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REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. ……….. OF 2019 (Arising out of SLP (C) No.31579 of 2018)

Madhav Prasad Aggarwal & Anr.   ..…Appellant(s)  

Versus

Axis Bank Ltd. & Anr.  ….Respondent(s)

With  

CIVIL APPEAL NO. ……….. OF 2019 (Arising out of SLP (C) No.30900 of 2018)

CIVIL APPEAL NO. ……….. OF 2019 (Arising out of SLP (C) No.30917 of 2018)

CIVIL APPEAL NO. ……….. OF 2019 (Arising out of SLP (C) No.698 of 2019)

J U D G M E N T

A.M. Khanwilkar, J.

Leave granted.  

2. These appeals take exception to the common judgment and

order passed by the High Court of Judicature at Bombay

(Ordinary Original Civil Jurisdiction) in Appeal Nos.360, 361, 362

and Commercial Appeal No.172 of 2017 dated 26th  October,

2018, whereby the notice of motion(s) filed by respondent No.1­

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Axis  Bank Ltd. (one of the defendant  in the suits  filed by the

respective  appellant(s)) came  to  be  allowed and as  a result  of

which, the suit filed by the concerned appellant(s) had been

dismissed as against respondent No.1­Axis Bank Ltd., by

invoking the provisions of Order 7 Rule 11(d) of the Civil

Procedure Code (for short “CPC”).

3. The appellant(s) being the original plaintiff(s) in the

respective suit(s) wanted to purchase flats in a project known as

‘Orbit Heaven’ (for short “the project”) being developed by Orbit

Corporation Ltd. (In Liq.) (for  short “The builder”),  at  Nepean

Sea  Road in  Mumbai  and in furtherance thereof  parted  with

huge amounts of money to the builder ranging in several crores

although the  construction of the  project  was under  way.  The

appellant(s) had started paying installments towards the

consideration of the concerned flats from 2009.   Admittedly, no

registered agreement/document for purchase of concerned flats

has been executed in favour of respective appellant(s). The

appellant(s), however,  would rely on the correspondence and

including the letter of allotment issued by the builder in respect

of concerned flats ­ to assert that there was an agreement

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between them and the builder in respect of the earmarked flat(s)

mentioned therein and which had statutory protection.  

4. The respondent No.1­bank gave loan facility to builder

against the project only around year 2013, aggregating to

principal sum of Rupees 150 Crores in respect of which a

mortgage deed is said to have been executed between the builder

and the bank. That transaction came to the notice of the

concerned plaintiff(s) only after publication of a public notice on

13th September, 2016 in Economic Times, informing the general

public that the said project (Orbit Heaven) has been mortgaged.

The sum and substance of the assertion made by the

appellant(s) is that the appellant(s) were kept in the dark whilst

the mortgage transaction was executed between the builder and

the bank whereunder their rights have been unilaterally

jeopardised, to receive possession of the concerned flats

earmarked in the allotment letter(s) and in respect of which the

concerned appellant(s)  have paid substantial  contribution and

the aggregate contribution of all the plaintiff(s) would be much

more than the loan amount given by the bank to the builder in

terms of the mortgage deed for the entire project. In this

backdrop, the concerned appellant(s) had asked for reliefs not

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only  against the  builder  but  also concerned parties joined as

defendant(s) in the suit(s) filed by them and including

respondent No.1­bank.  

5. The reliefs claimed by the concerned appellant(s) in separate

suit(s) filed by them are more or less similar. We may presently

refer to the reliefs claimed in suit No.8 of 2017 filed by Padma

Ashok Bhatt (appellant in civil appeal arising from SLP (C)

No.30900 of 2018), the same read thus:  

“The Plaintiff therefore prays: (a) That  the Defendant No.1 be ordered and decreed to

complete the Flat Nos.2302 and 2402 in the Project “Orbit Haven” situate at Darabshaw Lane, Nepean Sea Road,  Mumbai­400036 as per the agreement being letter of confirmation dated 16th  April 2009 and receipts executed by Defendant No.1 in favour of the Plaintiff and hand over the possession of Flat Nos.2302 and 2402 to the Plaintiff and that the Defendant No.1 and Defendant No.15 be jointly and/or severally  be ordered and directed to comply with all the obligations  under  Maharashtra  Ownership  Flats Act including, but not limited to, (i) the execution of the Agreement in terms of Section 4 of Maharashtra Ownership Flats Act, (ii) completing the building as per the sanction plan as sanctioned by Municipal Corporation of Greater Mumbai, (iii) to delivery vacant and peaceful possession of the respective flats, (iv) to form the Society or body of the Corporation as provided under Maharashtra Ownership Flats Act and to convey the land along with the building in favour of the Society or body of Corporation as per Maharashtra Ownership Flats Act.  

