SRIHARI HANUMANDAS TOTALA versus HEMANT VITHAL KAMAT & ORS.

[2021] 8 S.C.R. 387

SRIHARI HANUMANDAS TOTALA

HEMANT VITHAL KAMAT & ORS.

(Civil Appeal No. 4665 of 2021)

AUGUST 09, 2021[DR JUSTICE DHANANJAYA Y CHANDRACHUD ANDM. R. SHAH, JJ.]

Code of Civil Procedure 1908:

Or. 7 r. 11 – Rejection of plaint – Application u/Or. 7 r. 11 –When permissible – On facts, matter pertaining to property disputewherein property initially in the name of first respondent and hisbrother, later mortgaged to State Finance Corporation as securityfor repayment of loan – Auction of property for non-payment ofloan amount and property purchased by the third respondent andthereafter, execution of sale deed of property in his favour –However, the first respondent and his brother did not hand over thepossession of the suit property – Suit for possession by the thirdrespondent and on the other hand suit by first respondentchallenging execution of sale deed by the State Finance Corporationin favour of the third respondent – Held: On reading of the plaintof the subsequent suit, it is evident that the first respondent did notmake an attempt to conceal the fact that suit regarding the propertywas pending before the civil court at that time – At the time ofinstitution of the subsequent suit by the first respondent, no decreehad been passed by the civil court in the earlier suit – Thus, theissues raised in the earlier suit, at the time, had not been adjudicatedupon – Thus, the subsequent plaint on the face of it, did not discloseany fact that may lead to the conclusion that it deserves to be rejectedon the ground that it is barred by principles of res judicata – HighCourt and the trial court justified in holding that to decide on thearguments raised by the appellant, successor of third respondent,the court would have to go beyond the averments in the plaint, andperuse the pleadings, and judgment and decree in the earlier suit –Application u/Or. 7 r. 11 to be decided within the four corners ofthe plaint – Trial court and High Court correct in rejecting theapplication u/Or. 7 r. 11(d) – Plaint was not liable to be rejectedu/Or. 7 r. 11(d) – Order passed by the High Court upheld.

AOr. 7 r. 11 – Rejection of plaint – Application u/Or. 7 r. 11 –Guiding principles to decide – Stated.

s. 11 – Res judicata – Rule of res judicata – Held: Court shallnot try any suit or issue in which the matter that is directly in issuehas been directly or indirectly heard and decided in ‘former suit’B– Thus, for adjudicating on the issue of res judicata it is necessarythat the same issue (that is raised in the suit) has been adjudicatedin the former suit.

Dismissing the appeal, the Court

HELD: 1.1 Order 7 Rule 11(d) of CPC provides that theCplaint shall be rejected “where the suit appears from thestatement in the plaint to be barred by any law”. Hence, in orderto decide whether the suit is barred by any law, it is the statementin the plaint which will have to be construed. The Court whiledeciding such an application must have due regard only to theDstatements in the plaint. Whether the suit is barred by any lawmust be determined from the statements in the plaint and it isnot open to decide the issue on the basis of any other materialincluding the written statement in the case. [Para 16][399-A-C]

1.2 Section 11 of the CPC enunciates the rule of resEjudicata : court shall not try any suit or issue in which the matterthat is directly in issue has been directly or indirectly heard anddecided in ‘former suit’. Therefore, for the purpose ofadjudicating on the issue of res judicata it is necessary that thesame issue (that is raised in the suit) has been adjudicated in theformer suit. It is necessary that the exercise taken up by thisFCourt is referred to while adjudicating on res judicata, beforereferring to res judicata as ground for rejection of the plaintunder Order 7 Rule 11. [Para 17][399-D-F]1.3 The guiding principles for deciding an application underOrder 7 Rule 11(d) are that to reject plaint on the ground thatGthe suit is barred by any law, only the averments in the plaint willhave to be referred to; that the defense made by the defendant inthe suit must not be considered while deciding the merits of theapplication that to determine whether suit is barred by resjudicata, it is necessary that (i) the ‘previous suit’ is decided, (ii)H

the issues in the subsequent suit were directly and substantiallyin issue in the former suit; (iii) the former suit was between thesame parties or parties through whom they claim, litigating underthe same title; and (iv) that these issues were adjudicated andfinally decided by court competent to try the subsequent suit;and that since an adjudication of the plea of res judicata requiresconsideration of the pleadings, issues and decision in the ‘previoussuit’, such plea will be beyond the scope of Order 7 Rule 11 (d),where only the statements in the plaint will have to be perused.[Para 20][405-G-H; 406-A-D]

