Judgment:
IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED:
25. 04/2014 CORAM THE HON'BLE MR.JUSTICE R.S.RAMANATHAN APPLICATION Nos.5529 to 5532 of 2013 and O.A.No.709 of 2013 in C.S.No.634 of 2013 APPLICATION No.5529 of 2013 --------------------------- P-1 SHRI SHASHI KANT SHARMA D-196, PUSHPAK MARG, HANUMAN NAGAR, VAISHALI JAIPUR302019 P-2 SMT. KUSUM LATA SHARMA D-196, PUSHPAK MARG, HANUMAN NAGAR, VAISHALI JAIPUR302019 P-3 SMT. VIJAY LAXMI SHARMA @ CHAUHAN, REP.BY HER POWER AGENT SHRI. SHASHI KANT SHARMA HANUMAN NAGAR, VAISHALI JAIPUR302019 P-4 SHRI PRBODH SHARMA REP.BY HER POWER AGENT SHRI SHASHI KANT SHARMA D-196, PUSHPAK MARG, HANUMAN NAGAR, VAISHALI JAIPUR302019 VS R-1 MR.JITENDRA KUMAR JAIN B-152, SUNNYVALE APARTMENTS NO.351, KONNUR HIGH ROAD, AYANAVARAM, CHENNAI23R-2 M/S. INFLUENCE ENTERPRISES INDIA PRIVATE LTD REP BY ITS DIRECTOR MR NARESH JAIN APPLICATION No.5530 of 2013 --------------------------- P-1 SHRI SHASHI KANT SHARMA D-196, PUSHPAK MARG, HANUMAN NAGAR, VAISHALI JAIPUR302019 P-2 SMT. KUSUM LATA SHARMA D-196, PUSHPAK MARG, HANUMAN NAGAR, VAISHALI JAIPUR302019 P-3 SMT. VIJAY LAXMI SHARMA @ CHAUHAN, REP.BY HER POWER AGENT SHRI. SHASHI KANT SHARMA HANUMAN NAGAR, VAISHALI JAIPUR302019 P-4 SHRI PRBODH SHARMA REP.BY HER POWER AGENT SHRI SHASHI KANT SHARMA D-196, PUSHPAK MARG, HANUMAN NAGAR, VAISHALI JAIPUR302019 VS R-1 MR.JITENDRA KUMAR JAIN B-152, SUNNYVALE APARTMENTS NO.351, KONNUR HIGH ROAD, AYANAVARAM, CHENNAI23R-2 M/S. INFLUENCE ENTERPRISES INDIA PRIVATE LTD REP BY ITS DIRECTOR MR NARESH JAIN APPLICATION No.5531 of 2013 --------------------------- P-1 SHRI SHASHI KANT SHARMA D-196, PUSHPAK MARG, HANUMAN NAGAR, VAISHALI JAIPUR302019 P-2 SMT. KUSUM LATA SHARMA D-196, PUSHPAK MARG, HANUMAN NAGAR, VAISHALI JAIPUR302019 P-3 SMT. VIJAY LAXMI SHARMA @ CHAUHAN, REP.BY HER POWER AGENT SHRI. SHASHI KANT SHARMA HANUMAN NAGAR, VAISHALI JAIPUR302019 P-4 SHRI PRBODH SHARMA REP.BY HER POWER AGENT SHRI SHASHI KANT SHARMA D-196, PUSHPAK MARG, HANUMAN NAGAR, VAISHALI JAIPUR302019 VS R-1 MR.JITENDRA KUMAR JAIN B-152, SUNNYVALE APARTMENTS NO.351, KONNUR HIGH ROAD, AYANAVARAM, CHENNAI23R-2 M/S. INFLUENCE ENTERPRISES INDIA PRIVATE LTD REP BY ITS DIRECTOR MR NARESH JAIN APPLICATION No.5532 of 2013 --------------------------- P-1 SHRI SHASHI KANT SHARMA D-196, PUSHPAK MARG, HANUMAN NAGAR, VAISHALI JAIPUR302019 P-2 SMT. KUSUM LATA SHARMA D-196, PUSHPAK MARG, HANUMAN NAGAR, VAISHALI JAIPUR302019 P-3 SMT. VIJAY LAXMI SHARMA @ CHAUHAN, REP.BY HER POWER AGENT SHRI. SHASHI KANT SHARMA HANUMAN NAGAR, VAISHALI JAIPUR302019 P-4 SHRI PRBODH SHARMA REP.BY HER POWER AGENT SHRI SHASHI KANT SHARMA D-196, PUSHPAK MARG, HANUMAN NAGAR, VAISHALI JAIPUR302019 VS R-1 MR.JITENDRA KUMAR JAIN B-152, SUNNYVALE APARTMENTS NO.351, KONNUR HIGH ROAD, AYANAVARAM, CHENNAI23R-2 M/S. INFLUENCE ENTERPRISES INDIA PRIVATE LTD REP BY ITS DIRECTOR MR NARESH JAIN O.A. No.709 of 2013 ------------------- P-1 MR.JITENDRA KUMAR JAIN B-152, SUNNYVALE APARTMENTS NO.351, KONNUR HIGH ROAD, AYANAVARAM, CHENNAI23VS R-1 M/S. INFLUENCE ENTERPRISES INDIA PRIVATE LIMITED REP.BY ITS DIRECTOR MR.NARESH JAIN4H FLOOR VIJAY COMPLEX ANNA SALAI, CHENNAI02R-2 SHRI SHASHI KANT SHARMA D-196, PUSHPAK MARG, HANUMAN NAGAR, VAISHALI JAIPUR302019 R-3 SMT. KUSUM LATA SHARMA D-196, PUSHPAK MARG, HANUMAN NAGAR, VAISHALI JAIPUR302019 R-4 SMT. VIJAY LAXMI SHARMA @ CHAUHAN, REP.BY HER POWER AGENT SHRI. SHASHI KANT SHARMA HANUMAN NAGAR, VAISHALI JAIPUR302019 R-5 SHRI PRBODH SHARMA REP.BY HER POWER AGENT SHRI SHASHI KANT SHARMA D-196, PUSHPAK MARG, HANUMAN NAGAR, VAISHALI JAIPUR302019
