Vinod Grover And 5 Ors vs Videocon Realty And Infrastructure Ltd. And 3 Ors

The Chamber Summons seeks revocation of leave that I granted on 9th October 2018 to the Plaintiff under Clause XII of the Letters Patent of this

Court. I am not commenting on the accuracy or otherwise of the averments in the Leave Petition or even in the plaint.

The submission from Defendant No. 4, the Applicant in the Chamber Summons, is that, on a plain reading, the suit is one for specific performance

of a contract but combined with the prayer for delivery of possession of immovable property. That immovable property is situated wholly outside the

jurisdiction of this Court. Therefore, having regard to the judgments of the Supreme Court in Adcon Electronics Pvt Ltd v Daulat & Anr( 2001) 7 SCC

 and Excel Dealcomm Pvt Ltd v Asset Reconstruction Company (India) Ltd & Or (s2015) 8 SCC 219, and the judgment of a learned Single

Judge of this Court in DG Kotak & Anr v Rajeshkumar alias Rajas R Doshi & Or s2012 (3) Mh LJ 275., this is a ‘suit for land’ within the

meaning of Clause XII of the Letters Patent. Therefore, no leave could ever have been granted.

Clause XII of the Letters Patent read thus:

“XII. Original jurisdiction as to suits. â€" And we do further ordain that the said High Court of Judicature at Bombay, in the exercise of its ordinary

original civil jurisdiction, shall be empowered to receive, try and determine suits of every description, if, in the case of suits for land or other immovable

property such land or property shall be situated, or in all other cases if the cause of action shall have arisen, either wholly, or, in case the leave of the

Court shall have been first obtained, in part, within the local limits of the ordinary original jurisdiction of the said High Court or if the Defendant at the

time of the commencement of the suit shall dwell or carry on business, or personally work for gain, within such limits; except that the said High Court

shall not have such original jurisdiction in cases falling within the jurisdiction of the Small Causes Court at Bombay, or the Bombay City Civil Court.â€​

The only question is whether a Suit that seeks specific performance and combines a prayer for decree for specific performance with a prayer for

delivery of possession of immovable property is a suit for land. If it is, then it falls within the first part of Clause XII. This means, necessarily, that if

the land is outside the jurisdiction of this Court then no leave can be granted. The decisions referred to above are abundantly clear.

In Adcon Electronics, immovable property at Indore (land and a building) were the subject of sale agreement between the parties to the suit. There

followed a memorandum, also in regard to this property. Disputes arose. The purchasers brought suit in the Bombay High Court for specific

performance of the agreement and memorandum. The plaint did not seek possession of the suit property. The plaintiffs obtained leave under Clause

XII of the Letters Patent. The defendants filed a Chamber Summons for revocation of that leave. A single judge dismissed that Chamber Summons.

An appeal failed. The defendants approached the Supreme Court, and this resulted in the Adcon Electronics decision. Analyzing, Clause XII, the

Supreme Court said, first:

Thus, it is clear that under clause 12 of the Letters Patent, the High Court in exercise of its ordinary original jurisdiction will have power to receive,

try and determine:

(1) suits for land or other immovable property if such property is situated within the local limits of original jurisdiction of the High Court; or (2) all other

cases (a) if the cause of action has arisen wholly within the local limits of the ordinary original jurisdiction of the High Court; (b) if prior leave of the

Court has been obtained and the cause of action has arisen in part within the local limits of the ordinary original jurisdiction of the High Court; or (c) if

the defendant dwells or carries on business or personally works for gain within such limits.

Every suit for specific performance of an agreement that relates to land is not, the Adcon Electronics Court said, ‘a suit for land’. Such a suit

becomes a ‘suit for land’ only if it also claims relief related to title or possession of that land. The Supreme Court said:

The learned Single Judge while dismissing the chamber summons took the view that so far as the High Court of Bombay was concerned the law

was well settled that suits for specific performance, even though they might relate to the land, were not suits for land. On appeal the order of the

learned Single Judge was confirmed by the Division Bench opining that the suit for specific performance of an agreement for sale was not a “suit

for landâ€​.

The question then arises as to what is meant by “suit for landâ€. This expression has been interpreted by different High Courts as well as by

the Federal Court.

... ... ... ...

From the above discussion it follows that a “suit for land†is a suit in which the relief claimed relates to title to or delivery of possession of land

or immovable property. Whether a suit is a “suit for land†or not has to be determined on the averments in the plaint with reference to the reliefs

claimed therein; where the relief relates to adjudication of title to land or immovable property or delivery of possession of the land or immovable

property, it will be a “suit for landâ€. We are in respectful agreement with the view expressed by Mahajan, J. in Moolji Jaitha case [AIR 1950 FC

83 : 1949 FCR 849] .

