Delhi High Court
Amrit Environmental Technologies … vs Union Of India on 15 July, 2026
$~
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on: 17th April, 2026
Pronounced on: 15th July, 2026
+ CS(OS) 200/2024, I.A. 39173/2024 & I.A. 39980/2024
AMRIT ENVIRONMENTAL TECHNOLOGIES PRIVATE
LIMITED .....Plaintiff
Through: Mr. Manish Kaushik and Mr. Mishal
Johari, Advs.
versus
UNION OF INDIA .....Defendant
Through: Ms. Radhika Bishwajit Dubey, CGSC
with Ms. Gurleen Kaur Waraich, Mr.
Kritarth Upadhyay, Mr. Vivek Sharma
and Mr. Amulya Mishra, Advs. for
UOI
CORAM:
HON'BLE MS. JUSTICE MINI PUSHKARNA
JUDGMENT
I.A. 39173/2024 (Under Order VII Rule 11 read with Section 151 of the
Code of Civil Procedure, 1908)
INTRODUCTION:
1. The present suit has been filed seeking recovery of interest amount
from 01st December, 2012 till 31st August, 2023 to the tune of Rs.
2,53,70,525/- (Rs. Two Crores Fifty-Three Lacs Seventy Thousand Five
Hundred Twenty-Five Only), on the ground of inordinate delay in releasing,
and unlawfully withholding, the interest subsidy amount of Rs. 1,96,67,074/-
(Rupees One Crore Ninety-Six Lacs Sixty-Seven Thousand Seventy-Four
Only) (“interest subsidy amount”), payable by the defendant to the
Signature Not Verified
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plaintiff company, in terms of the Notification bearing No. 3/4/2003-CPG
dated 21st July, 2003 (“Notification”), along with compound interest at
monthly rests at the rate of 12% per annum, till the date of payment of the
interest.
2. The present application has been filed on behalf of the defendant
under Order VII Rule 11 of the Code of Civil Procedure, 1908 (“CPC“),
seeking rejection of the plaint on the grounds that the suit is not maintainable
for, inter-alia, non-disclosure of any subsisting cause of action, and for being
barred by limitation.
FACTUAL MATRIX:
3. The facts in brief, as given in the plaint, are as follows:
3.1 The defendant had issued the Notification dated 21st July, 2003, for
providing interest subsidy amounts at the rate of 2%, to biomass-based
power projects, subject to a maximum of Rs. 02 Crores, per project. The said
scheme contemplated central financial assistance in the form of grants-in-
aid, and subsidies under the Biomass Energy and Co-generation
Programmes.
3.2 Pursuant to the aforesaid Notification dated 21st July, 2003, the
plaintiff established a Biomass Power Plant of 7.5 MW capacity at RIICO
Industrial Area, Keshwana, Kotputli, District Jaipur, Rajasthan.
3.3 On 12th November, 2005, the State Bank of India, Commercial
Branch, Indore (“SBI Indore”) sanctioned a term loan in favour of the
plaintiff for an amount of Rs. 20,90,00,000/- (Rupees Twenty Crores Ninety
Lacs Only), which was subsequently increased to Rs. 21,90,00,000/-
(Rupees Twenty-One Crores Ninety Lacs Only) on account of an additional
term loan. On 19th December, 2005, the State Bank of Mysore, Indore
Branch sanctioned a further loan of Rs. 8,40,00,000/- (Rupees Eight Crores
Forty Lacs Only) in favour of the plaintiff.
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3.4 Thereafter, the plaintiff informed SBI Indore that it was eligible and
qualified for seeking benefit of interest subsidy amounts under the
Notification dated 21st July, 2003. The plaintiff also forwarded the requisite
papers to the defendant, through SBI Indore. On 30th October, 2006,
Rajasthan Rajya Vidyut Parasaran Limited (“RRVPL”) issued a
communication certifying commissioning of the plaintiff’s Biomass Power
Plant.
3.5 Since the interest subsidy amounts were not released by the defendant,
the plaintiff filed a writ petition being W.P.(C) 353/2008 before this Court,
seeking grant of the interest subsidy amounts, in terms of the Notification
dated 21st July, 2003. The said writ petition was disposed of vide judgment
dated 18th February, 2011, whereby, directions were issued to SBI Indore to
furnish requisite information/documentation to the defendant for the purpose
of grant of interest subsidy amount at the rate of 2% to the plaintiff.
Furthermore, the defendant was directed to take a decision regarding grant of
interest subsidy amount to the plaintiff in terms of the Notification dated 21st
July, 2003.
3.6 The defendant challenged the aforesaid judgment dated 18th February,
2011 by way of an intra-court appeal bearing LPA 435/2011, which came to
be dismissed as withdrawn vide order dated 16th May, 2011.
3.7 Thereafter, the defendant filed an application being CM 10532/2011
seeking modification of the judgment dated 18th February, 2011. The Court,
vide order dated 10th August, 2011, noted that the said application was
misconceived and hence, dismissed the same.
3.8 Subsequently, the defendant rejected the request of the plaintiff for
grant of interest subsidy amount vide letter dated 11th August, 2011.
Aggrieved thereby, the plaintiff filed another writ petition being W.P.(C)
8070/2011 before this Court.
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3.9 During the pendency of W.P.(C) 8070/2011, the defendant issued
another letter dated 18th October, 2012 stating that it had no objection in
considering the plaintiff’s case within the framework of the Notification
dated 21st July, 2003. In view thereof, W.P.(C) 8070/2011 came to be
disposed of, as not pressed vide order dated 19th October, 2012.
3.10 Pursuant thereto, SBI Indore submitted a fresh interest subsidy claim,
along with calculations and supporting documents, to the defendant vide
communication dated 26th October, 2012.
3.11 Since the interest subsidy amounts continued to remain unreleased,
various communications and legal notices came to be exchanged between
the parties. In the year 2014, a Committee chaired by Dr. N.P Singh was
constituted by the defendant – Ministry of New and Renewable Energy
(“MNRE”), for consideration of the plaintiff’s request for release of interest
subsidy amount.
3.12 It is pertinent to note that by the year 2014, the Biomass Power Plant
of the plaintiff had become non-operational. On 29th April, 2014, the
Committee stipulated that the plaintiff’s Biomass Power Plant be made
operational, prior to release of the interest subsidy amounts. However, no
such condition had been provided for under the Notification dated 21st July,
2003.
3.13 Subsequently, the defendant sought operational data of the plaintiff’s
project for a period of three years, after commissioning of the Biomass
Power Plant of the plaintiff, and the same was supplied by the plaintiff
company. Accordingly, by way of Sanction Order No. 4/1/2008-CPG dated
01st October, 2014 (“Sanction Order”), the defendant disbursed the interest
subsidy amount, i.e., Rs. 1,96,67,074/- (Rupees One Crore Ninety-Six Lacs
Sixty-Seven Thousand Seventy-Four Only) to SBI Indore.
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3.14 In terms of the record before this Court, disputes thereafter arose
between the parties regarding disbursal of the interest subsidy amount to the
plaintiff.
3.15 The plaintiff company issued a legal notice dated 02nd February, 2015,
to SBI Indore and the MNRE, seeking release of the interest subsidy
amounts as per the Notification. SBI Indore issued a reply to the said legal
notice on 09th March, 2015, claiming that it had no objection in disbursing
the interest subsidy amount if the Biomass Power Plant of the plaintiff is
made operational.
3.16 On 11th June, 2015, SBI Indore returned the interest subsidy amount to
the defendant. The plaintiff filed an application dated 16th June, 2015, under
the Right to Information Act, 2005 (“RTI Act“), seeking reasons for return
of the interest subsidy amount to the defendant. Thereafter, SBI Indore, vide
letter dated 08th July, 2015, stated that the interest subsidy amount had been
returned to the defendant on 11th June, 2015, owing to the absence of any
confirmation from the plaintiff as to whether their Biomass Power Plant had
been made operational.
3.17 Aggrieved thereby, the plaintiff filed another writ petition being
W.P.(C) 8827/2015 before this Court, seeking release of the subsidy amount
under the Notification dated 21st July, 2003.
3.18 In the meanwhile, vide reply dated 20th December, 2016 by SBI
Indore to the RTI application, the plaintiff was provided with a letter dated
19th May, 2015 of the defendant, wherein, the interest subsidy amount, as
released to SBI Indore, was sought back by the defendant, along with
interest, in case the Biomass Power Plant of the plaintiff was not made
operational.
3.19 During pendency of W.P.(C) 8827/2015, the defendant issued a
communication dated 26th April, 2023 to the plaintiff, stating therein that the
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interest subsidy amount payable to the plaintiff in terms of the Notification
would be disbursed. It is pertinent to note that the amount mentioned in the
said communication was Rs. 1,96,67,074/- (Rupees One Crore Ninety-Six
Lacs Sixty-Seven Thousand Seventy-Four Only). In view of the aforesaid
communication by the defendant, the plaintiff herein, i.e., the petitioner in
W.P.(C) 8827/2015, was satisfied and the aforesaid writ petition came to be
dismissed as withdrawn vide order dated 17th May, 2023.
3.20 Pursuant to the aforesaid communication by the defendant and
withdrawal of the writ petition, the interest subsidy amount of Rs.
1,96,67,074/- (Rupees One Crore Ninety-Six Lacs Sixty-Seven Thousand
Seventy-Four Only), came to be released to the plaintiff on 31st August,
2023.
3.21 However, the plaintiff has thereafter instituted the present suit against
the defendant, seeking recovery of interest on the interest subsidy amount,
on account of alleged delay in release of the same.
SUBMISSIONS OF THE PARTIES:
4. For the purpose of the present application, the defendant has made the
following submissions:
4.1 The plaint neither discloses any subsisting cause of action nor raises
any legally enforceable claim against the defendant. The present suit has
been instituted only with a view to create an illusory cause of action, and is
also barred by limitation.
4.2 While considering an application under Order VII Rule 11 of CPC, the
Court is required to examine the plaint as a whole, along with the documents
filed by the plaintiff itself. From a meaningful reading of the plaint and the
documents annexed thereto, if the suit is found to be barred by law or fails to
disclose any real cause of action, the plaint is liable to be rejected at the
threshold itself.
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4.3 The plaintiff has approached this Court by suppressing material facts
and by presenting an incomplete and misleading narration of the litigation
history between the parties, and as such, is guilty of supressio veri and
suggestio falsi. The plaint fails to disclose that the plaintiff had accepted the
interest subsidy amount of Rs. 1,96,67,074/- (Rupees One Crore Ninety-Six
Lacs Sixty-Seven Thousand Seventy-Four Only), without any protest or
demur. The plaintiff herein had withdrawn the earlier writ petition, i.e.,
W.P.(C) 8827/2015, vide order dated 17th May, 2023, upon being satisfied
with the letter dated 26th April, 2023, issued by the MNRE, i.e., the
defendant herein.
