Delhi High Court
Shri K.K. Mehta & Anr. vs Paras Poly Films (P) Ltd. & Ors. on 27 March, 2014
*IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision: 27th March, 2014.
+ CS(OS) No. 827/2008
SHRI K.K. MEHTA & ANR. ..... Plaintiffs
Through: Mr. Amiet Andlay & Mr. Arun K.
Sharma, Advs.
Versus
PARAS POLY FILMS (P) LTD. & ORS. ..... Defendants
Through: None.
CORAM :-
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
1. It is the case of the two plaintiffs:-
(i) that the defendant no.1 Company of which the defendant no.2
Shri Anil Kumar Jain is the Director / Chairman, is the owner
of land ad measuring 6700 sq. yds. together with building, plant
and machinery comprised in Khewat No.60/41 min Khata
No.89 Rect. & Kill No.21 & 42/2 situated in the Revenue
Estate of Village Liwaspur, Distt. Sonepat; Haryana;
(ii) that the defendant no.1 Company had, by mortgaging the said
property, availed loan facilities from the defendants no.3 Bank
of India, Sonepat Branch and Senior Manager of which and
Zonal Manager of Chandigarh Branch of which Bank have been
CS(OS) No.827/2008 Page 1 of 11
impleaded as defendants no.5&4 respectively (only by position
and without giving any name);
(iii) that the defendant no.1 Company was unable to repay the loan
and loan account of the defendant no.1 Company with the
defendant no.3 Bank became a 'Non-Performing Asset';
(iv) that in June, 2005 the defendants no.4&5 together with the
defendant no.8 Mr. Anil Aggarwal, Sr. Manager of Bank of
India, Sonepat approached the plaintiffs and their associate Mr.
M.L. Goel impleaded as defendant no.7, offering the aforesaid
mortgaged property for a total consideration of Rs.65 lacs;
(v) after negotiations, the plaintiffs along with the defendant no.7,
vide their letter dated 26th July, 2005 addressed to the defendant
no.4 made a settlement offer for settlement of the aforesaid loan
account of the defendant no.1 Company for a total sum of Rs.65
lacs and the two plaintiffs and defendant no.7 also opened their
accounts with the defendant no.3 Bank to facilitate speedy
transfer of the said amount from their account to the loan
account of the defendant no.1 Company;
CS(OS) No.827/2008 Page 2 of 11
(vi) that the defendant no.1 Company acting through the defendant
no.2 entered into an Agreement to Sell the aforesaid property to
the two plaintiffs and the defendant no.7 and whereunder the
defendant no.1 Company agreed to complete the sale in favour
of the plaintiffs and the defendant no.7 after obtaining sale
permission, No Objection Certificate (NOC) from the HUDA or
any other specified authority;
(vii) that the defendants no.4&5 vide their letter dated 10 th
November, 2005 accepted the offer of the plaintiffs and the
defendant no.7 contained in the letter dated 26th July, 2005
supra;
(viii) that the defendants no.1&2 however did not execute the Sale
Deed in favour of the plaintiffs and the defendant no.7 on
account of the sale permission and NOC from the appropriate
authorities having not been received;
(ix) that the plaintiffs and the defendant no.7 also handed over to
the defendants no.1&2 cheque for a sum of Rs.60,000/-
towards expenses to be incurred in obtaining the permissions,
CS(OS) No.827/2008 Page 3 of 11
though the same were to be obtained by the defendants no.1&2
at their own costs;
(x) that the defendant no.2 vide his letter dated 6 th December, 2005
to the defendant no.4 also sought extension of time up to 31 st
December, 2005 for completion of the compromise settlement;
(xi) that the defendant no.2 however got served a legal notice dated
19th January, 2006 on the plaintiffs and the defendant no.7
alleging that the plaintiffs and the defendant no.7 had failed to
deposit the entire amount with the Bank on or before 10th
December, 2005 and cancelling the Agreement to Sell dated
20th August, 2005;
(xii) that the plaintiffs vide reply dated 30th January, 2007 to the
legal notice supra contended that they had already deposited
Rs.65 lacs in their accounts aforesaid opened with the defendant
no.3 Bank and also handed over Rs.60,000/- to the defendants
no.1&2 for getting the sale permission and were not in default
of their obligations under the Agreement to Sell;
CS(OS) No.827/2008 Page 4 of 11
(xiii) that the defendant no.7 filed CS(OS) No.598/2006 in this Court
against the defendants no.2,4&5 for injunction, without
impleading the plaintiffs as parties thereto; and,
(xiv) that the defendant no.2 in the said suit disclosed execution of
Agreement to Sell dated 15th February, 2006 of the said
property in favour of the defendant no.6 Mr. Mukesh Gupta.
