L. Narasimha Reddy, J.
1. These civil revision petitions and civil miscellaneous appeals arise out of the orders passed under Rule 11 of Order VII of the Code of Civil Procedure, 1908 (for short 'CPC') read with Section 3 of the Limitation Act, 1963 rejecting the plaints in three suits.
2. For the sake of convenience, the parties are referred to, as arrayed in C.R.P. No. 5153 of 1998.
3. The genesis for this long drawn and multifaceted litigation is as under:
The 1st respondent is the mother of respondents 2 and 3. They are the owners of the premises bearing No. 1-6-49, Park Lane, Secunderabad. The said property was leased to Sri Amir All and his brother Mehdi Mahmood, petitioners 1 and 2 under a registered document dated 30.5.1977. The rent was fixed at Rs. 600/- for the first three months and thereafter at Rs. 750/-per month. The lease was agreed to be in force for a period of 9 years. The petitioners were conferred with the right to exercise option for renewal of the lease for three spells of 9 years each, beyond 1986, by enhancing the rent by 10%. Other conditions were also stipulated. The third petitioner, M/s. A.A. Lords Shoes Private Limited, is a company, comprising of the petitioners 2 and 3 and some others.
4. The original period of lease expired on 31.5.1986. The petitioners forwarded a draft lease deed dated 2.7.1986 to the respondents seeking renewal for 9 years. There was no reaction from the respondents except that 'the rent beyond 30th May, 1986 was being received by their G.P.A. 'without prejudice'. The respondents terminated the lease through a notice dated 25.7.1991. About one month thereafter, the third petitioner filed O.S. No. 1027 of 1991 in the Court of the XVII Junior Civil Judge-cum-Principal Rent Controller, Secunderabad against the respondents for the relief of declaration that the lease in respect of the suit premises is deemed to have been extended for a period of 9 years by virtue of clause contained in the document dated 30.5.1977, and to that it continues to be the lawful tenant of the suit premises, at an enhanced rent of Rs. 825/- per month.
5. The respondents filed a written statement raising several objections as to the maintainability of the suit itself, such as absence of cause of action, lack of privity of contract between them and the third petitioner. It was also pleaded that the suit is barred by limitation.
6. Even while O.S. No. 1027 of 1991 was pending, petitioners 1 and 2 filed O.S. No. 802 of 1995 against the respondents for specific performance of the agreement to renew the lease. They prayed for a direction to the respondents, to execute a lease deed for period of 9 years from 1.6.1995 to 31.5.2004, i.e. the second spell of renewal.
7. The respondents filed a written statement on the same lines as in O.S. No. 1027 of 1991. A further objection was raised that there was no valid lease upto 1.6.1995 and that the question of extending or renewing the same beyond that date does not arise.
8. Apart from different pleas in the written statement, the respondents filed I.A. No. 118 of 1997 in O.S. No. 1027 of 1991 and LA. No. 6 of 1998 in O.S. No. 802 of 1995 under Order VII Rule 11 of CPC read with Section 3 of the Limitation Act, with a prayer to reject the plaints. The applications were opposed by the petitioners, by filing counter-affidavits. Through a common order dated 15.9.1998, the trial Court allowed the applications and rejected the plaints in both the suits. C.R.P. Nos. 5152 and 5153 of 1998 are filed against LA. No. 118 of 1997 and I.A. No. 6 of 1998 respectively. The petitioners have also filed C.M.A. Nos. 118 and 119 of 1998 in the Court of First Additional Chief Judge, City Civil Court, Hyderabad under Order 43 Rule 1 C.P.C, against the orders passed in I.A. No. 118 of 1997 and 6 of 1998 respectively. Thereafter, they filed Transfer C.M.P. Nos. 55 and 56 of 1999 before this Court for withdrawal of the C.M.As to this Court so that they can be heard along with C.R.P. Nos. 5152 and 5153 of 1998. The said Transfer C.M.Ps were allowed and the C.M.As., since renumbered as Transfer C.M.A Nos. 2748 and 2749 of 1999 respectively.
