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2017 DIGILAW 222 (MAD)

Bollineni Developers Ltd. v. K. Sailendra Kumar

2017-01-23

N.SATHISH KUMAR

body2017
JUDGMENT : N. Sathish Kumar, J. 1. This application has been filed to revoke the leave granted by this Court to institute the suit in Application No. 1700 of 2013. 2. The brief averments of the petition is as follows: The applicant is the second defendant. It is the contention of the applicant that the first defendant while purchasing the property by the funds provided by the Bollineni Developers Limited, instead of purchasing the property in the name of the first defendant group of companies as per the M.O.U. Dated 31.07.97, purchased in his name. In this regard, arbitration proceedings were instituted in respect of the M.O.U. dated 31.3.97 and the award was passed in favour of the second defendant. Even before initiating arbitration proceedings, the second defendant initiated proceedings under section 9 of the Arbitration and Conciliation Act 1996 for protection and preservation of the subject matter of the M.O.U. and secured an order of interim direction in respect of the property purchased by the first defendant from and out of the funds provided by the second defendant. The plaintiff is aware of the dispute between the first and second defendants and he filed the suit for enforcement of the contract in respect of the property said to have been executed by the first defendant. 3. The suit property is located outside the jurisdiction of this Court. The agreement dated 30.06.2008 between the fourth respondent and the plaintiffs show that the vacant possession shall be delivered at the time of execution of the sale deed. Now, the suit has been filed on the basis that the possession of the property has already been handed over on the basis of the subsequent payment made by the plaintiff herein. According to the applicant, the endorsement dated 04.08.2008 and 26.08.2008 were prepared on the same day and the payment admittedly stated to have been made before the agreement for sale have been manipulated and fabricated after commencing of the arbitration proceedings for the purpose of this case. Thus, the plaintiff has been put in possession of the property pursuant to a valid contract as alleged by the plaintiff. Even if the person seems to be in possession as per Act 48 of 2001, such agreement is required to be registered, in the absence of possession has not been delivered pursuant to the agreement for sale dated 30.06.2008 perse false. Even if the person seems to be in possession as per Act 48 of 2001, such agreement is required to be registered, in the absence of possession has not been delivered pursuant to the agreement for sale dated 30.06.2008 perse false. It is the further contention of the applicant that the suit itself ought to have been filed on 29.06.2011. Hence, the suit itself is barred by limitation. The agreement of the sale is subject to the rights of the second defendant. The plaintiff who is seeking the relief of specific performance of the contract, in effect seeking control over the immovable property which is admittedly located outside the jurisdiction. Hence, it is the contention of the applicant that since the suit property is situated outside the jurisdiction of this Court, and falls within the jurisdiction of Sriperumbudur, Kancheepuram District, this suit is not maintainable before this Court. Hence, the leave granted by this Court in A. No. 1700 of 2013 dated 09.04.2013 has to be revoked. 4. The brief contentions of the counter filed by the first respondent is as follows: The first plaintiff, who is the first respondent in the application filed the counter denying the allegation of the applicant. It is the contention of the respondent that the application is a sheer abuse of process of court. In fact, no relief whatsoever has been sought against the applicant herein. Therefore, the applicant has no locus standi to question about the maintainability of the suit. It is the further contention of the respondent that the second defendant was made a party, even though no relief has been sought against him, only for proper adjudication of the suit. The applicant and fourth defendant are colluding with each other and trying to play fraud on the respondent as well as against the other respondents. It is the contention of the respondent that the sale agreement dated 30.06.2008 came to be executed only at Chennai. All the payments were made in Chennai. The agreement has been entered within the jurisdiction of this Court. The fourth respondent/1st respondent has handed over the possession of the suit property on 04.08.2008, subsequent to signing of the agreement for sale. Therefore, the relief sought for in the