Court Dismisses Applications for Rejection of Plaint, Highlights Jurisdiction of Civil Courts to Adjudicate Fraud and Malice Claims
In a significant judgment, the Bombay High Court has dismissed multiple applications seeking the rejection of a plaint filed by L&T Asian Realty Project LLP and others against the State of Maharashtra and other defendants. The plaintiffs alleged fraud, malice, and collusion in their removal as developers in a slum rehabilitation scheme and the appointment of a new developer. The court, presided over by Justice Gauri Godse, ruled that the allegations raised substantial triable issues which warranted adjudication by the civil court, thereby rejecting the defendants' pleas to dismiss the suit at the threshold.
The defendants argued that the suit was barred under Section 12A of the Commercial Courts Act, 2015, and Section 42 of the Maharashtra Slum Areas (Improvement, Clearance and Redevelopment) Act, 1971. They also contended that the suit was barred by limitation and lacked a meaningful cause of action. However, the court found that the plaintiffs had sufficiently pleaded allegations of fraud and conspiracy, which were actionable in a civil court, thus allowing the suit to proceed.
Justice Godse highlighted that the bar under Section 42 of the Slum Act did not apply where actions were not taken in good faith or were motivated by improper purposes. The court also noted that the exemption granted due to the COVID-19 pandemic extended the limitation period, making the suit timely. Additionally, the court imposed costs of Rs. 2,00,000/- per application on the defendants for filing frivolous applications that consumed court time and delayed proceedings.
This judgment reinforces the jurisdiction of civil courts to hear cases involving allegations of fraud and malice, even when special statutes provide for exclusive remedies. It underscores the necessity for courts to delve into substantial issues of fraud, which cannot be dismissed merely on procedural grounds at preliminary stages.
Bottom line:-
Plaint cannot be rejected under Order VII Rule 11 of CPC on grounds of alleged non-compliance with Section 12A of the Commercial Courts Act, 2015, bar under Section 42 of the Maharashtra Slum Areas (Improvement, Clearance and Redevelopment) Act, 1971, or lack of cause of action if substantial pleadings on fraud, malice, and collusion raise triable issues.
Statutory provision(s): Civil Procedure Code, 1908 Order VII Rule 11, Section 9; Commercial Courts Act, 2015 Section 12A; Maharashtra Slum Areas (Improvement, Clearance and Redevelopment) Act, 1971 Section 42; Limitation Act, 1963 Section 23
L&T Asian Realty Project LLP v. State of Maharashtra, (Bombay) : Law Finder Doc id # 2918776
