/2022 INSC 0254/
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REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.1689 OF 2022
M/S FROST INTERNATIONAL LIMITED    APPELLANT(S)
VERSUS
M/S MILAN DEVELOPERS AND 
BUILDERS (P) LIMITED & ANR.  RESPONDENT(S)
J U D G M E N T
NAGARATHNA J. 
1. This appeal is preferred by defendant no.1 in C.S. No.1065
of   2009   filed   before   the   Court   of   Civil   Judge   (Senior   Division)
Bhubaneswar,   by   assailing   order   dated   19 th
  January,   2016
passed by the High Court of Orissa at Cuttack in WP(C) No.7059
of 2013. By the said order, the application filed by the appellant
herein/defendant   no.1   under   Order   VII   Rule   11   of   the   Code   of
Civil Procedure 1908 (for short, the ‘CPC’) has been ordered to be
reconsidered   by   the   District   Court   at   Khurda,   Bhubaneswar
(revisional   court)   by   restoring   C.R.P.   No.5   of   2012   filed   by   the

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defendant  no.1   herein.   The  said   revision   was   filed  by  defendant
no.1   being   aggrieved   by   the   dismissal   of   the   said   application
being C.S. No.1065 of 2009 by the trial court, namely, the Court
of   Civil   Judge   (Senior   Division),   Bhubaneswar,   praying   for
rejection of the plaint under Order VII Rule 11 of the CPC.   
2. For   the   sake   of   convenience,   the   parties   herein   shall   be
referred   to   in   terms   of   their   rank   and   status   before   the   trial
court.
3. Briefly   stated,   the   facts   of   the   case   are   that,   respondent
no.1   herein/plaintiff   had   filed   a   suit   against   the   appellant
herein/defendant   no.1   and   respondent   no.2   herein/defendant
no.2 seeking the following reliefs: 
“(i)   Let   it   be   declared   that   the   plaintiff   had
handed   over   the   cheque   to   Sri   Dilip   Das,
Advocate as a security;
 
(ii) Let   it   be   declared   that   the   said   cheque   has
been illegally handed over by the defendant
no.2 to the defendant no.1 by violating term
and   condition   of   the   memorandum   of
understanding dated 17.01.2009;
 
(iii) Let   it   be   declared   that   the   plaintiff   is   not
liable to give delivery of 3876 MT of iron ore
fines   to   the   defendant   no.1   nor   the   cheque
amount since the defendant no.1 has failed
to save the plaintiff’s plot from cancellation;
(iv) Let the cost of the suit be decreed in favour
of the plaintiff and against the defendants;

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(v) Let   any   other   decree/decrees   be   passed   in
favour   of   the   plaintiff   to   which   the   plaintiff
is entitled to under law and equity.”
4. According   to   the   plaintiff,   which   is   a   Private   Limited
Company,   incorporated   under   the   provisions   of   the   Companies
Act, 1956, it is engaged in the business of export of iron ore from
Paradeep   Port   while   defendant   no.1   is   also   a   Company
incorporated   under   the   provisions   of   the   Companies   Act,   1956,
having   its   registered   office   at   Kanpur,   Uttar   Pradesh,   and   also
having   its   Branch   at   Kolkata   in   West   Bengal.   Defendant   no.1
carries   on   business   at   Paradeep   Port,   Orissa   in   supplying   and
exporting   iron   ore   from   the   said   Port   to   various   destinations
overseas.   That   plaintiff   had   a   plot   namely   Plot   No.RS­4   on
licence from Paradeep Port Trust Authority for the purpose of its
export business in iron ore. That defendant no.1 and the plaintiff
had   entered   into   a   Cooperation   Agreement   on   24 th
  December,
2007 but according to the plaintiff, the same was not given effect
to.   That   defendant   no.1,   through   its   Managing   Director   Sunil
Banna,   tried   to   blackmail   the   plaintiff   in   various   ways   and
threatened   him   that   he   would   intimate   Paradeep   Port   Trust
Authority   that   the   plaintiff   had   sub­let   his   licence   in   respect   of
Plot   No.RS­4   to   defendant   no.1   by   violating   the   terms   and
conditions of licence. 

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According to the plaintiff, defendant no.1 in January 2009
stated   that   plaintiff   had   illegally   exported   stock   of   4000   MT   of
iron   ore   and   when   the   plaintiff   through   its   Managing   Director
refuted   the   claim   of   defendant   no.1,   a   complaint   was   lodged   at
Paradeep Police Station on 8 th
  January, 2009 and thereafter, on
10 th
  January,   2009   alleging   theft   of   4000   MT   iron   ore   fines
belonging to defendant no.1. 
According   to   the   plaintiff,   defendant   no.1   lodged   another
false   complaint   with   the   Paradeep   Port   Trust   Authority   to   the
effect that the plaintiff was violating the terms and conditions of
his licence in respect of Plot No.RS­4 which had been sub­let to
defendant   no.1   and   a   copy   of   the   Cooperation   Agreement   dated
24 th
  December, 2007 which was in fact not acted upon was also
filed   along   with   complaint.   Acting   on   the   said   complaint,
Paradeep   Port   Trust   Authority   had   issued   show   cause   notice   to
the plaintiff on 20 th
  January, 2009 and thereafter, cancelled the
licence   of  the  plaintiff   vis­à­vis   Plot No.RS­4  by  letter  dated  18 th
February, 2009. 
5. Being apprehensive of the cancellation of the licence to Plot
No.RS­4, the Managing Director of the plaintiff Company agreed
to   the   proposal   of   the   representative   of   defendant   no.1   viz. ,
Rabindra   Banthia,   that   in   case   plaintiff   agreed   to   supply   3876

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MT   of   iron   ore   fines   to   defendant   no.1,   they   would   manage   to
withdraw their complaint and would save the licence of the plot
from cancellation. 
6. That   in   January,   2009,   plaintiff   had   outstanding   dues   of
Rs.21.50   lakhs   against   defendant   no.1   and   at   the   behest   of
defendant   no.2,   a   Memorandum   of   Understanding   (for   short,
‘MoU’)   was   arrived   at   on   17 th
  January,   2009   on   certain   terms
and   conditions   that   defendant   no.1   would   take   steps   to   protect
the   licence   of   the   plot   given   to   the   plaintiff   from   cancellation   in
seven   days’   time   and   it   was   further   agreed   that   defendant   no.1
would   give   a   cheque   of   Rs.21.50   lakhs   to   the   plaintiff   towards
the   outstanding   dues   to   the   plaintiff.   Similarly,   the   plaintiff
would issue a cheque for Rs.56 lakhs in favour of defendant no.1
and   the   same   would   remain   in   the   custody   of   Sri   Dilip   Das,
Advocate ­ defendant no.2 as security, which is equivalent to the
cost of 3876 MT of iron ore. The plaintiff would supply 3786 MT
of iron ore fines to defendant no.1 if defendant no.1 succeeded in
protecting   the  licence  of  the   said  plot of  the   plaintiff  from  being
cancelled.   Accordingly,   plaintiff   furnished   a   cheque   for   Rs.56
lakhs  in  favour   of  defendant  no.1  and  handed   over  the  same   to
Sri Dilip Das, Advocate ­ defendant no.2 in the suit, as security.
Defendant   no.2   wrote   a   letter   to   the   Managing   Director   of   the

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plaintiff   on   20 th
  January,   2009   intimating   therein   that   both
cheques   would   be   in   his   custody   and   the   cheque   drawn   by   the
plaintiff amounting to Rs.56 lakhs would  not be handed over to
defendant no.1 unless defendant no.1 fulfilled its undertaking as
per   the   MoU   dated   17 th
  January,   2009.   Further,   the   cheque
would   be   handed   over   to   defendant   no.1   only   when   the   plot
licence of the plaintiff was saved from cancellation by defendant
no.1 and if the plaintiff failed to supply the iron ore to defendant
no.1. 
7. According to the plaintiff, defendant no.1 did not take any
step   to   save   the   licence   of   the   plot   of   the   plaintiff   from
cancellation   and   the   licence   was   cancelled   on   the   complaint   of
defendant   no.1   by   letter   dated   18 th
  February,   2009   by   the
Paradeep   Port   Trust   Authority.   According   to   the   plaintiff,   the
question   of   handing   over   the   cheque   to   defendant   no.1   by
defendant no.2 did not arise at all. Plaintiff had approached the
High   Court   in   a   writ   petition   vis­à­vis   the   cancellation   of   the
licence   in   respect   of   the   plot   and   an   order   of   stay   on   the
cancellation was granted. 
It   is   the   further   case   of   the   plaintiff   that   when   the   matter
stood thus, defendants no.1 and 2 colluded with each other and
defendant   no.2   committed   breach   of   trust   and   betrayed   the

