Whether only a part of plaint can be rejected?

 It is trite law that not any particular plea has to be considered, and the  
whole plaint has to be read. As was observed by this Court in Roop Sathi v.  
Nachhattar Singh Gill , only a part of the plaint cannot be rejected and if no  
cause of action is disclosed, the plaint as a whole must be rejected.

                            IN THE HIGH COURT OF JUDICATURE AT BOMBAY.
                  ORDINARY  ORIGINAL CIVIL JURISDICTION  




             NOTICE OF MOTION NO.3897 OF 2006
             
IN
                                SUIT NO.2177 OF 2001
                         
Export Credit Guarantee Corporation 
of India Ltd, 


           
V/s.
  Mr T. Mathew
      the Settler and Trustee of 
      P
. M. T. Family Trust, 
      a Private Family Trust, 
  
           CORAM :  R.D.DHANUKA  J.
        
           JUDGMENT PRONOUNDED ON : MARCH  4,2014.
  
Citation; 2014(4) ALLMR 135 Bom


   By this notice of motion,  defendant No.3 seeks rejection of plaint under 
Order VII Rule 11 of Code of Civil Procedure 1908 on various grounds.   Some of 
the relevant facts which emerge from the plaint and the affidavits filed by the 
parties are as under : 
2. 
Defendant Nos.1 to 3 are the trustees of a private family trust known as 
PTM Family Trust incorporated under the deed of settlement dated 5 th September 
1979 (hereinafter referred to as the said trust).  In the year 1980, defendant Nos. 
1 to 3 approached the plaintiff with a request to advance monies to the said trust 

to purchase certain properties in a building viz. Dalamal House and offered that 
upon purchase of the said properties,  the said properties would be let out to the 
plaintiff for a period of 20 years  with other rights.  Plaintiff advanced a sum of 
Rs.93,93,420/­ in the form of deposit to the said trust  to enable it to buy certain 
premises in the said building Dalamal House.  On 15 th May 1980, the plaintiff and 
defendant Nos.1 to 3 entered into an agreement of lease by which the defendant 
Nos.1 to 3 gave on lease to the plaintiff the premises Nos.21 and 22 and for a 
period of 20 years at monthly rent of Rs.3.125 per sq. ft for the area of 9791.6 sq. 
ft  of the premises No.21 and 22 and  area of 2500 sq. ft of premises  No.31.  It is 

the case of the plaintiff that at the end of the lease period of 20 years, plaintiff  
was given a right to purchase the reversionary right in all the said premises at a 
pre­fixed   and   agreed   purchase   price   of   Rs.100   per   sq.   ft   and   without   any 
consideration   payable   for   the   tax.     Some   of   the   relevant   clauses   of   the   said 

agreement for the purpose of deciding this notice of motion are as under :  
  
Clause : 1     :   The Lessors shall grant to the Lessee and the Lessee 
shall   accept   from   the   Lessors   a   lease   of   all   those   the   said   office 
premises   No.21   and   22   on   the   second   floor   and   the   said   office 
premises   No.31   on   the   third   floor   of   the   said   building   known   a 
'Dalamal   House'   situate   at   Plot   No.206,   Block   No.III,   Backbay 
Reclamation Scheme at Nariman Point in Bombay more particularly 
described in the Schedule hereunder written for the definite term of 
20 (Twenty) years commencing from the date of this Agreement at a 
monthly rent for the said office premises of Rs.3.125 per square foot 
of the built up area of 9791.6 square feet on the second floor and 
2500 square feet on the 3rd floor subject to actual joint measurements 
comprised   in   the   said   office   premises   (but,   for   the   terrace   on   the 
second floor of the said Dalamal House no rent shall be paid clear of 
all deductions by equal monthly payments.     
Clause­(B) Covenants  by the lessors : 
(i)     To   join   in   the   formation   of   a   Co­operative   Society   or   any 
Company   to   be   formed   by   the   Purchasers   (owners)   of   all   the 
premises in the said building – Dalamal House – and to satisfy the 

Lessee   that   such   Society   or   Company   has   been   duly   and   legally 
formed and established and that the terms and conditions of the said 
Agreement both dated 15th May, 1980 between the Builders and the 
Lessors have been fully carried out and satisfied ; 
(vi)  To procure to an in favour of the Lessee and to produce a Bank 
              Guarantee   from   any   Nationalised   Bank   to   the   satisfaction   of   the 
                       Lessee   ensuring       the   payments   by   the   Lessors   of   all   existing 
                                  Municipal and Government taxes and all common charges payable to 
                                           the Co­operative Society or to the Company to be formed as aforesaid 
                                                       during the said term of twenty years ; 
  (vii)   To repay the said amount of the loan advanced by the Lessee 
                to   the   Lessor   by   adjusting   the   same   against   the   monthly   rent   are 
                           served in manner hereinbefore provided and not to sell, mortgage, 
                                    charge, hypothecate or otherwise encumber the said office premises 
                                            until   repayment   of   the   full   amount   of   the   said   loan   without   the 
                                                       previous consent in writing of the Lessee.  
  (C )  Provisos :  
   (i) ...  (ii)    Right  to the  Lessee  at  the  end  of  the  said term  of  20 
                      (Twenty) years to renew the Lease for further period of 10(Ten) years 
                                 at   the   same   rent   and   on   the   same   terms   and   conditions   and 
                                            thereafter to renew it for successive period of 10 (Ten) years at a 
                                                        time at a rent to be mutually agreed upon but not exceeding 10% of 
                                                                     the   rent   charged   for   the   previous   term   TOGETHER     ALSO   with   a 
                                                                                right to purchase the reversion at any time after the said first term of 
                                                                                             20 (Twenty) years the price upon such purchase being calculated at 
                                                                                                       the rate of Rs.100/­ per square foot of the built up  
                                                                                                                   area.     No 
                                                                                                                     price   being   charged   or   paid   for   the   terrace   area   of   approximately 
                                                                                                                               4700 sq.ft., on the 2nd floor of the said Dalamal House.  

  
(vi)             The   Lessors   shall   immediately   after   the   formation   and 
registration   of   the   said   Co­operative   Society   or   incorporation   and 
registration   of   a  Company,  as  the   case   may   be,   execute  to   and  in 
favour of the Lessee a Lease of the said office premises containing the 
Lessees' covenants, Lessors' covenants and provisos herein contained 
in   the   forms   previously   to   be   approved   by   the   Lessors   shall   also 
jointly and severally execute to and in favour of the Lessee to execute 
the said lease for and on behalf of and as the deed and act of the 


3.
Lessors. 
Defendant Nos.1 to 3 handed over possession of the said premises to 
the plaintiff.   Defendant Nos.1 to 3 also executed Power of Attorney dated 15 th 
May 1980 and gave various powers including the power to get the shares issued 
by defendant No.4 Society in respect of the said premises transferred in the name 
of the plaintiffs. 
4.  

It is case of the plaintiff that in pursuance of the Power of Attorney, 
plaintiff got a lease deed dated 8th July 1992 executed in their favour in respect of 

the premises Nos.21 and 22 and the said terrace adjacent thereto.  The said lease 
deed was duly registered with the Sub Registrar of Assurances some time in the 
lease dated 8th July 1992. 


It is case of the plaintiff that the said trust did not pay the quarterly 
5. 
year 2009 though lodged for registration immediately upon execution of the said 
dues of defendant No.4 society in respect of the suit premises.   Defendant No.4 
filed a dispute before the co­operative Court Mumbai.  By  an interim order dated 
17th November 1994, the Co­operative Court directed the plaintiff to pay certain 
amounts during the pendency of the said proceedings.   The appeal filed by the 
plaintiff in the Co­operative appellate Court came to be rejected by order dated 7 th 
November 1997.  The plaintiff was directed to deposit certain amounts in the co­
operative   Court   as  also to   pay  to  the   society  amounts  towards  charges,  taxes, 
outgoings etc. in  respect of the said premises.     It is case of the plaintiff that 
pursuant to said two orders, the plaintiff paid total amount of Rs.64,53,965.60 in 
respect of the said premises either to the society directly or in the form of deposit  
in the Co­operative Court which was otherwise payable by the trust   It is case of 
the plaintiff that    under the said agreement of  15 th May 1980 after expiry of 20 
years, plaintiff was entitled to exercise reversionary rights i.e. a right to purchase 

the   reversion   at   any   time   after   first   term   of   20   years   at   a   specified   rate. 
According to the plaintiff, the said amount towards purchase price payable by the 
plaintiff to the trust was of Rs.1001842/­ which amount the plaintiff was entitled 
to set off against the amount of Rs.7053965.60 which was alleged to have been 
paid by the plaintiff on behalf of defendant Nos.1 to 3 pursuant to the orders 
passed by the Co­operative Court.   
6.
  
By   their   advocate's   notice   dated   16th  May   2000   to   the   said   Trust, 
plaintiff   exercised   the   alleged   rights   to   purchase   of   the   reversionary   rights   in 
ig
respect of the said premises and called upon the said trust to effect the transfer of 
the suit premises to the plaintiff and also  called upon the defendant No.3 to pay 
a sum of Rs.5641658/­ to the   plaintiff which amount was after adjusting the 
consideration amount payable by the plaintiff to the trust.  

By   notice   dated   23rd  March   2001,   the   said   trust   called   upon   the 
7.
plaintiff to quit and vacate the said premises on the ground that plaintiff had no 
right, authority, power to continue to remain in possession of the said premises. 
    

8.
The plaintiff vide their advocate's letter dated 19 th April 2001, denied 
the   allegations   made   by   the   said   trust   and   contended   that   the   plaintiff   by 
exercising the right to purchase the said premises vide a notice dated 16 th  May 
2000 have become entitled to acquire the said premises as owners of the said 
premises.  
9. 

On 25th June 2001, the plaintiff filed this suit inter alia praying for a 
declaration that defendant Nos.1 to 3 are bound and liable to specifically perform 
the agreement dated 15th  May 1990 and lease deed dated 8 th  July 1992 at the 
agreed   purchase   price   of   Rs.10,01,842/­   and   for   execution   of   necessary 

documents for effecting transfer thereof in favour of the plaintiff.   Plaintiff also 
has prayed for a money decree against Defendant Nos. 1 to  3 for an amount of 
Rs.60,52,123.60 with further interest thereon. Defendant No.3 has filed a written 
statement in this suit in the year 2005. 
10.
Mr.Kapadia,  learned senior counsel and Mr.Purohit, learned counsel 
appearing for defendant no.3 submitted that alleged lease deed dated 8 th 
July, 1992 is not validly executed and did not create any right in favour of 
the plaintiff in the suit premises.  The power of attorney relied upon by the 

plaintiff   is   not   registered.     The   alleged   lease   agreement   dated   15 th  May, 
1980   is   not   a   registered   document   and   thus   such   unregistered   lease 
agreement is not admissible in evidence.   Under agreement to lease dated 
15th  May,1980,   the   lease   was   for   a   definitive   period   of   20   years   which 
expired on 14th  May, 2000.  There was no relationship of lessor and lessee 
after expiry of 20 years.  The said lease was admittedly not renewed.  The 
plaintiff thus could not seek to enforce the alleged revisionary rights in the 
property.  Reliance is placed on section 107 of the Transfer of Property Act, 
1882 in support of the plea that the said agreement was an unregistered 
agreement   and   was   barred   under   the   said   provisions   of   the   Transfer   of 
Property Act and was void.   Suit based on such unregistered document is 
not maintainable.    The learned senior counsel submits that registration of 
the   document   dated   8th  July,   1992   in   the   year   2009   would   not   in   any 
manner alter and/or affect the demise granted under the said agreement. 
11.
It is submitted that upon expiry of 20 years, the plaintiff was a mere 
tenant   at   sufferance   and  has not  paid any rent  nor the  defendants have 

consented   or   accepted   to  the   plaintiff   to  be   a  lessee   holding   over.     It   is 
submitted that in the year February 1992, the plaintiff executed a lease deed 
on behalf of the defendant nos. 1 to 3.  It is submitted that even if the said 
agreement dated 14th May, 1980 was a valid lease, it was determined on 14th 
May,   2000   and   purported   exercise   by   the   plaintiff   on   16 th  May,   2000   of 
supposedly   acquiring   revisionary   rights   could   not   subsist.     Subsequent 
registration of the agreement of February 1992 in the year 2009 would not 
make the lease valid and subsisting since the same was already determined 

in the year 2000.  There was thus no cause of action in filing this suit and 
the suit is therefore liable to be dismissed under order 7 Rule 11(a) of Code 
of   Civil   Procedure,   1908.     Learned   senior   counsel   submits   that   under 
proviso (C) (ii), the plaintiff was given a right to seek renewal of the lease 
at the end of 20 years for further period of 10 years at the same rent and on 
the   same   terms   and  conditions  and  thereafter   to   renew   it   for   successive 
period of 10 years at a time at a rent to be mutually agreed upon together 
also with a right to purchase the reversion at any time after at the first term 
of 20 years upon the purchase price calculated at the rate mentioned in that 
clause.  Since there was no renewal of the lease agreement after 20 years, 
there   was   no   question   of   exercising   any   alleged   right   to   purchase   the 
reversion by the plaintiff.  There is no cause of action in filing the suit.  
12.
The learned senior counsel placed reliance on the judgment of this 
court in case of Bhaskar Gopal and Another vs. Padman Hira Chaudhari  
and another AIR 1916 Bom.228  and in particular paragraph 2 thereof in 
support of his submission that there had to be a subsisting lease and a right 
of   lessor   –   lessee   relationship   before   the   plaintiff   could   exercise   right   of 

