1 CHS4.11.sxw srk IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION CHAMBER SUMMONS NO.4 OF 2011 IN SUIT NO.3268 OF 2010 Lafarge Aggregates and Concrete India Pvt.Ltd. .. Plaintiff. -versus 1.Q-Build Rock Aggregates & Products India Pvt.Ltd. & Anr. .. Defendants. Mr. V.R.Dhond a/w. ms. Meenakshi Iyer i/b. Advaya Legal, advocate for plaintiff. Mr. M.L.Palan, i/b. D.S.Mhaispurkar, advocate for Defendant No.2. CORAM: S.C.DHARMADHIKARI, J. DATED: MARCH 7, 2011 JUDGMENT: 1 This Chamber Summons moved by Defendant No.2 is placed for hearing and final disposal. In the submission of the Defendant No.2, this Court has no jurisdiction to entertain and try the suit and therefore, the leave under clause XII of the Letters Patent be revoked. An affidavit in support of this Chamber Summons has been filed. 2 CHS4.11.sxw 2 The Defendant No.2 states that the Suit essentially seeks relief of possession of immovable property belonging to second Defendant, which is situated in Villages Pimpaloli and Vaholi in Taluka Kalyan, District Thane. Once these lands/immovable properties are not situated within the jurisdiction of this Court and when the relief sought is for possession of these properties, then the Suit ought to have been filed where the immovable properties are located. The Suit for Land not being so filed, this Court has no jurisdiction to entertain and try it and therefore, the leave under Clause 12, which has been obtained wrongfully and illegally, must be revoked. 3 In reply to this Chamber Summons, an affidavit has been filed by the Company Secretary of the Plaintiff. He submits that what is relevant at this stage is only the allegations and averments in the plaint. If the averments in the plaint are read together and as a whole, then, what the plaintiff has sought is a relief of specific performance of a contract of the Boulder Purchase Agreement which is in relation to certain rights in the immovable properties. The Suit in question is not a “Suit for land” and therefore, this Court has jurisdiction to entertain and try it. The Suit is filed on the basis 3 CHS4.11.sxw that the contract for sale of the immovable property has been executed at Mumbai and material part of the cause of action has arisen in Mumbai, but the Defendant No.2 resides or has his business outside Mumbai. Therefore, with leave under clause 12 of the Letters Patent, this Court would have jurisdiction to entertain and try the Suit. Therefore, no illegality has been committed nor any material facts have been suppressed from this Court. In these circumstances, there is no merit in this Chamber Summons and it deserves to be dismissed. 4 I have heard Shri Palan, learned Counsel appearing on behalf of the Second Defendant and Shri V.R.Dhond, learned Counsel appearing on behalf of the Plaintiff. 5 Shri Palan has submitted that the Plaintiff has filed the Suit against the Defendant No.1, which is engaged in the business of owing and operating mining lease and production, processing and selling of stone metals. The Suit is filed against the Defendant No.2 as the owner of the land, more particularly described in paragraph-3 of the plaint. 6 The Plaintiff alleges that the Suit is filed seeking specific 4 CHS4.11.sxw performance of the Boulder Purchase Agreement dated 8th April, 2010 entered into between the Plaintiff and the Defendant No.1. Further, the Plaintiff is also seeking specific performance of the Lease Agreement dated 7th April, 2010 entered into between the Defendant No.1 and Defendant No.2. It is submitted that the Defendant No.2 is the owner of the land and he has put up an industrial undertaking on a part of the said land for carrying on mining and stone crushing operations and other conveniences like work space, hutments for workmen, etc. The Defendant No.2 is carrying on mining operations and stone crushing operations in the Undertaking. There was a Quarrying Lease Agreement entered into between the Defendant No.1 and Defendant No.2 on 21st May, 2009 whereunder the Defendant No.1 obtained leasehold rights of the said land from the Defendant No.2 for carrying out mining operations and stone crushing operations. 7 In pursuance of this agreement, certain applications were made by the Defendant No.1 to the Government for grant of quarrying/mining lease. 