-1- IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION APPEAL NO. 136 OF 2009 IN SUIT NO. 2551 OF 2006 Wimco Limited, a Company incorporated ) under the Indian Companies Act, 1913, and having its ) registered office at Indian Mercantile Chambers, ) R. Kamani Marg, Ballard Estate, ) Mumbai-400 038 )..Appellants versus 1. Matoshree Shelters Private Limited, ) a company incorporated under the Companies Act, 1956, ) and having its registered office at Room No.3, ) Vidhyarthi Singh Chawl, Rajesh Compound, Ovari Pada, ) Dahisar (East), Mumbai-400 068 ) 2. Ramchandra Jetharam Vaishnav, having his office ) at Room No. 3, Vidhyarthi Singh Chawl, Rajesh Compound ) Ovari Pada, Dahisar (E), Mumbai-400 068 ).Respondents Mr. Kevic Setalwad with Mr. N.H. Seervai, instructed by M/s. Nanu Hormasjee & Company, for the appellants. Ms. Rajani Iyer, Senior Advocate, with Mr. Shah, instructed by M. Hiralal & Company, for the respondents. CORAM: P.B. MAJMUDAR & R.M. SAVANT , JJ. DATE: APRIL 29, 2009 -2- ORAL JUDGMENT (Per P.B. Majmudar, J.) 1. This appeal is directed against the judgment and oder passed by the learned single Judge in Suit No. 2551 of 2006 dated 16th December,2008. By the impugned judgment and order, the learned single Judge came to the conclusion that the Court has no jurisdiction to try and entertain the present suit and the plaint was ordered to be returned to the plaintiffs for presenting the same to the proper Court. The learned single Judge came to the conclusion that in view of some of the prayers in the plaint, the suit could be said to be a suit for land and, therefore, the suit is required to be filed at the place where the land is located and, accordingly, as per Clause 12 of the Letters Patent, the suit on the Original Side of the Bombay High Court is not maintainable. By holding so, the plaint was ordered to be returned to the plaintiffs for presenting it to the proper Court. 2. In order to appreciate the controversy raised in this appeal, it is necessary to advert to the averments in the suit as well as the nature of the suit filed by the present appellants. 3. It is the case of the appellants-plaintiffs that the plaintiffs are a Company incorporated under the Indian Companies Act, 1913 and having its registered office at Mumbai. The plaintiffs, inter alia, carry on the business of -3- manufacture of safety matches. The defendant No.1 is a Company incorporated under the Companies Act, 1956 and having its registered office at Mumbai. As per the averments made in the plaint, defendant No.1 is carrying on the business as developers and builders of immovable properties. The defendant No.2 is a Director and Promoter of defendant No.1. It is stated in paragraph 2 of the plaint that the plaintiffs are the sole owners of certain plots, description of which is given in paragraph 2 of the plaint. All these plots are located in Thane District. It is the case of the plaintiffs that somewhere in October, 2003, the defendants approached the plaintiffs for the purpose of development of three plots in question. A Memorandum of Understanding (MoU) was arrived at between the parties on 29th July, 2004. As per the said MoU, the defendants were to provide plaintiffs’ workers with suitable housing accommodation and on completion of allotment of housing of the workers in plot No. 26, the defendants were to enter into development agreement in respect of plot Nos. 9-A and 9-B, Village Kohij, Dist. Thane. After completion of plot Nos. 9-A and 9-B, the defendants agreed to enter into a development agreement for another plot viz. DD-15. The MoU was annexed along with the plaint. The relevant clauses have been mentioned in the plaint. As per the averments made in paragraph 7 of the plaint, in pursuance of the MoU the defendants entered into an agreement dated 29th July, 2004 with the Union of employees of the plaintiffs. In pursuance of the said MoU, the plaintiffs also executed and handed over Power of Attorney dated 29th July, 2004 in favour of defendant No.2 with a view to see that -4- defendant No.2 can take necessary permissions from the Government and other statutory authorities in connection with the development of the said three plots. In paragraph 9 of the plaint, it is stated that the defendants were bound to obtain all the necessary statutory permissions/sanctions in connection with the development of the said land. At this stage, it is not necessary to go into each and every details about the terms and conditions of the MoU. It is further averred in the plaint that the plaintiffs handed over physical possession of plot No. NA-26 to the defendants only for the purpose of development on the terms and conditions contained in the development agreement dated 21st January, 2005. It is further averred that the ownership title to the plot No. NA-26 continued to vest solely in the plaintiffs. It is the further case of the plaintiffs in the plaint that the defendants committed various breaches and have not acted as per the MoU. In paragraph 23 of the plaint, it is averred that the defendants committed breach of the terms and conditions of the development agreement in the matter of making necessary payments. According to the plaintiffs, time was the essence of the contract. As per the averments made in paragraphs 27 and 28 of the plaint, it is the case of the plaintiffs that the defendants have committed breach of the MoU from time to time. On the basis of the aforesaid averments in the plaint, the plaintiffs approached the Court with the following reliefs: “(a) This Hon’ble Court be pleased to declare and adjudge the Memorandum of Understanding dated 29th July, 2004 (being Exhibit-F to the plaint) and the