Ansal Housing & Construction Ltd. vs Ajb Developers (P) Ltd.
2012 Latest Caselaw 3566 Del

*                  HIGH COURT OF DELHI AT NEW DELHI

+                                 OMP No.341/2009

                                        Date of Decision : 29.05.2012


ANSAL HOUSING & CONSTRUCTION LTD.             ......Petitioner
                       Through: Mr. A.S. Chandhiok and
                                  Mr. Suhail Dutt, Sr. Advs.
                                  with Mr. Vikas Tiwari and
                                  Mr. Ritesh Kumar, Advocates.

                                    Versus

AJB DEVELOPERS (P) LTD.                               .....Respondent
                                  Through:   Mr. Sandeep Sethi, Sr. Adv.
                                             with Mr. Gurmehar Sistani,
                                             Adv.

                                       AND

+                  Arbitration Application No.47/2010


ANSAL HOUSING & CONSTRUCTION LTD.             ......Petitioner
                       Through: Mr. A.S. Chandhiok and
                                  Mr. Suhail Dutt, Sr. Advs.
                                  with Mr. Vikas Tiwari and
                                  Mr. Ritesh Kumar, Advocates.

                                    Versus

AJB DEVELOPERS (P) LTD.                               .....Respondent
                                  Through:   Mr. Sandeep Sethi, Sr. Adv.
                                             with Mr. Gurmehar Sistani,
                                             Adv.
CORAM :
HON'BLE MR. JUSTICE V.K. SHALI




OMP No.341/2009 & AA No.47/2010                                Page 1 of 31
 V.K. SHALI, J.

1. These are two petitions filed by the petitioner u/S 9 and Section

11 of the Arbitration and Conciliation Act, 1996 seeking a

direction restraining the respondent company from transferring,

mortgaging, creating any charge or lien on the share holding of

the company and/or registering any transfer of shares or causing

the same to be registered by the respondent company and from

alienating, transferring, creating any third party right or interest,

parting possession with and/or encumbering in any manner

whatsoever with any of the immovable assets of the respondent

company, as per and in accordance of MOU dated 7.12.2006

pending resolution of disputes or claims of the petitioner

company in arbitration. So far as the petition u/S 11 is

concerned, that is for appointment of an independent Arbitrator

to adjudicate the dispute between the parties.

2. Briefly stated, the facts of the case are that in November 2006

the respondent company is alleged to have made a

representation to the petitioner company that it had acquired

contiguous agricultural land measuring 150 acres situated on the

By Pass Road, Village Valla & Village Verka, District Amritsar,

Punjab, duly approved under the Mega Project Schemes by the

Govt. of Punjab for the development of residential colony. The

petitioner and the respondent company entered into a MOU/

Agreement dated 7.12.2006, whereby, the respondent company

agreed to transfer its rights, title and interest in the said land/

project by causing its promoters to transfer all their shares to

the petitioner company at a value derived after reducing the

liabilities of the respondent company, for a total consideration

calculated @ `68 Lac per acre amounting to almost `102 Crores.

A separate detailed agreement covering all the aspects of the

transaction had to be executed within 30 days from the date of

MOU. However, due to failure of the respondent company in

giving specific details of complete contiguous land and its

revenue records, measurement, interest etc. for the purpose of

ascertaining the value of shares, the separate detailed

agreement for the transfer of shares never got executed.

3. The petitioner alleges that in the beginning of the year 2008, the

petitioner company while carrying out the due diligence of the

respondent company came to know that the respondent was

only having approx. 80 acres of clear and developable

contiguous land as against the false representation of having

approx. 150 acres of clear land. Petitioner also learnt that the

respondent had further about 60 acres of land which is not

contiguous and approx 38 acres of land falls in 'No Construction

Zone' being within 1000 yards of the Vallah Army Ammunition

Dump.

4. It is further alleged that the said fact had been deliberately

suppressed by the respondent company at the time of execution

of MOU whereas the petitioner duly acted upon the MOU and

made various payments to the respondent company from time to

time totaling to a sum of approx. 34 Crores till date. Despite the

receipt of the aforesaid amount, the respondent company is

alleged to have still persisted in its breaches and defaults.

5. It is alleged that till date the respondent company does not have

contiguous land as represented which was vital for the

development of the project and for obtaining the sanction from

the competent authority. In addition to this till date, the

respondent company has been unable to acquire clear/

licensable title for approx. 54 acres of land.