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plaintiff   as   the   cheque   for   Rs.56   lakhs   was   handed   over   by
defendant   no.2   to   defendant   no.1.   On   receipt   of   the   cheque,
defendant   no.1   pressurized   the   plaintiff   to   either   supply   3876
MT   iron   ore   fines   or   they   would   present   the   cheque   for
encashment. Since the plaintiff did not agree to supply iron ore,
defendant   no.1   presented   the   cheque   for   encashment   but   the
same was dishonoured as the plaintiff had issued stop payment
instructions to the Bank on coming to know about the collusion
between   defendant   no.1   and   defendant   no.2.   Thereafter,
defendant no.1 issued notice under Section 138 of the Negotiable
Instruments   Act,   1881   (for   short,   the   ‘N.I.   Act’)   through   their
advocate   on   10 th
  June,   2009   to   the   plaintiff   through   its
Managing   Director,   to   which   a   reply   was   sent   on   23 rd
  June,
2009.   It   was,   inter   alia,   stated   in   the   reply   that   the   defendants
were   trying   to   harass   the   plaintiff   and   having   no   other
alternative,   the   plaintiff   filed   the   suit  seeking   a   declaration   that
the   cheque   which   was   dishonoured   was   handed   over   by   the
plaintiff to defendant no.2 as a security and that defendant no.1
had not acquired any right over the said cheque as the plaintiff
had   no   liability   to   discharge   vis­à­vis   defendant   no.1.   It   was
averred in the plaint that defendant no.1 was liable to pay a sum
of   Rs.21.50   lakhs   to   the   plaintiff   towards   its   outstanding   dues

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for which a cheque was issued on 17 th
 January, 2009 which was
also   kept   with   defendant   no.2   and   in   respect   of   which   the
plaintiff   reserved   its   right   to   initiate   appropriate   proceeding   for
recovery   of   the   said   amount   from   defendant   no.1.   There   were
further   correspondences   between   the   parties   and   ultimately   the
aforementioned   suit   was   filed   by   the   plaintiff   against   the
defendants. 
8. On   receipt   of   the   summons   sent   by   the   trial   court,
defendant   no.1   appeared   and   filed   an   application   under   Order
VII Rule 11 of CPC seeking rejection of the plaint on the ground
that   the   suit   was   not   maintainable   being   barred   under   the
provisions of the Specific Relief Act, 1963 (for short, the ‘SR Act’)
and   secondly,   the   suit   was   frivolous   and   instituted   as   a
subterfuge   to   defeat   the   legitimate   claim   of   defendant   no.1
without   having   any   right   to   sue.   Objection   was   filed   to   the   said
application by the plaintiff. The said application was considered
by the trial court and dismissed by refusing to reject the plaint. 
9. Being   aggrieved,   defendant   no.1   preferred   C.R.P.   No.5   of
2012 before the Court of District Judge, Khurda at Bhubaneswar
under Section 115 of the CPC. By order dated 20 th
 March, 2013,
the   revisional   court   allowed   the   said   revision   petition,   set   aside
the   order   of   the   trial   court   refusing   to   reject   the   plaint,   and

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rejected   the   plaint.   Being   aggrieved,   the   plaintiff   filed   W.P.(C)
No.7059   of   2013   before   the   High   Court   of   Orissa   at   Cuttack
which   set   aside   the   order   of   the   revisional   court   and   remanded
the   matter   to   the   said   court   for   fresh   consideration   by   holding
that the revisional court had exceeded its jurisdiction in rejecting
the   plaint.   Being   dissatisfied   with   the   order   of   the   High   Court
defendant no.1 has preferred this appeal. 
10. We   have   heard   Mrs.   Rajdipa   Behura,   learned   counsel   for
the   appellant   and   Sri   Anirudh   Sanganeria,   learned   counsel   for
the respondents and perused the material on record. 
11. Learned counsel for the appellant submitted that the High
Court   was   not   right   in   setting   aside   the   order   passed   by   the
revisional   court   and   remanding   the   matter   to   the   said   court  for
reconsideration   of   the   application   filed   by   the   appellant   under
Order   VII   Rule   11   of   CPC   on   the   premise   that   revisional   court
had   exceeded   its   jurisdiction.   It   was   contended   that   the
application under Order VII Rule 11 of the CPC was filed by the
appellant/defendant   no.1   in   the   suit   filed   by   respondent
no.1/plaintiff   seeking   rejection   of   the   plaint   on   the   ground   that
the prayers sought in the suit could not have been granted and
the suit as such was not maintainable and was barred under the
provision   of   Section   41   of   the   SR   Act.   Further   there   was   no

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cause   of   action   for   the   plaintiff   to   file   the   suit   against   the
defendants. The  trial  court did not appreciate  the reasons  as  to
why an application was filed by defendant no.1 seeking rejection
of   the   plaint   and   dismissed   the   same.   Being   aggrieved   the
appellant/defendant no.1 filed revision petition in C.R.P. No.5 of
2012   before   the   District   Court   having   regard   to   Section   115   of
the   CPC   and   particularly   proviso   thereto   as,   if   the   application
filed by defendant no.1 under Order VII Rule 11 of CPC was to be
allowed by the revisional court, then, the proceedings before the
trial   court   would   conclude.   The   revisional   court   rightly
appreciated the case of appellant herein and rejected the plaint.
However,   the   High   Court   on   a   writ   petition   filed   by   the   plaintiff
held   that   the   revisional   court   while   exercising   its   power   of
revision   had   exceeded   its   jurisdiction   by   rejecting   the   plaint
instead of remanding the matter to the trial court to do so. While
adverting to Section 115 of the CPC [ vide  Orissa Act 26 of 1991,
Section   2   (w.e.f.   7 th
  November,   1991)],   learned   counsel   for   the
appellant   contended   that   when   the   trial   court   failed   to   exercise
jurisdiction   vested   in   it   and   refused   to   reject   the   plaint   by
allowing the application filed under Order VII Rule 11 of the CPC
by   the   appellant   herein,   the   revisional   court   rightly   allowed   the
said revision and rejected the plaint which finally disposed of the

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suit   in   terms   of   the   second   proviso   to   the   said   Section.   It   was
contended that the High Court has not taken into consideration
the Orissa amendment and has further misconstrued the object
and import of Section  115 of the CPC   vis­à­vis   the provisions of
the   revisional   court   and   has   erroneously   set   aside   the   order   of
the   revisional   court   rejecting   the   plaint   and   remanding   the
matter to the revisional court for fresh consideration. 
12. Drawing   our   attention   to   the   order   of   the   High   Court,   it
was contended  that the  said  order  is  contrary  to  Section  115 of
CPC (Orissa amendment) and hence the impugned order may be
set   aside   and   the   order   of   the   revisional   authority   may   be
restored.   It   was   contended   by   learned   counsel   for   the   appellant
that as against the order of the revisional authority rejecting the
plaint,   respondent   no.1   herein/plaintiff   could   not   have   filed   a
writ petition. 
13. Per   contra,   learned   counsel   for   respondent   no.1/plaintiff
supported   the   impugned   order   passed   by   the   High   Court   and
contended   that   when   a   plaint   is   rejected   by   allowing   an
application filed under  Order VII  Rule 11 of CPC,  it results in a
decree   being   passed   within   the   meaning   of   Section   2(2)   of   the
CPC   and   hence   the   High   Court   directed   the   revisional   court   to
consider   the   matter   afresh   and   if   necessary,   to   remand   the

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matter   to   the   trial   court   for   considering   the   aspect   regarding
rejection of plaint. Learned counsel for respondent no.1/plaintiff
contended   that   there   is   no   merit   in   this   appeal   and   the   same
may be dismissed. 
14. Having heard learned counsel for the respective parties the
following points would arise for our consideration: 
(a) Whether   the   High   Court   was   justified   in   setting
aside   the   order   passed   by   the   revisional   court   in
C.R.P.   No.5   of   2012   and   thereby   remanding   the
matter to the said court for reconsideration on the
premise that the revisional court had exceeded its
jurisdiction in rejecting the plaint?
(b) What order?
The   reliefs   sought   by   the   plaintiff   in   the   suit   have   been
extracted above. 
15. Having   regard   to   the   averments   in   the   plaint   summarised
above   and   the   reliefs   sought   in   the   plaint,   defendant
no.1/appellant   herein   filed   an   application   under   Order   VII   and
Rule   11   of   CPC   seeking   rejection   of   the   plaint.   The   rejection   of
the   plaint   was   sought   for   three   reasons   :­   firstly,   the   suit   was
barred under the provisions of the SR Act; secondly, the suit was
frivolous   and   was   filed   as   a   subterfuge   to   defeat   the   legitimate

