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Reportable

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.     4267  OF 2015 [Arising out of SLP(C) No. 11215 OF 2015]

Sumer Builders Pvt. Ltd. ... Appellant

                               Versus

Narendra Gorani ... Respondent

J U D G M E N T

Dipak Misra, J.

The instant  appeal  is  directed against  the  judgment

and order dated 10.03.2015 passed by the Division Bench

of the High Court of Judicature at Bombay in Appeal No.

572  of  2013  whereby  it  has  concurred  with  the  view

expressed  by  the  learned  Single  Judge  in  Chamber

Summons  No.  720/2013  in  Arbitration  Petition  No.

799/2013 dated 10.10.2013 whereunder the learned Single

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Judge had revoked the leave granted by the court  under

Clause  12  of  the  Letters  Patent  to  file  a  petition  under

Section 9 of the Arbitration and Conciliation Act, 1996 (for

brevity, “the 1996 Act”).   

2. The facts which are essential to be stated are that the

parties to the lis entered into an agreement on 28.2.2008 for

development of the land of the respondent.  As per the said

agreement,  the  appellant  was  required  to  develop  a

residential  project  and/or  commercial  complex  and/or

multiplex and/or hotels and/or malls etc. as permissible in

law.   The  respondent  had  handed  over  the  vacant

possession of the land to enable the appellant to start the

development  work.     Clause  13  of  the  development

agreement  contains  an  arbitration  clause  whereby  the

parties  had  agreed  to  refer  the  matter  in  respect  of  any

difference  or  dispute  between  them  with  regard  to  the

construction or the terms of the development agreement or

with  regard  to  the  project  undertaken  for  arbitration.   A

Memorandum  of  Understanding  (MoU)  was  entered  into

between the parties, which stipulates that the developer was

required  construct  a  township  project  consisting  of  one

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commercial building, 11 residential wings in four buildings

and one club house under licence from the Indore Municipal

Corporation.   It  was  further  agreed  that  if  the  MoU was

terminated, the developer would not have any right, title or

interest in the township project and would be required to

remove  his  employees  and  machineries  from  the  land.

Clause 13 of the developer agreement was also incorporated

in the MoU.   

3. As  disputes  arose  with  regard  to  payment,  the

respondent  terminated  the  MoU,  forfeited  the  security

deposit  and  invoked  the  arbitration  clause  by  issuing  a

notice  through his  Advocate  on 6.6.2013.   The appellant

herein replied to the termination notice by stating that it

had carries out substantial construction on the property by

constructing  three  buildings  and  by  taking  many  other

steps.   It  was  also  stated  by  the  appellant  that  the

environmental clearance certificate for the project was not

obtained by the respondent and, therefore, further work was

stopped.  The appellant required the respondent to perform

his  part  of  the  contract  in  obtaining  the  requisite

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environmental  clearance,  execute  irrevocable  power  of

attorney, refund the part of  the amount payable and pay

interest on the security deposit.   

4. As the factual matrix would undrape, when arbitration

was  demanded  by  the  respondent,  the  appellant  on

16.7.2013 replied that the arbitration tribunal had to be in

Mumbai.   It  was  also  put  forth  that  it  was  in  physical

possession  of  the  property  and  its  construction  material,

machinery, office equipments and other equipments were at

the site.  At this stage, the appellant moved the High Court

of Bombay for grant of leave under Clause 12 of the Letters

Patent by filing an application under Section 9 of the 1996

Act asserting that the courts at Bombay have the territorial

jurisdiction,  and  accordingly  leave  was  granted.   The

respondent  after  entering  appearance  filed  an application

praying for revocation of leave.  While seeking revocation of

leave,  it  was  contended  by  the  respondent  that  dispute

pertains  to  the  land which is  situate  at  Indore;  that  the

development agreement and the MoU had been executed at

Indore where the immoveable property is situated; and that

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the dispute fundamentally is for right and possession over

the land, hence, the court where the land is situated has the

territorial  jurisdiction in respect  of  the arbitration or  any

application to be filed under the 1996 Act.  

