L And T Asian Realty Project Llp Now Known As Elevated Avenue Realty Llp vs K S Chamankar
- Court
- Bombay High Court
2026:BHC-OS:12541
8-IA(L)-35100-2024.docx
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
Swapnil
ORDINARY ORIGINAL CIVIL JURISDICTION
INTERIM APPLICATION (L) NO. 35100 OF 2024
1. L&T Asian Realty Project LLP
(now known as Elevated Avenue Realty LLP)
A Limited Liability Partnership Firm
Registered under Limited Liability
Partnership Act, having its office at
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4 Floor, The Metropolitan, E Block,
Bandra Kurla Complex, Bandra (East)
Mumbai 400 051.
2. L&T Realty Limited
(now known as L&T Realty Developers Limited)
A Company Registered under
the Companies Act, 1956, having
its registered office at L&T House,
Ballard Estate, Narottam Morarjee
Marg, Mumbai 400 001. ...Applicants
(Org. Defendant Nos. 11 & 12)
WITH
INTERIM APPLICATION NO. 7746 OF 2025
Shiv Infra Vision Pvt. Ltd.
A Company incorporated under
the Indian Companies Act, 1956
and having its office at 1” Floor, R.C.
House, The Grand Residency, New
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Sheetal Cinema, L.B.S. Marg, Kurla
(West), Mumbai – 400 070. ...Applicant
(Org. defendant No.4)
WITH
INTERIM APPLICATION (L) No. 22392 OF 2024
Chief Executive Officer
Slum Rehabilitation Authority
An Authority constituted under
the provisions of Maharashtra
Slum Areas (I,C & R) Act 1971
and having its office address at
Administrative Building, Prof.
Anand Kanekar Marg, Bandra (E),
Mumbai – 400 051. ...Applicant
(Org. Defendant no.3)
WITH
INTERIM APPLICATION NO. 1925 OF 2025
Portsmouth Buildcon Pvt. Ltd.
A Company incorporated under the
Indian Companies Act, 2013 and
having its registered office at Adani
Corporate House, Shantigram Near
Vaishno Devi Circle, S. G. Highway,
Khodiyar, Ahmadabad 382421, Gujrat
and Corporate office at 601, Hall Mark
Business Plaza, Opp. Gurunanak Hospital,
Bandra (East), Mumbai 400 051. ...Applicant
(Org. Defendant No. 19)
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IN
COMMERCIAL SUIT NO. 21 OF 2024
1. K. S. Chamankar Enterprises,
A partnership firm, registered under
the partnership Act, 1932, having its
office at A-702, Krishna Galaxy, Datta
Mandir Road, Near Patha College,
Vakola, Santacruz (East), Mumbai 400 055
2. Krishna Shantaram Chamankar
Age 63 Yrs, of Mumbai, Indian
inhabitant, partner of M/s. K. S.
Chamankar Enterprises, having
his residence at A/1001, Aditi CHS,
Opp. Versova Tel. Exchange, S.V.P.
Nagar, MHADA, Four Bunglows, Andheri
(West), Mumbai 400 053. ...Plaintiffs
VERSUS
1. The State of Maharashtra
(To be served through Govt. Pleader
High Court, Bombay.)
2. Hon’ble Additional Chief Secretary
(Housing) and Chairman,
High Power Committee, SRA,
Administrative Building, Prof. Anant
Kanekar Marg, Bandra (East), Mumbai 400 051.
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3. Chief Executive Officer, Slum
Rehabilitation Authority,
An Authority Constituted under the
provisions of the Maharashtra Slum
Areas (I.C. & R.) Act, 1971, and having
its office address at Administrative Building
Prof. Anant Kanekar Marg, Bandra (East),
Mumbai 400 051.
4. Shiv Infra Vision Pvt. Ltd.
A Company incorporated under
the Indian Companies Act, 1956
and having its office at 1” Floor, R.C.
House, The Grand Residency, New
Sheetal Cinema, L.B.S. Marg, Kurla
(West), Mumbai – 400 070.
5. Prithvijeet Rajaram Chavan
Age 54 Yrs, Occ. Business,
Mumbai, Indian Inhabitant, Director of
Shiv Infra Vision Pvt. Ltd. Having its
office at 1” Floor, R.C. House, The
Grand Residency, New Sheetal Cinema,
L.B.S. Marg, Kurla (West),
Mumbai – 400 070.
6. Rani Rajaram Chavan
Age 70 Yrs, Occ. Business,
Mumbai, Indian Inhabitant, Director of
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Shiv Infra Vision Pvt. Ltd. Having its
office at 1” Floor, R.C. House, The
Grand Residency, New Sheetal Cinema,
L.B.S. Marg, Kurla (West),
Mumbai – 400 070.
7. Prime Builders and Developers
A partnership firm, registered under
the Indian Partnership Act, 1932, having
its office at 1307, Lotus Trade Centre,
New Link Road, Andheri (West),
Mumbai 400 053.
8. Shailesh Swarupchand Mehta
Age 62 Yrs, Occ. Business
Mumbai, Indian inhabitant, partner of
Prime builders and Developers, having
its office at 1307, Lotus Trade Centre
New Link Road, Andheri (West), Mumbai
400 053, and having residential address
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at 1 Floor, Sharnam, 45, J.V.P.D. Scheme,
Road No. 11, Vile Parle (West), Mumbai
400 049.
9. Dhanapat Parshuram Seth
Age 65 Yrs, Occ. Business,
Mumbai, Indian inhabitant, partner of
Prime Builders and Developers, having
its address at C/o. Enso Group, 901, Links
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Buildings, Corner of 14 Road and Khar
Pali Road, Khar (West), Mumbai 400 052.
10. Seth Discretionary Family Trust
305, Dol-Bin-Shir, 69/71, Janmbhoomi
Marg, Fort Mumbai 400001.
11. L&T Asian Realty Project LLP
A Limited Liability Partnership Firm
Registered under Limited Liability
Partnership Act, having its office at
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10 Floor, Tower-A, L & T Business Park
Gat No.5, Saki Vihar Road, Powai,
Mumbai 400 072.
12. L&T Realty Limited
A Company Registered under
the Companies Act, 1956, having
its registered office at L&T House,
Ballard Estate, Narottam Morarjee
Marg, Mumbai 400 001.
13. Think Tower Developers Pvt. Ltd.
(formerly known as LTR SSM Pvt. Ltd.),
a Company incorporated under the Indian
Companies Act, 1956 and its office at L & T
House, Ballard Estate, Narottam Morarjee
Marg, Mumbai 400001.
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14. Saourabh Shailesh Mehta
Age 36 Yrs, Occ. Business,
Mumbai, Indian inhabitant, Director of
LTR SSM Pvt. Ltd. And Partner of SSM
Realty LLP, having residential address at
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101, 1 Floor, Sharnam, 45, J.V.P.D. Scheme,
Road No. 11, Vile Parle (West), Mumbai
400 049.
15. Sudhir Gururaj Kulkarni
Age 67 Yrs, Occ. Business,
Mumbai, Indian inhabitant, a Director of
LTR SSM Pvt. Ltd. Having its office at L
& T House, Ballard Estate, Narottam Morarjee
Marg, Mumbai 400001.
16. SSM Realty LLP
A Limited Liability Partnership and having
its registered office at Plot 81, GIDC Colony,
Umbergaon, Valsad 396171, Gujrat.
17. Virtual Construction Pvt. Ltd.
A Company incorporated under there
Indian Companies Act, 1956 and
having its registered office at C-102,
Parijat Apartment, Royal Garden, Daman
Road, Chala, Vapi (West) Vapi, Valsad,
Gujrat 396191.
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18. Sangeeta Shailesh Mehta
Age 56 Yrs, Occ. Business,
of Mumbai, Indian Inhabitant, Designed
Partner of SSM Realty LLP, having
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residential address at 101, 1 Floor,
Sharnam, 45, J.V.P.D. Scheme Road No. 11,
Vile Parle (West), Mumbai 400 049.
19. Portsmouth Buildcon Pvt. Ltd.
A Company incorporated under the
Indian Companies Act, 2013 and
having its registered office at Adani
Corporate House, Shantigram Near
Vaishno Devi Circle, S. G. Highway,
Khodiyar, Ahmadabad 382421, Gujrat
and Corporate office at 601, Hall Mark
Business Plaza, Opp. Gurunanak Hospital,
Bandra (East), Mumbai 400 051.