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claim   of   defendant   no.1;   and   thirdly,   the   suit   has   been
deliberately   undervalued.   Objections   were   filed   to   the   said
application   of   defendant   no.1.   By   order   dated   19 th
  May,   2012,
the   trial   court   dismissed   the   said   application.   Being   aggrieved,
defendant   no.1   filed   C.R.P.   No.5   of   2012   under   Section   115
(Orissa amendment). 
16. The   revisional   court   considered   the   revision   and   allowed
the application filed under Order VII Rule 11 of CPC which had
the   effect   of   finally   disposing   of   the   suit.   It   is   against   the   said
order   that   the   plaintiff   filed   the   writ   petition   before   the   High
Court   which   was   allowed   and   the   matter   was   remanded   to   the
revisional court for fresh consideration with an observation that
the revisional court may, in turn, remand the matter to the trial
court   if   necessary.   This   was   on   the   premise   that   the   revisional
court had exceeded the jurisdiction vested in it by acting illegally
in allowing the application filed under Order VII Rule 11 of CPC. 
17. In order to consider the correctness of the impugned order
passed by the High Court, it would be useful to refer to Section
115 of the CPC as well as the Orissa Amendment. For immediate
reference, the same are extracted as under: 
“115.   Revision   —   (1)   The   High   Court   may   call
for   the   record   of   any   case   which   has   been
decided   by   any   Court   subordinate   to  such   High

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Court and in which no appeal lies thereto, and if
such subordinate Court appears— 
(a) to have exercised a jurisdiction not vested in
it by law, or
(b)   to   have   failed   to   exercise   a   jurisdiction   so
vested, or 
(c) to have acted in the exercise of its jurisdiction
illegally   or   with   material   irregularity,   the   High
Court   may   make   such   order   in   the   case   as   it
thinks fit: 
Provided   that   the   High   Court   shall   not,   under
this Section, vary  or reverse any order made, or
any   order   deciding   an   issue,   in   the   course   of   a
suit or other proceeding, except where the order,
if   it   had   been   made   in   favour   of   the   party
applying for revision would have finally disposed
of the suit or other proceedings.
(2) The High Court shall not, under this Section,
vary   or   reverse   any   decree   or   order   against
which an appeal lies either to the High Court or
to any Court subordinate thereto. 
(3)   A  revision  shall  not   operate   as  a  stay  of  suit
or   other   proceeding   before   the   Court   except
where such suit or other proceeding is stayed by
the High Court.
Explanation.—In   this   Section,   the   expression
“any case which has been decided” includes any
order   made,   or   any   order   deciding   an   issue   in
the course of a suit or other proceeding.”
ORISSA AMENDMENT
“115.   Revision   ­   The   High   Court,   in   cases
arising out of original suits or other proceedings
of the value exceeding one lakh rupees, and the
District   Court,   in   any   other   case   including   a
case   arising   out   of   an   original   suit   or   other
proceedings   instituted   before   the
commencement   of   the   Code   of   Civil   Procedure
(Orissa   Amendment)   Act,   1991   may   call   for   the

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record   of   any   case   which   has   been   decided   by
any  Court   subordinate  to  the High  Court  or   the
District Court, as the case may be, and in which
no   appeal   lies   thereto,   and   if   such   Subordinate
Court appears ­
(a) to have exercised a jurisdiction not vested in
it by law; or
(b)   to   have   failed   to   exercise   a   jurisdiction   so
vested; or
(c) to have acted in the exercise of its jurisdiction
illegally or with material irregularity;
the High Court or the District Court, as the case
may   be,   may   make   such   order   in   the   case   as  it
thinks fit;
Provided   that   in   respect   of   cases   arising   out   of
original   suits   or   other   proceedings   of   any
valuation decided by the District Court, the High
Court   alone   shall   be   competent   to   make   an
order under this Section;
Provided   further   that   the   High   Court   or   the
District Court shall not, under this Section, vary
or reverse any order, including an order deciding
an   issue,   made   in   the   course   of   a   suit   or   other
proceedings, except where ­
(i) the order, if so varied or reversed
would   finally   dispose   of   the   suit   or
other proceedings; or
(ii)   the   order,   if   allowed   to   stand,
would occasion a failure of justice or
cause irreparable injury to the party
against whom it was made.
Explanation   ­   In   this   Section,   the   expression
'any   case   which   has   been   decided'  includes   any
order deciding an issue in the course of a suit or
other proceeding".”
18. On   a   perusal   of   the   same   it   is   noted   that   the   Orissa
amendment   differs   from   the   main   Section   115   of   CPC   in   the
following ways:

16
(i) Firstly,   the  main  Section   115  deals  with  revisional   powers
of   the   High   Court   only,   whereas,   Section   115   of   CPC
(Orissa amendment) confers the power of revision not only
on   the   High   Court   but   also   on   the   District   Court   which
may call for the record of any case which has been decided
by any court subordinate to the High Court or the District
Court,   as   the   case   may   be,   and   in   which   no   appeal   lies
thereto,   if   such   subordinate   court   appears   ­   (a)   to   have
exercised   a   jurisdiction   not   vested   in   it   by   law;   or   (b)   to
have   failed   to   exercise   a   jurisdiction,   so   vested;   or   (c)   to
have acted in the exercise of its jurisdiction illegally or with
material irregularity. In such a case, the High Court or the
District   Court,   as   the   case   may   be,   may   make   such   order
in the case as it thinks fit. 
(ii) Secondly,   sub­section   (2)   of   Section   115   of   the   main
provision,   states   that   the   High   Court   shall   not,   under   the
said   Section,   vary   or   reverse   any   decree   or   order   against
which   an   appeal   lies   either   to   the   High   Court   or   to   any
Court subordinate thereto. But under the second proviso to
Section 115 of CPC (Orissa amendment), the High Court or
the District Court shall not under the said Section, vary or
reverse   any   order,   including   an   order   deciding   an   issue,

17
made   in   the   course   of   a   suit   or   other   proceeding,   except
where  –  (i)  the  order,  if  so  varied  or  reversed  would  finally
dispose of the suit or other proceedings; or 
(ii)   the   order,   if   allowed   to   stand,   would   occasion   a  failure
of   justice   or   cause   irreparable   injury   to   the   party   against
whom it was made. 
Thus, the first proviso to main Section 115 of CPC restricts
the revisional power of the High Court inasmuch as a revision is
maintainable only if it is filed by a party who is aggrieved by an
order   passed   by   the   court  subordinate   to   the   High   Court  on   an
order deciding an issue which, had it been made in favour of the
party   applying   for   revision,   would   have   finally   disposed   of   the
suit   or   other   proceeding.   But   as   per   the   second   proviso   to
Section   115   of   CPC   (Orissa   amendment),   the   High   Court   or   the
District   Court,   as   the   case   may   be,   under   the   said   Section   can
vary   or   reverse   any   order   including   an   order   deciding   an   issue,
made in the course of a suit or other proceeding only if the order
if so varied or reversed would finally dispose of the suit or other
proceeding   or   the   order   if   allowed   to   stand   would   occasion   a
failure of justice or cause irreparable injury to the party against
whom it was made. In other words, under Orissa amendment to
Section   115   of   CPC,   an   express   power   is   conferred   on   the   High

18
Court   or   the   District   Court,   as   the   case   may   be,   being   the
revisional   courts,   to   vary   or   reverse   an   order   of   the   court
subordinate thereto only when it would finally dispose of the suit
or other proceedings or if the impugned order is allowed to stand
would occasion a failure of justice or cause irreparable injury to
the party against whom it was made. 
19.  It would also be pertinent to mention that the instant suit
was filed in the year 2009 and therefore the Orissa amendment
to Section 115 CPC  vide  Orissa Act 26 of 1991, Section 2, would
be  applicable.   However, by Orissa  Act 14 of 2010, Sub­Section
2,   Section   115   was   amended   by   the   Orissa   Legislature   and
second   proviso   to   Section   115   has   been   amended   and   Sub­
Section   2   of   Section   115   has   been   added   which   states   that   the
High   Court   or   District   Court,   as   the   case   may   be,   shall   not
under this Section, vary or reverse any order including an order
deciding   an   issue,   made   in   the   course   of   a   suit   or   other
proceeding, except where the order, if it has been made in favour
of the party  applying for revision, would  finally  dispose  the suit
or other proceeding. 
20.  Further, clause 1 of the second proviso of Section 115 has
been   omitted   by   the   amendment   made   in   the   year   2010   and
Sub­Section   3   has   been   added.   This   provision   states   that   a

