Plaint cannot be rejected under order VII rule 11 CPC by relying on documents filed by defendant: Delhi high court

Delhi High Court Clarifies: Plaint Cannot Be Dismissed Based on Defendant's Documents Under Order VII Rule 11 CPC

Case Title: Central Court Hotel v. Jasmeet Singh Marwah and Anr.

Case Number: I.A. 6645/2023 in CS(OS) 147/2023

Citation: (2026) ibclaw.in 5155 HC

Coram: Justice Subramonium Prasad

The Delhi High Court has dismissed an application filed under Order VII Rule 11 of the Code of Civil Procedure, 1908 seeking rejection of a plaint, holding that the scope of enquiry under the provision is confined to the averments in the plaint and the documents filed along with it, and that documents relied upon by the defendant cannot be looked into at that stage.

Justice Subramonium Prasad was dealing with a suit filed by a partnership firm, the owner of commercial premises in Connaught Place, New Delhi, seeking recovery of over Rs. 4.63 crores from the former Managing Director of its erstwhile lessee company, along with a permanent injunction against alienation of his assets. The plaintiff had let out the premises to the lessee company for running a restaurant under a registered lease deed, and had earlier initiated proceedings under Section 9 of the Arbitration and Conciliation Act, 1996 and contempt proceedings on account of rental defaults. These proceedings culminated in a Settlement Agreement and an unconditional undertaking furnished by the defendant, then Managing Director of the lessee company, to the Court, undertaking compliance with the settlement terms.

According to the plaint, despite the settlement, the lessee company again defaulted, and it later emerged that the defendant had sold his entire shareholding in the company in December 2019, after allegedly being aware of its precarious financial condition at the time the settlement and undertaking were furnished. The plaintiff accordingly sought to hold the defendant personally liable, alleging fraudulent misrepresentation.

Contentions Of The Defendant

The defendant sought rejection of the plaint on the ground that he had acted only as an agent of the company while furnishing the undertaking and owed no personal or fiduciary duty to the plaintiff, that he had resigned as director with effect from 1 April 2019, prior to the period of default for which recovery was sought, and that the suit was barred by limitation, having been filed in February 2023 for rent defaults commencing November 2019.

Cause Of Action Cannot Be Tested Against Defendant's Documents

Referring to the Supreme Court's decisions in Popat and Kotecha Property v. State Bank of India Staff Assn. and Indian Evangelical Lutheran Church Trust Assn. v. Sri Bala & Co., the Court reiterated the settled position that an application under Order VII Rule 11 must be decided solely on the basis of the averments in the plaint and the documents annexed to it, and that documents or pleas raised by the defendant are irrelevant at that stage. The Court noted that the defendant's resignation letter, on which his defence primarily rested, was not filed with the plaint and did not form part of the plaintiff's pleadings, and that its veracity and legal effect could only be examined at trial.

The Court also noted that the plaint specifically pleaded a personal guarantee and an unconditional undertaking furnished by the defendant, and held that whether such undertaking was given in a personal or representative capacity was a matter for trial.

Limitation

On limitation, the Court held that the exclusion of the period from 15 March 2020 to 28 February 2022, directed by the Supreme Court in Re: Cognizance for Extension of Limitation, applied to the computation of the limitation period for the suit. Applying this exclusion, the Court found that the suit, filed on 9 February 2023 for a cause of action arising in November 2019, was within limitation.

The application under Order VII Rule 11 of the CPC was accordingly dismissed, and the suit was directed to be listed for further proceedings.