ORDER SHEET

Judgment Sheet

IN THE HIGH COURT OF SINDH AT KARACHI

Suit No. B – 52 of 2006

Date	Order with signature of Judge

Plaintiff : National Bank of Pakistan, through

Mr. Mohammad Zubair Quraishy advocate.

Defendants : M/S ARK Garments Industry (Pvt.) Ltd.,

Anwar Ahmed Rajwani and Salman Karim Rajwani,

through Mirza Sarfraz Ahmed advocate.

Date of hearing : 26.11.2013.

-------------------

NADEEM AKHTAR, J. : This Suit was instituted by the plaintiff on 29.11.2006 against the defendants for recovery of Rs.401,454,074.00 under Section 9 of the Financial Institutions (Recovery of Finances) Ordinance XLVI of 2001 (‘the Ordinance’). The amount claimed in the Suit includes the principal amount of several finance facilities purportedly provided by the plaintiff to the defendants, as well as the markup and liquidated damages calculated thereon till 30.09.2006. Summons was issued through all four modes, but the defendants did not file the application for leave to defend. Accordingly, the Suit proceeded ex-parte against the defendants, and ultimately an ex-parte decree was passed against them jointly and severally in the sum of Rs.334,545,061.67 with cost of funds thereon from the date of default, and also for the sale of the assets pledged and hypothecated by them and the properties mortgaged by them. The ex-parte decree was challenged by the defendants under Section 12(2) CPC through J. Misc. No.10 of 2010, which was allowed on 24.12.2012. The said ex-parte decree was set aside, and the defendants were allowed to file their application for leave to defend in this Suit within 30 days from the date of the said order, which they did file within time. Learned counsel for the parties stated that the said order dated 24.12.2012 setting aside the ex-parte decree was not challenged by the plaintiff. As such, the said order has attained finality.

2. The aforementioned order passed on 24.12.2012 in J. Misc. No. 10 of 2010 setting aside the ex-parte decree passed in this Suit, is available on record. A ‘Voluntary Return Agreement’ (the Agreement) dated 29.11.2006 between the plaintiff and defendant No.1, is also available on record. A perusal of the above shows that before filing this Suit, the plaintiff had filed a Reference before NAB against the defendants alleging that they were liable to pay to the plaintiff a sum of Rs.175.00 million ; both the parties negotiated and reached a settlement before NAB ; and, the terms and conditions of such settlement were recorded through the Agreement, which was duly executed by both the parties on 29.11.2006. The terms and conditions of the Agreement show that, vide Clause 7 thereof, the parties had specifically agreed that the defendants will pay to the plaintiff “the settlement amount of Rs.113.65 million” immediately after expiry of a grace period of one year from the date of the Agreement. The other important terms and conditions of the Agreement were :

a) The grace period of one year for payment was agreed as some claims of the defendants were pending before the Export Promotion Bureau (EPB) at the time of execution of the Agreement. It was, therefore, specifically mentioned vide Clause 7 that the amount will be paid by the defendants in case they do not receive their claims from EPB.

b) For the implementation of Clause 7, Clause 8 was incorporated, whereby the plaintiff itself authorized NAB to pay to the plaintiff the entire amount of the defendants’ claims received from EPB.

c) In Clause 9, it was specifically mentioned that only in case of non-payment of “the settlement amount of Rs.113.65 million” within one year grace period, or non-receipt of the defendants’ claims from EPB, the plaintiff will be authorized by the defendants to sell the mortgaged properties either through joint efforts and/or joint advertisement in order to recover “the settlement amount of Rs.113.65 million”.

d) The plaintiff was not entitled nor authorized to sell the mortgaged properties before the agreed one year grace period, and that too only in case of non-payment of “the settlement amount of Rs.113.65 million” by the defendants, or non-receipt of the defendants’ claims from EPB.

e) Vide Clause 9, it was further agreed by the parties that any amount over and above “the settlement amount of Rs.113.65 million”, received through the sale of the mortgaged properties, was to be released to the defendants.

f) In Clause 11, it was mentioned that upon signing of the Agreement, the plaintiff shall publish in two newspapers of Karachi, the daily ‘Dawn’ and the daily ‘Jang’, the fact regarding withdrawal of its earlier advertisement of 20.11.2006 for the sale of the mortgaged properties.

g) Vide Clause 12, the parties agreed that the terms and conditions of the Agreement shall be formalized by way of a consent decree from the competent Banking Court at Karachi.