(b) That the Plaintiff is also entitled for a declaration that there is no legal, valid enforceable lien, charge or mortgage in favour of Defendant No.15 in respect of the building or any part thereof known as Orbit Haven,

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situated at Darabshaw Lane, Napeansea Road, Mumbai­400036;

(c) The Defendant No.1 be also ordered and directed to disclose all their assets, properties including the personal properties of the Directors and its sister concern particularly  M/s Apex Hotel  Enterprise  Pvt. Ltd. on Affidavit before this Hon’ble Court, within the period of two weeks or such other time as this Hon’ble Court may deem fit and proper;

(d) This  Hon’ble  Court be  pleased to pass an order of injunction restraining the Defendant No.1 from in any manner creating any third party rights in respect of all the properties that may be disclosed by the Defendant No.1, pursuant to the orders of this Hon’ble Court on Affidavit;

(e) The Plaintiff is also entitled for an order and direction that the  Defendant  No.1  be  ordered and directed  to give clear and marketable title in respect of flat being Flat Nos.2302 and 2402 and the building Orbit Haven, situated at Darabshaw Lane, Napeansea Road, Mumbai­400036 and to enter into and register the Agreement as provided under the provisions of Maharashtra Ownership Flats Act;

(f) The Defendant No.1 be also ordered and directed to indemnify the Plaintiff in respect of all claims, charges that may be  made by anybody in respect of Flat Nos.2302 and 2402 at Orbit Haven, situated at Darabshaw  Lane,  Napeansea  Road,  Mumbai­400036 and keep the same indemnified till the registration of the Agreement and Conveyance of the land in favour of the Society that may be formed;

(f1) Without prejudice to the reliefs as claimed hereinabove and  in  the alternative and  in  the  event this Hon’ble Court comes to the conclusion that the specific performance of the suit  flat cannot or ought not  to be granted, in such an event, the Plaintiff is entitled for refund of the amount of Rs.9,23,50,000/­ (Rupees Nine Crores Twenty Three Lakhs Fifty Thousand Only) paid by the Plaintiff to Defendant No.1 along  with interest thereon  @12%  from the  date of payment till repayment and cost.

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(f2) It be declared that the payment of the amount as stated in prayer (f1) stands validly charged on the land and in the flat Nos.2302 and 2402.  

(f3) In the event of failure to pay the amount as stated in prayer (f1), directions be issued for enforcement of the Plaintiff’s  charge upon the suit  plot of land and Flat Nos.2302 and 2402. (f4) In addition to the amount as prayed in prayer (f1) the  Defendant be also ordered and decreed to pay damages of Rs.15,00,00,000/­ (Rupees Fifteen Crores Only) to the Plaintiff.  

(g) This Hon’ble Court be pleased to appoint Court Receiver, High Court, Bombay, as Receiver under all powers under Order XL Rule 1 of Code of Civil Procedure, in respect of suit building Orbit Haven and the Plot of Land being Plot No.12, 8, Darabshaw Road, Off  Nepean Sea  Road, admeasuring  1105.00  square yards i.e. 923.92 sq. mtrs. Or thereabouts and registered with Collector of Land Revenue under Collector’s Old Nos.573 and 104A and Collector’s New Nos.2736 and 11317 old Survey No.48 and New Survey Nos.3 and 4/7139 and Cadastral Survey Nos.8/593 of Malabar Hill and Cumballa Hill Division bearing Municipal Ward No.D­3326 (4) and Street No.76(a), to do following things and/or such other things as this Hon’ble Court may deem fit and proper:­ i. To take complete charge of the said building; ii. To call for the balance  money from the Flat

