CHHOTU RAM vs PURNENDU JAIN
- Court
- High Court of Himachal Pradesh
High Court of H.P.
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IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
OMPs No. 526 & 762/2021
in Civil Suits No. 44 & 45/2024
Reserved on: 19.05.2026
Decided on: 06.07.2026
Date of Uploading on Website:
06.07.2026
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(1) OMP No. 526/2021 in CS No. 44/2024
Chhotu Ram ....Non-applicant/plaintiff
Versus
Purnendu Jain (deceased) through LRs & Anr.
…Applicants/defendants
(2) OMP No. 762/2021 in CS No. 45/2024
Chhotu Ram ....Non-applicant/plaintiff
Versus
Anupama Jain & Anr. …Applicants/defendants
Coram
The Hon’ble Mr. Justice Sushil Kukreja, Judge.
1
Whether approved for reporting? Yes.
For the Non-applicant/plaintiff : Mr. Karan Singh Kanwar,
Advocate.
For the non-applicants/defendants :
Ms. Shradha Karol,
Advocate (through VC),
for defendants No. 1(a) to
1(c) in CS No.44/2024
and defendant No. 1 in
CS 45/2024.
Mr. Prem Chand Verma,
Mr. Varun Thakur and Mr.
Aakash Thakur, Advocate,
1
Whether reporters of Local Papers may be allowed to see the judgment?
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for defendants No. 2 in
CS Nos. 44 & 45/2024.
Sushil Kukreja, Judge
This order shall dispose of the applications filed
by applicant/defendant No. 2, under Order 7, Rule 11 read
with Section 151 CPC for rejection of the suit. As per the
applicant, the plaintiff filed a suit for specific performance of
agreement to sell dated 24.09.2018 against defendant No. 1
with respect to Plot No. 167 & 168, both measuring 221.65
square meters, situated at Phase 3, Housing Board Colony
Baddi, Tehsil Baddi District Solan, H.P. for a total sale
consideration of Rs. 1,60,00,000/-. As per the averments
made by the plaintiff, the sale deed was to be executed on or
before 30.10.2018 and no amount was given by the plaintiff
as consideration, except a cheque amounting to Rs.
50,00,000/- as earnest money, which was to be kept as
security cheque and not to be presented. However,
defendant No. 1 presented to same on 29/30.10.2018, but
the same could not be encashed, as the same was
presented without informing the plaintiff. Whereas, the
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agreement annexed with the plaint depicts that entire sale
consideration was paid and received, as such, a contrary
stand has been taken in the plaint. It has been further
averred that defendant No. 2 was first authorized vide
General Power of Attorney dated 27.11.2018 to take care of
the suit property in all respects and vide agreement to sell
dated 28.11.2018, the suit property alongwith other plots
were sold to applicant/defendant No. 2 and now he is in
possession of the same. The averments made in the plaint
dis-entitles the plaintiff from filing any suit as the same is not
maintainable, being barred by law. The plaintiff, as per his
own averments, did not pay a single penny to defendant No.
1 and the cheque in question got dishonoured due to
insufficient funds in the bank account of plaintiff. The
agreement annexed with the plaint depicts that entire sale
consideration was paid and received, as such, a contrary
stand has been taken in the plaint. There can be no oral
evidence qua the contents of a written document. Hence, it is
admitted position that there is an agreement without any
consideration i.e. a void document whose specific
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performance is now being sought. The plaintiff has never
paid any consideration in order to conclude any legal valid
contract for which, the plaintiff could seek any specific
performance, as such, the suit of the plaintiff is barred by
law, as neither there was any concluded contract between
the plaintiff and defendant No. 1 nor any consideration has
been paid by the plaintiff, as such, there arises no
enforceable cause of action in favour of the plaintiff and the
suit is liable to be dismissed.
2. Reply to the applications has been filed, wherein,
it has been averred that the defendant entered into an
agreement to sell dated 24.09.2018 for a total sale
consideration of Rs. 1,60,00,000/-. As per the agreement, the
sale deed was to be executed on or before 30.10.2018. As
per terms and conditions laid down in the aforesaid
agreement, the defendant had to seek permission from the
HIMUDA for merger of two plots/houses into one before the
registration of the sale deed. The defendant also had to
obtain permission/NOC from HIMUDA for transfer of two
plots/houses. The balance dues and charges were to be paid
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by the defendant to HIMUDA. The sale consideration
complete in all respect was also to be paid at the time of
execution and registration of the sale deed. As per terms and
conditions of the agreement, the defendant was duty bound
to get all formalities completed, which were pre-requisite for
executing and registering the sale deed. It has been admitted
that the plaintiff had issued a cheque of Rs. 50 lacs to the
defendant as earnest money, which was to be kept by the
defendant as a security. It has been denied that vide GPA
dated 27.11.2018 the applicant was authorized to take care
of the suit property and vide agreement to sell dated
28.11.2018, the suit property alongwith plots were sold to the
applicant. It has been denied that there was no concluded
contract between the plaintiff and defendant No. 1. It has
been averred that the applicant after seeking his
impleadment cannot be permitted to file the present
applications, as the original defendant has chosen to contest
the suit on merits. Hence, prayer for dismissal of the
applications has been made.
