w w w . L a w y e r S e r v i c e s . i n



M/s. ISG Overseas Private Ltd. & Another v/s M/s. Ravinder Nath Sondhi


Company & Directors' Information:- F. C. SONDHI & CO. (INDIA) PRIVATE LIMITED [Active] CIN = U36939PB1961PTC002402

Company & Directors' Information:- NATH OVERSEAS PRIVATE LIMITED [Strike Off] CIN = U51109DL1989PTC035631

Company & Directors' Information:- ISG OVERSEAS PRIVATE LIMITED [Active] CIN = U51109DL2000PTC104004

Company & Directors' Information:- ISG (INDIA) PRIVATE LIMITED [Active] CIN = U72200DL1996PTC075456

    IAs. 5755-56/2005 in CS (OS) No.668/2005

    Decided On, 19 January 2006

    At, High Court of Delhi

    By, THE HONOURABLE MR. JUSTICE SWATANTER KUMAR

    For the Petitioner: Ravinder Sethi, Sr. Advocate with T.K. Ganju & A.K. Thakur, Advocates. For the Respondent: Rajiv Dutta, Sr. Advocate with Uday Gupta, Advocate.



Judgment Text

Swatanter Kumar, J.


In a suit filed by the plaintiffs for specific performance of the Agreement to Sell dated 28th December, 2002 in relation to land bearing No.41 admeasuring 1.056 acres (5111.04 sq.yds.) at Ratendon Road, New Delhi and known as 7, Amrita Shergill Marg, New Delhi, the defendant has filed an application under Order 7 Rule 11 being IA 5756/2005 for rejection of the plaint and consequential dismissal of the suit of the plaintiffs on the ground that suit of the plaintiffs is barred under the provisions of Section 16(c) of the Specific Relief Act, 1963 as the plaintiffs have failed to make a specific averment that they were ready and willing to perform various obligations imposed upon them under the terms of the agreement and the plaint and documents relied upon by the plaintiff do not show such a pleading. The second ground pleaded in this regard is that the plaint does not disclose any cause of action against the defendant as the conversion application filed by the plaintiffs to the Land and Development Office for conversion of the property from lease hold to free hold is already rejected and as such the plaintiffs on their own showing are not entitled to any relief. Still another application being IA 5755/2005 has been filed by the defendant under Order 1 Rule 10 read with Section 151 CPC praying that the Land and Development Office and the legal representatives of late Shri M.L. Sondhi should be impleaded as defendants in the suit. Both these applications were opposed by the plaintiffs, who filed detailed replies to these applications. In order to decide the merit of rival contentions raised by counsel for the parties on these two applications, the necessary facts needs to be referred. According to the plaintiffs, late K.L. Sondhi had represented to the plaintiffs that Shri R.L. Sondhi was the lessee in possession of property in question. Mr. R.L. Sondhi expired intestate in 1954 leaving behind his widow and two sons. The widow expired in 1964 leaving behind the two sons namely M.L. Sondhi and K.L. Sondhi. A memorandum of partition dated 3rd April, 1984 was executed between K.L. Sondhi, his wife Smt. Veena Sondhi and his son, who were having 1/3rd share each. Smt. Veena Sondhi died on 23rd February, 1996 and the defendant and K.L. Sondhi became entitled to one half each of the 50% share in the property. The defendant and his father were desirous of selling their share in the property on as and where basis as there were certain tenants in the property in question. An agreement to sell dated 28th December, 2002, registered with the office of the Sub Registrar, New Delhi was executed by the defendant and his father Shri K.L. Sondhi in favour of the plaintiffs. The parties were to comply with the terms and conditions of the said agreement. The sale consideration for the share of the defendant and his father was Rs.3,10,00,000/-. Various other documents were also executed. According to the plaintiff they had paid the entire sale consideration of Rs.3,10,00,000/- to the defendant and his father, negotiated with the tenants and had paid a consideration of Rs.2,50,00,000/- to the tenants to leave the premises. Since then the plaintiffs claim to be in possession of the said property. The plaintiffs had applied to the Land and Development Office for conversion of the property in question from lease hold to free hold. It is the specific case of the plaintiffs that the defendant had objected before the authority and ensured that the said application was rejected by the Land and Development Office. The order was passed on 9th August, 2004, which was challenged in CWP No. 14271-72/2004 in the High Court. It is also the case of the plaintiffs that with oblique motive the defendant had been obstructing the conversion of the property as well as the conveyance of the property in favour of the plaintiffs. In these circumstances, the plaintiffs have filed the present suit for specific performance of the agreement with other reliefs. Written statement on behalf of the defendant has been filed wherein the defendant has taken various preliminary objections as well as disputed the claim of the plaintiffs on merits. According to the defendant, the plaintiffs have violated the specific provisions contained in the General Power of Attorney and have made additions, alterations and modification in the property and have even raised unauthorized construction. There was a threat from the Land and Development Office for the lease being cancelled and it is for the illegal acts and deeds of the plaintiffs that the permission for conversion has already been declined to the plaintiffs and as such the suit for specific performance is not maintainable, much less the relief’s prayed for can be granted to the plaintiffs. Besides taking these objections, the defendant has filed two applications, one under Order 7 Rule 11 CPC and the other for impleading the parties as afore-referred. It is a settled principle of law that a defendant, who wishes to argue an application under Order 7 Rule 11 and prays for rejection of the plaint and consequential dismissal of the suit, essentially must take the facts stated in the plaint as correct. For consideration of such an application, the defence pleaded by the defendant in his written statement cannot be taken into consideration. The plea of demurrer requires the applicant to argue the application on the basis of the plaint as stated. The applicant must show that the suit would fall in one of the clauses of Rule 11 of Order 7 CPC. The plaint as framed at best seen with the documents filed by the plaintiffs should fall in one of those clauses. In this regard, reference can be made to a recent judgment of this Court in the case of Arunesh Punetha Vs. Boston Scientific Corporation and Ors. (IAs. 2313, 2318, 1504/2005 in CS (OS) No. 951/2004 decided on 25th August, 2005). The relevant portion of the judgment reads as under: -


