Bombay High Court
Wimco Limited vs Matoshree Shelters Private Limited on 29 April, 2009
Author: P.B. Majmudar
Bench: P.B. Majmudar, R.M. Savant
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
APPEAL NO. 136 OF 2009
IN
SUIT NO. 2551 OF 2006
Wimco Limited, a Company incorporated )
under the Indian Companies Act, 1913, and having its )
registered office at Indian Mercantile Chambers, )
R. Kamani Marg, Ballard Estate, )
Mumbai-400 038 )..Appellants
1.
versus
Matoshree Shelters Private Limited, )
a company incorporated under the Companies Act, 1956, )
and having its registered office at Room No.3, )
Vidhyarthi Singh Chawl, Rajesh Compound, Ovari Pada, )
Dahisar (East), Mumbai-400 068 )
2. Ramchandra Jetharam Vaishnav, having his office )
at Room No. 3, Vidhyarthi Singh Chawl, Rajesh Compound )
Ovari Pada, Dahisar (E), Mumbai-400 068 ).Respondents
Mr. Kevic Setalwad with Mr. N.H. Seervai, instructed by M/s. Nanu Hormasjee &
Company, for the appellants.
Ms. Rajani Iyer, Senior Advocate, with Mr. Shah, instructed by M. Hiralal &
Company, for the respondents.
CORAM: P.B. MAJMUDAR &
R.M. SAVANT
, JJ.
DATE: APRIL 29, 2009
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ORAL JUDGMENT (Per P.B. Majmudar, J.)
1. This appeal is directed against the judgment and oder passed by the learned single Judge in Suit No. 2551 of 2006 dated 16th December,2008. By the impugned judgment and order, the learned single Judge came to the conclusion that the Court has no jurisdiction to try and entertain the present suit and the plaint was ordered to be returned to the plaintiffs for presenting the same to the proper Court. The learned single Judge came to the conclusion that in view of some of the prayers in the plaint, the suit could be said to be a suit for land and, therefore, the suit is required to be filed at the place where the land is located and, accordingly, as per Clause 12 of the Letters Patent, the suit on the Original Side of the Bombay High Court is not maintainable. By holding so, the plaint was ordered to be returned to the plaintiffs for presenting it to the proper Court.
2. In order to appreciate the controversy raised in this appeal, it is necessary to advert to the averments in the suit as well as the nature of the suit filed by the present appellants.
3. It is the case of the appellants-plaintiffs that the plaintiffs are a Company incorporated under the Indian Companies Act, 1913 and having its registered office at Mumbai. The plaintiffs, inter alia, carry on the business of ::: Downloaded on - 09/06/2013 14:33:48 ::: -3- manufacture of safety matches. The defendant No.1 is a Company incorporated under the Companies Act, 1956 and having its registered office at Mumbai. As per the averments made in the plaint, defendant No.1 is carrying on the business as developers and builders of immovable properties. The defendant No.2 is a Director and Promoter of defendant No.1. It is stated in paragraph 2 of the plaint that the plaintiffs are the sole owners of certain plots, description of which is given in paragraph 2 of the plaint. All these plots are located in Thane District. It is the case of the plaintiffs that somewhere in October, 2003, the defendants approached the plaintiffs for the purpose of development of three plots in question. A Memorandum of Understanding (MoU) was arrived at between the parties on 29th July, 2004. As per the said MoU, the defendants were to provide plaintiffs' workers with suitable housing accommodation and on completion of allotment of housing of the workers in plot No. 26, the defendants were to enter into development agreement in respect of plot Nos. 9-A and 9-B, Village Kohij, Dist. Thane. After completion of plot Nos. 9-A and 9-B, the defendants agreed to enter into a development agreement for another plot viz.
DD-15. The MoU was annexed along with the plaint. The relevant clauses have been mentioned in the plaint. As per the averments made in paragraph 7 of the plaint, in pursuance of the MoU the defendants entered into an agreement dated 29th July, 2004 with the Union of employees of the plaintiffs. In pursuance of the said MoU, the plaintiffs also executed and handed over Power of Attorney dated 29th July, 2004 in favour of defendant No.2 with a view to see that ::: Downloaded on - 09/06/2013 14:33:48 ::: -4- defendant No.2 can take necessary permissions from the Government and other statutory authorities in connection with the development of the said three plots.