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3. In rejoinder, contents of the reply are denied and
that of the applications are reasserted and reaffirmed.
4. I have heard learned Counsel for
applicant/defendant No. 2, learned counsel for the non-
applicants and also gone through the material available on
record.
5. Learned counsel for the applicant contended that
the suit of the plaintiff is not maintainable, being barred by
law and is liable to be rejected under Order 7 Rule 11 CPC.
He further contended that the plaintiff was never ready and
willing to perform his part of the contract and as per his own
averments, he did not pay even a singly penny to defendant
No. 1 and the cheque amounting to Rs. 50 lacs, which was
paid in lieu of the earnest money, was dishonored due to
‘funds insufficient’ in the bank account of the plaintiff, as
such, the plaint does not disclose any cause of action to file
the present suit and there is no enforceable cause of action
in favour of the plaintiff. With these averments he prayed for
rejection of the plaint.
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6. On the other hand, learned counsel for the non-
applicant/plaintiff contended that as per the agreement, the
sale deed was to be executed on or before 30.10.2018 and
as per terms and conditions laid down in the agreement, the
defendant had to seek permission from HIMUDA for merger
of two plots/houses into one before the registration of the
sale deed,however, the defendant had failed to obtain any
such permission. He further contended that the cheque of
Rs. 50 lacs, issued in favour of the defendant, as earnest
money, was to be paid as security and entire sale
consideration was to be paid at the time of execution of
registration of the sale deed and, therefore, the applicant has
failed to make out any case for rejection of the plaint. With
these averments, he submitted that present applications,
which are devoid of merits, deserves to be dismissed. In
support of his contentions, he placed reliance upon the
decisions of Hon’ble Apex Court in D. Ramachandran Vs.
R.V. Janakiraman and Others (1999) 3 SCC 267 , M.
Gurudas and Others Vs. Rasaranjan and Others (2006) 8
SCC 367 , Kamala Vs. K.T. Eshwara Sa (2008) 12 SCC 661 ,
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Chhotanben and Another Vs. Kiritbhai Jalkrushnabhai
Thakkar and Others (2018) 6 SCC 422 , Ripudaman Singh
Vs. Balkrishna (2019) 4 SCC 767 , Vinod Infra Developers
Ltd. Vs. Mahaveer Lunia and Others 2025 SCC OnLine
SC 1208 , Karam Singh Vs. Amarjit Singh and Others
2025 SCC OnLine SC 2240 , P. Kumarakurubaran Vs. P.
Narayana and Others 2025 SCC OnLine SC 975 and Marg
Limited Vs. Sushil Lalwani and Others 2026 SCC OnLine
SC 647.
7. It is a settled position of law that Order VII Rule
11 of Code of Civil Procedure empowers a Court to reject the
plaint to keep out of Court irresponsible suit, when prima
facie the Court comes to the conclusion that suit is an abuse
of process of Court. The Court can exercise the power under
Order VII Rule 11 of Code of Civil Procedure at any stage of
the suit, before conclusion of the trial. The procedure
contemplated is summary in nature. The averments in the
plaint and documents filed along with the plaint alone can be
taken into consideration while deciding the application filed
under this provision. The contentions of defendants in their
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affidavit or written statement and documents relied by them
cannot be taken into consideration. The plaint as a whole
has to be taken into consideration and it has to be read in a
meaningful manner. At this stage, it would be apposite to
reproduce Order VII Rule 11 of Code of Civil Procedure for
easy reference:
“11. Rejection of plaint— The plaint shall be rejected
in the following cases:—
(a) where it does not disclose a cause of action;
(b) where the relief claimed is undervalued, and the
plaintiff, on being required by the Court to correct
the valuation within a time to be fixed by the Court,
fails to do so;
(c) where the relief claimed is properly valued, but
the plaint is returned upon paper insufficiently
stamped, and the plaintiff, on being required by the
Court to supply the requisite stamp-paper within a
time to be fixed by the Court, fails to do so;
(d) where the suit appears from the statement in the
plaint to be barred by any law :
(e) where it is not filed in duplicate;
(f) where the plaintiff fails to comply with the
provisions of rule 9:
Provided that the time fixed by the Court for the
correction of the valuation or supplying of the requisite
stamp-paper shall not be extended unless the Court, for
reasons to be recorded, is satisfied that the plaintiff was
prevented by any cause of an exceptional nature form
correcting the valuation or supplying the requisite stamp-
paper , as the case may be, within the time fixed by the
Court and that refusal to extend such time would cause
grave injustice to the plaintiff.”
