Bombay High Court
Narendra Gorani vs Narendra Gorani on 10 October, 2013
Author: Roshan Dalvi
Bench: Roshan Dalvi
jsn 1 CHS No. No.720_2013
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
CHAMBER SUMMONS NO.720 OF 2013
IN
ARBITRATION PETITION NO.799 OF 2013
Narendra Gorani - Applicant
AND
Sumer Builders Pvt. Ltd. - Petitioner
Vs.
Narendra Gorani - Respondent
Mr. F.E. Devitre, a/w. Mr. Dinyar Madon, a/w. Mr. Pradeep Sancheti,
Sr. Counsels a/w. Ms. Yasmin Bhansali, Adv. i/b. Yasmin Bhansali &
Co. for the Petitioner.
Mr. Aspi Chinoy, Sr. Adv. a/w. Mr. Hamid Kadiani, Adv. a/w. Mr.
Yashpal Jain, Adv. for the Respondent.
CORAM : MRS. ROSHAN DALVI, J.
DATE OF RESERVING THE JUDGMENT : 19th September, 2013. DATE OF PRONOUNCING THE JUDGMENT : 10th October, 2013 J U D G M E N T
1. Leave under clause 12 of the Letters Patent of this Court has been granted in the above arbitration Petition to the Petitioner to pursue the Petition in this Court. The Applicant has sought to revoke that leave. The Applicant contends that the arbitration invoked by the parties is in respect of land which was owned by the Applicant and which was to be developed by the Petitioner which is in Indore and the agreement between the parties had been entered into in Indore so that no part of cause of action has arisen within the territorial limits of this Court's jurisdiction and hence leave could not have been granted.
2. The parties entered into an agreement for development of the land of the Applicant on 28th February, 2008. The Petitioner was ::: Downloaded on - 27/11/2013 20:24:50 ::: jsn 2 CHS No. No.720_2013 to develop a residential project and / or commercial complex and / or multiplex and / or hotels and / or malls etc. as permissible in law. The Applicant handed over vacant possession of the land for the parties. The Petitioner had to put up construction work thereon and start the proposed development work. The Petitioner was put in possession which was to continue until the completion of the project after which the entire land was to be jointly owned by the parties.
3. Clause 13 of the development agreement is the arbitration clause. Parties agreed to refer matters in respect of any difference or dispute between the parties with regard to the construction or the terms of the development agreement or with regard to the project undertaken to be resolved by the arbitration.
4. The parties thereafter entered into a Memorandum of Understanding (MOU) dated 8th June, 2012 which is unregistered and inadequately stamped. It recites that the developer has to construct a township project consisting of one commercial building, 11 residential wings in four buildings and one club house under license from Indore Municipal Corporation. The parties agreed that if the MOU was terminated the developer would not have any right, title and interest in the township project and would be required to remove his employees and machineries from the land. Clause 13 of the development agreement was reiterated and hence the parties sought reference to their dispute to arbitration under the MOU also.
5. The Petitioner did not make payment of the consideration as agreed. The Applicant terminated the MOU and forfeited the security deposit and invoked arbitration under his advocate's letter dated 6th June, 2013. The Petitioner replied to the termination notice by its advocate's letter dated 19 th June, 2013 stating that it had commenced substantial construction on the property by constructing three buildings and had commenced construction of two other ::: Downloaded on - 27/11/2013 20:24:50 ::: jsn 3 CHS No. No.720_2013 buildings and digging and footing work for yet another building. The Petitioner claimed that the environmental clearance certificate for the project was not obtained and hence further work was stopped. It contended that the Applicant was to obtain for permissions and sanctions. It called upon the Applicant to perform his part of the contract in obtaining environmental clearances, other permissions and approvals, execute irrevocable Power of Attorney, refund the part amount payable and pay interest on the security deposit. The Applicant's advocate in reply dated 30th June, 2013 also sought arbitration. The Petitioner in a further advocate's reply dated 16 th July, 2013 appointed an arbitrator from Mumbai as it contended that the arbitration tribunal would be in Mumbai. It further stated that in view of the physical possession of the property being with it, its construction material, machinery, office equipment and other equipments were at site. It is also contended that its staff and workers were also at site.
