POLOTRIPS INDIA PVT. LTD. & ANR. vs KARNATAKA BANK LIMTED & ORS.
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* IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on: 13th August, 2024
Date of Decision: 18th September, 2024
+ CS(COMM) 31/2024 & I.A. Nos. 675-76/2024
POLOTRIPS INDIA PVT. LTD. & ANR. …..Plaintiffs
Through: Mr. Sandeep Sindhwani, Sr. Advocate with Mr. Lalit Gupta, Ms. Neha Bansal, Ms. Vaishali Shukla, Mr. Ankit Singh, Mr. Anmol Ghai, Mr. Sanjay Dua, Mr. Priyansh Jain, and Mr. Leebo Boss Mr. Goutam, Advocates
versus
KARNATAKA BANK LIMTED & ORS. …..Defendants
Through: Mr. Sumeet Batra and Dr. Roopanshi Batra, Advocates for D-1
Mr. Amit Dhall, Advocate for D-2 to 6
Mr. Lokesh Sinhal Sr. AAG Haryana with Mr. Nikunj Gupta and Ms. Himanshi Shakya, Advocates for D-3
Mr Santosh Kumar Rout, Ms Dharna Veragi, Advocates for D-5/Indian Bank
Mr. Sudhir Nandrajog, Senior Advocate with Mr. B. N. Mishra, Advocates along with Mr. Kanwar Singh AR of M/s Deep Engineering for D-7 in I.A. No. 4423/2024.
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CORAM:
HON’BLE MS. JUSTICE MANMEET PRITAM SINGH ARORA
J U D G M E N T
MANMEET PRITAM SINGH ARORA, J:
1. The question arising for consideration in this judgment is whether the plaintiff herein can maintain before Courts in Delhi, the present suit for specific performance with respect to the suit property located in the State of Haryana in view of Section 16 of Code of Civil Procedure, 1908 (CPC) which 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) or 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.
2. The present suit has been filed seeking specific performance of the Agreement to Sell (ATS) dated 10.11.2021 and the Addendum dated 16.04.2022 as well as permanent and mandatory injunctions concerning Industrial Land and Building situated on Plot No. 174, measuring 5720.10 sq. mtrs., Sector-4, Bawal, District Rewari, Haryana (suit property).
3. It is stated in paragraph 34 of the plaint that the suit property is in the possession of defendant no. 5 i.e., Indian Bank, Sector-4, Rewari Branch, State of Haryana and in prayer (b), the plaintiff has sought a decree of mandatory injunction against defendant no. 5 for handing over the title documents and physical possession of the suit property to the plaintiffs.
4. The territorial jurisdiction of this Court has been invoked based on the averments set out in paragraph 40 of the plaint, which reads as follows:
40. JURISDICTION
This Hon’ble Court has the pecuniary jurisdiction to entertain the present suit. The subject matter agreement/addendum have been executed at Delhi. The prequel MOU 30.10.2021 was also executed at Delhi. The defendant No.1 Bank with whom the suit property is mortgaged is in Delhi. The defendant No. 6, who is also NRI, is also resident of Delhi. The entire negotiations, discussions and finalisation of the Agreement/ Addendum have taken place at Delhi. The mediation proceedings pursuant to the directions of this Hon’ble Court have taken place at New Delhi. Thus the cause of action has arisen in Delhi and defendants are ordinarily the residents of Delhi. In the ATS dated 10.11.2021 as well as the addendum to ATS dated 16.4.2022, the parties have agreed and acknowledged that the jurisdiction shall be Delhi. This Hon’ble Court thus has the territorial jurisdiction to try, entertain and adjudicate the present suit.
5. The primary relief of specific performance has been sought against defendant no. 2, Ms. Kalpana Verma, the owner/title holder of the suit property.
