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Uco Bank Vs. Sm. Ratni Devi JaIn and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil;Property
CourtKolkata High Court
Decided On
Case NumberSuit No. 451 of 1991 and G.A. No. 219 of 1996
Judge
Reported in(1997)2CALLT321(HC)
ActsCode of Civil Procedure (CPC) , 1908 - Order 2, Rule 2 - Order 7, Rule 10 - Order 14, Rule 2; ;Specific Relief Act, 1963 - Sections 22, 22(1), 22(3), 22(4), 28, 28(3) and 28(4); ;Transfer of Property Act, 1882 - Sections 54 and 55(1)
AppellantUco Bank
RespondentSm. Ratni Devi JaIn and ors.
Cases ReferredHaralall Banerjee v. Netambini Debt
Excerpt:
- orderbarin ghosh, j.1. this is an application of the defendants seeking dismissal of the suit on the ground that the suit is a suit for land situate outside the jurisdiction of this court and thus, depriving this court of its authority to entertain or try the suit; alternatively the issue as to the maintainability of the suit in this court or lack of territorial jurisdiction of this court to entertain or try the suit be heard and determined as a preliminary issue before the hearing of any other issues.2. in the plaint, the plaintiff has prayed for the following reliefs:-'(a) specific performance of the agreement as mentioned in paragraph 9 hereof by directing the defendants to execute and register the conveyance in respect of the said three flats, of the total carpet area of not less than.....
Judgment:
ORDER

Barin Ghosh, J.

1. This is an application of the defendants seeking dismissal of the suit on the ground that the suit is a suit for land situate outside the jurisdiction of this court and thus, depriving this court of its authority to entertain or try the suit; alternatively the issue as to the maintainability of the suit in this court or lack of territorial jurisdiction of this court to entertain or try the suit be heard and determined as a preliminary issue before the hearing of any other issues.

2. In the plaint, the plaintiff has prayed for the following reliefs:-

'(a) Specific performance of the agreement as mentioned in paragraph 9 hereof by directing the defendants to execute and register the conveyance in respect of the said three flats, of the total carpet area of not less than 3,000 sq. ft. (each having a carpet area of 1000 sq. ft.) with four covered garages or car parking spaces in a covered area together with all rights, benefits and advantages of the common facilities and conveniences reserved for common use of the occupants of the proposed new building at the premises being No. 62/7, Ballygunge circular Road, Calcutta-700- 019, in favour of the plaintiff or its nominee or nominees.

(b) In the event the defendants fail to execute such conveyances, the Registrar, Original Side, of this Hon'ble Court, be directed to execute and register the conveyances in respect of the said three flats as fully described in prayer (a), in favour of the plaintiff or its nominee or nominees.

(c) Mandatory injunction directing the defendants to renew the Bank Guarantee as mentioned in paragraph 13 of the plaint or issue new Bank Guarantee as per the terms of the agreement dated December, 8, 1984 in favour of the plaintiff, for the rent payable by the defendants to the Landlord of the temporary accommodation provided to the plaintiff, for the period commencing from the date of the decree till execution of the conveyances with regard to the three flats and four covered car parking spaces as fully described in prayer (a).

(d) Administration.

(e) Receiver.

(f) Injunction,

(g) Costs.

(h) Further or other reliefs.'

3. In support of the aforementioned reliefs, the plaintiff has alleged in the plaint, inter alia, that the plaintiff was inducted in premises No. 62/7, Ballygunge Circular Road, Calcutta, under a registered indenture of lease. While the plaintiff was enjoying the lease right in the said premises, the defendants No. 1,2,3 and 4 approached the plaintiff with the proposal that if the plaintiff temporarily shifted from the said premises, the said defendants would construct a building there at and make over to the plaintiff on ownership basis three flats of 1000 sq. ft. each with four garages free of costs and also arrange for temporary accommodation for the plaintiff during the period of construction. The plaintiff agreed to the said proposal for exchange of tenancy right in respect of the said premises for right of ownership of three flats or the total carpet area of 3000 sq. ft. and four covered garages or car parking space in the new building to be constructed at the said premises. Accordingly on 8th December, 1984 an agreement was entered by and between the plaintiff and the defendants No. 1,2,3, & 4, which agreement was subsequently modified by an agreement dated 10th February, 1987. As it appears, the agreement dated 8th December, 1984 was subject to the defendants purchasing the ownership right in the said premises from the then owners thereof, and on 28th August, 1985 the defendants by obtaining nine conveyances in their favour acquired the ownership right in the said premises, which was recorded in the agreement for modification dated 10th February, 1987. The plaintiff has contended that it has performed its part of the obligation under the agreement by vacating the said premises and shifting to the temporary accommodation provided by the defendants at premises No. 59/2A, Pratapaditya Road, Calcutta 26 and similarly the defendants furnished a bank guarantee for Rs. 3,26,000/ - in terms of the said contract, but the defendants failed and neglected to deliver vacant possession of the three flats in the newly constructed building at the said premises to the plaintiff in terms of the said agreement despite such construction was apparently completed by the defendants and also failed and neglected to renew the bank guarantee despite requests and despite the plaintiff applying for specific performance of the said agreement.

4. The agreement between the parties provides that to enable the defendants to construct the proposed building at the said premises, the plaintiff shall transfer the leasehold interest in the said premises by vacating or delivering vacant possession of the said premises to the defendants at a consideration of Rs. 8,00,000/- which will be set off against an equivalent amount representing the purchase consideration of the alternate accommodation to be provide in the building to be constructed comprising of three flats of 1000 sq. ft. each and costs of construction and costs of land absolutely and for ever free from encumbrances with all rights, benefits and advantages of usual in common facilities and the defendants in addition to such alternate accommodation providing the plaintiff with the temporary accommodation in three flats containing a total carpet area of not less than 3000 sq. ft., each containing a carpet area of 1000 sq. ft. together with four garages or car parking space in a covered area in Calcutta, in good locality and condition during the period of construction or payment by the plaintiff the existing rent of Rs. 1500 payable by the plaintiff in respect of the said premises; and that so soon as the proposed building is constructed and completed in all respects and made ready for occupation, the defendants shall deliver to the plaintiff vacant possession, in the proposed new building, three flats of the total carpet area of not less than 3000 sq. ft., each having a carpet area of 1000 sq. ft. with four covered garages or car parking space in covered area together with all rights, benefits and advantages to use in common the facilities and convenience reserved for common use of the occupants of the proposed new building subject to payment by the plaintiff proportionate shares of the taxes, charges and expenses in respect of the flats to be allotted, transfered and conveyed to the plaintiff in the proposed new building on ownership basis. The defendants shall furnish a bank guarantee for Rs. 3,26,000 in order to secure the differences in rent for the temporary accommodation agreed to be provided at premises No. 59/2 Pratapaditya Road, Calcutta. The agreement also provided that in the event of default of the defendants to deliver and make over possession to the plaintiff of the said three flats within 24 months from the date of delivery of vacant possession of the said premises, the plaintiff will have the right to enforce the specific performance of the agreement and also to get damages and in the alternative, at the option of the plaintiff, to obtain payment of the sum of Rs. 8,00,000/- representing the purchase consideration together with interest at the rate of 12% per annum from the date of demand to the date of actual payment thereof.