reversion.  Paragraphs  2 of the said judgment reads thus :­

2.   Section   54   of   the   Transfer   of   Property   Act   provides 
that,   in   the   case   of   tangible   Immovable   property   of   a 
value less than Rs. 100, transfer by way of sale may be 
made either by a registered instrument or by delivery of 
the   property.   But   the   section   draws   a   sharp   distinction 
between tangible Immovable property and a reversion or 
other intangible thing. The defendants contend that the 
thing sold to them was the tangible house, which indeed 
purported to be the object of the sale. But it is clear that 
the   vendor   could   not   sell   any   higher   interest   than   she 
possessed,   and   as   at   the   date   of   the   sale   she   had 
transferred   possession   to   the   defendants   who   were   in 
possession as her tenants, I am of opinion that the only 
interest which remained in the vendor was the reversion 
within the meaning of that term as used in Section 54. 
That,   so   far   as   I   am   aware,   is   the   only   interest   in   the 
property   which   remains   with   a   landlord   after   he   has 
leased the Immovable property to tenants and has made 
over possession to them. The word is used in this sense in 
Woodfall's Law of Landlord and Tenant and also in Lord 
Halsbury's   Laws   of   England,   Vol.   XVIII,   paragraph   766 
under   the   title   "Landlord   and   Tenant."   This   use   is   in 
conformity   with   the   definition   contained   in   Stroud's 
Judicial   Dictionary   where   a   "reversion"   is   described   as 
"the undisposed of interest in land which reverts to the 
grantor after the exhaustion of the particular estates, e.g., 
for years, for life, or in tail,­­which he may have created."
13.
My attention is invited to the letter dated 23rd March, 2001 from the 
defendant nos. 1 to 3 to the plaintiff terminating the agreement and asking 
for possession.   Reliance is also placed on the letter dated 19 th April, 2001 
addressed by the plaintiff in which it is contended by the plaintiff that the 
plaintiff had become the owner of the premises and therefore there was no 
relationship   of   lessor   and   lessee   or   landlord   or   tenant   under   the   lease 

agreement.  The learned senior counsel placed reliance on the judgment of 
the Supreme Court in case of  State of U.P
. And others vs. Lalji Tandon  
(2004) 1 SCC 1 and in particular paragraphs 13 and 15 in support of the 
submission that if covenant for renewal was to be exercised, a fresh deed of 
lease   ought   to   have   been   executed   between   the   parties   and   in   absence 
thereof,   the   original   lease   which   was   for   a   fixed   period   ceased   to   exist. 
Paragraphs 13 and 15 of the said judgment reads thus :­
ig
13. In India, a lease may be in perpetuity. Neither the 
Transfer   of   Property   Act   nor   the   general   law   abhors   a 
lease   in   perpetuity. (Mulla  on  The  Transfer of  Property 
Act, Ninth Edition, 1999, p.1011). Where a covenant for 
renewal exists, its exercise is, of course, a unilateral act or 
the lessee, and the consent of the lessor is unnecessary. 
(Baker v. Merckel (1960) 1 All ER 668, also Mulla, ibid, p. 
1204). Where the principal lease executed between the 
parties containing a covenant for renewal, is renewed in 
accordance with the said covenant, whether the renewed 
lease   shall   also   contain   similar   clause   for   renewal 
depends   on   the   facts   and   circumstances   of   each   case 
regard   being   had   to   the   intention   of   the   parties   as 
displayed  in   the   original  covenant   for   renewal  and  the 
surrounding circumstances. There is a difference between 
an extension of lease in accordance with the covenant in 
that regard contained in the principal lease and  renewal 
of   lease,   again   in   accordance   with   the   covenant   for 
renewal   contained   in   the   original   lease.   In   the   case   of 
extension it is not necessary to have a fresh deed of lease 
executed; as the extension of lease for the term agreed 
upon shall be a necessary consequence of the clause for 
extension. However, option for renewal consistently with 
the covenant for renewal has to be exercised consistently 
with the terms thereof and, if exercised, a fresh deed of 
lease   shall   have   to   be   executed   between   the   parties. 
Failing   the   execution   of   a   fresh   deed   of   lease,   another 

lease   for   a   fixed   term   shall   not   come   into   existence 
though  the  principal lease in  spite  of the expiry of the 
term thereof may continue by holding over for year by 
year or month by month, as the case may be.

15.   A  Division   Bench decision  of  Andhra  Pradesh  High 
Court in  Syed Jaleel Zane  v.  P
. Venkata Murlidhar and  
   ,   MANU/AP/0112/1981 :   AIR1981AP328,   wherein 
Ors. 
  
Jeevan Reddy, J., as His Lordship then was, spoke for the 
Division Bench makes almost an exhaustive discussion of 
the   relevant   English   and   Indian   Law   available   on   the 
point and we express our respectful agreement with the 
exposition of law as made therein. We note with approval 
the following proposition of law laid down therein:­
(i) In India, the law does not prohibit a perpetual lease; 
clear   and  unambiguous  language  would  be   required  to 
infer such a lease. If the language is ambiguous the Court 
would opt for an interpretation negating the plea of the 
perpetual lease;
(ii) To find an answer to the question whether a covenant 
for   renewal   contained   in   the   lease   deed   construed 
properly   and   in   its   real   context,   entitles   the   tenant   to 
continue as long as he chooses by exercising the option of 
renewal at the end of each successive period of 5 years 
subject to the same terms and conditions depends on the 
deed of lease being read as a whole and an effort made to 
ascertain the intention of the parties while entering into 
the contract. No single clause or term should be read in 
isolation so as to defeat other clauses. The interpretation 
must   be   reasonable,   harmonious   and   be   deduced   from 
the language of the document;
(iii) The Court always leans against a perpetual renewal 
and hence where there is a clause for renewal subject to 
the same terms and conditions, it would be construed as 
giving   a   right   to   renewal   for   the   same   period   as   the 
period of the original lease, but not a right to second or 

Learned senior counsel placed reliance on the judgment of Supreme 
14.
third renewal and so on unless, of course, the language is 
clear and unambiguous.
Court in case of Shri Janki Devi Bhagat Trust, Agra vs. Ram Swarup Jain  
AIR   1995   SC   2482  in   support   of   the   submission   that   any   lease   of 
immoveable property from year to year or for any term exceeding one year 
can be only made by registered instrument otherwise it would be void under 
section   107   of   the   Transfer   of   Properties   Act.,     paragraph   4   of   the   said 

judgment reads thus :­
4.
Under Section 107 of the Transfer of Property Act a 
lease of Immovable property from year to year or for any 
term   exceeding   one   year   can   be   made   only   by   a 
registered   instrument.   Any   lease   of   this   kind   would   be 
void unless it is created by a registered instrument. All 
other leases of Immovable property may be made either 
by   a   registered   instrument   or   by   an   oral   agreement 
accompanied   by   delivery   of   possession.   All   the   courts 
below have held that there was a valid lease. The High 
Court has also recorded that it was not the contention of 
the respondent that his lease was from year to year. The 
contention was that the lease was for a term exceeding 
one   year   and   was,   therefore,   compulsorily   registerable 
under   the   first   part   of   Section  107  of   the   Transfer   of 
Property Act. This contention has been negatived by the 
High Court as also by both the courts below. The High 
Court   has   held   that   the   lease   was   not   for   a   term 
exceeding   one   year,   and   so   was   not   compulsorily 
registerable   under   the   first   part   of   Section  107.   It, 
however   held   that   since   the   lease   was   for   a 
manufacturing   purpose,   six   month'   notice   to   quit   was 
required under Section  106. In its absence, termination 
was not valid.
15.
Learned   senior   counsel   placed   reliance   on   the   judgment   of   the 

Supreme Court in case of Delhi Motor Co. and others vs. V.A. Basrurkar  
AIR 1968 SC 794 in support of the plea that an unregistered lease is void 
and   no   specific   performance   can   be   claimed   under   a   void   document. 
Paragraphs 4 and 5 of the said judgment reads thus :­

4.
The first point urged on behalf of the firm was that, 
in this case, there was a completed sub­lease, but it did 
not require registration for two reasons. The first reason 
advanced  was  that  the lease  was not evidenced by the 
documents Exts. P
. 1, P
. 2 and P
. 3 only, but was, in fact, 
completed subsequently when, after the resolution of the 
Board  of  Directors  of  the  Company, the  Company gave 
possession of the leased property to the firm on or about 
the 1st April, 1950. The second reason was that, in any 
case, this lease was not a lease from year to year or for 
any term exceeding on year or reserving a yearly rent, so 
that   s.  107  of   the   Transfer   of   Property   Act   was   not 
applicable   and   registration   was   not   compulsory.   These 
submissions fail, because the lease, as relied upon by the 
firm, has to be held to be a lease of immovable property 
for a term exceeding one year, and such a lease is fully 
governed by s.  107  of the Transfer of Property Act. The 
firm itself came forward with the case that the rights that 
were being claimed were under a lease and the lease was 
in respect of immovable property consisting of the three 
portions   of   the   Scindia   House   which   have   been 
mentioned above. It was, however, urged that this lease 
was not for any fixed term at all and was for an indefinite 
period, so that it could not be held to be a lease from year 
to year either. It was further submitted that yearly rent 
had not been reserved in respect of this lease. Even these 
submissions were made on the basis that the terms of the 
lease have  to be ascertained from the three documents 
Exts. P
. 1, P
. 2 and P
. 3 which were relied upon by the firm 
to   claim   the   relief  in  the   suit.  It  appears   to  us  that,  if 
these   documents   are   properly   interpreted,   an   inference 
necessarily   follows   that   the   lease,   if   any,   brought   into 

existence by these documents was certainly for a period 
exceeding one year. Since reliance was placed on these 
documents on behalf of the firm to urge that there was a 
completed lease, learned counsel for the firm was asked 
to point out the provision which fixed the rent payable in 
respect   of   the   leased   property.   The   only   provision,   on 
which   he   relied   to   show   that   rent   had,   in   fact,   been 
agreed   upon   the   fixed,   was   para   1   of   Ext.   P   3   which 
.
contains notes on agreement dated 22nd February, 1950. 
That paragraph is as follows :­ 

"Profit share of party No. 1 would be 10% of net profit 
of New Delhi business only and will be settled at the 
end   of   the   1st   closing   of   the   financial   year   which 
would be 30th June, 1951." 
Accepting this submission that this paragraph lays 
down the rent payable, it is clear that, under it, the rent 
payable for the first time would be 10% of the net profits 
earned by the firm in its New Delhi business up to 30th 
June, 1951. The period would naturally begin on the date 
on which the lease commenced. That date, according to 
the  firm  itself, was 1st April, 1950. From these facts it 
follows that when the rent is to be paid for the first time, 
it would be an amount of 10% of the net profits earned 
by the firm in its New Delhi business between 1st April, 
1950   and  30th  June, 1951, and, naturally enough,  the 
rent   will   be   in   respect   of   the   same   period.   This   term, 
therefore, clearly laid down that the very first payment of 
rent was to be for a period of one year and three months, 
so   that,   even   though   no   further   period   for   the 
continuance of the lease after 30th June, 1951, was laid 
down, the lease at least made rent payable for the first 
period   of   fifteen   months.   The   lease   was,   therefore,   at 
least for a period of fifteen months and, consequently, for 
a period exceeding one year. Section 107 of the Transfer 
of Property Act was, thus clearly applicable and such a 
lease could not have been validly made, except under a 
registered   instrument.   Admittedly,   there   was   no 

registration of the documents which constituted the lease 
and, consequently, the firm could not claim any rights on 
the   basis   of   this   lease   evidenced   by   unregistered 
documents. 

5.
Learned counsel tried to urge that, since in these 
documents   no   definite   period   for   the   lease   was 
mentioned, we should hold that s. 106 of the Transfer of 
Property Act was applicable and the lease being in respect 
of   immovable   property   for   purposes   other   than 
agricultural   or   manufacturing  must  be  deemed  to  be  a 
lease from month to month. We are unable to accept this 
submission,   because   none   of   the   documents,   on   which 
reliance has been placed on behalf of the firm to prove 
the lease, contains any clause indicating that the tenancy 
was to be from month to month or the rent was payable 
monthly. In fact, the indication from para 1 of Ext. P
. 3 
quoted above is that the rent was to be payable annually, 
so that the contract itself seems to give an indication that 
it was to be a lease from year to year and annual rent was 
payable.   These   circumstances,  however,  are  immaterial, 
because   we   have   already   indicated   earlier   our   finding 
that this lease was at least for a minimum period of 15 
months   and,   consequently,   s.  107  of   the   Transfer   of 
Property   Act   becomes   applicable,   irrespective   of   the 
question whether it was a lease from month to month or 
from year to year. The High Court was, therefore, quite 
correct in holding that on the basis of this lease the reliefs 
claimed by the firm could not be granted to it. 
16.
Learned senior counsel submits that the lease agreement dated 15 th 
May, 1980 itself was an agreement of lease and was not an agreement for 
lease.   Learned counsel invited my attention to various paragraphs of the 
plaint   in   support   of   this   plea.     Learned   counsel   placed   reliance   on   the 
judgment of the Supreme Court in case of Ram Saran Lall and others vs.  

