Miraj Drymix Private Limited v. Snowcem Paints Private Limited
2022-09-07
B.P.COLABAWALLA
body2022
DigiLaw.ai
JUDGMENT: 1. At the outset, Mr. Lalwani, the learned advocate appearing on behalf of the Petitioners/Plaintiffs, tenders a draft amendment to substitute paragraph 19 of the plaint with the following: “19. Defendant No.1 has its registered office in Malegaon and corporate office in Mumbai. The Defendant No.2 is a resident of Mumbai. The Defendant No.3 has its registered office in Gujarat and corporate office Mumbai. The Defendant No.4 has registered office in Pune. The Term Sheet provides that all disputes in connection with or related to the Term Sheet, shall be submitted to the exclusive jurisdiction of the courts of Mumbai. With leave under Clause XII of the Letters Patent, this Hon’ble Court will have jurisdiction to try, entertain and dispose the Suit.” 2. The draft amendment tendered by Mr. Lalwani is taken on record and marked “X” for identification. The Plaintiffs are allowed to amend the plaint as per the draft handed in. The amendment shall be carried out within a period of one week from today and the amended copy of the plaint and proceedings shall be served on the Defendants within a period of two weeks thereafter. 3. The above Petition is filed under Clause XII of the Letters Patent seeking leave to institute the above suit in this Court. 4. Mr. Andhyarujina, the learned senior counsel appearing on behalf of Defendant No.3, appeared on notice, and opposed the grant of the said leave. Mr. Andhyarujina, took me through the plaint and submitted that when the plaint is read as a whole, there can be no dispute that the present suit is nothing but a “suit for land”. This being the case and considering that none of the lands [which are the subject matter of the suit] are within the jurisdiction of this Court, this Court would have no jurisdiction to entertain the above suit. He submitted that in a case where the disputes relate to land, and which land is not situated within the jurisdiction of this Court, there is no question of granting any leave under Clause XII of the Letters Patent. 5. To take this argument further, Mr.
He submitted that in a case where the disputes relate to land, and which land is not situated within the jurisdiction of this Court, there is no question of granting any leave under Clause XII of the Letters Patent. 5. To take this argument further, Mr. Andhyarujina submitted that in the present suit the Plaintiffs seek a declaration that the Term Sheet [Exhibit -B to the plaint] entered into and executed between Plaintiff No.1 and Defendant No.1 is valid, binding and subsisting, and that Defendant No.1 be directed to specifically perform the Term Sheet and to do all such acts, deeds and things and execute all writings [including execute Definitive Agreements] as may be required and necessary for the purposes described in the Term Sheet. Mr. Andhyarujina submitted that the Plaintiffs have also sought a declaration that the Definitive Agreement dated 7th April 2021 entered into between Defendant No.1 and Defendant No.3 be treated as null and void and that the Defendants be restrained by an order and permanent injunction from selling, alienating, encumbering and/or disposing of any of the assets described in the Term Sheet. Mr. Andhyarujina took me through the Term Sheet dated January 15/16, 2021 and submitted that according to the Plaintiffs the aforesaid Term Sheet contemplated the key terms and conditions pursuant to which Plaintiff No.1 or its subsidiaries or its affiliates [the purchasers] were to acquire the “Snowcem” brands, including all variants in any language/script and all registered/unregistered intellectual property rights (Brands) alongwith the goodwill relating to the Brands, land and building [including lease land and building], Plant and Machinery including the plant and machinery located at the plant premises, furniture and fixtures, vehicles, forklifts and other assets located in Sinnar (Maharashtra), Gummidipoondi (Tamil Nadu) and Gotan (Rajasthan). Mr. Andhyarujina submitted that therefore the subject matter of this Term Sheet are also three immovable properties which are all situated outside the jurisdiction of this Court. He submitted that if specific performance of this Term Sheet is to be granted, it would necessarily mean that possession of these three immovable properties would also have to be delivered to the Plaintiffs. If this be the case, then, the present suit would certainly be a “suit for land” as contemplated under Clause XII of the Letters Patent. 6. Though Mr.
If this be the case, then, the present suit would certainly be a “suit for land” as contemplated under Clause XII of the Letters Patent. 6. Though Mr. Andhyarujina relied upon several decisions of the Madras High Court as well as the decision of this Court reported in (2000) 1 BCR 209 [Vishram Parbat- H.U.F. vs. M/s. Shruti Builders & Others] to substantiate his arguments, heavy reliance was placed by Mr. Andhyarujina on two decisions of the Supreme Court (i) in the case of Excel Dealcomm Pvt. Ltd. Vs. Asset Reconstruction Co. (I) Ltd. & Others [ (2015) 8 SCC 219 ] and (ii) in the case of Manickam @ Thandapani & Anr. Vs. Vasantha [Civil Appeal No.2726 Of 2022 decided on 5th April 2022]. 7. On the other hand, Mr. Lalwani, the learned counsel appearing on behalf of the Plaintiffs, submitted that the suit as framed can never be termed as a “suit for land”. Mr. Lalwani submitted that in the present case, Defendant No.1, being an entity facing financial stress and difficulty, agreed to sell its assets to Plaintiff No.1. Accordingly, in December 2020, Plaintiff No.1 and Defendant No.1 commenced commercial negotiations and deliberations in order to complete the sale transaction. It was on this basis that Plaintiff No.1 and Defendant Nos. 1 & 2 thereafter finalised the commercial terms of the sale transaction and executed a Term Sheet dated January 15/16, 2021. Mr. Lalwani submitted that under the Term Sheet, the parties agreed that Plaintiff No.1 would purchase (i) the “Snowcem” brands including all variants in any language/ script and including all registered/ unregistered intellectual property rights (the “Brands”), along with goodwill relating to the Brands; (ii) land and building (including leased land and building); (iii) plant and machinery including the plant and machinery located outside the plant premises, furniture and fixtures, vehicles, forklifts, and other assets located at Sinnar (Maharashtra), Gummidipoondi (Tamil Nadu), and Gotan (Rajasthan) [referred to in the Term Sheet as the “Assets”]. The purchase price agreed was an aggregate consideration of Rs.41,11,00,000/-. Since Defendant No.1 reneged on completing the transaction as contemplated in the said Term Sheet, the above suit is filed seeking specific performance of the Term Sheet and consequential reliefs thereto.
The purchase price agreed was an aggregate consideration of Rs.41,11,00,000/-. Since Defendant No.1 reneged on completing the transaction as contemplated in the said Term Sheet, the above suit is filed seeking specific performance of the Term Sheet and consequential reliefs thereto. He submitted that it is now well settled that if the suit is simpliciter seeking 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 a suit for determination of title to land or that the decree in it would operate on the land. In support of this proposition, Mr. Lalwani relied upon the following judgments: (i) Prem Prakash vs. Neetu Dharamveer Bhatia [1994 SCC OnLine Bom 189: 1995 (1) Mh L. J. 869] [learned single Judge]; (ii) WIMCO Ltd., Mumbai vs. Matoshree Shelters Pvt. Ltd. [2009 (5) Mh. L.J. 619] [Division Bench]; and (iii) Adcon Electronics (P) Ltd vs. Daulat and Another. [ (2001) 7 SCC 698 ]. 8. Relying upon these decisions, Mr. Lalwani submitted that the present suit cannot be termed as a “suit for land” and hence on leave being granted, this Court would have jurisdiction to entertain the above suit on the Original Side of this Court. 9. I have heard the learned counsel for the parties at some length and have perused the papers and proceedings in the above suit. I have also perused the decisions relied upon by both sides. The focal question in the present case is whether the above suit, as framed, is one which is a “suit for land” [as contemplated under Clause XII of the Letters Patent] or whether it is suit for enforcement of a contract. It is now well settled that whether a particular suit is a “suit for land” or not, has to be determined on the basis of reading the averments in the plaint as a whole and with reference to the reliefs claimed therein. 10. Before I advert to the facts of the present case, it would be appropriate to refer to the decisions relied upon by both counsels.