5. The defendants, therefore, in the present application have contended that the principal object of the present suit is to obtain possession of three flats in the building newly constructed at the said premises, which is situated outside the jurisdiction of this court. They, therefore, contend that the suit is a suit for land in respect of a land situate wholly outside the jurisdiction of this court and therefore, this court could not entertain the suit at all.

6. Order 14, Rule 2, of the Code of Civil Procedure, 1908 provides that where issues both of law and of fact arise in the same suit and the court is of the opinion that the case or any part thereof may be disposed of on an issue of law only, it may try that issue first If that issue relates to the jurisdiction of court and for that purpose may, if it thinks fit, postpone the settlement of the other issues until after that issue has been determined, and may deal with the suit in accordance with the decision on that issue. Therefore, an issue relating to the jurisdiction of court may be tried as a preliminary issue.

7. At the same time order 7 Rule 10 of the Code provides that at any stage of the suit the plaint shall be returned to be presented to the court in which the suit should have been instituted. This provision has been inserted in order to enable the court to return the plaint to the plaintiff so as to enable the plaintiff to present the same at the appropriate court and not to face dismissal of the suit on a trial and determination of the issue relating to jurisdiction either by way of a preliminary issue or on an issue while dealing with other issues. The power under this provision should be exercised only by reading the plaint and by accepting the averments made in the plaint to be true and correct in order to reach to a conclusion whether the plaint has been presented in a wrong court or not.

8. By Order 49, Rule 3, sub-rule (1) of the Code the provisions contained in Order 7 Rule 10 was made inapplicable to Chartered High Courts in exercise of their ordinary original civil Jurisdiction. By the amendment dated 14th May, 1974, published in the Calcutta Gazette part (1) dated 1st August, 1974. of the High Court Rules, Original side of this court, the provisions contained in Order 49 Rule 3 sub-Rule (1) were deleted in so far as this Chartered High Court is concerned. Therefore, since 1st August, 1974 the provisions contained in Order 7 Rule 10 of the Code are applicable to this court.

9. In the suit the defendants have already filed a written statement. In that, I am told, it has not been alleged that this court has no jurisdiction to entertain the suit. Be that as it may, the hearing of the suit has not yet commenced. The point of Jurisdiction is substantially a point of law, although based on certain facts. The fact that the premises in question in 62/7, Ballygunge Circular Road, Calcutta is not disputed. It cannot also be disputed that the said premises is situate outside the jurisdiction of this court, although in the written statement it has not yet been urged so. That plea by way of introduction of an amendment can always be taken. If such plea is taken, which cannot be denied factually, the remaining would become a question of law in order to ascertain whether this court has jurisdiction to receive the suit. However, in the present application itself the defendants have asserted that the premises in question is situate outside the jurisdiction, which has not been denied. The right to raise objections as to the Jurisdiction is available atleast until upto the date of settlement of issues; admittedly as yet issues have not been settled. Before such settlement by making the present application the defendants have urged that this court had no competence or jurisdiction to receive the suit at the time when the plaint was presented in this court. Therefore, I do not see as to why a preliminary issue as to the Jurisdiction cannot be directed to be raised after giving the defendants an opportunity to amend their written statement, but I would not do so; since, if I do so, and if the ultimate conclusion on the issue is that this court had no jurisdiction to entertain the suit, on that conclusion itself the suit may be dismissed, which in turn would cause irreparable prejudice to the plaintiff. Therefore, I would look at the plaint and accept that the subject premises is situate outside the jurisdiction of this court, which contention of the defendants has not been denied by the plaintiff, in order to find out whether the suit was instituted in a wrong court, and if so, to return the plaint to the plaintiff for being presented in the right court.

10. Section 54 of the Transfer of Property Act, 1882 defines sale as a transfer of ownership, in exchange for a price paid or promised or part paid or part promised and such transfer in the case of tangible immovable property of the value of Rs. 100/- and upwards, can be made only by a registered instrument but in the case of tangible immovable property of a value less than Rs. 100/-, such transfer may be made either by a registered instrument or by delivery of the property. It also says that delivery of tangible immovable property takes place when the seller places the buyer or such person as he directs in possession of the property. In the instant case the value of the immovable property is in excess of Rs. 100/-. To effect the sale of the property in question i.e. transfer of ownership, a registered instrument is what is needed. The said section, further provides that a contract for the sale of immovable property is a contract that a sale of such property shall take place on the terms settled between the parties and a contract for sale does not, of itself create any interest in or charge on such property. The present suit is for enforcement of contract for sale of the subject property. Such sale can be made only by a registered instrument on the terms settled between the parties as enumerated in the contract. By that contract, no interest or charge in the property has been created. The interest on the property will only be created after the registered instrument is obtained.

11. Section 55 (1) (d) & (f) of the Transfer of Property Act, 1882 provides the respective rights and liabilities of the buyer and seller of immovable property in the absence of a contract to the contrary. The provisions contained in the said section makes it obligatory on the part of the seller to execute a proper conveyance on payment or tender of the amount due in respect of the price of the property and to give, on being so required by the buyer such possession of the property as its nature admits. These two obligations, i.e. to execute conveyance and to give possession of the seller are statutorily recognised in the absence of a contract to the contrary.

