advocatemmmohan

My photo

ADVOCATEMMMOHAN -  Practicing both IN CIVIL, CRIMINAL AND FAMILY LAWS,Etc.,

WELCOME TO LEGAL WORLD

WELCOME TO MY LEGAL WORLD - FOR KNOWLEDGE IN LAW & FOR LEGAL OPINIONS - SHARE THIS

Tuesday, October 20, 2015

whether on the factual score which has been exposited, the application filed under Section 9 of the 1996 Act before the High Court of Bombay can be regarded as a money claim. On a studied scrutiny of the agreement and the MoU it is clear as day that the development agreement indubitably had created certain interests in the land in favour of the appellant. The assertions made in the application along with the relief clause when read in entirety and appreciated in a holistic manner, it becomes luminescent that the core dispute pertains to possession of the land, for the appellant claims to be in exclusive possession and the respondent, per contra, has asseverated that it had taken over possession. It can irrefragably be stated that any order passed under Section 9 of the 1996 Act will have the impact on the land. It is difficult to accede to the submission that it will not conceptually fall within the category of “suit for land” as engrafted under Clause 12 of the Letters Patent. It is clearly a dispute with regard to the possession which is evincible from the correspondences and the averments made in the application preferred under Section 9 of the 1996 Act. Thus, there has to be determination as regards possession and impliedly issue of direction for recovery of possession. Hence, the conclusion arrived at by the Division Bench on the basis of the scrutiny of documents that the dispute is embedded with regard to the possession of the land because the fundamental claim pertains to certain constructed space on the land and, therefore, it would conceptually fall within the conception of “suit for land” appearing in Clause 12 of the Letters Patent is unexceptionable. Prayer (a) quoted above seeks restraint by a temporary order or injunction from entering upon the property. It is difficult to accept the submission that it is a money claim and, therefore, the Bombay High Court would also have the territorial jurisdiction and accordingly we unhesitatingly repel the same. 34. Resultantly, we find no substance in the appeal and accordingly the same stands dismissed. There shall be no order as to costs.

                        IN THE SUPREME COURT OF INDIA

                        CIVIL APPELLATE JURISDICTION

                       CIVIL APPEAL NO. 4267  OF 2015
                  [Arising out of SLP(C) No. 11215 OF 2015]



Sumer Builders Pvt. Ltd.                     ... Appellant

                                Versus

Narendra Gorani                        ... Respondent





                               J U D G M E N T



Dipak Misra, J.

      The instant appeal is directed against the judgment  and  order  dated
10.03.2015 passed by the Division Bench of the High Court of  Judicature  at
Bombay in Appeal No. 572 of 2013 whereby it  has  concurred  with  the  view
expressed by the learned Single Judge in Chamber  Summons  No.  720/2013  in
Arbitration Petition No. 799/2013 dated 10.10.2013  whereunder  the  learned
Single Judge had revoked the leave granted by the court under Clause  12  of
the Letters Patent to file a petition under Section  9  of  the  Arbitration
and Conciliation Act, 1996 (for brevity, “the 1996 Act”).
2.    The facts which are essential to be stated are  that  the  parties  to
the lis entered into an agreement on 28.2.2008 for development of  the  land
of the respondent.  As per the said agreement, the  appellant  was  required
to develop a residential project and/or commercial complex and/or  multiplex
and/or hotels and/or malls etc. as permissible in law.  The  respondent  had
handed over the vacant possession of the land to  enable  the  appellant  to
start the development  work.     Clause  13  of  the  development  agreement
contains an arbitration clause whereby the parties had agreed to  refer  the
matter in respect of any difference or dispute between them with  regard  to
the construction or the terms of the development agreement  or  with  regard
to the project undertaken for arbitration.  A  Memorandum  of  Understanding
(MoU) was entered into  between  the  parties,  which  stipulates  that  the
developer was required  construct  a  township  project  consisting  of  one
commercial building, 11 residential wings in four  buildings  and  one  club
house under licence from the Indore Municipal Corporation.  It  was  further
agreed that if the MoU was terminated, the  developer  would  not  have  any
right, title or interest in the township project and would  be  required  to
remove his employees and machineries  from  the  land.   Clause  13  of  the
developer agreement was also incorporated in the MoU.

