Kulwant Kaur vs Mrs. Amrinder Kaur and Another

Manmohan Singh, J.—This order shall dispose of the application filed by the defendant No. 1 under Order VII Rule 11 of the Code of Civil Procedure, 1908 (hereinafter referred to as ''CPC'') for rejection of the plaint.

The suit has been filed by the plaintiff for specific performance and permanent injunction on 21st January, 2008. The plaintiffs case is based on an agreement dated 3rd September, 2002 executed between the plaintiff and the applicant/defendant No. 1 in Albuquerque, New Mexico, USA.

It is contended by the defendant No. 1 that the aforesaid agreement was executed in USA and the signatories to the agreement, i.e. the plaintiff and defendant No. 1 are also residents of USA. The business conducted under the name and title "Residential Resorts Inc." was also incorporated in USA.

The defendant No. 1 referred to Clause 3 of the agreement wherein it is provided that all the properties except the flat located at M-401, Green Valley Co-operative Group Housing Society, Plot No. 18, Sector-22, Dwarka, Delhi (hereinafter referred to as the ''suit property'') are situated at USA. He also relied upon Clause 9 of the said agreement wherein it is provided that the same shall be governed by the law of the State of New Mexico. It is alleged that the dispute leading to the present suit has arisen from the subject agreement which was executed in the State of New Mexico, USA thus this Court has no territorial jurisdiction to entertain the suit as no cause of action has arisen in India.

The defendant No. 1 also relied upon Clause 7 of the agreement, which lays down that any action on the suit property would be subject to execution of transfer documents to be prepared by Brig. Jasbir Singh. It is, therefore, the basic contention of the defendant No. 1 that the rights and liabilities of parties as envisaged in the agreement were subject to interpretation and determination in accordance with the laws of the State of New Mexico, USA and this Court is not empowered to adjudicate on the terms and conditions of the agreement.

The defendant No. 1 also submits that he had filed an application under Order 7 Rule 11 read with Section 151 CPC for rejection of the plaint in another suit being CS(OS) No. 223/2007 titled as ''Kulwant Kaur v. Arminder Kaur and Anr.'' in the Court of Senior Civil Judge, Tis Hazari Courts, Delhi for perpetual/mandatory injunction under Sections 37, 38 & 39 of the Specific Relief Act, 1963 in respect of the same suit property on the ground that the plaint did not disclose any cause of action having arisen in India (Delhi) in favour of the plaintiff and against the defendant. The said application under Order 7 Rule 11 was heard and disposed of on 6th February, 2008 by the Learned Single Judge rejecting the plaintiff''s suit on the ground that the suit was not maintainable for want of cause of action in India.

It is averred in the application that the plaintiff in the present suit obtained an ex-parte ad-interim injunction order dated 22nd January, 2008 in her favour without disclosing the pendency of the above said suit. The defendant No. 1 submits that the prayer made in the present suit is the same which was also the subject matter of the earlier suit No. 223/2007. It is stated that the plaintiff has not challenged the above said order dated 6th February, 2008, which has therefore attained finality and therefore, the parties are bound by the same.

In the reply filed by the plaintiff, it is asserted that in the agreement/family settlement, it was decided that the documents relating to the suit property be prepared and signed in USA, but the attorneys in USA vide their letter dated 3rd September, 2002 made it clear to the parties that transfer of real estate in India had to be done according to the applicable laws in India. The plaintiff relied upon the reply dated 18th August, 2002 of the attorney of defendant No. 1 which shows her intentions to oust the jurisdiction of the New Mexico Court.

It is contended that parties even by consent cannot confer jurisdiction on a Court which otherwise does not have jurisdiction. The plaintiff submits that the present suit is confined to para 7 of the Agreement/Family Settlement and from the documents filed by the parties, it is apparent that the documents relating to transfer of the suit property were to be prepared and executed by Brig. Jasbir Singh in India, as per the applicable laws on behalf of defendant No. 1. The plaintiff has allegedly performed her part of the contract and thus filed the present suit for specific performance of the contract of the property which is situated within the jurisdiction of this Court.

It is further submitted that since the property detailed in para 7 of the agreement dated 3rd September, 2002 is situated in Delhi and the flat in question is governed by defendant No. 2 which has its office in Delhi and the dispute/cause of action between the plaintiff and the defendant No. 1 arose in Delhi when Brig. Jasbir Singh refused to act in terms of the agreement dated 3rd September, 2002, this Court has the jurisdiction to decide upon and enforce the agreement in view of Section 16 and 20 of the Civil Procedure Code.

