At first blush, this article may appear to offer a routine exposition of Order VII Rule 11 of the Civil Procedure Code, a provision often cited and applied in civil litigation. However, it ventures beyond the conventional. The piece seeks to re-examine this procedural safeguard through the prism of India’s shifting adjudicatory landscape, marked by the rise of specialised tribunals.
Rather than offering a mere restatement of established law, this article interrogates the strategic use and misuse of civil procedure to bypass statutory bars, particularly where litigants seek to invoke civil jurisdiction under the guise of general law, while the substance of the dispute plainly lies within the exclusive domain of expert fora. It argues that the test of ‘meaningful reading’ must now be recalibrated to include an inquiry into the institutional and statutory competence of tribunals, so as to prevent the dilution of their intended role.
1. Introduction
Civil litigation stands as a cornerstone in upholding rights and responsibilities within the legal system of India. At its core lies Section 9 of the Civil Procedure Code (“CPC”), a provision that enables civil courts to entertain disputes of a civil nature. However, this right is subject to certain exceptions outlined in the provision itself. Along with Section 9, another provision that impacts the authority of the civil courts to entertain civil suits is Order VII, Rule 11 of CPC. While the former grants civil courts the authority to hear suits of a civil nature, the latter delineates circumstances under which a court may reject a plaint.
This article analyses these provisions, examining their implications in the context of India’s shift towards specialised tribunals for civil dispute resolution. The legal position under Order VII Rule 11 is well-settled. The Supreme Court in T. Arivandandam v. T.V. Satyapal[1], held that courts must strike at frivolous and vexatious litigation at the threshold. The Court emphasized that if, on a meaningful reading of the plaint, the suit discloses no real cause of action or is barred by law, it must be rejected at the outset. Supreme Court has also re-affirmed in various cases[2] that a plaint must stand or fall as a whole and that partial rejection is impermissible.
In the present context of increasing tribunalisation, the author believes that the test of meaningful reading must also evolve. Courts must now consider not only whether the plaint discloses a cause of action or is barred by law, but also whether the issues raised in it fall within the jurisdictional and functional competence of a specialised tribunal. In other words, the test of ‘meaningful reading’ must incorporate an assessment of whether the grievance, even if framed under general civil law, in substance lies within the exclusive domain of a tribunal constituted under a special statute. This inquiry is essential to prevent litigants from bypassing the statutory forum by clever drafting. The relevance and appropriateness of an expert tribunal to adjudicate such disputes must be a key consideration when applying Order VII Rule 11, particularly where the statutory scheme indicates either an express or implied bar on civil jurisdiction.
2. Shift towards tribunalisation
In recent years, India has witnessed a significant shift towards tribunalisation. This wave of tribunalisation has been pushed by the need for specialized forums equipped to handle technical matters arising in various sectors. The proliferation of tribunals across domains such as finance, administration, telecom, power, etc. has redefined the contours of dispute resolution in the country.
The rise of tribunals in India has had an impact on the interpretation and application of Section 9 and Order VII, Rule 11 of CPC. Tribunals possessing specialized expertise have increasingly assumed jurisdiction over matters that were traditionally within the purview of civil courts.
The Law Commission of India’s Report No. 272, titled “Assessment of Statutory Frameworks of Tribunals in India, 2017,”[3] provides a list of 26 Acts where the jurisdiction of civil courts is expressly excluded or barred. The list of Acts expressly excluding the jurisdiction of civil courts spans various domains, from economic and financial matters to regulatory and administrative spheres. Some of the examples include (i.) The Airport Authority of India Act, 1994, (ii.) Telecom Regulatory Authority of India Act, 1997, (iii.) The Armed Forces Tribunal Act 2007, (iv.) Recovery of Debts Due to Banks and Financial Institutions Act, 1993, (“RDB Act”), (v) The Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (“SARFAESI Act”), (vi) Competition Act, 2002, and (vii) Electricity Act, 2003, etc. This list, however, is not exhaustive, as numerous other Acts exist that expressly confer jurisdiction to the tribunals.
