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REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL No.11345  OF 2017 (Arising out of S.L.P.(C) No.23605 of 2015)  

Bhargavi Constructions & Anr. ….Appellant(s)

VERSUS

Kothakapu Muthyam  Reddy & Ors.                                 …Respondent(s)

J U D G M E N T

Abhay Manohar Sapre, J.

1) Leave granted.

2) This appeal is filed by the defendants against

the  final  judgment  and  order  dated  25.06.2015

passed  by  the  High  Court  of  Judicature  at

Hyderabad for the State of Telangana and the State

of Andhra Pradesh in Appeal Suit No. 968 of 2013

whereby the High Court allowed the appeal filed by

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the respondents herein with costs and set aside the

order  dated  24.07.2013  passed  by  the  second

Additional District Judge, Ranga Reddy District in

I.A. No.894 of 2010 in O.S. No.107 of 2010.

3) In  order  to  appreciate  the  short  legal

controversy involved in  the  appeal,  it  may not  be

necessary to set out the factual controversy involved

in the case in detail and only narration of few facts

to appreciate the legal question arising in the case

would suffice for the disposal of this appeal.

4) On 07.05.2007,   T.  Jagat  Singh (respondent

No. 5 herein) filed a civil suit being O.S. No. 481 of

2007  against  respondent  Nos.  1  to  34  herein

(defendant  Nos.  1  to  33)  in  the  Court  of  District

Judge, Ranga Reddy District Court.  

5) The  suit  was  for  specific  performance  of

agreement  of  sale  dated  28.12.1995  said  to  have

been entered into between the parties in respect of

agricultural  land  totally  admeasuring  AC.  51.29

guntas in (Sy.Nos. 262-274) situated at Pappalguda

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village  of  Rajendranagar  Mandal,  Ranga  Reddy

District (hereinafter referred to as the "suit land").  

6) Originally,  the  plaintiff  had  filed  suit  only

against defendant Nos. 1 to 9 but later on defendant

Nos. 10 to 33 made an application for being joined

as  defendant  Nos.  10  to  33  in  the  civil  suit  as

according  to  them,  they  had  an  interest  in  the

subject  matter  of  the  civil  suit  and  also  in  its

decision and, therefore, they were necessary parties

to  the  suit.  Their  prayer  was  allowed.  The

defendants then contested the suit.

7) During  the  pendency  of  civil  suit,  on

22.08.2007,  the  parties  (plaintiff  and  defendants)

settled the matter in relation to the suit land and

accordingly entered into written compromise.

8)  A joint compromise petition signed by all the

parties to the suit was accordingly filed before the

Lok Adalat, which held its Lok Adalat sitting in the

Court on 22.08.2007.

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9) The members of the Lok Adalat before whom

the suit was posted for its disposal in terms of the

compromise petition filed by the parties perused the

compromise petition and accepted the compromise

petition  finding  it  to  be  in  order.  An  Award  was

accordingly passed on 22.08.2007 under Section 21

of  the  Legal  Services  Authorities  Act,  1987

(hereinafter referred to as “the Act”) in terms of the

compromise petition, which, in turn, disposed of the

suit as having been compromised. (Annexure P-2).

10)  On 14.11.2009, respondent Nos. 1 to 4 herein

(who were original defendant Nos. 22 to 25 in Suit

No.  481 of  2007) filed Civil  Suit  No.  107 of  2010

against the plaintiff and the remaining defendants

of Civil Suit No. 481 of 2007. This suit was filed in

the  Court  of  II  Additional  District  Judge,  Ranga

Reddy District at L.B.Nagar.  

11) This suit was for a declaration that the award

dated 22.08.2007 passed by the Lok Adalat in Civil

Suit  No.  481  of  2007  was  obtained  by  the

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defendants  of  this  suit  by  playing  fraud/mis-

representation  on  the  plaintiffs  and  hence  the

Award  dated  22.08.2007  be  declared  illegal,  null

and void and not binding on the plaintiffs.  