ORDERAPPLICATION Nos.5529 to 5532 of 2013 and O.A.No.709 of 2013 in C.S.No.634 of 2013 R.S.RAMANATHAN, J Defendants 2 to 5 in C.S.No.634 of 2013 on the file of this Court are the applicants in these Applications.
2. The first respondent/plaintiff filed the above suit in C.S.No.634 of 2013 for specific performance of an agreement dated 24.7.2013, and for permanent injunction.
3. The case of the first respondent/plaintiff is that the suit property belongs to defendants 2 to 5. Defendants 2 to 5 are residents of Jaipur, Rajasthan. The first respondent/plaintiff is the resident of Chennai and is carrying on various businesses. The first defendant is a company carrying on the business of real estate development and sale at Chennai and at other places in India. The first defendant / second respondent in these Applications represented to the plaintiff that the first defendant had entered into a Development Agreement with defendants 2 to 5 for developing their property bearing No.O-13, located at Ashok Marg, C-Scheme, Jaipur, admeasuring an extent of 1950 sq.yards (17,550 sq.ft.) by putting up construction of a residential apartment complex therein under the name and style of ".Master Piece". and the Development Agreement was registered before the Sub Registrar I, Jaipur. As per the Development Agreement dated 22.7.2013, the first defendant/second respondent is entitled to develop the project in and upon the suit schedule property and sell/dispose of his share of the flats/units, namely, 47,100 sq.ft. constructed area together with proportionate undivided share in the property and the owners/applicants defendants 2 to 5 agreed to convey the proportionate undivided share to the first defendant or their nominees either directly or through power agent. The first defendant/second respondent offered to sell a portion of his share in the development to the plaintiff as a package deal consisting of 6 flats at a pre-launch price. The plaintiff agreed to purchase an extent of 3510 sq.ft. of undivided share in the suit schedule property and to get six constructed flats in all admeasuring 16,550 sq.ft. in the 9th, 10th and 4th floors of the proposed residential complex known as ".Master Piece". and the price was agreed at Rs.1,50,00,000/- for the undivided share of land and Rs.5,44,75,000/- towards cost of construction. The plaintiff and the first defendant entered into a Sale cum Builder Agreement on 24.07.2013 at Chennai, whereby the first defendant agreed to convey 3510 sq.ft. undivided share in the suit schedule property to the plaintiff and also agreed to put up construction of 16,550 sq.ft. of super built up area consisting of 6 residential flats as detailed in the scheme and the plaintiff also paid an advance of Rs.1,00,00,000/- and agreed to pay the balance sale consideration in respect of undivided share at the time of execution of the sale deed. Mean while, the first defendant informed the plaintiff that the defendants 2 to 5 terminated the agreement dated 22.7.2013 entered into between them. Therefore, the first defendant expressed their inability to convey the undivided share of land. According to the plaintiff, the termination of the agreement dated 22.7.2013 entered into between the first defendant and defendants 2 to 5 was only a make belief affair to defraud and cheat the plaintiff and the plaintiff was ever ready and willing to perform his part of the contract. Hence, he is entitled to get the sale deed in respect of 3,510 sq.ft. of undivided share in the suit schedule property and therefore, filed the suit for the aforesaid reliefs.
