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REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 3272 OF 2015 (Arising out of S.L.P.(C)  No.15900 of 2013)

EXCEL DEALCOMM PRIVATE LIMITED     ...APPELLANT

:Versus:

ASSET RECONSTRUCTION COMPANY (INDIA)  LIMITED & ORS.      ….RESPONDENTS

J U D G M E N T

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 suit, assumed jurisdiction for non-suiting  

the  appellant  and  also  held  that  the  Agreement  dated  

13.2.2007  is  not  concluded  and  thus  not  enforceable,  and  

dismissed Civil Suit No.299 of 2007 filed by the appellant. The  

facts of the case necessary to dispose of this appeal are briefly  

narrated below.  

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3. Uniworth  Apparel  Limited  (hereinafter  referred  to  as  

'Uniworth'),  being  Respondent  No.3  herein,  was  a  company  

registered in Maharashtra under the Companies Act, 1956. It  

had  an  industrial  unit  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  of  Security  Interest  Act,  2002  

(hereinafter  referred  to  as  the  ‘SARFAESI  Act’).  ARCIL  took  

steps  under  Section  13  of  the  SARFAESI  Act  and  took  

possession of the assets.  Allegedly the ARCIL entered into a  

Private  Treaty  Agreement  dated  13.02.2007  (hereinafter  

referred  to  as  ‘the  Agreement’)  with  the  appellant  Excel  

Dealcomm Pvt. Ltd. (herein after referred to as 'Excel'), for sale  

of  the said properties  for  a  consideration of  Rs.7.50 Crores.  

This was to be a sale under SARFAESI Act wherein 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

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cheque of Rs. 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 through and the  

present appellant brought out a suit for specific performance  

of the Agreement against ARCIL, being C.S. No.299 of 2007, in  

the High Court of Calcutta in December 2007. Initially, there  

were  three  Defendants  in  the  said  suit,  namely,  ARCIL,  Mr.  

Sanjoy  Gupta  (Vice  President  of  ARCIL)  and  Uniworth.  

However, later on it was found that ARCIL had sold the suit  

property  to  one  Webtech  Industries  Pvt.  Ltd.  (hereinafter  

referred  to  as  'Webtech'),  Respondent  No.4  herein,  on  

10.02.2011. 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,

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Shil Mahape Road, New Mumbai, Maharashtra.

(ii) Hypothecation  of  the  whole  of  movable  assets  of  

Uniworth situate at  TTC Industrial Area, MIDC, Shil  

Mahape Road,  New Mumbai,  Maharashtra including  

the movable plant and machinery, machinery spare  

tools  and  accessories  and  other  movables  both  

present and future (save and except book debts).

4. ARCIL filed an application, being G.A. No.1225 of 2011, for  

revocation of leave granted under Clause 12 of Letters Patent  

by the High Court of Calcutta to the Excel and asking return of  

the plaint in C.S. No.299 of 2007 to be filed 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 and even the sale

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was to be conducted by execution of sale certificate  

as provided in Security Interest (Enforcement) Rules,  

2002 (hereinafter referred to as “Rules”). Therefore,  

the jurisdiction of civil court is excluded.

(c) That  the  Private  Treaty  Agreement  provided  that  

Mumbai Court would have exclusive jurisdiction.

5. The learned Single Judge of the Calcutta High Court under  

Original  jurisdiction,  vide  his  judgment  and  order  dated  

22.12.2011 dismissed the application for revocation of leave  

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  enforcement  of  

terms of agreement would not lead to the decree in  

suit for land.

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(ii) With  respect  to  Forum Selection  Clause,  the  High  

Court  held  that  the ARCIL  had waived its  right  to  

object to the lack of jurisdiction by participating in  

application  for  impleadment  of  Respondent  No.4,  

wherein  orders  were  passed  on  06.01.2011.  The  

learned High Court noted that ARCIL had made no  

objection to the jurisdiction while the impleadment  

application was argued.  