12) According to the plaintiffs,  though they were

parties to the award along with defendants in Civil

Suit  No.  481/2007  but  since  the  award  dated

22.08.2007  was  obtained  by  the  parties  by

misrepresenting the facts to the plaintiffs which was

nothing short of fraud played by the defendants on

them  to  grab  their  more  land  without  their

knowledge and taking advantage of their illiteracy,

the same is not a legal award and hence not binding

on the plaintiffs. On these averments, the plaintiffs

prayed that the award dated 22.08.2007 be declared

illegal,  void,  in-operative  and  not  binding  on  the

plaintiffs.

13) The  defendants,  on  being  served  with  the

notice of the suit, filed an application under Order 7

Rule  11  (d)  of  the  Code  of  Civil  Procedure,  1908

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(hereinafter referred to as "the Code") and prayed for

rejection of the plaint. According to the defendants,

since the suit seeks to challenge the Award of Lok

Adalat, it is not maintainable being barred by virtue

of rigour contained in Order 7 Rule 11(d) of Code. It

was contended that the remedy of the plaintiff was

in filing writ petition under Article 226 or/and 227

of the Constitution of India to challenge the award

dated 22.08.2007 as held by this Court in State of

Punjab & Anr. Vs. Jalour Singh & Ors., (2008)  2

SCC 660 .    

14) The  Trial  Court,  by  order  dated  24.07.2013

allowed the application filed by the defendants and

rejected the plaint by invoking powers under clause

(d) of Rule 11. It was held that the filing of the civil

suit  to  challenge  the  award  of  Lok  Adalat  is

impliedly barred and the remedy of the plaintiffs is

to challenge the award by filing writ petition under

Article 226 or/and 227 of  the Constitution in the

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High  Court  as  held  by  this  Court  in  the  case  of

State of Punjab (supra).  

15) The  plaintiffs,  felt  aggrieved,  filed  an  appeal

before  the  High  Court.  The  High  Court,  by

impugned order, allowed the appeal, set aside the

order of the Trial Court and restored the suit on its

file  for  its  disposal  on  merits  in  accordance  with

law.   The  High Court  held  that  since  the  suit  is

founded on the allegations of misrepresentation and

fraud, it is capable of being tried on its merits by

the Civil Court.  

16) Against  this  order,  the  defendants  have  felt

aggrieved  and  filed  this  appeal  by  way  of  special

leave before this Court.

17)     Heard Mr. Dushyant Dave and Mr. Jayant

Bhushan, learned senior counsel for the appellants

and  Mr.  B.  Adinarayana,  learned  senior  counsel,

Mr. D. Mahesh Babu, Mr. Pranab Mullick, Mr. Ejaz

Maqbool for the respondents.

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18) Mr.  Dushyant  Dave,  learned  senior  counsel,

appearing  for  the  appellants  (defendants)  while

assailing  the  legality  and  correctness  of  the

impugned  order  argued  only  one  legal  point.  He

urged that the reasoning and the conclusion arrived

at  by  the  Trial  Court  was  right  whereas  the

reasoning and the conclusion arrived at by the High

Court was not so and hence the Trial Court's order

deserves to be restored.

19) Elaborating  his  submission,  Mr.  Dushyant

Dave placed reliance on the law laid down by this

Court  in  State  of  Punjab (supra)  and  contended

that the issue urged by him no longer remains res

integra and  stands  answered  by  this  Court  in

appellant's favour.  

20) It  was  his  submission  that  the  expression

"barred by any law" occurring in clause (d) of Rule

11 of Order 7 not only includes any Act enacted by

the legislature creating a “bar” but the expression

“law”  includes  therein  “judicial  decision  of  the

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Supreme Court" also, which are binding on all the

Courts in the Country by virtue of Article 141 of the

Constitution of India.

21)  In other words, his submission was that the

expression “law” occurring in clause(d) of Rule 11 of

Order  7  should  be  construed  liberally  so  as  to

include  therein  not  only  any  “Act"  which  is

admittedly a “law” made by the legislature but also

include therein a  "a decision of Supreme Court ".  