4.4 The aforesaid order dated 17th May, 2023, specifically records that
upon being satisfied with the letter dated 26th April, 2023, learned counsel
for the petitioner therein sought leave to withdraw the writ petition. Further,
the aforesaid order has never been challenged by the plaintiff, and has now
attained finality.
4.5 The plaintiff thereafter accepted the interest subsidy amounts on 31st
August, 2023, without any reservation of rights or seeking liberty from this
Court to pursue any separate proceedings for interest on the delayed
payment. Thus, once the plaintiff accepted the principal amount
unconditionally, and permitted the earlier writ proceedings to attain finality,
the plaintiff is now estopped from instituting the present suit seeking interest
upon the same amount.
4.6 The present suit is barred by the principles of waiver, acquiescence
and estoppel as where a party, despite being fully aware of its rights,
consciously elects not to enforce the same, and accepts the benefits arising
out of a transaction without protest, the party would be prevented by the
principles of waiver and acquiescence to enforce such rights. Further, once
relief has been accepted without protest, and the earlier proceedings have
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been withdrawn, subsequent proceedings, seeking additional relief arising
from the same cause of action, would not be maintainable.
4.7 The plaintiff had multiple opportunities in the earlier writ proceedings
to seek all consequential reliefs, including, interest arising out of the alleged
delay in release of the interest subsidy amounts. However, despite full
knowledge of the alleged delay, the plaintiff consciously chose not to claim
any interest in any of the earlier proceedings, i.e., W.P.(C) 353/2008, W.P.(C)
8070/2011 and W.P.(C) 8827/2015.
4.8 Even the legal notices issued by the plaintiff over the years primarily
sought implementation of the orders passed in the writ proceedings, and
release of the interest subsidy amount.
4.9 The legal notice dated 05th January, 2013, issued by the plaintiff, did
not contain any claim for interest on delay, whatsoever. Interest on delay was
sought for the first time vide legal notice dated 08th August, 2014.
4.10 However, even in the said notice, interest had not been sought for the
delay occasioned from 01st December, 2012, as is being sought by way of the
present suit. Rather, the plaintiff had sought interest for the delay caused in
payment of interest subsidy amounts, after issuance of the said legal notice
dated 08th August, 2014. It is pertinent to note that the aforesaid legal notice
dated 08th August, 2014, itself stood withdrawn vide another legal notice
dated 16th September, 2014 issued by the plaintiff subsequently.
4.11 In the present suit, contrary to the legal notice dated 08th August,
2014, the plaintiff has wrongly calculated interest from 01st December, 2012,
inflating the valuation of the suit. Accordingly, the present suit is also liable
to be rejected on the ground of lack of pecuniary jurisdiction.
4.12 The plaintiff issued another legal notice dated 02nd February, 2015
directing the defendant to comply with the orders dated 18th February, 2011
and 19th October, 2012 of this Court in W.P.(C) 353/2008 and W.P.(C)
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8070/2011, respectively. Furthermore, vide the said legal notice, the plaintiff
also sought simple interest at the rate 12% per annum on the interest subsidy
amounts, without disclosing any specific period for claim of such interest.
Moreover, under Section 3(1)(b) of the Interest Act, 1978 (“Interest Act“),
in the absence of any written contract thereto, interest can be claimed only
from the date of issuance of a written notice demanding such interest.
4.13 It was only after the interest subsidy amount stood released and
accepted by the plaintiff on 31st August, 2023, that the plaintiff, for the first
time, issued a legal notice dated 16th December, 2023, claiming interest from
01st December, 2012 till 31st August, 2023, i.e., the date of realization of
interest subsidy amount, along with compound interest with monthly rests at
the rate of 12% per annum. The present suit is, thus, an afterthought and a
clear attempt to create an artificial cause of action, after unconditional
acceptance of the interest subsidy amount.
4.14 The plaintiff is further guilty of improvising its case by seeking
compound interest with monthly rests at the rate of 12% per annum through
the present suit, whereas, vide the legal notice dated 02nd February, 2015, the
plaintiff had only sought simple interest at the rate of 12% per annum. The
notices, prior to the legal notice dated 16th December, 2023, at best referred
to simple interest, and therefore, the present claim for compound interest is
wholly unsupported, by the Notification dated 21st July, 2003, or by law.
4.15 The present suit is also barred under Order II Rule 2 of the CPC, as
the claim for interest arises out of the same transaction, namely, the alleged
delayed release of interest subsidy amount, which formed the basis of the
earlier writ petitions instituted by the plaintiff. Having omitted to claim such
relief in the earlier proceedings, and having failed to obtain liberty from the
Court to institute fresh proceedings, the plaintiff cannot be permitted to re-
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agitate issues arising out of earlier writ proceedings, by instituting a separate
civil suit.
4.16 Had the plaintiff been aggrieved by the order dated 17th May, 2023
passed in W.P.(C) 8827/2015, the appropriate remedy available to the
plaintiff was either to seek review of the said order, or to prefer an appeal
against the said order. The plaintiff cannot now circumvent the finality
attached to the earlier proceedings, by instituting the present suit.
4.17 The plaintiff’s contention that the cause of action to claim interest
arose only upon receipt of the interest subsidy amount on 31st August, 2023,
is wholly misconceived and contrary to settled principles of law, as the
“right to sue” accrues when there is a clear and unequivocal infringement of
a right. Even according to the plaintiff, the alleged delay in release of
interest subsidy amount commenced during the years 2006-2007, and
therefore, the alleged cause of action, if any, arose at that stage itself, and not
upon the release of the interest subsidy amount by the defendant in the year
2023.
4.18 The Notification dated 21st July, 2003, which forms the very basis of
the plaintiff’s claim, does not contain any provision entitling the plaintiff to
claim interest on delayed disbursement of the interest subsidy amount. The
Notification does not contemplate payment of any compensation, damages
or interest in the event of delay, as the subsidy contemplated is in the nature
of grants-in-aid, and is not a commercial transaction. Therefore, in the
absence of any statutory or contractual provision, no legally enforceable
right exists in favour of the plaintiff to claim interest, upon the alleged delay
in release of interest subsidy amount.
4.19 The delay, if any, in processing the interest subsidy amount cannot be
attributed to the defendant, as the same occurred due to various factors,
including, change in the management of the plaintiff company, failure on the
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part of SBI Indore, being the lead bank, to furnish requisite documents, and
withdrawal of the subsidy for biomass-based power projects with effect from
26th December, 2006.
4.20 The interest subsidy amount had already been released by the
defendant to SBI Indore vide communication dated 01st October, 2014.
Reliance is placed upon the communication dated 09th March, 2015 issued
by SBI Indore, wherein, it is stated that the interest subsidy amount was
being held in the form of a fixed deposit (“FD”), and would be released
subject to compliance by the plaintiff. Thus, the amount had been retained
by SBI Indore due to plaintiff’s non-compliance, and the same cannot be
attributed to the defendant.
4.21 The plaintiff has deliberately suppressed the aforesaid facts, and has
falsely attempted to attribute the entire delay to the defendant. Thus, the
present suit is not only misconceived, but also constitutes an abuse of the
process of Court.
4.22 The plaint is wholly vexatious, illusory and barred by law, and hence,
the present application deserves to be allowed, and the present suit is liable
to be rejected under Order VII Rule 11 of CPC, along with exemplary costs.
5. Per contra, the plaintiff in its reply to the present application, has
opposed the same by making the following submissions:
5.1 The plaint, read as a whole, clearly discloses a complete and
subsisting cause of action. The defendant, under the guise of the present
application under Order VII Rule 11 of CPC, seeks adjudication upon
disputed questions of fact and merits of the present case, which is
impermissible at this stage.
5.2 The plaintiff was entitled to interest subsidy amount of Rs.
1,96,67,074/- (Rupees One Crore Ninety-Six Lacs Sixty-Seven Thousand
Seventy-Four Only) under the Notification dated 21st July, 2003, issued by
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the defendant. The plaintiff applied for grant of the subsidy on 18th July,
2006, and fulfilled all eligibility conditions thereto. Despite repeated
findings in favour of the plaintiff in earlier rounds of litigation, the defendant
failed to release the interest subsidy amount for nearly seventeen years, and
ultimately disbursed the same only on 31st August, 2023.
5.3 The present suit does not pertain to the principal amount, which
already stands released. The gravamen of the present suit is the loss and
injury caused to the plaintiff due to prolonged deprivation of funds from 01st
December, 2012 till 31st August, 2023.
5.4 The plaintiff received the interest subsidy amount that it was legally
entitled to receive, after an inordinate delay of seventeen years. The
defendant has not provided any compensation for the impact of inflation and
deprivation of funds faced by the plaintiff, during the said period of delay.
5.5 At the stage of considering an application under Order VII Rule 11 of
CPC, this Court is only required to examine whether the plaint discloses a
cause of action, and not whether the plaintiff is ultimately likely to succeed
in the suit. The averments made in the plaint are required to be taken as
being correct for the purpose of the present application, and in light thereof,
the present plaint prima facie raises a triable issue, as to whether the
defendant has validly discharged the due amount, without accounting for the
inordinate delay in the form of compensation.
5.6 The plaintiff had established a 7.5 MW Biomass Power Plant upon the
legitimate expectation arising from the Notification dated 21st July, 2003.
The subsidy under the said Notification was intended to reduce the burden of
interest on project financing. However, due to non-release of the interest
subsidy amount, the plaintiff was compelled to service and repay its loan
liabilities to SBI Indore and State Bank of Mysore from its own resources.
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5.7 Had the interest subsidy amount been released within a reasonable
period of time, the same would have been adjusted against the loan accounts
of the plaintiff, substantially reducing the interest burden payable to the
banks. By the time the interest subsidy amount was eventually released, the
plaintiff had already repaid the entire loan amount, along with interest. Thus,
the very purpose and economic utility of the subsidy scheme stood frustrated
due to delayed disbursal.
5.8 The conduct of the defendant itself demonstrates that retention of
money necessarily carries an element of interest. After release of subsidy
amount to SBI Indore vide Sanction Order dated 01st October, 2014, the
defendant subsequently sought recall of the said amount, along with interest.
Thus, the defendant itself claimed interest upon retention of money by SBI
Indore. Likewise, the plaintiff is equally entitled to compensation for
wrongful withholding of the interest subsidy amount by the defendant, for
nearly seventeen years.
5.9 The plaint specifically narrates the prolonged history of litigation
undertaken by the plaintiff to secure release of the interest subsidy amount.