Beyond the expressed exclusions, there are instances where the jurisdiction of civil courts is implicitly ousted. This arises when, even in the absence of an express provision, the authority of civil courts to adjudicate a matter is tacitly denied. Such implied ousters can stem from the framework of a particular statute. As new legislations continue to emerge, such as the Digital Personal Data Protection Act, 2023, which again excludes the jurisdiction of civil courts, it becomes imperative to reevaluate the application of Order VII, Rule 11 of CPC in cases that concern the violation of specialized laws.
3. Right to file civil suit is not absolute
Section 9 of the CPC stipulates that, unless expressly or impliedly barred, courts possess the authority to adjudicate upon all civil suits. There is no doubt that it is a fundamental principle of law that where there is a right, there is a remedy, and Section 9 of the CPC confers this general right of suit on an aggrieved person except where the suit is barred either expressly or impliedly.
Interpreting the scope of Section 9, the Supreme Court in Patil Automation (P) Ltd. v. Rakheja Engineers (P) Ltd.[4], observed that “Section 9 CPC is not the law, which creates a right to file a civil suit. It would, undoubtedly, require a law, however, to invade, absolutely or conditionally, the vital civil right of a person to take his grievance to a civil court. A civil suit can be barred by a law, either expressly or by necessary implication. The jurisdiction of a civil court can be ousted. In other words, there is no fundamental right with anyone to contend that he has a right to file a civil suit, which cannot be taken away.”
Therefore, it is not a fundamental right for anyone to assert an unconditional claim to file a civil suit, as this entitlement is subject to certain legal limitations or exclusions. The very presence of Order VII Rule 11(d) of CPC, which mandates rejection of a plaint, where a suit is barred by law, is a reminder of the principle that there is no absolute right to file a civil suit.
Order VII, Rule 11 of the CPC outlines specific circumstances under which a court is empowered to reject a plaint. One of the fundamental requirements for a valid civil suit is that it must be based on a genuine cause of action. If the plaint, inter alia, fails to disclose the necessary facts that constitute a cause of action, the court has the authority to reject it. Further, if based on the contents of the plaint, it is evident that the suit is barred by law, the court is empowered to reject it.
4. Dressing up the grievances as a civil suit
Unfortunately, a legal tactic has emerged, where litigants incorporate specific allegations into their plaints, aiming to render them admissible in civil courts. This tactic is employed even when the crux of their grievance pertains to a specialised Act that prohibits civil suits. In other words, the relief sought by these litigants before the civil court inherently corresponds with the jurisdiction and expertise vested in the specialised tribunals. This tactic is often employed when the litigants are met with an unfavorable outcome before the specialised tribunal. In such a situation, litigants seek to readdress their grievances by dressing them up into civil suits.
For instance, litigants have dressed up their grievances in civil suits by making allegations of fraud in matters which fall within the purview of the SARFAESI Act, and the RDB Act[5]; by alleging coercion and undue influence in a matter which falls within the purview of the Haryana Public Moneys (Recovery of Dues) Act, 1979[6]; and by labeling a cheque as a security under an agreement to seek an injunction before a civil court with an intent to frustrate the proceedings under the Negotiable Instruments Act, 1882[7], etc.
In all the above instances, the courts held the suits to be barred by law after identifying the core nature of the reliefs sought in the suits.
Similarly, in the case of R. Subramanian v. Hongkong & Shanghai Banking Corpn. Ltd,[8] The Madras High Court (Division Bench) held that a suit cannot be said to be maintainable when the Debts Recovery Tribunal (“DRT”) was considering a similar issue raised in the suit. It was observed that the plaintiff can very well agitate the issues before the DRT, and filing a civil suit is nothing but an abuse of the process of law. In this case, the DRT had already taken cognizance of an Original Application filed by the Bank for recovery of money under the RDB Act. While the said application was pending, the plaintiff instituted a separate suit before the Madras High Court, seeking enforcement of guarantees that he had executed in favor of the Bank. The Bank responded by filing an application under Order VII Rule 11 of the CPC for rejection of the suit.
