Bombay High Court
Jolly Elevators Pvt. Ltd. vs J.M. Yagnik And Ors. on 4 August, 2000
Equivalent citations: AIR2001BOM68, 2001(1)BOMCR205, (2000)3BOMLR671, 2000(4)MHLJ366, AIR 2001 BOMBAY 68, (2000) 4 ALLMR 289 (BOM), 2000 (4) ALL MR 289, (2000) 4 MAH LJ 366, (2001) 1 BOM CR 205, 2000 (3) BOM LR 671
Author: T.K. Chandrashekhara Das
Bench: T.K. Chandrashekhara Das
ORDER T.K. Chandrashekhara Das, J.
1. This Notice of Motion is taken for injunction restraining from disturbing the possession of the plaintiff in Industrial Shed on sub Plot No. 21, village Hamrapur, Taluka Wada, Dist. Thane and also injuncting defendant and their agents from creating or encumbering or creating any third party right or inducting a third person on the said sub plot No. 22, and additional plot adjoining sub plot 22 of Gut No. 26, at village Hamrapur, Taluka Wada, Dist. Thane.
2. In reply to the Notice of Motion, defendant filed detailed reply disputing the contentions of the plaintiff. Among the several contentions, defendant raised jurisdictional question in Para 8 contending that this Court has no jurisdiction to entertain or try this suit as the suit property is situated outside the Jurisdiction of this Court and no cause of action arose in Bombay and leave of the Court ought to have been obtained under Rule 12 of the Letters Patent. For convenience, Para 5 of the affidavit in reply is extracted below :
"5. I further respectfully submit that the suit as framed and filed is untenable, not maintainable and that this Hon'ble Court has no jurisdiction to entertain and try the suit. Admittedly and undisputedly subject matter of the property/plots are situated at village Hamrapur, Taluka Wada, Dist. Thane out side the jurisdiction of this Hon'ble Court. The plaintiffs are seeking performance of alleged agreement allegedly entered Into in respect of the said 2 plots. The plaintiffs are also seeking order and decree from this Hon'ble Court for execution of sale deed in respect of sub plot No. 22 which is situate outside the jurisdiction of this Hon'ble Court. The plaintiffs have alleged certain breaches against Defendant No. 1 in respect of the construction of structure to be constructed on sub plot No. 21 in respect of which sale deed has been executed and registered at Bhiwandi. I respectfully submit that entire cause of action or at least substantial and material part of cause of action has arisen outside the jurisdiction of this Hon'ble Court, which the plaintiffs have deliberately and Intentionally failed and/or avoided to over in the plaint. Without prejudice to the aforesaid I further respectfully submit that the plaintiffs have not taken leave under Clause XII of the Letters Patent Act which is condition precedent to file and maintain the suit in this Hon'ble Court, the suit is therefore, bad in law, not maintainable, untenable and liable to be and should be dismissed with costs on this ground only. I respectfully submit that the above issue of maintenability and jurisdiction be tried, decided/adjudicated as preliminary issues. In view of the above facts I respectfully submit that the plaintiffs are not entitled for any reliefs in the above Notice of Motion and the same is therefore, liable to be and should be dismissed with compensatory costs."
3. In view of this preliminary objection raised as to the jurisdiction of this Court, I heard the parties with regard to this objection.
4. The suit is filed for specific performance of the oral agreement, the terms of which have been stated by the plaintiff at para 4 of the plaint. So called Agreement No. 1 relates to the Plot No. 21 and Agreement 11 relates to sub Plot No. 22 along with additional plot adjoining sub plot 22. Both the properties are situated at Thane which is outside local limits of this Court. The objection of the defendant is that since the property is situated outside the local Jurisdiction of this Court and plaintiff has prayed for possession of the suit property besides the execution and registration of the sale deed, this Court has no jurisdiction to entertain. Plaintiff's on the other hand contended that since the suit is merely for specific performance of the contract, lie of the land is immaterial and when the defendants are residing in Bombay, this Court has jurisdiction. The counsel for the plaintiff explained that the entire sale consideration of Rs. 5,42,000/-was paid and therefore, what is remaining is only the execution and registration of the documents and handing over the possession is only a consequential of the execution and registration of the documents. Therefore, situation of the land is not a factor to be considered for deciding the local jurisdiction of the Court. The learned counsel for the plaintiff to substantiate his contention brought to my notice the decision reported in AIR 1950 FC 83 in Moolji Jaitha and Co. v. Khandesh Spinning and Weaving Mills Co. Ltd. This is a decision of Bench consisting of five Judges to which Shri Kania C. J., Shri Fazil All, J., Shri Patanjali Sastri, J., Shri Mahajan, J. and Shri B. K. Mukherjee, J. are the parties to the judgment, in this judgment Shri Shastri and Mukherjee JJ. rendered minority Judgment whereas Shri Kania, C. J., Shri Fazal All, J. and Shri Mahajan, J. rendered majority judgment. The principal question that arose in that case is what is the meaning of "Suits for land" occurring in Clause 12 of the Letters Patent Act. Each one of the Hon'ble Judges have given their own reasons for their conclusion. The learned counsel for the plaintiff has relied upon the observation made by the Mahajan, J. who supported the majority view. In fact all the learned Judges have given their opinions about