Delhi High Court
Rohit Kochhar vs Vipul Infrastructure Develpers Ltd. on 25 April, 2005
Author: Pradeep Nandrajog
Bench: Pradeep Nandrajog
JUDGMENT Pradeep Nandrajog, J.
1. Present order disposes of the preliminary objection raised by the defendants to the jurisdiction of this Court to entertain the present suit.
2. Suit prays that:
(i) A decree for specific performance be made against the defendants and in favor of the plaintiff, commanding the defendants to transfer the right, title and interest in the suit premises to the plaintiff, by executing and getting registered sale deed/document to transfer the title of the suit premises totally ad-measuring 10,747 sq.ft. situated on the second floor of the Fortune Global Hotel and Commercial Complex, Gurgaon in terms of the contract dated 16/20.01.2004 for sale concluded between the parties.
3. Pleadings pertaining to accrual of cause of action are :
44. That the cause of action first arose on January 16, 2004 when the defendants made an offer to sell the suit premises to the plaintiff. The cause of action further arose on January 20, 2004 when the said offer dated January 16, 2004 was accepted by the plaintiff and a payment of Rs. 20,00,000.00 (Rupees twenty lacs only) was made by the plaintiff in favor of MAB Finlease limited on the request of the defendants. The cause of action further arose on February 6,2004 when another part payment of Rs. 20,00,000.00 (Rupees Twenty Lacs only) was made by the plaintiff to MAB Finlease Limited on the request of the defendants. The cause of action further arose when the defendants 1 and 2 failed to issue receipts for the part payments of Rs. 40,00,000.00 (Rupees Forty Lacs only) made by the plaintiff. The cause of action further arose on 21.02.2004 when the defendants issued the receipt for the advance/part payment of Rs. 40,00,000.00 (Rupees Forty Lacs only) made by the plaintiff. The cause of action further arose when the cheques/drafts for the payment of Rs. 40,00,000.00 (Rupees Forty Lacs only) issued by the plaintiff were encashed by the defendants and binding agreement to sell was concluded between the plaintiff and the defendants.
The cause of action again arose on 26.07.2004 and 04.08.2004 when the plaintiff called upon the defendants to finalize the terms and conditions of sale. The cause of action again arose on 14.08.2004, when the defendants practically refused to honou the agreement dated16/20.01.2004 between the parties and told the plaintiff's colleague to forget the deal. The cause of action further arose on each of the dates when the plaintiff called upon the defendants to execute and register the sale deed in favor of the plaintiff in terms of the agreement dated 16/20.01.2004 The cause of action is a continuous one and continuing from day to day as the defendants have failed to execute and register a sale deed/ documents to transfer the title of the suit premises in favor of the plaintiff.
4. Pleadings qua jurisdiction are in para 46 of the plaint. Plaintiff has pleaded :
46. That the Corporate office of defendants 1 and 2 and the registered office of defendant No. 3 is at Saket, New Delhi and the defendants carry on business and work for gain at Delhi. The defendants made the offer to sell the suit premises to the plaintiff at New Delhi and the plaintiff accepted the said offer also at New Delhi. The payments were also made by the plaintiff to defendant No. 1 at New Delhi. Accordingly, the Agreement was concluded at New Delhi. Further, the plaintiff is merely seeking the relief of specific performance of the contract dated 16/20.01.2004 for sale concluded between the parties, which relief can be entirely enforced through the personal obedience of the defendants. Therefore, this Hon'ble Court has the territorial jurisdiction to entertain and try the present suit.
5. At the outset it maybe noted that not only has the plaintiff not prayed for a decree to be put in possession of the suit property but in para 46 of the plaint has specifically pleaded that plaintiff is merely seeking the relief of specific performance of contract dated 16/20.01.2004
6. In aid of the plea that this court had no jurisdiction to entertain the suit reliance was placed only on the provisions of Section 16 of the Code of Civil Procedure 1908 and in particular clause (d) thereof. Sh. Rajeev Virmani and Sh. Arun Bhardwaj, learned counsel for the defendants vehemently urged that:
(i) Right to be put in possession on purchase of immovable property in terms of clause (f) of Sub-Section (1) of Section 55 of the Transfer of Property Act, 1882 being a statutory right, the moment specific performance of a contract for sale of immovable property is directed, it would include a right in favor of the plaintiff to be put in possession of the property sold and therefore the suit would have an inherent claim to be put in possession of the suit property.
