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Citation Codes
Equivalent Citations
citation codes
Case Number
Disposition
Attorney(S)
Judges
Acts
  • a well-known maxim "equity acts in personam", recognised by the Chancery Courts in England
  • Rule 32 of Order 21 of the Code
  • Section 16(d) of the Code of Civil Procedure
  • Clause (d) of Section 16 of the Code
  • Section 16 of the Code, 1908
  • Section 16 of the Code, proviso to Section 16, and Section 20
  • Section 16, Section 21 of the Code
  • The Code
  • Section 15 to 20 of the Code
  • Section 16 of the Code and proviso to Section 16
  • Section 28 of the Contract Act, 1872
  • Order 6 Rule 17 of the Code of Civil Procedure, 1908
  • Section 20 of the Code
  • Section 5, Subsection 2 of the 1983 Income Tax Act
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Cites
Cited by
Citation Codes
Equivalent Citations
citation codes
Case Number
Disposition
Attorney(S)
Judges
Acts
  • a well-known maxim "equity acts in personam", recognised by the Chancery Courts in England
  • Rule 32 of Order 21 of the Code
  • Section 16(d) of the Code of Civil Procedure
  • Clause (d) of Section 16 of the Code
  • Section 16 of the Code, 1908
  • Section 16 of the Code, proviso to Section 16, and Section 20
  • Section 16, Section 21 of the Code
  • The Code
  • Section 15 to 20 of the Code
  • Section 16 of the Code and proviso to Section 16
  • Section 28 of the Contract Act, 1872
  • Order 6 Rule 17 of the Code of Civil Procedure, 1908
  • Section 20 of the Code
  • Section 5, Subsection 2 of the 1983 Income Tax Act
Smart Summary

Factual and Procedural Background

The appellant entered into a standard-form “plot buyer agreement” on 14-8-1985 with DLF Universal Ltd. (Respondent 1) for purchase of a 264 sq m residential plot in DLF Qutub Enclave Complex, Gurgaon, Haryana. According to the appellant, the contract was executed in Delhi, the head office of Respondent 1 is in Delhi, and all instalment payments were to be—and were—made in Delhi. On 4-4-1988 Respondent 1 unilaterally cancelled the agreement, alleging non-payment of sums owed to DLF Builders & Developers Pvt. Ltd. (Respondent 2). After serving a legal notice, the appellant filed Suit No. 3095 of 1988 on the Original Side of the Delhi High Court seeking declaration, specific performance, possession and injunction.

The defendants’ 1989 written statement “admitted” the Delhi court’s jurisdiction. Following an increase in the pecuniary jurisdiction of Delhi District Courts, the matter was transferred on 12-7-1993 to the District Court and renumbered as Suit No. 1036 of 1994. Issues were framed on 17-2-1997; none concerned territorial jurisdiction. On 22-8-1997—more than eight years after their first pleading—the defendants moved under Order 6 Rule 17 CPC to amend the written statement and raise a jurisdictional objection based on Section 16 CPC. The amendment was allowed on 16-1-1998, and an additional issue—“Whether the Delhi Civil Court has jurisdiction”—was framed.

By order dated 25-5-1998, the Additional District Judge held Delhi courts lacked jurisdiction and returned the plaint for presentation to the proper court. The Delhi High Court dismissed the plaintiff’s revision on 1-11-1999. The Supreme Court granted leave, stayed operation of the impugned orders, allowed the trial to proceed but restrained judgment until further orders, and eventually heard the appeal now decided.

Legal Issues Presented

  1. Whether a suit for specific performance and possession of immovable property situated in Gurgaon (Haryana) could be maintained in Delhi courts in view of Section 16(d) CPC.
  2. Whether the parties’ contractual clause conferring exclusive jurisdiction on Delhi courts (Clause 28) overrides Section 16 and brings the suit within Section 20 CPC.
  3. Whether defendants, having earlier admitted jurisdiction and sought amendment after eight years, were barred by Section 21 CPC from raising the objection.

