ELDECO HOUSING AND INDUSTRIES LIMITED  versus ASHOK VIDYARTHI AND OTHERS
[2023] 16 S.C.R. 872, Supreme Court of India, 2023
Outcome: Appeal(s) allowed (Granted)
Segment: Facts
[2023] 16 S.C.R. 872 : 2023 INSC 1043
872
CASE DETAILS
ELDECO HOUSING AND INDUSTRIES LIMITED 
v.
ASHOK VIDYARTHI AND OTHERS
(Civil Appeal No. 7891 of 2023)
NOVEMBER 30, 2023
[VIKRAM NATH AND RAJESH BINDAL, JJ.]
HEADNOTES
Issue for consideration: A suit for speciﬁ c performance was ﬁ led 
seeking enforcement of MoU dated 31.08.1998. It is in the aforesaid suit 
that application was ﬁ led by respondent No. 1 under Order VII Rule 11(d) 
CPC for rejection of the plaint on the ground that in terms of Order II Rule 
2 C.P.C., the suit was barred by law. In the review application ﬁ led by the 
respondent no.1, an application ﬁ led under Order VII Rule 11(d) CPC by 
the High Court was allowed and the suit ﬁ led by the appellant was rejected. 
Whether the order passed by the High Court in review application be legally 
sustained.
Code of Civil Procedure, 1908 – Order VII Rule 11(d) – Whether 
evidence or merits of the controversy can be examined at the stage of 
decision of the application under Order VII Rule 11 CPC:
Held: If the facts of the case are examined in the light of settled 
position of law, the order passed by the High Court in review application 
cannot be legally sustained – The suit for speciﬁ c performance was ﬁ led 
by the appellant on the basis of MoU dated 31.08.1998 (registered on 
01.09.1998) – In terms of the clauses in the agreement, it was pleaded that 
there was dispute pending amongst the family members of the vendor – 
After the same is decided and right of
the vendor is crystalized, he will get 
the sale deed registered – The rights of the vendor were ﬁ nally crystalized 
when the issue was decided by Supreme Court in Shreya Vidyarthi’s case 
on 16.12.1995 – Suit for speciﬁ c performance was ﬁ led on 03.08.2017 
stating that the appellant-plaintiﬀ  came to know about the disposal of the 
litigation amongst the family members just before ﬁ ling the suit – Earlier 
suit for injunction was ﬁ led on 22.01.2009 pleading that the appellant-
873
vendee came to know that the vendor was trying to create third party 
rights in the property while agreeing to sell the same to some other 
parties – At that stage cause of act to ﬁ le suit for speciﬁ c performance 
had not arisen – The application for rejection of the plaint was ﬁ led by 
the respondent claiming that prior to MoU registered on 01.09.1998, the 
MoU was entered into between the parties on 15.04.1998 and subsequent 
to the aforesaid MoUs, an agreement was executed on 02.09.1998 – In the 
aforesaid agreement, it was clearly mentioned that in case the litigation 
of the vendor regarding the property in question is not decided after 
one year, the vendee will have the right to get his earnest money back 
along with interest @ 18% p.a. – However, the fact remains that all the 
aforesaid documents, referred to by the respondent in support of his plea 
for rejection of the plaint, cannot be considered at this stage as these are 
not part of the record with the Court ﬁ led along with the plaint – No 
amount of evidence or merits of the controversy can be examined at the 
stage of decision of the application under Order VII Rule 11 CPC – Thus, 
the impugned order of the High Court passed in the Review Application 
is set aside – Trial Court directed to proceed with the suit. [Paras 23, 
25, 26 and 27]
LIST OF CITATIONS AND OTHER REFERENCES
Kamala and others v. K.T. Eshwara Sa and others [2008] 7 SCR 39 
: (2008) 12 SCC 661; Dahiben v. Arvindbhai Kalyanji Bhanusali
(Gajra) 
dead through legal representatives and others (2020) 7 SCC 366: 2020 
INSC 450 : [2020] 5 SCR 964 – relied on.
