1 IN THE HIGH COURT OF JUDICATURE AT MADRAS (ORDINARY ORIGINAL CIVIL JURISDICTION) WEDNESDAY, THE 2nd DAY OF NOVEMBER 2011 THE HON'BLE MR. JUSTICE VINOD K.SHARMA A. No.5097 of 2011 1. Timothy Bowen, also known as Tim Bowen 9 Manor Lane, Gerrards Cross, Bucks, SL9 7NH, UK. 2. Stew Investment Management Limited, International House, Castle Hill, Victoria, Douglas, Isle of Man, IM 2 4RB. 3. Bowen Financial Management Limited, 9 Manor Lane, Gerrards Cross, Bucks, SL9 7NH, UK. ..Applicants. Vs. 1. Clenergen Corporation, a company incorporated under the laws of the state of Nevada, USA, with the registered office at 5379, Lyons Road, Suite 301, Coconut Creek, Florida, USA 33073 and operating their office at 29, Harley Street, London W1G 9QR, UK. 2. Clenergen India Private Limited a company incorporated under the provisions of the companies act 956, having its registered office at North Wing, IVth Floor, KRM Centre, No.2, Harrington Road, Chetpet, Tamilnadu 600031. 3. United Biofuels Private Limited a company incorporated under the provisions of the companies act 1956 having its Registered Office at #824, Poonamallee, High Road, Chennai 600 010. https://hcservices.ecourts.gov.in/hcservices/ 2 4. Mark Quinn, 15 Dipper's Close, Kemsing, Sevenoaks, Kent, TN 15 6QD. ..Respondents. Application praying that this Hon'ble Court be pleased to grant leave to sue the Defendants 1 and 4 carrying on business out side jurisdiction of this Hon'ble Court under Clause 12 of the Letters Patent in the above suit. This Application coming on this day before this Court for hearing the court made the following order: The applicants / plaintiffs pray for grant of leave to sue defendant nos.1 and 4, who are carrying on business outside jurisdiction of this Court under Clause 12 of the Letters Patent. 2. The applicants / plaintiffs intend to file the suit, praying for the following relief: "a. For a declaration that the plaintiffs have the first charge on the in favour of the plaintiffs over its asset, namely, a 1.5 MW Power Generation Plant near Salem, Tamil Nadu (hereinafter referred to as the "Said Plant"), owned by the First Defendant, through its whooly owned subsidiary, the Second and the subsidiary of the second defendant being the Third Defendants, with effect from 24.05.2010 / 31.08.2011, pursuant to and in terms of the Bridge Loan Agreement dated 24.01.2011 and Settlement Agreement dated 31.08.2011; b. For a Mandatory Injunction directing the Defendants to record the first charge on the said https://hcservices.ecourts.gov.in/hcservices/ 3 Plant created in favour of the plaintiffs and to register the charge with the Registrar of Companies, Tamil Nadu and other statutory authorities; c. For a permanent injunction restraining the First and Second Defendants, their Directors and / or any other person/s in control or management of the First and Second Defendants and the Fourth Defendant, from transferring, alienating, encumbering or creating any charge, either directly or indirectly, of the shares held in the Second and Third Defendants and consequently, restraining the Second and Third Defendants, their Directors and/or any person/s in control or management of the Second and Third Defendants, from in any manner permitting, registering or recording the transfer of shares held by the First Defendant in the Second Defendant and/or by the Second Defendant in the Third Defendant, until repayment of the sum of US$ 400,000/- (United States Dollars Four Hundred Thousand only) by the Defendants to the Plaintiffs; d. For a permanent injunction restraining the Defendants, their directors, men, agents and/or any person acting through or under them, from transferring, alienating, encumbering or in any other manner creating any charge whatsoever on the Said Plant more fully set out in the Schedule. I crave leave of this Hon'ble Court to refer to the Plaint as part and parcel of this Affidavit." 3. The reading of reliefs shows that the applicants seek to have the first charge on the Generation Plant, Salem, Tamil Nadu by way of specific performance. The property is admittedly outside the jurisdiction of this Court. The other reliefs claimed are consequential to the first relief. 4. The Clause 12 of the Letters Paten reads as under: "12. Original Jurisdiction as to suits.- And We do further ordain that the said High Court of https://hcservices.ecourts.gov.in/hcservices/ 4 Judicature at Madras, in 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 at Madras, in which the debt or damage, or value of the property sued for does not exceed hundred rupees." 5. Once the immovable property, which is subject matter of the suit, does not fall within the jurisdiction of this Court, the applicants / plaintiffs are not entitled to leave for filing of the suit in this Court. 