Order VII Rule XI of CPC:

1. Order VII Rule XI of the Code of Civil Procedure, 1908 (“Order VII Rule XI”) deals with the provision of ‘rejection of plaint’. It is an independent and special remedy where a court, is empowered to summarily dismiss a suit at the threshold, without recording evidence or conducting a trial.Some of the grounds, basis which, a plaint can interalia be rejected are where the plaint (i) discloses no cause of action; (ii) is barred by any law; (iii) has been undervalued; and (iv) is written upon paper insufficiently stamped. The objective of this drastic power provided under Order VII Rule XI is to ensure that judicial time is not wasted on meaningless litigations.

 

2. The jurisprudence and the scope of Order VII Rule XI is now fairly settled. Some of the important principles as enunciated by the Supreme Court are summarized below:

 

1. An application for rejection of plaint can be entertained at anystage of the suit, i.e., before registering the plaint or after issuing summons to the defendant or at any time before the conclusion of the trial.

 

1. Once an application under Order VII Rule XI is allowed, the plaint stands rejected and hence the question of presenting the same plaint before the appropriate court does not arise, the only remedy is to file a fresh plaint within the parameters of Order VII Rule XIII.

 

1. While deciding an application under Order VII Rule XI, the court must only look at the facts and averments made in the plaint. The pleas taken by the defendant are irrelevant and not material.

 

1. The court must have a ‘meaningful’ and not a formal reading of the plaint and if it is manifestly vexatious and meritless i.e., it does not disclose a clear right to sue, the plaint must be rejected. The court must be wary of clever drafting which creates the illusion of a cause of action.

 

1. The provision of Order VII Rule XI is mandatory in nature. It states that the plaint ‘shall’ be rejected if any of the grounds specified in clauses (a) to (e) are 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 plaint.

 

1. The court at the time of dealing with an application under Order VII Rule XI, would not consider any evidence or enter into a disputed question of fact or law.

 

1. A plaint which does not contemplate any urgent interim and is instituted without following the mandatory pre-institution mediation under the provisions of Section 12-A of the Commercial Courts Act, 2015 must be rejected under Order VII Rule XI. This power can be exercised even suo motoby the court.

 

3. While the aforesaid principles of law are well-established, the question as to whether a plaint as a ‘whole’ can be rejected qua‘some’ of the Defendants, was mired with controversy and conflicting judicial precedents of the Supreme Court.

 

4. The earliest decision on this point can be traced to the year 1956, wherein the Division Bench of Rajasthan High Courtin the case of Phool Sundari v. Gurbans Singh, observed that where a plaint discloses no cause of action against some of the defendants, it can be rejected against those defendants. The Division Bench had also observed that there is a difference between (i) rejecting one part of the plaint against all the defendants (thereby carrying on with the rest of the plaint against them) and (ii) rejecting the entire plaint against a particular defendant and (carrying on with the entire plaint against others). In the latter scenario, there is a total rejection of the plaint as far as a particular defendant is concerned. Thus, the Division Bench of Rajasthan High Court observed that total rejection of the plaint qua one defendant was permissible.

 

5. In the year 2012, the Division Bench of the Supreme Court in the case of Church of Christ Charitable Trust & Educational Charitable SocietyPonniamman Educational Trust, upheld the decision given by a Single Judge of the Madras High Court inter alia, rejecting the plaint qua one defendant. The Supreme Court in the said case, also distinguished between the principle of rejecting the plaint in part, (which is not permissible as per Roop Lal Sathi v. Nachhattar Singh Gill,) vis-à-vis rejecting the plaint as whole as against some defendant/s. Thus, total rejection of the plaint qua one Defendant as per Division bench of the Supreme Court was possible.

 

6. Thereafter, in the year 2013, yet in another decision, the Division Bench of Bombay High Court, in the case of S. Dhondy v. Her Majesty the Queen of Netherlands,passed an order inter alia, rejecting plaint only against one defendant for want of cause of action. Thus, the Division Bench of Bombay High Court also ruled in favour of total rejection of the plaint qua one defendant.

 

7. The real controversy, however, set in the year 2017, in the case of Sejal Glass Ltd. v. Navilan Merchants (P) Ltd.,where, the Division Bench of the Supreme Court, without considering the aforesaid line of judgments, set aside the judgement passed by the Single Judge of Delhi High Court which had inter alia directed rejection of plaint qua some of the defendants and observed that under Order VII Rule XI, if the plaint survives against certain defendants and/or properties, Order VII Rule XI will have no application at all, and the suit, must then proceed to trial. The Supreme Court held that the plaint must be rejected as a ‘whole’ or not at all.

 

8. Thereafter, in the year 2019, in the case of Madhav Prasad Aggarwal v. Axis Bank Ltd.,the Division Bench of the Supreme Court, again without considering the earlier decisions relied upon the Sejal Glass judgment and held that a plaint cannot be rejected qua one or some of the defendants. In other words, the plaint must be rejected as a whole or not at all. The Supreme Court further held that the fact that some of the reliefs claimed against the applicant in the suit is barred by law can be raised by invoking other remedies including under Order VI Rule XVI, CPC at the appropriate stage.

 

9. Thus, there were conflicting set of judgments passed by the Supreme Court. On one hand, there was a ruling of the Supreme Court in Church of Christ (supra), permitting rejection of plaint quaone defendant and on the other hand there were judgments of Sejal Glass and Madhav Aggarwal, where such rejection of plaint was not permissible qua some defendant/s, all three judgments were notedly passed by co-equal bench of Supreme Court.

 

10. It is only in the year 2021, in the case of Sheela Ram Vidhani v. S. K. Trading Co.that the Division Bench of Bombay High Court, put the controversy to rest by ruling that the judgments passed by the Supreme Court in Sejal Glass and Madhav Aggarwal were per incuriam as they did not consider the binding precedent of Church of Christ. The Bombay High Court thus, followed the decision in Church of Christ and held that plaint can be rejected as a ‘whole’ qua some defendant/s. For arriving at this conclusion, the Bombay High Court, relied upon the decision in Sundeep Kumar Bafna v. State of Maharashtra, wherein the Supreme Court had observed that a decision or judgment can be per incuriam any provision in a statute, rule or regulation, which was not brought to the notice of the Court. A decision or judgment can also be per incuriam if it is not possible to reconcile its ratio with that of a previously pronounced judgment of a Co-equal or Larger Bench; or if the decision of a High Court is not in consonance with the views of the Supreme Court.

 

11. The Supreme Court, has also upheld the decision observed by the Bombay High Court in the case of Sheela Ramby dismissing the Special Leave Petition filed before it in that regard.

 

CONCLUSION-

 

12. The judgment of the Hon’ble Bombay High Court in the case of Sheela Ram, has provided much clarity after the reign of inconsistent judgments of the Division Benches of the Hon’ble Supreme Court. The Bombay High Court has been valiant enough in observing the judgments of the Division Benches of the Supreme Court as per incuriam. While it was a settled law that a plaint must be rejected as a whole and not in part, it appears that the Supreme Court in the case of Sejal Glassand Madhav Aggarwal incorrectly applied the aforesaid ratio and misinterpreted ‘part of the plaint’ with ‘some of the Defendants’. While a portion of the plaint cannot be rejected qua some defendant/s, it is now clear that the entire plaint can be rejected against some defendant/s. The Authors believe that this is the correct view as it would provide a defendant, who has been hopelessly dragged into litigation; an opportunity to have the plaint summarily rejected against it, at the threshold instead of undergoing the trial to arrive at the said finding.