present suit is only to enforce the agreement of sale. All the payments were made in Chennai. The agreement has been entered within the jurisdiction of this Court. The fourth respondent/1st respondent has handed over the possession of the suit property on 04.08.2008, subsequent to signing of the agreement for sale. Therefore, the relief sought for in the present suit is only to enforce the agreement of sale. Thus, the suit which is not for land, but only for enforcement of the contract is very much maintainable before this Court. The allegation that the endorsements are fabricated and manipulated are denied by the respondent. The respondent is in possession of the property over his virtue and therefore, he has initiated the suit for specific performance. The cause of action is very much before the jurisdiction of this Court. Hence, prayed for dismissal of this application. 5. The learned counsel for the applicant submitted that the suit itself filed beyond the period of limitation and the applicant is in possession of the property and the suit property is situated outside the jurisdiction of this Court. Therefore, the leave granted by this Court earlier to institute a suit is not maintainable as the same is against the clause 12 of the letters patent. Though no relief sought against the second applicant, admittedly there is an arbitration award in his favour and the award is also in his favour and to purchase the entire property by the fourth respondent/first defendant, only this applicant has paid the money. In fact, he is a necessary party. Since he is the title holder, the alleged possession handed over by the first defendant is also not correct. At any event, the plaintiff now seems to protect the possession handed over to him on the basis of the agreement said to have been executed by the first defendant. Since the agreement itself is not registered, he cannot seek protection of his possession under section 53(A) of the Transfer of Property Act. Since the rights of the second applicant is very much involved in the suit property, the suit itself in fact amount to control over the immovable property. Therefore, the suit, as such, filed only construed as suit for land and not suit for simplicitor for specific performance. Since the rights of the second applicant is very much involved in the suit property, the suit itself in fact amount to control over the immovable property. Therefore, the suit, as such, filed only construed as suit for land and not suit for simplicitor for specific performance. When the land itself is situated outside the jurisdiction of this Court, by creating some false endorsement that on the same day to show as if possession has been handed over to the plaintiff, the suit has been laid here. Such endorsement itself is fabricated in effect the suit is not for land and suit is for simplicitor for specific performance. Since right of the applicant is also very much involved in the suit property and the earlier award is also in favour of the plaintiff and hence, the leave granted by this Court has to be revoked. 6. In support of his arguments, the learned counsel appearing for the applicant has placed reliance on the judgments reported in P. Ranganathan and Others vs. Sai Jagannathan and Others, 1995 (2) MLJ 559 , Thamaraparani Investments Private Limited Represented by its Director Mr. V. Gopal, Chennai vs. Meta Films Private Limited, Chennai, 2005 (4) MLJ 357 : 2006 (1) MLJ 357 , Timothy Bowen also known as Time Bowen and Others vs. Clenergen Corporation and Others, 2012 (1) LW 66 , Jethmull Chordia vs. C. Venkatasubba Reddy, 2013 (1) LW 728 and Excel Dealcomm Private Limited vs. Asset Reconstruction Company (India) Limited and Other, 2015 (3) CTC 189. 7. It is the contention of the learned counsel for the respondent that no relief has been sought against the applicant. He is only a formal party to the suit. The second defendant is not a party to the agreement. Therefore, the allegation of fabrication committed by the respondent and endorsement cannot be countenanced. The applicant has no locustandi to file the application to revoke the leave already granted by this Court. Though the possession was not handed over on the date of agreement, the possession of the property was handed over on subsequent dates after receipt of the part payments. The present suit is filed not for possession or for title and is filed for mere enforcement of the contract. The suit itself is very much maintainable. Hence, prayed for the dismissal of the application. 8. The present suit is filed not for possession or for title and is filed for mere enforcement of the contract. The suit itself is very much maintainable. Hence, prayed for the dismissal of the application. 