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2011 DIGILAW 472 (CAL)

H. Guru Instruments Private Limited v. Mrs. Dipti Mookherjee

2011-04-01

SANJIB BANERJEE

body2011
Judgment : SANJIB BANERJEE, J. The suit has been recently filed for specific performance of an agreement for sale of an immovable property in Puri. The first relief claimed is for specific performance of the agreement by directing the defendant to execute the deed of conveyance relating to the property in terms of the agreement of February 23, 2010. The second relief claimed is for permanent injunction restraining the defendants from alienating or transferring or selling the suit property to any person other than the plaintiff “till disposal of the suit.” There are the other usual reliefs for receiver and attachment. GA No. 495 of 2011 is the plaintiff’s application for interlocutory orders in aid of the ultimate reliefs claimed in the suit. GA No. 660 of 2011 is the defendants’ application for dismissal and or rejection of the plaint relating thereto. Though the later application claims to have been made on behalf of all the defendants, the affidavit of competency filed by the first defendant shows that only the defendant nos. 2 to 4 have given her the authority to prosecute or defend any litigation concerning their rights and interests in respect of the assets inherited by them from their deceased father, who was the husband of the first defendant. There does not appear to be any authority on behalf of the fifth defendant that would allow the first defendant to represent the fifth defendant. It must be recorded at the outset that upon the application for rejection of the plaint being received, the plaintiff was afforded time to consider whether a suitable application need be brought for correcting the apparent mistakes in the plaint. The plaintiff has, however, stood its ground to defend the plaint. The cause-title in the plaint claims the first and fifth defendants to be associated with a Harrington Street address within jurisdiction. The addresses of the second, third and fourth defendants are shown to be outside jurisdiction. The suit has been lodged without leave under clause 12 of the Letters Patent, 1857. The cause-title is a departure from the usual practice where it is generally indicated as to whether the defendants, if they are human individuals and not firms or bodies corporate or the like, dwell or carry on business or personally work for gain within the territorial limits of the Original Side of this Court. The cause-title is a departure from the usual practice where it is generally indicated as to whether the defendants, if they are human individuals and not firms or bodies corporate or the like, dwell or carry on business or personally work for gain within the territorial limits of the Original Side of this Court. The plaint says that the defendants are the owners of a property in Puri situated outside the jurisdiction which the defendants were desirous of selling at Rs.1.7 crore. According to the plaint, the parties executed an agreement on February 23, 2010 under which “the plaintiff pay Rs.10,00,000/- … as earnest money and assured to pay the balance sum of Rs.1 Crore 70 Lakhs by 31.12.2010.” A copy of the agreement is appended to the plaint. It is the plaintiff’s case that the second, third and fourth defendants executed a power of attorney relating to the suit property in favour of the first defendant. Paragraph 11 of the plaint asserts that though the sale of the property was to be completed by December 31, 2010 in terms of the agreement of February 23, 2010, “the defendants failed to comply with the terms and conditions of the agreement.” The plaint proceeds to refer to a notice dated December 14, 2010 that was issued on behalf of the plaintiff to the defendants. Paragraph 12 of the plaint is of some relevance: “12. Although the defendants duly received the notice dated 14.12.2010 but failed to comply with the terms and conditions of the Agreement and did not handed over the documents relating to the property and also failed to give instruction of the suit property for the reasons best known to them. Xerox copy of the letter dated 14.12.2010 is annexed herewith and marked as Annexure “B” to the plaint.” Paragraph 15 of the plaint emphasises that despite receipt of the plaintiff’s notice the defendants violated the terms and conditions of the agreement dated February 23, 2010. Such paragraph is the justification for the relief of specific performance claimed in the suit. The succeeding paragraph is the pleading in support of the relief of injunction but, as in the relevant relief, the case is that such injunction should only be till the disposal of the suit. For varying reasons, the last two paragraphs of the plaint need to be noticed in the plaintiff’s words: “19. The succeeding paragraph is the pleading in support of the relief of injunction but, as in the relevant relief, the case is that such injunction should only be till the disposal of the suit. For varying reasons, the last two paragraphs of the plaint need to be noticed in the plaintiff’s words: “19. The cause of action of this suit arose on 23.02.2010 when the agreement was entered into by and between the parties and also on 14.12.2010 and on 31.12.2010 and the same is also continuing day by day. The cause of action arose at 10B, Ho-Chi-Minh Sarani, Kolkata 700071 and as such this Hon’ble Court has got the jurisdiction to try this