6. It is averred by the petitioner that on 26.7.2009, the petitioner

company learnt that the promoters of the respondent company

are already in process of transferring the share holding of the

company and immovable assets to the third party and therefore

they were constrained to file the present petition.

7. It was also stated that the petitioner company has already paid

the substantial amount of money and it was ready and willing to

pay the balance amount to the respondent as and when the later

would agree to transfer the shares at the agreed rate in favour

of the petitioner.

8. So far as the question of jurisdiction of Delhi Courts is

concerned, it was averred that the respondent company has its

Registered Office in Delhi. The petitioner is also in New Delhi.

The Agreement was executed in New Delhi. The meeting

between the representatives of two groups both at pre and post

MOU are stated to have taken place in Delhi. The shares of the

respondent company are allegedly being agreed to be

transferred in Delhi and, therefore, the Delhi Court is stated to

have the jurisdiction.

9. Apart from disputing the correctness of the allegations of the

petitioner on merits, the respondent has raised preliminary

objection as to the jurisdiction of this court to entertain the

present petition, since the claim of the petitioner is in respect of

the land situated in Amritsar. The plea of the respondent is that

since the present MOU is essentially an agreement for the

transfer of land situated in Amritsar and the purchase of share

holding of the respondent company is only a method for transfer

of the land, the present petition is hit by the proviso of Section

16(d) of Code of Civil Procedure, and therefore liable to be

rejected for the want of jurisdiction.

10. It was contended by the petitioners that they are not claiming

the specific performance of the MOU or possession of the land in

question. It is stated that the land is owned by the company

and it will remain with the company. Thus, the provisions

applicable are Section 20 and proviso to Section 16 of CPC and

not Section 16 (d) of CPC for determining the question of

territorial jurisdiction.

11. It was further contended by the learned counsel for the

petitioner that the respondent has expressly admitted that the

respondent has office in Delhi and the agreement was executed

in Delhi and, therefore, the Delhi Court has got the territorial

jurisdiction to entertain the present petition. Therefore, now

they can not dispute the same.

12. I have heard the learned senior counsel Mr. A.S. Chandhiok and

Mr. Suhail Dutt for the petitioners and Mr. Mukul Rohtagi and

Mr. Sandeep Sethi, the learned senior counsel for the

respondent.

13. The question of territorial jurisdiction is going to the root of the

matter and will have to be decided first. This question is

fundamental for deciding the maintainability of the relief of the

petitioner. For deciding this question, it will have to be decided

whether this was an Agreement to Sell and Purchase the shares

simplicitor or immoveable property? If the Court holds that it

was essentially an Agreement for Sale and Purchase of the

immovable property, then perhaps this Court may not have the

jurisdiction and the petitioner will be required to file the petition

at a place where the land is situated. If it is held that it was an

agreement to sell and purchase of shares, the compliance of

which can be obtained by personal obedience then this Court will

have jurisdiction.

14. The learned counsel for the petitioner has contended that all the

acts in relation of performance and discharging the respective

contractual obligations of the parties were performed within the

territorial jurisdiction of this Hon'ble Court. The MOU was

executed in Delhi, payments were made and received in Delhi,

both the parties to the MOU have their registered offices in Delhi

and they work for gain in Delhi and most importantly, the talks

of settlement, pre and post filing of the present petitions, were

also held in Delhi and, therefore, this court has the jurisdiction to

adjudicate the petitions filed by the petitioner.

15. It was contended that the petitioners were seeking only

enforcement of MOU from the Arbitrator with a direction against

the respondent to cause the transfer of entire share holding in

favour of the petitioners and also a direction against the

respondent company to do or cause to do all necessary transfers

in the books of the respondent company and also before the

office of the Registrar of Companies and thus, provisions of

Section 20 of the CPC would apply for the purpose of

determination of territorial jurisdiction and not Section 16 (d) of

CPC as is sought to be urged by the respondent. In this regard,

the petitioners in paragraph 6 of the OMP has urged as under :-

"then the petitioner has always been ready and willing to perform his obligation to produce the entire share holding of the respondent company"

16. It was also contended by the petitioners that the respondent

had, in its written statement to the petition, admitted the factum

of the jurisdiction of Delhi Courts by admitting all the averments

with regard to payment, office of the parties being in Delhi and

the MOU having been executed in Delhi. It was contended that

the petitioner had belatedly, only at the stage of hearing for the

first time on 28.3.2011, orally raised this question of jurisdiction

after a lapse of almost two years. It was contended that the

petitioner by its conduct was estopped from raising the question

of preliminary objection with regard to jurisdiction, as the

averments in the written statement by the respondent

tantamounted to waiver of this question of jurisdiction apart

from the principles of estoppel.