19
revision   shall   not   operate   as   a   stay   of   suit   or   other   proceeding
before   the   Court   except   where   such   suit   or   other   proceeding   is
stayed by the High Court or District Court, as the case may be.
Sub­Section   1   of   Section   115  is   in   pari  materia   with   the   Orissa
Amendment   of   1991   except   its   reference   to   the   Orissa
Amendment   Act   of   2010.   For   immediate   reference,   Section   115
of   the   CPC   as   per   the   2010   amendment   made   (Orissa
Amendment) is extracted as under:
“Amendment   of   Section   115.   ­   In   the   Code   of
Civil   Procedure,   1908   (5   of   1908),   for   Section
115,   the   following   Section   shall   be   substituted,
namely:­­
115.   Revision.­­ (1)   The   High   Court,   in   cases
arising out of original suits or other proceedings
of the value exceeding five lakhs rupees and the
District   Court,   in   any   other   cases,   including   a
case   arising   out   of   an   original   suit   or   other
proceedings   instituted   before   the
commencement   of   the   Code   of   Civil   Procedure
( Orissa Amendment) Act, 2010, may call for the
record   of   any   case   which   has   been   decided   by
any  Court   subordinate  to  the High  Court  or   the
District Court, as the case may be, and in which
no   appeal   lies   thereto,   and   if   such   subordinate
Court appears­­
(a) to have exercised a jurisdiction not vested in
it by law; or
(b)   to   have   failed   to   exercise   a   jurisdiction   so
vested; or
(c) to have acted in the exercise of its jurisdiction
illegally or with material irregularity,
the High Court or the District Court, as the case
may   be,   may   make   such   order   in   the   case   as  it
thinks fit:

20
Provided   that   in   respect   of   cases   arising   out   of
original   suits   or   other   proceedings   of   any
valuation decided by the District Court, the High
Court   alone   shall   be   competent   to   make   an
order under this Section
(2)   The   High   Court   or   the   District   Court,   as   the
case   may   be,   shall   not   under   this   Section,   vary
or reverse any order, including an order deciding
an   issue,   made   in   the   course   of   a   suit   or   other
proceedings,   except   where   the   order,   if   it   had
been   made   in   favor   of   the   party   applying   for
revision,   would   have   finally   disposed   of   the   suit
or other proceedings.
(3)   A  revision  shall  not   operate   as  a  stay  of  suit
or   other   proceeding   before   the   Court   except
where such suit or other proceeding is stayed by
the   High   Court   or   District   Court,   as   the   case
may be.
Explanation­­In   this   Section,   the   expression,
"any case which has been decided" includes any
order deciding an issue in the course of a suit or
other proceeding.".
[ Vide   the Orissa Act 14 of 2010, s. 2]”
21. Therefore,   we   hold   that   the   High   Court   was   not   right   in
observing   that  the  revisional   court had  exceeded  its  jurisdiction
and   it   could   not   have   allowed   the   application   filed   under   Order
VII   Rule   11   of   CPC   and   thereby   reversed   the   order   of   the   trial
court and finally disposed of the suit. In fact, the High Court has
failed   to   appreciate   the   second   proviso   to   Section   115   of   CPC
(Orissa amendment) in its true perspective. The revisional court,
being  the High  Court or the District Court,  as the  case may  be,
can   reverse   an   order   which   would   finally   dispose   of   the   suit   or
other   proceeding.   That   is   exactly   what   has   been   done   by   the

21
revisional   court   being   the   District   Court   in   the   petition   being
C.R.P. No.5 of 2012. 
22. Hence,   we   find   that   the   High   Court   was   not   justified   in
setting   aside   the   said   order   and   remanding   the   matter   to   the
revisional   court   (District   Court)   to   consider   afresh,   the
application filed by defendant no.1/appellant herein under Order
VII   Rule   11   of   CPC   seeking   rejection   of   the   plaint.   In   fact,   we
would observe that exercise of jurisdiction by the revisional court
in   the   instant   case   is   in   accordance   with   second   proviso   to
Section 115 of CPC (Orissa amendment). 
In this regard, we could also usefully refer to the following
decisions: ­ 
(a) Gajendragadkar,   CJ.,   in   a   judgment   passed   by   the   five
Judges   Bench   of   this   Court   in   Pandurang   Dhondi
Chougule   and   Others   vs.   Maruti   Hari   Jadhav   and
Others   –   [AIR   1966   SC   153]   dealt   with   the   question   of
jurisdiction under Section 115 CPC, as follows:­
“ 10.   The   provisions   of   Section   115   of   the   Code
have   been   examined   by   judicial   decisions   on
several   occasions.   While   exercising   its
jurisdiction   under   Section   115,   it   is   not
competent to the High Court to correct errors of
fact   however   gross   they   may,   or   even   errors   of
law,   unless   the   said   errors   have   relation   to   the
jurisdiction of the court to try the dispute itself.
As   clauses   ( a ),   ( b )   and   ( e )   of   Section   115

22
indicate,   it   is   only   in   cases   where   the
subordinate   court   has   exercised   a   jurisdiction
not vested in it by law, or has failed to exercise a
jurisdiction   so   vested,   or   has   acted   in   the
exercise   of   its   jurisdiction   illegally   or   with
material   irregularity   that   the   revisional
jurisdiction   of   the   High   Court   can   be   properly
invoked. It is conceivable that points of law may
arise   in   proceedings   instituted   before
subordinate   courts   which   are   related   to
questions of jurisdiction. It is well settled that a
plea   of   limitation   or   a   plea   of   res   judicata   is   a
plea   of   law   which   concerns   the   jurisdiction   of
the   court   which   tries   the   proceedings.   A   finding
on   these   pleas   in   favour   of   the   party   raising
them   would   oust   the   jurisdiction   of   the   court,
and   so,   an   erroneous   decision   on   these   pleas
can   be   said   to   be   concerned   with   questions   of
jurisdiction   which   fall   within   the   purview   of
Section   115   of   the   Code.   But   an   erroneous
decision   on   a   question   of   law   reached   by   the
subordinate   court   which   has   no   relation   to
questions of jurisdiction of that court, cannot be
corrected by the High Court under Section 115.”
(b) Nariman, J. while discussing Section 115 CPC and proviso
thereto held that revision petitions filed under Section 115
CPC   are   not   maintainable   against   interlocutory   orders   in
the case of   Tek Singh vs.  Shashi Verma and Another –
[(2019)   16   SCC   678].   The   following   observations   were
made in the said case:­ 
“ 6.   Even   otherwise,   it   is   well   settled   that   the
revisional jurisdiction under Section 115 CPC is
to   be   exercised   to   correct   jurisdictional   errors
only.   This   is   well   settled.   In   DLF   Housing   &
Construction   Co.   (P)   Ltd.   v.   Sarup   Singh   [ DLF
Housing   &   Construction   Co.   (P)   Ltd.   v.   Sarup
Singh ,   (1969)   3   SCC   807   :   (1970)   2   SCR   368]
this Court held: (SCC pp. 811­12, para 5)

23
“ 5 .   The   position   thus   seems   to   be
firmly   established   that   while
exercising   the   jurisdiction   under
Section   115,   it   is   not   competent   to
the   High   Court   to   correct   errors   of
fact   however   gross   or   even   errors   of
law   unless   the   said   errors   have
relation   to   the   jurisdiction   of   the
court   to   try   the   dispute   itself.
Clauses ( a ) and ( b ) of this section on
their   plain   reading   quite   clearly   do
not   cover   the   present   case.   It   was
not   contended,  as indeed  it  was not
possible to contend, that the learned
Additional   District   Judge   had   either
exercised a jurisdiction not vested in
him   by  law  or  had  failed  to exercise
a   jurisdiction   so   vested   in   him,   in
recording   the   order   that   the
proceedings   under   reference   be
stayed till the decision of the appeal
by   the   High   Court   in   the
proceedings for specific performance
of the agreement in question. Clause
( c )   also   does   not   seem   to   apply   to
the   case   in   hand.   The   words
“illegally”   and   “with   material
irregularity”   as   used   in   this   clause
do   not   cover   either   errors   of   fact   or
of   law;   they   do   not   refer   to   the
decision arrived at but merely to the
manner   in   which   it   is   reached.   The
errors   contemplated   by   this   clause
may,   in   our   view,   relate   either   to
breach of some provision of law or to
material   defects   of   procedure
affecting   the   ultimate   decision,   and
not to errors either of fact or of law,
after the prescribed formalities have
been complied with.” 
Therefore, in the instant case the High Court was not right
in  holding  that the  revisional  court had  no  jurisdiction  to  reject
the plaint filed under Order VII Rule 11 of CPC. The reasoning of