This Court directed release of the interest subsidy amount vide order dated
18th February, 2011 in W.P.(C) 353/2008. Despite the same, the defendant
failed to release the amount, continued to shift stands and impose conditions
dehors the Notification dated 21st July, 2003, thereby, compelling the
plaintiff to institute further proceedings, including, W.P.(C) 8070/2011 and
W.P.(C) 8827/2015.
5.10 After release of the interest subsidy amount to SBI Indore in the year
2014, the defendant sought to impose fresh conditions requiring operational
status of the plaintiff’s Biomass Power Plant, even though such conditions
were not stipulated under the Notification dated 21st July, 2003.
Subsequently, the defendant recalled the interest subsidy amount from SBI
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Indore, along with interest. Thus, the delay in releasing the interest subsidy
amount is attributable to the defendant, and such arbitrary conduct of the
defendant resulted in continued unlawful deprivation of plaintiff’s legitimate
entitlement, while the defendant itself sought interest over the interest
subsidy amount.
5.11 The cause of action for the present suit arose only upon release of the
interest subsidy amount on 31st August, 2023, by the defendant without any
compensatory adjustment for the prolonged delay. It is only after the
clearance of the due interest subsidy amounts that the final claim upon the
accrued amount for the purpose of compensation could be materialised.
5.12 The present suit arises from a distinct and independent injury, namely,
deprivation of use of money for an unreasonable period. Therefore, the suit
has been filed within the limitation period.
5.13 The defendant’s contention regarding absence of an express clause for
payment of interest under the Notification dated 21st July, 2003, is legally
untenable as the plaintiff’s claim is not founded upon contractual interest,
but upon settled principles of equity, restitution and compensatory justice.
5.14 Wrongful detention of money, which is legally due, gives rise to a
valid claim for compensatory interest, even in the absence of express
contractual or statutory stipulations, as interest constitutes compensation for
delayed payment, and offsets decline in value of money over time.
5.15 Issues of limitation and cause of action constitute mixed questions of
law and fact, which cannot be conclusively adjudicated in an application
under Order VII Rule 11 of CPC. For the purpose of deciding the present
application, only averments contained in the plaint are required to be
considered, and the same are deemed to be correct. So long the plaint
discloses triable issues, rejection thereof is impermissible.
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5.16 Defendant’s allegations regarding suppression of facts are vague and
unsupported by any particulars. All relevant facts concerning earlier
proceedings, correspondences and release of interest subsidy amount have
been specifically disclosed in the plaint itself.
5.17 Non-claim of interest in earlier writ proceedings does not bar
institution of the present suit. The earlier writ petitions concerned release of
the interest subsidy amount itself, whereas, the present suit concerns
compensation arising out of prolonged deprivation of money. Thus, the
present cause of action is distinct and independent from the earlier writ
proceedings. Moreover, the earlier writ proceedings did not culminate in any
adjudication upon the entitlement of the plaintiff to compensatory interest,
and therefore, neither the principles of res judicata nor constructive res
judicata would apply in the present case.
5.18 Claims involving compensation and quantification of monetary loss
ordinarily require appreciation of evidence, and fall outside the limited scope
of writ jurisdiction.
5.19 The defendant seeks a mini-trial under the guise of the present
application by inviting this Court to examine the merits of the plaintiff’s
claim and disputed factual issues. Such an exercise is wholly beyond the
scope of Order VII Rule 11 of CPC.
5.20 The present application under Order VII Rule 11 of CPC deserves to
be dismissed as the present plaint discloses substantial triable issues, which
require adjudication after leading of evidence.
FINDINGS AND ANALYSIS:
6. This Court has heard learned counsels for the parties, and has perused
the plaint as well as the documents filed therewith.
7. It is a settled principle of law that the Courts, while considering an
application under Order VII Rule 11 of CPC, are required to examine the
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plaint as a whole, along with the documents filed by the plaintiff. The Courts
are vested with a narrow scope of scrutiny while examining an application
under Order VII Rule 11(a) of CPC. This means that without considering the
likelihood of success of the suit, the Courts are required to examine whether
the plaint discloses a valid cause of action. The Courts cannot go into the
question of whether the cause of action alleged in the plaint is true or false.
8. Where from a meaningful reading of the plaint and the documents
annexed thereto, the plaint is found to disclose no real cause of action, then
the Courts are empowered to reject the plaint at the threshold itself. In an
application under Order VII Rule 11(a) of CPC, the Court has to decide
whether the cause of action alleged in the plaint is real, or whether the plaint
has been drafted in an intelligent manner to camouflage an illusory cause of
action as a real cause of action. A cause of action alleged in the plaint as
being illusory, is different from the cause of action alleged in the plaint as
being false. The former is liable to be rejected by the Court in an application
under Order VII Rule 11(a) of CPC.
9. In this regard, reference may be made to the judgment of the Supreme
Court in the case of Dahiben Versus Arvindbhai Kalyanji Bhanusali
(Gajra) And Others, (2020) 7 SCC 366, wherein, the Supreme Court while
elaborating upon the object of Order VII Rule 11(a) of CPC, held that if the
cause of action is not disclosed in the plaint, the Court must reject the plaint
without giving unnecessary time to the plaintiff. Furthermore, it was held
that if, on a meaningful reading of the plaint, it is found out that the suit is
manifestly vexatious, without any merit or does not disclose any “right to
sue”, the same would lead to rejection of the plaint. The Court must examine
the plaint, in conjunction with the documents relied upon by the plaintiff,
and if it is prima facie found that clever drafting has been done to create an
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illusory cause of action, the Court is bound to reject the plaint. The relevant
paragraphs from the said judgment are extracted as below:
“xxx xxx xxx
23.3. The underlying object of Order 7 Rule 11(a) is that if in a
suit, no cause of action is disclosed, or the suit is barred by
limitation under Rule 11(d), the court would not permit the
plaintiff to unnecessarily protract the proceedings in the suit. In
such a case, it would be necessary to put an end to the sham
litigation, so that further judicial time is not wasted.
xxx xxx xxx
23.13. If on a meaningful reading of the plaint, it is found that
the suit is manifestly vexatious and without any merit, and does
not disclose a right to sue, the court would be justified in
exercising the power under Order 7 Rule 11 CPC.
23.14. The power under Order 7 Rule 11 CPC may be exercised
by the court at any stage of the suit, either before registering the
plaint, or after issuing summons to the defendant, or before
conclusion of the trial, as held by this Court in the judgment of
Saleem Bhai v. State of Maharashtra. The plea that once issues
are framed, the matter must necessarily go to trial was repelled
by this Court in Azhar Hussain case.
23.15. The provision of Order 7 Rule 11 is mandatory in nature.
It states that the plaint “shall” be rejected if any of the grounds
specified in clauses (a) to (e) are made out. If the court finds
that the plaint does not disclose a cause of action, or that the suit
is barred by any law, the court has no option, but to reject the
plaint.
xxx xxx xxx
24.2. In T. Arivandandam v. T.V. Satyapal this Court held that
while considering an application under Order 7 Rule 11 CPC
what is required to be decided is whether the plaint discloses a
real cause of action, or something purely illusory, in the
following words : (SCC p. 470, para 5)
“5. … The learned Munsif must remember that if on a
meaningful–not formal–reading of the plaint it is
manifestly vexatious, and meritless, in the sense of not
disclosing a clear right to sue, he should exercise his
power under Order 7 Rule 11 CPC taking care to see that
the ground mentioned therein is fulfilled. And, if cleverSignature Not Verified
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drafting has created the illusion of a cause of action, nip
it in the bud at the first hearing….”
24.3. Subsequently, in ITC Ltd. v. Debts Recovery Appellate
Tribunal this Court held that law cannot permit clever drafting
which creates illusions of a cause of action. What is required is
that a clear right must be made out in the plaint.
24.4. If, however, by clever drafting of the plaint, it has created
the illusion of a cause of action, this Court in Madanuri Sri
Rama Chandra Murthy v. Syed Jalal held that it should be
nipped in the bud, so that bogus litigation will end at the earliest
stage. The Court must be vigilant against any camouflage or
suppression, and determine whether the litigation is utterly
vexatious, and an abuse of the process of the court.
xxx xxx xxx”
(Emphasis Supplied)
10. Likewise, in the case of Rajendra Bajoria And Others Versus
Hemant Kumar Jalan And Others (2022) 12 SCC 641, the Supreme Court
has held that it is the duty of the Court to determine whether the plaint
disclosed a cause of action, by scrutinizing the averments in the plaint, read
with the documents relied upon, or whether the suit is barred by any law.
Further, it was held that when the plaint does not disclose a cause of action,
the Court would not permit the plaintiff to unnecessarily prolong the
proceedings. The Supreme Court also emphasized that the reliefs sought
must flow from, and should be the culmination of the cause of action
pleaded in the plaint and if no relief can be granted to the plaintiff under the
law, the suit should be thrown out at the threshold/the plaint must be
rejected. Accordingly, it was held as under:
“xxx xxx xxx
15. It could thus be seen that this Court has held that reading
of the averments made in the plaint should not only be formal
but also meaningful. It has been held that if clever drafting has
created the illusion of a cause of action, and a meaningful
reading thereof would show that the pleadings are manifestly
vexatious and meritless, in the sense of not disclosing a clear
right to sue, then the court should exercise its power under
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Order 7 Rule 11 CPC. It has been held that such a suit has to
be nipped in the bud at the first hearing itself.
xxx xxx xxx
17. It could thus be seen that the court has to find out as to
whether in the background of the facts, the relief, as claimed in
the plaint, can be granted to the plaintiff. It has been held that
if the court finds that none of the reliefs sought in the plaint
can be granted to the plaintiff under the law, the question then
arises is as to whether such a suit is to be allowed to continue
and go for trial. This Court answered the said question by
holding that such a suit should be thrown out at the threshold.
This Court, therefore, upheld the order passed by the trial court
of rejecting the suit and that of the appellate court, thereby
affirming the decision of the trial court. This Court set aside
the order passed by the High Court, wherein the High Court
had set aside the concurrent orders of the trial court and the
appellate court and had restored and remanded the suit for
trial to the trial court.
