Bombay High Court

Navin Makhija & Ors vs Tulsi Bhimjiyani & Anr on 16 October, 2012

Bench: R.D. Dhanuka

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                 IN THE HIGH COURT OF JUDICATURE AT BOMBAY




                                                                                     
                      ORDINARY ORIGINAL CIVIL JURISDICTION

                       ARBITRATION PETITION NO. 560 OF 2012




                                                             
      Navin Makhija & Ors.                                 ..... Petitioners

                  Versus




                                                            
      Tulsi Bhimjiyani & Anr.                              ..... Respondents


      Mr.S.U.Kamdar, Senior Advocate a/w. Mr.Chirag Balsara, Mr.P.K.Shroff,




                                                  
      Mr.D.V.Deokar, Mr.V.P.Shroff, Ms.Jaylaxmi Gaud, Ms.Rashmi Jha, i/b. P.K.Shroff &
      Co. for the Petitioners.  
      Mr.Nitin Thakkar, Senior Advocate, a/w. Ms.Snehal Shah, Mr.Ritesh Jain, Ms.Anita
      J.Tatani, i/b. M/s.Purnanand & Co. for the Respondents.
                               
                                        CORAM : R.D. DHANUKA, J.

                                        DATE        : 16th OCTOBER, 2012.
      ORAL JUDGMENT :

By this petition, the petitioners seek interim measures under Section 9 of

the Arbitration and Conciliation Act, 1996.

2. Admittedly, the Arbitral Tribunal has been already constituted in the

above matter. The petitioners have made statement before the Arbitral Tribunal

that this application would be withdrawn. The petitioners have taken out

Chamber Summons in this proceedings (1215 of 2012) for seeking certain

amendments. The Learned Counsel appearing for the petitioners submit that

reliefs in the Chamber Summons be granted and the petitioners be permitted to

withdraw this petition.

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3. The Learned Senior Counsel appearing for the respondents, however,

strongly oppose this petition on the ground that this court has no territorial

jurisdiction to entertain, try and dispose of this petition and consequently this

court has no jurisdiction to entertain the Chamber Summons filed by the

petitioners. In view of the preliminary objection raised by the respondents this

court shall first decide whether this court has jurisdiction to entertain, try and

dispose of the present petition. Some of the relevant facts touching this issue

are as under :-

4. By an agreement dated 21st February, 2002 executed between one

Mr.Fardeen Nadir Shah Mulla and four others and the Respondent No.2, the

respondents became entitled to a property situated at Village Majiwade, Thane

admeasuring about 97,891.24 sq.mtrs.

5. On 3rd October, 2010, agreement in the form of Term Sheet was executed

at Mumbai between the Petitioners and the respondents recording the

agreement for joint development of the property and to form the LLP and to

have development agreement in favour of LLP to be executed on or before 31st

December, 2010 on the terms and conditions contained in the said agreement.

6. It is the case of the petitioners that on 22nd September, 2010, the

petitioners paid a sum of Rs.5,04,00,000/- to the 2nd respondent.

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7. On 3rd October, 2010, the petitioners paid a sum of Rs.10,00,00,000/- to

the 2nd Respondent. On 3rd November, 2010, the petitioners paid further

amount of Rs.1,01,00,000/- to the respondents and on 16th November, 2010 a

sum of Rs.20,00,00,000/-.

8. By notice dated 27th April, 2012, the petitioners invoked arbitration

clause and nominated Shri Justice F.I.Rebello (retired) as a arbitrator. The

arbitral tribunal was constituted. The proceedings before the arbitral tribunal

are pending.

9. The Learned Senior Counsel appearing for the respondents made

following submissions :-

(a) This court has no territorial jurisdiction to

entertain this petition.

(b) The proceedings filed by the petitioners is

for land which is situated outside Mumbai and thus

this court has no territorial jurisdiction to entertain

this petition.

(c) The petitioners have filed title dispute in

respect of the suit property.

(d) In view of Section 42 of the Arbitration and

Conciliation Act, 1996, if this application is

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entertained in this court which does not have

jurisdiction, all subsequent applications arising out

of that agreement shall also have to be filed in this

court which also would be without jurisdiction.

10. The Learned Senior Counsel for the respondents placed reliance on the

judgment of Supreme Court in case of Adcon Electronics Pvt. Ltd. vs. Daulat

and another1. Reliance is placed on paragraphs 9, 11, 12, 13, 15, 16, 17 and

18. The Learned Senior Counsel invited my attention to prayers (d), (g), (k)

and (l) of the statement of claim in support of the plea that the claim before the

arbitral tribunal made by the petitioners was for land for possession and also

for adjudication of title in respect of the suit land. Relevant paragraphs are

setout as under :-

9. Thus, it is clear that under clause 12 of the

Letters Patent, the High Court in exercise of its ordinary original jurisdiction will have power to receive, try and determine : (1) suits for land or other immovable property if such property is situated within the local limits of original

jurisdiction of the High Court; or (2) all other cases (a) if the cause of action has arisen wholly within the local limits of the ordinary original jurisdiction of the High Court; (b) if prior leave of the Court has been obtained and the cause of action has arisen in part within the local limits of the ordinary original jurisdiction of the High Court; or (c) if the defendant dwells or carries on business or personally works for gain within such

1 2001(4) MLJ 469

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limits.

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 the Federal Court.