Development Agreement dated 21st January, 2005 and 16th June, 2005 (being Exhibits-L and U-1 to the Plaint) as voidable at the option of the Plaintiffs and upon the termination of the same by the -5- plaintiffs on 31st August 2006, that the Memorandum of Understanding dated 29th July, 2004 (being Exhibit-F to the Plaint) and the Development Agreements dated 21st January, 2005 and 16th June, 2005 (being Exhibits L and U-1 to the Plaint) are void and inoperative in law. (b) That this Hon’ble Court be pleased to order that the Memorandum of Understanding dated 29th July, 2004 (being Exhibit-F to the Plaint) and the Development Agreement dated 21st January, 2005 and 16th June, 2005 (being Exhibits L and U-1 to the plaint) be rescinded and be delivered up and cancelled. (c) That this Hon’ble Court be pleased to order that as the Power of Attorney dated 16th March, 2005 (being Exh. P hereto) stands terminated, the same be rescinded and delivered up and cancelled. (d) This Hon’ble Court be pleased to order and decree that the Defendant Nos. 1 and 2 do, jointly and severally pay to the Plaintiffs damages aggregating to Rs. 8.64 crores more particularly described in the Particulars of Claim (being Exhibit- OO to the plaint) with interest thereon at the rate of 12% per annum from the date of this Suit, until payment and/or realization thereof. (e) This Hon’ble Court be pleased to pass mandatory order and injunction directing the defendant No.1 to hand over quiet, vacant and peaceful possession of the plot No. NA-26 along with structures thereon to the plaintiffs, as a consequence of the termination, and the rescission and cancellation of the Memorandum of Understanding dated 29th July, 2004 (being Exhibit-F to the plaint) and the Development Agreement dated 21st January, 2005 and 16th June, 2005 (being Exhibits-L and U-1 to the Plaint). (f) This Hon’ble Court be pleased to issue an order and permanent injunction to restrain the defendants by themselves, or through their agents, servants, representatives or any person acting for or on behalf of of either of them from in any manner whatsoever entering upon the plot Nos. 9Aand 9B and DD-15 or disturbing the plaintiffs’ exclusive occupation and possession of the same or seeking to develop, construct on, sell, alienate or create any third party rights in the said plots or any part -6- thereof.” 4. In so far as prayer clause (a) of the plaint is concerned, it is in connection with declaration to the effect that the development agreements dated 21st January, 2006 and 16th June, 2005 are void and inoperative in law. Prayer clause (b) is in connection with cancellation of the MoU and for delivering the same. 5. Before the learned single Judge, the defendants raised a preliminary objection to the effect that since there is a prayer in the suit for handing over possession of the lands in question, the suit is not maintainable on the Original Side of this Court in view of clause 12 of the Letters Patent. The learned single Judge, with the consent of both sides, framed the preliminary issue as to whether the suit is maintainable on the Original Side of the High Court. Before the learned single Judge, it was agreed by both the sides that it is not necessary to lead any oral evidence in this behalf. The learned single Judge accordingly, after considering the averments made in the plaint and after considering the documents on record, came to the conclusion that since the lands in question are situated beyond the territorial jurisdiction of this Court, the suit is not maintainable before this Court in view of clause 12 of the Letters Patent. Accordingly, the learned single Judge passed the impugned order returning the plaint to the plaintiffs for presentation to the proper Court. -7- 6. In order to resolve the narrow controversy raised by the appellants, it is required to be noted as to whether the suit in question is maintainable on the Original Side of the High Court. Mr. Setalvad, the learned counsel appearing for the appellants, has submitted that the learned single Judge has not properly appreciated the nature of the suit as well as the prayers sought for in the suit and has erred in coming to the conclusion that the suit in question is a suit for land and, therefore, it is not maintainable on the Original Side of this Court. Learned counsel further submitted that the entire transaction was based on the basis of the MoU and the defendants were given permissive possession only for the purpose of development of the land. It is submitted that this suit cannot be said to be suit regarding title as the tile always remained with the plaintiffs and since the defendants had committed breach of the MoU and subsequent agreements, that the suit is mainly filed for a declaration to the effect that the said MoU may be held to be void and inoperative and it may be held that the defendants cannot acquire any further right on the basis of the said MoU. It is submitted that the starting point of the transaction is execution of MoU between the plaintiffs and the defendants. It is submitted that even if there is any prayer for possession, the same is merely an incidental prayer as the natural consequences of cancellation of the MoU would be that the defendants may not thereafter have any right to continue with the possession as the possession was handed over only for the purpose of development of the land. By entering into the said agreement, it cannot be said that any title has passed to the defendants -8- in any manner. The learned counsel for the appellants, during the course of arguments, submitted that the plaintiffs in fact is willing to delete prayer clause (e) as according to him, it is merely a consequential prayer and even if a declaration as sought for in the suit is granted, it is not necessary for the plaintiffs to get specific order in connection with the restoration of possession. 