20. Crest Logistics and Engineering Private
Limited. (Formerly Knows as REL Utilities
Engineering Pvt. Ltd.)
CIN : U45200MH2003PTC140946, a
Company incorporated under the
provisions of the companies Act, 1956,
and having its registered office at Raheja
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point, Wing-B, 7 Floor, Behru Road, Vakola
Santacruz (East), Mumbai 400 055.
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21. Reliance Captial Limited
CIN : L65910MH1986PLC165645,
A Company registered under the
Companies Act, 1956, having its registered
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office at Reliance Centre, 6 Floor, Near
Prabhat Colony, Santacruz (East), Mumbai
400 055.
New Address:
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Trade World, B-Wing, 7 Floor, Kamla Mills
Compound, Senapati Bapat Marg,
Lower Parel, Mumbai, Mumbai City
MH 400013 In. (Deleted)
22. Sunshine Builders and Developers
registered under the Indian Partnership
Act, 1932, and having its registered office
at A-501, Kotia Nirman, Opp. Laxmi
Industrial Estate, New Andheri Link Road,
Andheri (W), Mumbai 400 053.
and also having address at :
1307, Lotus Trade Centre, New Link Road,
Andheri (W), Mumbai 400 023.
23. Rakesh Omprakash Seth
Age 61 Yrs, Occ : Business,
Partner of Sunshine Builders and
Developers, having residential
E-2, Joshi Apartments, 290, S. V. Road,
Bandra (West), Mumbai 400 051. ...Defendants
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Mr. Rohan Savant, Mr. Ish Jain, Mr. Vinayak Siraskar, Mr. Duj
Jain, Mr. Soham Bhagwat, Mr. Agam Mehta, Mr. Aman Saraf
i/b. Kiran Jain & Co for the plaintiff.
Ms. Aparna D. Vhatkar for defendant no.2.
Mr. Yashesh Kamdar, Mr. Brian Noronha, Ms. Amisha
Upadhyay i/b. India Law LLP for defendant nos. 11 and 12.
Mr. Simil Purohit, Senior Advocate a/w. Mr. Shrikant
Seegarla, Ms. Shraddha Achliya i/b. Law Associates for
defendant no.4 to 6.
Mr. Pravin Samdani, Senior Advocate, Mr. Aditya Shiralkar,
Ms. Disha Shetty and Ms. Jyoti Tated i/b. Wadia Gandhy and
Co for defendant no.19.
Mr. Dushyant Purekar, Mr. Rajat Dedhia, Ms. Esther Mathew
for defendant nos. 7, 10 and 22.
Mr. Mayur Khandeparkar, Mr. Jagdish G. Aradwad (Reddy)
and Mr. Abhijit Patil for applicant in IA-6341/2025 and for
defendant no.3 in SRA.
Mr. Himanshu Takke, AGP for defendant no.1 State.
Ms. Priyanka Fadia, Mr. Shashank Fadia for defendant nos.
14, 16, 17 and 18.
CORAM : GAURI GODSE J
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RESERVED ON: 24 FEBRUARY 2026
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PRONOUNCED ON: 8 JUNE 2026
JUDGMENT:
1. These applications are filed by defendant nos. 11 and
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12, defendant nos. 4, 3 and 19, respectively, under Order VII
Rule 11 (a) and (d) of the Civil Procedure Code, 1908
(“CPC”) for rejection of the plaint. The suit is filed for a
declaration that the plaintiffs were entitled to all the benefits
in lieu of the construction carried out by them under the slum
rehabilitation scheme, and, in the alternative, prayed for the
handing over of the constructed area. The plaintiffs also
prayed for monetary compensation in lieu of the construction
carried out and prayed for damages in terms of the
construction carried out and the cost incurred by them. The
plaintiffs have bifurcated their prayers regarding their
entitlement, based on the original agreement appointing
them as the developer. According to the plaintiffs, they are
subjected to and victimised by fraud and conspiracy by the
defendants and that they are illegally removed as the
developer in the slum rehabilitation schemes and a blaklisted
developer is appointed.
2. The applications are filed on the grounds that there is
no cause of action to file the suit and the suit is barred for
non- compliance with the mandatory provision under Section
12A of the Commercial Courts Act, 2015 (“the said Act”) and
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the suit is barred under Section 42 of Maharashtra Slum
Areas (Improvement, Clearance and Redevelopment) Act,
1971 (“Slum Act”). Additionally, defendant nos. 11 and 12
have raised an objection of bar under Order II Rule 2 of the
CPC.
3. The plaintiffs were appointed as developers for three
slum societies. According to the plaintiffs, in view of the
defendants' inter se conspiracy and fraud, the plaintiffs were
removed as the developer, and defendant no. 4 was
appointed as the new developer. The plaintiffs have alleged
fraud against the directors of defendant no.4 and the officers
of the slum authorities. It is alleged that these defendants
have fraudulently and with malafide intention colluded to
remove the plaintiffs as the developer and illegally appointed
defendant no.4 to substitute the plaintiffs. Defendant no.1 is
the State Government, defendant no.2 is the chairman of the
High Power Committee constituted by the government to
enquire into complaints regarding slum, rehabilitation
schemes and defendant no. 3 is the Chief Executive Officer
(“CEO”) of the Slum Rehabilitation Authority (“SRA”). The
remaining defendants are private parties and companies
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involved in the development of the slum rehabilitation
scheme in question.
SUBMISSIONS ON BEHALF OF DEFENDANT NO.4
4. Learned senior counsel for defendant no.4 submitted
that pursuant to the pleadings in the plaint, the cause of
rd
action to file the suit arose on 3 October 2018. Hence, the
nd
suit had to be filed within three years, i.e., before 2 October
2021. The exemption period due to Covid-19 restrictions
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would not apply, as the limitation period expired between 15
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March 2020 and 28 February 2022. Hence, the plaintiffs
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were entitled to claim the benefit of only 90 days from 1
March 2022. Hence, the suit should have been filed before
th th
30 May 2022. Therefore, the suit filed on 11 September
2023 is barred by limitation.
5. On the point of non-compliance with Section 12A of the
said Act, learned senior counsel for defendant no.4 submitted
that in view of the pleadings in paragraph 44 of the plaint, the
plaintiffs are not entitled to seek any benefit on the ground
that the provisions of Section 12A of the said Act would not
apply. To support his submissions on the applicability of bar
under Section 12A of the said Act, learned counsel for
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defendant no.4 relied upon the decisions in Deepak Raheja
1
Vs. Ganga Tao Vazirani , Patil Automation Private
2
Limited and Ors. Vs. Rakheja Engineers Private Limited ,
3
Dhanbad Fuels Pvt. Ltd. Vs. Union of India and Anr. and
4
Yamini Manohar Vs. T.K.D. Keerthi
6. Learned counsel for defendant no.4 submitted that the
plaintiffs have already availed of the remedy under Section
35 of the Slum Act by filing an appeal challenging the notice
of termination issued by the SRA. Hence, after availing the
remedy of appeal under the Slum Act, the plaintiffs are not
entitled to seek relief based on the termination, which is
upheld by the appellate authority under the Slum Act. Hence,
civil courts’ jurisdiction is barred from entertaining the suit in
view of Section 42 of the Slum Act.
7. According to the learned counsel for defendant no. 4,
all the prayers in the suit relate to the alleged illegal
termination of the plaintiffs as the developer of the slum
projects. Once the issue is dealt with in the appeal under the
Slum Act, the plaintiffs are not entitled to seek mandatory
1
2021 SCC Online Bom 3124
2
(2022) 10 SCC 1
3
(2025) 9 SCC 424
4
(2024) 5 SCC 815
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relief on the ground that the termination is illegal. The
prayers in the suit are based on the allegations of conspiracy
and fraud. However, no particulars of fraud are pleaded.
Hence, the prayers for mandatory relief based on allegations
of fraud would not constitute a meaningful cause of action for
filing the suit. Hence, the plaint is also liable to be rejected on
the ground that there is no meaningful cause of action to file
the suit.
8. Learned senior counsel for defendant no.4 refers to the
pleadings in the plaint regarding the termination notice
issued to plaintiff no.1 under Section 13(3) of the Slum Act.
