When Limitation Is A Mixed Question Of Law And Facts, Plaint Cannot Be Rejected At The Threshold Of Order 7 Rule 11 Of The Code Of Civil Procedure,1908

INTRODUCTION:

The Supreme Court in its decision in P. Kumarakurubaran vs. P. Narayan & Ors.¹, inter alia held rejection of plaint on the ground of limitation without permitting the parties to lead evidence is legally unsustainable. The issue of limitation cannot be decided summarily as it becomes a mixed question of law and fact which cannot be adjudicated at the threshold of Order 7 Rule 11 of the Code of Civil Procedure, 1908 ("CPC").

FACTS:       

The Appellant instituted a suit bearing Suit No. 310 of 2014 ("said Suit"). before the Principal District Court, Chengalpet against the Respondents and Government authorities inter alia seeking declaratory relief, among others that, he is the legal owner of the suit property.

It was contended by the Appellant in the plaint that he was assigned a vacant site by the Special Tahsildar, Saidapet, Tamil Nadu on 5^th May, 1974 whereupon he constructed a house and that he was in possession and enjoyment of the suit property by paying taxes and other charges.

The Appellant had executed a Power of Attorney in his father's favour, which was registered on 6^th January, 1978 with the Office of the Sub-registrar, Thallakulam Madurai for the purpose of putting up construction, entering into agreement, and performing other relevant activities.

It is stated that the father of the Appellant executed a sale deed on 1^st October, 1988 in favour of the Respondent No. 2/Defendant No. 1 vide Document No. 303/1993 on the file of the Sub-Registrar, Padukottai.

Being aggrieved, the Appellant approached the Additional Commissioner of Police, Chennai and filed a complaint dated 9^th December, 2011 under Land Grabbing Cell against the family of Defendant No. 1. Subsequently, the Appellant applied for the individual patta to the Special Tahsildar, Alandur on 24^th February, 2012 and made representation to Defendant No. 4 not to register any document in respect of the suit property.

In the interim, the Appellant's father passed away. Subsequent to which, Respondent No. 2/Defendant No. 1 executed a settlement deed in favour of Respondent No. 3/Defendant No. 2 vide Document No. 1198/2012. Thereafter, Respondent No. 3/Defendant No.2 executed a General Power of Attorney dated 31^st December, 2012 in favour of Respondent No. 1/Defendant No. 3.

On 5^th July, 2013, the Defendants made an application seeking building permission on the suit property, to which, the Appellant filed an objection.

In the said circumstances, the said suit came to be filed.

During the pendency of the said Suit, the Respondents/Defendants filed an interlocutory application seeking rejection of the plaint on the grounds of limitation and that the suit was undervalued. The said application was dismissed by the Additional District and Sessions Judge by order dated 4^th October, 2017 observing that the grounds raised by the Defendants can only be addressed after conducting a detailed trial based on material facts and records.

In the circumstances, the Respondent No. 1 preferred a Civil Revision Petition bearing No. 131 of 2018 before the Madras High Court. By its order dated 3^rd September, 2020 the Madras High Court allowed the Civil Revision Petition holding that the suit was barred by limitation.

Being aggrieved by the order passed by the Madras High Court, the present challenge came to be filed before the Apex Court.

ISSUE FOR CONSIDERATION:

The main issues for consideration for the Apex Court to entertain were as follows:

1. Whether the suit was barred by limitation and deserved to be rejected under Order 7 Rule 11 of the CPC; and
2. Whether the plea regarding the date of knowledge of the cause of action required appreciation of evidence.

SUBMISSIONS ON BEHALF OF THE APPELLANT:

It was submitted by the Appellant that the Madras High Court erred in allowing the application filed under Order 7 Rule 11 of the CPC thereby rejecting the plaint on the ground of limitation, particularly, while exercising its revisional jurisdiction. It was submitted further that, the question of limitation, especially in matters involving the knowledge or notice of the impugned transaction was a mixed question of law and facts, which cannot be conclusively determined without a full-fledged trial. The Additional District Judge, rightly held that the said Suit raised triable issues requiring evidence and therefore, correctly declined to reject the plaint at the preliminary stage.

It was further submitted that, the plaint contained specific averments challenging the alienation of the suit property by Appellant's father who had no authority to alienate it.

On the aspect of the Power of Attorney, the Appellant submitted that it is specific in nature and is confined solely to matters relating to construction and obtaining necessary approvals and not for executing a sale deed or for entering into a sale agreement - in the absence of such authority, the sale deed and the settlement deed are executed wholly without jurisdiction and stand vitiated by fraud.