12. It, therefore, logically follows that a contract for sale of an immovable property, although does not of itself create any interest in or charge on such property. But may contain terms settled between the parties to the effect that seller on payment or tender of the amount due in respect of price for such property shall execute a proper conveyance of the property and shall give, on being so required by the buyer, such possession of the property as its nature admits, but in absence of such terms being settled between the parties, the law will presume such obligations on the part of the seller provided there is no contract to the contrary. The transfer of ownership of the immovable property, being the subject metter of the contract, specific performance where of has been sought for in this suit, can be made only by a registered instrument. The Contract, being the subject matter of the suit, has not itself created any interest or charge on the property and interest in the property will be created when transfer of ownership is made by a registered instrument. The terms settled between the parties specifically provide the obligations of the defendants to give vacant possession of the property agreed to be sold and also to convey the same i.e. to execute a proper conveyance in order to effect transfer of ownership of the property agreed to be sold. Thus, the right to obtain conveyance as well as vacant possession of the property in question is flowing from the contract itself specific performance whereof has been sought for.

13. Grant of specific performance of a contract for sale of an immovable property is discretionary. If the court refuses to grant such a discretionary relief, then there would be no question of sale of the immovable property and consequently there would be no question of executing any conveyance or giving possession of such property. If the court grants such discretionary relief, if would direct the parties to act in terms of the terms settled by them, since the court cannot import any term not settled between the parties, nor can disregard or delete any term settled between the parties, since the same would tantamount to creation of a new contract between the parties by the court, which the court is incompetent to do. Thus, if the suit is decreed, the same would be a decree for specific performance of the contract embodying terms settled between the parties and not any or few of such terms, which in turn would postulate execution of a proper conveyance and giving of vacant possession by the defendants, although the plaintiff has sought for execution of conveyance only.

14. The nature of the suit i.e. whether the same is a suit for land or other suit, should be determined having regard to the primary object of the suit as on the date of presentation of the plaint filed in the suit and not on what relief or reliefs the plaintiff may ultimately get in the suit. This is so since the court's competence to receive, try and determine a suit is circumscribed by law. By Clause 12 of the Letters Patent, this court has been vested with the Jurisdiction to receive, try and determine suits. Under Clause 12 of the Letters Patent, suits have been divided into two classes, i.e. suit for land or other, immovable property and other suits. In the case of suits for land or other immovable property, this court will have jurisdiction to receive such suits, if the land or immovable property in question is situate wholly within the local limits of the Ordinary Original Civil jurisdiction of this court. If the land or immovable property is situate partly within the local limits and partly outside such limits, the suit can be instituted in this court only after first obtaining leave of this court under Clause 12. In the case of other suits, the same can be instituted in this court, if the cause of action arises wholly within the local limits of the ordinary original civil Jurisdiction of this court or the defendant resides or carries on business or works for gain within such limits. Where, however, the cause of action arises in part only within such limits, the suit can be instituted after first obtaining leave of the court under Clause 12. Therefore, to find out whether this court was competent to receive the suit, one has to ascertain whether the suit is a suit for land or the same is an other suit and if it is a suit for land whether the land is situate within the jurisdiction of this court and if partly within and partly outside whether leave had been obtained first before presentation of the plaint and if it is an other suit whether the cause of action has wholly arisen within the jurisdiction of this court or whether the defendants are residing or carrying on business or working for gain within the jurisdiction of this court and if not whether the leave under Clause 12 had been obtained first before presentation of the plaint suit. The defendants contend that the suit is a suit for land wholly situate outside the Jurisdiction of the court; whereas the plaintiff contends otherwise.

15. As has been said by the Division Bench of this court in T.B.K.S. Maharaj v. Mayapore Sri Chaitanya Math, : AIR1983Cal420 , the question whether out of several reliefs in the plaint, the claim for the grant of a particular relief, which does not relate to title to, or possession, control or management of land or buildings or other immovable property, is the primary object of the suit or not has to be decided by applying the test whether such relief claimed to be the primary object of the suit can be granted to the plaintiffs without the necessity of any adjudication on the question of title to any land or buildings or other immovable property, or possession, control or management thereof. Thus, it is required to be found out whether the primary object of the suit i.e. specific performance of the contract, can be granted to the plaintiff without the necessity of any adjudication on the question of title to the flats in the new building, or possession, control or management thereof.