“The ambit and scope of Order VII Rule 11 has always been a subject of detailed discussion by the courts. Before the facts of the present case are stated, reference to the general principles of these provisions could usefully be referred. These principles were discussed in some elaboration by the Punjab and Haryana High Court in the case of ABN-AMRE Bank v. the Punjab Urban Planning and Development Authority 1999(3) PLR 479, where the court held as under:-


“6. The first controversy that arises from the aforestated complex facts is whether the court is to look into the plaint alone for determining the merit of an application under Order 7 Rule 11 of the Code of Civil Procedure or it has to examine the pleadings of the respective parties and the documents along therewith.


7. It is a settled rule of law that the plea of rejection of plaint is founded on the PLEA OF DEMURRER. A person raising such plea in law has to take the facts as stated by the opponent as correct. Despite tentative admission of such correctness, the plaint does not disclose a complete or even partial cause of action or the relief claimed is barred by law and thus, the plaint is liable to be rejected within the provisions of Order 7 Rule 11 of the Code of Civil Procedure. Plain language of this rule shows that for determination of an application under this provision, the Court has to look into the plaint. This concept has been extended by judicial pronouncement of various courts so as to take within its ambit even the documents filed by the plaintiff alongwith plaint or subsequent thereto but prior to the hearing of such application. It would be more so where the documents have been referred to in the plaint itself. But the defence raised by the defendants in his written statement or the documents filed along therewith certainly falls beyond the zone of consideration, where an application for rejection of a plaint is being considered by the Court. The language of the rules does not admit any scope for doubt that the written statement filed by the defendant cannot be referred or relied upon by the applicants for decision of such application. Whether the plaint discloses any cause of action or not, is a question found on the basic cause of action pleaded by the plaintiff in his plaint. It must thus necessarily be construed that language of Rule 1 is circumscribed by the limitation or reading the plaint at best with its supporting documents. A Full Bench of this Court in the case of Harnam Singh v. Surjit Singh, AIR 1984 Punjab and Haryana 126, held as under:-


“It is well settled that a cause of action means every fact which, if traversed, would be necessary for the plaintiff to prove in order to support the right to a judgment in his favour. In other words, it is a bundle of facts which taken with the law applicable to him gives the plaintiff a right to relief against the tenant. Negatively it does not comprise the evidence necessary to prove the bundle of facts and equally has no relation whatsoever to the defence, which may be set up by the defendant nor does it depend on the character of the relief prayed for by the plaintiff.”


