Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2020 Supreme(SC) 495

ROHINTON FALI NARIMAN, NAVIN SINHA, INDIRA BANERJEE
Deccan Paper Mills Co. Ltd. – Appellant
Versus
Regency Mahavir Properties – Respondent

Advocates Appeared:
For the Appellant(s) :Meena Doshi, Prabha Swami, Nikhil Swami, Divya Swami, Advocates
For the Respondent(s):Vinay Navare, Abha R. Sharma, Jasmine Damkewala, Sriniwas Joshi, Vaishali Sharma, Advocates

Judgement Key Points

Key Points: - The judgment discusses that when there is an arbitration clause, disputes may be referred to arbitration if conditions of Section 8 are met. (!) (!) (!) - It addresses that an action under Section 31(1) is an in personam action between parties, and cancellation of a registered instrument does not automatically become in rem; the instrument’s cancellation is between the parties and their privies. (!) (!) (!) (!) - It clarifies that Section 39 provides preventive relief to cancel a document likely to affect the title, limited to instruments likely to affect the plaintiff’s title, not a stranger’s title, and is not a universal in rem remedy. (!) (!) (!)

How to refer disputes to arbitration when there is an arbitration clause and the subject matter falls within arbitration under the Contract Act?

What is the effect of Section 31 of the Specific Relief Act on cancellation of instruments and whether such actions are in rem or in personam?

What are the limitations on exercising Section 39 regarding cancellation of instruments and when such relief can be granted?

JUDGMENT :

R.F. NARIMAN, J.

1. The hearing in this appeal followed in the wake of the hearing in Civil Appeal Nos. 5145 of 2016, 5158 of 2016 and 9820 of 2016. The brief facts necessary to appreciate the controversy in this appeal are as follows:

(i) By an agreement dated 22.07.2004 between the Appellant, Deccan Paper Mills Co. Ltd. [hereinafter referred to as “Deccan”] and the Respondent No. 2 company, M/s Ashray Premises Pvt. Ltd. [hereinafter referred to as “Ashray”] Deccan, being the owner of approximately 80,200 sq. meters of land bearing Survey Nos. 96B, 96C and 96D at village Mundhwa, District Pune, decided to develop a portion of the said land, i.e. 32,659 sq. meters. It is not necessary to enter into the nitty-gritty of the said agreement. However, it is enough to note that this agreement contained clause 7(m), in which it is stated:

“7. The Owner and the Developer hereto covenant that upon the execution of these presents:

xxx xxx xxx

(m) The Owner shall have no objection if at any stage during the continuance of this agreement the Developer assigns, delegates the rights, under this agreement or the Power of Attorney/writings executed in furtherance hereof to any other person,

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2020 Supreme(SC) 495

ROHINTON FALI NARIMAN, NAVIN SINHA, INDIRA BANERJEEDeccan Paper Mills Co. Ltd. – AppellantVersusRegency Mahavir Properties – Respondent

How to refer disputes to arbitration when there is an arbitration clause and the subject matter falls within arbitration under the Contract Act?

What is the effect of Section 31 of the Specific Relief Act on cancellation of instruments and whether such actions are in rem or in personam?

What are the limitations on exercising Section 39 regarding cancellation of instruments and when such relief can be granted?

Cases Referred (22)

ROHINTON FALI NARIMAN, NAVIN SINHA, INDIRA BANERJEE
Deccan Paper Mills Co. Ltd. – Appellant
Versus
Regency Mahavir Properties – Respondent