Rehmania Academy Of Sciences, ... vs Shri B.B.D. Bhargava & Others
2011 Latest Caselaw 1361 Del

    IN THE HIGH COURT OF DELHI AT NEW DELHI

                     RFA NO.152/2006

                    Judgment reserved on: 25.11.2010

                    Judgment delivered on: 09.03.2011


REHMANIA ACADEMY OF SCIENCES,
MATHURA                           ......Appellant
               Through: Mr.Yunus Malik and Mr.Ravi
                        Kishore, Advocates.

                     Vs.

SHRI B.B.D.BHARGAVA & OTHERS           ......Respondents
                 Through: Ms.Ritu Singh Mann and
                          Mr.Dheeraj Garg, Advocates
                          for the respondent
                          No.1.CORAM:

HON'BLE MR. JUSTICE KAILASH GAMBHIR

1. Whether the Reporters of local papers may      yes

be allowed to see the judgment?

2. To be referred to Reporter or not?             yes

3. Whether the judgment should be reported        yes

in the Digest?

KAILASH GAMBHIR, J.

*

1. By this appeal filed under Section 96 of the Code

of Civil Procedure, 1908 the appellant seeks to set aside the

judgment and decree dated 16.11.2005 whereby the suit filed

by the respondents for declaration was decreed in favour of

the respondents and against the appellant.

2. Brief facts of the case relevant for deciding the

present appeal are that the appellant and respondents

entered into an agreement to sell 4/7th share of the property

belonging to the respondents bearing Nazul Plot No.38,

Company Bagh, Civil Lines, Mathura dated 2.6.02 and it was

stipulated between the parties that the complete payment of

the said property would be made by the appellant by 31.8.02.

That due to the failure of the appellant to pay the requisite

amount by the said date, the respondents No.1 to 3 rescinded

the contract vide notice dated 26.10.02 and filed a suit for

declaration of the same which vide judgment and decree

dated 16.11.05 was decreed in favour of the respondents

holding that the agreement was rightly terminated by the

respondent no.1 to 3. Feeling aggrieved with the same, the

appellant has preferred the present appeal. Respondent no.4,

however, being a performa respondent had sold her 1/7 th

share to the appellant vide a separate sale deed dated

9.4.2003 and during the pendency of the suit, respondent

nos. 2 and 3 vide sale deed dated 8.6.04 and 24.11.04 also

sold their respective shares to the appellant.

3. Assailing the impugned judgment and decree on

the point of jurisdiction, counsel appearing for the appellant

submitted that the suit filed by the respondents no. 1 to 3

was clearly hit by Section 16 (Clauses a to f) of CPC, as the

Courts at Delhi lacked the territorial jurisdiction to entertain

the said suit filed by the respondents. Elaborating this

argument, counsel further submitted that by seeking the

declaration in their favour, the respondents no. 1 to 3 sought

to enforce the right flowing from the immovable property and

not independent of the immovable property. Counsel further

contended that the said issue being legal, the same can even

be considered by this Court in exercise of its appellate

jurisdiction. In support of his arguments, counsel for the

appellant placed reliance on the decision of the Hon'ble Apex

Court in Harshad Chiman Lal Modi Vs. DLF Universal

Ltd & Anr. (2005) 7 SCC page 79 with special emphasis

on paras 16, 31 and 33.

4. On the merits of the case, counsel for the

appellant submitted that no notice to rescind the agreement,

as envisaged in Clause 3 of the agreement to sell dated

2.6.2002, was given by the respondents to the appellant.