6. The Petition has been filed in Mumbai by the developer.
The Petitioner claims that the part of the cause of action arose in Mumbai upon receipt of the termination notice issued by the Applicant-owner which was received by it in Mumbai. The Petitioner also claims that the amounts were payable through cheques. It claims that since arbitration is invoked for specific performance of the development agreement / MOU, it is a dispute not with regard to the land which is in Indore and consequently upon the leave being granted under Clause 12 of the Letters Patent this Court would have territorial jurisdiction in respect of the dispute and consequently the arbitration could be invoked within its territorial jurisdiction.
7. It is contended by the Applicant that the dispute with regard to the land which is in Indore and in respect of which the development agreement and the MOU have been executed in Indore ::: Downloaded on - 27/11/2013 20:24:50 ::: jsn 4 CHS No. No.720_2013 it is a dispute with regard to land and hence only the Court where the land is situate would have a territorial jurisdiction in respect of the arbitration invoked for such dispute.
8. The only material aspect would be to see whether the dispute under the development agreement and MOU aforesaid are in respect of the land. Had a suit been filed instead of invoking arbitration would it be a suit for land as contemplated in clause 12 of the Letters Patent, the relevant part of which runs thus:
The clause divides suits into two categories, (1) those where the subject in dispute is land or immovable property, and (2) those where the subject is neither land nor immovable property.
9. Suits for land would be required to be filed where the immoveable property or the land is situate. Other suits would be required to be filed where cause of action fully or partly arose or where Defendant resided or carried on business.
10. A very neat jurisprudence of what are suits for land has evolved in this State.
11. The earliest of the cases is the case of Yenkoba Balshet Kasar Vs. Rambhaji valad Arjun, 1872 BHCR 13 in which the cryptic judgment holds that the suit for land is the one which asked for delivery of said land to the Plaintiff.
12. The further case of His Highness Shrimant Maharaj Yashvantrav Holkar Vs. Dadabhai Cursetji Ashburner 1890 14 ILR 14 Bombay 353, before Division Bench of Gibbs and Melvill, JJ, the Court had to consider its jurisdiction in a case of specific performance of an agreement to release a mortgage debt by sale of the land on which it was secured. The agreement was entered into for the parties ::: Downloaded on - 27/11/2013 20:24:50 ::: jsn 5 CHS No. No.720_2013 by enabling the Defendant to apply at a sale by the Commissioner for consideration upon which the conveyance of the property and the possession thereof would be obtained. The suit was for obtaining conveyance and possession of the property. The ancillary reliefs in the suit were for payments of compensation and certain injunctions with regard to the collection of rents and profits. Considering the judgment in the case of Yenkoba (Supra) which was for sale of the mortgage land, it was held by the Division Bench of this Court of CJ Sir Charles Sargent, Kt. and Scott J that such a suit could be decreed by the Court in Bombay since it was for executing the mortgage and possession thereunder.
13. In the case of Hatimbhai Hassanally Vs. Framroz Eduljee Dinshaw, AIR 1927, Bom 278 = 29 BLR 498 FB the Judgment in the case of Yenkoba (Supra) and Holkar (Supra) with regard to whether a suit for mortgage is suit for land came to be considered by the Division Bench of seven Judges of this Court upon a reference being made to it by the another Full Bench of five Judges of this Court in the case of India Spinning and Weaving Company Ltd. Vs. Climax Industrial Syndicate, AIR 1925 Bombay 50 Bom.1 for reconsidering those Judgments.
The enunciation by each of the seven Judges for the interpretation of clause 12 of the Letters Patent granting original civil jurisdiction to this Court as the successor of the Supreme Court would be considered. The views of the Judges may be recited thus :
Marten, CJ considered the difference between the true nature of the suit to enforce a mortgage by sale and the true consideration of the words "suits for land". Upon the arguments showing two extreme views, and the need to draw a reasonable balance in interpretation, he observed in paragraph 42 of the Judgment that a Court would act in ::: Downloaded on - 27/11/2013 20:24:50 ::: jsn 6 CHS No. No.720_2013 personam in mortgage suits. A "suit for land" is a suit "to obtain or recover land" or suit "which substantially involved the recovery of land or its equivalent". He considered what would be suits substantially for land taking the extract of Sir Lawrence Jenkins and Woodroffe, JJ in the case of Sudamdih Coal Company Ltd. Vs. Empire Coal Company Ltd. 1915 42 Calcutta 942.
