Punjab-Haryana High Court
Atma Tube Products Ltd. vs Tata Iron And Steel Co. Ltd. on 25 September, 2000
Author: M.L. Singhal
Bench: M.L. Singhal
JUDGMENT M.L. Singlial, J.
1. The Tata Iron and Steel Co. Ltd. filed suil against (1) Alma Tube Products Limited, Registered Office 112, Ansal Bliawan, 16 Kasturba Gandhi Marg, New Delhi through the Managing Director; and (2) Atma Tube Products Ltd., SCO 457-58, Sector 35-C, Chandigarh for the recovery of Rs. 3,41,14,853.92 along with interest @ 18% per annum. It is a mortgage suit under section 34 CPC. In para 4 of the plaint, it has been averred :
"That during the course of business, the defendant had understanding with the plaintiff that goods will be supplied on credit, and payments will be made in due course of business within 30 days. This has been going on for a sufficiently long lime and the defendant in order to secure the due payment of the bills, which were raised by the plaintiff on the defendant for the value of the goods supplied, the defendant mortgaged various properties with the plaintiff by deposit of title deeds as under :-
(a) Mortgage by deposit of title deed of 74 kanals 16 marlas, 1 kanal and 19 marlas and 28 bighas and 6 biswas of the land situated at village Mubarik-pur, tehsil Dcrabassi, District Patiala. The price of land area is about Rs. 83,48,500/-.
(b) Another mortgage was effected on 17.10.1996 of House No. 235, Sector 9-B, Chandigarh by deposit of title deeds, value about Rs. 1 crore. Copies of the documents are attached and collectively marked as Annexure P-105 and P-106."
2. Along with the plaint, the plaintiff filed an application under Sections 17 and 18 CPC for permission to file mortgage suit at Chandigarh for the properties mortgaged at village Mubarikpur. Para 2 of the application filed under Sections 17 and 18 CPC by the plaintiff reads as follows :-
2. That the defendants had mortgaged the aforesaid two properties by deposit of title deeds at Chandigarh and on the basis of the aforesaid mortgage the goods were supplied to the defendants; are liable to make the aforesaid payments to the plaintiff at Chandigarh.
Para 3 of that application reads as follows :
3. That as both the properties are situated within the jurisdiction of two different Courts at Patiala, and at Chandigarh, therefore, the permission may be granted to file this suit at Chandigarh on the basis of the mortgage deeds concerning sate of both the properties as the defendants have their Corporate office at Chandigarh which had all the dealings with the plaintiff where orders were received and payments were to be made.
3. Plaintiff sought to invoke the jurisdiction of the Courts situated at Chandigarh on the ground that both the properties are situated within the jurisdiction of two different Courts at Patiala and at Chandigarh, therefore, permission be granted to file suit at Chandigarh on the basis of the mortgage deeds concerning sale of both the properties as the defendants have their Corporate office at Chandigarh who had all the dealings with the plaintiffs where orders were made and payments were to be received. Trial Court had not disposed of that application. Till that application was disposed and the permission granted to the plaintiff to file the suit at Chandigarh, the Court at Chandigarh could not assume jurisdiction over the seisin of the case and call upon defendant to file written statement in the case. Civil Judge (Senior Division), Chandigarh vide order dated 11.3.2000 which reads as follows :
"Written statement again not filed although today was the final opportunity for that purpose. I am not inclined to pass any harsh order since the lawyers are on indefinite strike today. For filing written statement and payment of cost to come up on 25.3.2000. Absolutely, final opportunity. Tn case of default, defence shall be liable to be struck off. No further adjournment shall be granted in any case whatsoever. After the case was adjourned, application was filed on behalf of defendant. Defendant seems to be filing frivolous application. He is directed to file written statement in which he can take all sorts of objections."
called upon the defendant to file written statement and pay costs on 25.3.2000. It was final opportunity granted to the defendant for filing written statement and paying costs. In case of default, the defendant was warned of the consequence namely that the defence shall be struck off. It is this order the legality of which has been called in question by the defendant through this revision.
