Calcutta High Court
Hindustan National Glass & Industries ... vs Ganesh Kumar Agarwal on 22 December, 2009
Author: Sanjib Banerjee
Bench: Sanjib Banerjee
GA No. 2901 of 2009
CS No. 205 of 2009
IN THE HIGH COURT AT CALCUTTA
ORDINARY ORIGINAL CIVIL JURISDICTION
HINDUSTAN NATIONAL GLASS & INDUSTRIES LIMITED
-Versus-
GANESH KUMAR AGARWAL
For the Plaintiff: Mr Surojit Nath Mitra, Sr. Adv.,
Mr Ratnanko Banerjee, Adv.,
Mr Rajan Kedia, Adv.
For the Defendant: Mr S.N. Mookherjee, Sr. Adv.,
Mr Abhrajit Mitra, Adv.,
Mr Sakya Sen, Adv.
Hearing concluded on: December 18, 2009.
BEFORE
The Hon'ble Justice
SANJIB BANERJEE
Date: December 22, 2009.
SANJIB BANERJEE, J. : -
The defendant claims that this is a suit for land since the primary object of
the suit is to obtain control of mines which are situated in faraway Rajasthan.
The defendant claims that it would be apparent from paragraphs 9, 12, 13 and
15 of the plaint that the plaintiff canvasses a right relating to an immovable
property and notwithstanding the principal relief being for specific performance
of an agreement, it is the right to the mines that is at the heart for the action.
The main relief in the suit is for specific performance of an agreement to
transfer a mining lease. At paragraph 9 of the plaint the plaintiff has pleaded an
implied negative covenant that the defendant would not extract marble or
minerals till the lease was transferred. At paragraph 12 the plaintiff has said that
the defendant is seeking to transfer the mining lease to a third party in breach of
the agreement with the plaintiff. At paragraph 13 the plaintiff has detailed the
manner in which it seeks specific performance of the agreement. At paragraph 15
the plaintiff has alleged that the defendant was invading or threatening to invade
the plaintiff's rights under its agreement with the defendant. Since the defendant
has referred to such portions of the plaint in particular, the relevant averments
need to be seen:
"9. From the respondent's email dated 29 May 2009 the petitioner for
the first time came to learn that the respondent is in the process of carrying on marble quarry from the mining leased area. There is an implied negative covenant in the agreement that the respondent would not extract any marble and other minerals from the mine lease area till the mining lease is transferred."
"12. The plaintiff has also come to learn that the defendant is now seeking to transfer the said mining lease to a third party in breach of the said agreement.
"13. The plaintiff therefore by a notice dated 4th July, 2009, sent from the plaintiff's registered office within the aforesaid jurisdiction to the defendant outside the aforesaid jurisdiction a copy whereof is annexed hereto and marked with the letter "G", called upon the defendant to specifically perform the said agreement by doing the following:
a) Execution of necessary documents for having the said mining lease rights transferred after obtaining necessary approvals therefore from the concerned authorities in favour of a company to be incorporated for this purpose and thereafter have the shares in the company transferred to the plaintiff or its nominees Or, Execution of necessary documents for transfer of the said mining lease rights to the plaintiff or its nominee/s after obtaining necessary approvals therefore from the concerned authorities.
b) Execution of all necessary documents for getting the requisite approvals/permissions as may be necessary for getting the mining lease transferred in the manner indicated in (a) above.
c) Payment of the balance consideration by the plaintiff to the defendant upon transfer of the mining lease rights in terms of the said agreement, after obtaining the necessary approvals therefore."
"15. The defendant is invading and/or threatening to invade the rights of the plaintiff under the said agreement by acting and/or threatening to act in a manner inconsistent with the terms of the said agreement. The invasion is such that compensation in money would not afford adequate relief. The invasion has taken place at the registered office of the plaintiff, within the jurisdiction aforesaid."