6. It is the case of the plaintiffs that the suit property was mortgaged by defendant no. 2 with defendant no. 1, Karnataka Bank, in relation to a loan availed by a company, namely, Carfour Foam Pvt. Ltd. However, through a sanction letter dated 09.12.2021, defendant no. 1 bank proposed a One Time Settlement (OTS) in respect of the aforesaid loan. In order to arrange funds for the OTS, the ATS dated 10.11.2021 and the Addendum dated 16.04.2022 were executed between plaintiff no. 1 and defendant no. 2. The ATS also bears the signature of Mr. Ved Prakash Verma, the father of defendant no. 2, and Atlas Electric Industries Pvt. Ltd., a company that had a prior dispute concerning the suit property.
7. It is stated in the plaint at paragraph no. 29 that defendant no. 1 i.e., the Karnataka Bank Ltd. and defendant no. 2 i.e., the recorded owner have since settled the matter between themselves without informing the plaintiff. It is further acknowledged at paragraph 34 of the plaint that defendant no. 5 i.e., the Indian Bank has pasted a notice on the suit property claiming the possession.
8. Defendant no. 7 filed I.A. No. 4423/2024 seeking impleadment on the averments that it has entered into an agreement of purchase with defendant no. 2 on 27.12.2023 and is currently in possession of the suit property. It is stated in the application that defendant no. 7 has availed loan from defendant no. 5 i.e., the Indian Bank by mortgaging the suit property and it is in these circumstances that defendant no. 5 i.e., the Indian Bank has a charge over this property. It was also contended during arguments that it is with the funds provided by defendant no. 7 that the OTS of defendant no. 1 bank was paid off by defendant no. 2.
9. The aforesaid contention of defendant no. 7 was confirmed by counsels appearing for defendant nos. 1, 2 and 5 during the course of arguments.
10. Before proceeding to examine the matter, it would be relevant to refer to the relief of specific performance and possession prayed for in the plaint. The relevant prayer clause (a) and (b) of the plaint reads as under:
a. Pass a decree of Specific Performance of the ATS/Addendum dated 10.11.2021/16.4.2022 in favor of the Plaintiff No. 1 with respect to the suit property i.e. immovaable property being identified as Industrial Land and Building situated on Plot No.l74, Measuring 5720.10 Sq. Mtrs, Sector-4 at, Bawal, Dist, Rewari, Haryana along with its structure and against the defendant No.2 thereby directing the defendant No.2 to execute the Sale/Transfer/Conveyance Deed of the suit property in favour of the Plaintiff No.1;
OR IN THE ALTERNATE
Direct the defendant No.1 and 2 to return the amount of Rs. 156.60 Lacs to the plaintiffs along with interest @ 18% per annum.
b. Pass a decree of Mandatory Injunction in favor of the Plaintiffs and against the defendant No.1 and 5 Banks thereby directing the said defendants/Bank to handover the original property papers and physical possession of the suit property to the plaintiffs.
11. In light of the fact that the suit property in respect of which reliefs of specific performance and possession are sought is located in District Rewari in the State of Haryana, this Court on 15.07.2024 had called upon the plaintiff to satisfy this Court with respect to its territorial jurisdiction in view of Section 16 of the Code of Civil Procedure, 1908 (CPC) and the judgment of the Supreme Court in Harshad Chiman Lal Modi vs. DLF Universal Ltd1. The order dated 15.07.2024 reads as under:
1. The present suit has been filed seeking specific performance of an agreement to sale with respect to immovable property situated in the jurisdiction of the state of Haryana.
2. The attention of the learned counsel for the plaintiff has been drawn to the judgment of the Supreme Court in Harshad Chiman Lal Modi vs. DLF Universal Ltd. and Another, (2005) 7 SCC 791), and has been called upon to satisfy the Court with respect to the territorial jurisdiction of this Court to entertain the present suit in view of the Section 16 of the Code of Civil Procedure, 1908 (CPC).
3. Learned counsel for defendant no. 5 as well raises an objection to the territorial jurisdiction. He states that the concerned branch of defendant no. 5 bank where the suit property stands mortgaged is at Gurugram, Haryana.
