Absence of Possession Claim Does Not Alter Jurisdiction of Court in Specific Performance Suits for Immovable Property: Supreme Court

Supreme Court of India upheld the Delhi High Court's decision to return a plaint seeking specific performance and permanent injunction concerning immovable property located in Gurugram. The Court ruled that the Delhi High Court lacks territorial jurisdiction under Section 16 of the Code of Civil Procedure, 1908 (CPC), as the suit relates to property situated outside its jurisdiction, even if possession is not expressly claimed in the plaint. The judgment reinforces the principle that courts where the immovable property is situated have exclusive jurisdiction over such matters.

Background of the Case

The petitioner, Rohit Kochhar, filed a suit before the Delhi High Court for specific performance of a contract dated January 20, 2004, and permanent injunction concerning commercial property located in Gurugram. The dispute arose from a transaction between the petitioner and the respondents, Vipul Infrastructure Developers Ltd., involving 10,747 sq. ft. of space in a commercial complex.

The petitioner alleged breach of contract by the respondents and sought specific performance of the agreement without explicitly including a claim for possession of the property. The respondents objected to the jurisdiction of the Delhi High Court, arguing that the suit property was situated in Gurugram, and any relief involving registration of the sale deed or possession must be sought in the courts at Gurugram.

Key Legal Issues

1. Does the Delhi High Court have jurisdiction to entertain a suit for specific performance of a contract involving immovable property situated in Gurugram under Section 16 of the CPC?

2. Does the absence of an explicit claim for possession of the immovable property alter the jurisdictional requirements?

3. What is the interplay between Section 16 of the CPC, Section 22 of the Specific Relief Act, 1963, and Section 55(1)(f) of the Transfer of Property Act, 1882?

Supreme Court’s Observations and Findings

1. Exclusive Territorial Jurisdiction of Courts Where Property is Situated (Section 16, CPC)

The Court emphasized the principle under Section 16 of the CPC that suits involving immovable property, such as those for specific performance, must ordinarily be filed in the courts within whose jurisdiction the property is located. It observed:

“Section 16 CPC recognizes a well-established principle that actions against res or property should be brought in the forum where such res is situate. A court has no jurisdiction over a dispute in which it cannot give an effective judgment.” (Para 16)

While the proviso to Section 16 permits suits to be entertained where relief can be obtained entirely through personal obedience of the defendant, the Court held that this proviso was inapplicable in the present case. It stated:

“The relief sought cannot be entirely granted through personal obedience of the defendants, as the sale deed would require execution and registration in Gurugram.” (Para 20)

2. Implicit Relief for Possession in Specific Performance Suits

The Court observed that possession of the property is an inherent part of specific performance unless explicitly excluded. Relying on Section 55(1)(f) of the Transfer of Property Act and the judgment in Babu Lal v. Hazari Lal Kishori Lal (1982), it held:

“Even if possession is not expressly prayed for, transfer of possession is implicit in the relief of specific performance of a contract involving immovable property.” (Para 23)

The Court clarified that registration of the sale deed, which completes the transfer of ownership, would necessarily have to occur in Gurugram, where the property is located. Consequently, the jurisdiction of the Gurugram court is essential.

3. Distinction Between Adcon Electronics and Babu Lal Cases

The petitioner relied on Adcon Electronics Pvt. Ltd. v. Daulat & Ors. (2001), where the Supreme Court held that a suit for specific performance without a claim for possession is not a “suit for land.” The Court distinguished the present case, observing:

“The decision in Adcon Electronics does not apply, as it was rendered in the context of Clause 12 of the Letters Patent and dealt with the expression ‘suit for land.’ The present case involves jurisdiction under Section 16 of the CPC, which specifically governs suits for immovable property.” (Para 28)

The Court further clarified that Babu Lal governs the interplay of Section 22 of the Specific Relief Act and Section 55 of the Transfer of Property Act, which recognize possession as integral to specific performance.

4. Prevention of Procedural Abuse

The Court warned against misuse of procedural laws, where plaintiffs might initially omit possession claims to invoke the jurisdiction of a particular court and later amend the plaint. It stated:

“An interpretation allowing such misuse would enable a plaintiff to file a suit for specific performance simpliciter in one jurisdiction and later amend the plaint to seek possession in another, resulting in procedural complications.” (Para 34)

5. Registration of Sale Deed and Execution Outside Jurisdiction

The Court noted that even if the Delhi High Court decreed specific performance, the registration of the sale deed would have to occur in Gurugram, making it impossible to enforce the decree without the involvement of the Gurugram courts. This further supported the lack of jurisdiction of the Delhi High Court.

Decision of the Supreme Court

1. The Supreme Court dismissed the Special Leave Petitions filed by the petitioner and upheld the decision of the Delhi High Court to return the plaint for presentation before the appropriate court in Gurugram.

2. The Court ruled that the Delhi High Court lacks jurisdiction to entertain the suit under Section 16 of the CPC, as the suit property is located in Gurugram and the relief sought cannot be granted entirely through personal obedience.

3. The interim relief granted by the Supreme Court earlier was vacated.

4. The petitioner was directed to take appropriate steps to present the plaint before the competent court in Gurugram for adjudication on merits.

Key Takeaways from the Judgment

1. Section 16 CPC Strictly Governs Jurisdiction Over Immovable Property: The location of the property determines the court's jurisdiction, and the proviso to Section 16 applies only in limited circumstances where relief can be entirely obtained through personal obedience of the defendant.

2. Possession Implicit in Specific Performance: Absence of a specific prayer for possession does not change the jurisdictional requirements, as possession is inherently tied to specific performance under Section 55(1)(f) of the Transfer of Property Act.

3. Adcon Electronics Not Universally Applicable: The Court clarified that the judgment in Adcon Electronics does not apply to cases involving Section 16 of the CPC and must be distinguished from Babu Lal.

4. Prevention of Procedural Manipulation: The decision prevents plaintiffs from circumventing jurisdictional rules by initially filing suits for specific performance simpliciter and later seeking possession in execution proceedings.

Date of Decision: November 26, 2024