3.    As disputes arose with regard to payment,  the  respondent  terminated
the MoU, forfeited the security deposit and invoked the  arbitration  clause
by issuing a notice through his Advocate on 6.6.2013.  The appellant  herein
replied to the termination  notice  by  stating  that  it  had  carries  out
substantial construction on the property  by  constructing  three  buildings
and by taking many other steps.  It was also stated by  the  appellant  that
the environmental clearance certificate for the project was not obtained  by
the respondent and, therefore, further  work  was  stopped.   The  appellant
required the respondent to perform his part of  the  contract  in  obtaining
the  requisite  environmental  clearance,  execute  irrevocable   power   of
attorney, refund the part of the amount payable  and  pay  interest  on  the
security deposit.

4.    As the factual matrix would undrape, when arbitration was demanded  by
the respondent, the appellant on  16.7.2013  replied  that  the  arbitration
tribunal had to be in Mumbai.   It  was  also  put  forth  that  it  was  in
physical  possession  of  the  property  and  its   construction   material,
machinery, office equipments and other equipments  were  at  the  site.   At
this stage, the appellant moved the High Court of Bombay for grant of  leave
under Clause 12 of  the  Letters  Patent  by  filing  an  application  under
Section 9 of the 1996 Act asserting that  the  courts  at  Bombay  have  the
territorial  jurisdiction,  and  accordingly   leave   was   granted.    The
respondent after  entering  appearance  filed  an  application  praying  for
revocation of leave.  While seeking revocation of leave,  it  was  contended
by the respondent that dispute pertains to the  land  which  is  situate  at
Indore; that the development agreement and the  MoU  had  been  executed  at
Indore where the immoveable property  is  situated;  and  that  the  dispute
fundamentally is for right and possession over the land,  hence,  the  court
where the land is situated has the territorial jurisdiction  in  respect  of
the arbitration or any application to be filed under the 1996 Act.

5.    The learned Single Judge scanned the  anatomy  of  Clause  12  of  the
Letters Patent and various  decisions  of  the  High  Court  of  Bombay  and
referred to the decision in Moolji Jaitha  &  Co.  v.  Khandesh  Spinning  &
Weaving Mills Co. Ltd.[1], adverted to the  issue  relating  to  what  would
constitute cause of action in the obtaining  factual  matrix,  analysed  the
decision of the Bombay High Court  in  Shiv  Bhagwan  Moti  Ram  Saraoji  v.
Onkarmal Ishar Dass & Ors.[2], and referred to Adcon Electronics  Pvt.  Ltd.
v. Daulat and Anr.[3] and eventually came to hold as follows:-
“... the Petitioner has put up its machinery,  staff  for  the  construction
and the ultimate construction upon the land.  Several  buildings  have  been
constructed fully or in part.  The parties are entitled to  a  part  of  the
construction each as per the directions  of  the  development  agreement  or
amount in cash as per the MOU.  The development work  is  in  progress.   An
order for protection of the property pending the arbitration  would  involve
the land itself.  The dispute has nothing to  do  with  the  rights  of  the
parties in personam only....”

      And again:-
“... The disputes in the development agreement are  closely  connected  with
the land, the possession of which is disputed by the parties.  The  suit  is
a suit for land.  It would have to be filed in  Indore  where  the  land  is
situate.”

6.    Being of this view, the learned Single Judge revoked  the  leave  that
was earlier granted.   Being dissatisfied  with  the  aforesaid  order,  the
appellant preferred  an  appeal  before  the  Division  Bench.   Before  the
Division Bench it was contended that the appellant was in possession of  the
land and the possession shall remain with it  till  the  completion  of  the
entire project and he was entitled to refund of security deposit.