17. So far as the application of principles of jurisdiction initiated

under Section 20 and not Section 16 (1) (d) are concerned, the

petitioners have placed reliance on the following judgments :-

1. M/s Adcon Electronics Pvt. Ltd. vs Daulat & Anr., 2001 (7) SCC 698

2. Rohit Kochhar vs Vipul Infrastructure Developers Ltd., 122 (2005) DLT 480

3. Bhawna Seth vs DLF Universal Ltd. & Anr., 138 (2007) DLT 639

4. Zoom Motels Pvt. Ltd. vs. Sheranwali Hotels and Resorts in OMP 28/2008 (Delhi High Court), decided on 25.9.2009.

18. It was also contended that so far as the judgment of Harshad

Chiman Lal Modi vs DLF Universal & Anr.; (2005) 7 SCC 791 is

concerned, the same is not applicable to the facts of the present

case because no relief qua that land is sought.

19. With regard to the principles of waiver and estoppels, it was

contended that Section 21 of the CPC also lays down that if there

is any objection with regard to the territorial jurisdiction, it must

be raised at the first available opportunity and this provision was

also not adhered to by the respondents and therefore, Delhi

Courts have the jurisdiction. Reliance in this regard was placed

on Bahrein Petroleum Co. Ltd. vs P.J. Pappu & Anr.; AIR 1966

SC 634 and Hiralal Patni vs Sri Kali Nath; AIR 1962 SC 199

etc.

20. As against this, the respondent had essentially contended that

the judgments which have been relied upon by the petitioners

are not applicable to the facts of the present case. It was

contended that the principles of law laid down in Harshad

Chimanlal Modi's (supra) case is applicable to the facts of the

present case inasmuch as in effect, the petitioners were seeking

specific enforcement of the MOU. It was contended that the

transfer of shares was only a modality to be adopted by the

petitioners and the respondent for actual transfer of right, title or

interest in the immovable property which was not situated within

the jurisdiction of this court. It was contended that assuming,

though not admitting, that the Arbitrator decides the matter and

grants the relief to the petitioners, viz. a restraint against the

transfer of mortgaging, transferring of shares to a third party

still that would not be the complete relief to the petitioners

because ultimately the possession of the land in question is with

the respondent company and its officials. The company, though

being in possession of the property on papers, but actually the

possession of the land is with the individuals and unless and until

a suit for specific performance is filed, the possession of the land

could not be transferred.

21. I have carefully considered the respective submissions made by

the parties. Before embarking on the examination of the

respective contentions of the parties, it would be worthwhile to

reproduce Sections 16 and 20 of the CPC, which reads as

under:-

"16. Suits to be instituted where subject-matter situate, subject to the pecuniary or other limitations prescribed: 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.

Explanation.- In this section "property" means property situate in [India].

20. Other suits to be instituted where defendants reside or cause of action arises, Subject to the limitations aforesaid, every suit shall be instituted in Court within the local limits of whose jurisdiction-

(a) the defendant, or each of the defendants where there are more than one, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain; or

(b) any of the defendants, where there are more than one, at the time of the commencement of the suit actually and voluntarily resides, or carries on business, or personally works for gain, provided that in such case either the leave of the Court is given, or the defendants who do not reside, or carry

on business, or personally work for gain, as aforesaid, acquiesce in such institution; or

(c) the cause of action, wholly or in part, arises."

22. In Harshad Chimanlal Modi Vs. DLF Universal Ltd. (2005) 7 SCC

791, wherein it has been observed by the Apex Court as under:

"16. Section 16 thus recognizes a well established principle that actions against rest or property should be brought in the forum where such rest is situate. A court within whose territorial jurisdiction the property is not situated 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.

........

18. 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.

19. 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 favor 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.

......

21. Plain reading of Section 20 of the Code leaves no room of doubt that it is a residuary provision and covers those cases not falling within the limitations of Sections 15 to 19. The opening words of the section "Subject to the limitations aforesaid" are significant and make it abundantly clear that the section takes within its sweep all personal actions. A suit falling under Section 20 thus may be instituted in a court within whose jurisdiction the defendant resides, or carries on business, or personally works for gain or cause of action wholly or partly arises."