Inviting attention of this Court to the legal notice dated

26.10.2002, counsel submitted that the respondents have not

given any notice of termination, but in fact rescinded the

agreement straightway through the said notice itself and

such termination notice was clearly in contravention of

clause 3 of the said agreement. Counsel for the appellant

further submitted that the respondents had suppressed a

very vital fact from the learned trial court by not disclosing

that the respondents No.2, 3 and 4, who were plaintiffs nos.2

and 3 and defendant no.2 before the learned trial court

respectively, had sold their respective shares in favour of the

appellant during the pendency of the said suit. Counsel

further stated that the photocopies of the sale deeds

executed by these respondents in favour of the appellant

have been placed on record. He further stated that it was

only the respondent No.1, who was plaintiff No.1 before the

learned trial court, who did not come forward to sell his

share to the appellant. Counsel thus contended that due to

the said willful suppression on the part of the respondents,

the learned trial court did not come to know about the

respondent nos. 2 and 3 having honoured the said agreement

and, therefore, there would not have arisen any question of

termination or rescission of the said agreement so far the

respondents No.2 and 3 are concerned. Counsel for the

appellant also placed reliance on Clause (d) of Sub Section 2

of Section 27 of the Specific Relief Act to support his

argument that a part of the contract could not have been

rescinded by the respondent No.1 alone, as it was an

indivisible contract which could not have been severed by the

respondent No.1 alone more particularly when all other

respondents had come forward and agreed to honour the said

agreement and in fact had executed sale deeds in favour of

the appellant during the pendency of the suit. Counsel also

stated that in fact the respondent No.1 was to refund the

money as per his share and this fact by itself would show that

the contract could not have been severed, the same being an

indivisible contract.

5. Refuting the submissions of counsel for the

appellant, Ms.Ritu Singh Mann, learned counsel for the

respondent No.1 argued that the judgment cited by the

counsel for the appellant would not be applicable to the facts

of the present case. Distinguishing the facts of the said case

the counsel pointed out that the suit filed by the appellant

therein was to claim specific performance of the agreement

and for possession of the property, besides seeking

declaration and permanent injunction, while in the present

case, the respondents had sought the relief of declaration to

the effect that the agreement dated 2.6.2002 was rightly

rescinded by the respondents herein. Counsel further stated

that as per Section 16 CPC, the jurisdiction is barred only

where the case of the parties is covered in one of the Clauses

(a) to (f) of the Section and not otherwise. The contention of

the counsel for the respondents was that the respondents

never claimed any right or interest in the immovable property

and, therefore, the case of the respondents would not be

covered even under Clause (d) of Section 16 CPC, rather the

same would fall under Section 20 CPC. Counsel for the

respondent placed reliance on Section 54 of the Transfer of

Property Act to contend that since there was only an

agreement between the parties, therefore, no right by the

said agreement could have been created by the respondents

in favour of the appellant and, therefore, there was no

question of determination of any right or interest in respect

of the immovable property, which right was still vested with

the respondents and was never transferred to the appellant.

6. Counsel for the respondents however did not

dispute the fact that the sale deeds were executed by the

respondents No.2 and 3 in favour of the appellant during the

pendency of the suit and that the respondent No.4 who was

defendant No.2 before the learned trial court had sold her

share prior to the filing of the said suit. Counsel thus did not

dispute the photocopies of the sale deeds filed by counsel for

the appellant but stated that even the appellant, who was

duly represented by his Advocate, never disclosed the fact of

the execution of the sale deeds before the learned trial

court. The counsel invited the attention of this court to the

fact that the Advocate of the appellant herein was present at

the stage of final arguments and the presence of

Mr.B.A.Hasim, Advocate for defendant No.1 has been shown

on the decree sheet also. Counsel for the respondents also

submitted that valid notice of termination to rescind the

agreement was given to the appellant in terms of Clause 3 of

the agreement. Counsel also submitted that after the

termination of the said contract, if any, fresh contracts were

entered into between the appellant and the other

respondents then the same will not defeat the rights of the

respondent No.1 claimed by him in the said suit.

7. Counsel for the respondent also submitted that the

said sale was made by the respondents No.2 and 3 at a lesser

rate than the rate earlier agreed upon by them in the

agreement to sell dated 2.6.2002. Drawing attention of the

Court to one of the photocopies of the sale deeds placed on

record by the appellant, counsel submitted that the

respondent No.4, who was defendant No.2 before the learned

trial court, had sold her share of 2167.63 sq. yds. for a total

consideration of Rs.31,59,405/-, which comes to (Approx.)

Rs.1457/- sq. yd. Counsel further submitted that the sale

amount even in the sale deeds executed by the respondents

No.2 and 3 during the pendency of the case were at

somewhat lesser rate and no reference has been made to the

earlier agreement dated 2.6.2002 in the said sale deeds.

Counsel also stated that in the subsequent sale deeds the

appellant has purchased the 3/7th share of the land

admeasuring 15173.4 sq yards, although in the notice sent by

the appellant, the appellant took a position that the area at

site falls short by 1350 sq. yds. Counsel also submitted that

the respondents had agreed to sell the plot on 'as is where is'

basis and this was specifically stated in the agreement.