Shreya Vidyarthi v. Ashok Vidyarthi and others [2015] 14 SCR 1190: 
(2015) 16 SCC 46 : 2015 INSC 934; Gurbux Singh v. Bhooralal, [1964] 7 
SCR 831; Sidramappa v. Rajeshetty and other (1970) SCC 186; Inbasegaran 
and another v. S. Natarajan (dead) through legal representatives [2014] 10 
SCR 1202: (2015) 11 SCC 12 : 2014 INSC 748, ; Jayakantham and others 
v. Abaykumar [2017] 2 SCR 355 : (2017) 5 SCC 178 : 2017 INSC 161; 
Vurimi Pullarao v. Vemari Vyankata Radharani [2019] 18 SCR 1125 : (2020) 
14 SCC 110: 2019 INSC 1291; Shakti Bhog Food Industries Ltd. v. Central 
Bank of India and another (2020) 17 SCC 260 : 2020 INSC 413; Srihari 
Hanumandas Totala v. Hemant Vithal Kamat and others (2021) 9 SCC 99 
: 2011 INSC 387; Kum. Geetha v. Nanjundaswamy and others 2023 SCC 
OnLine SC 1407: 2023 INSC 964 – referred to.
ELDECO HOUSING AND INDUSTRIES LIMITED v. ASHOK 
VIDYARTHI AND OTHERS
874 
SUPREME COURT REPORTS 
[2023] 16 S.C.R.
OTHER CASE DETAILS INCLUDING IMPUGNED 
ORDER AND APPEARANCES
CIVIL APPELLATE JURISDICTION: Civil Appeal No.7891 of 2023.
From the Judgment and Order dated 27.09.2021 of the High Court of 
Judicature at Allahabad in CMRA No.192 of 2021.
Appearances:
Shyam Divan, Sr. Adv., Ms. Kanika Agnihotri, Shaurya Rohit, Ms. 
Niharika Ahluwalia, Advs. for the Appellant.
S. B. Upadhyay, Dr. Adish Aggrawal, Sr. Advs., Ms. Kumud Lata Das, 
Harsh Ajay Singh, Ms. Pooja Rathore, Advs. for the Respondents.
JUDGMENT / ORDER OF THE SUPREME COURT
JUDGMENT
RAJESH BINDAL, J.
1. Leave granted.
2. Aggrieved against the order1 passed by the High Court2 in Review 
Application3 in Civil Revision4, the plaintiﬀ  is in appeal before this Court. 
Vide aforesaid order, the application ﬁ led by respondent No. 1- defendant 
before the Trial Court5 under Order VII Rule 11(d) C.P.C. was allowed and 
the suit ﬁ led by the appellant was dismissed.
3. Brieﬂ y stating, the facts available on record are that a Memorandum 
of Understanding6 was entered into between the appellant and respondent 
No. 1 on 31.08.1998, regarding sale of the property in question. It was 
speciﬁ cally mentioned in the MoU that there is a litigation pending 
between the family members of the respondent No. 1. The sale deed will 
1 
Order dated 27.09.2021.
2 
High Court of Judicature at Allahabad
3 
Review Application No. 192 of 2021
4 
Civil Revision No. 28 of 2020
5 
Civil Judge (Senior Division),
Kanpur Nagar
6 
Hereinafter referred to as ‘MoU’
875
be got registered immediately after the litigation is over and the right of 
the vendor is determined. The respondent No. 1 shall inform the appellant 
when the rights of the parties are ﬁ nalised. As the appellant came to know 
that the respondent No. 1 is trying to sell the property to third parties, 
it ﬁ led a suit for injunction7. The prayer made in the suit was that the 
defendant (respondent No. 1 herein) be restrained from transferring, 
selling or alienating the suit property in favour of anyone else except the 
plaintiﬀ  (appellant herein). It was also prayed that he be restrained from 
creating any encumbrance on the property. In the written statement ﬁ led 
in the aforesaid suit, the stand taken by respondent No. 1 was that he was 
not selling the property or creating any third-party rights therein. The suit 
was accordingly dismissed. 
4. The appellant was never updated by respondent No. 1 about the 
status of the litigation between the family members. The petitioner having 
come to know that respondent No. 1 was again intending to sell the property 
in question issued two public notices to inform the public at large from 
not entering into any agreement in respect of the property in question. 
When it came to the notice of the appellant that respondent No. 1 was 
again trying to dispose of the property, as the litigation between the family 
members had been ﬁ nally resolved by this Court in Shreya Vidyarthi v. 
Ashok Vidyarthi and others8, a suit9 for
speciﬁ c performance was ﬁ led 
seeking enforcement of MoU dated 31.08.1998. It is in the aforesaid 
suit that application was ﬁ led by respondent No. 1 under Order VII Rule 
11(d) C.P.C. for rejection of the plaint on the ground that in terms of 
Order II Rule 2 C.P.C., the suit was barred by law. The relief, as claimed 
in the suit, was available to the appellant when the suit for injunction 
was ﬁ led by it and a fresh suit was not maintainable. The Trial Court, 
vide order dated 12.02.2020 rejected the application. The revision ﬁ led 
against the aforesaid order was dismissed by the High Court vide order 
dated 14.07.2021. However, there being no error apparent on the record 
of the order, which was a detailed and speaking one, the respondent No. 