In paragraph 9 of the plaint, it is stated that the defendants were bound to obtain all the necessary statutory permissions/sanctions in connection with the development of the said land. At this stage, it is not necessary to go into each and every details about the terms and conditions of the MoU. It is further averred in the plaint that the plaintiffs handed over physical possession of plot No. NA-26 to the defendants only for the purpose of development on the terms and conditions contained in the development agreement dated 21st January, 2005. It is further averred that the ownership title to the plot No. NA-26 continued to vest solely in the plaintiffs. It is the further case of the plaintiffs in the plaint that the defendants committed various breaches and have not acted as per the MoU. In paragraph 23 of the plaint, it is averred that the defendants committed breach of the terms and conditions of the development agreement in the matter of making necessary payments. According to the plaintiffs, time was the essence of the contract. As per the averments made in paragraphs 27 and 28 of the plaint, it is the case of the plaintiffs that the defendants have committed breach of the MoU from time to time. On the basis of the aforesaid averments in the plaint, the plaintiffs approached the Court with the following reliefs:
"(a) This Hon'ble Court be pleased to declare and adjudge the Memorandum of Understanding dated 29th July, 2004 (being Exhibit-F to the plaint) and the Development Agreement dated 21st January, 2005 and 16th June, 2005 (being Exhibits-L and U-1 to the Plaint) as voidable at the option of the Plaintiffs and upon the termination of the same by the ::: Downloaded on - 09/06/2013 14:33:48 ::: -5- plaintiffs on 31st August 2006, that the Memorandum of Understanding dated 29th July, 2004 (being Exhibit-F to the Plaint) and the Development Agreements dated 21st January, 2005 and 16th June, 2005 (being Exhibits L and U-1 to the Plaint) are void and inoperative in law.
(b) That this Hon'ble Court be pleased to order that the Memorandum of Understanding dated 29th July, 2004 (being Exhibit-F to the Plaint) and the Development Agreement dated 21st January, 2005 and 16th June, 2005 (being Exhibits L and U-1 to the plaint) be rescinded and be delivered up and cancelled.
(c) That this Hon'ble Court be pleased to order that as the Power of Attorney dated 16th March, 2005 (being Exh. P hereto) stands terminated, the same be rescinded and delivered up and cancelled.
(d) This Hon'ble Court be pleased to order and decree that the Defendant Nos. 1 and 2 do, jointly and severally pay to the Plaintiffs damages aggregating to Rs. 8.64 crores more particularly described in the Particulars of Claim (being Exhibit- OO to the plaint) with interest thereon at the rate of 12% per annum from the date of this Suit, until payment and/or realization thereof.
(e) This Hon'ble Court be pleased to pass mandatory order and injunction directing the defendant No.1 to hand over quiet, vacant and peaceful possession of the plot No. NA-26 along with structures thereon to the plaintiffs, as a consequence of the termination, and the rescission and cancellation of the Memorandum of Understanding dated 29th July, 2004 (being Exhibit-F to the plaint) and the Development Agreement dated 21st January, 2005 and 16th June, 2005 (being Exhibits-L and U-1 to the Plaint).
(f) This Hon'ble Court be pleased to issue an order and permanent injunction to restrain the defendants by themselves, or through their agents, servants, representatives or any person acting for or on behalf of of either of them from in any manner whatsoever entering upon the plot Nos. 9Aand 9B and DD-15 or disturbing the plaintiffs' exclusive occupation and possession of the same or seeking to develop, construct on, sell, alienate or create any third party rights in the said plots or any part ::: Downloaded on - 09/06/2013 14:33:48 ::: -6- thereof."
4. In so far as prayer clause (a) of the plaint is concerned, it is in connection with declaration to the effect that the development agreements dated 21st January, 2006 and 16th June, 2005 are void and inoperative in law. Prayer clause (b) is in connection with cancellation of the MoU and for delivering the same.
5. Before the learned single Judge, the defendants raised a preliminary objection to the effect that since there is a prayer in the suit for handing over possession of the lands in question, the suit is not maintainable on the Original Side of this Court in view of clause 12 of the Letters Patent. The learned single Judge, with the consent of both sides, framed the preliminary issue as to whether the suit is maintainable on the Original Side of the High Court. Before the learned single Judge, it was agreed by both the sides that it is not necessary to lead any oral evidence in this behalf. The learned single Judge accordingly, after considering the averments made in the plaint and after considering the documents on record, came to the conclusion that since the lands in question are situated beyond the territorial jurisdiction of this Court, the suit is not maintainable before this Court in view of clause 12 of the Letters Patent.
Accordingly, the learned single Judge passed the impugned order returning the plaint to the plaintiffs for presentation to the proper Court.
