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Smart Summary

Structured Summary of the Opinion (Dr. M.K. Sharma, J.)

Factual and Procedural Background

The plaintiff instituted a suit seeking a decree for specific performance of a contract directing the defendant to sell/transfer an industrial plot (No. 20/6, Road No. 18, site No. 4, Sahibabad) and to take all necessary steps for transfer/sale in favor of the plaintiff. The plaint pleads territorial jurisdiction of the court under Section 20 CPC on the basis that the agreement was entered into in New Delhi, the receipt was signed and accepted in New Delhi, and the defendant resides and works for gain within the court's jurisdiction.

The defendant filed a written statement raising a preliminary objection to maintainability on territorial jurisdiction grounds, contending that the suit concerns immovable property situated at Sahibabad (U.P.), and therefore should be instituted in the court within whose local limits the property is situated (Sahibabad), invoking Section 16 CPC. The court was called upon to decide whether it has territorial jurisdiction to entertain and decide the suit.

Legal Issues Presented

  1. Whether the present court (in Delhi) has territorial jurisdiction to entertain and decide a suit for specific performance of a contract that concerns immovable property situated at Sahibabad (U.P.).
  2. Whether the suit falls to be governed by Section 16 CPC (suits to be instituted where the subject-matter — immovable property — is situated) or by Section 20 CPC (suits to be instituted where the defendant resides, carries on business, or cause of action arises).
  3. Whether the proviso to Section 16 CPC applies, i.e., whether the relief sought in the suit could be entirely obtained through the personal obedience of the defendant such that the suit may be instituted where the defendant resides (Delhi).

Arguments of the Parties

Plaintiff's Arguments

  • The court has territorial jurisdiction under Section 20 CPC because the agreement and receipt were executed/accepted in New Delhi and the defendant actually and voluntarily resides in New Delhi.
  • The suit is for specific performance of a contract (enforcement of a contract) and therefore governed by Section 20 CPC rather than Section 16 CPC concerning suits related to immovable property.
  • Even if Section 16 CPC applied, the proviso to Section 16 CPC would apply because the relief sought could be entirely obtained through the personal obedience of the defendant, allowing the suit to be instituted in Delhi.
  • Counsel relied on various precedents (listed in the opinion) in support of these contentions.

Defendant's Arguments

  • The suit relates to immovable property situated at Sahibabad (U.P.) and therefore is governed by Section 16 CPC; such suits must be instituted within the local limits where the property is situated (Sahibabad court), not in Delhi.
  • The suit seeks determination of rights and interests in immovable property (including recovery of immovable property), bringing it squarely within Section 16 CPC categories (the opinion specifically notes clause (d) relating to determination of any other right to or interest in immovable property).
  • Counsel relied on various precedents (listed in the opinion) in support of these contentions.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Ram Baran Prasad v. Mohit Hazra & Others — AIR 1967 SC 744 Relied upon by counsel (specific principle not detailed in this opinion). The opinion records that counsel for the plaintiff relied on this decision; no further exposition of its principle is given in the text.
Union Bank of India v. Logic Systems Pvt. Ltd. — AIR 1992 Delhi 153 (Union Bank of India v. M/s. Logic System) Relied upon by counsel; in the opinion it is cited in support of the view that the proviso to Section 16 CPC was not applicable in the present facts. The court stated that its conclusion (that the proviso to Section 16 CPC is not attracted here) is fortified by the decision in this case.
P.M.A. Velliappa Chettiar & Others v. Saha Govinda Dass & Others — AIR 1929 Madras 721 Relied upon by counsel (specific principle not detailed in this opinion). Recorded as relied upon by the plaintiff's counsel; the opinion does not set out how the court applied it.
Babu Lal v. M/s. Hazari Lal Kishori Lal & Others — AIR 1982 SC 818 The Supreme Court's interpretation of Section 22 of the Specific Relief Act: (a) a person suing for specific performance of a contract for transfer of immovable property may ask for possession/partition/separate possession in addition to specific performance; (b) relief under Section 22(1) cannot be granted unless specifically claimed; (c) proviso to Sub-sec. (2) allows amendment to include such relief at any stage to avoid multiplicity of suits; (d) possession relief may be inherent in specific performance when appropriate. The opinion discusses this decision at length and applies its principles to hold that possession may be granted in a suit for specific performance (where possession is with the vendor) and that Section 22 allows amendment to claim possession. The court uses this to explain why possession may be sought in the present suit, affecting the jurisdictional analysis.
Gyasa v. Smt. Risalo — AIR 1977 Allahabad 156 Relied upon by counsel (specific principle not detailed in this opinion). Cited by the plaintiff's counsel; the opinion does not elaborate the principle or its application here.
Ex. Servicemen Enterprises (P) Ltd. v. Sumey Singh — AIR 1976 Delhi 56 Relied upon by defendant's counsel (specific principle not detailed in this opinion). Recorded as relied upon by the defendant's counsel; the opinion does not detail its application.
Anil Kumar Handa v. Smt. Suman Bala — AIR 1980 DELHI 103 Relied upon by defendant's counsel (specific principle not detailed in this opinion). Cited by the defendant's counsel; the opinion does not set out its principle or use it explicitly in reasoning.