10. Before I advert to the facts of the present case, it would be appropriate to refer to the decisions relied upon by both counsels. In the case of Prem Prakash (supra) [1994 SCC Online Bom 189], a learned Single Judge of this Court had the occasion to consider whether a suit for specific performance of an agreement with respect to an immovable property (Shop) situated beyond the Original Civil Jurisdiction of this Court would be a suit for land as contemplated under Clause XII of the Letters Patent. In the facts of that case, the Respondent agreed to sell a Shop to the Petitioner for consideration and on the terms and conditions contained in the Agreement dated 15th October 1992. The Agreement was entered into within the jurisdiction of this Court. However, the said Shop was situated at Village Bolinge, Taluka - Vasai, District - Thane, Agashi Road, Virar. After referring to the Constitutional Bench decision of the Federal Court in the case of Moolji Jaitha and Co. vs. Khandesh Spinning and Weaving Mills Co. Ltd. [AIR 1950 FC 83], the learned single Judge inter-alia came to a finding that a suit for land within the meaning of Clause XII of the Letters Patent, is one which is substantially for land i.e. for the purpose of acquiring title to or possession of the land or for declaring any interest in the land. The learned single Judge opined that in the suit, if what is claimed is a decree for specific performance of an agreement, with an alternative claim for damages, the same cannot be said to be a “suit for land”. It would be a suit for enforcing the said agreement where this Court would be required to act only in personam, the cause of action for such specific performance being not the cause of action for recovery of possession of the said immovable property as such. The fact that recovery of possession may be a consequence of granting specific performance is immaterial for the purpose of jurisdiction, as the cause of action for specific performance of the said agreement is the breach thereof by the Respondent and not a titular or a possessory claim for the said immovable property. The relevant portion of this decision reads thus: “1.
The relevant portion of this decision reads thus: “1. By this Petition, the Petitioner seeks leave under clause XII of the Letters Patent to sue the Respondent in this Court. 2. The Respondent having acquired shop bearing No. 210 on the ground floor of the property known as ‘Kamanwala Nagar 1’ situate at Village Bolinge, Taluka Vasai, District Thane Agashi Road, Virar (for short, ‘the said shop’) on what is popularly known as ‘ownership basis’ agreed to sell the said shop to the Petitioner for the consideration and on the terms and conditions contained in the Agreement dated 15th October, 1992 entered into by and between the Petitioner and the Respondent at Bombay (for short, ‘the said agreement’). Clauses 5 and 7 of the said agreement, which are relevant for the purpose of this petition, read as under:- “5. At the time of completion of sale, the Vendor shall against the payment of the said balance purchase price, execute duly stamped sale deed or other documents in favour of the Purchaser or his nominee or nominees or such deeds, documents and writings as are necessary for effectuating the said transfer in favour of the Purchaser or his nominee or nominees.” “7. The Vendor shall deliver to the Purchaser or his nominees the vacant possession of the said shop till the time of completion of the sale.” ********************* 8. Under Clause XII of the Letters Patent, this Court in exercise of its Ordinary Original Civil Jurisdiction is empowered to receive, try and determine suits of every description, if, in the case of suits for land or other immovable property, such land or property is situated, or in all other cases if the cause of action has arisen, either wholly, or, in case the leave of this Court is first obtained, in part, within the local limits of the Ordinary Original Jurisdiction of this Court, or if the Defendant at the time of commencement of the suit dwells or carries on business, or personally works for gain within such limits. ‘A suit for land’ within the meaning of this clause is a suit substantially for land, that is, for the purpose of acquiring title to or possession of land or for declaring any interest in land.
‘A suit for land’ within the meaning of this clause is a suit substantially for land, that is, for the purpose of acquiring title to or possession of land or for declaring any interest in land. If natural meaning is given to the words in this clause, the present intended suit where the Petitioner claims a decree for specific performance of the said agreement with alternative claim for damages cannot be said to be ‘a suit for land.’ It would be suit for enforcing the said agreement to sell the said shop to the Petitioner where this Court would be required to act only in personam, the cause of action for such specific performance being not the cause of action for recovery of possession of the said shop as such and the fact that recovery of possession of the said shop by the Petitioner may be the consequence of granting specific performance of the said agreement is immaterial for the purpose of jurisdiction as the cause of action for specific performance of the said agreement is the breach thereof by the Respondent and not titular or possessory claim for the said shop. ***************************** 13. The main and substantial relief sought in the suit intended to be filed is the execution of conveyance by the Respondent in favour of the Petitioner in respect of the said shop in performance of the said agreement. The claim for transfer of title in respect of the said shop and delivery of possession thereof as specifically stated in prayer (b) itself are only consequential. The cause of action in the intended suit for specific performance of the said agreement to execute a conveyance in favour of the petitioner is not a cause of action for possession of the said shop. Possession of the said shop only is consequential and the right to the same arises by virtue of execution of conveyance conveying the said shop by the Respondent unto the Petitioner and not before. The intended suit being for enforcing the said agreement where the Court would be required to act only in personam is not ‘a suit for land’. The fact that a decree for specific performance, if passed, would result in ultimate possession of the said shop being given or obtained, does not convert it into a ‘suit for land’.” (emphasis supplied) 11.
The fact that a decree for specific performance, if passed, would result in ultimate possession of the said shop being given or obtained, does not convert it into a ‘suit for land’.” (emphasis supplied) 11. The next decision is the judgment of the Supreme Court in the case of Adcon Electronics (P) Limited (supra) [ (2001) 7 SCC 698 ]. In this case, the Hon’ble Supreme Court was considering the interpretation of Clause XII of the Letters Patent of the Bombay High Court. The facts of this case reveal that by an agreement of 12th July 1986, the land with the building known as Vithal Bhavan situated at Indore was agreed to be sold by the Defendants to the Plaintiffs for a consideration of Rs.53,75,000/-. Subsequently, the parties also executed a memorandum with regard to the said property. Disputes arose between the parties in relation to the performance of the said agreements and therefore, the Plaintiff filed a suit in this Court praying inter-alia for a declaration that the Agreement dated 12th July 1986 as well as the Memorandum dated 1st August 1987 are subsisting and binding on the Defendant and for a decree of specific performance. The suit was filed with the leave of this Court under Clause XII, which was granted. Thereafter, the Defendant took out a Chamber Summons for revocation of the said leave. A learned Single Judge of this Court dismissed the said application and which order was assailed before a Division Bench. The Division Bench also dismissed the Appeal. It was this order of the Division Bench which was challenged before the Hon’ble Supreme Court. The Supreme Court went on to consider as to what is meant by “suit for land” as contemplated under Clause XII of the Letters Patent. The discussion of the Supreme Court on this aspect can be found from paragraphs 11 to 19 which read thus: “11. The question then arises as to what is meant by “suit for land”. This expression has been interpreted by different High Courts as well as by the Federal Court. 12. In His Highness Shrimant Maharaj Yashvantrav Holkar of Indore v. Dadabhai Cursetji Ashburner [ILR (1890) 14 Bom 354] a Division Bench of the Bombay High Court held that a suit for specific performance would not fall within the meaning of that expression.