::: Downloaded on - 09/06/2013 14:33:48 ::: -7-6. In order to resolve the narrow controversy raised by the appellants, it is required to be noted as to whether the suit in question is maintainable on the Original Side of the High Court. Mr. Setalvad, the learned counsel appearing for the appellants, has submitted that the learned single Judge has not properly appreciated the nature of the suit as well as the prayers sought for in the suit and has erred in coming to the conclusion that the suit in question is a suit for land and, therefore, it is not maintainable on the Original Side of this Court.
Learned counsel further submitted that the entire transaction was based on the basis of the MoU and the defendants were given permissive possession only for the purpose of development of the land. It is submitted that this suit cannot be said to be suit regarding title as the tile always remained with the plaintiffs and since the defendants had committed breach of the MoU and subsequent agreements, that the suit is mainly filed for a declaration to the effect that the said MoU may be held to be void and inoperative and it may be held that the defendants cannot acquire any further right on the basis of the said MoU. It is submitted that the starting point of the transaction is execution of MoU between the plaintiffs and the defendants. It is submitted that even if there is any prayer for possession, the same is merely an incidental prayer as the natural consequences of cancellation of the MoU would be that the defendants may not thereafter have any right to continue with the possession as the possession was handed over only for the purpose of development of the land. By entering into the said agreement, it cannot be said that any title has passed to the defendants ::: Downloaded on - 09/06/2013 14:33:48 ::: -8- in any manner. The learned counsel for the appellants, during the course of arguments, submitted that the plaintiffs in fact is willing to delete prayer clause
(e) as according to him, it is merely a consequential prayer and even if a declaration as sought for in the suit is granted, it is not necessary for the plaintiffs to get specific order in connection with the restoration of possession.
7. Learned counsel for the appellants further submitted that since the suit was essentially a suit for declaration to the effect that the MoU in question has become inoperative and void, the other consequential or ancillary reliefs cannot be taken into account for the purpose of finding out the jurisdiction of this Court. It is accordingly submitted that the suit in question is validly instituted on the Original Side of this Court and that the order of the learned single Judge returning the plaint is required to be set aside.
8. Ms. Rajani Iyer, learned senior counsel, appearing for the respondents, on the other hand, submitted that looking to the nature of the entire suit and considering the documents and other aspects of the matter, the suit in question can essentially be described as a suit for obtaining possession and, therefore, when there is a specific prayer in the plaint for handing over the possession, the suit in question can be said to be a suit for land and in that view of the matter, the learned single Judge was perfectly justified in coming to the conclusion that such suit is not maintainable on the Original Side under Clause 12 of the Letters ::: Downloaded on - 09/06/2013 14:33:48 ::: -9- Patent. She has further submitted that by mere declaration to the effect that the MoU, development agreement and the power of attorney are not binding on the plaintiffs, the plaintiffs cannot get any effective relief and the effective relief in substance is a relief for possession and in order to find out the real nature of the transaction and the averments made in the plaint as well as the prayers in the suit are required to be taken into consideration. She has further submitted that it is an admitted fact that the defendants were put in possession part of the lands and unless there is a decree to that effect, the plaintiffs cannot get the possession back and since the plaintiffs have also prayed for restoration of possession, the suit in question can said to be a suit for land and if that be so, this Court has no territorial jurisdiction under clause 12 of the Letters Patent to decide the suit on its Original Side. Ms. Iyer has further submitted that subsequently the defendants have also filed a suit in connection with prayer for specific performance of the agreements and the said suit is filed in the Thane Court. It is submitted that in view of the factual aspect of the matter, the suit should be considered essentially a suit for land and, therefore, the learned Judge has rightly arrived at the conclusion that the suit is not maintainable before this Court on its Original Side and that the suit is required to be filed at the place where the lands in question are located i.e. at Thane.
9. We have heard the learned counsel appearing for both the parties at great length. We have gone through the pleadings as well as the necessary documents ::: Downloaded on - 09/06/2013 14:33:48 ::: -10- forming part of the record submitted before us. We have also gone through the order of the learned single Judge.
10. The principal question which requires consideration is as to whether the suit in question can be said to be a suit for land. If it is held that it is essentially a suit for land, naturally such suit is not maintainable on the Original Side of this Court under clause 12 of the Letters Patent. If it is held that the suit is essentially a suit for declaration in connection with the cancellation of MoU, development agreements and cancellation of power of attorney and the incidental prayers to the main reliefs, the suit instituted before the Original Side of this Court can be said to be maintainable. In order to find out as to whether the suit in question wherein various prayers have been made which includes one of the prayers for handing over possession is maintainable before the Original Side of this Court, a reference is also required to be made to some of the decisions to which both sides have relied upon.
11. Before discussing the judgments of the Apex Court on the point, we may point out that it is not in dispute that the suit in question as such is not a suit for declaration of any title as no such declaration has been claimed by the plaintiffs.