8. The above view has been accepted by all the courts. Reference in this regard can be made to cases Mrs. Pramilla Khosla v. Rajnish Kumar Khosla, AIR 1979 Delhi 78, Bhagwan Das v. Goswami Brijesh Kumarji and others, AIR 1983 Rajasthan 3, Dosal Private Limited and another v. Narmada Seaways Limited and others, AIR 1989 Bombay 96 and (1986-2) 89 PLR 219. Thus, I have no hesitation in coming to the conclusion that this Court must look into the plaint and the documents filed on record and more particulary the documents, which have been referred in the plaint to determine the merits of the application filed by the defendant-applicant -petitioner under Order 7 Rule 11 of the Code of Civil Procedure.


Reference can also be made to the judgment of Supreme Court in Liverpool and London S.P. and I. Association Ltd. v. M.V. Sea Success I and another (2004) 9 SCC 512, wherein the Supreme Court held as under:-


“139. Whether a plaint discloses a cause of action or not is essentially a question of act. But whether it does or does not must be found out from reading the plaint itself. For the said purpose the averments made in the plaint in their entirety must be held to be correct. The test is as to whether if the averments made in the plaint are taken to be correct in their entirety, a decree would be passed.”


In light of the above principles, the ground stated in the application that the Land and Development Office vide its order dated 9th August, 2004 has rejected the application of the plaintiffs for conversion of the property from lease hold to free hold and once this order has been passed by the authorities, suit for specific performance is not maintainable, is without any merit. In the plaint, the plaintiffs have specifically stated that with oblique motive the defendant had got the said application rejected despite the fact that he had received the entire sale consideration. This, itself, is a dispute between the parties and is to be decided by the Court only upon trial as to whether the plaintiffs have committed breach of terms of the agreement and/or the defendant has with oblique motive got the said application rejected. Even if the said application is taken to have been rejected, still the question of law which would have to be examined by the Court on merit of the suit is whether the plaintiffs are still entitled for a decree of specific performance on the lease hold rights as they stood at the time of execution of the agreement to sell. These are the questions, which cannot be decided by the Court at this stage of the proceedings and without permitting the parties to lead evidence. The defendant has already taken objection in that regard in the written statement. The provisions of Section 16(c) of the Specific Relief Act contemplate that the plaintiff should make a specific averment in the plaint that he was ever ready and willing to perform his part of the obligation. In paragraph 11 of the plaint, the plaintiffs have specifically stated that plaintiff No.1 has always been and is still ready and willing to perform its part of the agreement. In fact the plea taken is that entire sale consideration of Rs.3,10,00,000/- has already been paid by the plaintiffs to the defendant and his father. Receipt of this amount is neither disputed in the written statement nor was questioned during the course of hearing of this application. In fact there is no reason stated in this application as to what has not been stated by the plaintiffs in their plaint, which will call for dismissal of the suit in accordance with the provisions of Order 7 Rule 11 CPC. The basic obligation on the part of the plaintiffs was to pay the sale consideration, which they have admittedly paid. They had also applied for permission to convert the property from lease hold to free hold, which has been rejected and the order of rejection passed by the authorities is subject matter of adjudication in CWP No. 14271-72/2004 before the High Court. Thus, it cannot be said at this stage that the permission has been declined and, therefore, the suit of the plaintiffs has been rendered in fructuous or is without a cause of action. Another ground stated in the application is that the plaintiffs have committed breach of the terms of the agreement as the plaintiffs have raised unauthorized construction in the property in question, thus, threatening cancellation of lease hold rights in favour of the defendant. According to the plaintiffs, the unauthorized construction was raised by the tenants and in any case they have paid a sum of Rs.2,50,00,000/- to the tenants to leave the premises. This again would have to be gone into and finding is to be recorded by the Court as to who had raised the unauthorized construction and if so what is its effect on the relief of the specific performance claimed by the plaintiffs. The purpose of provisions of Order 7 Rule 11 CPC is not to commence a trial within a trial of the suit but to examine the matters at the very threshold of the proceedings, which would result in rejection of the plaint and consequential dismissal of the suit. The grounds taken in the applications under consideration certainly do not fall in the specified categories as contemplated under the provisions of Order 7 Rule 11 CPC. It is true that plaint can be rejected at any stage of the proceedings but the condition precedent to such rejection is that objection taken by the applicant must fall in one or more of the clauses (a) to (f) of Order 7 Rule 11 CPC. The phrase `does not disclose the cause of action' has to be very narrowly construed and the plaint on its bare reading should show that it does not disclose any cause of action against the defendant. In other words, the plaint does not show right to sue in favour of the plaintiff on the basis of the facts averred in the plaint even if they are taken to be correct in their entirety. There may be some cases where the plaint is manifestly vexatious, meritless and does not disclose a right to sue, the Court in such circumstances may exercise powers under Order 7 Rule 11 as held by the Supreme Court in the case of T. Arivandandam Vs. T. Stayapal, AIR 1977 SC 2421. The reasons stated in the application under consideration are not squarely covered under the provisions of Order 7 Rule 11 CPC as there is no prohibition in law in maintaining a suit for specific performance on any of the grounds referred to in the application in view of the facts of the present case, besides that the issues raised are the ones, which cannot be squarely answered by the Court without a complete trial. The pendency of the proceedings questioning the order of the Land and Development Office dated 9th August, 2004 in a writ petition by itself is a ground, which would require the Court to await such decision besides itself finding out whether this was a motivated act of the defendant and as such breach of the terms of the agreement entered into between the parties and consequences thereof.


