Holding

The suit is barred by limitation and must be rejected under clause (d) of Order VII Rule 11, as well as under the Specific Relief Act and Order II Rule 2 of the CPC.

Summary

The appellants filed a suit in 1996 seeking a declaration of ownership and a permanent injunction over land allegedly transferred by a 1953 sale deed that they claimed was actually a loan secured by an oral agreement to reconvey the property upon repayment. They asserted that the loan was fully repaid on 25 March 1987 and that a receipt was obtained, and they relied on subsequent revenue mutation orders as part of their cause of action. The trial court dismissed the suit as barred by limitation, and the High Court rejected the plaint under Order VII Rule 11, stating it disclosed no cause of action. On appeal, the Supreme Court held that the suit was clearly barred by limitation, that the plaint could be rejected under clause (d) of Order VII Rule 11, and that the Specific Relief Act and Order II Rule 2 of the CPC also precluded the claim. Consequently, the appeal was dismissed and exemplary costs were imposed on the appellants.

Issues considered

Whether the plaint discloses a cause of action under Order VII Rule 11 of the CPC.
Whether the suit is barred by the law of limitation.
Whether the Specific Relief Act bars the suit for relief claimed.
Whether Order II Rule 2 of the CPC bars the suit.

Legislation cited

Code of Civil Procedure, 1908s. Order II Rule 2, s. Order VII Rule 11 (clause d)
Specific Relief Act, 1963

Subjects

limitationOrder VII Rule 11Specific Relief Actdeclaration suitpermanent injunctionvexatious litigationexemplary costscivil procedure

Judgment

N.V. SRINIVASA MURTHY AND ORS.
v.
A
MARIYAMMA (DEAD) BY PROPOSED LRS. AND ORS.

JULY 11, 2005

[D.M. DHARMADHIKARI AND B.N. SRIKRISHNA, JJ.] B

Code of Civil Procedure, I 908:

Order VII, Rule I I rlw Order JI, Rule 2-Rejection of plaint-Suit for
declaration of title and permanent injunction filed in 1996-Basis of the claim C
being a sale deed of the year I 953 with oral agreement for reconveyance of
the property on repayment of loan amount-Receipt of entire loan amount
having been paid obtained on 25.3.1987-Earlier suit for permanent injunction
filed in 1990 still pending-Held, plaint liable to be rejected on ground covered
by clause (d) of r. I I of Order VII as barred by law of limitation as also
barred by provisions of Specific Relief Act and under Order II r.2-Specific D
Relief Act. ·

Vexatious Litigation-Exemplary costs-Imposing of

Appellants filed a suit for declaration that they were the absolute
owners of the suit lands and claimed permanent injunction restraining E
defendants from wrongfully entering the suit property. The suit was filed
in the year 1996 and the cause of action was said to have arisen when the
Assistant Commissioner, by order dated 28.4.1994, confirmed the orders
of the authorities below directing mutation of the names of the defendants
on suit lands and again in July 1995 when defendants were alleged to have
attempted to interfere with the plaintiffs' possession. It was, inter alia, F
averred in the plaint that the plaintiffs' father executed on 5.5.1953 a
registered sale deed in favour of the predecessor~in-title of the defendants,
against a loan amount, with a contemporaneous oral agreement that on
return of the borrowed sum a registered reconveyance deed would be
executed in favour of the borrower; that on re-payment of the entire loan G
amount a receipt was ob!ained on 25.3.1987 from defendants who orally
-r
promised to execute a reconveyance deed in favour of the plaintiffs; that
the plaintiffs had earlir also filed a suit seeking permanent injunction
against the defendants and that suit was still pending; that the defendants
manipulated the revenue records and got their names mutated over the
411 H
412 SUPREME COURT REPORTS (2005] SUPP. I S.C.R.

A suit land. The trial court dismissed the suit as barred by limitation.
However, the High Court ultimately rejected the plaint under Order VII,
Rule 11 on the ground that it disclosed no cause of action. Aggrieved, the
plaintiffs filed the present appeal.