8. In support of his arguments, he has relied upon the following judgments reported in N. Dhanalakshmi vs. Ekanathan, 1997 (2) CTC 550 , Adcon Electronics Pvt. Ltd. vs. Daulat and Another, 2002 (1) LW 368, S.V. Subramaniam vs. M/s. Cypress Technologies, 2008 (1) CTC 471 , Subbah Reddy vs. Jawahar International, 2008 (4) CTC 160 , K. Rajasekar vs. K. Sakunthala, 2008 (5) CTC 319 , Hendry Dasarathan vs. R. Prabhakaran, 2009 (4) CTC 181 , Hansraj Jain vs. Shantanu Chaudhuri, 114 CWN 572 and Ponammal vs. Jnarthanam, 2016 (3) MWN (Civil) 718. 9. In the light of the above submissions, the point arises for consideration is, Whether the leave granted by this Court in Application No. 1700 of 2013 is liable to be revoked? It is an admitted fact that the suit property, which is the subject matter of the agreement dated 30.06.2008 between the plaintiff and the first defendant, situate outside the jurisdiction of this Court. Leave to institute the suit is also granted by this Court in Application No. 1700 of 2013. Based on the endorsement in the above agreement, the present suit has been filed. The relief sought for in the plaint reads as follows: (a) Direct the 1st defendant herein to execute and register the Sale Deeds in favour of the plaintiffs, free from all encumbrance, on the date to be fixed by this Court and in the event of default, the Assistant registrar (O.S.), High Court of Judicature at Madras, to execute the Sale Deedss in respect of the Suit Schedule Property, in favour of the Plaintiffs or their nominee or nominees or in the alternate direct the 1st defendant herein to refund the advance sale consideration of Rs. 3,47,25,000/- together with interest at the rate of 24% per annum from the date of plaint to till the date of realization and to award compensation and damages that may be fixed by this Court. (b) Grant a permanent injunction restraining the 1st defendant, his men, agents, servants or anyone claiming any right either under or through him from in any manner, alienating or encumbering the Suit Schedule Property in any manner, in favour of any third parties." 10. (b) Grant a permanent injunction restraining the 1st defendant, his men, agents, servants or anyone claiming any right either under or through him from in any manner, alienating or encumbering the Suit Schedule Property in any manner, in favour of any third parties." 10. It is also an admitted fact that the applicant, though made as a second defendant, no relief, whatsoever, has been sought against him. The plaint averments further show that since there were interse dispute between the defendants based on the MOU entered between them, the arbitration proceedings were initiated and an award has been passed on 19.12.2011. It is the contention of the plaintiff that the entire transaction between the defendants 1 and 2 are not only collusive but also clear case of fraud on the the plaintiff. Therefore, the second defendant also made a formal party to the suit. It is also pleaded in the plaint that in the arbitration proceedings, consent award has been passed. The agreement between the parties dated 30.06.2008 recite that the possession shall be handed over at the time of registration of the document. The further endorsement and receipts filed along with the plaint indicate that further sale consideration was received by the first defendant on 04.08.2008, the first defendant has handed over the vacant possession of the suit property. The relief sought in the plaint is only with regard to the enforcement of the contract between the first defendant and the plaintiff and also to restrain the first defendant from alienating or encumbering the suit property in any manner in favour of the third parties. No relief whatsoever has been sought with regard to the property. 11. In this regard, it is useful to refer to the judgment reported in N. Dhanalakshmi vs. Ekanathan, 1997 (2) CTC 550 the Division Bench of this Court has held as follows: "4. Looking to the relief sought for in the plaint, it is plain that principally the suit is for Specific Performance of the agreement, and alternatively for the relief of refund of money. Even the ancillary relief of permanent injunction is also for restraining the defendants from alienating or dealing with the suit property in any way. In order words the suit is not one for title or possession. The ancillary reliefs of injunction sought did not affect the title or possession. Even the ancillary relief of permanent injunction is also for restraining the defendants from alienating or dealing with the suit property in any way. In order words the suit is not one for title or possession. The ancillary reliefs of injunction sought did not affect the title or possession. The reliefs sought for are against the defendants in person. In this view, it is not possible to hold that the suit filed by the plaintiff is for land, even having regard to the decisions cited by the learned counsel for the defendants. 