Arguments of the Parties

Appellant’s Arguments

  • The agreement was executed, payments were made, and breach occurred in Delhi; Respondent 1’s head office is in Delhi—thus Delhi courts have jurisdiction.
  • Clause 28 expressly states that “Delhi High Court or courts subordinate to it, alone shall have jurisdiction”; parties therefore contracted for exclusive Delhi jurisdiction under Section 20 CPC.
  • Defendants admitted jurisdiction in their original written statement and even in the amended pleading; allowing amendment after eight years causes prejudice and violates Section 21 CPC.
  • The Supreme Court’s interim order allowed trial to proceed; given long delay since 1985, the trial court should now be directed to pronounce judgment.

Respondents’ Arguments

  • The suit seeks specific performance and possession of immovable property; under Section 16(d) CPC only the court where the property is situated—Gurgaon—has jurisdiction.
  • Parties cannot confer jurisdiction on a court that lacks it; Clause 28 is ineffective because Delhi courts never possessed territorial jurisdiction over the property.
  • Section 20 applies only when two or more competent courts exist; here Delhi is not competent, so Section 20 and the contractual clause are inapplicable.
  • Admission or waiver cannot cure lack of subject-matter jurisdiction; amendment was rightly allowed and jurisdictional objection properly upheld.

Table of Precedents Cited

PrecedentRule or Principle Cited ForApplication by the Court
Ewing v. Ewing (1883) 9 AC 34 Court of equity may act in personam for property abroad; basis of proviso to Section 16. Explained that proviso to Section 16 applies only where relief can be obtained through personal obedience; not applicable here.
Hakam Singh v. Gammon (India) Ltd. (1971) 1 SCC 286 Parties may choose one of several competent courts; such agreement not against public policy. Court distinguished: principle valid only when more than one competent court exists; Delhi not competent under Section 16.
Globe Transport Corp. v. Triveni Engg. Works (1983) 4 SCC 707 Reaffirmed Hakam Singh principle on choice of forum. Cited to illustrate limitation that chosen court must otherwise be competent.
A.B.C Laminart (P) Ltd. v. A.P Agencies (1989) 2 SCC 163 Validity of jurisdiction clauses where multiple forums exist. Used similarly to stress requirement of inherent competence.
Patel Roadways Ltd. v. Prasad Trading Co. (1991) 4 SCC 270 Agreement restricting jurisdiction valid if chosen court competent. Relied on for same proposition.
R.S.D.V Finance Co. (P) Ltd. v. Shree Vallabh Glass Works Ltd. (1993) 2 SCC 130 Jurisdiction clause enforceable only among competent courts. Cited in support of respondents’ stance.
Angile Insulations v. Davy Ashmore India Ltd. (1995) 4 SCC 153 Reiterated law on forum-selection clauses. Referenced in same context.
Shriram City Union Finance Corp. Ltd. v. Rama Mishra (2002) 9 SCC 613 Limits of contractual ouster of jurisdiction. Quoted to underline necessity of underlying competence.
New Moga Transport Co. v. United India Insurance Co. Ltd. (2004) 4 SCC 677 Latest affirmation of Hakam Singh line of cases. Used for continuity of principle.
Hiralal Patni v. Sri Kali Nath (1962) 2 SCR 747 Objection to territorial/pecuniary jurisdiction must be timely (Section 21 CPC). Distinguished: subject-matter jurisdiction cannot be waived.
Bahrein Petroleum Co. Ltd. v. P.J Pappu (1966) 1 SCR 461 Consent or waiver cannot confer jurisdiction where none exists. Applied to reject appellant’s reliance on defendants’ admission.
Kiran Singh v. Chaman Paswan (1955) 1 SCR 117 Decree by court without jurisdiction is nullity; cannot be cured by consent. Formed core rationale for holding Delhi court incompetent.
Setrucherlu Ramabhadraraju v. Maharaja of Jeypore (1919) 46 IA 151 Objection to subject-matter jurisdiction not “place of suing”; results in nullity. Used to show Section 21 doesn’t cure absence of subject-matter jurisdiction.
New Mofussil Co. Ltd. v. Shankerlal Narayandas Mundade (AIR 1941 Bom 247) Suits for specific performance/possession governed by Section 16(d). Cited as High Court precedent supporting trial court view.
Ananda Bazar Patrika Ltd. v. Biswanath Prasad Maitin (AIR 1986 Pat 57) Similar application of Section 16(d) to immovable property. Mentioned to reinforce reasoning.