Dismissing the appeal, the Court
B
HELD: 1.1. The plaint was rightly held to be liable to rejection if
not on the alleged ground of non-disclosure of any cause of action but on
the ground covered by clause (d) of Rule 11 of Order VII of Code of Civil
Procedure, 1908, namely, that 'the suit appears from the statement in the
C plaint to be clearly. barred by law'. Besides, the suit is also barred by the
provisions of Specific Relief Act as also under Order II, Rule 2 CPC.
(413-G, H; 417-BI

1.2. On the averments in the plaint, the foundation of the suit is
clearly the registered instrument dated 5.5.1953; and the relief of declaring
the said document dated 5.5.1953 to be a loan transaction and second relief
D of specific performance of oral agreement of· re-conveyance of the property
by registered instrument should and ought to have been claimed in the
suit. A suit merely for declaration that the plaintiffs are absolute owners
of the suit lands could not have been filed without seekiitg declaration that
the registered sale deed dated 5.5.1953 was a loan transaction and not a
E real sale. The cause of action for seeking su.ch a declaration and for
obtaining re-conveyance deed, according to the plaintiff's own averments
in the plaint, arose on 25.3.1987 when the plaintiffs claimed to have paid
back the entire loan amount and obtained a promise from the defendants
to reconvey the property. Reckoning the cause,of action from 25.3.1987,
the suit filed on 26.8.1996, was hopelessly barred by time. The averments
F in the plaint concerning the mutation proceedings before the revenue
authorities and the orders passed by Tehsildar/Assistant Commissioner
did not furnish any independent or fresh cause of action for the suit and
they appear to have been made as a camouflage to get over the bar of
limitation. [415-G-H; 416-B]
G 2. Whatever relief the petitioners desired to claim from the civil court
on the basis of averment with regard to the registered sale deed of )953
could arid ought to have been claimed in the earlier suit which was pending
at that time. The second suit Claiming indirectly relief of declaration and
injunction is apparently barred by Order 2, Rule 2 of the Code of Civil.•
I-I Procedure. (416-D-F]
N.V. SR!NIVASA MURTI-IY '" MARIYAMMA (D) BY PROPOSED LRS. [DHARMADHIKARI, J.] 413

3. This is a fit case not only for rejecting the plaint but imposing A
exemplary costs on the appellant. The costs incurred throughout by the
respondents would be paid by the appellants. A further cost in the sum of
Rs.10,000 is imposed on the appellant to be paid to the respondents for
prosecuting and prolonging litigation up to this Court in a hopelessly
barred suit. (417-C, FJ
B
T Arvindam v. TV. Satyapgl, (1977) 4 SCC 467, relied on.

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4500 of2004.

From the Judgment and Order dated 26.5.2003 of the Karnataka High
Court in M.S.A.No. 413 of 1998. C
RS. Hegde, Ms. Savitri Pandey, Chandra Prakasn and P.P. Singh for
the Appellants.

G.V. Chandra Shekhar, T.N. Rao and K.R. Nagaraja for the Respondents.
D
The Judgment of the Court was delivered.-by

DHARMADHIKARI J. In these appeals preferred by the plaintiffs th~ .
only question involved is whether the trial court and the High Court were
right in holding that the plaint under Order VII Rule 11 of the Code of Civil
Procedure was liable to rejection. The High Court by the impugned order E
passed in Misc. Second Appeal reversed the order of the first appellate court
and upheld that of the trial court.·
i

Learned counsel appearing for the plaintiff in this appeal contends that
if the plaint allegations containing all facts are read ·in proper perspective, F
'ca.use of action' has clearly been pleaded and the High Court grossly erred
in rejecting the plaint on the ground that it does not disclose any cause of
action.

With the assistance and on the comments and counter comments of the
parties, we have carefully gone through the contents of the plaint. We find G
that the plaint has been very cleverly drafted with a view to get over the bar
of limitation and payment of ad valorem court fee. According to us, the plaint
-was rightly held to be liable to rejection jf not on the alleged ground of non-
disclosure of any cause of action but on the ground covered by clause (d) of
Rule 11 of Order VII of Code of Civil Procedure namely that 'the suit
appears from the statement in the plaint to be clearly barred by law'. H
414 SUPREME COURT REPORTS [2005] SUPP. I S.C.R.

A As per the plaint allegations of the plaintiffs, their I.ate father had incurred
some debts and had therefore borrowed <. sum of Rs. 2000 fr<;>m the predecessor
in title of the defendants. By way of security for the loan. advanced, a registered
sale deed was executed on 5.5.53 with a contemporaneous oral agreement
that on return of the borrowed sum with interest payable thereon @ 6% per
B annum, the registered re-conveyance deed shall be executed in favour of the
borrower. In the plaint it is further averred that even after execution of the
registered sale deed, which according to plaintiff was, in fact merely a loan
transaction, the father of the plaintiffs and thereafter the plaintiffs continued
to be in possession of the suit lands and paid the land revenue. The other
averments in the plaint are that as the lands in suit were already under
C mortgage with Bangalore Central Co-operative Barik Ltd., they could not
have been sold.