8 It is alleged that the first Defendant then approached the Plaintiff in August, 2009 for setting up and carrying out mining operations on the land and for supply of boulders to the Plaintiff. It 5 CHS4.11.sxw is alleged that relying upon the various representations made by the first Defendant and after perusing Quarrying Lease Agreement dated 21st May, 2009 between the Defendant No.1 and Defendant No.2, the Plaintiff entered into a Memorandum of Understanding with Defendant No.1 on 24th September, 2009. It is agreed that on receipt of the quarrying/mining lease from the Government of Maharashtra, the Defendant No.1 shall set up and carry out mining operations and supply boulders to the industrial establishment/plant proposed to be set up by the Plaintiff on the said land. Some of the clauses of the MOU and the correspondence pursuant thereto have been referred to. Thereafter, payments made under that MOU are set out. Then, reference is made to the mining lease sanctioned by the Government on 5th March, 2010 and thereafter, in paragraph-20 the new Lease Agreement between the Defendant No.1 and Defendant No.2 dated 7th April, 2010 has been extensively referred. 9 Shri Palan submits that it is the case of the Plaintiff that the Defendant No.2 was fully aware of the transaction and gave blanket consent to the assignment of all rights of the Lessee under the Lease Deed to the Assignee of Defendant No.1 on such terms and upon execution of such documents, as may be mutually agreed 6 CHS4.11.sxw between the Lessee and Assignee. 10 The Defendant No.2 was fully aware that the Defendant No.1 intended to assign its rights under the said Lease Deed in favour of the Plaintiff. That is how the agreement between the first and second Defendant is reached. 11 Thereafter, the Plaintiff makes reference to the Boulder Purchase Agreement with the Defendant No.1 and its various clauses are set out. The Plaintiff makes reference as to how it complied with the terms and conditions of the Boulder Purchase Agreement. In paragraph-30, reference is made to the various permissions given by the Defendant No.2 to the Plaintiff. However, these permissions are contained in letters dated 8th April, 2010. 12 Shri Palan has invited my attention to paragraphs-32 and 33 of the plaint, which read as under : “32. However, to the complete dismay of the Plaintiff, despite its full co-operation, Defendant No. 2 failed to provide, and Defendant No.1 failed to take, the possession of the land so as to set up Defendant No.1’s mining operations on the said Land and in turn supply boulders to the Industrial Establishment/stone crushing plaint of the Plaintiff 7 CHS4.11.sxw and also to enable the Plaintiff to set up the Industrial Establishment/stone crushing plant. The Plaintiff was therefore not able to set up its Industrial Establishment/stone crushing plaint on the said Land. A series of meetings took place amongst the Plaintiff, Defendant No.1 and Defendant No.2 including meetings on 27th May, 2010, 9th June, 2010, 10th June, 2010 and 1st July, 2010 on the said Land when time and again, requests were made by the Plaintiff to Defendants to comply with the obligations under the various documents executed between the parties. In order to further explore the possibility of performance in terms of the documents executed, the Plaintiff, with the concurrence of Defendant No.1, further had separate meetings with Defendant No.2 on 2nd July, 2010 and 27th July, 2010. Despite all these meetings, Defendant No.2 in fundamental breached of the Lease Deed, failed to hand over possession of the said Land to Defendant No.1 and, in complete breach of the documents executed, has continued to carry on the minding and stone crushing operations on the said Land. Defendant No.2 is continuing to enrich himself/profit from his mining and stone crushing activities even after having leased the said Land to defendant No.1 and having assigned certain rights under the Deed of Lease dated 7th April, 2010 to the Plaintiff. Defendant No.1 also in breach of the BPA and the Deed of Assignment has failed to take any effective steps to take over vacant and peaceful possession of the said Land for the purpose of setting up its minding operations so as to supply boulders to the Plaintiff and also for setting up the Industrial Establishment/stone crushing plaint of the Plaintiff and fencing the boundaries of the said Land in terms of Clause 3.5 of the BPA read with Cause 2.5.5 of the Lease Deed. 33. The Plaintiff was shocked to receive a letter dated 12th July, 2010 bearing reference No.003 from Defendant No.1 wherein it took a completely contradictory stand to the agreements executed. Defendant No.1, despite having full knowledge of the fact that the Plaintiff agreed to set up its Industrial Establishment on the said Land only after considering the availability of the mineral reserves in the entire Land (said Land and Additional Land) and the potential of uninterrupted supply of the 8 CHS4.11.sxw boulders by the Defendant No.1 over a period of time, stated that Defendant No.2 is insisting on continuing with his stone crushing activities for some more time (which was not defined) on a small portion of the said Land. Defendant No.1 added that the operations could be commenced on the