16. In All India Sugar Mills Co. Ltd. v. Sunder Singh : AIR1937Cal593 , a learned single Judge of this court held that a suit by a purchaser for specific performance of an agreement to sell land is a suit for land with the observation that he should have held English Law to be the key to the construction of Clause 12 and this suit, therefore, is not a suit for land. This view was not approved by the Division Bench of this court in Debendra Nath Chowdhury v. Southern Bank Ltd. : AIR1960Cal626 . In Debendra Nath Chowdhury v. Southern Bank Ltd. the Division Bench approved the views of this court in Promod Kumar Das v. Dantmara Tea Co. Ltd. ILR (1947) 2 Cal 113, and in Sm. Khatun Bibi v. Sm. Lilabati Dasi, 49 CWN 80, where it was held that both the Indian and English Courts can pass a decree which operates in personam upon the individual requiring him to do or to abstain from doing some specific act provided the party is within its jurisdiction so that the court can enforce its decree and that a claim by a purchaser against a vendor for specific performance of a contract for sale of land was not a suit for land within the meaning of Clause 12 of the Letters Patent. In Sm. Khatun Bibi v. Sm Lilabati Dasi, if was held that this court has Jurisdiction to entertain in its original side a suit for specific performance but when in a suit the plaintiffs also asked for recovery of possession, it became a suit for land and the court would then have no Jurisdiction to entertain the suit if the land is situate outside the Jurisdiction of this court. In Krishnammal v. Sundararaja Aiyar AIR 1914 Mad 464, the plaintiff had obtained in a previous suit a decree against the defendants for specific performance of an agreement to sell certain immovable property to the plaintiff and had got a sale deed in his favour by execution of the decree. The plaintiff, thereafter, instituted a subsequent suit for recovery of possession of the land, being the subject matter of the deed. It was urged that the second suit was barred by Order 2, Rule 2 of the Code of Civil Procedure, 1908. The Division Bench held in that case that the plaintiff was required to sue not only for the execution of the deed for sale but also for possession of the suit, but he was not bound to do so as at the time he brought the suit, the right to possession was not vested in him. He would acquire that right only on the execution of deed of conveyance. In a suit for specific performance the parties to the contract alone are made parties, whereas in a suit for possession all persons in possession are proper parties. In strict form the right to sue for possession on the title of the plaintiff does not arise untill the conveyance has been executed in his favour and unless thereafter the vendor refuses to give possession, there cannot be cause of action therefor. In Moolji Jaitha & Co. v. K.S. & W. Mills Co. AIR 1950 FC 83, the defendants were the secretaries and treasurers of the plaintiff company and, as such, were in management of the miles owned by the plaintiff. After the defendants seized to be such secretaries and treasurers of the plaintiff, it brought a suit alleging wrongful action by the defendants in breach of their fiduciary obligation in course of their employment. In addition to the prayer for a general account of the defendants' management of the plaintiffs' affairs and business during the whole period, when the defendants were functioning as such secretaries and treasurers, and certain other connected prayers, the plaintiff asked for two reliefs concerning certain lands said to have been acquired by the defendants on behalf of the plaintiff and out of the moneys or other property belonging to the plaintiff, but in the name of the defendants, lands were situate outside the local limits of the Jurisdiction of the Bombay High Court. It was claimed (a) that it may be declared that the said lands belong to and are the property of the plaintiff company and that the defendants have no beneficial interest therein: (b) that the defendants may be ordered to execute all such documents and deeds, and do such acts as may be necessary for transferring the said lands to the name of the plaintiff company. In the suit, the defendants had filled a written statement contending that in respect of the prayers mentioned above, the court had no jurisdiction to try the suit on its original side as the lands in question were situate outside the Original Civil Jurisdiction of the High Court. On the pleadings, several issues were raised, one of them was, 'whether this Hon'ble Court has jurisdiction to entertain the suit in so far as it relates to prayers (a) and (b) of the plaintiff.' By consent, that issue was agreed to be tried as a preliminary issue. The trial judge decided the said issued in favour of the defendants. On appeal, that judgment was reversed and it was held that on the plaint as it stood, as a whole, the court had Jurisdiction to try the suit in respect of prayers (a) and (b) also. The defendants, thereafter, approached the Federal Court by filing an appeal. Five learned Judges, namely, Kania C.J., Fazi All, Patanjali Sastri, Mohajan and B.K. Mukherjea JJ. comprised the Bench of the Federal Court who decided the said appeal. Kania C.J., Fazi All and Patanjali Sastri JJ. dismissed the appeal whereas Mahajan and B.K. Mukherjea allowed the appeal. Fazi Ali, J. dismissed the appeal on the ground that all connected suits between the parties should be tried in the same court and even if the objection as to jurisdiction raised by the defendants succeeds, It would be still open to the High Court to transfer the suit which may thereafter be instituted by the plaintiffs at Jalgaon, the place where the lands were situate, and try it along with the suits pending before it, since during the pendency of the suit in the Bombay High Court, the defendants had instituted a suit in the District Court at Jalgaon, claiming title to the very land and that suit had been transferred to the High Court, where a counter-claim had been made on behalf of the plaintiff in the High Court suit by which it had claimed virtually the same reliefs in regard to the Jalgaon, lands as they have claimed in their suit. Fazi Ali, J. also observed that if the objection of the defendants in regard to Jurisdiction succeeds, it will necessitate splitting up of the present suit, which, according to them, is of a composite nature, and in the those circumstances, it is hardly a fit case either for granting special leave or for invoking the discretionary Jurisdiction of the High Court to grant a certificate under Section 109(c) of the Code. In that view of the matter, the learned Judge felt it unnecessary to deal with the so-called substantial question of law, namely, what is the meaning of the expression 'suit for land'. The learned Judge thereafter observed, 'If I had really felt that I was called upon to decide it, I would have agreed with the line of cases in which it has been held that, broadly speaking, the expression 'suit for land' covers the following three classes of suits: (1) suits for the determination of title to land; (2) suits for possession of land; and (3) other suits in which the reliefs claimed, if granted, would directly affect title to or possession of land.' The learned Judge, thereafter, observed, 'since the reliefs to which reference has been made are not the only reliefs claimed in the suit, there is a much more important question involved in the appeal, namely, whether the present suit as a whole is a suit for land and whether the High Court is entirely precluded from giving any relief to the plaintiff in regard to lands at Jalgaon. On this question, I shall refrain from expressing any opinion for the obvious reason that it would be wholly unnecessary to do so, if the appeal is to be dismissed on a preliminary ground.' Kania C.J., on the other hand, held, in order to see whether the suit is covered by the expression 'suit for land' in Clause 12, one has to consider whether it is for the purpose of obtaining a direction for possession or a decision on title to land or the object of the suit is something different but involves the consideration of the question of title to land indirectly. Patanjali Sastri, J. similarly held that the words 'suits for land or other immovable property' in Clause 12 besides obviously covering claims for recovery of possession or control of land, are apt to connote also suits which primarily and substantially seek an adjudication upon title to immovable property or a determination of any right or interest therein. Kania C.J. and Patanjali Sastri, J. also held that the equitable principles, on which English Courts have exercised the Jurisdiction in personam, in respect of-land situate outside the jurisdiction of the court, against person locally within their jurisdiction in cases where there is equity between the parties arising from contract, fraud or trust, can be taken into consideration in determining the true scope of the High Court Original Civil Jurisdiction. Kania C.J., also held that Clause 19 of the Letters patent the court to apply the equitable principles of English Law despite Clause 12 of the Letters Patent. Patanjali Sastri, J., however, observed that the court's power to act in personam can, in a proper case be taken into consideration in judging whether a suit is a suit for land within the meaning of Clause 12 of the Letters Patent. The said learned Judges, namely Kania C.J. and Patanjali, J. held that the plaintiffs sought in regard to the lands at Jalgaon was the fulfilment of the personal obligation, which, it was claimed, the law cast upon the defendants to hold properties for the benefit of the plaintiff and to execute the necessary instruments conveying to them the legal title in those properties, an obligation arising out of the fiduciary relation between the parties and the circumstances relating to the acquisition of the properties as alleged in the plaint and since the defendants resided and carried on business in Bombay, they were amenable to the jurisdiction of the High Court and that court could act in personam and compel the defendants to fulfil their fiduciary obligation though such fulfilment had reference to lands situate outside the jurisdiction and therefore, the High Court had jurisdiction to entertain the suit in respect of prayers(a) and (b) in the plaint. As against that Mahajan, J. held that where the nature of the suit is such that in substance it involves a controversy about land or immovable property and the court is called upon to decide conflicting claims to such property and a decree or order is prayed which will bring about a change in the title to it, that suit can be said to be in respect of land or immovable property, but where incidentally in a suit, the main purpose of which or the primary object of which is quite different, some relief has to be given about land the title to it not being in dispute in the real sense of the term, then such a suit cannot fall within the four corners of the expression' suit for land'. B.K. Mukherjea, J. observed that the words 'suit for land' mean a suit for establishing title to land or any interest in the same or for possession or control thereof and the decree sought for must be intended proprio vigoro to be enforceable against and binding on the land itself. The said two learned Judges, namely, Mahajan and B. K. Mukherjea, JJ. also opined that the proper scope of Clause 12 cannot be determined with reference to the Jurisdiction in personam exercised by Courts of Equity in England in respect of foreign land since the Letters Patent provide separately for Jurisdiction of the courts and for the law to be applied after jurisdiction has been properly assumed. They observed, that the question of application of Equity Law does not arise till jurisdiction is actually conferred in the court under Clauses 11 and 12 of the Charter. They also observed that the suit was a suit for land and the High Court had no Jurisdiction to entertain the suit in respect of prayers (a) and (b) in the plaint, as the lands were situate outside the local limits of its original side jurisdiction. Therefore, all the four judges of the Federal Court, namely Kania C.J., Patanjali, Mahajan and B. K. Mukherjea, JJ. held that if the purpose of the suit is for obtaining a direction for possession or for bringing about a change in title to the land, being the subject matter of the suit or for establishing an interest therein, such a suit would be a suit for land. Kania C. J. and Patanjali Sastri, J. however, felt that the power of court to act in personam is a jurisdiction of court and such jurisdiction can be invoked when the claim is founded on contract or fraud or trust or fiduciary relationship, but Mahajan, J. and B. K. Mukherjea observed that there is a separation in the jurisdiction of courts as vested by Clause 12 and the law to be applied as ordained by Clause 19 of the Letters Patent and when the court has no jurisdiction, question of application of equity law does not at all arise.