3. After perusing the plaint, it was observed by me that this Suit has been instituted by the plaintiff for recovery of the same finances which are the subject matter of the Agreement ; and, which were negotiated by the parties and were agreed to be settled on the terms and conditions specified in the Agreement. The finance agreements on the basis of which this Suit has been framed and filed were actually substituted with the Agreement by the parties with mutual consent. In my humble opinion, such substitution of the finance agreements with the Agreement amounted to novatio of contract under Section 62 of the Contract Act, 1872. Thus, the finance agreements, which are the subject matter of this Suit, ceased to have any effect on 29.11.2006 when the Agreement was executed by the parties, and all the rights and obligations of the parties were to be governed under the Agreement with effect from 29.11.2006. In this context, reference may be made to the leading case of Banque Indosuez V/S Banking Tribunal for Sindh & Balochistan and others, 1994 CLC 2272, wherein it was held by an Hon’ble Division Bench of this Court that in case of novatio of contract, the rights and obligations of the parties under the original contract must be completely extinguished giving way to different / new rights and obligations under the subsequent agreement. Reference may also be made to UBL V/S M/S Aziz Tanneries (Pvt.) Ltd., 2004 CLD 1715, wherein it was held by a learned Single Judge of the Lahore High Court that novation of contract takes place when for an existing contract some new contract is substituted either by the same parties or between different parties, consideration mutually being the discharge of old contract ; when the contract is novated, a fresh contract comes into existence directly or by implication in place of the original contract ; and, the effect of novation is that it extinguishes the original contract and replaces it by another.

4. In view of the above, I was of the tentative opinion that the plaintiff had no cause of action against the defendants on the date (29.11.2006) when this Suit was instituted, as on the same date, the parties had mutually entered into the Agreement in substitution to the finance agreements which are the subject matter of this Suit. Therefore, in order to afford an opportunity to the plaintiff to clarify its stance, I asked the learned counsel for the plaintiff to satisfy me, as to how this Suit is maintainable on such finance agreements which are not in the field anymore, nor were they in the field when this Suit was filed ; and, as to why the plaint should not be rejected for want of cause of action.

5. Mr. Mohammad Zubair Quraishy, the learned counsel for the plaintiff, conceded that the Agreement was executed by the parties on 29.11.2006, and also that this Suit was instituted on the same day. He, however, argued vehemently that despite execution of the Agreement, this Suit filed on the same day is maintainable in law as well as on facts, as the Agreement has no nexus with the cause of action of this Suit. He submitted that when the Suit was filed, the plaintiff was not aware of the execution of the Agreement as the same had not been received by the plaintiff’s Head Office from the concerned department. He further argued that the maintainability of the Suit cannot be examined at this stage, even by the Court, without first hearing and deciding the defendants’ application for leave to defend, which is pending. It was urged that if the defendants succeed in raising any substantial question of law or fact, at best leave to defend the Suit can be granted to them, but the plaint cannot be rejected nor can the Suit be dismissed. It was further urged that in case leave to defend the Suit is not granted to the defendants, the plaintiff will be entitled to a decree in its favour under Sub-Section (11) of Section 10 of the Ordinance. The learned counsel submitted that, as the defendants have not complied with the mandatory requirements of Sub-Sections (3), (4) and (5) of Section 10 ibid, their application for leave to defend is liable to be dismissed under Sub-Section (6) of Section 10 ibid. He also submitted that no Board Resolution or power of attorney has been filed on behalf of defendant No.1, which is admittedly a private limited company, therefore, the Suit should be decreed against defendant No.1 straightaway.

6. In support of his submissions, the learned counsel for the plaintiff cited and relied upon the cases of (1) Imran Ali Soomro V/S Saudi Pak Leasing Company Limited, 2011 CLD 269, (2) H.B.L. V/S Crescent Softwear Products (Pvt.) Ltd., 2009 CLD 412, (3) Bank of Khyber V/S Messrs Spencer Distribution Ltd and 14 others, 2003 CLD 1406, (4) Habib Bank Limited V/S Messrs Sabcos (Pvt.) Ltd., 2006 CLD 244, (5) Faysal Bank Limited V/S Genertech Pakistan Ltd., 2009 CLD 856, (6) Habib Bank Ltd. V/S Paragon Industries (Pvt.) Ltd., 2009 CLD 1346, (7) NIB Bank Limited V/S Taha Spinning Mills Limited, 2010 CLD 635, (8) United Bank Limited V/S Progas Pakistan Limited, 2010 CLD 828, (9) Allied Bank Limited V/S Muslim Cotton Mills Private Limited and 3 others, 2011 CLD 393, (10) Silkbank Limited V/S Messrs Dewan Sugar Mills Limited, 2011 CLD 436, and (11) KASB Bank Limited V/S Mirza Ghulam Mujtaba and 2 others, 2011 CLD 461.

