Delhi High Court
Bhushan Steel & Strips Ltd. vs Prem H. Lalwani & Ors. on 3 February, 2000
Equivalent citations: 2000IIIAD(DELHI)490, 84(2000)DLT565, 2000(53)DRJ483
Author: Vikramajit Sen
Bench: Vikramajit Sen
ORDER Vikramajit Sen, J.
1. By this order I propose to dispose of I.A. 11674/98 filed under Order 39 Rule 1 & 2 and Order xxxvIII Rule 5 along with the plaint. In the plaint it has been prayed that a decree be passed for Rs. 55,84,000/- together with pendente lite and future interest at the rate of twenty four per cent per annum. Succinctly stated the facts giving rise to the disputes between the parties are that the Plaintiff was interested in purchasing land in Maharashtra for the setting up of a fresh industrial unit in that State. The Defendants represented to the Plaintiffs that they were holding land measuring fifty two (52) acres situated in Village Isambe, Taluka Khalapur, District Raigard, Maharashtra. The Defendants also owned a stone crusher and a 75 KVA generator on the land. A Memorandum of Understanding (MOU) for the purchase of the land and the stone crusher and electrical and mechanical fixtures was entered into between the parties for a total consideration of Rs.1.77 crores. This MOU was executed at Delhi. It was agreed that the entire transaction would be completed by 31.10.1998 and that although four different documents were drawn up, these would be treated as a single transaction. A sum of Rs.6 lacs was paid to the Defendants on the execution of this MOU. Thereafter three different Agreements to Sell, each dated 3.4.1998 were executed at Delhi. As recorded therein a sum of Rs.7 lacs was paid to Defendant No.1 two lacs to Defendant No. 2 and 1 lac to Defendant No. 3. Another payment of Rs.16 lacs was made on 29.7.1998 thus aggregating Rs. 32 lacs. The receipt of these moneys are not contradicted or controvent. It is, however, averred by the Defendants that the Plaintiff, having failed to obtain necessary loans had engineered the facts in such a manner as to show that the Defendants had failed to fulfill their obligation s contained in the Agreement to Sell, and , that consequently the Plaintiff was entitled to repudiate the contract. In their joint Written Statement the Defendants state that they are and have been ready and willing to perform the compact between the parties and that it is the plaintiff who has committed breach thereof. Therefore, the Defendants are not liable to refund the sums received by them. In their Written Statement preliminary objection has also been taken challenging the territorial jurisdiction of this Court. It has been submitted that the suit is bad for multifariousness, inasmuch as there are three distinct Agreement to Sell and three different suits ought to have been filed. It is further disputed that the orders prayed for in this application could be passed either under Order XXXIX or under Order xxxvIII CPC. These points were also argued before me.
2. As indicated above three questions arise for determination at this stage, namely: (i) Whether the suit is liable to be rejected on the ground of multifariousness; (ii) Whether this Court has no territorial jurisdiction to entertain the suit ; and (iii) whether the reliefs claimed for in the application ought to be granted.
3. Mention has already been made above, that although three different Agreements to Sell were undoubtedly executed between the parties, all these Agreements as also the MOU dated 25.4.1998 contain a covenant which specifically enjoins their simultaneous performance. Clauses 19 & 23 of the MOU reads as under:
"19. That the sellers have agreed to obtain all the necessary permissions from the concerned departments simultaneously to enable the purchaser to get the sale deed registered at one time from all the four sellers. The transaction shall constitute to be one transaction on behalf of four sellers".
"23. That this MOU shall remain in existence even on execution of regular agreement to sell with individual seller, till the time all the obligations as mentioned hereinbefore are complied with by the Sellers and Buyers."
4. On a reading of these Clauses it is palpably clear that although separate Agreements to Sell had been executed between the parties the entire transaction was one, and in respect of the entire tract of land sought to be purchased by the plaintiff. In these circumstances, I am unable to accept the arguments of the Defendants, at this stage, that the suit is bad for multifariousness. It is quite likely that in the event of three separate suits having being filed, an objection that a single suit should alone have been preferred, could well have been sustained.
5. Shri Saurabh Kirpal, learned counsel for the Defendants has vehemently submitted that this Court has no territorial jurisdiction. He contends that the subject matter of the dispute between the parties related to the purchase of immovable property, and that being so, the Court where the immmovable property was located alone has jurisdiction to entertain the present disputes. It is his submission that it is wholly irrelevant that the MOU, the Agreements to Sell had been executed in Delhi and the factum of money having been paid in Delhi. He buttresses in this argument by relying on the Plaintiff's claim for interim relief vis-a-vis the immovable property situate in Maharashtra. On the strength of a decision in Smt. Gouri Gupta Chaudhary Vs. Tarani Gupta Chaudhury, he had predicated the argument that since a charge was prayed for, only the Courts in Maharashtra would have jurisdiction. He relied on para 27 of that judgment which is reproduced hereinbelow.
