1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY O.O.C.J. APPEAL NO.108/2009 & 109/2009 IN CHAMBER SUMMONS NO.124/2009 & 118/2009 IN SUIT NO.3452/2004 Mantri Developers Pvt.Ltd. Appellant A Company incorporated under the (Ori.Deft.no.6) Companies Act,1956 having its Head Office at 41 Vithal Mallya Road, Banglore 560 001 and having its branch office at 125,Sohrab Hall ,Pune-411 001 VS. 1] Reveira Institute of Education Pvt.Ltd. A Company incorporated under the Companies Act, having its Registered Office at 143,First Floor, Ashoka Mall, Bund Garden Road,Pune 411 001 2] Mantri Real Estate Pvt.Ltd. A Company incorporated under the Companies Act,having its Registered Office at 3,Babulnath Road,Behind Central Bank,Mumbai 400 007 3] Mr.Satish Nanabhai Mody, Of Pune,Indian Inhabitant, residing at 201,Ashok Pavillion, Dr.Ambedkar Road,Pune 411001 4] Mr.Ashok Nagindas Bilakhia of Mumbai,Indian Inhabitant, residing at 106/107 Kailash Plaza Vallababang Lane, Near Orient Cinema,Ghatkopar(E), through his Constituted Attorney Mr.Satish N.Mody. 5] Mrs.Sunanda Ramesh Shah of Mumbai,Indian Inhabitant, 2 residing at A-805,Kailash Tower, Ghatkopar(E),through her Constituted Attorney Mr.Satish N.Mody. 6] Mrs.Alka Divyesh Shah, of Baroda,Indian Inhabitant, residing at 302,Venice Apartments, Baroda 13,Gujarat,through her Constituted attorney Mr.Satish N.Mody Res.no. 1 Ori.Plff. Res.2 to 5 Ori. Deft.nos.2 to 5 Mr.G.S.Godbole a/w Mrs.C.S.Radia for the Appellants Mr.M.S.Doctor ,counsel,i/b M/s Bachubhai Munim & Co.for Respondent no.1 CORAM: DR.D.Y.CHANDRACHUD,J. & MRS.MRIDULA BHATKAR,J. RESERVED ON: 21st March,2009. PRONOUNCED ON: 2nd September,2009. J U D G M E N T . These Letters Patent Appeals are preferred against an order of the learned Single Judge dated 13/2/2009 rejecting the Chamber Summons seeking relief under order 7 Rule 10(erroneously referred to as Rule 11 in Chamber Summons) of the Civil Procedure Code for rejection of the plaint on the ground that this Court does not possess jurisdiction. As the issue involved is same both these appeals are decided by the common judgment. 2] The plaintiffs have instituted a suit for the recovery of money.The suit arises out of a contractual obligation. Specific performance of a contract namely a Memorandum of Understanding (M.O.U.) dated 23/10/2003 is sought under the Specific Relief Act . The 3 plaintiff who is a developer entered into an agreement for the purchase of land bearing survey no.196/1-B admeasuring 20,700 sq.mtrs. at village Lohegaon, Tal.Haveli, Dist.Pune with defendant no. 1.The consideration is Rs.7,58,85,000/-,out of which the plaintiff paid a sum of Rs.50 lacs towards earnest money. Defendant no.1 allegedly did not produce documents evidencing a marketable title. The plaintiff has filed a suit in 2004 for recovery of its moneys against defendant no. 1.However,in the meantime , defendant nos.2 to 5 who had an interest in the property transferred their right,title and interest to defendant no.6. Defendant no.2 executed an irrevocable power of attorney and entered into an agreement with defendant no.6 on 4/3/2005 . 3] The plaintiffs thereafter amended the suit and impleaded defendant no.6 and amended the prayers .By the amended prayer the plaintiff sought relief against defendant nos. 2 to 6 and the creation of a charge on the suit property to the extent of the share of defendant no. 1 to secure the repayment of Rs.50 lacs. 4] The appellant thereafter moved an application under Order 7,Rule 11 of the Civil Procedure Code for rejection of the plaint .The application was dismissed. 5] Learned counsel appearing for the Appellant has submitted that the learned Single Judge has erred in construing the Full Bench judgment in India Spinning and Wseaving Co.Ltd.Vs.Climax Industrial Syndicate reported in A.I.R.1926 Bombay in which a suit regarding mortgage or possession is held to be ''a suit for land''within the meaning of clause 12 of the Letters Patent. The nature of the suit has , it was urged, changed due to the relief of a charge 4 which was subsequently added by the plaintiff. To grant such relief the Court will have to enter the arena of title to the land.So also if the suit is decreed the sale of land will follow in execution . If the suit is decreed then the decree will be executable at Pune where the property is situated. 