22) Learned  counsel  urged  that  the  appellants

(defendants)  were,  therefore,  fully  justified  in

invoking the powers under Order 7 Rule 11(d) of the

Code  praying  for  rejection  of  the  plaint  as  being

barred  on  the  strength  of  law  laid  down  by  this

Court in State of Punjab (supra).

23) In reply, learned counsel for the respondents

while  supporting  the  impugned  order  contended

that the reasoning and the conclusion arrived at by

the High Court is just and proper and hence does

not call for any interference.

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24) Having  heard  the  learned  counsel  for  the

parties and on perusal of the record of the case, we

find force in the submissions of the learned counsel

for the appellants.

25) The  question  arose  before  this  Court  (Three

Judge Bench) in the case of State of Punjab (supra)

as  to  what  is  the  remedy available  to  the  person

aggrieved of  the  award passed by  the  Lok  Adalat

under Section 20 of the Act. In that case, the award

was passed by the Lok Adalat which had resulted in

disposal  of  the  appeal  pending  before  the  High

Court relating to a claim case arising out of Motor

Vehicle Act. One party to the appeal felt aggrieved of

the Award and, therefore, questioned its legality and

correctness  by  filing  a  writ  petition  under  Article

226/227  of  the  Constitution  of  India.  The  High

Court dismissed the writ petition holding it to be not

maintainable.  The  aggrieved  party,  therefore,  filed

an appeal by way of special leave before this Court.

This Court, after examining the scheme of the Act

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allowed the appeal  and set aside the order of  the

High Court.   This Court held that the High Court

was not right in dismissing the writ petition as not

maintainable.  It  was  held  that  the  only  remedy

available with the aggrieved person was to challenge

the award of the Lok Adalat by filing a writ petition

under Article 226 or/and 227 of the Constitution of

India in the High Court and that too on very limited

grounds. The case was accordingly remanded to the

High Court for deciding the writ petition filed by the

aggrieved person on its merits in accordance with

law.  

26) This is what Their Lordships held in Para 12:

“12. It is true that where an award is made by the  Lok  Adalat  in  terms  of  a  settlement arrived at between the parties (which is duly signed by parties and annexed to the award of the Lok Adalat), it becomes final and binding on the parties to the settlement and becomes executable as if it is a decree of a civil court, and no appeal lies against it to any court. If any party wants to challenge such an award based on settlement, it can be done only by filing  a  petition  under  Article  226  and/or Article 227 of the Constitution, that too on very  limited  grounds.  But  where  no compromise  or  settlement is  signed by the

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parties and the order of the Lok Adalat does not refer to any settlement, but directs the respondent  to  either  make  payment  if  it agrees  to  the  order,  or  approach  the  High Court for disposal of appeal on merits,  if  it does not agree, is  not an award of  the Lok Adalat. The question of challenging such an order in a petition under Article 227 does not arise. As already noticed, in such a situation, the  High  Court  ought  to  have  heard  and disposed of the appeal on merits.”

27) In our considered view, the aforesaid law laid

down by this Court is binding on all the Courts in

the country by virtue of mandate of Article 141 of

the Constitution. This Court, in no uncertain terms,

has laid down that challenge to the award of Lok

Adalat  can  be  done  only  by  filing  a  writ  petition

under  Article  226  and/or  Article  227  of  the

Constitution of India in the High Court and that too

on very limited grounds.  

28) In the light of clear pronouncement of the law

by this Court, we are of the opinion that the only

remedy  available  to  the  aggrieved

person(respondents  herein/plaintiffs)  was  to  file  a

writ  petition under Article  226 and/or 227 of  the

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Constitution  of  India  in  the  High  Court  for

challenging the award dated 22.08.2007 passed by

the Lok Adalat.  It  was then for  the writ  Court  to

decide as to whether any ground was made out by

the writ petitioners for quashing the award and, if

so,  whether  those  grounds  are  sufficient  for  its

quashing.

29) The High Court was, therefore, not right in by

passing  the  law  laid  down  by  this  Court  on  the

ground that the suit can be filed to challenge the

award, if the challenge is founded on the allegations

of fraud. In our opinion, it was not correct approach

of the High Court to deal with the issue in question

to which we do not concur.