5. The  learned  Single  Judge  scanned  the  anatomy  of

Clause 12 of the Letters Patent and various decisions of the

High Court of Bombay and referred to the decision in Moolji

Jaitha & Co. v.  Khandesh Spinning & Weaving Mills

Co.  Ltd.1,  adverted  to  the  issue  relating  to  what  would

constitute cause of action in the obtaining factual matrix,

analysed the decision of  the Bombay High Court in  Shiv

Bhagwan Moti Ram Saraoji v. Onkarmal Ishar Dass &

Ors.2,  and  referred  to Adcon  Electronics  Pvt.  Ltd.  v.

Daulat and Anr.3 and eventually came to hold as follows:-

“... the Petitioner has put up its machinery, staff for  the  construction  and  the  ultimate construction  upon  the  land.   Several  buildings have  been  constructed  fully  or  in  part.   The parties are entitled to a part of the construction each  as  per  the  directions  of  the  development agreement or amount in cash as per the MOU. The development work is in progress.  An order for  protection  of  the  property  pending  the arbitration  would  involve  the  land  itself.   The

1  AIR 1950 FC 83 2  AIR 1952 Bom. 365 3  (2001) 7 SCC 698

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dispute has nothing to do with the rights of the parties in personam only....”

And again:-

“...  The disputes in the development agreement are  closely  connected  with  the  land,  the possession of  which is  disputed by the parties. The suit is a suit for land.  It would have to be filed in Indore where the land is situate.”

6. Being of  this view, the learned Single Judge revoked

the leave that was earlier granted.  Being  dissatisfied  with

the aforesaid order, the appellant preferred an appeal before

the  Division  Bench.   Before  the  Division  Bench  it  was

contended that the appellant was in possession of the land

and the possession shall remain with it till the completion of

the entire project and he was entitled to refund of security

deposit.   

7. In essence, it was urged that the application preferred

under Section 9 of the 1996 Act was tenable before the High

Court of Bombay and there was no justification to revoke

the leave.  The Division Bench referred to certain clauses of

the  agreement  and  the  clauses  from  the  MoU  and  the

correspondences between the parties, the assertions made

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in  the  Section  9  petition  and  the  relief  sought  therein,

addressed to the import of Clause 12 of the Letters Patent

and what meaning had been given to the “suit for land” in

Moolji Jaitha (supra) by analyzing various passages, culled

out the principles stated in Adcon Electronics (supra), took

note of  the fact  that  the development agreement and the

MoU had been executed at Indore, the statement of claim

and the counter claim filed by the parties before the learned

arbitrator who has already entered into reference and in the

ultimate eventuality opined thus:-

“... In the present case, we are of the vie that the disputes between the  parties hereto in relation to the  development  agreement  dated  28  February 2008 and the  MOU dated  8  June  2012 are  of such a nature that they are rooted to the land. The disputes are not such that they relate only to the  execution  of  any  document  and/or  specific performance  thereof  simplicitor.   The  disputes relate  to  possession  of  the  said  land  which  is outside  the  jurisdiction  of  the  Court  as  also regarding  the  percentage  of  the  parties  rights, title  and interest  in the said land and/or their entitlement to a sizable portion of the constructed space  thereon.   These  disputes  would  certainly fall  within  the  expression  “suit  for  land” appearing in Clause XII of the Letters Patent.”  

Expressing  thus,  the  Division  Bench  declined  to

interfere with the order passed by the learned Single Judge.

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8. We have heard Mr. Shekhar Naphade, learned senior

counsel  for  the  appellant  and Mr.  Shyam Divan,  learned

senior counsel for the respondent.