In the instant case the suit is for specific performance of the agreement for sale of the suit property wherein relief of delivery of the suit property

has not been specifically claimed, as such it cannot be treated as a “suit for landâ€​.

We cannot also accept the contention of Mr Chitale that the suit is for acquisition of title to the land and is a “suit for landâ€. In its true sense, a

suit simpliciter for specific performance of contract for sale of land is a suit for enforcement of terms of contract. The title to the land as such is not

the subject-matter of the suit.

In this view of the matter, we do not find any illegality in the order of the Division Bench of the Bombay High Court under challenge. The appeal

is dismissed but in the circumstances of the case, without costs. Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â

           (Emphasis added)

This decision was followed in 2015 in Excel Dealcomm. Meanwhile, in 2012, a learned single Judge of this Court, in DG Kotak also followed Adcon

Electronics, saying:

In my view, a suit for specific performance of a contract of sale of an immovable property in which possession of the property is claimed in

pursuance of the contract for sale or as a consequence of the sale deed to be executed in performance of an agreement of sale, is a suit for land.

Such a suit would be covered by the first part of Clause XII of Letters Patent. Being so, the High Court of Bombay would not have jurisdiction to

entertain and try the suit if the immovable property is situated outside the limits of its original jurisdiction. Leave to institute such as a suit in the High

Court cannot be granted. Grant of such leave would be a nullity because the court itself does not have a power to grant leave in respect of a suit for

land or immovable property. Â Â Â Â Â Â Â Â Â Â Â Â Â Â (Emphasis added)

I am unable to accept Mr Dwarkadas’s submission for the Plaintiffs that despite this clear position, I should prefer instead to follow the Division

Bench decision of this Court in Wimco Ltd v Matoshree Shelters Pvt Ltd.( 2009) 5 Mah LJ 615 : 2009 SCC Online Bom 65 8There, a learned single

Judge of this Court held that in view of certain prayers in the plaint, the suit was indeed a ‘suit for land’. The lands in question were in Thane

(as they are here). There was a Memorandum of Understanding between the parties. The defendants were put in possession. The plaint proceeded

on the footing that the defendants were in breach. They brought suit: to have the MoU (and certain subsequent agreements) voidable, and sought a

declaration to that effect; to have the MoU and other agreements delivered up for cancellation; for damages; for delivery of possession as a

consequence of termination and rescission; and for a permanent injunction. The Adcon Electronics decision was cited before the Division Bench,

which then said:

It has been held by the Supreme Court that a suit for land is a suit in which the relief claimed relates to title to or delivery of possession of land or

immovable property. Whether a suit is a suit for land or not has to be determined on the averments in the plaint with reference to the reliefs claimed

therein, where the relief relates to adjudication of title to land or immovable property or delivery of possession of the land or immovable property, it will

be a suit for land. It has been further held by the Supreme Court in the said judgment that in a suit for specific performance of contract for sale of

immovable property containing a stipulation that on execution of the sale deed the possession of the immovable property will be handed over to the

purchaser, it is implied that delivery of possession of the immovable property is part of the decree of specific performance of contract. In the aforesaid

case, even though the disputed property was located in the State of Madhya Pradesh, ultimately it was held that a suit for specific performance was

maintainable on the Original Side of the Bombay High Court. It was held that the suit for specific performance of the agreement for sale of the suit

property wherein relief of delivery of the suit property has not been specifically claimed, as such suit cannot be termed as a suit for land.

Learned counsel for the respondents submitted that since in the instant case possession is specifically claimed by the plaintiffs, the said suit should

also be treated as a suit for land. On the basis of the judgments of the Federal Court as well as the Supreme Court, which we have discussed above, it

is required to be found out as to whether the suit in question is really a suit for title or essentially a suit for possession. In order to determine the said

aspect, the Court is required to consider the averments made in the plaint as well as the nature of the transaction entered into between the parties.

