Jammu & Kashmir High Court
M/S Ardee Infrastructure Pvt Ltd vs Prabha Kapoor And Or on 7 April, 2018
Equivalent citations: AIR 2018 JAMMU AND KASHMIR 109
Author: Sanjeev Kumar
Bench: Sanjeev Kumar
HIGH COURT OF JAMMU AND KASHMIR
AT JAMMU
CREV No.20/2016, MP No.01/2016
Date of order: .04.2018
M/S ARDEE Infrastructure Private Ltd and anr
Vs
Prabha Kapoor and anr
Coram:
Hon'ble Mr Justice Sanjeev Kumar, Judge.
Appearance:
For the Petitioner(s) : Mr Aditya Gupta, Advocate.
For the Respondent(s) : Mr Aseem Sawhney, Advocate.
i) Whether approved for reporting in Yes
Law journals etc.:
ii) Whether approved for publication
in press: Yes/No
11 This revision petition assails the order of learned City Judge, Jammu
(hereinafter to be referred to as the „trial Court‟) dated 09.05.2016 passed in file
No.137/Civil titled "Prabha Kapoor and anr vs ADREE Infrastructure Pvt Ltd
and anr whereby the application moved by the petitioners under Order VII Rule
11 read with Section 151 of the Code of Civil Procedure for rejection of the plaint
has been dismissed.
2 Brief facts, giving rise to the filing of the instant revision petition, are that
the respondents filed a suit for declaration seeking to declare a communication
dated 04th October, 2013 issued by petitioner No.1 as nullity and inoperative in
the eyes of law and also for declaring the respondents entitled to title, rights and
interest in the under construction Flat No.A1-703 as per the Agreement dated 11th
August, 2005 entered into between the parties. The respondents also claimed a
decree of consequential relief of specific performance, mandatory injunction and
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permanent prohibitory injunction. In response to the summons issued by the trial
Court, the petitioners appeared and moved an application under Order VII Rule
11 of the Code of Civil Procedure for rejection of the plaint, primarily, on the
ground that the suit property, which is a Flat, is situated in Gurgaon (Haryana)
and, therefore, the Courts in Jammu including the trial Court would have no
jurisdiction to entertain the suit and pass the decree prayed for. In support of their
contentions, the petitioners relied upon Section 16 of the Code of Civil Procedure.
The said application was opposed by the respondents on the ground that, since the
Agreement between the parties was executed in Jammu, all the payments were
made from Jammu and a communication dated 04.10.2013 sent by the petitioners
too was received by the respondents in Jammu, therefore, a part of cause of action
has accrued in Jammu which is good enough to confer jurisdiction on the Courts
in Jammu including the trial Court. Reliance was placed on Section 20 of Code of
Civil Procedure.
3 Learned trial Court appears to have considered the matter at some length
and ultimately came to the conclusion that it had jurisdiction to entertain the suit
and grant the relief prayed for.
4 The order of the trial Court dated 09.05.2016 impugned in this petition is
assailed by the petitioners in this petition on the ground that the trial Court has
failed to appreciate the distinction between Section 16 and Section 20 of the Code
of Civil Procedure. It is submitted that the pith and substance of the suit of the
petitioners is for specific performance of contract pertaining to immovable
property and that being so, the jurisdiction of the Court would be regulated by
Section 16 and not Section 20 of the Code of Civil Procedure. Elaborating his
arguments, learned counsel for the petitioners submits that Section 20 of the Code
of Civil Procedure would operate only with respect to the suits other than those
categorized in Section 16 of the Code of Civil Procedure.
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5 Per contra, learned counsel for the respondents submits that looking to the
nature of reliefs claimed by them and the fact that the Agreement sought to be
enforced pertains to the immoveable property which is yet to come into existence,
it is the place where cause of action has accrued, that would determine the
jurisdiction of the Court. Referring to various documents appended with the plaint
including the Agreement to Sell and the inter se communications between the
respondents and the petitioners, learned counsel for the respondents submits that a
part of cause of action has accrued to the respondents within the territorial
jurisdiction of the trial Court and, therefore, the application moved by the
petitioners for rejection of the plaint has been rightly dismissed by the trial Court.
6 Having heard learned counsel for the parties, it would be necessary to first
set out the provisions of Section 16 and 20 of the Code of Civil Procedure which
are as follows:
"16.Suit to be instituted where subject matter situate.- Subject to
the pecuniary or other limitations prescribed by any law, suits--
(a) for the recovery of immovable property with or without rent or
profits,
(b) for the partition of immovable property,
(c) for foreclosure, sale or redemption in the case of a mortgage of
or charge upon immovable property,
(d) for the determination of any other right to or interest in
immovable property,
(e) for compensation for wrong to immovable property,
(f) for the recovery of movable property actually under distrait or
attachment, shall be instituted in the Court within the local limits
of whose jurisdiction the property is situate:
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Provided that a suit to obtain relief respecting, or compensation
for wrong to, immovable property held by or on behalf of the
defendant, may, where the relief sought can be entirely obtained
through his personal obedience, be instituted either in the Court
within the local limits of whose jurisdiction the property is situate,
or in the court within the local limits of whose jurisdiction the
defendant actually and voluntarily resides, or carries on business,
or personally works for gain.