Further averment in the plaint is that the ~efendants had executed a
receipt on 30.7.1963 in favour of the first plaintiff acknowledging return of
certain amounts under the loan with an oral promise to execute a registered
D reconveyance deed in faveur of the plaintiffs. In paragraph 9 of the plaint a
statement was made to the effect that in respect of the registered sale deed
of 1953, on payment of entire outstanding amount of loan, the receipt was
obtained on 25.3.1987 from the defendants and the original registered sale
deed dated 5.5.53 was returned to the first plaintiff with an oral promise by
E the defendants to execute a registered document in favour of plaintiff/borrower.

On reading all the averments in paragraph 9 of the plaint, it is apparent
that the cause of action for obtaining a registered reconveyance deed from
the defendants in favour of the plaintiffs first arose on 25.3.1987 when the
entire loan amount was alleged to have been repaid and an oral promise was
F given by the defendants to reconvey the suit lands.

In paragraph 11 of the plaint it is stated that the plaintiff had earlier
filed Civil Suit No.557 of 1990 in the Court of Second Munsiff, Bangalore
seeking permanent injunction restraining the defendants from interfering with
the possession and enjoyment of the suit land by the plaintiffs. That suit, it
G is stated, was pending on the date of filing of the present suit.

In paragraph 12 there are averments ·with regard to the .revenue
proceedings concerning mutation of names over the lands in question. It is
pleaded that the plaintiffs made formal application for mutation of their names -
on the lands and at that time the village accountant, in conspiracy with the
H second defendant, manipulated the revenue records. An ante-dated application
N.V. SRJNIVASAMURTIIY '" MARJYAMMA(D)BYPROPOSEDLRS. [DHARMADH!KARI, J.] 415

r for mutation was alleged to have been filed by the defendants. No date or A
year in which such manipulation took place has been stated in the plaint. The
said paragraph further reads that in the revenue proceedings Tehsildar passed
an order on 16.2.1990 directing the Deputy tehsildar to personally inspect the
lands in suit and then make entries in the Pahanis (revenue records). The
Deputy Tehsildar, it is alleged made a local inspection without giving any
notice to the plaintiffs, and thereafter, mutation in the revenue records was B
--{
made in favour of the second defendant. The plaintiffs then challenged the
order of the Tehsildar and the Deputy Tehsildar by way of an appeal before
the Assistant Commissioner who confirmed the orders of the lower revenue
authorities.

The cause of action is said to have arisen when the Assistant
c
Commissioner by order dated 28.4.1994 confirmed the orders of the lower
authorities directing mutation of the names of the defendants on the suit
lands and then again in the first week of July 1995 when the defendants as
alleged had made an· attempt to interfere with the plaintiffs' possession and
enjoyment of suit lands. The suit was filed on 26.8.1996. In the prayer clause, D
the relief claimed in the suit are (a) declaration that the plaintiffs are absolute
owners of the suit lands (b) permanent injunction restraining defendants from
.,
wrongfully entering the scb.eduled property and from interfering with the
peaceful possession and enjoyment of scheduled lands.

As seen from the pleadings it is clear that foundation of the suit is that E
the registered sale deed dated 5.5.1953 was, in fact, only a loan transaction
executed to secure the amount borrowed by the plaintiff's predecessor. The
amount borrowed was alleged to have been fully paid back on 25.3.1987 and
in acknowledgement thereof a formal receipt was obtained. At the same time,
there was an alleged oral agreement by the defendants to reconvey the property F
to the plaintiff by registered deed.

On the above averments, relief of declaring the registered sale deed
dated 5.5.1953 to be a loan transaction and second relief of Specific

• Perfonnance of oral agreement of re-conveyance of the property by registered
instrument should and ought to have been claimed in the suit. A suit merely G
for declaration that the plaintiffs are absolute owners of the suit lands could
not have been claimed without seeking declaration that the registered sale
deed dated 5.5.1953 was a loan transaction and not a real sale. The cause of
action for seeking such a declaration and for obtaining re-conveyance deed

.. according to the plaintiff'~ own avennents in paragraph 9 of the plaint, arose
H
416 SUPREME COURT REPORTS [2005) SUPP. I S.C.R.
)
A on 25.3.1987 when the plaintiffs claimed to have paid back the entire Joan
amount and obtained a promise from the defendants to reeonvey the proper):y.
Reckoning the cause of action from 25.3.1987, the suiffiled on 26.8.1996,
was hopelessly barred by time.