1 ﬁ led Review Application, which was allowed by the High Court and 
7 
Original Suit No. 111 of 2009
8 
(2015) 16 SCC 46: 2015:INSC:934
9 
Original Suit No. 751 of 2017
ELDECO HOUSING AND INDUSTRIES LIMITED v. ASHOK 
VIDYARTHI AND OTHERS [RAJESH BINDAL, J.]
876 
SUPREME COURT REPORTS 
[2023] 16 S.C.R.
consequently the application ﬁ led under Order VII Rule 11(d) C.P.C. was 
allowed and the suit ﬁ led by the appellant was rejected.
5. The argument raised is that for consideration of an application 
under Order VII Rule 11 C.P.C., it is only the pleadings in the suit which 
are to be considered and no other material. A plain reading of the plaint 
shows that there was a cause of action to ﬁ le the suit which was not time 
barred. The MoU entered into between the parties clearly mentioned that 
there was litigation pending between the family members; as and when the 
rights are ﬁ nally determined by the Court, the appellant will be informed 
and subsequent thereto the sale deed will be registered. Respondent No. 1 
failed to apprise the appellant about the status of the litigation. In the year 
2009, when the appellant came to know that respondent No. 1 was trying 
to create third party rights in the property by selling the same to some other 
person, immediately a suit for injunction was ﬁ led against respondent No. 
1. A second injunction suit was also ﬁ led impleading Ms. Shreya Vidyarthi 
from creating any third-party rights qua the property in question. The 
apprehension was that the respondent no.1 along with Ms. Shreya Vidyarthi 
was trying to transfer the property to a third party.
6. The stand taken by respondent No. 1 in the written statement was 
that no third-party rights were being created. The suit was disposed of on
06.10.2010. As was the responsibility of respondent No. 1 to update the 
appellant about the progress of litigation amongst the family members 
of respondent No. 1, despite the fact that this Court had disposed of the 
litigation on 16.12.2015 in Shreya Vidyarthi’s case (supra), the appellant 
was not informed about the same. When this came to its notice, suit for 
speciﬁ c performance was ﬁ led in August 2017. Nothing was withheld from 
the Court. Filing of the earlier suit for injunction was speciﬁ cally pleaded 
and so was the cause of action. 
7. It was argued that when the earlier suit for injunction was ﬁ led, 
the cause of action for claiming the relief of speciﬁ c performance was 
not ripe as at that stage, the litigation between the family members of 
respondent No. 1, was still pending. It was merely a suit for injunction 
ﬁ led to protect the rights of the appellant. As respondent No. 1 was trying 
to create third party rights in the property in question, regarding which 
MoU had been entered between the appellantand the sale deed was to be
877
executed only after the dispute amongst the family members of respondent 
No. 1 was resolved.
8. On a plain reading of the plaint, by no stretch of imagination, it 
could be said that suit for speciﬁ c performance ﬁ led by the appellant was 
not maintainable under law, but still the application ﬁ led by respondent No. 
1 for rejection of the plaint was allowed by the High Court in the review 
application, even though earlier the same was rejected by the Trial Court 
and even the revision petition was also dismissed. It is settled position 
of law that no material except the plaint or the documents annexed with 
the plaint could be considered at the stage of consideration of application 
under Order VII Rule 11 C.P.C. None of the documents including the 
earlier suit for injunction or any communication or agreement was on 
record, hence the High Court had committed error in allowing the review 
application and consequently the application under Order VII Rule 11(d) 
CPC, rejecting the plaint. In support of the arguments, reliance was placed 
upon Gurbux Singh v. Bhooralal10, Sidramappa v. Rajashetty and 
others11, and Inbasegaran and another v. S. Natarajan (dead) through 
legal representatives12.
9. On the other hand, learned counsel for respondent No. 1 submitted 
that ﬁ ling of the suit for speciﬁ c performance by the appellant seeking to 
enforce the MoU entered on 31.08.1998 was highly belated. In fact, the 
appellant had not approached the Court with clean hands. In
the aforesaid 
MoU entered into between the parties, it was mentioned that a litigation 
is pending between the family members of respondent No. 1 in the High 
Court and the sale deed will be registered in favour of the appellant in case 
respondent No. 1 succeeds in litigation and absolute title comes in his favour. 