MST   Domini   Kuer   and   others   (1962   )   2   SCR   474  in   support   of   his 
submission that  section 47 of the Registration Act applies to the document 
only after it is registered.  Learned counsel placed reliance on th judgment 
of the Supreme Court in case of  Har Narain vs. Mam Chand (2010) 13  
SCC 128  in support of the plea that section created by section 47 of the 
Registration   Act   does   not   come   into   play   before   registration   the   actual 
document takes place.  Paragraphs 13, 16 and 23 of the said judgment reads 
thus :­

13. Section  54  of the Act, 1882, mandatorily requires 
that the sale of any immovable property of the value of 
hundred   rupees   and   upward   can   be   made   only   by   a 
registered   instrument.   Section  47  of   the   Act,   1908, 
provides   that   registration   of   the   document   shall   relate 
back to the date of the execution of the document. Thus, 
the aforesaid two provisions make it crystal clear that sale 
deed in question requires registration. Even if registration 
had been done subsequent to the filing of Suit, it related 
back to the date of execution of the sale deed, which was 
prior to institution of the Suit. A similar issue though in a 
case   of   right   of   pre­emption   was   considered   by   the 
Constitution Bench of this Court in Ram Saran Lall and 
Ors.   v.   Mst.   Domini   Kuer   and   Ors. 
MANU/SC/0280/1961  :   AIR   1961   SC   1747,   by   the 
majority of 3:2, the Court came to the conclusion that as 
the mere execution of the sale deed could not make the 
same effective and registration thereof was necessary, it 
was of no consequence unless the registration was made. 
Thus, in spite of the fact that the Act, 1908, could relate 
back   to   the   date   of   execution   in   view   of   provisions   of 
Section  47  of the Act, 1908, the sale could not be given 
effect to prior to registration. However, as the sale was 
not complete until the registration of instrument of sale is 
complete, it was not completed prior to the date of its 
registration. The court held:
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ig
“ 8. ....... Section  47  of the Registration Act does not,  
however, say when sale would be deemed to be complete.  
It only permits a document when registered, to operate  
from a certain date which may be earlier than the date  
when it was registered. The object of this section is to  
decide which of two or more registered instruments in  
respect of the same property is to have effect. The section 
applies to a document only after it has been registered. It  
has nothing to do with the completion of the registration  
and therefore, nothing to do with the completion of a  
sale when the instrument is one of sale. A sale which is  
admittedly   not   completed   until   the   registration   of   the  
instrument of sale is completed, cannot be said to have  
been completed earlier because by virtue of Section  47 
the instrument by which it is effected, after it has been  
registered, commences to operate from an earlier date.  
Therefore, we do not think that the sale in this case can  
be said, in view of Section 47 to have been completed on  
January 31, 1946.
(Emphasis added).
16. However, all these cases are related to right to pre­
emption though the legal issue involved therein remained 
the same. In view of the above, we are of the considered 
opinion that in spite of the fact that the registration of the 
sale deed would relate back to the date of execution, the 
sale can not be termed as complete until its registration 
and it becomes effective  only once it stands registered. 
Thus, the fiction created by Section 47 of the Act, 1908, 
does not come into play before the actual registration of 
the document takes place.
23.   In   view   of   the   above,   we   reach   the   inescapable 
conclusion that the sale executed by respondent No. 1 in 
favour of respondent Nos. 2 to 6 on 2.8.1971 could not 
be   termed   as   a   complete   sale   until   the   document   got 
registered   on   3.9.1971.   In   view   of   the   provisions   of 
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17.
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Section  47  of   the   Act,   1908   the   effect   of   registration 
would be that registration would relate back to the date 
of   execution   but   it   does   not   mean   that   sale   would   be 
complete   in   favour   of   respondent   Nos.   2   to   6   prior   to 
3.9.1971 i.e. the date of registration of the sale deed. In 
view  of   the   above,  as   sale   stood   completed   during  the 
pendency of the suit, doctrine of lis pendens is applicable 
in   the   facts   and   circumstances   of   the   case.   The   courts 
below   failed   to   appreciate   that   the   fiction   created   by 
Section  47  of   the   Act   1908,   itself   is   a   consequence   of 
registration of the sale deed. More so, as the appellant 
had been in possession of the suit land being a mortgagee 
since 1970 and this fact had also been mentioned by the 
respondent   No.   1   in   the   sale   deed   dated   2.8.1971   in 
favour   of   respondent   Nos.   2   to   6,   the   question   of 
respondent   Nos.   2   to   6   being   bonafide   purchasers   for 
value and paid money in good faith without notice does 
not arise, simply for the reason that the said respondents 
were fully aware that the suit land was in possession of 
the appellant. Thus, the respondents No. 2 to 6 cannot 
take the benefit of the provisions of Section 19(b) of the 
Act, 1963.
Learned senior counsel placed reliance on the judgment of the Delhi 
High Court in case of  M/s.Asea Brown Boveri Limited vs. Shri Chiranjiv  
Lal Sharma 75 (1998) Delhi Law Times 773 in support of the plea that an 
unregistered lease deed is inadmissible in evidence under section 49 of the 
Registration Act except for the collateral purpose of proving the nature and 
character of possession of the plaintiff.  Paragraphs 10 of the said judgment 
reads thus :­
10. In   my   opinion,   the   unregistered   lease   deed   dated   1st 
December,   1979   is   clearly   inadmissible   in   evidence   under 
Section  49  of   the   Registration   Act   except   for   the   collateral 
purpose of proving the nature and character of possession of 
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the   plaintiff.   As   stated   earlier   that   the   option   for   further 
extension   of   the   lease   is   one   of   the   terms   of   the   lease 
agreement, the proviso to Section 49 of the Registration Act is 
not applicable to the present case inasmuch as the terms of 
the   lease   are   not   "collateral   purpose"   within   its   meaning 
(Satish Chand v. Govardhan Das, ). Consequently, I hold that 
the renewal clause of the agreement dated 1.12.1979 being a 
term of an inadmissible document could not form the basis of 
the present suit for specific performance of contract.
It is submitted by the learned senior counsel appearing for defendant 
18.
ig
no.3 that in so far as monetary claim made by the plaintiff is concerned, the 
same is barred by law of limitation and the suit is thus liable to be dismissed 
under Order 7 Rule (11)(d) of Code if Civil Procedure, 1908.  It is submitted 
that   the   monetary   claim   is based on  the  payments alleged  to have  been 
made by the plaintiff based on the order passed by the Co­operative Court 
which was filed by the defendant no.4 against the plaintiff and the said trust 
which payments were made prior to three years of filing this suit.  Appeal 
filed by the plaintiffs was already dismissed by the Co­operative court on 7 th 
November, 1997 whereas suit is filed on 18th June, 2001.   
19.
In support of the plea that after termination of lease, plaintiff was a 
tenant at sufferance and has no right and is like a tresspasser, reliance is 
placed by the learned senior counsel on the judgment of the Supreme Court 
in   case   of  Kewal   Chand   Mimani   vs.   S.K.Sen   and   others   AIR   2001   SC  
2569.     It is held by the Supreme Court that a tenancy at sufferance does 
not create the relationship of landlord and tenant.  Paragraphs 35 and 36 of 
the said judgment reads thus :­
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35. Coming back to the second of the twin issuance as 
noticed above, namely, can the Mimanis be termed to be 
a  tenant   holding  over   ­  incidentally,  the  act   of  holding 
over in any event after the expiration of the term does 
not necessarily create tenancy of any kind: if the lessee 
remains in possession after the determination of the term 
and   for   all   practical   purposes,   he   becomes   a   tenant   at 
sufferance. This Court in R.V
. Bhupal Prasad Vs. State of 
A.P
. and others MANU/SC/0035/1996 : AIR1996SC140 : 
AIR1996SC140 had the occasion to deal with this concept 
of tenancy at sufferance in paragraph * of the report, this 
court observed:­
ig
"8.   Tenant   at   sufferance   is   one   who   comes   into 
possession of land by lawful title, but who holds it by 
wrong after the termination of the term of expiry of 
the lese by efflux of time. The tenant at sufferance is, 
therefore, one who wrongfully continues in possession 
after   extinction   of   a   lawful   title.   There   is   little 
difference   between   him   and   a   trespasser.   In   Mulla's 
Transfer of Property Act (7th Edn.) at page 633 , the 
position of tenancy at sufferance has been stated thus; 
A   tenancy   at   sufferance   is   merely   a   fiction   to   avoid 
continuance   in   possession  operating  as  a  trespass.  It 
has   been   described   as   the   least   and   lowest   interest 
which   can   subsist   in   reality.   It   therefore,   cannot   be 
created by contract and arises only by implication of 
law which a person who has been a possession under a 
lawful title continues in possession under a lawful title 
continues   in   possession   after   that   title   has   been 
determined,   without   the   consent   of   the   person 
entitled. A tenancy at sufferance does not create the 
relationship of landlord and tenant. At page 769 it is 
stated   regarding   the   right   of   a   tenant   holding   over 
thus;  The  act  of the over after the  expiration of the 
term does not necessarily create a tenancy of any kind. 
If   the   lessee   remaining   in   possession   after 
determination   of   the   term,   the   common   law   rule   is 
that   he   is   a   tenant   of   sufferance.   The   expression 
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ig
"holding   over   "   is   used   in   the   sense   of   retaining 
possession. a distinction should be drawn between a 
tenant   continuing   in   possession   after   the 
determination of the lease, without the consent of the 
landlord   and   a   tenant   doing   so   with   the   landlord's 
consent. The former is called a tenant by sufferance in 
the language of the English law and the latter class of 
tenants is called a tenant holding over or a tenant at 
will. The lessee holding over with the consent of the 
lessor is in a better position than a mere tenant at will. 
the tenancy on sufferance is concerted into a tenancy 
at   will   by   the   assent   of   the   landlord,   but   the 
relationship of landlord and tenant is not established 
until the rent was paid and accepted. The assent of the 
landlord to  the  continuance  of the tenancy after the 
determination   of   the   tenancy   would   create   a   new 
tenancy. The possession of a tenant who has ceased to 
be a tenant is protected by law. Although he may not 
have   a   right   to   continue   to   possession   after   the 
termination of the tenancy, his possession is judicial."
36. There   is   thus,   however   a   subtle   difference 
resultantly   a   definite   distinction   between   a   tenant 
holding over and a tenant­at­sufferance, as noticed above 
in Bhupal prasad's decision (supra): Holding over stands 
equivalent   to   the   retention   of   possession   after 
determination   of   lease,   but   with   the   consent   of   the 
landlord­whereas,   on   similar   circumstance   if   the 
possession is without the consent of the landlord then the 
same stands out to be a tenant­at­sufferance. Section 116 
of   the   Transfer   of   Property   Act   does   let   a   statutory 
recognition   to   the   concept   of   holding   over:   Is   the 
situation presently a kin to a tenancy by way of holding 
over   the   property   or   the   Mimanis   be   even   termed   as 
tenant­at­sufferance ­ the answer obviously, in the facts of 
the   matter   under   consideration,   can   not   but   be   in   the 
negative   ­­   Are   the   Mimans   in   possession?   The   answer 
again   can   not   but   be   in   the   negative.   There   exists   a 
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20.
differentiation between the lessee of a determined lease 
in   possession   and   a   lessee   disposed.   Mimanis   stands, 
admittedly dispossessed from the lease premises, Can any 
right   be   said   to   accrue   in   favour   or   the   Mimanis   the 
answer cannot but be an emphatic `no' law courts will 
have to act within the limits of law and the courts try to 
take note of the moral fabric of the law.
Learned   senior   counsel   for   defendant   no.3   placed   reliance   on   the 
judgment of Supreme court in case of State of Maharashtra and others vs.  
ig
Atur India Pvt.Ltd. (1994) 2 SCC 497 in support of his submission that an 
agreement to lease may effect an actual demise in which case it is a lease 
and on the other hand the agreement to lease may be a merely a executory 
instrument binding the parties, the one to grant and the other to accept the 
lease in the future.  Paragraphs 27 and 28 of the said judgment reads thus :­
27.   We   will   now   turn   to   Indian   law:   Mulla   in   'The 
Transfer   of   Property   Act"   (7th   Edition)   at   page   674 
dealing with agreement to lease states as under:
“An agreement to lease may effect an actual demise in 
which   case   it   is   a   lease.   On   the   other   hand   the 
agreement   to   lease   may   be   a   merely   executory 
instrument binding the parties, the one, to grant, and 
the other, to accept a lease in the future. As to such an 
executory agreement the law in England differs from 
that   in   India.   An   agreement   to   lease   not   creating   a 
present   demise   is   not   a   lease   and   requires   neither 
writing nor registration.
As to an executory agreement to lease, it was at one 
time supposed that an intending lessee, who had taken 
possession   under   an   agreement   to   lease   capable   of 
specific performance, was in the same position as if the 
lease   had   been   executed   as   registered.   These   cases 
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have,   however,   been   rendered   absolute   by   the 
decisions of the Privy Council that the equity in Walsh 
V
. Lonsdale does not apply in India.”
28. If it is merely an agreement to lease as to whether it 
requires  registration has come up for discussion of this 
Court in Tiruvenibai and Anr. v. Smt. Lilabai, at page 111 
it was held as under:
ig
“   Before   dealing   with   these   points,   we   must   first 
consider what the expression "an agreement to lease" 
means under Section  2(7)  of the Indian Registration 
Act.   hereinafter   referred   to   as   the   Act.   Section  2(7) 
provides that a lease includes a counterpart, Kabuliyat, 
an   undertaking   to   cultivate   and   occupy   and   an 
agreement   to   lease.   In   Hemanta   Kumari   Debi   v. 
Midnapur Zamindari Co. Ltd. , the Privy Council has 
held that "an agreement to lease, which a lease is by 
the statute declared to include, must be a document 
which   effects   an   actual   demise   and   operates   as   a 
lease".   In   other   words,   an   agreement   between   two 
parties which entitles one of them merely to claim the 
execution of a lease from the other without creating a 
present   and   immediate   demise   in   his   favour   is   not 
included under Section 2, Sub­section (7). In Hemanta 
Kumari Debi's case (supra) a petition setting out the 
terms of an agreement in compromise of a suit stated 
as one of the terms that the plaintiff agreed that if she 
succeeded  in  another suit  which she  had brought  to 
recover   certain   land,   other   than   that   to   which   the 
compromised   suit   related,   she   would   grant   to   the 
defendants a lease of that land upon specified terms. 
The petition was recited in full in the decree made in 
the compromised suit under Section 375 of the CPC, 
1882.   A   subsequent   suit   was   brought   for   specific 
performance of the said agreement and it was resisted 
on the ground that the agreement in question was an 
agreement to lease under Section 2(7) and since it was 
not   registered   it   was   inadmissible   in   evidence.   This 
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ig
plea was rejected by the Privy Council on the ground 
that the document did not. effect an actual demise and 
was outside the provisions of Section  2(7). In coming 
to  the   conclusion  that  the  agreement  to  lease  under 
the said section must be a document which effects an 
actual   demise   the   Privy   Council   has   expressly 
approved   the   observations  made  by   Jenkins,   C.J.,  in 
the case of Panchanan Bose v. Chandra Charan Misra, 
in regard to the construction of Section 17 of the Act. 
The   document   with   which   the   Privy   Council   was 
concerned was construed by it as "an agreement that, 
upon   the   happening of  a contingent  event  at  a dale 
which   was   indeterminate   and   having   regard   to   the 
slow progress of Indian Litigation, might be far distant, 
a lease would be granted"; and it was held that "until 
the   happening   of   that   event,   it   was   impossible   to 
determine whether there would be any lease or not". 
This decision makes it clear that the meaning of the 
expression   "an   agreement   to   lease"   "which,   in   the 
context where it occurs and in the statute in which it is 
found,   mast   relate  to  some  document  that  creates  a 
present and immediate interest in the land". Ever since 
this decision was pronounced by the Privy Council the 
expression "agreement to lease" has been consistently 
construed   by   all   the   Indian   High   Courts   as   an 
agreement which creates an immediate and a present 
demise in the property covered by it.”
21.
It is submitted that agreement of 1980 itself created right in presenti 
and   was   compulsorily   required   to   be   registered.     All   the   terms   and 
conditions   of   lease   were   recorded   in   the   said   agreement   between   the 
parties.  The document was hit by section 107 of Transfer of Properties  Act.
22.
Per contra Mr.     Mehta   learned   senior   counsel     appearing   for   the 
plaintiff submits   that  all the submissions made by the defendant no. 3 in 
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support of the motion are on merits of the suit which can be considered at 
the time of trial and not under Order 7 rule 11 of CP
.C.    It is submitted that 
the plaintiff is seeking specific performance of the two agreements  and for 
claiming   such   reliefs,   plaintiff   has   to   show   that   such   agreements   were 
entered into, plaintiff is entitled to specific performance thereof and that the 
plaintiff  is  ready  and  willing to perform such agreement  all through out 
from the plaint.  Learned senior counsel placed reliance on the judgment of 
the supreme court in the case of Liverpool and London S.P
. & I Association  
ig
Ltd Vs. M.V. Sea Success I and Another reported in (2004) 9 Supreme  
Court   Cases   512  in   support   of   his   submission   that   material   facts   are 
required to be stated in the plaint and not the evidence.  Reliance is placed 
on paragraphs 4, 139 to 152 and 154 thereof which read thus.  
“ 4.   On an application for arrest of the 1 st respondent vessel having been made, the  
2nd respondent appeared and undertook to furnish security in respect of the appellant's  
claim and further gave an undertaking that until the security is furnished the said  
vessel   will   not   leave   the   Port   of   Mumbai.   However,   thereafter   S.S.   Shipping  
Corporation Inc., Liberia claiming to be the registered owner of the 1 st  respondent 
furnished a bank­guarantee in relation to the appellant's claim in discharge of the  
undertaking of security given by the second respondent. The 1st respondent thereafter  
took out a Notice of Motion for rejection of the plaint purported to be under Order 7  
Rule 11(a) of the Code of civil Procedure inter alia on the ground that the averments  
contained therein do not disclose a cause of action as the claim of unpaid insurance  
premium  was  not  a  "necessary"  within  the  meaning   of  Section  5 of  the  Admiralty  
Courts Act, 1861. A learned Single Judge of the High Court after hearing the Notice of  
Motion by an order dated 1­2/2/2001 referred the said question to a Division Bench  
as   it   could   not   agree   with   a   decision   rendered   by   another   learned   Single   Judge.  
However, on the other two grounds it discharged the Notice of Motion holding that the  
averments made in paragraphs 1 and 14 of the plaint inter alia to the effect that all  
the three ships are beneficially owned by the 2 nd respondent disclose a cause of action. 
 REJECTION OF PLAINT:
139. Whether a plaint discloses a cause of action or not is essentially a question of  
fact. But whether it does or does not must be found out from reading the plaint itself.  
For the said purpose the averments made in the plaint in their entirety must be held to  
be correct. The test is as to whether if the averments made in the plaint are taken to be  
correct in its entirety, a decree would be passed.
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CAUSE OF ACTION:
140. A cause of action is a bundle of facts which are required to be pleaded and proved  
for the purpose of obtaining relief claimed in the suit. For the aforementioned purpose,  
the material facts are required to be stated but not the evidence except in certain cases  
where   the   pleading   relies   on   any  misrepresentation,   fraud,   breach   of   trust,   wilful,  
default, or undue influence.
141. Order 7 Rule 14 of the Code of civil Procedure provides as follows:
"14 PRODUCTION OF DOCUMENT ON WHICH PLAINTIFF SUES OR RELIES.
(1) Where a plaintiff sues upon a document or relies upon document in his possession  
or power in support of his claim, he shall enter such documents in a list, and shall  
produce it in Court when the plaint is presented by him and shall, at the same time  
deliver the document and a copy thereof, to be filed with the plaint.
ig
(2) Where any such document is not in the possession or power of the plaintiff, he  
shall, where possible, state in whose possession or power it is.
(3) Where a document or a copy thereof is not filed with the plaint under this rule, it  
shall not be allowed to be received in evidence on behalf of the plaintiff at the hearing  
of the suit.
(4) Nothing in this rule shall apply to document produced for the cross­examination of  
the plaintiff's witnesses, or, handed over to a witness merely to refresh his memory."
142. In the instant case the 'Club' not only annexed certain documents with the plaint  
but also filed a large number of documents therewith. Those, documents having regard  
to   Order   7   Rule   14   of   the   Code   of   civil   Procedure   are   required   to   be   taken   into  
consideration for the purpose of disposal of application under Order 7 Rule 11(a) of  
the Code of civil Procedure. The 'Club' in its plaint pleaded:
"The Plaintiff is a Protection & Indemnity Association incorporated under the laws of  
the   United   Kingdom   and   carries   on   business   through   its   Managers,   Liverpool   &  
London P&I Management Ltd. at Liverpool, UK. The Plaintiff is a mutual association  
of   ship­owners   and   offers   insurance   cover   in   respect   of   vessels   entered   with   it   for  
diverse third  party  risks associated  with  the operation and trading of vessels.  This  
insurance is commonly known as Protection & Indemnity (P&I) cover in respect of  
various   risks   associated   with   the   vessels   in   their   maritime   adventure.   The   1st  
Defendant vessel m.v. "Sea Success I" is a sister ship of the vessels "Sea Ranger" and  
"Sea Glory" which were entered for P&I risks with the Plaintiff Association. The said  
two vessels were entered into the Plaintiff's Association for the policy year 1999­2000  
by Defendant No. 2, Singapore Soviet Shipping Co. Pte. Ltd. who, as per the terms of  
the insurance and Rules of the Plaintiff Association, were recognized and considered to  
be the owners of the said two vessels and the assured under the policy of insurance.  
The 1st Defendant vessel is owned and/ or controlled by Defendant No. 2 through its  
wholly   owned   100%   subsidiary,   Singapore   Soviet   Shipping   Corporation   Inc.,  
Monrovia. The 1st Defendant vessel is presently at the port and harbour of Mumbai  
within the territorial waters of India and within the Admiralty jurisdiction of this  
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Hon'ble Court. The 2nd Defendant is the owner of the 1st Defendant and is also inter  
alia the party liable in personam in respect of the Plaintiff's claim.
ig
The Plaintiff submits as more particularly stated in paragraph 1 above, that the 1st  
Defendant vessel is a sister ship of the two vessels "Sea Glory" and "Sea Ranger" in view  
of   the   beneficial   ownership,   management   of   all   three   vessels   having   vested   in  
Defendant   No.   2.   The   Plaintiff   further   submits   that   Defendant   No.   2   is   liable   in  
personam in respect of the unpaid insurance premium in respect of the two vessels "Sea  
Glory" and "Sea Ranger". Consequently, the Plaintiff is entitled to arrest any other  
vessel in  the ownership of Defendant No.  2. The 1st Defendant  vessel is  owned by  
Defendant   No.   2   through   it's   100%   subsidiary   S.S.   Shipping   Co.   Inc.   In   the  
circumstances,   the   Plaintiff   submits   that   they   are   entitled   to   proceed   against   the  
Defendant vessel in rem and are entitled to an order of arrest, detention and sale of  
the vessel for recovery of their outstanding dues in respect of insurance premium as  
more   particularly   stated   above.   The   Plaintiff   is,   therefore,   entitled   to   have   the  
Defendant vessel along with her hull, gear, engines, tackle, machinery, bunkers, plant,  
apparel, furniture, equipments and all appurtenances thereto condemned and arrested  
under a warrant of arrest of this Hon'ble Court for realization of the Plaintiff's dues.  
The Plaintiff is further entitled to have the Defendant vessel sold under the orders and  
directions of this Hon'ble Court and to have the sale proceeds thereof applied towards  
the satisfaction of the Plaintiff's claim in the suit. The Plaintiff is entitled to an order  
of arrest of the Defendant vessel as arrest is the only method of proceeding against the  
said vessel in rem. The Plaintiff submits that if such an order of arrest is not granted,  
irreparable harm and injury will be caused to the Plaintiff inasmuch as the Plaintiff's  
suit   will   be   rendered   infructuous.   There   is   no   other   alternative   efficacious   remedy  
available to the Plaintiff.
143. The Club has pleaded that the vessel is a sister ship of 'Sea Ranger' and 'Sea  
Glory' owned and possessed by the second defendant. The Club has also pleaded that  
the defendant No. 2 is beneficial owner of the first defendant ship. Determination on  
such assertions would amount to determination of question of fact. If the 'Vessel' denies  
or disputes the same; an issue in that behalf will have to be framed and decided.
144.   Beneficial   ownership   of   a   ship   is   not   a   question   of   fact   alone.   It   is   a   mixed  
question of fact and law. In William v. Wilcox it is held:
"It is an elementary rule in pleading that when a state of facts is relied, it is enough to  
allege   it   simply,   without  setting   out  the   subordinate   facts  which  are   the  means   of  
proving it or the evidence sustaining the allegations."
145. The aforementioned dicta has been quoted with approval in  Mohan Rawale  v.  