7.    In essence, it was urged that the application preferred under  Section
9 of the 1996 Act was tenable before the High Court of Bombay and there  was
no justification to revoke  the  leave.   The  Division  Bench  referred  to
certain clauses of the agreement and  the  clauses  from  the  MoU  and  the
correspondences between the parties, the assertions made in  the  Section  9
petition and the relief sought therein, addressed to the  import  of  Clause
12 of the Letters Patent and what meaning had been given to  the  “suit  for
land” in Moolji Jaitha (supra) by analyzing  various  passages,  culled  out
the principles stated in Adcon Electronics (supra), took note  of  the  fact
that the development agreement and the MoU had been executed at Indore,  the
statement of claim and the counter claim filed by  the  parties  before  the
learned arbitrator who  has  already  entered  into  reference  and  in  the
ultimate eventuality opined thus:-
“... In the present case, we are of the vie that the  disputes  between  the
parties hereto in relation to the development agreement  dated  28  February
2008 and the MOU dated 8 June 2012 are  of  such  a  nature  that  they  are
rooted to the land. The disputes are not such that they relate only  to  the
execution of any document and/or specific performance  thereof  simplicitor.
The disputes relate to possession of the said  land  which  is  outside  the
jurisdiction of the Court as also regarding the percentage  of  the  parties
rights, title and interest in the said land and/or their  entitlement  to  a
sizable portion of the constructed  space  thereon.   These  disputes  would
certainly fall within the expression “suit for  land”  appearing  in  Clause
XII of the Letters Patent.”

      Expressing thus, the Division Bench declined  to  interfere  with  the
order passed by the learned Single Judge.

8.    We have heard Mr. Shekhar Naphade,  learned  senior  counsel  for  the
appellant and Mr. Shyam Divan, learned senior counsel for the respondent.

9.    Criticizing the orders passed by the High Court, it  is  submitted  by
Mr. Naphade, learned senior counsel that the learned Single  Judge  as  well
as the Division Bench has fallen into serious error  in  their  appreciation
of the clauses in the agreement and the relief sought inasmuch as it  was  a
money claim and when the amount was  paid  at  Mumbai,  the  High  Court  of
Mumbai had the jurisdiction.  He has drawn our attention to various  clauses
in the  agreement  to  which  we  shall  refer  to  in  the  course  of  our
delineation.  In essence, his submission is that it  is  basically  a  claim
relating to money and it has nothing to do with  the  land  and,  therefore,
the analysis made by the High Court is fundamentally fallacious.

10.   Mr.  Divan,  learned  senior  counsel  appearing  for  the  respondent
countering the aforesaid submissions would contend that the cause of  action
had arisen at Indore regard being had to the fact that the land is  situated
at Indore and the agreement  in  question  and  the  MoU  were  executed  at
Indore.  It is his further submission that the order passed by the  Division
Bench is absolutely defensible inasmuch as it is a claim  for  land  and  in
the backdrop of prayer under Section 9 of the  1996  Act,  there  could  not
have been any other conclusion than what has  been  expressed  by  the  High
Court that it has no territorial jurisdiction to deal with the  controversy.


11.   To appreciate the controversy, it is appropriate to  refer  to  Clause
12 of the Letters Patent, which reads as follows:-
“12.  Original jurisdiction as to suits – And we do further ordain that  the
said High Court of Judicature at Bombay, in the  exercise  of  its  ordinary
original  civil  jurisdiction,  shall  be  empowered  to  receive,  try  and
determine suits of every description, if, in the case of suits for  land  or
other immovable property such land or property shall be situated, or in  all
other cases if the cause of action shall have arisen, either wholly,  or  in
case the leave of the Court shall have been first obtained, in part,  within
the local limits of the ordinary original  jurisdiction  of  the  said  High
Court, or if the defendant at the time  of  the  commencement  of  the  suit
shall dwell or carry on business, or personally work for gain,  within  such
limits; except that the  said  High  Court  shall  not  have  such  original
jurisdiction in cases falling within the jurisdiction  of  the  Small  Cause
Court at Bombay, in which the debt or damage, or value of property sued  for
does not exceed one hundred rupees.”