"There is another point which has yet to be decided. Mr. Gupta points out that in the plaint filed herein the Plaintiff has claimed a charge on the defendant's house at Dum Dum as also on the garden house at Garia, for payment of maintenance and for residence. The said properties are admittedly situate outside the jurisdiction of this Court. This suit being a suit for land because of the said claim for charge, this Court would have no jurisdiction to entertain or try this suit and as such no interim order could be passed in such a suit."
6. A reading of this decision shows that the injunction prayed for was granted, albeit after permitting the Plaintiff to delete prayer (b) from the plaint.
7. Learned counsel for the Plaintiff has emphasised that in the present case the claim in the plaint is for recovery of the sums paid to the Defendants and damages for the non-performance of the contract on account of the breaches committed by the Defendants. Para 22 of the plaint supports this contention. He further emphasised that contrary to Smt. Gouri Gupta Chaudhury's case (supra) no prayer fro creation of a charge on the immovable property has been sought for in the plaint. He submitted that interlocutory relief of this nature ought not to have the effect of ousting the jurisdiction of this Court which is founded on execution of the MOU, Agreement to Sell and Receipts within its territorial jurisdiction. Since this is a suit for the recovery of money simpliciter I am also not inclined to accept the contention of Mr. Saurabh Kirpal, Learned counsel for Defendants that this Court has no territorial jurisdiction. The cause of action has undoubtedly arisen in New Delhi.
8. In the application the Plaintiff has prayed for the following relief:
"The plaintiff prays that the Hon'ble Court may be pleased to pass an ex parte ad interim injunction in favour of the plaintiff and against the defendants thereby restraining the defendants from alienating, transferring or parting with possession of land admeasuring 52 acres approximately in village Isambe, Taluka Khalapur, District Raigard, Maharashtra as detailed in Annexure-I including the stone crusher, electrical and mechanical fixtures and fittings and a 75 KVA generator till the disposal of this suit.
Or in the alternative this Hon'ble Court may be pleased to pass an ex parte order of attachment attaching the said property land admeasuring 52 acres approximately in village Isambe, Taluka Khalapur, District Raigard, Maharashtra as detailed in Annexure-I or the defendants be directed to furnish a bank guarantee of the suit amount."
9. The grant of this prayer has been forcefully resisted and opposed by Shri Saurabh Kirpal, learned counsel for the Defendants. He has submitted that on an analysis of both Order XXXIX and Order xxxvIII there are no grounds or justification for the passing of these orders. Order XXXIX Rule 1 contemplates injunctive protection being granted to the Applicant but specifically in respect of immovable property. The rider to this generality is contained in Rule 1(b) but I am unable to find in the pleadings or the application any narration of facts which would persuade the Court to come to the conclusion that the Defendant threatens or intends to remove or dispose of his property with a view to defrauding the Plaintiff. Orders passed under this Clause necessarily are in the nature of attachment before judgment and, therefore, Rule 5 of Order xxxvIII would have to be strictly and completely fulfillled before such orders are passed. Beyond a perfunctory and bald statement, bringing the case formally within these provisions, no facts have been stated to show that the Defendants have acted in a manner calculated to create any obstruction or delay in the execution of a decree. It must be borne in mind that inasmuch as a claim of damages has been preferred in the suit, no prima facie case in respect of the liability presently exists. In fact, the liability can only be taken to come into effect if and when a decree in respect of damages has been passed. Secondly it is hotly in contest whether it is Plaintiff or the Defendant who has committed a breach of the Agreement to Sell. These documents witness that if the Plaintiff has breached the terms of the Agreement, "the earnest money and advance paid by the Purchaser (Plaintiff) to the Seller (Defendant) shall stand forfeited and the Seller shall be free to sell the land". Therefore, even in respect of the sums of money paid by the Plaintiff to the Defendants pursuant of these Agreements and to the MOU, contentious issues undoubtedly arise. This is not a fit case for proceeding either under the provisions of Order xxxvIII Rule 5 or of Order XXXIX, Rule 1. The application is accordingly dismissed. In view of the circumstances of the case there shall be no order as to costs.