Damodar Tatyaba, and Ors. 
  MANU/SC/0637/1994
  : (1994)2SCC392 .
146. It may be true that Order 7 Rule 11(a) although authorises the court to reject a  
plaint on failure on the part of the plaintiff to disclose a cause of action but the same  
would not mean that the averments made therein or a document upon which reliance  
has been placed although discloses a cause of action, the plaint would be rejected on  
the ground that such averments are not sufficient to prove the facts stated therein for  
the purpose of obtaining reliefs claimed in the suit. The approach adopted by the High  
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28/59
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Court, in this behalf, in our opinion, is not correct.
147.   In  D.   Ramachandran  v.  R.V.  Janakiraman   and   Ors.  MANU/SC/0154/1999 :  

  
  
[1999]1SCR983 , this Court held:
"It  is  well settled  that  in  all cases   of  preliminary objection,  the  test  is  to see  
whether any of the reliefs prayed for could be granted to the appellant if the  
averments   made   in   the   petition   are   proved   to   be   true.   For   the   purpose   of  
considering   a   preliminary   objection,   the   averments   in   the   petition   should   be  
assumed   to   be   true   and   the   court   has   to   find   out   whether   those   averments  
disclose a cause of action or a triable issue as such. The court cannot probe into  
the facts on the basis of the controversy raised in the counter."
148. Furthermore a fact which is within the special knowledge of the defendant need  
not be pleaded in the plaint. In Punit Rai v. Dinesh Chaudhary 

  MANU/SC/0608/2003
  
: AIR2003SC4355 , it is stated:
ig
"...These are the material facts relating to the plea raised by the appellant that  
the respondent is not a Scheduled caste. We don't think if the respondent means  
to say that the petitioner should have stated in the petition that the respondent  
is not born of Deo Kumari Devi said to be married to Bhagwan Singh in village  
Adai.   If   at   all   these   facts   would   be   in   the   special   knowledge   of   respondent,  
Bhagwan Singh and Deo Kumari Devi hence not required to be pleaded in the  
election petition. It is not possible as Well. In this connection, a reference may be  
made to a decision of this Court in Balwan Singh v.  Lakshmi Nrain and Ors.  
MANU/SC/0192/1960  :   [1960]3SCR91   .   This   case   also   relates   to   election  
matter and it was held that facts which are in the special knowledge of the other  
party   could   not   be   pleaded   by   the   election   petitioner.   It   was   found   that  
particulars of the arrangement of hiring or procuring a vehicle would never be  
in the knowledge of the petitioner, such facts need not and cannot be pleaded in  
the petition."
149.   In  D.   Ramachandran  v.  R.V.  Janakiraman   and   Ors.  MANU/SC/0154/1999 :  

  
  
[1999]1SCR983 , it has been held that the Court cannot dissect the pleading into  
several parts and consider whether each one of them discloses a cause of action.
150. In the aforementioned backdrop, the question as to whether the Club had been  
able to show that the Respondent No. 1 is a sister ship of "Sea Glory" and "Sea Ranger"  
admittedly belonging to the first respondent is a matter which is required to be gone  
into in the suit.
151.   In   ascertaining   whether   the   plaint   shows   a   cause   of  action,   the   court   is   not  
required to make an elaborate enquiry into doubtful or complicated questions of law  
or fact. By the statute the jurisdiction of the court is restricted to ascertaining whether  
on the allegations a cause of action is shown. In  Vijay Pratap Singh  v.  Dukh Haran  

Nath Singh 
  MANU/SC/0394/1962
  : AIR1962SC941 this Court held:
"By   the   express   terms   of   Rule   5   Clause   (d),   the   court   is   concerned   the   ascertain  
whether the allegations made in the petition show a cause of action. The court has not  
to see whether the claim made by the petitioner is likely to succeed: it has merely to  
satisfy itself that the allegations made in the petition, if accepted as true, would entitle  

the petitioner to the relief he claims. If accepting those allegations as true no case is  
made out for granting relief no cause of action would be shown and the petition must  
be rejected. But in ascertaining whether the petition shows a cause of action the court  
does not enter upon a trial of the issues affecting the merits of the claim made by the  
petitioner. It  cannot  take into consideration the  defences which the  defendant may  
raise upon the merits; nor is the court competent to make an elaborate enquiry into  
doubtful or complicated questions of law or fact. If the allegations in the petition,  
prima   facie,   show   a   cause   of   action,   the   court   cannot   embark   upon   an   enquiry  
whether the allegations are true in fact, or whether the petitioner will succeed in the  
claims made by him."
152. So long as the claim discloses some cause of action or raises some questions fit to  
be decided by a Judge, the mere fact that the case is weak and not likely to succeed is  
no ground for striking it out. The purported failure of the pleadings to disclose a cause  
of action is distinct from the absence of full particulars. [See Mohan Rawale (supra)]

