Summary
A landowner company sued to declare void sale deeds executed in July 2022 by its former attorney-holder after the power of attorney and an unregistered agreement to sell of 2014, allegedly given as security for a loan, had been revoked. The High Court in revision rejected the plaint under Order VII Rule 11 CPC. The Supreme Court held that unregistered agreements to sell and powers of attorney confer no title or authority to convey, that the plaint raised triable issues of title and fraud, that a plaint cannot be rejected in part or where even one cause of action survives, and that the civil court's jurisdiction was not barred; the trial court's order dismissing the application was restored.
Issues
- Whether the High Court was justified in rejecting the plaint in its entirety under Order VII Rule 11 CPC when the suit rested on two distinct causes of action, including the execution of sale deeds after revocation of the power of attorney.
- Whether an unregistered agreement to sell and unregistered power of attorney could confer on the attorney-holder any title or authority to execute sale deeds of the immovable property.
- Whether Section 207 of the Rajasthan Tenancy Act, 1955 barred the civil court's jurisdiction over a suit concerning ownership, validity of sale deeds and declaration of title to agricultural land.
- Whether a plaint can be rejected at the threshold for insufficient court fee without affording the plaintiff an opportunity to make good the deficiency.
Provisions considered
- Order VII Rule 11, Code of Civil Procedure, 1908A plaint may be rejected only where, on its face and without regard to the defence, it discloses no cause of action, is barred by law, is undervalued or insufficiently stamped; the court must confine itself to the plaint's averments and cannot reject it if triable issues arise. There can be no partial rejection, so if even one cause of action or relief survives the plaint cannot be rejected, and the court should not record adverse observations on the other reliefs. (¶¶ 8, 9.6, 9.7, 12, 13)
- Sections 17 and 49, Registration Act, 1908Documents compulsorily registrable under Section 17, if unregistered, do not affect the immovable property and are inadmissible to prove a transaction affecting it, except as evidence of a contract in a suit for specific performance or of a collateral transaction. The 2014 agreement to sell and power of attorney, being unregistered and revoked, could not be relied on by the attorney-holder to assert proprietary rights or authority to convey. (¶¶ 9, 9.2, 9.5)
- Section 23, Registration Act, 1908A document requiring registration must be presented within four months of execution; no attempt was made to register the 2014 documents, which further rendered the foundational agreement unenforceable. (¶ 9.5)
- Section 54, Transfer of Property Act, 1882A contract for sale of immovable property does not of itself create any interest in or charge on the property, and sale of tangible immovable property worth Rs. 100 or more can be made only by registered instrument. Following Suraj Lamp, Shakeel Ahmed, Cosmos Co-operative Bank and M.S. Ananthamurthy, an unregistered agreement to sell coupled with a power of attorney conveys no title; a power of attorney is only an agency, revocable unless coupled with interest. (¶¶ 9.2, 9.3, 9.4)
- Section 207, Rajasthan Tenancy Act, 1955The bar on civil court jurisdiction over khatedari rights and recovery of possession based on tenancy did not arise, because the issues pleaded concerned ownership, validity of sale deeds and declaration of title, which are civil in nature and triable exclusively by a civil court; revenue entries are for fiscal purposes and do not confer title. (¶¶ 5.3, 10)
- Section 6(2) and (3), Court Fees Act, 1870Following Tajender Singh Ghambhir, where court fee is found deficient the court must grant the plaintiff time to make good the deficiency and only on default can the plaint be rejected; a suit cannot be dismissed outright for insufficient court fee. (¶ 11)
Held
- Rejection of a plaint under Order VII Rule 11 CPC is permissible only where the plaint, read on its own without the defence, discloses no cause of action, is barred by law, is undervalued or is insufficiently stamped. The court must not enter into the merits or veracity of the claims at that stage; if triable issues arise from the pleadings the suit cannot be summarily rejected. (¶ 8)
- Unregistered documents required to be registered cannot confer authority to transfer title; under Sections 17 and 49 of the Registration Act they are admissible only for collateral purposes or as evidence of a contract in a suit for specific performance. An attorney-holder who filed no suit for specific performance and whose unregistered power of attorney had been revoked before the sale deeds were executed had no valid authority to execute them and cannot rely on those documents to claim proprietary rights. (¶¶ 9, 9.2, 9.5)
- Under Section 54 of the Transfer of Property Act an agreement to sell creates no interest in or charge on immovable property, and immovable property can be conveyed only by a registered deed of conveyance; SA/GPA transactions do not convey title and cannot found mutations in revenue records. The unregistered agreement to sell of 2014 could not create any right, title or interest in the attorney-holder, and the revocation of authority further nullified any claim based on it. (¶¶ 9.2, 9.3, 9.4)
- Where a plaint pleads multiple distinct causes of action supported by distinct facts, the court cannot reject it wholesale by treating one cause of action as untenable and the other as 'academic'; there is no partial rejection under Order VII Rule 11 and selective severance of reliefs is impermissible. The High Court erred in rejecting the plaint without judicially examining the independent cause of action arising from sale deeds executed after revocation of the power of attorney. (¶ 9.6)
- Contentions that the power of attorney was notarised, that a consent letter was executed, that the transaction appeared in income-tax records, that the defendants are in possession, or that impounded original documents were handed over, are factual defences to be examined at trial and furnish no ground for rejecting the plaint at the threshold. (¶¶ 9.7, 12)
- Questions of title to immovable property fall within the exclusive jurisdiction of civil courts; revenue entries are administrative and for fiscal purposes only. Since the suit concerned ownership, validity of sale deeds and declaration of title, Section 207 of the Rajasthan Tenancy Act, 1955 was not attracted, and the High Court committed a jurisdictional error in rejecting the plaint at the preliminary stage. (¶ 10)
- A suit cannot be dismissed merely for insufficient court fee; the plaintiff must first be given an opportunity to make good the deficiency and only on failure to do so can the plaint be rejected. (¶ 11)
Result
Appeal allowed; the High Court's order dated 31.01.2025 set aside and the Additional District Judge's order dismissing the Order VII Rule 11 application restored; the plaint to be taken on file and the suit to proceed in accordance with law uninfluenced by the observations in the judgment; parties to bear their own costs; connected applications closed.