23. A perusal of the aforesaid judgment makes it abundantly clear

that a Court within whose jurisdiction the property is not situated

cannot decide the rights of the parties in respect of land or any

other immoveable property and give effective judgment ruling on

the same. The only exception to this is provided in the provision

that is if the relief which is sought is of such a nature that it can

be obtained simply by the personal obedience then that Court

may entertain such a suit as an exception to Section 16(d).

24. In Vipul Infrastructure Developers Ltd. & Anr. vs Rohit Kochhar;

2008 (102) DRJ 178 (DB), a suit for specific performance

relating to a property situated in Gurgaon was filed in Delhi on

the ground that the agreement was executed at Delhi and the

defendants also carried on business at Delhi. The learned Single

judge held the suit to be maintainable on the ground that only a

declaration of right and title in the property was sought and not

the delivery of possession. The Division Bench overruled this

judgment holding that Delhi Court had no jurisdiction to

entertain and try the suit. The relevant paras of the judgment

are reproduced as under:

"19. Accordingly, we are of the considered opinion that the submissions of the learned Counsel for the Respondent and the findings recorded by the learned Single Judge that the present case is covered by the proviso of Section 16 of the Code of Civil Procedure are misplaced. In the facts and circumstances of the case as delineated, the relief in the present suit cannot be entirely obtained through the personal obedience of the Defendants. The proviso to Section 16 of the Code of Civil Procedure would be applicable to a case where the relief sought for by the Plaintiff was entirely obtainable through the personal obedience of the Defendant, i.e., the Defendant has not at all to go out of the jurisdiction of the Court for the aforesaid purpose. The present case is not a case of the aforesaid nature. In the present case for execution of the sale deed the Defendants will have to go out of the jurisdiction of this Court and get the same executed and registered in Gurgaon.

20. In the present case also it is an admitted position that possession of the said property was with the seller and, therefore, in terms of the provisions of Section 55(1) of the Transfer of Property Act, 1882, the relief of possession is inherent in the relief of specific performance of the contract. In our considered opinion the ratio of the decision of the Supreme Court in Babu Lal (supra) and the principles laid down in the case of Harshad Chiman Lal Modi(supra) are applicable to the facts of the present case. In Harshad Chiman Lal Modi (supra) it was found that in addition to passing decree, the court was also required to deliver possession of the property. It was held that such a relief can be granted only by sending the concerned person responsible for delivery of possession to Gurgaon and the court at Delhi does not have the jurisdiction to get the aforesaid decree enforced for the property situate outside territorial jurisdiction of Delhi High Court. The Court while referring to the provisions of Section 16 of the Code of Civil Procedure held that the location of institution of a suit would be guided by the location of the property in respect of which and for determination of any right or interest whereof the suit is instituted. The proviso to Section 16 Code of Civil Procedure is also not applicable to the case, as the relief sought for cannot be entirely granted or obtained through the personal obedience of the Respondent.

25. Similar view was taken by this Court in Splendor Landbase

Limited vs M/s. Mirage Infra Ltd. & Anr. 2010 (116) DRJ 702

(DB). In this case, a suit for declaration and permanent

injunction relating to a property situated at Chandigarh was filed

at Delhi on the ground that the agreement was executed at New

Delhi and payments were also made at New Delhi. The Division

Bench of this Court following the judgments of the Supreme Court

in Harshad Chiman Lal Modi (supra) and of Division Bench of this

Court in Vipul Infrastructure Developers Ltd. (supra) held that this

Court has no jurisdiction to entertain and try the suit. The

relevant paragraph is as under:

"25. Having considered the decisions referred by the parties and on a plain reading of the plaint as a whole, it is clear as we have indicated above that the present suit is one which comes within the purview of Section 16 (d) of the Code of Civil Procedure and the proviso of Section 16 of Code of Civil Procedure is not applicable under the circumstances as the proviso of Section 16 of Code of Civil Procedure is an exception to the main part of the Section which cannot be construed to enlarge the scope of the main provision. If the suit comes within Section 16(d) of the Code of Civil Procedure, it has been held by the Apex Court in Harshad Chiman Lal Modi's case (supra) that Section 20 of the Code would have No. application in view of the opening words of Section 20 "subject to limitations aforesaid". The Apex Court has held that the proviso to Section 16 would apply only if the relief sought could entirely be obtained by personal obedience of the Defendant. The proviso we feel will only apply if the suit falls within one of the categories specified in the main part of the Section. In the present case, although specifically the relief for possession of the property has not been claimed by the Appellant in the prayer for the purpose of development, however, it is settled law that by clever drafting a party cannot be permitted to come within different meaning of relief claimed. Hence, No. benefit can be derived by the Appellant either from the proviso of Section 16 or Section 20 of the Code of Civil Procedure.