2.1 In the instant case, meaningful reading of the plaintmakes it abundantly clear that when the first respondent institutedthe subsequent suit, he had been impleaded as the seconddefendant to the earlier suit. The first respondent instituted thesubsequent suit, though he had knowledge of the earlier suit.The plaint in the subsequent suit which was instituted by the firstrespondent indicates that the he was aware of the mortgageexecuted in favour of KSFC, that KSFC had executed its chargeby selling the property for the recovery of its dues and that theproperty had been sold on 8 August 2006 in favour of thepredecessor of the appellant. As matter of fact, the plaintcontains an averment that there was every possibility that thefirst respondent may suffer decree for possession in earliersuit which “has forced” the first respondent to institute the suitfor challenging the legality of the sale deed. Given the fact thatan argument was raised in the previous suit regarding no challengehaving been made to the auction and the subsequent sale deedexecuted by the KFSC, it is possible that the first respondentthen decided to exercise his rights and filed the subsequent suit.Be that as it may, on reading of the plaint, it is evident that thefirst respondent has not made an attempt to conceal the fact thata suit regarding the property was pending before the civil courtat the time. It is also relevant to note that at the time of institutionof the subsequent suit by the first respondent, no decree hadbeen passed by the civil court in the earlier suit. Thus, the issuesraised in the earlier suit, at the time, had not been adjudicatedupon. Therefore, the plaint, on the face of it, does not discloseany fact that may lead to the conclusion that it deserves to berejected on the ground that it is barred by principles of res

Ajudicata. The High Court and the trial court were correct in theirapproach in holding, that to decide on the arguments raised bythe appellant, the court would have to go beyond the avermentsin the plaint, and peruse the pleadings, and judgment and decreein the earlier suit. An application under Order 7 Rule 11 must bedecided within the four corners of the plaint. The trial court andBHigh Court were correct in rejecting the application under order7 Rule 11(d). [Para 21][406-D-H; 407-A-C]

2.2 The plaint was not liable to be rejected under Order 7Rule 11(d) and the findings of the trial court and the High Courtare upheld. However, no opinion is expressed on whether theCsubsequent suit is barred by the principles of res judicata. Theliberty is granted to the appellant, who claims as an assignee ofthe bona fide purchaser of the suit property in an auction conductedby KSFC, to raise an issue of the maintainability of the suit beforethe Additional Civil Judge, who would consider whether aDpreliminary issue should be framed under Order XIV, and if so,decide it within period of raising the preliminary issue. In anyevent, the suit shall be finally adjudicated upon within the outerlimit of 31 March 2022. [Para 22][407-C-E]

2.3 The impugned judgment and order of the High Court isEupheld. The application under Order 7 Rule 11 CPC is dismissed.[Para 23][407-E-F]

Soumitra Kumar Sen v. Shyamal Kumar Sen (2018) 5SCC 644; V. Rajeshwari v. T. C. Saravanabava (2004)1 SCC 551 : [2003] 6 Suppl. SCR 927; Kamala & othersFv. KT Eshwara Sa (2008) 12 SCC 661 : [2008] 7 SCR39; Church of Christ Charitable Trust & EducationalCharitable Society v. Ponniamman Educational Trust(2012) 8 SCC 706 : [2012] 6 SCR 404; Shakti BhogFood Industries Ltd. v. Central Bank of India andAnother (2020) SCC OnLine SC 482; Saleem Bhai v.GState of Maharashtra (2003) 1 SCC 557 : [2002] 5Suppl. SCR491 – referred to.

Case Law Reference

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4665of 2021.

From the Judgment and Order dated 18.01.2021 of the High Courtof Karnataka, Dharwad Bench in CRP. No.100089 of 2019.

Tarun Gupta, Santosh Pujari, Advs. for the Appellant.

Ms. Kiran Suri, Sr. Adv., S. J. Amith, Krishna Kumar, Dr. (Mrs.)Vipin Gupta, Advs. for the Respondents.

The Judgment of the Court was delivered by

DR DHANANJAYA Y CHANDRACHUD, J.

1. Leave granted.

2. This appeal arises from judgment dated 18 January 2021 of aSingle Judge at the Dharwad Bench of the High Court of Karnataka.The revisional jurisdiction of the High Court under Section 115 of theCode of Civil Procedure 1908 (“CPC”) was invoked for challenging anorder dated 1 July 2019 of the IInd Additional Senior Civil Judge andChief Judicial Magistrate, Belgaum on an application[1] under Order 7Rule 11 of the CPC.

3. Ms. Leela Vithal Kamat was the title holder of the suit property.On her death on 16 May 1996, the property was mutated in the namesof her legal heirs – the first respondent and his brother. The firstrespondent and his brother took loan from the Karnataka State FinanceCorporation (“KSFC”) and mortgaged the suit property as security forrepayment of the loan. Since the loan was not repaid, KSFC auctionedthe property. The third respondent, who is the predecessor-in-interest ofthe appellant, furnished the highest bid of Rs. 15,00,000. sale deed ofthe suit property was executed in favour of the third respondent on 8August 2006. Despite the execution of the sale deed, the first respondentand his brother failed to handover the possession of the suit property andas consequence suit for possession was filed by the third respondenton 13 March 2007. On 20 December 2007, the first respondent, who

Awas impleaded as the second defendant to the suit filed his writtenstatement raising inter alia the following defences:

(i)KSFC had no authority to put the suit property on sale;

(ii)The second defendant (first respondent herein) had not takenany loan from KSFC nor had any transaction with it. He hadBnot executed any documents offering the suit property assecurity; and

(iii) The second defendant had no concern with the borrower.