6] Though the application is made under order 7 Rule 11 of C.P.C.the learned Single Judge rightly treated it as an application relatable to order 7 rule 10, for return of plaint.Before adverting to the rival submissions of the parties,the aspect of territorial jurisdiction as laid down in the Civil Procedure Code has to be considered. Section 16 of the Code of Civil Procedure deals with suits regarding immovable property. Section 16(c) of the Code of Civil Procedure reads as follows. ‘’Suits to be instituted where subject-matter situate- Subject to the pecuniary or other limitations prescribed by any law, suits- (c) for foreclosure, sale or redemption in the case of a mortgage of or charge upon immovable property, shall be instituted in the Court within the local limits of whose jurisdiction the property is situate ;’’ 7] Hence, a suit in respect of immovable property for forclosure,sale or redemption of mortgage or charge is to be filed where the property is situated. 8] In a decision rendered in 1926 , in India Spinning and Weaving Co.Ltd.Vs.Climax Industrial Syndicate reported in A.I.R. 5 1926 Bombay a Full Bench of this Court held that a suit for mortgage is a ‘suit for land’ within the meaning of clause 12 of the Letters Patent. However, in the next year, 1927 a Full Bench in Hatimbhai Hassanally Vs.Framroz Edyliee Dinshaw (A.I.R.1927, Bombay , 278 ) overruled the decision and held that a suit on a mortgage is ‘not a suit for land’ and ,therefore,it can be filed,tried and decided within the original jurisdiction of the Bombay High Court. Thereafter the issue was again raised before the Federal Court in (Messrs Moolji Jaitha and Co.Vs.The Khandesh Spinning and Weaving Mills Co.Ltd.) reported in A.I.R.(37)1950 Federal Court,83 . By a majority the appeal was dismissed and it was held that a suit in respect of land situated outside Bombay could not be tried under the original jurisdiction. 9] In Adcon Electronics Pvt.Ltd.Vs.Daulat & Another (2001),7 Supreme Court Cases 698 the Supreme Court once again dealt with the issue. In paragraph 15 of the judgment the Supreme Court held 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''. 10] The basic distinction between a mortgage and a charge is that a charge only gives a right to payment out of a particular fund or property without transferring that fund or property. However, a mortgage is in essence a transfer of an interest in specific immovable 6 property. In a charge there is no transfer of interest in property but just a creation of a right of payment out of specific property. A mortgage is jus-in-reim and a charge is a jus-ad-reim. 11] Bearing in mind the law laid down in the judgment of the Supreme Court in Adcon Electronics Pvt.Ltd.Vs.Daulat & Another (2001),7 Supreme Court Cases 698 the averments contained in the plaint must be considered . The Court has to focus upon and understand the basic object for which the suit is filed. In the present case the plaintiff has filed a suit for specific performance ,that is for the recovery of the earnest money of Rs.50 lacs from defendant no.1 who was a party to the contract. Thus, the suit is based on a contractual agreement. The following salient features emerge from the plaint. [i] The plaintiff has not filed the suit for seeking possession of land or for a declaration of title to land; [ii] The plaintiff has filed the suit for recovery of the earnest money which was paid pursuant to the M.O.U.; [iii] The plaintiff seeks the creation of a charge on the suit property to the extent of the right of the first defendant who is a party to the M.O.U. 12] The primary object is to recover money from the first defendant. The plaintiff does not seek possession of the land because his contention is that the first defendant could not produce documents showing a clear title to the land. The plaintiff contends that there was a breach of the terms of contract which led to the institution of the suit for the repayment of money. Defendant nos.2 to 6 have been joined as parties as they claim to have entered into an agreement by which they 7 have sold the property to the sixth defendant who has a place of business at Pune where the suit property is situated. Thus, the plaintiff does not seek possession of the land or a declaration of title to the land but his primary object is the recovery of money paid as earnest in view of an alleged breach of the terms of the contract. 13] Hence in our view no fault can found with the judgment of the Learned Single Judge . No interference is required. The appeal is dismissed. Dr.D.Y.Chandrachud,J. Mrs.Mridula Bhatkar,J.