Anil Verman vs Raheja Developers Private ...
2011 Latest Caselaw 4671 Del

*                IN THE HIGH COURT OF DELHI AT NEW DELHI


                                                                Reserved on : 30.08.2011
%                                                           Date of decision : 22.09.2011


+                               FAO (OS) No.96 of 1999

ANIL VERMAN                                                  ...APPELLANT
                                Through:        Mr. P. Banerjee & Ms. Princy Ponnan,
                                                Advocates.

                                           Versus

RAHEJA DEVELOPERS PRIVATE LIMITED          ...RESPONDENT
                   Through:   Mr. G.L. Rawal, Sr. Advocate with
                              Mr. Kuljeet Rawal, Advocate.


CORAM:
HON'BLE MR. JUSTICE SANJAY KISHAN KAUL
HON‟BLE MR. JUSTICE RAJIV SHAKDHER

1.        Whether the Reporters of local papers
          may be allowed to see the judgment?                   Yes

2.        To be referred to Reporter or not?                    Yes

3.        Whether the judgment should be
          reported in the Digest?                               Yes


SANJAY KISHAN KAUL, J.

1. The appellant filed a suit for specific performance and permanent

injunction on the Original Side of this Court, which was numbered as

Suit No.1377/1995, making the following prayers:

"(a) pass a decree of Specific Performance in favour of the plaintiff and against the defendant in respect of an apartment in Neelanchal Apartments, Economy Type III, Pine Gardens, Nainital, developed by the defendant, together with the rights to the use of all common passages, entrances, terrace and any other common facilities and easements;

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(b) by means of the said decree of Specific Performance, the defendant be directed to:

i. to apply and obtain all permissions from all Authorities, including under Income Tax Act, that will render marketable, free from all encumbrances, the title of the said property, which is the subject-matter of the present suit in favour of the plaintiff;

ii. intimate to the plaintiff of having obtained necessary permission by means of registered letters/notice.

iii. to execute and sign the Sale Deed, appear before the Registrar or Sub-Registrar, admit the execution of the sale and get the same registered and to receive the balance sale consideration amount;

iv. all other directions be issued to the defendant for effecting the sale of the suit property and for passing clean, marketable, free from all encumbrances, title, upto the plaintiffs.

(c) This Hon‟ble Court may further observe in the decree and direct that in case the defendant fails to perform, neglects or otherwise becomes incapable of performing such acts and other directions as this Hon‟ble Court deems fit and proper, then, it may kindly direct any officer of this Hon‟ble Court to carry out all the aforesaid directions and to sign and execute proper Sale Deed for subject-matter of the present suit and accept the balance sale consideration.

(d) pass a decree of injunction permanently restraining the defendant from selling all the remaining flats/apartments in its Pine Gardens, Nainital and keep at least one flat/apartment reserved for the plaintiff till the disposal of this suit.

(e) cost of the suit be also awarded in favour of the plaintiff and against the defendant.

(f) Any other relief which this Hon‟ble Court may deem fit and proper in the circumstances or the case may also be granted in favour of the plaintiff and against the defendant."

2. The plaint states that one of the employees of the respondent had visited

the appellant in connection with the sale of an apartment in the complex

which was being developed by the respondent in Nainital when a video __________________________________________________________________________________________

tape of the site was shown to him. The appellant claims to have booked

one flat on 15.1.1992 and handed over a cheque bearing No.049748

drawn on Central Bank of India for Rs.50,000.00 and another post dated

cheque bearing No.948459 dated 25.4.1992 drawn on State Bank of

India for Rs.15,000.00. The plaintiff claims that no documents were

executed by the respondent in his favour despite lapse of three (3) years.

Oral agreement is pleaded for one apartment in Neelanchal Type

Economy III, having an area of 818 sq.ft. for a total price of

Rs.6,50,310.00. The respondent is stated to have acknowledged the

receipt of the sum of Rs.50,000.00 and the fact that the flat was to be a

two bedroom unit. However, a larger area of 1076 sq.ft. was developed

for which enhanced consideration of Rs.8,55,420.00 was demanded.

The appellant, however, wanted to adhere to the initial contract. The

appellant came across an advertisement of the respondent in respect of

sale of flats and on being contacted the respondent refused to execute

any agreement and wanted the current prevailing market price.

3. The respondent moved an application under Order 7 Rule 11 of the Code

of Civil Procedure, 1908 (hereinafter referred to as the „said Code‟).