Counsel further submitted that the appellant never took or

resorted to the remedy of seeking specific performance of the

contract based on the agreement to sell even till date.

8. In rejoinder arguments, counsel for the appellant

submitted that the right or interest claimed by the

respondents has flown only because of the agreement to sell

which concerns the sale of the immovable property which is

situated in Mathura (U.P.) and not in Delhi and, therefore,

only the Mathura Courts could have entertained the said suit

and not the Delhi Courts. Counsel further submitted that in

the subsequent sale deeds, there is a clear reference to the

earlier agreement dated 2.6.2002 and the said sale was made

by the respondents No.2 and 3 at a rate of Rs.1600 /- sq. yds

only which was also the rate as per the agreement to sell

dated 2.6.02.

9. I have heard learned counsel for the parties at

considerable length and gone through the records of the

case.

10. A suit for declaration was filed by respondents No.

1 to 3 (plaintiffs in the suit) against the appellant (defendant

No. 1 in the suit) and respondent No. 4 (defendant no.2 in the

suit) seeking declaration to the effect that the respondents

No. 1 to 3 had rightly terminated and rescinded the

agreement dated 2nd June, 2002. In the said suit a

declaration was also sought that out of the total sum of Rs. 28

lakhs refundable by respondents No. 1 to 3 and respondent

No. 4, respondents No. 1 to 3 were liable to refund only an

aggregate amount of Rs. 2,25,000/- to the appellant. It is not

in dispute between the parties that the subject property i.e.

Nazul plot No. 38, Company Bagh, Civil Lines is situated in

Mathura and respondents No. 1 to 3 were the co-owners of

3/7th undivided share of the property while respondent No. 4

was co-owner of 1/7th share . It is also not in dispute that

earlier there was an oral agreement and then the agreement

in writing was executed on 2nd June, 2002 between the

parties and the total consideration between the parties was

settled at Rs. 1,38,72,822.80 and out of the said sale

consideration an advance of Rs. 1 lakh was paid by the

appellant on 31.10.2001. On 9.1.2002, a further payment of

Rs. 22 lakhs was made by the appellant to respondent No. 1,

who accepted the said payment on behalf of the said sellers

and out of the said payment of Rs. 22 lakhs, cash payment of

Rs. 2 lakhs was meant for paying stamp duty etc. In terms of

the oral agreement between the parties, the appellant had

agreed to pay the entire balance sale consideration amount

within 7 days after the said property was converted from

lease hold to free hold. Since the appellant failed to make the

payment of the balance amount of Rs. 1,15,72,822.80 within

the period of one week from the date of the registration of

the conveyance deed of the said property, both the parties

came forward to reduce the terms of the agreement in

writing through the said agreement to sell dated 2nd June,

2002. At the time of the execution of the said agreement to

sell, further payment of Rs. 25 lakhs was made by the

appellant to the seller on 2nd June, 2002 through a demand

draft in the name of respondent no.4 and the appellant had

agreed to pay the balance amount with the agreed rate of

interest in terms of clause 2 of the agreement to sell on or

before 31st August, 2002. In terms of Clause 3 of the

agreement to sell, it was also agreed between the parties that

if the appellant failed to make the said payment by 31.8.2002,

then the seller shall have the option to rescind the agreement

after giving a written notice to the appellant. In clause 3 of

the said agreement it was also agreed between the parties

that the time is the essence of the agreement and the balance

sale consideration has to be paid on or before 31st August,

2002, failing which the agreement shall stand terminated at

the option of the seller. It was also agreed that in case the

seller chooses to rescind the agreement then the buyer shall

forfeit Rs. 20 lakhs from the amount of advance already paid

by him and the balance amount will be refunded within a

period of four months from the date of exercising such option

of rescinding the contract but without any interest. As per

the averments made in the plaint, in September, 2002 the

appellant through its Secretary Mr. A. R. Sani approached

the respondent No. 1 with draft of Rs. 30 lakhs with a request

of extension of time for payment, but the said request of the

appellant was not entertained by the respondents. The

appellant had also sent a notice dated 18th September, 2002

wherein the plea was taken by the appellant that the area of

the suit property was found short by 1350 sq yards.

Respondent No. 1 on the other hand sent a legal notice dated

26th October, 2002 to the appellant thereby terminating the

said agreement. The appellant was also informed through

the said notice that an amount of Rs. 20 lakhs stood forfeited

by them in terms of clause No. 3 of the agreement to sell.