30) We also do not agree with the submissions of

Mr. Adinarayana Rao, learned senior counsel for the

respondents  when  he  urged  that  firstly,  the

expression "law" occurring in clause(d) of  Rule 11

Order 7 does not  include the  "judicial  decisions"

and clause (d) applies only to bar which is contained

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in  “the  Act”  enacted  by  the  Legislature;  and

Secondly, even if it is held to include the “judicial

decisions”,  yet  the  law  laid  down  in  the  case  of

State of Punjab (supra) cannot be read to hold that

the suit is barred. Both these submissions, in our

view, have no merit.

31) Black's Law Dictionary (Ninth Edition) defines

the expression "law". It says that “Law" includes the

“judicial  precedents"  (see  at  page  962).  Similarly,

the expression "law” defined in Jowett’s Dictionary

of  English  Law  (Third  Edition  Volume-2,  (pages

1304/1305) says that "law is derived from judicial

precedents,  legislation  or  from  custom.   When

derived  from  judicial  precedents,  it  is  called

common  law,  equity,  or  admiralty,  probate  or

ecclesiastical  law  according  to  the  nature  of  the

Courts by which it was originally enforced".   

32) The  question  as  to  whether  the  expression

"law" occurring in clause(d) of Rule 11 of Order 7 of

the  Code  includes  "judicial  decisions  of  the  Apex

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Court" came up for consideration before the Division

Bench  of  the  Allahabad  High  Court  in  Virender

Kumar Dixit vs. State of U.P., 2014(9) ADJ 1506.

The Division Bench dealt with the issue in detail in

the context of several decisions on the subject and

held in para 15 as under:

“15.   Law  includes  not  only  legislative enactments but also judicial precedents.  An authoritative  judgment  of  the  Courts including higher judiciary is also law.”

33) This  very issue was again considered by the

Gujarat  High Court  (Single  Bench)  in  the  case  of

Hermes Marines Limited vs. Capeshore Maritime

Partners F.Z.C. & Anr. (unreported decision in Civil

Application (OJ) No.144 of 2016 in Admiralty Suit

No.10 of 2016 decided on 22.04.2016).  The learned

Single Judge examined the issue and relying upon

the  decision  of  the  Allahabad  High  Court  quoted

supra held in Para 53 as under:

“53.  In the light of the above discussion, in the considered view of this Court, it cannot be  said  that  the  term “barred  by  any  law” occurring in clause(d) of Rule 11 of Order 7 of

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the Code, ought to be read to mean only the law codified  in  a  legislative  enactment and not  the  law  laid  down  by  the  Courts  in judicial precedents.  The judicial precedent of the  Supreme  Court  in  Liverpool  &  London Steamship  Protection  and  Indemnity Association  vs.  M.V.  Sea  Success,  2004(9) SCC 512 has been followed by the decision of the  Division  Bench  in  Croft  Sales  & Distribution Ltd. vs. M.V. Basil, 2011(2) GLR 1027.   It is, therefore, the law as of today, which is that the Geneva Convention of 1999 cannot be made applicable to a contract that does not involve public law character.  Such a contract  would not  give  rise  to a maritime claim.  As discussed earlier, the word ‘law’ as occurring  in  Order  7 Rule  11(d)  would also mean  judicial  precedent.   If  the  judicial precedent bars any action that would be the law.”  

34) Similarly, this very issue was again examined

by the Bombay High Court (Single Judge) in Shahid

s. Sarkar & Ors. Vs. Usha Ramrao Bhojane, 2017

SCC OnLine Bom 3440. The learned Judge placed

reliance  on  the  decisions  of  the  Allahabad  High

Court in  Virender Kumar Dixit vs. State of U.P.

(Supra)  and  the  Gujarat  High  Court   in  Hermes

Marines Limited (supra) and held as under:

“18…………….The  law  laid  down  by  the highest  court  of  a  State  as  well  as  the Supreme Court,  is  the law.  In fact,  Article 141 of the Constitution of India categorically

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states that the law declared by the Supreme Court  shall  be  binding on all  Courts  within the  territories  of  India.   There  is  nothing even in the C.P.C. to restrict the meaning of the words “barred by any law” to mean only codified law or  statute law as sought to be contended by Mr. Patil.   In the view that I have taken, I am supported by a decision of the Gujarat High Court in the case of Hermes Marines Ltd..………..........................”

