19 Jun 2121

By Order VII Rule 11(a) of the Code of Civil Procedure,1908, no Notice of Motion can be accepted for the dismissal of a plaint against defendants for lack of cause of action - Bombay High Court

Case : Sheela Ram Vidhani and Ors v. M/s S. K. Trading Company and Anr Appeal No. 27 of 2020 in Notice of Motion (L) No. 2515 of 2016 in Suit No. 187 of 1993

Court : Bombay High Court

Bench : Justice S. J. Kathawalla and Justice Vinay Joshi

Decided on : 19 Jun 2121

Relevant Statutes

Section 19(c) of the Specific Relief Act, 1963

Section 33 of the Maharashtra Rent Control Act, 1999

The order I Rule 9, Order I Rule 3, Order I Rule 5, Order II Rule 2, Order VII Rule 11, Order VII Rule 11(a), Order VII Rule 11(d), Order X of the Code of Civil Procedure, 1908

Brief Facts & Procedural History

1. Defendant Nos. 2 and 3 a partner of Defendants No. 1. Defendant No. 1 possesses a 1714-square-yard property, which is detailed in Exhibit A, which is annexed to the plaint (“Suit Property”). Defendants Nos. 1 to 3 consented to sell the Suit Property to the Plaintiffs for Rs. 43,00,000/-, and an Agreement to Sell (“Agreement to Sell”) was signed as a result.

2. Defendant No. 4 was a partnership firm with Defendants Nos. 5 and 6 as partners. Several tenants occupied the Suit Property. Defendant No. 4 was one of the Suit Property's tenants, occupying about 500 square yards. Defendants Nos. 5 and 6 were connected to Defendants Nos. 2 and 3 in a close way.

3. The manner of payment of consideration was agreed upon by the parties to the Agreement to Sell. One of the requirements was that the Plaintiffs (Purchasers) pay a sum of Rs. 8,00,000/- directly to Defendant No. 1's renter, Defendant No. 4, to obtain substitute housing.

4. The Plaintiffs claim that the Vendors (Defendant Nos. 1 to 3) had agreed to leave the tenanted premises in exchange for a lump-sum payment of Rs.28,00,000/- with their tenant / Defendant No. 4. At the request of Defendants Nos. 1 to 3, it was decided that the Plaintiffs would pay Defendant No. 4 the sum of Rs.28,00,000/- directly. The sum of Rs.8,00,000/- was to be paid in advance to Defendant No. 4 and the remainder was to be paid after peaceful possession was handed over. The balance of the consideration was to be paid to the owners, namely Defendant Nos. 1 to 3.

5. The Plaintiffs have given the Vendors (Defendant Nos. 1 to 3) a partial payment of Rs.6,15,000/- and, at the Vendors' request, Rs.13,10,000/- straight to Defendant No. 4 (tenant). 

6. The Plaintiffs are alleged to have been ready and prepared to pay the remainder of the consideration, but the Vendors refused to execute their portion of the contract. The Vendors, in particular, refused to say when Defendant No.4 (tenant) would be able to depart a portion of the Suit Property. Finally, the Plaintiffs sent a legal notice to the Vendors, requesting that they fulfil their obligations by taking partial payment, but to no effect.

7. All of the Defendants filed written statements in response to the lawsuit. The questions were resolved by the Learned Single Judge based on opposing arguments. In addition, some other problems have been raised. Affidavits of Documents and Evidence have been filed by both parties. Following that, Defendants Nos. 4 to 6 filed a Notice of Motion for the dismissal of the plaint against them for lack of cause of action under Order VII Rule 11(a) of The Code of Civil Procedure, 1908. The Notice of Motion was granted by the Learned Single Judge in the impugned Order.

8. Plaintiff appeals in the High Court of Judicature at Bombay challenging the impugned order.

The Issue of the Case

Whether the order dated 14 January 2019 passed by learned Single Judge valid?