The consideration will be mutually agreed at that time. The aforesaid MoU 
was followed by an agreement executed between the parties on 02.09.1998 
with reference to the same property, in which all the terms and conditions 
for sale of property in case it comes to the share of respondent No. 1, were 
reduced in writing. It is speciﬁ cally mentioned in Clause (8) of the agreement 
10 (1964)7 SCR 831
11 (1970) SCC 186
12 (2015) 11SCC 12: 2014: INSC:748
ELDECO HOUSING AND INDUSTRIES LIMITED v. ASHOK 
VIDYARTHI AND OTHERS [RAJESH BINDAL, J.]
878 
SUPREME COURT REPORTS 
[2023] 16 S.C.R.
that pending litigation in the High Court is likely to be decided in favour of 
respondent No. 1, however, in case it is not decided favourably within one 
year from the date of ﬁ rst MoU dated 15.04.1998, the second party, namely, 
the appellant will have right to get the earnest money back along with interest 
@ 18% per annum. The aforesaid agreement was deliberately concealed 
by the appellant while ﬁ ling the civil suit. In terms of the agreement dated 
02.09.1998, the only right which was available to the appellant was to get 
the refund of earnest money along with interest for which the limitation 
expired long back but no action was taken. 
10. It was further argued that the appellant had even issued a notice 
dated 22.03.2001 for refund of earnest money. Even at the stage of ﬁ ling suit 
for injunction, the relief of speciﬁ c performance could very well be sought 
but the appellant failed to seek the same. The suit was not prosecuted by the 
appellant as the same was dismissed on 06.10.2010 and not disposed of, as 
claimed by the appellant. A separate suit on a part of cause of action which 
was already available to the appellant in a suit for injunction, was barred 
in terms of Order II Rule 2 C.P.C. The application ﬁ led by respondent No. 
1 was rightly allowed by the High Court. The facts, as have been stated 
by respondent No. 1, have not been disputed by the appellant. He further 
submitted that though respondent No.
1 expected that 3/4th part of the 
property will come to his share, however ﬁ nally he got only 1/10th share 
on which house is constructed and he is living there. In support of his plea, 
reliance was placed upon Jayakantham and others v. Abaykumar13 and 
Vurimi Pullarao v. Vemari Vyankata Radharani.14
11. Heard learned counsel for the parties and perused the relevant 
referred record.
12. Even from the documents placed on record by the appellant, it is 
evident that MoU was entered into between the parties on 15.04.1998 with 
reference to House No.7/89, Tilak Nagar, Kanpur. It was mentioned therein 
that the aforesaid property is in dispute and the respondent No. 1 has 3/4th 
share in the property. Though the Trial Court had decided against respondent 
No. 1, however, the appeal is pending in the High Court. Though sale 
13 (2017) 5 SCC 178: 2017: INSC:161
14 (2020) 14 SCC 110: 2019: INSCC:1291
879
consideration of ₹4,000/- per square yard was mentioned, however, the same 
was to be ﬁ nally determined after decision of appeal by the High Court. The 
sale deed was to be registered only after the litigation is decided in favour 
of respondent No. 1. The earnest money of ₹10,00,000/- was proposed to be 
paid in instalments. It was followed by a subsequent MoU signed between 
the parties on 31.08.1998 (registered on 01.09.1998) pertaining to the 
same property. This agreement did not provide for any details except that 
consideration for transfer of the property shall be mutually agreed between 
the parties at the time of registration of the sale deed, if the litigation 
is decided in favour of respondent No. 1. This MoU was followed by a 
registered agreement signed between the parties on 02.09.1998. It referred 
to an earlier MoU entered between the parties. Clause (4) of the agreement 
refers to the details of ₹10,00,000/- paid by the appellant to respondent 
No. 1. Besides other terms and conditions, which are not relevant for the 
decision of the controversy in issue, one of the clause in the agreement was 
that respondent No. 1 had assured the appellant that litigation pending in the 
High Court is likely to be decided shortly in his favour. However, in case 
it is not decided after one year from the date of execution of ﬁ rst MoU on 
15.04.1998, the appellant will have right to get the earnest money returned 
along with interest @ 18% per annum. Even the
appellant had issued notice 
dated 22.03.2001 to respondent No. 1 for refund of earnest money.