Court's Reasoning and Analysis

The Supreme Court undertook a structural analysis of Sections 15-20 CPC. It identified Section 16(d) as governing suits “for the determination of any right or interest in immovable property,” mandating institution where the property lies. The Court explained the historical underpinning of the proviso to Section 16 (“equity acts in personam”) and held the proviso applies only where the relief can be fully obtained through personal obedience; specific performance coupled with possession of land outside Delhi is not such a case.

Because the cause concerns immovable property in Gurgaon, Delhi courts lack inherent jurisdiction. Section 20 is a residuary provision “subject to the limitations aforesaid”; it cannot override Section 16 when that section squarely applies. Consequently, Clause 28 of the parties’ agreement cannot confer jurisdiction on Delhi courts which never possessed it.

On the appellant’s reliance on Section 21 CPC, the Court distinguished between objections to territorial/pecuniary jurisdiction (waivable) and want of subject-matter jurisdiction (non-waivable). Citing Kiran Singh and Bahrein Petroleum, it held that absence of subject-matter jurisdiction renders any decree a nullity; neither consent, admission, nor delay bars the objection.

The Court endorsed the High Court’s formulation that parties may choose among competent courts but cannot vest jurisdiction where none exists. Accordingly, the orders returning the plaint were legally correct.

Holding and Implications

Appeal Dismissed. The Supreme Court affirmed the orders of the Additional District Judge and Delhi High Court, thereby returning the plaint for presentation before the competent court in Gurgaon, Haryana.

Implications: The decision reiterates the primacy of Section 16 CPC over contractual forum-selection clauses when immovable property is located outside the chosen forum. While reaffirming established doctrine, the judgment sets no new precedent but clarifies that subject-matter jurisdiction cannot be created by consent or waiver, ensuring suits concerning land proceed only in the court territorially connected to the property.

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    Harshad Chiman Lal Modi v. Dlf Universal Ltd. And Another

    C.K Thakker, J.— This appeal is filed by the appellant against the order passed by the Additional District Judge, Delhi on 25-5-1998 in Suit No. 1036 of 1994 and confirmed by the High Court of Delhi on 1-11-1999 in Civil Revision Petition No. 506 of 1998 holding that the Delhi Court has no jurisdiction to try the suit and the plaint should be returned to the plaintiff for presentation to the proper court.

    2. To appreciate the controversy raised in this appeal, admitted and/or undisputed facts may be noted. The appellant-original plaintiff entered into a “plot buyer agreement” (“agreement” for short) with DLF Universal Limited, Respondent 1, original Defendant 1 on 14-8-1985 for purchase of a residential plot admeasuring 264 sq m in Residential Colony, DLF Qutub Enclave Complex, Gurgaon, Haryana. The agreement was in the Standard Form Contract of the first respondent. According to the appellant, the agreement was made in Delhi. The Head Office of Respondent 1 was situated in Delhi. Payment was to be made in Delhi. The plaintiff paid an amount of Rs 12,974 (Rupees twelve thousand nine hundred seventy-four only) towards the first instalment. It is the case of the appellant that payment was made by him in instalments as per the Schedule to the agreement. In spite of the payment of amount, the first respondent unilaterally and illegally cancelled the agreement on 4-4-1988 under the excuse that the appellant had not paid dues towards construction of Modular House to Respondent 2, original Defendant 2 DLF Builders and Developers Pvt. Ltd. The appellant objected to the illegal action of the first respondent and sent a legal notice through an advocate calling upon the first respondent to carry out his part of the contract but Respondent 1 replied that the agreement had been cancelled and nothing could be done in the matter. The appellant, in the circumstances, was constrained to file Suit No. 3095 of 1988 on the original side of the High Court of Delhi for declaration, specific performance of the agreement, for possession of the property and for permanent injunction.

