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2015 DIGILAW 563 (ORI)

BAJRANG METALLICS LTD. v. SHIVOM MINERALS LTD.

2015-09-25

K.R.MOHAPATRA

body2015
JUDGMENT : Krushna Ram Mohapatra, J - The plaintiff in C.S. No. 166 of 2008 has filed this appeal under Order 43 Rule 1(a) of the C.P.C. assailing the judgment dated 1.5.2009 passed by the learned Civil Judge (Senior Division), Rourkela directing him to take return of the plaint for its presentation in proper Court. 2. Factual matrix of the suit relevant for proper adjudication of the case is that C.S. No. 166 of 2008 was filed with a prayer to pass a decree of Rs. 18,05,332.21 paise, pendente lite and future damages at the rate of Rs. 18,000/- per day for illegal occupation of the plant premises of the plaintiff by the defendant and not removing its iron ore materials and for mandatory injunction along with cost of the suit. The plaintiff and defendant are companies registered under the Companies Act, 1956. By virtue of the agreement executed between the parties on 2.1.2005, the defendant took the crushing plant of the plaintiff on hire for a period from 1.1.2005 to 30.11.2005 for a consideration of Rs. 1,43,00,000/-. The defendant-company had paid 11 postdated cheques each for Rs. 13,00,000/-. On expiry of the period agreed upon, the plaintiff allowed the defendant to continue the business for a further period of two months on the said terms and conditions for a consideration of Rs. 26,00,000/-. It was also agreed between the parties that the defendant should pay the electricity charges during the aforesaid period. On expiry of the extended period of agreement, i.e. on 1.2.2005, the defendant-company failed to remove the iron ore materials, structures and machineries installed by them within thirty days. He turned deaf ear to the repeated requests of the plaintiff for removal of the aforesaid materials. The defendant also did not pay the consideration amount of Rs. 26,00,000/- as well as electricity charges etc. Hence, the plaintiff filed a suit for the aforesaid relief. 3. The defendant-respondent filed a written statement admitting the averments made in paragraphs- 1 to 3 of the plain in its entirety. He also admitted the averments made in paragraphs-4 and 5 partly and refuted all other averments made by the plaintiff. The defendant challenged the maintainability of the suit as well as cause of action for filing of the suit and categorically asserted that the learned Civil Judge (Senior Division), Rourkela lacked territorial jurisdiction to entertain and try the suit. He also admitted the averments made in paragraphs-4 and 5 partly and refuted all other averments made by the plaintiff. The defendant challenged the maintainability of the suit as well as cause of action for filing of the suit and categorically asserted that the learned Civil Judge (Senior Division), Rourkela lacked territorial jurisdiction to entertain and try the suit. The defendant contended that prior to the agreement dated 2.1.2005, they had entered into an agreement with the plaintiff on 1.10.2004 for running the business as per the terms and conditions stated therein. On expiry of the term of the said agreement, a fresh agreement was executed on 2.1.2005, which was valid up to 30.11.2005. As per the terms and conditions of the agreement on its determination, the employees of the defendant had initiated the process of removal of machineries, pipelines, structures etc. within the stipulated period. However, the plaintiff requested the defendant to carry on the business expressing his precarious financial condition. Thus, accepting the request of the plaintiff, the defendant carried on its business activities on the same terms and conditions. However, the condition with regard to the rent of the plant was modified to the effect that the defendant would pay Rs. 7.00 lakhs to the plaintiff for the month of December, 2005 and Rs. 6.00 lakhs for the month of January, 2006. Accordingly, the defendant had paid the rent vide Cheque No. 923016 dated 30.12.2005 and 923017 dated 5.1.2006 of Rs. 7,00,000/- and Rs. 6,00,000/-respectively drawn on Bank of Borada, Rourkela. The defendant specifically denied its liability to pay the monthly rent at the rate of Rs. 13,00,000/- per month. Further, the defendant had erected certain structures and installed certain machineries which they wanted to remove during 1st week of February, 2006 but the plaintiff obstructed the same and requested them to carry on business and requested for negotiation. As a result, the defendant could not remove