule 11 of
CPC and thereby reversed the order of the trial court and finally
disposed of the suit. In fact, the High Court has failed to appreciate
the second proviso to Section 115 of CPC (Orissa amendment)
in its true perspective. The revisional court, being the High Court D
or the District Court, as the case may be, can reverse an order
which would finally dispose of the suit or other proceeding. That
is exactly what has been done by the revisional court being the
District Court in the petition being C.R.P. No.5 of 2012. Hence,
the High Court was not justified in setting aside the said order
and remanding the matter to the revisional court (District Court) E
to consider afresh, the application filed by defendant no.1/appellant
herein under Order VII Rule 11 of CPC seeking rejection of the
plaint. In fact, the exercise of jurisdiction by the revisional court
in the instant case is in accordance with second proviso to Section
115 of CPC (Orissa amendment). Therefore, the High Court was F
not right in holding that the revisional court had no jurisdiction
to reject the plaint filed under Order VII Rule 11 of CPC. The
reasoning of the High Court is contrary to the express proviso of
Section 115 (Orissa Amendment). [Paras 21, 22][1120-B-E; 1122-
D-E]
G
1.4 No doubt rejection of a plaint is a decree within the
meaning of Section 2(2) of CPC and an appeal lies from every
decree passed by any court exercising original jurisdiction to the
Court authorised to hear appeals from a decision of such court.

H
1104 SUPREME COURT REPORTS [2022] 14 S.C.R.

A However, it must be borne in mind that when a revisional court
rejects a plaint, in substance, an application filed under Order
VII Rule 11 is being allowed. Under such circumstances, the
remedy by way of a writ petition under Article 227 of the
Constitution could be availed and respondent no.1/plaintiff has
resorted to the said remedy in the instant case; although if the
B
plaint had been rejected by the trial court i.e. court of original
jurisdiction, it would have resulted in a right of appeal under
Section 96 of CPC. Having regard to the second proviso to Section
115 of CPC (Orissa amendment), a revisional court while allowing
the application filed under Order VII Rule 11 of CPC would in
C substance reject the plaint but since the said decree is not passed
by the court of original jurisdiction, namely the trial court, the
remedy by way of writ petition under Article 227 of the Constitution
would be available to the aggrieved party and respondent no.1
has availed the said remedy. [Paras 23, 24][1122-E-H; 1123-A]
D 1.5 On a reading of the plaint, in the instant case it is noted
that it discloses a cause of action inasmuch as the MoU dated
17th January, 2009, entered into between the plaintiff and
defendant no.1 in the presence of defendant no.2 and the acts
done pursuant to the said MoU is the basis for the grievance of
the plaintiff. [Para 28][1128-C-D]
E
1.6 At the outset, on perusal of the plaint averments, the
plaintiff has indeed made out a cause of action for filing the suit.
In fact, in para 2 of the application filed under Order VII Rule 11
CPC, defendant no.1 has also encapsulated the averments made
in the plaint. Therefore, on that score the plaint cannot be rejected.
F [Para 29][1129-D-E]
1.7 The main thrust of the application seeking rejection of
the plaint is that apart from the fact that the plaint does not disclose
a cause of action which has been negated by the revisional court
and rightly so, plaintiff has sought only declaratory reliefs and
G has not sought further or consequential reliefs. In the
circumstances, the suit is barred under the provisions of the SR
Act.The proviso to Section 34 states that no court can make any
declaration where the plaintiff, being able to seek further relief
than mere declaration of title, omits to do so. The said question
H
M/S FROST INTERNATIONAL LIMITED v. M/S MILAN 1105
DEVELOPERS AND BUILDERS (P) LTD.

will have to be considered at the time of final adjudication of the A
suit as the question of granting further relief or consequential
relief would arise only if the court grants a declaration. If the
plaintiff is unsuccessful in seeking the main relief of declaration,
then, the question of granting any further relief would not arise
at all. Therefore, omission on the part of the plaintiff in praying
B
for further consequential relief, would become relevant only at
the time of final adjudication of the suit. Hence the plaint cannot
be rejected at this stage by holding that the plaintiff has only
sought declaratory reliefs and no further consequential reliefs.
[Para 31][1129-H; 1130-A-B, E-G]
1.8 On a reading of ss. 118(a) and 138 of the NI Act, it is C
clear that there is a rebuttable presumption that every negotiable
instrument including a cheque was made or drawn for a
consideration and every such instrument when it has been
accepted is for a consideration. [Para 33][1132-D-E]
1.9 On a reading of the plaint, it is evident that cheque D
issued had been dishonoured and defendant no.1 had issued
notice under Section 138 of N.I. Act on 10th June, 2009, to the
plaintiff and its Managing Director replied to the same through
their advocate on 23rd June, 2009. Therefore, it is evident that
the plaintiff by seeking the said reliefs is in substance frustrating E
the right of defendant no.1 to take steps under the provisions of
N.I. Act for releasing the amount of cheque issued by the plaintiff
to defendant no.1 for a sum of Rs. 56 lakhs by filing a civil suit
and/or by initiating a criminal prosecution. In other words, by
seeking such a declaration that the cheque was issued as a
security and that the same was illegally handed over by defendant F
no.2 to defendant no.1 in violation of the terms and conditions of
the MoU, the plaintiff in substance is making an attempt to
frustrate proceedings being initiated under Section 138 of the
N.I. Act or for recovery of the amount by filing a civil suit. [Para
34][1132-E-H] G
1.10 On a holistic reading of the plaint and on consideration
of the reliefs sought by the plaintiff, the said reliefs are barred by
law inasmuch as no plaintiff can be permitted to seek relief in a
suit which would frustrate the defendants from initiating a
H
1106 SUPREME COURT REPORTS [2022] 14 S.C.R.

A prosecution against plaintiff or seeking any other remedy
available in law. In fact, the attempt made by the plaintiff to seek
such a declaratory relief is, in substance, to seek a relief of
injunction against the defendants, particularly defendant no.1, but
framed it in the nature of a declaratory relief. In other words, the
plaintiff has sought an injunction against defendant no.1 from
B
seeking remedies in law on account of the cheque issued by the
plaintiff for a sum of Rs. 56 lakhs being dishonoured. Further,
the nature of the declaratory reliefs sought already arises out of
the MoU dated 17th January, 2009, between the plaintiff and
defendant no.1 in respect of which the plaintiff could seek
C appropriate remedies, if there is a breach of the said MoU by
defendant no.1, but the plaintiff cannot seek declaratory reliefs
to the effect that the plaintiff was not liable to carry out his
obligation under the terms of the MoU. If the plaintiff has failed
to do so then the defendant no.1 would have a cause of action
against the plaintiff, but there cannot be a frustration of the right
D
to seek a remedy in law by means of seeking declaration under a
contract or MoU as in the instant case. [Paras 35, 36][1133-A-C;
1135-F-H]
1.11 Moreover, the right of defendant no.1 to prosecute
the plaintiff owing to the dishonour of the cheque issued by the
E plaintiff for a sum of Rs. 56 lakhs cannot be frustrated by seeking
a declaration that the said cheque was handed over as a security.
Such a declaration cannot be ex facie granted as it would be
contrary to the provisions of the N.I. Act and particularly Section
118(a) thereof. If the plaintiff is aggrieved on account of breach
F of the terms and conditions of the MoU committed by defendant
no.1 then it could seek appropriate reliefs in accordance with
law. Whether the plaintiff was not liable to issue the cheque for
Rs. 56 lakhs to defendant no.1 under the terms of the MoU is a
matter which has to be considered in an appropriate proceeding
to be initiated by defendants on account of dishonour of the said
G cheque under Section 138 of the N.I. Act. The plaintiff can always
prove that it had no legal liability or debt to be discharged vis-a-vis
defendant no.1 under the terms of the MoU, if any proceeding is
to be initiated by defendant no.1 on account of the dishonour of
the said cheque. Further, if defendant no.1 is to seek any relief
H for the non-supply of 3876 MT of iron ore fines by the plaintiff
M/S FROST INTERNATIONAL LIMITED v. M/S MILAN 1107
DEVELOPERS AND BUILDERS (P) LTD.