After considering the averments in the plaint as well as the documents of MoU, agreements and the Power of Attorney, one thing is certain that the

soul of the transaction in question is the MoU which is a starting point of entering into the transaction between the parties. The MoU is the basis on

which subsequent documents were executed by the parties i.e. agreements and the power of attorney. As per the agreements between the parties,

the defendants were to carry out certain work on behalf of the plaintiffs. It cannot be disputed that the plaintiffs by entering into the said transaction

has never lost its title over land in question and as such it is an admitted fact that the title has all throughout remained in the plaintiffs. The suit,

therefore, in question can never be said to be a suit in connection with the title and the plaintiff has also not sought for any declaration of title. The

entire transaction was entered into on the basis of MoU. If that be so, in our view, the defendants were put into possession on the basis of MoU and

the possession can be said to be a mere permissive one. Looking to the prayer clauses (a) and (b) which we have noted in the earlier part of our

judgment, it is clear that the main prayer of the plaintiffs is for a declaration to the effect that the MoU in question is inoperative and no longer binding

on the plaintiffs. We may make it clear that we are not concerned with the merits of the said averments as ultimately that is a matter of trial. We are

discussing this aspect only with a view to find out as to whether the jurisdiction of this Court can be said to be excluded under clause 12 of the Letters

Patent simply because there is a relief for possession sought for by the plaintiffs in the suit. In a given case, if a suit is filed on the ground that the

MoU is entered into by fraud or misrepresentation and if the prayer is made that such MoU is not binding on the plaintiffs, then such a suit can be said

to be maintainable under clause 12 before the Original Side of this Court. If, on the basis of the averment in the plaint, a prayer is sought for to the

effect that the MoU has become inoperative on the ground that the defendants have committed breach of the conditions, we fail to understand as to

how, even if an incidental prayer for possession is made which is based only on the basis of prayer clauses (a) and (b) of the suit, such a suit is not

maintainable under clause 12 of the Letters Patent. As pointed out earlier, the entire transaction is based on the MoU and the subsequent agreements.

In our view, so far as the prayer regarding possession is concerned, it is mainly and solely dependent upon the prayers (a) and (b). In case the

plaintiffs fail to get relief in the suit in connection with the declaration sought for, naturally plaintiffs cannot get any relief in connection with handing

over possession as the prayer for handing over possession is solely and mainly depend upon the relief claimed by the plaintiffs regarding declaration

sought for in the suit in connection with the MoU and other agreements. It cannot be disputed that in case the said prayers have been rejected, the

prayer for possession becomes redundant and no decree can be passed in that behalf.

Considering the aforesaid aspect, in our view, the suit is essentially based on the prayer that the MoU has become ineffective or inoperative. The

prayer in connection with the declaration sought for by the plaintiffs regarding MoU, in our view, is perfectly within the jurisdiction of the Original Side

of this Court and, therefore, the suit is maintainable on the Original Side of the Bombay High Court. As pointed out earlier, it can never be said to be a

suit for title nor essentially it is a suit for possession. Possession is a consequential prayer based on the prayer for declaration in connection with the

MoU and agreements in question.

As per the submission of the learned counsel for the appellants, the defendants were given only permissive possession for development on the basis of

MoU and other documents. The possession of the defendants is solely based on the basis of an MoU between the parties. If the document is held to

be void or inoperative, naturally the defendants possession cannot be said to be in any way legal or valid. In our view, simply because in subsequent

prayers of the plaint, possession prayer is sought for, it cannot be said that the suit in question is a suit for land. If a suit for specific performance is

maintainable on the Original Side of this Court, even if the property is situated at a different place or in the different State, as the case may be, the suit

of such a nature wherein declaration is sought for in connection with the MoU and agreement can certainly be said to be maintainable here as the

defendant has given mere permission to get the possession only for enforcing MoU as well as subsequent agreements. For example, the defendants

also could have filed a suit before this Court for the specific performance of the agreements. If such suit is maintainable, we fail to understand as to

why suit wherein declaration for cancellation of MoU is sought for is not maintainable on the Original Side of this Court. Simply because an incidental

prayer for possession is made which is dependent upon earlier prayers of the plaint, as held by the Federal Court even in a case of a mortgage of

immovable property, the plaintiffs in a given case can give up his claim for security and such suit is still maintainable on the Original Side of the

Bombay High Court as it can never be said that the suit is essentially for land. Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â (Emphasis added)

It is impossible from a close reading of this decision to arrive at the broader, more generalized proposition Mr Dwarkadas commends. Indeed, it

seems to me that the Wimco-Matoshree decision turned very narrowly on the facts of that case. In fact, it was not a suit for specific performance at

all, but quite the reverse; and, as the Division Bench said, if the defendants were put in possession pursuant to the MoU and other documents, and the

plaintiffs succeeded in the suit and had the MoU and other deed declared void and delivered up for cancellation, the defendants could not possibly

continue in lawful possession of the land. Mr Dwarkadas can succeed only if he is able to demonstrate that despite the Supreme Court decision in

Adcon Electronics, the Division Bench in Wimco-Matoshree can truly be said to have permissibly taken the contrary view, viz., that in every case of

specific performance, a relief for possession is always only a consequential relief. Indeed, the Division Bench could not have taken such a view, and it

did not. The case before it was entirely different. The Division Bench followed Adcon Electronics, as it was bound to do. To accept Mr

Dwarkadas’s submission today, on his facts that are on all fours with Adcon Electronics, on the basis of the entirely different fact situation in

Wimco-Matoshree, would be to hazard a wholesale abandonment of the Adcon Electronics principle and ratio.