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As per the order dated 19 June 2017 issued under the Slum
Act, the plaintiffs were terminated, and the subsequent
developer was appointed. While appointing the subsequent
developer, the expenditure incurred by the first developer is
verified while deciding the notice of termination. After
following due process, the valuer appointed by the SRA
ascertained that Rs. 25 Crores would be paid by defendant
no. 4 to the plaintiffs for the costs incurred by the plaintiffs
before the termination. The valuation report is not acceptable
to the plaintiffs. However, if the plaintiffs are aggrieved by the
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computation or quantum of compensation, the remedy is to
file an appeal under the Slum Act. Hence, based on the
illegal termination or inadequate compensation, the plaintiffs
are not entitled to file this suit by making baseless and vague
allegations of fraud.
9. The particulars of fraud are required to be pleaded
under Order VI Rule 4 of the CPC, but are absent from the
plaint. Hence, for want of any sufficient pleadings of fraud,
the bar under Section 42 of the Slum Act would apply. Only
by making vague allegations of fraud, the plaintiffs have
sought to contend that there is cause of action to seek relief
on the ground of illegal termination of the plaintiffs and
alleged fraudulent appointment of defendant no.4. However,
only to bring the suit within limitation and to get away with the
bar under Section 42, an illusory cause of action is pleaded.
Hence, in view of the well-settled legal principles by the Apex
Court in the decision of C. S. Ramaswamy Vs. V. K. Senthil
5
and Ors , merely stating the fraud cannot be termed as a
meaningful cause of action to seek relief from the civil court.
Learned counsel for defendant no.4 relied upon the decision
of the Apex Court in Dahiben Vs. Arvindbhai Kalyanji
5
2022 SCC OnLine SC 1330
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Bhanusali (Gajra) Dead Through Legal Representatives
6
and Ors to support his submissions that when the plaint
discloses an illusory cause of action created by way of clever
drafting, the plaint is liable to be rejected at the threshold.
SUBMISSIONS ON BEHALF OF DEFENDANT NO. 19
10. In an attempt to get over the bar under Section 42 of
the Slum Act, the plaintiffs have made vague allegations of
fraud without pleading material particulars. There is a clear
distinction between malice in law and malice in fact. The
present case is of purported fraud in fact. Hence, in the
absence of any material particulars as required under Order
VI Rule 4 of the CPC, the vague allegations of fraud cannot
be a ground to maintain the suit. To support his submissions,
learned senior counsel for defendant no. 19 relied upon the
Apex Court’s decision in Electrosteel Castings Limited Vs
7
UV Asset Reconstruction Company Ltd. and C. S.
Ramaswamy. The reliefs in the suit are covered under the
provisions of the Slum Act as applicable to the slum
rehabilitation schemes. Hence, the SRA authorities under the
Slum Act are fully competent to adjudicate and grant the
6
(2020) 7 SCC 366
7
(2022) 2 SCC 573
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reliefs as claimed in the suit. Hence, the plaint is liable to be
rejected, as barred under Section 42 of the Slum Act.
11. The plaint is also liable to be rejected for the lack of a
meaningful cause of action pleaded by the plaintiffs. To
support his submissions, learned senior counsel for
defendant no. 19 relied upon the Apex Court’s decision in
Correspondence RBANMS Educational Institution Vs B.
8
Gunashekhar . The plaint is also liable to be rejected as
barred by limitation. Considering the cause of action and the
nature of reliefs claimed in the suit based on a wrongful act,
causing an injury, the suit would be bad by limitation in view
of Section 23 of the Limitation Act. To support his
submissions, learned senior counsel for defendant no. 19
relied upon the decision of the Apex Court in Balakrishna
Pujari Waghmare Vs Shree Dnyaneshwar Maharaj
9
Sansthan . The exemption granted by the Apex Court during
the COVID-19 pandemic would not be applicable in the
present case. When the period of limitation is expiring within
the excluded period, the plaintiffs would get only 90 days
extension. Hence, the plaint must be rejected at the
threshold on the ground that the suit is barred by the law of
8
2025 SCC OnLine SC 793
9
1959 SCC OnLine SC 68
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limitation. Hence, in view of the legal principles settled by the
Apex Court in Dahiben the plaint is liable to be rejected at
the threshold.
SUBMISSIONS ON BEHALF OF DEFENDANT NO. 3
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12. On 9 October 2018, defendant no. 4 was selected as
the new developer. The Order passed by the Apex Court is
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dated 12 April 2019. The plaintiffs have pleaded a cause of
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action of 3 October 2018 as per paragraph 42 of the plaint.
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The report for the letter of intent (LOI) is dated 15 October
2019, the date it was signed by the CEO of SRA. This LOI
was a revised letter of intent. The substituted Section 3B of
the amended Slum Act is applicable to the slum rehabilitation
schemes. Hence, in view of the remedy available under
Sections 34A and 34B read with 35, there would be a bar to
the present suit in view of Section 42 of the Slum Act. To
support his submissions on the bar of civil court jurisdiction,
learned counsel for defendant no. 3 relied upon the decision
of this court, in the case of New Janta SRA CHS Vs State
10
of Maharashtra and others .
13. The prayer clause (g) in the present suit pertains to the
10
WP No. 2349 of 2018 Dt. 26/09/2019
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powers exercised by the authorities under the Slum Act.
None of the prayers in the suit challenges the orders of the
Appellate Grievance Redressal Committee (“AGRC”).
Therefore, the CEO’s order stands merged with the AGRC
order. Hence, the plaint must be rejected in view of the bar
under Section 42 of the Slum Act. To support his
submissions, learned counsel for defendant no. 3 relied upon
the decision of the Apex Court in Competent Authority,
11
Calcutta Vs David Mantosh and others .
SUBMISSIONS ON BEHALF OF DEFENDANT NOS. 11
AND 12
14. Learned counsel for defendant nos. 11 and 12
submitted that the plaintiffs have referred to the entire written
th
statement dated 27 July 2021 filed by the plaintiffs in
Commercial Suit No. 971 of 2019 filed by defendant nos.11
and 12. The entire pleadings in the counterclaim are relied
upon by the plaintiffs in the present suit. Hence, the copy of
the counterclaim, though not annexed to the plaint, can be
considered and treated as part of the plaint of this suit. For
the purpose of objection of the bar under Order II Rule 2 of
the CPC, the counterclaim of the plaintiffs in the suit filed by
11
(2020) 12 SCC 542
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defendant nos. 11 and 12 needs to be compared with the
plaint in the present suit.
15. According to the learned counsel for defendant nos. 11
and 12, the frame of the plaint in the present suit and the
counterclaim and the entire cause of action as pleaded in the
counterclaim would reveal that the cause of action pleaded in
the present suit is similar. Hence, filing of this suit is an
attempt on the part of the plaintiffs to characterise the cause
of action in the counterclaim as one based on breach of the
contract, while the cause of action in the present suit is
characterised as one based on fraud. However, the facts
pleaded in the counterclaim and the present suit are the
same. Thus, based on the cause of action pleaded in the
counterclaim, it is clear that the suit would be barred by
limitation as well as barred in view of Order II Rule 2 of the
CPC.
16. To support his submissions that the bar under Order II
Rule 2 of the CPC can be considered at the stage of Order
VII Rule 11 of the CPC, learned counsel for defendant nos.
11 and 12 has relied upon the decision of the Apex Court in
the cases of Virgo Industries Pvt Ltd Vs Venturetech
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12
Solutions Pvt. Ltd. , Cuddalore Powergen Corporation
13
Vs Chemplast Cuddalore Vinyls Limited and Vurimi
14
Pullarao Vs Vemari Vyankata Radharani .
17. On the ground of rejection of the plaint for non-
compliance with the mandatory requirement under Section
12A of the said Act, learned counsel for defendants nos. 11
and 12 submitted that, on plain reading of the plaint, it is
clear that an illusory relief has been claimed only to wriggle
out of the mandatory requirement under Section 12A. Hence,
in view of the well-settled legal principles in the decisions of
Patil Automation, Deepak Raheja, Yamini Manohar and
Dhanbad Fules Pvt. Ltd. , the plaint is liable to be rejected in
view of the bar under Section 12A of the said Act. Learned
counsel for defendant nos. 11 and 12 also relied upon the
decision of the Apex Court in Novenco Building and
Industry A/s Vs. Xero Energy Engineering Solutions Pvt.
15
Ltd. And Anr .