18. Therefore, the question that will have to be considered is as
to whether the reliefs as claimed in the plaint by the plaintiffs
could be granted or not. We do not propose to do that exercise,
inasmuch as the Division Bench of the High Court has
elaborately considered the issue as to whether, applying the
provisions of the said Act read with the aforesaid clauses in the
partnership deed, the reliefs, as claimed in the plaint, could be
granted or not. The relevant discussion by the High Court reads
thus : (Hemant Kumar Jalan case, SCC OnLine Cal paras 32-
37)
xxx xxx xxx
37. What should the Court do if it finds that even taking the
averments in the plaint at face value, not one of the reliefs
claimed in the plaint can be granted? Should the Court send
the parties to trial? We think not. It will be an exercise in
futility. It will be a waste of time, money and energy for both
the plaintiffs and the defendants as well as unnecessary
consumption of Court’s time. It will not be fair to compel the
defendants to go through the ordinarily long drawn process of
trial of a suit at huge expense, not to speak of the anxiety and
un-peace of mind caused by a litigation hanging over one’s
head like the Damocles’s sword. No purpose will be served by
allowing the suit to proceed to trial since the prayers as
framed cannot be allowed on the basis of the pleadings in the
plaint. The plaintiffs have not prayed for leave to amend the
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plaint. When the court is of the view just by reading the plaint
alone and assuming the averments made in the plaint to be
correct that none of the reliefs claimed can be granted in law
since the plaintiffs are not entitled to claim such reliefs, the
Court should reject the plaint as disclosing no cause of action.
The reliefs claimed in a plaint flow from and are the
culmination of the cause of action pleaded in the plaint. The
cause of action pleaded and the prayers made in a plaint are
inextricably intertwined. In the present case, the cause of
action pleaded and the reliefs claimed are not recognised by
the law of the land. Such a suit should not be kept alive to go
to trial.”
(emphasis in original)
xxx xxx xxx
20. It could thus be seen that this Court has held that the power
conferred on the court to terminate a civil action is a drastic one,
and the conditions enumerated under Order 7 Rule 11 CPC are
required to be strictly adhered to. However, under Order 7 Rule
11 CPC, the duty is cast upon the court to determine whether
the plaint discloses a cause of action, by scrutinising the
averments in the plaint, read in conjunction with the
documents relied upon, or whether the suit is barred by any
law. This Court has held that the underlying object of Order 7
Rule 11 CPC is that when a plaint does not disclose a cause of
action, the court would not permit the plaintiff to unnecessarily
protract the proceedings. It has been held that in such a case, it
will be necessary to put an end to the sham litigation so that
further judicial time is not wasted.
xxx xxx xxx”
(Emphasis Supplied)
11. Reference may also be made to another judgment of the Supreme
Court in the case of Liverpool & London S.P. & I Association Ltd. Versus
M.V. Sea Success I And Another, (2004) 9 SCC 512. In this case, the
Supreme Court held that whether a plaint discloses a cause of action or not is
essentially a question of fact. However, the same must be found out from
reading the plaint itself. For the said purpose, the averments made in the
plaint in their entirety must be held to be correct. It is the substance, and not
merely the form, which has to be looked into. The Supreme Court held thatSignature Not Verified
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the test under Order VII Rule 11 of CPC is whether, if the averments made
in the plaint are taken to be correct in their entirety, a decree would be
passed. Thus, the Supreme Court held as follows:
“xxx xxx xxx
139. Whether a plaint discloses a cause of action or not is
essentially a question of fact. But whether it does or does not
must be found out from reading the plaint itself. For the said
purpose the averments made in the plaint in their entirety must
be held to be correct. The test is as to whether if the averments
made in the plaint are taken to be correct in their entirety, a
decree would be passed.
Cause of action
140. A cause of action is a bundle of facts which are required to
be pleaded and proved for the purpose of obtaining relief
claimed in the suit. For the aforementioned purpose, the material
facts are required to be stated but not the evidence except in
certain cases where the pleading relies on any misrepresentation,
fraud, breach of trust, wilful default or undue influence.
xxx xxx xxx
151. In ascertaining whether the plaint shows a cause of
action, the court is not required to make an elaborate enquiry
into doubtful or complicated questions of law or fact. By the
statute the jurisdiction of the court is restricted to ascertaining
whether on the allegations a cause of action is shown. In Vijai
Pratap Singh v. Dukh Haran Nath Singh this Court held: (AIR
pp. 943-44, para 9)
“By the express terms of Rule 5 clause (d), the court is
concerned to ascertain whether the allegations made in the
petition show a cause of action. The court has not to see
whether the claim made by the petitioner is likely to succeed:
it has merely to satisfy itself that the allegations made in the
petition, if accepted as true, would entitle the petitioner to
the relief he claims. If accepting those allegations as true no
case is made out for granting relief no cause of action would
be shown and the petition must be rejected. But in
ascertaining whether the petition shows a cause of action
the court does not enter upon a trial of the issues affecting
the merits of the claim made by the petitioner. It cannot take
into consideration the defences which the defendant may
raise upon the merits; nor is the court competent to make an
elaborate enquiry into doubtful or complicated questions of
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law or fact. If the allegations in the petition, prima facie,
show a cause of action, the court cannot embark upon an
enquiry whether the allegations are true in fact, or whether
the petitioner will succeed in the claims made by him.
xxx xxx xxx”
(Emphasis Supplied)
12. Tested on the aforesaid anvil, this Court proceeds to delve on the
factual matrix of the present case. It is to be noted that the present suit has
been filed seeking recovery of interest for the period between 01st December,
2012 till 31st August, 2023, to the tune of Rs. 2,53,70,525/- (Rupees Two
Crore Fifty-Three Lacs Seventy Thousand Five Hundred Twenty-Five
Only), along with compound interest with monthly rests at the rate of 12%
per annum, on the ground of inordinate delay by the defendant in releasing
the interest subsidy amount of Rs. 1,96,67,074/- (Rupees One Crore Ninety-
Six Lacs Sixty-Seven Thousand Seventy-Four Only) payable to the plaintiff,
in terms of the Notification dated 21st July, 2003.
13. In the present case, the plaintiff has submitted that the interest sought
over the interest subsidy amount is compensatory in nature, and that the
same could be calculated and claimed only after the payment of the interest
subsidy amount, i.e., the principal amount. Thus, as per the plaintiff, the
cause of action in the present suit is continuing in nature, and is distinct and
independent from the previous writ proceedings, wherein only release of the
interest subsidy amount was sought.
14. This Court finds no merit in the aforesaid submission of the plaintiff.
From a meaningful and holistic reading of the plaint and the documents
annexed thereto, it is apparent that the claim for interest is intrinsically
connected with the plaintiff’s claim for release of the interest subsidy
amount. The same is not founded upon any independent or subsequent
transaction, and flows directly from the alleged delay in payment of the
interest subsidy amount. The plaintiff, by way of clever drafting, has
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submitted that the exact computation of interest became possible only after
release of the interest subsidy amount.
15. However, the delay in the release of the interest subsidy amount was
already within the plaintiff’s knowledge during the previous rounds of
litigation. It is a matter of record that despite alleging prolonged delay at the
stage of filing the earlier writ petitions, the plaintiff did not seek any relief
towards interest for the period preceding those proceedings. In writ petitions
being W.P.(C) 353/2008, W.P.(C) 8070/2011 and W.P.(C) 8827/2015, the
plaintiff not only failed to claim future interest, but also failed to seek
interest for the delay already suffered, till the date of instituting the
respective writ petitions. The action, or rather the inaction, on part of the
plaintiff to not seek the interest in the previous proceedings, does not
automatically give rise to a real or fresh cause of action upon payment of the
principal amount.
16. Accordingly, it is evident that the plaint, as filed, fails to disclose a
real cause of action. The plaintiff, by way of clever drafting, has tried to
camouflage an illusory cause of action as a real one. Merely because the
exact computation of interest became possible after release of the interest
subsidy amount, the same does not give rise to a real, valid or fresh cause of
action. Without going into the issue of whether the cause of action pleaded in
the plaint is false or unsustainable, it is found that the same is rather wholly
illusory. The plaint is, therefore, liable to be rejected under Order VII Rule
11(a) of CPC.
17. This Court also notes that there has been a history of litigation
between the parties. The plaintiff had filed three writ petitions, being W.P.(C)
353/2008, W.P.(C) 8070/2011, and W.P.(C) 8827/2015, seeking release of the
interest subsidy amount. However, it is undisputed that the plaintiff never
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sought interest on the ground of delay, over the interest subsidy amount in
any of previous rounds of litigation between the parties.
18. In this regard, the litigation history between the parties is represented
in a tabular format, in the following manner:
Sno. Case Status Relief sought
1. W.P.(C) 353/2008: ▪ The writ petition was ▪ Issuance of a
Amrit Environmental disposed of vide order writ/order/direction in
Technologies P. Ltd dated 18th February, the nature of
Versus
Union of India and Anr. 2011. mandamus, directing
▪ The Court directed SBI the respondents to
(Filed by the plaintiff
Indore to furnish to grant 2% interest
herein)
subsidy on a principal
MNRE the requisite
sum of Rs. 21.90
information/documents
Crores to the petitioner
for the purposes of grant
company as promised
of 2% interest subsidy to
by them vide policy
the plaintiff herein on dated 21st July, 2003, in
the principal loan the interest of justice.
amount availed by the ▪ Costs of litigation.
plaintiff from the SBI.
Further, SBI was
directed to write to
MNRE in response to
the letter dated 18th
September, 2006
complying with all the
requirements stated
therein. Within four
weeks of receipt of the
said letter, MNRE was
directed to take a
decision on grant of 2%
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interest subsidy to the
petitioner in terms of the
policy dated 21st July,
2003. If still aggrieved
by such decision, it was
open to the plaintiff
herein to seek
appropriate remedies as
may be available to it.
2. LPA 435/2011: ▪ The appeal was
dismissed as not __
Union of India and Anr.
Versus pressed vide order
Amrit Environmental
dated 16th May, 2011.
Technologies Pvt. Ltd
and Anr.
(Filed by the defendant
herein)
3. C.M.APPL.10532/2011 ▪ This application was
in
filed for modification __
W.P.(C)353/2008:
of the order dated 18th
Amrit Environmental
February, 2011 passed
Technologies P. Ltd
Versus in W.P.(C)353/2008.
Union of India and Anr.
▪ The Court vide order
dated 10th August,
(Filed by the defendant
herein) 2011 noted that the
application was
misconceived, and
cannot be entertained.
Thus, the application
was dismissed.
4. W.P. (C) 8070/2011: ▪ This writ petition was ▪ Issuance of
Amrit Environmental disposed of vide order appropriate
Technologies Pvt. Ltd dated 19th October, writ/order/direction
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Versus 2012. setting aside the
UOI and Anr. ▪ The said order noted impugned letter
that the respondent dated 11th August,
(Filed by the plaintiff had issued a letter 2011 and further
herein) dated 18th October, directing the
2012 to the plaintiff respondents to grant
herein, stating that it 2% interest subsidy
does not have any on the loan amount
objection to consider of Rs. 21.90 Crores
this matter within the to the petitioner
framework of the company as per the
Notification dated 21st Notification dated
July, 2003. 21st July, 2003, along
▪ The said order further with costs of
noted that the plaintiff litigation.
herein was agreeable ▪ No interest sought
to the terms contained by the plaintiff for
in the said delay.
communication.