"20. Other suits to be instituted where defendants reside or cause
of action arises
Subject to the limitations aforesaid, every suit shall be
instituted in a Court within the local limits of whose jurisdiction--
(a) The defendant, or each of the defendants where there are more
than one, at the time of the commencement of the Suit, actually
and voluntarily resides, or carries on business, or personally
works for gain; or
(b) any of the defendants, where there are more than one, at the
time of the commencement of the suit, actually and voluntarily
resides, or carries on business, or personally works for gain,
provided that in such case either the leave of the Court is given, or
the defendants who do not reside, or carry on business, or
personally work for gain, as aforesaid, acquiesce in such
institution; or
(c) the cause of action, wholly or in part, arises".
7. From a bare reading of sections 16 and 20 of Code of Civil Procedure, it is
clear that the suits for recovery of immoveable property with or without rent or
profits, for partition of immoveable property; for foreclosure, sale or redemption
of a mortgage pertaining to immoveable property; for compensation for wrong to
the immoveable property; and for determination of any other rights or interest in
the immoveable property etc. are to be instituted where the subject matter is
situated. However, the suits of the categories other than those mentioned in
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Sections 16,17,18 &19 of the Code of Civil Procedure, are to be instituted in a
Court within the local limits of whose jurisdiction, besides others, the cause of
action wholly or in part accrues.
8 Now, the only issue to be determined in this revision petition is; whether
the suit of the respondents falls within the ambit of Section 16 or Section 20 of the
Code of Civil Procedure ?
9 If answer to the aforesaid question is that it falls in one or more categories
enumerated in Section 16, then admittedly the suit would lie in a Court within
whose territorial jurisdiction the subject matter of suit is situated. Likewise, if the
suit, when read as a whole, indicates that the suit does not belong to the categories
enumerated in Section 16 and also does not fall in Sections 17,18 &19 of the
Code of Civil Procedure, then the same would lie in a Court within the local limits
of whose jurisdiction the cause of action wholly or in part has accrued. The facts
are not in dispute. If Section 16 is applicable, then the trial Court has no
jurisdiction to entrain the suit as the subject matter is situated in Gurgaon
(Haryana) and if it is held that it is not Section 16 but Section 20 that would
apply, then there is no dispute that the trial Court would have jurisdiction to
entertain the suit and grant the relief prayed for.
10 To arrive at a correct conclusion, what is required to be seen is the plaint
filed by the respondents before the trial Court. The prayer clause of the suit which
is relevant in this context may be noticed. It reads thus:
"Pass a decree of declaration in favour of the plaintiffs
declaring that communication dated 4th October 2013 sent
by defendant No.1 as nullity and inoperative in the eyes of
law further declaring the plaintiffs entitled for title, rights
and interest in the under construction flat No.A1-703 as per
the Agreement dated 11th August 2005 between the plaintiffs
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and the defendants subject to all just conditions. Further to
pass decree of consequential relief of specific performance
and mandatory injunction directing the defendants to
implement the agreement executed with the plaintiffs dated
11th August 2005 and abide by the terms and conditions of the
agreement and complete the construction of flat No.A1-703
belonging to the plaintiffs as per the agreement.
And
To pass a decree of permanent prohibitory injunction
restricting the defendants from allotting the said flat No.A1-
703 or to alienate the rights of the plaintiff pertaining to the
construction and allotment of the said flat to any other
person or creating any third party interest over the said
under construction flat or entering into any agreement with
any other person/party with respect to the said flat No.A1-
703 being developed by the defendants".
11 From a reading of the prayer clause and on careful perusal of the averments
made in the body of the plaint, it is abundantly clear that the suit has been
instituted by the respondents for enforcement of the Agreement executed between
the respondents and the petitioners with regard to sale of flat No.A1-703 situated
in ARDEE city at Gurgaon (Haryana). Relevant extract of paragraphs 14 and 16
of the plaint deserves to be reproduced here-in-below :
"14..........................................................................
................................................................................
That as stated above the plaintiff No.2 physically also visited the site and saw the work was stopped and no progress at the site, therefore, the plaintiff No.2 observed C. REV NO.20 OF 2016 Page 6 of 12 the breach of agreement/contract and therefore stopped making the payments after 2009".