suit.” “20. That the defendants are trying to transfer the suit property or assign to any other party or sale out of the suit property without any informing to the plaintiff.” Paragraph 19 has been quoted since it is the very basis for carrying the action to this Court and on it hinges the fate of the application for rejection of the plaint. The last paragraph of the plaint has been extracted to indicate the general quality of the plaint. The applying defendants submit that though the plaint does not specifically say that the entirety of the plaintiff’s cause of action had arisen within the jurisdiction of this Court, in the relevant sentence in paragraph 19 of the plaint and the fact that no leave under clause 12 of the Letters Patent has been sought despite the addresses of three of the defendants being shown to be outside the territorial limits of this Court in exercise of its original jurisdiction, it is implicit that the plaintiff founds the suit on the basis of the entirety of its cause of action having arisen within jurisdiction. The applying defendants refer to the agreement of February 23, 2010 which forms a part of the plaint. They point out that the relevant clause of the agreement that records that upon payment of the balance consideration on or before December 31, 2010, “the Purchaser shall have the right of possession of the said property forthwith and the Vendors shall execute a deed of conveyance …”. They point out that the relevant clause of the agreement that records that upon payment of the balance consideration on or before December 31, 2010, “the Purchaser shall have the right of possession of the said property forthwith and the Vendors shall execute a deed of conveyance …”. There are two facets to the application for rejection of the plaint: that in the plaintiff issuing the notice dated December 14, 2010 to some of the defendants outside jurisdiction and relying on such letter as part of its cause of action, it is evident that a part of such cause of action had arisen outside jurisdiction; and, that this is a suit for land relating to an immovable property which is admittedly situated outside the jurisdiction of this Court. The applying defendants also suggest that even if the notice of December 14, 2010 is disregarded and the claim is seen to have been founded on the defendants’ failure to convey the property by December 31, 2010, a part of the cause of action would still have arisen outside the jurisdiction of this Court. The applying defendants refer to the agreement of which specific performance has been sought. They say that the obligation of the defendants under such agreement was to convey the property in favour of the plaintiff. Conveyance of an immovable property, according to the applying defendants, would also include registration thereof since conveyance without registration would be meaningless. The applying defendants have also referred to Section 2(10) of the Stamp Act, 1899 that defines conveyance. The applying defendants cite Section 54 of the Transfer of Property Act, 1882 that mandates that sale, implying the transfer of ownership in exchange for a price paid or promised or part-paid and part-promised, in case of tangible immovable property of the value of one hundred rupees and upwards can be made only by a registered instrument. The argument is that implicit in the prayer for execution of the conveyance is the demand for registration thereof. The applying defendants next draw attention to Section 28 of the Registration Act, 1908 that provides the place for registering documents relating to land. The section declares that the relevant document shall be presented for registration in the office of a sub-registrar within whose sub-district the whole or some portion of the property to which the document relates is situate. The applying defendants next draw attention to Section 28 of the Registration Act, 1908 that provides the place for registering documents relating to land. The section declares that the relevant document shall be presented for registration in the office of a sub-registrar within whose sub-district the whole or some portion of the property to which the document relates is situate. The applying defendants move on to Section 30 of the Registration Act that was amended in 2001 by deleting sub-section (2) there from. Prior to the amendment, it was possible to have documents relating to immovable properties registered in certain presidency towns, including Calcutta, despite the immovable property covered by the document being situated outside such presidency towns. A judgment reported at (1989) 2 SCC 163 (A.B.C. Laminart (P) Ltd v. A.P. Agencies) is placed by the applying defendants for the statement of law therein as to the situs of cause of action in claims pertaining to contracts. Paragraph 15 of the report has been relied on: “15. In the matter of a contract there may arise causes of action of various kinds. In a suit for damages for breach of contract the cause of action consists of the making of the contract, and of its breach, so that the suit may be filed either at the place where the contract was made or at the place where it should have been performed and the breach occurred. The making of the contract is part of the cause of action. A suit on a contract, therefore, can be filed at the place where it was made. The determination of the place where the contract was made is part of the law of contract. But making of an offer on a particular