Considering another Calcutta High Court Judgment in the case of Nagendra Nath Chowdhuri Vs. Eraligool Co. Ltd., 49 Calcutta 670 = AIR 1922 Calcutta 443 holding that a vendor's suit for specific performance was not a suit for land, he reproduced the question asked by Sir Lancelot Sanderson, J and Richardson J.
Again he quoted Srinivasa Aiyangar, J in the case of Krishnadoss Vithaldoss Vs. Ghanshamdoss & Narayandoss, Air 1925 Mad. 1084 ....no suit can be described as a 'suit for land' as the result of the decision in which the title to or possession of immovable property will not in any manner or measure be directly affected. Further, the preposition 'for' in the expression 'suit for land' would seem to indicate that the title to or possession of immovable property must be the primary object of the action.
Thus stated he concluded that the primary element in a mortgage is the debt and not the security. Hence the primary and substantial object of a mortgage suit is the payment of debt and the sale sought for is merely ancillary to the main or final end namely the payment of the mortgage debt.
His Judgment would, therefore, imply that the suit for land referred to suits to obtain or recover land or which substantially involved the recovery of land or its equivalent. This would seem to indicate that the title or possession of the property in a suit for land must be the primary object of the action which is not so in a mortgage ::: Downloaded on - 27/11/2013 20:24:50 ::: jsn 7 CHS No. No.720_2013 suit which is a suit for money.
Fawcett J similarly held about what would substantially relate to land upon the nature of the reliefs sought thus :
I think it was open to the Court to rule that a suit, in order to be one for land, should relate to the land in the sense that the relief sought for from the Court was such as would directly operate upon the land and affect the control or possession of that land.
Hence he held :
A suit for land grammatically means a suit for possession of the land and also covers suits for title to or compensation for wrong or trespass to land which are properly local 'actions'.
He, therefore, differed from the ruling in the case of Holkar (Supra) as held in the case of India Spinning (Supra) by another Full Bench of this Court. He in fact observed that the suit for foreclosure, rare in this Presidency, would not be suit for land indicating that the suit for land :
.... should substantially relate to land and that this should primarily be judged by considering what is the nature of the relief sought by the Plaintiff.
He considered the true nature of a suit to enforce a mortgage by sale of land which would include an interest in or arising out of land and, therefore, require to get control over the land for the purpose of releasing a money out of it which was held in the case of Maha Prasad Vs. Ramani Mohan Singh (1914) 42 Calcutta 116 thus :
... which makes it difficult, if not impossible to say that such a suit is not a "suit for land."
He considered whether the residence of the Defendant was at all material in determining the territorial jurisdiction in a suit for land. He referred to the case of Balaram V. Ramchandra, (1898) 22 Bom.::: Downloaded on - 27/11/2013 20:24:50 :::
jsn 8 CHS No. No.720_2013 922, in which Candy J observed;
it has never been apparently contended that a defendant residing in Bombay could be sued in the Bombay High Court for land , say in Calcutta simply because the defendant resided in Bombay.
Hence observing that in a suit for land it does not matter where the Defendant lived, it mattered where the land was. Thus he concluded that the suit for mortgage of the kind that he was considering was a suit for land and that being outside the Court's territorial jurisdiction could not be maintained.
Kemp, J on the other had, agreed with Marten, CJ in holding that such a suit is not a suit for land upon accepting the views of Calcutta and Madras High Courts (Supra).
Mirza, J again considered the concept or purpose of the suit for acquiring title to or control over the land as a guiding factor in determining whether it was a suit relating to or concerning land.
He held :
In the view that in a mortgage decree for sale the Court merely executes a decree in personam the inconvenience of a Court sale of immovable property outside the Court's local jurisdiction would be that the Court would be unable to put the purchaser at the Court sale in possession of the property. What the Court sells under a mortgage decree for sale is not only the interest of the mortgagee in the property but the interest both of the mortgagee and the mortgagor, in other words, the property itself.