13. A suit for injunction was ﬁ led by the appellant against respondent 
No. 1 in January 2009. In the aforesaid civil suit, the appellant referred to 
the MoU entered into between the parties on 31.08.1998 (as registered on 
01.09.1998). No reference was made to the subsequent agreement dated 
02.09.1998. It was pleaded that the appellant (plaintiff therein)  c a m e 
to know that respondent No. 1 was intending to sell the property to some 
other person as the prices of the property had increased manifold during 
the interregnum. It was pleaded that respondent No. 1 had not informed the 
appellant (plaintiﬀ  therein) about the ﬁ nal result of the pending litigation 
and the appellant is still ready and willing to purchase the property at the 
rate which is mutually settled between the parties. An application was ﬁ led 
by respondent No. 1 under Order VII Rule 11(d) C.P.C. for rejection of the 
plaint.
14. From the paper book it is evident that another suit was ﬁ led by 
the appellant praying for permanent injunction with reference to the same 
ELDECO HOUSING AND INDUSTRIES LIMITED v. ASHOK 
VIDYARTHI AND OTHERS [RAJESH BINDAL, J.]
880 
SUPREME COURT REPORTS 
[2023] 16 S.C.R.
property referring to MoU dated 31.08.1998. The pleadings in the aforesaid 
suit were replied to by respondent No. 1 stating that the earlier suit No. 111 
of 2009 pertaining to the same property and claiming the same relief was 
already pending between the parties. An application under Order VII Rule 
11(d) C.P.C. was also ﬁ led pleading the same. It was further pleaded that 
the suit was barred by Section 41(h) of the Speciﬁ c Relief Act, 1963. Vide 
two orders of even date i.e., 06.10.2009 (in Suit No. 111 of 2009 and Suit 
No. 269 of 2009) the cases were dismissed as the counsel for the plaintiﬀ  
therein had failed to appear.
15. The order passed by this Court has been placed on record, in terms 
of which the share of family members of respondent No. 1 in the property 
in dispute was ﬁ nally decided on 16.12.2015. Notice dated 14.09.2016 was 
issued by the appellant to respondent No. 1 calling upon him to get the sale 
deed of the property in question registered in favour of the appellant. It 
referred to MoU executed on 15.04.1998, 01.09.1998and also agreement 
dated 02.09.1998. This was replied to by respondent No. 1 stating that 
there was no valid registered agreement to sell executed between the 
parties. Vide letter dated 22.03.2001, the appellant had backed out from 
the deal and sought refund of the earnest money which respondent No. 
1 was ready and willing to give. Two suits ﬁ led earlier by the appellant 
were
dismissed. Another notice was issued by the appellant to respondent 
No. 1 on 27.12.2016 and 10.03.2017 calling upon him to get the sale deed 
registered. The Civil Suit was ﬁ led in August 2017 by the appellant for 
speciﬁ c performance on the basis of MoU dated 31.08.1998. It is in the 
aforesaid suit that respondent No. 1 by ﬁ ling the written statement and also 
ﬁ led his counter claim. It was speciﬁ cally pleaded that the appellant had 
already withdrawn an earlier agreement and issued a notice in that regard 
to respondent No. 1 on 22.03.2001 seeking refund of the earnest money. 
The written statement also referred to two suits ﬁ led by the appellant for 
injunction. It was claimed that the present suit was barred under Order II 
Rule 2 C.P.C. Along with the written statement, an application was ﬁ led 
under Order VII Rule 11(d) C.P.C. for rejection of the plaint. The Trial Court, 
vide order dated 12.02.2020 dismissed the application. The High Court in 
the revision ﬁ led by respondent No. 1, vide order dated 14.07.2021 upheld 
the order passed by the Trial Court. The review application was ﬁ led by 
respondent No. 1 which was allowed vide order dated 29.7.2021.
881
16. It was not disputed at the time of hearing that pleadings in the 
earlier suits or documents which are sought to be referred to by respondent 
No.1, i.e., MoU dated 15.04.1998 and the agreement dated 02.09.1998 are 
not part of the record before the Trial Court.
17. In Kamala and others v. K. T. Eshwara Sa and others,15 this 
Court opined that for invoking clause (d) of Order VII Rule 11 C.P.C., only 
the averments in the plaint would be relevant. For this purpose, there cannot 
be any addition or substraction. No amount of evidence can be looked into. 
