Case Note & Summary
The Supreme Court allowed the appeal filed by defendant no.1, M/s Frost International Limited, against the order of the Orissa High Court which had set aside the revisional court's order rejecting the plaint in a civil suit. The suit was filed by the plaintiff, M/s Milan Developers and Builders (P) Limited, seeking declarations that a cheque for Rs.56 lakhs was handed over to defendant no.2, an advocate, as security under a Memorandum of Understanding dated 17.01.2009, and that defendant no.1 had no right over the cheque. The plaintiff alleged that defendant no.2 colluded with defendant no.1 and handed over the cheque, which was then presented and dishonoured. Defendant no.1 filed an application under Order VII Rule 11 CPC for rejection of the plaint on the ground that the suit was barred under Section 41 of the Specific Relief Act, 1963 and lacked cause of action. The trial court dismissed the application. The revisional court allowed the revision and rejected the plaint. The High Court, in a writ petition, set aside the revisional court's order and remanded the matter for fresh consideration, holding that the revisional court had exceeded its jurisdiction. The Supreme Court, after hearing counsel, held that the High Court erred in remanding the matter. The Supreme Court found that the revisional court was justified in rejecting the plaint as the suit was not maintainable. The declaratory reliefs sought were not covered under the Specific Relief Act, and the plaintiff had an alternative remedy under the Negotiable Instruments Act. The Supreme Court restored the revisional court's order rejecting the plaint and allowed the appeal.
Headnote
A) Civil Procedure - Rejection of Plaint - Order VII Rule 11 CPC - Maintainability - The court considered whether a plaint seeking declaratory reliefs regarding a cheque handed over as security could be rejected under Order VII Rule 11 CPC on the ground that the suit was barred under Section 41 of the Specific Relief Act, 1963 and lacked cause of action. The Supreme Court held that the revisional court was justified in rejecting the plaint as the suit was not maintainable and the High Court erred in remanding the matter. (Paras 1-10) B) Specific Relief Act - Bar on Suit - Section 41 - Declaratory Relief - The court examined whether a suit for declaration that a cheque was handed over as security and that the defendant had no right over it is barred under Section 41 of the Specific Relief Act, 1963. The Supreme Court held that such a suit is not maintainable as the plaintiff had an alternative remedy under the Negotiable Instruments Act, 1881 and the declaratory relief sought was not covered under the Specific Relief Act. (Paras 8-10) C) Civil Procedure - Revisional Jurisdiction - Section 115 CPC - Scope - The court considered whether the revisional court exceeded its jurisdiction by allowing the application under Order VII Rule 11 CPC and rejecting the plaint. The Supreme Court held that the revisional court acted within its jurisdiction as the order of the trial court refusing to reject the plaint was erroneous and the revision was maintainable under the proviso to Section 115 CPC. (Paras 9-10)
Issue of Consideration
Whether the High Court was correct in setting aside the revisional court's order rejecting the plaint under Order VII Rule 11 CPC and remanding the matter for fresh consideration on the ground that the revisional court had exceeded its jurisdiction.
Final Decision
The Supreme Court allowed the appeal, set aside the order of the High Court, and restored the order of the revisional court rejecting the plaint under Order VII Rule 11 CPC.
Law Points
- Order VII Rule 11 CPC
- Rejection of Plaint
- Maintainability of Suit
- Bar under Specific Relief Act
- 1963
- Section 41
- Cause of Action
- Revisional Jurisdiction under Section 115 CPC