Issues were framed in the suit, among them being the following:C“4.Whether defendant No. 2 KSFC had no authority to put thesuit property for sale?”

4. On 12 November 2008, the first respondent instituted suitbeing OS No. 138/2008 challenging the sale deed dated 8 August 2006executed by KSFC in favour of the third respondent primarily on theDground that KSFC had no authority to put the suit property for sale. Hesought partition of the suit property and possession of his share. Thefirst respondent made the following averments in the plaint:

(i)The suit property was owned by the mother of the firstrespondent. After her death, the suit property was inheritedEby the first respondent and his brother and the first respondenthas been in possession of this property from 1998 till thefiling of the suit;

(ii)The brother of the first respondent mortgaged the suit propertywith KFSC without his consent and KFSC withoutFinvestigating the title of the suit property and verifying theunderlying title documents, accepted the suit property assecurity;

(iii) In 2004, the daughters of the first respondent’s brother hadfiled suit for partition and separate possession of the saidGsuit property, where the first respondent was party. Therewas no mention made of loan being sanctioned by KFSCagainst the suit property;

(iv) The first respondent did not consent to the mortgage of thesuit property to KFSC and executed no documents for thisHpurpose; and

(v) The first respondent received knowledge of the sale deedexecuted by KFSC in favour of the third respondent onlywhen he appeared in the suit filed by the third respondent-that is OS No. 103/2007. There is possibility that the firstrespondent could suffer decree for possession in OS No.103/2007. Thus, the first respondent filed this suit for partitionand possession to challenge the validity of the sale deed andto claim his share in the suit property.

5. The following issues were framed by the Trial Court:

“1. Whether the description of suit property is correct

2. Whether plaintiff proves that he has purchased suit propertyand he acquired valid title as pleaded

3. Whether plaintiff is entitled for possession of suit property

4. Whether defendant No. 2 proves that K.S.F .C. had noauthority to put the suit property for sale

5. Whether defendant No. 2 proves that there is no cause ofaction for the suit

6. Whether plaintiff is entitled for decree

7. What decree or order”

6. By judgment dated 26 February 2009, the Trial Judge decreedthe first suit (OS No. 103/2007) that was instituted by the third respondentand directed the defendants (first respondent and his brother) in the suitto hand over vacant and peaceful possession of the suit property to thethird respondent-plaintiff. The Trial Court concluded that:

(i)The contention of the first respondent-defendant that KFSCdid not have the right to auction the suit property cannot bedetermined in the suit and must be challenged independently.The first respondent took no action to challenge the auctionor the sale deed executed between KFSC and the plaintiff-third respondent till arguments were being heard by the TrialCourt, though evidence suggests that he had knowledge ofthe auction. The first respondent acknowledged the receiptof the letter from KFSC. Moreover, KSFC was impleadedas the fourth defendant in O.S No. 369/2004- the suit that

Awas filed by his brother’s daughters and it was averred inthe plaint that the auction notice by KSFC was null and void;

(ii)The defendant- first respondent had filed suit in OS No. 138/2008 for partition and separate possession, where one of thereliefs claimed was that the sale deed executed between theBplaintiff-third respondent and KFSC was not binding on thefirst respondent. Though an application was filed to club O.SNo. 103/2007 and O.S No. 138/2008, it was not allowed.Under these circumstances, the validity of the sale deedcannot be determined in the present suit, particularly whenKFSC was not made party to this suit. Thus, the validity ofCthe sale deed and the auction would have to be considered inthe other suit filed by the first respondent (OS No. 138/2008);and

(iii) On the date of the judgment of the court, the sale deedexecuted by the plaintiff-third respondent and KFSC had notDbeen set aside. Other than this challenge, there was no otherground raised by the first respondent to challenge the claimof possession of the plaintiff-third respondent. Based on this,the sale deed is valid and title to the suit property is transferredto the third respondent – plaintiff by virtue of the sale deedEexecuted by KSFC. The third respondent had the right totake possession of the property.

7. The first respondent appealed against the judgment of the TrialCourt before the High Court[2]. During the pendency of the appeal, thethird respondent filed an application under Section 10 of the CPC in OSFNo. 138/2008 for staying the suit proceedings till the disposal of the firstappeal from the judgment in OS No. 103/2007, on the ground that theissues involved in the second suit were directly and substantially thesame as the issues in the previous suit. The Trial Judge by an orderdated 3 November 2012 held that the issues involved in the previous suitfor possession and the subsequent suit for declaration filed by the firstGrespondent were directly and substantially the same. Hence theapplication was allowed and the proceedings in the subsequent suitinstituted by the first respondent were stayed.