To entertain a mortgage suit for the sale of immovable property the Court should be able to seize the property and give possession of it to the purchaser at the Court sale. The Court could do this only if the property is situated within the limits of its local jurisdiction.
In substance his conclusion was :::: Downloaded on - 27/11/2013 20:24:50 :::
jsn 9 CHS No. No.720_2013 A suit for land means a suit which is substantially for land, that is, for the purpose of acquiring title to or control over land. It includes any suit in which a decree is asked for operating directly upon the land. A suit which prays for any relief with reference to any specific immovable property is a suit for land.
Thus held he agreed with Fawcett, J with regard to expression "suit for land" in case of mortgage suits where a decree for sale of the property was sought.
Blackwell, J accepted only the suits for land as the suits to obtain or recover land. He excluded from that definition suits "substantially" for land even where the question of title was involved.
He considered it imperative that in construing the words "suit for land" he had to examine the language in its natural meaning uninfluenced by any other considerations as the test of real interpretation laid down by Lord Herschell in Bank of England Vs. Vagliano Brothers (1891) A C 107. He thus concluded that "a suit for" would mean "a suit to obtain" and accepted the contention of the Advocate General that the "suit for land" would mean "suit to obtain land". Consequently he further held :
I cannot therefore hold that the meaning of the expression "suit for land" can be extended so as to include a suit "substantially" for land where a question of title to the land may be involved.
Patkar, J considered the intrinsic nature of the suit by a mortgagee to enforce his mortgage by sale of the land. He observed :
The mortgagee's interest in such a suit comprises (1) the right to sue the mortgagor personally for the mortgage debt and (2) the right to realise the debt by sale of the mortgaged property. In Halsbury's Laws of England, Vol.21, para.124, a mortgage is said to consist of two things.::: Downloaded on - 27/11/2013 20:24:50 :::
jsn 10 CHS No. No.720_2013 It is a personal contract for a debt and an estate pledged as security for the debt. Every mortgage implies a debt and a personal obligation by the mortgagor to pay it.
For the purpose of the Civil Procedure Code mortgage debt according to the trend of judicial opinion in the different High Courts is considered to be a debt within the meaning of O.21 R.46 and not immovable property within the meaning of O.21 R.54.
He also considered the history of law of mortgage in England as also amongst Hindus and Muslims in India culminating in Transfer of Property Act, 1982. He observed that :
The mortgage creates a personal obligation but the right which is created in immovable property or land is only an accessory right intended merely to secure due payment of the debt. If the interest created by mortgage be immovable property, the Courts would have enforced specific performance of a contract to effect a mortgage, but specific performance is refused on the ground that the intending lender cannot be compelled to make nor the intending borrower to take the loan.
He thus held that a suit for land would mean a suit for which a substantial question is the right to land. He thus agreed with Marten, CJ in holding that the suit to enforce such a mortgage was not a suit for land.
Taleyarkhan, J though disagreeing with the ruling in the case of Yenkoba (Supra) and Holkar (Supra) independently held that the suit for sale of mortgage property was not a suit for land. He observed :
I prefer to rest my opinion on the broad ground that a suit by a mortgagee for the realisation of the moneys advanced by him to the mortgagor by the sale of the mortgaged property is substantially a suit for the recovery of the mortgage debt, and as such it is not a suit for land within ::: Downloaded on - 27/11/2013 20:24:51 ::: jsn 11 CHS No. No.720_2013 the meaning of Cl.12 of the Letters Patent.
Thus came the majority judgment with regard to the suit for land which has been of cited in later judgments. Though it dealt with a suit on mortgage it gave the perspective of how a suit for the land could be construed.
14. The Full Bench decision of 5 Judges in the case of Moolji Jaitha & Co. Vs. Khandesh Spinning & Weaving Mills Co. Ltd., AIR 1950 FC 83 shows how this subject has been dealt with by each of them {Kania, CJ, Fezal Ali, J., Patanjali Sastri, J., Mahajan, J. and D.K. Mukherjea, J. of the Federal Court.} The various views of the Full Bench were be culled thus :
... a suit for land is one the primary or direct object of which is to obtain possession of, or an adjudication of title to land.