4. Learned counsel for the plaintiff seeks accommodation to examine the legal position and take instructions.
5. At request, list on 30.07.2024.
12. The plaintiff in the intervening period on 26.07.2024 filed a transfer petition i.e., T.P. (C) No. 1972/2024 under Section 25 of CPC before the Supreme Court seeking transfer of the captioned suit to a Commercial Court, Rewari District Court, Haryana. In the grounds pleaded in this petition, the plaintiff unequivocally admitted that this Court does not have the requisite territorial jurisdiction to entertain the captioned suit. The relevant grounds A, B and G read as under:
A. BECAUSE the suit sought to be transferred, is a suit for specific performance in relation to property situated at Bawal, Rewari District, Haryana, and in view of the judgement of the Hon’ble Supreme Court in Harshad Chiman Lal Modi v/s DLF Universal & Ors. AIR 2005 SC 4446 a suit for specific performance is liable to transferred where the property is situated even if there is contract between the parties.
B. BECAUSE the pending suit before the Delhi High Court is not instituted within the appropriate jurisdiction as per laid down law.
B. BECAUSE the pending suit before the Delhi High Court is not instituted within the appropriate jurisdiction as per laid down law.
G. BECAUSE the present suit is liable to transferred to Commercial Court, Rewari District Court from the stage it has left from the High Court of Delhi, because entire fraud transaction is being mapped out by the Respondents.
(Emphasis supplied)
13. In view of the aforenoted admitted facts, ordinarily the plaintiff ought to have prayed for the return of plaint for filing the same before the appropriate Court which has requisite territorial jurisdiction over the suit property. However, on 30.07.2024, learned senior counsel appearing on behalf of the plaintiffs stated that having examined the judgment of the Supreme Court in Harshad Chiman Lal Modi (supra), the plaintiff has decided to abandon the relief of physical possession of the suit property as sought for in prayer clause (b) and consequently, the suit can be entertained by the Courts at Delhi. This fact was recorded in the order dated 30.07.2024, which reads as under:
1. This Court is of the opinion that the present suit is not maintainable in this Court in view of Section 16(d) of the Code of Civil Procedure, 1908.
2. Learned senior counsel for the plaintiff states that having examined the judgment of the Supreme Court in Harshad Chiman Lal Modi v. DLF Universal Ltd., (2005) 7 SCC 791), the plaintiff is willing to curtail the relief sought in the plaint and abandon the relief of physical possession of the suit property in prayer (b) so as to maintain this suit within the territorial jurisdiction of this Court.
3. List for arguments on 09.08.2024.
14. In these altered facts, the plaintiff and defendants addressed arguments on the aspect of territorial jurisdiction on 09.08.2024 and 13.08.2024.
15. Mr. Sanjeev Sindhwani, learned senior counsel for the plaintiff stated that since the plaintiff is willing to abandon the relief of physical possession, the relief of specific performance sought at prayer clause (a) would be maintainable in view of proviso to Section 16 CPC as the said relief can be obtained through the personal obedience of defendant no. 2.
15.1. In support of this proposition, he relied upon the judgment of a Coordinate Bench of this Court in Bhawna Seth v. DLF Universal Limited2 and Dr. Ramesh Chander Munjal v. Dr. Suraj Munjal3. Additionally, he relied upon the judgment of the Division Bench of this court in Anil Verman v. Raheja Developers Private Limited4 and the judgment of the Supreme Court in Babu Lal v. Hazari Lal Kishori Lal5 to contend that it is not necessary for the plaintiff in a suit for specific performance to seek the relief for possession and the plaintiff can therefore, maintain the present suit for specific performance by abandoning the plea for possession in prayer (b). He states that the plaintiff can file a fresh suit at a subsequent stage for the physical possession of the suit property after obtaining a decree for specific performance.