154.  The approach of the High Court, in our considered opinion, is not correct. For  
the purpose of rejecting a plaint it is not necessary to consider whether the averments  
made in the plaint prove the factum that the defendant No. 1 "Sea Success­I" is a sister  
ship of "Sea Glory" and "Sea Ranger" or the said two ships are beneficially owned by  
the defendant No. 2. The reasons which have been assigned in support of the said  
aforementioned finding that that the ship is a valuable commercial chattel and her  
arrest undeservingly prejudices third parties as well as affect the interest of owner and  
others is a question which must be gone into when passing a final order as regard  
interim arrest of ship or otherwise. For the aforementioned purpose the Vessel herein  
could file an application for vacation of stay. While considering such an application,  
the Court was entitled to consider not only a prima facie case but also the elements of  
balance   of   convenience   and   irreparable   injury   involved   in   the   matter.   In   such   a  
situation and particularly when both the parties disclose their documents which are in  
their possession, the Court would be in a position to ascertain even prima facie as to  
whether the Club has been able to make out that "Sea Glory" and "Sea Ranger" are  
sister vessels of the "Vessel".
23.
Mr.Mehta learned senior counsel then submits that it is the case of the 
plaintiff in the plaint that  revisionary rights were given to the plaintiff by 
the defendant nos. 1 to 3 in the suit property which are exercised by the 
plaintiff.   My attention is invited to paragraphs 4C to 4E of the plaint and 
also to the copy of the lease deed dated 8 th July, 1992, 14th May, 1980 and 
the other documents in support of the submission that the lease deed dated 
8th July, 1992 had been already registered on 10 th July, 2009 though it was 

lodged on 8th July, 1992 itself. Mr. Mehta learned senior counsel also invited 
my attention to paragraph  5, 6, 8 to 10, 10B 10C and 10E of the plaint in 
support of his plea that all the averments required to be made in a suit for 
specific performance are made in the plaint.   It is submitted that this court 
has to  consider  the averments  in the plaint and not what is stated in the 
written statement of the defendant. 
Mr.   Mehta   learned   senior   counsel   then   submits   that   under 
24.

proviso to clause (C )(ii), the plaintiff was given right to  seek renewal   of 
the   lease     at   the   end   of   20   years   or   to   exercise   right   of  reversion.   It   is 
submitted that it was not mandatory for the plaintiff to seek renewal of the 
lease   and   then   exercise   right   of   reversion.   It   is   submitted   that   right   of 
reversion   could   be   exercised   by   the   plaintiff   anytime   after   the   expiry   of 
twenty years.  It is submitted that if the submissions of the defendants are 
accepted, it would amount to rewriting the contract or to read additional 
words in the agreement which is not permissible.  Intention of the parties is 
clear   from   the   plain   reading   of   the   proviso   to   clause   (C   )(ii)   of   the 
agreement.   Learned senior counsel submits  that whether there is reversion 
or   not     can   be   decided   only   at   the   trial   of   the   suit   and   not   in   this 
proceedings.     Learned   senior   counsel   distinguished   the   judgment   of   this 
Court in case of  Bhaskar Gopal & Anr. Vs. Padman Hira Chowdhari &  
Anr.  reported  in AIR 1916 Bom 228 on the ground that the facts of that 
case   are   totally   different.   In   so   far   as   issue   of   registration   raised   by 
defendant no. 3 is concerned, it is submitted  by Mr. Mehta learned senior 
counsel  that  the lease agreement dated 8 th July, 1992 was already lodged 
on   8th  July,   1992   itself   for   the   registration.   If     the   said   document   is 

registered in 2009, plaintiff is not responsible for the same.   It is submitted 
that in any event, the registration of the document would relate back to the 
date of its execution.   Twenty years period of lease had not expired on 8 th 
July, 1992 admittedly. The fact that the agreement dated 8 th  July, 1992 is 
registered is not in dispute   and is not challenged by the defendants.   My 
attention is invited to page 94 of the plaint in support of the submission that 
a draft lease was appended to the said agreement of 15 th May, 1980 which 
was to be executed in future by exercising power of attorney.  My attention 

is also invited to the power of attorney which was executed by defendant 
nos. 1 to 3 in favour of plaintiff which included power to execute lease deed 
in favour of the plaintiff. It is submitted that the  plaintiff rightly exercised 
such  powers  and executed a lease    in favour of the  plaintiff on  8 th  July, 
25.
1992. 
Mr. Mehta learned senior counsel placed reliance on the judgment on 
the Supreme Court in the case  of Hardesh Ores (P) Ltd.  Vs. Hede & Co.  
reported   in   (2007)   5   Supreme   Court   Cases   614  in   support   of   the 
submission that whether a document is registered or not  and effect thereof 
can   not   be   urged   in   an   application     under   Order     7   rule   11   of   C.P
.C. 
Paragraph 2, 3, 21, 23 and 25 of the said judgment  read thus :
“ 2. These appeals have been filed by the appellants against the common judgment  
and order  of the High Court  of Judicature at Bombay dated  20.10.2006 in First  
Appeal Nos. 138 and 139 of 2006 whereby the High Court has affirmed the order of  
the Trial Court dismissing the suits filed by the appellants under Order VII Rule 11 of  
the Code of Civil Procedure holding that the suits are barred by limitation.
3. The representative facts giving rise to these appeals are taken from the pleadings in  
suit filed by Hardesh Ores Pvt. Ltd. The appellants herein, namely, Hardesh Ores Pvt.  
Ltd. in civil appeal arising out of SLP(C) No. 106/2007 (for short 'Hardesh') and  
Sociedade de Fomento Industrial Pvt. Ltd. in civil appeal arising out of SLP(C) No.  

640/2007 (for short 'Fomento') respectively entered into two agreements with the  
respondent   Hede   &   Co.   (for   short   'Hede')   on   23.10.1996.   The   agreement   with  
Hardesh was for extraction of ore from the mine in question whereas the agreement  
with   Fomento   was   for   purchase   of   minerals   extracted   from   the   mine.   Both   the  
agreements   contained   similar   terms   and   conditions.   As   per   Clause   2.1   of   the  
Agreement, the agreement though executed on 23.10.1996 was to come into force  
from 1.1.1997 and was to remain in force for a period of 5 years from such date.  
Clause   2.2   of   the   agreement   provided   that   on   the   expiry   of   every   5   years   the  
agreement shall stand renewed for further periods of like duration at the sole option  
of Hardesh on the same terms and conditions as contained in the original agreement.  
Hardesh was entitled to exercise its option during the entire period of lease in respect  
of the said mine and renewals thereafter, and until such time as remaining deposits of  
ore in the said mine could be economically exploited. Clause 2.3 gave the right to  
Hardesh to terminate the agreement by giving two calendar months prior notice in  
writing to the respondent­Hede of its intention to do so. Clause 2.5 of the agreement  
provided inter alia that in case Hardesh was forced to abandon work in the said  
mine/land on account of any lawful or legal claim made and/or objection raised by  
any person including the holder of surface right or on account of any injunction being  
passed   by   any   Court   of   Law   or   on   account   of   any   fault   of   the   respondent,   the  
agreement shall not stand terminated but the operation thereof shall stand suspended  
for such time. In the event such a condition/situation continued to exist for a period  
exceeding six calendar months, Hardesh shall be entitled to terminate the agreement  
after giving 30 days notice in writing. Clause 9.2 of the agreement ensured that the  
respondent shall not in any manner interfere or obstruct Hardesh from carrying on  
the work of extraction, raising, loading or delivering the ore and its other functions  
under and in accordance with the agreement.
21. 
Mr. Mukul Rohtagi, learned senior counsel appearing for the respondent in  
civil appeal arising out of SLP(C) No. 106/2007 submitted that the High Court was  
fully   justified   in   coming   to   the   conclusion   that   the   clever   drafting   of   the   plaint  
purporting to be a suit for injunction was merely to camouflage the real issue. He did  
not   dispute   that   the   plaint   must   be   read   as   a   whole   and   one   must   look   to   the  
substance rather than the form. He submitted that the appellant's case that there was  
automatic renewal after the original term expired on mere exercise of option by the  
appellant was not legally tenable. According to him the renewal of a mining lease  
must be evidenced by the execution of a deed evidencing renewal, or a fresh mining  
lease, and such a document must incorporate the negative covenants as were sought  
to be enforced. According to him if the submission urged on behalf of the appellants is  
to   be   accepted,   by   mere   exercise   of   option   and   without   execution   of   an   actual  
agreement,   a   renewed   agreement   comes   into   existence   with   the   same   negative  
covenants which gave a right to the appellant to enforce the newly born negative  
covenants. According to him where an option is to be exercised by the lessee, he must  
insist upon the execution of an actual physical agreement evidencing renewal of the  
original term. If the promisor refused to execute such a document, the appellants  
should have sought the assistance of the Court and ought to have moved the Court  
claiming a relief against the promisor for execution of a document evidencing renewal  
of the lease. That should have been done within a period of 3 years from the date on  
which the promisor rejected the claim of the appellant that the lease stood renewed  
by mere exercise of option by it. If no suit is filed and no agreement executed by the  

parties, there can  be no  question of a fresh agreement coming into existence  and  
consequently   no   question   of   enforcement   of   a   negative   covenant   in   such   a   non­
existent agreement. He further submitted that the 1996 agreement was a lease for a  
period exceeding 11 months and, therefore, required compulsory registration in view  
of the provisions of Sections 17 and 49 of the Registration Act. It, therefore, cannot  
be read as evidence in the suit and consequently no rights under such an agreement  
can  be  claimed.   He   further   submitted  that  even renewal  of  such   a  lease  required  
registration.   According   to   him   the   appellants   were   trying   to   side   step   something  
which was imperative and which had necessarily to be asked for in the suit, which  
had   not   been   asked   for.   Therefore,   applying   the   principle   laid   down   in   Srinivasa  
Murthy's case (supra) the suit must fail because the appellants should have asked for  
a declaration under Order II Rule 2 to the effect that the agreement stood renewed  
and the respondent's denial was unlawful. Rather than doing that, the appellants  
have sought only the end relief which could not be asked for without first asking for a  
declaration that the lease deed stood renewed on mere exercise of option without the  
execution of an indenture evidencing renewal of the lease. Only in such a renewed  
lease   a   negative   covenant   could   have   been   incorporated   which   could   have   been  
enforced.   Since   such   an   agreement   never   came   into   existence   and   a   suit   for  
declaration stood barred by time, the appellant cannot get over the limitation and  
seek the remedy of injunction by way of enforcement of the negative covenants in an  
agreement which never came into existence. In sum and substance he submitted that  
without  first  getting  a  renewed  lease  deed  executed  in  physical form  or  getting  a  
declaration from a Court of Law that lease stood renewed as contended by them, the  
appellant cannot seek a relief by way of injunction by filing a suit for enforcement of  
negative covenants. He further submitted that the appropriate Article which applied  
in the facts of this case was Article 54. Since the respondent denied the fact that the  
lease  stood  automatically renewed, the  limitation commenced from  that  day and,  
therefore, a suit for declaration and/or specific performance was barred after 3 years  
from the date of refusal, i.e., 29.12.2001. Articles 58 and 113 did not apply to the  
facts of this case.
23.   Replying to the submissions urged on behalf of the respondents, Mr. Sorabjee,  
appearing for the appellants submitted that the question as to whether the agreement  
was really a mining lease or a mere agreement, and whether it required registration,  
has to be gone into in the suit and this question cannot be urged in an application  
under Order 7 Rule 11 CPC. At this stage whatever is stated in the plaint must be  
accepted. The question of registration may arise when the document is produced and  
objected   to   by   the   respondent.   In   any   event,   even   if   the   document   requires  
registration, that cannot be a ground for rejecting the plaint on the ground that the  
suit is barred by limitation. Moreover, since the respondents have given up the plea of  
absence   of   cause   of   action,   this   matter   cannot   be   investigated   at   this   stage.   He  
reiterated his submission that under Clause 2.2 of the agreement read with Clause  
18, by exercise of option claiming renewal, the agreement ipso facto stands renewed  
and there is no need to get a fresh agreement executed.

25. 
The language of Order VII Rule 11 CPC is quite clear and unambiguous. The  
plaint can be rejected on the ground of limitation only where the suit appears from  
the statement in the plaint to be barred by any law. Mr. Nariman did not dispute that  

It   is   submitted   that   whether   document   was     compulsorily 
26.