Counsel for the
plaintiff herein further
stated that he did not
wish to press the writ
petition as the relief
prayed for, stood
satisfied.
▪ No interest was
sought by the
plaintiff.
5. W.P.(C)8827/2015: ▪ The petition was
Amrit Environmental dismissed as __
Technologies Pvt. Ltd withdrawn vide order
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Versus dated 17th May, 2023.
Union of India and ▪ The said order noted
Ors. that the respondent
had handed over a
(Filed by the plaintiff letter dated 26th April,
herein) 2023 to the plaintiff
herein. Being satisfied,
the plaintiff herein
withdrew the writ
petition.
▪ No interest was
sought by the
plaintiff.
▪ Furthermore, the
plaintiff did not seek
leave of the Court to
file a subsequent suit
arising out of the
same cause of action.
19. A perusal of the prior litigations between the parties on the basis of the
documents filed by the plaintiff, as mentioned in the aforesaid table, shows
that neither any claim for interest was made by the plaintiff, nor any such
liberty in that regard was granted by the Court, in any of the aforesaid
proceedings.
20. The plaintiff was aware of the alleged delay in payment of the interest
subsidy amount, and it could have, at the relevant stage itself, claimed all
consequential reliefs flowing therefrom, including, interest on the delayed
payment. However, despite such knowledge and opportunity, the plaintiff
consciously chose not to seek interest in any of the earlier proceedings. The
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omission was, therefore, not inadvertent, but an intentional decision on the
part of the plaintiff.
21. The writ petition, i.e., W.P.(C) 8827/2015 was dismissed as withdrawn
by this Court, vide order dated 17th May, 2023. The said order clearly records
that the respondent no. 1 therein, i.e., the defendant herein, had handed over
a letter dated 26th April, 2023 to the petitioner therein, i.e., the plaintiff.
22. The aforesaid letter dated 26th April, 2023, as filed on record by the
plaintiff, expressly mentioned that the amount of Rs. 1,96,67,074/- (Rupees
One Crore Ninety-Six Lacs Sixty-Seven Thousand Seventy-Four Only), was
to be released by the defendant to the plaintiff. The order dated 17th May,
2023 further records that the plaintiff, upon being satisfied with the aforesaid
letter, sought withdrawal of the petition.
23. Thus, perusal of the order dated 17th May, 2023 passed in W.P. (C)
8827/2015, filed along with the plaint, manifestly shows that the interest
subsidy amount of Rs. 1,96,67,074/- (Rupees One Crore Ninety-Six Lacs
Sixty-Seven Thousand Seventy-Four Only), was duly accepted by the
plaintiff herein, without any protest or demur, and the petition was
withdrawn by the plaintiff herein, unconditionally. More importantly, neither
any liberty was sought by the plaintiff, nor any liberty was granted by the
Court, to pursue any subsequent claim for interest.
24. The aforesaid order dated 17th May, 2023, has not been challenged in
appeal or review by the plaintiff, and has accordingly attained finality.
Pursuant thereto, the interest subsidy amount, i.e., the principal sum of Rs.
1,96,67,074/- (Rupees One Crore Ninety-Six Lacs Sixty-Seven Thousand
Seventy-Four Only), as released by the defendant, was accepted by the
plaintiff on 31st August, 2023.
25. Thus, clearly the plaintiff accepted the interest subsidy amount
released by the defendant, without any protest or reservation of any further
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rights. The record reflects that the plaintiff voluntarily chose not to seek
interest for the alleged delay caused in release of the interest subsidy
amount. The plaintiff had full knowledge of the delay, and had multiple
opportunities to seek all consequential reliefs. However, the plaintiff
consciously chose to pursue only the principal claim relating to interest
subsidy amount.
26. Accordingly, in terms of the aforesaid order dated 17th May, 2023, the
plaintiff held an articulated position of being satisfied with the amount
mentioned in letter dated 26th April, 2023. The plaintiff cannot now be
permitted to hold a stance, in derogation of his previously held position.
Thus, the plaint is barred by the principle of acquiescence in terms of Order
VII Rule 11(d) of the CPC.
27. At this stage, it would be fruitful to refer to the judgment of the
Supreme Court in the case of Bhargavi Constructions and Another Versus
Kothakapu Muthyam Reddy and Others, (2018) 13 SCC 480, wherein, the
Supreme Court held that the scope of Order VII Rule 11(d) of CPC, to reject
a plaint on the ground that it is “barred by law”, is not confined to statutory
prohibitions alone, but also extends to prohibitions imposed by judicial
decisions. Thus, it was held as follows:
“xxx xxx xxx
28. 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 Court” came up consideration
before the Division Bench of the Allahabad High Court in
Virendra Kumar Dixit v. State of U.P. 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: (SCC OnLine All)
“15. Law includes not only legislative enactments
but also judicial precedents. An authoritative judgment of
the courts including higher judiciary is also law.”
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29. This very issue was again considered by the Gujarat High
Court (Single Bench) in Hermes Marines Ltd. v. Capeshore
Maritime Partners FZC 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: (Hermes case, SCC
OnLine Guj)
“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 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 Assn. Ltd. v.
M.V. Sea Success I, has been followed by the decision of
the Division Bench in Croft Sales & Distribution Ltd. v.
M.V. Basil. 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.”
30. Similarly, this very issue was again examined by the Bombay
High Court (Single Judge) in Shahid S. Sarkar v. Mangala
Shivdas Dandekar. The learned Judge placed reliance on the
decisions of the Allahabad High Court in Virendra Kumar Dixit
v. State of U.P. and the Gujarat High Court in Hermes Marines
Ltd. and held as under: (Shahid case, SCC OnLine Bom paras
18 & 19)
“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
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 CPC 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 Hermes Marines Ltd. …
19. One must also not lose sight of the purpose and
intention behind Order 7 Rule 11(d). The intention
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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.”
31. Similarly, issue was again examined by the High Court of
Jharkhand (Single Judge) in Mira Sinha v. State of Jharkhand.
The learned Judge, in para 7 held as under: (SCC OnLine Jhar)
“7. In the background of the law laid down by the
Hon’ble Supreme Court, it is apparent that Order 7 Rule
11(d) CPC application is maintainable only when the suit
is barred by any law. The expression “law” included in
Rule 11(d) includes the law of limitation and, it would
also include the law declared by the Hon’ble Supreme
Court.”
32. We are in agreement with the view taken by the 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.
xxx xxx xxx”
(Emphasis Supplied)
28. In this regard, reference is also made to the case of Asha Sharma &
Ors. Versus Sanimiya Vanijiya P. Ltd. & Ors., 2012 SCC OnLine Del 2749,
wherein, a Division Bench of this Court affirmed the judgment of the Single
Judge, dismissing a suit under Order VII Rule 11(d) of CPC on the basis of,
inter alia, the principles of acquiescence. The Court held that the power of a
Court to reject a plaint which is an abuse of the process of the law is not
restricted to Order VII Rule 11 of CPC, and if it is warranted, the inherentSignature Not Verified
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power of the Court can always be invoked. The relevant paragraphs of the
aforesaid judgment, read as under:
“xxx xxx xxx
20. The learned Single Judge has correctly applied the law
pertaining to estoppel by pleading as also acquiescence by
correctly appreciating the decisions reported as (1911) 2 KB
1125 Cooke v. Rickmen, (2006) 7 SCC 756 : (2006) 133 Comp
Cas 794, Jai Narain Parasrampura v. Pushpa Devi Saraf and
(2007) 10 SCC 528, Deewan Singh v. Rajendra Prasad Ardevi.
21. Submission urged by learned senior counsel for the
appellants that Order VII Rule 11(d) of the Code of Civil
Procedure relates to when the suit appears from the statement in
the plaint to be barred by law, and that the plea of estoppel by
pleading cannot apply for the plaint to be rejected, is noted and
rejected by us for the reason the law pertaining to estoppel by
pleading would result in a suit being barred by law. Needless to
state, if with reference to previous pleadings in a suit, a party is
barred from pleading to the contrary in a subsequent suit, the
principle of estoppel by pleading is squarely attracted.
22. Besides, a Court of Record has inherent power which a
court of justice must possess to prevent misuse of its procedures
in relation to an action initiated which would amount to an
abuse of the process of the law. In the decision reported
as (2006) 3 SCC 100 Mayar (H.K.) Ltd. v. Owners & Parties,
Vessel M.V. Fortune Express, the Supreme Court had held that
the power of a Court to reject a plaint which is an abuse of the
process of the law is not restricted to Order VII Rule 11 of the
Code and if it is warranted, the inherent power of the Court
can always be invoked.
xxx xxx xxx
24. Suffice would it be to state that admissions made in
documents or made orally can be explained by the maker of the
statement and in that context previous admissions contained in
documents, cannot attract Order VII Rule 1(d) of the Code, but
admissions in pleadings stand on a different footing and if a
matter pertaining to a ownership of a property or execution of a
sale-deed, though not a matter in issue, but arose properly for
consideration or was relevant in the context of a claim made or a
claim defended, pleadings would be not only relevant but would
also attract the principle of estoppel by pleading.
xxx xxx xxx”
(Emphasis Supplied)
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29. It would also be relevant to refer to judgment in the case of Sean
Dushyant Manchanda and Another Versus Rabia Manchanda and Others,
2023 SCC OnLine Del 3534, wherein, this Court noted that the plea of
acquiescence requires a party to give up rights of which he/she has full
knowledge, and a plaint can be rejected on account of acquiescence, if it is in
derogation of an inconsistent plea taken in earlier proceedings. The Court in
the aforesaid judgment laid down certain principles with respect to
applications under Order VII Rule 11 of CPC, in the following manner:
“xxx xxx xxx
17. For the purpose of the present case, the following principles
laid down in these judgments are of relevance: —
A. The power under Order VII Rule 11 of the CPC can be
exercised at any stage of a suit.
B. The determination of such an application requires a holistic
and meaningful reading of the plaint in its entirety. The plaint
and the documents annexed thereto can be looked at, but not
the written statement of the defendants or any defences raised
by them.
C. Order VII Rule 11(d) does not apply only in the case of
statutory prohibitions, but also to causes of action, that are
barred on account of judicial decisions.
D. The provisions of Order VII Rule 11 of the CPC are not
exhaustive and the power to stem frivolous or vexatious
litigation is inherent in the Court.