The respondent pleaded that it is the appellant who resiled from his

obligations and failed to pay the installments. The application is

predicated on the plea of absence of territorial jurisdiction of the Delhi

High Court apart from the issue of non-readiness and willingness of the

appellant to perform his obligations. The property in suit being located

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at Nainital, it is pleaded that the courts at Nainital alone would have

territorial jurisdiction to try & determine the suit.

4. The prayer made by the respondent was accepted and the application

was allowed vide impugned order dated 23.2.1999. The impugned order

proceeds on the reasoning that the appellant seeks a decree for specific

performance of the contract and in view of provisions of Section 22 of

the Specific Relief Act, 1963 (hereinafter referred to as the „SR Act‟),

the appellant is required to claim possession, or partition and separate

possession, of the property, in addition to such performance in an

appropriate case, if such relief has to be specifically claimed. Section 22

of the SR Act reads as under:

"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 (5 of 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.

(3) The power of the court to grant relief under clause (b) of sub-section (1) shall be without prejudice to its powers to award compensation under section 21.23.Liquidation of damages not a bar to specific performance."

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5. The impugned order relies upon the judgement of the Supreme Court in

Babu Lal Vs. M/s. Hazari Lal Kishori Lal & Ors. AIR 1982 SC 818 as

also on an unreported decision of the learned single Judge of this Court

in Suit No.187/1989 titled G.S. Kohli & Ors. Vs. Mrs. Raj Rani Vijh &

Ors. decided on 6.7.1992. It has, thus, been concluded that it may not

always be necessary for a plaintiff to specifically claim possession of a

property as a relief of possession is inherent in the relief for specific

performance of a contract for sale.

6. The impugned order concludes that in a case where possession of the

immovable property is vested with the vendor, even if no decree for

possession is sought for in the plaint, in a suit for specific performance

of a contract the Court shall have the power to grant a decree for

possession of the immovable property in favour of the plaintiff and

against the defendant besides granting the relief for specific

performance. The plea of the learned counsel for the appellant that the

claim was only for a decree of specific performance and not for

possession of immovable property has not been accepted since though

the suit has been framed as a suit for specific performance of the

contract, a further declaration is sought for transfer of property in

question in favour of the appellant thereby seeking a decree of

possession as well. Such relief for possession has been held to be

inherent in the relief for specific performance of the contract in view of

Section 55(1) of the Transfer of Property Act, 1882.

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7. The effect of the provisions of Section 16 of the said Code have also

been analyzed. The said provision reads 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."

8. The learned single Judge has found that clause (d) of Section 16 of the

said Code would apply in the present case as the property is situated in

Nainital and that the proviso would not come to the aid of the appellant

as the relief in the suit cannot be said to be entirely obtainable through

personal obedience of the defendant. Even after the execution of the sale

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deed, the possession would be handed over to the appellant by the

respondent only by going to Nainital.

9. The aforesaid order of the learned single Judge has now been assailed in

the appeal.

10. The basic plea as canvassed by learned counsel for the appellant was that

the nature of the suit in the present case was not a suit for land as the

relief was only for specific performance simplicitor without the relief of

possession and, thus, Section 16 of the said Code would not apply, but

Section 20 of the said Code would be applicable. To buttress his

submissions, learned counsel strongly relied upon the judgment in

Adcon Electronics Pvt. Ltd. v. Daulat & Anr., (2001) 7 SCC 698. It is in

the context of clause 10 of the Letters Patent of Bombay High Court that

it was held that a suit for specific performance of an agreement for sale

of suit property without claim for delivery of possession could not be

treated as a suit for land and was thereafter triable under clause 10, if

other conditions thereunder are fulfilled. It was further observed that the

relief of possession could be granted only if specifically prayed for and,

thus, a suit for specific performance of contract for sale of land is a suit

for enforcement of the terms of the contract and cannot be treated as a

suit for land. The title of the land concerned is not subject matter of a

suit for specific performance. Sub-section (1) of Section 22 of the SR

Act was held to be an enabling provision and, thus, a plaintiff in a suit

for specific performance may ask for further reliefs mentioned in clause

(a) and (b) thereof. In the plaint in question, no specific relief had been __________________________________________________________________________________________