"16.That the plaintiffs came to know from broker/agent that the work has been resumed at the site at slow place and therefore the plaintiffs thought that about Rs.26 lacs were stuck so on the assurance and request of the broker the plaintiffs decided to resume the payment cycle........................................................................... ................................................................................. ..............................................................................."
12 When we read the plaint as a whole, particularly the paragraphs referred to above in the light of the prayer made in the suit, it is manifest that the suit in pith and substance, is for enforcement of specific performance of contract with regard to flat No.A1-703 situated in Gurgaon. The respondents in the plaint have referred to the immoveable property as "under construction flat". Under construction flat that is coming up or would come up on the land is nothing but immoveable property. The Agreement entered into between the respondents and the petitioners is with regard to the sale of immoveable property situated in Gurgaon. It would, therefore, be not correct to say that since the flat, the subject matter of the Agreement between the parties, has not come in existence, therefore, the dispute raised in the suit does not pertain to immovable property. There is sufficient material on record in the shape of plaint and the documents appended therewith which goes a long way to show that the respondents essentially seek a direction to the petitioners to implement the aforesaid Agreement and complete the construction of the aforesaid flat agreed to be sold to the respondents as per the said Agreement. It would be relevant at this stage to take note of the provisions of Order VII Rule 11 of the Code of Civil Procedure which are as follows:
"11. Rejection of plaint The plaint shall be rejected in the following cases:--
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(a) where it does not disclose a cause of action;
(b) where the relief claimed is undervalued, and the plaintiff, on being required by the court to correct the valuation within a time to be fixed by the court, fails to do so;
(c) where the relief claimed is properly valued, but the plaint is written upon paper insufficiently stamped, and the plaintiff, on being required by the court to supply the requisite stamp paper within a time to be fixed by the Court, fails to do so;
(d) where the suit appears from the statement in the plaint to be barred by any law;
Provided that the time fixed by the court for the correction of the valuation or supplying of the requisite stamp papers shall not be extended unless the court, for reasons to be recorded, is satisfied that the plaintiff was prevented by any cause of an exceptional nature from correcting the valuation or supplying the requisite stamp papers, as the case may be within the time fixed by the court and that refusal to extend such time would cause grave injustice to the plaintiff".
13 It is trite law that at the time of consideration of an application under Order VII Rule 11, the only material to be taken into consideration is the averments made and the case set up in the plaint. If from the perusal of the plaint, it appears to the Court that the averments made in the plaint constitute a cause of action against the defendants, it has to dismiss such an application. The truth or veracity of the contents of the plaint and the averments made therein cannot be gone into by the trial court at this stage. The Court is called upon to read the plaint as a whole to find out whether it discloses cause of action against the defendants or C. REV NO.20 OF 2016 Page 8 of 12 not. What is a "cause of action" is a question of fact which has to be gathered on the basis of averments made in the plaint in entirety. A "cause of action" is every fact, which traversed, it would be necessary for the plaintiff to prove in order to support his right to a judgment of the Court" [see A.B.C. Laminart Pvt. Ltd. v. A.P. Agencies, Salem, (1989) 2 SCC 163 and Bloom Dekor Ltd. v. Subhash Himatlal Desai (1994) 6 SCC 322].
14 In view of the foregoing discussion, it is now clear that the suit of the respondents is essentially for determination of their rights and interest in the immoveable property and, therefore, falls in Section 16 (d) of the Code of Civil Procedure. That being so, the suit pertaining to the determination of rights and interest in the immoveable property i.e Flat No.A1-703 which is situated in Gurgaon would lie in a Court in Gurgaon within whose territorial jurisdiction the aforesaid under construction flat or the land where it is being constructed is situated.