17. In the said judgment, it is clearly stated that in order to consider whether a suit is covered by the expression "suit for land" in Clause 12 of Letters Patent, one has to consider whether it is for obtaining a decree for possession, or a decision on title to land, or is something different, but involves the consideration of the question of title to the land indirectly. "Suit for land" covers three classes of suits, viz. (i) suit for determination of title to the land, (ii) suits of possession of land; and (iii) other suits in which the reliefs claimed if granted would directly affect title to, or possession of, the land. The words "suits for land or other immovable property" in Clause 12, besides obviously covering claims for recovery of possession or control of land, or apt to connote also suits, are primarily and substantially seeking an adjudication upon title to immovable property or a determination of any right or interest therein. The words "suit and land" means 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." 12. In the Judgment reported in Adcon Electronics Pvt. Ltd. vs. Daulat and Another, 2002 (1) LW 368, the Honourable Supreme Court has held as follows: "Specific Relief Act, 1963 - Section 22 - "Suit simplicitor for specific performance" is a "suit for land" - Held Suit is for specific performance of agreement for sale of suit property - wherein relief of delivery of suit property has not been specifically claimed - It can' be treated as "suit for land." 13. In the judgment reported in S.V. Subramaniam vs. Cypress Technologies, 2008 (1) CTC 471 , it has been held that: "10. In the judgment reported in S.V. Subramaniam vs. Cypress Technologies, 2008 (1) CTC 471 , it has been held that: "10. Maintainability of the suit under Clause 12 of the Letters Patent: (a) Clause 12 of the Letters Patent (Madras) initially fell for consideration before a Full Bench of this Court in the decision reported in Vellappa Chettiar vs. Saha Govinda Doss, 1929 (57) MLJ 190 . In that case, the suit was preferred for specific performance. A question was framed having regard to the Indian authorities "is a suit by a purchaser of the land situate outside Madras for specific performance of a contract to sell made in Madras by parties resident therein, a suit for land within the meaning of Clause (12) of the Letters Parent, and so not cognizable by the High Court in its Ordinary Original Civil Jurisdiction?" Having noticed the relevant provision, the Court was of the view that in a suit for the acquisition of title to or control over land, if the plaintiff gets a decree for specific performance, he does not get any title to, but only a right to get a title to the land and it cannot be termed as a "suit for land". 14. In the judgment reported in Subbah Reddy vs. Jawahar International, 2008 (4) CTC 160 , the Honourable Division Bench of this Court has held as follows: (c) For a permanent injunction restraining the defendants 1 to 6 or any other person or persons claiming through them from alienating or encumbering dealing with the suit schedule mentioned property either by way of sale, mortgage, joint development lease or in any other manner detrimental to the interest of the plaintiff except in accordance with law. 4. If we look at the prayer "a" and "c" alone, it is clear that principally the Suit is for specific performance of the agreement and even the ancillary relief of permanent injunction is also for restraining defendants from alienating or dealing with the suit property in any way. Prayers "a" and "c" are not for title or possession and the injunction relief sought for also does not affect the tile or possession. 5. Prayers "a" and "c" are not for title or possession and the injunction relief sought for also does not affect the tile or possession. 5. The learned Single Judge has, however, held that the prayer for "b" permanent injunction would amount to control of the suit property and therefore the Suit must be regarded as a Suit for land and since the property is situated outside Chennai, this Court has no jurisdiction to try the Suit. 6. The learned counsel appearing for the appellant wants to give up the prayer for permanent injunction in terms of prayer "b". We do not see any reason why such a prayer should not be granted and accordingly plaintiff is permitted to delete prayer "b". Consequently, the order of the learned Single Judge is set aside." 