9. The petitioners filed O.S. No. 979 of 2004 in the Court of the I-Junior Civil Judge, City Civil Court, Hyderabad for the same relief as claimed in O.S. No. 802 of 1995. This however, is in respect of period beyond 31.5.2003. Obviously due to mistake, the period was mentioned as '1.5.2004 to 31.5.2003'.
10. The respondents filed a written statement raising several objections to this suit. They have also pointed that the relief is incompatible. I.A. No. 1512 of 2004 was filed by them under Rule 11 of Order VII CPC for rejection of the plaint. On noticing the serious mistake, in description of the period, the petitioners filed I.A. No. 475 of 2005 under Rule 17 of Order VI CPC for correction of dates in the body of the plaint as well as in the prayer portion. The trial Court allowed I.A. No. 1512 of 2004 through order dated 3.6.2006. C.R.P. No. 5723 of 2006 is filed against the same. I.A. No. 475 of 2005 was dismissed vide separate order of the same date. C.R.P. No. 5638 of 2006 arises out of it. The petitioners have also filed A.S. No. 232 of 2006 in the Court of I Additional Chief Judge, City Civil Court, Hyderabad against the order in LA. No. 1512 of 2004, rejecting the plaint. They filed transfer C.M.P. No. 64 of 2007 before this Court seeking transfer of the appeal. It was allowed on 5.6.2007 and the appeal was withdrawn to this Court as Transfer CCCA No. 268 of 2007. The respondents on other hand initiated proceedings against the petitioners under the provisions of the A.P. Buildings (Lease, Rent and Eviction) Control Act. They are not the subject-matter of this batch.
11. Sri S. Balchand, learned Counsel for the petitioners submits that the orders passed by the trial Court rejecting the plaints are untenable, and contrary to law. He submits that it is only the averments in the plaint that must be taken into account while dealing with the application filed under Rule 11 of Order VII CPC and it is impermissible for any Court to go beyond the same. The learned Counsel contends that the question as to whether the suits were barred by limitation or whether there does not exist the cause of action, ought to have been considered, after the trial and it was not at all possible to record any finding on such vital aspects, without framing the relevant issues and recording evidence.
12. Sri T. Mohan Rao, learned Counsel for the respondents, on the other hand, raised objection to the very maintainability of the revisions and miscellaneous appeals. He contends that a regular appeal, but not a revision, much less miscellaneous appeal, can be filed against the order rejecting the plaint and that the petitioners resorted to gross misuse of process of Court. He submits that the lease expired way back in the year 1986 and for the past two decades the petitioners have not only squatted on the property illegally, but have also subjected the respondents to unnecessary litigation and unwarranted expenditure.
13. Both the Counsel have relied upon several precedents in support of their contentions.
14. As observed, at the out set, this bunch of proceedings arise out of the orders, rejecting the plaints in three separate suits. Before going into the merits of the matter, the maintainability of some of the proceedings particularly, the revisions and miscellaneous appeals, as such needs to be dealt with.
15. Once a suit is presented before the civil Court, the examination thereof is taken up at various stages and from different angles. When the plaint presented before a Court does not accord with the procedural aspects, it is returned to the plaintiff pointing out the objections. Opportunity is given for compliance. These objections may include those relating to adequacy of Court fee, doubt as to the jurisdiction of the Court, be it of territorial, pecuniary or the one of subject-matter, maintainability or otherwise of the suit, in the light of the provisions contained in the various statutes, statement of cause of action with the required amount of certainty etc. Whenever a plaint is returned, the plaintiff would have a right to represent the same either by compliance with the deficiency pointed out by the Court or by explaining as to how the objection raised by Court does not arise. If the plaint is once again returned on not being satisfied with the explanation offered or lapse committed by the plaintiff, the remedy is to challenge the same by filing a revision.