7. I have heard the learned counsel for the plaintiff, and have also examined the plaint in order to see whether it discloses any cause of action or not. In the cases of Abdul Rehman V/S Sher Zaman and another, 2004 CLC 1340 (Supreme Court, AJ&K), and Abdul Rehman V/S Wahid Bakhsh and 9 others, PLD 1977 Lahore 1243, the term ‘cause of action’ has been extensively discussed and defined. It was held that it refers to every fact which if traversed, it will become necessary for the plaintiff to prove in order to support his right ; it refers to the ground on the basis of which the plaintiff asks for a favourable judgment ; it means the whole of material facts which are necessary for the plaintiff to allege and prove, and in order to succeed ; it does not mean that if a constituent of cause of action is in existence, the claim can succeed ; the totality of the facts must co-exist, and if anything is lacking, the claim would be incompetent ; and, a part of cause of action is included in the whole cause of action, but the whole can never be equal to the part of it. It is well-settled that the party seeking relief must have a cause of action not only when the transaction or the alleged act is done, but also at the time of the institution of the Suit ; and, the plaintiff is required to show that not only a right has been infringed in a manner to entitle him to a relief, but also that when he approached the Court, the right to seek relief for such infringement was in existence.

8. In paragraph 14 of the plaint, the plaintiff has stated that the cause of action for filing this Suit accrued in its favour when finance facilities were sanctioned and granted to the defendants ; when finance agreements and other charge documents and guarantees were executed by the defendants ; when the said facilities were renewed ; when the defendants were liable to adjust their liabilities, but failed in doing so ; and, when demands were made by the plaintiff and admissions were made by the defendants. As observed earlier, the infringement of the finance agreements and the outstanding liabilities arising out therefrom, which are the subject matter of this Suit, were negotiated by the parties and were agreed to be settled on the terms and conditions specified in the Agreement, in substitution to the finance agreements on the basis of which this Suit has been framed and filed. The parties had settled their dispute through the Agreement, whereby the defendants were not required to pay any amount to the plaintiff before the one year grace period commencing on 29.11.2006 and ending on 29.11.2007 ; and, the defendants were required to pay to the plaintiff only “the settlement amount of Rs.113.65 million” after one year from 29.11.2006. The contention of the learned counsel for the plaintiff that the Agreement has no nexus with the cause of action of the Suit, therefore, is not tenable. It is important to note here that the execution of the Agreement on the date of filing this Suit, has been admitted by the plaintiff. The plaintiff, being a party to the admitted Agreement and the beneficiary thereof, was fully aware of its execution and existence at the time of filing the Suit. It is not the case of the plaintiff that the Agreement had been revoked or cancelled by any of the parties, particularly by the plaintiff, when this Suit was filed. In fact, the parties had agreed that the terms and conditions of the Agreement shall be formalized by way of a consent decree from the competent Banking Court at Karachi. However, instead of filing the Suit on the basis of the Agreement and obtaining a consent decree in terms thereof, the plaintiff filed this Suit on the same day for recovery of the amounts allegedly due under the earlier finance agreements. The finance agreements, which are the subject matter of this Suit, were superseded and substituted with the Agreement by the parties, and as such all the rights and obligations of the parties were to be governed under the admitted Agreement with effect from 29.11.2006. It is to be noted that breach of the Agreement dated 29.11.2006 has not been pleaded or alleged in this Suit, nor has the Suit been filed on the basis thereof, although it was only the Agreement dated 29.11.2006 that was in the field when this Suit was instituted on 29.11.2006. Therefore, when this Suit was filed on 29.11.2006, the plaintiff had no cause of action against the defendants, as alleged in the plaint. This being the position, the plaintiff cannot prove its claim in this Suit against the defendants, and cannot succeed in this Suit, for enforcement of the finance agreements or for recovery of the amounts thereunder. Reliance is placed on Pakistan Agricultural Storage and Services Corporation LTD. V/S Mian Abdul Latif and others, PLD 2008 Supreme Court 371, wherein it was held by the Hon’ble Supreme Court that the term ‘cause of action’ represents all the requisites and facts which are necessary for the plaintiff to prove before he can succeed in a Suit.