the same. The defendant also contended that the plaintiff had violated the terms and conditions of the agreement for which they were not liable to pay any compensation and prayed for dismissal of the suit with cost. 4. Taking into consideration the rival contentions of the parties, the learned trial court framed as many as seven issues. The learned trial court for the sake of convenience took up Issue Nos. 4. Taking into consideration the rival contentions of the parties, the learned trial court framed as many as seven issues. The learned trial court for the sake of convenience took up Issue Nos. 1 and 3 for adjudication and held that the Court lacked territorial jurisdiction to try the suit and directed the plaintiff to take return of the plaint to be presented before the competent court. Issue Nos. 1 and 3 are as follows: "(i) Is the suit maintainable? (ii) Had this Court jurisdiction to try the suit?" 5. It is not disputed that the property i.e. Crusher Unit situates at village Somua under Kaira P.S. in the district of Sundargarh beyond the territorial jurisdiction of the learned Civil Judge (Senior Division), Rourkela. The suit agreement dated 2.1.2005 (Ext. 1) was executed at Rourkela. However, both the plaintiff and the defendant ordinarily reside within the territorial jurisdiction of the learned trial court and voluntarily carry on their business and personally work for gain at Rourkela. The defendant raised the question of maintainability of the suit on the ground of lack of territorial jurisdiction of the Court to try the suit on the allegation that the property involved in the suit situates beyond the territorial jurisdiction of the Court in which the suit was instituted. 6. Mr. P. Mohapatra, learned counsel for the appellant strenuously urged that the suit is for realization of compensation and damages. The learned trial court misconstruing the same to be recovery of immovable property and misreading the provisions of Section 16 of the C.P.C. has passed the impugned judgment which has resulted in grave miscarriage of justice. He further contended that the learned trial court did not, at all, take into consideration the proviso to Section 16 of the C.P.C. which is squarely applicable to the case at hand. He further contended that this being not a suit for possession or determination of any right or interest relating to the suit property and the suit being filed for compensation which can be entirely obtained through personal obedience of the defendant, the same is maintainable before the learned Civil Judge (Senior Division), Rourkela. 7. Mr. He further contended that this being not a suit for possession or determination of any right or interest relating to the suit property and the suit being filed for compensation which can be entirely obtained through personal obedience of the defendant, the same is maintainable before the learned Civil Judge (Senior Division), Rourkela. 7. Mr. A.K. Mohapatra, learned counsel for the respondent, on the other hand, refuting the contentions of the learned counsel for the appellant submitted that the suit is essentially covered under Clause (d) and (e) of Section 16 C.P.C. In view of the provisions contained in Section 16(d) and (e) of the C.P.C., the suit for determination of any right to or interest in immovable property other than recovery of possession, partition, foreclosure, sale or redemption of mortgage and for compensation for wrong to immovable property shall be instituted in the Court within whose local limits of jurisdiction the property situates. However, proviso to Section 16 carves out an exception to the effect that where the immovable property is held by or on behalf of the defendant and the relief sought can be entirely obtained through his personal obedience, the suit may be instituted either in the Court within the local limits of whose jurisdiction the property situates, or in the Court within the local limits of whose jurisdiction the defendant actually and voluntarily resides, or carries on business, or personally works for gain. Thus, the proviso to Section 16 applies only to the cases where the immovable property is held by or on behalf of defendant. In that event, the plaintiff has two options i.e. either to institute the suit in the Court within the local limits of whose jurisdiction the property situates or in the Court within the local limits of whose jurisdiction the defendant actually and voluntarily resides and carries on business, or personally works for gain. Had the immovable property been held by or on behalf of