9. Criticizing the orders passed by the High Court, it is

submitted by Mr. Naphade, learned senior counsel that the

learned  Single  Judge  as  well  as  the  Division  Bench  has

fallen into serious error in their appreciation of the clauses

in the agreement and the relief sought inasmuch as it was a

money claim and when the amount was paid at Mumbai,

the  High Court  of  Mumbai  had the jurisdiction.   He has

drawn our attention to various clauses in the agreement to

which we shall refer to in the course of our delineation.  In

essence,  his  submission  is  that  it  is  basically  a  claim

relating to money and it has nothing to do with the land

and,  therefore,  the  analysis  made  by  the  High  Court  is

fundamentally fallacious.   

10. Mr.  Divan,  learned  senior  counsel  appearing  for  the

respondent  countering  the  aforesaid  submissions  would

contend that the cause of action had arisen at Indore regard

being had to the fact that the land is situated at Indore and

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the agreement in question and the MoU were executed at

Indore.  It is his further submission that the order passed

by the Division Bench is absolutely defensible inasmuch as

it is a claim for land and in the backdrop of prayer under

Section 9 of the 1996 Act, there could not have been any

other conclusion than what has been expressed by the High

Court that it has no territorial jurisdiction to deal with the

controversy.   

11. To appreciate the controversy, it is appropriate to refer

to Clause 12 of the Letters Patent, which reads as follows:-

“12. Original jurisdiction as to suits – And we do further  ordain  that  the  said  High  Court  of Judicature  at  Bombay,  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 such original jurisdiction in cases falling within the jurisdiction of the Small Cause  Court  at  Bombay,  in  which  the  debt  or damage, or value of  property sued for does not

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exceed one hundred rupees.”

12. The  said  clause  fell  for  interpretation  in  Adcon

Electronics (supra), wherein the Court stated thus:-

“Thus,  it  is  clear  that  under  clause  12  of  the Letters Patent, the High Court in exercise of its ordinary original  jurisdiction will  have power to receive, try and determine: (1)  suits for land or other  immovable  property  if  such  property  is situated  within  the  local  limits  of  original jurisdiction  of  the  High  Court;  or  (2)  all  other cases (a) if the cause of action has arisen wholly within  the  local  limits  of  the  ordinary  original jurisdiction of the High Court; (b) if prior leave of the  Court  has  been obtained and the  cause  of action has arisen in part within the local limits of the  ordinary  original  jurisdiction  of  the  High Court; or (c) if the defendant dwells or carries on business or personally works for gain within such limits.”

13. Be  it  noted  under  Section  120  of  the  Code  of  Civil

Procedure, 1908 (for short, “CPC”), Sections 16, 17 and 20

are  not  applicable  to  the  High  Court  in  original  civil

jurisdiction.   Thus,  as  far  as  the  Bombay  High  Court  is

concerned, it is Clause 12 of the Letters Patent that would

govern the controversy.  

14. In  Adcon Electronics (supra),  the  two-Judge Bench

referred  to  the  divergence  of  opinion  in  Moolji  Jaitha

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(supra), the Full Bench decision of the High Court of Madras

in  P.M.A.  Velliappa  Chettiar  v.  Saha  Govinda  Doss4,

Division  Bench  judgment  of  Calcutta  High  Court  in

Debendra Nath Chowdhury v. Southern Bank Ltd.5 and

ruled thus:-

“From the above discussion it follows that a “suit for  land”  is  a  suit  in  which  the  relief  claimed relates to title to or delivery of possession of land or immovable property. Whether a suit is a “suit for  land”  or  not  has  to  be  determined  on  the averments  in  the  plaint  with  reference  to  the reliefs claimed therein; where the relief relates to adjudication  of  title  to  land  or  immovable property or delivery of possession of the land or immovable property, it will  be a “suit for land”. We  are  in  respectful  agreement  with  the  view expressed by Mahajan, J. in Moolji Jaitha case.”