The three major reliefs claimed in the suit relate to specific performance of the agreement in the manner indicated at paragraph 13 of the plaint, alternative mode for executing the relevant documents if the defendant failed to execute them and prohibitory injunction restraining the defendant from acting in derogation of the agreement:
"a) Decree for specific performance of the agreement dated 4th August, 2008 in the manner as indicated in paragraph 13 above;
"b) If the defendant fails to specifically perform the said agreement dated 4 August, 2008, the Registrar, Original Side of this Hon'ble Court be th directed to specifically perform the same in the manner indicated in prayer
(a) above;
"c) Perpetual injunction restraining the defendant, his agents, servants, assigns from acting in breach of or in any manner inconsistent with the terms of the said agreement dated 4th August, 2008;"
The defendant relies on a judgment reported at AIR 1959 Cal 767 (SB) (Maharaja Probirendra Mohun Tagore v. State of Bihar) and says that if an adjudication as to title relating to the land is involved, the suit would be a suit for land which could only be instituted before the competent court exercising jurisdiction over the land or a part thereof. In the reported case the plaintiff had sought a permanent injunction restraining the State of Bihar from giving effect to a particular notification. The plaintiff asserted that the notification would not affect the plaintiff's right, title and interest in the properties comprised in the notification. This would be evident from paragraph 15 of the report:
"(15) It appears that prior to the institution of the present suit another suit (being suit No. 2498 of 1952, Brohmo Gopal Jiu v. State of Bihar) was instituted by the present plaintiff as the next friend of a deity named Sri Brohmo Gopal Jiu against the State of Bihar and certain other defendants for reliefs which are identical to the reliefs prayed for in the present case, with this difference only that in that suit the declarations were asked for only in respect of one-third share of the settled estate whereas in the present case the reliefs are asked for in respect of the entire settled estate.
In that suit the issue about the jurisdiction of this Court was decided in favour of the plaintiff by G.K. Mitter J. by a judgment dated December 10, 1953. The suit however was dismissed on the ground that no notice under S. 80, Civil Procedure Code, had been served upon the State of Bihar. In that judgment G.K. Mitter J. after a consideration of the relevant authorities came to the conclusion that the suit instituted by the plaintiff was a suit for land within the meaning of Cl. 12 of the Letters Patent; but since the plaintiff of that suit was asking for a declaration of one-third share of the entire settled estate and since the settled estate comprises land both within and without the jurisdiction of this Court, this Court has jurisdiction to try the suit under Cl. 12 of the Letters Patent. Mr. Banerjee appearing for the plaintiff relied upon this judgment of G.K. Mitter J. in support of his proposition that the suit can be tried by this Court in the exercise of its Ordinary Original Civil Jurisdiction. On a consideration of the plaint as a whole however it appears to me that the primary object of the present suit is to obtain a permanent injunction restraining the State of Bihar from giving effect to the notification dated October 30, 1952 on a declaration that the said notification did not in any way affect the plaintiff's right, title and interest in the properties comprised in the notification. It is true that in prayers (a) and (b) of the plaint the plaintiff asks for a declaration of his right, title and interest to the entire settled estate and also for a construction of the plaintiff's rights under the Will executed by Maharaja Sir Jotindra Mohun Tagore on December 12, 1906, but those reliefs are ancillary to the principal prayer for a declaration that the plaintiff's rights in the properties included in the notification dated October 30, 1952 have not been affected by the Bihar Land Reforms Act. That being the principal relief asked for by the plaintiff and that relief being in respect of lands situate wholly outside the territorial limits of the State of West Bengal it seems to me that the suit cannot be tried by this Court in the exercise of its Ordinary Original Civil Jurisdiction. It is remarkable that there is no averment in the plaint to the effect that there is any invasion of the plaintiff's rights to any of the properties situate within the local limits of the Original Jurisdiction of this Court. In paragraph 7, the plaintiff alleges that the Bihar Land Reforms Act of 1950 expropriates and/or takes away the plaintiff's rights and interest in certain properties of the Settled Estate and in paragraph 8 he alleges that the State of Bihar has no authority and jurisdiction to invade the plaintiff's interest in the said estate. The properties which the Bihar Land Reforms Act is alleged to expropriate or to invade are more specifically described in the notification which is an annexure to the plaint and since all those properties are situate in the State of Bihar the alleged expropriation or invasion cannot be said to relate to any property within the local limits of the Original Jurisdiction of this Court. In the absence of any averment in the plaint that there is any injury or threatened injury to any property within the jurisdiction of this Court, the prayers (a) and (b) of the plaint are not sufficient to confer jurisdiction. If therefore the present suit be a suit for land as was held by G.K. Mitter J. in suit No. 2498 of 1952, this Court has no jurisdiction to try it in the exercise of its Ordinary Original Civil Jurisdiction. With great respect to G.K. Mitter J. I cannot agree with his conclusion that if a declaration is asked for in respect of the entire estate and if that estate comprises lands both within and outside the jurisdiction of this Court, this Court will have jurisdiction to try the suit in the absence of any averment of an injury or threatened injury to any property within that jurisdiction."