6. Learned counsel for the applicants / plaintiffs however placed reliance on the judgment of this Court in the case of Southern Petrochemical Industries Corporation Ltd vs. Durga Iron Works, and 3 others in 1995 (II) CTC 602, to contend that this Court can grant leave to file a suit in this Court, as the applicants / plaintiffs are merely seeking creation of charge over the property, situated outside the jurisdiction, without seeking possession or title to the property, therefore, the suit, as framed, cannot be said to be a suit for land. https://hcservices.ecourts.gov.in/hcservices/ 5 7. The Hon'ble Division Bench of this Court in this case of Southern Petrochemical Industries Corporation Ltd vs. Durga Iron Works, and 3 others (supra), was pleased to lay down as under: "6. As we could see from the views of the learned Judges of the Federal Court, the relevant tests to be remembered and applied to find out as to whether the suit is one for land are: (1) Whether the suit involves determination of right, title or interest in land; or (2) whether the suit involves recovery of possession or control of land. In a suit to recover money due under a mortgage, when we apply the above tests, it is not possible to say that the suit will come within the mischief of any of the above tests. There may not be a determination of title to the land as such. Equally so, there may not be straightway a decree for recovery of possession of land. Primarily the decree will be one for recovery of money. Only when there is a default, a final decree may ensue permitting recourse to the land in satisfaction of the money claim. Even then, there is no determination of title to the land and there is no decree for recovery of possession. It is only at the time of execution, a need to advert to these questions may arise, on contingencies therefor presenting themselves. Shanmukham, J. in State Industries Promotion Corporation of Tamil Nadu Ltd. v. Arvind Distillery and Chemicals Ltd., Madras and Ors. adverted to the pronouncements of the Full Bench of this Court in Velliappa Chettiar and Ors. v. Saha Govinda Doss and Ors. (AIR 1929 Madras 721) and the pronouncement of the Federal Court in Moolji Jaitha and Co. v. K.S. and W. Mills Co. (AIR (37) 1950 Federal Court 83) and held that the suit for recovery of amount due on mortgage in respect of properties situate outside the jurisdiction of the original side of this Court cannot be classified as a suit for land. The learned Judge approached the question as follows: "In this case the suit is not for recovery of possession, nor is the question of the title https://hcservices.ecourts.gov.in/hcservices/ 6 to the land involved even indirectly. Indeed, till execution is levied there is need for the Court to deal with any question relating to the property, all that the Court has to decide is the amount due on the mortgage. Further even in execution, the Court is in no way concerned with the possession of the property or the title to the property." We approve the view of Shanmukham, J. on this question. M.Srinivasan, J. in his order of reference, is of the view that the observations neither in the pronouncement of the Full Bench in Velliappa Chettiar and Ors. v. Saha Govinda Doss and Ors. (AIR 1929 Madras 721) nor in the pronouncement of the Federal Court in Moolji Jaihta and Co. v. K.S. and W. Mills Co. (AIR (37) 1950 Federal Court 83) can be stated to have the effect of overruling the view of Moore, J. in Nalum Lakshimikantham and Anr. v. Krishnaswamy Mudaliar and Ors. (1904) ILR 27 157). Our analysis of the principles and tests laid down by the Full Bench of this Court and of the Federal Court to govern the question leaves no room for doubt in our mind, that the view of Moore, J. in Nalum Lakshimikantham and Anr. v. Krishnaswamy Mudaliar and Ors. (1904) ILR 27 157) and the view of the other subsequent pronouncements, already referred to, which seem to have fallen in line with the thinking of Moore, J. cannot survive on this question." 8. On consideration, I find no force in the contention. The applicants / plaintiffs, in fact, seek relief in the nature of specific performance of execution of charge over the property, which falls outside the jurisdiction of this Court, therefore, the suit is basically in the nature of claiming interest in the property. Merely, because no possession is claimed, cannot change the nature of suit, as creation of charge would be shadow on title. https://hcservices.ecourts.gov.in/hcservices/ 7 9. The Hon'ble Division Bench of this Court in the case of Southern Petrochemical Industries Corporation Ltd vs. Durga Iron Works, and 3 others (supra) in para-5 of the judgment, approved the views expressed by the Bombay High Court to the following effect: "5. In Moolji Jaitha and Co. v. K.S. and W. Mills Co. (AIR (37) 1950 Federal Court 83), the facts of the case dealt with by the five learned Judges of the Federal Court ran as follows: "The defendants, who were a firm of merchants carrying on business in Bombay, were the secretaries and treasures of the plaintiff company and, as such, were in sole management of the spinning and weaving mill owned by the company at Jalgaon outside the local limits of its jurisdiction. After terminating the agency of the defendants, the company brought a suit for various reliefs founded, in general, on alleged wrongful action by the defendants in breach