A) ABSTRACT / HEADNOTE

The Supreme Court in Vinod Infra Developers Ltd. v. Mahaveer Lunia & Ors. (2025) dealt with the rejection of a plaint under Order VII Rule 11, Code of Civil Procedure, 1908. The dispute arose from a series of transactions involving agricultural land in Jodhpur, which the appellant had purchased in 2013. In 2014, the appellant executed an unregistered agreement to sell and power of attorney in favour of Respondent No.1 as security for a loan. These were later revoked in May 2022, but despite the revocation, Respondent No.1 executed registered sale deeds in July 2022 in favour of himself and Respondent Nos.2–4.

The appellant filed a civil suit seeking declarations, possession, and injunction. While the trial court refused to reject the plaint, the Rajasthan High Court reversed the decision, rejecting it entirely. On appeal, the Supreme Court held that a plaint cannot be dismissed in its entirety merely because one relief is untenable if other reliefs based on distinct causes of action survive. Issues of title, validity of sale deeds, revocation of authority, and mortgage characterization raised serious triable issues. The High Court’s approach amounted to a jurisdictional error, as matters relating to title and ownership lie within the exclusive jurisdiction of civil courts, not revenue courts.

The Court reaffirmed that unregistered agreements to sell and powers of attorney do not create title under Sections 17, 23, 49 of the Registration Act, 1908 and Section 54 of the Transfer of Property Act, 1882. It restored the trial court’s order, allowing the suit to proceed.

Keywords: Order VII Rule 11 CPC, Rejection of plaint, Triable issues, Revocation of power of attorney, Unregistered documents, Sale deeds, Civil court jurisdiction, Khatedari rights, Registration Act 1908, Transfer of Property Act 1882.

B) CASE DETAILS

C) INTRODUCTION AND BACKGROUND OF JUDGEMENT

The litigation originates from the tension between procedural law under Order VII Rule 11 CPC and substantive rights in immovable property governed by the Transfer of Property Act, 1882 and the Registration Act, 1908. The case presented before the Supreme Court revolved around the rejection of a plaint at a preliminary stage by the Rajasthan High Court. The appellant company had initiated a civil suit asserting its ownership rights over agricultural land purchased in 2013, which was later entangled in loan transactions structured through an unregistered agreement to sell and a power of attorney. These documents, executed in favour of Respondent No.1, were claimed to have been intended as security for a loan rather than a transfer of title.

In 2022, after revocation of the power of attorney, Respondent No.1 nonetheless executed sale deeds transferring the property to himself and Respondent Nos.2–4. These deeds were registered and followed by revenue mutations. The appellant, aggrieved by the encroachment upon its proprietary rights, filed a civil suit seeking declaratory and injunctive reliefs. While the trial court acknowledged triable issues and declined to reject the plaint, the High Court reversed the decision under Order VII Rule 11 CPC, thereby dismissing the entire suit.

The Supreme Court was called upon to decide whether such wholesale rejection was justified. The case thus raises foundational questions about the scope of judicial scrutiny at the stage of Order VII Rule 11 CPC, the competence of civil courts vis-à-vis revenue courts in matters involving ownership and title, and the enforceability of unregistered instruments under property law. The judgment assumes significance as it reiterates the principle that a plaint cannot be rejected in its entirety merely because one relief is untenable if other claims survive, and underscores the exclusive jurisdiction of civil courts over disputes concerning title to immovable property.

D) FACTS OF THE CASE

The appellant, Vinod Infra Developers Ltd., purchased agricultural land comprising Khasra Nos. 175, 175/2, 175/4, 175/5, 175/6, 175/7, measuring 18 bighas and 15 biswas in Jodhpur in 2013. In 2014, it obtained a loan of Rs. 7.5 crores from Respondent No.1. To secure repayment, the appellant executed a Board Resolution dated 23.05.2014, followed by an unregistered agreement to sell and unregistered power of attorney in favour of Respondent No.1 on 24.05.2014. These documents authorized Respondent No.1 to deal with the land, though the appellant claimed the arrangement was essentially a mortgage rather than a transfer.

On 12.08.2015, the sale deeds by which the appellant had originally purchased the land were impounded for insufficient stamp duty. During this period, the appellant handed over the original property documents to Respondent No.1 as security. In 2022, when the appellant attempted to redeem the loan and reclaim the property documents, Respondent No.1 did not cooperate. Consequently, the Board of Directors revoked the authority granted to Respondent No.1 on 24.05.2022, followed by revocation of the power of attorney on 27.05.2022.

Despite this, Respondent No.1 executed two sale deeds dated 13.07.2022 and 14.07.2022, which were registered on 19.07.2022 in favour of himself and Respondent Nos.2–4. Their names were thereafter mutated in revenue records.