4. The plaintiff / first respondent also obtained leave of this Court in Application No.4339 of 2013 and also filed O.A.No.709 of 2013 for ad-interim injunction restraining the defendants 1 to 5 from alienating or encumbering the suit property and ad-interim injunction was also granted. Therefore, the applicants/defendants 2 to 5 filed Application No.5529 of 2013 to revoke the leave granted to the plaintiff in Application No.4339 of 2013 and also Application No.5530 of 2013 to vacate injunction granted in O.A.No.709 of 2013 in C.S.No.634 of 2013, Application No.5531/2013 to dismiss the suit as not maintainable due to the arbitration clause mentioned in the Joint Development Agreement dated 22.7.2013 entered into between the applicants and the first defendant and Application No.5532 of 2013 to reject the plaint in C.S.No.634 of 2013.
5. It is submitted by the learned Counsel Mr.R.Thiagarajan, appearing for the applicants/defendants 2 to 5 that the present suit C.S.No.634 of 2013 is a clear abuse of process of Court and no part of cause of action arose at Chennai and even according to the plaintiff, defendants 2 to 5 / applicants herein are residents of Jaipur and the suit property is situate at Jaipur and agreement dated 22.7.2013 between the applicants and the second respondent/first defendant was entered at Jaipur for developing the suit property and therefore, this Court has no jurisdiction to entertain the suit as no part of cause of action arose at Chennai. He also submitted that the present suit for specific performance of Sale cum Builder Agreement cannot also be enforced in part and there is no privity of contract between the applicants and plaintiff/first respondent and under the Development Agreement dated 22.7.2013 entered into between the applicants and the second respondent/first defendant, no power was given to the second respondent/first defendant to enter into any agreement of sale for the sale of undivided share of property, which has been agreed to be allotted towards builder's share and it is specifically provided under clause 3 and 4 that a proper power document will be executed in favour of the developer, namely, the second respondent/first defendant and it is further provided that if any agreement is entered into by the developer, namely, the second respondent/first defendant with any third party, the developer alone shall be liable and responsible to such party. Admittedly, the applicants did not execute any power of attorney in favour of the developer and therefore, any agreement entered into between the first respondent and second respondent, namely, the plaintiff and the first defendant will not have any legal force and on that basis, the plaintiff cannot file the suit for specific performance of an agreement of Sale cum Builder Agreement dated 24.7.2013. He further submitted that Development Agreement dated 22.7.2013 was also revoked on 7.8.2013 and therefore, the developer the second respondent cannot execute any sale deed transferring undivided share in the suit schedule property and the agreement dated 24.7.2013 has been executed in collusion with the plaintiff for the purpose of defrauding the applicants and therefore, the suit for specific performance is not maintainable and is liable to be rejected. He also submitted that having regard to the arbitration clause in the Agreement dated 22.7.2013 entered into between the applicants and the second respondent, the present suit is also not maintainable and having regard to the fact that the property is at Jaipur and the defendants 2 to 5 are residents of Jaipur, the Court has no jurisdiction. Therefore, the leave granted is liable to be revoked and the injunction has to be vacated.