(ii) Under Section 22 of the Specific Relief Act, plaintiff can at any stage of the proceedings claim decree for possession and therefore suit should be treated as one which seeks determination of right and interest in immovable property.
(iii) Plaintiff has not relinquished claim for possession. Right to possession of immovable property under an agreement to sell, being founded on the same cause as entitling relief for specific performance, plaintiff having not specifically stated that he relinquishes claim for possession, plaintiff would have a right to amend the suit and claim possession. Alternatively, it was urged that under sub-rule 1 of Rule 2 of Order 2 CPC plaintiff must specifically relinquish right to seek possession in order to maintain the suit within the jurisdiction of this court.
7. Learned counsel for the defendants relied upon the following decisions:-
(i) Babu Lal v. Hazari Lal Kishori Lal and Ors.;
(ii) Harshad Chiman Lal Modi v. DLF Universal Limited ;
(iii) Anil Verman v. Raheja Developers Private Limited ;
(iv) Uttam International v. Joginder Pal Singh ;
(v) Ranjana Nagpal v. Devi Ram .;
(vi) Sheela Agarwal v. Infocom Digital Systems Ltd. ;
(vii) Union Bank of India v. Logic Systems Pvt. Ltd. AIR 1992 Delhi 153;
(viii) Anant Raj Industries Ltd. v. Balmer Lawrie and Co. Ltd. ;
(ix) Ramesh Kumar v. Chander Mohan 1998-2 PLR 39;
(x) Praking v. State Bank of Indore ;
(xi) Anant Raj Industries Ltd. v. Balmer Lawrie and Co. Ltd. ;
(xii) D.K. Bhargava v. Maya Devi 2002 (1) Civil Court Cases 193 (Delhi)
8. Learned senior counsel Sh. P.V. Kapoor appearing for the plaintiff relied upon following decisions:-
(i) Sidharth Choudhary v. Mahamaya General Finance;
(ii) Karan Mahendru and Anr. v. Vatika Plantations (P) Ltd.;
(iii) Adcon Electronics Pvt. Ltd. v. Daulat And Anr.
9. Since issue of jurisdiction was raised in the context of clause (d) of Section 16 of the Code of Civil Procedure, it would be useful to note the same. It reads as under:-
"16. Suits to be instituted where subject matter situate: Subject to the pecuniary or other limitations prescribed by any law, suits,-
(a) .............
(b) .............
(c) .............
(d) for the determination of any other right to or interest in immovable property,
(e) .............
(f) .............
shall be instituted in the court within the local limits of whose jurisdiction the property is situate:
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.
10. At the outset, it has to be noted that the proviso to Section 16 carves out an exception by providing that relief respecting immovable property if could be enforced through the personal obedience of the defendant, suit could be instituted within the local limits of the jurisdiction of the court where the defendant resides, carries on business or personally works for gain.
11. Another fact to be noted is that clause (d) of Section 16 stands attracted where the suit seeks determination of a right to or interest in immovable property.
12. It is trite that an agreement to sell does not create any interest in the property agreed to be sold and is a contract for sale binding the seller in person. A suit for specific performance of a contract for sale of immovable property simplicitor would, therefore, be a suit for enforcement of the terms of the contract. Title to the immovable property as such is not the subject matter of the suit for specific performance.
13. A decree for specific performance of a contract for sale of immovable property can be enforced by the personal obedience of the vendor and if the vendor resides or carries on business or works for gain within the territorial jurisdiction of a court, subject to pecuniary jurisdiction, the court in question would prima-facie have jurisdiction to entertain the suit.
14. Legal decisions have made a distinction between suits relating to specific performance of a contract for sale of immovable property simplicitor and a suits where additional claim for delivery of possession is prayed for. In the case of latter category, since delivery of possession can be ordered through agency of the court, if the vendor does not carry out the mandate of the decree, it has been held that this would oust the jurisdiction of a court within the territorial jurisdiction whereof the property is not situate.