16. In reply, Mr. Sudhir Nandrajog, learned senior counsel for the defendant no. 7 states that the argument of the plaintiff that it has abandoned the relief for physical possession is factually incorrect as the prayer clause (a) wherein the plaintiff has sought the relief of specific performance of the ATS and Addendum therein the ATS dated 10.11.2021 encompasses the relief of possession with it. He states that clause 6 of the ATS records the obligation of the vendor (i.e., defendant no. 2) to handover the vacant, exclusive and peaceful possession of the suit property to the vendee (i.e. plaintiff) herein and thus, grant of relief of specific performance would entail grant of relief in terms of clause 6 of the ATS. The relevant clause 6 of the ATS reads as under:
That the FIRST PARTY/VENDOR/SELLER will hand over the vacant, exclusive, and peaceful physical possession of the said property to the Vendee the date the SECOND PARTY/VENDEE/BUYER tenders/pays the entire sum of Rs.6,00,50,000/- (Rupees Six Crore Fifty Thousand Only) as per Payment Schedule to Karnataka Bank Ltd. It is pertinent to mention here that currently said property is under physical possession of Karnataka Bank Ltd.
(Emphasis supplied)
16.1. He states that, therefore, the relief of possession is an integral part of the present plaint. He states that defendant no. 7 is in actual physical possession and is claiming possessory rights in the suit property. He states that the suit property stands mortgaged with defendant no. 5.
17. Learned counsel for defendant no. 5 states that the transfer petition i.e., T.P. (C) No. 1972/2024 has since been dismissed by the Supreme Court on 02.08.2024 recording the petitioner/plaintiffs submission that the same is not pressed.
18. Learned counsel for defendant no. 1 confirms the status of the loan having been repaid by defendant no. 2 and the fact that the title deeds of the suit property have been released by defendant no. 1.
19. This Court has heard the submissions advanced by the learned counsels for the parties and perused the record.
20. In the considered opinion of this Court, the contention of the learned senior counsel for the plaintiff that the suit for specific performance qua prayer clause (a) can be maintained in Delhi on account of the proviso to Section 16 CPC is clearly misconceived in the facts of the present case as the owner/vendor i.e., defendant no. 2 admittedly does not reside within the territorial jurisdiction of this Court. The plaintiff admits that the defendant no. 2 is a resident of United Kingdom and in India her residence is in Ludhiana, Punjab as is evident from the memo of parties.
21. Notwithstanding the aforesaid factual position, this Court is also of the considered opinion that the suit of the plaintiff seeking relief of specific performance with respect to a property located in District Rewari, Haryana is not maintainable before Courts at Delhi under Section 16 of the CPC, in view of the law authoritatively settled by the Supreme Court in Harshad Chiman Lal Modi (supra). The relevant paragraphs of the said judgment read as under:
16. Section 16 thus recognises 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. The 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 a well-known maxim equity acts in personam, recognised by the Chancery Courts in England. The 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 the courts could grant relief in suits respecting immovable property situate abroad by enforcing their judgments by process in personam i.e. by arrest of the defendant or by attachment of his property.
17. In Ewing v. Ewing [(1883) 9 AC 34: 53 LJ Ch 435 (HL)] 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 lands, in Scotland, in Ireland, in the colonies, in foreign countries.
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 Defendant 1 to execute the 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.
26. The question, however, is whether the Delhi Court has jurisdiction in the matter. If the answer to that question is in the affirmative, the contention of the plaintiff must be upheld that since the Delhi Court also has jurisdiction to entertain the suit and parties by an agreement had submitted to the jurisdiction of that Court, the case is covered by Section 20 of the Code and in view of the choice of forum, the plaintiff can be compelled to approach that Court as per the agreement even if the other court has jurisdiction. If, on the other hand, the contention of the defendant is accepted and it is held that the case is covered by Section 16 of the Code and the proviso to Section 16 has no application, nor Section 20 would apply as a residuary clause and the Delhi Court has no jurisdiction in the matter, the order impugned in the present appeal cannot be said to be contrary to law. As we have already indicated, the suit relates to specific performance of an agreement of immovable property and for possession of plot. It is, therefore, covered by the main part of Section 16. Neither the proviso to Section 16 would get attracted nor Section 20 (residuary provision) would apply and hence the Delhi Court lacks inherent jurisdiction to entertain, deal with and decide the cause.