6. In support of his contention, he relied upon the following judgments:- 1. Vinod Seth v. Devinder Bajaj and another [ (2010) 8 SCC1 2. Parameswari Veluchamy and 2 others Vs. T.R.Jayaraman and 7 others [2002 (1) CTC134 3. South Indian Bank Ltd., v. M.M.T.C.Ltd [(2007) 5 MLJ303 4. P.Ranganathan and eight others v. Sai Jagannathan and nine others [(1995) 2 MLJ5595. Thamiraparani Investments Pvt. Ltd. v. Meta Films Pvt.Ltd. [2006 (1) CTC270 6. Thamiraparani Investments Pvt. Ltd. v. Meta Films Pvt.Ltd. [2005 (5) CTC483 7. Adcon Electronics Pvt.Ltd. Vs. Daulat and another [(2001) 7 SCC698 8. D.Hari Krishnan Vs. M.G.R. Memorial Charitable Trust [2000 (4) CTC479 7. On the other hand, the learned counsel for the plaintiff, Mr.M.V.Venkataseshan, submitted that this Court has got jurisdiction to entertain the suit as cause of action for the suit arose at Chennai by reason of the Agreement dated 24.7.2013 executed at Chennai between the plaintiff and the first defendant and though the property is situate at Jaipur, having regard to clause 12 of the Letters of Patent, the suit for specific performance of an agreement of sale is maintainable before this Court, if the agreement was executed at Chennai, though the property is situate outside the jurisdiction of this Court, and it cannot be contended that the suit is not maintainable and leave was also given. He further submitted that pursuant to the development agreement entered into between the applicants and the second respondent, the second respondent developer entered into an agreement of Sale cum Builder Agreement dated 24.7.2013 offering to sell 3,510 sq.ft. of undivided share of land from and out of the portion, allotted to it under the Development Agreement dated 22.7.2013 and even though no power was executed, the Sale cum Builder Agreement dated 24.7.2013 was entered into pursuant to the development agreement and the applicants were aware of the same and there was no collusion with the first defendant/second respondent, and they terminated the Development Agreement dated 22.7.2013 by letter dated 7.8.2013 and the termination letter was not binding on the plaintiff as the agreement of sale was entered into earlier to the termination of Development Agreement and the plaintiff has paid a sum of Rs.1 crore towards the sale consideration and is ready to pay the balance sale consideration of Rs.50,00,000/-. As the second respondent / developer in collusion with the applicants attempted to wriggle out from the Sale cum Builder Agreement, the suit was filed and as per the terms of the agreement, the suit is maintainable and whether there was fraud or collusion between the applicants and the second respondent or between the plaintiff and the first defendant/second respondent can be found out during trial and as per the Sale cum Builder Agreement, the plaintiff is entitled to enforce the agreement. Therefore, the applications are not maintainable. He also submitted that there is no arbitration clause in the agreement dated 24.7.2013 between the plaintiff and the second respondent/first defendant and the arbitration clause in the agreement dated 22.7.2013 will not bind the plaintiff, and the applicants were also aware of the Sale cum Builder Agreement dated 24.7.2013 entered into between the plaintiff and the first defendant and therefore, in the absence of any arbitration clause in the agreement dated 24.7.2013, the parties cannot be directed to refer the matter to arbitration and leave was granted as per the law laid down by this Court stating that in a suit for specific performance, even though the property is situate outside the jurisdiction of this Court, when the contract was entered at Chennai within the jurisdiction of this Court, the suit is maintainable and therefore, the present applications are liable to be dismissed.