18. Learned counsel for defendant nos. 11 and 12,
submitted that no urgent interim relief is contemplated in the
12
(2013) 1 SCC 625
13
2025 SCC OnLine SC 82
14
(2020) 14 SCC 110
15
2025 SCC OnLine SC 2278
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suit seeking monetary relief on the ground of fraud. Hence,
the plaint is liable to be rejected in view of the bar under
Section 12A of the said Act. To support the submission of
rejection of the plaint on the ground that it is barred by
limitation, it was submitted that the exclusion claimed by the
plaintiffs on the ground of the decision of the Apex Court
granting exemption due to the Covid-19 pandemic period
would not apply in the present case. The suit is filed after 5
years from the real cause of action. The suit has been
th
instituted on 14 September 2023 based on a cause of
action of 2018. Hence, the suit is clearly barred by limitation.
19. Learned counsel for defendant nos. 11 and 12 also
claimed rejection of the plaint on the ground of bar under
Section 42 of the Slum Act on the same grounds argued on
behalf of the above-referred defendants. So far as the
rejection of the plaint only qua defendant nos. 11 and 12 on
the ground of Order II Rule 2 of the CPC is concerned, he
submitted that it is a well-established legal principle that the
plaint as a whole can be rejected qua a particular defendant
if no cause of action is pleaded against the said defendant.
To support his submissions, learned counsel for defendant
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no.11 and 12 relied upon the decisions in the case of
Church of Christ Charitable Trust & Educational
16
Charitable Soc., Vs. Poonnimman Educational Trust ,
17
Roop Lal Sathi Vs. Nachhattar Singh Gill and the three-
judge bench decision of the Apex Court in D. Ramchandran
18
Vs. R. V. Janakiraman and Ors . He submits that the said
decision would not dilute or render the decision in the
Church of Christ as per incuriam. The view taken by the
Apex Court in Church of Christ in holding that the plaint can
be rejected as a whole would squarely apply to the facts of
the present case qua defendant nos. 11 and 12.
20. To support his submissions that the decisions of the
Apex Court in Sejal Glass Limited Vs. Navilan Merchants
19
Private Ltd and Madhav Prasad Aggarwal and Anr Vs.
20
Axis Bank Limited and Anr , would not apply, the learned
counsel for defendant nos. 11 and 12 relied upon the
decision of this Hon'ble Court in Sheela Ram Vidhani and
21
Anr. Vs. S. K. Trading Company and Ors holding that the
decision in Church of Christ prior in time is binding and the
16
(2012) 8 SCC 706
17
(1982) 3 SCC 487
18
(1999) 3 SCC 267
19
(2018) 11 SCC 780
20
(2019) 7 SCC 158
21
(2022) 10 SCC 1
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ratio decidendi in the subsequent two decisions were
irreconcilable.
SUBMISSIONS ON BEHALF OF THE PLAINTIFFS:
21. Learned counsel for the plaintiffs submitted that the
plaint contains substantive pleadings that give particulars of
the allegations of fraud against each defendant. He submits
that in view of the reliefs claimed on the ground of fraud, the
bar under Section 42 of the Slum Act would not apply. The
nature of reliefs claimed in the suit can be tried only by the
civil court in view of Section 9 of the CPC, and the civil
court’s jurisdiction is not excluded by Section 42 of the Slum
Act. To support his submissions, learned counsel for the
plaintiffs relied upon the decisions of this court in Om Shree
22
Sai Developers Vs State of Maharashtra and Qari
Mohammed Zakir Hussain Vs Municipal Corporation of
23
Greater Mumbai .
22. Learned counsel for the plaintiffs relied upon the
relevant pleadings in the plaint to contend that the cause of
rd
action arose on 3 October 2018. The three-year period to
rd
seek a declaration would therefore end on 3 October 2021.
22
2010 (3) Mh.L.J. 586
23
2001 SCC OnLine BOM 871
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th
The suit was filed on 11 September 2023 on the ground
that, in view of the exemption of limitation period granted by
the Apex Court during the Covid-19 Pandemic, the three-year
th
period would end on 18 September 2023. He, therefore,
submitted that in view of the Apex Court’s decision in
24
Cognisance for Extention of Limited, In RE , the suit is
well within limitation .
23. Learned counsel for the plaintiffs submitted that the
pleadings raising cause of action against all the defendants
are specifically pleaded in paragraph 10 of the plaint. In
paragraph 13 of the plaint, the particulars of the fraud are
substantially pleaded, including the conspiracy of the
defendants in the removal of the plaintiffs as the developer
and the appointment of defendant no.4 as a developer. To
support his submissions, he relied upon the decision of this
court in the case of Kangana Ranaut Vs. Municipal
25
Corporation of Greater Mumbai & Ors .
24. With reference to specific pleadings of fraud, learned
counsel for the plaintiffs relied upon paragraph 17 of the
plaint. According to the learned counsel for the plaintiffs, the
24
(2022) 3 SCC 117
25
2020 SCC OnLine Bom 3132
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cause of action in the counterclaim filed in the suit filed by
defendant nos. 11 and 12 is based on the contractual dispute
with the said defendants. The present suit is filed based on
the allegations of fraud. Hence, the bar under Order II Rule 2
argued on behalf of the defendant nos. 11 and 12 would not
apply in the present case for rejection of the plaint at the
threshold. He submitted that the cause of action is not
identical, even if the reference to fraud is made in the
counterclaim. Hence, the bar under Order II Rule 2 cannot
apply at this stage. The prayer for rejection of the plaint
under Order VII Rule 11 of the CPC can be decided only
based on the averments in the plaint in the present suit. To
support his submissions, learned counsel for the plaintiffs
relied upon the Apex Court’s decision in Srihari
26
Hanumandas Totala Vs Hemant Vithal Kamat .
25. On the objection raised on the bar under Section 12A
of the said Act, learned counsel for the plaintiffs referred to all
the prayers in the suit which are in the aid of final relief.
However, the same cannot be a ground to reject the plaint.
Similarly, in the present case, the points argued for rejection
of the plaint cannot apply. By praying for rejection of the
26
(2021) 9 SCC 99
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plaint by raising objections on the point of limitation and the
bar under Section 12A of the said Act and Section 42 of the
Slum Act, the defendants are making an attempt to nullify the
liberty granted by the Apex Court to the plaintiffs to file this
suit.
26. On the issue of cause of action, learned counsel for the
th
plaintiffs submitted that the report dated 19 April 2017 was
favourable to the plaintiffs. However, it was not made
available. The non-supply of the report to the plaintiffs is
specifically pleaded in paragraph (I) of the plaint. The
plaintiffs had applied under the Right to Information Act,
2005, for a copy of the report, which is also specifically
pleaded in paragraph (VIII) of the plaint. Hence, assuming
the cause of action is of 2018, the suit is filed within the
limitation due to Covid-19 exemption. The cause of action is
based on the report being made available to the plaintiff.
Hence, the triable issue on the point of limitation arises in the
present suit, and therefore, the issue of limitation, if any,
cannot be decided at the threshold in the present case. To
support his submissions, learned counsel for the plaintiffs
relied upon the Apex Court’s decision in P.
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27
Kumarakurubaran Vs P. Narayanan .
27. Learned counsel for the plaintiffs, therefore, submitted
that none of the grounds argued on behalf of the defendants
are available for rejection of the plaint at the threshold. In
view of the substantial pleadings in the plaint, triable issues
arise, and the grounds raised cannot be decided at the
threshold.
CONSIDERATION OF SUBMISSIONS AND ANALYSIS:
28. I have carefully perused the pleadings and supporting
documents. According to the plaintiffs, they were removed as
the developer by playing fraud. Defendant nos. 5 and 6 are
the partners of defendant no.4. The description of the
defendants is pleaded in the plaint. Defendant no.11 had
entered into an agreement with the plaintiffs and defendant
no.7 at the relevant time. Hence, they are made party
defendants. Defendant no.13 had participated in the
selection process of the new developer. Defendant no.14 is
the son of defendant no.8 and was a director, along with
defendant no.5, in defendant no.13-company. Serious
allegations are made against defendant no. 8, who is alleged
27
2025 SCC OnLine SC 975
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to be a blacklisted developer. Defendant no.15 is the director
of defendant no.16 along with defendant no.18. Defendant
no.15 is the business head of defendant no.11, who had
executed the tripartite agreement with plaintiff no.1 and
defendant no. 7, and is also a director of defendant no.13
along with defendant no.14. Defendant no.16 is formed by
defendant no.8 and defendant nos. 14 and 18 as partners.