Kania, J.
... the expression "suit for land" covers the following three classes of suit; (1) suits for the determination of title to land;
and (2) suits for possession of land; and (3) other suits in which the reliefs claimed, if granted would directly affect title to or possession of land."
Fezal Ali, J.
The clause divides suits into two categories, (1) those where the subject in dispute is land or immovable property, and (2) those where the subject is neither land nor immovable property.
The subject-matter of a suit would be land or immovable property where on the pleadings the controversy raised is such that the Court is called upon to adjudicate as to title to land or immovable property or is asked to pass a decree or order which would affect directly the proprietary or possession title to land or immovable property. Hence the test was that if the question concerning land arose only incidentally in a suit and the real subject-matter was not the land but the administration of an estate or a trust ::: Downloaded on - 27/11/2013 20:24:51 ::: jsn 12 CHS No. No.720_2013 taking accounts. It would not be a suit for land. If the suit involved controversy about the land if they were conflicting claims for such property and order would bring about change in the title it would be a suit for land. If the main purpose in the suit was quite different but some relief had to be given for the land, and the title was not in dispute it would not be a suit for land. The Court would have to determine true nature of the suit and then see whether any substance it affects the land or not.
Yet if a suit for a specific performance and a decree for possession was claimed it would be a suit for land. If it was a suit for simplicitor for specific performance i.e. for enforcement of the contract of sale for execution of conveyance it is not a suit for land as it would not operate on the land. ig Mahajan, J.
15. Similarly it has been held by B.K. Mukherjea, J. that if a suit for establishing title to the land or any interest in the land for possession or control of the land and the decree would be binding on the land, it would be a suit for land.
16. It has similarly been held by Patanjali Sastri, J that where the Plaintiff does not claim possession or control of the land, and was not asked for title to the land and only seeks fulfillment of personal obligation against the Defendant to execute the conveyance conceding the Defendant's title, it is not a suit for land.
17. In the later case of Shiv Bhagwan Moti Ram Saraoji Vs. Onkarmal Ishar Dass & Ors., AIR 1952 Bom 365, the Division Bench of Chagla, CJ and Bhagwati, J considered whether a suit for partition of moveable and immoveable properties was a suit for land. In that case the immoveable properties were all located outside the jurisdiction of this Court; the moveables were within the jurisdiction. It was held that the Court would not assume jurisdiction if none of the ::: Downloaded on - 27/11/2013 20:24:51 ::: jsn 13 CHS No. No.720_2013 immoveable properties were located within its jurisdiction. Pending the appeal one property which then situate in Vikhroli, Salcette came within the extended jurisdiction of the Court and it was held later that the Court would exercise jurisdiction over moveables and that property.
The Court considered why if the immoveable properties were within its territorial jurisdiction it would assume jurisdiction - that would be because a part of the cause of action would have arisen in Bombay. This analogy was taken from the judgment of the Calcutta High Court in the case of Hadjee Ismail Hadjee Hubbeeb Vs. Mahomed Hadjee Joosub, 13 Beng LR 91, in paragraph 6 of which the Division Bench held that a suit for partition of immoveable properties is a suit for land. The Court would have jurisdiction in case of suits for land if the land was situated in its jurisdiction. If part of the land was situated within its jurisdiction the Court could grant leave under clause 12 and assume jurisdiction. Since in the case of Shiv Bhagwan (Supra) all the immoveable properties were outside the Court's jurisdiction when the suit was filed, if it was a suit simply for partition the Court would not have jurisdiction. The Court considered that the existence of a property in a partition suit was the cause of action since it was necessary for the Plaintiff to allege that there was some property of which he was seeking partition. The Court also observed that the mere fact that there was a joint family and that the Plaintiff was its member would not be sufficient to entitle him to maintain the suit because if the joint family had no property there would be nothing to partition. It, therefore, held that the averment as to the existence of property was a necessary and material fact. Such a necessary and material fact would be the part of the cause of action. Hence it held :
The first duty of the Court is to ascertain what facts constitute ::: Downloaded on - 27/11/2013 20:24:51 ::: jsn 14 CHS No. No.720_2013 the cause of action. Having ascertained that, the next duty of the Court is to ascertain where these facts arose. It is perfectly true that the existence of a property at a particular place is not a part of the cause of action. What is a part of the cause of action is the existence of the property. But having ascertained that, the next question is, "where did that fact, namely, the existence of the property, arise?" And if the property is situated in Bombay then, to the extent of that particular fact constituting the cause of action, the cause of action arises in Bombay. Certain facts constitute a cause of action irrespective of where they arise. But the importance of where they arise arises only in connection with the question of jurisdiction.
