Order VII Rule 11 applications are confined to plaint averments and cannot determine disputed factual issues.

The Plaintiff, a registered partnership firm and owner of premises at Connaught Place, leased them to Defendant No. 2 for nine years under a registered Lease Deed dated 25 May 2015, at an initial monthly rent of ₹19,00,000.

Following rental defaults, the parties entered into a Settlement Agreement dated 10 December 2018, under which the Plaintiff reduced the rent and waived interest in return for payment of arrears and punctual future payments.

Defendant No. 1, then Managing Director and a major shareholder of Defendant No. 2, furnished an unconditional undertaking before the Court to ensure compliance with the Settlement Agreement.

The Plaintiff alleged that Defendant No. 2 subsequently defaulted, with the last part-payment being made on 12 March 2020, and that possession was ultimately handed over on 20 October 2020.

During subsequent proceedings, the Plaintiff allegedly discovered that Defendant No. 1 had sold his shareholding in Defendant No. 2 in December 2019 and had knowledge of the company’s financial difficulties.

The Plaintiff therefore instituted the present suit for recovery of ₹4,63,86,584, principally against Defendant No. 1, alleging fraudulent representations, personal assurances, guarantee and misfeasance.

Defendant No. 1 applied under Order VII Rule 11 CPC, contending that the plaint disclosed no cause of action against him in his personal capacity and that the recovery claim was barred by limitation.

Whether the plaint disclosed a cause of action against Defendant No. 1, notwithstanding his contention that he acted only as an agent or director of Defendant No. 2?

Whether the suit, instituted on 9 February 2023 for alleged rent defaults commencing in November 2019, was barred by limitation under Order VII Rule 11(d) CPC?

The Court applied Order VII Rule 11 CPC, under which a plaint may be rejected where it does not disclose a cause of action or where the suit appears from the plaint to be barred by law.

Relying on T. Arivandandam v. T.V. Satyapal, Saleem Bhai v. State of Maharashtra, Popat and Kotecha Property v. State Bank of India Staff Assn., Raptakos Brett & Co. Ltd. v. Ganesh Property, R.K. Roja v. U.S. Rayudu, and Indian Evangelical Lutheran Church Trust Assn. v. Sri Bala & Co., the Court held that the plaint must be read as a whole and meaningfully; the Court must ordinarily confine itself to the plaint and documents filed with it; the defendant’s written statement and independent documents cannot be relied upon at this stage; and rejection on limitation is permissible only where the bar is apparent on the face of the plaint.

The Court also applied the Supreme Court’s directions in Re: Cognizance for Extension of Limitation, Suo Motu Writ Petition (C) No. 3 of 2020, excluding the period from 15 March 2020 to 28 February 2022 for limitation purposes.

The plaint specifically alleged that Defendant No. 1 had made personal assurances and furnished an unconditional undertaking concerning compliance with the Settlement Agreement, and the undertaking was annexed to the plaint.

These averments, if accepted at trial, constituted a plausible cause of action against Defendant No. 1.

His reliance on a resignation letter to establish that he ceased to be a director on 1 April 2019 involved consideration of a document filed by the defence and disputed factual matters, which could not be adjudicated under Order VII Rule 11 CPC.

Whether the undertaking was given merely as an agent of Defendant No. 2 or created personal liability was therefore held to be a matter for trial.

On limitation, although the suit was filed on 9 February 2023 and related to rent allegedly due from November 2019, the period from 15 March 2020 to 28 February 2022 had to be excluded pursuant to the Supreme Court’s COVID-19 limitation orders.

Consequently, the suit could not be held ex facie time-barred on the basis of the plaint.

The suit was also held to be within limitation after excluding the COVID-19 period prescribed by the Supreme Court.

Accordingly, Defendant No. 1’s application under Order VII Rule 11 CPC was dismissed.

The suit and connected application were directed to be listed on 7 October 2026.