under the very same MoU then the plaintiff is entitled to take A
appropriate defences as are available in law. If the plaintiff has a
grievance against the defendants and particularly defendant no.1,
arising from the MoU, such prayers have not been sought by the
plaintiff. Such reliefs could have been sought by the plaintiff
inasmuch as there is no prayer seeking recovery of Rs. 21.50
B
lakhs from defendant no.1 which according to the plaintiff is due
to it. [Para 37][1136-A-E]
1.12 In the circumstances, while the plaintiff has certain
grievances arising from the MoU, against the defendants which
may give rise to seek appropriate remedies in law, the aforesaid
three declaratory reliefs sought in the plaint are barred by law. C
Hence, the plaint is liable to be rejected in exercise of jurisdiction
under Order VII Rule 11 CPC. The revisional court was justified
in rejecting the plaint but the High Court has erroneously set
aside the order of the revisional court without appreciating the
facts and circumstances of the case and has simply remanded the D
matter to the revisional court to reconsider the revision afresh
on the premise that the revisional court did not have the
jurisdiction to reject the plaint u/s. 115. The Order of the High
Court is set aside and the Order of the revisional court is restored.
The plaint is rejected. [Paras 38, 39][1136-E-H; 1137-A]
E
Pandurang Dhondi Chougule and Others v. Maruti Hari
Jadhav and Others AIR 1966 SC 153 : [1966] 1 SCR
102; Tek Singh v. Shashi Verma and Another (2019) 16
SCC 678 : [2019] 3 SCR 697; T. Arivandandam v. T. V.
Satyapal & Anr. (1977) 4 SCC 467 : [1978] 1 SCR
742; Azhar Hussain v. Rajiv Gandhi (1986) Supp SCC F
315 : [1986] 2 SCR 782; Sopan Sukhdeo Sable and
Ors. v. Assistant Charity Commissioner and Others
(2004) 3 SCC 137 : [2004] 1 SCR 1004; I.T.C Ltd. v.
Debts Recovery Appellate Tribunal and Ors. (1998) 2
SCC 70 : [1997] 6 Suppl. SCR 683; Liverpool & G
London S.P. & I Assn. Ltd. v. M.V. Sea Success I & Anr.
(2004) 9 SCC 512 : [2003] 5 Suppl. SCR 851;
Madanuri Sri Rama Chandra Murthy v. Syed Jalal
(2017) 13 SCC 174 : [2017] 5 SCR 294; Dahiben v.

H
1108 SUPREME COURT REPORTS [2022] 14 S.C.R.

A Arvindbhai Kalyanji Bhanusali (Gajra) Dead through
Legal Representatives and Others (2020) 7 SCC 366;
Rajendra Bajoria and Others v. Hemant Kumar Jalan
and Others 2021 SCC Online SC 764; Hardesh Ores
(P.) Ltd. v. Hede & Co. (2007) 5 SCC 614 : [2007]
6 SCR 608; D. Ramachandran v. R. V. Janakiraman
B
(1999) 3 SCC 367; Saleem Bhai v. State of Maharashtra
(2003) 1 SCC 557 : [2002] 5 Suppl. SCR 491; Cotton
Corporation of India Limited v. United Industrial Bank
Limited and Ors. (1983) 4 SCC 625 : [1983] 3 SCR
962; Ratna Commercial Enterprises Ltd. v. Vasutech Ltd.
C AIR 2008 Del 99 - referred to.
Case Law Reference
[1966] 1 SCR 102 referred to Para 22A
[2019] 3 SCR 697 referred to Para 22A
D [1978] 1 SCR 742 referred to Para 25(a)
[1986] 2 SCR 782 referred to Para 25(b)
[2004] 1 SCR 1004 referred to Para 25(c)
[1997] 6 Suppl. SCR 683 referred to Para 25(c)
E [2003] 5 Suppl. SCR 851 referred to Para 25(d)
[2017] 5 SCR 294 referred to Para 25(e)
(2020) 7 SCC 366 referred to Para 25(f)
[2007] 6 SCR 608 referred to Para 26
F
(1999) 3 SCC 367 referred to Para 26
[2002] 5 Suppl. SCR 491 referred to Para 26
[1983] 3 SCR 962 referred to Para 36(a)
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1689
G of 2022.
From the Judgment and Order dated 19.01.2016 of the High Court
of Orissa at Cuttack in WP (C) No. 7059 of 2013.

H
M/S FROST INTERNATIONAL LIMITED v. M/S MILAN 1109
DEVELOPERS AND BUILDERS (P) LTD.

Mrs. Rajdipa Behura, A. Venayagam Balan, Philomin Kani, Ashray A
Behura, Ms. Neha Lingwal, Ms. Hansika Sahu, Swayamtosh Rath, Advs.
for the Appellant.
Anirudh Sanganeria, Adv. for the Respondents.
The Judgment of the Court was delivered by
B
NAGARATHNA, J.
1. This appeal is preferred by defendant no.1 in C.S. No.1065 of
2009 filed before the Court of Civil Judge (Senior Division) Bhubaneswar,
by assailing order dated 19th January, 2016 passed by the High Court of
Orissa at Cuttack in WP(C) No.7059 of 2013. By the said order, the C
application filed by the appellant herein/defendant no.1 under Order VII
Rule 11 of the Code of Civil Procedure 1908 (for short, the ‘CPC’) has
been ordered to be reconsidered by the District Court at Khurda,
Bhubaneswar (revisional court) by restoring C.R.P. No.5 of 2012 filed
by the defendant no.1 herein. The said revision was filed by defendant
no.1 being aggrieved by the dismissal of the said application being C.S. D
No.1065 of 2009 by the trial court, namely, the Court of Civil Judge
(Senior Division), Bhubaneswar, praying for rejection of the plaint under
Order VII Rule 11 of the CPC.
2. For the sake of convenience, the parties herein shall be referred
to in terms of their rank and status before the trial court. E
3. Briefly stated, the facts of the case are that, respondent no.1
herein/plaintiff had filed a suit against the appellant herein/defendant
no.1 and respondent no.2 herein/defendant no.2 seeking the following
reliefs:
F
“(i) Let it be declared that the plaintiff had handed over the
cheque to Sri Dilip Das, Advocate as a security;
(ii) Let it be declared that the said cheque has been illegally
handed over by the defendant no.2 to the defendant no.1
by violating term and condition of the memorandum of
understanding dated 17.01.2009; G

(iii) Let it be declared that the plaintiff is not liable to give delivery
of 3876 MT of iron ore fines to the defendant no.1 nor the
cheque amount since the defendant no.1 has failed to save
the plaintiff’s plot from cancellation;
H
1110 SUPREME COURT REPORTS [2022] 14 S.C.R.

A (iv) Let the cost of the suit be decreed in favour of the plaintiff
and against the defendants;
(v) Let any other decree/decrees be passed in favour of the
plaintiff to which the plaintiff is entitled to under law and
equity.”
B 4. According to the plaintiff, which is a Private Limited Company,
incorporated under the provisions of the Companies Act, 1956, it is
engaged in the business of export of iron ore from Paradeep Port while
defendant no.1 is also a Company incorporated under the provisions of
the Companies Act, 1956, having its registered office at Kanpur, Uttar
C Pradesh, and also having its Branch at Kolkata in West Bengal. Defendant
no.1 carries on business at Paradeep Port, Orissa in supplying and
exporting iron ore from the said Port to various destinations overseas.
That plaintiff had a plot namely Plot No.RS-4 on licence from Paradeep
Port Trust Authority for the purpose of its export business in iron ore.
That defendant no.1 and the plaintiff had entered into a Cooperation
D Agreement on 24th December, 2007 but according to the plaintiff, the
same was not given effect to. That defendant no.1, through its Managing
Director Sunil Banna, tried to blackmail the plaintiff in various ways and
threatened him that he would intimate Paradeep Port Trust Authority
that the plaintiff had sub-let his licence in respect of Plot No.RS-4 to
E defendant no.1 by violating the terms and conditions of licence.
According to the plaintiff, defendant no.1 in January 2009 stated
that plaintiff had illegally exported stock of 4000 MT of iron ore and
when the plaintiff through its Managing Director refuted the claim of
defendant no.1, a complaint was lodged at Paradeep Police Station on
F 8th January, 2009 and thereafter, on 10th January, 2009 alleging theft of
4000 MT iron ore fines belonging to defendant no.1.
According to the plaintiff, defendant no.1 lodged another false
complaint with the Paradeep Port Trust Authority to the effect that the
plaintiff was violating the terms and conditions of his licence in respect
G of Plot No.RS-4 which had been sub-let to defendant no.1 and a copy of
the Cooperation Agreement dated 24th December, 2007 which was in
fact not acted upon was also filed along with complaint. Acting on the
said complaint, Paradeep Port Trust Authority had issued show cause
notice to the plaintiff on 20th January, 2009 and thereafter, cancelled the
licence of the plaintiff vis-à-vis Plot No.RS-4 by letter dated 18th February,
H 2009.
M/S FROST INTERNATIONAL LIMITED v. M/S MILAN 1111
DEVELOPERS AND BUILDERS (P) LTD. [B. V. NAGARATHNA, J.]

