Summary
The High Court, in revision, rejected the plaintiff's plaint under Order VII Rule 11 CPC as barred by limitation, reversing the trial court which had held that limitation required trial. The Supreme Court restored the trial court's order, holding that where the plaint specifically pleads the date on which the plaintiff learnt of the impugned sale deed, limitation under Article 59 of the Limitation Act, 1963 is a mixed question of law and fact that cannot be decided at the threshold, and that the High Court ought not to have interfered under Section 115 CPC in the absence of any jurisdictional error.
Issues
- Whether a plaint can be rejected under Order VII Rule 11(d) CPC on the ground of limitation when the plaint pleads a specific date of knowledge of the transaction sought to be set aside.
- Whether the High Court, exercising revisional jurisdiction under Section 115 CPC, could interfere with the trial court's refusal to reject the plaint.
Provisions considered
- Order VII Rule 11(d), Code of Civil Procedure, 1908The plaint is to be rejected where the suit appears from the statements in the plaint to be barred by any law. The Court held that at this stage only the plaint averments are germane and must be taken at face value; once the date of knowledge is specifically pleaded as the basis of the cause of action, limitation becomes a mixed question of law and fact which cannot be adjudicated at the threshold, and rejecting the plaint on limitation without permitting evidence is legally unsustainable. (¶¶ 10, 12.1, 12.2, 13, 14)
- Article 59, Limitation Act, 1963Article 59 governs suits for cancellation of an instrument and prescribes three years from the date when the facts entitling the plaintiff to that relief first became known to him. The emphasis is not on the date of the transaction but on accrual of the cause of action, which in cases of alleged fraud or unauthorised execution hinges on the date the plaintiff acquired knowledge. (¶¶ 9, 11)
- Section 115, Code of Civil Procedure, 1908The trial court acted within its jurisdiction in refusing to reject the plaint; the High Court, exercising revisional jurisdiction, ought not to have interfered in the absence of any jurisdictional error or perversity in the trial court's order. (¶ 14)
Held
- Under Article 59 of the Limitation Act the three-year period for a suit to cancel an instrument runs from the plaintiff's first knowledge of the facts entitling him to that relief; the emphasis is on the accrual of the cause of action, which in cases involving alleged fraud or unauthorised execution of documents turns on the date of knowledge, not on the date of the transaction. (¶ 11)
- Whether the plaintiff had prior notice of the transaction, or whether his plea on the date of knowledge is credible, requires appreciation of evidence. At the Order VII Rule 11 stage the plaint averments must be assumed true; once the date of knowledge is specifically pleaded as the foundation of the cause of action, limitation cannot be decided summarily and becomes a mixed question of law and fact. This is consistent with Daliben Valjibhai, Salim D. Agboatwala and Shakti Bhog Food Industries, which hold that where limitation hinges on disputed facts or the date of knowledge the plaint cannot be rejected at the threshold. (¶¶ 12, 12.1, 12.2)
- The High Court rejected the plaint on a prima facie assumption that the suit was time-barred without examining whether the plea regarding the date of knowledge was demonstrably false or inherently improbable on the record; this is an error of law and a misapplication of the principles governing Order VII Rule 11 CPC. The decisions relied on by the respondents (Dahiben, Raghwendra Sharan Singh, Mukund Bhavan Trust) are factually distinguishable. (¶ 13)
- The plaint categorically avers that the registered power of attorney in favour of the plaintiff's father was limited to constructing a house and related activities and contained no clause authorising sale, yet the father sold the property to his granddaughter; this raises serious questions of misuse of authority and potential fraud which cannot be rejected under Order VII Rule 11. The plaint discloses a cause of action, the trial court rightly held that the matter should go to trial, and the High Court in revision under Section 115 CPC ought not to have interfered absent jurisdictional error or perversity. (¶ 14)
Result
Appeal allowed; High Court judgment dated 03.09.2020 in CRP (NPD) No. 131 of 2018 set aside; trial court order dated 04.10.2017 dismissing the Order VII Rule 11 application affirmed; suit restored for trial on merits, the trial court to proceed uninfluenced by the High Court's observations; no order as to costs.