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EXCEL DEALCOMM PRIVATE LIMITED Versus ASSET RECONSTRUCTION COMPANY (INDIA) LIMITED & ORS.

2015 (5) TMI 658 - SUPREME COURT OF INDIA

Default in repayment of Bank's dues - Assignment of claim in favour of Asset Reconstruction Company India Limited - Whether the present suit is suit for land - Matter of High court jurisdiction - Jurisdiction clause in an agreement makes the intention of the parties to an agreement quite clear - Held that:- The suit for land is a suit in which the relief claimed relates to the title or delivery of possession of land or immovable property, [See: Adcon Electronics Pvt. Ltd. [2001 (9) TMI 1123 - SU .....

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ificate 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 [2001 (9) TMI 1123 - SUPREME COURT] would not apply .....

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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 clearl .....

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dv., Mr. Galav Sharma, Adv., Ms. Nandita Bajpai, Adv., Mr. Shashank Bhansali, Adv., M/s. Parekh & Co.,Adv., Mr. Atishi Dipankar,Adv., Mr. Rabin Majumder,Adv., Mr. Jayant Mohan,Adv. JUDGMENT : Pinaki Chandra Ghose, J. 1. Leave granted. 2. This appeal has been preferred against the judgment delivered by the Division Bench of the Calcutta High Court on March 8, 2013 in A.P.O. No.180 of 2012 whereby the High Court while holding that the Calcutta High Court does not have jurisdiction to try civil .....

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nit in Thane District of Maharashtra. It availed credit facilities from ICICI Bank. Uniworth could not clear the Bank's dues, as a result the Bank assigned their claim in favour of Asset Reconstruction Company India Limited (hereinafter referred to as 'ARCIL'), being Respondent No.1 herein, a company incorporated under Companies Act, 1956 and registered with the Reserve Bank of India as a Company under Section 3 of the Securitization and Reconstruction of Financial Assets Enforcement .....

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erein the sale was to be conducted by execution of sale certificate by the ARCIL in favour of Excel. The Excel alleges that it had even issued a cheque of ₹ 9.5 Crores dated March 1, 2007 to the ARCIL. In reply thereto, Mr. Sanjoy Gupta, Vice President of the ARCIL (Respondent No. 2 herein) had vide letter dated 20-03-2007 informed Excel to collect its cheque since the deal could not be materialised as the management of ARCIL did not approve such a proposal. Thus, the sale could not get th .....

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11. So Webtech was impleaded as Defendant No.4 in the said suit after the application for impleadment, being G.A. No.3574 of 2010 was allowed on 06-01-2011. It is to be noted that the suit property was the one mentioned in the Schedule of the Agreement and included both movable and immovable properties as mentioned below: (i) Mortgage on immovable properties of the Uniworth situate at Plot No. A606, TTC Industrial Area, MIDC, Shil Mahape Road, New Mumbai, Maharashtra. (ii) Hypothecation of the w .....

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led before the Court having jurisdiction to try the same. The said application was based on following grounds: (a) 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. (b) That the alleged Private Treaty Agreement between ARCIL and Excel was entered into pursuant to Section 13(4) of the SARFAESI Act a .....

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and refused to return the plaint for the following reasons: (i) The suit was not a suit for land as the Private Treaty Agreement required creation of security or charge of the assets mentioned in the schedule i.e. mortgage of immovable properties and hypothecation of movable properties ; the nature of this security was not mentioned in the agreement and thus, any security could be created on the said mortgage or hypothecation. Therefore, the learned High Court came to the conclusion that the en .....

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Civil Court being ousted by the SARFAESI Act, the High Court found that the breach of present agreement would not fall under Section 17 of the SARFAESI Act wherein the Debt Recovery Tribunal is given the jurisdiction to rule only that whether the sale was a correct measure adopted and conducted properly. In the present case, even if it is assumed that ARCIL was the assignee of ICICI and a third party sued for specific performance against such assignee, the case would not fall under Section 17 o .....

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while allowing the appeal: (I) The Private Treaty Agreement was not to be considered a concluded contract as it was subject to the approval of the Board of Directors of the ARCIL. Since, the approval was not given and even the cheque supplied by Excel was made available for return, the said agreement was at best a term sheet. (II) On the point of suit for land the High Court found the alleged sale of assets was to take place by issuing sale certificate in terms of Rule 5(6) of the Rules which p .....

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ion Bench revoked the leave granted under Clause 12 of the Letters Patent. 8. In the above factual backdrop, following questions arise for our consideration: (i) Whether the suit for specific performance filed by Excel was a suit for land ? (ii) 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? (iii) Whether the jurisdiction of civil Court .....

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ll other cases, if the cause of action shall have arisen either wholly, or in case the leave of the Court shall have been first obtained, in part, within the local limits of the ordinary original jurisdiction of the said High Court, or if the defendant at the time of the commencement of the suit shall dwell or carry on business, or personally work for gain, within such limits; except that the said High Court shall not have original jurisdiction in cases falling within the jurisdiction of the Sma .....

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y within the said territorial jurisdiction of the Court, if the leave of the Court shall have been first obtained. (b) in suits other than suit for land • if the cause of action has arisen wholly within the said limits; • where the cause of action has arisen in part only within the said limits, if the leave of the Court shall been first obtained; • If the defendant at the time of the commencement of the suit dwells or carries on business or personally works for gain within such li .....

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Electronics Pvt. Ltd. vs. Daulat and Anr., (2001) 7 SCC 698]. Further it is an established rule that to determine whether it is a suit for land, the Court will look into barely the Plaint and no other evidence, [Indian Mineral & Chemicals Co. and Others vs. Deutsche Bank, (2004) 12 SCC 376]. If by the averments in the plaint and prayers therein, it appears that the suit is one for land, it shall be so held and if it does not so appear, then the suit shall continue under leave granted under .....

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lly argued that this prayer is in effect a prayer for possession of the said properties since the procedure under the Rules for execution of the sale certificate, the transfer of possession is pre-requisite. Therefore, he has submitted that although, the possession is not asked for in direct words but that would be the obvious corollary to granting of the prayer. Further, another point which has been emphasized on behalf of respondent is that the prayer requires sale to be effected in terms of t .....

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rant 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 follows: Whereas the undersigned being the authorised officer of the …................. .....

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r 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 t .....

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able 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. Exclusive jurisdiction 15. 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 .....

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