2012 (5) TMI 815 - HC - Indian Laws

Summary

Issues Involved:
1. Jurisdiction of Delhi Courts.
2. Nature of the Agreement (Sale of Shares vs. Sale of Immovable Property).
3. Applicability of Section 16 and Section 20 of CPC.
4. Waiver and Estoppel regarding Jurisdiction Objections.
5. Maintainability of Petitions under Section 9 and Section 11 of the Arbitration and Conciliation Act.

Summary:

Jurisdiction of Delhi Courts:
The primary issue was whether the Delhi High Court had jurisdiction to entertain the petitions. The petitioner argued that the Delhi Court had jurisdiction because the MOU was executed in Delhi, payments were made in Delhi, and both parties had their offices in Delhi. The respondent contended that the subject matter of the dispute was immovable property located in Amritsar, thus falling u/s 16(d) of the CPC, which mandates that suits related to immovable property must be filed where the property is situated.

Nature of the Agreement:
The court had to determine if the MOU was an agreement for the sale of shares or for the sale of immovable property. The petitioner argued it was merely for the transfer of shares, while the respondent claimed it was essentially for the transfer of immovable property, disguised as a share transfer to avoid duties and levies.

Applicability of Section 16 and Section 20 of CPC:
The court examined whether the proviso to Section 16 or Section 20 CPC applied. The petitioner cited several judgments to argue that the relief sought could be obtained through personal obedience, thus falling under the proviso to Section 16 and Section 20 CPC. However, the court found that the relief sought included the transfer of possession of land, which could not be obtained solely through personal obedience, thus falling under Section 16(d) CPC.

Waiver and Estoppel:
The petitioner argued that the respondent had waived their right to challenge jurisdiction by admitting it in their written statement and participating in the proceedings for almost two years. The court held that jurisdiction over the subject matter could not be conferred by consent or waiver, citing the Supreme Court's ruling in Harshad Chiman Lal Modi vs. DLF Universal Ltd. and other precedents.

Maintainability of Petitions under Section 9 and Section 11:
The court noted that for a petition under Section 9 of the Arbitration and Conciliation Act to be maintainable, the court must have jurisdiction over the subject matter. Since the subject matter involved immovable property in Amritsar, the Delhi High Court lacked jurisdiction. The court also emphasized that Section 9 does not allow for specific performance of the contract but only for interim measures to preserve the subject matter of the dispute.

Conclusion:
The Delhi High Court dismissed the petitions u/s 9 and Section 11 of the Arbitration and Conciliation Act due to lack of jurisdiction over the subject matter, which involved immovable property situated in Amritsar. The court vacated the interim order dated 03.7.2009.