- 1 - NC: 2025:KHC-D:5334-DB RFA No. 100414 of 2019 C/W RFA No. 100418 of 2019 IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE 24TH DAY OF MARCH, 2025 PRESENT THE HON'BLE MR. JUSTICE SACHIN SHANKAR MAGADUM AND THE HON'BLE MR. JUSTICE G BASAVARAJA REGULAR FIRST APPEAL NO.100414 OF 2019 C/W REGULAR FIRST APPEAL NO.100418 OF 2019 IN RFA NO.100414 OF 2019: BETWEEN: SHRI. VINEET S/O. VASANTRAO JOSHI AGE: 63 YEARS, OCC: BUSINESS, R/O. R.S.NO.33/1/2, BHAGYA NAGAR, 1ST CROSS, ANGOL ROAD, BELAGAVI-590 006. …APPELLANT (BY SRI. ANIL KALE, ADVOCATE) AND: 1. MR.TAUFIQ AHMED S/O. RAFIQ AHMED INAMDAR, AGE: MAJOR, OCC: BUSINESS, R/O. CTS NO.4818/31, SUBHASH ANGAR, BELAGAVI-590 001. 2. MR. SUHEEL S/O. RAFIQ AHMED INAMDAR, AGE: MAJOR, OCC: BUSINESS, R/O. CTS NO.4818/31, Digitally signed by ASHPAK KASHIMSA MALAGALADINNI Location: HIGH COURT OF KARNATAKA DHARWAD BENCH Date: 2025.04.09 11:27:28 +0530 - 2 - NC: 2025:KHC-D:5334-DB RFA No. 100414 of 2019 C/W RFA No. 100418 of 2019 SUBHASH NAGAR, BELAGAVI-590 001. 3. MR. SHABBIR AHMED S/O. APPASAHEB PEERJADE, AGE: MAJOR, OCC: BUSINESS, R/O. CTS NO.4818/31, SUBHASH NAGAR, BELAGAVI-590 001. …RESPONDENTS (BY SRI. HARSHAVARDHAN M.PATIL, ADVOCATE FOR R1 & 2) THIS RFA IS FILED UNDER SEC.96 OF CPC, PRAYING TO SET ASIDE THE ORDER AND DECREE DATED 25.01.2019 PASSED ON IA NO.8 IN O.S.NO.226/2012 ON THE FILE OF THE II ADDITIONAL SENIOR CIVIL JUDGE AND CHIEF JUDICIAL MAGISTRATE, BELAGAVI, IN THE INTEREST OF JUSTICE AND EQUITY. IN RFA NO.100418 OF 2019: BETWEEN: SHRI. VINEET S/O. VASANTRAO JOSHI AGE: 63 YEARS, OCC: BUSINESS, R/O. R.S.NO.33/1/2, BHAGYA NAGAR, 1ST CROSS, ANGOL ROAD, BELAGAVI-590 006. …APPELLANT (BY SRI. ANIL KALE, ADVOCATE) AND: 1. MR.TAUFIQ AHMED S/O. RAFIQ AHMED INAMDAR, AGE: MAJOR, OCC: BUSINESS, - 3 - NC: 2025:KHC-D:5334-DB RFA No. 100414 of 2019 C/W RFA No. 100418 of 2019 R/O. CTS NO.4818/31, SUBHASH ANGAR, BELAGAVI-590 001. 2. MR. SUHEEL S/O. RAFIQ AHMED INAMDAR, AGE: MAJOR, OCC: BUSINESS, R/O. CTS NO.4818/31, SUBHASH NAGAR, BELAGAVI-590 001. 3. MR. SHABBIR AHMED S/O. APPASAHEB PEERJADE, AGE: MAJOR, OCC: BUSINESS, R/O. CTS NO.4818/31, SUBHASH NAGAR, BELAGAVI-590 001. …RESPONDENTS (BY SRI. ASHWIN C.HUBLI, ADVOCATE FOR R1; SRI. HARSHAVARDHAN M.PATIL, ADVOCATE FOR R2; NOTICE TO R3 IS SERVED) THIS RFA IS FILED UNDER SEC.96 OF CPC PRAYING TO SET ASIDE THE ORDER AND DECREE DATED 26.06.2019 PASSED ON IA NO.12 IN O.S.NO.226/2012 ON THE FILE OF THE II ADDITIONAL SENIOR CIVIL JUDGE AND CHIEF JUDICIAL MAGISTRATE, BELAGAVI, IN THE INTEREST OF JUSTICE AND EQUITY. THESE APPEALS ARE COMING ON FOR ADMISSION THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: CORAM: THE HON'BLE MR. JUSTICE SACHIN SHANKAR MAGADUM AND THE HON'BLE MR. JUSTICE G BASAVARAJA - 4 - NC: 2025:KHC-D:5334-DB RFA No. 100414 of 2019 C/W RFA No. 100418 of 2019 ORAL JUDGMENT (PER: THE HON'BLE MR. JUSTICE SACHIN SHANKAR MAGADUM) These two appeals are taken up together as both the appeals arise out of the order passed in O.S.No.226/2012. 2. For the sake of convenience, rank of parties is referred to as per their rank before the trial Court. 3. Facts leading to the case are as under: These two appeals are by the plaintiff. Plaintiff has filed a suit seeking a declaration that registered sale deed dated 21.02.2012 executed by plaintiff in favour of defendants No.1 and 2 pertaining to the suit schedule property by declaring it as null and void. Consequently, injunction is also sought. In the suit, though plaintiff has admitted the sale transaction, he is primarily aggrieved by non-payment of the sale consideration, plaintiff has alleged in the plaint that the defendants No.1 and 2 had obtained the sale deed from plaintiff and the balance sale consideration was assured to be paid by issuing post dated - 5 - NC: 2025:KHC-D:5334-DB RFA No. 100414 of 2019 C/W RFA No. 100418 of 2019 cheques. Plaintiff alleges that defendants are guilty of not paying the balance sale consideration of Rs.15,00,000/- which is required to be paid by defendants. The present suit is filed alleging that the cheques issued by defendant No.3 on behalf of defendants No.1 and 2 has bounced and therefore, the plaintiff alleges that the entire sale consideration is not paid and therefore, the plaintiff is entitled to seek cancellation of the sale deed, on account of breach on the part of the defendants in not paying the balance sale consideration. 