place does not form cause of action in a suit for damages for breach of contract. Ordinarily, acceptance of an offer and its intimation result in a contract and hence a suit can be filed in a court within whose jurisdiction the acceptance was communicated. The performance of a contract is part of cause of action and a suit in respect of the breach can always be filed at the place where the contract should have been performed or its performance completed. If the contract is to be performed at the place where it is made, the suit on the contract is to be filed there and nowhere else. If the contract is to be performed at the place where it is made, the suit on the contract is to be filed there and nowhere else. In suits for agency actions the cause of action arises at the place where the contract of agency was made or the place where actions are to be rendered and payment is to be made by the agent. Part of cause of action arises where money is expressly or impliedly payable under a contract. In cases of repudiation of a contract, the place where repudiation is received is the place where the suit would lie. If a contract is pleaded as part of the cause of action giving jurisdiction to the court where the suit is filed and that contract is found to be invalid, such part of cause of action disappears. The above are some of the connecting factors.” The plaintiff insists that no part of its cause of action pleaded in the plaint had arisen outside the jurisdiction of this Court that necessitated leave under clause 12 of the Letters Patent being obtained at the institution of the suit. It says that the agreement is said to have been entered into within jurisdiction; that there is no prayer for possession of the property; and, that all that the plaintiff seeks is for execution of the conveyance pursuant to the agreement for sale that has been referred to in the plaint. The plaintiff submits that as to whether the mere execution of the conveyance would be adequate relief for the plaintiff, is not a matter that should concern the defendants. The plaintiff asserts that it will be happy to obtain a decree for execution of the conveyance relating to the Puri land and as to whether such decree will oblige the defendants to have the document registered is a matter that should be left till after the suit is concluded. The plaintiff has relied on the judgments reported at (2010) 1 Cal LT 274 (Hansraj Jain Karta of Hansraj Jain & Sons v. Santanu Chaudhuri) and 2010 (1) CHN 343 (Hindustan National Glass & Industries Ltd v. Ganesh Kumar Agarwal) to suggest that where possession of an immovable property situated outside the jurisdiction of this Court is not sought in a suit for specific performance of an agreement for sale of the property, the suit would not be a suit for land. As to whether the present suit is a suit for land is not relevant at the moment. Though the applying defendants have suggested that the tenor of the plaint and the nature of the reliefs claimed, if seen in the light of the agreement of which specific performance has been sought, would make this a suit for land, they have emphasised on the other aspect of the challenge: that even if the suit is not one for land, this Court was not competent to have received it. In such circumstances, as to whether the suit is a suit for land or not has not been considered at this stage. Subject to pecuniary limits, the authority of this Court to receive a suit in its original jurisdiction is governed by clause 12 of the Letters Patent. As has been recognised in a Full Bench judgment of this Court reported at 2009 (1) CHN 346 (M/s. Chainrup Sampatram v. Punjab & Sind Bank), there are three limbs to clause 12 of the Letters Patent. The first limb covers suits relating to immovable properties. The second limb speaks of the place of accrual of the cause of action in the suit. The final limb is based on the situs of the defendant at the time of commencement of the suit. Since it is not relevant at the moment to consider whether this is the suit for land, the second and third limbs of clause 12 of the Letters Patent have to be seen to assess the maintainability of this action in this Court. In a suit which is not a suit for land, the plaintiff has the choice of invoking the jurisdiction of this Court on either of the second and third limbs of clause 12 of the Letters Patent. If all the defendants are outside the jurisdiction of this Court at the time of the institution of the action, but the entirety of the plaintiff’s cause of action has arisen within the jurisdiction of this Court, the suit can be launched here without any leave being obtained under clause 12 of the Letters Patent. If all the defendants are outside the jurisdiction of this Court at the time of the institution of the action, but the entirety of the plaintiff’s cause of action has arisen within the jurisdiction of this Court, the suit can be launched here without any leave being obtained under clause 12 of the Letters Patent. Again, if a suit is not a suit for land and the entirety of the plaintiff’s cause of action has arisen outside the jurisdiction of this Court, but all the defendants are within jurisdiction, the suit can be lodged in this Court without obtaining leave under clause 12 of the Letters Patent. If, however, any of the defendants is, at the time of the commencement of the action, not within the jurisdiction of this Court and any part of the plaintiff’s cause of action has arisen