This expression has been interpreted by different High Courts as well as by the Federal Court. 12. In His Highness Shrimant Maharaj Yashvantrav Holkar of Indore v. Dadabhai Cursetji Ashburner [ILR (1890) 14 Bom 354] a Division Bench of the Bombay High Court held that a suit for specific performance would not fall within the meaning of that expression. There the suit was filed for specific performance of an agreement to mortgage certain immovable property. The agreement was made in Bombay between the parties on 8-1-1883. The Divisional Court held, “it had jurisdiction” and granted decree. On appeal a Division Bench referred to an earlier judgment of that Court in Yenkoba Balshet Kasar v. Rambhaji [(1872) 9 Bom HCR 12] which laid down that suit for land was a suit which asked for delivery of land to the plaintiff. The High Court also referred to the view of the Calcutta High Court in Delhi and London Bank v. Wordie [ILR (1876) 1 Cal 249] (ILR at p. 263) construing that expression to mean, “substantially for land” - “that is, for the purpose of acquiring title to, or control over, land”. It also noticed the view of a learned Single Judge of the Calcutta High Court in Sreenath Roy v. Cally Doss Ghose [ILR (1880) 5 Cal 82] holding that the court had no jurisdiction to make a decree in a suit for specific performance. The Division Bench of the Bombay High Court held that the suit was within the jurisdiction whether regarded as a suit for specific performance or to enforce equitable mortgage by deposit of title deeds as a court of equity in England could entertain it. 13. In Moolji Jaitha and Co. v. Khandesh Spg. and Wvg. Mills Co. Ltd. [AIR 1950 FC 83 : 1949 FCR 849] there is divergence of opinion among the learned Judges of the five-Judge Bench of the Federal Court in regard to the import of the expression “suit for land”.
13. In Moolji Jaitha and Co. v. Khandesh Spg. and Wvg. Mills Co. Ltd. [AIR 1950 FC 83 : 1949 FCR 849] there is divergence of opinion among the learned Judges of the five-Judge Bench of the Federal Court in regard to the import of the expression “suit for land”. The Chief Justice Kania opined: (AIR p. 89, para 15) “[T]aking the suit as a whole, one has to consider whether it is for the purpose of obtaining a direction for possession or a decision on title to land, or the object of the suit is something different but involves the consideration of the question of title to land indirectly.” Justice Fazl Ali observed: (AIR p. 96, para 47) “[I]f 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 suits: (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 or possession of land.” Justice Patanjali Sastri took the view: (AIR p. 97, para 53) “[T]he words in question, besides obviously covering claims for recovery of possession or control of land, are apt to connote also suits which primarily and substantially seek an adjudication upon the title to immovable property or a determination of any right or interest therein.” Justice Mahajan observed: (AIR p. 105, para 81) “If an attempt is made to find a comprehensive definition of the phrase, it will eventually be discovered that it has 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 bring 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.” He added: (AIR p. 110, para 102) “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 a suit for determination of title to land or that the decree in it would operate on the land.” (emphasis supplied) In that view he expressed his agreement with the decision of the Full Bench of the Madras High Court in P.M.A. Velliappa Chettiar v. Saha Govinda Doss [AIR 1929 Mad 721 : ILR 52 Mad 809 (FB)]. Justice Mukherjea perceived: (AIR p. 119, para 142) “[I]t seems to me fairly clear that the expression ‘suit for land’ occurring in clause 12 Letters Patent, means a suit which is instituted with the object of establishing claims regarding title to the property or possession of it. Whether or not possession is claimed, if title to any immovable property is to be directly affected by the result of the decision, the suit would be a suit for land.” 14.
Whether or not possession is claimed, if title to any immovable property is to be directly affected by the result of the decision, the suit would be a suit for land.” 14. In Debendra Nath Chowdhury v. Southern Bank Ltd. [ AIR 1960 Cal 626 : 64 CWN 439] a Division Bench of the Calcutta High Court took the view that the suit for specific performance of the contract to execute and register a lease with alternative claims for damages is not a “suit for land” within the meaning of clause 12 of the Letters Patent. 15. From the above discussion it follows that a “suit for land” is a suit in which the relief claimed relates to title to or delivery of possession of land or immovable property. Whether a suit is a “suit for land” or not has to be determined on the averments in the plaint with reference to the reliefs claimed therein; where the relief relates to adjudication of title to land or immovable property or delivery of possession of the land or immovable property, it will be a “suit for land”. We are in respectful agreement with the view expressed by Mahajan, J. in Moolji Jaitha case [AIR 1950 FC 83 : 1949 FCR 849]. 16. In a suit for specific performance of contract for sale of immovable property containing a stipulation that on execution of the sale deed the possession of the immovable property will be handed over to the purchaser, it is implied that delivery of possession of the immovable property is part of the decree of specific performance of contract. But in this connection it is necessary to refer to Section 22 of the Specific Relief Act, 1963 which runs: “22. Power to grant relief for possession, partition, refund of earnest money, etc.-(1) Notwithstanding anything to the contrary contained in the Code of Civil Procedure, 1908, any person suing for the specific performance of a contract for the transfer of immovable property may, in an appropriate case, ask for- (a) possession, or partition and separate possession, of the property, in addition to such performance; or (b) any other relief to which he may be entitled, including the refund of any earnest money or deposit paid or made by him, in case his claim for specific performance is refused.
(2) No relief under clause (a) or clause (b) of sub-section (1) shall be granted by the court unless it has been specifically claimed: Provided that where the plaintiff has not claimed any such relief in the plaint, the court shall, at any stage of the proceeding, allow him to amend the plaint on such terms as may be just for including a claim for such relief.” 17. It may be seen that sub-section (1) is an enabling provision. A plaintiff in a suit of specific performance may ask for further reliefs mentioned in clauses (a) and (b) thereof. Clause (a) contains reliefs of possession and partition and separate possession of the property, in addition to specific performance. The mandate of subsection (2) of Section 22 is that no relief under clauses (a) and (b) of sub-section (1) shall be granted by the court unless it has been specifically claimed. Thus it follows that no court can grant the relief of possession of land or other immovable property, subject-matter of the agreement for sale in regard to which specific performance is claimed, unless the possession of the immovable property is specifically prayed for. 18. In the instant case the suit is for specific performance of the agreement for sale of the suit property wherein relief of delivery of the suit property has not been specifically claimed, as such it cannot be treated as a “suit for land”. 19. We cannot also accept the contention of Mr Chitale that the suit is for acquisition of title to the land and is a “suit for land”. In its true sense, a suit simpliciter for specific performance of contract for sale of land is a suit for enforcement of terms of contract. The title to the land as such is not the subject-matter of the suit.” (emphasis supplied) 12. From the decision of the Supreme Court in the case of Adcon Electronics (P) Limited (supra) [ (2001) 7 SCC 698 ], it is clear that where a 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 a “suit for land”. 13.
13. The decision of the Supreme Court in the case of Adcon Electronics (P) Limited (supra) was thereafter considered by a Division Bench of this Court in the case of WIMCO Ltd (supra) [2009 (5) Mh. L. J 615]. The facts of that case would reveal that a declaration was sought to adjudge the MoU dated 29th July 2004 and the Development Agreements dated 21st January 2005 and 16th June 2005 as voidable at the option of the Plaintiffs and that upon termination of the same by the Plaintiffs, they are void inoperative in law. There was also a prayer claiming damages and seeking a mandatory order and injunction directing Defendant No.1 to handover quiet, vacant and peaceful possession of Block No. NA-26, along with structures thereon to the Plaintiffs as a consequence of the termination, rescission and cancellation of the MoU dated 29th July 2004 and the Development Agreements dated 21st January 2005 and 16th June 2005. After the suit was filed, the Defendants raised a preliminary objection to the effect that since there is a prayer in the suit for handing over possession of the lands in question, the suit is not maintainable on the Original Side of this Court in view of the Clause XII of the Letters Patent. The learned Single Judge accordingly framed the preliminary issue and after considering the averments made in the plaint and the documents on record, concluded that since the lands in question were situated beyond the territorial jurisdiction of this Court the suit was not maintainable before this Court in view of the Clause XII of the Letters Patent. It was this order that was challenged before a Division Bench. The Division Bench, after considering the Judgment of the Hon’ble Federal Court in Moolji Jaitha’s case as well as the Judgment of the Hon’ble Supreme Court in the case of Adcon Electronics (P) Limited (supra), held as under: “12. The learned single Judge of this Court came to the conclusion that the suit in the nature is suit for land and, therefore, Court has no territorial jurisdiction to decide the same. The order of the learned single Judge in that case was carried further before the Division Bench.