"law" within the meaning of Clause (d) of Order VII Rule 11 must include the law of  
limitation as well. It is well settled that whether a plaint discloses a cause of action is  
essentially a question of fact, but whether it does or does not must be found out from  
reading the plaint itself. For the said purpose the averments made in the plaint in  
their entirety must be held to be correct. The test is whether the averments made in  
the   plaint   if   taken   to   be   correct   in   their   entirety   a   decree   would   be   passed.   The  
averments made in the plaint as a whole have to be seen to find out whether Clause  
(d) of Rule 11 of Order VII is applicable. It is not permissible to cull out a sentence or  
a passage and to read it out of the context in isolation. Although it is the substance  
and not merely the form that has to be looked into, the pleading has to be construed  
as   it   stands   without   addition   or   subtraction   of   words   or   change   of   its   apparent  
grammatical sense. As observed earlier, the language of Clause (d) is quite clear but if  
any authority is required, one may usefully refer to the judgments of this Court in  
Liverpool   and   London   S.P   and   I   Association   Ltd.   v.  M.V.   Sea   Success   I   and   Anr.  
.
MANU/SC/0951/2003  : (2004)9SCC512 and Popat and Kotecha Property v.  State  
Bank of India Staff Association MANU/SC/0516/2005 : (2005)7SCC510 . 
required to be registered or not  and effect thereof has to be considered at 
the time of trial of the suit  and not  at the stage of hearing this application  

27.
under Order 7 rule 11 of C.P
.C.   
It   is   submitted   by   Mr   Mehta   learned   senior   counsel   that   no 
portion of claim can be struck off.  In so far as issue of limitation raised by 
the defendants is concerned, it is submitted by the learned senior counsel 
that   the   plaintiff   had   paid   various   amounts   to   the   society   as   per   orders 
passed   by   Co­operative   Court.     Plaintiff   has   pleaded   adjustment   of   such 
amounts  against   the   purchase  price  for reversion  of rights.   Plaintiff has 
claimed set off in respect of society dues against the consideration amount 
and has given credit in respect thereof.       Defendants did not reply to the 
letter of demand issued by the plaintiff vide a letter dated 16 th  May 2000. 
It   is   submitted   that   cause   of   action   arose   on   16 th  May   2000   when   the 
plaintiff   had   raised   a   demand   and   the   amount   was   not   paid   by   the 

defendants.     In the alternate, it is submitted that the payments made 3 
years prior to the filing of suit are clearly within time and thus no part of 
28.   
claim can be rejected under Order 7 Rule 11 of the Code of Civil Procedure. 
Mr   Mehta   learned   senior   counsel   submits   that   even   if   1980 
document is not registered,   lease is not non existent and such document 
can   be   relied   upon   in   evidence   in   a   suit   for   specific   performance.       My 
attention is invited to clause 4 of 1980 document in support of a submission 

that   a   draft   lease   was   annexed   to   the   said   document   which   was   to   be 
29.   
executed in future.  
In   support   of   his   plea   that   no   part   of   the   plaint   cannot   be 
rejected,     learned   senior   counsel   placed   reliance   on   the   judgment   of 
Supreme   Court   in   case   of  Sopan   Sukhdeo   Sable   &   Ors.   vs.   Assistant  
Charity   Commissioner     (2004)   3   Supreme   Court   Cases   137  and   in 
particular paragraph 13 thereof which reads thus :  

13.  It is trite law that not any particular plea has to be considered, and the  
whole plaint has to be read. As was observed by this Court in Roop Sathi v.  
Nachhattar Singh Gill , only a part of the plaint cannot be rejected and if no  
cause of action is disclosed, the plaint as a whole must be rejected.

30.   
It is submitted that the notice of motion filed by defendant No.3 
in 2006 and being pressed at this stage in the suit of 2001 is liable to be 
dismissed on the ground of gross delay.  Suit is ready for hearing and final 
hearing.   
31.  Mr Kapadia learned senior counsel appearing for defendant No.3 in 

rejoinder submits that 1992 document has been entered into by the plaintiff 
only  with a view to get  it registered by exercising power of attorney on 
behalf   of   both   the   parties.     Learned   senior   counsel   submits   that   1980 
document   which   was   required   to   be   registered   and   not   having   been 
registered,   such   defect   could   not   be   cured   by   entering   into   another 
agreement and by registration of such agreement.   My attention is invited 
to   the   power   of   attorney   and   it   is   submitted   that   though   the   power   of 
attorney refers to an annexure, no document is annexed to the power of 
ig
attorney  and  thus  it   is   clear   that   1980  document   itself   created   rights   in 
favour of the plaintiff.       Mr Kapadia learned senior counsel distinguished 
the Judgment of Supreme Court in case of  Hardesh Ores (P) Ltd.  (supra) 
on the ground that observation made by the Supreme Court in paragraph 23 
is not a ratio but is   passing observation.   The suit was dismissed on the 
ground of limitation.    Learned senior counsel submits that under proviso of 
clause   (C   )(ii)   of   the   document   of   1980   as   well   as   1992   contemplated 
execution of a fresh document for renewal of lease at the end of 20 years. 
There is no automatic renewal of lease.  Execution of a document for such 
renewal   was   must.     Learned   senior   counsel   submits   that   even   in   the 
judgment of Hardesh Ores (P) Ltd. (supra),  Supreme Court looked into the 
clause of the contract and not only plaint.  Reliance is placed on paragraph 
14 to 16, 18, 25, 31, 36, 40 and 41 of the said judgment.     Mr Kapadia 
placed   reliance   on   the   Judgment   of   Supreme   Court   in   the   case   of    T. 
Arivandandam Vs. T.V. Satyapal & Anr. Reported in AIR 1977 Supreme  
Court   2421  and   in   particular   paragraph   5   thereof   in   support   of   his 
submission   that   the   trial   Court   can   examine   the   party   even   at   the   first 
hearing   so   that   bogus   litigation   can   be   shot   down   at   the   earlier   stage. 

Paragraph 5 of the said judgment reads thus : 

“ 5. We have not the slightest hesitation in condemning the petitioner for the gross  
32.   

abuse of the process of the court repeatedly and unrepentantly resorted to. From the  
statement of the facts found in the judgment of the High Court, it is perfectly plain  
that the suit now pending before the First Munsif's Court Bangalore, is a flagrant  
misuse   of   the   mercies   of   the   law   in   receiving   plaints.   The   learned   Munsif   must  
remember   that   if   on   a   meaningful   ­­   not   formal   ­­   reading   of   the   plaint   it   is  
manifestly vexatious, and meritless, in the sense of not disclosing a clear right to sue,  
he should exercise his power under Order VII Rule 11, C.P
.C. taking care to see that  
the   ground   mentioned   therein   is   fulfilled.   And,   if   clear   drafting   has   created   the  
illusion of a cause of action, nip it in the bud at the first hearing by examining the  
party   searchingly   under   Order   X,   C.P   An   activist   Judge   is   the   answer   to  
.C.
irresponsible law suits. The trial Courts would insist imperatively on examining the  
party at the first hearing so that bogus litigation cam be shot down at the earliest  
stage. The Penal Code is also resourceful enough to meet such men, (Ch. XI) and  
must be triggered against them. In this case, the learned Judge to his cost realised  
what George Bernard Shaw remarked on the assassination of Mahatma Gandhi : 
"It is dangerous to be too good."
It is submitted by the learned senior counsel that registration of 
1992 document would relate back to 1992 and not 1980.   It is submitted 
that   under   1980   document,     lease   premises   were   already   transferred   in 
favour of the plaintiff.  Since 1980 document was not registered,  no part of 
such document can be relied upon as no rights can be emanated from such 
document.  
33.   
Mr Kapadia learned senior counsel placed reliance   on Section 
91 and 92 of the Indian Evidence Act  and submits that no oral evidence can 
be submitted which would be inconsistent with the document.  Intention of 
the parties has to be gathered from the document itself.     Only in case of 
latent   effect,     other   material   has   to   be   considered   at   the   time   of   trial. 
Construction   of   a   document   is   always   a   question   of   law   and   no   parole 
evidence is permitted.     On the issue of delay raised by the plaintiff, it is 

submitted that for making an application, under Order 7 Rule 11, no time is 
provided and it can be made at any stage.  It is submitted that the plaintiff 
never took steps to get the suit heard at the earliest and thus no prejudice 
would be caused to the plaintiff, if this application for rejection of plaint is 
considered at this stage.  In support of this plea, Mr Kapadia learned senior 
counsel   placed   reliance   on   the   judgment   of     Supreme   Court   in   case   of 
Mayar H.K. Ltd. & Ors. vs. Owners & Parties, Vessel M. V. Fortune Express  

paragraph 11 which reads thus :   
& Ors. reported in (2006) 3 Supreme Court Cases 100  and in particular 
“ 11.     Under Order VII Rule 11 of the Code, the Court has jurisdiction to  
reject the plaint where it does not disclose a cause of action, where the relief  
claimed is undervalued and the valuation is not corrected within a time as  
fixed by the Court, where insufficient court fee is paid and the additional court  
fee is not supplied within the period given by the Court, and where the suit  
appears from the statement in the plaint to be barred by any law. Rejection of  
the plaint in exercise of the powers under Order VII Rule 11 of the Code would  
be   on   consideration   of   the   principles   laid   down   by   this   Court.   In  T. 
Arivandandam  v.  T.V.   Satyapal   and   Anr.  MANU/SC/0034/1977 :  

  
  
[1978]1SCR742 , this Court has held that if on a meaningful, not formal,  
reading of the plaint it is manifestly vexatious, and meritless, in the sense of  
not disclosing a clear right to sue, the Court should exercise its power under  
Order VII Rule 11 of the Code taking care to see that the ground mentioned  
therein   is   fulfilled.   In  Roop   Lal   Sethi  v.  Nachhattar   Singh   Gill,  
MANU/SC/0521/1982 : (1982) 3 SCC 487, this Court has held that where  
the plaint discloses no cause of action, it is obligatory upon the court to reject  
the plaint as a whole under Order VII Rule 11 of the Code, but the rule does  
not justify the rejection of any particular portion of a plaint. Therefore, the  
High Court could not act under Order VII Rule 11(a) of the Code for striking  
down certain paragraphs nor the High Court could act under Order VI Rule  
16   to   strike   out   the   paragraphs   in   absence   of   anything   to   show   that   the  
averments in those paragraphs are either unnecessary, frivolous or vexatious,  
or that they are such as may tend to prejudice, embarrass or delay the fair  
trial of the case, or constitute an abuse of the process of the court. In ITC Ltd. 
v. Debts Recovery Appellate Tribunal 

  MANU/SC/0968/1998
  : AIR1998SC634  
,   it   was   held   that   the   basic   question   to   be   decided   while   dealing   with   an  
application filed by the defendant under Order VII Rule 11 of the Code is to  
find out whether the real cause of action has been set out in the plaint or  

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something illusory has been projected in the plaint with a view to get out of  
the said provision. In Saleem Bhai and Ors. v. State of Maharashtra and Ors.  
MANU/SC/1185/2002 : [2002]SUPP5SCR491 , this Court has held that the  
trial court can exercise its powers under Order VII Rule 11 of the Code at any  
stage of the suit before registering the plaint or after issuing summons to the  
defendant   at   any   time   before   the   conclusion   of   the   trial   and   for   the   said  
purpose the averments in the plaint are germane and the pleas taken by the  
defendant in the written statement would be wholly irrelevant at that stage.  
In  Popat   and   Kotecha   Property  v.  State   Bank   of   India   Staff   Association 
MANU/SC/0516/2005 : (2005)7SCC510 , this Court has culled out the legal  
ambit of Rule 11 of Order VII of the Code in these words:
“There cannot be any compartmentalization, dissection, segregation  
and inversions of the language of various paragraphs in the plaint. If  
such a course is adopted it would run counter to the cardinal canon of  
interpretation   according   to   which   a   pleading   has   to   be   read   as   a  
whole to ascertain its true import. It is not permissible to cull out a  
sentence of a passage and to read it out of the context in isolation.  
Although it is the substance and not merely the form that has to be  
looked  into,  the pleading  has to be  construed  as it stands  without  
addition   or   subtraction   of   words   or   change   of   its   apparent  
grammatical   sense.   The   intention   of   the   party   concerned   is   to   be  
gathered primarily from the tenor and terms of his pleadings taken as  
a   whole.   At   the   same   time,   it   should   be   borne   in   mind   that   no  
pedantic   approach   should   be   adopted   to   defeat   justice   on   hair­  
splitting technicalities.”
ig

34.   
On the issue of limitation, learned senior counsel re­iterated that 
each and every part of the monetary claim is barred by law of limitation. 
Though various payments were alleged to have been made by the plaintiff 
pursuant to the interim orders passed by Co­operative Court, plaintiff did 
not seek for any appropriate direction for refund of the amounts paid by the 
plaintiffs to the society and gave consent to the society in withdrawing the 
dispute filed by the society before the Co­operative Court.  There is thus no 
cause of action against the defendant Nos.1 to 3 in respect of such monetary 
claim and in any event the same is barred by law of limitation.   It is lastly 
submitted that all such payments were made by the plaintiff under 1980 
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agreement   and   not   under   1992   agreement.     Since   1980   agreement   is 
admittedly not  registered,  no rights can be  claimed under the  said 1980 
agreement and thus there is no cause of action for making any monetary 
claim against the defendants.   It is submitted that on this ground also the 
suit is liable to be dismissed under Order 7 Rule 11 (a) of the Code of Civil 
Procedure.    
REASONS AND CONCLUSION 
From the judgments relied upon by both sides on the issue of scope of 
35.
ig
Order   7   Rule   11   of   Code  of  Civil Procedure  1908, referred to aforesaid, 
following principles of law can be culled out :­
Court should exercise its power under Order 7 Rule 
(a)
11 if on a meaningful, not formal reading of the plaint, it 
is   manifestly   vexatious   and   merit­less   and   does   not 
disclose   a  clear  right  to sue.   It is obligatory upon the 
court to reject the plaint as a whole in such circumstances 
and cannot reject a portion of the plaint.
(b)
Court cannot reject the plaint on the basis of the 
allegations made by the defendants or cannot probe into 
the facts on the basis of controversy raised in the written 
statement or in an application for rejection of the plaint. 
Court has to read the entire plaint as a whole to find out 
whether it discloses a cause of action for the purpose of 
exercising powers under Order 7 Rule 11.   
(c)If plaint discloses some cause of action which requires 
determination   by   the   court,   the   mere   fact   that   in   the 
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opinion of the court, the plaint may not succeed cannot 
be a ground for rejection of the plaint.   Intention of the 
party has to be gathered primarily from the tenor and the 
terms   of   his   pleadings  taken   as  a  whole.    No  pedantic 
approach  should be  adopted to defeat  justice on    heir­
splitting technicalities.
(d)Court   cannot   dismiss   the   plaint   at   the   threshold 
without going into the merit of the case on the ground 
ig
that on account of any provisions of the contract, plaintiff 
was unlikely to succeed.
Court cannot reject a plaint on the ground that the 
(e)
averments   are   not   sufficient   to   prove   the   facts   stated 
therein for the purpose of obtaining reliefs claimed in the 
suit.  