outside the jurisdiction of this Court, prior leave under clause 12 of the Letters Patent has to be obtained for this Court to receive the action. Just as if an infinitesimal part of a plaintiff’s cause of action having arisen within the jurisdiction of this Court would entitle the plaintiff to lodge a suit in this Court based on such part of the cause of action having arisen within, but with prior leave under clause 12; if the territorial jurisdiction of this Court is invoked not on the basis of the situs of the defendants but on the situs of the cause of action, even if an infinitesimal part of the cause of action is seen to have arisen outside the territorial limits of this Court, the action in this Court would be incompetent without previous leave under clause 12 of the Letters Patent having been obtained. The question of territoriality in the context of a contract is, loosely speaking, based on the place of execution of the contract, the place or places for the performance thereof and the place or places where the breach may have occurred. The place of performance will, more often than not, be the place of the breach. The question of territoriality in the context of a contract is, loosely speaking, based on the place of execution of the contract, the place or places for the performance thereof and the place or places where the breach may have occurred. The place of performance will, more often than not, be the place of the breach. It is also necessary to remember that in an application in the nature of demurer, the allegations contained in the plaint have per force to be accepted as correct; the challenger is required to demonstrate either that if the statements contained in the plaint are accepted as correct the suit will fail without any help from the challenger or that the statements in the plaint as to the jurisdiction of the Court to receive the action are belied by the contents of the plaint or the documents forming a part of the plaint. The plaintiff has averred that the agreement of February 23, 2010 was executed within jurisdiction. The plaintiff has not said, in so many words, that the entirety of its cause of action had arisen within the territorial limits of this Court. But for the plaintiff to continue the action here, such assertion must be read into paragraph 19 of the plaint, particularly since the plaintiff did not obtain leave under clause 12 of the Letters Patent at the time of the institution of this suit. Though the plaintiff argues that its cause of action based on its demand of December 14, 2010 arose entirely within jurisdiction since the reply on behalf of all the defendants (or at least the defendant nos. 1 to 4) was issued from within jurisdiction and the fifth defendant received the demand within jurisdiction, it is evident from the notice that it was issued to the second, third and fourth defendants outside jurisdiction and a part of the plaintiff’s cause of action for seeking specific performance of the agreement has, accordingly, arisen outside jurisdiction. Even if the notice of December 14, 2010 is disregarded, as charitably suggested by the applying defendants, it is inescapable that a part of the plaintiff’s cause of action arose outside jurisdiction and the suit has been instituted without leave under clause 12 of the Letters Patent. The performance of the agreement of February 23, 2010 would entail the defendants’ execution of the deed of conveyance and the mandatory registration thereof. The performance of the agreement of February 23, 2010 would entail the defendants’ execution of the deed of conveyance and the mandatory registration thereof. The place of performance of the agreement was, therefore, partly in Puri or, at any rate, at the office of the relevant sub-registrar outside the jurisdiction of this Court. The suit could only have been instituted in this Court upon leave under clause 12 of Letters Patent having been obtained since a part of the plaintiff’s cause of action, as evident from the plaint and the agreement appended thereto, arose outside jurisdiction. The matter can be viewed from another perspective. Say, the defendants had signed the deed of conveyance but had not condescended to travel to the relevant sub-registrar’s office in Puri or thereabouts. It was possible then for the plaintiff to bring a claim to compel the defendants to complete the registration of the document. The registration of the document is, therefore, included in the bundle of the defendants’ obligations under the agreement as made out in the plaint. A part of the plaintiff’s cause of action as pleaded has evidently arisen outside the jurisdiction of this Court and the plaintiff has brought the action without obtaining leave under clause 12 of the Letters Patent. The suit in its present form is found to be incompetent. All that the plaintiff was required to do was to obtain leave under clause 12 of the Letters Patent for the suit to have been maintained in this Court. GA No. 660 of 2010 is allowed by rejecting the plaint relating to CS No. 15 of 2011. As a consequence, GA No. 495 of 2011 stands dismissed. Though the defendants would have been entitled to costs, no costs are awarded in view of the reckless assertion by the applying defendants that GA No. 660 of 2011 had also been filed on behalf of the fifth defendant. Urgent certified photocopies of this judgment, if applied for, be supplied to the parties subject to compliance with all requisite formalities.