Accordingly, this suit was filed, seeking the relief of (i) cancellation
of Agreement to Sell and General Power of Attorney dated 15 th February,
2006 with respect to the property aforesaid executed by the defendants
no.1&2 in favour of the defendant no.6; (ii) for permanent injunction
restraining the defendants no.1&2 from executing the Sale Deed of the said
property in favour of the defendant no.6 or his assignees; (iii) for declaration
that the Agreement to Sell dated 20 th August, 2005 of sale of the property by
the defendants no.1&2 in favour of the plaintiffs and the defendant no.7 is
final and binding; and, (iv) for specific performance thereof by directing the
defendants no.1&2 to execute the Sale Deed of the said property in favour of
the plaintiffs and the defendant no.7.
2. As the aforesaid would show, the suit is primarily for the relief of
specific performance of an Agreement of Sale of immovable property
CS(OS) No.827/2008 Page 5 of 11
situated at Sonepat. Though the Supreme Court in Harshad Chiman Lal
Modi Vs. DLF Universal Limited (2005) 7 SCC 791 held that Section 16 of
the CPC recognizes the well established principle that actions against res or
property should be brought in the forum where such res is situated and 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 or to
give an effective judgment with respect thereto, but the suit was entertained
and summons thereof issued on 5th May, 2008 though no ex-parte ad-interim
relief as sought granted.
3. Written statements were filed by the defendants No.1&2 and
defendant No.8 Mr. Anil Aggarwal. The defendants No.3 to 5 adopted the
written statement of defendant No.8, as recorded in the order dated 26th May,
2009. The defendant No.7 failed to appear despite service and was on 26 th
May, 2009 proceeded against ex-parte. The defendant No.6 was permitted
to be served by publication and the order dated 27 th October, 2010 records
that the defendant No.6 was so served. None appeared for the defendant
no.6.
CS(OS) No.827/2008 Page 6 of 11
4. Though the defendants No.1&2 also stopped appearing however on
the pleadings of the plaintiffs, defendants No.1&2 and defendants No.3 to 5
& 8, the following issues were framed in the suit on 20th July, 2011:
"1. Whether the plaintiffs are entitled to a decree of
declaration declaring that the agreement to sell dated
20.08.2005 is final and binding upon the parties and the
defendants are liable to execute the Sale Deed in favour
of the plaintiffs? OPP
2. Whether the plaintiffs are entitled to a decree of
Cancellation of Agreement to Sell and General Power of
Attorney dated 15.02.2006? OPP
3. Whether the suit of the plaintiffs is barred by res
judicata? OPD-1&2
4. Whether this court does not have the territorial
jurisdiction to try and decide the present suit? OPD-
1&2
5. Relief?"
and the suit put to trial.
5. The defendants No.1&2 did not appear thereafter also and the
defendants No.3 to 5 & 8 also stopped appearing and vide order dated 13th
July, 2012, the defendants No.1 to 6 & 8 were proceeded against ex-parte.
The plaintiffs have led their ex-parte evidence and the two plaintiffs besides
examining themselves have also examined the Zonal Manager, Chandigarh
of the defendant No.3 Bank of India as PW-3, the Chief Manager of the
Sonepat Branch of the defendant No.3 Bank of India as PW-4, Retired
CS(OS) No.827/2008 Page 7 of 11
Manager of Sonepat Branch of the respondent No.3 Bank of India as PW-5
and another Retired Assistant General Manager of the Parliament Street
Branch of the defendant No.3 Bank of India as PW-6.