26. Learned counsel for the respondent submitted that in view of the

aforesaid decisions, since the petition filed by the petitioner

essentially pertains to a property situated in Amritsar, in view of

the provisions of section 16 (d) CPC, this court will have no

jurisdiction to try and entertain the same.

27. Learned counsel for the petitioner has contended that all the acts

in relation to performing and discharging of the respective

contractual obligations were to be done in Delhi and, therefore,

Delhi Court had jurisdiction. Reliance has placed reliance on the

following judgments:

(i) M/s Adcon Electronics Pvt. Ltd. vs Daulat & Anr. 2001 (7) SCC 698

(ii) Rohit Kochhar vs Vipul Infrastructure Developers Ltd. 122 (2005) DLT 480

(iii) Bhawna Seth vs DLF Universal Ltd. & Anr. 138 (2007) DLT 639

28. The decisions relied upon by the petitioner have been discussed

by the learned Single Judge of our own High Court in Bhawna

Seth's case (supra), including the judgment in Harshad Chiman

Lal's case (supra). A distinction between a suit for specific

performance simplicitor and a suit for specific performance

coupled with delivery of possession has been drawn, it has been

held that the court has no jurisdiction to try the case if the

property in question is not situated within its jurisdiction though

in former case the legal position is different and the judgment in

Adcon Enterprises (supra) squarely applies. It would be relevant

to reproduce the relevant paragraphs of the said judgment:

"20. On consideration of the aforesaid judgments, I am of the view, that there can be no doubt that where in a suit for specific performance possession is also claimed as a relief, the competent court to deal with the matter is the court where the property is located in view of Section 16 of the said Code. The judgment in Harshad Chiman Lal Modi case (supra) clearly lays down the said proposition. However, what cannot be lost sight of is that the judgment is in the facts of the case where the relief of possession was specifically claimed. The question as to what would happen where the relief for possession is not claimed does not form subject matter of a relief in Harshad Chiman Lal Modi case (supra).

......

22. M/s. Adcon Electronics Pvt. Ltd. case (supra) deals with the distinction in a case simplicities for specific performance as against a case where possession is also prayed. This issue is not discussed in Harshad Chiman Lal Modi case (supra) nor has the judgment in Adcon Electronics Pvt. Ltd. case (supra) been apparently cited in the proceedings in Harshad Chiman Lal Modi case (supra). Thus, both the judgments would operate in their respective areas. M/s. Adcon Electronics Pvt. Ltd. case (supra) clearly sets down that in a suit for simplicities specific performance the same does not amount to a suit for land. If it is a simplicities suit for specific performance, i.e. for enforcement of Contract for Sale and for execution of sale, in that event there can be no good ground for holding that such a suit is for determination of title to the land or that the decree in it would operate on the land. The observations made in the judgment in Moolji Jaitha & Co. v. The Khandesh Spinning

& Weaving Mills Co. Ltd. referred to in the said judgment being a judgment of the Federal Court was approved by the Supreme Court, as noted in paragraph 15 of the Adcon Electronics Pvt. Ltd. case (supra). Thus a distinction has been carved out in respect of a suit where no possession has been claimed of the land in question.

.......

25. I am thus of the view that since the plaintiff is not claiming possession of the suit property and has specifically stated so and the relief is confined to specific performance of the Agreement in question without the relief of possession, the judgment in Adcon Electronics Pvt. Ltd. case (supra) would squarely apply to the facts of the present case and thus this Court would have territorial jurisdiction to try and entertain the present suit. The issue is accordingly answered in favor of the plaintiff and against the defendants."

29. The case of the petitioner is that the relief sought by the

petitioner in the present petition does not involve determination

of any right or title in the immovable property, the petitioner has

only sought relief to the extent of restraining the respondent

from alienating, transferring or creating any third party interest

in the immovable assets of the respondent company & the relief

sought is such which can be obtained through personal

obedience of the respondent, and therefore, proviso to section

16 and section 20 CPC are applicable.