15. It  will  be  appropriate  to  reproduce  what  Justice

Mahajan had observed in Moolji Jaitha (supra):-

“If an attempt is made to find a comprehensive definition  of  the  phrase,  it  will  eventually  be discovered  that  it  has  created  further complications.  I  therefore  content  myself  by saying that where the nature of the suit is such that in substance it involves a controversy about land  or  immovable  property  and  the  court  is called upon to decide conflicting claims to such property  and  a  decree  or  order  is  prayed  for which will bring about a change in the title to it, that suit can be said to be in respect of land or immovable property; but where incidentally in a

4  AIR 1929 Mad. 721 5  AIR 1960 Cal. 626

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suit, the main purpose of which or the primary object of which is quite different, some relief has to be given about land, the title to it not being in dispute in the real sense of the term, then such a suit  cannot  fall  within  the  four  corners  of  this expression.”

16. He had further added:-

“In  my  opinion,  if  the  suit  is  for  specific performance and a decree for possession of the land sold is claimed, such a suit would certainly be a suit for land; but if the suit is simpliciter for specific performance, i.e., for the enforcement of the  contract  of  sale  and  for  execution  of  a conveyance, in that event there can be no good ground for holding that such a suit is a suit for determination of title to land or that the decree in it would operate on the land.”

17. Recently,  in  Excel  Dealcomm  Pvt.  Ltd.  v.  Asset

Reconstruction  Co.  (India)  Ltd.6,  the  controversy  had

arisen  from the  High  Court  of  Calcutta.   The  two-Judge

Bench addressed to the issue “what is the suit for land”,

and observed as under:-

“A  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 (P) Ltd. v. Daulat]. 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. v.  Deutsche  Bank7).  If  by  the

6  (2015) 8 SCC 219 7   (2004) 12 SCC 376

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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.”

18. Be it noted, in the said case suit was filed for specific

performance of the agreement which contemplated sale of

property  as  has  been  described  under  Section  13  of  the

SARFAESI Act, 2002.  The issue that arose before the Court

is as follows:-

“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  the SARFAESI  Act  in  terms  of  the  Rules.  The question with respect to Clause 12 of the Letters Patent  in  the  present  case  is  that  whether  the present suit is suit for land.”

19. The Court referred to the relief clause, the authority in

Adcon Electronics (supra) and came to hold that:-

“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 Adcon Electronics would not apply as there was a prayer for  delivery of

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possession  in  the  present  case.  Therefore,  we hold that the present suit was indeed a suit for land.”

Being  of  this  view,  it  concurred  with  the  opinion

expressed by the High Court of Calcutta that it did not have

the territorial jurisdiction.

20. The obtaining factual matrix has to be appreciated on

the basis of the principles that have been enunciated in the

authorities we have referred to hereinabove.  It has to be

borne in mind that it was an application under Section 9 of

the 1996 Act.  Section 9 of the 1996 Act reads as follows:-

“9.  Interim measures, etc. by Court.—A party may, before or during arbitral proceedings or at any time after the making of the arbitral award but before it is enforced in accordance with sec- tion 36, apply to a court—

(i) for the appointment of a guardian for a minor or a person of unsound mind for the purposes of arbitral proceedings; or

(ii) for an interim measure of protection in respect of any of the following matters, namely:—

(a) the preservation, interim custody or sale of any goods which are the subject-matter of the arbitration agreement;

(b) securing the amount in dispute in the arbi- tration;

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other clauses.  The recital part reads as follows:-

“AND WHEREAS the Owner and Developer have agreed to develop the said land by entering in a Development  Agreement,  by  which  the  owner shall get 40% of the Developed Saleable area and Developer  shall  get  60%  of  the  Developed Saleable Area in the proposed project irrespective of  its  being residential/commercial  or  hotels  or Multiplex or mixture of the either etc.”

23. Clause  3  of  the  agreement  deals  with  the  security

amount which stipulates that for developing the said land of

the owner, the developer shall give a “Refundable Security

Deposit” of Rs.20 crores to the owner.  A schedule was fixed

for payment of the said amount.  Clause 4 of the agreement

stipulates what events would take place after execution of

the development agreement.  It basically relates to certain

obligations to be performed by the parties.  