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8. Thus under Order 7 Rule 11 CPC plaint can be
rejected on the grounds that the suit is barred by law or it does
not disclose the cause of action or proper court fees has not
been paid even after order of the court. It is a settled
proposition of law that frivolous litigations are required to be
nipped in the bud at the earliest possible stage. If court reaches
to the conclusion that suit is frivolous from the totality of the
facts brought on record or which have come on record then by
not dismissing the suit at earliest, the court virtually declares
that a frivolous suit can demand trial of suit and aggrieved party
has no remedy against frivolous suit. If there are creases in the
law or sometimes is left out or not specifically provided in
statute then they are required to be ironed out by the courts by
interpreting the law in a manner to advance the cause of justice
and no party can be left with no remedy against frivolous suits.
9. The principles which would guide the
Court while exercising its power under Order 7 Rule 11 of the
CPC have been widely laid down by the Apex Court
in Mayar (H.K) Ltd. vs. Owners & Parties,
Vessel M. V. Fortune Express & Ors., AIR 2006 SC 1828,
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wherein the court laid down the applicable law stating as
hereunder:
“10. Under Order 7 Rule 11 of the Code, the court
has jurisdiction to reject the plaint where it does not
disclose a cause of action, where the relief claimed
is undervalued and the valuation is not corrected
within the time as fixed by the court, where
insufficient court fee is paid and the additional court
fee is not supplied within the period given by the
court, and where the suit appears from the statement
in the plaint to be barred by any law. Rejection of the
plaint in exercise of the powers under Order 7 Rule
11 of the Code would be on consideration of the
principles laid down by this Court. In T. Arivanandam
v. T.V. Satyapal, this Court has held that if on a
meaningful, not formal reading of the plaint it is
manifestly vexatious, and meritless, in the sense of
not disclosing a clear right to sue, the court should
exercise its power under Order 7 Rule 11 of the
Code taking care to see that the ground mentioned
therein is fulfillled. In Roop Lal Sathi v. Nachhattar
Singh Gill, this Court has held that where the plaint
discloses no cause of action, it is obligatory upon the
court to reject the plaint as a whole under Order 7
Rule 11 of the Code, but the rule does not justify the
rejection of any particular portion of a plaint.
Therefore, the High Court therein could not act under
Order 7 Rule 11 (a) of the Code for striking down
certain paragraphs in the absence of anything to
show that the averments in those paragraphs are
either unnecessary, frivolous or vexatious, or that
they are such as may tend to prejudice, embarrass
or delay the fair trial of the case, or constitute an
abuse of the process of the court. In ITC Ltd. v.
Debts Recovery Appellate Tribunal, it was held that
the basic question to be decided while dealing with
an application filed by the defendant under Order 7
Rule 11 of the Code is to find out whether the real
cause of action has been set out in the plaint or
something illusory has been projected in the plaint
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with a view to get out of the said provision. In
Saleem Bhai v. State of Maharashtra, this Court has
held that the trial court can exercise its powers under
Order 7 Rule 11 of the Code at any stage of the suit
before registering the plaint or after issuing
summons to the defendant at any time before the
conclusion of the trial and for the said purpose the
averments in the plaint are germane and the pleas
taken by the defendant in the written statement
would be wholly irrelevant at that stage. In Popat and
Kotecha Property v. State Bank of India Staff Assn.,
(2005) 7 SCC 510, this Court has culled out the legal
ambit of Rule 11 of the Order 7 of the Code in these
words:
“There cannot be any compartmentalisation,
dissection, segregation and inversions of the
language of various paragraphs in the plaint. If
such a course is adopted it would run counter to
the cardinal canon of interpretation according to
which a pleading has to be read as a whole to
ascertain its true import. It is not permissible to
cull out a sentence or a passage and to read it
out of the context in isolation. Although it is the
substance and not merely the form that has to
be looked into, the pleading has to be construed
as it stands without addition or subtraction of
words or change of its apparent grammatical
sense. The intention of the party concerned is to
be gathered primarily from the tenor and terms
of his pleadings taken as a whole. At the same
time it should be borne in mind that no pedantic
approach should be adopted to defeat justice on
hair-splitting technicalities”
11. From the aforesaid, it is apparent that the plaint
cannot be rejected on the basis of the allegations
made by the defendant in his written statement or in
an application for rejection of the plaint. The court
has to read the entire plaint as a whole to find out
whether it discloses a cause of action and if it does,
then the plaint cannot be rejected by the court
exercising the powers under Order 7 Rule 11 of the
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Code. Essentially, whether the plaint discloses a
cause of action, is a question of fact which has to be
gathered on the basis of the averments made in the
plaint in its entirety taking those averments to be
correct. A cause of action is a bundle of facts which
are required to be proved for obtaining relief and for
the said purpose, the material facts are required to
be stated but not the evidence except in certain
cases where the pleadings relied on are in regard to
misrepresentation, fraud, willful default, undue
influence or of the same nature. So long as the plaint
discloses some cause of action which requires
determination by the court, the mere fact that in the
opinion of the Judge the plaintiff may not succeed
cannot be a ground for rejection of the plaint.”