30. The examination of the aforesaid decisions relied upon by the

parties, In my considered opinion the decisions relied upon by

the petitioner in Bhawna Seth's case (supra) and Adcon

Electronics Pvt. Ltd case (supra) are not applicable to the

present petition as herein the petitioner has approached this

Court under Section 9 of the Arbitration & Conciliation Act, 1996

(in short the 'Act') & these judgments have not addressed and

dealt with the issue of jurisdiction under Section 9 of the Act. In

order to decide a petition under section 9 of Arbitration and

Conciliation Act, the court where petition is filed must have the

jurisdiction taking into account the subject matter of the

petition. Section 2 (1) (e) read with section 9 of the Arbitration

and Conciliation Act makes it clear that in order to have

jurisdiction to decide an application under section 9, the court

entertaining the petition should be one which has power to

entertain the suit on the same facts.

31. To illustrate the fact, the relief claimed by the petitioner does not

simply involve the transfer of shares in the books or in the office

of the Registrar of Companies, but it would also involve the

transfer of the possession of the land in question because this

transfer of shares has no meaning. The petitioner's reasoning is

that once the transfer of shares takes place, the land being in

the name of the Company, therefore, they also get the

possession of the land. I feel that the petitioner is deliberately

expressing ignorance in the sense that even if shares are

transferred, that does not solve the problem or get the complete

relief to the petitioner, which in Harshad Chiman Lal's case is

called effective judgment or adjudication of the dispute between

the parties. This is because, no doubt, the company is in

possession of the land but being a juristic person, it has to be in

possession through some individual office bearer or the

employee. Suppose, despite transfer of these shares, these

employees, individuals or the office bearers do not give the

possession to the petitioner, the only remedy available to the

petitioner is to rush to the Court to file a suit for possession or

suit for specific performance because the complete relief cannot

be obtained by simply passing order, it has to be implemented

also. Therefore, what would be applicable is not only the

personal obedience but also actual specific performance and

hence the petitioner would be barred by Section 16(d) of the

CPC.

32. In Trehan Promoters and Builders Pvt. Ltd. vs Welldone

Technology Parks Development Pvt. Ltd., the learned Single

Judge of this court observed as under:

"Section 9 is applicable only where a party has invoked the arbitration clause or has intention to invoke the arbitration clause. Section 9 is not in the nature of provisions of Specific Relief Act where a party can come to the Court and pray for a relief of performance of the contract and ask the Court to compel the other party to abide by the terms and conditions of the contract and seek an injunction from the Court that the party should be restrained from violating the terms and conditions of the contract. In fact, Section 9 of the Act envisages existence of an arbitration clause whereunder the disputes resolution mechanism is provided and the parties had chosen the arbitration as a dispute resolution mechanism instead of choosing the Court to resolve their disputes. Resort to the Court under Section 9 of the Act is for limited purpose of preserving the property which is the subject matter of dispute so that by the time the arbitrator decides the dispute, the property itself is either sold away or disposed of by the opposite side, or being of perishable nature is likely to perish or where there is need to appoint a receiver, the Court passes an order for appointing a receiver. The extent and scope of relief under Section 9 of the Act cannot extend so as the Court directs a party to specifically perform the contract so that the party approaching the Court has not to go to the arbitrator for breach of contract. Section 9 does not envisage a situation where the order of the Court under Section 9 itself settles the disputes between the parties. Neither by the instrumentalities of Section 9, the Court can put the party back into pre-dispute situation and ask the party to comply with the contract. If the Court could direct specific performance of the contract under Section 9 of the Arbitration & Conciliation Act, and could place the parties in the position prior to rising of dispute, no dispute would ever go to the arbitrator and by an interim relief itself, the Court would be finally disposing of all the disputes between the contracting parties by just directing specific performance of the contract, irrespective of the breach on the part of one or the other."

33. The aforesaid judgment also reinforces the view that this court

does not have the territorial jurisdiction to entertain the present

petition. The present petition relates to a relief in respect of an

immovable property situated in Amritsar i.e. outside Delhi and

therefore, it is covered by section 16 (d) of CPC and the proviso

to section 16 has no application, nor section 20 would apply as a

residuary section and Delhi Court has no jurisdiction. Clause

16(d) of CPC provides that for determination of any right or

interest for immovable property, the suit has to be instituted in

the Court within the local limits of whose jurisdiction the

immovable property is situated. The proviso cannot be explained

in a manner that for every relief under Section 16 CPC personal

obedience is pleaded. Personal obedience cannot be stretched to

such an extent that Section 16 of CPC itself becomes redundant.