24. Clause 5(ii) of the agreement on which emphasis has

been laid is to the following effect:-

“5. (ii) The Developer and the Owner shall at all times thereafter be entitled to receive money, take bookings,  enter  into  leasing  agreements,  sell, assign any or all portions of the proposed project falling  under  his  share,  and owner hereby give express consent for the same to the Developers.”

25. Clause 7 deals with refund of security deposit.  Clause

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7D from which inspiration has been drawn by the learned

senior counsel for the appellant reads as follows:-

“7D. It is agreed between the parties hereto that if the Owner fails to refund the security deposit and the parties hereto decides to sale the units and/or blocks then in that event the Developer shall  be  entitled  to  recover  refundable  security deposit from the sale of Units and/or Blocks of the Owner’s share and in the circumstances the Developers shall  be entitled to receive 60% and the Owner shall be entitled to receive 40% of the sale  price  of  the  Units  and/or  Blocks  of  the Owner’s  share  and  the  said  60% price  will  be adjusted towards refundable security deposit.”

26. Clause 9 deals with the responsibility of the developer.

Clause 10 deals with the joint responsibilities of the owner

and the developer.  The said clause reads as follows:-

“10.  Joint  Responsibility  of  Owners  and Developers:-

(i) To  provide  cooperation  to  each  other  for sanctioning  the  plans  of  the  project  with  all required  permissions  and  obtaining  occupation certificate  for  handing  over  possession  of  the tenements to the Purchasers of Tenements.

(ii) To  clear  all  the  dues  of  authorities concerned  with  respect  of  plot  under development.  

(iii) To  convey  the  land  with  building  to  the societies and/or condominium or apex body after completion of project as per rules applicable.”

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27. At  this  juncture,  it  is  relevant  to  refer  to  certain

aspects  which  have  been  enumerated  in  the  MoU.   The

recital in the MoU is as follows:-

“& Whereas ‘YES BANK’ (hereinafter referred to as  the  ‘SAID  BANK’)  has  principally  agreed  to grant loan of Rs.85 crores to the Developers for the development of the said Township for which purpose the Developers are required to mortgage the Land and Development of the said Township to  the  SAID  BANK  in  lieu  of  which  the  SAID BANK  has  agreed  to  disburse  construction related loan which shall be disbursed as per the progress of the project.

& Whereas as  the  Development  Agreement  did not provide for mortgage of the Land of the Owner and for availing the facility of loan the Developer are  required  to  mortgage  the  entire  project  the Developer  has  proposed  to  pay  a  lump  sum amount of Rs.137 crores to the Owner in lieu of his  share  in  the  said  Township  for  which consideration the Owner has agreed to permit the Developer to avail loan facility from the said Bank for the development of the Said Township and to release/transfer his share in the said Township in favour of the Developer.”

28. Clause  13  of  the  agreement  refers  to  resolution  of

disputes.  We quote the said clause:-

“13. RESOLUTION OF DISPUTES:-

That in case of any difference or dispute between the  parties  with  regard  to  the  meaning  of construction of this MoU or regarding any terms of the Development Agreement or with regard to

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the  project  undertaken  under  this  MoU  or Development agreement to be executed between the  parties,  the  same  shall  be  resolved  by arbitration in conformity  with the  provisions of the Arbitration and Conciliation Act, 1996.”

29. In this context reference to the reliefs prayed for under

Section 9 petition gain significance.  Prayers (a) and (b) of

the paragraph relating to relief sought read as under:-

“(a) pending the hearing and final of the proposed arbitral proceedings and for a period of sixty days after  the  award  therein,  the  respondent  by himself and through his servant and or his agent and/or in any manner, howsoever, be restrained by a temporary order or injunction from entering upon  the  property  bearing  Survey  No.  1487/1 and 1487/2 at Kasba, Indore, Patwari Halka No. 15/2,  Tahsil  &  District  –  Indore,  Madhya Pradesh,  and  from dealing  with  or  moving  the petitioners’  construction machinery  on the  said property and from disturbing or interfering with the Petitioners possession thereof in any manner;