10. In T. Arivandandam vs. T.V. Satyapal, (1977) 4
SCC 467, the Hon’ble Supreme Court while dealing with the
powers of the Court under Order 7 Rule 11 CPC had noted
that where the meaningful reading of the plaint disclosed that
the suit which had been filed was in fact vexatious and
meritless; it being a case of clever drafting which has created
the illusion of a cause of action, it must be nipped in the bud
by the Court.
11. The provision of Order VII Rule 11 is mandatory in
nature. It states that the plaint “shall” be rejected if any of the
grounds specified in clause (a) to (e) are made out. If the
Court finds that the plaint does not disclose a cause of
action, or that the suit is barred by any law, the Court has no
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option, but to reject the plaint. A “Cause of action” means
every fact which would be necessary for the plaintiff to prove,
if traversed, in order to support his right to judgment. It
consists of a bundle of material facts, which are necessary
for the plaintiff to prove in order to entitle him to the reliefs
claimed in the suit. A cause of action, thus, means every
fact, which if traversed, it would be necessary for the plaintiff
to prove an order to support his right to a judgment of the
court. In other words, it is a bundle of facts, which taken with
the law applicable to them gives the plaintiff a right to relief
against the defendant.
12. In the case on hand, as per the plaintiff, the
cause of action is said to have arisen on 24.09.2018, when
agreement to sell in question was executed between the
parties and thereafter on each and every date when plaintiff
approached and requested the defendant to receive the
entire sale consideration and execute the sale deed. The
cause of action is also stated to have arisen on 12.11.2018
when the plaintiff sent a legal notice to the defendant to
execute and register the sale deed and when the defendant
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allegedly sent a false and frivolous legal notice to the
plaintiff. The cause of action is further stated to have arisen
on 28.11.2018 when the plaintiff visited and remained
present in the office of Sub-Registrar Baddi throughout the
day, but the defendant did not come to execute and register
the sale deed. The cause of action is stated to be still
continuing and subsisting, as the plaintiff is stated to be
ready and willing to perform his part of the contract.
13. Now the question, which arises for consideration
before this Court, is as to whether the plaintiff has always
been ready and willing to perform his part of the agreement
or not. In a suit for specific performance, the plaintiff has to
prove a valid sale agreement; the breach of the contract by
the defendants; and readiness and willingness of the plaintiff
to perform his part of the contract. Section 16(c) of the
Specific Relief Act mandates "readiness" and "willingness"
on the part of the plaintiff as a condition precedent to seek
specific performance. At this stage, it would be apposite to
examine Section 16 (c) of the Specific Relief Act, 1963,
which reads as under : -
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"16. Personal bars to relief. Specific performance of
a contract cannot be enforced in favour of a person--
(a) and (b)..........
(c) who fails to prove that he has performed or has
always been ready and willing to perform the
essential terms of the contract which are to be
performed by him, other than terms the performance
of which has been prevented or waived by the
defendant.
Explanation.-- For the purposes of Clause (c).
(i) where a contract involved the payment of money,
it is not essential for the plaintiff to actually tender to
the defendant or to deposit in Court any money
except when so directed by the Court;
(ii) the plaintiff must prove performance of, or
readiness and willingness to perform the contract
according to its true construction."
14. A bare reading of the section shows that a
decree for specific performance cannot be granted to any
one who fails to prove that either he had performed or had
always been ready and willing to perform the essential terms
of the contract. The compliance of the requirements of
Section 16(c) of the Specific Relief Act is, therefore,
mandatory in nature . The "readiness" and "willingness" are
two separate issues. The former depends on the availability
of requisite funds whereas the latter depends on the intention
of the purchaser. The "readiness" has to be proved by the
purchaser that he had the availability of the funds whereas
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the intention has to be inferred from his conduct and
circumstances. In N.P. Thirugnanam v. Dr. R. Jagan
Mohan Rao, (1995) 5 SCC 115, the Hon’ble Supreme Court
held that the Court must take into consideration the conduct
of the plaintiff prior and subsequent to the filing of the suit
along with other attending circumstances to adjudge the
"readiness" and "willingness" of the plaintiff. The amount of
balance sale consideration must be proved to be available
with the purchaser right from the date of execution of the
agreement till the date of decree.
15. In J.P. Builders v. A. Ramadas Rao, (2011) 1
SCC 429, the Hon’ble Supreme Court explained the
distinction between "readiness" and "willingness". The former
refers to financial capacity and the latter to the conduct of the
plaintiff wanting performance.
16. The specific performance is an equitable relief
and the Court is not bound to grant such relief merely
because it is lawful to do so. The Court is required to see the
totality of the circumstances which are to be assessed by the
Court in the light of facts and circumstances of each case.
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The specific performance is usually granted where
substantial sale consideration has been paid. When the
parties enter into an agreement relating to an immovable
property, they amicably agree on the sale consideration,
earnest money as well as the payment of the balance sale
consideration. If both the parties are ready and willing, they
usually complete the transaction within the stipulated time.