Moreover, this MOU in my opinion was essentially an agreement

for sale and purchase of property between the parties. It was

only camouflaged as an agreement or MOU to sell and purchase

shares of a company so that the property changes the hands by

changing the management. This was only done in my opinion to

avoid the payment of various duties or levies which have to be

paid normally on such transactions therefore, if seen in its

proper prospective, it was essentially an agreement of purchase

of immoveable property though with a different modality which

will be governed by Section 16(d) CPC.

34. The second contention of the learned counsel for the petitioner is

that the respondent in their reply to the petition has expressly

admitted/ stated that 'this court has got the territorial

jurisdiction to entertain the petition' and therefore, the

respondent cannot challenge the territorial jurisdiction of this

court after having admitted the same in the pleadings and

participating without any objection for almost 2 years. This

belated stage of objection is hit by section 21 of the code of Civil

Procedure. Section 21 of CPC reads as under:

"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 at or before such settlement, and unless there has been a consequent failure of justice."

35. The learned counsel for the petitioner has placed reliance on a

full bench judgment of the Apex court in case titled Bahrein

Petroleum Co. Ltd. vs P.J. Pappu & Anr, AIR 1966 SC 634

where Apex court relying upon a constitution bench judgment

Hiralal Patni vs Sri Kali Nath, AIR 1962 SC 199 held that:

"As a general rule, neither consent nor waiver nor acquiescence can confer jurisdiction upon a Court, otherwise incompetent to

try the suit. But Section 21of the Code provides an exception, and a defeat as to the place of suing, that is to say the local venue for suits cognizable by the Courts under the Code, may be waived under this section. The waiver under Section 21 is limited to objections in the appellate and revisional Courts. But Section 21 is a statutory recognition of the Principle that the defeat as to the place of suing under Ss. 15 to 20 may be waived Independently of this section, the defendant may waive the objection and may be subsequently precluded from taking it."

36. However, in Harshad Chiman Lal's case Supreme Court has held

as under:

The jurisdiction of a court may be classified into several categories. The important categories are (i) Territorial or local jurisdiction; (ii) Pecuniary jurisdiction; and (iii) Jurisdiction over the subject matter. So far as territorial and pecuniary jurisdictions are concerned, objection to such jurisdiction has to be taken at the earliest possible opportunity and in any case at or before settlement of issues. The law is well settled on the point that if such objection is not taken at the earliest, it cannot be allowed to be taken at a subsequent stage. Jurisdiction as to subject matter, however, is totally distinct and stands on a different footing. Where a court has no jurisdiction over the subject matter of the suit by reason of any limitation imposed by statute, charter or commission, it cannot take up the cause or matter. An order passed by a court having no jurisdiction is nullity.

In Halsbury's Laws of England, (4th edn.), Reissue, Vol. 10; para 317; it is stated;

317. Consent and waiver. Where, by reason of any limitation imposed by statute, charter or commission, a court is without jurisdiction to entertain any particular claim or matter, neither the acquiescence nor the express consent of the parties can confer jurisdiction upon the court, nor can consent give a court jurisdiction if a condition which goes to the jurisdiction has not been performed or fulfilled. Where the court has jurisdiction

over the particular subject matter of the claim or the particular parties and the only objection is whether, in the circumstances of the case, the court ought to exercise jurisdiction, the parties may agree to give jurisdiction in their particular case; or a defendant by entering an appearance without protest, or by taking steps in the proceedings, may waive his right to object to the court taking cognizance of the proceedings. No appearance or answer, however, can give jurisdiction to a limited court, nor can a private individual impose on a judge the jurisdiction or duty to adjudicate on a matter. A statute limiting the jurisdiction of a court may contain provisions enabling the parties to extend the jurisdiction by consent." In Bahrein Petroleum Co., this Court also held that neither consent nor waiver nor acquiescence can confer jurisdiction upon a court, otherwise incompetent to try the suit. It is well-settled and needs no authority that 'where a court takes upon itself to exercise a jurisdiction it does not possess, its decision amounts to nothing.' A decree passed by a court having no jurisdiction is non-est and its validity can be set up whenever it is sought to be enforced as a foundation for a right, even at the stage of execution or in collateral proceedings. A decree passed by a court without jurisdiction is acoram non judice.

The case on hand relates to specific performance of a contract and possession of immovable property. Section 16 deals with such cases and jurisdiction of competent court where such suits can be instituted. Under the said provision, a suit can be instituted where the property is situate. No court other than the court where the property is situate can entertain such suit. Hence, even if there is an agreement between the parties to the contract, it has no effect and cannot be enforced.