It is only in order to determine the jurisdiction that the question has to be considered as to where certain facts arose.
Therefore, in my opinion, if the existence of property is a material fact constituting a part of the cause of action in a partition suit, then the location of the property must be considered in order to determine the jurisdiction of the Court. If the property or part of the property is situated within jurisdiction, then the cause of action or a part of the cause of action has arisen within jurisdiction.
Further in paragraph 7 of the judgment it held :
If it was a suit for land, then the only material consideration was the location of the land. It is only in suits other than suits for land that one considers the question of the residence of the defendant.
It further observed that :
... on a true construction of Clause 12, leave in a suit for land can only be granted provided part of the land was situated within jurisdiction.
And further in paragraph 12 of the judgment it held :
... in the case of a suit for land, the Court has jurisdiction to entertain the suit even though some of the lands are situated outside jurisdiction, provided some lands are situated within jurisdiction and leave has been obtained under Clause 12.::: Downloaded on - 27/11/2013 20:24:51 :::
jsn 15 CHS No. No.720_2013 The conclusion of Chagla C J in paragraph 15 is :
(15) The result, therefore, is that the order of the learned Judge dismissing the suit will be set aside. The Court will try the suit for partition of movables and also of the immovable property situated at Vikhroli. 'With regard to movables they may be within or without jurisdiction as leave under Clause 12 has been obtained.
Distinguishing between moveable and immoveable properties Justice Bhagwati held in paragraph 13 of the judgment :
...The possession of property, whether land or goods, undoubtedly gives the Courts of the country where the property is situate jurisdiction over that property, and, therefore, over the owner or possessor thereof, in regard thereto...
And with regard to the moveables relied upon the passage from Salmond on Jurisprudence, 10th edn., p.431:
"A right over a chattel is movable property, and where chattel goes the right goes also."
18. He relied upon the judgment of the Madras High Court in the case of Abdul Kabim Vs. Badrudeen 28 Mad 215 that when all the moveable properties are outside the jurisdiction no question of obtaining leave under clause 12 arise though the Court would have jurisdiction to entertain the suit for partition of moveable properties even outside the jurisdiction with leave under clause 12 of the Letters Patent being granted.
19. Thus a suit for land is distinct and separate from any other suit.
20. A suit to enforce a mortgage by sale came to be considered in the case of Manalal Rikhbaji & Ors. Vs. Mohanlal Harilal Rathi ::: Downloaded on - 27/11/2013 20:24:51 ::: jsn 16 CHS No. No.720_2013 & Ors., AIR 1963 Bombay 94 (V 50 C 25). It was held in paragraph 6 of the judgment by relying upon the case of Hatimbhai Hasanali (Supra) that the suit to enforce a mortgage by sale of property was primarily essentially a suit to recover a debt and could not be considered a suit for land. Hence it was observed that unless the whole cause of action arose in Bombay, leave of the Court had to be obtained in a mortgage suit where the land and Defendant were outside its jurisdiction. The Single Judge of this Court K.K. Desai J, held in paragraph 9 that the Court would have to consider not only the primary object and purpose of the suit but the whole nature of the suit to determine the cause of action. That suit was for monies due at the foot of the mortgage account, for declaration that the Plaintiff had a first charge thereof, for sale of the immoveable property and appointment of Receiver. The Court observed that all the reliefs were in respect of the debt claimed in the suit. Upon the Plaintiff becoming the mortgagee, the Plaintiff had to prove that the property belonged to and was of the ownership of the Defendant and was transferred to the Defendant as the owner by way of a mortgage to secure the repayment to the Plaintiff of the amount under the mortgage claimed in the suit. Hence it was observed that the Plaintiff would have to prove the transfer of interest in the property to the Plaintiff by way of the mortgage and also to prove that the Defendant (debtor) was the owner of the property. This question directly related to the title of the property. Hence it was observed :
... it is clear that the question of the situation and existence of the property at a particular place must arise to be proved on behalf of the Plaintiff in a claim to enforce a mortgage.