24
the High Court is contrary to the express proviso of Section 115
(Orissa Amendment).
23. No   doubt   rejection   of   a   plaint   is   a   decree   within   the
meaning   of   Section   2(2)   of   CPC   and   an   appeal   lies   from   every
decree passed by any court exercising original jurisdiction to the
Court authorised to hear appeals from a decision of such court.
However, it must be borne in mind that when a revisional court
rejects   a   plaint,   in   substance,   an   application   filed   under   Order
VII   Rule   11   is   being   allowed.   Under   such   circumstances,   the
remedy   by   way   of   a   writ   petition   under   Article   227   of   the
Constitution could be availed  and respondent  no.1/plaintiff has
resorted   to   the   said   remedy   in   the   instant   case;   although   if   the
plaint   had   been   rejected   by   the   trial   court   i.e.   court   of   original
jurisdiction,   it   would   have   resulted   in   a   right   of   appeal   under
Section 96 of CPC.
24. Having regard to the second proviso to Section 115 of CPC
(Orissa   amendment),   a   revisional   court   while   allowing   the
application   filed   under   Order   VII   Rule   11   of   CPC   would   in
substance   reject   the   plaint   but   since   the   said   decree   is   not
passed   by   the   court   of   original   jurisdiction,   namely   the   trial
court, the remedy by way of writ petition under Article 227 of the

25
Constitution   would   be   available   to   the   aggrieved   party   and
respondent no.1 has availed the said remedy. 
25. Having   held   as   above,   we   now   proceed   to   consider,
whether,   the   revisional   court   (District   Court)   was   justified   in
allowing   the   application   filed   under   Order   VII   Rule   11   of   CPC
and thereby rejecting the plaint filed by the plaintiff/respondent
no.1 herein. Before proceeding further, it would be useful to refer
to the following judgments of this Court in respect with Order VII
Rule 11 CPC:
a) In T. Arivandandam vs. T.V. Satyapal & Anr. – [(1977)
4   SCC   467],   this   Court   observed,   in   the   following   words,
that while considering an application under Order VII Rule
11 CPC what is required to be decided is whether the plaint
discloses   a   real   cause   of   action,   or   something   purely
illusory:­ 
“5.   We   have   not   the   slightest   hesitation   in
condemning the petitioner for the gross abuse of
the   process   of   the   court   repeatedly   and
unrepentently resorted to. From the statement of
the   facts   found   in   the   judgment   of   the   High
Court,   it   is   perfectly   plain   that   the   suit   now
pending   before   the   First   Munsif's   Court,
Bangalore, is a flagrant misuse of the mercies of
the  law  in   receiving   plaints.  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

26
therein   is   fulfilled.   And,   if   clever   drafting   has
created the illusion of a cause of action, nip it in
the   bud   at   the   first   hearing   by   examining   the
party   searchingly   under   Order   10,   CPC.   An
activist Judge is the answer to irresponsible law
suits.   The   trial   courts   would   insist   imperatively
on   examining   the   party   at   the   first   hearing   so
that   bogus   litigation   can   be   shot   down   at   the
earliest stage. The Penal Code is also resourceful
enough to meet such men, (Cr. XI) and must be
triggered against them. In this case, the learned
Judge   to   his   cost   realised   what   George   Bernard
Shaw   remarked   on   the   assassination   of
Mahatma   Gandhi:   “It   is   dangerous   to   be   too
good.”
b) In   Azhar   Hussain   vs.   Rajiv   Gandhi   –   [1986   Supp   SCC
315],   this   Court   discussed   the   very   purpose   of   the   power
conferred under Order VII Rule 11 CPC by observing thus:
­
“12.   The   whole   purpose   of   conferment   of   such
power   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   if   an   ordinary
civil   litigation,   the   Court   readily   exercises   the
power   to   reject   a   plaint,   if   it   does   not   disclose
any cause of action.”
c) In   Sopan   Sukhdeo   Sable   and   Ors.   vs.   Assistant
Charity Commissioner and Others ­ [(2004) 3 SCC 137] ,
it   was   held   that   Rule   11   of   Order   VII   lays   down   an
independent   remedy   made   available   to   the   defendant   to

27
challenge   the   maintainability   of  the   suit   itself,   irrespective
of   his   right   to   contest   the   same   on   merits.   The   law
ostensibly   does   not   contemplate   any   stage   when   the
objections can be raised, and also does not say in express
terms   about   the   filing   of   a   written   statement.   It   was   held
that the word ‘shall’ is used to clearly imply that a duty is
cast on the Court to perform its obligations in rejecting the
plaint   when   the   same   is   hit   by   any   of   the   infirmities
provided   in   the   four   clauses   of   Rule   11,   even   without
intervention of the defendant. Elaborating on the aspect of
cause   of   action   by   quoting   I.T.C   Ltd.   vs.   Debts   Recovery
Appellate Tribunal and Ors. – [(1998) 2 SCC 70] , it was
held   that   the   basic   question   to   be   decided   while   dealing
with   an   application   filed   under   Order   VII   Rule   11   of   the
Code is whether a real cause of action has been set out in
the   plaint   or   something   purely   illusory   has   been   stated
with a view to get out of Order VII Rule 11 of the Code.
d) This Court in  Liverpool & London S.P. & I Assn. Ltd. vs.
M.V. Sea Success I & Anr. ­ [(2004) 9 SCC 512]  held that
a   plaint   must   be   construed   as   it   stands   without   any
amendments. The same is extracted herein as follows­ 

28
“ 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 its entirety,
a decree would be passed.” 
e) We   could   allude   to   the   exposition   of   this   Court   in
Madanuri   Sri   Rama   Chandra   Murthy   vs.   Syed   Jalal   –
[(2017) 13 SCC 174] , wherein it was held as under:­
“7.   …..The   averments   of   the   plaint   have   to   be
read   as   a   whole   to   find   out   whether   the
averments disclose a cause of action or whether
the   suit   is   barred   by   any   law.   It   is   needless   to
observe that the question as to whether the suit
is barred by any law, would always depend upon
the   facts   and   circumstances   of   each   case.   The
averments   in   the   written   statement   as   well   as
the   contentions   of   the   defendant   are   wholly
immaterial   while   considering   the   prayer   of   the
defendant for rejection of the plaint. Even when,
the   allegations   made   in   the   plaint   are   taken   to
be correct as a whole on their face value, if they
show   that   the   suit   is   barred   by   any   law,   or   do
not   disclose   cause   of   action,   the   application   for
rejection   of   plaint   can   be   entertained   and   the
power   under   Order   VII   Rule   11   of   CPC   can   be
exercised.   If   clever   drafting   of   the   plaint   has
created   the   illusion   of   a   cause   of   action,   the
court will nip it in the bud at the earliest so that
bogus litigation will end at the earlier stage. ”
f) In   Dahiben   vs.   Arvindbhai   Kalyanji   Bhanusali   (Gajra)
Dead   through   Legal   Representatives   and   Others   –
[(2020)  7 SCC 366] , Indu Malhotra, J., while dealing  with
an   appeal   against   an   order   allowing   rejection   of   a   suit   at

29
the   threshold,   had   an   occasion   to   consider   various
precedents discussing the intent and purpose of Order  VII
Rule 11 CPC while setting out principles in relation to the
same. It was held   that the provision of Order VII Rule 11 is
mandatory in nature and that the plaint “shall” be rejected
if   any   of   the   grounds   specified   in   clause   (a)   to   (e)   is   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.  The  relevant
portion of the judgment is extracted as below:­
“23.1 X X X X X
 
23.2 The remedy  under Order 7 Rule 11 CPC is
an independent and special remedy wherein the
court is empowered to summarily dismiss a suit
at   the   threshold,   without   proceedings   to   record
evidence, and conducting a trial, on the basis of
the   evidence   adduced,   if   it   is   satisfied   that   the
action   should   be   terminated   on   any   of   the
grounds contained in this provision.
23.3 The underlying  object  of Order  VII  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. 
23.4   In   Azhar   Hussain   v.   Rajiv   Gandhi,   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