16. When, the Court finds that the suit presented before it is barred on any grounds mentioned in Rule 11 of Order VII CPC, it would entail in rejection of the plaint. Such rejection can be ordered by the Court on its own accord, or on application filed by the opposite party. One important aspect that needs to be borne in mind is that while a plaint can be returned only at a stage before it is numbered, whereas rejection can be ordered at any stage till the suit is disposed of.
17. Inasmuch as a final expression of view on certain facets of the suit emerges out of an order of rejection, remedy by way of a regular appeal is provided under CPC. This emerges from the definition of decree under Section 2(2) CPC which includes an order of rejection of the plaint. Once the order is equated to a decree, the only remedy provided under CPC is the one under Section 96 CPC.
18. There is another way of examining this matter. Order XLIII CPC enlists the nature of orders that are made appealable under Section 104 of CPC. There is no mention of an order passed under Rule 11 of Order VII CPC in this list. Therefore, there would not be any occasion for filing the appeal under Order XLIII Rule 1 and 2 CPC against an order rejecting the plaint.
19. Section 115 of CPC is another provision, which has been invoked by the petitioners. A remedy under this provision is available if only no appeal lies against the concerned order. Once a regular appeal under Section 96 CPC is provided against order rejecting the plaint, the question of invoking Section 115 CPC does not arise. Therefore, viewed from any angle, the revisions and miscellaneous appeals filed by the petitioners against the orders rejecting the plaints are not maintainable.
20. In view of the observations made above, the revisions and miscellaneous appeals filed against orders rejecting the plaints become untenable. The petitioners, however, filed C.M.P. Nos. 18759 and 18760 of 2003 before this Court, with a prayer to convert the miscellaneous appeals into regular appeals. Several objections have been raised on behalf of the respondents as to the maintainability of such applications. This Court had allowed the said applications subject to payment of Court fee, lest the controversy is further protracted between the parties which was already spread over more than two decades.
21. There does not exist any doubt that the defendant in a suit must make out a strong case for rejection of a plaint. The reason is that the lis which was otherwise to be decided on merits has to be terminated at the threshold on preliminary objection and thereby, remedy is denied to the plaintiff. The Supreme Court and various High Courts have laid down and reiterated the principles governing this exercise. In Popat and Kotecha Property v. State Bank of India Staff Association 2005 (6) ALD 27 (SC), the Supreme Court held that the disputed questions of fact cannot be decided while examining an application under Rule 11 of Order VII CPC. It was also held that the plaint must be read as a whole and every effort must be made to see that the dispute is settled on merits. The same principle is reiterated in Mayar (HK) Ltd. and Ors. v. Owners and Parties, Vessel M.V. Fortune Express and Ors. 2006 (2) ALD 36 (SC).
22. In Samar Singh v. Kedarnath and Ors. : AIR1987SC1926 , it was held that where the plaint presented before the Court does not reveal cause of action, the parties cannot be burdened with unnecessary trial. The Supreme Court, in T. Arivandandam v. T.V. Satyapal and Anr. : [1978]1SCR742 , has emphasized the importance of avoiding vexatious litigation. Authorities can be multiplied.
23. The existence of cause of action constitutes the very basis for maintaining a suit. Time and again, it was observed that the expression 'cause of action' cannot be defined in concise terms. It represents a bundle of facts that confer right upon the party to seek the relief. It takes in its fold, not only the presence of a right in the person, but also the corresponding obligation on the part of the defendant to honour that right. In a way, it can be said that the relevant provisions of law and the contemporary facts work in tandem, to bring about such enforceable right in the person. If the plaint fails to disclose a cause of action, it constitutes a valid ground for rejection thereof, under Rule 11 of Order VII CPC.
