The Supreme Court bench of Justice J.B. Pardiwala and Justice R.Mahadevan, while scrutinizing the scope and limitations of Order VII Rule 11 of the Code of Civil Procedure, 1908 (CPC) overturned the Rajasthan High Court's order rejecting a civil plaint under Order VII Rule 11 of the CPC. The bench held that a plaint disclosing even one legitimate cause of action involving triable issues cannot be rejected at the threshold.

The dispute originated over agricultural land in Jodhpur owned by Vinod Infra Developers Ltd. (Appellant). The Appellant had, in 2014, obtained a loan of ₹7.5 crore from the Mahaveer Lunia (Respondent 1), pursuant to which it executed a board resolution, an unregistered agreement to sell, and a power of attorney in his favor. The original sale deeds of the property were impounded for inadequate stamp duty but later handed over to the Respondents as security. In 2022, the Appellant sought to repay the loan and reclaim the documents. When the respondents failed to cooperate, the company revoked the power of attorney. Nevertheless, Respondent no. 1 proceeded to execute and register sale deeds in his and his associates’ names, prompting the appellant to file a civil suit seeking declaratory, possessory, and injunctive relief.

The trial court refused to reject the plaint, identifying triable issues including alleged misuse of revoked authority and potential fraud. However, the High Court reversed this, treating the Appellant’s case as based entirely on an unregistered agreement to sell and hence legally untenable and aggrieved by the same, the Appellant approached the Supreme Court.

At the outset, the court provided the position of law on rejecting a plaint under Order VII Rule 11 CPC. The bench stated, “...rejection of a plaint under Order VII Rule 11 CPC is permissible only when the plaint, on its face and without considering the defence, fails to disclose a cause of action, is barred by any law, is undervalued, or is insufficiently stamped. At this preliminary stage, the court is required to confine its examination strictly to the averments made in the plaint and not venture into the merits or veracity of the claims. If any triable issues arise from the pleadings, the suit cannot be summarily rejected”

The bench reiterated the already settled law under Sections 17 & 49 of the Registration Act, 1908 , that in the absence of registration, such documents do not confer valid authority to transfer title. The Court drew extensively from precedents such as S. Kaladevi v. V.R. Somasundaram (2010) 5 SCC 401, and Muruganandam v. Muniyandi (2025) SCC OnLine SC 1067 to establish that such documents cannot confer ownership or be used to justify registered sale deeds without due authority.

The court also observed that in the present case, Respondent No. 1 had not instituted any suit for specific performance. Moreover, the power of attorney relied upon was unregistered and had already been revoked prior to the execution of the sale deeds. Therefore, Respondent No. 1 cannot rely on the unregistered documents to assert any proprietary rights and had no valid authority to execute the impugned sale deeds.

Crucially, the Court held that even assuming one cause of action might be barred, the presence of another viable cause of action, such as the challenge to the post-revocation sale deeds, requires the plaint to be tried. Relying on Central Bank of India v. Prabha Jain 2025 SCC OnLine SC 352, particularly the relevant para stating “...25. If the civil court is of the view that one relief (say relief A) is not barred by law but is of the view that Relief B is barred by law, the civil court must not make any observations to the effect that relief B is barred by law and must leave that issue undecided in an Order VII, Rule 11 application. This is because if the civil court cannot reject a plaint partially, then by the same logic, it ought not to make any adverse observations against relief B.”

The Court emphasized the inadmissibility of partial rejection and that causes of action must be judicially severed only where legally permissible, not arbitrarily ignored.

Ultimately the court observed that “In light of the above, we find that the trial court rightly held that the issues are triable and that the application filed under Order VII Rule 11 CPC was without merit. In contrast, the High Court erred in overturning this finding and rejecting the plaint in its entirety.”

Accordingly, the appeal was allowed.

Case Title: Vinod Infra Developers Ltd. Versus Mahaveer Lunia & Ors. C.A. No 7109 / 2025

Advocate for Petitioner(s): Mr. C. Aryaman Sundaram, Sr. Adv.; Dr. Manish Singhvi, Sr. Adv.; Mr. Apurv Singhvi, Adv.; Mr. Zafar Inayat, Adv.; Ms. Shalini Haldar, Adv.

Advocate For Respondent(s): Dr. Abhishek Singhvi, Sr. Adv.Mr. Sumit Chander, Adv. Mr. Yash Johri, Adv. Mr. Saransh Vij, Adv. Mr. Gurdeep Chauhan, Adv. Ms. Barnali Basak, Adv. Ms. Mahak Dua, Adv. Mr. Amit Agarwal, Adv. Mr. Nitin Mish