    3. In the prayer clause, the plaintiff stated:

    “Therefore, it is most respectfully prayed that in the facts and circumstances stated above, this Hon'ble Court may graciously be pleased to:
    (a) pass a decree of declaration to the effect that there is a valid and existing contract with regard to Plot No. L-31/4, DLF Qutub Enclave Complex, Gurgaon, Haryana, between the plaintiff and Defendant 1;
    (b) pass a decree to the effect that Defendant 1 is bound to abide by the contract i.e plot-buyer agreement dated 14-8-1985 and the unilateral rescinding/cancelling/withdrawing of the contract by Defendant 1 is bad and illegal;
    (c) pass a decree of specific performance directing Defendant 1 to perform its part of the contract by withdrawing the letter dated 4-4-1988 and further accepting the payments of the due instalments with regard to the plot from the plaintiff in accordance with the terms and conditions of the agreement, and execute a sale deed in favour of the plaintiff after the full money is paid to Defendant 1 as per clause 22 of the agreement;
    (d) pass a decree of permanent injunction restraining the defendants from allotting, selling, transferring, alienating in any manner whatsoever the said Plot No. L-31/4, DLF Qutub Enclave Complex, Gurgaon (Haryana) to any person other than the plaintiff and further restrain them from interfering in any manner whatsoever with the possession or rights of the plaintiff after the said plot has been handed over to the plaintiff;
    (e) pass a decree of delivery of possession against Defendant 1 directing him to hand over vacant and peaceful possession of Plot No. L-31/4, DLF Qutub Enclave Complex, Gurgaon (Haryana) to the plaintiff, or in the event, the said plot is already allotted and handed over to some other person by Defendant 1, another plot in the same complex of equivalent area in identical location be handed over to the plaintiff by Defendant 1.”

    4. On 9-12-1988, a Single Judge of the High Court of Delhi granted interim injunction in favour of the plaintiff. A common written statement was filed by both the defendants on 29-3-1989 controverting the claim of the plaintiff on merits. So far as jurisdiction of the court was concerned, it was clearly admitted and in paras 18 and 19 it was stated that “jurisdiction of this Hon'ble Court is admitted”. In view of increase in pecuniary jurisdiction of the District Court, Delhi, the suit came to be transferred from the High Court of Delhi to the District Court, Delhi on 12-7-1993 and it was renumbered as Suit No. 1036 of 1994. On 17-2-1997, the trial court framed issues which did not include the issue as to the jurisdiction of the court obviously because jurisdiction of the court was not disputed by the defendants. As late as on 22-8-1997 i.e after more than eight years of the filing of the written statement, the defendants filed an application under Order 6 Rule 17 of the Code of Civil Procedure, 1908 (hereinafter referred to as “the Code”) seeking amendment in the written statement by raising an objection as to jurisdiction of the Delhi Court to entertain the suit. It was stated that the suit was for recovery of immovable property situated in Gurgaon district. Under Section 16 of the Code, such suit for recovery of property could only be instituted within the local limits of whose jurisdiction the property was situated. Since the property was in Gurgaon, the Delhi Court had no jurisdiction in the matter. On 16-1-1998, the application was allowed and the written statement was permitted to be amended. The amended written statement was filed which also contained a statement that the jurisdiction of the court was “admitted”. On the basis of the amendment of written statement, however, the learned Additional District Judge framed an additional issue as under:

    “Whether the Delhi Civil Court has jurisdiction to try and entertain the present suit: OPD?”

    5. After hearing the parties, the trial court by an order dated 25-5-1998 upheld the contention of the defendants and ruled that the Delhi Court had no jurisdiction to try the suit. The plaint was, therefore, ordered to be returned to the plaintiff for presentation to the proper court.

    6. The Court stated:

    “In this view of the matter, I have no hesitation in coming to the conclusion that the suit falls within the ambit of Section 16(d) of the Code of Civil Procedure and the proviso thereto has no application on the facts of the present case.
    In view of my above discussion, it is held that the Delhi Civil Court has no jurisdiction to try the present suit and as such, the plaint in the present suit is returned to the plaintiff for presentation in the proper court. Parties through their counsel are directed to be present in the proper court on 5-6-1998.”