8. The second respondent/first defendant filed a separate counter stating that the applicants have not come before the Court with clean hands and suppressed the material facts and the first applicant is not the authorising agent representing the interest of the applicants 3 and 4 and further submitted that even in August, 2012 negotiations started with the applicants for a joint development of the suit property and a sum of Rs.10,00,000/- was paid as advance on 24.8.2013 and an agreement for sale was entered into between the second respondent and the applicants on 25.10.2012 whereby the second respondent was authorised and empowered by the applicants to develop the suit property and the second respondent was also put in possession of the suit property and the second respondent also invested money and in the month of March, 2013, the applicants wanted to re-negotiate the terms of the joint development agreement and therefore, the sale agreement dated 9.3.2013 was entered into between the applicants and the second respondent and the earlier agreement of sale dated 25.10.2012 was cancelled and the second respondent agreed to purchase the suit property from the applicants for a sum of Rs.13 crores and also offered to give 8 flats to them. Thereafter, the applicants changed their mind, and on 10.3.2013 another joint development agreement was entered into, whereby the second respondent was granted a right to develop the suit property and the applicants were to be given 34,500 sq.ft. of saleable area and the balance 47,100 sq.ft. saleable area was allotted to the share of the second respondent and the second respondent was also authorised to enter into agreement of sale in respect of his share of the land with outsiders and Rs.18,00,000/- was paid on 12.4.2013 in the joint account of first and second applicants. He further submitted that pursuant to the works contract dated 29.4.2013, the second respondent appointed M/s.J.Mohan Co., as a contractor to carryout the said works and they were paid advance of Rs.45,00,000/- and the second respondent instructed them to commence their work on 1.5.2013 and work was going on till July 2013. At the end of July, 2013, the applicants once again retracted their terms under the Joint Development Agreement and demanded more money and finally a fresh Development Agreement dated 22.7.2013 was entered modifying the terms of the earlier agreement and the developer namely, the second respondent, was given power to enter into the agreement of sale to the prospective purchasers in respect of the developer's share. The Development Agreement was thereafter registered before the Sub-Registrar-I, Jaipur on 23.7.2013. Various payments were made towards the sale consideration and cheques were also issued and the power of attorney has to be executed by the applicants in favour of the second respondent. He also submitted that the plaintiff agreed to invest in the project to an extent and even in October 2012 also, he paid Rs.1 crore to the second respondent on various dates and thereafter Sale-cum-Builder's Agreement was entered into between the plaintiff and the second respondent. As per clauses 8, 9, 10 and 13 of the Joint Development Agreement dated 22.7.2013, the developer/second respondent herein was empowered and authorised to enter into agreement of sale in respect of his share in the suit property and as per clause 13, the applicants agreed to execute the sale deed/power of attorney in favour of the second respondent or his nominees. Therefore, the second respondent has got the authority to enter into Sale-cum-Builder's Agreement with the first respondent/plaintiff and that is also binding on the applicants. The termination of the Development Agreement by the applicants is illegal and therefore, the second respondent invoked arbitration clause contained in the Development Agreement dated 22.7.2013 and filed application under Section 9 of the Arbitration and Conciliation Act, 1996 before the Additional District Judge No.IV, Jaipur, in Case No.313 of 2013 seeking injunction restraining the applicants from selling, dispossessing or alienating or encumbering the suit property and also filed an interim application seeking an order of ".status quo". and the same was dismissed, against which an appeal was filed before the High Court of Rajasthan and that was dismissed by the High Court of Rajasthan with a direction to the District Judge IV, Jaipur, to dispose of Section 9 Application and the same is pending on the file of the Additional District Judge IV, Jaipur. He further submitted that the first applicant in collusion with the civil contractor M/s.J.Mohan Co., terminated the Development Agreement and the applicants filed the Application in collusion with the contractor with a view to deprive the second respondent from developing the suit property as per the Development Agreement. He also supported the case of the plaintiff in other respects and submitted that the court has got jurisdiction and the plaintiff is entitled to maintain the suit for specific performance.
9. Though the learned counsel appearing for the applicants and the respondents submitted their arguments in respect of all the applications, all of them agreed that Application Nos.5529 and 5532 of 2013 filed by the plaintiff to revoke the leave granted and to reject the plaint can be taken up and depending upon the result in those Applications, the other Applications, can be considered. Therefore, Application Nos.5529 and 5532 of 2013 were taken up for consideration.
10. For the purpose of disposing of the Applications, at this stage, there is no need to refer to the earlier agreement of sale and development agreement, works contract entered into, prior to 22.7.2013 and admittedly, parties are governed by the Development Agreement dated 22.7.2013 and the Sale-cum-Builder's Agreement dated 24.7.2013, which are sought to be interpreted in the suit.