21. Considering the scheme of clause 12 of the Letters Patent it was held that the Court will not assume jurisdiction in a suit for land ::: Downloaded on - 27/11/2013 20:24:51 ::: jsn 17 CHS No. No.720_2013 unless the property was within its jurisdiction or a part of the property was situate within its jurisdiction and leave was obtained. Drawing from the case of Shiv Bhagwan (Supra), it observed that the existence of the property in a suit for partition which is suit for land is part of the cause of action. Upon that analogy it was held in paragraph 12 of the Judgment that in a suit for enforcing a mortgage by sale, the existence of the property is an essential fact and the existence of the property at a particular place is a part of the cause of action. Consequently if the Plaintiff obtained leave, the Court would have had jurisdiction to try such suit. In that case leave was not obtained and hence it was held that the Court would have no territorial jurisdiction.
22. The case of Dr. Prem Prakash Vs. Neetu Dharamveer Bhatia, (1994) 96 BLR 212 [ it was held by the Single Judge S.M. Jhunjhunwala ] was a suit for enforcement of performance of contract. The property was situated outside Bombay. The Court considered whether it was a suit for land or only an action in personam. This is what the Court had to say for what the suit for land, was :
7. 'A suit for land' within the meaning of this clause is a suit substantially for land, that is, for the purpose of acquiring title to or possession of land or for declaring any interest in land. If natural meaning is given to the words in this clause, the present intended suit where the petitioner claims a decree for specific performance of the said agreement with alternative claim for damages can not be said to be 'a suit for land'. It would be suit for enforcing the said agreement to sell the said shop to the petitioner where this Court would be required to act only in personam, the cause of action for such specific performance being not the cause of action for recovery of possession of the said shop as such and the fact that recovery of possession of the said shop by the petitioner may be the consequence of granting specific performance of the said agreement is immaterial for the purpose of jurisdiction as the ::: Downloaded on - 27/11/2013 20:24:51 ::: jsn 18 CHS No. No.720_2013 cause of action for specific performance of the said agreement is the breach thereof by the respondent and not titular or possessory claim for the said shop.
23. The Court considered various earlier cases which were or were not held to be suit for land. A suit for mortgage was held to be not a suit for land (see Jasraj Fooaji v. Akubai and others, AIR 1924 Bom.419.). A suit for specific performance directing a Defendant to execute a registered lease with the alternative claim of damages was not a suit for land. (see Debendra Nath Chowdhary v.
Southern Bank Ltd., AIR 1960 Cal.626.). This was drawn from the case of Moolji Jaitha (Supra) which lays down a test of determining whether a suit is a suit for land - whether taking a suit as whole it is seen that it is for the purpose of obtaining directions for possession or a decision on the title to the land. If it was for the title it was a suit for land. If the Plaintiff, however, asked the Court to act in personam and direct the Defendant to execute a conveyance in favour of the Plaintiff, even the addition of the prayer of the declaration of the title did not make it a suit for land. Hence it was concluded that where the suit for specific performance was only for execution of the document of transfer, it was not a suit for land. It was observed in the penultimate paragraph that the main relief was the execution of the conveyance and the transfer of title. The suit would not be a suit for land even if possession was specifically asked for because that would be a consequential relief in a suit for specific performance of an agreement to execute a conveyance. The right to the same arose by the way of execution of the conveyance conveying the property to the Plaintiff and not before. The Court would, therefore, require to act only in personam even if ultimate possession had to be given.
24. In the case of Jolly Elevators Pvt. Ltd. Vs. J.M. Yagnik & ::: Downloaded on - 27/11/2013 20:24:51 ::: jsn 19 CHS No. No.720_2013 Ors., Air 2001 Bombay 68, Single Judge of this Court Das, J considered a suit for specific performance of a contract involving a serious dispute as to possession of the land. The oral agreement between the parties related to two specified plots of land. The Plaintiff prayed for possession of property besides the execution and registration of the sale deed.