The Single Bench of Madras High Court allowed the application under Order VII, Rule 11, CPC and held that “the present suit is nothing but an abuse of process of law. The plaintiff, having approached the DRT for the similar issue can very well agitate the same before it.”
In the appeal before the Division Bench, the Madras High Court upheld the order of the Single Bench. One of the contentions of the appellant before the Division Bench was that DRT is not empowered to give a relief of declaration that the guarantee is void and unenforceable. After considering the scheme of the RDB Act and contentions of parties, the Madras High Court observed that: –
The essence of the RDB Act, primarily enacted for loan recovery by Banks and Financial Institutions, is to provide a speedy mechanism for debt recovery. It establishes under Sections 17 and 18 that if a suit pertains to both debt recovery and sale or realization of securities ancillary to debt recovery, it falls substantially within the realm of debt recovery and is not maintainable before a Civil Court.
In this case, the bank had already initiated proceedings before the DRT. Once a remedy is provided under the RDB Act, a debtor or guarantor is barred from approaching a Civil Court.
The tribunal established under the RDB Act operates within the framework set by the statute, guided by principles of natural justice. The remedies under the RDB Act are not only effective but also efficient.
This judgment emphasizes the importance of considering the primary objective of the Act when addressing such matters. It serves as a reminder that litigants may sometimes assert that only a civil court can grant relief, a tactic employed to create a false impression.
Another matter worth noting is the series of civil suits filed against Google entities by various app developers. The primary grievance of the developers was that Google had imposed one-sided terms through its contracts. Although the plaintiffs sought to frame the dispute as one under the Indian Contract Act, a meaningful reading of the plaints revealed that the core grievance related to Google’s alleged abuse of dominance under Competition Act, 2002 (“Competition Act”). The pleadings primarily focused on how Google was using its dominant position to impose unfair and unconscionable terms.
The Single Judge of the Madras High Court rejected all plaints. The Court held that the suits were expressly barred under the Competition Act. This finding was based on a meaningful reading of the plaints, which disclosed that the allegations squarely related to abuse of dominance and the enforcement of findings recorded in a CCI order concerning Google’s market conduct.
In appeal, the Division Bench of the Madras High Court[9] upheld the decision of the Single Judge. It observed that the genesis of the plaints lay in the allegation that Google held a dominant position and was using that dominance to impose unconscionable conditions on the developers.
5. Vague pleadings are insufficient to create a case of action: Supreme Court’s recent observations
In the case of Charu Kishor Mehta v. Prakash Patel[10], the Supreme Court upheld the decision of the Bombay High Court, which had affirmed rejection of the plaint on the ground that the allegations of fraud were merely a ploy to circumvent the provisions of the SARFAESI Act.
In this case, the petitioner/plaintiff engaged in multiple rounds of litigation, challenging various stages of the debt recovery process, from the initial order in the DRT to subsequent proceedings before the Debts Recovery Appellate Tribunal (“DRAT”), the Bombay High Court, and even the Supreme Court.
Even after engaging in multiple rounds of litigation, the petitioner proceeded to file a suit. In the said suit, the opposite party filed an application under Order VII, Rule 11 seeking rejection of the plaint on the ground that the jurisdiction of civil courts is barred under Section 34 of the SARFAESI Act. Section 34 of the said Act reads as under:
“34. Civil court not to have jurisdiction– No civil court shall have jurisdiction to entertain any suit or proceedings in respect of any matter which a Debts Recovery Tribunal or the Appellate Tribunal is empowered by our under this Act to determine and no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act or under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (51 of 1993)”
The petitioner/plaintiff contended that certain defendants were engaged in fraudulent activities against the plaintiff. In light of these circumstances, it was argued by the petitioner/plaintiff that the restriction under Section 34 would not be applicable in cases involving allegations of fraud or collusion.