The learned counsel for the appellants has relied upon the decision of the Federal Court in the case of M/s. Moolji Jaitha and Company vs. The Khandesh Spinning and Weaving Mills Co. Ltd., AIR (37) 950 Federal Court 83. So far as ::: Downloaded on - 09/06/2013 14:33:48 ::: -11- the aforesaid case is concerned, the plaintiff therein had filed the said suit on the Original Side of this Court with the following reliefs.
"(a) That it may be declared that the said land (particulars in para
8) belonged and are the properties of the plaintiff company and the defendants have no beneficial interest therein.
(b) That the defendants may be ordered to execute all such documents and deeds and do such acts as may be necessary for transferring the sad lands to the name of the plaintiff company."
12. The learned single Judge of this Court came to the conclusion that the suit in the nature is suit for land and, therefore, Court has no territorial jurisdiction to decide the same. The order of the learned single Judge in that case was carried further before the Division Bench. The Division Bench of this Court reversed the order of the learned single Judge and came to the conclusion that the suit in question cannot be said to be a suit for land and, therefore, the suit was held to be maintainable under clause 12 of the Letters Patent before this Court on its Original Side. The defendants therein carried the matter further before the Federal Court. By majority view, the Federal Court came to the conclusion that the suit was maintainable on the Original Side of the Bombay High Court and while deciding the said issue, the Federal Court has considered the provisions of Clause 12 of the Letters Patent and has also considered the aspect regarding suit for land. The five learned Judges delivered separate judgments in the aforesaid case. Since the issue in question in the present case has a direct bearing on the said judgment of the Federal Court, the observations made by the learned Chief Justice are required to be taken into account. In ::: Downloaded on - 09/06/2013 14:33:48 ::: -12- paragraph 6 of the judgment delivered by Chief Justice Kania, it has been held and observed as under:
" It may be useful to ascertain in the first place what is the natural meaning of the expression ' suit for land', irrespective of judicial decisions. It is not difficult to understand the meaning of the word 'suit' and the word 'land' . The difficulty arises in determining the ambit given to those words by the connecting word 'for'.
Inasmuch as the first word in the expression is 'suit', it is obvious that it has to be followed by the word 'for' as no other preposition can be used in connection with 'suit'. The word 'for' can have the meaning ' to obtain', when used in connection with a noun, e.g. land, jewellery. It can equally be used in connection with the relief sought by the parties, e.g. for possession, damages, etc. It can equally be used to indicate the grievance of the plaintiff. Thus, when one speaks of a suit for libel or for trespass, one really means that it is a suit for damages in an action for libel, or a suit for compensation in an action for trespass on land. The question is in what sense the word 'for' is used in this expression. It appears that to confine its meaning to a suit to obtain possession of land only is not proper. The object of treating suits for land differently from other suits in the clause, which defines the jurisdiction of the Original Side of the High Court, is to respect the generally approved principle that disputes as to title or possession are ordinarily decided where the land is situated. Therefore questions of title to land and not merely to obtain possession of land should be covered by this expression. It seems equally clear that the widest meaning, which will include suits which have any reference to land, should also be rejected. The object cannot be that any question which indirectly or incidentally has any reference to land should be excluded from trial merely because the suit has some reference to land. In the ordinary way therefore a suit for land is one the primary or direct object of which is to obtain possession of, or an adjudication of title to, land.
13. The learned Chief Justice has accordingly considered the scope of the suit to find out whether it is really a suit for land. It has been observed that any question which indirectly or incidentally has any reference to land should be ::: Downloaded on - 09/06/2013 14:33:48 ::: -13- excluded from trial merely because the suit has some reference to the land.
Considering the said reasoning and observation, it is required to be noted as to whether the prayer for possession of the land is the primary object of filing of the suit or adjudication of title to land or whether the prayer is incidental to the main substantive prayer in the suit. In paragraph 15 it has been observed by the learned Chief Justice that expression' suit for land ' should not be narrowly confined and limited to suits for recovery of possession of land or to obtain declaration of title to land only. The relevant observations in paragraph 15 are as under:
" 15. The view of a large majority of Judges thus appears to be that the expression 'suit for land' should not be narrowly confined and limited to suits for recovery of possession of land or to obtain a declaration of title to land only. The wider meaning of the expression, so as to cover all suits relating to land i.e. which has anything to do with land, does not appear to be accepted by anyone. That leaves the question wherein between the line of demarcation should be drawn. The Courts have differed in the matter of drawing this line under different circumstances, and the same Court has taken divergent views on the point. No judicial decision has attempted to give an exhaustive enumeration of the suits covered by the expression 'suit for land' and I do not propose to do so. It is sufficient to say that taking the suit as a whole, one has to consider whether it is for the purpose of obtaining a direction for possession or a decision on title to land, or the object of the suit is something different but involves the consideration of the question of title to land indirectly."
