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TMI Blog2012 (5) TMI 815X X X X Extracts X X X X X X X X Extracts X X X X ..... ny in arbitration. So far as the petition u/S 11 is concerned, that is for appointment of an independent Arbitrator to adjudicate the dispute between the parties. 2. Briefly stated, the facts of the case are that in November 2006 the respondent company is alleged to have made a representation to the petitioner company that it had acquired contiguous agricultural land measuring 150 acres situated on the By Pass Road, Village Valla Village Verka, District Amritsar, Punjab, duly approved under the Mega Project Schemes by the Govt. of Punjab for the development of residential colony. The petitioner and the respondent company entered into a MOU/ Agreement dated 7.12.2006, whereby, the respondent company agreed to transfer its rights, title and interest in the said land/ project by causing its promoters to transfer all their shares to the petitioner company at a value derived after reducing the liabilities of the respondent company, for a total consideration calculated @ ₹ 68 Lac per acre amounting to almost ₹ 102 Crores. A separate detailed agreement covering all the aspects of the transaction had to be executed within 30 days from the date of MOU. However, due to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Delhi. The petitioner is also in New Delhi. The Agreement was executed in New Delhi. The meeting between the representatives of two groups both at pre and post MOU are stated to have taken place in Delhi. The shares of the respondent company are allegedly being agreed to be transferred in Delhi and, therefore, the Delhi Court is stated to have the jurisdiction. 9. Apart from disputing the correctness of the allegations of the petitioner on merits, the respondent has raised preliminary objection as to the jurisdiction of this court to entertain the present petition, since the claim of the petitioner is in respect of the land situated in Amritsar. The plea of the respondent is that since the present MOU is essentially an agreement for the transfer of land situated in Amritsar and the purchase of share holding of the respondent company is only a method for transfer of the land, the present petition is hit by the proviso of Section 16(d) of Code of Civil Procedure, and therefore liable to be rejected for the want of jurisdiction. 10. It was contended by the petitioners that they are not claiming the specific performance of the MOU or possession of the land in quest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he respondent to cause the transfer of entire share holding in favour of the petitioners and also a direction against the respondent company to do or cause to do all necessary transfers in the books of the respondent company and also before the office of the Registrar of Companies and thus, provisions of Section 20 of the CPC would apply for the purpose of determination of territorial jurisdiction and not Section 16 (d) of CPC as is sought to be urged by the respondent. In this regard, the petitioners in paragraph 6 of the OMP has urged as under :- then the petitioner has always been ready and willing to perform his obligation to produce the entire share holding of the respondent company 16. It was also contended by the petitioners that the respondent had, in its written statement to the petition, admitted the factum of the jurisdiction of Delhi Courts by admitting all the averments with regard to payment, office of the parties being in Delhi and the MOU having been executed in Delhi. It was contended that the petitioner had belatedly, only at the stage of hearing for the first time on 28.3.2011, orally raised this question of jurisdiction after a lapse of almo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rbitrator decides the matter and grants the relief to the petitioners, viz. a restraint against the transfer of mortgaging, transferring of shares to a third party still that would not be the complete relief to the petitioners because ultimately the possession of the land in question is with the respondent company and its officials. The company, though being in possession of the property on papers, but actually the possession of the land is with the individuals and unless and until a suit for specific performance is filed, the possession of the land could not be transferred. 21. I have carefully considered the respective submissions made by the parties. Before embarking on the examination of the respective contentions of the parties, it would be worthwhile to reproduce Sections 16 and 20 of the CPC, which reads as under:- 16. Suits to be instituted where subject-matter situate, subject to the pecuniary or other limitations prescribed: suits, (a) for the recovery of immovable property with or without rent or profits, (b) for the partition of immovable property, (c) for foreclosure, sale or redemption in the case of a mortgage of or c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich it cannot give an effective judgment. 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 well known maxim equity acts in personam , recognized by Chancery Courts in England. 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 courts could grant relief in suits respecting immovable property situate abroad by enforcing their judgments by process in personam, i.e. by arrest of defendant or by attachment of his property. .. 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 obe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the learned Single Judge that the present case is covered by the proviso of Section 16 of the Code of Civil Procedure are misplaced. In the facts and circumstances of the case as delineated, the relief in the present suit cannot be entirely obtained through the personal obedience of the Defendants. The proviso to Section 16 of the Code of Civil Procedure would be applicable to a case where the relief sought for by the Plaintiff was entirely obtainable through the personal obedience of the Defendant, i.e., the Defendant has not at all to go out of the jurisdiction of the Court for the aforesaid purpose. The present case is not a case of the aforesaid nature. In the present case for execution of the sale deed the Defendants will have to go out of the jurisdiction of this Court and get the same executed and registered in Gurgaon. 