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1998 Supreme(Del) 234

High Court Of Delhi
SHILA AGARWAL - Appellant
Versus
INFOCOM DIGITAL SYSTEMS LIMITED - Respondent
Interim Application 11743 of 1996
Decided On : 03/25/1998

Advocates Appeared:
ANIL SAPRA, D.K.GARG

A suit for specific performance of an agreement to sell relating to land outside the court's territorial jurisdiction is not maintainable under Section 16(d) of the Code of Civil Procedure.

Headnote:

JURISDICTION - SUIT FOR SPECIFIC PERFORMANCE - SECTION 16 CPC - SUBJECT PROPERTY SITUATED OUTSIDE COURT'S JURISDICTION - SUIT NOT MAINTAINABLE - COURT LACKS TERRITORIAL JURISDICTION.

Fact of the Case:

Plaintiff filed a suit for specific performance of an agreement to sell an industrial plot in Gurgaon, Haryana, against the defendant company. The defendant contended that the court lacked territorial jurisdiction as the property was situated outside its jurisdiction.

Finding of the Court:

The court held that the suit fell within the ambit of Section 16(d) of the Code of Civil Procedure and the proviso thereto had no application on the facts of the present case. Therefore, the court lacked territorial jurisdiction to try the suit.

Issues: Whether the court had territorial jurisdiction to try the suit for specific performance of an agreement to sell relating to land outside its territorial jurisdiction.

Ratio Decidendi: The court held that the suit was not maintainable as it fell within the ambit of Section 16(d) of the Code of Civil Procedure and the proviso thereto had no application on the facts of the present case. The suit was essentially one for possession and the decree for specific performance would be one for possession as well. There was a contest regarding the payment of consideration, whether the agreement to sell was executed by a competent person, and whether it could be sold or its possession be handed over to the plaintiff without prior approval.

Final Decision: The court directed that the plaint be returned to the plaintiff for presenting it to the Court of competent jurisdiction.

D. K. Jain, J.

( 1 ) THIS is defendant s application under Section 16 read with Section 151 of the Code of Civil Procedure (for short the CPC) for rejection of the plaint/dismissal of suit on the ground that this Court does not have territorial jurisdiction to try the suit.

( 2 ) THE plaintiff has filed the present suit for specific porformance, mandatory and permanent injunction, praying for a decree for specific performance of the agreement to sell an industrial plot, bearing No. 52, Sector-34, Gurgaon Technology Park, Gurgaon (Haryana), for which the entire sale consideration stands paid. Alternatively, if the decree for spedfic performance cannot be granted, the plaintiff has prayed for a decree for a sum of Rs. 20 lacs alongwith interest @ 30% per annum or market value of the said plot, whichever is higher, alongwith future interest. She has also prayed for permanent injunction restraining the defendant from alienating, mortgaging, selling or transferring the said. property to anybody else. Plaintiff s case is that in the last week of September, 1995, the defendant, a public limited company, through its Director Mr. S. L. Rastogi, known to the plaintiff, approached her for advancing of certain loan to the company; the plaintiff was induced to give a term loan, on interest@ 30% p. a. , of a total sum of Rs. 20 lacs by means of various cheques, issued on 30th September, 1995; the terms of the transaction were not reduced into writing because of the trust and confidence and the relationship of the plaintiff with defendant s Director, Mr. S. L. Rastogi, but despite the mutual agreement between the parties, whereby the defendant had agreed to pay the interest on or before 5th of every month, the defendant defaulted in making the said payment of interest and as the defendant made two consecutive defaults in payment of interest, the plaintiff vide her letter dated 2nd January, 1996 requested the defendant to refund the entire prindpal amount of Rs. 20 lacs alongwith interest, upon which the said S. L. Rastogi approached the plaintiff with a request to wait for some period for refund of the amount as the Company was facing financial problems; on her great insistence for refund of her money, the defendant came up with a proposal to sell the aforenoted industrial plot belonging to the Company against the said amount of Rs. 20 lacs; the proposal was accepted by the plaintiff; the terms and conditions therefore were mutually settled and an agreement to sell was signed between the parties on 15th January, 1996, whereby the defendant sold the said plot for a total consideration of Rs. 20 lacs which amount stood already paid and further handed over the actual vacant and physical possession of the said plot to the plaintiff on the same date; the only copy of the agreement to sell, which was signed by the plaintiff and Mahinder Pratap, Managing Director of the defendant was retained by the plaintiff; on 16th January, 1996, S. L. Rastogi approached the plaintiff and requested her to hand over the agreement to sell since the same was required for obtaining the necessary permissions under the Income Tax Act etc. ; the plaintiff, bona fide and in good faith, handed over the original agreement to sell to S. L. Rastogi, whereafter the defendant has been adopting dilly-dallying tactics. It is claimed that though the plaintiff has been ready and willing to perform her part of the contract, the defendant has totally failed and neglected to obtain the permission from Income Tax and other authorities as per the terms and conditions contained in the agreement to sell dated 15th January, 1996 and is now threatening to mortgage the said plot of land with the Bank in order to jeopardise the rights of the plaintiff in the plot and in case the defendant succeeds, the plaintiff would suffer irreparable loss and injury, which cannot be compensated in terms of money. Hence the present suit.

( 3 ) IN the written statement filed on behalf of the defendant Comp









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