“19.  One must also not lose sight of the purpose and intention behind Order VII Rule 11(d).  The intention appears to be that when the suit appears from the statement in the plaint to be barred by any law, the Courts will not unnecessarily protract the litigation and proceed with the hearing of the suit.  The purpose clearly appears to be to ensure that where a Defendant is  able to establish that the Plaint ought to be rejected on any of the grounds set out in the said Rule, the Court would be duty bound to do so, so as to save expenses,  achieve expedition and avoid  the court’s  resources  being  used  up  on  cases which  will  serve  no  useful  purpose.   A litigation, which in the opinion of the court, is doomed to fail would not further be allowed to  be  used  as  a  device  to  harass  a Defendant…………………..”

35) Similarly,  issue  was  again  examined  by  the

High  Court  of  Jharkhand(Single  Judge)  in  Mira

Sinha & Ors. Vs. State of Jharkhand & Ors., 2015

SCC  OnLine  Jhar.4377.   The  learned  Judge,  in

paragraph 7 held as under:

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“7. In the background of the law laid down by the  Hon’ble  Supreme  Court,  it  is  apparent that Order VII Rule 11(d) C.P.C. application is maintainable only when the suit is barred by any law.   The expression “law” included in Rule 11(d) includes Law of Limitation and, it would  also  include the law declared by the Hon’ble Supreme Court………”

36) We are in agreement with the view taken by

Allahabad, Gujarat, Bombay and Jharkhand  High

Courts in the aforementioned four decisions which,

in our opinion,  is the proper interpretation of  the

expression "law" occurring in clause (d) of Rule 11 of

Order  7  of  the  Code.  This  answers  the  first

submission  of  the  learned  counsel  for  the

respondents against the respondents.

37) So  far  as  the  second  submission  of  learned

counsel  for  the  respondents  is  concerned,  it  also

has no merit. In our view, the decision rendered in

the case of State of Punjab (supra) is by the larger

Bench (Three Judge) and is,  therefore, binding on

us. No efforts were made and rightly to contend that

the said decision needs reconsideration on the issue

in question. That apart, when this Court has laid

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down a particular remedy to follow for challenging

the award of Lok Adalat then in our view, the same

is required to be followed by the litigant in letter and

spirit  as  provided  therein  for  adjudication  of  his

grievance  in  the  first  instance.  The  reason  being

that it is a law of the land under Article 141 of the

Constitution of India (see -  M. Nagaraj & Ors. Vs.

U.O.I. & Ors. 2006 ( 8 ) SCC 212). It  is  then  for

the writ court to decide as to what orders need to be

passed on the facts arising in the case.  

38) In the light of foregoing discussion, we cannot

concur  with  the  reasoning  and  the  conclusion

arrived at by the High Court.  

39) As  a  result,  the  appeal  succeeds  and  is

allowed. Impugned order is set aside and that of the

order  passed by the  Trial  Court  is  restored.  As a

consequence, the application filed by the appellants

(defendants) under Order 7 Rule 11 (d) of the Code

is allowed resulting in rejection of the plaint.      

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40) We,  however,  make  it  clear  that  the

respondents  (plaintiffs)  would  be  at  liberty  to

challenge the legality and correctness of the award

dated 22.08.2007 passed by the Lok Adalat by filing

the writ  petition under Article  226 or/and 227 of

the  Constitution in the  High Court  in accordance

with law.

41)  We  also  make  it  clear  that  we  have  not

examined the merits of case of either parties which

is the subject matter of the suit and hence the writ

court, in the event of writ petition being filed, would

decide the writ petition strictly in accordance with

law  without  being  influenced  by  any  of  our

observations.   

               ………...................................J.

[R.K. AGRAWAL]             

                        …... ……..................................J.

        [ABHAY MANOHAR SAPRE] New Delhi; September 07, 2017