24. While the defendant in a suit can plead several facts for rejection of a plaint, the Court is also placed under an obligation to verify on its own accord, whether there exist any circumstances that warrant the rejection of plaint. For instance, several enactments such as the A.P. Cooperative Societies Act, the A.P. Panchayat Raj Act bar the jurisdiction of the civil Courts to decide the disputes that arise by operation of the provisions of those enactments. If on a plain reading of the plaint it emerges that it attracts the prohibition, the Court can reject the plaint, even if no objection, in this regard is raised by the defendant. Such step can be taken even before issuing summons to the defendant. Similarly, Section 3 of Limitation Act places an obligation on the Court to dismiss a suit or appeal, presented after the prescribed period of limitation, even if, no such plea was set up in defence.
25. Reverting to the facts of the case, the plaint in O.S. No. 1027 of 1991 needs to be considered first. After narrating the manner in which the lease was brought about, and other relevant facts, the third petitioner filed the suit for declaration. Even according to the plaint, the lease was in favour of Mr. Amir Ali and his brother Mr. Mehdi Mahmood, petitioners 1 and 2. Those two individuals are not parties to the suit. There did not exist any lease in favour of the third petitioner. It hardly needs any emphasis that a company incorporated under the Companies Act is an independent legal personality, whose identity is totally different from that of its board of directions or share holders, whether individually or collectively. In the context of Order VII it can be safely said that there did not exist any cause of action in favour of the plaintiff in O.S. No. 1027 of 1991.
26. Secondly, the relief claimed in the suit is in the form of declaration, to the following effect:
For declaration that the lease in respect of premises No. 134, bearing Municipal No. 1-6-49 (Ground floor) is deemed to have been extended for a period of nine years in pursuance of registered rental deed dated 30.5.1977 executed by Sri Amir Ali and Sri Mehdi Mohammed, Managing Director and Director of Plaintiff company respectively in favour of the defendants with effect from 31.5.1986 and that the plaintiff continues to be the lawful tenant of the suit Mulgi which his fully described in the schedule of the plaint at the enhanced rent of Rs. 825/- per month.
Subsequently, it was amended to incorporate the plea of specific performance in the following manner:
For specific performance in respect of premises No. 134, (Ground Floor) bearing Municipal No. 1-6-49, situated at Park Lane, Secunderabad, in favour of Sri Amir Ali and Sri Mehdi Mohammed, Managing Director and Director of the plaintiff company respectively at the enhanced rent of Rs. 825/-per month.
27. Even if the uncertainty and lack of clarity in the prayers is to be ignored, it needs to be seen as to whether the relief of renewal of lease was claimed within the period of limitation.
28. Unlike other grounds which constitute the basis for rejection of plaint, limitation is the one which would not depend upon a specific objection being raised by the defendant. It has already been pointed out that Section 3 of the Limitation Act confers powers and in a way casts duty upon the Court, to examine the question of limitation, on its own accord. Here again a note of caution is to be added. A finding on the question of limitation for rejection of plaint, must be based upon the averments in the plaint and no other factors or material outside the plaint must be taken in to account. In other words, there should not be any ambiguity as to period of limitation, the starting point thereof, and the date of filing the suit. Conversely, if the determination of the question of limitation requires verification of any other facts or evidence, the suit must be decided on merits and the plaint cannot be rejected.
29. In the instant case, the initial period of lease in favour of the petitioners expired on 31.5.1986. Any renewal provided under the agreement is not automatic and it is to be on the basis of mutual consent. The clause reads as under:
The tenancy is for a period of 9 (nine) years initially. Thereafter the tenant shall have right to exercise three options to renew the lease, each option being for the renewal of the lease for a period of nine years. At the time of every extension of nine years of tenancy period the rent shall be enhanced by 10% (ten per cent).