4. Learned counsel for the petitioner has submitted that the trial Court could not pass this order and direct the defendant to file written statement. It should have first disposed of the plaintiff's application filed under Sections 17 and 18 CPC seeking its permission to institute suit at Chandigarh and also the Court should have passed an order disposing of application made by the defendant under Order 7 Rule 10 read with Section 151 CPC for the return of this plaint/mortgage suit to a Court of competent jurisdiction. It was alleged in the application filed by the defendant under Order 7 Rule 10 read with Section 151 CPC (Annexure P1) for return of this plaint/mortgage suit to a Court of competent jurisdiction that in the mortgage suit filed under Section 34 CPC, there is lack of ingredients of Order 34 CPC. Defendant never created any equitable mortgage by deposit of title deed of house No. 235, Sector 9-B, Chandigarh in favour of the plaintiff. Mortgage suit is not maintainable. Piaintiff is not in possession of document of title of house No. 235, Sector 9, Chandigarh. Lt. Col. Balwant Singh was owner of house No. 235. Lt. Col. Balwant Singh executed will dated 4.8.1987 in favour of Deepak Singh. Lt. Col. Balwant Singh died on 10.9.1987. The said will was probated by the Court of Shri B.R. Gupta, Additional District Judge, Chandigarh vide judgment dated 26.11.1990. Grant of probate and the letters of administration is conclusive evidence of the testamentary capacity of the testator as to the'factum of its due execution and validity of the will, and the finding of the Probate Court as to the due execution of the will is conclusive. The probate, therefore, is not a document of title within the meaning of Section 58(f) of the Transfer of Property Act, and therefore, cannot be the basis of mortgage by deposit of title deeds. There has to be delivery of the document of title to the creditors otherwise, there can be no equitable mortgage. What is delivered must be a document of title. No title is created in the creditor by the delivery of the order granting probate and the letters of administration. If the documents deposited show no kind of title in the depositor, no mortgage is created. No ownership is created in this case in favour of Deepak Singh which put Deepak Singh in the shoes of Lt. Col. Balwant Singh as what was deposited in respect of House No. 235 with the Creditor was the probate granted in favour of Deepak Singh which put Deepak Singh in the shoes of Lt. Col. Balwant Singh. These may be evidence of title but are not documents of title. As per section 16 of the CPC, a suit for the sale in the case of immovable property shall be instituted in the Court within local limits of whose jurisdiction the property is situated. In this case, the land mortgaged is situated within the territorial limits of the jurisdiction of Patiala Courts and, therefore, the suit could be filed there. Section 17 CPC is not applicable as no equitable mortgage was created in respect of house No. 235 by the deposit of title deeds.
5. Equitable mortgage is created under Section 58 of the Transfer of Property Act which reads as follows : 58(f). Mortgage by deposit of title deeds - Where a person in any ofthe following towns, namely, the towns of Calcutta, Madras and Bombay, and in any other town which the Stale Government concerned may by notification in the Official Gazette, specify in this behalf, delivers to a creditor or his agent documents of title to immovable property, with intent to create a security thereon, (he transaction is called a mortgage by deposit of title deeds.