5. Being apprehensive of the cancellation of the licence to Plot A
No.RS-4, the Managing Director of the plaintiff Company agreed to the
proposal of the representative of defendant no.1 viz., Rabindra Banthia,
that in case plaintiff agreed to supply 3876 MT of iron ore fines to
defendant no.1, they would manage to withdraw their complaint and
would save the licence of the plot from cancellation.
B
6. That in January, 2009, plaintiff had outstanding dues of Rs.21.50
lakhs against defendant no.1 and at the behest of defendant no.2, a
Memorandum of Understanding (for short, ‘MoU’) was arrived at on
17th January, 2009 on certain terms and conditions that defendant no.1
would take steps to protect the licence of the plot given to the plaintiff
from cancellation in seven days’ time and it was further agreed that C
defendant no.1 would give a cheque of Rs.21.50 lakhs to the plaintiff
towards the outstanding dues to the plaintiff. Similarly, the plaintiff would
issue a cheque for Rs.56 lakhs in favour of defendant no.1 and the same
would remain in the custody of Sri Dilip Das, Advocate - defendant no.2
as security, which is equivalent to the cost of 3876 MT of iron ore. The D
plaintiff would supply 3786 MT of iron ore fines to defendant no.1 if
defendant no.1 succeeded in protecting the licence of the said plot of the
plaintiff from being cancelled. Accordingly, plaintiff furnished a cheque
for Rs.56 lakhs in favour of defendant no.1 and handed over the same to
Sri Dilip Das, Advocate - defendant no.2 in the suit, as security. Defendant
no.2 wrote a letter to the Managing Director of the plaintiff on 20th E
January, 2009 intimating therein that both cheques would be in his custody
and the cheque drawn by the plaintiff amounting to Rs.56 lakhs would
not be handed over to defendant no.1 unless defendant no.1 fulfilled its
undertaking as per the MoU dated 17th January, 2009. Further, the cheque
would be handed over to defendant no.1 only when the plot licence of F
the plaintiff was saved from cancellation by defendant no.1 and if the
plaintiff failed to supply the iron ore to defendant no.1.
7. According to the plaintiff, defendant no.1 did not take any step
to save the licence of the plot of the plaintiff from cancellation and the
licence was cancelled on the complaint of defendant no.1 by letter dated G
18th February, 2009 by the Paradeep Port Trust Authority. According to
the plaintiff, the question of handing over the cheque to defendant no.1
by defendant no.2 did not arise at all. Plaintiff had approached the High
Court in a writ petition vis-à-vis the cancellation of the licence in respect
of the plot and an order of stay on the cancellation was granted.
H
1112 SUPREME COURT REPORTS [2022] 14 S.C.R.

A It is the further case of the plaintiff that when the matter stood
thus, defendants no.1 and 2 colluded with each other and defendant no.2
committed breach of trust and betrayed the plaintiff as the cheque for
Rs.56 lakhs was handed over by defendant no.2 to defendant no.1. On
receipt of the cheque, defendant no.1 pressurized the plaintiff to either
supply 3876 MT iron ore fines or they would present the cheque for
B
encashment. Since the plaintiff did not agree to supply iron ore, defendant
no.1 presented the cheque for encashment but the same was dishonoured
as the plaintiff had issued stop payment instructions to the Bank on coming
to know about the collusion between defendant no.1 and defendant no.2.
Thereafter, defendant no.1 issued notice under Section 138 of the
C Negotiable Instruments Act, 1881 (for short, the ‘N.I. Act’) through
their advocate on 10th June, 2009 to the plaintiff through its Managing
Director, to which a reply was sent on 23rd June, 2009. It was, inter
alia, stated in the reply that the defendants were trying to harass the
plaintiff and having no other alternative, the plaintiff filed the suit seeking
a declaration that the cheque which was dishonoured was handed over
D
by the plaintiff to defendant no.2 as a security and that defendant no.1
had not acquired any right over the said cheque as the plaintiff had no
liability to discharge vis-à-vis defendant no.1. It was averred in the plaint
that defendant no.1 was liable to pay a sum of Rs.21.50 lakhs to the
plaintiff towards its outstanding dues for which a cheque was issued on
E 17th January, 2009 which was also kept with defendant no.2 and in respect
of which the plaintiff reserved its right to initiate appropriate proceeding
for recovery of the said amount from defendant no.1. There were further
correspondences between the parties and ultimately the aforementioned
suit was filed by the plaintiff against the defendants.
F 8. On receipt of the summons sent by the trial court, defendant
no.1 appeared and filed an application under Order VII Rule 11 of CPC
seeking rejection of the plaint on the ground that the suit was not
maintainable being barred under the provisions of the Specific Relief
Act, 1963 (for short, the ‘SR Act’) and secondly, the suit was frivolous
and instituted as a subterfuge to defeat the legitimate claim of defendant
G no.1 without having any right to sue. Objection was filed to the said
application by the plaintiff. The said application was considered by the
trial court and dismissed by refusing to reject the plaint.
9. Being aggrieved, defendant no.1 preferred C.R.P. No.5 of 2012
before the Court of District Judge, Khurda at Bhubaneswar under Section
H
M/S FROST INTERNATIONAL LIMITED v. M/S MILAN 1113
DEVELOPERS AND BUILDERS (P) LTD. [B. V. NAGARATHNA, J.]

115 of the CPC. By order dated 20th March, 2013, the revisional court A
allowed the said revision petition, set aside the order of the trial court
refusing to reject the plaint, and rejected the plaint. Being aggrieved, the
plaintiff filed W.P.(C) No.7059 of 2013 before the High Court of Orissa
at Cuttack which set aside the order of the revisional court and remanded
the matter to the said court for fresh consideration by holding that the
B
revisional court had exceeded its jurisdiction in rejecting the plaint. Being
dissatisfied with the order of the High Court defendant no.1 has preferred
this appeal.
10. We have heard Mrs. Rajdipa Behura, learned counsel for the
appellant and Sri Anirudh Sanganeria, learned counsel for the respondents
and perused the material on record. C

11. Learned counsel for the appellant submitted that the High
Court was not right in setting aside the order passed by the revisional
court and remanding the matter to the said court for reconsideration of
the application filed by the appellant under Order VII Rule 11 of CPC on
the premise that revisional court had exceeded its jurisdiction. It was D
contended that the application under Order VII Rule 11 of the CPC was
filed by the appellant/defendant no.1 in the suit filed by respondent no.1/
plaintiff seeking rejection of the plaint on the ground that the prayers
sought in the suit could not have been granted and the suit as such was
not maintainable and was barred under the provision of Section 41 of the E
SR Act. Further there was no cause of action for the plaintiff to file the
suit against the defendants. The trial court did not appreciate the reasons
as to why an application was filed by defendant no.1 seeking rejection
of the plaint and dismissed the same. Being aggrieved the appellant/
defendant no.1 filed revision petition in C.R.P. No.5 of 2012 before the
District Court having regard to Section 115 of the CPC and particularly F
proviso thereto as, if the application filed by defendant no.1 under Order
VII Rule 11 of CPC was to be allowed by the revisional court, then, the
proceedings before the trial court would conclude. The revisional court
rightly appreciated the case of appellant herein and rejected the plaint.
However, the High Court on a writ petition filed by the plaintiff held that G
the revisional court while exercising its power of revision had exceeded
its jurisdiction by rejecting the plaint instead of remanding the matter to
the trial court to do so. While adverting to Section 115 of the CPC [vide
Orissa Act 26 of 1991, Section 2 (w.e.f. 7th November, 1991)], learned
counsel for the appellant contended that when the trial court failed to
H
1114 SUPREME COURT REPORTS [2022] 14 S.C.R.

A exercise jurisdiction vested in it and refused to reject the plaint by allowing
the application filed under Order VII Rule 11 of the CPC by the appellant
herein, the revisional court rightly allowed the said revision and rejected
the plaint which finally disposed of the suit in terms of the second proviso
to the said Section. It was contended that the High Court has not taken
into consideration the Orissa amendment and has further misconstrued
B
the object and import of Section 115 of the CPC vis-à-vis the provisions
of the revisional court and has erroneously set aside the order of the
revisional court rejecting the plaint and remanding the matter to the
revisional court for fresh consideration.
12. Drawing our attention to the order of the High Court, it was
C contended that the said order is contrary to Section 115 of CPC (Orissa
amendment) and hence the impugned order may be set aside and the
order of the revisional authority may be restored. It was contended by
learned counsel for the appellant that as against the order of the revisional
authority rejecting the plaint, respondent no.1 herein/plaintiff could not
D have filed a writ petition.
13. Per contra, learned counsel for respondent no.1/plaintiff
supported the impugned order passed by the High Court and contended
that when a plaint is rejected by allowing an application filed under Order
VII Rule 11 of CPC, it results in a decree being passed within the meaning
E of Section 2(2) of the CPC and hence the High Court directed the
revisional court to consider the matter afresh and if necessary, to remand
the matter to the trial court for considering the aspect regarding rejection
of plaint. Learned counsel for respondent no.1/plaintiff contended that
there is no merit in this appeal and the same may be dismissed.

F 14. Having heard learned counsel for the respective parties the
following points would arise for our consideration:
(a) Whether the High Court was justified in setting aside the order
passed by the revisional court in C.R.P. No.5 of 2012 and
thereby remanding the matter to the said court for
G reconsideration on the premise that the revisional court had
exceeded its jurisdiction in rejecting the plaint?
(b) What order?
The reliefs sought by the plaintiff in the suit have been extracted
above.
H
M/S FROST INTERNATIONAL LIMITED v. M/S MILAN 1115
DEVELOPERS AND BUILDERS (P) LTD. [B. V. NAGARATHNA, J.]