E. The doctrine of estoppel is an equitable doctrine which bars
a litigant from making assertions inconsistent with earlier
statements upon which the other party has placed reliance. The
rules of approbate/reprobate, doctrine of election of causes of
action and doctrine of acquiescence are all species of the larger
doctrine of estoppel.
F. A plaint can be rejected on account of estoppel by pleading
and acquiescence if it is in derogation of an inconsistent plea
taken in earlier proceedings.
G. To examine questions of this nature, which are akin to a
plea under Order II Rule 2 of the CPC, it is necessary that the
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pleadings in the earlier suit be placed in evidence, so that the
identity of the causes of action can be demonstrated.
H. The plea of acquiescence requires a party to give up rights
of which he/she has full knowledge. Such a plea is not
available in the face of fraud committed by the other party.
xxx xxx xxx
30. What is the consequence of this analysis upon the fate of the
present suit? The remedy sought by the defendants of rejection of
plaint without trial is no doubt a drastic one. However, the
judgments of the Supreme Court, inter alia in Sopan Sukhdeo
Sable, K. Akbar Ali and Dahiben, emphasise the responsibility of
the Court to thwart vexatious litigants. The judgment in
Mumbai International Airport (P) Ltd., makes it clear that
inconsistent pleas cannot be permitted. In Asha Sharma, the
Division Bench has held that such a plea — of “estoppel by
pleadings” — can indeed be used to reject a plaint under Order
VII Rule 11 of the CPC. The said judgment was sought to be
distinguished on the basis that the case there was one of an
admission in a pleading which was inconsistent with the case
pleaded in a subsequent suit. I do not see any distinction on
principle between the two situations. In the present case also,
one has only to look at the pleading of the plaintiff in the 2012
suit to come to the conclusion that the plaintiff has elected to
claim the proceeds of sale of the suit property, a position
entirely at odds with the present claim for reversal of the very
same sale.
xxx xxx xxx”
(Emphasis Supplied)
30. It is the plaintiff’s own case that there has been an inordinate delay of
seventeen years in release of the interest subsidy amount. Despite being
aware of the said delay, the plaintiff never raised any claim for interest on
the delay in any of the earlier proceedings between the parties. Rather, the
plaintiff was satisfied with the letter dated 26 th April, 2023, which explicitly
provided that MNRE shall disburse the interest subsidy amount of Rs.
1,96,67,074/- (Rupees One Crore Ninety-Six Lacs Sixty-Seven Thousand
Seventy-Four Only). Thus, the plaintiff was satisfied by the said disbursal of
the said interest subsidy amount, and sought unconditional withdrawal of the
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writ petition, i.e., W.P.(C) 8827/2015. Despite having full knowledge, the
plaintiff accepted the interest subsidy amount unconditionally, and
voluntarily gave up his rights as to interest on delay, if any. Thus, the
principle of acquiescence squarely applies in the present case, and the plaint
is liable to be rejected.
31. Furthermore, it is also to be noted that the plaintiff had also issued
several legal notices seeking compliance with the orders passed by the
Court, and release of the interest subsidy amount. Significantly, in some of
the notices, the plaintiff did raise a claim for interest, on account of the
alleged delay in payment of the interest subsidy amount. However, no
interest was sought by the plaintiff for the delay caused from 01st December,
2012. A brief tabular representation of the said notices is set out below:
S. no. Legal Notice Particulars
1. Legal notice dated 05th ▪ Plaintiff called upon the
January, 2013 defendant to make payment of
interest subsidy amount.
However, no claim for interest
on delay was raised.
2. Legal notice dated 08th ▪ The plaintiff sought interest
August, 2014 for the first time by way of
this notice at the rate of 12%
per annum.
▪ However, in the said
notice, interest was not sought
by the plaintiff for the delay
caused from 01st December,
2012, as it is sought in the
present suit. Rather, interest
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was sought for the delay
caused in payment of the
subsidy amount after issuance
of the said legal notice dated
08th August, 2014.
▪ The said legal notice was
withdrawn by the plaintiff vide
a subsequent legal notice
dated 16th September, 2014.
3. Legal notice dated 02nd The plaintiff sought interest at
February, 2015 12% per annum without
specifying the time period for
interest.
4. Legal notice dated 16th The plaintiff, for the first time,
December, 2023. sought interest from 01st
(Notice of present suit December, 2012 till 31st August,
under Section 80 of 2023, i.e., the date of realization
CPC) of interest subsidy amount, along
with compound interest at
12% at monthly rests, till the date
of payment of the
interest component.
32. It is evident that the plaintiff never sought interest from the period
starting from 01st December, 2012 till 31st August, 2023, on any occasion
before the release of the interest subsidy amount. Further, it is also
undisputed that the plaintiff had never sought interest over the interest
subsidy amount in the previous rounds of litigation. The interest subsidy
amount was released by the defendant on 31st August, 2023, and it was only
after accepting the entire interest subsidy amount unconditionally, that the
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plaintiff sought interest, by way of the legal notice dated 16 th December,
2023, from 01st December, 2012 till 31st August, 2023, along with compound
interest with monthly rests at 12% per annum.
33. Therefore, in the background of the aforesaid legal position,
considering the facts of the present case as disclosed from the plaint and the
documents on record, it is apparent that the present suit is barred under
Order VII Rule 11(d) of CPC, on account of the principle of acquiescence.
34. Another question that arises before this Court is the issue of
limitation. For the purpose of determining the limitation period to file the
present suit, it is necessary to refer to the relevant provisions of the
Limitation Act, 1963 (“Limitation Act“). Article 113 of the Limitation Act
provides that in any suit, for which no period of limitation is provided
elsewhere in the Schedule under the Limitation Act, the period of limitation
shall be three years from the date when “right to sue” accrues. Furthermore,
Section 9 of the Limitation Act provides that once the time has begun to run,
no subsequent disability or inability to institute a suit or make an application,
stops it.
35. Thus, for filing a suit seeking recovery of interest from the defendant,
the plaintiff had to seek his relief within three years from the date the interest
became due.
36. It is the case of the plaintiff that the interest subsidy amount was due
and payable to the plaintiff since the year 2006. As per the plaint, the cause
of action, for the purpose of the present suit, arose when the interest subsidy
amount was released by the defendant, without any interest over the said
amount, to compensate for the delay caused in release of payment.
Furthermore, the plaintiff has submitted that the interest on the interest
subsidy amount could only be calculated and claimed post the release of the
interest subsidy amount, and thus, the suit is within the period of limitation
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as the interest subsidy amount was finally released by the defendant on 31st
August, 2023.
37. The aforesaid submission of the plaintiff not only appears to be
inconsistent with the relief sought in the plaint, but is also contrary to the
scheme of the Limitation Act. The plaintiff makes a categorical assertion in
the plaint that the interest subsidy amount was due since the year 2006. At
the same time, the plaintiff itself seeks interest for delay from 01st December,
2012 till 31st August, 2023. Notably, no explanation has been furnished in
the plaint as to why the claim for interest has been computed from 01st
December, 2012, and not from the year 2006.
38. Even if the averments mentioned in the plaint are taken at their face
value, the interest, according to the plaintiff, became due at least from 01st
December, 2012. The law in this regard as encapsulated under Article 113 of
the Limitation Act, is clear that the limitation period to file a suit for interest
is three years from the date when the “right to sue” arises. Consequently, the
limitation period, for filing the present suit seeking such interest, expired in
December, 2015, i.e., much prior to the institution of the present suit.
39. Even otherwise, it is pertinent to note that Section 3(1)(b) of the
Interest Act states that in the absence of a written contract, interest can be
claimed only from the date of a written notice. The plaintiff, in the present
case, claimed interest for the first time vide legal notice dated 08th August,
2014, which was subsequently withdrawn vide legal notice dated 16th
September, 2014. Therefore, interest could only be claimed, if at all, from
08th August, 2014. The plaintiff has calculated interest from 01st December,
2012. Even if the case of the plaintiff is examined from this standpoint, the
limitation period would still have expired long before the filing of the
present suit.
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40. Reference at this stage is made to the judgment in the case of Indian
Evangelical Lutheran Church Trust Association Versus Sri Bala & Co.,
2025 SCC OnLine SC 48, wherein, the Supreme Court held that upon a
holistic reading of the plaint, the same could be rejected as being barred by
law of limitation. Article 113 of the Schedule to the Limitation Act provides
that a suit has to be instituted within three years from the date when the
“right to sue” accrues. Thus, the time under Article 113 of the Limitation Act
commences to run when the “right to sue” accrues, i.e., when the cause of
action, or the right to prosecute to obtain legal relief, arises. The suit must be
instituted when the right asserted in the suit is infringed, or when there is a
clear and unequivocal threat to infringe that right by the defendant, against
whom the suit is instituted. The Supreme Court further relied on Section 9 of
the Limitation Act, to hold that once limitation has started to run, it will
continue to do so, unless it is arrested by reason of any express statutory
provision, and rejected the plaint in the following manner:
“xxx xxx xxx
8.8. Thus, on a holistic reading of the plaint it could be rejected
as being barred by law of limitation. However, it is stated that
normally the question of limitation would be a mixed question
of law and fact. Hence, usually, on a reading of the plaint it is
not rejected as being barred by the law of limitation. However,
the above is not an inflexible rule. We wish to discuss the
relevant Article under the Limitation Act applicable to the facts
of the present case which is Article 113 for the second suit with
a preface on the law of limitation.
9. The Limitation Act, 1963 consolidates and amends the law of
limitation of suits, appeals and applications and for purposes
connected therewith. The law of limitation is an adjective law
containing procedural rules and does not create any right in
favour of any person, but simply prescribes that the remedy can
be exercised only up to a certain period and not beyond. The
Limitation Act therefore does not confer any substantive right,
nor defines any right or cause of action. The law of limitation is
based on delay and laches. Unless there is a complete cause of
action, limitation cannot run and there cannot be a complete
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cause of action unless there is a person who can sue and a
person who can be sued. There is also another important
principle under the Law of Limitation which is crystallized in
the form of maxim that “when once the time has begun to run,
nothing stops it”.
xxx xxx xxx
9.3. Further, to say that a suit is not governed by the law of
limitation runs foul of the Limitation Act. The statute of
limitation was intended to provide a time limit for all suits
conceivable. Section 3 of the Limitation Act provides that a suit,
appeal or application instituted after the prescribed “period of
limitation” must, subject to the provisions of Sections 4 to 24, be
dismissed, although limitation has not been set up as a defence.
Section 2(j) defines the expression “period of limitation” to
mean the period of limitation prescribed in the Schedule for suit,
appeal or application. Section 2(j) also defines “prescribed
period” to mean the period of limitation computed in accordance
with the provisions of the Limitation Act. The court’s function
on the presentation of plaint is simply to examine, whether, on
the assumed facts, the plaintiff is within time. The court has to
find out when the “right to sue” accrued to the plaintiff.