17. While discussing the merit of the case before them, the learned Judges of the Federal Court in Moolji Jaitha's case, made the following observations which are relevant for understanding the law prevalent at that time in relation to the present controversy:-

Kania C. J.: (Para 6 of the Report)

'It appears that to confine its meaning to a suit to obtain possession of land only is not proper. The object of treating suits for land differently from other suits in the clause, which defines the Jurisdiction of the original side of the High Court, is to respect the generally approved principle that disputes as to title or possession are ordinarily decided where the land is situated. Therefore questions of title to land and not merely to obtain possession of land should be covered by this expression. It seems equally clear that the widest meaning, which will include suits which have any reference to land, should also be rejected. The object cannot be that any question which indirectly or incidentally has any reference to land should be excluded from trial merely because the suit has some reference to land. In the ordinary way therefore a suit for land is one the primary or direct object of which is to obtain possession of, or an adjudication of title to land.'

(Para 15 of the Report)

'The view of a large majority of Judges thus appears to be that the expression 'suit for land' should not be narrowly confined and limited to suits for the recovery of possession of land or to obtain a declaration of title to land only. The wider meaning of the expression, so as to cover all suits relating to land, i.e. which has anything to do with land, does not appear to be accepted by anyone. That leaves the question wherein between the line of demarcation should be drawn. The courts have differed in the matter of drawing this line under different circumstances, and the same court has taken divergent views on the point. No judicial decision has attempted to give an exhaustive enumeration of the suits covered by the expression 'suit for land' and 1 do not propose to do so. it is sufficient to say that taking the suit as a whole, one has to consider whether it is for the purpose of obtaining a direction for possession or a decision on title to land, or the object of the suit is something different but involves the consideration of the question of title to land indirectly.'

(Para 23 of the Report)

'In my opinion, the proper construction is to treat the claim in respect of the Jalgaon lands as a claim by a principal against his agent, in respect of property acquired by the use of the respondents' fund by the appellants. The claim is to follow the property in the appellants' hands on the ground that the appellants had committed a breach of trust in utilising the respondents money in obtaining title to the land. It cannot be disputed that the only way in which the appellants could and did come into possession of the respondents money was because the appellants were the agents of the respondents. Therefore, in my opinion in this case the respondents are entitled to ask the court to act in personam and ask the appellants to execute a conveyance in favour of the respondents if they succeed in proving their allegations in their plaint. In the present case the fiduciary relationship is not disputed.'

(Para 24 of the Report)

'In my opinion, the fact that the respondents have lodged a plaint containing a prayer for a declaration of title does not oust the Jurisdiction of the court to consider whether the lands were acquired by the appellants in breach of the trust and, if so, whether they should not be compelled to transfer the lands to the respondents. The nature of the suit and its purpose have to be determined by reading the plaint as a whole. It is not proper to dissect the prayers and consider whether the court has jurisdiction on the limited point. In the present case, the court has certainly jurisdiction to determine the propriety of the appellants' actions as agents in dealing with the property and money of the respondents. That seems to me to be the main purpose of the suit. It seems to me also that the court is competent to investigate and ascertain if the appellants had utilised the respondents money in the purchase of the immovable property at Jalgaon. If the court holds that the property was purchased by the use of such funds, as claimed by the respondents, having regard to the fact that the respondents are in possession of those properties, the court has Jurisdiction to order the defendants to execute a conveyance of those lands in favour of the respondents.'

(Para 25 of the Report)

'That leaves the question whether the respondents suit should fail because they had put prayer (a) in the plaint. The inclusion or absence of a prayer is not decisive of the true nature of the suit nor is the orders in which the prayers are arrayed in the plaint. The substance or object of the suit has to be gathered from the aversments made in the plaint and on which the reliefs asked in the prayers are based. A plaintiff may ask for a relief which a court of equity may not grant. But I do not see any justification to non-suit the plaintiff because of such a prayer. That will be insisting on a form of pleading and not on the substance of the suit.'