(iii) On  the  question  of  the  jurisdiction  of  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 of the SARFAESI  

Act.

6. Aggrieved by the judgment and order dated 22.12.2011

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passed by the learned Single Judge of the Calcutta High Court,  

dismissing  the  application  for  revocation  of  leave  granted  

under Clause 12 of Letters Patent, ARCIL filed an appeal before  

the Calcutta High Court, being A.P.O. No.180 of 2012. The High  

Court  in  this  appeal,  analysed the  judgment  of  the  learned  

Single Judge in the Original Jurisdiction of the High Court of  

Calcutta.  The High Court came to following conclusion 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  pre-supposes  the  handing  over  of  the  

possession.  

(III) In  view of  above  two  conclusions,  the  High  Court  

found it was not necessary to answer the question  

regarding forum selection clause.

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7. On the basis of these conclusions, the Division Bench of  

the High Court reversed the order of the learned single Judge  

holding that the contract could not be specifically enforced as  

it was not a concluded one and also that it would be a suit for  

land if, at all, the suit is maintainable. Therefore, the Division  

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 is barred  

in  the  present  case  by  virtue  of  Section  17  of  

SARFAESI Act?

Suit for land

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9. Clause  12  of  the  Letters  Patent  of  the  High  Court  of  

Calcutta reads:

“12. And we do further ordain that the said High  Court of Judicature at Fort William in Bengal in the  exercise  of  its  ordinary  original  civil  jurisdiction  shall be empowered to receive, try and determine  suits of every description, if, in the case of suits for  land or  other  immovable  property,  such  land or  property shall be situated, or, in all 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 Small Cause Court at Calcutta, in  which  the  debt  or  damage,  or  value  of  the  property sued for  does not  exceed one hundred  rupees.”

A plain reading of the provision suggests that ordinary original  

civil  jurisdiction of the High Court of  Calcutta will  extend in  

following cases:

(a)  In a suit for land or other immovable property-

• where such land or property is wholly situated in the  

territorial jurisdiction of the High Court of Calcutta;

• where such land or  property is  situated in  part  only  

within the said territorial jurisdiction of the Court, if the  

leave of the Court shall have been first obtained.

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(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 limits.

10. In  the  present  case,  a  suit  was  filed  for  the  specific  

performance of the Agreement which contemplated the sale of  

property, as has been described in para 1 under Section 13 of  

SARFAESI Act in terms of the Rules. The question with respect  

to  Clause  12  of  Letters  Patent  in  the  present  case  is  that  

whether the present suit is suit for land.  

11. 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. vs.  

Daulat  and  Anr., (2001)  7  SCC  698].  Further  it  is  an  

established rule that to determine whether it is a suit for land,

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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 clause 12. In  

the  present  case,  the  prayer  in  the  plaint  was  couched  in  

following words:

“A  decree  for  specific  performance  of  the  agreement  for  sale  recorded  in  the  document  dated  February  13,  2007  being  Annexure  “A”  hereto by directing the Defendant no. 1 and 2 to  issue in favour of the plaintiff  Sale Certificate in  respect  of  assets  mentioned  in  Schedule  1  to  Annexure A hereto and on as is where is basis in  terms of the said agreement”

12. The  learned  counsel  for  the  Respondent  has  very  

emphatically 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

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respondent is that the prayer requires sale to be effected in  

terms of the Agreement, and therefore, the entire agreement  

may be read as a part of the prayer.   

13. On  the  question  of  suit  for  specific  performance  of  an  

agreement  to  sell  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 follows:

“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

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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.”

14. 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.

Exclusive jurisdiction

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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 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 Court/Tribunals only”

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

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the parties.  

16. 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.

….....…..…………………..J.  (M.Y. Eqbal)

                                       ...........…………………….J.                         (Pinaki Chandra  Ghose)

New Delhi; April 01, 2015.