Court's Reasoning and Analysis

The court's analysis focused on which provision of the Code of Civil Procedure (CPC) governs the forum for the present suit: Section 16 CPC (suits to be instituted where the subject-matter — immovable property — is situated) or Section 20 CPC (suits to be instituted where the defendant resides, carries on business, personally works for gain, or where the cause of action arises).

The court set out the text and effect of both provisions as pleaded by the parties:

  • Section 16 CPC prescribes that suits in respect of immovable property (including recovery of immovable property, partition, foreclosure, and "determination of any other right to or interest in immovable property") must be instituted in the court within whose jurisdiction the property is situated. A proviso to Section 16 allows, in certain cases, suits to be instituted where the defendant resides or works for gain when the relief sought can be entirely obtained through his personal obedience.
  • Section 20 CPC prescribes that, subject to Sections 18 & 19, suits shall be instituted in a court within whose jurisdiction the defendant resides or carries on business or personally works for gain, or where the cause of action arises in whole or in part.

The court considered the parties' rival contentions:

  • The defendant argued that the suit concerns recovery/determination of rights in immovable property situated at Sahibabad and hence Section 16 is "squarely applicable", requiring institution in Sahibabad.
  • The plaintiff argued the suit is for specific performance of a contract (enforcement of contract) and governed by Section 20; alternatively, the plaintiff argued the proviso to Section 16 applies because the relief could be entirely obtained through the personal obedience of the defendant.

On the merits of these contentions the court made the following points (as expressly stated in the opinion):

  1. The plaint shows that, besides seeking specific performance, the plaintiff also seeks delivery of possession and a direction to the defendant to take steps for transfer/sale of the industrial plot. Section 22 of the Specific Relief Act was considered: the court noted the Supreme Court's ruling in Babu Lal that Section 22 allows a plaintiff in a suit for specific performance of a contract for transfer of immovable property to claim possession where appropriate, and that the relief of possession may be inherent in specific performance in some cases (for example where exclusive possession is with the contracting party). The court observed that Section 22 also permits amendment to include such relief if not initially claimed.
  2. Because possession of the suit property is admitted to be with the seller (the defendant), the court accepted that relief for possession is inherent in specific performance and that a decree for possession may be granted alongside specific performance.
  3. The court considered which clause of Section 16 applied. While expressing reservation about clause (a), the court agreed that clause (d) of Section 16 (for determination of any other right to or interest in immovable property) is applicable because the suit concerns determination of rights and interests in the immovable property at Sahibabad.
  4. The court rejected the plaintiff's contention that the proviso to Section 16 applied. The court explained that the proviso is applicable only when the relief sought could be entirely obtained through the personal obedience of the defendant (i.e., when the defendant need not leave the court's jurisdiction to give effect to the relief). In the present case, the court found that even after execution of the sale deed, possession might have to be handed over at Sahibabad (U.P.), requiring the defendant to act outside Delhi; therefore the relief cannot be said to be entirely obtainable by the defendant's personal obedience within Delhi.
  5. The court noted that this conclusion (that the proviso is not attracted) is fortified by the decision in Union Bank of India v. M/s. Logic System (supra), as relied upon.

Based on these steps the court concluded that the substantive provision of Section 16 CPC governs the present suit and that the suit must be instituted in the court within whose local limits the property is situated (Sahibabad). Consequently, the present court does not have territorial jurisdiction.

Holding and Implications

Holding:
The court held that it does not have territorial jurisdiction to entertain and decide the present suit and that the suit is not maintainable in this court for want of territorial jurisdiction.