8. The decree in the previous suit (OS No. 103/2007) was upheldby the High Court by judgment dated 11 August 2017. The High Courtdismissed the appeal with the following observations:

(i)The plaintiff-third respondent states that both the defendants(that is first respondent and his brother) had borrowed themoney. However, KSFC filed memo in MiscellaneousBPetition No. 114/2003 stating that the first respondent (seconddefendant therein) was not guarantor; and

(ii)The application filed for clubbing O.S No. 138/2008 and O.SNo. 103/2007 ought to have been allowed by the Trial Court.Since the right of the first respondent cannot be consideredin the present proceedings arising out of O.S No. 103/2007,the third respondent is entitled to the possession of the suitproperty as he is bona fide auction purchaser.

9. Pursuant to the judgment of the High Court, the appellant whohas purchased the suit property from the third respondent, filed anapplication[3] for rejection of plaint under Order 7 Rule 11 of the CPC onthe grounds of (i) non-payment of court fee; (ii) non-disclosure of causeof action; and (iii) the suit being barred by res judicata. It was contendedthat the suit instituted by the first respondent was barred by res judicataas the grounds relating to the validity of the sale deed and the issue oftitle were raised in the previous suit O.S No. 103/2007. The appellanturged that after the judgment of the Trial Court, which had been affirmedby the High Court, the rights of the parties cannot be further adjudicatedand re-litigated upon.

10. The application under Order 7 Rule 11 was dismissed by theTrial Judge on 1 July 2019 for the following reasons:

(i)With respect to non-payment of the court fee, according toOrder 7 Rule 11(c), plaint would only be rejected if theplaint is written on paper that is insufficiently stamped, andthe court requires the plaintiff to supply the requisite stamppaper within time fixed and despite such an order, theplaintiff fails to do so. In this case, no such order was passedby the court;

A(ii)The cause of action had been specifically pleaded by thefirst respondent in paragraph 5 of the plaint; and

(iii) In order to reject plaint for the suit being barred by any lawunder Order 7 Rule 11(d), the court needs to be guided bythe averments in the plaint and not the defence taken. TheBgrounds taken by the appellant – that the issues raised hadbeen decided by the decree of the Trial Court in OS No. 103/2007 and affirmed on appeal by the High Court – were thedefence of the appellant. Thus, these cannot be taken intoaccount while rejecting plaint under Order 7 Rule 11 of theCPC. Moreover, the issue as to whether the suit is barred byCres judicata cannot be decided in an Order 7 Rule 11application but has to be decided in the suit.

11. The appellant filed revision petition before the High Courtassailing the 1 July 2019 order of the Trial Court. The High Court dismissedthe appeal upholding the reasoning of the Trial Court on all the threeDgrounds raised in the Order 7 Rule 11 application. On the ground of resjudicata, the High Court placed reliance on the decision of this Court inSoumitra Kumar Sen v. Shyamal Kumar Sen[4], and observed that thelearned Trial Judge correctly came to the conclusion that the applicationfiled under Order 7 Rule 11(d) on the ground of res judicata could notEbe decided merely by looking into the averments in the plaint. In theview of the High Court, plaint could be rejected under Order 7 Rule 11only if it was not maintainable on the basis of the averments contained inthe plaint. In the present application, such determination would requirethe production of pleadings, the issues framed and the judgment in theprevious suit, to compare it with the present suit. This exercise, the HighFCourt held, could not be undertaken merely by looking into the plaintaverments as held in Soumitra Kumar Sen (supra). Pursuant to thedismissal of the revision petition by the High Court, the appellant hasapproached this Court challenging the order of the High Court.

12. The rejection of the application under Order 7 Rule 11 of theGCPC is the bone of the contention in this appeal. O.S No. 138 of 2008,instituted by the first respondent, is suit for declaration, partition,possession, and for consequential relief of injunction. Besides the firstrespondent, who is the plaintiff in the said suit, KSFC (the secondrespondent) is the first defendant. The third respondent is the second

H4 (2018) 5 SCC 644.

defendant, the appellant is the fourth defendant. The third defendant tothe suit is Dr Arvind Vithal Kamat, the brother of the first respondent.The following reliefs have been sought in the suit :

“a] Declaring that the Sale-Deed dated: 08-08-2006 executed byDefendant No. 1 in favor of the Defendant No. 2 with respect tothe suit property is null and void to the extent of half share of thePlaintiff and the same is not binding on the plaintiff.

b] Awarding half share in the suit property to the plaintiff andputting him in actual possession of his half share by effectingphysical partition in the suit property.

c] Restraining the defendants from causing inference in thePlaintiffs actual possession of the suit property that may be givento him by issue of perpetual injunction.

d] Entire costs of the suit may be awarded to the Plaintiff.”

