Man’s Claim That Land Sale Secured ₹25-Lakh Loan Gets Suit Restored; Supreme Court Orders Courts To Record Pre-Registration Rejections

The plaintiff alleged that his son settled the suit property on him by a registered deed and that, after borrowing ₹25 lakh from the defendant’s husband, he executed a registered sale deed in the defendant’s favour only as security for the loan.

He claimed to have remained in possession and sought, among other reliefs, a declaration of title, redemption of the transaction, injunction and reconveyance.

Before the suit was registered, the trial court rejected the plaint, reasoning that the sale deed contained no reconveyance provision and no separate agreement to that effect had been produced.

The High Court upheld the rejection for want of a cause of action.

The plaintiff appealed to the Supreme Court.

Order IV Rules 1 and 2 CPC distinguish presentation and institution of a plaint from its admission and provide for the recording of suit particulars in the Register of Civil Suits.

Under Order VII Rule 11 CPC, a plaint may be rejected at any stage, including before registration, but the inquiry must be confined to the plaint’s averments; for rejection under clauses (a) and (d), the court considers whether those averments disclose a cause of action or show that the suit is barred by law.

T. Arivandandam v. T.V. Satyapal requires a meaningful, rather than formal, reading of the plaint.

Saleem Bhai v. State of Maharashtra and The Church of Christ Charitable Trust v. Ponniamman Educational Trust confirm that rejection may occur before registration or service of summons.

Under Ganga Bai v. Vijay Kumar, a person has an inherent right to bring a suit of a civil nature unless barred by statute.

Rejection of a plaint is a “decree” under Section 2(2) CPC; accordingly, a pre-registration rejection should be recorded in a register maintained for that purpose, with High Courts able to make appropriate provision under Section 122 CPC.

The Court rejected the plaintiff’s contention that Order VII Rule 11 could be invoked only after registration, holding that the power may be exercised from the time of presentation of the plaint.

However, the trial court had not identified the applicable clause of Rule 11 and had effectively assessed the merits by relying on the absence of a reconveyance term or separate agreement.

Reading the plaint as a whole, the Court found pleaded facts supporting the asserted loan, the alleged security nature of the sale deed, the plaintiff’s continued possession and the defendant’s alleged attempt to dispossess him; the plaint also sought several forms of relief.

Those allegations disclosed a cause of action, and the plaint did not show on its face that the suit was barred by law.

The possibility that the plaintiff might fail after trial could not justify summary rejection.

The Court further held that pre-registration rejection must be recorded to preserve a record for appellate review and for purposes such as a later proceeding based on the same cause of action.

It set aside the trial court’s and High Court’s orders, restored the plaint for registration and directed that the suit be decided in accordance with law, uninfluenced by the Supreme Court’s observations on the merits.

It also directed that any plaint rejected before registration be recorded in a register maintained for that purpose, and that High Courts take steps under Section 122 CPC if their applicable rules do not provide for such a register.

The appeal was allowed with no order as to costs.