IN THE HIGH COURT OF DELHI AT NEW DELHI

 

SUBJECT:

 

CIVIL SUIT (ORIGINAL SIDE) 2167/1996

 

Date of decision : 22nd April, 2004.

 

Section 320 CPC Preliminary Issue- Territorial Jurisdiction

 

 

Karan Mahendru & Anr.

Represented by Mr.Anil K. Kher, Advocate .....Plaintiffs.

Versus

 

M/s Vatika Plantations (P) Ltd.

Represented by Mr.S.K.Sahni, Advocate .....Defendant.

 

CORAM:

HON'BLE JUSTICE DR. MUKUNDAKAM SHARMA:.

 

 

1. Whether reporters of local papers may be allowed to see

the Judgment?

 

2. To be referred to the Reporter or not? Yes

 

3. Whether the judgment should be reported in the Digest? Yes

 

 

DR. MUKUNDAKAM SHARMA, J :

 

1. In the present suit filed by the plaintiff praying for a decree of specific performance and in the alternative, for a decree for recovery of the money that is paid by the plaintiffs to the defendant, various issues were framed by this Court on the pleadings of the parties. One of the issues that was framed by order dated 28.1.2004 is whether this Court does not have territorial jurisdiction to try and decide the present suit. By order dated 28.1.2004, it was observed that the issue framed regarding territorial jurisdiction of this Court to entertain and try this suit be tried as a preliminary issue as the said issue goes to the root of the matter. In terms of the aforesaid order, the counsel appearing for the parties advanced their arguments on the aforesaid preliminary issue framed by this Court regarding territorial jurisdiction.

2. The plaintiffs filed the present suit with the contention that on 5.6.1987 the plaintiffs entered into an agreement to purchase the farm land from the defendants and paid Rs.50,000/- as advance. It is alleged that subsequently on 19.11.1987, the plaintiffs paid the balance consideration and asked the defendant to execute the sale deed and get it registered in favour of the plaintiffs. On 16.7.1988, the parties signed a purchase agreement in respect of the said farm land. Thereafter the plaintiffs visited the office of the defendant and requested the defendant to perform their obligation under the agreement. But it is alleged that the defendant has failed to and refused to perform its obligations under the agreement and, therefore, the present suit was filed contending, inter alia, that the agreement between the parties was signed in New Delhi where also the parties to the suit reside and work for gain. It is also stated that the plaintiffs made the payment to the defendant in New Delhi where the registered office of the defendant was also located at the relevant time. The defendant, however, has taken up a plea that the land, which is the subject matter of the aforesaid agreement is situated in Haryana which is beyond the jurisdiction of this Court and, therefore, this Court does not have the territorial jurisdiction to try and decide the present suit.

 

3. The relief that is sought for in the plaint is for a decree of specific performance of the purchase agreement dated 16.7.1988 executed between the parties and also for execution of the sale deed and handing over possession of the premises or in the alternative, for a decree directing the defendant to pay the plaintiffs a sum of Rs.25,00,000/- as compensation for non-performance of the aforesaid obligations arising out of the purchase agreement. The copies of the purchase agreement executed by the defendant in favour of the plaintiffs and receipts of the part consideration money are placed on record. The purchase agreement is shown to have been executed between the parties at New Delhi on 16.7.1988. There are several stipulations in the purchase agreement including certain general covenants which are set out in clause 14 of the said agreement. Sub clause (x) thereof states as follows

 

"The Vendor having its registered office in New Delhi, the Delhi courts shall have jurisdiction in all matters arising out of the Agreement."

 

The consideration money was also received by the defendant in New Delhi and receipts thereof have been issued by the defendant from its New Delhi office where its registered office was located at the relevant time.

 

4. Counsel appearing for the defendant, however, submitted that to the facts and circumstances of the present case provisions of Section 16 of the Code of Civil Procedure would be applicable and, therefore, the suit should have been instituted at the place where the property of the agreement is situated. Counsel for the plaintiffs, however, submitted that to the facts and circumstances of the case provisions of Section 20 CPC would be applicable. According to him, part of cause of action also arises within Delhi as the purchase agreement, which is sought to be enforced was entered into in New Delhi and the consideration money was also received in New Delhi and, therefore, the concluded agreement having been arrived at New Delhi, the Delhi Courts would also have jurisdiction to try and decide the present suit, which is reiterated and made clear in one of the covenants contained in the purchase agreement.

 

5. I have considered the aforesaid submissions of the counsel for the parties. The relief that is sought for in the suit is for specific performance of the purchase agreement praying for a decree for execution of the sale deed and handing over possession of the property but the plaint also contains an alternative prayer for recovery of the amount of Rs.25,00,000/- as compensation from the defendant for non-performance of the obligations by the defendant arising out of the purchase agreement, which was entered into and executed in New Delhi. Section 16 of the Code of Civil Procedure provides the jurisdiction where a suit is to be instituted. A suit for determination of any right to or interest in immovable property is to be instituted in a court within the local limits of whose jurisdiction the property is situated. However, a proviso is added thereto wherein it it stated that a suit to obtain relief respecting, or compensation for wrong to, immovable property held by or on behalf of the defendant may, where the relief sought can be entirely obtained through his personal obedience, be instituted either in the Court within the local limits of whose jurisdiction the property is situate, or in the Court within the local limits of whose jurisdiction the defendant actually and voluntarily resides, or carries on business, or personally works for gain.

 

6. In the present suit, the suit is filed not only for specific performance of the contract, which is one of the reliefs but in the alternative a relief is also sought for grant of a decree for compensation for an amount of Rs.25,00,000/-, which is sought to be recovered for non-performance of the decree by the defendant arising out of purchase agreement. The purchase agreement was admittedly executed in New Delhi. The consideration amount was also received in New Delhi. Registered office of the defendant at the relevant time when the aforesaid agreement was entered into was also located at New Delhi. These are the admitted facts. One of the clauses of the purchase agreement also categorically states that Delhi Courts shall have jurisdiction to decide any matter arising out of the purchase agreement. So the parties also decided that the Delhi Courts shall also have jurisdiction as part of cause of action arises therein. In terms of the said position and situation, the parties also made it crystal clear that for the purpose of the agreements, Delhi Courts shall have jurisdiction.

 

7. In view of the aforesaid position, I am of the considered opinion that this Court shall definitely have the territorial jurisdiction to try the present suit as cause of action although partly has arisen in New Delhi and since the registered office of the defendant at the time of execution of the agreement was located in Delhi, wherefrom the defendant was carrying on its business. The issue framed on territorial jurisdiction is answered accordingly in favour of the plaintiffs and against the defendant.

 

8. As the issue No.(ii) is answered holding that this Court shall have territorial jurisdiction to try and decide the suit, the remaining issues shall have to be tried and decided in this Court after recording evidence. The matter be listed before the Local Commissioner on 4th May, 2004, for directions in terms of the last order.

(DR. MUKUNDAKAM SHARMA)

JUDGE

April 24, 2004.