13. The essential averments in the plaint are that the property inquestion was owned by the mother of the first respondent-plaintiff andthe third defendant. It has been averred that their father had predeceasedtheir mother, and that after the death of their mother on 26 May 1996,the property was inherited by the first respondent and his brother inequal shares. The third defendant is stated to have taken loan fromKSFC for setting up CT scan centre and to have mortgaged the suitproperty as security for that purpose. According to the first respondent,his brother had no right to create mortgage in respect of the suit propertywhich was held in joint ownership by both the first respondent and hisbrother. It has been alleged that KSFC sold the property in executing itscharge on the property and entered into registered sale deed on 8August 2006 in favour of the second defendant (third respondent herein).According to the first respondent, he had neither consented to themortgage nor signed any document. The first respondent pleaded thathe may suffer decree for possession in O.S. 103 of 2007 instituted bythe auction purchaser and was accordingly seeking to assert his claimand interest as lawful owner in respect of half share in the suit propertyby filing O.S No. 138 of 2008.

14. The submission which has been urged on behalf of the appellantis that the issue concerning title of the suit property stands adjudicated infavour of the predecessor-in-interest of the appellant in the earlier suitand the decree for possession was upheld by the High Court. Hence,

Aanother suit agitating the same issues and challenging the same saledeed is not maintainable and is barred by the principles of res judicata.Moreover, it has been submitted that the first respondent was arrayedas the second defendant to the earlier suit and had raised specificdefence in regard to the validity of the sale conducted by the KSFC infavour of the third respondent. The submission is that the original saleBdeed executed by KSFC is of 8 August 2006. The decree in the first suitwas of 26 February 2009 and though twelve years have passed sincethe date of the decree, the appellant as successor-in-interest of theauction purchaser is not being allowed to enjoy the suit property.

15. Order 7 Rule 11 of the CPC reads as follows:

C“11. Rejection of plaint.— The plaint shall be rejected in the—following cases:

(a) where it does not disclose cause of action;

(b) where the relief claimed is undervalued, and the plaintiff, onDbeing required by the Court to correct the valuation within timeto be fixed by the Court, fails to do so;

(c) where the relief claimed is properly valued, but the plaint isreturned upon paper insufficiently stamped, and the plaintiff, onbeing required by the Court to supply the requisite stamp-paperEwithin time to be fixed by the Court, fails to do so;

(d) where the suit appears from the statement in the plaintto be barred by any law;

[(e) where it is not filed in duplicate;]

F[(f) where the plaintiff fails to comply with the provisions of rule9:]

[Provided that the time fixed by the Court for the correction ofthe valuation or supplying of the requisite stamp-paper shall notbe extended unless the Court, for reasons to be recorded, isGsatisfied that the plaintiff was prevented by any cause of anexceptional nature from correcting the valuation or supplying therequisite stamp-paper, as the case may be, within the time fixedby the Court and that refusal to extend such time would causegrave injustice to the plaintiff.]”

(emphasis supplied)

16. Order 7 Rule 11(d) of CPC provides that the plaint shall berejected “where the suit appears from the statement in the plaintto bebarred by any law”. Hence, in order to decide whether the suit is barredby any law, it is the statement in the plaint which will have to be construed.The Court while deciding such an application must have due regard onlyto the statements in the plaint. Whether the suit is barred by any lawmust be determined from the statements in the plaint and it is not open todecide the issue on the basis of any other material including the writtenstatement in the case. Before proceeding to refer to precedents on theinterpretation of Order 7 Rule 11(d) CPC, we find it imperative to referto Section 11 of CPC which defines res judicata:

“11. Res judicata.—No Court shall try any suit or issue in whichthe matter directly and substantially in issue has been directly andsubstantially in issue in former suit between the same parties, orbetween parties under whom they or any of them claim, litigatingunder the same title, in Court competent to try such subsequentsuit or the suit in which such issue has been subsequently raised,and has been heard and finally decided by such Court.”

17. Section 11 of the CPC enunciates the rule of res judicata : acourt shall not try any suit or issue in which the matter that is directly inissue has been directly or indirectly heard and decided in ‘former suit’.Therefore, for the purpose of adjudicating on the issue of res judicata itis necessary that the same issue(that is raised in the suit) has beenadjudicated in the former suit. It is necessary that we refer to the exercisetaken up by this Court while adjudicating on res judicata, before referringto res judicata as ground for rejection of the plaint under Order 7Rule 11. Justice R Lahoti (as the learned Chief Justice then was),speaking for two Judge bench in V. Rajeshwari v. T.C. Saravanabava[5]discussed the plea of res judicata and the particulars that would berequired to prove the plea. The court held that it is necessary to refer tothe copies of the pleadings, issues and the judgment of the ‘former suit’while adjudicating on the plea of res judicata:

“11. The rule of res judicata does not strike at the root of thejurisdiction of the court trying the subsequent suit. It is rule ofestoppel by judgment based on the public policy that there shouldbe finality to litigation and no one should be vexed twice for thesame cause.

5 (2004) 1 SCC 551.