In Sumer Builders Pvt Ltd v Narendra Gorani, 2015 SCC Online SC 953, in the context of a petition under Section 9 of the Arbitration & Conciliation

Act, and after eaerlier referencing Moolji Jaitha, Adcon Electronics and Excel Dealcomm, the Supreme Court said in paragraph 35:

The seminal issue is whether on the factual score which has been exposited, the application filed under Section 9 of the 1996 Act before the High

Court of Bombay can be regarded as a money claim. On a studied scrutiny of the agreement and the MoU it is clear as day that the development

agreement indubitably had created certain interests in the land in favour of the appellant. The assertions made in the application along with the relief

clause when read in entirety and appreciated in a holistic manner, it becomes luminescent that the core dispute pertains to possession of the land, for

the appellant claims to be in exclusive possession and the respondent, per contra, has asseverated that it had taken over possession. It can irrefragably

be stated that any order passed under Section 9 of the 1996 Act will have the impact on the land. It is difficult to accede to the submission that it will

not conceptually fall within the category of “suit for land†as engrafted under Clause 12 of the Letters Patent. It is clearly a dispute with regard to

the possession which is evincible from the correspondences and the averments made in the application preferred under Section 9 of the 1996 Act.

Thus, there has to be determination as regards possession and impliedly issue of direction for recovery of possession. Hence, the conclusion arrived at

by the Division Bench on the basis of the scrutiny of documents that the dispute is embedded with regard to the possession of the land because the

fundamental claim pertains to certain constructed space on the land and, therefore, it would conceptually fall within the conception of “suit for

land†appearing in Clause 12 of the Letters Patent is unexceptionable. Prayer (a) quoted above seeks restraint by a temporary order or injunction

from entering upon the property. It is difficult to accept the submission that it is a money claim and, therefore, the Bombay High Court would also

have the territorial jurisdiction and accordingly we unhesitatingly repel the same.

Having regard to these circumstances and prayers (a-i) and (aiii) of the plaint, the Chamber Summons will have to be made absolute. The

Chamber Summons is made absolute.

The leave granted on 9th October 2018 is revoked. The plaint will thus have to be returned, though not under Order 7 Rule 10 of the Code of Civil

Procedure 1908, this being a Chartered High indubitably had created certain interests in the land in favour of the appellant. The assertions made in the

application along with the relief clause when read in entirety and appreciated in a holistic manner, it becomes luminescent that the core dispute

pertains to possession of the land, for the appellant claims to be in exclusive possession and the respondent, per contra, has asseverated that it had

taken over possession. It can irrefragably be stated that any order passed under Section 9 of the 1996 Act will have the impact on the land. It is

difficult to accede to the submission that it will not conceptually fall within the category of “suit for land†as engrafted under Clause 12 of the

Letters Patent. It is clearly a dispute with regard to the possession which is evincible from the correspondences and the averments made in the

application preferred under Section 9 of the 1996 Act. Thus, there has to be determination as regards possession and impliedly issue of direction for

recovery of possession. Hence, the conclusion arrived at by the Division Bench on the basis of the scrutiny of documents that the dispute is embedded

with regard to the possession of the land because the fundamental claim pertains to certain constructed space on the land and, therefore, it would

conceptually fall within the conception of “suit for land†appearing in Clause 12 of the Letters Patent is unexceptionable. Prayer (a) quoted above

seeks restraint by a temporary order or injunction from entering upon the property. It is difficult to accept the submission that it is a money claim and,

therefore, the Bombay High Court would also have the territorial jurisdiction and accordingly we unhesitatingly repel the same.

Court, but under Rule 283 of the Bombay High Court Original Side Rules.

Finally, Mr Dwarkadas for the Plaintiffs urges me to make a note that his clients have diverse litigation strategies planned. This is perhaps a little

more information than is strictly necessary. That said, I have no doubt that the Plaintiffs will follow Mr Dwarkadas’s sagacious advice.