The appellant instituted Original Civil Suit No.122 of 2022 before the District Court, Jodhpur, seeking:
(i) declaration that the sale deeds were void,
(ii) recovery of possession, and
(iii) permanent injunction.

The trial court, upon an application by Respondents under Order VII Rule 11 CPC, refused to reject the plaint, holding that triable issues existed. However, the High Court reversed this finding, allowing the respondents’ revision petition, and rejected the plaint in its entirety on 31.01.2025. This prompted the present appeal before the Supreme Court.

E) LEGAL ISSUES RAISED

i. Whether the High Court erred in rejecting the plaint in entirety under Order VII Rule 11 CPC despite triable issues being disclosed?
ii. Whether an unregistered agreement to sell and unregistered power of attorney executed in 2014 could confer valid rights or authority for transfer under Sections 17, 23, 49 Registration Act, 1908 and Section 54 Transfer of Property Act, 1882?
iii. Whether the revocation of the power of attorney prior to execution of the sale deeds rendered the deeds void ab initio?
iv. Whether the dispute pertained to khatedari rights under Section 207 Rajasthan Tenancy Act, 1955 and hence fell within the exclusive jurisdiction of revenue courts?
v. Whether mutation entries based on the impugned sale deeds could confer title to Respondents?
vi. Whether insufficient court fee justified rejection of the plaint without affording opportunity to rectify?

F) PETITIONER/ APPELLANT’S ARGUMENTS

The counsels for the appellant submitted that the High Court’s rejection of the plaint was legally flawed and premature. They argued that the plaint disclosed multiple causes of action: (i) the unregistered agreement to sell and power of attorney executed in 2014, which in substance created a mortgage arrangement, and (ii) the sale deeds of July 2022 executed despite revocation of authority. It was contended that even if the first cause of action was untenable, the second raised serious triable issues of fraud and validity, which could not be dismissed as academic.

Reliance was placed on Central Bank of India v. Prabha Jain (2025 INSC 95), where the Court held that a plaint cannot be rejected entirely if even one cause of action survives. The doctrine of severance cannot be used to strike down the entire plaint. The appellant emphasized that under Sections 17, 23, and 49 of the Registration Act, 1908 and Section 54 of the Transfer of Property Act, 1882, an unregistered agreement to sell cannot transfer title, nor was any suit for specific performance filed by Respondent No.1.

It was further argued that title disputes over immovable property are within the exclusive jurisdiction of civil courts, as held in Suraj Bhan v. Financial Commissioner (2007) 6 SCC 186 and Jitendra v. State of Madhya Pradesh (2021 SCC OnLine SC 802). Revenue entries are merely fiscal and cannot confer ownership. The appellant also invoked Section 92 of the Indian Evidence Act, 1872 to argue that oral and extrinsic evidence is admissible to establish the true nature of the transaction as a mortgage.

The appellant reiterated readiness to repay Rs.19 crores to redeem the property, underscoring bona fides. By rejecting the plaint wholesale, the High Court not only ignored triable issues but also usurped jurisdiction not vested at the preliminary stage.

G) RESPONDENT’S ARGUMENTS

The counsels for the respondents contended that the suit was devoid of cause of action, since all executed documents — including the agreement to sell of 24.05.2014 — unequivocally reflected a sale transaction, not a mortgage. The assertion of a mortgage was an afterthought raised in 2022. As the documents were unregistered, no enforceable rights could be claimed, and the suit amounted to an abuse of process.

They relied on Pyare Lal v. Shubhendra Pilania (2019) 3 SCC 692 to submit that disputes over khatedari rights fall under Section 207 Rajasthan Tenancy Act, 1955, and thus the suit was barred before civil courts. It was argued that the appellant itself claimed khatedari rights, bringing the matter within revenue jurisdiction.

The respondents highlighted that the appellant failed to pay proper court fees and attempted to merge redemption of mortgage into declaratory reliefs without seeking redemption separately. They argued that once sale deeds were validly executed and registered, mutation was a natural administrative consequence, and no triable issues remained. The High Court, therefore, rightly exercised its jurisdiction under Order VII Rule 11 CPC in rejecting the plaint outright.

H) RELATED LEGAL PROVISIONS

i. Order VII Rule 11, Code of Civil Procedure, 1908 – Grounds for rejection of plaint.
ii. Sections 17, 23, 49, Registration Act, 1908 – Compulsory registration, time for registration, effect of non-registration.
iii. Section 54, Transfer of Property Act, 1882 – Agreement to sell does not by itself create title.
iv. Section 207, Rajasthan Tenancy Act, 1955 – Jurisdiction of revenue courts in tenancy and khatedari matters.
v. Section 92, Indian Evidence Act, 1872 – Admissibility of oral evidence to explain written contracts.