Direct implications (as ordered by the court):

  • The plaint is returned to the plaintiff to file in an appropriate court (within whose local limits the property is situated), and the plaint may be returned to the counsel in accordance with the provisions of law.
  • All pending applications are disposed of in terms of the order.

Broader implications: The opinion applies established provisions of Sections 16 and 20 CPC and the Supreme Court's interpretation of Section 22 of the Specific Relief Act to conclude that suits involving determination of rights in immovable property situated outside the forum must ordinarily be instituted where the property is situated; the proviso to Section 16 is narrowly applied only where relief can be entirely obtained through the defendant's personal obedience. The opinion does not purport to lay down a novel legal principle or to set new precedent beyond applying the cited authorities to the facts; it directs the plaint to be filed in the appropriate territorial forum.

    M/S. Uttam International v. Jogender Pal Singh.

    Dr. M.K Sharma, J.— In the present suit instituted by the plaintiff against the defendant the plaintiff has sought for a decree for specific performance of the contract in the following terms:

    “Pass a decree for specific performance of the contract directing the defendant to sell/transfer the industrial plot bearing No. 20/6, Road No. 18, site No. 4, Sahibabad in favour of the plaintiff and directing the defendant to take all necessary steps for the transfer/sale of the industrial plot of land in favour of the plaintiff.

    2. In order to show that this court has territorial jurisdiction to entertain the present suit the plaintiff has stated in paragraph 13 of the plaint that this court has territorial jurisdiction to hear and determine the suit as the agreement was entered into between the parties in New Delhi and that the receipt was signed and accepted by the defendant at New Delhi and also as the defendant resides and works for gain within the jurisdiction of this court. Thus, the plaintiff claims that this court has territorial jurisdiction to hear and decide the suit as per provision of section 20 cpc. The suit instituted seeks for a decree for specific performance of the contract of sale/transfer of an immovable property situated at Sahibabad in the State of U.P The plaintiff has also sought for a decree directing the defendant to take all necessary steps for the transfer/sale of the said industrial plot of land in favour of the plaintiff.

    3. The defendants filed their written statement raising a preliminary objection regarding maintainability of the present suit on the ground that this court does not have territorial jurisdiction to entertain and to decide the suit. It is stated in paragraph No. 3 of the preliminary objections of the written statement that since the plaintiff is seeking determination of alleged right and alleged interest in the immovable property on the basis of an alleged agreement to sell, which is admittedly situated in Sahibabad, (U.P), the suit for specific performance of contract is not maintainable in Delhi courts and the suit is required to be dismissed. It is also stated in the paragraph No. 13 of the written statement that this court has no territorial jurisdiction to entertain the present suit as the subject matter of the suit is an immovable property, which is situated beyond the jurisdiction of this court. There could be no denial of the fact that the immovable property in question, of which the alleged agreement to sell was entered into between the plaintiff and the defendant, is located at Sahibabad (U.P) and, therefore, is situated out side the jurisdiction of this court.

    4. In the light of the aforesaid pleadings of the parties, I have been called upon to decide the issue as to whether this court has territorial jurisdiction to entertain and decide the suit and/or whether the suit is not maintainable in this court for want of territorial jurisdiction.

    5. The plaintiff claims jurisdiction of this court on the basis of the provisions of section 20 cpc, whereas according to the defendant, jurisdictional aspect in the present suit is guided by the provisions of section 16 cpc. section 16 provides that a suit is to be instituted where the subject matter is situated, when it states that subject to the pecuniary or other limitations prescribed by any law, suits (a) for the recovery of immovable property with or without rent or profits, (b) for the partition of immovable property, (c) for foreclosure, sale or redemption in the case of a mortgage of or charge upon immovable property, (d) for the determination of any other right to or interest in immovable property, (e) for compensation for wrong to immovable property, (f) for the recovery of movable property actually under distraint or attachment shall be instituted in the Court within the local limits of whose jurisdiction the property is situated. A proviso is, however, added to the aforesaid provisions, which states 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 situated, 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.

    6. Section 20 CPC, on the other hand, provides the forum in which a suit, subject to the limitations provided for under Sections 18 & 19 CPC, should be instituted, when it states that subject to the limitations as provided for under Sections 18 & 19 CPC, every suit shall be instituted in a Court within the local limits of whose jurisdiction the defendant, or each of the defendants resides or carries on business or personally works for gain or where the cause of action wholly on in part arises.