the interpretation of the Clause 12 of the Letters Patent. Before going to those findings, it is necessary to refer the brief facts involved in that case, the plaintiffs are joint stock company which is having its registered office at Bombay. The defendants were appointed Secretaries and Managing Agents of the Respondent. It is alleged in the plaint that on incorporation of the plaintiff company purchased lands at Jalgaon and erected on some of them a textile mill and structures accessories thereto. Subsequently as and when required for the purpose of the company, other places of land were purchased and godowns, workmen's premises and other structures were constructed their on. All the said lands, since their purchase, have been used by and for the purpose of the plaintiff company and have been in the plaintiff's possession and occupation. After setting out various Articles of Association of the Company dealing with the powers of the appellants as secretaries and treasurers, the plaint states that in or about September-October, 1940 the appellants transferred their office to Inder Singh and Sons Ltd. who became thereafter the secretaries and treasurers of the respondents. Subsequently, when Inder Singh and Sons Ltd. called upon the appellants to get transferred to the respondents some of the pieces of land herein before mentioned, which though belonging to the respondents were found to be standing in the Government records in the name of the appellants, they refused to do so and contended that the respondents were lessees of the said land's from the appellants. In the plaint respondent contended that some of the pieces of land were purchased by the appellants when they were secretaries and treasurers of the respondents in the name of the appellants, but with the monies which the respondents paid and for the purpose of the respondents as nominees of the respondents and for and on behalf of the respondents, the appellants being then in sole management of all affairs of the respondents. The respondents denied that any rent had been paid by them to the appellants for any of the said pieces of land. The respondents charged that the appellants had fraudulently got entries made in the respondents books at the close of the year, showing rent paid for the last year, by one of the old employees of the respondents. The respondents further charged that after the appellants ceased to be the secretaries, at a Boat meeting held on 13th December, 1940, at which no representative of Inder Singh and Sons Ltd. was present. Mr. Chaturbhuj of the appellant firm, taking advantage of the position, got two minutes of the meeting fraudulently recorded to support their wrongful claim to be owners of the said lands. In para 8 of the plaint, it is alleged that the plots of land set out therein did not belong to the appellants and the beneficial interest in the same had always been in the respondents and they stood in the name of the appellants only as benamidaras or trustees of the respondents. At a later stage of the proceedings, para 8A was added to the plaint. In that paragraph, it is stated that even if the appellants, during the period of their managing agency, purported to acquire on their own behalf the said lands, the appellants, being in fiduciary relationship to the respondents, were bound to protect the interests of the respondents and in law and equity were bound to hold the lands so acquired for the benefit of the respondents and to execute a legal conveyance in favour of the respondents if and when called upon to do so. The respondents alleged that in the acquisition of the said properties the appellants availed themselves of their position as the managing agents and their interests were in conflict with their duty."
5. Therefore, in the aforesaid cases before the Federal Court found on facts the possession was already with respondent/ plaintiff. What they sought is only specific performance of the contract. In that context, Shri Kania, C. J. held thus :
"It appears that to confine its meaning to a suit to obtain possession of land only is not proper, the object of trotting suits for land differently from other suits in the clause, which defines the jurisdiction of the original side of the High Court, is to respect the generally approved principle that disputes as to title or possession are ordinarily decided where the land is situated. Therefore, question of title to land and not merely to obtain possession of land should be covered by this expression. It seems equally clear that the widest meaning, which will include suits which have any reference to land, should also be rejected. The object cannot be that any question which indirectly or incidentally has any reference to land should be excluded from trial merely because the suit has some reference to land. In the ordinary way therefore, 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."
6. Shri Fazal Ali, J. held thus :
"In the view I take it is unnecessary to deal with the so-called substantial question of law said to be involved in the appeal, namely what is the exact meaning of the expression "suit for land". This question is said to be an important one, since there has been considerable divergence of opinion in regard to it; and if I had really felt that I was called upon to decide it, I would have agreed with the line Of cases in which it has been held that, broadly speaking, the expression "suit for land" covers the following three, classes of suit; (1) suits for the determination of title to land; (2) suits for possession of land; and (3) other suits in which the reliefs claimed, if granted would directly affect title to for possession of land."