of their fiduciary obligation in the course of their employment. In addition to the prayer for a general account of the defendants' management of the company's affairs and business during the whole period of the agency and certain other connected prayers, the company asked for two reliefs concerning certain lands at Jalgaon specified in the plaint which were alleged to have been acquired by the defendants on behalf of the company and out of the moneys or other property belonging to the company but in the name of the defendants and that the lands stood in the name of the defendants only as benamidars or trustees of the plaintiff company. The reliefs were thus described: (a) That it may be declared that the said lands belong to and are the property of the plaintiff company and that the defendants have no beneficial interest therein. (b) That the defendants may be ordered to execute all such acts as may be necessary for transferring the said lands to https://hcservices.ecourts.gov.in/hcservices/ 8 the name of the plaintiff company." The views expressed by each one of the learned Judges with regard to 'suit for land' occurring in Clause 12 of the Letters Patent of the High Court of Bombay -- the language of which is similar to Clause 12 of the Letters Patent of this Court -- are portent and they have been, in our view, correctly summed up in the head - note of the report itself and it will suffice the purpose if we extract them as follows:- "Per kania C.J. -- In order to see whether a suit is covered by the expression 'suit for land' in Clause 12 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 involved the consideration of the question of title to land indirectly. Per Fazl Ali, J. (Obiter) - The expression "suit for land" covers the following three classes of suits (1) suits for the determination of title to land; (2) suits for possession of land; and (3) other suits in which the reliefs claimed, if granted, would directly affect title to or possession of land. Per Patanjali Sastri, J. - The words 'suits for land or other immovable property' in Clause 12 besides obviously covering claim for recovery of possession or control of land, are apt to connote also suits which primarily and substantially seek an adjudication upon title to immovable property or a determination of any right or interest therein. Per Mahajan, J. - 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 https://hcservices.ecourts.gov.in/hcservices/ 9 being in dispute in the real sense of the term, then such a suit cannot fall within the four comers of this expression. Per B.K. Mukherjea, J. - The words 'suit for land' mean a suit for establishing title to land or any interest in the same or for possession or control thereof; and the decree sought for must be intended proprio vigore to be enforceable against and binding on the land itself." 10. The creation of charge in the suit property, therefore, is determination of right or interest in the immovable property. It is not only the title or possession, but any interest in the property, which will also fall within the definition of suit for land or other immovable properties. This judgment cannot advance the case of the applicants / plaintiffs. 11. Learned counsel for the applicants / plaintiffs, thereafter, placed reliance on the judgment of the Hon'ble Supreme Court in the case of Adcon Electronics Pvt. Ltd. vs. Daulat and Another reported in (2001) 7 SCC 698, to contend that the simpliciter for suit for specific performance of a contract for sale of land is a suit for enforcement of the terms of the contract, therefore, cannot be treated as a suit for land. 12. This contention of the learned counsel for the applicants / plaintiffs cannot be accepted, as the Hon'ble Supreme Court in this very judgment was pleased to lay down as under: https://hcservices.ecourts.gov.in/hcservices/ 10 "11. The question then arises as to what is meant by "suit for land". This expression has been interpreted by different High Courts as well as the Federal Court. 12. In His Highness Shrimant Maharaj Yashvantrav Holkar of Indore Vs. Dada Bhai Cursetji Ashburner [1890 (14) I.L.R. Bombay 353] a Division Bench of the Bombay High Court held that a suit for specific performance would not fall within the meaning of that expression. There the suit was filed for specific performance of an agreement to mortgage certain immovable property. The agreement was made in Bombay between the parties on January 8, 1883. The Divisional Court held, "it had jurisdiction" and granted decree. On appeal a Division Bench referred to an earlier judgment of that court in Yenkoba Balset Kasar vs. Rambhaji (9 Bombay H.C.Rep.13) which laid down that suit for land was a suit which asked for delivery of land to the plaintiff. The High Court also referred to the view of the Calcutta High Court in The Delhi and London Bank Vs. Wordie [I.L.R., 1 Calcutta 249 at p.263] construing that expression to mean, "substantially for land" -- that is for the purpose of acquiring title to, or control over, land." It also noticed the view of a learned single Judge of