12. In His Highness Shrimant Maharaj Yashvantrav Holkar of Indore vs. Dada Bhai Cursetji Ashburner 1890 (14) I.L.R. Bombay 353 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 January 8, 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 Balset Kasar Vs. Rambhaji 9 Bombay H.C.Rep.13 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 The Delhi and London Bank Vs. Wordie I.L.R., 1 Calcutta 249 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 Vs. Cally

Doss Ghose I.L.R. (5) Calcutta 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 M/s.Moolji Jaitha and Co. Vs. The

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Khandesh Spinning and Weaving Mills Co. Ltd. A.I.R. (37) 1950 Federal Court 83, there is

divergence of opinion among the learned Judges of five-Judge Bench of the Federal Court in regard to

the import of the expression "suit for land". Chief Justice Kania opined, "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". Justice Fazl Ali observed, "If I had really felt that I was called upon to decide it, I would have agreed with

the line of cases in which it has been held that, broadly speaking, the expression "suit for land"

covers the following three classes of 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, "The words in question, besides obviously covering claims for recovery of

possession or control of land, are apt to connote also suit which primarily and substantially seek an

adjudication upon title to immovable property or a determination of any right or interest therein". Justice Mahajan observed, "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

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added, "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". In that view he expressed his agreement with the decision of the Full Bench of the Madras High Court in Velliappa Chettiar vs. Govinda Doss AIR (16) 1929 Madras

721 F.B. Justice Mukherjea perceived, "It 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."

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 M/s.Moolji Jaitha's case (supra).

16. In a suit for specific performance of contract for sale of immovable property containing 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

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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 my 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 sub-section (2) of Section 22 is that no relief under clauses (a) and

(b) of sub-section (1) shall be granted by the Court

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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 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".

11. The learned counsel also placed reliance upon the judgment of Calcutta

High Court in case of Raj Kumar Singhania vs. Benoy Kumar Mazumdar

and others2 . Para (23) of the said judgment reads thus :-

23. Having considered the rival contentions

urged, this Court is of the view that there is more substance in the contention of Mr. P. K. Das, namely a claim for possession now sought to be

introduced by way of an amendment should not be allowed. To my mind it is not a mere case of amendment which if allowed would divest the jurisdiction of the Court but a case where the facts evidence that the property being situate outside

jurisdiction no relief of possession could initially have been claimed in the original proceedings as the matter would be admittedly beyond jurisdiction of the Court if such a prayer or claim incorporated.

It is significant that with knowledge of this aspect of the matter relief under clause 12 of the Letters Patent and Order 2, Rule 2 was obtained by the plaintiff and specifically stated that the plaintiff reserved his right to take appropriate action to claim possession of the suit premises. The present

2 AIR 1985 CALCUTTA 328

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application for amendment is not one such appropriate action contemplated. As such, it cannot

be said that there was any inadvertence or negligence or any such factors required to be

considered when considering whether the plea for amendment should be allowed. It cannot also be said that there is any defective pleadings on record which is required to be cured as viewed in AIR

1978 SC 484. The second aspect of the matter, of great significance is that Section 22 of the Specific Relief Act which is an enabling provision does not seek to interfere with the jurisdiction of a Court and the section itself enacts that "in an appropriate

case" a claim for possession and ancillary reliefs can be sought by way of amendment in order to

avoid multiplicity of proceedings. In the instant case, the decree for possession could not have been asked for in the original plaint as the Court would

be incompetent too entertain and try a suit for land and the legislature in enacting Section 22 did not override Clause 12 of the Letters Patent. As such, the expression "in an appropriate case" must

necessarily mean and refer to a case where the plaintiff was competent to make a claim for

possession and/or seek other ancillary reliefs, to avoid multiplicity of proceedings. It was not the intention of the legislature to give jurisdiction to a

Court which had none, and it would be travesty of justice to allow a prayer for possession to be brought into the pleadings in this circuitous manner, when admittedly the original Court lacked jurisdiction to do so, and the plaintiff well knew his

limitations and, therefore, sought appropriate relief under clause 12 of the Letters Patent as also Order 2 Rule 2 so that appropriate action could be taken by him, if necessary, in further proceedings. In this view of the matter, any prayer for possession and any amendment relating thereto cannot be allowed and is refused. The Division Bench decision cited in is distinguishable and each case must be guided by its own facts. In any event in that case, the court was not required to construe section 22 of the Specific Relief Act. So far as the prayer for

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incorporating the prayer for decree directing the defendant No. 1 to make payment of Rs. 34,500/-

and consequential reliefs hereunder, the same arises out of the agreement which is the subject-matter of

the suit and not being a new case and being a matter which is in issue between the parties namely, as to whether the agreement sought to be enforced is required to be specifically enforced, the

same would be sustainable and such amendments are thus allowed. Mr. Mitra has expressly indicated to the Court that so far as amendments sought for in paragraphs of Annexure X(e3) to (e5) are concerned, he was not pressing for the same and as

such the same are not required to be considered.

12. The Learned Senior Counsel Mr.S.U.Kamdar, appearing for the

petitioners on the other hand submits as under :-

(a) The reliefs claimed in the arbitral

proceedings are for seeking specific performance

of the agreement entered into between the parties.

There is no dispute in respect of the title of the

suit property. There is no prayer for possession in

respect of the land. The petitioners have claimed

specific performance of the agreement which is

admittedly executed at Mumbai. Petitioners have

obtained leave under Clause 12 of the Letters

Patent. This court, therefore, has territorial

jurisdiction to entertain, try and dispose of this

petition.

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(b) From the averments made in the statement

of claim filed by the petitioners before the arbitral

tribunal, it is clear that the claim is for specific

performance of the agreement and is not for land

or for adjudication of the title.

13. In my view, whether suit is a suit for land or not has to be determined on

the basis of the averments in the statement of claim filed before the arbitral

tribunal. The Learned Senior Counsel Mr.S.U.Kamdar invited my attention to

paragraphs 2.7 to 2.16 and paragraphs (3) to (10), paragraphs (34) to (45) and

prayers (a), (b), (c), (d), (e), (f), (h) and (i) of the statement of claim. From the