30
prove abortive, should not be permitted to waste
judicial time of the court.
23.5   The   power   conferred   on   the   court   to
terminate   a   civil   action   is,   however,   a   drastic
one, and the conditions enumerated in Order VII
Rule 11 are required to be strictly adhered to.
23.6 Under Order VII Rule 11, a duty is cast on
the   Court   to   determine   whether   the   plaint
discloses   a   cause   of   action   by   scrutinizing   the
averments   in   the   plaint,   read   in   conjunction
with the documents relied upon, or whether the
suit is barred by any law.
23.7 X X X X X
23.8   Having   regard   to   Order   7   Rule   14,   the
documents   filed   with   the   plaint,   are   required   to
be   taken   into   consideration   for   deciding   the
application   under   Order   7   Rule   11(a).   When   a
document   referred   to   in   the   plaint,   forms   the
basis of the plaint, it should be treated as a part
of the plaint. 
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.”
g) In a recent judgment of  Rajendra Bajoria and Others vs.
Hemant   Kumar   Jalan   and   Others   ­   [2021   SCC   Online
SC   764] ,   this   Court   while   elucidating   on   the   underlying
object   of   Order   VII   Rule   11   CPC   and   considering   various
precedents of this Court, held as under : ­

31
“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  VII  Rule 11
of   CPC   are   required   to   be   strictly   adhered   to.
However,   under   Order   VII   Rule   11   of   CPC,   the
duty   is   cast   upon   the   court   to   determine
whether   the   plaint   discloses   a   cause   of   action,
by scrutinizing 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   VII   Rule   11   of   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.”
26.  Relying on the case of   Hardesh Ores (P.) Ltd. vs. Hede &
Co. – [(2007) 5 SCC 614] , it was 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.  Further delving upon the ratio
in   D.   Ramachandran   vs.   R.V.   Janakiraman  –   [(1999)   3  SCC
367] , it was held that 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.
27.  It   was   further   held   that   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

32
would   be  justified  in  exercising  the  power  under   Order  VII   Rule
11   CPC.   Placing   reliance   on   Saleem   Bhai   vs.   State   of
Maharashtra – [(2003) 1 SCC 557],   it was held that the power
under Order  VII 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.
28.  On   a   reading   of   the   plaint,   in   the   instant   case   it   is   noted
that   it   discloses   a   cause   of   action   inasmuch   as   the   MoU   dated
17 th
  January,   2009,   entered   into   between   the   plaintiff   and
defendant   no.1   in   the   presence   of   defendant   no.2   and   the   acts
done pursuant to the said MoU is the basis for the grievance of
the plaintiff. According to the plaintiff, a cheque for Rs. 56 lakhs
was issued by him in favour of defendant no.1 and handed over
to   Sri  Dilip  Das,  Advocate   –  defendant no.2  as  security  with   an
understanding   that   the   said   cheque   will   not   be   handed   over   by
defendant   no.2   to   defendant   no.1   unless   defendant   no.1   fulfils
its   undertaking   and   carries   out   the   responsibility   of   saving   the
licence   to   plot   No.   RS­4,   issued   in   favour   of   the   plaintiff   by   the
Paradeep Port Trust Authority, from being cancelled. As a result,
the   plaintiff   would   continue   to   remain   as   the   licensee   of   the
Paradeep   Port   Trust   Authority   vis­a­vis   the   said   plot.   According

33
to   the   plaintiff,   defendant   no.1   did   not   take   any   step   to   save
licence of the plaintiff from cancellation and it was cancelled on
the   basis   of   the   complaint   made   by   defendant   no.1   vide   letter
dated 18 th
 February, 2009, by the Paradeep Port Trust Authority.
Hence, the question  of defendant no.2 handing over the cheque
for   Rs.   56   lakhs   to   defendant   no.1   did   not   arise.   Further,
plaintiff   was   pressurized   to   either   supply   3876   MT   of   iron   ore
fines to defendant no.1 or else defendant no.1 would present the
cheque for encashment. Since plaintiff did not agree to the illegal
demand   of   defendant   no.1,   the   cheque   for   Rs.56   lakhs   which
had been handed over by defendant no.2 to defendant no.1, was
presented by defendant no.1 and it was dishonoured. According
to the Plaintiff, defendant no.2 and defendant no.1 colluded with
each other to make an illegal gain and defendant no.2 could not
have handed over the cheque to defendant no.1. Hence, a letter
was   written   to   the   Bank   directing   them   to   stop   the   payment   of
the   cheque   and   the   same   was   conveyed   to   the   defendants.   The
said   cheque   was   dishonoured.   Defendant   no.1   issued   notice
under   Section   138   of   NI   Act   dated   10 th
  June,   2009,   to   the
plaintiff   through   its   Managing   Director,   to   which   a   reply   was
given   on   23 rd
  June,   2009.   According   to   the   plaintiff,   defendant
no.1 owes the plaintiff Rs. 21.50 lakhs but the plaintiff does not

34
have   to   pay   anything   to   defendant   no.1.   Hence,   defendant  no.1
is   duty   bound   to   return   the   cheque   to   the   plaintiff   but,   on   the
other   hand,   the   defendants   are   trying   to   harass   the   plaintiff   by
presenting   the   cheque   and   hence   certain   reliefs   were   sought   in
the   suit.   The   relief   of   declaration   was   sought   to   the   effect   that
the cheque handed over by the plaintiff to defendant no.2 was as
a   security;   that   the   cheque   had   been   illegally   handed   over   by
defendant   no.2   to   defendant   no.1   in   violation   of   the   terms   and
conditions   of   the   MoU   dated   17 th
  January,   2009   and   that   the
plaintiff   is   neither   liable   to   deliver   3876   MT   of   iron   ore   fines   to
defendant   no.1   nor   to   pay   an   amount   of   Rs.   56   lakhs   since
defendant   no.1   had   failed   to   save   the   licence   of   plaintiff’s   plot
from cancellation by the Paradeep Port Trust Authority.
29.  At   the   outset,   we   hold   that   on   perusal   of   the   plaint
averments,   the   plaintiff   has   indeed   made   out   a   cause   of   action
for filing the suit. In fact, in para 2 of the application filed under
Order   VII   Rule   11   CPC,   defendant   no.1   has   also   encapsulated
the   averments   made   in   the   plaint.   Therefore,   on   that   score   the
plaint cannot be rejected. 
30.  The   other   contention   of   defendant   no.1   is   that   from   the
pleadings   and   averments   in   the   plaint   and   the   prayers   sought
therein, it appears that only certain declaratory reliefs have been

35
sought   and   further,   consequential   reliefs   have   been   omitted   to
be prayed. Hence, the suit is barred under the provisions of the
SR Act and is liable to be dismissed and the plaint is liable to be
rejected under Order VII Rule 11 CPC. 
31.  In   the   objections   filed   to   the   application   under   order   VII
Rule   11   CPC,   it   has   been   averred   that   the   plaint   averments
would   clearly   show   a   cause   of   action   for   filing   the   suit   and
further   that   the   suit   is   not   barred   by   any   law.   Further,   the
declaratory   reliefs   have   been   valued   properly   and   appropriate
court   fee   has   been   paid.   Hence,   the   application   is   liable   to   be
rejected. 
Thus,   the  main  thrust  of   the  application  seeking  rejection
of the plaint is that apart from the fact that the plaint does not
disclose   a   cause   of   action   which   has   been   negated   by   the
revisional   court   and   rightly   so,   plaintiff   has   sought   only
declaratory   reliefs   and   has   not   sought   further   or   consequential
reliefs.   In   the   circumstances,   the   suit   is   barred   under   the
provisions of the SR Act. 
Section 34 of the SR Act reads as under:
“34.   Discretion   of   court   as   to   declaration   of
status or right.—Any person entitled to any legal
character,   or   to   any   right   as   to   any   property,
may institute a suit against any person denying,

36
or interested to deny, his title to such character
or   right,   and   the   court   may   in   its   discretion
make therein a declaration that he is so entitled,
and   the   plaintiff   need   not   in   such   suit   ask   for
any further relief: 
Provided  that  no  court  shall make  any  such
declaration   where   the   plaintiff,   being   able   to
seek   further   relief   than   a   mere   declaration   of
title, omits to do so. 
Explanation.—A  trustee  of  property  is  a  “person
interested   to   deny”   a   title   adverse   to   the   title   of
some  one  who  is  not  in  existence,  and  whom,  if
in existence, he would be a trustee.”
The   proviso   to   Section   34   states   that   no   court   can   make
any   declaration   where   the   plaintiff,   being   able   to   seek   further
relief   than   mere   declaration   of   title,   omits   to   do   so.   The   said
question   will   have   to   be   considered   at   the   time   of   final
adjudication of the suit as the question of granting further relief
or   consequential   relief   would   arise   only   if   the   court   grants   a
declaration.   If   the   plaintiff   is   unsuccessful   in   seeking   the   main
relief   of   declaration,   then,   the   question   of   granting   any   further
relief   would   not   arise   at   all.   Therefore,   omission   on   the   part   of
the   plaintiff   in   praying   for   further   consequential   relief,   would
become relevant only at the time of final adjudication of the suit.
Hence, in view of the above, the plaint cannot be rejected at this
stage   by   holding   that   the   plaintiff   has   only   sought   declaratory
reliefs and no further consequential reliefs. 