25. After dissecting what each of five judges had had to say in the case of Moolji Jaitha Das J held in paragraph 10 and 16 :
10. The sum and substance of the view expressed above is that if the suit is for specific performance of the contract simplicitor without involving the issue of handing over of possession of the land or involving title to the property and relating to any interest thereto, it cannot be said to be a suit "for land."
16. Where the Court is called upon to adjudicate a dispute relating to a land or immovable property to grant or decline the decree, then the suit is for land in case for a specific performance of the Contract for sale is concerned. On the other hand, if the adjudication centres round on an execution and registration of sale deed, not on the control or power in respect of the title or possession of the land, then it cannot be called as a suit for land.
26. The Supreme Court in the case of Adcon Electronics Pvt. Ltd. Vs. Daulat and Anr., (2001) 7 Supreme Court Cases 698, whilst considering same question under clause 12 of the Letters Patent drawing from the case of Yenkoba (Supra) as also His Highness Holkar (Supra) held that if the suit asked for delivery of land, was substantially for the land, for acquiring title to or control over the land, claimed possession of the land, it was a suit for land. If the suit was simplicitor for specific performance of a contract for sale or a execution of conveyance or where the title was not denied or delivery or possession was not asked, it was not a suit for land.
::: Downloaded on - 27/11/2013 20:24:51 :::jsn 20 CHS No. No.720_2013 Though that suit was for execution of the sale deed and to distribute the sale proceeds, no title or possession was asked. The ownership was admitted and it was held to be not a suit for land.
27. The case which is on all fours the facts of this case is the case of New Age Realty Pvt. Ltd., Vs. M/s. Karthikeya Ancilaries Pvt. Ltd. & Anr., 2012 (2) Arb L J 241(Cal) of the Single Judge of the Calcutta High Court Sanjib Banerjee, J. That was the case of a joint development agreement. The Defendants' title to the land was not in question. The Plaintiff asserted that possession was made over it. However, certain work had to be performed on the land and construction work had to be undertaken on the land. It was observed with regard to development agreement in paragraph 21 of the judgment :
A development agreement, by its very nature, has to be inextricably connected to the land that it relates to. There is no dispute that it is a development agreement relating to Coimbatore property that the parties fight over. It may be true that the Petitioner herein is in possession of the property, but such possession is not by virtue of any immediate right or title relating to the property; but only by virtue of development agreement itself and the obligation of the Petitioner to perform in terms thereof.
It was observed that the possession of the land was for constructing a shop, mall and commercial complex and the disputes between the parties were completely rooted in the land and cannot be divorced there from. The suit did not relate to the execution of the document. It involved the construction upon the land.
The question that arose in that suit was with regard the Plaintiffs' right, title and interest in the land. The Plaintiff remained in possession of the land and the Plaintiffs entitlement was to a sizeable portion of the constructed space upon the land. It was observed that :::: Downloaded on - 27/11/2013 20:24:51 :::
jsn 21 CHS No. No.720_2013 .... disputes between the parties are so closely connected to the Coimbatore land that any claim in relation to the development agreement made by the Petitioner would be a suit for land.
28. In this case, as aforesaid, the Petitioner has put up its machinery, staff for the construction and the ultimate construction upon the land. Several buildings have been constructed fully or in part. The parties are entitled to a part of the construction each as per the directions of the development agreement or amount in cash as per the MOU. The development work is in progress. An order for protection of the property pending the arbitration would involve the land itself. The dispute has nothing to do with the rights of the parties in personam only. The possession and the title are disputed.
The specific performance that is sought is not only for executing any document, any possession being ancillary as in the case of Dr. Prem Prakash (Supra). The title, possession and control of the land is claimed as in the case of Jolly Elevators (Supra). The disputes in the development agreement are closely connected with the land, the possession of which is disputed by the parties. The suit is a suit for land. It would have to be filed in Indore where the land is situate.
This Court would have no territorial jurisdiction at all.
29. Leave granted by this Court is, therefore, revoked.
30. Chamber Summons is disposed off accordingly.
( ROSHAN DALVI, J. ) ::: Downloaded on - 27/11/2013 20:24:51 :::