Thereafter the respondent no.1 to 3 filed a suit for

declaration for the rightful termination of the contract,

wherein, the appellant was proceeded ex parte before the

learned Trial Court. The appellant had moved an application

under Order IX Rule 7 CPC before the learned Trial Court to

seek setting aside of the ex parte order but the said

application of the appellant was dismissed by the learned

Trial Court vide order dated 16th May, 2005 with costs of Rs.

5,000/-. The learned Trial Court in the said order observed

that the application moved by the appellant was nothing but

a pack of lies. The said order dated 16th May, 2005 dismissing

the application of the appellant was never challenged by the

appellant and, therefore, the said order became final between

the parties. After the dismissal of the said application, the

matter was taken up for final arguments by the learned Trial

Court on 16.9.2005. On 16.9.2005, the Advocate representing

the appellant sought to advance his arguments but the said

request was opposed by the respondent on the ground that

the appellant had failed to pay the costs as was imposed by

the Trial Court vide order dated 16.5.2005. The matter was

accordingly adjourned to 19.10.2005 giving an opportunity to

the appellant to deposit the said costs. On 19.10.2005

respondents No. 1 to 4 gave up prayer Nos. 2 and 3 of the

plaint. The final arguments were heard by the Court in the

pre-lunch session and after lunch session. It was observed in

the said order that in the pre-lunch session the appellant was

duly represented by his Advocate but after the lunch the

Advocate did not appear. The matter was accordingly

reserved for orders by the Court for 16.11.2005. The learned

Trial Court, however, still granted an opportunity to the

appellant to advance arguments before the next date after

having paid the costs imposed by the Court vide order dated

16th May, 2005. The appellant did not choose to advance the

final arguments and the learned Trial Court vide orders

dated 16.11.2005 passed the final order thereby decreeing

the suit filed by the respondents No. 1 to 3 in terms of prayer

No. 1 of the plaint.

11. The narration of aforesaid sequence of facts

became necessary as the main argument advanced by the

counsel for the appellant before this court was that the Delhi

Court had no territorial jurisdiction to entertain the suit in

terms of Section 16 of the Code of Civil Procedure. Counsel

also contended that the objections concerning the territorial

jurisdiction being legal can be agitated even at the stage of

appeal. Counsel for the appellant also placed reliance on the

decision of the Apex Court in the case of Harshad Chiman

Lal Modi (Supra). Before I deal with the said legal objection

raised by the counsel for the appellant, it would be

appropriate to reproduce Section 16 of the Code of Civil

Procedure as under:-

"16. Suits to be instituted where subject-matter situate.

Subject to the pecuniary or other limitations prescribed by any law, suits-

(a) for the recovery of immovable property with or without rent or profits,

(b) for the partition of immovable property,

(c) for foreclosure, sale or redemption in the case of a mortgage of or charge upon immovable property,

(d) for the determination of any other right to or interest in immovable property,

(e) for compensation for wrong to immovable property,

(f) for the recovery of movable property actually under

distraint or attachment,

shall be instituted in the Court within the local limits of whose jurisdiction the property is situate :

Provided that a suit to obtain relief respecting, or compensation for wrong to, immovable property held by or on behalf of the defendant, may where the relief sought can be entirely obtained through his personal obedience be instituted either in the Court within the local limits of whose jurisdiction the property is situate, or in the Court within the local limits of whose jurisdiction the defendant actually and voluntarily resides, or carries on business, or personally works for gain."

12. Section 16 of the Code of Civil Procedure deals

with the territorial jurisdiction. As the title of the section

suggests suits are to be instituted where the subject matter

situates. It is not in dispute between the parties that the

immoveable property under sale is situated within the

jurisdiction of Mathura and territorial jurisdiction for the

determination of any right concerning the said immoveable

property in terms of Section 16(d) would clearly vest with the

Courts at Mathura and not with Delhi Courts. The relief,

which was sought by respondents No. 1 to 3 in the said plaint

flows from the agreement to sell dated 2.6.2002 which is

clearly covered within the ambit of section 16(d) and it is

easily discernable from the language of the said section that

the suit for declaration arising out of non-performance of the

terms of the agreement concerning sale of immovable

property cannot be filed at a place other than the place of

location of the immoveable property. The learned Apex Court

in the said judgment of Harshad Chiman Lal Modi (Supra)

has clearly held that a Court within whose territorial

jurisdiction the property is not situated has no power to deal

and decide the rights or interest in respect of such property.