15. In the Judgment reported in Hendry Dasarathan vs. R. Prabhakaran, 2009 (4) CTC 181 , it has been held that: "In a case where there is specific clause in the agreement for sale of immovable property that the possession of the immovable property would be handed over to the purchaser immediately after the execution of the sale deed, there is an implication that delivery of possession forms part of the decree for Specific Performance of contract. Where there was no such clause found in the contract for sale of immovable property, the plaintiff, who seeks for Specific Performance of agreement of sale, will have to necessarily seek a relief for delivery of possession. Of course, as contemplated under the proviso to sub-section (2) of Section 22 of the Specific Relief Act, 1963, the plaintiff can at any stage of the Suit, seek for such a relief and the Court shall allow him to amend the Plaint facilitating him to include such a relief in the prayer portion of the Suit. So long as the prayer was not in the contemplation of the scheme of the pleadings, the Suit filed simplicitor for Specific Performance of agreement for sale will have to be necessarily construed only as a Suit not for land, but, for enforcement of the terms of the contract. If the plaintiff elects to invoke the Proviso to Sub-section (2) of Section 22 of the Specific Relief Act, 1963 at an advanced stage of the proceedings of the Suit, the defendant is entitled to seek for revocation of the leave at such stage of the proceedings. 17. If the plaintiff elects to invoke the Proviso to Sub-section (2) of Section 22 of the Specific Relief Act, 1963 at an advanced stage of the proceedings of the Suit, the defendant is entitled to seek for revocation of the leave at such stage of the proceedings. 17. Coming to the facts and circumstances of the instant case, though, admittedly, possession is only with the applicants who have entered into an agreement with the respondent to sell the property, in as much as the frame of the Suit does not contemplate a prayer for delivery for possession and it only seeks for Specific Performance of agreement for sale, the Suit cannot be construed as a Suit for land. This Court has rightly granted leave to sue considering the fact that part of the cause of action has arisen within the jurisdiction of this Court. In view of the above, the Application stands dismissed. There is no order as to costs. 16. Considering the above judgments, when the suit itself filed for mere enforcing the contract, such suit is held to be a suit for Specific Performance simplicitor and not for land. Similarly grant of injunction restraining the defendant from alienating or encumbering in favour of the third party is also held to be suit not for land. 17. The learned counsel for the applicant relied upon the judgment reported in P. Ranganathan and Others vs. Sai Jagannathan and Others, 1995 (2) MLJ 559 it has been held as follows: "Letters Patent (Madras), Clause 12 - words 'suit for land' meaning of - Suit for bare injunction restraining defendants from interfering with the applicant's possession of land - Held to be suit for land - Land lying outside jurisdiction of High Court - Defendants residing within jurisdiction of High Court - High Court, held, will have no jurisdiction to entertain the suit." 18. In the Judgment reported in 2005 (4) MLJ 357 , it has been held as follows: "Though in a suit for bare injunction the Court would not go into the question of title but is concerned about a prima facie case as to the possession, if title to any immovable property is to be directly affected by the result of the decision, the suit would be only a suit for land. Suit in respect of a land situate outside the jurisdiction of the High Court cannot be entertained by the High Court." 19. In the Judgment reported in 2006 (1) MLJ 357 , it has been held as follows: "Letters Patent, Clause 12 - Civil Procedure Code (V of 1908), Section 16 - Suit filed for Permanent and mandatory injunction on the basis of an agreement for sale - Grant of leave sought on the basis of the agreement of sale - Leave granted - Application to revoke the leave, allowed 0 Order challenged in O.S.A. - Question whether suit for injunction is a suit for land - Expression suit for land covers three classes of suits: (a) suit for determination of title; (b) suit for possession and (c) other suits in which reliefs claimed, if granted, would directly affect title to, or possession of land - Present suit is for control of land lying outside the jurisdiction of the Court - It is a suit for land - Court has no jurisdiction to entertain the suit - Leave was rightly revoked." 