A13. Not only the plea has to be taken, it has to besubstantiated by producing the copies of the pleadings,issues and judgment in the previous case. Maybe, in givencase only copy of judgment in previous suit is filed in proof of pleaof res judicata and the judgment contains exhaustive or in requisitedetails the statement of pleadings and the issues which may beBtaken as enough proof. But as pointed out in Syed Mohd. SalieLabbai v. Mohd. Hanifa [(1976) 4 SCC 780] the basicmethod to decide the question of res judicata is first todetermine the case of the parties as put forward intheirrespective pleadings of their previous suit and then to findCout as to what had been decided by the judgment whichoperates as res judicata. It is risky to speculate about thepleadings merely by summary of recitals of the allegations madein the pleadings mentioned in the judgment. The Constitution Benchin Gurbux Singh v. Bhooralal [AIR 1964 SC 1810 : (1964) 7SCR 831] placing on par the plea of res judicata and the pleaDof estoppel under Order 2 Rule 2 of the Code of Civil Procedure,held that proof of the plaint in the previous suit which is set tocreate the bar, ought to be brought on record. The plea is basicallyfounded on the identity of the cause of action in the twosuits and, therefore, it is necessary for the defence whichEraises the bar to establish the cause of action in theprevious suit. Such pleas cannot be left to be determined bymere speculation or inferring by process of deduction what werethe facts stated in the previous pleadings. Their Lordships of thePrivy Council in Kali Krishna Tagore v. Secy. of State for Indiain Council [(1887-88) 15 IA 186 : ILR 16 Cal 173] pointed outFthat the plea of res judicata cannot be determined withoutascertaining what were the matters in issue in the previous suitand what was heard and decided. Needless to say, these can befound out only by looking into the pleadings, the issues and thejudgment in the previous suit.”

(emphasis supplied)

18. At this stage, it would be necessary to refer to the decisionsthat particularly deal with the question whether res judicata can be thebasis or ground for rejection of the plaint. In Kamala & othersv. KT

Eshwara Sa[6], the Trial Judge had allowed an application for rejection ofthe plaint in suit for partition and this was affirmed by the High Court.Justice S Sinha speaking for the two judge bench examined the ambitof Order 7 Rule 11(d) of the CPC and observed:

“21. Order 7 Rule 11(d) of the Code has limited application. Itmust be shown that the suit is barred under any law. Such aconclusion must be drawn from the averments made in theplaint. Different clauses in Order 7 Rule 11, in our opinion, shouldnot be mixed up. Whereas in given case, an application forrejection of the plaint may be filed on more than one groundspecified in various sub-clauses thereof, clear finding to thateffect must be arrived at. What would be relevant for invokingclause (d) of Order 7 Rule 11 of the Code are the avermentsmade in the plaint. For that purpose, there cannot be any additionor subtraction. Absence of jurisdiction on the part of courtcan be invoked at different stages and under differentprovisions of the Code. Order 7 Rule 11 of the Code isone, Order 14 Rule 2 is another.

22. For the purpose of invoking Order 7 Rule 11(d) of theCode, no amount of evidence can be looked into. The issueson merit of the matter which may arise between the partieswould not be within the realm of the court at that stage. Allissues shall not be the subject-matter of an order underthe said provision.”

(emphasis supplied)

The Court further held:

“23. The principles of res judicata, when attracted, would baranother suit in view of Section 12 of the Code. The questioninvolving mixed question of law and fact which may requirenot only examination of the plaint but also other evidenceand the order passed in the earlier suit may be taken upeither as preliminary issue or at the final hearing, but, thesaid question cannot be determined at that stage.

24. It is one thing to say that the averments made in the plaint ontheir face discloses no cause of action, but it is another thing to

say that although the same discloses cause of action, the sameis barred by law.

25. The decisions rendered by this Court as also by various HighCourts are not uniform in this behalf. But, then the broadprinciple which can be culled out therefrom is that the courtBat that stage would not consider any evidence or enter intoa disputed question of fact or law. In the event, thejurisdiction of the court is found to be barred by any law,meaning thereby, the subject-matter thereof, the applicationfor rejection of plaint should be entertained.”

(emphasis supplied)

The above view has been consistently followed in line of decisionsof this Court. In Church of Christ Charitable Trust & EducationalCharitable Society v. Ponniamman Educational Trust[7], Justice PSathasivam (as the learned Chief Justice then was), speaking for twoDjudge Bench, observed that

“10. […] It is clear from the above that where the plaint does notdisclose cause of action, the relief claimed is undervalued andnot corrected within the time allowed by the court, insufficientlystamped and not rectified within the time fixed by the court, barredEby any law, failed to enclose the required copies and the plaintifffails to comply with the provisions of Rule 9, the court has noother option except to reject the same. reading of the aboveprovision also makes it clear that power under Order 7 Rule 11 ofthe Code can be exercised at any stage of the suit either beforeregistering the plaint or after the issuance of summons to theFdefendants or at any time before the conclusion of the trial.

