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1990 Supreme(Del) 300

High Court Of Delhi
PRAKASH KAUR - Appellant
Versus
EVEREST CONSTRUCTION COMPANY - Respondent
Suit 82 of 1989
Decided On : 09/18/1990

An agreement to sell immovable property does not create any interest in the property, and therefore, a suit for declaration of existence of such an agreement is not barred by Section 16 (d) of the Civil Procedure Code.

Headnote:

JURISDICTION - AGREEMENT TO SELL IMMOVABLE PROPERTY - SECTION 54, TRANSFER OF PROPERTY ACT - SECTION 16 (D), CIVIL PROCEDURE CODE - SECTION 34, SPECIFIC RELIEF ACT - ORDER 2 RULE 2, CIVIL PROCEDURE CODE - ORDER 7 RULE 11 (A), CIVIL PROCEDURE CODE - SECTION 20, CIVIL PROCEDURE CODE - Whether the court has jurisdiction to entertain a suit for declaration of existence of an agreement to sell immovable property executed at Bombay, when the immovable property is also situated at Bombay.

Fact of the Case:

Plaintiff filed a suit for declaration of existence of an agreement to sell immovable property executed at Bombay, where the immovable property was also situated. The defendant objected to the jurisdiction of the court at Delhi, arguing that the court lacked jurisdiction under Section 16 (d) of the Civil Procedure Code.

Finding of the Court:

The court held that it had jurisdiction to entertain the suit. The court relied on Section 54 of the Transfer of Property Act, which states that an agreement to sell immovable property does not create any interest in the property. Therefore, Section 16 (d) of the Civil Procedure Code, which bars suits relating to immovable property by courts other than the one in which the immovable property is situated, did not apply.

Issues: 1. Whether Section 16 (d) of the Civil Procedure Code barred the court's jurisdiction to entertain the suit. 2. Whether Section 34 of the Specific Relief Act barred the suit. 3. Whether Order 2 Rule 2 and Order 7 Rule 11 (a) of the Civil Procedure Code barred the suit. 4. Whether Section 20 of the Civil Procedure Code barred the court's jurisdiction to entertain the suit.

Ratio Decidendi: 1. Section 54 of the Transfer of Property Act states that an agreement to sell immovable property does not create any interest in the property. Therefore, Section 16 (d) of the Civil Procedure Code, which bars suits relating to immovable property by courts other than the one in which the immovable property is situated, did not apply. 2. The first part of Section 34 of the Specific Relief Act allows a person to institute a suit for a declaration of status or right, even if they are able to seek further relief. The proviso to Section 34 does not bar a suit for a mere declaration of title if the plaintiff has deliberately chosen not to ask for any further relief. 3. Order 2 Rule 2 and Order 7 Rule 11 (a) of the Civil Procedure Code were not a bar to the suit because the plaint disclosed a cause of action which could be adjudicated upon by the court. 4. Section 20 of the Civil Procedure Code, which requires a suit to be instituted in a court within whose local limits the cause of action arises, did not bar the court's jurisdiction because part of the cause of action arose in Delhi when the defendant denied the agreement and put that denial into the hands of the Post Office, which denial was received by the plaintiff in Delhi.

Final Decision: The court held that it had jurisdiction to entertain the suit and decided the preliminary objection against the defendant and in favor of the plaintiff.

Mahinder Narain

( 1 ) BY this order, I propose to deal with the preliminary objection which has been taken by the defendant that this Court has no jurisdiction to entertain the suit.

( 2 ) THE plaintiff asserts that an agreement was entered into between the plaintiff and the defendant. This agreement was enteied into at Bombay on 13 10. 1981. This postulated that defendant will sell a flat in a proposed building which was to be construsted at Prabha Devi, Bombay. It is not disputed between the parties that on 13. 10. 1981 when the agreement was entered into the building was not in existence. At the time of entering into that agreement, plaintiff had paid a sum of Rs. 12,875. 00 to the defendant.

( 3 ) THE pff. asserts that the deft. is denying the existence of the aforesaid agreement, and that the deft. is refusing to specifically perform that agreement, illegally, and the pff. seeks a declaration only that the agreement dated 13. 10. 1981 continues to exist.

( 4 ) THE preliminary objection which has been taken is bscause it is stated that the agreement bstween the parties was executed at Bombay ; that the immovable property which was proposed to be constructed, was to be constructed at Bombay, and for both the aforesaid reasons, the courts at Delhi have no jurisdiction to entertain the suit.

( 5 ) IN order to deal with the objection relating to jurisdiction, Counsel for pff. has cited a judgment by B. N. Kirpal, J. in Prakash Kaur vs. K. G. Ringshia, (LA. No. 7322 of 1984 in Suit No. 1979 of 1984 ). This judgment need not be dealt with in view of the contentions raised by the counsel for the pff. before me, which were not raised before Kirpal, J. Before me, he has contended that in view of S. 54, Transfer of Property Act, inasmuch as the agreement between the parties dated 13. 10. 1981 is an agreement covered by that section, it creates no interest in any immovable property, and, therefore, S. 16 (d) of the Civil Procedure Code. does not come in operation, and does not bar jurisdiction of this Court.

( 6 ) SECTION 54 of T. P. A. is :

--A contract for the sale of immovable property is a contract that a sale of such property shall take place on terms settled between the parties. It does not, of itself, create any interest in or charge on such property.

( 7 ) MR. P. C. Khanna has also cited 1967 SCR 293= 1967 SC 744 (Ram Baran Prasad vs. Ram Mohit) and AIR 1980 SC 1334 (Bai Dosabai vs. Mathuradas ). In both these cases, the Supreme Court has considered S. 54, T. P. A. , and has reiterated that what the section states, namely, that an agreement to sell does not create any interest in any immovable property.

( 8 ) IN this view of the matter, the plea taken by the deft. that S. 16 (d), Civil Procedure Code. , which bars the cognizance of suits relating to immovable property by courts other than the one in which the immovable property situates, is of no force, inasmuch as the words in S. 16 (d), C P. C. and the words in S. 54, T. P. A. are "interest" in immovable property. In my view, same words being used in two different statutes, must be given same meaning, and for this reason, the contention of the deft. that this Court has no jurisdiction on account of S. 16 (d), Civil Procedure Code. , must be rejected.

( 9 ) IT is contended by Mr. P. B. Aggarwal, learned counsel for the deft. that considering the provisions of S. 34 of the Specific Relief Act, this suit is not maintainable. Sec. 34 of Specific Relief Act reads :-

"34. Discretion of court as to declaration of status or right. Any person entitled to any legal character, or to any right as to any property, may institute a suit against any person denying or interested to deny, his title to such character or right, and the court may in its discretion make therein a declaration that he is so entitled, and the plaintiff need not in such suit ask for any further relief: Provided that no court shall make any such declaration where the plaintiff, being able to seek further relief than a m














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