The trial court allowed the application under Order VII, Rule 11. This decision of the trial court was further affirmed by the Bombay High Court. The Bombay High Court’s observations highlighted that the allegations of fraud were vague and did not meet the requirements of Order VI Rule 4 of the CPC. It was emphasized that the claims of fraud and collusion were artfully drafted to bypass the provisions of Section 34 of the SARFAESI Act.
The Supreme Court affirmed these findings in the Special Leave Petition and underscored the importance of Order VI, Rule 4 of the CPC. The Court pointed out that a mere assertion of fraud is insufficient. When fraud is alleged, it must be substantiated with particulars, including dates and items, in accordance with Order VI, Rule 4 of the CPC. This requirement ensures that allegations of fraud are supported by specific details, providing a clear basis for legal evaluation.
The Supreme Court unveiled the illusion of a cause of action that the plaintiff had attempted to create through allegations of fraud. Consequently, the Supreme Court rightly exercised its power under Order VII Rule 11 of the CPC to reject the plaint.
The analysis of the aforesaid cases shows that courts play a pivotal role in discerning the true essence behind the creation of special Acts, ensuring their intended purpose is not undermined. It is imperative that litigants do not manipulate these provisions with extraneous claims. Specialized legal frameworks have been enacted to address specific issues, and allowing litigants to dilute them through superfluous claims would be counterproductive. Thus, it becomes the duty of the courts to uphold the true spirit and purpose of special acts by thwarting attempts of litigants to evade the special laws through artfully drafted pleadings.
The Supreme Court has acknowledged that the establishment of tribunals serves a specific purpose, which is to alleviate the workload of civil courts. In State of Gujarat v. Gujarat Revenue Tribunal Bar Assn., (2012) 10 SCC 353, the Supreme Court observed that “the legislature, in its wisdom has created tribunals and transferred the work which was regularly done by the civil courts to them, as it was found necessary to do so in order to provide efficacious remedy and also to reduce the burden on the civil courts….”
In this light, following the approach advocated by Charu Kishor (Supra) becomes crucial to ensure that the purpose for which tribunals were created remains undiluted. It is incumbent upon the courts to differentiate between cleverly drafted pleadings aimed at circumventing special statutes and genuine cases that warrant the attention of civil courts. In other words, courts have the duty to maintain an equilibrium by upholding the intended purpose of special Acts while ensuring that the doors of civil courts are not shut for litigants with legitimate grievances.
[1] (1977) 4 SCC 467.
[2] Sejal Glass Ltd. v. Navilan Merchants Pvt. Ltd., (2018) 11 SCC 780; Madhav Prasad Aggarwal vs Axis Bank Ltd., (2019) 7 SCC 158.
[3] LAW COMMISSION OF INDIA, Report No.272, Assessment of Statutory Frameworks of Tribunals in India October, 2017, [https://images.assettype.com/barandbench/import/2017/10/Report-272-Tribunalisation-watermark.pdf]
[4] (2022) 10 SCC 1.
[5] Charu Kishor Mehta v. Prakash Patel, 2022 SCC OnLine SC 1962, R. Subramanian v. Hongkong & Shanghai Banking Corpn. Ltd, 2018 SCC OnLine Mad 13690.
[6] Om Aggarwal v. Haryana Financial Corpn., (2015) 4 SCC 371.
[7] Frost (International) Ltd. v. Milan Developers & Builders (P) Ltd., (2022) 8 SCC 633.
[8] 2018 SCC OnLine Mad 13690.
[9] Info Edge (India) Ltd. v. Google India (P) Ltd., 2024 SCC OnLine Mad 150.
[10] 2022 SCC OnLine SC 1962.