11. This position was explained by this Court in SaleemBhai v. State of Maharashtra [(2003) 1 SCC 557] , in which,while considering Order 7 Rule 11 of the Code, it was held asunder: (SCC p. 560, para 9)

“9. perusal of Order 7 Rule 11 CPC makes it clear that therelevant facts which need to be looked into for deciding anapplication thereunder are the averments in the plaint. The trialcourt can exercise the power under Order 7 Rule 11 CPC at any

stage of the suit—before registering the plaint or after issuingsummons to the defendant at any time before the conclusion ofthe trial. For the purposes of deciding an application under clauses(a) and (d) of Rule 11 of Order 7 CPC, the averments in the plaintare germane; the pleas taken by the defendant in the writtenstatement would be wholly irrelevant at that stage, therefore, adirection to file the written statement without deciding theapplication under Order 7 Rule 11 CPC cannot but be proceduralirregularity touching the exercise of jurisdiction by the trial court.”It is clear that in order to consider Order 7 Rule 11, the court hasto look into the averments in the plaint and the same can beexercised by the trial court at any stage of the suit. It is also clearthat the averments in the written statement are immaterial and itis the duty of the Court to scrutinize the averments/pleas in theplaint. In other words, what needs to be looked into in decidingsuch an application are the averments in the plaint. At that stage,the pleas taken by the defendant in the written statement arewholly irrelevant and the matter is to be decided only on the plaintaverments. These principles have been reiterated in RaptakosBrett & Co. Ltd. v. Ganesh Property [(1998) 7 SCC 184]and Mayar (H.K.) Ltd. v. Vessel M.V. Fortune Express [(2006)3 SCC 100].”

Similarly, in Soumitra Kumar Sen (supra), an application wasmoved under Order 7 Rule 11 of the CPC claiming rejection of the plainton the ground that the suit was barred by res judicata. The Trial Judgedismissed the application and the judgement of the Trial Court wasaffirmed in revision by the High Court. Justice AK Sikri, while affirmingthe judgment of the High Court held:

“9. In the first instance, it can be seen that insofar as relief ofpermanent and mandatory injunction is concerned that is basedon different cause of action. At the same time that kind of reliefcan be considered by the trial court only if the plaintiff is able toestablish his locus standi to bring such suit. If the avermentsmade by the appellant in their written statement are correct, sucha suit may not be maintainable inasmuch as, as per the appellant ithas already been decided in the previous two suits that Respondent1-plaintiff retired from the partnership firm much earlier, aftertaking his share and it is the appellant (or appellant and Respondent

A2) who are entitled to manage the affairs of M/s Sen Industries.However, at this stage, as rightly pointed out by the HighCourt, the defense in the written statement cannot be goneinto. One has to only look into the plaint for the purpose of decidingapplication under Order 7 Rule 11 CPC. It is possible that in acleverly drafted plaint, the plaintiff has not given the details aboutBSuit No. 268 of 2008 which has been decided against him. He hastotally omitted to mention about Suit No. 103 of 1995, the judgmentwherein has attained finality. In that sense, the plaintiff-Respondent1 may be guilty of suppression and concealment, if the avermentsmade by the appellant are ultimately found to be correct. However,Cas per the established principles of law, such defense projectedin the written statement cannot be looked into while decidingapplication under Order 7 Rule 11 CPC.”

Referring to Kamala (supra), the Court further observed that

“12. … The appellant has mentioned about the earlier two casesDwhich were filed by Respondent 1 and wherein he failed. Theseare judicial records. The appellant can easily demonstrate thecorrectness of his averments by filing certified copies of thepleadings in the earlier two suits as well as copies of the judgmentspassed by the courts in those proceedings. In fact, copies of theEorders passed in judgement and decree dated 31-3-1997 passedby the Civil Judge (Junior Division), copy of the judgment dated31-3-1998 passed by the Civil Judge (Senior Division) upholdingthe decree passed by the Civil Judge (Junior Division) as well ascopy of the judgment and decree dated 31-7-2014 passed by CivilJudge, Junior Division in Suit No. 268 of 2008 are placed on recordFby the appellant. While deciding the first suit, the trial court gavea categorical finding that as per MoU signed between the parties,Respondent 1 had accepted sum of Rs 2,00,000 and, therefore,the said suit was barred by principles of estoppel, waiver andacquiescence. In case like this, though recourse to OrderG7 Rule 11 CPC by the appellant was not appropriate, at thesame time, the trial court may, after framing the issues,take up the issues which pertain to the maintainability ofthe suit and decide the same in the first instance. In thismanner the appellant, or for that matter the parties, can beabsolved of unnecessary agony of prolonged proceedings,

in case the appellant is ultimately found to be correct in hissubmissions.”

(emphasis supplied)

While holding that “recourse to Order 7 Rule 11” by the appellantwas not appropriate, this Court observed that the Trial Court may, afterframing the issues, take up the issues which pertain to the maintainabilityof the suit and decided them in the first instance. The Court held thatthis course of action would help the appellant avoid lengthy proceedings.