Purchasers  as  mentioned in  Exhibit ‘E’, being Plaintiff and Defendant Nos.2 to 14;

iii. To execute the Agreement for and on behalf of Defendant  No.1  with the Plaintiff as provided under the  provisions  of  MOFA on  payment  of stamp duty, registration charges and all  other incidental charges to be paid by the Plaintiff;

iv. To pay all requisite fees to Municipal Corporation of Greater Mumbai as may be required for further progress of the work;

v. To appoint the existing Architect,  who are  the Architect to complete the said Project;

vi. To  appoint the existing Contractor  of the said building, to complete the work;

vii. To appoint the existing Structural Engineer who have already been the Structural Engineer of the said Project;

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viii. To pay all fees/charges in respect of the aforesaid persons;

ix. To regularly submit report to this Hon’ble Court with regard to the progress and any other measures that may be required for completion of the Project;

x. To make all application to Corporation and all other  Semi­Government  Authorities  as  may be required for completing the said building Orbit Haven.  

xi. After completion of the Project, to apply for Occupancy Certificate and Completion Certificate.  

xii. To hand over  the  flats  after  completion to  the Plaintiff.  

(h) Interim and ad­interim in terms of prayers (c) to (g) be granted;

(i) Cost of the suit be provided; (j) Such further and other reliefs as the nature and

circumstances of the case may require be granted.”

6. The respondent  No.1­bank  (defendant  No.15)  appeared  in

the concerned  suit and filed  a  notice  of  motion for identical

relief,  as claimed in notice of motion No.1206 of 2017 in suit

No.8 of 2017. The relief claimed in the subject notice of motion(s)

was limited to reject the plaint qua respondent No.1 herein, in

exercise of powers  under  Order 7  Rule  11(d) of  CPC on the

ground that the  suit(s)  against the  said  respondent  would be

barred  by  provisions  of  Section  34  of  The  Securitisation  and

Reconstruction of Financial Assets and Enforcement of Security

Interest Act, 2002 (for short “2002 Act”). The reliefs claimed in

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notice  of  motion No.1206 of  2017  in suit  No.8 of  2017, read

thus:  

“(a) That the plaint in suit no.8 of 2017 be rejected qua the applicant/defendant No.15; (b) that  pending the hearing and final  disposal  of the Notice of Motion the suit be stayed; (c) that  pending the hearing and final  disposal  of the notice of motion the status­quo granted vide dated 3rd March, 2017, of this Hon’ble Court be vacated; (d) for ad­interim relief in terms of prayers (b) and (c) above; (e) for such further and other relief as the nature and circumstances of the case may require; and  (f) costs.”

(emphasis supplied)

As aforementioned, the reliefs claimed in the plaint and the

notice of motion in the respective suit(s) which are the subject

matter of the present set of appeals are similar, albeit with minor

variation. That,  however, need not detain us from considering

the common question which has arisen for our consideration in

the present appeals.  

7. Be that as it may, the notice of motion(s) in the concerned

appeals came to be dismissed by the learned Single Judge of the

High Court by a common judgment dated 26th July, 2017, on the

finding that there was no bar from entertaining civil  suit(s)  in

respect of any other matter which is outside the scope of matters

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required to be determined by the Debt Recovery Tribunal (for

short “DRT”) constituted  under  2002 Act.  The learned  Single

Judge held that the facts of the present case clearly indicate that

the  cause of  action and the  reliefs  claimed by the  concerned

plaintiff(s)  fell within the excepted category and the bar under

Section 34 read with Section 17 of 2002 Act would be no

impediment in adjudicating the subject matter of the concerned

suit. The learned Single Judge referred to decisions of this Court

in  Mardia Chemicals Ltd. and Ors. Vs. Union of India and

Ors.1, Jagdish  Singh  Vs.  Heeralal and  Ors.2  and of  High

Courts in  State Bank of India Vs. Smt. Jigishaben B.

Sanghvi and Ors.3  and  Arasa Kumar Vs. Nauammal4.

