The Bench Comprising Justices JB Pardiwala and R Mahadevan
Introduction
The Supreme Court held that a plaint cannot be rejected under Order VII Rule 11(d) CPC as time-barred if the issue of limitation involves mixed questions of law and fact. The judgment reinforces the principle that such matters require trial and evidence before determination.
Facts
The Appellant filed a suit in 2014 seeking cancellation of a sale deed, claiming to have discovered fraud in 2011. The Respondent contended the cause of action arose in 1988 when the deed was executed. The trial court dismissed the respondent's application under Order VII Rule 11 CPC, but the High Court reversed it and rejected the plaint.
Issues
- Whether the suit was barred by limitation and could be rejected under Order VII Rule 11(d) CPC?
- Whether the plea regarding the date of knowledge of cause of action required trial and evidence?
Contentions of the Petitioner
The cause of action arose in 2011 when the fraud was discovered during subsequent transactions. The suit was filed within three years as per Article 59 of the Limitation Act, which prescribes limitation from the date of knowledge. The issue of limitation is a mixed question of law and fact and cannot be decided without trial.
Contentions of the Respondent
The suit is barred by limitation as the sale deed was executed and registered in 1988. The cause of action arose at the time of execution, and the suit filed in 2014 is hopelessly time-barred. Hence, the plaint is liable to be rejected under Order VII Rule 11(d) CPC.
Court's Analysis
The Court emphasized that for the purpose of Order VII Rule 11, the averments in the plaint must be assumed to be true. Since the plaint clearly stated that knowledge of the cause of action arose in 2011, it raised a triable issue requiring evidence. The High Court erred in rejecting the plaint without examining the plausibility of the plea of fraud or giving the parties an opportunity to prove it. Relying on Daliben Valjibhai v. Prajapati Kodarbhai, the Court reiterated that when limitation is a mixed question of law and fact, the plaint cannot be rejected at the threshold.
Conclusion
The Supreme Court allowed the appeal and restored the trial court's decision, holding that:
- Order VII Rule 11(d) CPC applies only when the suit is clearly barred from the plaint itself.
- Article 59 of the Limitation Act provides for a three-year limitation from the date of knowledge in cases of cancellation of instruments.
Since the plaintiff's claim of knowledge in 2011 was not demonstrably false, the issue was triable and not suitable for summary dismissal.