(Emphasis supplied)
22. It would be relevant to note that in the aforesaid judgment of Harshad Chiman Lal Modi (supra) the defendant therein i.e., DLF Universal Ltd. had its Head Office at Delhi and there was no dispute that a part of the cause of action had arisen at Delhi. In the said suit, the parties had even agreed to an exclusive jurisdiction clause which conferred jurisdiction to the Courts at Delhi. However, after considering the said facts, the Supreme Court categorically held that in a suit relating to the specific performance of an agreement, it is covered by the main part of Section 16 and neither the proviso to Section 16 would get attracted nor Section 20 CPC would apply to such suits. The Supreme Court emphatically held that the Delhi Courts lacks the inherent jurisdiction to entertain and decide the cause.
22.1. Therefore, the reliance placed by plaintiff on the proviso to Section 16 CPC to raise the plea for maintaining the suit for specific performance is misconceived in law.
23. This Court is unable to accept the contention of the plaintiff that a suit for specific performance can be maintained in Delhi and subsequently a fresh suit will be filed by the plaintiff at Rewari, Haryana for obtaining the physical possession after the grant of the decree of the specific performance, in view of the judgment of the Coordinate Bench in Bhawna Seth (supra) pronounced on 19.02.2007. The judgment of Bhawna Seth (supra) authored by Justice Sanjay Kishan Kaul was passed following the judgment of a learned Single Judge in Rohit Kochhar v. Vipul Infrastructure Developers Ltd.6 as noted by another Division Bench in Anil Verman (supra), which was also authored by Justice Sanjay Kishan Kaul. However, the judgment of Rohit Kochhar (supra) passed by the learned Single Judge has since been reversed by the Division Bench vide judgment dated 11.03.2008 in Vipul Infrastructure Developers Ltd. v. Rohit Kochhar7.
24. In this regard, it would also be relevant to refer to the judgment of the Division Bench in Vipul Infrastructure Developers Ltd. (supra) wherein the Division Bench in identical facts, declined to entertain the suit for specific performance in Delhi as the suit property therein was not located within its territorial jurisdiction and rejected the contention that the suit could be maintained by invoking the proviso to Section 16 CPC. The Division Bench noted that the agreement for which specific performance was sought contained a clause regarding the delivery of physical possession. The Division Bench held that the suit could only be decreed in favor of the plaintiff if the Court had jurisdiction over the statutory authority (i.e., the sub-Registrar), which has to execute and register the sale deed. The relevant paragraphs of the said judgment read as follows:
17. The interpretation that is sought to be given by the respondents herein, if accepted, would in view of the aforesaid decision, lead to an incongruous situation, as a person who is located in Delhi and buys a property in Gurgaon or in Mumbai, would seek for declaration at Delhi and at the execution stage, get the decree transferred to Gurgaon or Mumbai for its execution.
18. In the present case, it is an admitted position that the appellant had entered into the aforesaid alleged contract at its Corporate office at Delhi. It is the specific stand of the appellant that they were initially residents of Delhi and that they had moved to Gurgaon and their corporate office is now also located at Gurgaon. It is the contention of the counsel appearing for the respondents that the proviso to Section 16 of Code of Civil Procedure is applicable which is sought to be invoked, for, the relief which is sought for could be entirely enforced through the personal obedience of the defendants in Delhi. There is however not only a prayer in the plaint for declaration of the right and title, but also to transfer the right, title and interest in the suit premises situate at Gurgaon. As, in our opinion, the suit can be decreed in favour of the plaintiff only when the Court can get the sale deed executed and registered in favour of the plaintiff which would confer the title of the suit premises on the plaintiff, and the execution and the registration of the sale document would have to take place at Gurgaon and, for this the Court will also have to pass a decree directing the defendant to get the sale deed executed and registered at Gurgaon, implication of the same will be that a direction will have to be given to the defendant that he shall have to move out of Delhi and go to Gurgaon and get the same registered. No sale deed is sought to be registered at Delhi and, therefore, in our considered opinion such a relief cannot be entirely obtained through the personal obedience of the defendant, who in this case has to go to the jurisdiction of another court to get the decree executed and the sale deed registered.
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 CPC 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 CPC 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.