20. In the Judgment reported in 2012 (1) LW 66 , it has been held as follows: "Suit has been filed mainly for declaration that the plaintiffs are having the 1st charge over the Power Generation Plant near Salem and a permanent injunction restraining the respondents from alienating, encumbering or any manner creating any charge on the said Plant. It still amount to adjudication of right to the immovable property and it will be a suit for land." 21. In the Judgment reported in 2013 (1) LW 728 , it has been held as follows: "Letters Patent, Clause 12/Suit for land, Suit for permanent injunction, is suit for land, 'B' Schedule property in A.P., Cause of action, whether arises in Madras/Leave to sue, Revoked, Appeal against, Scope of. Since one item i.e. "B" schedule property situate at Nellore, Andhra Pradesh, is outside the jurisdiction of Madras High Court, the Suit being one for Permanent Injunction is "Suit for land". All Defendants are also residing outside the jurisdiction of Madras High Court, the learned single Judge has rightly revoked the leave granted in respect of "B" schedule property and vacated the interim injunction in respect of "B" schedule property." 22. All Defendants are also residing outside the jurisdiction of Madras High Court, the learned single Judge has rightly revoked the leave granted in respect of "B" schedule property and vacated the interim injunction in respect of "B" schedule property." 22. From the above judgments cited by the learned counsel, the decisions are to the fact that the prayers in the suit are in effect prayer for possession of the suit property and control over the suit property. The suit held to be a suit for land. Whereas in this case, the suit has been filed for specific performance, simplicitor. It is contended by the plaintiff that the possession was already handed over at the time of subsequent sale consideration on 04.08.2008. Though such endorsements were challenged by the applicant herein, whether those endorsements are true or fabricated as a result of manipulation cannot be gone at this stage. It is the case of the plaintiff that he has taken over the possession of the property. When the possession is already with him, filing a suit for specific performance to enforce the contract, such suit cannot be construed as a suit for land. The decisions relied upon by the plaintiff counsel clearly show that such suits are not at all suits for land. 23. It is the contention of the learned counsel for the applicant that the plaintiff claiming possession on the basis of an unregistered document is not sustainable in law since Section 17(1-a) of the Registration Act mandates the registration of the agreement to claim protection under section 53-A of the Transfer of Property Act. It is to be noted that Section 53-A merely protects the possession taken pursuant to agreement and does not confer any legal right. Right conferred by Section 53-A of the Transfer of the Property Act is in the nature for passive equity available for the person for protection of his right without conferring upon him any active right on its basis. The right conferred under Section 53(3) of the Transfer of Property Act is the right available to the person to protect his possession and does not create any title on him. Whereas, Section 49 of the Registration Act clearly show that the unregistered sale agreement can be received as an evidence in a suit for specific performance. Now the plaintiff has not filed any suit to protect his possession. Whereas, Section 49 of the Registration Act clearly show that the unregistered sale agreement can be received as an evidence in a suit for specific performance. Now the plaintiff has not filed any suit to protect his possession. He simply filed a suit for enforcing the contract. Therefore, the contention of the learned counsel for the applicant that Section 53-A of the Transfer of Property Act will come into play cannot be sustained. 24. Therefore, this Court is of the view that only the agreements which are sought to be enforced for the protection available under section 53-A of the Transfer of Property Act alone are made compulsorily registrationable under section 17(1)(a) of the Indian Registration Act. Therefore, this Court is of the view that such contention of the applicant is not maintainable. Though the learned counsel for the applicant vehemently contended that his rights would be affected and he is in possession of the property and he is already in possession, no documents whatsoever is filed to substantiate the same. Since the suit itself filed for mere enforcing the contract between the plaintiff and the first defendant with the limited prayer not to transfer the property, I am of the view that this suit is filed simplicitor suit for mere enforcing the contract and not for land. Accordingly, the leave granted by this Court is sustained and this application filed for revocation of the leave is liable to be dismissed. 25. In the result, this application is dismissed.