15. Having regard to the averments in the plaint summarised above A
and the reliefs sought in the plaint, defendant no.1/appellant herein filed
an application under Order VII and Rule 11 of CPC seeking rejection of
the plaint. The rejection of the plaint was sought for three reasons :-
firstly, the suit was barred under the provisions of the SR Act; secondly,
the suit was frivolous and was filed as a subterfuge to defeat the legitimate
B
claim of defendant no.1; and thirdly, the suit has been deliberately
undervalued. Objections were filed to the said application of defendant
no.1. By order dated 19th May, 2012, the trial court dismissed the said
application. Being aggrieved, defendant no.1 filed C.R.P. No.5 of 2012
under Section 115 (Orissa amendment).
16. The revisional court considered the revision and allowed the C
application filed under Order VII Rule 11 of CPC which had the effect
of finally disposing of the suit. It is against the said order that the plaintiff
filed the writ petition before the High Court which was allowed and the
matter was remanded to the revisional court for fresh consideration with
an observation that the revisional court may, in turn, remand the matter D
to the trial court if necessary. This was on the premise that the revisional
court had exceeded the jurisdiction vested in it by acting illegally in allowing
the application filed under Order VII Rule 11 of CPC.
17. In order to consider the correctness of the impugned order
passed by the High Court, it would be useful to refer to Section 115 of E
the CPC as well as the Orissa Amendment. For immediate reference,
the same are extracted as under:
“115. Revision — (1) The High Court may call for the record
of any case which has been decided by any Court subordinate to
such High Court and in which no appeal lies thereto, and if such F
subordinate Court appears—
(a) to have exercised a jurisdiction not vested in it by law, or
(b) to have failed to exercise a jurisdiction so vested, or
(c) to have acted in the exercise of its jurisdiction illegally or with
G
material irregularity, the High Court may make such order in the
case as it thinks fit:
Provided that the High Court shall not, under this Section, vary or
reverse any order made, or any order deciding an issue, in the
course of a suit or other proceeding, except where the order, if it
H
1116 SUPREME COURT REPORTS [2022] 14 S.C.R.

A had been made in favour of the party applying for revision would
have finally disposed of the suit or other proceedings.
(2) The High Court shall not, under this Section, vary or reverse
any decree or order against which an appeal lies either to the
High Court or to any Court subordinate thereto.
B (3) A revision shall not operate as a stay of suit or other proceeding
before the Court except where such suit or other proceeding is
stayed by the High Court.
Explanation.—In this Section, the expression “any case which
has been decided” includes any order made, or any order deciding
C an issue in the course of a suit or other proceeding.”
ORISSA AMENDMENT
“115. Revision - The High Court, in cases arising out of original
suits or other proceedings of the value exceeding one lakh rupees,
D and the District Court, in any other case including a case arising
out of an original suit or other proceedings instituted before the
commencement of the Code of Civil Procedure (Orissa
Amendment) Act, 1991 may call for the record of any case which
has been decided by any Court subordinate to the High Court or
the District Court, as the case may be, and in which no appeal lies
E thereto, and if such Subordinate Court appears -
(a) to have exercised a jurisdiction not vested in it by law; or
(b) to have failed to exercise a jurisdiction so vested; or
(c) to have acted in the exercise of its jurisdiction illegally or with
F material irregularity;
the High Court or the District Court, as the case may be, may
make such order in the case as it thinks fit;
Provided that in respect of cases arising out of original suits or
other proceedings of any valuation decided by the District Court,
G the High Court alone shall be competent to make an order under
this Section;
Provided further that the High Court or the District Court shall
not, under this Section, vary or reverse any order, including an
order deciding an issue, made in the course of a suit or other
H proceedings, except where -
M/S FROST INTERNATIONAL LIMITED v. M/S MILAN 1117
DEVELOPERS AND BUILDERS (P) LTD. [B. V. NAGARATHNA, J.]

(i) the order, if so varied or reversed would finally dispose of A
the suit or other proceedings; or
(ii) the order, if allowed to stand, would occasion a failure of
justice or cause irreparable injury to the party against whom it
was made.
Explanation - In this Section, the expression ‘any case which B
has been decided’ includes any order deciding an issue in the
course of a suit or other proceeding”.”
18. On a perusal of the same it is noted that the Orissa amendment
differs from the main Section 115 of CPC in the following ways:
(i) Firstly, the main Section 115 deals with revisional powers C
of the High Court only, whereas, Section 115 of CPC
(Orissa amendment) confers the power of revision not only
on the High Court but also on the District Court which may
call for the record of any case which has been decided by
any court subordinate to the High Court or the District Court, D
as the case may be, and in which no appeal lies thereto, if
such subordinate court appears - (a) to have exercised a
jurisdiction not vested in it by law; or (b) to have failed to
exercise a jurisdiction, so vested; or (c) to have acted in the
exercise of its jurisdiction illegally or with material irregularity.
In such a case, the High Court or the District Court, as the E
case may be, may make such order in the case as it thinks
fit.
(ii) Secondly, sub-section (2) of Section 115 of the main
provision, states that the High Court shall not, under the
said Section, vary or reverse any decree or order against F
which an appeal lies either to the High Court or to any
Court subordinate thereto. But under the second proviso to
Section 115 of CPC (Orissa amendment), the High Court
or the District Court shall not under the said Section, vary
or reverse any order, including an order deciding an issue, G
made in the course of a suit or other proceeding, except
where – (i) the order, if so varied or reversed would finally
dispose of the suit or other proceedings; or
(ii) the order, if allowed to stand, would occasion a failure
of justice or cause irreparable injury to the party against
whom it was made. H
1118 SUPREME COURT REPORTS [2022] 14 S.C.R.

A Thus, the first proviso to main Section 115 of CPC restricts the
revisional power of the High Court inasmuch as a revision is maintainable
only if it is filed by a party who is aggrieved by an order passed by the
court subordinate to the High Court on an order deciding an issue which,
had it been made in favour of the party applying for revision, would have
finally disposed of the suit or other proceeding. But as per the second
B
proviso to Section 115 of CPC (Orissa amendment), the High Court or
the District Court, as the case may be, under the said Section can vary
or reverse any order including an order deciding an issue, made in the
course of a suit or other proceeding only if the order if so varied or
reversed would finally dispose of the suit or other proceeding or the
C order if allowed to stand would occasion a failure of justice or cause
irreparable injury to the party against whom it was made. In other words,
under Orissa amendment to Section 115 of CPC, an express power is
conferred on the High Court or the District Court, as the case may be,
being the revisional courts, to vary or reverse an order of the court
subordinate thereto only when it would finally dispose of the suit or other
D
proceedings or if the impugned order is allowed to stand would occasion
a failure of justice or cause irreparable injury to the party against whom
it was made.
19. It would also be pertinent to mention that the instant suit was
filed in the year 2009 and therefore the Orissa amendment to Section
E 115 CPC vide Orissa Act 26 of 1991, Section 2, would be applicable.
However, by Orissa Act 14 of 2010, Sub-Section 2, Section 115 was
amended by the Orissa Legislature and second proviso to Section 115
has been amended and Sub-Section 2 of Section 115 has been added
which states that the High Court or District Court, as the case may be,
F shall not under this Section, vary or reverse any order including an order
deciding an issue, made in the course of a suit or other proceeding,
except where the order, if it has been made in favour of the party applying
for revision, would finally dispose the suit or other proceeding.
20. Further, clause 1 of the second proviso of Section 115 has
G been omitted by the amendment made in the year 2010 and Sub-Section
3 has been added. This provision states that a revision shall not operate
as a stay of suit or other proceeding before the Court except where
such suit or other proceeding is stayed by the High Court or District
Court, as the case may be. Sub-Section 1 of Section 115 is in pari materia
with the Orissa Amendment of 1991 except its reference to the Orissa
H
M/S FROST INTERNATIONAL LIMITED v. M/S MILAN 1119
DEVELOPERS AND BUILDERS (P) LTD. [B. V. NAGARATHNA, J.]

Amendment Act of 2010. For immediate reference, Section 115 of the A
CPC as per the 2010 amendment made (Orissa Amendment) is extracted
as under:
“Amendment of Section 115. - In the Code of Civil Procedure,
1908 (5 of 1908), for Section 115, the following Section shall be
substituted, namely:— B
115. Revision.—(1) The High Court, in cases arising out of
original suits or other proceedings of the value exceeding five
lakhs rupees and the District Court, in any other cases, including
a case arising out of an original suit or other proceedings instituted
before the commencement of the Code of Civil Procedure ( Orissa C
Amendment) Act, 2010, may call for the record of any case which
has been decided by any Court subordinate to the High Court or
the District Court, as the case may be, and in which no appeal lies
thereto, and if such subordinate Court appears—
(a) to have exercised a jurisdiction not vested in it by law; or D
(b) to have failed to exercise a jurisdiction so vested; or
(c) to have acted in the exercise of its jurisdiction illegally or with
material irregularity,
the High Court or the District Court, as the case may be, may
E
make such order in the case as it thinks fit:
Provided that in respect of cases arising out of original suits or
other proceedings of any valuation decided by the District Court,
the High Court alone shall be competent to make an order under
this Section
F
(2) The High Court or the District Court, as the case may be,
shall not under this Section, vary or reverse any order, including
an order deciding an issue, made in the course of a suit or other
proceedings, except where the order, if it had been made in favor
of the party applying for revision, would have finally disposed of
the suit or other proceedings. G

(3) A revision shall not operate as a stay of suit or other proceeding
before the Court except where such suit or other proceeding is
stayed by the High Court or District Court, as the case may be.