9. The question whether the plaint in a Suit under the Ordinance can be rejected at this stage, came under discussion in a recent case of Gulistan Textile Mills Ltd. V/S Askari Bank Ltd., etc. 2013 CLD 2005. In a very well-reasoned, exhaustive and edifying judgment delivered in the said case, a learned Single Judge of the Lahore High Court rightly held that, in the earlier reported cases holding that the plaint cannot be rejected prior to the hearing and disposal of the defendant’s application for leave to defend, the inherent and suo moto power of the Court to reject the plaint, which precedes the power of granting leave to the defendant, was not discussed ; and, the said earlier decisions were based on the premise that an objection under Order VII Rule 11 CPC raised by the defendant in his application for leave to defend can only be heard once his application for leave to defend is heard and granted. In the cited case, it was held that the Court has a primary obligation to examine the plaint and reject it, inter alia, if it does not disclose a cause of action. By exercising the inherent and suo moto power under Order VII Rule 11 CPC, the plaint in the above cited case was rejected before / without hearing and deciding the defendants’ applications for leave to defend, as it failed to disclose any cause of action.

10. In order to appreciate the contention of the learned counsel for the plaintiff that the maintainability of the Suit cannot be examined at this stage even by the Court, without first deciding the defendants’ application for leave to defend which is pending, and the plaint cannot be rejected nor can the Suit be dismissed at this stage, I examined the provisions contained in Section 10 of the Ordinance, and enumerated in Rule 11 of Order VII CPC.

11. Sub-Section (1) of Section 10 of the Ordinance provides that in the event of the defendant’s default in obtaining leave from the Banking Court to defend the Suit in which summons has been served on him, the allegations of fact in the plaint shall be deemed to be admitted, and the Banking Court may pass a decree in favour of the plaintiff on the basis thereof, or such other material as the Banking Court may require in the interest of justice. The consequences mentioned in Sub-Section (1) ibid are penal in nature, therefore, it must be construed strictly. The words underlined by me for emphasis, appearing in Sub-Section (1) ibid, are of great importance. The said words undoubtedly indicate that, if the defendant fails in obtaining leave to defend the Suit, his admission shall be deemed only to the extent of the allegations of fact in the plaint, and a decree in favour of the plaintiff may be passed only because of such admission of the allegations of fact in the plaint, or such other material as the Banking Court may require in the interest of justice. The reason for highlighting the above aspect is that before passing a decree in favour of the plaintiff in a blindfolded fashion because of the defendant’s failure in obtaining leave to defend the Suit, allegations of fact in the plaint must be examined critically and minutely by the Banking Court so as to corroborate as to whether or not the same constitute a cause of action in favour of the plaintiff. In such a situation, it must be kept in mind by the Banking Court that cause of action arises only and only out of the facts pleaded / alleged in the plaint. Another significant aspect in Sub-Section (1) ibid is that, it is directory and not mandatory in nature because of the use of the word “may” therein.

12. Sub-Section (11) of Section 10 of the Ordinance provides that where the application for leave to defend is rejected, or where the defendant fails to fulfill the conditions attached to the grant of leave to defend, the Banking Court shall forthwith proceed to pass judgment and decree in favour of the plaintiff against the defendant. However, this does not mean that a Suit, which does not disclose a cause of action or is otherwise not maintainable being barred by any law, and which ought to be dismissed or the plaint ought to be rejected, should be decreed simply because the defendant did not file the application for leave to defend, or he was unable to obtain leave to defend the Suit on account of dismissal of his application for leave to defend, or he failed in fulfilling the conditions attached to the grant of leave to defend. For instance, if a Suit is barred by limitation, or is based on illegal or void claim, the Banking Court is certainly not expected to decree the same either under Sub-Section (1) or under Sub-Section (11) of Section 10 of the Ordinance. I can say with conviction that this surely must not have been the intention of the lawmakers. It is, therefore, held that the Banking Court can exercise jurisdiction under Sub-Section (1) or under Sub-Section (11) of Section 10 ibid and pass a decree thereunder in favour of the plaintiff, only when summons in the prescribed form are issued and served on the defendant as provided in Sub-Section (5) of Section 9 of the Ordinance ; the plaint is compliant of the mandatory requirements of Sub-Section (3) of Section 9 of the Ordinance ; the allegations of fact in the plaint disclose a cause of action against the defendant ; the Suit is maintainable by all standards ; and, the plaintiff is able to show that he is entitled to the relief prayed for against the defendant. If any one of the above conditions precedent for a competent Suit are lacking, the plaintiff shall not be entitled to a decree either under Sub-Section (1) or under Sub-Section (11) of Section 10 of the Ordinance. It is also held that irrespective of the defense set up by the defendants, and in Suits filed under the Ordinance, whether or not the defendant files the application for leave to defend, or whether his application for leave to defend is maintainable or not, or even if his application for leave to defend is dismissed, the Banking Court is duty-bound to first apply its mind and confirm as to whether or not the plaint discloses a cause of action against the defendant ; whether the Suit, as framed, is maintainable or not ; and, whether or not the plaintiff is entitled to the relief prayed for, whether the defendant is before the Court or not.