In the judgment reported at (2003) 2 WBLR 42 (Smt. Saroj Agarwal v. Mohanlal Seal), which the defendant next cites, the Division Bench considered a suit where a lease had been forfeited and among the reliefs claimed in the plaint there was one for a permanent injunction restraining the defendants from realising rents and profits from the lessee or sub-lessee at the premises in question. Paragraph 17 of the report sums up the basis for the opinion:
"17. From the plaint itself it becomes clear that the primary object of the present suit by the plaintiff is to establish title to the land and the natural consequence of granting the relief as prayed for in the plaint is to seek possession of the property in question. In other words, in order to determine whether a suit is a suit for forfeiture of lease not only the Court has to go into the right, title and interest of the plaintiff in the suit property, but also the normal and natural consequences of such determination is the ultimate possession of the land, which must be held to be the ultimate object of the suit. In our considered view the reliefs as sought for in the plaint, make it clear that the same relates to the right, possession, control and management of the immovable property in question. On perusal of the plaint we find that there is a prayer for injunction restraining the defendant Nos. 1, 2 and 3 from realising rents, profits from the lessee or sub-lessee in respect of the premises in question. There is also a prayer for injunction restraining the defendants from dealing with the premises in question. If the decree claimed in the present suit affects the property directly and/or possessory title to the property in question, then the same, must be held to be a "suit for land". We are also of the view that the primary object of the plaintiff in the suit was to seek possession of the suit property for which a notice terminating the lease was also given. For the purpose of obtaining possession and for sustaining relief against forfeiture of lease the plaintiff is also required to adjudicate his right title and interest in respect of the property in question."
The last decision cited by the defendant is a judgment reported at (2007) 3 Cal LT 43 (Apeejay Oxford Bookstores Private Limited v. Hotel Leela Venture Limited). Paragraph 42 of the report has been placed:
"42. The substance of the dispute is the possession of the bookstore. It cannot be, as the petitioner wants it to be, that its reference would be restricted to the determination of quantum of monthly rent payable to the respondent and the respondent being precluded in such reference from making a counter-claim for possession in continuance of its letter of termination. In the context of the disputes that have arisen, it is not possible to accept the petitioner's simplistic view thereof. Though the petitioner refers to Section 23 of the Act, the provisions contained therein do not restrict a respondent in a reference to limit his counter-claim to the narrow claim made by the claimant. On the substantive test, at which the petitioner fails, it is apparent that the immediate and principal cause for the petitioner's present request and for the disputes, is the respondent's termination of the agreement and the attendant matters that such termination, whether valid or not, raises. Questions as to possession, if not title, have arisen and need to be answered.
It is, thus, evident that in the Special Bench judgment of this Court the plaintiff had sought to establish title in respect of the immovable property situated in Bihar; that in Saroj Agawral the Division Bench was of the opinion that the Court had to go into the right, title and interest of the plaintiff in the suit property which would make it a suit for land; and, in Apeejay Oxford Bookstores the dispute was as to the possession of a bookstore in Bangalore.
In a suit for specific performance where the relief is for execution of a document of transfer, the Court acts only in personam and though the right to possession is almost a necessary corollary, the right to seek possession does not fructify till such time that the document of transfer is perfected.