The nexus between defendant no.17 and defendant no.18 is
alleged on the ground that defendant no.18 is the partner of
defendant no.16 and the wife of defendant no.8. It is alleged
that defendant no.5 has transferred his shares to defendant
no.18 after the letter of intent was issued to defendant no.4.
29. Defendant no.19 is the company with whom defendant
st
no. 4 executed an agreement dated 31 March 2022
regarding the development of the slum rehabilitation scheme.
Defendant nos. 20 and 21 are the group of companies that
executed an agreement with defendant no. 7; defendant no.
22 is a blacklisted company by the SRA; and defendant no.
23 is its partner along with defendant no. 22. Defendant no.
th
21 is deleted vide Order dated 19 January 2026. The
particulars of the fraud alleged against these defendants are
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substantially pleaded in paragraphs 10 and 11 of the plaint.
The plaintiff has pleaded conspiracy among the defendants
to remove the plaintiffs as the developer and appoint
defendant no. 4.
30. It is pleaded by the plaintiffs that various construction
activities for the development of the slum plot for the
rehabilitation of the slum dwellers were undertaken by the
plaintiffs. According to the plaintiffs, the composite building
no.1 was constructed, and 155 slum dwellers were
accommodated, and 9 sale tenements in the composite
building were constructed. The construction was completed
in 2007, and the plaintiff had commenced and undertaken to
complete the rehab building no. 1 to accommodate 397
project-affected persons, including 122 residential and 3
commercial project-affected persons. The construction of the
two multistoried rehab buildings was ongoing when the
th
notice dated 12 January 2017 was issued to the plaintiffs.
31. The substantial work carried out by the plaintiffs
regarding the infrastructure is pleaded in the plaint. Hence,
according to the plaintiffs, despite having taken all necessary
steps to complete the project, the plaintiffs received the
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notice of termination. Pursuant to the notice issued to the
th th
plaintiffs, two reports dated 10 March 2017 and 19 April
2017 were prepared by the Engineering Department of the
SRA. The plaintiffs have raised objections to the reports on
the grounds that they were based on factually incorrect
statements. According to the plaintiffs, the removal was
systematically planned by manipulating the CEO of the SRA.
Defendant no. 8 was allowed to participate in the
appointment of the new developer by creating false records.
Hence, the plaintiffs pleaded that there was a conspiracy in
the appointment of defendant no. 4, who is the alter ego of
Mr. Shailesh Mehta, that is, defendant no. 8, who is a
blacklisted developer.
32. The plaintiffs contended that, since they were
subjected to and victimised by fraud, they filed the present
suit for a declaration that they were entitled to benefits in lieu
of the construction carried out by them, and, in the
alternative, prayed for the handing over of the constructed
area. The plaintiffs also prayed for monetary compensation in
lieu of the construction carried out and prayed for damages
in terms of the construction carried out and the cost incurred
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by them. The plaintiffs have bifurcated their prayers
regarding their entitlement, based on the original agreement
appointing plaintiffs as the developer.
33. The plaintiffs have pleaded a cause of action in
paragraph 42 of the plaint, thereby stating that, for the first
rd
time, the cause of action arose on 3 October 2018, when
the plaintiffs learned of the wrongful appointment of
defendant no. 4 as the developer. However, subsequently,
the fraud and conspiracy committed by the defendants were
revealed. The plaintiffs got knowledge of the reports dated
th th th
10 March 2017 and 19 April 2017 after the order dated 12
April 2019 was passed by the Apex Court. Since the prayers
allege fraud and conspiracy, according to the plaintiffs, the
bar under Section 42, read with Section 35 of the Slum Act,
would not apply. It is pleaded that only the civil court would
have jurisdiction to decide the allegations of fraud and the
illegalities committed by the defendants in removing the
plaintiffs as the developer and appointing defendant no.4 as
the new developer.
th
34. It is pleaded in the plaint that the Order dated 19
June 2017 passed by the CEO of the SRA against the
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plaintiffs was challenged by them in this court as well as by
filing an appeal before the AGRC. The plaintiffs have relied
upon the liberty granted by the Apex Court in the order dated
th
12 April 2019 in SLP (c) Nos. (s) 8737/2019. Copies of the
orders passed by the High Court and the Apex Court are
annexed to the plaint. By order dated 20 April 2019, the Apex
Court dismissed the plaintiffs’ special leave petition; however,
it granted liberty to pursue other appropriate remedies
regarding breach of contract and damages as permissible in
law. Accordingly, the plaintiffs have pleaded that the cause of
rd
action first arose on 3 October 2018, when the plaintiff
learnt about the wrongful appointment of defendant no. 4 as
developer. It is further pleaded that subsequently, even the
fraud and conspiracy committed by the defendants were
revealed. The plaintiffs have pleaded to have obtained
th th
knowledge of the reports dated 10 March 2017 and 19
April 2017, after the order passed by the Apex Court.
35. The plaintiffs had challenged the SRA order on the
basis of the said reports. The plaintiffs in paragraphs (I) and
(VIII) have pleaded non-supply of copies of the reports and
applications made under the Right to Information Act for
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obtaining the copies of the reports. The plaintiffs have also
pleaded about the false criminal proceedings initiated against
them, the various suits filed by various defendants, and the
source of knowledge of the conspiracies from the various
proceedings. It is also explained by the plaintiffs that the
reports not supplied to them formed the basis of the
adjudication for compensation in lieu of the plaintiffs’
termination.
36. The exhaustive and substantial pleadings in the plaint
show that all particulars of the allegations of fraud, malice
and collusion are pleaded. Section 42 of the Slum Act bars
civil court’s jurisdiction in respect of any matters which the
AGRC and the Apex Grievance Redressal Committee or
Tribunal is empowered by or under the Slum Act to determine
in respect of any action taken or to be taken in pursuance of
any power conferred by or under the Slum Act. Under
Section 35 of the Slum Act, a remedy of appeal is provided to
any person aggrieved by any notice, order or direction issued
by SRA authorities. In the present case, according to the
plaintiffs, they exhausted the said remedy; however, in view
of the liberty granted by the Apex Court, the present suit is
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filed where they seek relief on the ground of allegations of
fraud, malice and collusion, which were not the subject
matter of the remedy availed under the Slum Act.
37. In Electrosteel Castings Ltd., the Apex Court while
dealing with the issue of bar under Section 34 of
the Sarfaesi Act held in the facts of that case that, the
pleadings and averments in the suit more particularly the use
of the word fraud even considering the case on behalf of the
plaintiff, the allegations of fraud are made without any
particulars and only with a view to get out of the bar under
Section 34 of the Sarfaesi Act and by such a clever drafting
the plaintiff intends to bring the suit maintainable despite the
bar under Section 34 of the Sarfaesi Act, which is not
permissible. Considering the different facts of the present
case, the legal principles settled in the said decision would
not be of any assistance to the arguments raised on behalf of
the defendants for rejecting the plaint at the threshold.
38. In State of W.B. Vs David Mantosh , the Apex Court,
while dealing with the issue of bar of civil court’s jurisdiction
in view of the provisions of the Urban Land (Ceiling and
Regulation) Act 1976, relied upon the test laid down in
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28
Dhulabhai Vs State of M.P. for examining the issue of
jurisdiction as under:
“(1) Where the statute gives a finality to the orders of
the special tribunals the civil courts' jurisdiction must be
held to be excluded if there is adequate remedy to do
what the civil courts would normally do in a suit. Such
provision, however, does not exclude those cases where
the provisions of the particular Act have not been
complied with or the statutory tribunal has not acted in
conformity with the fundamental principles of judicial
procedure.
(2) Where there is an express bar of the jurisdiction of
the court, an examination of the scheme of the particular
Act to find the adequacy or the sufficiency of the remedies
provided may be relevant but is not decisive to sustain the
jurisdiction of the civil court. Where there is no express
exclusion the examination of the remedies and the
scheme of the particular Act to find out the intendment
becomes necessary and the result of the inquiry may be
decisive. In the latter case it is necessary to see if the
statute creates a special right or a liability and provides for
the determination of the right or liability and further lays
down that all questions about the said right and liability
shall be determined by the tribunals so constituted, and
whether remedies normally associated with actions in civil
courts are prescribed by the said statute or not.
