The Supreme Court while reversing the order of Trial Court as well as the High Court in rejecting the plaint under Order VII Rule 11(d) of the Code of Civil Procedure, held that, "When a plaintiff claims that he gained knowledge of the essential facts giving rise to the cause of action only at a particular point of time, the same has to be accepted at the stage of considering the application under Order VII Rule 11".
The case of the Plaintiffs in a Suit filed in the year 1987 was that their predecessor in title died in the year 1946, leading to some of his heirs filing a Suit for the administration of the estate left behind by him, in the year 1947. By the Judgment in the said Suit, a Receiver was appointed, who took over possession and management of the properties. According to the Plaintiffs in the present Suit, certain sale of properties through Agricultural Lands Tribunal and mutation in the revenue records were effected by the Receiver without their knowledge. Therefore, the Suit was filed primarily for setting aside an order passed by the Agricultural Lands Tribunal in a tenancy case under Section 32G of the Maharashtra Tenancy and Agricultural Lands Act, 1948 and for setting aside a sale certificate issued under Section 32M of the Act.
The City Civil Court of Bombay, rejected the plaint as barred by limitation and for the reason that Section 85 of the Act bars the jurisdiction of Civil Court. The First appeal filed before the Bombay High Court was dismissed.
Before the Apex Court, it was contented by the Plaintiffs that limitation is a question of fact and law and that notices were never ordered to them by the Tribunal and therefore that the Suit was filed within limitation from the date of knowledge. The Respondents before the Supreme Court, the Defendants, argued that the Plaintiffs had constructive notice of the proceedings under Section 32-G of the Act.
The Bench of the Apex Court comprising of Justice Hemant Gupta and Justice V. Ramasubraminian held that a Defendant in a suit cannot pick up a few sentences here and there from the plaint and contend that the Plaintiffs had constructive notice of the proceedings and that therefore limitation started running from the date of constructive notice. The Bench also held that the plea of constructive notice cannot be raised in an application under Order VII Rule 11.
The Court held, "Therefore, the plea of constructive notice raised with a view to sustain the plea of limitation cannot be accepted at the stage of dealing with an application for rejection of plaint."
The Court found that the bar under Section 85(2) of the Act was not absolute. The Court also held that the question whether the order of the Tribunal and the sale certificate issued thereafter are the product of fraud and collusion, cannot be determined by the appellate or revisional authority under the Act.
The Judgments of the Trial Court as well as the High Court were set aside and the Suit was restored to file.