Once a seller has entered into an agreement to sell of an
immovable property, he is looking for the sale consideration
within the period stipulated in the agreement. If he does not
get the money within the stipulated period, his plan to use
the money for whatever purpose he has intended would get
frustrated. He may have a plan to buy some other property or
for some other purpose. Secondly, the delay in completion of
sale also causes injustice to the seller as the property prices
keep on increasing in normal parlance. As such, more the
delay, the seller may suffer loss due to rise in property price
and greater is the profit which the purchaser would derive by
tying down a property and not paying the sale consideration
.
within the stipulated period
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17. In Saradamani Kandappan v. S. Rajalakshmi &
Ors., (2011) 12 SCC 18, the Supreme Court declined to
grant the discretionary relief of specific performance to the
purchaser who had made payment of nominal advance to
the seller. The Apex Court while examining the doctrine that
time is generally not the essence in contracts relating to
immovable property, clarified that such a principle cannot be
applied mechanically in modern commercial realities. The
Court observed that although earlier precedents treated time
stipulations in property contracts as merely indicative, the
significant escalation in property values and changing
economic circumstances require courts to give due
significance to the time stipulations agreed between the
parties. Where the contract clearly prescribes specific dates
for payment of consideration and provides consequences for
default, such stipulations may demonstrate the intention of
the parties to treat time as the essence of the contract. In
such circumstances, failure to adhere to the agreed schedule
of payment may justify termination of the agreement and
disentitle the purchaser from seeking the equitable relief of
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specific performance. The relevant portion of the aforesaid
judgments is extracted hereunder:-
"37. The reality arising from this economic change
cannot continue to be ignored in deciding cases
relating to specific performance. The steep increase in
prices is a circumstance which makes it inequitable to
grant the relief of specific performance where the
purchaser does not take steps to complete the sale
within the agreed period, and the vendor has not been
responsible for any delay or non-performance. A
purchaser can no longer take shelter under the
principle that time is not of essence in performance of
contracts relating to immovable property, to cover his
delays, laches, breaches and 'non-readiness'. The
precedents from an era, when high inflation was
unknown, holding that time is not of the essence of the
contract in regard to immovable properties, may no
longer apply, not because the principle laid down
therein is unsound or erroneous, but the circumstances
that existed when the said principle was evolved, no
longer exist. In these days of galloping increases in
prices of immovable properties, to hold that a vendor
who took an earnest money of say about 10% of the
sale price and agreed for three months or four months
as the period for performance, did not intend that time
should be the essence, will be a cruel joke on him, and
will result in injustice. Adding to the misery is the delay
in disposal of cases relating to specific performance,
as suits and appeals therefrom routinely take two to
three decades to attain finality. As a result, an owner
agreeing to sell a property for rupees one lakh and
received rupees ten thousand as advance may be
required to execute a sale deed a quarter century later
by receiving the remaining rupees ninety thousand,
when the property value has risen to a crore of rupees.
xxx xxx xxx”
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18. In Padmakumari & others v. Dasayyan &
others, (2015) 8 SCC 695, the Apex Court, emphasized that
where the agreement of sale stipulates a specific period for
payment of the balance consideration, failure on the part of
the purchaser to comply with such stipulation assumes
significant legal importance in determining entitlement to
specific performance. The Court held that when the
purchaser does not pay the balance consideration within the
agreed period and no acceptable explanation is offered for
such default, the conduct of the purchaser clearly indicates
lack of readiness and willingness to perform the essential
terms of the contract. The Court further observed that courts
must carefully examine the contractual terms and
surrounding circumstances and cannot ignore such material
aspects while granting the equitable relief of specific
performance. Accordingly, non-compliance with the
stipulated time for payment of consideration may disentitle
the purchaser from obtaining the relief sought. The relevant
para of the aforesaid judgment is as under:
“20. The said contention urged on behalf of the
plaintiff is unacceptable to us that the question of
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taking measurement would not arise before the plaintiff
performed his part of the contract regarding the
balance consideration within the period stipulated in
the agreement. Undisputedly, that had not been done
by the plaintiff in the instant case within the stipulated
time and the notice was issued by the plaintiff only
after one year, therefore, the plaintiff has not adhered
to the time which is stipulated to pay the balance
consideration amount to defendants 1 to 11 which is a
very important legal aspect which was required to be
considered by the courts below at the time of
determining the rights of the parties and passing the
impugned judgment. The courts below have ignored
this important aspect of the matter while answering the
contentious issues (i) and (ii) in favour of the plaintiff
and granted decree of specific performance in respect
of the suit scheduled property. The said finding of fact
is contrary to the terms and conditions of the
agreement, pleadings and the evidence on record.
Accordingly, we answer the said issues in favour of
defendants 12 to 15 after setting aside the concurrent
findings of fact recorded by the High Court.”
19. It is apt to note that in Man Kaur (dead) by L.Rs.
vs. Hartar Singh Sangha (2010) 10 SCC 512, the Apex
Court clarified that breach of contract by the defendant and
ready and willingness of the plaintiff are two distinct issues in
a suit for specific performance. Even if, a defendant is
proved to have committed breach, the plaintiff cannot obtain
a decree unless he pleads and proves that he was always
ready and willing to perform the essential terms of the
contract as required under Section 16 (c) of the Act, 1963.