So far the contention of counsel for the respondents that the

suit filed by the respondents before the Delhi Courts is

maintainable in terms of proviso of Section 16 CPC, this

Court is constrained to observe that the argument of counsel

for the respondents is totally misplaced. The proviso of

Section 16 CPC cannot be interpreted in a manner to enlarge

the scope of the Section. For the applicability of the proviso

the relief sought must be one which can be obtained entirely

through personal obedience of the defendant which means

that the obedience must be such which the defendant can

render without going beyond the jurisdiction of that Court. In

any case the proviso of Section 16 would be applicable only

in a case where the personal obedience of the defendant can

be secured only if the defendant resides within the local

limits of the jurisdiction of the court, or carries on business

within those limits which is not the situation in the present

case as the defendant No.1 (the appellant herein) does not

reside or works within the jurisdiction of the courts at Delhi.

It would be of advantage to reproduce the following paras of

the said judgment as under:-

"Section 16 thus recognizes a well established principle that actions against res or property should be brought in the forum where such res is situate. A court within whose territorial jurisdiction the property is not situate has no power to deal with and decide the rights or interests in such property. In other words, a court has no jurisdiction over a dispute in which it cannot give an effective judgment. Proviso to Section 16, no doubt, states that though the court cannot, in case of immovable property situate beyond jurisdiction, grant a relief in rem still it can entertain a suit where relief sought can be obtained through the personal obedience of the defendant. The proviso is based on well known maxim "equity acts in personam", recognized by Chancery Courts in England. Equity Courts had jurisdiction to entertain certain suits respecting immovable properties situated abroad through personal obedience of the defendant. The principle on which the maxim was based was that courts could grant relief in suits respecting immovable property situate abroad by enforcing their judgments by process in personam, i.e. by arrest of defendant or by attachment of his property.

In Ewing v. Ewing, (1883) 9 AC 34 : 53 LJ Ch 435, Lord Selborne observed :

"The Courts of Equity in England are, and always have been, courts of conscience operating in personam and not in rem; and in the exercise of this personal jurisdiction they have always been accustomed to compel the performance of contracts in trusts as to subjects which were not either locally or ratione domicilli within their jurisdiction. They have done so, as to land, in Scotland, in Ireland, in the Colonies, in foreign countries."

The proviso is thus an exception to the main part of the section which in our considered opinion, cannot be interpreted or construed to enlarge the scope of the principal provision. It would apply only if the suit falls within one of the categories specified in the main part of the section and the relief sought could entirely be obtained by personal obedience of the defendant".

13. The argument of the learned counsel for the

respondent that section 16(d) would have no application in

view of section 54 of the Transfer of Property Act and the

case of the respondents would be covered under section 20 of

CPC does not hold any ground. For determining the

jurisdiction with regard to an immoveable property, Sections

16 to 19 would be applicable and certainly section 54 of the

TPA cannot be construed to determine the jurisdiction as to

the place of suing. In view of the aforesaid legal position, it

would be quite manifest that the suit filed by the respondents

No. 1 to 3 is duly covered under Section 16(d) of the Code of

Civil Procedure and proviso of Section 16 will have no

application. The courts at Delhi cannot act in personam as

the defendant (the appellant herein) is not subject to the

jurisdiction of this Court. Hence the courts at Delhi do not

have the jurisdiction to entertain the said suit filed by the

respondents.

14. Although the aforesaid legal position to this extent

is on the side of the appellant, but the moot question here is

as to whether the plea of lack of territorial jurisdiction would

be available to the appellant at the appellate stage. Section

21 of the Code of Civil Procedure is an answer to the plea

raised by the counsel for the appellant. Under Section 21 of

the Code of Civil Procedure the mandate of law is that no

objection as to the place of suing shall be allowed by any

Appellate or Revisional Court unless such objection was

taken in the Court of first instance at the earliest possible

opportunity and in all cases where issues are settled, either

at the stage of settlement of issues or before such stage. On

the satisfaction of these requirements the appellant has to

further satisfy the Court that due to the lack of territorial

jurisdiction there has been a consequent failure of justice. It

would be appropriate to reproduce the said section here:

"21. Objections to jurisdiction.