The issue on merits of the matter would not be within the realm of the Court 
at that stage. The Court at that stage would not consider any evidence or 
enter a disputed question of fact of law. Relevant paragraphs thereof are 
extracted below:
“21. Order 7 Rule 11(d) of the Code has limited application. It must 
be shown that the suit is barred under any law. Such a conclusion must 
be drawn from the averments made in the plaint. Diﬀ erent clauses in 
Order 7 Rule 11, in our opinion, should not be mixed up. Whereas in 
a given case, an application for rejection of the plaint may be ﬁ led on 
more than one ground speciﬁ ed in various sub-clauses thereof, a clear 
ﬁ nding to that eﬀ ect must be arrived at. What would be relevant for 
invoking clause (d) of Order 7 Rule 11 of the Code are the averments 
made in the plaint. For that purpose, there cannot be any addition 
or subtraction. Absence of jurisdiction on the
part of a court can be 
invoked at diﬀ erent stages and under diﬀ erent provisions of the Code. 
Order 7 Rule 11 of the Code is one, Order 14 Rule 2 is another.
22. For the purpose of invoking Order 7 Rule 11(d) of the Code, no 
amount of evidence can be looked into. The issues on merit of the 
matter which may arise between the parties would not be within the 
realm of the court at that stage. All issues shall not be the subject-matter 
of an order under the said provision.
23. The principles of res judicata, when attracted, would bar another 
suit in view of Section 12 of the Code. The question involving a mixed 
question of law and fact which may require not only examination of the 
plaint but also other evidence and the order passed in the earlier suit 
15 (2008) 12 SCC 661
ELDECO HOUSING AND INDUSTRIES LIMITED v. ASHOK 
VIDYARTHI AND OTHERS [RAJESH BINDAL, J.]
882 
SUPREME COURT REPORTS 
[2023] 16 S.C.R.
may be taken up either as a preliminary issue or at the ﬁ nal hearing, 
but, the said question cannot be determined at that stage.
24. It is one thing to say that the averments made in the plaint on their 
face discloses no cause of action, but it is another thing to say that 
although the same discloses a cause of action, the same is barred by 
a law.
25. The decisions rendered by this Court as also by various High 
Courts are not uniform in this behalf. But, then the broad principle 
which can be culled out therefrom is that the court at that stage would 
not consider any evidence or enter into a disputed question of fact or 
law. In the event, the jurisdiction of the court is found to be barred by 
any law, meaning thereby, the subject-matter thereof, the application 
for rejection of plaint should be entertained.”
(emphasis supplied)
18. Similar was the view expressed in Shakti Bhog Food Industries 
Ltd. v. Central Bank of India and another16 and Srihari Hanumandas 
Totala v. Hemant Vithal Kamat and others17.
19. The law applicable for deciding an application under Order VII 
Rule 11 C.P.C. was summed up by this Court in Dahiben v. Arvindbhai 
Kalyanji Bhanusali (Gajra) dead through legal representatives and 
others18. Relevant parts of paragraph 23 thereof are extracted below:
“23 to 23.1 
× 
× 
×
23.2. The remedy under Order 7 Rule 11 is an independent and special 
remedy, wherein the court is empowered to summarily dismiss
a suit at 
the threshold, without proceeding to record evidence, and conducting 
a trial, on the basis of the evidence adduced, if it is satisﬁ ed that the 
action should be terminated on any of the grounds contained in this 
provision.
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 
16 (2020) 17 SCC 260: 2020: INSC:413
17 (2021) 9 SCC 99: 2011: INSC:387
18 (2020) 7 SCC 366: 2020:INSC:450
883
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.
23.4. In Azhar Hussain v. Rajiv Gandhi 1986 Supp SCC 315, this 
Court held that the whole purpose of conferment of powers under this 
provision is to ensure that a litigation which is meaningless, and bound 
to prove abortive, should not be permitted to waste judicial time of 
the court, in the following words :
“12. … The whole purpose of conferment of such powers is to 
ensure that a litigation which is meaningless, and bound to prove 
abortive should not be permitted to occupy the time of the court, 
and exercise the mind of the respondent. The sword of Damocles 
need not be kept hanging over his head unnecessarily without 
point or purpose. Even in an ordinary civil litigation, the court 
readily exercises the power to reject a plaint, if it does not disclose 
any cause of action.”
23.5. The power conferred on the court to terminate a civil action is, 
however, a drastic one, and the conditions enumerated in Order 7 Rule 
11 are required to be strictly adhered to.
23.6. Under Order 7 Rule 11, a duty is cast on the court to determine 
whether the plaint discloses a cause of action by scrutinising the 
averments in the plaint [Liverpool & London S.P. & I Assn. Ltd. v. 
M.V. Sea Success I, (2004) 9 SCC 512], read in conjunction with the
documents relied upon, or whether the suit is barred by any law.