14. Of course, in so far as the facts of the said case are concerned, it was held by the learned Chief Justice that the main purpose of the suit was to administer the estate of the deceased and to set aside the decree obtained by ::: Downloaded on - 09/06/2013 14:33:48 ::: -14- fraud by the defendants. In paragraph 23 of the said judgment it has been observed that the defendants came into possession of the land because the appellants were agents of the respondents and accordingly the respondents were entitled to ask the Court to act in personam and ask the appellants to execute a conveyance in favour of the respondents, if they succeed in proving their allegations in the plaint. It is relevant to quote here the observations of the learned Chief Justice in paras 22 and 23 of the said judgment. The same reads thus:
" 22. It was argued on behalf of the appellants that the exercise of equity jurisdiction was limited to cases of express trust and for this some reliance was placed on the words of O. 11, R. 1 of the Rules of the Supreme Court of England. In my opinion, this argument is unsound because the equity jurisdiction is held applicable equally to cases were there is a contract, fraud or trust and a fiduciary relationship. I do not think the equity jurisdiction exists or is exercised only in cases of express trust.
23. The question then is whether the plaint in the present case, inasmuch as it contains prayers (a) and (b) makes it a suit for land, or it is a suit which falls under the description 'all other cases' in Cl. 12 of the Letters Patent. In approaching this question I think it is relevant to bear in mind the principles of equity under which the Court grants reliefs to parties under certain circumstances, is respect of land situated outside its original civil jurisdiction. I am unable to accept the proposition that the question of jurisdiction under Cl. 12 has to be decided independently of the question of application of equitable principles to the case. In the present case the central fact running through the whole plaint on which all the claims are based is that the appellants were the secretaries and treasurers of the respondents. Paragraphs 18A relate to the dispute between the parties about the Jalgaon lands. Even before the inclusion of para 8-A, the respondents had alleged that the appellants were their agents, that as such they were kin possession of the respondents' funds,that by using those funds they purchased the lands and held them for the respondents' use till the termination of the ::: Downloaded on - 09/06/2013 14:33:48 ::: -15- agency. Thereafter, the appellants wrongfully contended that the lands belonged to them and by the suit the respondents sought to enforce fulfilment of the obligation incurred by the appellants under those circumstances. It is not disputed that in fact the land is in the possession of the respondents. The respondents contend that although the conveyance stands in the name of the appellants, the respondents are the beneficial owners. In view of these allegations.S. 82 and S. 88 and illus. 4 thereto of the Trust Act, may be noticed. These sections are found in a chapter which deals with "Certain obligations in the nature of Trusts". Section 82 deals with a benami purchase, apart from any fiduciary relationship. Section 88 deals with the acquisition of some financial benefit by a person standing in fiduciary relationship to the claimant. Illustration 4 to S. 88 clearly shows that when property is purchased by a partner out of partnership funds, the other partners can claim the property as partnership property. Te extent of the fiduciary relationship is not material. It is sufficient is the existence of such relationship is established. I am unable to accept the contention that this is a suit by the respondents against the appellants, their agents, for accounts. In my opinion, the proper construction is to treat the claim in respect of the Jalgaon lands as a claim by a principal against his agent, in respect of property acquired by the use of the respondents' fund by the appellants. The claim is to follow the property in the appellants' hands on the ground that the appellants had committed a breach of trust in utilising the respondents' money in obtaining title to the land. It cannot be disputed that the only way in which the appellants could and did come into possession of the respondents' money was because the appellants were the agents of the respondents. Therefore, in my opinion, in this case the respondents are entitled to ask the Court to act in personam and ask the appellants to execute a conveyance in favour of the respondents, if they succeed in providing their allegations in the plaint. In the present case the fiduciary relationship is not disputed."
In the said case, the learned Chief Justice has also considered prayer clause (a) in the plaint and after considering the said prayer it has been observed in paragraph 25 as under.