The learned single Judge of this Court came to the conclusion that the suit in the nature is suit for land and, therefore, Court has no territorial jurisdiction to decide the same. The order of the learned single Judge in that case was carried further before the Division Bench. The Division Bench of this Court reversed the order of the learned single Judge and came to the conclusion that the suit in question cannot be said to be a suit for land and, therefore, the suit was held to be maintainable under clause 12 of the Letters Patent before this Court on its Original Side. The defendants therein carried the matter further before the Federal Court. By majority view, the Federal Court came to the conclusion that the suit was maintainable on the Original Side of the Bombay High Court and while deciding the said issue, the Federal Court has considered the provisions of Clause 12 of the Letters Patent and has also considered the aspect regarding suit for land. The five learned Judges delivered separate judgments in the aforesaid case. Since the issue in question in the present case has a direct bearing on the said judgment of the Federal Court, the observations made by the learned Chief Justice are required to be taken into account. In paragraph 6 of the judgment delivered by Chief Justice Kania, it has been held and observed as under: “It may be useful to ascertain in the first place what is the natural meaning of the expression ‘suit for land’, irrespective of judicial decisions. It is not difficult to understand the meaning of the word ‘suit’ and the word ‘land’. The difficulty arises in determining the ambit given to those words by the connecting word ‘for’. Inasmuch as the first word in the expression is ‘suit’, it is obvious that it has to be followed by the word ‘for’ as no other preposition can be used in connection with ‘suit’. The word ‘for’ can have the meaning ‘to obtain’, when used in connection with a noun, e.g. land, jewellery. It can equally be used in connection with the relief sought by the parties, e.g. for possession, damages, etc. It can equally be used to indicate the grievance of the plaintiff.
The word ‘for’ can have the meaning ‘to obtain’, when used in connection with a noun, e.g. land, jewellery. It can equally be used in connection with the relief sought by the parties, e.g. for possession, damages, etc. It can equally be used to indicate the grievance of the plaintiff. Thus, when one speaks of a suit for libel or for trespass, one really means that it is a suit for damages in an action for libel, or a suit for compensation in an action for trespass on land. The question is in what sense the word ‘for’ is used in this expression. It appears that to confine its meaning to a suit to obtain possession of land only is not proper. The object of treating 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 questions 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”. 13. The learned Chief Justice has accordingly considered the scope of the suit to find out whether it is really a suit for land. It has been observed 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 the land. Considering the said reasoning and observation, it is required to be noted as to whether the prayer for possession of the land is the primary object of filing of the suit or adjudication of title to land or whether the prayer is incidental to the main substantive prayer in the suit.
Considering the said reasoning and observation, it is required to be noted as to whether the prayer for possession of the land is the primary object of filing of the suit or adjudication of title to land or whether the prayer is incidental to the main substantive prayer in the suit. In paragraph 15 it has been observed by the learned Chief Justice that expression ‘suit for land’ should not be narrowly confined and limited to suits for recovery of possession of land or to obtain declaration of title to land only. The relevant observations in paragraph 15 are as under: “15. The view of a large majority of Judges thus appears to be that the expression ‘suit for land’ should not be narrowly confined and limited to suits for recovery of possession of land or to obtain a declaration of title to land only. The wider meaning of the expression, so as to cover all suits relating to land i.e. which has anything to do with land, does not appear to be accepted by anyone. That leaves the question wherein between the line of demarcation should be drawn. The Courts have differed in the matter of drawing this line under different circumstances, and the same Court has taken divergent views on the point. No judicial decision has attempted to give an exhaustive enumeration of the suits covered by the expression ‘suit for land’ and I do not propose to do so. It is sufficient to say that taking the suit as a whole, one has to consider whether it is for the purpose of obtaining a direction for possession or a decision on title to land, or the object of the suit is something different but involves the consideration of the question of title to land indirectly.” 14. Of course, insofar as the facts of the said case are concerned, it was held by the learned Chief Justice that the main purpose of the suit was to administer the estate of the deceased and to set aside the decree obtained by fraud by the defendants.
Of course, insofar as the facts of the said case are concerned, it was held by the learned Chief Justice that the main purpose of the suit was to administer the estate of the deceased and to set aside the decree obtained by fraud by the defendants. In paragraph 23 of the said judgment it has been observed that the defendants came into possession of the land because the appellants were agents of the respondents and accordingly the respondents were entitled to ask the Court to act in personam and ask the appellants to execute a conveyance in favour of the respondents, if they succeed in proving their allegations in the plaint. It is relevant to quote here the observations of the learned Chief Justice in paras 22 and 23 of the said judgment. The same reads thus: “22. It was argued on behalf of the appellants that the exercise of equity jurisdiction was limited to cases of express trust and for this some reliance was placed on the words of O. 11, R. 1 of the Rules of the Supreme Court of England. In my opinion, this argument is unsound because the equity jurisdiction is held applicable equally to cases were there is a contract, fraud or trust and a fiduciary relationship. I do not think the equity jurisdiction exists or is exercised only in cases of express trust. 23. The question then is whether the plaint in the present case, inasmuch as it contains prayers (a) and (b) makes it a suit for land, or it is a suit which falls under the description ‘all other cases’ in Cl. 12 of the Letters Patent. In approaching this question I think it is relevant to bear in mind the principles of equity under which the Court grants reliefs to parties under certain circumstances, in respect of land situated outside its original civil jurisdiction. I am unable to accept the proposition that the question of jurisdiction under Cl. 12 has to be decided independently of the question of application of equitable principles to the case. In the present case the central fact running through the whole plaint on which all the claims are based is that the appellants were the secretaries and treasurers of the respondents. Paragraphs 18A relate to the dispute between the parties about the Jalgaon lands.
In the present case the central fact running through the whole plaint on which all the claims are based is that the appellants were the secretaries and treasurers of the respondents. Paragraphs 18A relate to the dispute between the parties about the Jalgaon lands. Even before the inclusion of para 8A, the respondents had alleged that the appellants were their agents, that as such they were in possession of the respondents' funds, that by using those funds they purchased the lands and held them for the respondents' use till the termination of the agency. Thereafter, the appellants wrongfully contended that the lands belonged to them and by the suit the respondents sought to enforce fulfilment of the obligation incurred by the appellants under those circumstances. It is not disputed that in fact the land is in the possession of the respondents. The respondents contend that although the conveyance stands in the name of the appellants, the respondents are the beneficial owners. In view of these allegations section 82 and section 88 and illus. 4 thereto of the Trust Act, may be noticed. These sections are found in a chapter which deals with “Certain obligations in the nature of Trusts”. Section 82 deals with a benami purchase, apart from any fiduciary relationship. Section 88 deals with the acquisition of some financial benefit by a person standing in fiduciary relationship to the claimant. Illustration 4 to section 88 clearly shows that when property is purchased by a partner out of partnership funds, the other partners can claim the property as partnership property. The extent of the fiduciary relationship is not material. It is sufficient is the existence of such relationship is established. I am unable to accept the contention that this is a suit by the respondents against the appellants, their agents, for accounts. In my opinion, the proper construction is to treat the claim in respect of the Jalgaon lands as a claim by a principal against his agent, in respect of property acquired by the use of the respondents' fund by the appellants. The claim is to follow the property in the appellants' hands on the ground that the appellants had committed a breach of trust in utilising the respondents' money in obtaining title to the land.