Pazi Ali, J. : (Para 49 of the Report)

'It may be difficult to find a comprehensive definition for the expression 'suit for land' so as to cover all possible cases, but there is overwhelming authority for the view that a suit for determination of title to land is prima facie a suit for land. But, since the reliefs to which reference has been made are not the only reliefs claimed in the suit there is a much more Important question involved in the appeal, namely, whether the present suit as a whole is a suit for land and whether the High Court is entirely precluded from giving any relief to the plaintiff in regard to lands at Jalgaon. On this question, I shall refrain from expressing any opinion for the obvious reason that it would be wholly unnecessary to do so, if the appeal is to be dismissed on a preliminary ground.'

Patanjali Sastri, J.: (Para 56 of the Report)

'What, then, is the true character of the present suit ?'

(Para 57 of the Report)

'It is important to note that the company did not seek recovery of possession of the lands as it is their case that the lands have all along remained in their own possession and enjoyment.'

(Para 59 of the Report)

'The facts alleged in para 8 are that the defendants acquired the lands in question in their own name but on behalf of the plaintiffs with the plaintiffs money in their hands as the managing agents of the plaintiffs. Having alleged these facts the plaint proceeds to describe the legal result of such acquisition by saying that the 'beneficial interest' in the property acquired was in the plaintiffs and not in the defendants who were only 'benamidars or trustees'....................................The fiduciary obligations on which the claim in paras. 8 and 8-A of the plaint are founded are laid down in Ch. X, Sections 82 and 88, and are spoken of as 'Certain obligations in the nature of trusts' and Section 95 provides that the person holding the property in accordance with any of the sections of that Chapter must, so far as may be, perform the same duties, and is subject to the same liabilities and disabilities as if he were a trustee for the person for whose benefit he holds the property. It is in accordance with this conception that a benamidar has been held to be a trustee and could sue for the property in his own name. .......................................... Though this is the true position in law, it is by no means uncommon, as a matter of convenience, to speak of the trustee or benamidar having no 'beneficial interest' in the property held by him and of the beneficiary being the 'real owner' in contradistinction to the formal ownership vested in the trustee or benamidar. It is in this sense apparently that the lands in question were said to 'belong' to the plaintiffs, and the same notion seems to underlie the prayer for a declaration that the lands in suit 'belong to and are the property of the plaintiff company.' That this has reference to 'the beneficial interest' in the lands is made clear by the words which follow, namely, 'and that the defendants have no beneficial interest therein'. Thus the prayer for declaration, based as it is upon the commonly but loosely used terminology, is not in accordance with the true legal result of the facts alleged in paras. 8 and 8A of the plaint, and it is a relief which is not only unnecessary for the object which the plaintiffs have in view but is one which the court would not, strictly, be in a position to grant even it the plaintiffs established their case; for, until the defendants conveyed the legal title, it could not be said that the lands 'belong' to them and 'are their property'. The only relief which the plaintiffs will in law be entitled to on proof of the facts alleged by them is the execution of the necessary instruments formally transferring the lands to the name of the plaintiff company asked for in para 18 (b) and it is also the only necessary and sufficient relief for the plaintiffs to obtain.'

(Para 60 of the Report)

' I am of opinion that the present suit is not a suit for land within the meaning of Clause 12. The plaintiffs, as has been stated, do not claim possession or control of the lands, being already in possession and enjoyment thereof. Nor do they ask for an adjudication of title to those lands. By their very demand for its transfer they concede that the legal title is vested in the defendants who have purchased the properties and got them entered in the Government records in their own names. All that the plaintiffs seek on this part of their case is the fulfilment of the personal obligation which, it is claimed, the law casts upon the defendants, to hold the properties for the benefit of the plaintiffs and to execute the necessary instruments conveying to them the legal title in those properties, an obligation arising out of the fiduciary relation between the parties and the circumstances relating to the acquisition of the properties as alleged in the plaint. The position is thus analogous to that in a suit for specific performance where the plaintiff conceding the defendant's title claims a conveyance of it in accordance with the contract. And as the defendants reside, and carry on business in Bombay and are thus amenable to the jurisdiction of the High Court, that court can act in personam and compel the defendants to fulfil their fiduciary obligation though such fulfilment has reference to lands situate outside the Jurisdiction.'

Mahajan J.: (Para 72 of the Report)

'A plain reading of the plaint discloses that the object of the suit so far as Jalgaon lands are concerned is to establish title to them. Prayer (b) is consequential to the declaration asked for in prayer (a), Plaintiffs have based their claim of ownership to the Jalgaon lands on alternative grounds. In the first place, it is alleged that the lands were purchased by the defendants with plaintiffs' money and as their benamidars. In the alternative it is alleged that even if the lands were purchased by the defendants for their own benefit as the purchase was made when they were in the relation of an agent to them, it should be held to be for their benefit. It is not easy to follow the legal basis of the alternative claim, presumably it is founded on some vague notion of the principles underlying Section 88, Trusts Act. So far as I have been able to comprehend this plaint, it contains a number of claims founded on different causes of action and no common relief is claimed or is claimable in respect of them. There is no intimate connection between the claim made in respect of the lands and the claim for rendition of accounts. The claim for damages in Clause (12) arises by virtue of the relationship of purchaser and seller; the claim for Rs. 650 arises on account of rent falsely received after the termination of the agency, the claim for lands arises owing to a benami purchase or owing to a fiduciary obligation owed by the defendants to the plaintiffs, while the claim for specific sums of money and account arises owning to the misconduct of the agent or his failure to discharge his duty or on account of his negligence. A question has also been raised as to the construction of the agency contract in regard to the commission payable to the agent.'

(Para 74 of the Report)

'The subject matter of a suit would not be land or immobable property on this construction if the question concerning the land only arises incidentally in a suit, the real subject matter of which is not land or immovable property but say the administration of an estate or of a trust or taking accounts of a partnership in which no decree or order is claimed in respect of proprietary or possessory title to land or immovable property.'