9.4. Further, if a suit is not covered by any of the specific
articles prescribing a period of limitation, it must fall within
the residuary article. The purpose of the residuary article is to
provide for cases which could not be covered by any other
provision in the Limitation Act. The residuary article is
applicable to every variety of suits not otherwise provided for
under the Limitation Act. It prescribes a period of three years
from the date when the “right to sue” accrues. Under Article
120 of the erstwhile Limitation Act, 1908, it was six years, which
has been reduced to three years under Article 113 of the present
Act. According to the third column in Article 113, time
commences to run when the right to sue accrues. The words
“right to sue” ordinarily mean the right to seek relief by means
of legal proceedings. Generally, the right to sue accrues only
when the cause of action arises, that is, the right to prosecute to
obtain relief by legal means. The suit must be instituted when
the right asserted in the suit is infringed or when there is a
clear and unequivocal threat to infringe that right by the
defendant against whom the suit is instituted [State of
Punjab v. Gurdev Singh, (1991) 4 SCC 1].
9.5. This Court in Shakti Bhog Food Industries Ltd. v. Central
Bank of India, (2020) 17 SCC 260, stated that the expression
used in Article 113 of the 1963 Act is “when the right to sue
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accrues”, which is markedly distinct from the expression used
in other Articles in First Division of the Schedule dealing with
suits, which unambiguously refer to the happening of a
specified event. Whereas Article 113, being a residuary clause,
does not specify happening of particular event as such, but
merely refers to the accrual of cause of action on the basis of
which the right to sue would accrue.
xxx xxx xxx
9.7. In the present case, the earlier suit was filed by the
respondent/plaintiff in July, 1993 on the basis of Article 54
referred to above and the plaint in the said suit was rejected on
12.01.1998. The second suit being O.S. No. 49/2007 was filed on
the strength of Order VII Rule 13 of the Code for the very same
cause of action and for seeking the very same relief of specific
performance of the agreement dated 26.04.1991 as the plaint in
the earlier suit was rejected on 12.01.1998. Therefore, it cannot
be said that the second suit namely O.S. No. 49/2007 was filed as
per Article 54 of the Limitation Act. Since this is a suit filed for
the second time after the rejection of the plaint in the earlier suit,
in our view, Article 54 of the Limitation Act does not apply to a
second suit filed for seeking specific performance of a contract.
Then, the question is, what is the limitation period for the filing
of O.S. No. 49/2007. We have to fall back on Article 113 of the
Limitation Act.
9.8. Under Article 113 of the Limitation Act, time commences
to run when the right to sue accrues. This is in contradistinction
to Article 54 of the Limitation Act relating to a suit for specific
performance of a contract which is on the happening of an event.
No doubt, the second suit which is the present suit filed by the
respondent/plaintiff is also for specific performance of the
contract but the right to sue accrued to file the second suit is on
the basis of Order VII Rule 13 of the Code subsequent to the
rejection of the plaint in the earlier suit on 12.01.1998.
Therefore, the right to sue by means of a fresh suit was only after
12.01.1998. The expression “when the right to sue accrues” in
Article 113 of the Limitation Act need not always mean “when
the right to sue first accrues”. For the right to sue to accrue,
the right sought to be vindicated in the suit should have already
come into existence and there should be an infringement of it
or at least a serious threat to infringe the same vide M.V.S.
Manikyala Rao v. M. Narasimhaswami, AIR 1966 SC 470.
Thus, the right to sue under Article 113 of the Limitation Act
accrues when there is an accrual of rights asserted in the suit
and an unequivocal threat by the defendant to infringe the
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right asserted by the plaintiff in the suit. Thus, “right to sue”
means the right to seek relief by means of legal procedure
when the person suing has a substantive and exclusive right to
the claim asserted by him and there is an invasion of it or a
threat of invasion. When the right to sue accrues, depends, to a
large extent on the facts and circumstances of a particular case
keeping in view the relief sought. It accrues only when a cause
of action arises and for a cause of action to arise, it must be
clear that the averments in the plaint, if found correct, should
lead to a successful issue. The use of the phrase “right to sue”
is synonymous with the phrase “cause of action” and would be
in consonance when one uses the word “arises” or “accrues”
with it. In the instant case, the right to sue first occurred in the
year 1993 as the respondent/plaintiff had filed the first suit
then, which is on the premise that it had a cause of action to do
so. The said suit was filed within the period of limitation as per
Article 54 of the Schedule to the Limitation Act.
9.9. Thus, generally speaking, the right to sue accrues only
when the cause of action arises, that is, the right to prosecute to
obtain relief by legal means. The suit must be instituted when
the right asserted in the suit is infringed or when there is a
clear and unequivocal threat to infringe that right by the
defendant against whom the suit is instituted. Article 113 of the
Schedule to the Limitation Act provides for a suit to be
instituted within three years from the date when the right to sue
accrues and not on the happening of an event as stated in
Article 54 of the Schedule to the Limitation Act.
9.10. In the facts and circumstances of the present case, it is
also necessary to apply Section 9 of the Limitation Act while
applying Article 113 thereto. Section 9 reads as under:
“9. Continuous running of time.–
Where once time has begun to run, no subsequent
disability or inability to institute a suit or make an
application stops it:
Provided that where letters of administration to the estate
of a creditor have been granted to his debtor, the running
of the period of limitation for a suit to recover the debt
shall be suspended while the administration continues.”
Section 9 is based on the general principle that when once
limitation has started to run, it will continue to do so unless it
is arrested by reason of any express statutory provision. Period
of limitation can be extended, inter alia, when cause of action
was cancelled such as by dismissal of a suit. Ordinarily,
limitation runs from the earliest time at which an action can be
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brought and after it has commenced to run, there may be
revival of a right to sue where a previous satisfaction of a claim
is nullified with the result that the right to sue which has been
suspended is reanimated [Pioneer Bank Ltd v. Ramdev
Banerjee, (1949-50) 54 CWN 710]. In that case, the court
distinguished between suspension and interruption of
limitation period.
9.11. Once time has begun to run, it will run continuously but
time ceases to run when the plaintiff commences legal
proceedings in respect of the cause of action in question. It is a
general principle of some importance that bringing an action
stops running of time for the purpose of that action only
[Andrew McGee, Limitation Periods, 4th Edn., Sweet & Maxwell,
chapter 2, para 1]. The Indian law also follows the English law
[James Skinner v. Kunwar Naunihal Singh, ILR (1929) 51 All
367, (PC)]. Intervention of court in proceedings would prevent
the period of limitation from running and date of courts’ final
order would be the date for start of limitation [N
Narasimhiah v. State of Karnataka, (1996) 3 SCC 88].
[Source : Tagore Law Lectures, U N Mitra, Law of Limitation
and Prescription, Sixteenth Edition, Volume 1, Sections 1-32 &
Articles 1-52]
9.12. Applying the aforesaid dictum to the facts of the present
case, it is observed that the respondent/plaintiff had filed the suit
for specific performance of the agreement to sell dated
26.04.1991 in the year 1993 itself. The plaint in the said suit was
rejected on 12.01.1998. The plaintiff could have filed the second
suit on or before 12.01.2001 as it got right to file the suit on
12.01.1998 on the rejection of the plaint in the earlier suit filed
by it. This is on the basis of Order VII Rule 13 of the Code.
However, the limitation period expired in January, 2001 itself
and the second suit was filed belatedly in the year 2007. The
cause of action by then faded and paled into oblivion. The right
to sue stood extinguished. The suit was barred in law as being
filed beyond the prescribed period of limitation as per Article
113 to the Schedule to the Limitation Act. Hence the second
suit is barred under Order VII Rule 11(d) of the Code. We
therefore have no hesitation in rejecting the plaint in O.S No.
49/2007 filed by the respondent herein even in the absence of
any evidence being recorded on the issue of limitation. This is
on the admitted facts. Thus, on the basis of Order VII Rule
11(d) of the Code read with Article 113 of the Limitation Act by
setting aside the impugned orders of the High Court and the
trial court and by allowing the application filed under Order
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VII Rule 11(d) of the Code. Consequently, this appeal is
allowed.
xxx xxx xxx”
(Emphasis Supplied)
41. Thus, it is a settled position that the “right to sue” accrues when there
is a clear and unequivocal infringement of a right. The “right to sue”
ordinarily means the right to seek relief by means of legal proceedings, and
the suit must be instituted when the right asserted in the suit is infringed, or
when there is a clear and unequivocal threat to infringe that right by the
defendant.
42. Applying the aforesaid principles to the facts of the present case, it is
evident that the alleged infringement, if any, can be said to have arisen in the
years 2006-2007, i.e., at the time when the interest subsidy amount was not
released, within the period as claimed by the plaintiff. The plaint itself
discloses that the interest subsidy amount was due and payable to the
plaintiff since the year 2006. Therefore, the “right to sue”, if any, accrued at
the time of such alleged delay/non-payment, and not upon the eventual
release of the interest subsidy amount on 31st August, 2023.
43. The plaintiff has sought to contend that the cause of action to claim
interest arose only upon receipt of the interest subsidy amount on 31 st
August, 2023, when the plaintiff allegedly realised that compensation for
delay had not been paid.
44. However, the plaintiff’s contention that the cause of action arose only
upon receipt of the principal amount, is wholly misconceived and contrary to
settled law, as also being barred by limitation. The plaintiff, by way of clever
drafting, is effectively seeking to link the cause of action to the subsequent
release of the interest subsidy amount, in order to circumvent the bar of
limitation by treating quantification of the interest as a fresh starting point of
limitation.
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45. However, the said contention of the plaintiff that the claim for interest
could arise only upon release of the subsidy amount, on the ground that the
exact computation could be made only thereafter, is ex facie unsustainable in
view of Section 9 of the Limitation Act. The said provision clearly
establishes that once time has begun to run, no subsequent disability or
inability to institute a suit or make an application, stops it. Therefore, the
right, if any, to claim such interest arose way back in the year 2012 as per the
averments and claims made in the plaint, and the same cannot be revived by
linking it to subsequent events of “computation” or “quantification”.
46. From the pleadings and documents on record, it is evident that it was
only after accepting the interest subsidy amount without protest that the
plaintiff, vide legal notice dated 16th December, 2023, claimed interest
retrospectively from 01st December, 2012. Accordingly, the present suit filed
by the plaintiff is clearly an afterthought.
47. Therefore, on a complete, holistic and meaningful reading of the
plaint, it becomes clear that the suit is ex facie barred by limitation. The
plaint is, thus, barred by law, and is liable to be rejected under Order VII
Rule 11(d) of CPC.