×× 
×× 
××
23.9. In exercise of power under this provision, the court would 
determine if the assertions made in the plaint are contrary to statutory 
law, or judicial dicta, for deciding whether a case for rejecting the 
plaint at the threshold is made out.
23.10. At this stage, the pleas taken by the defendant in the written 
statement and application for rejection of the plaint on the merits, would 
be irrelevant, and cannot be adverted to, or taken into consideration. 
[Sopan Sukhdeo Sable v. Charity Commr., (2004) 3 SCC 137]
ELDECO HOUSING AND INDUSTRIES LIMITED v. ASHOK 
VIDYARTHI AND OTHERS [RAJESH BINDAL, J.]
884 
SUPREME COURT REPORTS 
[2023] 16 S.C.R.
23.11. The test for exercising the power under Order 7 Rule 11 is that 
if the averments made in the plaint are taken in entirety, in conjunction 
with the documents relied upon, would the same result in a decree 
being passed. This test was laid down in Liverpool & London S.P. & 
I Assn. Ltd. v. M.V. Sea Success I [Liverpool & London S.P. & I Assn. 
Ltd. v. M.V. Sea Success I, (2004) 9 SCC 512] which reads as : (SCC 
p. 562, para 139)
“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.”
23.12. In Hardesh Ores (P) Ltd. v. Hede & Co. [Hardesh Ores (P) 
Ltd. v. Hede & Co., (2007) 5 SCC 614] the Court further held that it 
is not permissible to cull out a sentence or a passage, and to read it in 
isolation. It is the substance, and not merely the form, which has to be 
looked into. The plaint has to be construed as it stands, without addition 
or subtraction of words. If the allegations in the plaint prima facie show 
a cause of action, the court cannot embark upon an enquiry whether 
the allegations are true in fact. D. Ramachandran v. R.V.Janakiraman, 
(1999) 3 SCC 267; See
also Vijay Pratap Singh v. Dukh Haran Nath 
Singh, AIR 1962 SC 941].
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 justiﬁ ed 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, (2003) 1 SCC 557. The plea that once issues are framed, 
the matter must necessarily go to trial was repelled by this Court in 
Azhar Hussain v. Rajiv Gandhi, 1986 Supp SCC 315.Followed in
885
Manvendrasinhji Ranjitsinhji Jadeja v. Vijaykunverba, 1998 SCC 
OnLine Guj 281 : (1998) 2 GLH 823.
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 speciﬁ ed 
in clauses (a) to (e) are made out. If the court ﬁ nds 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.”
20. The same view was reiterated in Kum. Geetha v. Nanjundaswamy 
and others19.
21. The facts in Inbasegaran’s case (supra) are similar to the case in 
hand. In the above case, initially a suit for injunction was ﬁ led by the vendee 
restraining the vendor from interfering with the possession and enjoyment of 
the property. It was pleaded that in pursuance of the agreement, the vendee 
was delivered possession of the property. Subsequently, suit was ﬁ led seeking 
decree for speciﬁ c performance of agreement to sell. This Court found that 
cause of action in both the suits were diﬀ erent, hence the subsequent suit 
was not held to be barred in terms of Order II Rule 2 C.P.C.
22. The judgment of this Court in Vurimi Pullarao’s case (supra), 
relied upon by learned counsel for the respondent is distinguishable as in 
that case the cause of action to pray for relief of speciﬁ c performance had 
arisen at the stage when the suit for injunction was ﬁ led, however, the relief 
was not claimed. To notice certain dates, agreement to sell was
executed on 
26.10.1995; the time for completion of sale deed was upto 25.10.1996; notice 
for speciﬁ c performance was issued on 13.10.1996 which was replied to by 
the vendor therein on 13.10.1996 denying execution of sale deed; the suit 
for injunction was ﬁ led on 30.10.1998 pleading that the plaintiﬀ  is going to 
ﬁ le a suit for speciﬁ c performance of agreement to sell. Hence at the time 
of ﬁ ling of the suit for injunction on 30.10.1996, the cause of action for 
seeking speciﬁ c performance of agreement to sell had arisen. The relief, 
which was due to the plaintiﬀ  therein, when the suit for injunction was ﬁ led 
was omitted without leave of the Court, hence, barred under Order II Rule 
2(3) C.P.C. was attracted.
19 2023 SCC OnLine SC 1407: 2023 INSC 964.