(Para 102 of the Report)

'Finally, I would like to say a word about suits for specific performance regarding which conflicting decisions have been pronounced by the High Courts in India. In my opinion, if the suit is for specific performance and a decree for possession of the land sold is claimed, such a suit would certainly be a suit for land, but if the suit is simpliciter for specific performance, i.e., for the cenforcement of the contract of sale and for execution of a conveyance, in that event there can be no good ground for holding that such a suit is a suit for | determination of title to land or that the decree in it would operate on the land. It is curious that in some cases in Calcutta a distinction has been drawn between a vendor's suit for specific performance and a purchaser's suit for specific performance. The nature of the suit in both contingencies is the same, though in one case the vendor is prepared to offer a deed while in the other case the court has to direct that a deed be executed but the nature of the suit does not change by that circumstance. The suit is not for land because it is a suit for specific performance of a contract, and does not involve any declaration as to title about land. The only question in issue in such a case is whether the contract was made and if so, are there any reasons why it should not be specifically enforced. No controversy as to title to land is directly raised when the court is not called upon to adjudicate on title. Cases therefore which have held that a suit for specific performance simpliciter is a suit for land must be held to have been wrongly decided.'

(Para 104 of the Report)

'The primary object of an administrative suit is not to obtain any decision from the court in respect to title to any land or immovable property. Its real purpose is to administer the deceased's estate. That is its true nature, irrespective of the fact that the administration may involve assumption of jurisdiction by the administrator on lands outside the court's Jurisdiction. That circumstance cannot convert an administration suit into a suit for land. This case has no bearing on the point. The controversy raised about Jalgaon lands purchased benami or held for the plaintiffs by the defendants as agents is independent ) of the accounting between principal and agent. This is not an item in account. It is a distinct claim that lands were purchased benami for the plaintiffs with their money and they are the owners and even otherwise, these being purchases by an agent, they belong to them. Whatever the result of accounts under other heads of the claim may be, this matter would still remain for adjudication. Suit for accounts may fail or succeed, but this part of the claim has to be decided. It is on the same footing as the claim in para 12 of the plaint. That fact has no connection with the fiduciary relationship. The relationship there was that of seller and purchaser. Similar is the claim for refund of Rs. 6.50 in cl. (c) of para 18. Whether account or no account, this specific item is claimed by the plaintiffs as it was taken by the defendants from the plaintiffs by fraud. Claim for general account in cl. (d) has been particularised in the same paragraph but land claim is not particularized there.'

(Para 107 of the Report)

'As indicated in the earlier portion of the judgment, this is not a case for a general account by a principal against an agent, where in the course of accounting incidentally a decision has to be reached as to how the land in dispute was acquired and with whose money. The relief in respect of land is not at all involved or raised in the prayer for account............................................................................It has to be observed that the issue of Jurisdiction was raised in respect of prayer (a) and it was open to the plaintiffs in the trial court as well as in the court of appeal to withdraw that prayer and amend the plaint if they so desired instead of fighting out in the two courts below and then suggesting before us that this prayer may be treated as merely a surplusage in the plaint. Taking the plaint therefore as it stands, there can be no manner of doubt that a clear controversy is raised about title to the land situate in Jalgaon, the plaintiffs claiming that the lands are owned by them and they are ostensibly held by the defendants as their benamidars, the purchase having been made with funds supplied by them. The defendants on the other hand contend that the lands were purchased by them with their own money for their own benefit. On these pleadings, the plaintiffs have asked for a declaration to the effect that they be declared to be the owner of these lands. The issues raised in the pleadings very clearly indicate the nature of the controversy, Even a question of adverse possession has been raised about the lands. In this situation it is difficult to hold that this suit in view of the interpretation that 1 have placed on the words 'suit for land' in Clause 12 is not a suit for land. The prayer regarding execution of the deeds is consequestlal to the declaration of title and is not merely a prayer in the nature of a prayer for specific performance or in the nature of an incidental prayer in a general suit for account between a principal and an agent.'

(Para 108 of the Report)

'It is not possible to say that the question of the title to land is inextricably tied up with the question relating to the defendants' agency. On the other hand, the first eight paragraphs of the palint exclusively deal with the land claim and no mention of it is made in the other paragraphs where the question of misconduct of the agents has been raised or the relief for accounts has been asked for. The plaintiffs clearly asserted title to the lands on the ground of benami purchase by them in the name of the defendants. In the alternative they claim that the title vests in them because they were purchased by the agents in a fiduciary capacity. The whole burden of the first eight paragraph of the plaint and of the reliefs (a) and (b) in para 18 is as to the title to the land independently of any accounting between the parties or of the misconduct of the agents. The controversy as to land can be independently adjudicated upon without any reference to any acts of omission and commission of the agents as such in their fiduciary capacity.'

(Para 110 of the Report)

'On these observations the prayer clause in para 18 would have only contained one prayer to the effect that the plaintiffs claim a rendition of accounts of the dealings of the defendants as agents as a result of accounting certain consequential reliefs. A prayer as to declaration of title in' respect to certain specific pieces of land would be out of place in such a suit...............................................................In respect of these lands, no cause of action has been based on the contract of agency, the cause of action has been based on the ground that the purchases were made by the defendants as benamidars for the plaintiffs or as agents for them the plaintiffs are not seeking to enforce any contract against the defendants in respect of these lands the learned Advocate General described the suit as one to enforce fiduciary obligations and said that the reliefs claimed are founded on such obligations. This contention is clearly erroneous so far as Clause 12 of the plaint is concerned. Moreover, when the plaintiffs' title to land is denied, the question of fiduciary obligation cannot alter the character of the suit. Further I can see no claim for enforcement of the fiduciary obligation so far as the refund of Rs. 650 is concerned, the claim having been based on the ground of fraud.'

B.K. Mukherjea J.: (Para 148 of the Report)

'Speaking for myself, I am inclined to take the view that even a purchaser's suit for specific performance, where there is no prayer for possession, should not be regarded as a suit for land according to the definition given by Sir Richard Garth referred to above. It is not a suit to acquire title to any land; the object is to compel the defendant to carry out specifically what he had agreed to do, and no question of title to the property as between the vendor and the purchaser arises in such cases. The property is not touched in execution of the decree and the title of the purchaser is created not by the decree itself but as a result of the conveyance which is executed in terms of the decree. It is moreover not necessary for the plaintiff to pray for recovery of possession in such suits. If there is actually a prayer for possession, to that extent the suit might be regarded as one for land but not the claim for specific performance itself.'

(Para 150 of the Report)

'It is enough to state at the present moment that irrespective of what the equity courts have done in England, it would be quite legitimate to hold on the meaning that has been given to the words of the Letters Patent by Sir Richard Garth that a suit for specific performance is not a suit for land.'

