JURISDICTION - Section 17 of SARFAESI Act - Private Treaty Agreement - specific performance of an agreement to sell - immovable property was situate in New Mumbai, Maharashtra. - Clause 9(e)(viii) of the Agreements :"Disputes, if any, shall be subject to the jurisdiction of Mumbai Court/Tribunals only" - Hence Calcutta High court has no jurisdiction - Mumbai court only has got jurisdiction - 2015 S.C. MSK LAW REPORTS
Whether the suit for specific performance filed by Excel was a "suit for
Whether the Private Treaty Agreement conferred an exclusive jurisdiction on
the Court of Mumbai and if so, Whether or not ARCIL waived this clause by
participating in impleadment application without protest?
Whether the jurisdiction of civil Court is barred in the present case by
virtue of Section 17 of SARFAESI Act?
The suit was effectively a "suit for land" and the immovable property was
situate in New Mumbai, Maharashtra.
Therefore, as per clause 12 of Letters
Patent the suit should be filed in a Court having territorial jurisdiction
over the immovable property.
That the alleged Private Treaty Agreement between ARCIL and Excel was
entered into pursuant to Section 13(4) of the SARFAESI Act and even the
sale was to be conducted by execution of sale certificate as provided in
Security Interest (Enforcement) Rules, 2002 (hereinafter referred to as
Therefore, the jurisdiction of civil court is excluded.
That the Private Treaty Agreement provided that Mumbai Court would have
being a suit for land, this Court has laid down a clear principle in Adcon
Electronics Pvt. Ltd. vs. Daulat Ram and Anr., (2001) 7 SCC 698, that a
suit for specific performance simplicitor without a prayer for delivery of
possession is not a suit for land as Section 22 of the Specific Relief Act,
1963 categorically bars any Court to grant such relief of possession in a
suit for specific performance unless specifically sought.
In view of this
judgment, in the present case, the only question for our determination in
the plaint is whether a prayer for delivery of possession is sought or not
? The prayer sought is issuance of sale certificate which is provided in
Appendix V to the Rules under SARFAESI Act.
The sale certificate reads as
"Whereas the undersigned being the authorised officer of the
............................ (name of the institution) under the
Securitization and Reconstruction of Financial Assets and Enforcement of
Security Interest Act, 2002 and in exercise of the powers conferred under
Section 13 read with Rule 12 of the Security Interest Enforcement Rules,
2002 sold on behalf of the ........................... (name of the
secured creditor/institution) in favour of the ............................
(purchaser), the immoveable property shown in the schedule below secured in
favour of the ............................ (name of the secured creditor)
by ........................ (the names of the borrowers) towards the
financial facility ............................. (description) offered by
............................. (secured creditor). The undersigned
acknowledge the receipt of the sale price in full and handed over the
delivery and possession of the scheduled property. The sale of the
scheduled property was made free from all encumbrances known to the secured
creditor listed below on deposit of the money demanded by the undersigned."
It may be noted that the sale certificate sought under the prayer requires
the delivery of possession of the suit property. Thus, we find that the
prayer for delivery of possession was an implicit one in the present case.
The prayer as sought in the plaint could not have been granted without the
delivery of possession of the suit property as the sale certificate itself
contemplates the delivery of the immovable property.
Thus, in view of this
we find that the Adcon Electronics would not apply as there was a prayer
for delivery of possession in the present case. Therefore, we hold that the
present suit was indeed a suit for land.
Now, we shall consider as to which court has the jurisdiction to entertain
and try the suit.
Clause 5 of the Agreement entered into between the
parties reads as under:
"The payment/cheque shall be drawn and made payable in Mumbai. The
jurisdiction shall be Courts of Mumbai."
Clause 9(e)(viii) of the Agreements further reads as follows:
"Disputes, if any, shall be subject to the jurisdiction of Mumbai
It is clear from these two clauses that the intention of the parties to the
Agreement was to restrict limitation to the forums/courts of Mumbai only.
This Court in Swastik Gases P. Ltd. vs. Indian Oil Corporation Ltd., (2013)
9 SCC 32, has held as under:
"The very existence of a jurisdiction clause in an agreement makes the
intention of the parties to an agreement quite clear and it is not
advisable to read such a clause in the agreement like a statute. In the
present case, only the Courts in Kolkata had jurisdiction to entertain the
disputes between the parties."
Therefore, we are of the opinion that the Courts of Mumbai were granted
exclusive jurisdiction as per the Agreement and we find no reason to create
any exception to the intention of the parties.
In view of the above-mentioned two findings that the present suit is a suit
for land, and that the parties had granted exclusive jurisdiction to the
Court of Mumbai, the jurisdiction of the Court at Calcutta is clearly
ousted as per law. Thus, from the above conclusion it appears that the
plaint will have to be returned by the Calcutta High Court as it does not
have the jurisdiction.
Therefore, we are of the view that the question of
jurisdiction of the Debt Recovery Tribunal need not be answered.
Consequently, this appeal is dismissed.
The parties may proceed to take any
appropriate measure in an appropriate forum as provided in law to enforce
their rights. - 2015 S.C. MSK LAWREPORTS