It was also further argued that the Appellant has sought the relief of declaration of title and permanent injunction by expressly disputing the right, title, and possession claimed by the Respondents. The plaint contains specific allegations regarding fraudulent alienation, subsequent encumbrance, and the absence of authority with Appellant's father to alienate the suit property which are serious and contested issues necessitating a detailed adjudication based on oral and documentary evidence.

SUBMISSIONS ON BEHALF OF THE RESPONDENTS:

Respondent No. 1 submitted that the challenge before the Apex Court was liable to be dismissed as per the judgement of Madras High Court. It was also submitted that in the plaint the Appellant failed to establish the date of knowledge of the alleged transaction, which was a significant and material fact necessary to corroborate the cause of action for filing the suit.

The certified copy of the sale deed dated 10^th October, 1978 executed by the Appellant's father, was alleged to have been received by the Appellant on 28^th July, 2011. If the said date was construed as the date of knowledge, then the suit ought to have been instituted on or before 27^th July, 2014 in accordance with the Article 59 of the Limitation Act, 1963. However, the plaint came to be filed on 3^rd December, 2014.

It was further submitted that the Appellant and the Respondents are closely related; therefore, the contention that he remained unaware of the alleged transaction for 26 years is untenable in law.

Respondent No. 1 also submitted that Appellant's father being a POA holder was duly authorized to execute lawful agreements.

It was further submitted that a bare perusal of averments in the plaint reveals that the suit is barred by limitation. In support of this contention, reliance was placed upon the decisions in Dahiben vs. Arvindbhai Kalyanji Bhanusali² and Raghwendra Sharan Singh vs. Ram Prasanna Singh (Dead) by LRs³wherein, it was held that when the foundational facts, as pleaded, squarely attract the bar of limitation, no trial is warranted and the suit is liable to be dismissed at the threshold.

Respondent No. 1 also relied upon the decision of the Apex Court in Shri Mukund Bhavan Trust and Others vs. Shrimant Chhatrapati Udayam Raje Pratapsinh Maharaj Bhonsle and Another⁴, to submit that it was held that the spirit and intention of Order 7 Rule 11(d) of the CPC is for the courts to nip at the bud when any litigation ex-facie appears to be a clear abuse of process.

It was thus submitted that the Respondents/Defendants are the absolute owners of the property, having been in peaceful possession and enjoyment thereof. The Appellant, having suppressed material facts, deliberately filed a suit after an inordinate delay of 26 years and therefore, the impugned order passed by the Madras High Court rejecting the plaint does not warrant any interference by the Apex Court.

JUDGMENT:

The Apex Court observed that the issue whether the Appellant had prior notice or reason to be aware of the transaction at an earlier point in time, or whether the plea regarding the date of knowledge is credible, are matters that necessarily require appreciation of evidence. The averments made in the plaint must be taken at their face value and assumed to be true at the preliminary stage. Once the date of knowledge is specifically pleaded and forms the basis of the cause of the action, the issue of limitation cannot be decided summarily as it becomes a mixed question of law and fact which cannot be adjudicated at the threshold under Order 7 Rule 11 of the CPC.

Accordingly, the Apex Court held that rejection of plaint on the ground of limitation without permitting the parties to lead evidence is legally unsustainable.

In furtherance to the above, the Apex Court placed reliance upon its own decisions in Daliben Valjibhai & Ors vs. Prajapati Kodarbhai Kachrabhai & Ors.⁵, Salim D. Agboatwala & Others⁶ vs. Shamalji Oddhavji Thakkar & Others' and Shakti Bhog Food Industries Ltd. vs. Central Bank of India & Another⁷

The Apex Court held that the approach of the Madras High Court in reversing the well-reasoned order of the Trial Court warrants interference. The Trial Court had rightly held that the issue of limitation necessitated adjudication upon evidence, particularly, in view of the Appellant's assertion that the Power of Attorney executed by him did not confer any authority upon his father to alienate the suit property and that the impugned transaction came to his knowledge only at much later point.

The Apex Court observed that the Madras High Court had proceeded on the assumption that suit was barred by limitation without undertaking examination as to whether the plea regarding the date of knowledge was demonstrably false or inherently improbable in light of the record - such approach amounts to an error of law and constitutes a misapplication of the well established principles governing the exercise of power under Order 7 Rule 11 of the CPC.

The Apex Court held that the plaint discloses a cause of action which cannot be shut out at the threshold. Accordingly, the judgment and order passed by the Madras High Court came to be set aside, Accordingly, the suit was restored for trial on its merit.

Footnotes

1. Civil Appeal No. 5622 of 2021.

2. (2020) 7 SCC 366.

3. (2020) 16 SCC 601.

4. 2024 SCC OnLine SC 3844.

5. 2024 SCC OnLine SC 4105.

6. (2021) 17 SCC 100.

7. (2020) 17 SCC 260.

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