13. In the above context, I would like to discuss the principles laid down in the following two landmark Full Bench authorities of the Hon’ble Supreme Court:

I. In the case of Haji Ali Khan and Company, Abbottabad, and 8 others V/S Messrs Allied Bank of Pakistan Limited, Abbottabad, PLD 1995 Supreme Court 362, it was held inter alia by Mr. Justice Ajmal Mian, as his Lordship then was, that if a defendant fails to appear, or fails to obtain leave to defend, or fails to fulfill the conditions on which leave was granted, or where the Court refuses to grant leave, the Court is to pass a decree. It was further held that this does not necessarily mean that the Court is not required to apply its mind before passing any order or judgment notwithstanding the factum that no person has appeared before it to oppose such an order, or that the person who wanted to oppose was not allowed to oppose because he failed to fulfill the requirements of law. While agreeing with his Lordship Mr. Justice Ajmal Mian in this case, Mr. Justice Fazal Karim, as his Lordship then was, was pleased to consider that when the allegations in the plaint are to be deemed to be admitted and the plaintiff is entitled to a decree, does it mean that the Court must pass a decree although the allegations of fact in the plaint do not entitle him to do so ; and, suppose the allegations of fact in the plaint show that the plaintiff has no cause of action for the Suit, or the Suit has not been instituted timeously and is barred by time. It was held by his Lordship that in neither of these cases will the plaintiff be entitled to a decree, nor will the Court be bound to pass one.

II. In Messrs Qureshi Salt and Spices Industries, Khushab, and another V/S Muslim Commercial Bank Limited, Karachi, through President, and 3 others, 1999 SCMR 2353, leave to defend the Suit was granted to the respondent-bank by a learned Single Judge of the Lahore High Court, despite the fact that the application for leave to defend was barred by time and was not supported by any application for condonation of delay. It was observed by the Hon’ble Full Bench that the Appeal against the aforesaid order would have been allowed, but it would have caused miscarriage of justice instead of advancing the cause of justice ; and, the jurisdiction is vested in the Court to dispense justice and not to perpetuate injustice. The above observations were made as a Suit for damages for a huge amount had been filed against the bank, and the plaintiff intended to recover the said amount from the bank under the summary procedure by obtaining a decree without trial. It was held that if the impugned order was set aside, it would perpetuate injustice as the appellant / plaintiff might get a decree for the said huge amount without proving the quantum of damages allegedly suffered by him. The leave granting order was recalled, and the appeal was dismissed.

14. In view of the above discussion and the law laid down by the Hon’ble Supreme Court in the aforementioned Full Bench authorities, the contention of the learned counsel for the plaintiff that the maintainability of the Suit cannot be examined at this stage even by the Court, without first hearing and deciding the defendants’ application for leave to defend, and, the plaint cannot be rejected nor can the Suit be dismissed at this stage, does not appear to be correct.

15. Rule 11 of Order VII CPC provides that the plaint “shall” be rejected in any of the four eventualities mentioned therein, including where the plaint does not disclose a cause of action. I have already held that when this was filed on 29.11.2006, the plaintiff had no cause of action to file this Suit against the defendants, as alleged in the plaint. Therefore, the plaint is liable to be rejected.

16. In the case of Abdul Nasir and another V/S Haji Saeed Akbar, 2010 SCMR 1770, the Hon’ble Supreme Court was pleased to maintain the order of rejection of the plaint, by holding that no cause of action had arisen in favour of the plaintiff when the Suit was filed.

