Only the Averments in the Plaint Would be Relevant: Supreme Court Overturns High Court’s Review Order in Eldeco Housing Case

In a significant ruling, the Supreme Court today set aside a High Court order that had dismissed a suit for specific performance involving Eldeco Housing and Industries Limited and others. The apex court’s decision hinged on the principle that for considering an application under Order VII Rule 11(d) C.P.C., “only the averments in the plaint would be relevant,” a standard that was not met in the High Court’s review.

The dispute centered around a Memorandum of Understanding (MoU) dated 31.08.1998 regarding the sale of property. The appellant, Eldeco Housing, had filed a suit against respondent Ashok Vidyarthi, following attempts by the latter to sell the property to third parties. The initial suit sought to prevent the creation of third-party rights over the property, whereas the subsequent suit aimed for the specific performance of the MoU post-resolution of family litigation.

Justice Rajesh Bindal, in delivering the judgment, noted that the High Court erroneously allowed the review application leading to the dismissal of the suit. The Supreme Court underscored that for the purpose of invoking Order VII Rule 11(d) of the Code, the court should only consider the plaint’s averments, without looking into any additional evidence.

The Supreme Court’s decision has shed light on the nuanced application of procedural law, particularly in the context of property disputes and contractual obligations. The ruling clarifies the parameters within which courts should evaluate applications for rejection of a plaint, emphasizing the need to strictly adhere to the contents of the plaint itself.

The case has been remanded for trial, with the Supreme Court providing the Trial Court with the discretion to treat the issue of the suit’s maintainability as preliminary. This decision is expected to have far-reaching implications on how courts interpret and apply procedural laws in civil litigation.

Date of Decision: November 30, 2023

Eldeco Housing and Industries Limited VS Ashok Vidyarthi and Others