15. A learned single Judge of this court (Cyriac Joseph, J.) held so in the decision reported as Sidharth Choudhary v. Mahamaya General Finance cited by learned counsel for the plaintiff. Another learned single Judge (Dr. M.K. Sharma, J.) concurred with the said view in the decision reported as Karan Mahendru and Anr. v. Vatika Plantations (P) Ltd.
16. It is true that the two decisions do not note either Section 22 of the Specific Relief Act, 1963 or Section 55 of the Transfer of Property Act, 1882, but that would make no difference in light of the decision of the Supreme Court relied upon by counsel for the plaintiff, decision being Adcon Electronics Pvt. Ltd. v. Daulat and Anr.
17. Decision of the Hon'ble Supreme Court aforenoted arose out of a decision of the Bombay High Court which had held that a suit seeking specific performance of a contract for sale of immovable property simplicitor without seeking relief of possession was maintainable with the leave of the court in Bombay notwithstanding that the immovable property was in the State of Madhya Pradesh.
18. Clause (xii) of the letters patent of the High Court of Judicature at Bombay was considered by their Lordship of the Supreme Court. Clause reads as under:-
12. Original jurisdiction as to suits.- And we do further ordain that the said High Court of Judicature at Bombay, in the exercise of its ordinary original civil jurisdiction, shall be empowered to receive, try, and determine suits of every description, if, in the case of suits for land or other immovable property such land or property shall be situated, or in all other cases if the cause of action shall have arisen, either wholly, or in case the leave of the Court shall have been first obtained, in part, within the local limits of the ordinary original jurisdiction of the said High Court, or if the defendant at the time of the commencement of the suit shall dwell or carry on business, or personally work for gain, within such limits; except that the said High Court shall not have such original jurisdiction in cases falling within the jurisdiction of the Small Cause Court at Bombay, in which the debut or damage, or value of property sued for does not exceed one hundred rupees.
19. Dealing with the argument pertaining to Section 22 of the Specific Relief Act, 1963 in paras 16 and 17 of the report, their Lordships of the Supreme Court observed as under:-
16. 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. But in this connection it is necessary to refer to Section 22 of the Specific Relief Act, 1963 which runs:
22. Power to grant relief for possession, partition, refund or earnest money, etc.-
(1) Notwithstanding anything to the contrary contained in the Code of Civil Procedure, 1908, any person suing for the specific performance of a contract for the transfer of immovable property may, in an appropriate case, ask for-
(a) possession, or partition and separate possession, of the property, in addition to such performance; or
(b) any other relief to which he may be entitled, including the refund of any earnest money or deposit paid or made by him, in case his claim for specific performance is refused.
(2) No relief under clause (a) or clause (b) of sub-section (1) shall be granted by the court unless it has been specifically claimed:
Provided that where the plaintiff has not claimed any such relief in the plaint, the court shall, at any stage of the proceeding, allow him to amend the plaint on such terms as may be just for including a claim for such relief.
20. Dealing with the span of the words "suit for land in clause (XII) of the letters patent, their Lordships of the Supreme Court in para 15 of the report held as under:-
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.
21. Their Lordships of the Supreme Court noted observations of a Five Judge Bench of the Federal Court in the decision reported as AIR 1950 FC 83 Mool Ji Jaitha and Co. v. Khandesh Spg. and Wvg. Mills Co. Ltd. Their Lordships of the Supreme Court noted the opinion of Chief Justice Kania, Justice Fazal Ali, Justice Patanjali Shastri and Justice Mahajan of the Federal Court. Their Lordships emphasized the following observations of Justice Mahajan in Mool Ji Jaitha's case (Supra)
102. ...................
In my opinion if the suit is for specific performance and a decree for possession of the land sold is claimed, such a suit would certainly be a suit for land; but if the suit is simplicitor for specific performance, i.e. for the enforcement of the contrat of sale and for execution of a conveyance, in that event there can be no good ground for holding that such a suit is a suit for determination of title to land or that the decree in it would operate on the land.
22. Section 22 of the Specific Releif Act has been specifically held to be an enabling provision by their Lordships of the Supreme Court in Adcon Electronic's case (Supra). Argument of counsel for the defendants pertaining to applicability of Section 22 of the Specific Relief Act, 1963 in context of certain observations of the Supreme Court in Babu Lal's case (Supra) are not only out of context but would have to be read in the context of the categorical decision of the Supreme Court in Adcon Electronics case (Supra) which directly dealt with the issue at hand.