However, the learned Single Judge rejected the

argument/objection raised by the appellant(s) that it is

impermissible to reject the plaint only against one of the

defendant(s), in exercise of power under Order 7 Rule 11(d) of

CPC by relying on the decision of the Division Bench of the same

High Court in M.V. “Sea Success I” Vs. Liverpool and London

1 (2004) 4 SCC 311 2 (2014) 1 SCC 479 3 2011 (3) Bom. C. R. 187 4 II (2015) BC 127

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Steamship Protection and Indemnity Association Ltd. and

Ors.5  As the notice of motion moved by respondent No.1­bank

came  to  be dismissed, respondent  No.1 carried the  matter in

appeal before the Division Bench by way of separate five appeals

in the concerned suit. All these appeals came to be allowed by

the Division Bench vide impugned judgment.  

8. The impugned  judgment  has reversed the  opinion  of the

learned Single Judge that bar under Section 34 will not come in

the  way  of the appellants/plaintiffs.  The  Division  Bench also

opined that the averments in the concerned plaint do not spell

out the case of fraud committed by the bank and/or the builder.

As a result of which, the Court held that the suit(s) instituted by

the appellant(s) did not come within the excepted category

predicated in  Mardia  Chemicals Ltd.  (supra) and thus the

plaint against respondent No.1­bank was not maintainable,

being barred by Section 34 of the 2002 Act.  

9. Feeling aggrieved, out of the five plaintiff(s) only four of them

have chosen to file the present appeals. They have assailed every

reason assigned by the Division Bench both on facts and the

5 AIR 2002 BOMBAY 151

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law. It is urged that the plaint cannot be rejected only against

one of the defendant(s) but it could be rejected as a whole. To

buttress this contention reliance has been placed on  Sejal

Glass Limited Vs. Navilan Merchants Private Limited6.

According to the appellant(s), even otherwise the decisions

considered by the High Court to hold against the appellant(s)

that the suit(s) filed by them were barred by Section 34 of 2002

Act were in applicable to the fact situation of the present case

being a case of third party claiming right under an agreement

which has the statutory protection under the provisions of The

Maharashtra Ownership Flats (Regulation of the  Promotion of

Construction,  Sale,  Management  and  Transfer)  Act,  1963 (for

short “1963 Act”). The appellant(s) would also urge that the bar

under Section 34 has no bearing on the subject matter of the

suit filed by the respective appellant(s) and the nature of reliefs

claimed by them including against respondent No.1­bank. The

presence of respondent No.1 in the said suit would be proper,

even  if  not  a  necessary  party. It is  urged  that the impugned

judgment cannot be countenanced.  

6 (2018) 11 SCC 780

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10. Per contra,  respondent No.1­bank would urge that the

Division Bench was justified in allowing the notice of motion filed

by respondent No.1­bank to reject the plaint qua the bank being

barred  by  Section 34  of the  2002 Act.  According to the  said

respondent, the appellant(s) are not genuine home buyers but

are investors of developers i.e. Orbit Corporation Ltd. (In Liq.).

Due to the close acquaintance/business relationship, the

concerned appellant(s) took commercial unsecured risk by

purportedly investing huge amount under the guise of

purchasing flats and entered into transactions which were

contrary to the provisions of  1963 Act.  Thus,  the appellant(s)

cannot claim  any right  merely on the  basis of a self­serving

allotment letter pertaining to the concerned flat, purportedly

given by the builder.  Noticeably, contends learned counsel  for

respondent No.1 that  the averments  in the plaint(s)  regarding

allegation of fraud played upon the appellant(s) are vague and

general. The same are baseless and unsubstantiated. Rather, no

case can be culled out from the averments in the plaint so as to

hold that the suit filed by the concerned appellant(s) comes

within the excepted category predicated in  Mardia Chemicals

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Ltd.  (supra). Respondent No.1 has supported the impugned

judgment  of the  Division  Bench and  would contend that the

bank is not a necessary or even a proper party to suit for specific

performance of the alleged agreement and including in relation

to alternative relief of damages claimed against the developers.  

11. We do not deem it necessary to elaborate on all other

arguments as  we are inclined to accept the objection of the

appellant(s) that the  relief  of rejection of  plaint in  exercise  of

powers under Order 7 Rule 11(d) of CPC cannot be pursued only

in respect of one of the defendant(s). In other words, the plaint

has to be rejected as a whole or not at all, in exercise of power

Order 7 Rule 11 (d) of  CPC. Indeed, the learned Single Judge

rejected this objection raised by the appellant(s) by relying on

the decision of the  Division  Bench of the same  High  Court.