Even if, the vendor wrongfully refuses to execute the sale
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deed, if the purchaser did not possess the financial capacity
to pay the balance sale consideration at the time of the
performance, he is not entitled to the specific performance.
For the sake of ready reference the relevant para of the
aforesaid judgment is extracted hereunder:
“40. … … “Therefore, even assuming that the
defendant had committed breach, if the plaintiff fails to
aver in the paint or prove that he was always ready
and willing to perform the essential terms of contract
which are required to be performed by him (other than
the terms the performance of which has been
prevented or waived by the plaintiff), there is a bar to
specific performance in his favour. Therefore,
the assumption of the respondent that readiness and
willingness on the part of the plaintiff is something
which need not be proved, if the plaintiff is able to
establish that the defendant refused to execute the
sale deed and thereby committed breach, is not
correct.”………
20. In the light of the aforesaid principles, coming to
the facts of the present case. In the instant case, admittedly,
the agreement to sell was executed between the parties on
24.09.2018 and the sale deed was to be executed on or
before 30.10.2018, but no amount was paid by the plaintiff as
consideration. The plaintiff, as per his own averments, did
not pay even a single penny to defendant No. 1. The cheque
amounting to Rs. 50,00,000/- which was given by the plaintiff
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to defendant no.1 as earnest money, could not be encashed
and it got dishonoured due to “Funds Insufficient” in the bank
account of plaintiff, when defendant No. 1 presented the
same with his banker on 29/30.10.2018. Thus the plaintiff
has failed to show the availability of funds at the time of the
execution of the agreement to sell which is an indication of
his non readiness to perform his part of the agreement since
the very first date of the agreement. In the opinion of this
court, no prudent person would fail to honour the cheque
with respect to the payment of earnest money, if he was
really interested in going ahead with the sale transaction.
Therefore, the only inference, that can be drawn is that the
plaintiff was not ready and willing to perform his part of the
agreement since the very first date of the execution of the
agreement.
21. It is a settled law that that the party who seeks
specific performance being an equitable relief, must come to
the Court with clean hands. In other words, the party who
makes false allegations and/or does not come to the Court
with clean hands is not entitled to the equitable relief. While
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exercising the discretion, the Court would take into
consideration the circumstances of the case, the conduct of
parties and the motive behind the litigation.
22. In the case on hand, the plaintiff had averred in
para-9 of the plaint that he had issued a cheque of Rs. 50
lacs to the defendant as earnest money, but with an
undertaking that the said cheque was not to be used and it
was to be kept by the defendant only as a security and was
not to be presented for getting it encashed and the entire
sale consideration was to be paid by the plaintiff to the
defendant at the time of execution and registration of the
sale deed. The plaintiff further averred that this arrangement
was made because the defendant was yet to obtain the
permissions for transfer and merger and the defendant,
however, in utter violation and disregard of the mutual
agreement and understanding between the parties,
committed a fraud on the plaintiff and presented the cheque
on 29/30.10.2018 without informing the plaintiff and without
the consent of the plaintiff.
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23. I have gone through the agreement to sell
minutely, perusal of which, reveals that there is no such
stipulation in the agreement that cheque of Rs. 50 lacs,
which was paid to the defendant by the plaintiff, as earnest
money, was issued with an understanding that it was not to
be used and was to be kept by the defendant only as
security. Thus, it has become clear that the plaintiff has not
come to the Court with clean hands and has made false
averments in the plaint regarding dishonor of the cheque in
question.
24. It is trite law that the plaintiff seeking specific
performance of the agreement has to prove all along until the
final decision in the suit is made, that he was ready and
willing to perform his part of the contract and the plaintiff is
duty- bound to show his readiness and willingness. A reading
of the plaint as a whole shows that the plaint does not
disclose a cause of action either for the relief of specific
performance of agreement to sell or for the relief of
declaration of permanent prohibitory injunction as well as
mandatory injunction. The plaintiff has agreed to purchase
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the suit property from the defendant No. 1 for a total sale
consideration of Rs. 1,60,00,000/-, out of which the plaintiff
issued a cheque of Rs. 50,00,000/- in favour of defendant
No. 1 at the time of the execution of the agreement on
24.09.2018 in lieu of advance money and the balance sale
consideration of Rs. 1,10,00,000/- was payable by the
plaintiff on or before 30.10.2018. However, the plaintiff
committed breach of the agreement dated 24.09.2018 by
failing to honour the aforesaid cheque amounting to Rs.
50,00,000/- due to “Funds Insufficient” in his bank account.
