Supreme Court Restores Suit Alleging Fraudulent Alienation, Holds Limitation Cannot Be Decided at Threshold

A bench of Justices J.B. Pardiwala and R. Mahadevan heard an appeal against the Madras High Court's order that allowed a civil revision and rejected a plaint under Order VII Rule 11 CPC on the ground of limitation. The appeal challenged the High Court's interference with the trial court's refusal to reject a suit seeking declaration and injunction over alleged fraudulent alienation of immovable property.

The Court allowed the appeal, set aside the High Court's order dated 03.09.2020 and affirmed the Additional District Judge, Chengalpattu’s order of 04.10.2017 refusing to reject the plaint. The Supreme Court held that where “the date of knowledge” of an impugned transaction is specifically pleaded, limitation often presents a mixed question of law and fact which ordinarily could not be decided on an application under Order VII Rule 11 without permitting evidence. The Court emphasised that the averments in the plaint must be accepted at the threshold and that summary rejection is permissible only where the plaint on its face discloses a clear bar. The Court noted that the High Court had “proceeded to reject the plaint solely on a prima facie assumption that the suit was barred by limitation, without undertaking any examination” and that such an approach amounted to an error of law. The Court, in its reasoning, observed: "At this preliminary stage, the averments made in the plaint must be taken at their face value and assumed to be true. Once the date of knowledge is specifically pleaded and forms the basis of the cause of action, the issue of limitation cannot be decided summarily. It becomes a mixed question of law and fact, which cannot be adjudicated at the threshold stage under Order VII Rule 11 CPC. Therefore, rejection of the plaint on the ground of limitation without permitting the parties to lead evidence, is legally unsustainable." The Court further recorded that “the trial Court acted within its jurisdiction in refusing to reject the plaint and in holding that the matter ought to proceed to trial.”

Background

The dispute concerned a vacant site assigned to the appellant in 1974. The appellant executed a registered power of attorney in favour of his father in 1978, allegedly limited to works of construction and related matters. The father executed a sale deed on 10.10.1988 in favour of his granddaughter (Respondent No.1), which the appellant contended exceeded the scope of the power of attorney and was therefore void, alleging misuse of authority and fraud. The appellant lodged a complaint with the Additional Commissioner of Police, Chennai on 09.12.2011, applied for patta in February 2012 and objected to building permission in 2013. He instituted O.S. No. 310 of 2014 on 03.12.2014 seeking a declaration of title, permanent injunctions and cancellation/nullification of subsequent instruments.

During trial the defendants filed I.A. No. 151 of 2015 under Order VII Rule 11 CPC contending the plaint was undervalued and barred by limitation. The trial court dismissed the interlocutory application on 04.10.2017, holding that limitation raised triable issues. The High Court, in revision, allowed the application and rejected the plaint as time-barred, treating the date of receipt of a certified copy (28.07.2011) as starting limitation. The Supreme Court reviewed Article 59 of the Limitation Act and the settled precedents that where knowledge is disputed the plaint averments must be accepted at the threshold. Relying on authorities including Daliben, Salim D. Agboatwala and Shakti Bhog, the Court concluded that the High Court erred in reversing the trial court without resolving factual disputes. The appeal was allowed, the High Court order set aside, and the suit was restored for trial with a direction that the trial court proceed “without being influenced by any of the observations made by the High Court.” There was no order as to costs.

Case Details: Case No.: Civil Appeal No. 5622 of 2025 (Arising from SLP (C) No. 2549 of 2021) | 2025 INSC 598 Case Title: P. Kumarakurubaran v. P. Narayanan & Ors. Appearances: For the Petitioner(s): [Names not indicated in the reported judgment] For the Respondent(s): [Names not indicated in the reported judgment]