For these reasons, the Court is unable to find any merit in the application for rejection of the plaint, which is hereby dismissed. The second application has been filed by the defendant under Order 1 Rule 10 read with Section 151 CPC praying for impleadment of Land and Development Office and legal heirs of late M.L. Sondhi. This application has been filed by the applicant while referring to certain paragraphs mentioned in the plaint. In the plaint it has been stated that plaintiffs had entered into an agreement with Shri M.L. Sondhi, who was owning the remaining 50% share in the entire property for purchase of his share. It is also stated that because the application for conversion from lease hold to free hold filed by the plaintiffs was rejected, as such both these parties are necessary parties to the present suit and thus are entitled to be impleaded as parties to the present suit. It is a settled rule of law that plaintiff is the dominus lites of the suit and is entitled to implead such of the parties as he deems necessary for seeking the relief prayed for before the Court. The Court cannot impose any party upon the plaintiff unless such party was necessary or a proper party for the purpose of completely adjudicating and deciding the disputes raised before the Court. The exception to the rule of dominus lites is required to be construed strictly and any person cannot be impleaded as a party to the suit on his asking. The fact that name of a party has been mentioned in the plaint would by itself not be a criteria or a consideration for impleadment of a party as a defendant to the suit in view of the fact that the plaintiff has not prayed for any relief against that party and has also in no way prayed before the Court for adjudication of the right and obligations relating to the share of that

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third party. The present suit for specific performance has been filed by the plaintiffs on the basis of the Agreement to Sell entered into between the plaintiffs and defendant and his father K.L. Sondhi in relation to their 50% share in the property in question. In the entire application, no circumstances, grounds or reasons have been stated to show that this party is a necessary or a proper party to the suit and his presence before the Court is essential for the purpose of fully and finally determining the issues in controversy. As far as the question in relation to impleadment of Land and Development Office is concerned, it has only passed an order rejecting the application of the plaintiffs for which the plaintiffs have already taken an appropriate remedy by filing the civil writ. The plaintiffs do not claim any relief against the Land and Development Office and have not questioned the correctness or otherwise of the order dated 9th August, 2004 in the present suit. In fact the claim of the plaintiffs is that defendant with oblique motive has raised objections before the Land and Development Office resulting in passing of the said order. Whatever be the decision of the writ Court, it would be binding between the parties to the writ petition and its consequential effect on the present suit can be appropriately considered by the Court once the order so passed by the writ court is placed on record. Learned counsel appearing for the applicant has failed to demonstrate before the Court as to how the presence of either of these parties is essential before the Court for proper and complete adjudication of the issues arising in the present suit. Obviously, both these parties are neither necessary nor proper parties to the present suit. Thus, this application filed by the defendant is also liable to be dismissed. In view of the above discussion, both the applications being IAs.5755/2005 and 5756/2005 are dismissed while leaving the parties to bear their own costs.
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