30. The exercise of option or enforcement of right under the clause ought to have been undertaken within a period of three years from the date, on which it became due. The relief to be claimed in this regard, is the one of specific performance. Article 54 of the Limitation Act prescribes three years for this purpose. The limitation starts from the date, meant for specific performance, or the receipt of the information about refusal of performance. If there existed any uncertainty about the date of refusal there would not have been any occasion for the Court to reject the plaint. Admittedly, the petitioners forwarded a draft renewal lease deed to the respondents on 2.7.1986. It is not as if the respondents either remained silent or indirectly conveyed their acceptance. On the other hand they expressed their intention in receiving the rents by endorsing on the receipts, 'without prejudice'. One does not have to look any other material in this regard. In the plaint, the 3rd petitioner pleaded inter alia, as under:
The plaintiffs submit that they have been regularly paying the monthly rent at the enhanced rate of Rs. 825/- per month with effect from 31.5.1986 and the defendants' G.P.A. has been regularly receiving the rents and issuing receipts in favour of the plaintiff. It is submitted that the G.P.A. of the defendants is not at all mentioning the owners' names and addresses in the rental receipts issued by him from time to time for the reasons best known to him. However with a view to create some ground for eviction and with mala fide intention the defendants' G.P.A. was writing in the receipts 'Received without Prejudice'. It is submitted that what is alleged prejudice of the defendants or their G.P.A. is not made known to the plaintiff at any time after 31.5.1986 and it was for the first time the defendants' G.P.A. issued notice dated 25.7.1991 illegally terminating the lease and demanding the plaintiff to vacate the suit mulgi. It appears the defendants and their G.P.A. with dishonest and mischievous intentions avoided execution of further lease deed in terms of original lease deed, and wrongly writing in the receipts 'Received without Prejudice' just to create grounds for eviction.
31. From the perusal of this, it is evident that the petitioners clearly understood that the respondents were not inclined to renew the lease and on the other hand they were creating a 'ground for eviction with a mala fide intention' by endorsing on the receipts 'received without prejudice'. This practice began soon after the expiry of the first option of the lease period, i.e., May, 1986. Therefore, the refusal to perform their part of the contract if one may chose to call it, became manifest from the respondents soon after the expiry of the original lease period in May, 1986. Therefore, the suit ought to have been filed within a period of three years from the date of making such endorsement i.e. in May, 1989. However, it was filed on 12.9.1991, by which time it became barred by limitation.
32. Apart from discussing the matter from various angles, such as limitation, cause of action, the trial Court examined the purport of Clause 4, by applying the principle laid down by this Court in Indian Oil Corporation Limited v. Karem Zaheer Yar Jung and Anr. : 1997(2)ALT689 . As in the present case, in Indian Oil Corporation's case (supra), also a plea was taken as though the renewal was automatic and mere declaration would do. The Division Bench repelled the contention with the following observation:
The automatic renewal without any further act of the parties contemplated in the renewal clause to become effective for a further term of ten years after the expiry of the first term is subject to the condition of mutual agreement of the parties concerning the monthly rent. If there was no mutuality concerning the monthly rent, the lessee has no right to insist upon a fresh agreement to be executed for the period subsequent to 31.7.1976 when the first term of ten years expired. The contention of Sri Raghava Rao that in the absence of mutual agreement as to rent, the renewal agreement should be based upon the same monthly rent is not supported by the language employed in the renewal clause.
33. In the context of the claim for specific performance of contract of lease, in such cases, and the limitation therefore, the Bench made the following observation:
Coming to the question of limitation, we have no doubt at all that the suit laid by the IOC-O.S. No. 1145 of 1981- was barred by time. Under Article 54 of the Limitation Act, for specific performance of a contract, the period of limitation is three years commencing from the date fixed for the performance. But if no such date is fixed, the period commences from the date when the plaintiff has notice that the performance is refused. The date fixed for the performance in the present case is 31.7.1976 when the first term of ten years expired under Ex.-A.8. Within three years from that date, the IOC had the right to bring an action against the landlady seeking a direction for execution of a renewal lease deed. The suit laid by the IOC on 14.8.1981 is therefore, barred by time.
34. Even if there were to have been no endorsement on the receipts indicating that it is without prejudice, limitation in this case started with the expiry of the initial period of lease, i.e. 31.5.1986. The present case stands on the same footing. It is to be noted that these conclusions emerge from the averments in the plaint, but not on the basis of any external material. Therefore, no exception can be taken to the rejection of plaint O.S. No. 1027 of 1991.