(f)
For   the   purpose  of   deciding   an   application   under 
Order 7 Rule 11, the averments in the plaint should be 
assumed  to  be   true  and court  has  to find  out   whether 
those   averments  disclose  a  cause  of  action   or   a triable 
issue as such. 
(g)
In   ascertaining   whether   plaint   shows   a   cause   of 
action,   the   court   is   not   required   to   make   an   elaborate 
enquiry into doubtful or complicated questions of law or 
facts.     The   jurisdiction   of   the   court   is   restricted   to 
ascertaining whether on the allegations a cause of action 
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is shown.  If the allegations in the plaint prima facie show 
a   cause   of   action,   the   court   cannot   embark   upon   an 
enquiry   whether   the   allegations   are   true   in   fact   or 
whether the plaintiff will succeed in the claims made by 
him.  So long as the claim discloses some cause of action 
or raises some questions fit to be decided by a judge, the 
mere fact that the case is weak and not likely to succeed 
Court has to see whether a real cause of action has 
ig
(h)
is no ground for striking it out.   
been setout in the plaint or something purely illusory has 
been stated with a view to get out of Order 7 Rule 11 of 
the   Code.     There   cannot   be   any   compartmentalisation, 
dissection, segregation and inversions of the language of 
various  paragraphs  in   the  plaint.    The  intention   of  the 
party   concerned  has to  be   gathered  primarily  from  the 
tenor and terms of his pleadings taken as a whole.  
36.
In   this   backdrop   of   the   law   summarized   aforesaid,   I   shall   now 
consider whether plaint discloses any cause of action or not or whether suit 
appears from the statement in the plaint to be barred by any law.  
37.
It is averred by the plaintiffs that by virtue of an agreement of lease 
dated   15th  May   1980,   the   defendant   nos.,   1  to   3  gave   on   lease   the   suit 
premises at a monthly rent.  Under the said agreement, the plaintiffs were 
given a right to purchase the revisionary rights in the suit premises at the 
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end of lease  period of  20  years at a prefixed and agreed purchase  price 
mentioned   therein.       It   is   alleged   that   by   virtue   of   power   of   attorney, 
absolute powers and authorities were conferred on the plaintiffs in regard to 
the lease premises including the right to get shares issued by defendant no.4 
in respect of the said premises transferred in the name of the plaintiffs.  The 
lease rent for 20 years in respect of premises nos. 21 and 22 was to be 
adjusted   by   the   trust   from   out   of   the   amount   of   deposit   made   by   the 
ig
38.
plaintiffs with the trust.  
It is alleged that under the said lease agreement dated 15th May, 1980, 
the   trust   and   the   trustees   were   responsible   to   pay   the   taxes,   outgoings 
maintenance and other charges levied by the society in respect of the suit 
premises.     The   trust   was   regularly   getting   rent   in   respect   of   the   suit 
preemies by virtue of adjustment of rent from the deposit of Rs.93,93,420/­ 
made   by   the   plaintiffs   with   the   trust   as   per   the   provisions   of   lease 
agreement.    Pursuant  to the power of attorney, the  plaintiffs got  a lease 
deed   dated   8th  July   1992   executed   in   their   favour   in  respect   of   the   suit 
premises which lease deed was duly registered.  
39.
It is alleged that the said trust failed to pay the society charges.  The 
society   purported   to   terminate   the   allotment   of   member   in   respect   of 
premises nos. 21 and 22 and filed  a dispute against the defendant no.1 and 
the plaintiffs for recovery of arrears of dues and possession of suit premises. 
The co­operative court passed interim Orders from time to time directing 
the plaintiffs to pay the society outgoings and other charges.  
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It is alleged that under the agreement dated 15 th  May, 1980 and the 
40.
lease deed dated 8th  July 1992 the plaintiffs   have right to purchase the 
revisionary   interest   in   the   entire   suit   premises   for   a   consideration   to   be 
calculated at the rate of Rs.100/­ per sq.ft. of the premises nos. 21 and 22. 
It   is   averred   that   the   plaintiffs   are   ready   and   willing   to   pay   the   said 
consideration of Rs10,01,842/­ to the defendant no.1 and have been ready 
and   willing  to   pay   the   purchase   price   to   the   trust   and   perform  all   their 
obligations  under  the   said two documents for purchasing the  revisionary 
ig
rights   in   respect   of   the   suit   premises.     It   is   averred   that   the   said   two 
41.
agreements are valid, subsisting and binding on the trust and the trustees.
It   is  averred  that   pursuant  to  the   interim  orders  passed by  the  co­
operative   court   the   plaintiffs   have   paid   total   amount   of   about 
Rs.64,53,965.60 in respect of the suit premises to the society directly or in 
the form of deposit in the Co­operative  Court which deposits were made to 
protect   their   own   interest   in   the   said   premises.     It   is   alleged   that   the 
plaintiffs have made those payments on behalf of the lessors, the benefit 
whereof the lessors have enjoyed/accepted and are bound to make good 
and compensate the plaintiffs in that behalf.  It is alleged that the plaintiffs 
have   become   entitled   to   and   to   have   set   off   the   purchase   price   of 
Rs.10,01,842/­ payable under the said agreement in respect of the premises 
against the amount of Rs.70,53,965.60 for the period upto 30 th  May, 2000 
paid by the plaintiffs to the society or deposited in court.  It is alleged that 
the plaintiffs being entitled, claimed a set off and have set off the purchase 
price against the amount payable by the trust to the plaintiffs and called 
upon the trust to effect the transfer of the suit premises to the plaintiffs by 
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validly exercising their right to purchase the revisionary rights in respect of 
the suit premises.  
It   is   alleged   that   the   defendants   nos.   1   to   3   have   failed   and/or 
42.
neglected to comply with the requisitions contained in the notice dated 16 th 
May,   2000.     It   is   averred   that   the   defendants   nos.   1   to   3   are   liable   to 
perform   their   obligations   under   the   said   agreement   by   effectively 
transferring   the   suit   premises   to   the   plaintiffs   in   terms   of   the   said 
agreement.   It is alleged that under the lease agreement dated 15 th  May, 
ig
1980 the plaintiffs were given the right to purchase the revisionary rights in 
respect of the suit premises after expiry of lease period of 20 years from 15 th 
May,1980.  It is averred that the plaintiffs have got the lease deed dated 8 th 
July 1992 executed in their favour which is duly registered with the Sub 
43.
Registrar of Assurances.  
It is averred that the plaintiffs had always complied with and ready 
and willing to comply with all their obligations under the lease agreement 
and the lease deed in respect of the suit premises.  
44.
In paragraph (16) of the plaint it is averred that no part of the claim 
of the plaintiffs is barred by law of limitation.  The cause of action for this 
suit arose for the first time on 16th May 2000.  
45.
The   plaintiffs   have   prayed   in   the   plaint   for   a   declaration   that   the 
defendants   nos.   1   to   3   are   bound   and   liable   to   specially   perform   the 
agreement contained in the lease agreement dated 15 th May, 1980 and lease 
deed dated 8th July, 1992 by a sale and transfer of the suit premises and to 
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deliver and transfer the concerned share certificate issued by the society for 
an agreed purchase price aggregating to Rs.10,01,842/­ and to execute all 
necessary documents for effecting transfer thereof in favour of the plaintiffs. 
The plaintiffs have also prayed for an Order and decree against the trust in 
the sum of Rs.60,52,123.60.   Plaintiff has also sought an Order and decree 
against the society to make the plaintiffs as members in respect of the suit 
premises and to transfer and deliver the concerned share certificate in the 
name of the plaintiffs.   In the alternative, the plaintiffs have prayed for a 
ig
money   decree   against   the   defendant   nos.   1   to   3   in   the   sum   of 
Rs.2,75,88,375.60 and also sum of Rs.20,00,00,000/­ with interest thereon. 
back. 
Defendants  no.3   has  filed this  Notice   of Motion  on   17 th  November, 
46.
Defendants nos.  3 has already filed a written statement in this suit long 
2006 ineralia praying for rejection of plaint under Order 7 Rule 11 of Code 
of   Civil   Procedure,   1908   on   various   grounds.   Defendants   no.3   has   filed 
additional affidavits in this notice of motion raising additional objections in 
support   of   plea     for   dismissal   of   plaint.       Plaintiff   has   filed   affidavits 
opposing the Notice of Motion.  
47.
On reading the averments in the plaint in toto it is clear that it is case 
of the plaintiff that at the end of 20 years under the agreement dated 15 th 
May 1980 read with lease deed dated 8 th  July 1992, plaintiff has right to 
purchase   the   revisionary   interest   in   he   entire   suit   property   for   a 
consideration to be calculated at the described rate.   It is also case of the 
plaintiff that the plaintiff is ready and willing to pay the consideration of 
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Rs.10,01,842/­ to the defendant no.1 and have been ready and willing to 
pay the said purchase price to the trust and perform all their obligations 
under   the   said   two   documents   for   purchasing   the   revisionary   rights   in 
respect of the suit premises.  It is also averred that the said two agreements 
are valid, subsisting and binding on the trust and the trustees.  In paragraph 
(16) read with (13) of the plaint it is averred that the cause of action from 
this suit arose for  the  first time on 16 th  May 2000 when the trust failed 
and/or neglected to comply with the demands contained in the notice dated 
Per contra, the submissions of the defendant no1. to 3 is that under 
48.
ig
16th May, 2000 as also the letter dated 19th April, 2001.  
the agreement dated 15th  May, 1980, itself was an agreement of lease and 
not   an   agreement   for   lease   and   being   unregistered   document   though 
compulsorily required to be register under section 107 of the Transfer of 
Property Act, no rights can be claimed under such unregistered document. 
It is also case of defendants nos. 1 to 3 that since at the end of 20 years 
period under agreement dated 15th May, 1980 or under 8th July, 1992 since 
plaintiff did not apply  for renewal of the lease agreement, there was no 
question of exercising any alleged rights of purchase of revisionary rights in 
the absence of any existing lease.  For the purpose of deciding this objection 
raised across the bar, and also partly raised in the affidavit in support of 
Notice of Motion, it would be also appropriate to consider the plea raised by 
the defendant nos. 1 to 3 in the affidavit in reply filed on 10 th March, 2006 
in Notice of Motion No. 1488 of 2001 by the defendant no.3.  
49.
It is averred in the said affidavit in reply by the defendant no.3 that no 
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agreement   of   lease   was   executed   between   the   parties   as   alleged.     It   is 
alleged that pursuant to the negotiations between the parties, parties has 
drawn up terms of agreement to lease on 15 th  May, 1980.   It is alleged by 
terming the said 'agreement to lease' as 'agreement of lease' the plaintiff is 
trying to mislead the court.  The said agreement was subject to further final 
agreement.   In paragraph (4) of the affidavit it is alleged that the plaintiff 
was allowed to occupy the suit premises in good faith as the final agreement 
of lease was to be drawn up.   However, no final terms were agreed upon 
ig
and the said agreements dated 15 th  May 1980 remained inchoate. In the 
affidavit it is case of the defendant no.3 that the terms suggested by the 
plaintiff were one sided and onerous for the trust and accordingly the trust 
by its letter dated 15 th February 1982 had informed the plaintiff that due to 
wrong calculation and misunderstanding, the trust was forced to sign the 
agreement to lease on a mistaken notion.  In para 7 of the said affidavit it is 
alleged that in view of those developments, the parties did not execute any 
agreements of lease thereby letting out the suit premises to the plaintiff.  It 
is alleged that the alleged lease deed is illegal and nonest in law.  The said 
agreement dated 8th  July, 1992 did not create any right  in favour of the 
plaintiff.  In paragraph 10 of the affidavit, it is alleged that the document to 
which   the   plaintiff   is   referring   as   agreement   of   lease   is   in   fact   only 
agreement to lease and no agreement to lease in respect of the premises was 
in favour of the plaintiff and/or to any other person.  It is alleged that no 
agreement of lease and/or lease deed was ever executed by the parties.  
50.
On perusal of the affidavit in reply filed by defendant nos.1 to 3 in the 
Notice   of   Motion   in   the   same   suit,   it   is   clear   that   the   submissions   now 

advanced across the bar that the agreement dated 15 th May 1980 itself was 
an agreement to lease and not agreement of lease and was required to be 
registered   mandatorily   under   section   107   of   Transfer   of   Property   Act   is 
totally contrary to and inconsistent with the plea of the defendant nos.1 to 3 
raised   in   the   affidavit   in   reply   to   the   notice   of   motion.     In   my   view 
defendants nos. 1 to 3 cannot be permitted to take a different stand in the 
notice of motion taken out by defendant nos. 1 to 3 for dismissal of suit 
under Order 7 Rule  11 than the stand already taken in the affidavit in rely 

filed by the same defendants  in the notice of motion filed by the plaintiff. 
The defendants did not bring these facts to the notice of this court while 
51.
making submissions in support of their notice of motion.  
In   my   view,     court   cannot   reject   the   plaint   on   the   basis   of   the 
allegations made by the defendants in the written statement.       However, 
court can certainly look into the   averments in the affidavits filed by the 
defendants themselves in the same proceedings taking a contradictory or 
inconsistent stand than the stand taken in the   application for rejection of 
plaint under Order 7 Rule 11. In my view a party can not be allowed to take 
two different stand, one while opposing the application for interim relief 
filed by the plaintiff and another stand   while making an application for 
rejection of plaint under Order 7 Rule 11.  Once court is satisfied that plaint 
prima facie  shows  a cause of action, court  is   not required to   make  an 
elaborate enquiry into the doubtful or complicated questions of law or facts. 
Court cannot consider whether   plaintiff would ultimately succeed in the 
claims made by him or not while deciding application under Order 7 Rule 
11 of Code of Civil Procedure, 1908.   A perusal of the plaint in toto  clearly 

indicates that   the cause of action set out in the plaint is not illusory but 
requires to be decided at the time of trial.    
On the issue as to whether the  documents relied upon by the plaintiff 
52.
were in the nature of agreement to lease or agreement of lease,  defendants 
placed reliance on the judgment of the Supreme Court  in the case of State  
of Maharashtra and others vs. Atur India Pvt.Ltd. (supra).  In view of the 
inconsistent stand taken by the defendants themselves in the affidavits in 
reply filed in Notice of Motion and affidavit in support of the application 

under Order 7 Rule 11, regarding the nature of documents and as the said 
issue has to be decided at the time of trial, judgment relied upon by the 
53.
learned senior counsel is of no assistance to the defendant no.3 at this stage.
Mr. Kapadia, learned senior counsel and Mr. Simil Purohit also placed 
reliance on the following judgments on the issue that the 1980 agreement 
created an interest in the property being lease for more than one year and 
required registration under section 107 of the Transfer of Property Act and 
in the absence thereof no rights were created under the said document and 
thus no reliance thereon can be placed. 2010 13 SCC 128, AIR 1995 SC 
2482, 75 (1998) Delhi Law Times 773, AIR 1968 SC 794.
54.
It is not in dispute that  on 8 th July, 1992, an agreement was entered 
into  by the plaintiff  by exercising powers under power of attorney. The said 
document is admittedly registered.   Supreme Court in case of  Harnarayan  
(supra)  has held that   under section 47 of the Registration Act, 1908, a 
registration of the document shall relate back to the date of execution of the 
document. It is held that even if registration has been done subsequent to 

the filing of the suit, it relates back to the date of execution of the deed 
which required registration.  I am thus not inclined to accept the submission 
of   the   learned   senior   counsel   appearing   for   defendant   no.   3   that     such 
registration in the year 2009 which was after expiry of 20 years of lease 
period would not relate back to the date of execution of the agreement. I 
am respectfully bound by the judgment of the Supreme Court in Case of 
Since   1980   document   itself   is   considered   by   the   defendants   as 