H
1120 SUPREME COURT REPORTS [2022] 14 S.C.R.

A Explanation—In this Section, the expression, “any case which
has been decided” includes any order deciding an issue in the
course of a suit or other proceeding.”.
[Vide the Orissa Act 14 of 2010, s. 2]”
21. Therefore, we hold that the High Court was not right in
B observing that the revisional court had exceeded its jurisdiction and it
could not have allowed the application filed under Order VII Rule 11 of
CPC and thereby reversed the order of the trial court and finally disposed
of the suit. In fact, the High Court has failed to appreciate the second
proviso to Section 115 of CPC (Orissa amendment) in its true perspective.
C The revisional court, being the High Court or the District Court, as the
case may be, can reverse an order which would finally dispose of the
suit or other proceeding. That is exactly what has been done by the
revisional court being the District Court in the petition being C.R.P. No.5
of 2012.

D 22. Hence, we find that the High Court was not justified in setting
aside the said order and remanding the matter to the revisional court
(District Court) to consider afresh, the application filed by defendant
no.1/appellant herein under Order VII Rule 11 of CPC seeking rejection
of the plaint. In fact, we would observe that exercise of jurisdiction by
the revisional court in the instant case is in accordance with second
E proviso to Section 115 of CPC (Orissa amendment).
In this regard, we could also usefully refer to the following
decisions: -
(a) Gajendragadkar, CJ., in a judgment passed by the five Judges
F Bench of this Court in Pandurang Dhondi Chougule and
Others vs. Maruti Hari Jadhav and Others – [AIR 1966
SC 153] dealt with the question of jurisdiction under Section
115 CPC, as follows:-
“10. The provisions of Section 115 of the Code have been
examined by judicial decisions on several occasions. While
G
exercising its jurisdiction under Section 115, it is not
competent to the High Court to correct errors of fact
however gross they may, or even errors of law, unless the
said errors have relation to the jurisdiction of the court to
try the dispute itself. As clauses (a), (b) and (e) of Section
H 115 indicate, it is only in cases where the subordinate court
M/S FROST INTERNATIONAL LIMITED v. M/S MILAN 1121
DEVELOPERS AND BUILDERS (P) LTD. [B. V. NAGARATHNA, J.]

has exercised a jurisdiction not vested in it by law, or has A
failed to exercise a jurisdiction so vested, or has acted in
the exercise of its jurisdiction illegally or with material
irregularity that the revisional jurisdiction of the High Court
can be properly invoked. It is conceivable that points of
law may arise in proceedings instituted before subordinate
B
courts which are related to questions of jurisdiction. It is
well settled that a plea of limitation or a plea of res judicata
is a plea of law which concerns the jurisdiction of the court
which tries the proceedings. A finding on these pleas in
favour of the party raising them would oust the jurisdiction
of the court, and so, an erroneous decision on these pleas C
can be said to be concerned with questions of jurisdiction
which fall within the purview of Section 115 of the Code.
But an erroneous decision on a question of law reached by
the subordinate court which has no relation to questions of
jurisdiction of that court, cannot be corrected by the High
D
Court under Section 115.”
(b) Nariman, J. while discussing Section 115 CPC and proviso
thereto held that revision petitions filed under Section 115 CPC
are not maintainable against interlocutory orders in the case
of Tek Singh vs. Shashi Verma and Another – [(2019) 16
SCC 678]. The following observations were made in the said E
case:-
“6. Even otherwise, it is well settled that the revisional
jurisdiction under Section 115 CPC is to be exercised to
correct jurisdictional errors only. This is well settled. In DLF
Housing & Construction Co. (P) Ltd. v. Sarup Singh F
[DLF Housing & Construction Co. (P) Ltd. v. Sarup
Singh, (1969) 3 SCC 807 : (1970) 2 SCR 368] this Court
held: (SCC pp. 811-12, para 5)
“5. The position thus seems to be firmly established that
while exercising the jurisdiction under Section 115, it is not G
competent to the High Court to correct errors of fact
however gross or even errors of law unless the said errors
have relation to the jurisdiction of the court to try the dispute
itself. Clauses (a) and (b) of this section on their plain
reading quite clearly do not cover the present case. It was H
1122 SUPREME COURT REPORTS [2022] 14 S.C.R.

A not contended, as indeed it was not possible to contend,
that the learned Additional District Judge had either
exercised a jurisdiction not vested in him by law or had
failed to exercise a jurisdiction so vested in him, in recording
the order that the proceedings under reference be stayed
till the decision of the appeal by the High Court in the
B
proceedings for specific performance of the agreement in
question. Clause (c) also does not seem to apply to the
case in hand. The words “illegally” and “with material
irregularity” as used in this clause do not cover either errors
of fact or of law; they do not refer to the decision arrived at
C but merely to the manner in which it is reached. The errors
contemplated by this clause may, in our view, relate either
to breach of some provision of law or to material defects of
procedure affecting the ultimate decision, and not to errors
either of fact or of law, after the prescribed formalities have
been complied with.”
D
Therefore, in the instant case the High Court was not right in
holding that the revisional court had no jurisdiction to reject the plaint
filed under Order VII Rule 11 of CPC. The reasoning of the High Court
is contrary to the express proviso of Section 115 (Orissa Amendment).
E 23. No doubt rejection of a plaint is a decree within the meaning
of Section 2(2) of CPC and an appeal lies from every decree passed by
any court exercising original jurisdiction to the Court authorised to hear
appeals from a decision of such court. However, it must be borne in
mind that when a revisional court rejects a plaint, in substance, an
application filed under Order VII Rule 11 is being allowed. Under such
F circumstances, the remedy by way of a writ petition under Article 227
of the Constitution could be availed and respondent no.1/plaintiff has
resorted to the said remedy in the instant case; although if the plaint had
been rejected by the trial court i.e. court of original jurisdiction, it would
have resulted in a right of appeal under Section 96 of CPC.
G 24. Having regard to the second proviso to Section 115 of CPC
(Orissa amendment), a revisional court while allowing the application
filed under Order VII Rule 11 of CPC would in substance reject the
plaint but since the said decree is not passed by the court of original
jurisdiction, namely the trial court, the remedy by way of writ petition
H
M/S FROST INTERNATIONAL LIMITED v. M/S MILAN 1123
DEVELOPERS AND BUILDERS (P) LTD. [B. V. NAGARATHNA, J.]

under Article 227 of the Constitution would be available to the aggrieved A
party and respondent no.1 has availed the said remedy.
25. Having held as above, we now proceed to consider, whether,
the revisional court (District Court) was justified in allowing the application
filed under Order VII Rule 11 of CPC and thereby rejecting the plaint
filed by the plaintiff/respondent no.1 herein. Before proceeding further, B
it would be useful to refer to the following judgments of this Court in
respect with Order VII Rule 11 CPC:
a) In T. Arivandandam vs. T.V. Satyapal & Anr. – [(1977) 4
SCC 467], this Court observed, in the following words, that
while considering an application under Order VII Rule 11 CPC C
what is required to be decided is whether the plaint discloses
a real cause of action, or something purely illusory:-
“5. We have not the slightest hesitation in condemning the
petitioner for the gross abuse of the process of the court
repeatedly and unrepentently resorted to. From the D
statement of the facts found in the judgment of the High
Court, it is perfectly plain that the suit now pending before
the First Munsif’s Court, Bangalore, is a flagrant misuse of
the mercies of the law in receiving plaints. The learned
Munsif must remember that if on a meaningful — not formal
— reading of the plaint it is manifestly vexatious, and E
meritless, in the sense of not disclosing a clear right to sue,
he should exercise his power under Order 7, Rule 11 CPC
taking care to see that the ground mentioned therein is
fulfilled. And, if clever drafting has created the illusion of a
cause of action, nip it in the bud at the first hearing by F
examining the party searchingly under Order 10, CPC. An
activist Judge is the answer to irresponsible law suits. The
trial courts would insist imperatively on examining the party
at the first hearing so that bogus litigation can be shot down
at the earliest stage. The Penal Code is also resourceful
enough to meet such men, (Cr. XI) and must be triggered G
against them. In this case, the learned Judge to his cost
realised what George Bernard Shaw remarked on the
assassination of Mahatma Gandhi: “It is dangerous to be
too good.”
H
1124 SUPREME COURT REPORTS [2022] 14 S.C.R.