The avennents in paragraph 12 of the plaint concerning the mutation
B proceedings before the revenue authorities did not furnish any fresh cause of
action for the suit and they appear to have been made as a camouflage to get
over the bar of limitation. The dispute of mutatiOn in the revenue court
between the parties arose only on the basis of registered sale deed dated r
~
5.5.1953. The orders passed by Tehsildar/Assistant Commissioner did not
furnish any independent or fresh cause of action to seek declaration of the
c sale deed of 5.5.53 to be merely a loan transaction. The foundation of suit
does not seem to be the adverse orders passed by revenue courts or authorities
in mutation proceedings. The.foundation of suit is clearly the registered sale
deed of 1953 which is alleged to be a loan transaction and the alleged oral
agreement of re-conveyance of the property on return of borrowed amount.
D )
In paragraph 11 of the plaint, the plaintiffs have stated that they had
earlier instituted original suit No.557 of 1990 seeking permanent injunction ~ ... I
.against defendants and the said suit was pending. when· the present suit was
filed. Whatever relief the petitioners desired to claim from the civil court on
the basis of avennent with regard to the registered sale deed oU 953 could
E and ought to have been claimed in original civil suit N.o.557 of 1990 which
was pending at that time. The second suit claiming indirectly relief of
declaration and injunction is apparently barred by Order 2, Rule 2 of the
Code of Civil Procedure.

f_ clearlyAfter examining the pleadings of the plaint as discussed above, we are
of the opinion that by clever drafting of the plaint the civil suit which
is hopelessly barred for seeking avoidance of registered sale deed of 5.5.1953,
has been instituted by taking recourse to orders passed in' mutation proceedings
by the Revenue Courts.

G Civil suit No.557 of 1990 was pending when the present suit was filed.
In the present suit, the relief indirectly claimed is of declaring the sale deed
of 5.5.1953 to be not really a sale deed but a loan transaction. Relief of
reconveyance of property under alleged oral agreement on return of loan has
been deliberately omitted from the relief clause. In our view, the present
plaint is liable to rejection, if not on the ground that it does not disclose /
H 'cause of action', on the ground that from the averments in the plaint, the suit
N.V.SRINIVASAMURTIIYI'. MARIYAMMA(D)BYPROPOSEDLRS.[DHARMADHIKARI, J.) 417
is apparently barred by law within the meaning of clause (ci) of Order VII, A
Rul~ 11 of Code of Civil Procedure. The High Court does not seem to be
right in rejecting the plaint on the ground that it does not disclose any 'cause
of action'. In our view, the trial court was right in coming to the conclusion
that accepting all averments ·in the plaint, the suit seems to be barred by
limitation. On critical examination of the plaint as discussed by us above, the B
suit seems to be clearly barred on the facts stated irt.the plaint itself. The suit
as framed is pririla facie barred by the law of limitation, provisions of Specific
Relief Act as also under Order 2 Rule 2 of the Code of Civil Procedure.

This is a fit case not only for rejecting the plaint but imposing exemplary
costs on the appellant on the observations of this Court in the case of T. C
Arvindam v. T. V.Satyapal, [1977] 4 SCC 467 :-

"The trial court must remember that if on a meaningful no formal
reading of the plaint it is manifestly vexatious and meritless in the
sense of not disclosing a clear right to sue, it should exercise its
power under Order VII, Rule 11 CPC taking care to see that the D
ground mentioned therein is fulfilled. If clever drafting has created
the illusion of a cause of action, the court must nip it in the bud at
the first hearing by examining the party searchingly under Order X,
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 E
stage. The Penal Code is also resourceful enough to meet such men
(Ch.XI) and must be triggered against them."

In the result, the appeal fails with costs incurred throughout by the
respondents to be paid by the appellants. A further cost in the sum of Rs. I 0,000
(Rupees ten thousand only) is imposed on the appellant to be paid. to the F
respondents for prosecuting and prolonging litigation up to this Court in a
hopelessly barred suit.

R.P. Appeal dismissed.