Thus the plaintiff has failed to prove the availability of the
funds with him at the time of the execution of the agreement
and even on the date of the filing of the suit or even
thereafter. The plaintiff s conduct shows that he was never ‟
ready and willing to perform his part of the agreement at any
stage and he did not possess the financial capacity to pay
even the earnest money what to talk about the balance sale
consideration and had instituted a false claim with the hope
that he would arrange the funds, if the suit is decreed in his
favour. Therefore, it is clear from the averments in the plaint,
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that the plaint as a whole does not disclose any cause of
action for filing the suit. The plaintiff had committed the
breach of the agreement and is not entitled to the decree of
specific performance against the defendant No. 1.
25. As observed earlier, under Order VII Rule 11 of
CPC, the duty is cast upon the Court to determine whether
the plaint discloses a cause of action, by scrutinizing the
averments in the plaint, read in conjunction with the
documents relied upon. The underlying object of Order VII
Rule 11 of CPC is that when a plaint does not disclose a
cause of action, the court would not permit the plaintiff to
unnecessarily protract the proceedings. In such a case, it
will be necessary to put an end to the sham litigation so that
further judicial time is not wasted. In Dahiben Vs.
Arvindbhai Kalyanji Bhanusali (Gajra) Dead Through
Legal Representatives and Others , (2020) 7 SCC 366, it
has been held as under:-
“23.1 We will first briefly touch upon the law
applicable for deciding an application under Order VII
Rule 11 CPC, which reads as under:
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“11. Rejection of plaint.–The plaint shall be
rejected in the following cases:–
(a) where it does not disclose a cause of
action;
(b) where the relief claimed in undervalued,
and the plaintiff, on being required by the
Court to correct the valuation within a time to
be fixed by the Court, fails to do so;
(c) where the relief claimed is properly valued
but the plaint is written upon paper
insufficiently stamped, and the plaintiff, on
being required by the Court to supply the
requisite stamp-paper within a time to be fixed
by the Court, fails to do so;
(d) where the suit appears from the statement
in the plaint to be barred by any law;
(e) where it is not filed in duplicate;(f)where
the plaintiff fails to comply with the provisions
of rule 9.
Provided that the time fixed by the Court for the
correction of the valuation or supplying of the
requisite stamp-paper shall not be extended
unless the Court, for reasons to be recorded, is
satisfied that the plaintiff was prevent by any
cause of exceptional nature for correction the
valuation or supplying the requisite stamp-paper,
as the case may be, within the time fixed by the
Court and that refusal to extend such time would
cause grave injustice to the plaintiff.”(emphasis
supplied)
23.2 The remedy under Order VII Rule 11 is an
independent and special remedy, wherein the Court is
empowered to summarily dismiss a suit at the
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threshold,without proceeding to record evidence, and
conducting a trial, on the basis of the evidence
adduced, if it is satisfied that the action should be
terminated on any of the grounds contained in this
provision.
23.3 The underlying object of Order VII Rule 11 (a) is
that if in a suit, no cause of action is disclosed, or the
suit is barred by limitation under Rule 11 (d), the Court
would not permit the plaintiff to unnecessarily protract
the proceedings in the suit. In such a case, it would be
necessary to put an end to the sham litigation, so that
further judicial time is not wasted.
23.4 In Azhar Hussain v. Rajiv Gandhi this Court held
that the whole purpose of conferment of powers under
this provision is to ensure that a litigation which is
meaningless, and bound to prove abortive, should not
be permitted to waste judicial time of the court, in the
following words :
“12. ...The whole purpose of conferment of such
power is to ensure that a litigation which is
meaningless, and bound to prove abortive should
not be permitted to occupy the time of the Court,
and exercise the mind of the respondent. The
sword of Damocles need not be kept hanging
over his head unnecessarily without point or
purpose. Even if an ordinary civil litigation, the
Court readily exercises the power to reject a
plaint, if it does not disclose any cause of action.”
23.5 The power conferred on the court to terminate
a civil action is,however,a drastic one, and the
conditions enumerated in Order VII Rule 11 are
required to be strictly adhered to.
23.6 Under Order VII Rule 11, a duty is cast on the
Court to determine whether the plaint discloses a
cause of action by scrutinizing the averments in the
plaint, read in conjunction with the documents relied
upon, or whether the suit is barred by any law.
xxx xxx xxx
23.8 Having regard to Order VII Rule 14 CPC, the
documents filed alongwith the plaint, are required to
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be taken into consideration for deciding the application
under Order VII Rule 11 (a). When a document
referred to in the plaint, forms the basis of the plaint, it
should be treated as a part of the plaint. 23.9 In
exercise of power under this provision, the Court
would determine if the assertions made in the plaint
are contrary to statutory law, or judicial dicta, for
deciding whether a case for rejecting the plaint at the
threshold is made out.
23.10 At this stage, the pleas taken by the defendant
in the written statement and application for rejection of
the plaint on the merits, would be irrelevant, and
cannot be adverted to, or taken into consideration.
23.11 The test for exercising the power under Order
VII Rule 11 is that if the averments made in the plaint
are taken in entirety, in conjunction with the documents
relied upon, would the same result in a decree being
passed. This test was laid down in Liverpool & London
S.P. & I Assn. Ltd.v. M.V. Sea Success, which reads as
:“
“139. Whether a plaint discloses a cause of
action or not is essentially a question of fact.