However, we find that the decision of this Court in the case of

Sejal  Glass Limited  (supra) is  directly  on  the  point. In that

case, an application was filed by the defendant(s) under Order 7

Rule 11(d) of CPC stating that the plaint disclosed no cause of

action. The civil court held that the plaint is to be bifurcated as

it did  not  disclose  any cause of action  against the  director’s

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defendant(s) 2 to 4 therein. On that basis, the High Court had

opined that the suit can continue against defendant No.1­

company alone. The question considered by this Court was

whether such a course is open to the civil court in exercise of

powers under Order 7 Rule 11(d) of CPC. The Court answered

the said question in the negative by adverting to several

decisions on the point  which  had consistently held that the

plaint can either be rejected as a whole or not at all. The Court

held that it is not permissible to reject plaint qua any particular

portion of  a plaint  including against some of the defendant(s)

and continue the same against the others. In no uncertain terms

the Court  has  held  that if the plaint  survives against  certain

defendant(s) and/or properties, Order 7 Rule 11(d) of CPC will

have no application at all, and the suit as a whole must then

proceed to trial.  

12. In view of this settled legal position we may now turn to the

nature  of reliefs claimed by  respondent  No.1 in the  notice  of

motion considered by the Single Judge in the first instance and

then the  Division  Bench of the  High  Court of Bombay. The

principal or singular substantive relief is to reject the plaint only

qua the applicant/respondent No.1 herein. No more and no less.

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13. Indubitably, the plaint can and must be rejected in exercise

of powers under Order 7 Rule 11(d) of CPC on account of non­

compliance of mandatory requirements or being replete with any

institutional deficiency at the time of presentation of the plaint,

ascribable to clauses (a) to (f) of Rule 11 of Order 7 of CPC. In

other words, the plaint as presented must proceed as a whole or

can be rejected as a whole but not in part. In that sense, the

relief claimed by respondent  No.1 in the notice of  motion(s)

which commended to the High Court, is clearly a jurisdictional

error. The fact that one or some of the reliefs claimed against

respondent No.1 in the concerned suit is barred by Section 34 of

2002 Act or otherwise, such objection can be raised by invoking

other remedies including under Order 6 Rule 16 of CPC at the

appropriate stage. That can be considered by the Court on its

own  merits and in accordance  with law.  Although, the  High

Court has examined those matters in the impugned judgment

the same, in our opinion,  should stand effaced and we order

accordingly.  

14. Resultantly, we do not wish to dilate on the argument of the

appellant(s) about the inapplicability of the judgments taken into

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account  by the  Division Bench of the  High Court  or for that

matter the correctness of the dictum in the concerned judgment

on the principle underlying the exposition in Nahar Industrial

Enterprises Limited Vs. Hong Kong and Shanghai Banking

Corporation7  to the effect that the DRT and also the appellate

authority cannot pass a decree nor it is open to it to enter upon

determination in respect of matters beyond the scope of power or

jurisdiction endowed in terms of Section 17 of the 2002 Act. We

leave all questions open to be decided afresh on its own merits in

accordance with law.  

15. A fortiori, these appeals must succeed on the sole ground

that the principal relief claimed in the notice of motion filed by

respondent No.1 to reject the plaint only qua the said

respondent and which commended to the High Court, is replete

with jurisdictional error. Such a relief “cannot be entertained” in

exercise of power under Order 7 Rule 11(d) of CPC. That power is

limited to rejection of the plaint as a whole or not at all.   

       16. In view of the above, these appeals are allowed. Resultantly,

the impugned judgment and order of the Division Bench of the

7 (2009) 8 SCC 646

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High Court in the concerned appeals are set­aside and instead

the order of the learned Single Judge dismissing the notice of

motion(s) in the concerned suit(s), is restored. Thus, the notice of

motion taken out by respondent No.1 in the concerned suit(s)

are dismissed with liberty to respondent No.1, as

aforementioned. All pending interim applications are also

disposed of. No order as to costs.   

     ……………………………..J       (A.M. Khanwilkar)

     ……………………………..J       (Ajay Rastogi)

New Delhi; July 01, 2019.