7. Learned counsel for the appellants further submitted that since the suit was essentially a suit for declaration to the effect that the MoU in question has become inoperative and void, the other consequential or ancillary reliefs cannot be taken into account for the purpose of finding out the jurisdiction of this Court. It is accordingly submitted that the suit in question is validly instituted on the Original Side of this Court and that the order of the learned single Judge returning the plaint is required to be set aside. 8. Ms. Rajani Iyer, learned senior counsel, appearing for the respondents, on the other hand, submitted that looking to the nature of the entire suit and considering the documents and other aspects of the matter, the suit in question can essentially be described as a suit for obtaining possession and, therefore, when there is a specific prayer in the plaint for handing over the possession, the suit in question can be said to be a suit for land and in that view of the matter, the learned single Judge was perfectly justified in coming to the conclusion that such suit is not maintainable on the Original Side under Clause 12 of the Letters -9- Patent. She has further submitted that by mere declaration to the effect that the MoU, development agreement and the power of attorney are not binding on the plaintiffs, the plaintiffs cannot get any effective relief and the effective relief in substance is a relief for possession and in order to find out the real nature of the transaction and the averments made in the plaint as well as the prayers in the suit are required to be taken into consideration. She has further submitted that it is an admitted fact that the defendants were put in possession part of the lands and unless there is a decree to that effect, the plaintiffs cannot get the possession back and since the plaintiffs have also prayed for restoration of possession, the suit in question can said to be a suit for land and if that be so, this Court has no territorial jurisdiction under clause 12 of the Letters Patent to decide the suit on its Original Side. Ms. Iyer has further submitted that subsequently the defendants have also filed a suit in connection with prayer for specific performance of the agreements and the said suit is filed in the Thane Court. It is submitted that in view of the factual aspect of the matter, the suit should be considered essentially a suit for land and, therefore, the learned Judge has rightly arrived at the conclusion that the suit is not maintainable before this Court on its Original Side and that the suit is required to be filed at the place where the lands in question are located i.e. at Thane. 9. We have heard the learned counsel appearing for both the parties at great length. We have gone through the pleadings as well as the necessary documents -10- forming part of the record submitted before us. We have also gone through the order of the learned single Judge. 10. The principal question which requires consideration is as to whether the suit in question can be said to be a suit for land. If it is held that it is essentially a suit for land, naturally such suit is not maintainable on the Original Side of this Court under clause 12 of the Letters Patent. If it is held that the suit is essentially a suit for declaration in connection with the cancellation of MoU, development agreements and cancellation of power of attorney and the incidental prayers to the main reliefs, the suit instituted before the Original Side of this Court can be said to be maintainable. In order to find out as to whether the suit in question wherein various prayers have been made which includes one of the prayers for handing over possession is maintainable before the Original Side of this Court, a reference is also required to be made to some of the decisions to which both sides have relied upon. 11. Before discussing the judgments of the Apex Court on the point, we may point out that it is not in dispute that the suit in question as such is not a suit for declaration of any title as no such declaration has been claimed by the plaintiffs. The learned counsel for the appellants has relied upon the decision of the Federal Court in the case of M/s. Moolji Jaitha and Company vs. The Khandesh Spinning and Weaving Mills Co. Ltd., AIR (37) 950 Federal Court 83. So far as -11- the aforesaid case is concerned, the plaintiff therein had filed the said suit on the Original Side of this Court with the following reliefs. “(a) That it may be declared that the said land (particulars in para 8) belonged and are the properties of the plaintiff company and the defendants have no beneficial interest therein. (b) That the defendants may be ordered to execute all such documents and deeds and do such acts as may be necessary for transferring the sad lands to the name of the plaintiff company.” 