(3) Challenge to the provisions of the particular Act as
ultra vires cannot be brought before Tribunals constituted
under that Act. Even the High Court cannot go into that
question on a revision or reference from the decision of
the Tribunals.
(4) When a provision is already declared
unconstitutional or the constitutionality of any provision is
to be challenged, a suit is open. A writ of certiorari may
include a direction for refund if the claim is clearly within
the time prescribed by the Limitation Act but it is not a
compulsory remedy to replace a suit.
28
AIR 1969 SC 78
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(5) Where the particular Act contains no machinery for
refund of tax collected in excess of constitutional limits or
illegally collected, a suit lies.
(6) Questions of the correctness of the assessment
apart from its constitutionality are for the decision of the
authorities and a civil suit does not lie if the orders of the
authorities are declared to be final or there is an express
prohibition in the particular Act. In either case, the scheme
of the particular Act must be examined because it is a
relevant enquiry.
(7) An exclusion of the jurisdiction of the civil court is
not readily to be inferred unless the conditions above set
down apply.”
39. In the facts of the case the Apex Court held that the
civil court had no jurisdiction to try the civil suit in relation to
the land which is subject to ceiling proceedings under the Act
in question; nor did the civil court have the jurisdiction to
declare the proceedings held under the Act, as void or illegal
or non est, since it was impliedly excluded and barred under
the Act.
40. In New Janta SRA CHS Ltd , this Court while dealing
with the issue whether the slum dwellers society was entitled
to a change of a developer under the provisions of Section
13(2) of the Slums Act discussed the scope of powers of the
SRA under Chapter IV which provides for slum clearance
and redevelopment under which Section 13 which is a
relevant provision for change of the developer in case the
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redevelopment is not being undertaken within the time.
Considering the statutory scheme, it is held that once a
developer is appointed, it is within the powers of the SRA on
a proper verification and scrutiny of the facts and applying
the rules and the law to take an appropriate decision on any
proposal to change the developer and/or the viability of a
new developer being appointed in the facts of a given case.
In view of the scope of interference under Article 226 of
the Constitution of India, it was held that the exercise of
powers by the Writ Court in the SRA matters must be limited
to the matters which remain unresolved despite the remedy
of an appeal being exhausted, more particularly when the
full-fledged hearing complying with the principles of natural
justice was granted before AGRC on all the issues. This
judgment does not consider the bar under Section 42 of the
Slum Act and the Civil Court’s plenary jurisdiction under
Section 9 of the CPC.
41. In Qari Mohammed Zakir Hussain , this Court held
that if the allegation is that the act done or intended to be
done by the concerned authority is the result of fraud,
collusion or mala fide and is clearly in transgression of the
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powers conferred on that person or authority under the Act or
Rules, in such a case, the allegation would be actionable,
before the Civil Court being one of civil nature to be tried only
by the Civil Court by virtue of Section 9 of the CPC. This
Court held in paragraph 16 as under:
“16. It is well settled that exclusion of the jurisdiction of
the Civil Court is not to be readily inferred but such
exclusion must either be explicity expressed or clearly
implied. It is also well settled that even if the jurisdiction it
so excluded the Civil Courts have jurisdiction is examine
into the issues where the provisions of the Act have not
been complied with, or statutory Tribunal has not acted in
conformity with the fundamental judicial procedure. On the
other hand, a suit in a Civil Court can always be
maintained to question the order of a Tribunal created by
a statute, even if its order is, expressly or by necessary
implication, made final, if the said Tribunal abuses its
power or does not act under the Act but in violation of its
provisions. In other words, if the suit proceeds on the
premises that the offending act has been done not in good
faith, then there is no bar for such a suit. This legal
position is enunciated in catena of decisions including
1
(A.I.R. 1940 Privy Council 105) ( State of Kerala v. N.
2
Ramaswamy Iyer & Sons ) , A.I.R. 1966 S.C. 1738, ( Firm
Seth Radhakishan (deceased) represented by
Harikishan v. Administrative Municipal Committee,
3
Ludhiana ) , A.I.R. 1963 S.C. 1547, as well as decision of
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Kerala High Court in ( Secretary, K.S.E.B.,
4
Trivandrum v. M. Sainaba ) , A.I.R. 1990 Kerala 50.”
42. In Om Shree Sai Developers , this court held that the
bar of civil Court’s jurisdiction under Section 42 of the Slum
Act is not absolute. It is held that the disputes which are
purely private or contractual will have to be resolved by suit
or arbitration as permissible in accordance with law and that
Section 42 of the Slum Act is not a blanket bar for institution
of civil suits, but prohibits civil court from entertaining such
suits or granting injunction in suits in respect of action taken
or to be taken in good faith in exercise of powers conferred
under the Slum Act. It is further held that the remedy of civil
suit is not barred to seek relief against malafide commission
or omission of acts which are not in good faith.
43. In Kangana Ranaut , this court has summarized the
well-settled legal principles on malice in law and facts, as
under;
“ 162. The principles which can thus be deduced from the
aforesaid Judgments, as well as the Judgments referred to in
the respective written submissions of the parties, are as
under:
i. An action is said to be vitiated by malice in fact when the
same lacks good faith and is motivated by personal
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bias, grudge, oblique or improper motive or ulterior
purpose. The malice in fact needs to be pleaded, the
party concerned against whom malice in fact is alleged,
needs to be impleaded and an opportunity has to be
given to the party so impleaded, to respond to the
allegations. The said allegations have to be established
before the Court.
ii. An Order or action can be said to be vitiated by malice
in law in one or more of the following circumstances:
(a) From doing of a wrongful act intentionally without
any just cause, or excuse, or without there being
reasonable relation to the purpose of exercise of
statutory power.
(b) It is the attainment of ends beyond the sanctioned
purposes of power by simulation or pretention of
gaining legitimate goal. When the custodian of
power is influenced in its exercise by consideration
outside those for the promotion of which the power
is vested, the Court calls it colourable exercise and
is undeceived by illusion.
(c) It is a deliberate act in disregard to the rights of
others.
(d) It is an act taken with an oblique or indirect object.
(e) Conscious violation of the law to the prejudice of
another, a depraved inclination on the part of the
authority to disregard the rights of others, which
intent is manifested by its injurious acts.
(f) Passing an Order for unauthorized purpose.
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iii. Malice in law need not be pleaded and does not need
proof. For malice in law, intention is immaterial.
iv. There are no strict guidelines for proving malice in a
case where there is material from which the Court can
infer malice. The Court is empowered to draw inference
on the basis of facts disclosed and material produced
before the Court and arrive at a conclusion, which
according to its opinion may not be of much doubt and
could be supported by justifiable reasons. The party
against whom allegations are made is expected to
cover up its decision or action and dress it up in a
manner to give colour or justification, but the Court has
to discover whether the action is colourable on the
basis of material, looking beyond the apparent.
Malafide cannot be established by direct evidence. It
may not be discernable from the Order impugned, or
from the note made in the file preceding the Order, and
can be deduced as a reasonable and unescapable
inference from true facts. “
44. In Srihari Hanumandas Totala , the Apex Court held
that at the stage of deciding an application of rejection of the
plaint under Order VII Rule 11 of the CPC, in order to decide
whether the suit is barred by any law, it is the statement in
the plaint which will have to be construed and that the court
while deciding such an application must have due regard
only to the statements in the plaint. It is further held that
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whether the suit is barred by any law must be determined
from the statements in the plaint, and it is not open to decide
the issue on the basis of any other material, including the
written statement in the case.
45. When viewed in the light of the aforesaid legal
principles, the substantial pleadings in the present case, as
discussed in the above paragraphs regarding fraud, malice
and collusion, raise triable issues to be adjudicated by the
civil court. The bar under Section 42 of the Slum Act would
therefore not apply. Whether the allegations pleaded in the
plaint would constitute an action vitiated by malice in fact and
lack good faith and is motivated by personal bias, grudge,
oblique or improper motive or ulterior purpose raises triable
issues and would fall within the civil court’s jurisdiction.
Hence, the plaint cannot be rejected at the threshold on the
ground of the bar under Section 42 of the Slum Act.