12.   The said clause fell for interpretation in Adcon Electronics  (supra),
wherein the Court stated thus:-
“Thus, it is clear that under clause 12 of  the  Letters  Patent,  the  High
Court in exercise of its ordinary original jurisdiction will have  power  to
receive, try and determine: (1) suits for land or other  immovable  property
if  such  property  is  situated  within  the  local  limits   of   original
jurisdiction of the High Court; or (2) all other cases (a) if the  cause  of
action has arisen wholly within the local limits of  the  ordinary  original
jurisdiction of the High Court; (b) if prior leave of  the  Court  has  been
obtained and the cause of action has arisen in part within the local  limits
of the ordinary original jurisdiction of the  High  Court;  or  (c)  if  the
defendant dwells or carries on business or personally works for gain  within
such limits.”


13.   Be it noted under Section 120 of the Code  of  Civil  Procedure,  1908
(for short, “CPC”), Sections 16, 17 and 20 are not applicable  to  the  High
Court in original civil jurisdiction.  Thus,  as  far  as  the  Bombay  High
Court is concerned, it is Clause 12 of the Letters Patent that would  govern
the controversy.

14.   In Adcon Electronics (supra), the  two-Judge  Bench  referred  to  the
divergence of opinion in Moolji Jaitha (supra), the Full Bench  decision  of
the High Court of Madras  in  P.M.A.  Velliappa  Chettiar  v.  Saha  Govinda
Doss[4], Division Bench judgment of Calcutta High  Court  in  Debendra  Nath
Chowdhury v. Southern Bank Ltd.[5] and ruled thus:-
“From the above discussion it follows that a “suit for land” is  a  suit  in
which the relief claimed relates to title to or delivery  of  possession  of
land or immovable property. Whether a suit is a “suit for land” or  not  has
to be determined on the averments  in  the  plaint  with  reference  to  the
reliefs claimed therein; where the relief relates to adjudication  of  title
to land or immovable property or delivery  of  possession  of  the  land  or
immovable property, it will be a “suit  for  land”.  We  are  in  respectful
agreement with the view expressed by Mahajan, J. in Moolji Jaitha case.”


15.   It will be appropriate to reproduce what Justice Mahajan had  observed
in Moolji Jaitha (supra):-
“If an attempt is made to find a comprehensive definition of the phrase,  it
will eventually be discovered that it has created further  complications.  I
therefore content myself by saying 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  for  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
this expression.”


16.   He had further added:-
“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 enforcement 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.”


17.   Recently, in Excel Dealcomm Pvt.  Ltd.  v.  Asset  Reconstruction  Co.
(India)  Ltd.[6],  the  controversy  had  arisen  from  the  High  Court  of
Calcutta.  The two-Judge Bench addressed to the issue “what is the suit  for
land”, and observed as under:-
“A suit for land is a suit in which the relief claimed relates to the  title
or delivery of possession of land  or  immovable  property  [see  [pic]Adcon
Electronics (P) Ltd. v. Daulat]. Further, it is an established rule that  to
determine whether it is a suit for land, the court  will  look  into  barely
the plaint and  no  other  evidence  (Indian  Mineral  &  Chemicals  Co.  v.
Deutsche Bank[7]). If by the averments in the plaint  and  prayers  therein,
it appears that the suit is one for land, it shall be  so  held  and  if  it
does not so appear, then the suit shall continue under leave  granted  under
Clause 12.”


18.   Be it noted, in the said case suit was filed for specific  performance
of the agreement which contemplated sale of property as has  been  described
under Section 13 of the SARFAESI Act, 2002.  The  issue  that  arose  before
the Court is as follows:-
“In the present case, a suit was filed for the specific performance  of  the
agreement which contemplated the sale of property, as has been described  in
Para 1 under Section 13 of the SARFAESI Act  in  terms  of  the  Rules.  The
question with respect to Clause 12 of the  Letters  Patent  in  the  present
case is that whether the present suit is suit for land.”