::: Downloaded on - 09/06/2013 14:33:48 ::: -16-" 25. That leaves the question whether the respondents' suit should fail because they had put prayer (a) in the plaint. The inclusion or absence of a prayer is not decisive of the true nature of the suit, nor is the order in which the prayers are arrayed in the plaint. The substance or object of the suit has to be gathered from the averments made in the plaint and on which the reliefs asked in the prayers are based. A plaintiff may ask for a relief which a Court of equity may not grant. But I do not see any justification to non-suit the plaintiff because of such a prayer. That will be insisting on a form of pleading and not on the substance of the suit. In Penn. V. Lord Baltimore, 2 white &Tudor's Eq. Cas. 4th Ed. 923, a claim for possession was made but the Court did not give that relief in its decree. But the Court did not dismiss the suit because such claim was made by the plaintiff in the writ. In my opinion, therefore, the respondents' prayer for a declaration of title to the land is no ground for holding that the Original Side of the Bombay High Court is not competent to try the suit. "
15. In the aforesaid case, the other Hon'ble Judges had also delivered their separate judgments and by a majority view, it is held that the suit in question was maintainable on the Original Side of the Bombay High Court.
16. Learned counsel for the respondents has, however, argued that even as per the aforesaid judgment if ultimately it is held that the suit is for getting decree of possession of land, such suit is to be tried where such land is located as per clause 12 of the Letters Patent. It is submitted that in the facts of the case which were before it, the Federal Court came to the conclusion after considering the prayers that it was not essentially a suit for title for possession of the land and suit in personam and in view of the facts of that case ultimately it was held that the suit was maintainable before the High Court on its Original Side.
::: Downloaded on - 09/06/2013 14:33:48 ::: -17-17. As per the principles laid down by the Federal Court in the aforesaid case, ultimately this Court is required to find out as to whether looking to the transaction in question and looking to the various prayers in the plaint, whether the suit in question can be said to be essentially a suit for land which may take the suit outside the jurisdiction of this Court.
18. At this stage, it is necessary to refer to the decision of the Supreme Court relied upon by both sides in Babu Lal vs. M/s. Hazari Lal Kishori Lal and others, (1982) 1 SCC 525. In the said case, the Supreme Court while considering the provisions of Section 22 of the Specific Relief Act,1963 has held that in appropriate cases of specific performance of contract of sale of immovable property, the Court is competent to order delivery of possession of the property, even if not specifically asked for, by allowing suitable amendment in the plaint.
In paragraph 11 of the aforesaid decision,the Supreme Court has observed that in order to avoid multiplicity of proceedings, the plaintiff may claim a decree for possession in a suit for specific performance, even though strictly speaking, the right to possession accrues only when suit for specific performance is decreed.
The legislature has now made a statutory provision enabling the plaintiff to ask for possession in the suit for specific performance and empowering the court to provide in the decree itself that upon payment by the plaintiff of the consideration money within the given time, the defendant should execute the ::: Downloaded on - 09/06/2013 14:33:48 ::: -18- deed and put the plaintiff in possession. It is submitted by the learned counsel for the appellants that in the instant case ultimately the consequences may follow in case the declaration sought for by the plaintiff regarding cancellation of documents viz. MoU, agreements to sale and power of attorney is passed. The learned counsel for the respondents, on the other hand, would submit that the suit in question is not a suit for specific performance but as per the judgment of the Supreme Court, the suit for specific performance can be said to be maintainable, even if no specific prayer for possession in a given case is sought for. The prayer for possession in such a suit is merely incidental and cannot be said to be a basis for filing a suit for specific performance.
19. Both the learned counsel have relied upon the decision of the Supreme Court in the case of Adcon Electronics Pvt. Ltd. Vs.Daulat and another, (2001) 7 SCC 698. In the aforesaid case, the Supreme Court has held that a simple suit for sale of land is a suit for enforcement of the terms of the contract and cannot be treated as a 'suit for land'. It has been held that as far as the title of the land is concerned, the same is not the subject matter of a suit for specific performance. So far as the aforesaid case is concerned, the plaintiff and defendant entered into an agreement on 12th July, 1986 in connection with the land together with the building, located at Indore in Madhya Pradesh. The plaintiff filed the suit in the High Court of Bombay against the defendant, inter alia, praying for a declaration that agreement dated 12th July, 1986 and MoU ::: Downloaded on - 09/06/2013 14:33:48 ::: -19- dated 1st August, 1987 are subsisting and binding on the defendant and for a decree for specific performance of the said agreement and memorandum. The suit was filed with the leave of the Court under clause 12 of the Letters Patent.
The learned single Judge in the aforesaid case granted leave. The defendant thereafter took out a Chamber Summons for revocation of the leave. The learned single Judge dismissed the Chamber Summons against which an appeal was preferred before the Division Bench. The Appeal was also dismissed and the matter was carried further before the Supreme Court. On behalf of the defendant it was argued that in the agreement there is a specific stipulation that the defendant will hand over possession of the suit property on the execution of the sale deed and, therefore, the suit for specific performance of the agreement would be a suit for land within the meaning of Clause 12 of the Letters Patent.