(Para 151 of the Report)

'In Nistarint Dasi v. Nundolal Bose, 26 Cal. 591, a suit was commenced by the widow of a deceased testator in the original side of the Calcutta High Court for administration of the estate of her husband. Under the will, she was entitled inter alia to the interest of a part of the estate; but after her husband's death she was induced to execute certain documents, by which she surrendered her rights under the will. In claiming administration, she alleged that these instruments were obtained by fraud. It was further alleged that a decree passed by the Alipore court on the basis of an arbitrator's award was void, her consent to the reference having been obtained by fraudulent means and she also challenged, as invalid, certain leases which the executors purported to create in favour of themselves. As the properties, in respect to which the leases were executed, were situated outside the jurisdiction of the Calcutta High Court and the decree on the award was passed by the Alipore court, a question of Jurisdiction was raised and it was contended that the Calcutta High Court had no jurisdiction to entertain the suit. This objection was overruled and the decision of the High Court was affirmed on appeal by the Privy Council Bilasrai v. Shivnarayan, 33 Cal. 180: (32 I.A. 193 P.C.). 'On the question of Jurisdiction', so runs the judgment of the Judicial Committee:

Their Lordships consider the decision right. The primary object of the suit was the administration of the estate of a deceased person resident within the Jurisdiction, the principal executor being also resident there and the actual administration going on there. The High Court of Calcutta, in its ordinary jurisdiction, had the right to order administration of this estate, and, as ancillary to such an order, to set aside deeds obtained by the fraud of the executor. Nor does the circumstance that a decree had been granted by the court of the 24 Paragunnahs making a fraudulent award an order of court protect that decree from the Jurisdiction of the Calcutta court when redressing that fraud. In like manner, their Lordships consider the Calcutta court entitled, for the due administration of the estate, to set aside leases of land outside the territorial limits of their Jurisdiction, those leases having been made as an incident of the same fraud.'

This is a pronouncement of the Judicial Committee in a case where the question of Jurisdiction under Clause 12, Letters Patent, was definitely raised, and the Judicial Committee approved of the interpretation which the Calcutta High Court placed upon these-words in the clause. It is to be noted that there was no prayer for declaration of title or for recovery of possession in the plaint. What the plaintiff prayed for was due administration of the estate of her husband by the executors under the terms of the will of the deceased. What stood in the way of carrying out the directions in the will was a decree passed upon a fraudulent award and certain leases which the executors fraudulently created in favour of themselves. It was held by the Judicial Committee that these ancillary matters did not take away the Jurisdiction of the High Court which was undoubtedly competent to make an order for administration and to grant redress against the travel which the executors were found to have committed. These subsidiary matters were mere parts and indicia of the fraud that was alleged against the executors. When, however, the plaintiff prayed for immediate possession of the immovable property on the construction of a certain will and prayed at the same time that the estate should be administered and accounts rendered by the executors, it was held, and in my opinion, trightly by Harrington J. in Haralall Banerjee v. Netambini Debt, 29 Cal. 315 that the suit was one for land within the meaniong of Clause 12, Letters Patent.'

(Para 170 of the Report)

'As I have said already, the principles of equity may assist us in determining the essential hature of a particular suit or action. Thus, the remedy by way of specific performance was fashioned by the equity courts for the purpose of giving a more complete relief in the way of enforcing a contract. In its essence, it is a suit to enforce a contract, and its nature is not changed simply because it relates to immovable property. But there is no reason why a suit for foreclosure should be regarded as a personal action, simply because the equity courts in England entertain such suits with regard to foreign lands.'

(Para 174 of the Report)

'It is quite true that the different causes of action which the plaintiffs have united in one suit are based on different acts of misconduct alleged to have been committed by the defendants during the period that they acted as agents of the plaintiff company; but it would not be correct to say that the suit, in substance, is one for accounts brought by a principal against an ex-agent and that the reliefs claimed in relation to lands are nothing but different items in the rendering of accounts. The whole structure of the plaint makes it perfectly clear that the first three prayers are based on the allegations contained in paras. 1 to 8 (a), whereas Paras 9 to 15 contain the other allegations upon which the prayers for rendering of accounts or for recovery of specific sums of money in the alternative have been made. The first two prayers relate exclusively to the immovable properties which the plaintiffs allege belong to them but which according to the defendants are their property purchased with their own money and which they assert are being held by the plaintiffs as their tenants. There is no question of accounting so far as these claims are concerned, and I am unable to agree with the view taken by Bhagwati J. that these prayers also are including in the claim for accounts and if the court finds, on taking accounts, that the properties where purchased by the defendants with monies belonging to the plaintiffs, it would be a matter of course for the court to order the defendants to transfer these properties to the plaintiffs. This is not the plaintiffs' case as made in the plaint and this certainly not their prayer. We have no right to read the plaint in a manner different from what it purports to be. So far as prayers (a) and (b) are concerned, the plaintiff's case, in essence, is that the defendants purchased these properties in their names but with monies belonging to the plaintiff company and as such are nothing but benamidars or name-lenders. The beneficial interest is vested in the plaintiff company and they have all along been in possession and enjoyment of these lands. As the defendants set up an adverse title and claimed the lands to be their property, a declaration of title has become necessary. This is the gist of prayer (a) in the plaint. The defendants, on the other hand, have in their written statement denied the title of the plaintiffs and asserted that these properties were their own acquisitions and that the possession of the plaintiffs was only in the character of a tenant under them. A question of title to the land, therefore, expressly arose on the pleadings of the parties. As there is a claim of title in regard to the lands in suit and the plaintiffs want a declaration which should be binding on the property, the suit cannot but be one for land according to the tests which have been formulated above. It is argued, however, on behalf of the respondents that a declaration of title is wholly unnecessary in the present case. If the plaintiffs succeed in establishing that the defendants are their benamidars or trustees and hold the land in trust for them, they can pray for an order directing the defendants to transfer the properties to them. I do not dispute as a proposition of law that if without raising any question of title or even admitting that the title is with the defendant, the plaintiff seeks to compel the defendant to excute a conveyance of the property in his favour in fulfilment of a personal obligation imposed on the defendant by reason of certain fiduciary relationship existing between him and the plaintiff, the suit would not be a suit for land according to the definition given above. There is no claim of title to land in such cases and no decree is sought for which would be operative on the property itself. It would be an action to enforce a personal o


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