- Case
- RAJINDERSINGH TARLOCHANSINGH DHINGRA AND ORS v. AHMED SAFWAN AHMED RIZWAN AND ORS (Bombay High Court, 21-03-2025)
- Law
- Code of Civil Procedure, Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, Transfer of Property Act.
Facts: The plaintiffs (appellants) filed a suit seeking cancellation of a sale deed and correction deed, declaration of ownership, and perpetual injunction, arguing that the purchaser (defendant no. 1) did not pay the entire sale consideration. The defendant no. 1 subsequently transferred the property to defendant no. 2, and defendant no. 3 is a financial institution from which the defendant obtained a loan. The Trial Court rejected the plaint under Order VII Rule 11 of the Code of Civil Procedure (CPC). The First Appellate Court upheld this rejection.
Procedural Posture: This is a Second Appeal before the High Court against the concurrent decrees of rejection of the plaint by the Trial Court and the First Appellate Court. The rejection was based on applications filed by defendant nos. 1 and 2 under Order VII Rule 11 of the CPC.
Issue: (1) Is the suit maintainable against defendant nos. 1 and 2 with respect to the prayer for perpetual injunction restraining dispossession without following due process of law? (2) Can a plaint be rejected against one of the defendants in the suit, and what is the effect of such rejection? (3) Can prayers for cancellation of sale deed, declaration of ownership, and injunction against creation of third-party interests be summarily rejected while permitting the suit to proceed for adjudication of the prayer for perpetual injunction?
Holding: The High Court partly allowed the Second Appeal. The rejection of the plaint against defendant no. 3 is maintained. The suit can proceed against defendant nos. 1 and 2 only with respect to the prayer for perpetual injunction restraining forcible dispossession, but not for the prayers for cancellation of the sale deed, declaration of ownership, and injunction restraining the defendant from creating third-party interests.
Reasoning: The Court reasoned that non-payment of the entire sale consideration is not a valid ground for cancellation of the sale deed, relying on the Supreme Court's decision in Dahiben -versus- Arvindbhai Kalyanji Bhanushali. However, the plaintiffs' claim of being in possession of the suit property and the defendants' attempt to dispossess them without due process of law establishes a cause of action for a prayer for perpetual injunction. The Court also held that rejection of a plaint against one defendant does not amount to partial rejection of the plaint. The Court invoked Order XII Rule 6 of the CPC, regarding judgment on admissions, to sustain the rejection of prayers for cancellation of the sale deed and declaration of ownership, as the plaintiffs admitted to executing the sale deed and receiving part consideration. The Court emphasized the duty of courts to prevent meaningless litigation and ensure that procedural laws serve the cause of justice.