6. Learned counsel for the petitioner submitted that when the very jurisdiction of the Court at Chandigarh was seriously in issue, the Court should have first decided the question of jurisdiction and if the Court had found in favour of the jurisdiction of Chandigarh Court, then and then alone, the Court could call upon the defendant to file written statement. It was submitted that the defendant made this application on 11.3.2000 and the Court should have first decided this application and not called upon the defendant to file written statement through the impugned order dated 20.3.2000. It was submitted that this objection as to the lack of the jurisdiction of the Chandigarh Court should have been disposed of at the outset when this objection had been taken by the defendant at the earliest possible opportunity. It was submitted that Section 21(1) CPC inter-alia provides that no objection as to the place of suing shall be allowed by any appellate or revisional Court unless such objection was taken in the Court of first instance at the earlier possible opportunity and in all cases where issues are settled at or before such settlement and unless there has been a consequent failure of justice. It was submitted that this objection was taken by the defendant at the earliest possible opportunity. It was submitted that it was not necessary that the written slatement should have been filed and this objection taken in the written statement. In support of this submission, he drew my attention to The New India Assurance Co. Ltd. and others v. Kamta Singh, AlR 1965 Patna 55 where it was held that there is nothing in the Code of Civil Procedure suggesting that objection as to jurisdiction can be taken only in the written statement and cannol be taken earlier to the filing of the written statement. He drew my attention to Sasa Musa Sugar Works Pvl. Ltd. v. Chunilal Chororia, AIR 1975 Gauhati 34 where also it was held that if there is objection as to jurisdiction, there is no necessity to file written statement. Objection as to jurisdiction can be raised even before the filing of the written statement. He drew my attention to Samblu Nath Singh and others v. Sankarananda Banerjee, AIR 1981 Calcutta 196 where it was held that if such objection is not decided at the outset and the Court decides after trial that it had no jurisdiction, the object of enacting order 7 Rule 10 CPC by the legislature will be rendered afoul. There is no doubt that the Court should have decided the objection as to jurisdiction taken by the defendant in the application moved under Order 7 Rule 10 CPC before calling upon the defendant to file written statement. Application under Order 7 Rule 10 read with Section 151 CPC moved by the defendant should not be labelled as a frivolous applica-
tion as through this application a serious point had been raised viz whether the grant of probate and the letters of administration to the defendant in respect of house No. 235 could be viewed as creating equitable mortgage. If it is decided that the delivery of the grant of probate and the letters of administration could not be viewed as deed of title creating equitable mortgage. Chandigarh Court shall suffer from the vice of lack of territorial jurisdiction. For determining the question of jurisdiction, the Court shall focus its attention to the allegations of the plaint alone and will not allow itself to be influenced by what is alleged in the written statement to oust jurisdiction. In view of the law laid down in ABN-AMRO Bank v. The Punjab Urban Planning and Development, 1999(3) Civil Court Cases 427 : 1999(4) RRR 197(P&H) where it was held that for determination ofthe point ofjurisdiction, Court can look into the plaint and the documents filed on record and more particularly the documents which have been referred in the plaint, written statement cannot be referred or relied upon. In Gopi Chand v. Khazan Chand and others, AIR 1938 Lahore 226 it was held that where the award relates to mortgaged property situated at Sialkot, the Court of the District Judge at Amritsar has no jurisdiction to make an order filing the award. In Urmilabai v. Jehangir B. Pastakia and another, AIR 1953 Bombay 75 it was held that suit for sale in case of a mortgage property situated outside Greater Bombay filed in the City Civil Court, city civil court shall have no territorial jurisdiction to try such a suit.
7. In view of the position of law as it is, Court should not have insisted upon the defendant filing written statement and take objection as to jurisdiction etc. in the written statement. Instead the Court should have decided the defendant's application filed under Order 7 rule 10 read with Section 151 CPC wherethrough the ouster of the jurisdiction of Chandigarh Court was being claimed. So, this revision is allowed. Order dated 11.3.2000 impugned in this revision is set aside and the learned trial Court is directed to decide the application moved under Order 7 Rule 10 read with Section 151 CPC and till that application is decided, the defendant shall be under no obligation to file written statement. Since the claim/suit instituted on 10.2.1999 is for a very huge amount namely Rs. 3,31,14,853.92 and had not made any headway so far, the learned trial Court is directed to dispose of that application as early as possible, at any rate, within three months of receipt of copy of this order. If the defendants are found prevaricating deliberately and not interested in the disposal of that application, objection as to jurisdiction shall be deemed to have been found against the defendants and objection as to jurisdiction shall be deemed to have been waived by them. Learned trial Court will determine whether the grant of probate and letters of administration to the plaintiff by the defendant was equivalent to delivery of title deed creating equitable mortgage in the property in respect of which probate/letter of administration was granted. Counsel for the parties are directed to cooperate with the trial Court so that this direction is carried out and objection as to jurisdiction decided. Parties shall appear before the trial Court on 3.10.2000.
8. Revision allowed.