4. On receipt of summons, defendants No.1 and 2 have filed an application in I.A.No.XII under Order VII Rule 11(d) of Code of Civil Procedure (hereinafter referred to as ‘CPC’ for brevity) to reject the plaint as barred by law. Defendants No.1 and 2 have contended that plaintiff having completed the transaction, is not entitled to seek cancellation of sale deed and therefore, the present suit is not maintainable. - 6 - NC: 2025:KHC-D:5334-DB RFA No. 100414 of 2019 C/W RFA No. 100418 of 2019 5. Defendant No.3 has filed I.A.No.VIII under order VII rule 11(a) of CPC seeking rejection of plaint on the ground that the plaint does not disclose cause of action. Learned Judge has allowed both the applications filed by defendants No.1 and 2 and defendant No.3 and plaint is rejected both under the provisions of Order VII Rule 11(a) of CPC and order VII Rule 11(d) of CPC. The plaintiff has challenged these two orders by filing two separate appeals. 6. Heard the learned counsels appearing for the plaintiff and defendants. Perused the records. 7. We have given our anxious consideration to the prayer sought in the applications. We have also given our anxious consideration to the reasons assigned by the learned trial Judge while rejecting the plaint invoking provisions of order VII Rule 11 of CPC. - 7 - NC: 2025:KHC-D:5334-DB RFA No. 100414 of 2019 C/W RFA No. 100418 of 2019 8. The following points would arise for consideration: i) Whether learned trial Judge erred in rejecting the plaint by applying the provisions of order VII Rule 11(a) and (d) of CPC and therefore, warrants interference at the hands of this Court ? ii) What order? FINDINGS ON POINT No.1:- 9. Before we delve into the case, it would be useful for this Court to cull out the relevant pleadings of the plaint and consequent prayer sought in the suit. Para Nos.6 and 7 of the plaint would be relevant and same is cull out, which reads as under: “6] The plaintiff further submits that he has thereafter persistently followed the defendants to pay the balance sale consideration amount of Rs.50,00,000/-, The defendants instructed the plaintiff to present the four cheques for encashment in the month of May 2012. At the instructions of defendants the plaintiff presented Cheque bearing No. 018162 dated 24-02-2012 drawn on Shri Mahant Shivayogi Co-op. Bank Ltd., Murgod for Rs. - 8 - NC: 2025:KHC-D:5334-DB RFA No. 100414 of 2019 C/W RFA No. 100418 of 2019 20,00,000/-, Cheque bearing No. 018163 dated 25-02- 2012 drawn on Shri Mahant Shivayogi Co-op. Bank Ltd., Murgod for Rs. 10,00,000/- for encashment through his banker on 22-05-2012. To the utter surprise and dismay of the plaintiff the aforesaid cheques were returned to the plaintiff unpaid for the reasons Funds Insufficient' vide 2 separate memos dated 28-05-2012. The plaintiff also presented cheque bearing No. 080735 drawn on ICICI Bank Tilakwadi Belgaum for Rs.20,00,000/-. The said cheque has also been returned unpaid for the reasons ‘Funds Insufficient’. The plaintiff personally approached the defendant No. 1 and 2 seeking an explanation as to why they had not arranged the funds so as to honour the cheques. The defendant No. 1 and 2 expressed their financial inability to arrange the amount and requested the plaintiff that they will seek loan from Diwan Housing Finance Ltd, Belgaum and pay the balance consideration amount of Rs. 50,00,000/- with additional amount of Rs.2,00,000/- as damages. The defendant No. 1 and 2 have accordingly executed affidavit on 22-06-2012 in favour of the plaintiff which is duly sworn before Mr. R. G. Joshi, Advocate and Notary Public admitting that they will pay an amount of Rs.52,00,000/-. Issuance of cheque bearing No. 018162 dated 24-02-2012, cheque bearing No. 018163 dated 25-02-2012 and cheque bearing No. 080735 dated 25-02-2012 has been admitted by the defendant No. 1 and 2 in the said affidavit. 