Amendment Application under Order 6 Rule 17 Must Be Decided Prior to Order 7 Rule 11 Application

The Appellant/Plaintiff filed a suit for declaration and permanent injunction to declare a registered sale deed dated 06.04.2022 null and void.

The Appellant alleged that the Respondent/Defendant No. 1 induced him to execute the sale deed for agricultural land worth Rs. 1,04,00,000/- by providing four post-dated cheques.

Subsequently, the Respondent reclaimed all cheques under the pretext of rectifying a clerical error in one cheque, promising to return fresh cheques and an amended deed, but failed to do so.

During the pendency of the suit, the Appellant filed applications under Order 6 Rule 17 (Amendment) and Order 1 Rule 10 (Addition of Parties) of the CPC.

However, the Trial Court allowed the Respondent’s application under Order 7 Rule 11 of the CPC and rejected the plaint, holding that a suit for cancellation is not maintainable for non-payment of consideration and that only a recovery suit lies.

1. Whether the Trial Court erred in rejecting the plaint under Order 7 Rule 11 CPC while an application for amendment under Order 6 Rule 17 CPC was pending.

2. Whether the plaint disclosed a cause of action for declaring the sale deed void based on allegations of fraud and deception (vitiating Section 54 of the Transfer of Property Act) rather than mere non-payment of consideration.

Order 7 Rule 11 of the CPC regarding the rejection of a plaint and Order 6 Rule 17 of the CPC concerning the amendment of pleadings, noting that a pending amendment application intended to remedy defects must generally be decided prior to an application for rejection.

Section 54 of the Transfer of Property Act, 1882, which defines "Sale" as a transfer of ownership in exchange for a price paid or promised; if a sale is executed without consideration or promise of future payment, it is void.

A sale deed without price is of no legal effect, as established in Kewal Krishan v. Rajesh Kumar (2022) 18 SCC 489.

The entirety of the plaint, including elements of deception/fraud, must be considered under Order 7 Rule 11 as established in Shaukat Hussain Mohammed Patel v. Khatunben Mohmmedbhai Polara (2019) 10 SCC 226.

The High Court observed that the Trial Court had taken cognizant of the Order 6 Rule 17 application but ignored it to proceed with the Order 7 Rule 11 application, which constitutes a procedural "illegality" as the amendment could have remedied the alleged maintainability defects.

On merits, the Court distinguished the present case from Dahiben v. Arvindbhai Kalyanji Bhansali (2020) 7 SCC 366, noting that the Appellant’s pleadings specifically alleged an "element of deception and fraud" from the inception, asserting that the Respondent never intended to pay and took back all cheques.

Unlike Dahiben, where there was gross delay/part-payment, here the suit was filed within eight months and involved a complete absence of consideration.

Since the validity of the execution itself was challenged on the grounds of fraud, Section 55 of the Transfer of Property Act (rights of unpaid sellers) did not apply as it presupposes a valid execution.

The Court allowed the appeal and set aside the order dated 02.08.2024, restored the suit to its original number, and remitted the matter back to the Trial Court for adjudication on merits.