The claim is to follow the property in the appellants' hands on the ground that the appellants had committed a breach of trust in utilising the respondents' money in obtaining title to the land. It cannot be disputed that the only way in which the appellants could and did come into possession of the respondents' money was because the appellants were the agents of the respondents. Therefore, in my opinion, in this case the respondents are entitled to ask the Court to act in personam and ask the appellants to execute a conveyance in favour of the respondents, if they succeed in providing their allegations in the plaint. In the present case the fiduciary relationship is not disputed.” In the said case, the learned Chief Justice has also considered prayer clause (a) in the plaint and after considering the said prayer it has been observed in paragraph 25 as under. “25. That leaves the question whether the respondents' suit should fail because they had put prayer (a) in the plaint. The inclusion or absence of a prayer is not decisive of the true nature of the suit, nor is the order in which the prayers are arrayed in the plaint. The substance or object of the suit has to be gathered from the averments made in the plaint and on which the reliefs asked in the prayers are based. A plaintiff may ask for a relief which a Court of equity may not grant. But I do not see any justification to non-suit the plaintiff because of such a prayer. That will be insisting on a form of pleading and not on the substance of the suit. In Perm. V. Lord Baltimore, 2 white &Tudor's Eq. Cas. 4th Ed. 923, a claim for possession was made but the Court did not give that relief in its decree. But the Court did not dismiss the suit because such claim was made by the plaintiff in the writ. In my opinion, therefore, the respondents' prayer for a declaration of title to the land is no ground for holding that the Original Side of the Bombay High Court is not competent to try the suit.” ****************** 19. Both the learned counsel have relied upon the decision of the Supreme Court in the case of Adcon Electronics Pvt. Ltd. v. Daulat, 2001 (4) Mh.L.J. (SC) 469 : (2001) 7 SCC 698 .
Both the learned counsel have relied upon the decision of the Supreme Court in the case of Adcon Electronics Pvt. Ltd. v. Daulat, 2001 (4) Mh.L.J. (SC) 469 : (2001) 7 SCC 698 . In the aforesaid case, the Supreme Court has held that a simple suit for sale of land is a suit for enforcement of the terms of the contract and cannot be treated as a ‘suit for land’. It has been held that as far as the title of the land is concerned, the same is not the subject-matter of a suit for specific performance. So far as the aforesaid case is concerned, the plaintiff and defendant entered into an agreement on 12th July, 1986 in connection with the land together with the building, located at Indore in Madhya Pradesh. The plaintiff filed the suit in the High Court of Bombay against the defendant, inter alia, praying for a declaration that agreement dated 12th July, 1986 and MoU dated 1st August, 1987 are subsisting and binding on the defendant and for a decree for specific performance of the said agreement and memorandum. The suit was filed with the leave of the Court under clause 12 of the Letters Patent. The learned single Judge in the aforesaid case granted leave. The defendant thereafter took out a Chamber Summons for revocation of the leave. The learned single Judge dismissed the Chamber Summons against which an appeal was preferred before the Division Bench. The Appeal was also dismissed and the matter was carried further before the Supreme Court. On behalf of the defendant it was argued that in the agreement there is a specific stipulation that the defendant will hand over possession of the suit property on the execution of the sale deed and, therefore, the suit for specific performance of the agreement would be a suit for land within the meaning of Clause 12 of the Letters Patent. The Court has observed in para 12 as under: “12. In His Highness Shrimant Maharaj Yashvantrav Holkar of Indore v. Dadabhai Cursetji Ashburner, ILR (1890) 14 Bom 354, a Division Bench of the Bombay High Court held that a suit for specific performance would not fall within the meaning of that expression. There the suit was filed for specific performance of an agreement to mortgage certain immovable property. The agreement was made in Bombay between the parties on 8-1-1883.
There the suit was filed for specific performance of an agreement to mortgage certain immovable property. The agreement was made in Bombay between the parties on 8-1-1883. The Divisional Court held, “it had jurisdiction’ and granted decree. On appeal a Division Bench referred to an earlier judgment of that Court in Yenkoba Balshet Kasar v. Rambhaji, (1872) 9 Bom HCR 12 which laid down that suit for land was a suit which asked for delivery of land to the plaintiff. The High Court also referred to the view of the Calcutta High Court in Delhi and London Bank v. Wordie, ILR (1876) 1 Cal 249 (ILR at p. 263) construing that expression to mean, ‘substantially for land’ - that is, for the purpose of acquiring title to, or control over, land’. It also noticed the view of a learned single Judge of the Calcutta High Court in Sreenath Roy v. Cally Doss Ghose, ILR (1880) 5 Cal 82 holding that the Court had no jurisdiction to make a decree in a suit for specific performance. The Division Bench of the Bombay High Court held that the suit was within the jurisdiction whether regarded as a suit for specific performance or to enforce equitable mortgage by deposit of title deeds as a Court of equity in England could entertain it.” 20. It has been held by the Supreme Court that a suit for land is a suit in which the relief claimed relates to title to or delivery of possession of land or immovable property. Whether a suit is a suit for land or not has to be determined on the averments in the plaint with reference to the reliefs claimed therein, where the relief relates to adjudication of title to land or immovable property or delivery of possession of the land or immovable property, it will be a suit for land. It has been further held by the Supreme Court in the said judgment that in a suit for specific performance of contract for sale of immovable property containing a stipulation that on execution of the sale deed the possession of the immovable property will be handed over to the purchaser, it is implied that delivery of possession of the immovable property is part of the decree of specific performance of contract.
In the aforesaid case, even though the disputed property was located in the State of Madhya Pradesh, ultimately it was held that a suit for specific performance was maintainable on the Original Side of the Bombay High Court. It was held that the suit for specific performance of the agreement for sale of the suit property wherein relief of delivery of the suit property has not been specifically claimed, as such suit cannot be termed as a suit for land. 21. Learned counsel for the respondents submitted that since in the instant case possession is specifically claimed by the plaintiffs, the said suit should also be treated as a suit for land. On the basis of the judgments of the Federal Court as well as the Supreme Court, which we have discussed above, it is required to be found out as to whether the suit in question is really a suit for title or essentially a suit for possession. In order to determine the said aspect, the Court is required to consider the averments made in the plaint as well as the nature of the transaction entered into between the parties. After considering the averments in the plaint as well as the documents of MoU, agreements and the Power of Attorney, one thing is certain that the soul of the transaction in question is the MoU which is a starting point of entering into the transaction between the parties. The MoU is the basis on which subsequent documents were executed by the parties i.e. agreements and the power of attorney. As per the agreements between the parties, the defendants were to carry out certain work on behalf of the plaintiffs. It cannot be disputed that the plaintiffs by entering into the said transaction has never lost its title over land in question and as such it is an admitted fact that the title has all throughout remained in the plaintiffs. The suit, therefore, in question can never be said to be a suit in connection with the title and the plaintiff has also not sought for any declaration of title. The entire transaction was entered into on the basis of MoU. If that be so, in our view, the defendants were put into possession on the basis of MoU and the possession can be said to be a mere permissive one.
The entire transaction was entered into on the basis of MoU. If that be so, in our view, the defendants were put into possession on the basis of MoU and the possession can be said to be a mere permissive one. Looking to the prayer clauses (a) and (b) which we have noted in the earlier part of our judgment, it is clear that the main prayer of the plaintiffs is for a declaration to the effect that the MoU in question is inoperative and no longer binding on the plaintiffs. We may make it clear that we are not concerned with the merits of the said averments as ultimately that is a matter of trial. We are discussing this aspect only with a view to find out as to whether the jurisdiction of this Court can be said to be excluded under clause 12 of the Letters Patent simply because there is a relief for possession sought for by the plaintiffs in the suit. In a given case, if a suit is filed on the ground that the MoU is entered into by fraud or misrepresentation and if the prayer is made that such MoU is not binding on the plaintiffs, then such a suit can be said to be maintainable under clause 12 before the Original Side of this Court. If, on the basis of the averment in the plaint, a prayer is sought for to the effect that the MoU has become inoperative on the ground that the defendants have committed breach of the conditions, we fail to understand as to how, even if an incidental prayer for possession is made which is based only on the basis of prayer clauses (a) and (b) of the suit, such a suit is not maintainable under clause 12 of the Letters Patent. As pointed out earlier, the entire transaction is based on the MoU and the subsequent agreements. In our view, so far as the prayer regarding possession is concerned, it is mainly and solely dependent upon the prayers (a) and (b).