7] The plaintiff as a matter of abundant precaution issued notice to the defendants calling upon them to pay the amount covered under the Cheque bearing No. 018162 dated 24-02-2012 drawn on Shri Mahant Shivayogi Co-op. Bank Ltd., Murgod for Rs.20,00,000/- and Cheque bearing No. 018163 dated 25-02-2012 drawn - 9 - NC: 2025:KHC-D:5334-DB RFA No. 100414 of 2019 C/W RFA No. 100418 of 2019 on Shri Mahant Shivayogi Co-op. Bank Ltd., Murgod for Rs. 10,00,000/- on 26-06-2012. The notice addressed to the defendant No. 3 has been returned unserved with an endorsement by the postal authorities that the addressee is not known. The notice addressed to the defendant No. 1 and 2 has been duly served upon them. The plaintiff most respectfully submits that the defendant No. 1 and 2 have issued reply to the notice dated 26-06-2012 through their counsel on 06-07-2012. By issuing reply dated 06- 07-2012 the defendant No. 1 and 2 have expressed their fraudulent intention of duping the plaintiff of his valuable balance sale consideration. The defendant No. 1 and 2 by issuing the reply notice have gone to the extent of denying issuance of cheques bearing No. 018162 and 018163 drawn on Shri Mahant Shivayogi Co-op. Bank Ltd., Murgod. The very said conduct of the defendant No. 1 and 2 in denying issuance of the cheques which have been mentioned in the registered sale deed dated 25-02- 2012 discloses their fraudulent intention which is to dupe the plaintiff. The defendant No. 1 and 2 have fraudulently contended in the reply notice that the cheque bearing No 080735 drawn on ICICI Bank for Rs.20,00,000/- in stolen by the plaintiff. The said fraudulent contention stands contrary to the contents of affidavit executed by the defendant No. 1 and 2 on 22-06-2012. The defendant No. 1 and 2 have falsely stated in the reply notice that they have to pay amount of Rs.12,00,000/- only. The defendant No. 1 and 2 have further threatened the plaintiff that they are intending to initiate criminal action against the plaintiff. The plaintiff most respectfully submits that the defendant No. 1 and 2 by issuing the reply dated 06-07-2012 have disclosed that they have induced the plaintiff fraudulently to execute sale deed in respect of the suit property on assurance that the entire - 10 - NC: 2025:KHC-D:5334-DB RFA No. 100414 of 2019 C/W RFA No. 100418 of 2019 sale consideration of Rs.70,00,000/- will be paid and having got executed registered sale deed by fraudulent inducement have failed to adhere to their solemn commitment. The plaintiff submits that the sale deed dated 25-02-2012 is a result of fraud played by the defendant No. 1 and 2 and as such the same is a void document which confers no right, title and interest in favour of the defendant No. 1 and 2. The defendants No. 1 and 2 are trying to misuse the sale deed dated 25-02- 2012. The plaintiff therefore left with no other efficacious remedy is constrained to file the present suit for cancellation of the sale deed dated 25-02-2012 and for perpetual injunction so as to restrain the defendants, their agents, their servants or any other person acting on their behalf from alienating or creating encumbrance over the suit property.” 10. The cause of action would be relevant and same is cull out, which reads as under: “The cause of action for filing this suit arose on 06.07.2012 i.e., when the defendants No.1 and 2 have issued fraudulent reply to the notice got issued by the plaintiff and the same is continued thereon.” 11. The prayer sought in the plaint would be relevant and same is cull out, which reads as under: “It is therefore most humbly prayed that setting aside the contentions of defendant if any, a decree in the following terms may kindly be passed. - 11 - NC: 2025:KHC-D:5334-DB RFA No. 100414 of 2019 C/W RFA No. 100418 of 2019 a) The Registered sale deed dated 25-02-2012 executed by the plaintiff in favour of the defendant No. 1 and 2 pertaining to the suit property may kindly be cancelled by declaring that it is null and void and has no legal effect. b) Perpetual injunction may kindly be issued against the defendants No. 1 and 2, restraining them, their agents, their henchmen or any person acting on their behalf from alienating or creating encumbrance over the suit property. c) Permission to amend the plaint as and when necessary may kindly be accorded. d) Cost of the suit may kindly be awarded. e) Any other relief deemed fit and proper may kindly be awarded.” 