19.   The Court referred to  the  relief  clause,  the  authority  in  Adcon
Electronics (supra) and came to hold that:-
“It may be noted that the sale certificate sought under the prayer  requires
the delivery of possession of the suit property.  Thus,  we  find  that  the
prayer for delivery of possession was an implicit one in the  present  case.
The prayer as sought in the plaint could not have been granted  without  the
delivery of possession of the suit property as the sale  certificate  itself
contemplates the delivery of the immovable property. Thus, in view  of  this
we find that Adcon Electronics would not apply as there  was  a  prayer  for
delivery of possession in the present case.  Therefore,  we  hold  that  the
present suit was indeed a suit for land.”


      Being of this view, it concurred with the  opinion  expressed  by  the
High Court of Calcutta that it did not have the territorial jurisdiction.

20.   The obtaining factual matrix has to be appreciated  on  the  basis  of
the principles  that  have  been  enunciated  in  the  authorities  we  have
referred to hereinabove.  It has  to  be  borne  in  mind  that  it  was  an
application under Section 9 of the 1996 Act.  Section  9  of  the  1996  Act
reads as follows:-
“9. Interim measures, etc. by Court.—A party may, before or during  arbitral
proceedings or at any time after  the  making  of  the  arbitral  award  but
before it is enforced in accordance with section 36, apply to a court—

(i) for the appointment of a guardian for a minor or  a  person  of  unsound
mind for the purposes of arbitral proceedings; or

(ii) for an  interim  measure  of  protection  in  respect  of  any  of  the
following matters, namely:—

(a) the preservation, interim custody or sale of any  goods  which  are  the
subject-matter of the arbitration agreement;

(b) securing the amount in dispute in the arbitration;

(c) the detention, preservation or  inspection  of  any  property  or  thing
which is the subject-matter of the dispute in arbitration, or  as  to  which
any question may arise therein and authorising  for  any  of  the  aforesaid
purposes any person to enter upon any land or building in the possession  of
any party, or authorising any samples to be taken or any observation  to  be
made, or experiment to be tried, which may be  necessary  or  expedient  for
the purpose of obtaining full information or evidence;

(d) interim injunction or the appointment of a receiver;

(e) such other interim measure of protection as may appear to the  court  to
be just and convenient,

and the Court shall have the same power for making orders as it has for  the
purpose of, and in relation to, any proceedings before it.”

21.   There can be no cavil over the proposition  that  Section  9  petition
can be entertained in the absence of arbitral proceeding.   Be  that  as  it
may, it is imperative to scan the relevant  clauses  of  the  agreement  and
carefully x-ray the clauses of the MoU and also  critically  scrutinise  the
relief sought in the petition preferred under Section 9 of the Act.

22.   Mr. Naphade, learned senior counsel has drawn  our  attention  to  the
recital part of the agreement and certain other clauses.  The  recital  part
reads as follows:-
“AND WHEREAS the Owner and Developer have agreed to develop  the  said  land
by entering in a Development Agreement, by which the owner shall get 40%  of
the Developed Saleable area and Developer shall get  60%  of  the  Developed
Saleable  Area  in  the  proposed  project   irrespective   of   its   being
residential/commercial or hotels or  Multiplex  or  mixture  of  the  either
etc.”


23.   Clause 3 of  the  agreement  deals  with  the  security  amount  which
stipulates that for developing the said land of  the  owner,  the  developer
shall give a “Refundable Security Deposit” of Rs.20 crores to the owner.   A
schedule was fixed for  payment  of  the  said  amount.   Clause  4  of  the
agreement stipulates what events would take place  after  execution  of  the
development agreement.  It basically relates to certain  obligations  to  be
performed by the parties.

24.   Clause 5(ii) of the agreement on which emphasis has been  laid  is  to
the following effect:-
“5. (ii) The Developer and the  Owner  shall  at  all  times  thereafter  be
entitled to receive money, take bookings,  enter  into  leasing  agreements,
sell, assign any or all portions of the proposed project falling  under  his
share,  and  owner  hereby  give  express  consent  for  the  same  to   the
Developers.”