46. In P. Kumarakuruban , the Apex Court held that the
plea regarding the date of knowledge, whether it is credible
for deciding the issue of limitation, was a matter that would
necessarily require appreciation of evidence and that at the
preliminary stage, the averments made in the plaint must be
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taken at their face value and assumed to be true. It is further
held that once the date of knowledge is specifically pleaded
and forms the basis of the cause of action, the issue of
limitation cannot be decided summarily, and it becomes a
mixed question of law and fact, which cannot be adjudicated
at the threshold stage under Order VII Rule 11 of CPC . It is
therefore held that the rejection of the plaint on the ground of
limitation without permitting the parties to lead evidence is
legally unsustainable.
47. On the point of limitation, much was argued on behalf
of the above-referred defendants/applicants that, in view of
the explanation in paragraph 5.3 in the Apex Court’s order
granting the period of suspension of limitation, when the
th th
limitation period expires between 15 March 2020 and 28
February 2022, after the expiry of the exempted period, only
90-day limitation is available. Hence, the plaintiffs are not
entitled to seek the benefit of more than 90 days. Learned
senior counsel for defendant no. 19 relied upon an order
passed by this court in CRA No. 431 of 2023 in the case of
Hemlata Joshi Vs Naman Enterprises, and submitted that
this court has taken the view that, considering the
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explanation in paragraph 5.3 of the Apex Court’s order, when
th
the limitation period expires between 15 March 2020 and
th
28 February 2022, the further limitation period available is
st
90 days from 1 March 2022.
48. Paragraph no.5.3 of the Apex Court’s Order in
Cognizance For Extension of Limitation, In Re , reads as
under:
“5.3. In cases where the limitation would have expired during
the period between 15-3-2020 till 28-2-2022, notwithstanding
the actual balance period of limitation remaining, all persons
shall have a limitation period of 90 days from 1-3-2022. In
the event the actual balance period of limitation
remaining, with effect from 1-3-2022 is greater than 90
days, that longer period shall apply. ”
emphasis applied by me
rd
49. In the present case, the cause of action is dated 3
October 2018. The exemption period as per the Apex Court’s
th
Order due to the COVID-19 pandemic was from 15 March
th
2020 to 28 February 2022. Therefore, without the
exemption period, the three-year limitation would expire on
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rd
3 October 2021, i.e. during the exempted period. Therefore,
th
as of 15 March 2020, the actual balance period of limitation
was 1 year, 6 months and 17 days (From 15/3/2020 to
th
3/10/2021). Thus, after the exemption period ended on 28
February 2022, the actual balance period of limitation
available was 1 year, 6 months and 17 days, which is longer
th
than 90 days and would have ended on 17 September
th
2023. The suit was filed on 11 September 2023.
50. Therefore, in view of the clarification in the last part of
paragraph 5.3, when the actual balance period of limitation
st
remaining with effect from 1 March 2022 is greater than 90
days, that longer period shall apply. In the present case, the
st
actual balance period of limitation as of 1 March 2022 was
1 year, 6 months and 17 days, which is greater than 90 days.
Hence, the suit is not barred by limitation. Therefore, the
plaint cannot be rejected at the threshold on the ground of
barred by limitation. This Court in Hemlata Joshi has
observed in paragraph 11 that in those cases where the
st
balance period of limitation as on 1 March 2022 exceeds 90
days, such persons shall be entitled to the benefit of a longer
period of limitation. Therefore, even considering the view
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taken by this Court in Hemlata Joshi , the present suit is
within limitation.
51. In Balakrishna Savalram Pujari Waghmare , while
discussing the argument by relying on Section 23 of the
Limitation Act, the Apex Court held that Section 23 refers not
to a continuing right but to a continuing wrong and that it is
the very essence of a continuing wrong that it is an act which
creates a continuing source of injury and renders the doer of
the act responsible and liable for the continuance of the said
injury. It is further held that if the wrongful act causes an
injury which is complete, there is no continuing wrong even
though the damage resulting from the act may continue;
however, if a wrongful act is of such a character that the
injury caused by it itself continues, then the act constitutes a
continuing wrong.
52. Considering the facts of the present case, as discussed
in the foregoing paragraphs, the legal principles settled in
this decision would not be of any assistance to decide the
issue of limitation at the threshold at the stage of Order VII
Rule 11 of CPC. In the present case, the cause of action is
rd
pleaded to have first arisen on 3 October 2018 and then
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th
after the Apex Court’s order dated 12 April 2019. Therefore,
the pleadings on the cause of action would raise a triable
issue for considering the issue of limitation and cannot be
decided at the preliminary stage.
53. With reference to the mandatory requirement under
Section 12A of the said Act, the plaintiffs have pleaded that,
in view of the urgency as explained in paragraphs 34 to 36
and 38 of the plaint for seeking urgent interim relief, the bar
under Section 12A of the said Act would not apply. The
plaintiffs have contended that defendant no. 4 is carrying out
construction, even on the non-slum plots and thus causing
serious prejudice and loss of profit to the plaintiffs. It is
further alleged that by taking undue advantage of the orders
passed under the slum rehabilitation scheme, the plaintiffs’
private rights are being infringed, thereby causing substantial
loss to them. Hence, according to the plaintiffs, the suit was
filed with urgency seeking prayers for the appointment of a
court receiver and an injunction to protect the plaintiffs’ rights.
54. The legal principles governing the rejection of a plaint
under Order VII Rule 11 of the CPC are no longer res
integra. The Hon’ble Apex Court in Dahiben held that the
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power conferred on the court to terminate a civil action is a
drastic one and thus the conditions enumerated under Order
VII Rule 11 of the CPC must be strictly adhered to.
55. The Division Bench of this Court in Deepak Raheja
held that Section 12-A of the said Act is mandatory, and a
commercial suit which does not contemplate any urgent
interim relief cannot be instituted unless the plaintiff exhausts
the remedy of pre-institution mediation in accordance with
such manner and procedure as may be prescribed by rules.
56. While discussing the legal principles settled in the
decision of Patil Automation, the Hon’ble Apex Court, in the
decision of Yamini Manohar, held that the words
“contemplate urgent interim relief” suggest that the suit must
contemplate, which means the plaint documents and facts
should show and indicate the need for urgent interim relief.
The Hon’ble Apex Court further held that if any urgent interim
relief is contemplated, the commercial courts have to carry
out a limited exercise in the facts and circumstances of the
case to ascertain whether the prayer for interim relief is not
made in a disguise only to wriggle out of the mandatory
compliance under Section 12A of the said Act. It is thus held
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that the facts and circumstances have to be considered
holistically from the standpoint of the plaintiff.
57. The legal principles settled by the Hon’ble Apex Court
in the case of Patil Automation and Yamini Manohar are
further explained in the decision of Dhanbad Fuels. The
Hon’ble Apex Court held that the courts must also be wary of
the fact that the urgent interim relief must not be merely an
unfounded excuse by the plaintiff to bypass the mandatory
requirement of Section 12A of the said Act. If the urgent
interim relief ultimately comes to be denied, the suit of the
plaintiff may be proceeded with without compliance with
Section 12A, if the test for urgent interim relief is satisfied,
notwithstanding the actual outcome on merits. Thus, the
legal principles are now well-established that the test for
“urgent interim relief” is to see whether, on the examination of
the nature of and the subject matter of the suit and the cause
of action, the plaintiff's prayer for urgent interim relief could
be said to be contemplable when the matter is seen from the
standpoint of the plaintiff. Therefore, if the test for urgent
interim relief is satisfied notwithstanding the actual outcome
on merits, the suit can be proceeded with without compliance
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with Section 12A.
58. In Novenco Building and Industry , the Apex Court
held that a plaintiff can be exempted from the requirement of
Section 12A only when the plaint and the documents
attached to it clearly show a real need for urgent interim
intervention and on a wholesome reading of the plaint and
the material annexed to the plaint ought to disclose the need
for urgent relief. It is held that the court must look at the
plaint, pleadings and supporting documents to decide
whether urgent interim relief is genuinely contemplated, and
the court may also look for immediacy of the peril, irreparable
harm, risk of losing rights/assets, statutory timelines,
perishable subject-matter, or where delay would render
eventual relief ineffective.
59. In C. S. Ramaswamy , the Apex Court held that while
considering the issue/question whether the plaint can be
rejected on the ground of limitation in exercise of powers
under Order VII Rule 11(d) CPC, the cause of action pleaded
in the plaint is required to be referred to . It is further held that
from the averments in the plaint and the bundle of facts
stated in the plaint, it must be ascertained whether, by clever
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drafting, the plaintiff has tried to bring the suit within the
period of limitation, which otherwise may be barred by
limitation.