But whether it does or does not must be found
out from reading the plaint itself. For the said
purpose, the averments made in the plaint in
their entirety must be held to be correct. The
test is as to whether if the averments made in
the plaint are taken to be correct in their
entirety, a decree would be passed.”
23.12 In Hardesh Ores (P.) Ltd. v. Hede & Co.
the Court further held that it is not permissible to cull
out a sentence or a passage, and to read it in
isolation. It is the substance, and not merely the
form,which has to be looked into. The plaint has to be
construed as it stands, without addition or subtraction
of words. If the allegations in the plaint prima facie
show a cause of action, the court cannot embark upon
an enquiry whether the allegations are true in fact.
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23.13 If on a meaningful reading of the plaint, it
is found that the suit is manifestly vexatious and
without any merit, and does not disclose a right to sue,
the court would be justified in exercising the power
under Order VII Rule 11 CPC.
23.14 The power under Order VII Rule 11 CPC
may be exercised by the Court at any stage of the suit,
either before registering the plaint, or after issuing
summons to the defendant, or before conclusion of the
trial, as held by this Court in the judgment of Saleem
Bhai v. State of Maharashtra. The plea that once
issues are framed, the matter must necessarily go to
trial was repelled by this Court in Azhar Hussain
(supra).
23.15. The provision of Order VII Rule 11 is
mandatory in nature. It states that the plaint “shall” be
rejected if any of the grounds specified in clause (a) to
(e) are made out. If the Court finds that the plaint does
not disclose a cause of action, or that the suit is barred
by any law, the Court has no option, but to reject the
plaint.
24. “Cause of action” means every fact which would
be necessary for the plaintiff to prove, if traversed, in
order to support his right to judgment. It consists of a
bundle of material facts, which are necessary for the
plaintiff to prove in order to entitle him to the reliefs
claimed in the suit.
24.1 In Swamy Atmanand v. Sri Ramakrishna
Tapovanam this Court held :
“24. A cause of action, thus, means every fact,
which if traversed, it would be necessary for the
plaintiff to prove an order to support his right to
a judgment of the court. In other words, it is a
bundle of facts, which taken with the law
applicable to them gives the plaintiff a right to
relief against the defendant. It must include
some act done by the defendant since in the
absence of such an act, no cause of action can
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possibly accrue. It is not limited to the actual
infringement of the right sued on but includes
all the material facts on which it is
founded”(emphasis supplied)
24.2 In T. Arivandandam v. T.V. Satyapal & Anr. this
Court held that while considering an application under
Order VII Rule 11 CPC what is required to be decided
is whether the plaint discloses a real cause of action,
or something purely illusory, in the following words :
“5. ...The learned Munsiff must remember thatif
on a meaningful –not formal –reading of the
plaint it is manifestly vexatious, and meritless,
in the sense of not disclosing a clear right to
sue, he should exercise his power under O. VII,
R. 11, C.P.C. taking care to see that the ground
mentioned therein is fulfilled. And, if clever
drafting has created the illusion of a cause of
action, nip it in the bud at the first
hearing ...”(emphasis supplied)
24.3 Subsequently, in I.T.C. Ltd. v. Debt Recovery
Appellate Tribunal, this Court held that law cannot
permit clever drafting which creates illusions of a
cause of action. What is required is that a clear right
must be made out in the plaint. If, however, by clever
drafting of the plaint, it has created the illusion of a
cause of action, this Court in Madanuri Sri
Ramachandra Murthy v. Syed Jalal held that it should
be nipped in the bud, so that bogus litigation will end
at the earliest stage. The Court must be vigilant
against any camouflage or suppression, and
determine whether the litigation is utterly vexatious,
and an abuse of the process of the court”
26. In the instant case, as discussed above, the
plaint as a whole does not disclose any cause of action for
filing the suit as the plaintiff had committed breach of
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agreement by failing to honour the cheque amounting to Rs.
50,00,000/- issued to the defendant no.1 in lieu of earnest
money due to “Funds Insufficient” in his bank account as
such he has failed to prove the availability of the funds with
him. Therefore, the only inference, that can be drawn is that
the plaintiff was not ready and willing to perform his part of
the agreement since the very first date of the execution of
the agreement as such in the facts and circumstances of
the case, he is not entitled to a decree of specific
performance against defendant No. 1. Therefore, the plaints
in both the suits which do not disclose any cause of action
deserve to be rejected under the provisions of Order 7 Rule
11 (a) CPC in order to unnecessarily protract the
proceedings and also to put an end to the sham litigation.
27. Hence, in view of my aforesaid discussion, both
the applications filed by applicant/defendant No. 2, are
allowed and the plaints in both the suits, which do not
disclose any cause of action, are rejected.
28. Both the suits are disposed of accordingly. All the
interim orders stand vacated.
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Pending application(s), if any, stands disposed of.
( Sushil Kukreja )
Judge
July 06, 2026
(raman)
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