Specific Performance and Limitation - Order VII Rule 11 CPC

Source: Allahabad High Court 

Why in News? 

The bench of Justice Jaspreet Singh of Allahabad High Court in the case of Devendra Srivastava and Ors. v. M/s Eifel Recreation Club (P) Ltd. (2025) dismissed a revision petition challenging the trial court's refusal to reject a plaint under Order VII Rule 11 of the Code of Civil Procedure, 1908 (CPC) on grounds of limitation. 

What was the Background of Devendra Srivastava and Ors. v. M/s Eifel Recreation Club (P) Ltd. (2025) Case? 

• The plaintiff company (Eifel Recreation Club) filed a suit for specific performance of contract and perpetual injunction in November 2021. 
• An agreement to sell was executed between the parties on 12.12.2012, whereby the defendants agreed to sell property for a total consideration of Rs. 2,65,00,000. 
• Out of the total consideration, Rs. 2,40,00,000 had been paid by the plaintiff, with Rs. 25,00,000 to be paid at the time of executing the sale deed. 
• The agreement stipulated that the sale deed would be executed within one year from the date of agreement, i.e., by December 2013. 
• The plaintiff claimed that a supplementary agreement was executed on 06.09.2013, and an additional Rs. 24,00,000 was paid to the defendants. 
• The plaintiff alleged that the defendants continued to assure execution of the sale deed but sought time to clear an encumbrance on the property. 
• On 17.09.2021, the defendants through their counsel refused to execute the sale deed and stated they had forfeited the consideration already paid. 
• The defendants filed an application under Order VII Rule 11 CPC seeking rejection of the plaint on the ground that it was barred by limitation. 
• The defendants argued that the suit should have been filed within three years from December 2013 (as per Article 54 of the Limitation Act 1963), which expired in December 2016, but the suit was filed in 2021. 
• The trial court rejected the defendants' application on 06.05.2022, holding that the issue of limitation was a mixed question of law and fact requiring evidence. 
• The defendants challenged this order through a revision petition under Section 115 CPC before the Allahabad High Court. 

What were the Court's Observations? 

• The Court outlined that while dealing with applications under Order VII Rule 11 CPC, only the averments in the plaint and supporting documents can be considered, not the defence. 
• The averments in the plaint must be taken as true, and the Court must undertake a meaningful reading of the plaint without compartmentalization or dissection. 
• The Court emphasized that Article 54 of the Limitation Act 1963 has two parts: (i) when a date is fixed for performance, limitation runs from that date; (ii) when no date is fixed, limitation runs from when the plaintiff receives notice that performance is refused. 
• Whether the supplementary agreement was actually executed, whether it had the capability of extending the limitation period, and what impact the encumbrance had on the property were all matters requiring evidence. 
• The Court held that these contentious issues could only be ascertained after parties lead evidence at trial. 
• The Court found that the trial court rightly concluded that the issue of whether the plaint fell within the first part or latter part of Article 54 could only be decided at trial. 
• The Court clarified that its observations were made only for examining the issue within the narrow ambit of Order VII Rule 11 CPC and should not be taken as an expression of opinion on merits. 
• The Court directed that the trial court will decide the matter on merits based on evidence led by the respective parties. 
• The revision petition was dismissed with no order as to costs.

What is Order VII Rule 11 of CPC ? 

• Order VII Rule 11 of the Code of Civil Procedure, 1908 is a significant procedural provision that empowers courts to reject a plaint at the threshold stage without proceeding to trial. This rule serves as a filtering mechanism to prevent frivolous, vexatious, or legally untenable suits from consuming judicial time and resources. 
• The provision enumerates six specific grounds on which a court may reject a plaint: 
  • Where the plaint does not disclose a cause of action (Rule 11(a)). 
  • Where the relief claimed is undervalued, and the plaintiff fails to correct the valuation within the court-specified timeframe (Rule 11(b)). 
  • Where the plaint is insufficiently stamped, and the plaintiff fails to supply the requisite stamp paper within the court-specified timeframe (Rule 11(c)). 
  • Where the suit appears from the statements in the plaint itself to be barred by any law, including limitation laws (Rule 11(d)). 
  • Where the plaint is not filed in duplicate (Rule 11(e)). 
  • Where the plaintiff fails to comply with the provisions of Rule 9 regarding copies of the plaint (Rule 11(f)). 
• The rule includes a proviso that restricts the court's ability to extend time for correcting valuation or supplying stamp paper unless the plaintiff was prevented by exceptional circumstances and a refusal would cause grave injustice.