21. The decision of the Supreme Court in the case of Adcon Electronics Pvt. Ltd. v. Daulat and Another (2001) 7 SCC 698, relied upon by the respondents, would also not be applicable to the facts of the present case. The said decision was rendered in the context of the expression “suit for land. The Supreme Court in the said decision held that suit for specific performance of an agreement for sale of the suit property, without a claim for delivery of possession, cannot be treated as a suit for land and is, therefore, triable under clause 12 if the other conditions thereunder are fulfilled. The facts of the said case are, therefore, distinguishable and are not applicable to the case in hand. The said decision was rendered due to specific provision therein and it is also apparent from the fact that the case of Babu Lal (supra) was not even referred to in that case.
22. Another decision of the Supreme Court which needs reference at this stage is the case of Begum Sabiha Sultan v. Nawab Mohd. Mansur Ali Khan and others (2007) 4 SCC 343. In para 12 of the said judgment it was held by the Supreme Court that reading the plaint as a whole in this case, there cannot be much doubt that the suit is essentially in relation to the relief of partition and declaration in respect of the properties situate in Village Pataudi, Gurgaon, outside the jurisdiction of court at Delhi. In that view of the matter it was also held that the Delhi Court will have no jurisdiction to try and decide the aforesaid suit. It was also held in the said decision by following the decision of Harshad Chiman Lal Modi (supra) that the relief of partition, accounting and declaration of invalidity of the sale executed in respect of immovable property situate in Village Pataudi, Gurgaon, could not entirely be obtained by personal obedience to the decree by the defendants in the suit. It was further held that applying the test laid down therein, it is clear that the present suit could not be brought within the purview of the proviso to Section 16 of the Code or entertained relying on Section 20 of the Code on the basis that three out of the five defendants are residing within the jurisdiction of the court at Delhi.
23. In view of the above facts and circumstances, we are of the considered opinion that the Delhi court would not have the territorial jurisdiction to entertain and decide the aforesaid suits. Consequently, we hold that the decision rendered by the learned Single judge cannot be upheld. The same is accordingly set aside and quashed.
(Emphasis supplied)
25. The contention of maintainability of a suit for specific performance in Delhi Courts with respect to an immovable property located outside Delhi by invoking the proviso to Section 16 CPC was specifically negated by the Division Bench in the aforesaid judgment of Vipul Infrastructure Developers Ltd. (supra), which has been passed after the pronouncement by the Coordinate Bench in Bhawna Seth (supra). Thus, the plaintiff cannot place reliance on the judgment of Bhawna Seth (supra).
26. Thus, the submission of the plaintiff that the present suit seeking specific performance in terms of prayer clause (a) can be maintained in Delhi with respect to a suit property situated in Haryana by invoking the proviso to Section 16 CPC is without any merit in view of the authoritative judgment of the Supreme Court in Harshad Chiman Lal Modi (supra) and the judgment of the Division Bench in Vipul Infrastructure Developers Ltd. (supra).
27. Notwithstanding, the bar of Section 16 CPC, the plea of the plaintiff that it can maintain the present suit for specific performance without seeking the relief of actual and physical possession, at this initial stage is misconceived.
