NDLI: M/s Frost International Limited Vs. M/s Milan Developers and Builders (p) Limited & Anr.

Content Provider	Supreme Court of India
e-ISSN	30484839
Language	English
Access Restriction	NDLI
Subject Keyword	Code of Civil Procedure 1908
Content Type	Text
Resource Type	Law Judgement
Jurisdiction	India
Case(s) Referred	Referred Case 0 Referred Case 1 Referred Case 2 Referred Case 3 Referred Case 4 Referred Case 5 Referred Case 6 Referred Case 7 Referred Case 8 Referred Case 9 Referred Case 10
Case Type	Appeal
Court	Supreme Court of India
Disposal Nature	Appeal Allowed
Headnote	Code of Civil Procedure, 1908 : ss. 96, 115 and Or. VII r. 11 - Negotiable Instruments Act - ss. 118, 138 - Specific Relief Act - ss. 34, 41 – Suit for declaration – Rejection of plaint - Respondent no. 1 engaged in business of exporting iron ore from Paradeep Port, had a plot on licence from Paradeep Port Trust Authority for carrying its business - Respondent no. 1 and appellant entered into a Cooperation Agreement, however, as per respondent no. 1, it was not given effect – Thereafter, appellant filed a complaint against respondent no. 1 with Paradeep Port Trust Authority for violating terms and conditions of his license – Parties then entered into a Memorandum of understanding agreeing the appellant would take steps to protect the license of the plot given to the respondent no. 1 from cancellation and that the respondent no. 1 would issue a cheque for Rs. 56 lakhs in favour of appellant and the same would remain in the custody of the respondent no. 2 as security, which is equivalent to the cost of 3876 MT of iron ore, and if the appellant succeeded in protecting the licence from being cancelled then respondent no. 1 would supply iron ore fines to appellant - Accordingly cheque was given to the respondent no. 2 as security, however, the appellant took no step to save the license of the plot and the license was cancelled, and the cheque of Rs. 56 lakhs was handed over to appellant, who presented the same for encashment and it got dishonoured – Appellant issued notice u/s. 138 of N.I. Act to the respondent no. 1 – Respondent no. 1 then filed suit for declaration against the appellant and the respondent no. 2 that the cheque which was dishonoured was handed over by him to respondent no. 2 as a security and that appellant had not acquired any right over the said cheque as the respondent no. 1 had no liability to discharge in favour of appellant – Appellant then filed an application u/Or. VII Rule 11 seeking rejection of the plaint – Dismissed by trial court, however, the revisional court set aside the order of the trial court and rejected the plaint – In writ petition, the High Court set aside the order of the revisional court and remanded the matter holding that the revisional court had exceeded its jurisdiction in rejecting the plaint – On appeal, held : High Court was not right in holding that the revisional court had exceeded its jurisdiction and it could not have allowed the application filed under Order VII Rule 11 and thereby reversed the order of the trial court and finally disposed of the suit - High Court failed to appreciate the second proviso to s. 115 of CPC (Orissa amendment) in its true perspective - Revisional court, being the High Court or the District Court, as the case may be, can reverse an order which would finally dispose of the suit or other proceeding - Revisional court being the District Court, did the same.s. 115 and Order VII Rule 11 - Specific Relief Act, 1963 - ss. 34, 41 - Negotiable Instruments Act - ss. 118, 138 - Revisional court-District Court allowing the application filed u/rod. VII r. 11 by the appellant and thereby rejecting the plaint filed by the respondent no. 1 – Justification of – Appellant’s case that respondent no. 2 has sought only declaratory that the cheque issued in the name of the appellant was a security and the appellant had no right to encash it and has not sought further or consequential reliefs, thus, suit is barred under Specific Relief Act; and that the suit filed by the respondent no. 1 is an attempt to frustrate the possibility of the appellant initiating action under the provisions of the N.I. Act for the dishonour of cheque - Held : Omission on the part of the respondent no. 1 in praying for further consequential relief, would become relevant only at the time of final adjudication of the suit - Right of appellant to prosecute the respondent no. 1 owing to the dishonour of the cheque issued by the respondent no. 1 cannot be frustrated by seeking a declaration that the said cheque was handed over as a security – Such a declaration cannot be ex facie granted as it would be contrary to the provisions of the N.I. Act and particularly s. 118(a) thereof – In these circumstances, while the respondent no. 1 has certain grievances arising from the MoU, against the appellants which may give rise to seek appropriate remedies in law, the declaratory reliefs sought in the plaint are barred by law - Hence, the plaint is liable to be rejected in exercise of jurisdiction u/Or. VII r. 11 CPC.Order VII Rule 11 - Rejection of Plaint - Purpose/Object - Discussed.
Judge	Hon'ble Ms. Justice B.V. Nagarathna
Neutral Citation	2022 INSC 380
Petitioner	M/s Frost International Limited
Respondent	M/s Milan Developers And Builders (p) Limited & Anr.
SCR	[2022] 14 S.C.R. 1100
Judgement Date	2022-04-01
Case Number	1689

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M/s Frost International Limited Vs. M/s Milan Developers and Builders (p) Limited & Anr.

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