Supreme Court: Plaint Not To Be Rejected Under Order VII Rule 11 CPC When Substantial Factual Disputes Exist Concerning Limitation

The Supreme Court enunciated that rejecting the Plaint where substantial factual disputes exist concerning limitation and the scope of authority under the Power of Attorney, is unlawful.

The Court held thus in a Civil Appeal filed against the Judgment of the Madras High Court, which allowed the Civil Revision Petition and rejected a Plaint under Order VII Rule 11 of the Civil Procedure Code, 1908 (CPC) on the ground that the Suit was barred by limitation.

The two-Judge Bench of Justice J.B. Pardiwala and Justice R. Mahadevan observed, “… we are of the view that the plaint discloses a cause of action which cannot be shut out at the threshold. Thus, the trial Court acted within its jurisdiction in refusing to reject the plaint and in holding that the matter ought to proceed to trial. The High Court, while exercising its revisional jurisdiction under Section 115 CPC, ought not to have interfered in the absence of any jurisdictional error or perversity in the trial court’s order. Rejecting the plaint where substantial factual disputes exist concerning limitation and the scope of authority under the Power of Attorney, is legally unsustainable.”

The Bench reiterated that when the question of limitation involves disputed facts or hinges on the date of knowledge, such issues cannot be decided at the stage of Order VII Rule 11 CPC.

AOR K. K. Mani represented the Appellant while Senior Advocate S. Nandakumar represented the Respondents.

Factual Background

The Appellant i.e., the Plaintiff instituted a Suit before the Principal District Court against the Respondents/Defendants and the Government authorities. It was alleged in the Plaint that the Plaintiff was assigned a vacant site by the Special Tahsildar in 1974 and he constructed a roof house. He was in possession and enjoyment of the said property by paying tax and other charges. While so, he executed a Power of Attorney (PoA) in favour of his father, K, which was registered as a Document in the Office of the Sub-Registrar for the purposes of putting up construction, entering into agreement, and performing other relevant activities. Contrary to the same, the Plaintiff’s father executed a Sale Deed in 1988 in favour of the Defendant i.e., granddaughter, which according to the Plaintiff was illegal as the PoA did not authorize his father to alienate the property.

The Plaintiff approached the Additional Commissioner of Police and gave a Complaint under Land Grabbing Cell against the Defendant’s family. Subsequently, the Plaintiff applied for the individual patta. In the meanwhile, the Plaintiff’s father had died and thereafter, the Defendant executed a Settlement Deed in favour of the third Respondent. Resultantly, the Plaintiff filed a Suit, seeking reliefs. During the pendency of the Suit, the Defendants filed an Interlocutory Application under Order VII Rule 11 CPC, seeking rejection of the Plaint, on the ground that the Suit was undervalued and was barred by limitation. The Sessions Judge dismissed the Application and challenging the same, the Defendant filed a Civil Revision Petition before the High Court, which was allowed. Being aggrieved, the Appellant approached the Apex Court.

Reasoning

The Supreme Court in the above regard, noted, “Once the date of knowledge is specifically pleaded and forms the basis of the cause of action, the issue of limitation cannot be decided summarily. It becomes a mixed question of law and fact, which cannot be adjudicated at the threshold stage under Order VII Rule 11 CPC. Therefore, rejection of the plaint on the ground of limitation without permitting the parties to lead evidence, is legally unsustainable.”

The Court said that the High Court’s approach in reversing the well-reasoned Order of the Trial Court warrants interference as the Trial Court had rightly held that the issue of limitation necessitated adjudication upon evidence particularly in view of the Appellant’s assertion that the PoA executed by him did not confer any authority upon his father to alienate the suit property and that the impugned transaction came to his knowledge only at a much later point in time.

“In such circumstances, the determination of limitation involved disputed questions of fact that could not be summarily decided without the benefit of trial. The High Court, however, proceeded to reject the plaint solely on a prima facie assumption that the suit was barred by limitation, without undertaking any examination as to whether the plea regarding the date of knowledge was demonstrably false or inherently improbable in light of the record. In the opinion of this Court, such an approach amounts to an error of law and constitutes a misapplication of the well-established principles governing the exercise of power under Order VII Rule 11 CPC”, it added.

The Court further noted that there is no express clause authorizing his father to sell the suit property to any person without the Appellant’s consent and knowledge and yet, his father executed a Sale Deed in favour of his granddaughter, going beyond the scope of the PoA, which raises serious doubt about misuse of authority and potential fraud.

“Such assertions cannot be rejected in the application under Order VII Rule 11 CPC. … the trial Court shall proceed without being influenced by any of the observations made by the High Court”, it concluded.

Accordingly, the Apex Court allowed the Appeal, set aside the High Court’s Order, and restored the Suit for trial on its merits.

Cause Title- P. Kumarakurubaran v. P. Narayanan & Ors. (Neutral Citation: 2025 INSC 598)

Appearance:

Appellant: AOR K. K. Mani and Advocate T. Archana.

Respondents: Senior Advocate S. Nandakumar, AOR Naresh Kumar, Advocates Siddharth Naidu, V Balachandran, Deepika Nandakumar, Viresh Kumar Bhawra, and Aisha Bansal.

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