A b) In Azhar Hussain vs. Rajiv Gandhi – [1986 Supp SCC
315], this Court discussed the very purpose of the power
conferred under Order VII Rule 11 CPC by observing thus: -
“12. The whole purpose of conferment of such power is to
ensure that a litigation which is meaningless, and bound to
B prove abortive should not be permitted to occupy the time
of the Court, and exercise the mind of the respondent. The
sword of Damocles need not be kept hanging over his head
unnecessarily without point or purpose. Even if an ordinary
civil litigation, the Court readily exercises the power to reject
a plaint, if it does not disclose any cause of action.”
C
c) In Sopan Sukhdeo Sable and Ors. vs. Assistant Charity
Commissioner and Others - [(2004) 3 SCC 137], it was
held that Rule 11 of Order VII lays down an independent
remedy made available to the defendant to challenge the
maintainability of the suit itself, irrespective of his right to
D contest the same on merits. The law ostensibly does not
contemplate any stage when the objections can be raised, and
also does not say in express terms about the filing of a written
statement. It was held that the word ‘shall’ is used to clearly
imply that a duty is cast on the Court to perform its obligations
E in rejecting the plaint when the same is hit by any of the
infirmities provided in the four clauses of Rule 11, even without
intervention of the defendant. Elaborating on the aspect of
cause of action by quoting I.T.C Ltd. vs. Debts Recovery
Appellate Tribunal and Ors. – [(1998) 2 SCC 70], it was
held that the basic question to be decided while dealing with
F an application filed under Order VII Rule 11 of the Code is
whether a real cause of action has been set out in the plaint or
something purely illusory has been stated with a view to get
out of Order VII Rule 11 of the Code.
d) This Court in Liverpool & London S.P. & I Assn. Ltd. vs.
G M.V. Sea Success I & Anr. - [(2004) 9 SCC 512] held that
a plaint must be construed as it stands without any
amendments. The same is extracted herein as follows-
“139. Whether a plaint discloses a cause of action or not is
essentially a question of fact. But whether it does or does
H
M/S FROST INTERNATIONAL LIMITED v. M/S MILAN 1125
DEVELOPERS AND BUILDERS (P) LTD. [B. V. NAGARATHNA, J.]

not, must be found out from reading the plaint itself. For the A
said purpose the averments made in the plaint in their entirety
must be held to be correct. The test is as to whether if the
averments made in the plaint are taken to be correct in its
entirety, a decree would be passed.”
e) We could allude to the exposition of this Court in Madanuri B
Sri Rama Chandra Murthy vs. Syed Jalal – [(2017) 13
SCC 174], wherein it was held as under:-
“7. …..The averments of the plaint have to be read as a
whole to find out whether the averments disclose a cause
of action or whether the suit is barred by any law. It is C
needless to observe that the question as to whether the suit
is barred by any law, would always depend upon the facts
and circumstances of each case. The averments in the
written statement as well as the contentions of the
defendant are wholly immaterial while considering the prayer
of the defendant for rejection of the plaint. Even when, the D
allegations made in the plaint are taken to be correct as a
whole on their face value, if they show that the suit is barred
by any law, or do not disclose cause of action, the application
for rejection of plaint can be entertained and the power
under Order VII Rule 11 of CPC can be exercised. If clever E
drafting of the plaint has created the illusion of a cause of
action, the court will nip it in the bud at the earliest so that
bogus litigation will end at the earlier stage.”
f) In Dahiben vs. Arvindbhai Kalyanji Bhanusali (Gajra)
Dead through Legal Representatives and Others – [(2020) F
7 SCC 366], Indu Malhotra, J., while dealing with an appeal
against an order allowing rejection of a suit at the threshold,
had an occasion to consider various precedents discussing
the intent and purpose of Order VII Rule 11 CPC while setting
out principles in relation to the same. It was held that the
provision of Order VII Rule 11 is mandatory in nature and G
that the plaint “shall” be rejected if any of the grounds specified
in clause (a) to (e) is made out. If the Court finds that the
plaint does not disclose a cause of action, or that the suit is
barred by any law, the Court has no option, but to reject the
H
1126 SUPREME COURT REPORTS [2022] 14 S.C.R.

A plaint. The relevant portion of the judgment is extracted as
below:-
“23.1 X X X X X
23.2 The remedy under Order 7 Rule 11 CPC is an
independent and special remedy wherein the court is
B empowered to summarily dismiss a suit at the threshold,
without proceedings to record evidence, and conducting a
trial, on the basis of the evidence adduced, if it is satisfied
that the action should be terminated on any of the grounds
contained in this provision.
C 23.3 The underlying object of Order VII Rule 11 (a) is that
if in a suit, no cause of action is disclosed, or the suit is
barred by limitation under Rule 11 (d), the Court would not
permit the plaintiff to unnecessarily protract the proceedings
in the suit. In such a case, it would be necessary to put an
D end to the sham litigation, so that further judicial time is not
wasted.
23.4 In Azhar Hussain v. Rajiv Gandhi, this Court held
that the whole purpose of conferment of powers under this
provision is to ensure that a litigation which is meaningless,
E and bound to prove abortive, should not be permitted to
waste judicial time of the court.
23.5 The power conferred on the court to terminate a civil
action is, however, a drastic one, and the conditions
enumerated in Order VII Rule 11 are required to be strictly
F adhered to.
23.6 Under Order VII Rule 11, a duty is cast on 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.
G
23.7 X X X X X
23.8 Having regard to Order 7 Rule 14, the documents filed
with the plaint, are required to be taken into consideration
for deciding the application under Order 7 Rule 11(a). When
H
M/S FROST INTERNATIONAL LIMITED v. M/S MILAN 1127
DEVELOPERS AND BUILDERS (P) LTD. [B. V. NAGARATHNA, J.]

a document referred to in the plaint, forms the basis of the A
plaint, it should be treated as a part of the plaint.
23.9 In exercise of power under this provision, the Court
would determine if the assertions made in the plaint are
contrary to statutory law, or judicial dicta, for deciding
whether a case for rejecting the plaint at the threshold is B
made out.
23.10 At this stage, the pleas taken by the defendant in the
written statement and application for rejection of the plaint
on the merits, would be irrelevant, and cannot be adverted
to, or taken into consideration.” C
g) In a recent judgment of Rajendra Bajoria and Others vs.
Hemant Kumar Jalan and Others - [2021 SCC Online
SC 764], this Court while elucidating on the underlying object
of Order VII Rule 11 CPC and considering various precedents
of this Court, held as under : - D
“20. It could thus be seen that this Court has 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 E
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. This Court has held
that the underlying object of Order VII Rule 11 of CPC is
that when a plaint does not disclose a cause of action, the F
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.”
26. Relying on the case of Hardesh Ores (P.) Ltd. vs. Hede & G
Co. – [(2007) 5 SCC 614], it was held that it is not permissible to cull
out a sentence or a passage, and to read it in isolation. It is the substance,
and not merely the form, which has to be looked into. The plaint has to
be construed as it stands, without addition or subtraction of words. Further
delving upon the ratio in D. Ramachandran vs. R.V. Janakiraman –
H
1128 SUPREME COURT REPORTS [2022] 14 S.C.R.

A [(1999) 3 SCC 367], it was held that if the allegations in the plaint
prima facie show a cause of action, the court cannot embark upon an
enquiry whether the allegations are true in fact.
27. It was further held that if on a meaningful reading of the
plaint, it is found that the suit is manifestly vexatious and without any
B merit, and does not disclose a right to sue, the court would be justified in
exercising the power under Order VII Rule 11 CPC. Placing reliance on
Saleem Bhai vs. State of Maharashtra – [(2003) 1 SCC 557], it was
held that the power under Order VII Rule 11 CPC may be exercised by
the Court at any stage of the suit, either before registering the plaint or
after issuing summons to the defendant, or before conclusion of the trial.
C
28. On a reading of the plaint, in the instant case it is noted that it
discloses a cause of action inasmuch as the MoU dated 17th January,
2009, entered into between the plaintiff and defendant no.1 in the presence
of defendant no.2 and the acts done pursuant to the said MoU is the
basis for the grievance of the plaintiff. According to the plaintiff, a cheque
D for Rs. 56 lakhs was issued by him in favour of defendant no.1 and
handed over to Sri Dilip Das, Advocate – defendant no.2 as security
with an understanding that the said cheque will not be handed over by
defendant no.2 to defendant no.1 unless defendant no.1 fulfils its
undertaking and carries out the responsibility of saving the licence to
E plot No. RS-4, issued in favour of the plaintiff by the Paradeep Port
Trust Authority, from being cancelled. As a result, the plaintiff would
continue to remain as the licensee of the Paradeep Port Trust Authority
vis-a-vis the said plot. According to the plaintiff, defendant no.1 did not
take any step to save licence of the plaintiff from cancellation and it was
cancelled on the basis of the complaint made by defendant no.1 vide
F letter dated 18th February, 2009, by the Paradeep Port Trust Authority.
Hence, the question of defendant no.2 handing over the cheque for Rs.
56 lakhs to defendant no.1 did not arise. Further, plaintiff was pressurized
to either supply 3876 MT of iron ore fines to defendant no.1 or else
defendant no.1 would present the cheque for encashment. Since plaintiff
G did not agree to the illegal demand of defendant no.1, the cheque for
Rs.56 lakhs which had been handed over by defendant no.2 to defendant
no.1, was presented by defendant no.1 and it was dishonoured. According
to the Plaintiff, defendant no.2 and defendant no.1 colluded with each
other to make an illegal gain and defendant no.2 could not have handed
over the cheque to defendant no.1. Hence, a letter was written to the
H
M/S FROST INTERNATIONAL LIMITED v. M/S MILAN 1129
DEVELOPERS AND BUILDERS (P) LTD. [B. V. NAGARATHNA, J.]