As pointed out earlier, the entire transaction is based on the MoU and the subsequent agreements. In our view, so far as the prayer regarding possession is concerned, it is mainly and solely dependent upon the prayers (a) and (b). In case the plaintiffs fail to get relief in the suit in connection with the declaration sought for, naturally plaintiffs cannot get any relief in connection with handing over possession as the prayer for handing over possession is solely and mainly depend upon the relief claimed by the plaintiffs regarding declaration sought for in the suit in connection with the MoU and other agreements. It cannot be disputed that in case the said prayers have been rejected, the prayer for possession becomes redundant and no decree can be passed in that behalf. 22. Considering the aforesaid aspect, in our view, the suit is essentially based on the prayer that the MoU has become ineffective or inoperative. The prayer in connection with the declaration sought for by the plaintiffs regarding MoU, in our view, is perfectly within the jurisdiction of the Original Side of this Court and, therefore, the suit is maintainable on the Original Side of the Bombay High Court. As pointed out earlier, it can never be said to be a suit for title nor essentially it is a suit for possession. Possession is a consequential prayer based on the prayer for declaration in connection with the MoU and agreements in question. As per the submission of the learned counsel for the appellants, the defendants were given only permissive possession for development on the basis of MoU and other documents. The possession of the defendants is solely based on the basis of an MoU between the parties. If the document is held to be void or inoperative, naturally the defendants possession cannot be said to be in any way legal or valid. In our view, simply because in subsequent prayers of the plaint, possession prayer is sought for, it cannot be said that the suit in question is a suit for land.
If the document is held to be void or inoperative, naturally the defendants possession cannot be said to be in any way legal or valid. In our view, simply because in subsequent prayers of the plaint, possession prayer is sought for, it cannot be said that the suit in question is a suit for land. If a suit for specific performance is maintainable on the Original Side of this Court, even if the property is situated at a different place or in the different State, as the case may be, the suit of such a nature wherein declaration is sought for in connection with the MoU and agreement can certainly be said to be maintainable here as the defendant has given mere permission to get the possession only for enforcing MoU as well as subsequent agreements. For example, the defendants also could have filed a suit before this Court for the specific performance of the agreements. If such suit is maintainable, we fail to understand as to why suit wherein declaration for cancellation of MoU is sought for is not maintainable on the Original Side of this Court. Simply because an incidental prayer for possession is made which is dependent upon earlier prayers of the plaint, as held by the Federal Court even in a case of a mortgage of immovable property, the plaintiffs in a given case can give up his claim for security and such suit is still maintainable on the Original Side of the Bombay High Court as it can never be said that the suit is essentially for land.” (emphasis supplied) 14. As can be seen from the aforesaid decision, the Division Bench of this Court [in the case of WIMCO Ltd (supra)], after considering the decisions of (i) the Federal Court in Moolji Jaitha’s case; and (ii) the Supreme Court in Adcon Electronics (P) Limited (supra), has inter-alia come to the conclusion that the scope of the suit has to be considered to find out whether it is really a “suit for land”. 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.
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. The Division Bench opined that considering the said reasoning and observation, it is required to be noted as to whether the prayer for possession of the land is the primary object of filing of the suit or adjudication of title to land or whether the prayer is incidental to the main substantive prayer in the suit. If it is incidental to the main prayer, then merely because of that, without anything more, would not make the suit one for land. This is for the simple reason that the inclusion or absence of a prayer is not decisive of the true nature of the suit, nor is the order in which the prayers are arrayed in the plaint. The substance or object of the suit has to be gathered from the averments made in the plaint and on which the reliefs asked in the prayers are based. 15. The next decision is that of the Supreme Court is in the case of Excel Dealcomm Pvt. Ltd [ (2015) 8 SCC 219 ] which was heavily relied upon by Mr. Andhyarujina. The facts of this case is that one Uniworth Apparel Ltd (“Uniworth”) had an industrial unit in Thane District of Maharashtra. It availed of certain credit facilities from ICICI bank. Uniworth could not clear the bank’s dues and as a result the bank assigned their claim against Uniworth in favour of ARCIL. To recover the dues, ARCIL took steps under Section 13 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 [for short “SARFAESI Act”] against Uniworth and took possession of the assets. Thereafter, ARCIL allegedly entered into a private treaty agreement dated 13th February 2007 with the Appellant before the Supreme Court [Excel Dealcomm (P) Ltd] for sale of the said property for a consideration of Rs.7.50 Crores. This was a sale under the SARFAESI Act wherein the sale was to be conducted by execution of a sale certificate by ARCIL in favour of the Excel. Since ARCIL did not thereafter act on the alleged private treaty agreement entered into with Excel, a suit came to be filed before the Calcutta High Court.
This was a sale under the SARFAESI Act wherein the sale was to be conducted by execution of a sale certificate by ARCIL in favour of the Excel. Since ARCIL did not thereafter act on the alleged private treaty agreement entered into with Excel, a suit came to be filed before the Calcutta High Court. That suit was ultimately dismissed by a Division Bench (in appeal) of the Calcutta High Court and which came before the Supreme Court. After considering Clause XII of the Letters Patent of the High Court of Calcutta, the Supreme Court held as under: 10. Clause 12 of the Letters Patent of the High Court of Calcutta reads: “12. And we do further ordain that the said High Court of Judicature at Fort William in Bengal in the exercise of its ordinary original civil jurisdiction shall be empowered to receive, try and determine suits of every description, if, in the case of suits for land or other immovable property, such land or property shall be situated, or, in all other cases, if the cause of action shall have arisen either wholly, or in case the leave of the court shall have been first obtained, in part, within the local limits of the ordinary original jurisdiction of the said High Court, or if the defendant at the time of the commencement of the suit shall dwell or carry on business, or personally work for gain, within such limits; except that the said High Court shall not have original jurisdiction in cases falling within the jurisdiction of the Small Cause Court at Calcutta, in which the debt or damage, or value of the property sued for does not exceed one hundred rupees.” 11. A plain reading of the provision suggests that ordinary original civil jurisdiction of the High Court of Calcutta will extend in the following cases: (a) In a suit for land or other immovable property- (i) where such land or property is wholly situated in the territorial jurisdiction of the High Court of Calcutta; (ii) where such land or property is situated in part only within the said territorial jurisdiction of the court, if the leave of the court shall have been first obtained.
(b) In suits other than suit for land- (i) if the cause of action has arisen wholly within the said limits; (ii) where the cause of action has arisen in part only within the said limits, if the leave of the court shall have been first obtained; (iii) if the defendant at the time of the commencement of the suit dwells or carries on business or personally works for gain within such limits. 12. In the present case, a suit was filed for the specific performance of the agreement which contemplated the sale of property, as has been described in Para 1 under Section 13 of the Sarfaesi Act in terms of the Rules. The question with respect to Clause 12 of the Letters Patent in the present case is that whether the present suit is suit for land. 13. A suit for land is a suit in which the relief claimed relates to the title or delivery of possession of land or immovable property [see Adcon Electronics (P) Ltd. v. Daulat [Adcon Electronics (P) Ltd. v. Daulat]. Further, it is an established rule that to determine whether it is a suit for land, the court will look into barely the plaint and no other evidence (Indian Mineral & Chemicals Co. v. Deutsche Bank [ (2004) 12 SCC 376 ]). If by the averments in the plaint and prayers therein, it appears that the suit is one for land, it shall be so held and if it does not so appear, then the suit shall continue under leave granted under Clause 12. In the present case, the prayer in the plaint was couched in the following words: “A decree for specific performance of the agreement for sale recorded in the document dated 13-2-2007 being Annexure ‘A’ hereto by directing Defendants 1 and 2 to issue in favour of the plaintiff sale certificate in respect of assets mentioned in Schedule 1 to Annexure A hereto and on as is where is basis in terms of the said agreement.” 14. The learned counsel for the respondent has very emphatically argued that this prayer is in effect a prayer for possession of the said properties since the procedure under the Rules for execution of the sale certificate, the transfer of possession is prerequisite.