11. Admittedly, Development Agreement was entered into between the applicants and the second respondent on 22.7.2013 and there is no clause in the agreement dated 22.7.2013 that possession was handed over under the agreement to the second respondent. As per clause 3 of the agreement dated 22.7.2013, the applicants agreed to give power of attorney in favour of the developer for developing the property and for sale of the units in respect of developer's allocation and as per clause 4, the applicants agreed to permit the developer / second respondent to enter into an agreement of sale in respect of the units in the project (except owners' area) and to get the same registered with the concerned authority with the owners as consenting or confirming party. Therefore, from clause 3 and 4(f), in the absence of any power of attorney given by the owners/applicants herein, the second respondent has no authority to enter into the agreement of sale for the sale in respect of undivided share of property and admittedly, no power was given by the applicants in favour of the second respondent as per the Development Agreement dated 22.7.2013. Though as per clause 4(f), permission was given to enter into any agreement of sale in respect of the units in the project and to get the same registered with the Owners as consenting or confirming party, in the absence of any power of attorney executed in his favour, the second respondent cannot enter into the agreement of sale in respect of undivided share of land. The relevant clauses in Development Agreement dated 22.07.2013 entered into between the applicants/defendants 2 to 5 and 2nd respondent / first defendant, namely, clauses 3 and 4(f) are as follows:- ".3. The Owners shall give power of attorney in favour of the Developer for the development of the Project and for sale of units in the Developer's allocation simultaneously at the time of execution of development agreement to enable the Developer to start development work and to execute necessary documents for allotment, sale of units in the Developers Allocation and collect advances of the same. 4(f) To appoint contractor / builder for the Project and to enter into and execute contract / builder agreement and other requisite documents / agreements / power of attorneys authorising the said contractor / builder to enter upon the Project Land, to carry out the development of the Project, to accept advances, bookings, installments, to execute agreement to sell, sale deed in respect of the units in the Project (except Owners' Area) and to get the same registered with the concerned authority with the Owners as consenting / confirming party.'' 12. Therefore, the plaintiff and the second respondent are aware that under the Development Agreement, the applicants authorised the developer to sell or allot the dwelling units by entering into any arrangement for alienation of such flats only after the execution of power of attorney. Admittedly, no power of attorney was executed by the applicants in favour of the developer, the second respondent herein and therefore, in the absence of any power executed by the applicants, the second respondent has no authority to enter into any agreement of sale for the sale of 3,510 sq.ft. undivided share of land in the suit property and therefore, the suit for specific performance as against the applicants is not maintainable. In other words, there is no privity of contract between the applicants and the first respondent and the applicants are not duty bound to execute the sale deed on the basis of the Sale-cum-Builder's Agreement entered into between the first and second respondents. According to the applicants, the Development Agreement dated 22.7.2013 was also terminated which is the subject matter of arbitration claim before the Additional District Judge No.IV, Jaipur. Therefore, in the absence of any agreement between the applicants and the first respondent, the first respondent/plaintiff cannot file any suit for specific performance against the applicants directing the applicants to execute the sale deed in respect of undivided share of land.
13. The prayer in the suit filed by the first respondent/plaintiff is to direct the applicants/defendants to execute a sale deed in respect 3,510 sq.ft. of undivided share in the suit schedule property in favour of the plaintiff in terms of Clause 4 of the Sale-cum-Builder's Agreement dated 24.07.2013. Admittedly, the Agreement dated 24.07.2013 entered into between the first respondent/plaintiff and the second respondent / first defendant is an agreement for sale cum development and as per the said agreement, the first respondent/plaintiff agreed to purchase 3,510 sq.ft. undivided share of land in schedule ".A'' and also agreed to purchase six residential flats to be constructed for a sum of Rs.5,44,75,000/-. Therefore, the agreement dated 24.07.2013 is a composite agreement and it cannot be bifurcated into two, namely, agreement for sale of land and agreement for purchase of six flats. However, the first respondent/plaintiff filed the suit for specific performance of the agreement dated 24.07.2013 in respect of undivided share of land and he has not sought for the specific performance in respect of six flats to be constructed as per the agreement. Under Section 12 of the Specific Relief Act, the Court shall not direct the specific performance of a part of the contract except as, otherwise, provided in that section. Sub-clauses (2) and (3) of Section 12 are not applicable to the present case as it is not the case of the first respondent/applicant that the part which is left unperformed by the second respondent/first defendant represents a small portion to the whole in value and admits of compensation in money and as per sub-clause (3), the first respondent/plaintiff is not entitled to obtain relief of specific performance and the Court may at his instance direct the second respondent who has defaulted according to the first respondent/plaintiff, if the first respondent/plaintiff has agreed to pay the consideration for the whole of the contract reduced by the consideration for the part which is left unperformed. Here, that is not the case, and according to the first respondent/plaintiff, the second respondent and applicants failed to perform their part of the contract by executing the sale deed in respect of the undivided share of land and the first respondent/plaintiff has not stated that he was willing to pay the consideration for the flats to be constructed in the property. Therefore, in the case of composite agreement like the present one without pleading that the plaintiff was ready and willing to pay the consideration for the flats to be constructed, the plaintiff cannot seek the relief of specific performance in respect of undivided share of land. Further, sub-clause (4) of Section 12 will also clarify the same.