37
32.  The other reason cited for rejection of the plaint is that the
suit   is   an   attempt   on   the   part   of   the   plaintiff   to   deprive
defendant   no.1   of   its   legitimate   dues.   In   other   words,   the
plaintiff is seeking a declaration that the cheque for Rs. 56 lakhs
issued   in   the   name   of   defendant   no.1   and   handed   over   to
defendant   no.2   in   turn   to   be   handed   over   to   defendant   no.1   at
the   appropriate   time   was   only   as   a   security.   According   to   the
plaintiff it was not liable to pay the cheque amount to defendant
no.1 since defendant no.1 had not fulfilled its obligations under
the terms of the MoU. The declaratory reliefs sought are worded
as under: 
“(i)   Let   it   be   declared   that   the   plaintiff   had
handed   over   the   cheque   to   Sri   Dilip   Das,
Advocate as a security;
(ii)  Let   it   be   declared   that   the   said   cheque   has
been illegally handed over by the defendant
no.2 to the defendant no.1 by violating term
and   condition   of   the   memorandum   of
understanding dated 17.01.2009;
(iii)  Let   it   be   declared   that   the   plaintiff   is   not
liable to give delivery of 3876 MT of iron ore
fines   to   the   defendant   no.1   nor   the   cheque
amount since the defendant no.1 has failed
to   save   the   plaintiff’s   plot   from
cancellation;”
Hence, it is contended by defendant no.1 that the suit filed
by   the   plaintiff   is   an   attempt   to   frustrate   the   possibility   of   the
defendant no.1 initiating  action under  the provisions of the N.I.

38
Act  for  the  dishonour   of  cheque.  In  this  regard,  reference  could
be made to Sections 118 (a) and 138 of N.I. Act, which reads as
under:
“118.   Presumptions   as   to   negotiable
instruments.   —Until  the   contrary   is   proved,   the
following presumptions shall be made:—
(a)   of   consideration   —that   every   negotiable
instrument   was   made   or   drawn   for
consideration,   and   that   every   such   instrument,
when it has been accepted, indorsed, negotiated
or   transferred,   was   accepted,   indorsed,
negotiated or transferred for consideration;
XXX  XXX  XXX
138. Dishonour of cheque for  insufficiency, etc.,
of   funds   in   the   account.—Where   any   cheque
drawn by a person on an account maintained by
him with a banker for payment of any amount of
money   to   another   person   from   out   of   that
account for the discharge, in whole or in part, of
any   debt   or   other   liability,   is   returned   by   the
bank   unpaid,   either   because   of   the   amount   of
money   standing   to   the   credit   of   that   account   is
insufficient   to   honour   the   cheque   or   that   it
exceeds   the   amount   arranged   to   be   paid   from
that   account   by   an   agreement   made   with   that
bank,   such   person   shall   be   deemed   to   have
committed   an   offence   and   shall,   without
prejudice   to   any   other   provision   of   this   Act,   be
punished   with   imprisonment   for   [a   term   which
may   be   extended   to   two   years’],   or   with   fine
which   may   extend   to   twice   the   amount   of   the
cheque, or with both: 
Provided   that   nothing   contained   in   this
section shall apply unless— 
(a)   the   cheque   has   been   presented   to   the   bank
within   a   period   of   six   months   from   the   date   on
which   it   is   drawn   or   within   the   period   of   its
validity, whichever is earlier; 

39
(b)   the   payee   or   the   holder   in   due   course   of   the
cheque,   as   the   case   may   be,   makes   a   demand
for the payment of the said amount of money by
giving   a   notice;   in   writing,   to   the   drawer   of   the
cheque,   [within   thirty   days]   of   the   receipt   of
information by him from the bank regarding the
return of the cheque as unpaid; and 
(c)   the   drawer   of   such   cheque   fails   to   make   the
payment   of   the   said   amount   of   money   to   the
payee   or,   as   the   case   may   be,   to   the   holder   in
due   course   of   the   cheque,   within   fifteen   days   of
the receipt of the said notice. 
Explanation.—For   the   purposes   of   this   section,
“debt   of   other   liability”   means   a   legally
enforceable debt or other liability. ”
33. On   a   reading   of   the   same,   it   is   clear   that   there   is   a
rebuttable   presumption   that   every   negotiable   instrument
including a cheque was made  or drawn  for a consideration  and
every   such   instrument   when   it   has   been   accepted   is   for   a
consideration. 
34.  In   the   instant   case,   on   a   reading   paragraph   13   of   the
plaint,   it   is   evident   that   cheque   issued   had   been   dishonoured
and defendant no.1 had issued notice under Section 138 of N.I.
Act on 10 th
 June, 2009, to the plaintiff and its Managing Director
replied   to   the   same   through   their   advocate   on   23 rd
  June,   2009.
Therefore, it is evident that the plaintiff by seeking the aforesaid
reliefs is  in substance  frustrating  the right of defendant no.1 to
take   steps   under   the   provisions   of   N.I.   Act   for   releasing   the
amount of cheque issued by the plaintiff to defendant no.1 for a

40
sum   of   Rs.   56   lakhs   by   filing   a   civil   suit   and/or   by   initiating   a
criminal   prosecution.   In   other   words,   by   seeking   such   a
declaration   that   the   cheque   was   issued   as   a   security   and   that
the   same   was   illegally   handed   over   by   defendant   no.2   to
defendant   no.1   in   violation   of   the   terms   and   conditions   of   the
MoU, the plaintiff in substance is making an attempt to frustrate
proceedings being  initiated  under  Section  138 of the  N.I.  Act or
for recovery of the amount by filing a civil suit. 
35.  On a holistic reading of the plaint and on consideration of
the reliefs sought by the plaintiff, we find that the said reliefs are
barred by law inasmuch as no plaintiff can be permitted to seek
relief   in   a   suit   which   would   frustrate   the   defendants   from
initiating   a   prosecution   against   plaintiff   or   seeking   any   other
remedy   available   in   law.   In   fact,   the   attempt   made   by   the
plaintiff to seek such a declaratory relief is, in substance, to seek
a   relief   of   injunction   against   the   defendants,   particularly
defendant   no.1,   but   framed   it   in   the   nature   of   a   declaratory
relief.   In   other   words,   the   plaintiff   has   sought   an   injunction
against defendant no.1 from seeking remedies in law on account
of   the   cheque   issued   by   the   plaintiff   for   a   sum   of   Rs.   56   lakhs
being dishonoured. 

41
36.  We may refer to Sections 41 (b) and (d) of SR Act which are
extracted as under: ­ 
“41. Injunction when refused. ­ xxx
(b)    to   restrain   any   person   from
instituting   or   prosecuting   any
proceeding   in   a   Court   not
subordinate   to   that   from   which   the
injunction is sought;
 
xxx xxx xxx
(d)  to   restrain   any   person   from
instituting   or   prosecuting   any
proceeding in a criminal matter;”
In   the   above   context,   following   decisions   are   useful   to
be referred to:­ 
(a) In   the   case   of   Cotton   Corporation   of   India   Limited
vs.   United   Industrial   Bank   Limited   and   Ors.   ­
[(1983)   4   SCC   625] ,   this   Court   highlighted   the
equitable   principle   underlying   Section   41   (b)   of   the
Specific Relief Act, 1963 as under : ­ 
“ 8.   It   is,   therefore,   necessary   to   unravel   the
underlying   intendment   of   the   provision
contained   in   Section   41(6).   It   must   at   once   be
conceded   that   Section   41   deals   with   perpetual
injunction and it may as well be conceded that it
has   nothing   to   do   with   interim   or   temporary
injunction   which   as   provided   by   Section   37   are
dealt   with   by   the   Code   of   Civil   Procedure.   To
begin   with,   it   can   be   said   without   fear   of
contradiction   that   anyone   having   a   right   that   is
a   legally   protected   interest   complains   of   its