60. In The Correspondence, RBANMS Educational
Institution , the Hon’ble Apex Court was dealing with a
prayer for rejection of the plaint, on the ground that the
respondents were only agreement holders and not owners of
the suit property and that mere execution of an agreement to
sell does not create or confer any right or interest in the
property in favour of the proposed purchasers. The Apex
Court relied upon the legal principles settled in Dahiben and
held that Order VII Rule 11of the CPC serves as a crucial
filter in civil litigation, enabling courts to terminate
proceedings at the threshold where the plaintiff's case, even
if accepted in its entirety, fails to disclose any cause of action
or is barred by law, either express or by implication. It is held
that there is a bounden duty on the Court to discern and
identify a fictitious suit, which on the face of it would be
barred, but for the clever pleadings disclosing a cause of
action, that is surreal and when clever drafting veils the
implied bar to disclose the cause of action; it then becomes
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the duty of the Court to lift the veil and expose the bar to
reject the suit at the threshold. It is further held that merely
including a paragraph on cause of action is not sufficient, but
rather, on a meaningful reading of the plaint and the
documents, it must disclose a cause of action and the plaint
should contain such cause of action that discloses all the
necessary facts required in law to sustain the suit and not
mere statements of fact which fail to disclose a legal right of
the plaintiff to sue and breach or violation by the defendant.
61. Thus, in view of the well-settled legal principles as
discussed in the above paragraphs, it is clear that when a
prayer is made for rejection of the plaint at the threshold, it is
the duty of the court to read the plaint in a meaningful
manner. There is a difference between non-disclosure of
cause of action, or express bar in law that can be
ascertained only on pleadings without the requirement of any
evidence, which comes within the scope of Order VII Rule 11
and a defective cause of action, or merits of the pleadings in
support of jurisdiction and entitlement of the reliefs from a
civil court which has to be decided during the trial. Therefore,
it is the bounden duty of the Court to examine the material
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mentioned in the plaint along with the other documents and,
on a meaningful reading of it, to arrive at a conclusion
whether the plaint can be rejected at the threshold without
the requirement of any evidence.
62. Considering the urgency pleaded by the plaintiffs and
the nature of the interim relief claimed, urgent interim relief is
contemplated from the plaintiff’s standpoint. A cause of action
is also pleaded in the plaint, seeking substantial relief as
prayed against all the defendants. Therefore, in view of the
aforesaid legal principles, the plaint cannot be rejected on
the ground that there is no cause of action or that the bar
under Section 12A of the said Act or Section 42 of the Slum
Act would apply.
63. In Virgo Industries (Eng.) (P) Ltd., the Apex Court
while considering the objection on the bar under Order II
Rule 2 of the CPC, held that the tule engrafts a laudable
principle that discourages/prohibits vexing the defendant
again and again by multiple suits except in a situation where
one of the several reliefs, though available to a plaintiff, may
not have been claimed for a good reason. It is further held
that , considering the true object of the law, the provision of
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Order II Rule 2 of the CPC would apply in both situations:
when the first suit is disposed of and when the second suit is
filed during the pendency of the first suit.
64. In Vurimi Pullarao , the appeal before the Apex Court
arose from the Bombay High Court's judgment in a second
appeal. The Apex Court held that a plaintiff who has omitted
to sue or has intentionally relinquished any portion of the
claim within the meaning of Order II Rule 2(2) of the CPC
shall not afterwards be entitled to sue in respect of the
portion so omitted or relinquished.
65. In Cuddalore Powergen Corporation Ltd. the Apex
Court discussed the law on the applicability of the bar under
Order II Rule 2 of the CPC, including the legal principles
settled in Virgo Industries and Vurimi Pullarao , and in the
context of rejection of the plaint under Order VII Rule 11(d) of
the CPC held as under;
“ 56. Order VII Rule 11(d) reads as - “ where the suit
appears from the statement in the plaint to be barred by any
law ”. In light of the aforesaid, it follows that before rejecting
the plaint under Order VII Rule 11(d), the Courts must ensure
that the plaint is read as a whole and its entire averments are
looked into. A few lines or passages must not be read in
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isolation and it is imperative that the pleadings are read as a
whole for ascertaining the true import of the averments
therein. In performing such a holistic reading, it must be
deduced whether the causes of action in both the suits are
identical in substance in order to sustain a successful plea
under Order II Rule 2. It would be a reductive approach to
only cull out the cause of action paragraphs from the
respective plaints and decide that they disclose the
same cause of action on mere comparative overview .”
emphasis applied by me
66. It was thus observed in Cuddalore Powergen
Corporation Ltd. that the true import of the bar under Order
II Rule 2 must be that it operates to preclude a plaintiff from
instituting a second suit, on the same cause of action, for a
claim, any portion of a claim, or reliefs, which the plaintiff was
entitled to avail at the time of filing of the first suit. On the
approach to ascertain the applicability of the bar under Order
II Rule 2 of the CPC, it was observed as under;
“74. There may arise a situation where the plaintiff may be
entitled to a relief but such a relief was not available at a
certain point in time. In other words, that obtaining such a
relief was impossible due to the circumstances which existed
during the institution of the first suit. It is our opinion that,
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in such scenarios, Courts must give such an
interpretation to the principles under Order II Rule 2 that
is not bogged down by mere technicalities. ”
emphasis applied by me
67. Learned counsel for defendant nos. 11 and 12 relied
upon the decisions in Church of Christ by the Apex Court
and the learned Division Bench of this court in Sheela Ram
Vidhani to support his contention that rejection of a plaint in
its entirety qua a particular defendant is permissible when the
pleadings disclose no cause of action against such
defendant. He distinguished the concept of a “partial
rejection” of the plaint by dissecting its pleadings, which is
not permissible as held by the Apex Court in D.
Ramachandran and Roop Lal Sathi and the concept of
rejection of the plaint as a whole only against a particular
defendant .
68. All these aforesaid judgments were referred to in
support of the contention that the plaint in the present suit
deserves to be rejected as a whole against defendant nos.
11 and 12 on the ground that it does not disclose any cause
of action against them and the bar under Order II Rule 2 of
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the CPC would apply. The objection on the bar under Order II
Rule 2 of the CPC is argued on the ground that in the suit
filed by defendant nos. 11 and 12, the plaintiffs have filed a
counterclaim seeking similar relief and based on the same
cause of action. I have perused the counterclaim. The
counterclaim is based on the allegations of breach of the
terms and conditions of the contract between the parties.
Therefore, the cause of action and the relief in the
counterclaim are based on contractual obligations. Even if
the pleadings on the cause of action may seem overlapping,
the issue, if any, as to the bar under Order II Rule 2 cannot
be considered at this stage, as the present suit is filed on the
basis of allegations of fraud, malice and collusion. Therefore,
even if the issue of bar under Order II Rule 2 would arise, the
same would be a triable issue and cannot be considered at
the stage of Order VII Rule 11 of the CPC.
69. I have recorded my reasons to hold that the plaint does
disclose a cause of action against all the defendants. Hence,
in the present case, it is not necessary to decide the
controversy whether the plaint as a whole can be rejected or
cannot be rejected at the threshold under Order VII Rule 11
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of the CPC only against defendant nos. 11 and 12.
70. Therefore, the plaint can neither be rejected under
clause (d) of Rule 11 of Order VII of the CPC on the ground
that there is non-compliance with the mandatory provision of
Section 12A, nor on the ground of any express bar under
Section 42 of the Slum Act, nor can it be rejected under
clause (a) of Rule 11 of Order VII of the CPC on the ground
that no cause of action is disclosed.
71. Before parting with the judgment, I must add that
despite the well-settled legal principles on the circumstances
under which the bar under Section 12A of the said Act
applies, and well settled legal principles on the other
objections raised in these applications, as well as the well-
established legal principles under Order VII Rule 11 of the
CPC, these applications were filed and argued for
considerable long time by citing large number of decisions of
this Court and the Apex Court and lengthy written notes were
also submitted. Such attempts by the defendants defeat the
very object of the Commercial Courts Act, namely, the
speedy disposal of suits and also unnecessarily consume the
court’s time. Hence, the applicant/applicants in each
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application shall pay the costs of their respective applications
to the plaintiffs, quantified at Rs. 2,00,000/- per application.
The costs shall be paid within two weeks from today.
72. For the reasons recorded above the Interim
Applications are dismissed.
[GAURI GODSE, J.]
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