7. Shri Patanjali Sastri, J. held thus :
"It is important to note that the company did not seek recovery of possession of the lands as it is their case that the lands have all along remained in their own possession and enjoyment. It is with reference to those two prayers that the controversy as to jurisdiction arises."
"That being, in my view, the gist of the plaintiffs' claim in regard to the land at Jalgaon. I am of the opinion-that the present suit is not a suit for land within the meaning of Clause 12. The plaintiffs, as has been stated, do not claim possession or control of the lands, being already in possession and enjoyment thereof. Nor do they ask for an adjudication of title to those lands. By their very demand for its transfer they concede that the legal title is vested in the defendants who have purchased the properties and got them entered in the Government records in their own names. All that the plaintiffs seek on this part of their case is the fulfilment of the personal obligation which, it is claimed, the law casts upon the defendants, to hold the properties for the benefit of the plaintiff's and to execute the necessary instruments conveying to them the legal title in those properties, an obligation arising out of the fiduciary relation between the parties and the circumstances relating to the acquisition of the properties as alleged in the plaint. The position is thus analogous to that is a suit for specific performance where the plaintiff conceding the defendant's title claims a conveyance of it in accordance with the contract. And as the defendants reside, and carry on business in Bombay and are thus amenable to the jurisdiction of the High Court, that Court can act in personam and compel the defendants to fulfill their fiduciary obligation though such fulfillment has reference to lands situate outside the jurisdiction."
8. Shri Mahajan, J. held thus :
"The expression "suit for land" in the clause has given considerable trouble to Judges who had to construe it and a voluminous literature has grown up around this expression. If the matter was to be decided on first impressions and without being involved in the subleties and distinctions discussed in a number of decided cases, it admits of an easy solution. I think that the clause was intended to mean that where the subject-matter of a suit or the subject in dispute was land or immovable property, then the High Court could only try and determine it provided that such land or property was situate within the local limits of its ordinary original jurisdiction. 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 jurisdiction regarding the first category of suits is exerclsable on the basis of the situation of the property, while jurisdiction in the second category of suits is exer-cisable by reason of the residence of the defendant or of his business or by reason of the cause of action arising within that forum, whether partially or wholly. The clause does not take into consideration the various reliefs that may be claimable in suits of different descriptions. 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 possessory title to land or immovable property. This construction of the expression "suit for land" in Clause 12 is in conformity with the rule that questions relating to the title or ownership of land shall be determined not only by the lex situs but also in forum situs. The statute does not override the fundamental juridical distinction which obtains in every organized community in the world, viz. that between decrees that effect the status of the individual or family or bring about proprio vigore an immediate change in the ownership of property, and decrees which merely purport to compel the defendant to do or obtain from doing something which the Court orders. Such decrees operate on the conscience of the defendant but not on his land. The subject-matter of a suit would not be land or Immovable property on this construction if the question concerning the land only arises incidentally in a suit, the real subject-matter of which is not land or Immovable property but say the administration of an estate or of a trust or taking accounts of a partnership in which no decree or order is claimed in respect of proprietary or possessory title to land or Immovable property." (Underlines supplied) "..... No definition expressed in general words can possibly be satisfactory in the sense of covering every case which may arise. The only method is to see if the facts of any particular case fall within the meaning of the words and the question had to be decided with reference to the essential nature of the relief sought. Except in the manner Indicated above, it is not possible to give a definition to the expression "suit for land". If an attempt is made to find a comprehensive definition of the phrase, it will eventually be discovered that it was created further complications. I therefore, content myself by saying that where the nature of the suit is such that in substance it involves a controversy about land or immovable property and the Court is called upon to decide conflicting claims to such property and a decree or order is prayed for which will being about a change in the title to it, that suit can be said to be in respect of land or Immovable property; but where incidentally in a suit, the main purpose of which or the primary object of which is quite different, some relief has to be given about land, the title to it not being in dispute in the real sense of the term then such a suit cannot fall within the four corners of this expression. In each case the Court has to determine the true nature of the suit and then to say whether the suit is in substance a suit which affects land or immovable property or whether it falls in the category "other cases". Cases can be visualized where no dispute as to title is raised but compensation is claimed for trespass or for any wrong done to Immovable property, or where a mortgages abandons the security and claims a money decree in respect of a mortgage debt. All such, cases will be outside the definition because though they may have reference to land or immovable property, no dispute as to title to such property has to be decided in them and the relief does not directly operate of the land."
Mahajan, J. further held :
"Finally, I would like to say a word, about suits for specific performance regarding which conflicting decisions have been pronounced by the High Court in India. 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 simpliciter for specific performance, i.e. for the enforcement of the contract of sale and for execution of a conveyance, in that event there can be no good ground for holding that such a suit is suit for determination of title to land or that the decree in it would operate on the land."