The Court has observed in para 12 as under:
" 12. In His Highness Shrimant Maharaj Yashvantrav Holkar of Indore v. Dadabhai Cursetji Ashburner, ILR (1890) 14 Bom 354, a Division Bench of the Bombay High Court held that a suit for specific performance would not fall within the meaning of that expression. There the suit was filed for specific performance of an agreement to mortgage certain immovable property. The agreement was made in Bombay between the parties on 8-1-1883. The Divisional Court held , "it had jurisdiction' and granted decree. On appeal a Division Bench referred to an earlier judgment of that Court in Yenkoba Balshet Kasar v. Rambhaji, (1872) 9 Bom HCR 12 which laid down that suit for land was a suit which asked for delivery of land to the plaintiff. The High Court also referred to the view of the Calcutta High Court in Delhi and London Bank vs.Wordie, ILR (1876) 1 Cal 249 (ILR at p.
263) construing that expression to mean, 'substantially for land' - that is, for the purpose of acquiring title to, or ::: Downloaded on - 09/06/2013 14:33:48 ::: -20- control over, land'. It also noticed the view of a learned single Judge of the Calcutta High Court in Sreenath Roy vs.Cally Doss Ghose, ILR (1880) 5 Cal 82 holding that the court had no jurisdiction to make a decree in a suit for specific performance. The Division Bench of the Bombay High Court held that the suit was within the jurisdiction whether regarded as a suit for specific performance or to enforce equitable mortgage by deposit of title deeds as a court of equity in England could entertain it."
20. It has been held by the Supreme Court that a suit for land is a suit in which the relief claimed relates to title to or delivery of possession of land or immovable property. Whether a suit is a suit for land or not has to be determined on the averments in the plaint with reference to the reliefs claimed therein, where the relief relates to adjudication of title to land or immovable property or delivery of possession of the land or immovable property, it will be a suit for land. It has been further held by the Supreme Court in the said judgment that in a suit for specific performance of contract for sale of immovable property containing a stipulation that on execution of the sale deed the possession of the immovable property will be handed over to the purchaser, it is implied that delivery of possession of the immovable property is part of the decree of specific performance of contract. In the aforesaid case, even though the disputed property was located in the State of Madhya Pradesh, ultimately it was held that a suit for specific performance was maintainable on the Original Side of the Bombay High Court. It was held that the suit for specific performance of the agreement for sale of the suit property wherein relief of ::: Downloaded on - 09/06/2013 14:33:48 ::: -21- delivery of the suit property has not been specifically claimed, as such such suit cannot be termed as a suit for land.
21. Learned counsel for the respondents submitted that since in the instant case possession is specifically claimed by the plaintiffs, the said suit should also be treated as a suit for land. On the basis of the judgments of the Federal Court as well as the Supreme Court, which we have discussed above, it is required to be found out as to whether the suit in question is really a suit for title or essentially a suit for possession. In order to determine the said aspect, the Court is required to consider the averments made in the plaint as well as the nature of the transaction entered into between the parties. After considering the averments in the plaint as well as the documents of MoU, agreements and the Power of Attorney, one thing is certain that the soul of the transaction in question is the MoU which is a starting point of entering into the transaction between the parties. The MoU is the basis on which subsequent documents were executed by the parties i.e. agreements and the power of attorney. As per the agreements between the parties, the defendants were to carry out certain work on behalf of the plaintiffs. It cannot be disputed that the plaintiffs by entering into the said transaction has never lost its title over land in question and as such it is an admitted fact that the title has all throughout remained in the plaintiffs.