28. In the facts of this case, it is the stated case of the plaintiff in the plaint at paragraph no. 34 that the possession of the suit property is with defendant no. 5 i.e., Indian Bank at Rewari, Haryana. The Supreme Court in Babu Lal (supra) has held that in a case where the suit property is in the possession of the third party, the plaintiff in a suit for specific performance is obliged to seek a decree of possession so as to bind the third party to the decree passed. The Supreme Court further held that where the decree of specific performance contemplates handing over of possession as the term of the agreement to sell, the party may pray for the relief of possession. In the facts of this case, clause 6 of the ATS contemplates handing over of the possession to the vendee and the said clause is also inherently a part of the prayer clause (a). In view of the said dicta of the Supreme Court, the averment of the plaintiff that he can maintain this suit without seeking the relief of possession from defendant no. 5 (who is a third party) is without any merit. The relevant paragraph of the judgment in Babu Lal (supra) reads as under:
13. The expression in sub-section (1) of Section 22 in an appropriate case is very significant. The plaintiff may ask for the relief of possession or partition or separate possession in an appropriate case. As pointed out earlier, in view of Order 2 Rule 2 of the Code of Civil Procedure, some doubt was entertained whether the relief for specific performance and partition and possession could be combined in one suit; one view being that the cause of action for claiming relief for partition and possession could accrue to the plaintiff only after he acquired title to the property on the execution of a sale deed in his favour and since the relief for specific performance of the contract for sale was not based on the same cause of action as the relief for partition and possession, the two reliefs could not be combined in one suit. Similarly, a case may be visualised where after the contract between the plaintiff and the defendant the property passed in possession of a third person. A mere relief for specific performance of the contract of sale may not entitle the plaintiff to obtain possession as against the party in actual possession of the property. As against him, a decree for possession must be specifically claimed or such a person is not bound by the contract sought to be enforced. In a case where exclusive possession is with the contracting party, a decree for specific performance of the contract of sale simpliciter, without specifically providing for delivery of possession, may give complete relief to the decree-holder. In order to satisfy the decree against him completely he is bound not only to execute the sale deed but also to put the property in possession of the decree-holder. This is in consonance with the provisions of Section 55(1) of the Transfer of Property Act which provides that the seller is bound to give, on being so required, the buyer or such person as he directs, such possession of the property as its nature admits.
16. It may be pointed out that the Additional Civil Judge had decreed the suit for specific performance of the contract. The High Court modified the decree to the extent that the sale deed was to be executed by Respondents 6 to 9 together with the petitioner. In short, the decree was passed by the High Court not only against Respondents 6 to 9 but also against the subsequent purchaser i.e. the petitioner and thus the petitioner was himself the judgment-debtor and it cannot be said that he was a third person in possession and, therefore, relief for possession must be claimed. The contention on behalf of the petitioner is that the relief for possession must be claimed in a suit for specific performance of a contract in all cases. This argument ignores the significance of the words in an appropriate case. The expression only indicates that it is not always incumbent on the plaintiff to claim possession or partition or separate possession in a suit for specific performance of a contract for the transfer of the immovable property. That has to be done where the circumstances demanding the relief for specific performance of the contract of sale embraced within its ambit not only the execution of the sale deed but also possession over the property conveyed under the sale deed. It may not always be necessary for the plaintiff to specifically claim possession over the property, the relief of possession being inherent in the relief for specific performance of the contract of sale. Besides, the proviso to sub-section (2) of Section 22 provides for amendment of the plaint on such terms as may be just for including a claim for such relief at any stage of the proceeding.
(Emphasis supplied)
29. The Supreme Court recently in Manickam alias Thandapani v. Vasantha8 after referring to Babu Lal (supra) reiterated that where the suit property is in possession of a third party (i.e., other than the vendor) the plaintiff would have to seek a specific relief for possession.
30. This Court finds merit in the submission of the learned senior counsel for the defendant no. 7 that the prayer for possession of the suit property is inherent in prayer clause (a) of the suit since the ATS dated 10.11.2021 itself in clause 6 contemplates handing over of physical possession. This is also the law settled by Supreme Court in Babu Lal (supra) and Manickam alias Thandapani (supra) wherein at para 17 the Supreme Court has held that grant of relief for possession is inherent in the grant of prayer for specific performance in favour of the vendee and against the vendor. Thus, the submission of the learned senior counsel for the plaintiff recorded on 30.07.2024 that the plaintiff is willing to abandon the prayer of possession at prayer clause (b) qua third party is a red-herring. Moreover, the abandonment of the said prayer would not make the suit maintainable at Delhi due to the bar of Section 16 of CPC.
31. The reliance placed by the plaintiff in the judgment of Excel Dealcomm Private Limited v. Asset Reconstruction Company (India) Limited9 is also misconceived and in fact, the said judgment as well at paragraphs 14, 15 and 16 has held that where the relief of possession is in-built in the prayer for specific performance and the suit would lie in the Court where the property is located. The relevant paragraph 16 reads as under:
16. It may be noted that the sale certificate sought under the prayer requires the delivery of possession of the suit property. Thus, we find that the prayer for delivery of possession was an implicit one in the present case. The prayer as sought in the plaint could not have been granted without the delivery of possession of the suit property as the sale certificate itself contemplates the delivery of the immovable property. Thus, in view of this we find that Adcon Electronics [Adcon Electronics (P) Ltd. v. Daulat] would not apply as there was a prayer for delivery of possession in the present case. Therefore, we hold that the present suit was indeed a suit for land.