    7. The plaintiff has pleaded that the provisions of section 20 is attracted in the present case as the cause of action wholly or in part arises in Delhi and also because the defendant actually and voluntarily resides in Delhi. There could be no denial of the fact subject to the provisions of sections 18 and 19 cpc, a suit could, therefore, be instituted in a court where the defendant actually or voluntarily resides or carries on business or where the cause of action wholly or in part arises. This is the mandate of Section 20 CPC, but where a suit relates to an immovable property concerning any of the claims as mentioned from (a) to (f) as stated in Section 16 CPC, such a suit shall have to be instituted in the court within whose local limits of jurisdiction the property is situated. If, however, proviso to the aforesaid Section 16 CPC is attracted, in that case also, provisions of section 20 cpc shall be applicable although the suit may be relating to an immovable property.

    8. Counsel for the defendant submitted before me that in the present case, the suit instituted by the plaintiff is for recovery of an immovable property without rent or profit and also for determination of any other right or interest in the immovable property and, therefore, the provision of section 16 cpc is squarely applicable to the facts and circumstances of the case and the suit, therefore, was required to be instituted in the local limits of whose jurisdiction, the property is situated namely in the court of Sahibabad in the State of U.P and not in Delhi courts.

    9. Contention of the counsel for the plaintiff, on the other hand, is that the present suit has been instituted by the plaintiff for specific performance of a contract and, therefore, the suit does not relate to an immovable property but relates to enforcement of a contract which would be guided by the provisions of section 20 cpc. His further contention was that in any case, even if it is assumed that the provision of section 16 applies to the facts and circumstances of the present case, still this is a case where proviso to the provisions of section 16 cpc would applicable as the relief sought for in the present suit could be entirely obtained through the personal obedience of the defendant and in that view of the matter, the suit could be instituted in Delhi courts also.

    10. Counsel for the parties, in support of their contentions, relied upon various decisions of the Supreme Court as also of different High Courts.

    11. The counsel for the plaintiff relied upon the decisions in Ram Baran Prasad v. Mohit Hazra & Others—AIR 1967 SC 744, Union Bank of India v. Logic Systems Pvt. Ltd. AIR 1992 Delhi 153, P.M.A Velliappa Chettiar and Others v. Saha Govinda Dass and others AIR 1929 Madras 721, Babu Lal v. M/s. Hazari Lal Kishori Lal & Others—AIR 1982 SC 818, Gyasa v. Smt. Risalo—AIR 1977 Allahabad 156.

    Counsel for the defendant, however, relied upon the decisions in Ex. Servicemen Enterprises (P) Ltd. v. Sumey Singh—AIR 1976 Delhi 56, Anil Kumar Handa v. Smt. Suman Bala AIR 1980 DELHI 103 as also the deecision in Babu Lal v. M/s. Hazari Lal Kishori Lal & Others (supra).

    11. The present suit is a suit seeking for a decree for specific performance of the contract. However, the relief as sought for by the plaintiff in the plaint also makes it amply clear that the plaintiff is also seeking for delivery of possession of the suit property to the plaintiff as he has sought for a direction to the defendant to take all necessary steps also for transfer of the industrial plot of land in favour of the plaintiff. In this connection, reference may also be made to the provisions of Section 22 of the Specific Relief Act which provides that any person suing for the specific performance of a contract for the transfer of immovable property may, in an appropriate case, as for possession, or partition and separate possession, of the property, in addition to such performance. It is further provided in the said provisions that no relief under the said provision shall be granted by the court unless it has been specifically claimed, provided that where the plaintiff has not claimed any such relief in the plaint, the court shall, at any stage of the proceeding, allow him to amend the plaint on such terms as may be just for including a claim for such relief.