Bank directing them to stop the payment of the cheque and the same A
was conveyed to the defendants. The said cheque was dishonoured.
Defendant no.1 issued notice under Section 138 of NI Act dated 10th
June, 2009, to the plaintiff through its Managing Director, to which a
reply was given on 23rd June, 2009. According to the plaintiff, defendant
no.1 owes the plaintiff Rs. 21.50 lakhs but the plaintiff does not have to
B
pay anything to defendant no.1. Hence, defendant no.1 is duty bound to
return the cheque to the plaintiff but, on the other hand, the defendants
are trying to harass the plaintiff by presenting the cheque and hence
certain reliefs were sought in the suit. The relief of declaration was
sought to the effect that the cheque handed over by the plaintiff to
defendant no.2 was as a security; that the cheque had been illegally C
handed over by defendant no.2 to defendant no.1 in violation of the
terms and conditions of the MoU dated 17th January, 2009 and that the
plaintiff is neither liable to deliver 3876 MT of iron ore fines to defendant
no.1 nor to pay an amount of Rs. 56 lakhs since defendant no.1 had
failed to save the licence of plaintiff’s plot from cancellation by the
D
Paradeep Port Trust Authority.
29. At the outset, we hold that on perusal of the plaint averments,
the plaintiff has indeed made out a cause of action for filing the suit. In
fact, in para 2 of the application filed under Order VII Rule 11 CPC,
defendant no.1 has also encapsulated the averments made in the plaint.
Therefore, on that score the plaint cannot be rejected. E

30. The other contention of defendant no.1 is that from the
pleadings and averments in the plaint and the prayers sought therein, it
appears that only certain declaratory reliefs have been sought and further,
consequential reliefs have been omitted to be prayed. Hence, the suit is
barred under the provisions of the SR Act and is liable to be dismissed F
and the plaint is liable to be rejected under Order VII Rule 11 CPC.
31. In the objections filed to the application under order VII Rule
11 CPC, it has been averred that the plaint averments would clearly
show a cause of action for filing the suit and further that the suit is not
barred by any law. Further, the declaratory reliefs have been valued G
properly and appropriate court fee has been paid. Hence, the application
is liable to be rejected.
Thus, the main thrust of the application seeking rejection of the
plaint is that apart from the fact that the plaint does not disclose a cause
H
1130 SUPREME COURT REPORTS [2022] 14 S.C.R.

A of action which has been negated by the revisional court and rightly so,
plaintiff has sought only declaratory reliefs and has not sought further or
consequential reliefs. In the circumstances, the suit is barred under the
provisions of the SR Act.
Section 34 of the SR Act reads as under:
B “34. Discretion of court as to declaration of status or right.—Any
person entitled to any legal character, or to any right as to any
property, may institute a suit against any person denying, or
interested to deny, his title to such character or right, and the
court may in its discretion make therein a declaration that he is so
C entitled, and the plaintiff need not in such suit ask for any further
relief:
Provided that no court shall make any such declaration
where the plaintiff, being able to seek further relief than a mere
declaration of title, omits to do so.
D Explanation.—A trustee of property is a “person interested
to deny” a title adverse to the title of some one who is not in
existence, and whom, if in existence, he would be a trustee.”
The proviso to Section 34 states that no court can make any
declaration where the plaintiff, being able to seek further relief than
E mere declaration of title, omits to do so. The said question will have to be
considered at the time of final adjudication of the suit as the question of
granting further relief or consequential relief would arise only if the court
grants a declaration. If the plaintiff is unsuccessful in seeking the main
relief of declaration, then, the question of granting any further relief
F would not arise at all. Therefore, omission on the part of the plaintiff in
praying for further consequential relief, would become relevant only at
the time of final adjudication of the suit. Hence, in view of the above, the
plaint cannot be rejected at this stage by holding that the plaintiff has
only sought declaratory reliefs and no further consequential reliefs.
32. The other reason cited for rejection of the plaint is that the suit
G
is an attempt on the part of the plaintiff to deprive defendant no.1 of its
legitimate dues. In other words, the plaintiff is seeking a declaration that
the cheque for Rs. 56 lakhs issued in the name of defendant no.1 and
handed over to defendant no.2 in turn to be handed over to defendant
no.1 at the appropriate time was only as a security. According to the
H plaintiff it was not liable to pay the cheque amount to defendant no.1
M/S FROST INTERNATIONAL LIMITED v. M/S MILAN 1131
DEVELOPERS AND BUILDERS (P) LTD. [B. V. NAGARATHNA, J.]

since defendant no.1 had not fulfilled its obligations under the terms of A
the MoU. The declaratory reliefs sought are worded as under:
“(i) Let it be declared that the plaintiff had handed over the
cheque to Sri Dilip Das, Advocate as a security;
(ii) Let it be declared that the said cheque has been illegally
handed over by the defendant no.2 to the defendant no.1 B
by violating term and condition of the memorandum of
understanding dated 17.01.2009;
(iii) Let it be declared that the plaintiff is not liable to give delivery
of 3876 MT of iron ore fines to the defendant no.1 nor the
cheque amount since the defendant no.1 has failed to save C
the plaintiff’s plot from cancellation;”
Hence, it is contended by defendant no.1 that the suit filed by the
plaintiff is an attempt to frustrate the possibility of the defendant no.1
initiating action under the provisions of the N.I. Act for the dishonour of
cheque. In this regard, reference could be made to Sections 118 (a) and D
138 of N.I. Act, which reads as under:
“118. Presumptions as to negotiable instruments. —Until the
contrary is proved, the following presumptions shall be made:—
(a) of consideration —that every negotiable instrument was made
E
or drawn for consideration, and that every such instrument, when
it has been accepted, indorsed, negotiated or transferred, was
accepted, indorsed, negotiated or transferred for consideration;
XXX XXX XXX
138. Dishonour of cheque for insufficiency, etc., of funds in the F
account.—Where any cheque drawn by a person on an account
maintained by him with a banker for payment of any amount of
money to another person from out of that account for the discharge,
in whole or in part, of any debt or other liability, is returned by the
bank unpaid, either because of the amount of money standing to
the credit of that account is insufficient to honour the cheque or G
that it exceeds the amount arranged to be paid from that account
by an agreement made with that bank, such person shall be deemed
to have committed an offence and shall, without prejudice to any
other provision of this Act, be punished with imprisonment for [a
H
1132 SUPREME COURT REPORTS [2022] 14 S.C.R.

A term which may be extended to two years’], or with fine which
may extend to twice the amount of the cheque, or with both:
Provided that nothing contained in this section shall apply unless—
(a) the cheque has been presented to the bank within a period of
six months from the date on which it is drawn or within the period
B of its validity, whichever is earlier;
(b) the payee or the holder in due course of the cheque, as the
case may be, makes a demand for the payment of the said amount
of money by giving a notice; in writing, to the drawer of the cheque,
[within thirty days] of the receipt of information by him from the
C bank regarding the return of the cheque as unpaid; and
(c) the drawer of such cheque fails to make the payment of the
said amount of money to the payee or, as the case may be, to the
holder in due course of the cheque, within fifteen days of the
receipt of the said notice.
D
Explanation.—For the purposes of this section, “debt of other
liability” means a legally enforceable debt or other liability.”
33. On a reading of the same, it is clear that there is a rebuttable
presumption that every negotiable instrument including a cheque was
made or drawn for a consideration and every such instrument when it
E
has been accepted is for a consideration.
34. In the instant case, on a reading paragraph 13 of the plaint, it
is evident that cheque issued had been dishonoured and defendant no.1
had issued notice under Section 138 of N.I. Act on 10th June, 2009, to
the plaintiff and its Managing Director replied to the same through their
F
advocate on 23rd June, 2009. Therefore, it is evident that the plaintiff by
seeking the aforesaid reliefs is in substance frustrating the right of
defendant no.1 to take steps under the provisions of N.I. Act for releasing
the amount of cheque issued by the plaintiff to defendant no.1 for a sum
of Rs. 56 lakhs by filing a civil suit and/or by initiating a criminal
G prosecution. In other words, by seeking such a declaration that the cheque
was issued as a security and that the same was illegally handed over by
defendant no.2 to defendant no.1 in violation of the terms and conditions
of the MoU, the plaintiff in substance is making an attempt to frustrate
proceedings being initiated under Section 138 of the N.I. Act or for
recovery of the amount by filing a civil suit.
H
M/S FROST INTERNATIONAL LIMITED v. M/S MILAN 1133
DEVELOPERS AND BUILDERS (P) LTD. [B. V. NAGARATHNA, J.]