The Observations of the Court

1. The High Court of Judicature at Bombay observes that the pleadings in paragraph 5 of the plaint are significant. The Plaintiffs are said to have paid Defendant No. 4 a total sum of Rs. 13,10,000/- at the request of Defendant No. 1. (Vendor). Furthermore, it is alleged that Defendant No. 4 accepted this money under the terms of the Agreement to Sell to get other housing. Needless to add, the Plaint's averments must be regarded as written. The Plaintiffs have paid a sum of Rs. 13,10,000/- to Defendant No. 4 in connection with the Agreement to Sell, as evidenced by a particular pleading. 

2. The High Court of Judicature at Bombay also observes that according to the pleading in paragraph 8 of the Plaint, the Plaintiffs spoke with Defendant No. 4 about the transaction, but Defendant No. 4 did not reply or refund the Rs. 13,10,000/- it received. The Plaintiffs' claim that they paid Rs. 13,10,000/- directly to Defendant No. 4 in fulfilment of the contract and that he refused to return the money is supported by this pleading. As a result, it is sufficient evidence to support the Plaintiffs' alternative claim for a refund of the earnest money given to Defendant No. 4, the renter.

3. The High Court of Judicature at Bombay also observes that the Plaint discloses an adequate cause of action against Defendants Nos. 4 to 6 in light of the aforementioned pleadings. The pleadings don't only pretend to be a cause of action. Plaintiffs have established that they have standing to sue Defendants 4–6. 

4. The High Court of Judicature at Bombay also observes that in the context of the alternative claim of reimbursement of the earnest money, the Plaintiffs have stated a valid cause of action against Defendants Nos. 4 to 6. An application under Order VII Rule 11(a) of The Code of Civil Procedure, 1908 would be rejected as a result of this.

5. The High Court of Judicature at Bombay also observes that Defendants Nos. 4 to 6 have an adequate cause of action, according to the Plaint. In reality, Order I Rule 9 of The Code of Civil Procedure, 1908 states that an action cannot be dismissed because of misjoinder, which is the inverse of non-joinder. The Code of Civil Procedure, 1908, allows all defendants in a suit who has a right to relief arising out of the same conduct or transaction to be joined as defendants, whether jointly or severally, or in the alternative. A thorough examination of the whole Plaint reveals that, according to the Plaintiffs, they paid an earnest sum directly to Defendants Nos. 4 to 6 as part of the same transaction, namely the Agreement to Sell. As a result, the Plaintiffs can join Defendants Nos. 4 to 6 in this suit under the requirements of Order I Rule 3 of The Code of Civil Procedure, 1908. It is not essential for every defendant to be interested in all of the reliefs sought in the complaint against him, according to Order I Rule 5 of The Code of Civil Procedure, 1908. This Rule should be read in conjunction with Order I Rule 3 of the Code of Civil Procedure,1908. In effect, it states that if a lawsuit is filed against many defendants, the fact that each defendant is not interested in all of the reliefs sought in the lawsuit does not suggest that the defendants are misjoined. As a result, the claims of Defendants Nos. 4 to 6 regarding misjoinder cannot be accepted on this point.

6. The High Court of Judicature at Bombay also observes that the situation can also be seen from a different perspective. Parties shall seek all of the reliefs available to them at the time of bringing the complaint, according to the structure of Order II Rule 2 of the Code. A second suit on the same cause of action is barred if there is an intentional omission. When further reliefs arise from the same cause of action, a plaintiff is not necessary to file a second suit for those reliefs. Because the remedy of specific performance and the alternative claim of return of earnest money arises from the same cause of action, the Plaintiffs' filing of a second suit for money recovery against Defendants 4 to 6 may be unsustainable.

The Decision Held by the Court

The High Court of Judicature at Bombay held that a complaint against some of the defendants can be dismissed as a whole. In the light of Plaintiff's alternative claim for return of earnest money, additionally, conclude that the Plaint in the current Suit discloses an adequate cause of action against Defendants Nos. 4 to 6. The Learned Single Judge should not have granted the Notice of Motion because he should have reviewed the entire case. As a result, the impugned Order dated 14.01.2019 in Notice of Motion No.2515/16 is set aside, and the Notice of Motion is therefore dismissed. As a result, the appeal is granted and dismissed. Costs are not in any particular sequence.

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