    7. Being aggrieved by the said order, the appellant approached the High Court by filing Civil Revision Petition No. 506 of 1998 which also came to be dismissed. Against the said order, the appellant has approached this Court. Notice was issued on 6-12-1999 and parties were directed to maintain status quo. On 17-4-2000, leave was granted, operation of the judgment was stayed and the Additional District Judge, Tis Hazari, Delhi, was allowed to proceed with the suit but it was stated that he would not deliver judgment “until further orders”. Status quo granted earlier was ordered to be continued. The appeal has now come up for final hearing.

    8. We have heard learned counsel for the parties.

    9. Ms Indu Malhotra, learned counsel for the appellant contended that the courts below have committed an error of law as well as of jurisdiction in allowing the amendment in the written statement and in holding that the Delhi Court had no jurisdiction. She submitted that the defendants were having their Head Office at Delhi, the agreement had been entered into at Delhi, payment was to be made and in fact made at Delhi, breach of agreement took place at Delhi and hence the Delhi Court had jurisdiction to entertain the suit and the plaintiff could have instituted the suit in the Delhi Court. It was also submitted that the parties had agreed that the Delhi Court alone had jurisdiction in all matters arising out of the transaction. It was urged that in the facts and circumstances of the case, the courts below should not have exercised discretionary jurisdiction in favour of the party who had filed a written statement in which jurisdiction of the Delhi Court had been expressly admitted. The written statement was filed in 1989 but an amendment application was moved after more than eight years. Serious prejudice had been caused to the plaintiff due to delay on the part of the defendants. When the defendants had waived the objection as to jurisdiction by specifically admitting the jurisdiction of the Delhi Court, amendment ought not to have been allowed by the trial court nor such order could have been confirmed by the High Court. The learned counsel also submitted that even after the amendment was allowed and the amended written statement was filed, in the amended reply also, the defendants had stated that the jurisdiction of the court was “admitted”.

    10. The counsel submitted that even on merits, no case had been made out by the defendants. At the most, it was a case of accrual of cause of action in more than one court. As clause 28 of the agreement specifically provided that the transaction would be subject to the jurisdiction of the Delhi Court, institution of the suit in the Delhi Court by the plaintiff could not have been objected to and no order could have been passed by the trial court holding that it had no jurisdiction and the plaint was required to be returned to the plaintiff for presentation to the proper court.

    11. Clause 28 of the agreement reads thus:

    “The Delhi High Court or courts subordinate to it, alone shall have jurisdiction in all matters arising out of, touching and/or concerning this transaction.”

    12. Finally, it was submitted that at the time of granting leave and admitting appeal, this Court permitted the trial court to proceed with the matter. Accordingly, the evidence was led by the parties and the trial is concluded. In view of the order of this Court, the trial court could not deliver the judgment. Considering the fact that the agreement was executed in August 1985 and more than two decades have passed, this Court may issue necessary direction to the trial court to deliver judgment.

    13. Mr Rohatgi, Senior Advocate appearing for the respondents, on the other hand, supported the order passed by the trial court and confirmed by the High Court. He submitted that the suit relates to specific performance of agreement relating to immovable property. In accordance with the provisions of Section 16 of the Code, such suit can be instituted where the immovable property is situate. Admittedly the property is situate in Gurgaon (Haryana). The Delhi Court, therefore, has no jurisdiction to entertain the suit which is for specific performance of agreement of purchase of a plot, immovable property, situate outside Delhi. According to the counsel, even if it was not contended by the defendants that the Delhi Court had no jurisdiction or there was an admission that the Delhi Court had jurisdiction, it was totally irrelevant and immaterial. If the court had no jurisdiction, parties by consent cannot confer jurisdiction on it. The counsel also submitted that this is not a case in which two or more courts have jurisdiction and parties have agreed to jurisdiction of one court. According to Mr Rohatgi, Section 20 of the Code would apply where two courts have jurisdiction and the parties agree as to jurisdiction of one such court by restricting their right to that forum instead of the other. When the Delhi Court had no jurisdiction whatsoever, no reliance could be placed either on Section 20 of the Code or on clause 28 of the agreement. The order passed by the trial court and confirmed by the High Court is, therefore, legal and lawful and the appeal deserves to be dismissed, submitted the counsel.