ELDECO HOUSING AND INDUSTRIES LIMITED v. ASHOK 
VIDYARTHI AND OTHERS [RAJESH BINDAL, J.]
886 
SUPREME COURT REPORTS 
[2023] 16 S.C.R.
23. If the facts of the case are examined in the light of settled position of 
law, in our opinion, the order passed by the High Court in review application 
cannot be legally sustained. The suit for speciﬁ c performance was ﬁ led by 
the appellant on the basis of MoU dated 31.08.1998. In terms of the clauses 
in the agreement, it was pleaded that there was dispute pending amongst 
the family members of the vendor. After the same is decided and right of 
the vendor is crystalized, he will get the sale deed registered. The rights 
of the vendor were ﬁ nally crystalized when the issue was decided by this 
Court in Shreya Vidyarthi’s case (supra) on 16.12.1995. Suit for speciﬁ c 
performance was ﬁ led on 03.08.2017 stating that the appellant-plaintiﬀ  came 
to know about the disposal of the litigation amongst the family members 
just before ﬁ ling the suit. Earlier suit for injunction was ﬁ led on 22.01.2009 
pleading that the appellant-vendee came to know that the vendor was trying 
to create third party rights in the property while agreeing to sell the same to 
same to some other parties. At that stage cause of act to ﬁ le suit for speciﬁ c 
performance had not arisen.
24. The cause of action as contained in paragraph No. 9 of the plaint 
in question is extracted below:
“9. That the cause of action for the present suit arose on 13.1.2009 
when the plaintiﬀ  came to know that the defendant is intending to sell 
the property to
others and in this connection, he is negotiating with 
the interested parties and on coming to know about the said news, the 
plaintiﬀ  made contact to the defendant and refrained the defendant 
from transferring, selling or alienating the property in suit in favour 
of any other person except to the plaintiﬀ  as there is an agreement in 
between the parties and the parties are bound by the said agreement 
and the plaintiﬀ  further said to the defendant that the plaintiﬀ  was ever 
ready and willing to perform their part of contract and is still ready 
and willing to perform their part of the contract and the plaintiﬀ  are 
having money of sale consideration to pay the same to the defendant 
and to meet out the registry expenses and they are ready to purchase 
the property at the price and sale consideration, as may be mutually 
agreed between the parties but the defendant did not pay any heed 
on the plaintiﬀ ’s request and said to the plaintiﬀ  that he will sell the 
property to others for a high price and will not sell the property to the 
plaintiﬀ  and further given threat to the plaintiﬀ  that he will execute
887
the document in favour of others within a day or two and whatever 
action the plaintiﬀ  want to take, they are free to take and continues to 
every day within the jurisdiction of this learned court and this learned 
court has got jurisdiction to try the present suit.”
25. The application for rejection of the plaint was ﬁ led by the respondent 
claiming that prior to MoU dated 31.8.1995 (registered on 01.09.1998), the 
MoU was entered into between the parties on 15.04.1998 and subsequent 
to the aforesaid MoUs, an agreement was executed on 02.09.1998. In the 
aforesaid agreement, it was clearly mentioned that in case the litigation of the 
vendor regarding the property in question is not decided after one year, the 
vendee will have the right to get his earnest money back along with interest 
@ 18% per annum. In fact, the vendee had issued a notice on 22.03.2001 
seeking refund of the earnest money. In the light of the aforesaid facts, the 
suit for speciﬁ c performance ﬁ led after dismissal of the suit for injunction 
was barred under Orde II Rule 2 CPC and deserved to be rejected.
26. However, the fact remains that all the aforesaid documents, referred 
to by the respondent in support of his plea for rejection of the plaint, cannot be 
considered at this stage as these are not part of the record with the Court ﬁ led 
along with the plaint. This is the stand taken by the respondent-defendant 
in the application ﬁ led under Order VII Rule 11 C.P.C. As noticed above, 
no
amount of evidence or merits of the controversy can be examined at the 
stage of decision of the application under Order VII Rule 11 C.P.C. Hence, 
in our view, the impugned order of the High Court passed in the Review 
Application deserves to be set aside. Ordered accordingly.
27. The Trial Court shall proceed with the suit. However, if considered 
appropriate, after pleadings are complete, the issue regarding maintainability 
of the suit can be treated preliminary.
28. The appeal is allowed in the manner indicated above.
Headnotes prepared by: 
Appeal allowed.
Ankit Gyan
ELDECO HOUSING AND INDUSTRIES LIMITED v. ASHOK 
VIDYARTHI AND OTHERS [RAJESH BINDAL, J.]