prayed qua possession. The legal position has been discussed in para 13

to 18 as under:-

"13. Now, Sections 15 to 20 of the Code contain detailed provisions relating to jurisdiction of courts. They regulate forum for institution of suits. They deal with the matters of domestic concern and provide for the multitude of suits which can be brought in different courts. Section 15 requires the suitor to institute a suit in the court of the lowest grade competent to try it. Section 16 enacts that the suits for recovery of immovable property, or for partition of immovable property, or for foreclosure, sale or redemption of mortgage property, or for determination of any other right or interest in immovable property, or for compensation for wrong to immovable property shall be instituted in the court within the local limits of whose jurisdiction the property is situate. Proviso to Section 16 declares that where the relief sought can be obtained through the personal obedience of the defendant, the suit can be instituted either in the court within whose jurisdiction the property is situate or in the court where the defendant actually or voluntarily resides, or carries on business, or personally works for gain. Section 17 supplements Section 16 and is virtually another proviso to that section. It deals with those cases where immovable property is situate within the jurisdiction of different courts. Section 18 applies where local limits of jurisdiction of different courts is uncertain. Section 19 is a special provision and applies to suits for compensation for wrongs to a person or to movable property. Section 20 is a residuary section and covers all those cases not dealt with or covered by Sections 15 to 19.

14. 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 Section16, no doubt, states that though the court cannot, in case of immovable property situate beyond jurisdiction, grant a relief in rem still it

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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.

15. 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."

16. 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.

17. In the instant case, the proviso has no application. The relief sought by the plaintiff is for specific performance of agreement respecting immovable property by directing the defendant No. 1 to execute sale-deed in favour of the plaintiff and to deliver possession to him. The trial court was, therefore, right in holding that the suit was covered by Clause (d) of Section 16 of the Code and the proviso had no application.

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18. In our opinion, the submission of the learned counsel for the appellant that the parties had agreed that Delhi Court alone had jurisdiction in the matters arising out of the transaction has also no force. Such a provision, in our opinion, would apply to those cases where two or more courts have jurisdiction to entertain a suit and the parties have agreed to submit to the jurisdiction of one court."

11. Learned counsel for the appellant, thus, sought to distinguish the

judgment in Harshad Chiman Lal Modi v. DLF Universal Ltd. & Anr.,

AIR 2005 SC 4446 = (2005) 7 SCC 791wherein the plaint in question

was for a suit of specific performance along with a suit for possession.

Clause (d) of Section 16 of the said Code was held applicable and not

the proviso as the relief sought for by the plaintiff was for specific

performance of agreement in respect of immovable property thereby

directing defendant No. 1 to execute the sale deed in favour of the

plaintiff and to deliver possession to him.

12. The effect of the aforesaid two judgments had been considered by one of

us (Sanjay Kishan Kaul, J.) in Bhawna Seth v. DLF Universal Limited &

Anr., 138 (2007) DLT 639. The plaintiff had filed a suit for specific

performance of agreement relating to a space in a shopping mall located

in Gurgaon. The prayer was for a decree seeking execution of the sale

deed and the relief for possession was not specifically claimed. The

discussion revolved around the judgment in Harshad Chiman Lal Modi‟s

case (supra) not taking note of the judgment in Adcon Electronics Pvt.

Ltd.‟s case (supra) specifically praying for the relief of possession which

was the position in Bhawna Seth‟s case (supra). Thus, the distinction

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made in Adcon Electronics Pvt. Ltd.‟s case (supra) in respect of the suit

for specific performance simplicitor and the suit for possession of the

property were said to be the distinguishing factor. On analysis of other

judgments, the stand of the plaintiff was upheld that the absence of relief

of possession made the principles of Adcon Electronics Pvt. Ltd.‟s case

(supra) applicable, while Harshad Chiman Lal Modi‟s case (supra) was,

thus, held applicable in the facts where the relief of possession was

specifically claimed. We were informed that no appeal had been filed

before the Division Bench against this judgment. This fact was verified

by the Registry.

13. It is appropriate for us to notice that while delivering the judgment in

Bhawna Seth‟s case (supra), one of the judgments considered to support

the view was of Rohit Kochhar v. Vipul Infrastructure Developers Ltd.,

122 (2005) DLT 480. This judgment has been subsequently set aside in

Vipul Infrastructure Developers Ltd. & Anr. v. Rohit Kochhar & Anr.,

2008 IV AD (Delhi) 63. However, against the Order of the Division

Bench, a Special Leave to Appeal (Civil) Nos. 10169-10171/2008 titled

„Rohit Kochhar v. Vipul Infrastructure Developers Ltd. & Ors.‟ was

filed before the Supreme Court and in terms of the Order dated

28.04.2008, notice was issued and interim orders were granted that no

third-party right would be created. On 19.02.2010, the matter was

directed to be listed for final disposal with interim orders to continue.