35. On a holistic reading of the plaint and on consideration of the A
reliefs sought by the plaintiff, we find that the said reliefs are barred by
law inasmuch as no plaintiff can be permitted to seek relief in a suit
which would frustrate the defendants from initiating a prosecution against
plaintiff or seeking any other remedy available in law. In fact, the attempt
made by the plaintiff to seek such a declaratory relief is, in substance, to
B
seek a relief of injunction against the defendants, particularly defendant
no.1, but framed it in the nature of a declaratory relief. In other words,
the plaintiff has sought an injunction against defendant no.1 from seeking
remedies in law on account of the cheque issued by the plaintiff for a
sum of Rs. 56 lakhs being dishonoured.
36. We may refer to Sections 41 (b) and (d) of SR Act which are C
extracted as under: -
“41. Injunction when refused. - xxx
(b) to restrain any person from instituting or prosecuting any
proceeding in a Court not subordinate to that from which D
the injunction is sought;
xxx xxx xxx
(d) to restrain any person from instituting or prosecuting any
proceeding in a criminal matter;”
E
In the above context, following decisions are useful to be referred
to:-
(a) In the case of Cotton Corporation of India Limited vs. United
Industrial Bank Limited and Ors. - [(1983) 4 SCC 625], this Court
highlighted the equitable principle underlying Section 41 (b) of the Specific
F
Relief Act, 1963 as under: -
“8. It is, therefore, necessary to unravel the underlying intendment
of the provision contained in Section 41(6). It must at once be
conceded that Section 41 deals with perpetual injunction and it
may as well be conceded that it has nothing to do with interim or
temporary injunction which as provided by Section 37 are dealt G
with by the Code of Civil Procedure. To begin with, it can be said
without fear of contradiction that anyone having a right that is a
legally protected interest complains of its infringement and seeks
relief through court must have an unhindered, uninterrupted access
to law courts. The expression ‘court’ here is used in its widest H
1134 SUPREME COURT REPORTS [2022] 14 S.C.R.

A amplitude comprehending every forum where relief can be obtained
in accordance with law. Access to justice must not be hampered
even at the hands of judiciary. Power to grant injunction vests in
the court unless the legislature confers specifically such power
on some other forum. Now access to court in search of justice
according to law is the right of a person who complains of
B
infringement of his legally protected interest and a fortiori
therefore, no other court can by its action impede access to justice.
This principle is deducible from the Constitution which seeks to
set up a society governed by ride of law. As a corollary, it must
yield to another principle that the superior court can injunct a person
C by restraining him from instituting or prosecuting a proceeding
before a subordinate court. Save this specific carving out of the
area where access to justice may be impeded by an injunction of
the court, the legislature desired that the courts ordinarily should
not impede access to justice through court. This appears to us to
be the equitable principle underlying Section 41(b). Accordingly,
D
it must receive such interpretation as would advance the
intendment, and thwart the mischief it was enacted to suppress,
and to keep the path of access to justice through court
unobstructed.”
(b) In the case of Ratna Commercial Enterprises Ltd. vs.
E Vasutech Ltd. – [AIR 2008 Del 99], it was held: -
“29. The other issue concerns the maintainability of the suit itself
in terms of the Section 41(d) of the Specific Relief Act, 1963
(‘SRA’) which reads as under:

F “41. An injunction cannot be granted …. (d) to restrain any
person from instituting or prosecuting any proceeding in a criminal
matter.”
The law concerning the interpretation of Section 41(d) of
the SRA is fairly well settled. It has been held In Re N.P. Essappa
G Chettiar AIR 1942 Mad. 756 and in Gauri Shanker v. District
Board AIR 1947 All. 81 that a suit to restrain criminal
proceedings being initiated is not maintainable. In Aristo Printers
Pvt. Ltd. v. Purbanchal Trade Centre AIR 1992 Gau. 81 a
Division Bench of the Gauhati High Court was dealing with a
case where cheques issued by the plaintiff to the defendant had
H been dishonoured and notice had been issued to the defendant
M/S FROST INTERNATIONAL LIMITED v. M/S MILAN 1135
DEVELOPERS AND BUILDERS (P) LTD. [B. V. NAGARATHNA, J.]

under Section 138 NI Act. The plaintiff then filed a suit to restrain A
the defendant from instituting proceedings under the NI Act. The
Court referred to a judgment of the Hon’ble Supreme Court
in State of Orissa v. Madan Gopal Rungta AIR 1952 SC 12
and Cotton Corporation of India Ltd. v. United Industrial Bank
Ltd. AIR 1983 SC 1272 and held that “an order of injunction
B
of the nature issued in this case cannot be granted and the hands
of the criminal court cannot be fettered by the civil court.”
30. The decision of this Court in Atul Kumar Singh v. Jalveen
Rosha AIR 2000 Del 38 was in a case where the plaintiff had
issued four cheques issued in favour for the defendant for a value
of Rs. 7 lakhs. The cheques when presented were dishonoured. C
After service of notice under Section 138 NI Act, the plaintiff
filed a suit for a declaration that “the defendant is not entitled to
any benefit on account of holding the cheques” and to injunct the
defendant “from using or claiming any benefit by virtue of
possessing the instruments.” This Court, while allowing the D
defendant’s application for rejecting the plaint, held that (AIR,
p.40):
“The reliefs claimed in this suit are in substance for an injunction
restraining the defendant from prosecuting the criminal case
instituted against the plaintiff. Section 41(b) of the SRA denies E
to the Court the jurisdiction to grant an injunction restraining
any person from prosecuting any proceedings in a Court.
Consequently, the injunction sought by the plaintiff cannot be
granted since it would have the effect of preventing the
defendant from prosecuting the criminal case against the
plaintiff.” F

Further, the nature of the declaratory reliefs sought already arises
out of the MoU dated 17th January, 2009, between the plaintiff and
defendant no.1 in respect of which the plaintiff could seek appropriate
remedies, if there is a breach of the said MoU by defendant no.1, but the
plaintiff cannot seek declaratory reliefs to the effect that the plaintiff G
was not liable to carry out his obligation under the terms of the MoU. If
the plaintiff has failed to do so then the defendant no.1 would have a
cause of action against the plaintiff, but there cannot be a frustration of
the right to seek a remedy in law by means of seeking declaration under
a contract or MoU as in the instant case. H
1136 SUPREME COURT REPORTS [2022] 14 S.C.R.

A 37. Moreover, the right of defendant no.1 to prosecute the plaintiff
owing to the dishonour of the cheque issued by the plaintiff for a sum of
Rs. 56 lakhs cannot be frustrated by seeking a declaration that the said
cheque was handed over as a security. Such a declaration cannot be ex
facie granted as it would be contrary to the provisions of the N.I. Act
and particularly Section 118(a) thereof. If the plaintiff is aggrieved on
B
account of breach of the terms and conditions of the MoU committed by
defendant no.1 then it could seek appropriate reliefs in accordance with
law. Whether the plaintiff was not liable to issue the cheque for Rs. 56
lakhs to defendant no.1 under the terms of the MoU is a matter which
has to be considered in an appropriate proceeding to be initiated by
C defendants on account of dishonour of the said cheque under Section
138 of the N.I. Act. The plaintiff can always prove that it had no legal
liability or debt to be discharged vis-a-vis defendant no.1 under the terms
of the MoU, if any proceeding is to be initiated by defendant no.1 on
account of the dishonour of the said cheque. Further, if defendant no.1 is
to seek any relief for the non-supply of 3876 MT of iron ore fines by the
D
plaintiff under the very same MoU then the plaintiff is entitled to take
appropriate defences as are available in law. If the plaintiff has a
grievance against the defendants and particularly defendant no.1, arising
from the MoU, such prayers have not been sought by the plaintiff. Such
reliefs could have been sought by the plaintiff inasmuch as there is no
E prayer seeking recovery of Rs. 21.50 lakhs from defendant no.1 which
according to the plaintiff is due to it.
38. In the circumstances, we hold that while the plaintiff has certain
grievances arising from the MoU, against the defendants which may
give rise to seek appropriate remedies in law, the aforesaid three
F declaratory reliefs sought in the plaint are barred by law. Hence, the
plaint is liable to be rejected in exercise of jurisdiction under Order VII
Rule 11 CPC. In our view, the revisional court was justified in rejecting
the plaint but the High Court has erroneously set aside the order of the
revisional court without appreciating the facts and circumstances of the
case and has simply remanded the matter to the revisional court to
G reconsider the revision afresh on the premise that the revisional court
did not have the jurisdiction to reject the plaint under Section 115 of the
CPC.
39. In the result, the impugned Order of the High Court is set
aside and the Order of the revisional court passed in C.R.P. No.5 of
H
M/S FROST INTERNATIONAL LIMITED v. M/S MILAN 1137
DEVELOPERS AND BUILDERS (P) LTD. [B. V. NAGARATHNA, J.]

2012 dated 23.02.2013 is restored. The plaint in C.S. No. 1065 of 2009 A
is rejected. This appeal is accordingly allowed.
40. However, it is clarified that the rejection of the plaint would
not come in the way of the plaintiff filing a suit against defendant no.1
for seeking appropriate reliefs in accordance with law, if so advised.
Parties to bear their respective costs. B

Nidhi Jain Appeal allowed.
(Assisted by : Tamana, LCRA)

C

D

E

F

G

H