37. Also in Kiran Singh vs Chaman Paswan & others, [1955] 1

SCR 117 , this Court declared as under:

"It is a fundamental principle well established that a decree passed by a court without jurisdiction is a nullity and that its invalidity could be set up whenever and it is sought to be enforced or relied upon, even at the stage of execution and even in collateral proceedings. A defect of

jurisdiction ... strikes at the very authority of the court to pass any decree, and such a defect cannot be cured even by consent of parties."

38. Moreover, so far as the decision of Apex Court, relied upon by

the petitioner, in Bahrein Petroleum's case (supra) is

concerned even that does not support the contention of the

petitioner inasmuch as in the said case the Apex court has held

that unless there has been a 'consequent failure of justice' the

objection to jurisdiction under section 21 CPC cannot be raised.

The relevant paragraph reads as under:

7. Counsel for the plaintiff also submitted that the defendants having neither alleged nor proved that there has been a failure of justice in consequence of the order of the High Court, they are precluded by Section 21 of the Code from raising this objection in this Court. We think that this contention has no force. The suit has not yet been tried on the merits. So far, only the preliminary issue as to jurisdiction has been tried. That issue was decided in favour of the defendants by the trial Court and the District Court and against them by the High Court, and from the order of the High Court, this appeal has been filed. There cannot be a consequent failure of justice at this stage. The condition "unless there has been a consequent failure of justice" implies that at the time when the objection is taken in the appellate or revisional Court, the suit has already been tried on the merits. The section does not preclude the objection as to the place of suing, if the trial Court has not given a verdict on the merits at the time when the objection is taken in the appellate or revisional Court

39. Section 21 of the Code, requires that the objection to the

jurisdiction must be taken by the party at the earliest possible

opportunity and in any case where the issues are settled at or

before settlement of such issues and in case there is consequent

failure of justice. Though the petitioner is right in submitting

that the respondent had agreed to the jurisdiction of Delhi Court

and in their written statement, they had expressly admitted that

Delhi court has jurisdiction, yet it cannot take away the right of

the respondent to challenge the jurisdiction of the court nor it

can confer jurisdiction on Delhi Court, which it did not possess.

Moreover, in the present case the issue has still not been settled

and the objection to the jurisdiction is only a preliminary

objection and also there is no consequent failure of justice, thus

the requirements of section 21 CPC are not made out and

therefore the respondent cannot be said to have waived there

right to raise the objection to the jurisdiction. Moreover, Section

21 CPC restrains a party from raising the question of jurisdiction

before the Appellate or the Revisional Court unless and until it is

not raised before the Trial Court. In the present case, the

petition u/s 9 is not before the Appellate or the Revisional

Forum, therefore, in my view, Section 21 would not be

applicable.

40. There is another aspect of the matter to illustrate that the

question of jurisdiction in the instant case is not a question of

territorial or pecuniary jurisdiction which may be waived or given

up but, is one pertaining to subject matter, that is to say, it is

related to the immovable property or the land which is not

situated within the jurisdiction of this Court. In terms of Section

16(d) lays down that in such cases, suit has to be filed at a place

where the land is situated. If that be the legal position, then

even if the respondent has admitted that Delhi Courts have the

jurisdiction, it does not estop the petitioner from turning around

and disputing the jurisdiction of Delhi Courts because there is no

estoppel against a law passed by a competent legislature.

Reliance in this regard is placed on Faqir Chand vs. Rattan

Rattan, AIR 1973 SC 921.

41. For the reasons mentioned above, I am of the considered

opinion that the present petitions under Section 9 for interim

relief and Section 11 for appointment are not maintainable in

Delhi Courts on account of lack of jurisdiction over the subject

matter because the petitioners in effect are seeking a relief

which cannot be given simply by personal obedience of the

respondents. It will require the transfer of possession of the

land in question also which is admittedly situated in Amritsar,

which is beyond the jurisdiction of this court. I also do not

agree with the contention of the learned counsel for the

petitioners that the respondents are estopped from raising the

question of jurisdiction of Delhi Courts having admitted by way

of an averment in their written statement originally the Delhi

Court as the jurisdiction because there is no estoppel against

law. Both the petitions are accordingly dismissed. Interim

order dated 03.7.2009 stands vacated.

V.K. SHALI, J.

MAY 29, 2012 AA