15. Under similar set of circumstances, an identical issue came to be considered by Hon‟ble the Supreme Court in the case of Begum Sabiha Sultan vs Nawab Mohd Mansur Ali Khan and ors, 2007(4)SCC 343, in which Hon‟ble Supreme Court, after finding that the suit was essentially in relation to the relief of partition and declaration in respect of properties situated in Gurgaon, held that the suit is not maintainable before the Courts in Delhi. The observations of the Hon‟ble Supreme court in the aforesaid case in paragaraph No.12 are noteworthy, which are reproduced hereunder:
"12.On a reading of the plaint as a whole, it is clear, as we have indicated above, that the suit is one which comes within the purview of Section 16(b) and (d) of the Code. If a suit comes within Section 16 of the Code, it has been held by this Court in Harshad Chiman Lal Modi Vs. DLF Universal Ltd. & Anr. [(2005) 7 S.C.C. 791] that Section 20 of the Code cannot have application in view of the opening words of Section 20 "subject to the limitations aforesaid". This Court has also held that the C. REV NO.20 OF 2016 Page 9 of 12 proviso to Section 16 would apply only if the relief sought could entirely be obtained by personal obedience of the defendant. The relief of partition, accounting and declaration of invalidity of the sale executed in respect of immovable property situate in Village Pataudi, Gurgaon, could not entirely be obtained by a personal obedience to the decree by the defendants in the suit. We are in respectful agreement with the view expressed in the above decision. Applying the test laid down therein, it is clear that the present suit could not be brought within the purview of the proviso to Section 16 of the Code or entertained relying on Section 20 of the Code on the basis that three out of the five defendants are residing within the jurisdiction of the court at Delhi"
16 There is yet another judgment rendered by Hon‟ble the Supreme Court in the case of Harshad Chiman Lal Modi vs DLF Universal and anr, 2005(7)SCC 791 which is very near to the facts of the instant case. What is observed by Hon‟ble Supreme Court in paragraphs Nos. 11, 12 and 13 is reproduced hereunder:
"11.Having heard learned counsel for the parties and having considered the relevant provisions of the Code as also the decisions cited before us, in our opinion, the order passed by the trial court and confirmed by the High Court deserves no interference. As stated above, it is an admitted fact that the suit relates to the recovery of immovable property, a plot admeasuring 264 sq. mtrs. in the Residential Colony DLF Qutub Enclave Complex, Gurgaon. It is not in dispute by and between the parties that the property is situate in Haryana. It is no doubt true that the defendants are having their Head Office at Delhi. It is also true that the agreement was entered into between the parties at Delhi. It also cannot be denied that the payment was to be made at Delhi and some instalments were also paid at Delhi. The pertinent and material question, however, is in which court a suit for specific performance of agreement relating to immovable property would lie?"
C. REV NO.20 OF 2016 Page 10 of 12 "12. Now, Sections 15 to 20 of the Code contain detailed provisions relating to jurisdiction of courts. They regulate forum for institution of suits. They deal with the matters of domestic concern and provide for the multitude of suits which can be brought in different courts. Section 15 requires the suitor to institute a suit in the court of the lowest grade competent to try it. Section 16 enacts that the suits for recovery of immovable property, or for partition of immovable property, or for foreclosure, sale or redemption of mortgage property, or for determination of any other right or interest in immovable property, or for compensation for wrong to immovable property shall be instituted in the court within the local limits of whose jurisdiction the property is situate. Proviso to Section 16 declares that where the relief sought can be obtained through the personal obedience of the defendant, the suit can be instituted either in the court within whose jurisdiction the property is situate or in the court where the defendant actually or voluntarily resides, or carries on business, or personally works for gain. Section 17 supplements Section 16 and is virtually another proviso to that section. It deals with those cases where immovable property is situate within the jurisdiction of different courts. Section 18 applies where local limits of jurisdiction of different courts is uncertain. Section 19 is a special provision and applies to suits for compensation for wrongs to a person or to movable property. Section 20 is a residuary section and covers all those cases not dealt with or covered by Sections 15 to 19".
"13.Section 16 thus recognizes a well established principle that actions against res or property should be brought in the forum where such res is situate. A court within whose territorial jurisdiction the property is not situate has no power to deal with and decide the rights or interests in such property. In other words, a court has no jurisdiction over a dispute in which it cannot give an effective judgment. Proviso to Section 16, no doubt, states that though the court cannot, in case of immovable property situate beyond jurisdiction, grant a relief in rem still it can entertain a suit where relief sought can be C. REV NO.20 OF 2016 Page 11 of 12 obtained through the personal obedience of the defendant. The proviso is based on well known maxim "equity acts in personam, recognized by Chancery Courts in England. Equity Courts had jurisdiction to entertain certain suits respecting immovable properties situated abroad through personal obedience of the defendant. The principle on which the maxim was based was that courts could grant relief in suits respecting immovable property situate abroad by enforcing their judgments by process in personam, i.e. by arrest of defendant or by attachment of his property".
17. The case law cited by learned counsel for the respondents pertains to the interpretation of the term "cause of action" as contained in Section 20 of the Code of Civil Procedure and mostly interpreted in the context of service disputes, may not be relevant in view of the findings returned hereinabove that the suit of the respondents falls within the ambit of Section 16 of Code of Civil Procedure and the jurisdiction of the Court is required to be determined with respect to the situs of the subject matter.
18 Viewed thus, this revision petition is allowed. Consequently, the order of the trial Court dated 09.05.2016 is set aside. Record of the trial Court be sent back. The trial Court, on receipt of the record, shall return the plaint to the respondents for its presentation before the competent Court of jurisdiction.
(Sanjeev Kumar) Judge Jammu .04.2018 Sanjeev C. REV NO.20 OF 2016 Page 12 of 12