The plaintiff has relied on the famous judgment reported at AIR 1960 Cal 626 (Debendra Nath Chowdhury v. Southern Bank Ltd.) and has placed paragraph 23 of the report for the principle of law recognised therein:
"(23) The foundation of this Court holding that a suit for specific performance, where the only relief claimed is a decree for execution of a document of transfer and nothing else is not a suit for land, is first the principle that it is a suit for enforcing a contract where the court is required to act only in personam; secondly, the cause of action for such specific performance is not the cause of action for the recovery of land as such or recovery of possession of land as such and the fact that such will or may be the consequence is immaterial for the purpose; the cause of action for specific performance of a contract and not the cause of action for a titular or possessory claim for land; and thirdly, the context of clause 12 of the Letters Patent in providing three basic tests for suits (i) for land, (ii) cause of action and (iii) place of residence or business of the defendant, -
clearly indicates that where Courts are intended to act in equitable jurisdiction in personam it is the second or third test which has to be applied. The fact that a decree for specific performance will result in ultimate possession being given or obtained, does not convert it into a suit for land, for in that case the suit for land would not have been grouped as a class by itself apart from the class governed by the test of the cause of action or the test of the place of residence or place of business of the defendant in Clause 12 of the Letters Patent. Historically, as Fry points out in his celebrated work on Specific Performance, 6th Edition, page 7, the Old Common Law before equity in such cases commanded the Sheriff to deliver the land. Precisely because of that reason equity intervened to act in personam, so that now a decree for specific performance orders the defendant, or failing him this Court in his place, to execute a document of transfer. In modern jurisprudence and practice, this is now well settled. In Volume X, page 397 of Atkin's Encyclopedia of Forms, the only prayer shown in the pleading is for specific performance and not for possession. Indeed, in the forms of the Civil Procedure Code, both the Forms are used, one for specific performance simpliciter and the other for joint claim for specific performance and possession."
The plaintiff has also cited the judgment reported at (2001) 7 SCC 698 (Adcon Electronics Pvt. Ltd. v. Daulat) where the Supreme Court held that a suit would be a suit for land if the relief claimed therein related to title to or delivery of possession of land or immovable property. Paragraph 15 of the report is relevant:
"15. From the above discussion it follows 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". We are in respectful agreement with the view expressed by Mahajan, J. in Moolji Jaitha case."
The first relief claimed in this suit is for specific performance of the agreement of August 4, 2008 in the manner set out at paragraph 13 of the plaint. The second relief is the one that has now come to be accepted where the plaintiff seeks the execution of the document through Court if the defendant fails to execute the same. The third relief is the prohibitory order of injunction in aid of and consequent to the agreement for which specific performance has been sought. The suit does not involve the adjudication of title relating to any immovable property. The plaintiff has not sought delivery or recovery of possession of any immovable property. There is no doubt that the ultimate objective of a plaintiff seeking specific performance of an agreement for sale or lease of an immovable property is to obtain the possession thereof. The test as to whether a suit for specific performance of such nature is a suit for land is in the assessment as to whether that is the direct and immediate objective.
Adcon Electronics says that where the relief of delivery of the suit property has not been specifically claimed, it cannot be treated as a suit for land. Such principle precludes the present suit being regarded as a suit for land. Further, at paragraph 17 of the plaint, the plaintiff has pleaded that the claim for possession has been kept outside the purview of the suit. Leave under Order II Rule 2 of the Code of Civil Procedure, 1908 has also been obtained on such pleading. That would imply that if a decree is made in the plaintiff's favour in this suit, the possession of the mines cannot be claimed in the execution of such decree.
On the averments found in the plaint, which have to be accepted as correct on a demurer of the present kind, the suit does not appear to be a suit for land. GA No. 2901 of 2009 is dismissed, but without any order as to costs.
Urgent certified photocopies of this judgment, if applied for, be supplied to the parties subject to compliance with all requisite formalities.
(Sanjib Banerjee, J.)