12. Upon a meticulous examination of the pleadings set out in Paragraphs 6 and 7 of the plaint, it is evident that the plaintiff has comprehensively detailed the non- payment of the entire sale consideration by the defendants. The plaintiff has asserted that the cheques issued by Defendant No.3 on behalf of Defendants No.1 and 2 were dishonored due to insufficient funds. This non- - 12 - NC: 2025:KHC-D:5334-DB RFA No. 100414 of 2019 C/W RFA No. 100418 of 2019 payment forms the core of the plaintiff’s grievance, as he claims that Defendants No.1 and 2 failed to fulfill their contractual obligation to pay the balance sale consideration amounting to Rs.52,00,000/-. Furthermore, the plaintiff has categorically stated in Paragraph 7 of the plaint that legal notices were duly issued to the defendants, calling upon them to remit the outstanding amount. Despite such formal intimation, Defendants No.1 and 2, instead of making the necessary payment, issued a reply notice denying their liability. This act, according to the plaintiff, amounts to a fraudulent attempt to misappropriate the suit property without paying the agreed consideration. 13. A closer examination of the specific allegations made in Paragraphs 6 and 7 of the plaint reveals that the plaintiff has furnished detailed particulars regarding the execution of the sale deed, the issuance of cheques, and their subsequent dishonor. The plaint further asserts that Defendants No.1 and 2 misrepresented their financial - 13 - NC: 2025:KHC-D:5334-DB RFA No. 100414 of 2019 C/W RFA No. 100418 of 2019 ability at the time of executing the sale deed, thereby inducing the plaintiff into completing the transaction under a false pretence. Given these explicit allegations, it was incumbent upon the learned Judge to allow the matter to proceed to trial rather than dismissing the suit at the threshold. The plaintiff has sought a decree for cancellation of the sale deed, a relief that necessitates a full-fledged trial where evidence could be adduced and properly scrutinized. However, the learned Judge, without conducting such an inquiry, proceeded to reject the plaint under Order VII Rule 11 of CPC, thereby depriving the plaintiff of an opportunity to establish his case through proper adjudication. 14. It is a well-settled principle of law that the power to reject a plaint under Order VII Rule 11 of CPC should be exercised with great caution. The Hon’ble Supreme Court and various High Courts have consistently held that the rejection of a plaint at the preliminary stage should not be done in a superficial or mechanical manner. - 14 - NC: 2025:KHC-D:5334-DB RFA No. 100414 of 2019 C/W RFA No. 100418 of 2019 In the present case, the learned Judge failed to assign cogent reasons justifying the rejection of the plaint under Order VII Rule 11. The plaint, when read as a whole, discloses a clear cause of action and contains averments that require detailed examination. The learned Judge’s approach in summarily rejecting the suit without providing substantial reasoning reflects an improper application of judicial discretion, thereby leading to a miscarriage of justice. 