    14. Having heard learned counsel for the parties and having considered the relevant provisions of the Code as also the decisions cited before us, in our opinion, the order passed by the trial court and confirmed by the High Court deserves no interference. As stated above, it is an admitted fact that the suit relates to the recovery of immovable property, a plot admeasuring 264 sq m in the Residential Colony, DLF Qutub Enclave Complex, Gurgaon. It is not in dispute by and between the parties that the property is situate in Haryana. It is no doubt true that the defendants are having their Head Office at Delhi. It is also true that the agreement was entered into between the parties at Delhi. It also cannot be denied that the payment was to be made at Delhi and some instalments were also paid at Delhi. The pertinent and material question, however, is in which court a suit for specific performance of agreement relating to immovable property would lie?

    15. Now, Sections 15 to 20 of the Code contain detailed provisions relating to jurisdiction of courts. They regulate forum for institution of suits. They deal with the matters of domestic concern and provide for the multitude of suits which can be brought in different courts. Section 15 requires the suitor to institute a suit in the court of the lowest grade competent to try it. Section 16 enacts that the suits for recovery of immovable property, or for partition of immovable property, or for foreclosure, sale or redemption of mortgage property, or for determination of any other right or interest in immovable property, or for compensation for wrong to immovable property shall be instituted in the court within the local limits of whose jurisdiction the property is situate. The proviso to Section 16 declares that where the relief sought can be obtained through the personal obedience of the defendant, the suit can be instituted either in the court within whose jurisdiction the property is situate or in the court where the defendant actually or voluntarily resides, or carries on business, or personally works for gain. Section 17 supplements Section 16 and is virtually another proviso to that section. It deals with those cases where immovable property is situate within the jurisdiction of different courts. Section 18 applies where local limits of jurisdiction of different courts are uncertain. Section 19 is a special provision and applies to suits for compensation for wrongs to a person or to movable property. Section 20 is a residuary section and covers all those cases not dealt with or covered by Sections 15 to 19.

    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 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.

    20. In our opinion, the submission of the learned counsel for the appellant that the parties had agreed that the Delhi Court alone had jurisdiction in the matters arising out of the transaction also has no force. Such a provision, in our opinion, would apply to those cases where two or more courts have jurisdiction to entertain a suit and the parties have agreed to submit to the jurisdiction of one court.

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

    22. It is, no doubt true, as submitted by Ms Malhotra that where two or more courts have jurisdiction to entertain a suit, parties may by agreement submit to the jurisdiction of one court to the exclusion of the other court or courts. Such agreement is not hit by Section 28 of the Contract Act, 1872, nor can such a contract be said to be against public policy. It is legal, valid and enforceable.

    23. Earlier, more than thirty years ago, such a question came up for consideration before this Court in Hakam Singh v. Gammon (India) Ltd. (1971) 1 SCC 286, (1971) 3 SCR 314 It was the first leading decision of this Court on the point. There, a contract was entered into by the parties for construction of work. An agreement provided that notwithstanding where the work was to be executed, the contract “shall be deemed to have been entered into at Bombay” and the Bombay Court “alone shall have jurisdiction to adjudicate” the dispute between the parties. The question before this Court was whether the court at Bombay alone had jurisdiction to resolve such dispute.

    24. Upholding the contention and considering the provisions of the Code as also of the Contract Act, this Court stated:

    “By clause 13 of the agreement it was expressly stipulated between the parties that the contract shall be deemed to have been entered into by the parties concerned in the city of Bombay. In any event the respondents have their principal office in Bombay and they were liable in respect of a cause of action arising under the terms of the tender to be sued in the courts at Bombay. It is not open to the parties by agreement to confer by their agreement jurisdiction on a court which it does not possess under the Code. But where two courts or more have under the Code of Civil Procedure jurisdiction to try a suit or proceeding an agreement between the parties that the dispute between them shall be tried in one of such courts is not contrary to public policy. Such an agreement does not contravene Section 28 of the Contract Act.”
    (emphasis supplied)