9. B.K. Mukherjea, J. held thus :
"Having regard to the scope and object of Clause 12, Letters Patent, it seems to me that the proper interpretation to be put upon the words "suits for land" would be to take them to mean a suit for establishing title to land or any interest in the same or for possession or control thereof; and the decree sought for must be intended proprio vigore to be enforceable against and binding on the land Itself."
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".
11. Following the observation of the Federal Court, several decisions of the High Courts in India and Supreme Court have discussed at the Bar. Some of them are referred to here.
12-13. In P.N.A. Vallappa Chettiar v. Saha Govinda Doss, reported in AIR 1929 Mad 721 : (ILR 52 Mad 809) (FB), it has been held by the Full Bench in that case considering facts involved therein that specific performance of an agreement to sell is an act in personam, therefore, it will not be suit for land. Shri Ramesan, J. has observed in the above judgment thus :
"I may observe that in a suit for specific performance the decree is primarily addressed to the defendant, that is, the Court acts in personam -- which a Court of Equity is always entitled to do. Though the land may be described in the conveyance, it is not going to be touched even in the execution of the decree as in the case of a decree for sale on a mortgage, nor does any issue as to the title to the land arise in such a suit. These are strong considerations for holding that a suit for specific performance is not a suit for land."
14. In Khandesh Spinning and Weaving Mills Ltd. v. Moolji Jaitha & Co., reported in AIR 1948 Bom 272, it is held that the Court will have to take the object of the suit. This is a case which was referred by Federal Court and discussed in AIR 1980 FC 83. In Bombay decision in Para 26 reads thus :
"The review of these authorities to my mind clearly establishes that out Courts have practically consistently taken the view that Clause 12, Letters Patent confers upon this Court an equity Jurisdiction similar to the one exercised by the English Courts; that the Court must in each case ascertain what is the primary object or the leading purpose of the suit. If that object for that purpose does not directly involve a question of title or right to land, then the suit is not a suit for land and further questions which may incidentally arise relating to title to land do not necessarily make the suit a suit for land, and Courts may even give a declaration as to title to land, if it becomes necessary for the purpose of effectuaing the main purpose of the suit, provided, as I have said such main purpose does not directly involve a question of title or right to land."
15. In Prem Prakash v. Neetu Dharamveer Bhatia, reported in (1995) 1 Mah LJ 869 : (1995 AIHC 3167), Shri S.M. Jhunjhunuwala, J. has held in taking into account the facts involves therein that a suit for specific performance of a contract of sale of land cannot be treated as suit for land. It has been held in that possession sought for in that suit was only consequential, it cannot be treated as the suits for land.
16. The principle that is emerged from the above decisions is that the questions whether the suits is for land or not, largely depend upon the pleadings and the relief sought in each suit. Whether 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 concerend. 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. Elaborate discussions by the Federal Court on the subject leads to the conclusion is that whether the contract is to be performed in personam or not depends upon the relief sought in the suit. The Federal Court on facts found in that case that the decree sought for has nothing to do with control or power of the land and hence that suit is not for land.
17. In the case in hand, a serious dispute is highlighted with regard to the adjoining additional land to plot No. 22 and decree for possession of that land is also asked for. The learned Counsel for the plaintiff has strongly urged that possession of the land is only an incidental as ancillary factor of the specific performance of the contract, therefore, the suit must be treated to have claimed a relief in personam. I cannot agree to this submission. After all agreement is an oral agreement. A serious dispute has contained in the pleadings of the parties as to what has been agreed upon between the parties which also involves possession of the adjoining additional land to Sub Plot No. 22. This is clear from the reply and her relief sought in the suit. Therefore, it cannot be treated as a contract in personam. Contention of the learned Counsel for the plaintiff that whenever suit is filed for specific performance of a contract for sale of immovable property, it should be automatically treated as a suit not for land cannot be accepted in the light of aforesaid decision. All depends upon facts and disputes raised in each case. It cannot be taken as a general rule. Therefore, I hold that the suit is for land. Accordingly as per Rule 12 of the Letters Patent, this Court has no territorial jurisdiction to entertain the suit because lands are situated in Thane. The objection raised by the defendant is sustained. Proper Court to entertain the suit would be the District Court, Thane in whose jurisdiction lands are situated.
18. Therefore, plaint is returned for representation to the District Court, Thane.
19. Parties are directed to appear before the District Court. Thane on 4th September. 2000.
20. Parties to act on the ordinary copy of this order authenticated by the Associate of this Court. P.A. to issue ordinary copy of this order.