20. In the present case also it is an admitted position that possession of the said property was with the seller and, therefore, in terms of the provisions of Section 55(1) of the Transfer of Property Act, 1882, the relief of possession is inherent in the relief of specific performance of the contract. In our considered opinion the ratio of the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been held by the Apex Court in Harshad Chiman Lal Modi's case (supra) that Section 20 of the Code would have No. application in view of the opening words of Section 20 subject to limitations aforesaid . The Apex Court has held that the proviso to Section 16 would apply only if the relief sought could entirely be obtained by personal obedience of the Defendant. The proviso we feel will only apply if the suit falls within one of the categories specified in the main part of the Section. In the present case, although specifically the relief for possession of the property has not been claimed by the Appellant in the prayer for the purpose of development, however, it is settled law that by clever drafting a party cannot be permitted to come within different meaning of relief claimed. Hence, No. benefit can be derived by the Appellant either from the proviso of Section 16 or Section 20 of the Code of Civil Procedure. 26. Learned counsel for the respondent submitted that in view of the aforesaid decisions, since the petition filed by the petitioner essentially pertains to a property situated in Amritsar, in view of the provisions of section 16 (d) CPC, this court will have no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Modi case (supra). Thus, both the judgments would operate in their respective areas. M/s. Adcon Electronics Pvt. Ltd. case (supra) clearly sets down that in a suit for simplicities specific performance the same does not amount to a suit for land. If it is a simplicities suit for specific performance, i.e. for enforcement of Contract for Sale and for execution of sale, in that event there can be no good ground for holding that such a suit is for determination of title to the land or that the decree in it would operate on the land. The observations made in the judgment in Moolji Jaitha Co. v. The Khandesh Spinning Weaving Mills Co. Ltd. referred to in the said judgment being a judgment of the Federal Court was approved by the Supreme Court, as noted in paragraph 15 of the Adcon Electronics Pvt. Ltd. case (supra). Thus a distinction has been carved out in respect of a suit where no possession has been claimed of the land in question. . 25. I am thus of the view that since the plaintiff is not claiming possession of the suit property and has specifically stated so and the relief is confined to specific performance of the Agreement in question without the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce in the sense that even if shares are transferred, that does not solve the problem or get the complete relief to the petitioner, which in Harshad Chiman Lal s case is called effective judgment or adjudication of the dispute between the parties. This is because, no doubt, the company is in possession of the land but being a juristic person, it has to be in possession through some individual office bearer or the employee. Suppose, despite transfer of these shares, these employees, individuals or the office bearers do not give the possession to the petitioner, the only remedy available to the petitioner is to rush to the Court to file a suit for possession or suit for specific performance because the complete relief cannot be obtained by simply passing order, it has to be implemented also. Therefore, what would be applicable is not only the personal obedience but also actual specific performance and hence the petitioner would be barred by Section 16(d) of the CPC. 32. In Trehan Promoters and Builders Pvt. Ltd. vs Welldone Technology Parks Development Pvt. Ltd., the learned Single Judge of this court observed as under: Section 9 is applicable only where a party h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sar i.e. outside Delhi and therefore, it is covered by section 16 (d) of CPC and the proviso to section 16 has no application, nor section 20 would apply as a residuary section and Delhi Court has no jurisdiction. Clause 16(d) of CPC provides that for determination of any right or interest for immovable property, the suit has to be instituted in the Court within the local limits of whose jurisdiction the immovable property is situated. The proviso cannot be explained in a manner that for every relief under Section 16 CPC personal obedience is pleaded. Personal obedience cannot be stretched to such an extent that Section 16 of CPC itself becomes redundant. Moreover, this MOU in my opinion was essentially an agreement for sale and purchase of property between the parties. It was only camouflaged as an agreement or MOU to sell and purchase shares of a company so that the property changes the hands by changing the management. This was only done in my opinion to avoid the payment of various duties or levies which have to be paid normally on such transactions therefore, if seen in its proper prospective, it was essentially an agreement of purchase of immoveable property though with a dif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 nullity. 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 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 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x Court, relied upon by the petitioner, in Bahrein Petroleum s case (supra) is concerned even that does not support the contention of the petitioner inasmuch as in the said case the Apex court has held that unless there has been a consequent failure of justice the objection to jurisdiction under section 21 CPC cannot be raised. The relevant paragraph reads as under: 7. Counsel for the plaintiff also submitted that the defendants having neither alleged nor proved that there has been a failure of justice in consequence of the order of the High Court, they are precluded by Section 21 of the Code from raising this objection in this Court. We think that this contention has no force. The suit has not yet been tried on the merits. So far, only the preliminary issue as to jurisdiction has been tried. That issue was decided in favour of the defendants by the trial Court and the District Court and against them by the High Court, and from the order of the High Court, this appeal has been filed. There cannot be a consequent failure of justice at this stage. The condition unless there has been a consequent failure of justice implies that at the time when the objection is taken in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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