55.
Harnarayan (supra).
agreement   to   lease   and   also   an   agreement   for   lease,   whether   such 
document required registration or not therefore cannot be decided at this 
stage while considering the application under Order 7 Rule 11 of Code of 
Civil Procedure, 1908.  The said issue can be considered by this court at the 
trial.  In my view issue of registration would depend upon the issue whether 
the 1980 document is an agreement to lease or agreement for lease.   The 
proposition of law laid down by the Supreme Court and Delhi High Court in 
the aforesaid judgments relied upon by the defendant no.3 is not in dispute 
but cannot be applied at this stage.
56.
A   perusal   of   the   plaint   indicates   that   the   suit   is   for   specific 
performance of the two documents.  In paragraph 5, 6, 8 to 10, 10B, 10C, 
10E of the plaint, it clearly indicates that the plaintiff has pleaded cause of 
action  required  to  be  made in  a suit for specific performance.   Supreme 
Court in case of  Liverpool and London S.P
. & I Association Ltd. (supra)  
has held that a cause of action is a bundle of facts which are required to be 
pleaded and for the purpose of obtaining relief claimed in the suit.   The 

material   facts   are   required   to   be   stated   but   not   the   evidence   except   in 
certain cases where the pleadings relies on any misrepresentation, fraud, 
breach of trust, willful default or undue influence.  I am respectfully bound 
by   the   judgment   of   Supreme   Court   referred   to   aforesaid   which   squarely 
applies to the facts of this case.
57.
In so far as issue of limitation raised by the defendant no.3 in respect 
of monetary claim made in prayer (b) (II) or prayer (e)(I) is concerned, 

reliance is placed by the learned senior counsel on the judgment of Supreme 
Court in case of Hardesh Ores (P) Ltd.(Supra) and in case of Mayar H.K.  
Ltd.   (supra).     This   court   in   case   of  Western   Coalfields   Ltd.   vs.   Shri  
Chandraprakash K.Khare 2010 (3) Bom.C.R. 344  after considering the 
judgment   of   Supreme   Court   in   case   of  Hardesh   Ores   (P)   Ltd.   (supra),  
judgment   of   Supreme   Court   in   case   of  N.V.   Srinivasa   Murthy   v.  
Mariyamma  2005 (5)SCC 548 and judgment of Supreme Court in case of 
Popat  and Kotecha  Property  vs.  State  Bank  of   India Staff   Association  
2005 (7) SCC 510  considered the issue whether a plaint can be rejected 
under   Order   7   rule   11(d)   of   Code   of   Civil   Procedure   on   the   ground   of 
limitation.    Paragraphs  7 to 11 of the  said judgment  in case  of  Western 
Coalfields   Ltd.   (supra)  which   are   relevant   for   the   purpose   of   deciding 
whether plaint can be rejected on the ground of limitation under Order 7 
Rule 11(d) read thus :­
7. The Supreme Court had relied on its own decisions 
in  MANU/SC/0403/2005  : 2005 (5) SCC 548 (N.V
. 
Srinivasa   Murthy   v.   Mariyamma)   as   well   as 
MANU/SC/0516/2005  :   2005   (7)   SCC   510   (Popat 

and   Kotecha   Property   v.   State   Bank   of   India   Staff 
Assn.).   In   fact,   there   was   a   conflict   of   opinion   in 
these decisions hence the matter was referred to the 
larger Bench by the Supreme Court. The larger Bench 
did not, however, express opinion as to which view 
was correct, as it found that rendering of a decision 
on   that   question   would   be   merely   academic. 
Obviously, the conflict between the two decisions is 
not   at   all   resolved.   This   can   be   gathered   from   the 
decision   of   the   Supreme   Court   in   (Balasaria 
Construction   (P)   Ltd.   v.   Hanuman   Seva   Trust   and 
Ors.).   Referring   to   the   above   two   decisions,   in 
Shrinivasa Murthy and Popat and Kotecha Property, 
the Supreme Court observed in as follows:
5. Noticing the conflict between the various High Courts
and the apparent conflict of opinion expressed by this
Court in N.V. Srinivasa Murthy v. Mariyamma and Popat
and Kotecha Property v. State Bank of India Staff Assn.
the Bench referred the following question of law for
consideration to a larger Bench:
Whether the words 'barred by law' under Order 7 Rule
11(d) would also include the ground that it is barred by the
law of limitation.
6. Before the three Judge Bench, counsel for both the
parties stated as follows:
...It is not the case of either side that as an absolute
proposition an application under Order 7 Rule 11 (d) can
never be based on the law of limitation. Both sides state
that the impugned judgment is based on the facts of this
particular case and the question whether or not an
application under Order 7 Rule 11(d) could be based on
law of limitation was not raised and has not been dealt
with. Both sides further state that the decision in this case
will depend upon the facts of this case.
7. In view of the statement made by the counsel for the
parties, the Bench held that the question referred to the

larger Bench was academic so far as this case is concerned
and accordingly declined to decide the question. The case
was sent back to the Bench for disposal on merits based
on the facts of the case.

8. After hearing counsel for the parties, going through the
plaint, application under Order 7 Rule 11(d) CPC and the
judgments of the trial court and the High Court, we are of
the opinion that the present suit could not be dismissed as
barred by limitation without proper pleadings, framing of
an issue of limitation and taking of evidence. Question of
limitation is a mixed question of law and fact. Ex facie in
the present case on the reading of the plaint it cannot be
held that the suit is barred by time. The findings recorded
by the High Court touching upon the merits of the dispute
are set aside but the conclusion arrived at by the High
Court is affirmed. We agree with the view taken by the
trial court that a plaint cannot be rejected under Order 7
Rule 11(d) of the Code of Civil Procedure.
This decision is also rendered by the two Hon'ble Judges and
they find that plaint cannot be rejected under Rule 11 since
question of limitation is a mixed question of fact and law. The
Supreme Court, however, in Hardesh Ore's (P) Ltd. case
observes that the plaint can be rejected when the suit appears
from the statement in plaint to be barred by limitation and
relies on Popat and Kotecha Property decision. Referring to
the same decision the Supreme Court in Balasara Construction
(P) Ltd. referred to above, says that the plaint can not be
rejected since limitation is a question of fact and law. I too find
that the plaint cannot be rejected on the ground that the suit is
barred by limitation and I give my own reasons in addition to
the reasons given by the Supreme Court in Balasara
Construction (P) Ltd. case.
8. The words used in Clause (d) of Rule 11 of C.P.C. are to the
effect that the plaint can be rejected when suit appears from
the statement in the plaint to be barred by law. The important
words in the said clause are "barred by law". The words barred
by law have to be interpreted in the sense the suit itself could

not be filed in the civil court i.e. where the civil court
inherently lacks jurisdiction and certain law prohibits it from
taking cognizance of the suit. Where, therefore, a mere plea of
limitation is raised; it could not be said that the suit is barred
by law. The law of limitation cannot prevent a party from
instituting a suit in civil court. But there are certain laws which
prevent the suit being instituted in the civil court, for that law,
makes a provision of alternate remedy and forum. If a person
wants to get an industrial dispute resolved, which is essentially
a civil dispute, such a person cannot approach civil court, since
Industrial Disputes Act makes remedy and forum available and
therefore, civil court in such cases will inherently lack
jurisdiction. The law of limitation, therefore, does not prohibit
a party from approaching the civil court and filing a suit even
though it may be barred by limitation.
9. While dealing with the question, we have to bear in mind
the difference between rejection of a plaint and the dismissal
of a suit. The plaint is rejected because it is found to be
defective for the reasons mentioned in Rule 11. Though not in
every case, generally the defective plaint is rejected by the
court at the threshold. The court refusing to take cognizance
can reject the plaint. Where plaint is rejected, a party has a
right to present a fresh plaint but where a suit is dismissed, no
party has a right to present a fresh suit on the same cause of
action. It is for this reason, we must look into Section 3 of the
Limitation Act. Section 3 of the Limitation Act reads as
follows -
3. Bar of limitation (1) Subject to the provisions
contained in Sections 4 - 24 (inclusive), every suit
instituted, appeal preferred, and application made after
the prescribed period shall be dismissed, although
limitation has not been set up as a defence.
(2) For the purposes of this Act,
(a) A suit is instituted,
(i) in an ordinary case, when the plaint is presented to the

(ii) in the case of a pauper, when his application for leave
to sue as a pauper is made; and
proper officer;
(iii) in the case of a claim against a company which is
being wound up by the Court, when the claimant first
sends in his claim to the official liquidator;
(b) any claim by way of a set off, or a counter claim, shall
be treated as a separate suit and shall be deemed to have
been instituted

(i) in the case of a set off, on the same date as the suit in
which the set off is pleaded;
(ii) in the case of a counterclaim, on the date on which the
counter claim is made in Court;
(c) an application by notice of motion in a High Court is
made when the application is presented to the proper
officer of that Court.
10. The section itself says that if suit is barred by limitation, it
has to be necessarily dismissed. If law of limitation, which is a
substantive law, speaks as to how a suit barred by limitation
should be dealt with, then the mandate in the substantive law
has to be followed. The Legislation in its wisdom has
mandated dismissal of the suit. It could have also said that in
such cases plaint be rejected. The fact that it makes use of the
word dismiss is by itself eloquent. Necessarily, therefore, if the
suit is apparently barred by limitation, the suit has to be
dismissed. This is necessary because the rejection of plaint
does not prohibit a party from filing a fresh suit as envisaged
by Rule 13 of Order 7 of C.P.C. Therefore, when once court
records a finding that suit is barred by limitation and dismisses
it, the lis comes to an end while where a plaint is rejected the
lis does not come to an end.
11. Where, therefore, a plea of limitation is raised, the court
cannot reject the plaint but may dismiss it on framing a

58.
preliminary issue. The learned judge of the trial court has
rightly rejected the application under Order 7 Rule 11 of C.P.C.
There is, therefore, no substance in the revision and the same
is dismissed. No order as to costs.
A perusal of section 3 of Limitation Act clearly indicates that every suit 
filed   after   prescribed   period   has   to   be   dismissed   subject   however   to 
provisions contained in sections 4 to 24 of the Limitation Act, 1963, even if 
limitation has not been set up as a defence.  In so far as remedy under order 
7 rule 11 of the CPC, 1908 is concerned, if the conditions setout therein are 

satisfied, suit cannot be dismissed but only plaint can be rejected. Under 
order 7 rule 13 of the CPC, even if plaint is rejected, fresh suit can be filed 
whereas if suit is dismissed on the ground of limitation, no fresh suit can be 
filed in respect of such time barred claim.  In my view both the provisions 
thus operate in different field.   Plaint therefore cannot be rejected under 
order 7 rule 11 of CPC on the ground of limitation.   If according to the 
defendant   no.3,   suit   is  barred  by  limitation, such  issue   can   be   raised by 
defendant no.3 in the affidavit in reply or in the written statement and such 
issue if raised can be tried by this court as a preliminary issue.
59.
Even otherwise, a perusal of the plaint in toto indicates that it is case 
of   the   plaintiff   that   various   payments   were   made   by   the   plaintiff   to   the 
society or were required to be deposited in the co­operative court  pursuant 
to   the   interim   orders.     It   is   also   case   of   the   plaintiff   that   plaintiff   was 
required to set off and have set off such payments against the consideration 
payable   to   the   defendant   nos.   1   to   3   for   exercising   rights   to   purchase 
revisionary rights in the suit property.  It is also stated in the plaint that the 

cause of action for filing the suit arose when the trust neglected to comply 
with the demands contained in the notice dated 16 th May, 2000 as also the 
letter dated 19th  April, 2001.   it is also stated that no part of the plaint is 
barred by law of limitation.   In   my view, the plea of limitation is a mix 
question of facts and law and particularly considering the averments made 
in the plaint, this court cannot come to any conclusion at this stage whether 
the claim is liable to be rejected on the ground of limitation.   In my view, 
issue of limitation thus raised by the defendant no.3 in the notice of  motion 

can be considered as a preliminary issue under section 9A of Code of Civil 
60.
Procedure.  
Supreme court in case of Sopan Sukhdeo Sable (supra) has taken a 
view that court cannot reject only part of the plaint and if no cause of action 
is disclosed, the plaint as a whole must be rejected.  In my view, no case is 
made out by the defendant no.3 that the plaint is liable to be rejected on 
any of the grounds alleged in the affidavits filed in the notice of motion 
under Order 7 Rule 11 or on the grounds urged across the bar.  
61.
The suit is filed in the year 2001.   Defendant no.3 has already filed 
written statement.  Notice of Motion under order 7 rule 11 has been filed in 
the year 2006.  The Notice of Motion is pending for more than 7 years.  In 
my view the Notice of Motion is devoid of any merits and deserves to be 
dismissed.  I, therefore, pass the following order :­
(a) Notice of Motion is dismissed.  
(b) Hearing of suit is expedited.
(c) Both parties are  directed to exchange draft issues 

within two weeks from today. Office is directed to place 
the suit on board for framing issues after two weeks after 
parties filing the draft issues.  No order as to costs.

[R.D. DHANUKA, J.]

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