35. Two more suits were filed against the respondents, seeking a direction against them, to execute registered lease deed for two spells of 9 years each. O.S. No. 802 of 1995 was filed by all the three petitioners, in respect of the period from 1.6.1995 to 31.5.2004. Petitioners 1 and 2 filed O.S. No. 979 of 2004, as regards the period from 1.5.2004 to 31.5.2005. Subsequently, these dates were sought to be amended. The respondents filed independent applications, for rejection of the plaints, and the same were ordered by the trial Court.
36. In the words of the petitioners, the relief claimed in these suits is for a direction against the respondent 'to execute and register lease deed for the second/third optionally extended leased period of 9 years.' All the facts that were pleaded in O.S. No. 1027 of 1991, were pleaded in these suits also. Therefore, the same legal consequence that ensued in that suit would follow in these suits. The additional circumstance is that there did not exist any valid lease upto 1.6.1995, or 1.5.2004, as the case may be. The question of renewal would arise if only there was a subsisting lease upto the date, from which, the renewal was sought. Admittedly, no such lease existed. In fact, there is a clear contradiction in terms in the plea raised in O.S. No. 1027 of 1991, on the one hand, and the other two suits, on the other hand.
37. It has already been observed that O.S. No. 1027 of 1991 was filed with a prayer to declare that the lease in respect of the premises is deemed to have been extended for a period of 9 years. It was through an amendment that, a prayer, in the form of a direction to the respondents to renew the lease, was incorporated. Therefore, the petitioners were also aware that the renewal for the first term would accrue to them, if only O.S. No. 1027 of 1991 is decreed. As a matter of fact, the prayer for subsequent renewals could have been incorporated, in that very suit by way of amendment. The pleadings in the subsequent suits particularly in O.S. No. 802 of 1995 are contrary to the scope and ambit of O.S. No. 1027 of 1991. In the plaint in O.S. No. 802 of 1995, the petitioners pleaded as under:
That plaintiffs 1 and 2 exercised their first option of extension of lease and therefore, the monthly rent of the premises became Rs. 825-00. Plaintiffs 1 and 2 were paying Rs. 285-00 per month towards rent and same was being received by the defendants. Thus, the first option of extension of lease was not only exercised by the plaintiffs 1 and 2, but also was acted upon by the parties. Defendants are therefore not entitled to dispute the same. Having received the rents for the extended optional period under the first option, when the rents were received at the increased rates, as provided in Clause 4 of the registered lease deed, the defendants 1 to 3 are estopped by their conduct in disputing the right of the plaintiffs 1 and 2 in that regard. Thus, the first extended period of lease, as per first option continued till May, 1995 though it is not necessary to state the precise the date in that regard.
This stand of the petitioners virtually renders their suit O.S. No. 1027 of 1991, either superfluous, or infructuous. If the lease already stood extended, there was no necessity to file a suit for that purpose. The fact, however, remains that the assumption of the petitioner that is reflected in the paragraph extracted above, is totally untenable in law, and runs contrary to the principle laid down by this Court in Indian Oil Corporation's case (supra). The petitioners cannot assume to themselves that the lease stood renewed for the first spell, beyond 1986. If such legal consequences were to ensue, there was no necessity to file the subsequent suits also they too become devoid of cause of action. Therefore, the trial Court has rightly rejected the plaints in O.S. Nos. 802 of 1995 and 979 of 2004.
38. For the foregoing reasons, CRP Nos. 5152 and 5153 of 1998, 5638 and 5723 of 2006 and Transfer CMA Nos. 2748 and 2749 of 1999, which are to be renumbered as appeals, and Transfer CCCA No. 268 of 2007, are dismissed.
39. The petitioners have subjected the respondents to the spate of unwarranted litigation. Hence, they are liable to pay exemplary costs of Rs. 3,000/- in each case.