(b)  pending and hearing and final disposal of the proposed arbitral proceedings and for a period of sixty  days  after  the  award  therein,  the Respondent  by  himself  and  or  through  his servants  and/or his  agents,  be restrained by  a temporary  order  of  injunction  from  or  in  any manner  directly  or  indirectly  disposing  off, alienating,  encumbering  or  creating  third  party rights in any manner whatsoever in the property bearing Survey No. 1487/1 and 1487/2 at Kasba, Indore, Patwari Halka No. 15/2, Tahsil & District – Indore, Madhya Pradesh, and from disturbing or  interfering  with  the  Petitioners  possession thereof in any manner.”

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30. At this stage, we are obligated to state that the High

Court  has  referred  to  the  correspondences  between  the

parties.   It  has  referred  to  the  letter  dated  19.6.2013  in

extenso.   In the said letter  it  was mentioned that  as the

owner  of  the  land  had  terminated  the  development

agreement  and  the  MoU,  he  had  taken  over  the  entire

physical  and  actual  possession of  the  said  land and the

developer  was  called  upon  to  remove  its  machinery  and

construction material lying upon the said land.  The said

letter was replied to vide letter dated 16.7.2013 refuting the

fact that the physical possession of the land had been taken

over by the land owner and stating that the possession was

still with the developer.   The Division Bench has extensively

reproduced from the petition preferred under Section 9 of

the 1996 Act.  We think it apt to reproduce the same:-

“10.   The  Petitioners  have  shocked  to  receive letter  dated  6  June  2013,  from  Respondent’s Advocates,  informing  the  Petitioner  that  the Respondent  had  terminated  the  MOU  and  the Development  Agreement  with  immediate  effect and had allegedly  taken over  the  possession of the Township in terms of the MOU.  By the said letter, the petitioners were further informed that the  Security  Deposit  of  Rs.20  crores  stood

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forfeited.   The  petitioners  were  informed  that without  prejudice  to  the  termination,  the respondent made a demand of payment of Rs.71 crores along with interest thereon.  A copy of the letter dated 6 June 2013 is annexed and marked Exhibit-F hereto.  

xxxxx xxxxx xxxxx

14.  The respondent, by Advocates letter dated 30 June  2013  sought  to  invoke  the  Arbitration Clause  under  the  Development  Agreement  and the Memorandum of Understanding.  By the said letter,  the  petitioners  were  informed  that  the entire  physical  and  actual  possession  was allegedly already taken over by the respondent. This is a false statement.  The petitioners were further called upon to remove the machinery and construction  material.   Hereto  annexed  and marked  Exhibit-I  is  a  copy  of  the  respondent’s Advocates letter dated 30 June 2013.

xxxxx xxxxx xxxxx

17.   The  petitioners  submit  that  they  had completed  substantial  work  by  completing Building B-1, B-2 and B-3 (where only top slabs are  pending),  construction  of  five  slabs  of Building  C-1,  commencing  digging  and  footing work of Building A-1.  The petitioners’ machinery and  labour  are  at  site.   The  petitioners  are  in possession of the site.  Now, the respondent has suddenly  demanded  a  sum  of  Rs.71  crores, allegedly due to the respondent, under the MOU dated  8  June  2012.   Though  not  entitled,  the respondent  has  sought  to  forfeit  the  security deposit of Rs. 20 crores, in accordance with the MOU.  

18.  In the circumstances, the petitioners submit that  the  petitioners  are  entitled  to,  pending  an

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adjudication in the proposed Arbitral proceedings and for a period of sixty (60) days after the award therein, for an order of injunction, restraining the respondent by himself or through his servants or agents from entering upon the property, subject matter of the Development Agreement and from dealing  with  and  moving  the  machinery  of  the petitioners used in construction activity and from disturbing  or  interfering  with  the  petitioners possession thereof in any manner.”