the defendant in the present case, the Court in Rourkela would have assumed jurisdiction to entertain the suit filed by the plaintiff. Had the immovable property been held by or on behalf of the defendant in the present case, the Court in Rourkela would have assumed jurisdiction to entertain the suit filed by the plaintiff. He further submitted that the learned court below on scrutiny of the pleadings and the evidence of the plaintiff with regard to possession over the immovable property in dispute came to a conclusion that the defendant had handed over possession of the immovable property in dispute to the plaintiff after expiry of the agreement period on 1.02.2006, which was admitted by the plaintiff in its plaint as well in its evidence in para-8. In view of the above, the proviso to Section 16 of the C.P.C. has no application to the facts of the present case and the plaintiff should have instituted the suit in a Court having jurisdiction over the immovable property in dispute and not before the Court situated in Rourkela. Thus, the leaned trial court has rightly directed the plaintiff to take return of the plaint to file the same before the Court having territorial jurisdiction over immovable property i.e. Crusher Unit. 8. In order to analyze the rival contentions raised by the parties, it is profitable to go through the provisions under Section 16 of C.P.C. Section 16 of the C.P.C. reads as follows: "16. 8. In order to analyze the rival contentions raised by the parties, it is profitable to go through the provisions under Section 16 of C.P.C. Section 16 of the C.P.C. reads as follows: "16. Suits to be instituted where subject-matter situate -Subject to the pecuniary or other limitations prescribed by any law, suits- (a) for the recovery of immovable property with or without rent or profits, (b) for the partition of immovable property, (c) for foreclosure, sale or redemption in the case of a mortgage of or charge upon immovable property, (d) for the determination of any other right to or interest in immovable property, (e) for compensation for wrong to immovable property, (f) for the recovery of movable property actually under distraint or attachment, shall be instituted in the Court within the local limits of whose jurisdiction the property is situated: Provided that a suit to obtain relief, respecting, or compensation for wrong to, immovable property held by or on behalf of the defendant may, where the relief sought can be entirely obtained through his personal obedience, be instituted either in the Court within the local limits of whose jurisdiction the property is situated or in the Court within the local limits of whose jurisdiction the defendant actually and voluntarily resides, or carries on business, or personally works for gain." Proviso to Section 16 C.P.C. provides that the suit to obtain relief, respecting, or compensation for wrong to the immovable property held by or on behalf of the defendant, where the relief sought can be entirely obtained through personal obedience, can be instituted either in the Court within the local limits of whose jurisdiction the property situates or in the Court within the local limits of whose jurisdiction the defendant actually or voluntarily resides or carries on business or personally works for gain. The Hon'ble Supreme Court in the case of Harshad Chiman Lal Modi Vs. DLF Universal and Another, AIR 2005 SC 4446 : (2006) 101 CLT 5 : (2005) 5 CTC 133 : (2005) 8 JT 561 : (2005) 7 SCALE 533 : (2005) 7 SCC 791 : (2005) AIRSCW 5369 : (2005) 6 Supreme 634 , held at paragraphs-16, 17 and 18 as follows: "16. Section 16 thus recognizes a well established principle that actions against res or property should be brought in the forum where such res is situate. Section 16 thus recognizes a well established principle that actions against res or property should be brought in the forum where such res is situate. A court within whose territorial jurisdiction the property is not situate has no power to deal with and decide the rights or interests in such property. In other words, a court has no jurisdiction over a dispute in which it cannot give an effective judgment. Proviso to Section 16, no doubt, states that though the court cannot, in case of immovable property situate beyond jurisdiction, grant a relief in rem still it can entertain a suit where relief sought can be obtained through the personal obedience of the defendant. The proviso is based on well known maxim "equity acts in personam, recognized by Chancery Courts in England. Equity Courts had jurisdiction to entertain certain suits respecting immovable properties situated abroad through personal obedience of the defendant. The principle on which the maxim was based was that courts could grant relief in suits respecting immovable property situate abroad by enforcing their judgments by process in personam, i.e. by arrest of defendant or by attachment of his property. 