High Court Dismisses Civil Revision Petition in Contract Dispute - Limitation Issue for Damages Suit Held to be Mixed Question of Law and Fact - Trial Court Order Rejecting Plaint Rejection Application Under Order VII Rule 11(d) CPC Upheld

High Court: Karnataka High Court Bench: DHARWAD
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Case Note & Summary

The petitioner company challenged termination of contract dated 26.04.2012 through writ proceedings which were dismissed -- The respondents filed suit O.S.No.95/2016 on 09.11.2016 seeking recovery of damages and cost of balance work -- The petitioner filed application under Order VII Rule 11(d) CPC seeking rejection of plaint on ground of limitation contending cause of action arose on 26.04.2012 -- The Trial Court rejected application holding limitation issue to be mixed question of law and fact -- The High Court in Civil Revision Petition upheld Trial Court order finding that determination of limitation required examination of facts regarding when cause of action actually accrued and whether it was continuing -- The Court held that plaint could not be rejected at threshold under Order VII Rule 11(d) CPC

Headnote

The petitioner filed Civil Revision Petition under Section 115 of Code of Civil Procedure, 1908 (CPC) challenging order dated 26.10.2021 passed by Senior Civil Judge and JMFC, Hungund rejecting I.A. No.V filed under Order VII Rule 11(d) read with Section 151 of CPC seeking rejection of plaint in O.S.No.95/2016 on ground of limitation -- The petitioner contended that cause of action arose on 26.04.2012 when contract was terminated and suit filed on 09.11.2016 was barred by limitation under Article 55 of Limitation Act, 1963 -- The respondents contended that plaint disclosed continuing cause of action as damages could be determined only after measurement of executed work, estimation of balance work, approval from competent authority and execution of balance work at risk and cost of contractor -- The High Court held that issue of limitation was mixed question of law and fact requiring evidence and could not be decided at threshold under Order VII Rule 11(d) of CPC -- The Court dismissed Civil Revision Petition confirming Trial Court order

Issue of Consideration: Whether the Trial Court erred in rejecting the application under Order VII Rule 11(d) read with Section 151 of CPC seeking rejection of plaint on ground of limitation

Final Decision

The High Court dismissed Civil Revision Petition and confirmed order dated 26.10.2021 passed by Senior Civil Judge and JMFC, Hungund rejecting I.A. No.V filed under Order VII Rule 11(d) read with Section 151 of CPC

2026 LawText (KAR) (02) 44

Civil Revision Petition No.100020 of 2022

2026-02-20

Dr. Justice K. Manmadha Rao

Sri. Chetan Munnoli for petitioner, Sri. Narayan G. Rasalkar for respondents

M/s Shyamaraju & Company (India) Ltd., represented by its authorized signatory Mr. V.M. Mathew

The Municipal Commissioner, City Municipal Council Ilkal, The Managing Director, Karnataka Urban Infrastructure Development and Finance Corporation (KUIDFC), The Project Manager, Karnataka Urban Infrastructure Development and Finance Corporation

Nature of Litigation: Civil Revision Petition challenging Trial Court order rejecting application for rejection of plaint on ground of limitation

Remedy Sought

Petitioner sought setting aside of order dated 26.10.2021 passed on I.A. No.V in O.S.No.95/2016 and dismissal of suit

Filing Reason

Petitioner aggrieved by Trial Court order rejecting application under Order VII Rule 11(d) CPC seeking rejection of plaint on limitation ground

Previous Decisions

Contract terminated on 26.04.2012 -- Writ petition challenging termination dismissed on 11.01.2013 -- Writ appeal dismissed on 15.02.2013 -- O.S.No.130/2013 filed by petitioner for declaration and injunction -- Liberty granted to file separate suit for damages -- Respondents filed O.S.No.95/2016 on 09.11.2016 for recovery of damages

Issues

Whether the suit O.S.No.95/2016 filed by respondents was barred by limitation under Article 55 of Limitation Act, 1963 Whether the Trial Court erred in rejecting application under Order VII Rule 11(d) CPC seeking rejection of plaint on ground of limitation

Submissions/Arguments

Petitioner contended cause of action arose on 26.04.2012 when contract was terminated and suit filed on 09.11.2016 was barred by limitation -- Reliance placed on Dahiben v. Arvindbhai Kalyanji Bhanusali and Raghwendra Sharan Singh v. Ram Prasanna Singh -- Respondents contended plaint disclosed continuing cause of action as damages could be determined only after measurement, estimation, approval and execution of balance work -- Limitation issue required evidence and could not be decided at threshold

Ratio Decidendi

The issue of limitation is mixed question of law and fact requiring evidence and cannot be decided at threshold under Order VII Rule 11(d) of Code of Civil Procedure, 1908 -- Where plaint discloses facts suggesting continuing cause of action, rejection of plaint on limitation ground at preliminary stage is not warranted

Judgment Excerpts

The Trial Court, by order dated 26.10.2021, rejected I.A.No.V holding that the issue of limitation is a mixed question of law and fact and cannot be decided at the threshold under Order VII Rule 11(d) of the CPC It is submitted that under the terms of the contract, the respondents were required to measure the executed work, estimate the balance work, obtain approval from the competent authority and then execute the balance work at the risk and cost of the contractor Thus, the litigation initiated by the petitioner continued, and the consequences arising out of the termination order dated 26.04.2012 remained sub judice

Procedural History

Contract executed on 18.10.2010 -- Contract terminated on 26.04.2012 -- Writ petition filed challenging termination dismissed on 11.01.2013 -- Writ appeal dismissed on 15.02.2013 -- O.S.No.130/2013 filed by petitioner -- Liberty granted to file separate suit for damages -- Respondents filed O.S.No.95/2016 on 09.11.2016 -- Petitioner filed I.A.No.V under Order VII Rule 11(d) CPC on 26.10.2021 -- Trial Court rejected application -- Civil Revision Petition filed before High Court

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High Court High Court Dismisses Civil Revision Petition in Contract Dispute - Limitation Issue for Damages Suit Held to be Mixed Question of Law and Fact - Trial Court Order Rejecting Plaint Rejection Application Under Order VII Rule 11(d) CPC Upheld
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