31. After  discussing  the  facts  in  entirety,  the  Division

Bench has opined thus:-

“...  The  development  agreement  also  stipulated that the appellant was entitled to possession of the said land and accordingly the respondent, by a separate possession receipt dated 28 February 2008 handed over to the appellant possession of the said land which is the subject matter of the development agreement.  Thereafter,  the parties entered into  a  MOU dated 8  June 2012 which inter  alia  recited  that  the  appellant  was  to construct  the  township  project  consisting  of residential and commercial buildings and a club house and further that the respondent would be paid a sum of Rs.137 crores in place of its 40% share  under  the  development  agreement.   As disputes  arose  between  the  parties,  the  said development  agreement  and  the  MOU  were terminated by the  respondent  by its  Advocate’s letter  dated  6  June  2013  and  the  respondent invoked arbitration.  It is pertinent to note that in paragraph 9  of  the  said  termination  letter,  the respondent has specifically stated that as on that date  (6  June  2013),  the  respondent  had taken over  the  possession  and absolute  ownership  of the  said  township  including  the  structures thereon,  in  accordance  with  the  terms  of  the

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MOU.  This included the construction put up by the appellant on the said land.  In the said letter, at  paragraphs  11  and  12,  the  respondent reiterated that it was the owner of the said land.  

32. And  thereafter  the  Division  Bench  proceeded  to

analyse  the  letter  dated  30.6.2013  and  on  that  basis

observed that:-

“...  This  letter  of  the  respondent  further  stated that  since  the  Respondent  had  terminated  the development agreement and MoU, the respondent had  taken  over  the  entire  physical  and  actual possession of the said land and in view thereof called  upon  the  Appellant  to  remove  its machinery  and  construction  material  from  the said  land.   Again,  by  its  letter  dated  16  July, 2013, the Appellant once again denied that the physical  possession  of  the  said  land  had  been taken over by the Respondent as alleged in its letters  dated  6  June  2013  and  30  June  2013 respectively.”

33. The  seminal  issue  is  whether  on  the  factual  score

which  has  been  exposited,  the  application  filed  under

Section 9 of the 1996 Act before the High Court of Bombay

can be regarded as a money claim.  On a studied scrutiny of

the  agreement  and  the  MoU  it  is  clear  as  day  that  the

development  agreement  indubitably  had  created  certain

interests  in  the  land  in  favour  of  the  appellant.   The

assertions  made  in  the  application  along  with  the  relief

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clause when read in entirety and appreciated in a holistic

manner,  it  becomes  luminescent  that  the  core  dispute

pertains to possession of the land, for the appellant claims

to  be  in  exclusive  possession  and  the  respondent,  per

contra, has asseverated that it had taken over possession.

It  can irrefragably be stated that any order passed under

Section 9 of the 1996 Act will have the impact on the land.

It  is  difficult  to  accede to the submission that it  will  not

conceptually  fall  within the category of  “suit  for  land” as

engrafted under Clause 12 of the Letters Patent.  It is clearly

a dispute with regard to the possession which is evincible

from the correspondences and the averments made in the

application  preferred  under  Section  9  of  the  1996  Act.

Thus, there has to be determination as regards possession

and impliedly issue of direction for recovery of possession.

Hence, the conclusion arrived at by the Division Bench on

the basis of the scrutiny of documents that the dispute is

embedded with regard to the possession of the land because

the fundamental claim pertains to certain constructed space

on the land and, therefore, it would conceptually fall within

the conception of “suit for land” appearing in Clause 12 of

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the  Letters  Patent  is  unexceptionable.   Prayer  (a)  quoted

above  seeks restraint  by  a  temporary order  or  injunction

from entering upon the property.  It is difficult to accept the

submission  that  it  is  a  money  claim  and,  therefore,  the

Bombay  High  Court  would  also  have  the  territorial

jurisdiction  and  accordingly  we  unhesitatingly  repel  the

same.   

34. Resultantly, we find no substance in the appeal and

accordingly the same stands dismissed.  There shall be no

order as to costs.  

.............................J. [Dipak Misra]

............................J. [Prafulla C. Pant]

New Delhi October 15, 2015