Limitation Cannot Be Decided at the Threshold When Fraud and Date of Knowledge Are Pleaded: Allahabad High Court

In a compelling decision that reiterates the settled principle of law regarding the maintainability of civil suits when fraud and limitation are in dispute, the Allahabad High Court on 08 October 2025 ruled that rejection of a plaint under Order 7 Rule 11(d) CPC is impermissible when the plaintiff pleads fraud and a cause of action based on the date of knowledge. Justice Sandeep Jain, delivering the judgment, held that “once the date of knowledge is specifically pleaded and forms the basis of the cause of action, the issue of limitation cannot be decided summarily”, restoring the plaintiff’s suit for specific performance that had been dismissed by the trial court without trial.

The judgment sets a notable precedent in civil procedural law by reaffirming that “limitation is a mixed question of law and fact where fraud is alleged and must be determined after the parties are permitted to lead evidence.”

 “Plaint Averments Must Be Taken as True; Trial Courts Cannot Dissect Facts at Threshold”

The Court made strong observations against the mechanical application of limitation provisions by the trial court. It noted that the rejection of the suit under Order 7 Rule 11(d) CPC was based on a narrow reading of Article 54 of the Limitation Act, 1963, ignoring the vital pleadings of fraud and continuous assurances.

Justice Sandeep Jain observed, “It is well settled that the plea regarding the date on which the plaintiffs gained knowledge of the essential facts is crucial for deciding the question, whether the suit is barred by limitation or not. It becomes a triable issue and hence, the suit cannot be thrown out at the threshold.”

Suit for Specific Performance Was Based on Registered Agreement; Alleged Fraud Misled Plaintiff Into Believing Seller Was Dead

The case originated from a registered agreement to sell dated 13.06.2007, under which the plaintiff, Piyush Parihar, paid an earnest amount of ₹1 lakh for purchase of agricultural land measuring over 2.6 hectares in Varanasi. The agreement stipulated a two-year period for execution of sale deed upon payment of the remaining consideration.

According to the plaintiff, the defendants—Munni Devi and Ramroop—repeatedly assured him that due to the death of co-owner Ramroop and the ongoing mutation process, the sale deed could not be executed immediately. Believing this representation, and relying on mutation entries in revenue records which showed Ramroop as “deceased”, the plaintiff did not pursue legal remedy immediately. However, on 14.05.2013, the plaintiff discovered that Ramroop was not dead, and had executed a sale deed in favour of a third party. This discovery prompted the plaintiff to file the suit for specific performance on 05.08.2013.

The trial court, however, rejected the plaint under Order 7 Rule 11(d), holding that the suit was filed beyond the three-year limitation period prescribed under Article 54 of the Limitation Act, which started from 13.06.2009, the date when the two-year period under the agreement expired.

“When Conduct Extends Performance Period, Suit Cannot Be Dismissed Without Trial” – High Court Reprimands Trial Judge

The High Court criticised the trial court for failing to appreciate that the limitation period could not be mechanically computed without examining whether the defendants' conduct extended the performance timeline. Justice Jain held, “An agreement to extend time need not necessarily be reduced to writing, but may be proved by oral evidence or, in some cases, even by evidence of conduct including forbearance on the part of the other party.”

The Court highlighted that the plaintiff had pleaded continuing negotiations, repeated assurances, and fraudulent misrepresentations—facts which, if established in trial, could prove that the cause of action arose only upon discovery of fraud in May 2013.

Justice Jain concluded: “The issues raised by the plaintiff were triable, which were mixed questions of law and fact, which could only have been decided after the parties had led evidence. It is well settled that at the threshold the court is not required to examine the issue on merits and the court is bound to believe the version of the plaintiff as setup in the plaint.”

Revenue Entries Falsely Declaring Vendor Dead Supported Plaintiff’s Claim of Fraud

The Court noted that official revenue records showed Ramroop as deceased and his legal heirs as mutated as early as March 2011, a mutation entry which was later cancelled by the Tehsildar on 30.07.2013, thereby establishing that for over two years, Ramroop appeared as deceased in public records.

The plaintiff’s reliance on this official misinformation, coupled with the defendants' assurances, constituted sufficient basis for a trial, the Court said. It remarked, “It is evident that for almost two years and four months, Ramroop remained ‘dead’ in the revenue records and then all of a sudden ‘came back to life’ to execute the sale deed on 13.05.2013.”

This, the Court held, was prima facie sufficient to raise a triable issue of fraud.

Rejection of Plaint Declared “Perverse” – High Court Sets Aside Trial Court’s Order and Restores Suit

Finding that the trial court’s order was passed without considering the legal principles laid down by the Supreme Court, the High Court allowed the appeal and set aside the order of rejection. It directed restoration of the original suit (O.S. No. 1112 of 2013) to its number and dismissal of the defendant’s application under Order 7 Rule 11(d).

The Court also gave directions for expeditious trial, stating: “The trial court is directed to decide the suit preferably within a period of one year from the date a certified copy of this order is received, without affording unnecessary adjournments.”

Key Precedents Cited: Apex Court Has Repeatedly Rejected Summary Dismissals on Limitation When Fraud or Date of Knowledge is Pleaded

The Court relied extensively on authoritative rulings including:

• P. Kumarakurubaran v. P. Narayanan, 2025 SCC OnLine SC 975

• Pancharan Dhara v. Monmatha Nath Maity, (2006) 5 SCC 340

• Chhotanben v. Kirtibhai Thakkar, (2018) 6 SCC 422

• Shakti Bhog Food Industries Ltd. v. Central Bank of India, (2020) 17 SCC 260

Each of these judgments reaffirm the principle that when the plaint discloses facts which raise issues of fraud, extension of time, or date of knowledge, courts must not invoke Order 7 Rule 11(d) CPC to reject the suit without trial.

As the Court summarised: “Only the averments in the plaint are germane. The defence available to the defendants or the plea taken by them in the written statement or any application filed by them, cannot be the basis to decide the application under Order 7 Rule 11(d).”

Fraud Allegations and Plea of Date of Knowledge Mandate Full Trial – Threshold Dismissals Condemned

This judgment stands as a caution to trial courts against using Order 7 Rule 11(d) CPC to dismiss civil suits involving complex factual questions, especially those involving fraud or misrepresentation. The Allahabad High Court’s ruling reaffirms the importance of permitting evidence when date of knowledge is pleaded, thereby strengthening the jurisprudence on access to trial and substantive justice.

“The trial court has certainly erred in dismissing the plaintiff’s suit at the threshold… The order is perverse,” concluded Justice Jain.

Date of Decision: 08 October 2025