[(1)] No objection as to the place of suing shall be allowed by any appellate or Revisional Court unless such objection was taken in the Court of first instance at the earliest possible opportunity and in all cases where issues or settled at or before such settlement, and unless there has been a consequent failure of justice.

[(2) No objection as to the competence of a Court with reference to the pecuniary limits of its jurisdiction shall be allowed by any Appellate or Revisional Court unless such objection was taken in the Court of first instance at the earliest possible opportunity, and in all cases where issues are settled, at or before such settlement, and unless there has been a consequent failure of justice.

(3) No objection as to the competence of the executing Court with reference to the local limits of its jurisdiction shall be allowed by any Appellate or Revisional Court unless such objection was taken in the executing Court at the earliest possible opportunity, and unless there has been a consequent failure of justice.

Therefore it would be manifest from above that in order that

an objection to the place of suing must be entertained by an

Appellate or Revisional court, the fulfillment of the following

conditions is necessary:

1. The objection was taken at the court of first instance;

2. It was taken at the earliest possible opportunity and in

cases where issues are settled, at or before such

settlement;

3. There has been a consequent failure of justice;

4. All the above three conditions must co-exist

15. Section 15 of the Code of Civil Procedure deals

with 'pecuniary jurisdiction' while Sections 16 to 20 deal

with 'place of suing'. The heading 'place of suing' covers

Section 15 also. The Apex Court in Bahrein Petroleum Co.

Ltd. vs. P.J. Pappu AIR 1966 SC 634 made no distinction

between Section 15 on one hand and Sections 16 to 20 on the

other hand in the context of Section 21 of the CPC. Thus it is

quite apparent that the objection to the territorial jurisdiction

and to pecuniary jurisdiction is treated at par by Section 21

of the Code of Civil Procedure. So far objection to the

jurisdiction of a Court concerns the subject matter, in that

case the objection can be taken at any stage even if it is not

taken at the first instance as there will be an inherent lack of

jurisdiction with such a Court and decree passed by such a

Court would be a nullity. In Hiralal Patni vs Kali Nath AIR

1962 SC 1999 the Supreme Court held as under:-

"It is well settled that the objection as to local jurisdiction of a Court does not stand on the same footing as an objection to the competence of a Court to try a case. Competence of a Court to try a case goes to the very root of the jurisdiction, and where it is lacking, it is a case of inherent lack of jurisdiction. On the other hand, an objection as to the local jurisdiction of a Court can be waived and this principle has been given a statutory recognition by enactments like s. 21 of the Code of Civil Procedure."

The present is a case where the learned trial court at Delhi

clearly had the jurisdiction so far as the subject matter of the

suit was concerned and therefore this court in exercise of its

appellate powers cannot entertain the plea of lack of

jurisdiction as the courts below at Delhi did not suffer from

any inherent lack of jurisdiction.

16. Recently, dealing with the law on the subject

relating to Section 21, the Apex Court in Subhash

Mahadevasa Habib vs Nemasa Ambasa Dharmadas

(Dead) by Lrs. And Others (2007) 13 SCC 650 held that:

"It may be noted that Section 21 provided that no objection as to place of the suing can be allowed by even an appellate or revisional court unless such objection was taken in the court of first instance at the earliest possible opportunity and unless there has been a consequent failure of justice. In 1976, the existing section was numbered as sub-section (1) and sub-section (2) was added relating to pecuniary jurisdiction by providing that no objection as to competence of a court with reference to the pecuniary limits of its jurisdiction shall be allowed by any appellate or revisional court unless such objection had been taken in the first instance at the earliest possible opportunity and unless there had been a consequent failure of justice. Section 21-A also was introduced in 1976 with effect from 1-2-1977 creating a bar to the institution of any suit challenging the validity of a decree passed in a former suit between the same parties on any ground based on an objection as to the place of suing.