the Calcutta High Court in Sreenath Roy Vs. Cally Doss Ghose [I.L.R. (5) Calcutta 82] holding that the court had no jurisdiction to make a decree in a suit for specific performance. The Division Bench of the Bombay High Court held that the suit was within the jurisdiction whether regarded as a suit for specific performance or to enforce equitable mortgage by deposit of title deeds as a court of equity in England could entertain it. 13. In M/s.Moolji Jaitha and Co. Vs. The Khandesh Spinning and Weaving Mills Co. Ltd. [A.I.R. (37) 1950 Federal Court 83], there is divergence of opinion among the learned Judges of five-Judge Bench of the Federal Court in regard to the import of the expression "suit for land". The Chief Justice Kania opined: (AIR p.89, para 15) https://hcservices.ecourts.gov.in/hcservices/ 11 "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." Justice Fazl Ali observed: (AIR p.96, para 47) "If I had really felt that I was called upon to decide it, I would have agreed with the line of cases in which it has been held that, broadly speaking, the expression "suit for land" covers the following three classes of suits : (1) suits for the determination of title to land; (2) suits for possession of land; and (3) other suits in which the reliefs claimed, if granted, would directly affect title to or possession of land." Justice Patanjali Sastri took the view:(AIR p.97, para 53) "The words in question, besides obviously covering claims for recovery of possession or control of land, are apt to connote also suit which primarily and substantially seek an adjudication upon title to immovable property or a determination of any right or interest therein." Justice Mahajan observed: (AIR p.105, para 81) , "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 https://hcservices.ecourts.gov.in/hcservices/ 12 term, then such a suit cannot fall within the four corners of this expression." He added: (AIR p.110, para 102) "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." (emphasis supplied) In that view he expressed his agreement with the decision of the Full Bench of the Madras High Court in Velliappa Chettiar Vs. Govinda Doss [AIR (16) 1929 Madras 721 F.B.]. Justice Mukherjea perceived: (AIR p.119, para 142) "It seems to me fairly clear that the expression 'suit for land' occurring in clause 12, Letters Patent, means a suit which is instituted with the object of establishing claims regarding title to the property or possession of it. Whether or not possession is claimed, if title to any immovable property is to be directly affected by the result of the decision, the suit would be a suit for land." 14. In Debendra Nath Chowdhury Vs.Southern Bank Ltd. [AIR 1960 Calcutta 626] a Division Bench of the Calcutta High Court took the view that the suit for specific performance of the contract to execute and register a lease with alternative claims for damages is not a 'suit for land' within the meaning of clause 12 of the Letters Patent. 15. 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 https://hcservices.ecourts.gov.in/hcservices/ 13 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 M/s.Moolji Jaitha's case. 13. The ratio of the judgment again shows that when plaintiffs seek to create some interest or title in the property, it would be a suit for land. The applicants seeks to create mortgagee right in the land, which is situated outside the jurisdiction of this Court. The creation of mortgage creates interest in the property as also is shadow on marketable title of the owner and goes with the property till redemption. 14. Learned counsel for the applicants / plaintiffs, thereafter placed reliance on a judgment of the Hon'ble Division Bench of this Court in the case of Thamiraparani Investments Private Limited vs. Meta Films Private Limited, Chennai in (2006) 1 MLJ 357, wherein, the Hon'ble Division Bench of this Court was pleased to lay down as under: "12. Further, a reading of paragraph 20 of the plaint clearly shows that the allegation of the plaintiff is that since the defendant is encroaching upon the suit "A" schedule property which is beyond the territorial jurisdiction of this Court, the plaintiff has sought for a decree for permanent injunction. It is not disputed that the registered office of the defendant is at No. 157/1, G.N.T. Road, Chinnambedu Post, Kavarapet- 601 206, Tiruvallur District, which is situated outside the jurisdiction of this Court and the https://hcservices.ecourts.gov.in/hcservices/ 14 defendant has no office within the jurisdiction of this Court. The present suit being one for bare injunction, it is a suit for land. In other words, it is a suit for the purpose of acquiring possession of or safeguarding possession of or establishing title to or a right in land viz., the suit schedule property. It is well settled that the expression 'suit for land' should not be confined and limited to suits for recovery of possession of land or to obtain a declaration of title to land only. The present suit being one for control of land lying outside the jurisdiction of this Court, this Court has no