The learned counsel for the respondent has very emphatically argued that this prayer is in effect a prayer for possession of the said properties since the procedure under the Rules for execution of the sale certificate, the transfer of possession is prerequisite. Therefore, he has submitted that although, the possession is not asked for in direct words but that would be the obvious corollary to granting of the prayer. Further, another point which has been emphasised on behalf of the respondent is that the prayer requires sale to be effected in terms of the agreement, and therefore, the entire agreement may be read as a part of the prayer. 15. On the question of suit for specific performance of an agreement to sell being a suit for land, this Court has laid down a clear principle in Adcon Electronics (P) Ltd. v. Daulat [Adcon Electronics (P) Ltd. v. Daulat], that a suit for specific performance simpliciter without a prayer for delivery of possession is not a suit for land as Section 22 of the Specific Relief Act, 1963 categorically bars any court to grant such relief of possession in a suit for specific performance unless specifically sought. In view of this judgment, in the present case, the only question for our determination in the plaint is whether a prayer for delivery of possession is sought or not? The prayer sought is issuance of sale certificate which is provided in Appendix V to the Rules under the Sarfaesi Act. The sale certificate reads as follows: “Whereas the undersigned being the authorised officer of the …………………………. (name of the institution) under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and in exercise of the powers conferred under Section 13 read with Rule 12 of the Security Interest (Enforcement) Rules, 2002 sold on behalf of the ……………………… (name of the secured creditor/institution) in favour of the ………………………. (purchaser), the immovable property shown in the Schedule below secured in favour of the ………………………. (name of the secured creditor) by …………………… (the names of the borrowers) towards the financial facility ……………………….. (description) offered by ……………………….. (secured creditor). The undersigned acknowledge the receipt of the sale price in full and handed over the delivery and possession of the scheduled property.
(purchaser), the immovable property shown in the Schedule below secured in favour of the ………………………. (name of the secured creditor) by …………………… (the names of the borrowers) towards the financial facility ……………………….. (description) offered by ……………………….. (secured creditor). The undersigned acknowledge the receipt of the sale price in full and handed over the delivery and possession of the scheduled property. The sale of the scheduled property was made free from all encumbrances known to the secured creditor listed below on deposit of the money demanded by the undersigned.” 16. It may be noted that the sale certificate sought under the prayer requires the delivery of possession of the suit property. Thus, we find that the prayer for delivery of possession was an implicit one in the present case. The prayer as sought in the plaint could not have been granted without the delivery of possession of the suit property as the sale certificate itself contemplates the delivery of the immovable property. Thus, in view of this we find that Adcon Electronics [Adcon Electronics (P) Ltd. v. Daulat] would not apply as there was a prayer for delivery of possession in the present case. Therefore, we hold that the present suit was indeed a suit for land. (emphasis supplied) 16. As can be seen from the facts of this case, what was sought was specific performance of the Agreement for Sale recorded in the document dated 13th February 2007 by directing Defendant Nos. 1 & 2 to issue in favour of the Plaintiff a sale certificate in respect of the assets mentioned in Schedule-1 to Annexure - A thereto. The Supreme Court once again reiterated the principle set out in Adcon Electronics (P) Ltd that a suit for specific performance simpliciter without the prayer for delivery of possession is not a “suit for land”. The Supreme Court then went on to consider whether a prayer for delivery of possession was sought or not. The Supreme Court opined that the prayer sought is for issuance of a sale certificate which is provided in Appendix V to the rules under the SARFAESI Act. It noted that the sale certificate sought under the said prayer required delivery of possession of the suit property. Thus, the Supreme Court opined that the prayer for delivery of possession was an implicit one in that case.
It noted that the sale certificate sought under the said prayer required delivery of possession of the suit property. Thus, the Supreme Court opined that the prayer for delivery of possession was an implicit one in that case. Taking this view, the Supreme Court held that since there was a prayer for delivery of possession, the suit was indeed a “suit for land” and since the land was not within the jurisdiction of the Calcutta High Court, it had no jurisdiction to entertain the suit. 17. Having discussed the law on the subject, I shall now examine the averments in the plaint and the reliefs sought in the present suit. The averments in the plaint reveal [which for the time being I have to assume as correct], that Defendant No. 1 agreed to sell all its assets to Plaintiff No.1 on a slump sale basis as per the Term Sheet dated January 15/16, 2021. It is true that under this Term Sheet, amongst all the assets to be transferred, three immovable properties were also included, all situated outside the jurisdiction of this Court. It is this Term Sheet of which specific performance is sought.
It is true that under this Term Sheet, amongst all the assets to be transferred, three immovable properties were also included, all situated outside the jurisdiction of this Court. It is this Term Sheet of which specific performance is sought. The prayers in the suit are as under: “(a) That this Hon'ble court be pleased to order and declare that the Term Sheet (Exhibit B hereto) entered into and executed by and between the Plaintiff No. 1 and Defendant No. 1 is valid, binding and subsisting, and the defendant No. 1 is bound by the terms thereof; (b) That this Hon’ble Court be pleased to order and direct the Defendant No. 1 to specifically perform the Term Sheet (Exhibit B hereto) and in relation thereto to do all such acts, deeds and things and execute all writings (including Definitive Agreement) as may be required and necessary for the purpose described in the Term Sheet; (c) That this Hon’ble Court be pleased to order and declare that; (d) The definitive agreement dated April 7, 2021 entered between the Defendant No.1 and Defendant No. 3 is null and void and be cancelled and; (i) Any acts, deeds and steps taken by the Defendant No. 1 and Defendant No. 3 their directors, officers, employees, agents, servants and any person acting through either of them or on either of their behalf in pursuance of the definitive agreement dated April 7,2021 are null and void; (ii) The tripartite agreement dated March 31, 2021 entered between the Defendant Nos. 1,3 and 4 is null and void and cancelled; (iii) Any acts, deeds and steps taken by the Defendant Nos. 1, 3 and 4 their directors, officers, employees, agents, servants and any person acting through either of them or on either of their behalf, in pursuance of the tripartite agreement dated March 31, 2021 are null and void. (iv) Without prejudice and in the alternative to prayer (a), (b) and (c), in the event for any reason whatsoever this Hon’ble Court comes to a finding that prayer (a), (b) and (c) cannot be granted, then in that event but not otherwise, this Hon’ble court may be pleased to order and direct the Defendant No. 1 to pay the Plaintiff No. 1: (i) A sum of Rs.
15,00,00,000 along with interest at the rate 18% p.a. from the date of filing the present suit till payment and/ or realisation as damages in lieu of specific performance, being loss incurred by the Plaintiff No. 1 due to nonperformance of the Term Sheet, as set out in the particulars of claim being Exhibit -FF hereto and; (ii) A sum of Rs. 43,47,531/- along with interest at the rate of 18%p.a. from the date of filing the present suit till payment and/or realisation being cost incurred by the Plaintiff No. 1 for the steps taken in pursuance of the term sheet and for completion of the Transaction including appointing legal and tax advisors, conducting legal and financial due diligence, advisory support expenses miscellaneous expenses and setting up of the Plaintiff No. 2 as set out in the particulars of claim being Exhibit -FF hereto. (e) That the Defendant, their directors, officers, employees, agents, servants and any person acting through either of them or on either of their behalf, be restrained by an order and permanent injunction of this Hon’ble Court from selling, alienating, encumbering, transferring, parting with possession or otherwise disposing of in any manner or creating any right, title or interest to or in the assets described under the Term Sheet.” 18. After perusing the averments in the plaint read with the reliefs sought, it is clear that the Plaintiff does not seek any declaration of title to or delivery of possession of any lands which are situated outside the jurisdiction of this Court. To get over this problem, Mr. Andhyarujina submitted that implicit in a prayer for seeking specific performance, is a prayer seeking delivery of possession. If this be the case, then the present suit would certainly be a “suit for land”, was the submission. It was in support of this proposition that Mr. Andhyarujina heavily relied upon the decision of the Supreme Court in the case of Excel Dealcomm (P) Ltd. (supra) [ (2015) 8 SCC 219 ] and the decision of the Supreme Court in the case of Manickam @ Thandapani & Anr. Vs. Vasantha (supra) [Civil Appeal No.2726 Of 2022 decided on 5th April 2022]. I have already discussed the ambit and scope of the decision in Excel Dealcomm (P) Ltd. (supra).
