Introduction: The Supreme Court of India, in Vinod Infra Developers Ltd. v. Mahaveer Lunia & Ors., rendered a significant judgment on the proper application of Order VII Rule 11 of the Code of Civil Procedure, 1908, and the legal effect of unregistered documents related to immovable property transactions. The case involved intricate issues surrounding property rights, alleged mortgage transactions disguised as sale agreements, revocation of powers of attorney, and the jurisdiction of civil courts over disputes of title. The judgment reaffirms critical principles governing the admissibility of documents under the Registration Act and the Transfer of Property Act and provides clarity on the scope of judicial review at the stage of plaint rejection.
Factual Background: The appellant, Vinod Infra Developers Ltd., claimed ownership over agricultural land located in Village Pal, District Jodhpur, which was purchased in 2013. In 2014, the appellant obtained a loan of Rs. 7.5 crores from Respondent No. 1, Mahaveer Lunia. Subsequently, a Board Resolution dated 23.05.2014 authorized the company's Managing Director and Respondent No. 1 to sell the property. In furtherance of this resolution, an unregistered agreement to sell and an unregistered power of attorney were executed in favour of Respondent No. 1 on 24.05.2014.
In August 2015, the original sale deeds of the subject property were impounded for insufficient stamp duty, and although the matter was later remanded by the Rajasthan Tax Board, the appellant handed over these documents to the respondents as security for the loan. In 2022, the appellant sought to settle the loan and retrieve the documents, but the respondents failed to cooperate. Consequently, on 24.05.2022 and 27.05.2022, the Board Resolution and the Power of Attorney were formally revoked. However, despite these revocations, Respondent No. 1 executed sale deeds on 13.07.2022 and 14.07.2022 in favour of himself and Respondents No. 2 to 4, which were registered on 19.07.2022. The respondents' names were subsequently mutated in the revenue records.
Procedural Background: The appellant filed an Original Civil Suit No. 122 of 2022 before the District Court, Jodhpur, seeking a declaration of title, possession, and a permanent injunction concerning the subject property. During the pendency of the suit, Respondents No. 1 to 4 filed an application under Order VII Rule 11 of the CPC seeking rejection of the plaint on the grounds that it disclosed no cause of action, lacked jurisdiction, and had insufficient court fees. The trial court rejected this application, finding that the plaint raised triable issues.
On revision, the High Court of Rajasthan at Jodhpur reversed the trial court’s order, allowed the revision petition (S.B. Civil Revision Petition No. 99/2023), and rejected the plaint entirely by order dated 31.01.2025. Aggrieved by this order, the appellant preferred a Civil Appeal before the Supreme Court of India.
Legal Issue: The central legal issue before the Supreme Court was whether the High Court had erred in rejecting the plaint under Order VII Rule 11 CPC without due regard to the triable issues raised in the suit, particularly in the context of the legality of unregistered documents, revocation of powers of attorney, and jurisdiction of the civil court over property disputes.
Discussion on Judgments: The appellant relied heavily on Central Bank of India v. Prabha Jain, 2025 INSC 95, where it was held that a plaint cannot be rejected in its entirety if even one cause of action survives. The doctrine of severance does not permit rejection of an entire plaint due to a partial legal defect. This judgment was cited to argue that the High Court erred in dismissing the suit entirely despite triable issues concerning the validity of sale deeds executed post revocation of power of attorney.
To support the argument that unregistered agreements to sell are inadmissible to convey title, the appellant cited S. Kaladevi v. V.R. Somasundaram, (2010) 5 SCC 401, where it was held that unregistered documents cannot be used to assert ownership in immovable property and may only be admitted in a suit for specific performance or for collateral purposes.
The appellant also referred to Suraj Lamp & Industries (P) Ltd. v. State of Haryana, (2012) 1 SCC 656, wherein the Supreme Court clarified that transactions such as GPA sales or SA/GPA/WILL transactions do not amount to transfer of ownership unless executed via a registered conveyance deed.