14. Further, as per clause (5) of the Agreement for Sale cum Development dated 24.07.2013 which is sought to be enforced in the suit, it has been made very clear that the agreement for the sale of the undivided share in the land is expressly subject to the condition that the purchaser shall get constructed the six flats in the multi-storied residential complex building by engaging a developer only for the practical purpose of construction along with the purchasers of the other undivided co-sharers of Schedule ".A'' land. Therefore, as per clause (5), without seeking the relief in respect of six flats to be constructed by the developer, the first respondent/plaintiff cannot seek the relief for specific performance in respect of undivided share of land alone. Admittedly, the applicants cancelled the Development Agreement dated 22.07.2013 entered into with the second respondent developer and therefore, the second respondent cannot proceed with construction and therefore, having regard to clause (5) of the Agreement for Sale cum Development dated 24.07.2013, the sale in respect of undivided share of land alone cannot be claimed or enforced. Further, according to me, in this case, having regard to the findings rendered above, and also having regard to the pleas taken in the plaint and also the terms of Agreement for Sale cum Development dated 24.07.2013 compensation in terms of money will be the adequate relief and therefore, the relief prayed for cannot be granted as per Section 12 of the Specific Relief Act. Therefore, even as per Section 12 of the Specific Relief Act, the suit is liable to be rejected.
15. Further, As per Section 17 of the Specific Relief Act, 1963, a contract to sell or let any immovable property cannot be specifically enforced in favour of the vendor or lessor who, has no title to the property. Further, under Section 14 (3)(c) of the Specific Relief Act, where the suit is for enforcement of a contract for the construction of any building or the execution of any other contract on the land, such contract can be enforced provided the conditions enumerated in the proviso are fulfilled. As per Condition No.3 of proviso to clause 3(c) of Section 14 of the Specific Relief Act, the defendants has, in pursuance of the contract, obtained possession of the whole or any part of the land on which the building is to be constructed or other work is to be executed. In this case, reference to defendant is the second respondent herein. As stated supra, as per the Development Agreement dated 22.7.2013, possession was not given to the second respondent, and as per Condition No.2 of proviso to clause 3(c) of Section 14 of the Specific Relief Act, specific performance can be granted only when compensation in money for non-performance of the contract could not be an adequate relief. Admittedly, the suit is filed for specific performance of the Sale-cum-Builder's Agreement dated 24.7.2013 only in respect of the sale of the extent of 3,510 sq.ft. undivided share in the suit property and the suit is not filed in respect of the building to be constructed by the second respondent as per the Sale-cum-Builder's Agreement dated 24.7.2013. Therefore, as per Section 14 of the Specific Relief Act, the plaintiff cannot seek enforcement of the sale of 3,510 sq.ft. of undivided share of land from the applicants as there is no privity of contract between the applicants and the second respondent and the plaintiff and the second respondent who entered into the Sale-cum-Builder's Agreement dated 24.7.2013 has no authority to sell the undivided share of land in the absence of any power deed executed under the developer's agreement dated 22.7.2013. Further, it has been held already that compensation in terms of money will be the adequate relief.
16. Further, as rightly submitted by the learned Counsel, Mr.R.Thiyagarajan, for the applicants, the Court can invoke inherent power to reject the suit having regard to the admitted facts.