    The aforesaid provisions of Section 22 of the Specific Relief Act came to be considered by the Supreme Court in the decision of Babu Lal v. M/s. Hazari Lal Kishori Lal (supra). In the said decision, it was held that Section 22 of the Specific Relief Act provides that a person in a suit for specific performance of a contract for the transfer of immovable property may ask for appropriate reliefs, namely, he may ask for possession, or for partition or for separate possession, including the relief for specific performance. The Supreme Court also took note of Sub-sec. (2) of the said Section, which provides that the aforesaid relief cannot be granted by the court unless the same is expressly claimed by the plaintiff in the suit. The Supreme Court further goes on to hold that the proviso to the Sub-sec (2) states that where the plaintiff has not specifically claimed the reliefs in his plaint, in the initial stages of the suit, the Court shall permit the plaintiff at any stage of the proceedings, to include one or more of the reliefs, by means of an amendment of the plaint on such terms as it may deem proper. The object and purpose for enacting the aforesaid provision the Supreme Court held is to avoid multiplicity of suits and that the plaintiff may get appropriate relief without being hampered by procedural complications. The Supreme Court in the said decision also took note of the expression” in an appropriate case” as appearing in Section 22 (1), which was found be very significant. While interpreting the said provisions, it was held by the Supreme Court that the said expression only indicates that it is not always incumbent on the plaintiff to seek possession or partition or separate possession in a suit for specific performance of a contract for the transfer of the immovable property and 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. The aforesaid preposition laid down by the Supreme Court was further explained holding that it may not always be necessary for the plaintiff to specifically claim possession over the property as the relief of possession is inherent in the relief for specific performance of the contract of sale. It was further held that in a case where exclusive possession is with the contracting party, a decree for specific performance of the contract of sale simplicitor, without specifically providing for delivery of possession, may give complete relief to the decree holder and that 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, which course of action is in consonance with the provisions of Section 55 (1) of the T.P.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.

    12. Thus, in a case where possession of the immovable property is vested with the vendor, in such a case even if no decree for possession is sought for in the plaint, in a suit for specific performance of contract, the court shall have the power to grant a decree for possession of the immovable property in favour of the plaintiff and against the defendant besides granting the relief of specific performance of contract, for relief of possession is inherent in the relief for specific performance of the contract for sale and also in view of the fact that the seller is bound to give such possession of the property as he possesses to the buyer. Even otherwise, in a case where decree for possession is only sought for, an amendment could be allowed even at examination stage, to incorporate such a relief.

    13. Although the counsel for the defendant submitted before me that even clause-(a) of Section 16 CPC is applicable to the facts and circumstances of the present case, I have my strong reservation on the aforesaid plea. However, I am on agreement with the contention of the counsel for the defendant that clause (d) of the provisions of Section 16 CPC is applicable to the facts and circumstances of the present case as the present suit relates to determination of right and interest in the immovable property at Sahibabad (U.P).

    14. The contention of the counsel for the plaintiff that the suit instituted is only for claiming a decree for specific performance of the contract and not for immovable property, cannot be accepted for the simple reason that although the suit has been framed to be a suit for specific performance of contract, a further declaration is sought for transfer of the property in question in favour of the plaintiff thereby seeking for a decree for possession as well. Even otherwise, in the present case it is an admitted position that possession of the property is with the seller and, therefore, the relief of possession is inherent in the relief for specific performance of the contract and the buyer is bound to give such possession to the seller as he has, as provided for under Section 55 of T.P.Act

    15. The next contention of the learned counsel for the plaintiff that the present case is covered by the proviso of Section 16 CPC is also found to be misplaced. In my considered opinion, it cannot be said in the present case that the relief in the present suit could be entirely obtained through the personal obedience of the defendant. The aforesaid proviso to Section 16 CPC could be said to be applicable only when the relief sought for by the plaintiff was entirely obtainable through the personal obedience of the defendant i.e when the defendant has not at all to go out of the jurisdiction of the court for the aforesaid purpose. The present is not a case of the said nature. In the present case even after execution of the sale deed possession of the property could be handed over to the plaintiff by the defendant by going to Sahibabad (U.P) and thus, in my considered opinion, the proviso is not applicable to the facts and circumstances of the present case. In coming to the aforesaid conclusion, I am fortified by the decision of this court in Union Bank of India v. M/s. Logic System (supra).

    16. In the light of the aforesaid discussion and conclusion, I am of the considered view that the substantive provision of section 16 cpc is alone applicable to the facts and circumstances of the present case and that the present suit is to be instituted in the court within local limits of whose jurisdiction the property is situated. This court, therefore, does not have territorial jurisdiction to entertain and decide the present suit. In that view of the matter, it is held that the present suit is not maintainable in this court and accordingly, the plaint is returned to the plaintiff to file in an appropriate court in terms of the order passed herein. The plaint may be returned to the counsel in accordance with the provisions of law. All pending applications stand disposed of in terms of this order.

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    Comments

    M/S. Uttam International v. Jogender Pal Singh.
    (Feb 23, 1999)