Also, in the case of Mantoo Sarkar vs. Oriental Insurance

Company Ltd. (2009)2 SCC 244 the Apex Court held that

the Appellate court has to pose unto itself the question as to

whether the appellant raising the plea of lack of jurisdiction

at the stage of the appeal has been able to show sufferance of

any prejudice and if it has not suffered any prejudice or

otherwise no failure of justice had occurred, the High Court

should not entertain the appeal on that ground alone. In the

present case the appellant has failed to show any miscarriage

of justice caused to it due to the lack of territorial jurisdiction

of the court at Delhi. It also cannot be lost sight of the fact

that the object underlying the provision in Section 21 is not

to encourage litigants who invoke the jurisdiction of a court

not having jurisdiction whatsoever for ulterior motives but to

avoid harassment to litigants who with bona fide and in good

faith commenced proceedings in a court which is later found

to be wanting in jurisdiction. (ONGC vs. Utpal Kumar Basu

(1994) 4 SCC 711)

17. Hence, applying the aforesaid principles of law to

the facts of the present case, it would be manifest that the

appellant never raised such an objection of lack of territorial

jurisdiction before the trial Court. In fact it seems that the

appellant was never serious in contesting the said suit filed

by the respondents No. 1 to 3 as the appellant did not even

challenge the order dated 16 th May, 2005 whereby the

application filed by appellant under Order IX Rule 7 CPC was

dismissed. The appellant also even did not address oral

arguments despite the fact that sufficient opportunities were

granted by the learned Trial Court in this regard. Thus the

appellant having not fulfilled the conditions as stipulated by

Section 21 of the CPC, the objection taken by the counsel for

the appellant assailing the order of the learned Trial Court on

the ground of lack of territorial jurisdiction lacks merit and

cannot be entertained by this court at this stage.

18. Coming to the next objection of the counsel for the

appellant that no notice was given by the respondents No. 1

to 3 to rescind the agreement in conformity with Clause 3 of

the agreement, the argument of counsel for the appellant is

equally devoid of any merit as the respondents were well

within their right to rescind the agreement once the

appellant failed to fulfill its part of obligation to pay the

balance sale consideration amount before the stipulated date

31.8.2002, as settled between the parties in the agreement

dated 2.6.2002. It is not the case of the appellant that the

said agreement was rescinded by the respondent No. 1 to 3

even after the payment of the balance sale consideration. In

terms of Clause 3 of the agreement, option was given to the

seller i.e. respondents to rescind the agreement in the event

of buyer not paying the sale consideration amount and the

interest amount on or before 31st August, 2002. This Court,

therefore, does not find any force in the argument of the

counsel for the appellant that prior notice was not given by

the respondents 1 to 3 before rescinding the said agreement.

19. Dealing with the next argument of counsel for the

appellant that the respondent has failed to disclose the fact

that respondents No. 2 and 3 had sold their respective shares

in favour of the appellant during the pendency of the suit,

this argument of counsel for the appellant is equally

misplaced as the appellant also did not disclose the said fact

before the learned trial Court and, therefore, at this stage

the appellant cannot put blame on the respondents for such

suppression on their part.

20. Coming to deal with the last argument of counsel

for the appellant that respondent No. 1 could not have

rescinded the agreement while other respondents had agreed

to honour the agreement and in support whereof the counsel

had also placed reliance on Clause (d) of sub section 2 of

Section 27 of the Specific Relief Act. This argument of the

learned counsel for the appellant will also not sustain as it is

not in dispute between the parties that as on the date of the

termination of the agreement when the notice dated

26.10.2002 was served on the appellant there was a uniform

decision taken by all the respondents to rescind the

agreement. However, the respondent no.4 executed the sale

deed on 9.4.03 and this fact was before the learned trial

court as it was duly mentioned in the plaint and the suit was

filed on 1.5.03, after the execution of the sale deed. Also, it is

only during the course of the pendency of the suit that the

respondents no.2 and 3 came forward to sell their respective

shares in favour of the appellant. Due to this subsequent

development, which was not brought to the notice of the

Court by both the parties, the appellant cannot challenge the

maintainability of the suit as on the date of rescission of

agreement to sell there was no such severance of the

contract. Also, the sale deed executed between the appellant

and respondent no.4 to sell her 1/7th share of the property

which was also a part of the 4/7th share to be sold to the

appellant vide agreement to sell dated 2.6.02 is a clear

admission on the part of the appellant admitting the

severance of the contract and now the appellant cannot turn

around and take the plea of section 27(2)(d) of the Specific

Relief Act to contend that it was an indivisible contract. Even

otherwise these respondents had agreed to sell their

undivided share in the said property in question and,

therefore, every co owner is well within his/her right to sell

his/her own share even after rescinding the earlier contract.

21. In the light of the aforesaid discussion, this Court

does not find any merit in the present appeal and the same is

hereby dismissed.

March 09th, 2011                KAILASH GAMBHIR, J
dc/rkr