    25. Hakam Singh (1971) 1 SCC 286, (1971) 3 SCR 314 was followed and principle laid down therein reiterated in several cases thereafter. [See Globe Transport Corpn. v. Triveni Engg. Works (1983) 4 SCC 707, A.B.C Laminart (P) Ltd. v. A.P Agencies (1989) 2 SCC 163, (1989) 2 SCR 1, Patel Roadways Ltd. v. Prasad Trading Co. (1991) 4 SCC 270, R.S.D.V Finance Co. (P) Ltd. v. Shree Vallabh Glass Works Ltd. (1993) 2 SCC 130, Angile Insulations v. Davy Ashmore India Ltd. (1995) 4 SCC 153, Shriram City Union Finance Corpn. Ltd. v. Rama Mishra (2002) 9 SCC 613 and New Moga Transport Co. v. United India Insurance Co. Ltd. (2004) 4 SCC 677]

    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.

    27. The High Court considered the submission of the plaintiff that the Delhi Court had jurisdiction to entertain the suit but negatived it. The Court, after referring to various decisions cited at the Bar, concluded:

    “From the aforesaid principles laid down by the Supreme Court it is abundantly clear that where the parties to a contract agreed to vest jurisdiction to a particular court although cause of action has arisen within the jurisdiction of different courts, including that particular court, the same cannot be said to be void or to be against the public policy. It was also made clear in the said decision that if however a particular court does not have any jurisdiction to deal with the matter and no part of the cause of action has arisen within the jurisdiction of that court, the parties by their consent and mutual agreement cannot vest jurisdiction in the said court. Therefore, a clause vesting jurisdiction on a court which otherwise does not have jurisdiction to decide the matter, would be void as being against the public policy.”

    28. We are in agreement with the above observations and hold that they lay down correct proposition of law.

    29. Ms Malhotra, then contended that Section 21 of the Code requires that the objection to the jurisdiction must be taken by the party at the earliest possible opportunity and in any case where the issues are settled at or before settlement of such issues. In the instant case, the suit was filed by the plaintiff in 1988 and the written statement was filed by the defendants in 1989 wherein jurisdiction of the court was “admitted”. On the basis of the pleadings of the parties, issues were framed by the Court in February 1997. In view of the admission of jurisdiction of the court, no issue as to jurisdiction of the court was framed. It was only in 1998 that an application for amendment of the written statement was filed raising a plea as to the absence of jurisdiction of the court. Both the courts were wholly wrong in allowing the amendment and in ignoring Section 21 of the Code. Our attention in this connection was invited by the learned counsel to Hiralal Patni v. Kali Nath (1962) 2 SCR 747, AIR 1962 SC 199 and Bahrein Petroleum Co. Ltd. v. P.J Pappu (1966) 1 SCR 461, AIR 1966 SC 634.

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

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

    317. Consent and waiver.—Where, by reason of any limitation imposed by a statute, charter or commission, a court is without jurisdiction to entertain any particular claim or matter, neither the acquiescence nor the express consent of the parties can confer jurisdiction upon the court, nor can consent give a court jurisdiction if a condition which goes to the root of the jurisdiction has not been performed or fulfilled. Where the court has jurisdiction over the particular subject-matter of the claim or the particular parties and the only objection is whether, in the circumstances of the case, the court ought to exercise jurisdiction, the parties may agree to give jurisdiction in their particular case; or a defendant by entering an appearance without protest, or by taking steps in the proceedings, may waive his right to object to the court taking cognizance of the proceedings. No appearance or answer, however, can give jurisdiction to a limited court, nor can a private individual impose on a judge the jurisdiction or duty to adjudicate on a matter. A statute limiting the jurisdiction of a court may contain provisions enabling the parties to extend the jurisdiction by consent.”

    32. In Bahrein Petroleum Co. (1966) 1 SCR 461, AIR 1966 SC 634 this Court also held that neither consent nor waiver nor acquiescence can confer jurisdiction upon a court, otherwise incompetent to try the suit. It is well settled and needs no authority that “where a court takes upon itself to exercise a jurisdiction it does not possess, its decision amounts to nothing”. A decree passed by a court having no jurisdiction is non est and its invalidity can be set up whenever it is sought to be enforced as a foundation for a right, even at the stage of execution or in collateral proceedings. A decree passed by a court without jurisdiction is a coram non judice.