remaining portion of the said Land. Further, the letter carried an indirect threat to the Plaintiff on the adverse consequences of taking any legal course. It inter-alia threatened the Plaintiff that (i) the process of litigation is time consuming and prone to delays (ii) Defendant No.2 was a prominent local businessman having his own extensive network of socially and politically influential contacts and a strong support system; (iii) enforcement of any Order against him might be a difficult proposition; adoption of legal proceedings might boomerang on Defendant No.1 and have serious consequences on Defendant No.1 and might generate adverse publicity which might affect the Plaintiff’s future business prospects in the area. The Plaintiff therefore, has reasons to believe that Defendant Nos. 1 and 2 have colluded with each other with malafide and mischievous intentions, in order to defeat the valuable rights of the Plaintiff. Every attempt was made to pressurise the Plaintiff. Hereto annexed and marked Exhibit “M” is a copy of the said letter dated 12th July, 2010.” 13 Mr. Palan then invites my attention to paragraph-36 and submits that the Plaintiff was aware that the stone crushing machine would be dismantled by Defendant No.1 after the Plaintiff started operation on the land. It was understood that the Defendant No.2, who was occupying a small portion of land will not interfere with the Plaintiff’s operation and would continue to keep his machinery on the said land as he was not confident of the plaintiff starting its operations. These are the statements, which 9 CHS4.11.sxw are made in paragraph-36 of the plaint. According to Shri Palan, they are attributable to Defendant No.2. Thus, allegations made are that the Plaintiff has not done everything in pursuance of the Boulder Purchase Agreement with the Defendant No.1. Shri Palan submits that if paragraphs-43 and 44 are perused, it is apparent that the Plaintiff has based its claim on the understanding between the Defendant no.1 and Defendant No.2 and was aware that unless entire land is handed over to the Plaintiff, it would not be able to commence the operations therefrom. From paragraph-45 of the plaint, it is apparent that this is not a case of specific performance of agreement of sale of immovable property, but to obtain benefits under a mining lease agreement between the owner of the land/property and its lassee and thereafter, the assignee of such lessee. Shri Palan submits that from paragraph-45 onwards, it is apparent that failure of Defendant No.1 to take possession of the land from Defendant No.2 and set up mining operations and supply boulders to the industrial establishments/stone crushing unit of the Plaintiff, is the principal and primary allegation. This is not a suit for specific performance as ordinarily understood. It is a suit for possession of the immovable property and when the land is not situated within the territorial jurisdiction of this Court, then, the allegations in paragraph-58 would not confer any jurisdiction on this court. This is essentially a suit for land and therefore, must 10 CHS4.11.sxw be filed in the court within whose jurisdiction the land is located and situated. Relying on the prayers Shri Palan submits that the suit is not within the jurisdiction of this Court. 14 In support of these submissions, Shri Palan relies on the following decisions. (1)AIR 1924 BOM 412 K.G.Shriman Nedan Rajah Kotakal vs. The Malabar Timbers Company Ltd. (2)AIR 1927 BOM 278 Hatimbhai Hassanally vs. Framroz Eduljee Dinshaw. (3)AIR 1931 Cal.651 Sewdayal Ramjeedas vs.Official Trustee of Bengal. (4)AIR 1933 BOM 398 Keshavlal Sakidas vs. Amarchand Somchand. (5)AIR (37) 1950 FC 83 M/s. Moolji Jaitha and Company vs. Khandesh Spinning and Weawing Mills Company Limited. (6)AIR 1955 Cal.402 Smt. Bimal Kumari vs. Ashok Mitra and ors. (7)AIR 1983 CAL 420 Tridandeeswami Bhakti Kusum Sraman Maharaj and ors. vs. Mayapore Shree Chaitanya Math. (8)AIR 1986 CAL 57 Bangal Glass and Silicate Works vs. Lalit Mohan Bijlani and ors. (9)AIR 2009 SC 628 Deepak Bajaj vs. State of Maharashtra. (10)Bombay Law Reporter Vol. LXXVI Page 278 11 CHS4.11.sxw Yeshbai Gangadhar Pathak vs. Ganpat Irappa Jangam 15 On the other hand, Shri Dhond, learned Counsel appearing on behalf of the Plaintiff submits that the suit is not a suit for land. The suit is seeking relief of specific performance, as is clear from the averments in the plaint. He submits that the plaint must be read in its entirety. It is not permissible to read part of it and omit the other. He submits that Shri Palan had read some sentences and statements from one paragraph and omitted the rest of it. He submits that such reading of the plaint will not enable the Court to decide as to whether the Suit is a Suit for land or