25.   Clause 7 deals with refund of security deposit.  Clause 7D from  which
inspiration has been drawn by the learned senior counsel for  the  appellant
reads as follows:-
“7D.  It is agreed between the parties hereto that if  the  Owner  fails  to
refund the security deposit and the  parties  hereto  decides  to  sale  the
units and/or blocks then in that event the Developer shall  be  entitled  to
recover refundable security deposit from the sale of Units and/or Blocks  of
the Owner’s share and in the circumstances the Developers shall be  entitled
to receive 60% and the Owner shall be entitled to receive 40%  of  the  sale
price of the Units and/or Blocks of the  Owner’s  share  and  the  said  60%
price will be adjusted towards refundable security deposit.”


26.   Clause 9 deals with the responsibility of the  developer.   Clause  10
deals with the joint responsibilities of the owner and the  developer.   The
said clause reads as follows:-
“10. Joint Responsibility of Owners and Developers:-

(i)   To provide cooperation to each other for sanctioning the plans of  the
project with all required permissions and obtaining  occupation  certificate
for  handing  over  possession  of  the  tenements  to  the  Purchasers   of
Tenements.

(ii)  To clear all the dues of authorities concerned with  respect  of  plot
under development.

(iii) To convey the land with building to the societies  and/or  condominium
or apex body after completion of project as per rules applicable.”


27.   At this juncture, it is relevant to refer  to  certain  aspects  which
have been enumerated in the MoU.  The recital in the MoU is as follows:-

“& Whereas ‘YES BANK’ (hereinafter referred  to  as  the  ‘SAID  BANK’)  has
principally agreed to grant loan of Rs.85 crores to the Developers  for  the
development of the said  Township  for  which  purpose  the  Developers  are
required to mortgage the Land and Development of the said  Township  to  the
SAID  BANK  in  lieu  of  which  the  SAID  BANK  has  agreed  to   disburse
construction related loan which shall be disbursed as per  the  progress  of
the project.

& Whereas as the Development Agreement did not provide for mortgage  of  the
Land of the Owner and for availing the facility of loan  the  Developer  are
required to mortgage the entire project the Developer has proposed to pay  a
lump sum amount of Rs.137 crores to the Owner in lieu of his  share  in  the
said Township for which consideration the Owner has  agreed  to  permit  the
Developer to avail loan facility from the said Bank for the  development  of
the Said Township and to release/transfer his share in the said Township  in
favour of the Developer.”


28.   Clause 13 of the agreement  refers  to  resolution  of  disputes.   We
quote the said clause:-
“13.  RESOLUTION OF DISPUTES:-

That in case of any difference or dispute between the  parties  with  regard
to the meaning of construction of this MoU or regarding  any  terms  of  the
Development Agreement or with regard to the project  undertaken  under  this
MoU or Development agreement to be executed between the  parties,  the  same
shall be resolved by arbitration in conformity with the  provisions  of  the
Arbitration and Conciliation Act, 1996.”


29.   In this context reference to the reliefs prayed for  under  Section  9
petition gain significance.  Prayers (a) and (b) of the  paragraph  relating
to relief sought read as under:-
“(a) pending the hearing and final of the proposed arbitral proceedings  and
for a period of sixty days  after  the  award  therein,  the  respondent  by
himself and through his servant and or  his  agent  and/or  in  any  manner,
howsoever, be restrained by a temporary order or  injunction  from  entering
upon the property bearing Survey No. 1487/1 and  1487/2  at  Kasba,  Indore,
Patwari Halka No. 15/2, Tahsil & District  –  Indore,  Madhya  Pradesh,  and
from dealing with or moving the petitioners’ construction machinery  on  the
said property and  from  disturbing  or  interfering  with  the  Petitioners
possession thereof in any manner;

(b)  pending and  hearing  and  final  disposal  of  the  proposed  arbitral
proceedings and for a period of sixty days  after  the  award  therein,  the
Respondent by himself and or through his  servants  and/or  his  agents,  be
restrained by a  temporary  order  of  injunction  from  or  in  any  manner
directly or indirectly disposing off, alienating,  encumbering  or  creating
third party rights in any manner whatsoever in the property  bearing  Survey
No. 1487/1 and 1487/2 at Kasba, Indore, Patwari Halka  No.  15/2,  Tahsil  &
District – Indore, Madhya Pradesh, and from disturbing or  interfering  with
the Petitioners possession thereof in any manner.”