6. The counsel for the plaintiffs has been heard.
7. At the outset it has been enquired from the counsel for the plaintiffs,
as to how in the light of Harshad Chiman Lal Modi supra this Court has
territorial jurisdiction over the subject matter of suit. Attention of the
counsel is also invited to the judgment of the Division Bench of this Court in
Vipul Infrastructure Developers Ltd. Vs. Rohit Kochhar
MANU/DE/0546/2008 laying down that relief of possession is inherent in
the relief of specific performance of the contract and 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 wherein the suit is instituted
and further holding that the suit for specific performance of an Agreement of
Sale of property in Gurgaon does not lie before this Court. Attention is also
invited to Pantaloon Retail India Ltd. Vs. DLF Limited 155 (2008) DLT
642 (DB) taking the same view.
8. The counsel for the plaintiffs in response, has referred to the judgment
dated 18th March, 2014 of a Division Bench of this Court in RFA(OS)
No.143/2013 titled Inder Sharma Vs. Vikas Nagpal. However a reading of
the said judgment shows the same to be concerned with a suit filed by a
seller against the purchaser of an immovable property, for declaration that
the Agreement to Sell stood terminated and cancelled and for permanent
injunction restraining the purchaser from disturbing the possession of the
seller of the property agreed to be sold and for declaration that the purchaser
had no right, title or interest in the property and for damages. Upon
objection as to territorial jurisdiction being taken, the seller/plaintiff offered
to give up the relief of declaration that the purchaser had no right, title or
interest in the property which was situated outside the territorial jurisdiction
of this Court. However, the same was not permitted. The Division Bench in
appeal held that the plaintiff could not be prohibited from giving up the
relief of declaration of rights in the property which take the suit outside the
territorial jurisdiction of the Court and further held that this Court, insofar as
the other reliefs claimed in the suit, had territorial jurisdiction to adjudicate
the same. No reference is found to have been made to the judgments
aforesaid.
9. In my opinion, Inder Sharma supra would have no application to the
factual controversy in this suit. That case, after the plaintiff therein had
given up the relief of declaration of rights in immovable property situated
outside the territorial jurisdiction of this Court, was concerned only with
declaration of rights in an agreement though of sale of immovable property
and permanent injunction restraining the agreement purchaser from
disturbing the possession of the seller of the said property and both of which
reliefs were found to be de hors immovable property. Per contra, this suit is
concerned primarily, as aforesaid, with the relief of specific performance of
an agreement of sale of immovable property situated outside the territorial
jurisdiction of this Court and which as aforesaid has been held to be not
maintainable. The Supreme Court in Harshad Chiman Lal Modi supra also
held that when a Court has no jurisdiction owing to the property not being
situated within its jurisdiction, the objection goes to the extent of making the
order of that Court a nullity on the ground of want of jurisdiction and
jurisdiction could not have been conferred by non traverse or consent. Thus,
the factum of the defendants having not contested the suit is irrelevant. As
far as the other reliefs claimed in the suit are concerned, the same are
dependent upon the grant of the relief of specific performance (since without
being entitled to the relief of specific performance, the plaintiffs would have
no rights in the property so as to be entitled to seek cancellation of
documents of the property created in favour of another or to seek the relief
of injuncting the property from being dealt with).
10. No other argument has been raised on the aspect of territorial
jurisdiction, though the counsel for the plaintiffs has made argument on the
merits of the claim. However, once it is found that this Court does not have
territorial jurisdiction as aforesaid, need is not felt to go into the merits of the
claim of the plaintiffs.
11. The suit thus fails on the ground of this Court not having territorial
jurisdiction to entertain the suit and is dismissed.
No costs. Decree sheet be drawn up.
RAJIV SAHAI ENDLAW, J.
MARCH 27, 2014.
pp/bs
(Corrected & released on 10th May, 2014)