19. In more recent decision of this Court in Shakti Bhog FoodIndustries Ltd. v. Central Bank of India and Another[8], threeJudge bench of this Court, speaking though Justice AM Khanwilkar,was dealing with the rejection of plaint under Order 7 Rule 11 by theTrial Court, on the ground that it was barred by limitation. The Courtreferred to the earlier decisions including in Saleem Bhai v. State ofMaharashtra[9], Church of Christ Charitable Trust (supra), andobserved that

“18. It is clear that in order to consider Order 7 Rule 11, the courthas to look into the averments in the plaint and the same can beexercised by the trial court at any stage of the suit. It is also clearthat the averments in the written statement are immaterial and itis the duty of the Court to scrutinize the averments/pleas in theplaint. In other words, what needs to be looked into in decidingsuch an application are the averments in the plaint. At that stage,the pleas taken by the defendant in the written statement arewholly irrelevant and the matter is to be decided only on the plaintaverment. These principles have been reiterated in Raptakos Brett& Co. Ltd. v. Ganesh Property, (1998) 7 SCC 184 and Mayar(H.K.) Ltd. v. Vessel M.V. Fortune Express, (2006) 3 SCC 100.”

20. On perusal of the above authorities, the guiding principlesfor deciding an application under Order 7 Rule 11(d) can be summarizedas follows:

(i)To reject plaint on the ground that the suit is barred by anylaw, only the averments in the plaint will have to be referredto;

8 2020 SCC OnLine SC 482.

9 (2003) 1 SCC 557.

A(ii)The defense made by the defendant in the suit must not beconsidered while deciding the merits of the application;

(iii) To determine whether suit is barred by res judicata, it isnecessary that (i) the ‘previous suit’ is decided, (ii) the issuesin the subsequent suit were directly and substantially in issueBin the former suit; (iii) the former suit was between the sameparties or parties through whom they claim, litigating underthe same title; and (iv) that these issues were adjudicatedand finally decided by court competent to try the subsequentsuit; and

C(iv) Since an adjudication of the plea of res judicata requiresconsideration of the pleadings, issues and decision in the‘previous suit’, such plea will be beyond the scope of Order7 Rule 11 (d), where only the statements in the plaint willhave to be perused.

D21. In the present case, meaningful reading of the plaint makesit abundantly clear that when the first respondent instituted the subsequentsuit, he had been impleaded as the second defendant to the earlier suit(OS No. 103/2007) that was instituted on 13 March 2007. The firstrespondent instituted the subsequent suit, OS 138/2008 though he hadknowledge of the earlier suit. The plaint in the subsequent suit whichEwas instituted by the first respondent indicates that the he was aware ofthe mortgage executed in favour of KSFC, that KSFC had executed itscharge by selling the property for the recovery of its dues and that theproperty had been sold on 8 August 2006 in favour of the predecessor ofthe appellant. As matter of fact, the plaint contains an averment thatFthere was every possibility that the first respondent may suffer decreefor possession in OS 103/2007 which “has forced” the first respondentto institute the suit for challenging the legality of the sale deed. Giventhe fact that an argument was raised in the previous suit regarding nochallenge having been made to the auction and the subsequent sale deedexecuted by the KFSC, it is possible that the first respondent then decidedGto exercise his rights and filed the subsequent suit. Be that as it may, ona reading of the plaint, it is evident that the first respondent has not madean attempt to conceal the fact that suit regarding the property waspending before the civil court at the time. It is also relevant to note thatat the time of institution of the suit (OS No. 138/2008) by the firstHrespondent, no decree had been passed by the civil court in OS No. 103/

2007. Thus, the issues raised in OS No. 103/2007, at the time, had notbeen adjudicated upon. Therefore, the plaint, on the face of it, does notdisclose any fact that may lead us to the conclusion that it deserves to berejected on the ground that it is barred by principles of res judicata.The High Court and the Trial Court were correct in their approach inholding, that to decide on the arguments raised by the appellant, thecourt would have to go beyond the averments in the plaint, and perusethe pleadings, and judgment and decree in OS No. 103/2007. An applicationunder Order 7 Rule 11 must be decided within the four corners of theplaint. The Trial court and High Court were correct in rejecting theapplication under order 7 Rule 11(d).22. For the above reasons, we hold that the plaint was not liableto be rejected under Order 7 Rule 11(d) and affirm the findings of theTrial Court and the High Court. We clarify however, that we haveexpressed no opinion on whether the subsequent suit is barred by theprinciples of res judicata. We grant liberty to the appellant, who claimsas an assignee of the bona fide purchaser of the suit property in anauction conducted by KSFC, to raise an issue of the maintainability ofthe suit before the Additional Civil Judge, Belgaum in OS No. 138/2008.The Additional Civil Judge, Belgaum shall consider whether preliminaryissue should be framed under Order XIV, and if so, decide it within aperiod of 3 months of raising the preliminary issue. In any event, the suitshall be finally adjudicated upon within the outer limit of 31 March 2022.

23. For the above reasons, we dismiss the appeal and affirm theimpugned judgment and order of the High Court dated 18 January 2021.The application under Order 7 Rule 11 of the CPC shall stand dismissed.There shall be no orders as to costs.

24. Pending application(s), if any, stand disposed of.

Nidhi Jain

Appeal dismissed.