Vs. Vasantha (supra) [Civil Appeal No.2726 Of 2022 decided on 5th April 2022]. I have already discussed the ambit and scope of the decision in Excel Dealcomm (P) Ltd. (supra). The Supreme Court, in Excel’s case, concluded that not only was the Plaintiff seeking a decree for specific performance of the Agreement for sale but also for an issuance in favour of the Plaintiff a sale certificate as per the statutory form under the rules of the SARFAESI Act. That sale certificate [and which was specifically sought for in the prayer], itself contemplated that delivery of possession would be handed over to the Plaintiff. The sale certificate has also been reproduced by the Supreme Court in paragraph 15 of its decision in Excel’s case. It is for this reason, and after perusing the form of the sale certificate, that the Supreme Court opined that since the prayer in the suit specifically sought for issuance of a sale certificate which required the delivery of possession of the immoveable property, it held in Excel’s case that the said suit was indeed a “suit for land”. This decision does not in any way lay down a general proposition that in a suit for specific performance, implicit in it, is a prayer for delivery of possession and would therefore consequently be a “suit for land”. 19. In the case of Manickam @ Thandapani & Anr. Vs. Vasantha (supra) [Civil Appeal No.2726 Of 2022 decided on 5th April 2022], the Supreme Court was not considering whether a suit filed for specific performance of an Agreement relating to immovable property was a “suit for land”. The issue before the Supreme Court was the interpretation of Section 22 of the Specific Relief Act, 1963. The Supreme Court, after examining the law and after considering its judgment in Adcon Electronics (P) Limited (supra), inter-alia concluded that the relief of possession is ancillary to the decree for specific performance and need not be specifically claimed. The Supreme Court opined that this was the position even under the Specific Relief Act, 1877 and that Section 22 of the Specific Relief Act, 1963 was introduced in pursuance of the recommendation of the Law Commission to avoid multiplicity of the proceedings and to cut down delay.
The Supreme Court opined that this was the position even under the Specific Relief Act, 1877 and that Section 22 of the Specific Relief Act, 1963 was introduced in pursuance of the recommendation of the Law Commission to avoid multiplicity of the proceedings and to cut down delay. In other words, though the preponderance of judicial opinion under the Specific Relief Act, 1877 was in favour of the fact that relief of possession is ancillary to a decree for specific performance, this was further clarified by introducing Section 22 in the Specific Relief Act, 1963. The Supreme Court held that sub-section (2) of Section 22 [which contemplates that no relief under clause (a) or clause (b) of Section 22 (1) shall be granted by the Court unless it has been specifically claimed], is a rule of prudence to ask for possession “in an appropriate case”. The appropriate case would not include a suit for specific performance simpliciter but may include a suit for partition or a suit when the decree is to be executed against a transferee. The Supreme Court opined that Section 22(2) cannot be said to be a mandatory provision as the power to claim of possession at any stage of the proceeding makes sub-section (2) of Section 22 directory. It further went on to hold that Section 22(2) is a matter of procedure to avoid multiplicity of proceedings and the procedural laws are handmaidens of justice and cannot defeat substantive rights. After carefully going through this decision, I am of the view that this decision/judgment does not in any way lay down a proposition that because the relief of possession would flow from the decree of specific performance, the same would amount to be a “suit for land”. In fact, the Supreme Court, referring to a decision of the Bombay High Court in the case of Lotu Bandu Sonavane v. Pundalik Nimba Koli [AIR 1985 Bombay 412] opined that if the relief of possession is ancillary to and necessarily flows from the decree for specific performance then it is not necessary to specifically seek such a relief and the bar of Section 22(2) would not be attracted. I, therefore, do not think that Mr.
I, therefore, do not think that Mr. Andhyarujina, [relying upon the decision of the Supreme Court in Excel’s case read with the decision in Manickam’s case], is correct in his submission that since implicit in the prayer seeking specific performance of a contract relating to immovable property, is also a relief for delivering possession, the suit would a “suit for land”. This, to my mind, is too sweeping a proposition to accept. If I was to accept the submission of Mr. Andhyarujina, then, virtually in every suit where specific performance relating to immovable property is sought, would be a “suit for land”. I am afraid that is not the law. When the Court has to determine whether a particular suit is a “suit for land” or otherwise, it has to determine and examine whether it is substantially for land i.e. for the purpose of acquiring title to or possession of land or declaring any interest in the land. Merely because the Plaintiff may or may not be entitled to possession once a decree of specific performance is granted, would not by itself, without anything more, make it for “suit for land”. This proposition, according to me, is clearly culled out from the decisions referred to by me above, and more particularly the decision of the Division Bench of this Court in the case of WIMCO Ltd (supra), which has considered the decision of the Supreme Court in the case of Adcon Electronics (P) Limited (supra). Another factor which also militates against the argument that the present suit is a “suit for land” is that in the facts of the present case, the Plaintiffs have, in the alternative to the prayer of specific performance, also sought compensation in lieu thereof [Rs.15,00,00,000/-] and costs of Rs.43,47,531/- for the steps taken in pursuance of the Term Sheet including appointing legal and tax advisors, conducting legal and financial due diligence etc. To put it simply, the present suit is for enforcement of a contract [i.e. the Term Sheet] or in the alternative for compensation/damages for breach, and not one for acquiring title to or possession of land or declaring any interest in the land. 20. I must mention that Mr.
To put it simply, the present suit is for enforcement of a contract [i.e. the Term Sheet] or in the alternative for compensation/damages for breach, and not one for acquiring title to or possession of land or declaring any interest in the land. 20. I must mention that Mr. Andhyarujina also half-heartedly submitted that because the Plaintiff has sought a permanent injunction restraining the Defendants from alienating, selling, encumbering, transferring, or parting with possession of any of the assets described in the Term Sheet [which include three immovable properties outside the jurisdiction of this Court] the present suit would amount to a “suit for land”. I am afraid, I unable to accept this submission. Merely seeking a prayer restraining the Defendants from creating third party rights of an immovable property which is outside the jurisdiction of this Court, without anything more, would not make it a “suit for land”. One would have to examine the averments in the plaint as a whole, read with the reliefs sought, before coming to such a conclusion. Reading one prayer in isolation would not be the correct approach. 21. In view of the forgoing discussion, in the facts of the present case, I am clearly of the view that since the Plaintiff has not asked for any prayer for delivery of possession of any land and the suit is filed simpliciter seeking specific performance of the Term Sheet, the present suit is not a “suit for land”. Hence, considering the averments in paragraph 14 of the Leave Petition and paragraph 19 (as amended) of the Plaint, the Leave Petition is allowed in terms of prayer clause (a) which reads thus: “(a) That leave granted to the Petitioner under Clause XII of the Letters Patent to institute and prosecute Suit in this Hon’ble Court against the Respondents/Defendants; 22. The Leave Petition is accordingly disposed of. No order as to costs. 23. This order will be digitally signed by the Personal Assistant of this Court. All concerned will act on production by fax or email of a digitally signed copy of this order.