48. Accordingly, the present suit is liable to be rejected at the threshold as
it does not disclose any subsisting or legally enforceable cause of action.
49. In the present case, the plaintiff has submitted that it is entitled to
compensation in the form of interest, for the extraordinary delay caused in
disbursal of the interest subsidy amount. The plaintiff further submits that
the delay is attributable to the defendant and, therefore, the plaintiff deserves
an opportunity to establish its rights and claims in the trial.
50. The question before this Court, however, is not whether the plaintiff is
otherwise entitled to interest over the delayed disbursal of the interest
subsidy amount, nor whether the delay is attributable to the defendant. The
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moot question is whether the plaintiff has failed to disclose a real cause of
action in the plaint, and whether the plaint is barred by law from seeking
such relief, on account of its own inaction to claim the same in the earlier
proceedings.
51. To this effect, suffice it to note the legal maxim
vigilantibus non dormientibus jura subveniunt, which means that “the law
assists only those who are vigilant and not those who sleep over their
rights”.
52. The defendant has contended that the present suit is also barred under
Order II Rule 2 of the CPC. However, the said contention is misplaced.
Order II Rule 2 of CPC curtails the “right to sue” in respect of claims
relinquished or omitted in the earlier suit. The same is distinct from Order
VII Rule 11(d) of CPC, which bars the filing of a suit under any law, on a
meaningful reading of the plaint. In this regard, reference is made to the
decision in the case of S. Valliammai and Others Versus S. Ramanathan
and Another, 2026 SCC OnLine SC 603, wherein, the Supreme Court held
that the application of Order II Rule 2 of CPC cannot be construed to be a
ground for rejection of the plaint under Order VII Rule 11(d) of the CPC, in
the following manner:
“xxx xxx xxx
5.13. Bar to sue is distinct from a suit being barred by any law.
In the former, a suit cannot be commenced at all and,
therefore, would have to be dismissed on the application of
Order II Rule 2 of the Code, while in the latter case, a suit can
be commenced but is not entertainable owing to a bar in law.
Under Order II Rule 2, a suit can be dismissed after recording
evidence depending upon the facts and circumstances of the
case and on the analysis of the cause of action in a former suit
and a subsequent suit. In the case of rejection of a plaint,
recording of evidence on the bar to file a suit may not be
necessary in all circumstances. It all depends on the nature of
the bar.
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5.14. To sue, according to Webster Dictionary, is “to seek justice
or right by legal process”. According to Strouds’ Judicial
Dictionary, (Fifth Edition, p.2540) the words “to sue” is said to
have meaning generally speaking, ‘of bringing action’. Thus, the
word ‘sue’ means to institute or commence a proceeding and has
reference to the point of time when the suit is instituted and not
to any subsequent stages of the suit. The word ‘sue’ means to
take any legal proceedings in accordance with the provisions of
the Code.
5.15. Thus, the right to sue is circumscribed by what is stated
under Order II Rules 1 and 2 of the Code. Order II Rule 2(1)
states that every suit shall include the whole of the claim which
the plaintiff is entitled to make in respect of the cause of action;
but a plaintiff may relinquish any portion of his claim in order to
bring the suit within the jurisdiction of the court. With regard to
relinquishment of part of the claim and omission to sue for one
of several reliefs, the consequences are stated in sub-rules (2)
and (3) of Order II Rule 2 of the Code. Thus, under the said sub-
rules the right to sue in respect of relinquishment of a claim or
omitted reliefs in the absence of conditions occurring therein
would not arise. Therefore, sub-rules (2) and (3) of Order II Rule
2 deal with claims and reliefs.
xxx xxx xxx
5.17. Turning to Order VII Rule 11 (d), it deals with rejection
of plaint and not the right to sue being barred. A rejection of a
plaint is as per clauses (a) to (f) mentioned in Order VII Rule
11. Order VII Rule 11 (d) states that the plaint shall be rejected
where the suit appears from the statement in the plaint to be
barred by any law. Therefore, the crucial words are, the filing
of the suit being barred by any law. The issue, whether the suit
is barred by any law has to be determined from the statement in
the plaint. The expression “statement in the plaint” would
mean not only a meaningful reading of the averments in the
plaint but also a meaningful reading of the documents
appended to the plaint. Thus, it is on a meaningful reading of
the plaint and the annexed documents, the suit should appear
to be barred by any law. Hence, the written statement or any
other document cannot be taken into consideration in order to
ascertain whether the suit is barred by any law.
5.18. When the expression “barred by any law” is read in
juxtaposition with Order II Rule 2 of the Code, it is already
noted that Order II Rule 2 does not bar the filing of any suit
but sub-rules (2) and (3) forbids the suing for certain claims
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which have been relinquished or certain reliefs which have
been omitted to sue in the earlier suit in respect of which a
plaintiff cannot sue for those claims or reliefs by filing a
subsequent suit.
5.19. On the other hand, the bar to filing of any suit in law
under Order VII Rule 11(d) is distinct. The law must bar the
filing of a suit either by an express bar or by an implied bar. An
example of an express bar of a suit is in Section 34 of
the Securitisation and Reconstruction of Financial Assets and
Enforcement of Security Interest Act, 2002 (for short,
“SARFAESI Act, 2002“) which reads as under:
“34. Civil court not to have jurisdiction.– No civil court
shall have jurisdiction to entertain any suit or proceeding
in respect of any matter which a Debts Recovery Tribunal
or the Appellate Tribunal is empowered by or under this
Act to determine and no injunction shall be granted by any
court or other authority in respect of any action taken or to
be taken in pursuance of any power conferred by or under
this Act or under the Recovery of Debts Due to Banks and
Financial Institutions Act, 1993 (51 of 1993).”
If Section 34 of the SARFAESI Act, 2002 applies in a case,
then, such a suit is barred in law. If on a meaningful reading of
the plaint a suit is barred in law, then the plaint itself has to be
rejected. In other words, the suit can be filed but the plaint has
to be rejected for reasons enumerated in Order VII Rule 11 of
the Code such as the suit being barred by any law. When a
plaint is rejected, a fresh suit could be filed only in terms of
Order VII Rule 13 which is extracted above. The said provision
would however not apply, if there is absence of a cause of
action, the suit is hit by limitation or on the principle of res
judicata or is otherwise barred by law.
5.20. As opposed to the above, under Order II Rule 2 of the
Code, the right to sue is taken away in terms of sub-rules (2)
and (3) thereof which means that the suit could not have been
filed at all. On the other hand, under Order VII Rule 11(d),
there is “no bar to sue” but “the suit is barred by law from
being filed”. There is a subtle but distinct difference between
the two. If the conditions under sub-rules (2) and (3) of Order
II Rule 2 of the Code are satisfied in a case, it would be a case
of there being a curtailment of the right to sue for the claims
relinquished or omitted in the earlier suit. It is not a case where
the plaint has to be rejected as it is barred by the provision of
Order II Rule 2 [sub-rules (2) and (3)]. In other words, the
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application of Order II Rule 2 of the Code to a case can
result in rejection of reliefs being granted to a plaintiff which
may, in certain cases, also result in dismissal of the suit itself.
But it does not result in rejection of the plaint under Order VII
Rule 11 (d) of the Code.
5.21. We think that in a case where Order II Rule 2 of the Code
applies, there is no legal bar to filing a suit but the reliefs
sought for or the claims made therein cannot be granted if the
conditions mentioned therein apply. For arriving at such a
conclusion, there has to be evidence let in in order to determine
whether the provision of Order II Rule 2 would apply to the
suit or not. On the other hand, in the case of Order VII Rule
11(d), if there is express or implied bar for filing of a suit under
any law then on a meaningful reading of the plaint, it has to be
rejected. The suit need not proceed to record evidence on
merits but only to the extent where evidence is necessary to be
recorded for the purpose of rejection of the plaint such as on
the ground of the suit being bit by law of limitation or on the
principle of res judicata. Thus, the bar created by any law to
the filing of a suit is different from a plaintiff suing for certain
claims or reliefs which he could not have claimed or sued
having regard to Order II Rule 2 of the Code. Therefore, in our
view, the application of Order II Rule 2 cannot be construed to
be a ground for rejection of the plaint under Order VII Rule
11(d) of the Code.
xxx xxx xxx
7. A juxtaposition of the above discussion with the discussion
for rejection of a plaint under Order VII Rule 11(d) of the Code
must be made. On a conjoint reading of Order II Rule 2 with
Order VII Rule 11(d) of the Code, it emerges that the plea
under Order II Rule 2 of the Code cannot be a basis or a
ground for rejection of the plaint. In other words, it is for the
defendant to establish by way of evidence, the bar of the
subsequent suit under Order II Rule 2 of the Code filed by the
very same plaintiff. In such an event, on a comparative
analysis of the plaint filed in the first suit and the plaint filed in
the second suit, if the Court comes to the conclusion that the
second suit was filed on an identical cause of action which led
to the filing of the first suit and there was an omission to make
the claim or to reserve the reliefs to be claimed in the first suit
in a subsequent suit, then the bar under Order II Rule 2 of the
Code would apply to the subsequent suit or the second suit.
Then the claims or reliefs not maintainable would be rejected
as the plaintiff could not have sued for those reliefs by filing a
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second suit, although technically, the filing of such a suit was
not barred by any law. On the other hand, if the cause of action
for filing the second suit is totally distinct from the cause of
action from filing the first suit and the reliefs claimed are
distinct, subject-matter of the suits are different and if the
parties to the suit are also different then in such a case, the
plea under Order II Rule 2 of the Code would not arise at all.
The above are, inter alia, the heads of distinction to be
analysed while analysing the plaints in the first/former suit and
a subsequent suit.
xxx xxx xxx”
(Emphasis Supplied)
53. Considering the conspectus of facts and circumstances in the present
case, and for the reasons mentioned aforesaid, the plaint in the present case
fails to disclose a valid, real and subsisting cause of action. Additionally, the
plaint is barred by limitation and the principle of acquiescence. Therefore,
the plaint is liable to be rejected under Order VII Rules 11(a) and 11(d) of
CPC.
54. Considering the detailed discussion hereinabove, the present plaint is
liable to be rejected at the threshold under Order VII Rule 11 of CPC.
Accordingly, for the aforesaid reasons, the present application is allowed.
55. The present plaint, i.e., CS(OS) 200/2024 is rejected.
CS(OS) 200/2024
56. In view of allowing the application of the defendant, i.e., I.A.
39173/2024, under Order VII Rule 11 of CPC, the present suit stands
dismissed.
57. All pending applications are also disposed of.
MINI PUSHKARNA
(JUDGE)
JULY 15, 2026
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CS(OS) 200/2024 Page 50 of 50
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