30.   At this stage, we are obligated to  state  that  the  High  Court  has
referred to the correspondences between the parties.   It  has  referred  to
the letter dated 19.6.2013 in extenso.  In the said letter it was  mentioned
that as the owner of the land had terminated the development  agreement  and
the MoU, he had taken over the entire physical and actual possession of  the
said land and the developer was called upon  to  remove  its  machinery  and
construction material lying  upon  the  said  land.   The  said  letter  was
replied to vide letter dated 16.7.2013 refuting the fact that  the  physical
possession of the land had been taken over by the  land  owner  and  stating
that the possession was still with the developer.   The Division  Bench  has
extensively reproduced from the petition preferred under Section  9  of  the
1996 Act.  We think it apt to reproduce the same:-
“10.  The Petitioners have shocked to receive  letter  dated  6  June  2013,
from Respondent’s Advocates, informing the Petitioner  that  the  Respondent
had terminated the MOU and the Development Agreement with  immediate  effect
and had allegedly taken over the possession of the Township in terms of  the
MOU.  By the said letter, the petitioners were  further  informed  that  the
Security Deposit of Rs.20 crores  stood  forfeited.   The  petitioners  were
informed that without prejudice to the termination, the  respondent  made  a
demand of payment of Rs.71 crores along with interest thereon.   A  copy  of
the letter dated 6 June 2013 is annexed and marked Exhibit-F hereto.

                      xxxxx       xxxxx           xxxxx

14.  The respondent, by Advocates  letter  dated  30  June  2013  sought  to
invoke the Arbitration  Clause  under  the  Development  Agreement  and  the
Memorandum of Understanding.  By  the  said  letter,  the  petitioners  were
informed that the  entire  physical  and  actual  possession  was  allegedly
already taken over by the respondent.   This  is  a  false  statement.   The
petitioners  were  further  called  upon  to  remove   the   machinery   and
construction material.  Hereto annexed and marked Exhibit-I  is  a  copy  of
the respondent’s Advocates letter dated 30 June 2013.

                      xxxxx       xxxxx           xxxxx

17.  The petitioners submit that they  had  completed  substantial  work  by
completing Building B-1, B-2 and B-3 (where only  top  slabs  are  pending),
construction of five slabs of Building C-1, commencing digging  and  footing
work of Building A-1.  The petitioners’ machinery and labour  are  at  site.
The petitioners are in possession of the  site.   Now,  the  respondent  has
suddenly demanded a sum of Rs.71 crores, allegedly due  to  the  respondent,
under the MOU dated 8 June 2012.  Though not entitled,  the  respondent  has
sought to forfeit the security deposit of Rs. 20 crores, in accordance  with
the MOU.

18.  In the circumstances, the petitioners submit that the  petitioners  are
entitled to, pending an adjudication in the  proposed  Arbitral  proceedings
and for a period of sixty (60) days after the award therein,  for  an  order
of  injunction,  restraining  the  respondent  by  himself  or  through  his
servants or agents from entering upon the property, subject  matter  of  the
Development Agreement and from dealing with and moving the machinery of  the
petitioners  used  in  construction  activity   and   from   disturbing   or
interfering with the petitioners possession thereof in any manner.”