42
infringement   and   seeks   relief   through   court
must have an unhindered, uninterrupted access
to law courts. The expression ‘court’ here is used
in   its   widest   amplitude   comprehending   every
forum   where   relief   can   be   obtained   in
accordance with law. Access to justice must not
be   hampered   even   at   the   hands   of   judiciary.
Power   to   grant   injunction   vests   in   the   court
unless   the   legislature   confers   specifically   such
power on some other forum. Now access to court
in search of justice according  to law is the right
of a person who complains of infringement of his
legally protected interest and a fortiori therefore,
no   other   court   can   by   its   action   impede   access
to   justice.   This   principle   is   deducible   from   the
Constitution   which   seeks   to   set   up   a   society
governed   by   ride   of   law.   As   a   corollary,   it   must
yield to another principle that the superior court
can   injunct   a   person   by   restraining   him   from
instituting   or   prosecuting   a   proceeding   before   a
subordinate court. Save this specific carving out
of   the   area   where   access   to   justice   may   be
impeded   by   an   injunction   of   the   court,   the
legislature   desired   that   the   courts   ordinarily
should   not   impede   access   to   justice   through
court.   This   appears   to   us   to   be   the   equitable
principle   underlying   Section   41( b ).   Accordingly,
it   must   receive   such   interpretation   as   would
advance   the   intendment,   and   thwart   the
mischief it was enacted to suppress, and to keep
the   path   of   access   to   justice   through   court
unobstructed.”  
(b)  In   the   case   of   Ratna   Commercial   Enterprises   Ltd.   vs.
Vasutech Ltd. – [AIR 2008 Del 99] , it was held: ­  
“ 29.   The   other   issue   concerns   the
maintainability   of   the   suit   itself   in   terms   of   the
Section   41(d)   of   the   Specific   Relief   Act,   1963
(‘SRA’) which reads as under:
“41.   An   injunction   cannot   be   granted
….   (d)   to   restrain   any   person   from
instituting   or   prosecuting   any
proceeding in a criminal matter.”

43
The   law   concerning   the   interpretation   of
Section   41(d)   of   the   SRA   is   fairly   well   settled.   It
has been held In Re   N.P. Essappa Chettiar   AIR
1942   Mad.   756   and   in   Gauri
Shanker   v.   District   Board   AIR   1947   All.   81
that a suit to restrain criminal proceedings being
initiated is not maintainable. In   Aristo Printers
Pvt.   Ltd.   v.   Purbanchal   Trade   Centre   AIR
1992   Gau.   81   a   Division   Bench   of   the   Gauhati
High   Court   was   dealing   with   a   case   where
cheques  issued  by  the  plaintiff  to  the defendant
had   been   dishonoured   and   notice   had   been
issued   to   the   defendant   under   Section   138   NI
Act. The plaintiff then filed a suit to restrain the
defendant   from   instituting   proceedings   under
the   NI   Act.   The   Court   referred   to   a   judgment   of
the   Hon'ble   Supreme   Court   in   State   of
Orissa   v.   Madan   Gopal   Rungta   AIR   1952   SC
12   and   Cotton   Corporation   of   India
Ltd.   v.   United Industrial Bank Ltd.   AIR 1983
SC   1272   and   held   that   “an  order  of  injunction
of   the   nature   issued   in   this   case   cannot   be
granted   and   the   hands   of   the   criminal   court
cannot be fettered by the civil court.”
30.   The   decision   of   this   Court   in   Atul   Kumar
Singh   v.   Jalveen   Rosha   AIR   2000   Del   38   was
in   a   case   where   the   plaintiff   had   issued   four
cheques issued in favour for the defendant for a
value   of   Rs.   7   lakhs.   The   cheques   when
presented   were   dishonoured.   After   service   of
notice   under   Section   138   NI   Act,   the   plaintiff
filed a suit for a declaration that “the defendant
is   not   entitled   to   any   benefit   on   account   of
holding   the   cheques”   and   to   injunct   the
defendant “from using or claiming any benefit by
virtue   of   possessing   the   instruments.”   This
Court, while allowing the defendant's application
for rejecting the plaint, held that (AIR, p.40):
“The   reliefs   claimed   in   this   suit   are
in   substance   for   an   injunction
restraining   the   defendant   from
prosecuting   the   criminal   case
instituted   against   the   plaintiff.
Section   41(b)   of   the   SRA   denies   to

44
the   Court   the   jurisdiction   to   grant
an injunction restraining any person
from prosecuting any proceedings in
a   Court.   Consequently,   the
injunction   sought   by   the   plaintiff
cannot   be   granted   since   it   would
have   the   effect   of   preventing   the
defendant   from   prosecuting   the
criminal case against the plaintiff.”
Further,   the   nature   of   the   declaratory   reliefs   sought
already arises out of the MoU dated 17 th
 January, 2009, between
the plaintiff and defendant no.1 in respect of which the plaintiff
could seek appropriate remedies, if there is a breach of the said
MoU by defendant no.1, but the plaintiff cannot seek declaratory
reliefs   to   the   effect   that   the   plaintiff   was   not   liable   to   carry   out
his   obligation   under   the   terms   of   the   MoU.   If   the   plaintiff   has
failed   to   do   so   then   the   defendant   no.1   would   have   a   cause   of
action  against the  plaintiff, but there  cannot be a frustration  of
the   right   to   seek   a   remedy   in   law   by   means   of   seeking
declaration under a contract or MoU as in the instant case. 
37.  Moreover,   the   right   of   defendant   no.1   to   prosecute   the
plaintiff   owing   to   the   dishonour   of   the   cheque   issued   by   the
plaintiff   for   a   sum   of   Rs.   56   lakhs   cannot   be   frustrated   by
seeking a declaration that the said cheque was handed over as a
security.   Such   a   declaration   cannot   be   ex   facie   granted   as   it
would   be   contrary   to   the   provisions   of   the   N.I.   Act   and

45
particularly Section 118(a) thereof. If the plaintiff is aggrieved on
account   of   breach   of   the   terms   and   conditions   of   the   MoU
committed   by   defendant   no.1   then   it   could   seek   appropriate
reliefs   in   accordance   with   law.   Whether   the   plaintiff   was   not
liable   to   issue   the   cheque   for   Rs.   56   lakhs   to   defendant   no.1
under   the   terms   of   the   MoU   is   a   matter   which   has   to   be
considered   in   an   appropriate   proceeding   to   be   initiated   by
defendants   on   account   of   dishonour   of   the   said   cheque   under
Section 138 of the N.I. Act. The plaintiff can always prove that it
had no legal liability or debt to be discharged  vis­a­vis  defendant
no.1   under   the   terms   of   the   MoU,   if   any   proceeding   is   to   be
initiated   by   defendant   no.1   on   account   of   the   dishonour   of   the
said   cheque.   Further,   if   defendant   no.1   is   to   seek   any   relief   for
the   non­supply   of   3876   MT   of   iron   ore   fines   by   the   plaintiff
under   the   very   same   MoU   then   the   plaintiff   is   entitled   to   take
appropriate defences as are available in law. If the plaintiff has a
grievance   against   the   defendants   and   particularly   defendant
no.1, arising from the MoU, such prayers have not been sought
by   the   plaintiff.   Such   reliefs   could   have   been   sought   by   the
plaintiff inasmuch  as there is  no  prayer  seeking recovery  of  Rs.
21.50 lakhs   from defendant no.1 which according to the plaintiff
is due to it. 

46
38.     In   the   circumstances,   we   hold   that   while   the   plaintiff   has
certain grievances arising from the MoU, against the defendants
which   may   give   rise   to   seek   appropriate   remedies   in   law,   the
aforesaid three declaratory reliefs sought in the plaint are barred
by   law.   Hence,   the   plaint   is   liable   to   be   rejected   in   exercise   of
jurisdiction   under   Order   VII   Rule   11   CPC.   In   our   view,   the
revisional court was justified in rejecting the plaint but the High
Court has erroneously set aside the order of the revisional court
without   appreciating   the   facts   and   circumstances   of   the   case
and   has   simply   remanded   the   matter   to   the   revisional   court   to
reconsider the revision afresh on the premise that the revisional
court   did   not   have   the   jurisdiction   to   reject   the   plaint   under
Section 115 of the CPC. 
39.  In the result, the impugned Order of the High Court is set
aside and the Order of the revisional court passed in C.R.P. No.5
of   2012   dated   23.02.2013   is   restored.   The   plaint   in   C.S.   No.
1065 of 2009 is rejected. This appeal is accordingly allowed. 
40.  However, it is clarified that the rejection of the plaint would
not   come   in   the   way   of   the   plaintiff   filing   a   suit   against
defendant no.1 for seeking appropriate reliefs in accordance with
law, if so advised. 

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Parties to bear their respective costs.
…..………..…………………..J.
[M.R. SHAH]
…………………………………J.
[B.V. NAGARATHNA]
NEW DELHI;
April 01, 2022.