suit for specific performance. Shri Dhond submits that the moment the suit plaint is read as a whole, it becomes apparent that the relief is of specific performance of agreements, namely, Boulder Purchase Agreement dated 8th April, 2010 and the Lease Deed dated 7th April, 2010 read with Deed of Assignment dated 8th April, 2010 and the undertakings dated 8th April, 2010. In these circumstances and when the Defendant No.1 has agreed and undertaken to transfer the mining lease and that the Plaintiff is entitled to seek transfer of the said land in its favour in terms of the Boulder Purchase Agreement to enable the Plaintiff to carry out mining operations, therefore, the Plaintiff is not seeking possession of the immovable 12 CHS4.11.sxw property, but seeking enforcement and performance of the agreement noted above. Such a suit is not a suit for land. Shri Dhond therefore, submits that the Chamber Summons be dismissed. He relies upon the decision of the Hon’ble Supreme Court reported in AIR 2001 SC page 3712(Adcon Electronics Pvt.Ltd. vs. Daulat & anr.) 16 For proper appreciation of the rival contentions, it would be necessary to proceed on this basis that the averments in the plaint are true and correct. The Court will have to decide this controversy only on the basis of the averments and statements in the plaint. The Court cannot take into account anything that may be stated in defence of the claim. 17 Applying this test, it is clear that the reference is made in the plaint to the Memorandum of Understanding dated 24th September, 2009 between the Plaintiff and the Defendant No.1. Under this Memorandum of Understanding, it is stated by the parties that the Defendant No.1 is having leasehold rights and possession of a piece of land, which is held by it under a Lease Agreement dated 21st May, 2009 entered into by it with the Defendant No.2. The Plaintiff is engaged in the business of 13 CHS4.11.sxw manufacture and/or sale of ready mix concrete and quarrying, processing, selling of hard rock/sand and gravel aggregate products. The first Defendant made an application to the Government of Maharashtra for grant of mining lease for the rough stones and road metals over the land processing in quarry area. The first defendant proposes to carry out mining operation over the quarry and supply the boulders to the Plaintiff on terms and conditions mutually agreed by the parties. The first defendant further proposes to obtain leasehold rights over a part of land of 10 acres adjacent to quarry area, which is known as additional area. It is in such circumstances, the MOU was executed, under which it was agreed that the first Defendant will carry out all types of exploratory operations under the main activity of “mining operation” in accordance with the mining plan agreed with the Plaintiff. Thereafter, supply of boulders will be done. 18 The plaint proceeds on the basis that the first defendant informed the Plaintiff on 20th October, 2009 that in terms of the MOU, permission/consent from the lessor permitting the Plaintiff to inspect and carry out certain tests has been obtained. 19 Thereafter, there is an Advance Agreement Against Expenses executed on 22nd December, 2009 between the Plaintiff 14 CHS4.11.sxw and the Defendant No.1. 20 Subsequently, both the MOUs and the Agreement for Advance are referred to in a letter dated 23rd December, 2009 addressed by the first Defendant to the Plaintiff. There is also reference to a pronote and subsequently, the first Defendant informed the Plaintiff that they have taken several steps towards fulfillment of various obligations in terms of the MOUs. The Board Resolution was forwarded alongwith this letter. The order from the Collector, Thane giving permission for conducting and carrying out mining operations for a period of five years was received and the said permission is dated 5th March, 2010. Thereafter, the parties executed the Boulder Purchase Agreement on 8th April, 2010. The term “parties” here means the Defendant No.1 and the Plaintiff. Subsequently, there is an agreement between the Defendant No.1 and Defendant No.2. The Defendant No.1 has relied upon the authority and power given to it by the Defendant No.2, as is clear from the MOU dated 24th September, 2009 and that is the recital in the agreement dated 8th April, 2010 between the Plaintiff and the first defendant. In such circumstances, the Plaintiff and the first Defendant have agreed to conduct mining operations and to supply boulders. There may be certain rights including setting up of industrial establishment, but it is clear that the agreement is to 15 CHS4.11.sxw supply boulders as per the terms of the Deed. It would enable the mining operations to be carried out and for the boulders to be supplied. That the amounts have been