I) JUDGEMENT

The Supreme Court allowed the appeal, set aside the High Court’s order, and restored the trial court’s decision. It held that rejection of a plaint under Order VII Rule 11 CPC is permissible only if, on a plain reading, it discloses no cause of action, is barred by law, or suffers from valuation and stamp defects. The High Court erred in dismissing the plaint wholesale without examining independent causes of action.

The Court reiterated that unregistered agreements to sell and powers of attorney cannot convey title as per Sections 17 and 49 of the Registration Act, 1908 and Section 54 of the Transfer of Property Act, 1882. It emphasized that ownership disputes fall within civil court jurisdiction, and revenue entries are not conclusive proof of title. It also clarified that insufficiency of court fees cannot justify rejection without granting an opportunity to rectify, as held in Tajender Singh Ghambhir v. Gurpreet Singh (2014) 10 SCC 702.

Accordingly, the Court directed the trial court to proceed with the suit uninfluenced by observations in the judgment.

a) RATIO DECIDENDI

The ratio decidendi of the case is that a plaint cannot be rejected in entirety under Order VII Rule 11 CPC merely because one relief is legally untenable if other reliefs survive and are based on distinct causes of action. Ownership disputes over immovable property, including validity of sale deeds and revocation of authority, lie within civil court jurisdiction. Unregistered agreements to sell and powers of attorney cannot transfer title under property law, and revocation of authority nullifies subsequent transactions. Revenue records are administrative and do not confer ownership.

b) OBITER DICTA

The Court observed that even if documents are notarized, reflected in tax filings, or supported by possession, such factors cannot confer proprietary rights if the underlying instruments are unregistered or revoked. Such factual disputes must be adjudicated at trial, not dismissed at the threshold. The Court further remarked that jurisdictional bars under Section 207 Rajasthan Tenancy Act apply only to tenancy or khatedari rights, not to ownership disputes involving sale deeds.

c) GUIDELINES

1. Order VII Rule 11 CPC must be applied strictly to the averments in the plaint, not the defence.

2. A plaint cannot be rejected in entirety if even one cause of action survives. Partial rejection is impermissible.

3. Disputes relating to ownership, sale deeds, and title of immovable property fall exclusively within civil court jurisdiction.

4. Unregistered agreements to sell and powers of attorney cannot convey title; revocation nullifies subsequent transactions.

5. Revenue entries are only for fiscal purposes and do not constitute proof of title.

6. Deficiency in court fees requires opportunity to rectify before rejection.

J) CONCLUSION & COMMENTS

This judgment strengthens procedural safeguards against premature dismissal of suits under Order VII Rule 11 CPC. By restoring the trial court’s order, the Supreme Court emphasized the necessity of allowing trial where substantive triable issues exist. The decision reaffirms that property ownership disputes are within civil jurisdiction and cannot be displaced by revenue authorities or summary rejection.

The ruling harmonizes the interplay between Registration Act, 1908 and Transfer of Property Act, 1882, reiterating that unregistered instruments do not transfer title. It also reflects judicial restraint in preliminary stages, ensuring that parties’ rights are not foreclosed without adjudication. By invoking precedents such as Central Bank v. Prabha Jain, Suraj Lamp v. State of Haryana, and S. Kaladevi v. V.R. Somasundaram, the Court consolidated jurisprudence on property law and procedural law.

The judgment carries significant implications for real estate and loan transactions structured around unregistered agreements and powers of attorney. It safeguards borrowers from misuse of revoked authority while affirming that civil courts retain jurisdiction to adjudicate ownership disputes.

K) REFERENCES

Important Cases Referred
i. Central Bank of India v. Prabha Jain, 2025 INSC 95 : [2025] 2 SCR 263.
ii. Suraj Bhan v. Financial Commissioner, (2007) 6 SCC 186.
iii. Jitendra v. State of Madhya Pradesh, 2021 SCC OnLine SC 802.
iv. S. Kaladevi v. V.R. Somasundaram, (2010) 5 SCC 401.
v. Muruganandam v. Muniyandi, 2025 SCC OnLine SC 1067.
vi. Suraj Lamp & Industries (P) Ltd. v. State of Haryana, (2012) 1 SCC 656.
vii. Cosmos Co-operative Bank Ltd. v. Central Bank of India, 2025 SCC OnLine SC 352.
viii. Tajender Singh Ghambhir v. Gurpreet Singh, (2014) 10 SCC 702.
ix. Pyare Lal v. Shubhendra Pilania, (2019) 3 SCC 692.

Important Statutes Referred
i. Code of Civil Procedure, 1908 – Order VII Rule 11.
ii. Registration Act, 1908 – Sections 17, 23, 49.
iii. Transfer of Property Act, 1882 – Section 54.
iv. Rajasthan Tenancy Act, 1955 – Section 207.
v. Indian Evidence Act, 1872 – Section 92.