31.   After discussing the facts in entirety, the Division Bench has  opined
thus:-
“... The development  agreement  also  stipulated  that  the  appellant  was
entitled to possession of the said land and accordingly the  respondent,  by
a separate possession receipt dated 28 February  2008  handed  over  to  the
appellant possession of the said land which is the  subject  matter  of  the
development agreement.  Thereafter, the parties entered into a MOU  dated  8
June 2012 which inter alia recited that the appellant was to  construct  the
township project consisting of residential and commercial  buildings  and  a
club house and further that the respondent would be paid  a  sum  of  Rs.137
crores in place of its  40%  share  under  the  development  agreement.   As
disputes arose between the parties, the said development agreement  and  the
MOU were terminated by the respondent by its Advocate’s letter dated 6  June
2013 and the respondent invoked arbitration.  It is pertinent to  note  that
in  paragraph  9  of  the  said  termination  letter,  the  respondent   has
specifically stated that as on that date (6 June 2013), the  respondent  had
taken over the possession  and  absolute  ownership  of  the  said  township
including the structures thereon, in accordance with the terms of  the  MOU.
This included the construction put up by the appellant  on  the  said  land.
In the said letter, at paragraphs 11 and 12, the respondent reiterated  that
it was the owner of the said land.


32.   And thereafter the Division Bench  proceeded  to  analyse  the  letter
dated 30.6.2013 and on that basis observed that:-
“... This letter of the respondent further stated that since the  Respondent
had terminated the development agreement and MoU, the respondent  had  taken
over the entire physical and actual possession of the said land and in  view
thereof called upon the Appellant to remove its machinery  and  construction
material from the said land.  Again, by its letter dated 16 July, 2013,  the
Appellant once again denied that the physical possession of  the  said  land
had been taken over by the Respondent as alleged  in  its  letters  dated  6
June 2013 and 30 June 2013 respectively.”


33.   The seminal issue is whether on  the  factual  score  which  has  been
exposited, the application filed under Section 9 of the 1996 Act before  the
High Court of Bombay can be  regarded  as  a  money  claim.   On  a  studied
scrutiny of the  agreement  and  the  MoU  it  is  clear  as  day  that  the
development agreement indubitably had created certain interests in the  land
in favour of the appellant.  The assertions made in  the  application  along
with the relief clause when read in entirety and appreciated in  a  holistic
manner, it becomes luminescent that the core dispute pertains to  possession
of the land, for the appellant claims to be in exclusive possession and  the
respondent, per contra, has asseverated that it had taken  over  possession.
It can irrefragably be stated that any order passed under Section 9  of  the
1996 Act will have the impact on the land.  It is  difficult  to  accede  to
the submission that it will not conceptually fall  within  the  category  of
“suit for land” as engrafted under Clause 12 of the Letters Patent.   It  is
clearly a dispute with regard to the possession which is evincible from  the
correspondences and the averments made in the  application  preferred  under
Section 9 of the 1996 Act.  Thus, there has to be determination  as  regards
possession and impliedly issue of  direction  for  recovery  of  possession.
Hence, the conclusion arrived at by the Division Bench on the basis  of  the
scrutiny of documents that the  dispute  is  embedded  with  regard  to  the
possession of the land because the fundamental  claim  pertains  to  certain
constructed space on the land and, therefore,  it  would  conceptually  fall
within the conception of “suit for land”  appearing  in  Clause  12  of  the
Letters Patent is unexceptionable.  Prayer (a) quoted above seeks  restraint
by a temporary order or injunction from entering upon the property.   It  is
difficult to accept the submission that it is a money claim and,  therefore,
the Bombay High Court would  also  have  the  territorial  jurisdiction  and
accordingly we unhesitatingly repel the same.

34.   Resultantly, we find no substance in the appeal  and  accordingly  the
same stands dismissed.  There shall be no order as to costs.

                                             .............................J.
                                                               [Dipak Misra]



                                              ............................J.
                                                          [Prafulla C. Pant]
New Delhi
October 15, 2015
-----------------------
[1]     AIR 1950 FC 83
[2]     AIR 1952 Bom. 365
[3]     (2001) 7 SCC 698
[4]     AIR 1929 Mad. 721
[5]     AIR 1960 Cal. 626
[6]     (2015) 8 SCC 219
[7]      (2004) 12 SCC 376

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.