paid. Thus, what the Plaintiff is seeking is to enforce the obligations under the Boulder Supply Agreement. That is the cause of action in the plaint. Paragraph-1 to 22 to make reference to various agreements and MOUs. Paragraph-23 refers to clauses of Boulder Purchase Agreement. Paragraph 25 reinforces the said obligations and in paragraph-26, the representations of the first defendant about the consent of the second defendant having been obtained by the first defendant have been referred to. It is also clear from a perusal of the said paragraphs that the amounts have been paid as dismantling costs in terms of clause 5.2 of the Boulder Purchase Agreement. Thereafter, payment of security deposit in terms of clause 7 is referred to in paragraph-27. In paragraph-28 and 29, the Deed of Assignment together with the clauses has been extensively referred to. It is clear that the Plaintiff is stating that there are events of default set out in clause 12.2 of the Boulder Purchase Agreement. In paragraph-30 and 31 there is reference to the Lease Deed and the acts of the Defendant No.2 in writing letters to the Defendant No.1. These letters pertain to grant of permission in favour of the Plaintiff. From paragraph-32 the defendants’ failure to abide by the respective commitments and 16 CHS4.11.sxw the correspondence is referred to. There is also reference to the meetings. The paragraph-33 refers to the shifting stand of Defendant No.1 as taken in letter dated 12th July, 2010. Paragraph-34 makes reference to the reply of the Plaintiff dated 14th July, 2010. Paragraphs-35 and 36 make allegations against the Defendant No.1 for giving excuse for non-performance of the contractual obligations. The entire correspondence is therefore, between the Plaintiff and the Defendant No.1. That is how the further paragraphs also read. Mr. Palan would refer to the paragraphs-34, 43,44, 47 and 58 and the fact of the possession of the property being with the Defendant No.2. However, what the Plaintiff is highlighting is the failure to commence their project because of acts of the first defendant. It also refers to the undertakings of the defendant No.2 given in favour of the Plaintiff in letters dated 8th April, 2010 and that is why the Plaintiff asserts that the Defendant Nos.1 and 2 are bound to carry out their respective obligations. The acts of both are enlisted in all these paragraphs and the further paragraphs. That is how the Plaintiff asserts that they are always ready and willing to perform essential terms of the contract, but the Defendant No.1 has committed willful breach of the obligations. The Defendant No.1 has failed to take possession of the land from the Defendant No.2. He has merely given an excuse that the Defendant No.2 is occupying small plot of land and 17 CHS4.11.sxw refusing to hand over vacant possession and that is the reason why the performance of the obligations of Defendant No.2 is delayed. In such circumstances, there is substance in the contention of Mr. Dhond that the suit is not a suit for land. 21 The Judgment of the Hon’ble Supreme Court clearly considers and decides the question as to what is meant by a “suit for land”. Mr. Palan would refer to several decisions, all of which have been considered by the Supreme Court. These decisions are rendered by this Court and Calcutta High Court. However, the Supreme Court has concluded that a suit to be for land is one, in which the relief claimed relates to title to or delivery of possession of land or immovable property. Whether the suit is a suit for land or not has to be determined from 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 land or immovable property, it will be a “suit for land”. 22 In a suit for specific performance of contract for sale of immovable property containing stipulation that on execution of sale deed the possession of the immovable property will be handed over to the purchaser, it is implied that delivery of possession of 18 CHS4.11.sxw the immovable property is a part of the decree of specific performance of the contract. 23 The Supreme Court has also held that in a suit seeking specific performance of such contract, no court can grant relief of possession of land or other immovable property, which is a subject matter of the agreement for sale and in regard to which specific performance is claimed, unless the possession of the immovable property is specifically prayed for. 24 Like in the Supreme Court decision, even in the present case when the allegations and averments in the plaint are considered, so also the reliefs, the plaintiff has not prayed for any adjudication with regard to the title of land or immovable property, nor has it claimed any relief of delivery of possession. 25 The Objection of Shri Palan is that clever drafting of