Summary
The Supreme Court restored the first appellate court's refusal to reject, under Order VII Rule 11 CPC, a plaint seeking cancellation of a 2004 registered sale deed alleged to be forged. The plaintiffs pleaded that they learnt of the deed only in 2017 through a revenue notice; since limitation under Article 59 of the Limitation Act runs from knowledge, the question was triable, and the High Court wrongly decided it on facts in second appeal and presumed knowledge from the date of registration.
Issues
- Whether a plaint seeking cancellation of a registered sale deed, filed about 13 years after its execution but pleading knowledge only in 2017, could be rejected under Order VII Rule 11(d) CPC as barred by limitation.
- Whether, for a suit to cancel a registered instrument, knowledge must be presumed from the date of registration.
- Whether the High Court, in second appeal under Section 100 CPC, could reverse the first appellate court on findings of fact.
Provisions considered
- Order VII Rule 11(d), Code of Civil Procedure, 1908A plaint may be rejected where the suit appears from the statements in the plaint to be barred by law. Following P.V. Guru Raj Reddy and Chhotanben, the Court held that only the plaint averments, read as a whole and taken as true, are relevant, and the defendants' stand is immaterial; on the plaintiffs' pleaded date of knowledge, limitation was a triable issue. (¶¶ 3, 7, 11, 12, 13, 16)
- Article 59, Schedule, Limitation Act, 1963A suit to cancel an instrument may be filed within three years from when the facts entitling the plaintiff to cancellation first become known to him. The Court held that the High Court, while recognising this, erred in holding that knowledge must be presumed from the date of registration. (¶¶ 7, 10, 12, 13)
- Section 100, Code of Civil Procedure, 1908The Court held that in second appeal the High Court could not reverse the first appellate court's findings on facts, and its findings here were primarily factual inferences possible only after trial. (¶¶ 7, 9, 14)
Held
- On an application under Order VII Rule 11 the court must confine itself to the plaint averments, read as a whole and assumed to be correct; the defence or the material relied on by the defendants cannot be the basis for rejecting the plaint. (¶¶ 11, 12, 13)
- Where plaintiffs specifically plead that they learnt of an allegedly forged registered sale deed only when a revenue notice was issued on the defendants' application, and sued soon after, whether the suit is within limitation under Article 59 is a triable issue and the plaint cannot be rejected at the threshold merely because the deed was registered many years earlier. (¶¶ 10, 12, 13)
- The High Court erred in holding that limitation to cancel a registered sale deed runs from the date of registration as deemed knowledge; under Article 59 limitation runs from the plaintiff's knowledge. (¶¶ 10, 12, 13)
- The High Court went beyond the plaint by drawing trial-stage inferences on burden of proof, failure to inquire and lack of particulars of fraud; such factual findings could not be used to reject the plaint, nor could the first appellate court's findings of fact be reversed in second appeal under Section 100 CPC. (¶¶ 7, 9, 13, 14)
Result
Appeal allowed; High Court judgment set aside and the first appellate court's judgment restored; trial court to dispose of the 2017 suit expeditiously, with no opinion expressed on merits.