The suit, therefore, in question can never be said to be a suit in connection with the title and the plaintiff has also not sought for any declaration of title. The ::: Downloaded on - 09/06/2013 14:33:48 ::: -22- entire transaction was entered into on the basis of MoU. If that be so, in our view, the defendants were put into possession on the basis of MoU and the possession can be said to be a mere permissive one. Looking to the prayer clauses (a) and (b) which we have noted in the earlier part of our judgment, it is clear that the main prayer of the plaintiffs is for a declaration to the effect that the MoU in question is inoperative and no longer binding on the plaintiffs. We may make it clear that we are not concerned with the merits of the said averments as ultimately that is a matter of trial. We are discussing this aspect only with a view to find out as to whether the jurisdiction of this Court can be said to be excluded under clause 12 of the Letters Patent simply because there is a relief for possession sought for by the plaintiffs in the suit. In a given case, if a suit is filed on the ground that the MoU is entered into by fraud or misrepresentation and if the prayer is made that such MoU is not binding on the Plaintiffs, then such a suit can be said to be maintainable under clause 12 before the Original Side of this Court. If, on the basis of the averment in the plaint, a prayer is sought for to the effect that the MoU has become inoperative on the ground that the defendants have committed breach of the conditions, we fail to understand as to how, even if an incidental prayer for possession is made which is based only on the basis of prayer clauses (a) and (b) of the suit, such a suit is not maintainable under clause 12 of the Letters Patent. As pointed out earlier, the entire transaction is based on the MoU and the subsequent agreements. In our view, so far as the prayer regarding possession is concerned, it is mainly and ::: Downloaded on - 09/06/2013 14:33:48 ::: -23- solely dependent upon the prayers (a) and (b). In case the plaintiffs fail to get relief in the suit in connection with the declaration sought for, naturally plaintiffs cannot get any relief in connection with handing over possession as the prayer for handing over possession is solely and mainly depend upon the relief claimed by the plaintiffs regarding declaration sought for in the suit in connection with the MoU and other agreements. It cannot be disputed that in case the said prayers have been rejected, the prayer for possession becomes redundant and no decree can be passed in that behalf.
22. Considering the aforesaid aspect, in our view, the suit is essentially based on the prayer that the MoU has become ineffective or inoperative. The prayer in connection with the declaration sought for by the plaintiffs regarding MoU, in our view, is perfectly within the jurisdiction of the Original Side of this Court and , therefore, the suit is maintainable on the Original Side of the Bombay High Court. As pointed out earlier, it can never be said to be a suit for title nor essentially it is a suit for possession. Possession is a consequential prayer based on the prayer for declaration in connection with the MoU and agreements in question. As per the submission of the learned counsel for the appellants, the defendants were given only permissive possession for development on the basis of MoU and other documents. The possession of the defendants is solely based on the basis of an MoU between the parties. If the document is held to be void or inoperative, naturally the defendants possession cannot be said to be in any ::: Downloaded on - 09/06/2013 14:33:48 ::: -24- way legal or valid. In our view, simply because in subsequent prayers of the plaint, possession prayer is sought for, it cannot be said that the suit in question is a suit for land. If a suit for specific performance is maintainable on the Original Side of this Court, even if the property is situated at a different place or in the different State, as the case may be, the suit of such a nature wherein declaration is sought for in connection with the MoU and agreement can certainly be said to be maintainable here as the defendant has given mere permission to get the possession only for enforcing MoU as well as subsequent agreements. For example, the defendants also could have filed a suit before this Court for the specific performance of the agreements. If such suit is maintainable, we fail to understand as to why suit wherein declaration for cancellation of MoU is sought for is not maintainable on the Original Side of this Court. Simply because an incidental prayer for possession is made which is dependent upon earlier prayers of the plaint, as held by the Federal Court even in a case of a mortgage of immovable property, the plaintiffs in a given case can give up his claim for security and such suit is still maintainable on the Original Side of the Bombay High Court as it can never be said that the suit is essentially for land.
23. In order to find out the territorial jurisdiction of this Court, essentially the Court is required to consider the averments and prayers made in the plaint. Considering the averments made in the plaint as well as considering ::: Downloaded on - 09/06/2013 14:33:48 ::: -25- the prayers in the plaint and the nature of the suit which is based on the basis of MoU and agreement between the parties, such suit, in our view, is maintainable and it cannot be said that it is a suit for land. Considering the aforesaid aspect of the matter, we are not in a position to agree with the view of the learned single Judge that since there is a prayer for possession, the suit is not maintainable in view of clause 12 of the Letters Patent. Every case depends upon the facts of each case. It can never be said that in the instant suit the prayer for possession is a substantive prayer. It is only an incidental prayer.
24. In view of what is stated above, we set aside the order of the learned single Judge by holding that the suit is maintainable on the Original Side of this Court. The suit shall now proceed further in accordance with law. The Appeal is accordingly allowed with no order as to costs.
25. In view of the above order, the Notice of Motion Nos. 3020 of 2006, 4042 of 2006 and 2076 of 2007 which were pending before the learned single Judge at the time when the suit was pending shall revive and the same shall be disposed of by the learned single Judge. It is pointed out that at the time when the suit was pending, the order regarding interim relief which was passed in Notice of Motion No. 3020 of 2006 was operating in favour of Plaintiffs. In view of this order, the said Notice of Motion is now revived and ::: Downloaded on - 09/06/2013 14:33:48 ::: -26- till all the Notices of Motion are disposed of by the learned single Judge on merits, the interim order shall continue to operate till the disposal of Notices of Motion.
P.B. MAJMUDAR, J.
R.M. SAVANT, J.
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