    33. In Kiran Singh v. Chaman Paswan (1955) 1 SCR 117, AIR 1954 SC 340 this Court declared: (SCR p. 121)

    “It is a fundamental principle well established that a decree passed by a court without jurisdiction is a nullity, and that its invalidity could be set up whenever and wherever it is sought to be enforced or relied upon, even at the stage of execution and even in collateral proceedings. A defect of jurisdiction … strikes at the very authority of the court to pass any decree, and such a defect cannot be cured even by consent of parties.”
    (emphasis supplied)

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

    35. In Setrucherlu Ramabhadraraju v. Maharaja of Jeypore (1919) 46 IA 151, AIR 1919 PC 150 a suit was instituted in the subordinate court for possession of mortgage property partly situated in Vishakhapatnam and partly in a scheduled district to which the provisions of the Code did not apply. No objection as to jurisdiction of the court was taken by the defendant and the decree was passed. In appeal, however, such objection was taken by the defendant. Relying on Section 21 of the Code, the High Court overruled the objection. The defendant approached the Privy Council. Upholding the contention and partly reversing the decree, the Judicial Committee of the Privy Council stated: (IA p. 156)

    “The learned Judges of the High Court thought that the matter was met by Section 21 of the Code, which provides that no objection as to the place of suing shall be allowed by any appellate court unless the objection was taken in the court of first instance, which in this case had admittedly not been done. Their Lordships cannot agree with that view. This is not an objection as to the place of suing; it is an objection going to the nullity of the order on the ground of want of jurisdiction.”
    (emphasis supplied)

    36. In New Mofussil Co. Ltd. v. Shankerlal Narayandas Mundade AIR 1941 Bom 247, ILR 1941 Bom 361 almost a similar question came up for consideration before the High Court of Bombay. In that case, a suit for specific performance of contract and possession of immovable property situated at Dhulia was filed in the Court of First Class Subordinate Judge, Dhulia against Defendant 1 Company in liquidation. The registered office of the Company was in Bombay and the agreement was finally concluded in Bombay. It was, therefore, contended that the Dhulia Court had no jurisdiction to try the suit. It was, however, held by the High Court that the case was covered by clause (d) of Section 16 of the Code, the proviso had no application and since the property was situated at Dhulia, the Subordinate Judge, Dhulia had jurisdiction to entertain and try the suit. (See also Ananda Bazar Patrika Ltd. v. Biswanath Prasad Maitin AIR 1986 Pat 57, 1985 Pat LJR 366.)

    37. In the instant case, the Delhi Court has no jurisdiction since the property is not situate within the jurisdiction of that court. The trial court was, therefore, right in passing an order returning the plaint to the plaintiff for presentation to the proper court. Hence, even though the plaintiff is right in submitting that the defendants had agreed to the jurisdiction of the Delhi Court and in the original written statement, they had admitted that the Delhi Court had jurisdiction and even after the amendment in the written statement, the paragraph relating to jurisdiction had remained as it was i.e the Delhi Court had jurisdiction, it cannot take away the right of the defendants to challenge the jurisdiction of the court nor can it confer jurisdiction on the Delhi Court, which it did not possess. Since the suit was for specific performance of agreement and possession of immovable property situated outside the jurisdiction of the Delhi Court, the trial court was right in holding that it had no jurisdiction.

    38. The learned counsel for the appellant drew our attention to Rule 32 of Order 21 of the Code which relates to execution. It, however, presupposes a decree passed in accordance with law. Only thereafter can such decree be executed in the manner laid down in Rule 32, 34 or 35 of Order 21. Those provisions, therefore, have no relevance to the question raised in the present proceedings.

    39. For the foregoing reasons, in our opinion, no case has been made out by the appellant against the order passed by the trial court and confirmed by the High Court. The appeal, therefore, deserves to be dismissed and is accordingly dismissed. In the facts and circumstances of the case, however, there shall be no order as to costs.

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