17. In Ewing v. Ewing, (1883) 9 AC 34 : 53 LJ Ch 435, Lord Selborne observed : "The Courts of Equity in England are, and always have been, courts of conscience operating in personam and not in rem; and in the exercise of this personal jurisdiction they have always been accustomed to compel the performance of contracts in trusts as to subjects which were not either locally or ratione domicilli within their jurisdiction. They have done so, as to land, in Scotland, in Ireland, in the Colonies, in foreign countries." 18. The proviso is thus an exception to the main part of the section which in our considered opinion, cannot be interpreted or construed to enlarge the scope of the principal provision. It would apply only if the suit falls within one of the categories specified in the main part of the section and the relief sought could entirely be obtained by personal obedience of the defendant." Admittedly, the instant suit is for compensation for wrong to the immovable property which situates beyond the local limits of learned Civil Judge (Senior Division), Rourkela i.e. under Kaira P.S of Sundargarh District. In the instant case, the plaintiff does not seek for a relief in rem. In the instant case, the plaintiff does not seek for a relief in rem. The relief sought for can be obtained through the personal obedience of the defendant adhering to the principles of 'equity acts in personam' as it is a suit to obtain relief, respecting, or compensation for wrong to, immovable property. 9. Thus, the question remains to be decided as to whether the suit property is held by or on behalf of the defendant-company. The plaintiff-company in para-10 of the plaint pleads as follows: "10. That as agreed the defendant stopped the use of the crushing plant of the plaintiff from 1.2.05 onwards and handed over the possession of the plant to the plaintiff, but as agreed the defendant did not remove all his iron ore materials left in the plant premises of the plaintiff within 30 (thirty) days of 31.1.06 in spite of repeated demands and requests. Which has also caused hindrances, obstacle, and great inconvenience in the smooth and profitable operation of the crushing plant by the plaintiff, in course of his personal use and operation of the plant from and after the period 1.2.06." Again reiterating the pleadings in para-10 of the plaint, the P.W.1 in his deposition stated on oath as follows: "8. That as agreed the defendant handed over the possession of the crushing plant on expiry of it's period on 1.2.06 but did not remove all his iron ore material stored in the plant premises of the plaintiff within 30 days of 31.1.06 in spite of repeated demands and request of the plaintiff, which has also caused hindrances, obstacle and great inconvenience in the smooth and profitable operation of the crushing plant by the plaintiff in the course of his personal use and operation of the plant from the and after the period 1.2.06." Moreover, the suit is for damages for occupying the plant premises of the plaintiff and not removing the iron ore materials by the defendant from the plant premises. 10. It is clear from the pleadings, deposition of the witness of the plaintiff and the relief sought for in the suit that though the possession of the crushing plant was handed over to the plaintiff on 1.2.2006, the defendant did not remove the iron ore and other materials stored in the plant premises of the plaintiff and the defendant was occupying the plant premises creating hindrance to the plaintiff. Thus, it cannot be held that the plant premises, where the iron ore and other materials were stacked by the defendant, was handed over to the plaintiff. The defendant continued to hold and remain in possession over the same. Moreover, the suit is filed for compensation for wrong to the suit land where the iron ore and other materials were stacked. There cannot be any dispute that the suit property includes the plant and the premises. When the materials of the defendant stacked in the plant premises are admittedly not removed and the suit was filed for compensation/damages for such occupation of the defendant, it can be safely held that a portion of the suit property is still in possession and occupation of the defendant. In that view of the matter, the finding of the learned trial court to the effect that the proviso to Section 16 of the C.P.C. is not applicable to the case at hand, is not sustainable. 