17. In the case of Diamond Rubber Mills V/S Pakistan Television Corporation Ltd. and 2 others, 1989 CLC 1989, it was held by a learned Single Judge of this Court that for the purposes of Order VII Rule 11 CPC, it is not necessary that the plaint, coming up for consideration, be identical to the one that was filed ; provisions in such Rule apply in the context of the plaint, as it stand, at any given time ; this is clearly so in context of cause of action and the bar under any law ; and, if at any given time, cause of action ceases to subsist or bar under any law comes into operation and that position is discernible from the plaint, recourse to Order VII Rule 11 CPC can be taken. It was further held that thus, if on a meaningful and formal reading of the plaint, it is found to be meritless, as not disclosing a cause of action or a clear cut relief, duly based, the power under Order VII Rule 11 CPC would be clearly attracted. The plaint in the cited case was rejected by holding that nothing further remained in the Suit as no cause of action, which did not subsist on a certain date, can even be alleged to subsist now.

18. In Hyderabad Electronic Industries Ltd. V/S Messrs Sony Corporation through Messrs Sony Gulf Company, 1999 MLD 850, a Suit was filed for permanent and mandatory injunction. The defendant filed its written statement and an application for rejection of the plaint, by alleging that the agreement between the parties stood terminated, and the same was not to be renewed as per the arrangement between the parties. The plaint of the Suit was rejected on the ground that the plaintiff had no cause of action. The order of rejection of the plaint on such ground was maintained by an Hon’ble Division Bench of this Court.

19. The Hon’ble Supreme Court was pleased to hold in the case of Raja Ali Shan V/S Messrs Essem Hotel Limited and others, 2007 SCMR 741, that it is the duty of the Court to reject the plaint if, on a perusal thereof, it appears that the Suit is incompetent ; and, the Court is not only empowered but under an obligation to reject the plaint, even without any application from a party, if the same is hit by any of the clauses mentioned under Rule 11 of Order VII CPC.

20. In Pakistan Agricultural Storage and Services Corporation LTD. supra, it was held by the Hon’ble Supreme Court that the object of Rule 11 of Order VII CPC is primarily to save the parties from rigors of frivolous litigation at the very inception of the proceedings, and if the Court on the basis of averments made in the plaint and documents available, comes to the conclusion that even if all the allegations made in the plaint are proved, the plaintiff would not be entitled to the relief claimed, the Court would be justified in rejecting the plaint in exercise of powers available under Rule 11 of Order VII CPC.

21. It is well-settled that for deciding the question of rejection of the plaint, only the plaint and its accompaniments can be examined. However, in the case of Jewan and 7 others V/S Federation of Pakistan, 1994 SCMR 826, the Hon’ble Supreme Court was pleased to hold that if there is some other material before the Court apart from the plaint at that stage which is admitted by the plaintiff, the same can also be looked into and taken into consideration by the Court while rejecting the plaint under Order VII Rule 11 CPC. Since the Agreement dated 29.11.2006 was admitted before me, and also in the plaintiff’s replication, the contents thereof can be looked into and taken into consideration at this stage. Similar view was taken by the Hon’ble Supreme Court in the case of S. M. Shafi Ahmed Zaidi through Legal Heirs V/S Malik Hassan Ali Khan (Moin) through Legal Heirs, 2002 SCMR 338, by holding that besides averments made in the plaint, other material available on record, which on its own strength is legally sufficient to completely refute the claim of the plaintiff, can also be looked into for the purpose of rejection of the plaint. In the case of Muhammad Saleem Ullah and others V/S Additional District Judge, Gujranwala, and others, PLD 2005 Supreme Court 511, the Hon’ble Supreme Court was pleased to go a step further by holding that this is settled law that Order VII Rule 11 CPC becomes operative only when the plaint is liable to be rejected on the basis of its contents taken to be true and correct, but the Court can also rely upon the documents annexed to the plaint and brought on record with written statement to consider the question of applications of Order VII Rule 11 CPC.

22. The upshot of the above discussion is that the finance agreements on the basis of which this Suit has been instituted were not in the field on 29.11.2006 when this Suit was instituted, and the Suit has not been instituted on the basis of the Agreement dated 29.11.2006, which was in the field when this Suit was instituted. From the averments made in the plaint and in view of the relevant admitted material on record, I have come to the conclusion that the facts averred and the allegations made in the plaint do not disclose any cause of action ; and also that the plaintiff had no cause of action when this Suit was instituted on 29.11.2006. Accordingly, the plaint is hereby rejected with no order as to costs.

23. Before parting with this case, I may observe that despite the query raised by the Court regarding the maintainability of this Suit for want of cause of action, no request was made nor was any application filed for amendment of the plaint. I may further observe that rejection of the plaint in this Suit shall not bar a fresh Suit by the plaintiff, if it is so advised, provided that a due and subsisting cause of action is spelt out, and the Suit is otherwise maintainable and is not barred by any law.

_________________

J U D G E