23. Be that as it may, their Lordships of the Supreme Court in Babu Lal's case (Supra) were confronted with the issue, whether a claim for possession could be made at the stage of execution where decree only for specific performance was obtained. Noting that Section 22 was worded as empowering a person suing for specific performance of a contract for transfer of immovable property to seek possession, 'in an appropriate case', their Lordships in Babu Lal's case (supra) held that the expression 'in an appropriate case' in Section 22 is very significant. Their Lordships further noted that the proviso to sub-section (2) of Section 22 permitted the plaintiff to claim relief seeking possession at any stage of the proceedings. Their Lordships held that the term proceedings is a very comprehensive term and generally speaking means a prescribed course of action for enforcing a legal right. Their Lordships held that Section 22 of the Specific Relief Act, 1963 must be construed in harmony with Section 55 of the Transfer of Property Act and held that even at the execution stage, relief for possession of immovable property in respect of which a decree for specific performance was obtained by the plaintiff could be granted.
24. Facts of the case were that at execution stage, the executing court granted a relief of being put in possession of immovable property for which a decree for specific performance has been obtained by the plaintiff. Upholding the said Act of the execution court, their Lordships of the Supreme Court, however, at page 109 of the report observed:-
The execution court has very jurisdiction to allow the amendment. The only difficulty is that instead of granting a relief of possession, the High Court should have allowed an amendment in the plaint. The omission of the High Court to allow an amendment in the plaint is not so fatal as to deprive the decree holder of the benefits of the decree which Section 55 of the Transfer of Property Act authorizes.
25. Aforesaid observations of the Hon'ble Supreme Court cannot be ignored. For, the Hon'ble Supreme Court has categorically observed that even at the execution stage, plaint would have to be got amended.
26. In normal circumstances the moment plaint would be amended and relief of possession claimed, immediately, issue of jurisdiction would arise. It did not arise in Babu Lal's case (Supra) for the reason, property was within the local limits of the court even otherwise.
27. It is trite that where an issue is specifically answered by a decision of the Supreme Court, it would bind all courts in India. It would, therefore, be impermissible for this court to cull out by analogy a ratio from the decision of the Supreme Court in Babu Lal's case (Supra) when the same has been directly raised and answered by their Lordships of the Supreme Court in Adcon Electronic's case (Supra).
28. I need not, therefore, deal with the various decisions of this court and other High Courts relied upon by counsel for the defendants for the reason that the decision of the Supreme Court in Adcon Electronic's case (Supra) holds the field. The said decision has taken into account Section 22 of the Specific Relief Act. Decision categorically hold that a suit seeking specific performance of an agreement to sell simplicitor even if it relates to immovable property is not a suit in which the relief claimed relates to title or to land. The suit is for enforcement of terms of contract. Decision categorically holds that it is at the option of the plaintiff to seek delivery of possession. Decision categorically holds that unless possession of immovable property is specifically prayed for, suit could be instituted within the local limits of the court having jurisdiction where the defendant resides, carries on business or personally works for gain.
29. Section Transfer of Property Act of the Transfer of Property Act is also an enabling provision and need not be enforced by the buyer.
30. In respect of the submission made by counsel for the defendants pertaining to the provisions of Order 2 Rule 2 of the Code of Civil Procedure, the point that the rule is directed to secure the exhaustion of the reliefs in respect of a cause of action and not to the inclusion in one and the same action different causes of action, even though they arise from the same transaction (see decision of Privy Counsel reported as 26 IC 228 Payana v. Panna Lal) has been lost sight of by counsel.
31. Order 2 Rule 2 is aimed against multiplicity of the suits in respect of same cause of action. Complete identity of cause of action and various reliefs flowing there from has not to be confused with various causes of action which may accrue under same transaction.
32. A vendee may be happy to gain title to immovable property at the pains of the vendor having lost title and since possession was pursuant to title, being labelled as an unauthorized occupant if after execution of sale deed and possession being required to the delivered refuses to do so. In such eventuality, the vendor would be liable to pay damages/mesne profits for unauthorized occupation. This would be an entirely separate cause of action post execution of the sale deed.
33. I accordingly decide the objection raised by the defendants against them. It is held that this court has jurisdiction to entertain the suit.