12. The learned single Judge of this Court came to the conclusion that the suit in the nature is suit for land and, therefore, Court has no territorial jurisdiction to decide the same. The order of the learned single Judge in that case was carried further before the Division Bench. The Division Bench of this Court reversed the order of the learned single Judge and came to the conclusion that the suit in question cannot be said to be a suit for land and, therefore, the suit was held to be maintainable under clause 12 of the Letters Patent before this Court on its Original Side. The defendants therein carried the matter further before the Federal Court. By majority view, the Federal Court came to the conclusion that the suit was maintainable on the Original Side of the Bombay High Court and while deciding the said issue, the Federal Court has considered the provisions of Clause 12 of the Letters Patent and has also considered the aspect regarding suit for land. The five learned Judges delivered separate judgments in the aforesaid case. Since the issue in question in the present case has a direct bearing on the said judgment of the Federal Court, the observations made by the learned Chief Justice are required to be taken into account. In -12- paragraph 6 of the judgment delivered by Chief Justice Kania, it has been held and observed as under: “ It may be useful to ascertain in the first place what is the natural meaning of the expression ‘ suit for land’, irrespective of judicial decisions. It is not difficult to understand the meaning of the word ‘ suit’ and the word ‘ land’ . The difficulty arises in determining the ambit given to those words by the connecting word ‘ for’. Inasmuch as the first word in the expression is ‘ suit’, it is obvious that it has to be followed by the word ‘ for’ as no other preposition can be used in connection with ‘ suit’. The word ‘ for’ can have the meaning ‘ to obtain’, when used in connection with a noun, e.g. land, jewellery. It can equally be used in connection with the relief sought by the parties, e.g. for possession, damages, etc. It can equally be used to indicate the grievance of the plaintiff. Thus, when one speaks of a suit for libel or for trespass, one really means that it is a suit for damages in an action for libel, or a suit for compensation in an action for trespass on land. The question is in what sense the word ‘ for’ is used in this expression. It appears that to confine its meaning to a suit to obtain possession of land only is not proper. The object of treating suits for land differently from other suits in the clause, which defines the jurisdiction of the Original Side of the High Court, is to respect the generally approved principle that disputes as to title or possession are ordinarily decided where the land is situated. Therefore questions of title to land and not merely to obtain possession of land should be covered by this expression. It seems equally clear that the widest meaning, which will include suits which have any reference to land, should also be rejected. The object cannot be that any question which indirectly or incidentally has any reference to land should be excluded from trial merely because the suit has some reference to land. In the ordinary way therefore a suit for land is one the primary or direct object of which is to obtain possession of, or an adjudication of title to, land. 13. The learned Chief Justice has accordingly considered the scope of the suit to find out whether it is really a suit for land. It has been observed that any question which indirectly or incidentally has any reference to land should be -13- excluded from trial merely because the suit has some reference to the land. Considering the said reasoning and observation, it is required to be noted as to whether the prayer for possession of the land is the primary object of filing of the suit or adjudication of title to land or whether the prayer is incidental to the main substantive prayer in the suit. In paragraph 15 it has been observed by the learned Chief Justice that expression’ suit for land ‘ should not be narrowly confined and limited to suits for recovery of possession of land or to obtain declaration of title to land only. The relevant observations in paragraph 15 are as under: “ 15. The view of a large majority of Judges thus appears to be that the expression ‘ suit for land’ should not be narrowly confined and limited to suits for recovery of possession of land or to obtain a declaration of title to land only. The wider meaning of the expression, so as to cover all suits relating to land i.e. which has anything to do with land, does not appear to be accepted by anyone. That leaves the question wherein between the line of demarcation should be drawn. The Courts have differed in the matter of drawing this line under different circumstances, and the same Court has taken divergent views on the point. No judicial decision has attempted to give an exhaustive enumeration of the suits covered by the expression ‘ suit for land’ and I do not propose to do so. It is sufficient to say that taking the suit as a whole, one has to consider whether it is for the purpose of obtaining a direction for possession or a decision on title to land, or the object of the suit is something different but involves the consideration of the question of title to land indirectly.” 14. Of course, in so far as the facts of the said case are concerned, it was held by the learned Chief Justice that the main purpose of the suit was to administer the estate of the deceased and to set aside the decree obtained by -14- fraud by the defendants. In paragraph 23 of the said judgment it has been observed that the defendants came into possession of the land because the appellants were agents of the respondents and accordingly the respondents were entitled to ask the Court to act in personam and ask the appellants to execute a conveyance in favour of the respondents, if they succeed in proving their allegations in the plaint. It is relevant to quote here the observations of the learned Chief Justice in paras 22 and 23 of the said judgment. The same reads thus: “ 22. It was argued on behalf of the appellants that the exercise of equity jurisdiction was limited to cases of express trust and for this some