1. 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 5th 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 15th 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, Back-bay 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:
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 :
¦ (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 Lessors.
3. 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 15th 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 year 2009 though lodged for registration immediately upon execution of the said lease dated 8th July 1992.
5. It is case of the plaintiff that the said trust did not pay the quarterly 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 7th November 1997. The plaintiff was directed to deposit certain amounts in the cooperative 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 Co-operative Court which was otherwise payable by the trust It is case of the plaintiff that under the said agreement of 15th 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 Co-operative 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 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.
7. By notice dated 23rd March 2001, the said trust called upon the 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 19th 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 16th 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 8th 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 8th 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 15th 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 16th 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 BhaskarGopal 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 un-disposed 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 19th 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 :-
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 SyedJaleel Zane v. P. Venkata Murlidhar and Ors. , MANU/AP/0112/1981 : AIR1981AP328, wherein 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 third renewal and so on unless, of course, the language is clear and unambiguous.
14. Learned senior counsel placed reliance on the judgment of Supreme Court in case of ShriJanki Devi Bhagat Trust, Agra vs. Ram Swarup Jain AIR 1995 SC 2482in 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 :-
œProfit 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 15th 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 HarNarain 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:
œ8. ¦.... 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 preemption 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 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 bona-fide 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.
17. 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 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.
18. It is submitted by the learned senior counsel appearing for defendant 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 7th 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 tress-passer, reliance is placed by the learned senior counsel on the judgment of the Supreme Court in case of KewalChand 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 :
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 : AIR 1996 SC140 : AIR 1996 SC 140 had the occasion to deal with this concept of tenancy at sufferance in paragraph * of the report, this court observed:-
œ8. 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 "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 tenant-at-sufferance, 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 landlord-whereas, on similar circumstance if the possession is without the consent of the landlord then the same stands out to be a tenant-at-sufferance. 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 tenant-at-sufferance 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 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.
20. Learned senior counsel for defendant no.3 placed reliance on the judgment of Supreme court in case of State of Maharashtra and others vs. 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 executor 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:
œAn 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 executor 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 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:
œBeforedealing 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 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 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. and I Association 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.
œ4. On an application for arrest of the 1st 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 1st respondent furnished a bank-guarantee 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 2nd 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.
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.
(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 cross-examination 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 and Indemnity Association incorporated under the laws of the United Kingdom and carries on business through its Managers, Liverpool and London PandI Management Ltd. at Liverpool, UK. The Plaintiff is a mutual association of ship-owners 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 and Indemnity (PandI) 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 PandI risks with the Plaintiff Association. The said two vessels were entered into the Plaintiff's Association for the policy year 1999-2000 by Defendant No.2, Singapore Soviet Shipping Co. Pvt. 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 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.
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 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 : AIR 2003 SC 4355 , it is stated:
"...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] 3 SCR 91 . 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]1 SCR 983 , 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 : AIR 1962 SC 941 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 Success-I" 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 8th 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 10th 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, 10-B 10-C and 10-E 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.
24. Mr. Mehta learned senior counsel then submits that under 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 BhaskarGopal and Anr. Vs. Padman Hira Chowdhari and 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 8th 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 8th July, 1992 admittedly. The fact that the agreement dated 8th 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 15th 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 8th July, 1992.
25. Mr. Mehta learned senior counsel placed reliance on the judgment on the Supreme Court in the case of Hardesh Ores (P) Ltd. Vs. Hede and 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:
œ2. 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 and 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 respondent-Hede 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 nonexistent 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 "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) 7 SCC 510 .
26. It is submitted that whether document was compulsorily 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 under Order 7 rule 11 of C.P.C.
27. 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 16th May 2000. It is submitted that cause of action arose on 16th 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 claim can be rejected under Order 7 Rule 11 of the Code of Civil Procedure.
28. 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 executed in future.
29. 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 SopanSukhdeo Sable and 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 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 HardeshOres (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 HardeshOres (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 and 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 :
œ5. We have not the slightest hesitation in condemning the petitioner for the gross 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.C. An activist Judge is the answer to 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."
32. 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 MayarH.K. Ltd. and Ors. vs. Owners and Parties, Vessel M. V. Fortune Express and Ors. reported in (2006) 3 Supreme Court Cases 100 and in particular paragraph 11 which reads thus:
œ11. 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] 1 SCR 742 , 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 : AIR 1998 SC 634 , 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 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] SUPP 5 SCR 491 , 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) 7 SCC 510, this Court has culled out the legal ambit of Rule 11 of Order VII of the Code in these words:
œThere 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 hairsplitting technicalities.?
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 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
35. From the judgments relied upon by both sides on the issue of scope of Order 7 Rule 11 of Code of Civil Procedure 1908, referred to aforesaid, following principles of law can be culled out :-
(a) Court should exercise its power under Order 7 Rule 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 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 heirsplitting technicalities.
(d) Court cannot dismiss the plaint at the threshold without going into the merit of the case on the ground that on account of any provisions of the contract, plaintiff was unlikely to succeed.
(e) Court cannot reject a plaint on the ground that the 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 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 is no ground for striking it out.
(h) Court has to see whether a real cause of action has 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 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 plaintiffs with the trust.
38. 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.
40. It is alleged that under the agreement dated 15th May, 1980 and the 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 Rs.10,01,842/- 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 rights in respect of the suit premises. It is averred that the said two agreements are valid, subsisting and binding on the trust and the trustees.
41. It is averred that pursuant to the interim orders passed by the cooperative 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 30th 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 validly exercising their right to purchase the revisionary rights in respect of the suit premises.
42. It is alleged that the defendants nos. 1 to 3 have failed and/or neglected to comply with the requisitions contained in the notice dated 16th 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 15th May, 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 15th May,1980. It is averred that the plaintiffs have got the lease deed dated 8th July 1992 executed in their favour which is duly registered with the Sub Registrar of Assurances.
43. 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 15th May, 1980 and lease deed dated 8th July, 1992 by a sale and transfer of the suit premises and to 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 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. Defendants nos.3 has already filed a written statement in this suit long back.
46. Defendants no.3 has filed this Notice of Motion on 17th November, 2006 inter-alia 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 to it is clear that it is case of the plaintiff that at the end of 20 years under the agreement dated 15th May 1980 read with lease deed dated 8th 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 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 16th May 2000 when the trust failed and/or neglected to comply with the demands contained in the notice dated 16th May, 2000 as also the letter dated 19th April, 2001.
48. Per contra, the submissions of the defendant no1. to 3 is that under 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 10th 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 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 15th 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 and the said agreements dated 15th 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 15th 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 15th 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 making submissions in support of their notice of motion.
51. 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 to 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.
52. On the issue as to whether the documents relied upon by the plaintiff 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 learned senior counsel is of no assistance to the defendant no.3 at this stage.
53. 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 8th 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 Harnarayan(supra).
55. Since 1980 document itself is considered by the defendants as 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, 10-B, 10-C, 10-E 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. and 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 HardeshOres (P) Ltd.(Supra) and in case of MayarH.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 HardeshOres (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 Popatand 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 proper officer;
(ii) in the case of a pauper, when his application for leave to sue as a pauper is made; and
(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 counter-claim, 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 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.
58. 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 setouttherein 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 to 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 16th 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 Procedure.
60. Supreme court in case of SopanSukhdeo 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.