15. It is imperative to note that the cause of action, as reflected in the plaint, should be construed liberally and in favour of the plaintiff, unless it is demonstrably barred by law. In the present matter, the plaintiff has pleaded that the defendants fraudulently induced him to execute the sale deed without fulfilling their payment obligations. If a defendant asserts that the relief sought by the plaintiff is barred under any legal provision, the trial court is duty- bound to meticulously scrutinize the pleadings and determine the matter based on a proper legal and factual - 15 - NC: 2025:KHC-D:5334-DB RFA No. 100414 of 2019 C/W RFA No. 100418 of 2019 analysis. However, in this case, the learned Judge summarily dismissed the suit without undertaking such an examination, thereby failing to appreciate the complexity of the issues involved. The provisions of Order VII Rule 11(d) of CPC, which pertain to rejection of a plaint on the ground of it being barred by law, have been misapplied in the instant case, as no conclusive legal bar was established to warrant such rejection. 16. Furthermore, the nature of relief sought by the plaintiff falls squarely within the ambit of Section 31 of the Specific Relief Act, 1963, which governs suits seeking cancellation of written instruments. The plaintiff has asserted that the sale deed in question is vitiated by fraud, and as such, he has the right to seek its annulment. The defendants, in their reply notice, have partially admitted their liability while simultaneously denying the issuance of certain cheques. This contradictory stance adopted by the defendants further strengthens the plaintiff’s claim that fraud has been perpetrated upon him. Such allegations - 16 - NC: 2025:KHC-D:5334-DB RFA No. 100414 of 2019 C/W RFA No. 100418 of 2019 necessitate a thorough evidentiary assessment, which can only be undertaken through a full-fledged trial. Therefore, the summary rejection of the suit by the learned Judge, without considering the scope of Section 31 of the Specific Relief Act, 1963, is legally untenable and unsustainable. 17. The approach adopted by the learned Judge in dismissing the suit by invoking Order VII Rule 11 CPC is, therefore, erroneous and unjustified. The plaintiff has provided specific details regarding the execution of the sale deed, the dishonor of cheques, and the fraudulent conduct of the defendants. These allegations raise substantial questions of fact and law that warrant a trial rather than summary rejection. By dismissing the plaint at the threshold, the learned Judge has effectively precluded the plaintiff from substantiating his claims through legal proceedings. Such an approach is not only contrary to established judicial precedents but also results in a gross miscarriage of justice. Given that these appeals have been pending since 2019, it is imperative to rectify this grave - 17 - NC: 2025:KHC-D:5334-DB RFA No. 100414 of 2019 C/W RFA No. 100418 of 2019 error and ensure that the plaintiff is afforded an opportunity to present his case in a duly constituted trial. Accordingly, we hold that the order of the learned Judge rejecting the plaint is perverse, patently erroneous, and unsustainable in law, thereby necessitating interference by this Court. Consequently, Point No.1 is answered in the affirmative. FINDING ON POINT NO.2:- 18. For the foregoing reasons, we proceed to pass the following: ORDER i) Appeal filed by the plaintiff in RFA No.100414/2019 is allowed. The impugned order dated 25.01.2019 passed on I.A.No.VIII filed under Order VII Rule 11(a) of CPC by learned II Additional Senior Civil Judge and CJM, Belagavi is rejected. ii) Appeal filed by the plaintiff in RFA No.100418/2019 is allowed. The impugned - 18 - NC: 2025:KHC-D:5334-DB RFA No. 100414 of 2019 C/W RFA No. 100418 of 2019 order dated 26.06.2019 passed on I.A.No.XII filed under Order VII Rule 11(d) of CPC by learned II Additional Senior Civil Judge and CJM, Belagavi, is hereby set- aside. Consequently, I.A.No.XII is rejected. iii) The matter stands remitted back to the trial Court. Parties are relegated to full fledged trial. No order as to cost. iv) Registry is hereby directed to refund the entire Court fee taking note of Section 64 of the Karnataka Court Fees and Suits Valuation Act. v) Since parties are represented by the counsels, without expecting any further notice are hereby directed to appear before the trial Court on 17.04.2025. Sd/- (SACHIN SHANKAR MAGADUM) JUDGE Sd/- (G BASAVARAJA) JUDGE RHR/-AM Ct:vh List No.: 1 Sl No.: 16