17. In the judgment reported in AIR1961Supreme Court 218 (Padam Sen v. State of U.P.), the Hon'ble Supreme Court held as follows:- ".8. .... The inherent powers of the court are in addition to the powers specifically conferred on the court by the Code. They are complementary to those powers and therefore, it must be held that the court is free to exercise them for the purposes mentioned in Section 151 of the Code when the exercise of those powers is not in any way in conflict with what has been expressly provided in the Code or against the intentions of the legislature .....
9. ... The inherent powers saved by Section 151 of the Code are with respect to the procedure to be followed by the Court in deciding the cause before it. These powers are not powers over the substantive rights which any litigant possesses. Specific powers have to be conferred on the courts for passing such orders which would affect such rights of a party.".
18. Similarly, in the judgment reported in AIR1962SC527(Manohar Lal Chopra v. Seth Hiralal), it is held as follows:- ".21. ... that the inherent powers are not in any way controlled by the provisions of the Code as has been specifically stated in Section 151 itself. But those powers are not to be exercised when their exercise may be in conflict with what had been expressly provided in the Code or against the intentions of the legislature.".
19. In the judgment reported in AIR1966SC1899(Ram Chand and Sons Sugar Mills (P) Ltd. v. Kanhayalal Bhargava), it is held as follows:- ". ...The inherent power of the court is in addition to and complementary to the powers expressly conferred under the Code but that power will not be exercised if its exercise is inconsistent with, or comes into conflict with any of the powers expressly or by necessary implication conferred by the other provisions of the Code. Section 151 however is not intended to create a new procedure or any new right or obligation.".
20. In the judgment reported in AIR1970SC997(Nain Singh v. Koonwarjee), it is held as follows:- ".Under the inherent power of courts recognised by Section 151 CPC, a court has no power to do that which is prohibited by the Code. Inherent jurisdiction of the court must be exercised subject to the rule that if the Code does contain specific provisions which would meet the necessities of the case, such provisions should be followed and inherent jurisdiction should not be invoked. In other words, the court cannot make use of the special provisions of Section 151 of the Code where a party had his remedy provided elsewhere in the Code ...".
21. In the judgment reported in 2006 (1) CTC270(Thamiraparani Investments Pvt.Ltd., v. Meta Films Pvt.Ltd., the Hon'ble Division Bench of this Court held that when the suit for the purpose of acquiring possession of or safeguarding possession of or establishing title to or a right in the suit property and when the property is situate outside the jurisdiction of this Court, leave granted is liable to be revoked. In that case, the Hon'ble Division Bench dealt with the scope of suit for land. The Hon'ble Division Bench relied upon the judgment of the Hon'ble Supreme Court reported in (2001) 7 SCC698(Adcon Electronics Pvt.Ltd., vs. Daulat and another), wherein the Hon'ble Supreme Court held that if the suit is respect of determination of title of land or suit for possession of land or other suits in which the relief claimed if granted would directly affect the title or of possession of land, the suit could be filed only in the court which jurisdiction of the land is situate.
22. Though the prayer in the suit is to direct the applicants and the second respondent to execute the sale in respect of 3,510 sq.ft. of undivided share in the suit property, having regard to the Sale-cum-Builder's Agreement dated 24.7.2013, the plaintiff wanted to enforce the building agreement by getting a decree in respect of 3,510 sq.ft. of undivided share of land in the suit property. Therefore, the purpose of getting specific performance of the agreement of sale in respect of 3,510 sq.ft. of undivided share of land in the suit property is only to enforce the building agreement entered into between the first and second respondent and as held in the Division Bench judgment reported in 2006 (1) CTC270and also held in (2001) 7 SCC698 it is a suit for the purpose of enforcing the agreement of construction or to acquire possession for the second respondent to put up construction. Therefore, it clearly comes within the definition of suit for land and admittedly, the property is situate outside jurisdiction of this Court. Therefore, this Court has no jurisdiction to entertain the suit and on that ground leave already granted in A.No.4339 of 2013 is liable to be revoked.
23. Therefore, Application Nos.5529 and 5532 of 2013 are allowed and the leave granted in A.No.4339 of 2013 is revoked and the plaint is also rejected as there is no privity of contract between the applicants and the plaintiff/first respondent and the suit is also not maintainable by virtue of Sections 12, 14 and 17 of the Specific Relief Act, 1963. Consequently, Original Application No.709 of 2013, Application Nos.5530 and 5531 of 2013 are closed. No costs. asvm