We are, however, informed that this appeal is still pending consideration.

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14. We may note the submission of learned counsel for the appellant that the

relief of possession is not inherent in the relief of specific performance

as held in Bhawna Seth‟s case (supra). The pronouncements to the

contrary were prior to the law propounded in Adcon Electronics Pvt.

Ltd.‟s case (supra) that in a suit for specific performance, the relief of

possession is intrinsic. Thus, it has been held that the judgment in

Adcon Electronics Pvt. Ltd.‟s case (supra) and Harshad Chiman Lal

Modi‟s case (supra) operate in different factual matrix. It was submitted

that the proviso to Section 16 of the said Code would come into play

where a relief can be obtained through personal obedience of the

defendant, which is based on the well-known maxim „equity acts in

personam‟ recognized by Chancery Courts in England.

15. The pleas of learned senior counsel for the respondent are really on

alternative submissions. The initial plea is that the bar of Section 16 of

the said Code was fully attracted and that the judgment of Adcon

Electronics Pvt. Ltd.‟s case (supra) would only apply within the scope of

clause 10 of the Letters Patent of the Bombay High Court, which is not

so in the present case. The fact that Bhawna Seth‟s case (supra) relied

upon Rohit Kochhar‟s case (supra), which had been reversed by the

Division Bench, was also plea advanced. But then, it was accepted that

Rohit Kochhar‟s case (supra) has gone to the Supreme Court where

interim orders were operating. The alternative plea was that in the given

factual matrix, the plaint could not be said to be one claiming the relief

of specific performance simplicitor as rights of usage of common __________________________________________________________________________________________

passages, entrances, terrace, common facilities and easements had also

been sought, which were in the nature of possession. Further, all

permissions were required to be obtained at Nainital for which relief had

been claimed.

16. We are in a legally fluid situation on the basic plea of a distinction

between a suit for specific performance simplicitor and a suit where the

relief for possession is also claimed. It is our view that the principles set

out in Adcon Electronics Pvt. Ltd.‟s case (supra) would come into play

where no relief of possession was claimed. The field of the factual

matrix would be material to determine whether the principles of Adcon

Electronics Pvt. Ltd.‟s case (supra) would come into play or not. But

then in Vipul Infrastructure Developers Ltd.‟s case (supra), a co-ordinate

Bench of this Court had taken a different view without specifically

discussing this aspect. The matter is little more complicated arising out

of the pendency of the SLP against that Order of the Division Bench

where interim orders are operating.

17. We, however, do not consider it necessary to refer this issue to a larger

Bench or await the judgment of the Supreme Court for the reasons set

out hereinafter.

18. It is our view that the plaint as framed in the present case is not a suit

filed simplicitor for specific performance without any relief of

possession. The relief of possession has, in fact, been claimed albeit by

not stating so in so many words. Thus, the appellant cannot avail of the

benefit of the principles set out in Adcon Electronics Pvt. Ltd.‟s case __________________________________________________________________________________________

(supra) to file the suit in Delhi by claiming that it is merely a suit for

specific performance and the reliefs as claimed can be enforced by the

personal obedience of the defendant.

19. The reason for us to come to such a conclusion is based on the manner of

reliefs claimed. We have already reproduced the prayer clause above.

The first prayer being clause (a) is for specific performance in respect of

the apartment, but "together with the rights to use of all common

passages, entrance, terrace and any other common facilities and

easements". The appellant is clearly seeking the use and enjoyment of

these common areas, which can only be available if there is common

possession of the appellant over these areas. It, thus, does not lie in the

mouth of the appellant to claim that possessory reliefs are completely

absent. We may note that the appellant has claimed the relief in prayer

clause (b) for necessary permissions to be obtained from authorities and

sale deed to be registered with the clean marketable title, but the material

aspect as observed by us aforesaid is possessory reliefs have been

claimed as part of prayer clause (a).

20. In view of the aforesaid factual position, the plaint as framed cannot be

maintained at Delhi and, thus, the operative portion of the impugned

order dated 23.02.1999 is sustained albeit for reasons different to that,

which are recorded in the impugned order.

21. The plaint may, thus, be returned to the counsel for the appellant to be

presented in accordance with law to the court of competent territorial

jurisdiction.

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22. The appeal is accordingly dismissed leaving the parties to bear their own

costs.

SANJAY KISHAN KAUL, J.

SEPTEMBER 22, 2011                                      RAJIV SHAKDHER, J.
b'nesh / madan

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