Learned Counsel for the plaintiff submits that the plaintiff has disclosed facts as regards the suit for injunction filed before the learned Civil Judge in the plaint and had also provided a copy of the status quo orders passed in the present suit to the learned Civil Judge but the learned Civil Judge proceeded to pass orders on the application filed by the defendant No. 1 under Order 7 Rule 11, thereby rejecting the plaintiff''s suit. The plaintiff urged that the order passed by the learned Civil Judge is not binding on this Court as the learned Civil Judge proceeded to decide the application filed by the defendant No. 1, being aware at that time of the orders dated 22nd January, 2008 passed by this Court. The plaintiff submits that she has challenged the said order in a Court of competent jurisdiction.

The defendant No. 1 reiterated that the plaintiff had not only contested the defendant''s application under Order 7 Rule 11 in Suit No. 223/2007, but had also obtained an ex-parte ad-interim injunction order dated 22nd January, 2008 granted by this Court directing the defendant to maintain status quo in respect of the suit property till the next date of hearing.

Learned Counsel for the defendant No. 1 states that defendant No. 1 has no knowledge about any challenge to the order passed by the learned Civil Judge as no notice of any such challenge has been received by the defendant No. 1.

From the bare reading of Clause 9 of the agreement entered into between the parties on 3rd September, 2002, it is clear that the said agreement was intended by the parties to be governed by the law of the State of Mexico. Clause 7 of the agreement stipulates that the suit property will be transferred to the plaintiff by the defendant and the necessary documents transferring her right, title and interest shall be prepared by Brig. Jasbir Singh.

The defendant relied upon the case of AIR 2002 2402 (SC) , to contend that where two or more courts have jurisdiction to try a suit, parties can by an agreement choose one of such courts for adjudication of their disputes. It was observed in this case that if there is such an express agreement, the suit filed in a different court would be invalid. He further relied upon Kitec Industries (India) Ltd. v. Unicor Gmbh Rahn Plastmaschinen and Anr. reported as 78 (1999) DLT 38, wherein this Court has laid down that the parties under the contract have freedom to choose the law, venue and mode of resolving their disputes. It was held that the cause of action contemplated under Order 7 Rule 11 of the Code will necessarily be the cause of action or the ground giving rise to the plaintiff''s right which is enforceable according to Indian Laws by Indian Courts in India and where the Court is not competent to adjudicate, no suit will lie before it.

In the case of Harshad Chiman Lal Modi Vs. DLF Universal and Another, , it has been held by the Apex Court that where the case relates to specific performance of an agreement of immovable property and for possession of plot, it will be covered by the main part of Section 16 of CPC. It was made clear that neither the proviso to Section 16 would get attracted nor Section 20 would apply as Section 16 deals with such cases and jurisdiction of competent court where such suits can be instituted. Under the said provision, a suit can be instituted where the property is situated. No court other than the court where the property is situated can entertain such a suit.

The case of Laxman Prasad Vs. Prodigy Electronics Ltd. and Another, has been relied upon to support his contention that where the terms and conditions of the contract are agreed to be interpreted in accordance with some foreign court, such stipulation does not oust the jurisdiction of Indian courts within whose territorial jurisdiction the cause of action had wholly or partly arisen. It was observed by the Supreme Court that there is no doubt that the suit could have been instituted in a foreign court as well but that would not take away the jurisdiction of the Indian court where a part of the cause of action has arisen.

In the instant case, since the agreement relates to the property situated at Dwarka, Delhi, this Court has the jurisdiction to try the present suit. The Supreme Court has made it clear that where the case relates to specific performance of the contract and possession of immovable property, a suit will be instituted at the place where the property is situated u/s 16 of CPC. The power to reject the plaint has to be exercised cautiously and sparingly and the benefit of doubt must go to the plaintiff. It has been held in the case of M/s. Patel Roadways Limited, Bombay Vs. M/s. Prasad Trading Company, that it is not open to the parties to confer jurisdiction by agreement on any court which did not otherwise possess the same u/s 20 of Code of Civil Procedure.

No doubt the parties by agreement may choose the court for adjudication of their disputes but that will not oust the jurisdiction of the court where the property is situated. Section 20 of the Code is a residuary provision which covers only those cases which do not fall within the limitation of Sections 15 - 19 of the Code of Civil Procedure. The cause of action has also arisen in Delhi as the parties failed to transfer the property situated at Delhi and the suit clearly relates to specific performance of the agreement for transfer of the property. Prima facie, therefore, the suit appears to be maintainable and the benefit goes to the plaintiff.

In my view, therefore, although the court at New Mexico, USA has the jurisdiction to deal with the present dispute, it cannot be said that the jurisdiction of this Court is barred. No case has been made out by the defendant No. 1 for rejection of the suit. In the result, the application of the defendant No. 1 is dismissed.

CS(OS) No. 114/2008

List on 15th January, 2010 before Joint Registrar for admission/denial of documents.