(Emphasis supplied)
32. A perusal of the grounds set out in the transfer petition i.e., T.P. (C) No. 1972/2024 shows that the plaintiff is cognizant that this Court does not have the territorial jurisdiction as it has no inherent jurisdiction over the subject matter of the suit and is also conscious of the law laid down by the Supreme Court in Harshad Chiman Lal Modi (supra). The submission of the plaintiff on 30.07.2024 before this Court that he is now willing to abandon the relief of possession at prayer clause (b) so as to maintain this suit in Delhi Courts despite being aware that the vendor i.e., defendant no. 2 has handed over the physical possession to a third party i.e., defendant no. 7 evidences desperate measures to cling to the jurisdiction of this Court.
33. The reliance placed by the plaintiff on the judgment of Division Bench in Anil Verman (supra) is also of no assistance. In the said case, the plaint was rejected by the learned Single Judge for lack of territorial jurisdiction and the Division Bench concurred with the learned Single Judge to hold that relief of possession cannot be granted by Delhi Court with respect to a property located in Nainital. The Division Bench rejected the submission of the plaintiff therein premised on Bhawna Seth (supra) case and held that where the prayer clause for specific performance on a meaningful reading contained the prayer for possession then such a suit would be governed by Section 16 and would only be maintainable in the territorial jurisdiction of the Court where the suit property was located. The relevant paragraph 19 reads as under:
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).
(Emphasis supplied)
34. Similarly, the reliance placed by the plaintiff on the judgment of the Coordinate Bench Dr. Ramesh Chander Munjal (supra) is not applicable to the facts of the present case. In the said judgment the learned Single Judge held that provisions of Section 17 of CPC were attracted in the facts of the case and therefore, the suit was held to be maintainable at Delhi. In the facts of the present case, admittedly Section 17 CPC is not applicable.
35. Lastly, learned senior counsel for the plaintiff had prayed that if this Court were to not find favour with the prayer of the plaintiff to entertain the present suit at Delhi and direct return of the plaint, this Court may continue the interim order dated 11.01.2024 for a further period of four (4) weeks. This Court is, however, not inclined to accept this limited prayer in view of the unreasonable persistence of the plaintiff in continuing with this suit despite being aware of its non-maintainability as is evident from the grounds raised in the T.P. (C) 1972/2024.
36. In view of the above settled law, this Court is of the considered opinion that it has no territorial jurisdiction to entertain the present suit for specific performance qua Industrial Land and Building situated on Plot No. 174, measuring 5720.10 sq. mtrs., Sector-4, Bawal, District Rewari, Haryana. Therefore, the plaint is liable to be returned under Order VII Rule 10 CPC for presentation before the appropriate Court at Rewari District Court, Haryana.
37. The interim order passed on 11.01.2024, wherein the parties were directed to maintain status quo as to the title of the suit property stands vacated.
38. The Registry is directed to return the plaint to the plaintiff through counsel as per the applicable rules.
39. Pending applications stand disposed of.
MANMEET PRITAM SINGH ARORA, J
SEPTEMBER 18/msh/AKT
1 (2005) 7 SCC 791
2 MANU/DE/7173/2007, Paragraphs 5, 7, 8, 9, 12, 17 and 18
3 2022 SCC OnLine Del 1045, Paragraphs 21, 22 and 28
4 2011 SCC OnLine Del 4063, Paragraphs 10, 12, 14, 16 and 18
5 (1982) 1 SCC 525, Paragraphs 11, 15, 16
6 122 (2005) DLT 480
7 2008:DHC:914-DB
8 2022 SCC OnLine SC 2096 at paragraph 16
9 (2015) 8 SCC 219
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