11. The learned Civil Judge (Senior Division), Rourkela relied upon the decision in the case of Harshad Chiman Lal Modi Vs. D.L.F. Universal Ltd. and Another, AIR 2006 SC 646 : (2006) 102 CLT 128 : (2006) 1 CTC 64 : (2005) 10 JT 567 : (2006) 142 PLR 606 : (2006) 1 SCC 364 : (2005) 3 SCR 495 Supp : (2006) 1 UJ 305 : (2005) AIRSCW 6533 : (2005) 6 Supreme 634 : (2005) 8 Supreme 450 wherein it was held as under: "Since the dispute relates to immovable property and the prayer was for specific performance of an agreement on sale of immovable property and recovery of possession thereof, the relevant provision was Section 16 of the Code. Under Clause (d) of the said section, only Gurgaon Court had jurisdiction. We also held that notwithstanding the agreement between the parties that only Delhi Court had jurisdiction, the said clause could not operate as section 20 of the Code could not be invoked. According to us Section 20 would apply where two or more courts had jurisdiction and the parties by an agreement consented that one of such Courts would try the suit." 12. There cannot be any dispute with regard to the ratio decided above in the case of Harshad Chiman Lal Modi Vs. According to us Section 20 would apply where two or more courts had jurisdiction and the parties by an agreement consented that one of such Courts would try the suit." 12. There cannot be any dispute with regard to the ratio decided above in the case of Harshad Chiman Lal Modi Vs. D.L.F. Universal Ltd. and Another, AIR 2006 SC 646 : (2006) 102 CLT 128 : (2006) 1 CTC 64 : (2005) 10 JT 567 : (2006) 142 PLR 606 : (2006) 1 SCC 364 : (2005) 3 SCR 495 Supp : (2006) 1 UJ 305 : (2005) AIRSCW 6533 : (2005) 6 Supreme 634 : (2005) 8 Supreme 450 . However, the aforesaid ratio is not applicable as the facts involved and relief sought for in the instant case is completely different to the case at hand. In the reported case (supra), the appellant claimed for specific purpose of an agreement for sale of immovable property and recovery of possession thereof, which comes under Clause (a) and (c) of Section 16, C.P.C. On the other hand, the instant case is squarely covered under Section 16(e) of C.P.C. Thus, the principles decided in the case of Harshad Chiman Lal Modi Vs. DLF Universal and Another, AIR 2005 SC 4446 : (2006) 101 CLT 5 : (2005) 5 CTC 133 : (2005) 8 JT 561 : (2005) 7 SCALE 533 : (2005) 7 SCC 791 : (2005) AIRSCW 5369 : (2005) 6 Supreme 634 has an application to the facts and circumstances of this case. 13. Mr. P. Mohapatra, learned counsel for the appellant further relied upon a decision in the case of S. Kumar Investment and Properties Vs. D.D. Resorts Pvt. Ltd. and in the said case, the Hon'ble Court relying upon the decision in the case of Harshad Chiman Lal Modi (supra) held as under: "16. After having considered the legal proposition and facts of this case from which it is clear that plaintiff is already in possession of suit property, I am of the view that proviso of Section 16(d) of CPC would have application to the facts of this case. Proviso is based on the maxim equity acts in personam. After having considered the legal proposition and facts of this case from which it is clear that plaintiff is already in possession of suit property, I am of the view that proviso of Section 16(d) of CPC would have application to the facts of this case. Proviso is based on the maxim equity acts in personam. Under the proviso even though the immovable property is not situated within the jurisdiction of a court, a suit in respect of compensation to the immovable property may at the option of the plaintiff be instituted in that court if the person of the defendant or his personal property is within its jurisdiction and the relief asked for can be entirely obtained through defendant's personal obedience." Thus, the relief sought for with regard to compensation which includes the suit amount, compensation, pendent lite interest and future damages can be granted by the leaned Civil Judge (Senior Division), Rourkela. 14. In view of the above, the impugned judgment and order is set aside and the matter is remitted back to the learned Civil Judge (Senior Division), Rourkela for fresh adjudication in accordance with law. Accordingly, the appeal is allowed, but in the circumstances, there shall be no order as to costs. Final Result : Allowed