The Supreme Court has held that the likelihood of a civil suit being dismissed after trial cannot justify rejecting its plaint at the threshold when the pleadings disclose a cause of action and do not show that the suit is barred by law.

The Bench of Justice Ujjal Bhuyan and Justice Atul S. Chandurkar clarified that courts may reject a plaint under Order VII Rule 11 of the Code of Civil Procedure, 1908 (CPC), even before its registration. However, that power must be exercised within the grounds specified in the provision, after reading the plaint meaningfully and as a whole.

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The Court also directed trial courts to maintain a formal record of plaints rejected before registration. Where the applicable Civil Manual or rules do not provide for such a record, High Courts may take appropriate steps under Section 122 of the CPC.

According to the plaint, the disputed property had been settled in favour of the plaintiff by his son through a registered settlement deed dated February 26, 2021.

The plaintiff alleged that he subsequently borrowed ₹25 lakh from the defendant’s husband. At the latter’s insistence, he executed a registered sale deed dated March 15, 2021, in the defendant’s name.

His case was that the sale deed had been executed as security for the borrowing and that he continued to possess the property despite its execution.

The judgment records his pleading that the loan carried interest at 24% per month under the usage and custom relied upon by him. This remained an allegation in the plaint; the Supreme Court did not determine the validity of the transaction or the interest claimed.

The plaintiff further alleged that he later offered to repay the principal with interest, but the defendant avoided reconveying the property. He also alleged an attempt to take forcible possession on May 25, 2025.

He consequently sought a declaration of title, redemption of the alleged mortgage styled as a sale deed, a permanent injunction protecting his possession, and a mandatory injunction directing reconveyance of the property. He also expressed readiness to deposit the loan amount with accrued interest.

Before registering the suit, the Principal District Judge examined the plaint and accompanying documents.

The trial court noted that the sale deed contained no provision for resale and that the plaintiff had not produced an agreement establishing an obligation to reconvey the property. It also relied on the deed’s terms granting the defendant rights of enjoyment and alienation.

On that basis, the court rejected the plaint and directed refund of court fees.

The Madras High Court upheld the decision. It considered that the documents did not support an inference that the transaction constituted a mortgage or a conditional sale carrying a right of reconveyance. It further held that the plaint lacked a cause of action.

Before the Supreme Court, the plaintiff argued that the trial court could not exercise its powers under Order VII Rule 11 before registering the suit. He also contended that his allegations required evidence and adjudication.

The defendant maintained that the registered document reflected an outright sale and that no document established an obligation to reconvey the property. She argued that there was no legal bar to rejecting the plaint before registration.

The Supreme Court rejected the plaintiff’s argument that registration must necessarily precede rejection.

Referring to earlier decisions, including Saleem Bhai v. State of Maharashtra, T. Arivandandam v. T.V. Satyapal, and The Church of Christ Charitable Trust & Educational Charitable Society v. M/s Ponniamman Educational Trust, the Court reiterated that the power may be exercised before registration, after issuance of summons, or at a later stage before conclusion of trial.

Formal registration does not protect a plaint from scrutiny under Order VII Rule 11. Nevertheless, the availability of that power before registration does not permit a court to determine disputed merits while examining whether a statutory ground for rejection exists.

The Supreme Court found that the trial court had entered into the merits without identifying the specific clause of Order VII Rule 11 under which it rejected the plaint.

Its order did not explain whether the plaint failed to disclose a cause of action or whether the suit appeared, from statements in the plaint, to be barred by law.

On a meaningful reading of the entire plaint, the Supreme Court found that it disclosed a cause of action. It also found no statement showing that the suit was barred by law.

The trial court had effectively treated the action as a suit solely for redemption of a mortgage described as a sale deed. In doing so, it overlooked the other reliefs sought, including protection of the plaintiff’s alleged possession and a direction for reconveyance.

The allegations concerning the borrowing, the purpose of the sale deed, continued possession, willingness to repay and attempted dispossession had to be considered together.

The Court held that material averments could not be ignored and that the plaint had to be read as a whole.

It also noted that the High Court had not considered the plaintiff’s specific contention that he should have been permitted to lead evidence to substantiate his pleadings.

The Supreme Court distinguished between a plaint attracting a statutory ground for rejection and a claim that a judge considers unlikely to succeed after trial.

Even if the trial court believed that the plaintiff would ultimately fail, that assessment could not justify rejecting the plaint where a cause of action was disclosed.

Whether the plaintiff could prove his account of the transaction remained a question for adjudication.

The ruling therefore restores the opportunity to have the dispute tried. It does not establish that the sale deed was a mortgage, that the plaintiff retained title, or that the defendant was obliged to reconvey the property.

The Supreme Court separately addressed the need to preserve records when plaints are rejected before registration or numbering.

It explained that rejection of a plaint has the character of a decree under Section 2(2) of the CPC. Allowing such an order to pass without a record creates difficulties, particularly when an appellate court calls for the trial court’s records.

Maintaining a record also preserves information about earlier proceedings if a plaintiff subsequently presents another plaint on the same cause of action, as permitted under Order VII Rule 13. It enables the defendant to obtain information concerning the earlier rejection.

The Court accordingly directed that the rejection of a plaint before registration must be duly recorded in a register maintained for that purpose under Order IV Rule 2.

Where the relevant Civil Manual or applicable rules contain no such provision, High Courts may take appropriate steps under Section 122.

Copies of the judgment were directed to be sent to the Registrars General of the High Courts and the Directors of State Judicial Academies for circulation and follow-up action.

The Supreme Court set aside the trial court’s order dated July 11, 2025, and the Madras High Court’s judgment dated October 16, 2025.

It restored the plaint for registration and directed that the suit thereafter be decided in accordance with law.

The Court expressly clarified that its observations were not an expression on the merits and that the suit must be decided uninfluenced by them. No order as to costs was made.

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