Further support came from Muruganandam v. Muniyandi (Died) through LRs, 2025 SCC OnLine SC 1067, reiterating that unregistered documents can only serve as evidence in specific performance suits, and not to establish title.
Additionally, Cosmos Co. Operative Bank Ltd. v. Central Bank of India & Ors, 2025 SCC OnLine SC 352, emphasized that title to immovable property can only pass through a registered deed.
On the matter of court fees, Tajender Singh Ghambhir v. Gurpreet Singh, (2014) 10 SCC 702, was cited, establishing that deficiency in court fee cannot be grounds for rejection unless the plaintiff is given an opportunity to rectify the defect.
To assert that revenue entries do not confer title, the appellant relied on Suraj Bhan v. Financial Commissioner, (2007) 6 SCC 186 and Jitendra v. State of Madhya Pradesh, 2021 SCC OnLine SC 802.
The respondents cited Pyare Lal v. Shubhendra Pilania, (2019) 3 SCC 692, to contend that disputes relating to khatedari rights lie within the jurisdiction of revenue courts. They also argued that the plaint was drafted to create a false mortgage narrative unsupported by any registered document, and that mutation based on sale deeds was a natural administrative process.
Reasoning and Analysis of the Judge: The Supreme Court held that the High Court committed a serious error in summarily rejecting the plaint without appreciating that it raised significant triable issues concerning title, validity of sale deeds executed post revocation of power of attorney, and the inadmissibility of unregistered documents for conveying ownership.
The Court reaffirmed the settled legal position that unregistered agreements to sell and powers of attorney cannot confer title and are inadmissible for that purpose under Sections 17 and 49 of the Registration Act and Section 54 of the Transfer of Property Act. The failure of Respondent No. 1 to file a suit for specific performance and to register the agreement further nullified any claim of ownership.
The Court also clarified that the execution of sale deeds after revocation of the power of attorney was invalid and non-est in law. Since the suit sought reliefs based on multiple causes of action, including one arising after the revocation, the High Court's rejection of the plaint in its entirety was improper and contrary to Central Bank of India v. Prabha Jain.
On the issue of jurisdiction, the Court noted that the suit pertained to title and ownership over immovable property, which is squarely within the domain of civil courts. The revenue court’s jurisdiction under Section 207 of the Rajasthan Tenancy Act was held to be inapplicable in this context.
Lastly, on court fees, the Court reiterated the principle that plaintiffs must be given an opportunity to cure any deficiency before rejection, citing Tajender Singh Ghambhir.
Final Decision: The Supreme Court allowed the appeal, set aside the impugned judgment of the High Court, and restored the order of the trial court rejecting the application under Order VII Rule 11 CPC. The plaint was directed to be taken on file and proceeded with in accordance with law. The parties were directed to bear their own costs.
Law Settled in This Case: The judgment reinforces that a plaint can only be rejected under Order VII Rule 11 CPC when it fails to disclose a cause of action or falls within other narrowly defined grounds, and that partial defects cannot lead to total rejection of a plaint. It reaffirms that unregistered documents, including agreements to sell and powers of attorney, are legally ineffective in transferring ownership of immovable property. Registered conveyance deeds are the only valid instruments to confer title. The decision also reiterates the jurisdiction of civil courts over disputes of ownership and clarifies that revenue records and mutation entries do not constitute proof of title. Lastly, it emphasizes the requirement of affording plaintiffs an opportunity to rectify deficiencies in court fee before dismissing a suit.
Vinod Infra Developers Ltd. Vs. Mahaveer Lunia:23 May 2025:Civil Appeal No. 7109 of 2025: 2025 INSC 772S:upreme Court of IndiaH:on'ble Mr. Justice J.B. Pardiwala and Hon'ble Mr. Justice R. Mahadevan
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Written By: Advocate Ajay Amitabh Suman, IP Adjutor [Patent and Trademark Attorney], High Court of Delhi
