SC Transfers Civil Suit to Madhya Pradesh in Land Dispute Between ACME Papers and Chintaman Developers

The Supreme Court of India recently adjudicated on a significant transfer petition involving a dispute between M/s ACME Papers Ltd. and M/s Chintaman Developers Pvt. Ltd. over a land transaction. The dispute, which originated from a Memorandum of Understanding (MoU) executed between the parties, led to multiple legal actions in different jurisdictions. The primary question before the Court was whether the case should be transferred to Sehore, Madhya Pradesh, or remain in Calcutta, West Bengal.

In a judgment delivered by Justices Sudhanshu Dhulia and Prasanna B. Varale, the Court ruled in favor of transferring the case to Sehore, Madhya Pradesh, emphasizing that the subject property was located there and that most of the related documentation and witnesses would be available in that jurisdiction. The ruling ensures that the case is heard efficiently and avoids multiplicity of proceedings.

Background of the Case

The dispute arose from an MoU dated November 10, 2022, under which M/s Chintaman Developers Pvt. Ltd. agreed to purchase approximately 74.06 acres of land from M/s ACME Papers Ltd. for Rs. 20,69,92,000. The MoU stipulated that ACME Papers Ltd. would secure all necessary approvals and No Objection Certificates (NOCs) for the transaction. However, when the approvals were not obtained in a timely manner, ACME Papers Ltd. sought to cancel the agreement.

Chintaman Developers, disagreeing with the termination, filed a suit for specific performance of the MoU in the District Court of Sehore, Madhya Pradesh. Meanwhile, ACME Papers Ltd. initiated legal proceedings in Calcutta, seeking a declaration that the MoU stood terminated.

Legal Issues and Arguments

Petitioner’s Arguments (ACME Papers Ltd.)

The MoU was executed in Calcutta; therefore, the case should be heard there.
Their lawsuit in Calcutta focused on the fundamental issue of the MoU’s validity and enforceability.
If the MoU was deemed invalid, the question of specific performance (as sought by Chintaman Developers) would be irrelevant.

Respondent’s Arguments (Chintaman Developers Pvt. Ltd.)

The dispute is fundamentally about the land, which is situated in Sehore, Madhya Pradesh.
All land records, official documents, and witnesses are available in Madhya Pradesh, making it the appropriate forum.
ACME Papers Ltd. had previously litigated related matters in Sehore and was appearing before the Debt Recovery Tribunal in Jabalpur regarding the same property.

Supreme Court’s Observations

The Court relied on the legal principle under Section 16 of the Code of Civil Procedure (CPC), which mandates that suits related to immovable property should be filed where the property is located. It stated:

“Section 16, CPC inter alia provides that suits for the determination of any other right to or interest in immovable property shall be instituted in the Court within the local limits of whose jurisdiction the property is situate.”

The Court rejected ACME Papers Ltd.’s reliance on Section 20 of the CPC, clarifying that it is a residuary provision applicable only when Sections 15 to 19 do not cover a situation.

The Court also referenced the case of Harshad Chiman Lal Modi v. DLF Universal Ltd. (2005) 7 SCC 791, which reaffirmed that disputes involving immovable property must be decided in the jurisdiction where the property is located.

Timing of the Suits and Section 10 of CPC

The Supreme Court also examined the timing of the suits:

Chintaman Developers Pvt. Ltd. filed its suit in Sehore on May 12, 2023.
ACME Papers Ltd. filed its vakalatnama in the Sehore case on June 28, 2023.
ACME Papers Ltd. then filed its own suit in Calcutta on July 20, 2023.
Two days later, on July 22, 2023, ACME Papers Ltd. filed its written statement in Sehore.

Under Section 10 of the CPC, courts are prohibited from proceeding with a suit if the matter is already pending in another competent court. The Supreme Court cited the case of Gupte Cardiac Care Centre and Hospital v. Olympic Pharma Care (P) Ltd. (2004) 6 SCC 756, stating:

“The suit at Nashik has been instituted first in point of time. By reference to Section 10 CPC, the trial of the suit at Delhi, being the latter suit, shall be liable to be stayed.”

Final Judgment and Directions

The Supreme Court ruled:

The transfer petition filed by ACME Papers Ltd. (TP(C) No. 2664/2023) was dismissed.
The transfer petition filed by Chintaman Developers Pvt. Ltd. (TP(C) No. 499/2024) was allowed.
The case pending in the City Civil Court, Calcutta (TS No. 1346/2023) was transferred to the Principal Judge in Sehore, Madhya Pradesh.
ACME Papers Ltd. was given the liberty to withdraw the transferred suit and file a counterclaim in the ongoing Sehore case.
Once transferred, the Sehore court would issue fresh notices to all parties and proceed from the stage where the Calcutta court left off.

Implications of the Judgment

This ruling has significant implications:

Jurisdictional Clarity: The Supreme Court reaffirmed that land-related disputes should be decided where the property is located.
Avoiding Parallel Litigation: The judgment discourages filing multiple cases in different jurisdictions to delay proceedings.
Efficiency in Judicial Process: By consolidating proceedings in one location, the Court ensures that the dispute is resolved efficiently.

The ruling underscores the importance of adhering to jurisdictional principles in civil disputes involving immovable property, ensuring that litigation is conducted in the most appropriate forum.

Petitioner Name: M/s ACME Papers Ltd..
Respondent Name: M/s Chintaman Developers Pvt. Ltd. & Ors..
Judgment By: Justice Sudhanshu Dhulia, Justice Prasanna B. Varale.
Place Of Incident: Sehore, Madhya Pradesh.
Judgment Date: 22-03-2024.

Don’t miss out on the full details! Download the complete judgment in PDF format below and gain valuable insights instantly!

Download Judgment: ms-acme-papers-ltd.-vs-ms-chintaman-develo-supreme-court-of-india-judgment-dated-22-03-2024.pdf

Directly Download Judgment: Directly download this Judgment

See all petitions in Property Disputes
See all petitions in Specific Performance
See all petitions in Judgment by Sudhanshu Dhulia
See all petitions in Judgment by Prasanna Bhalachandra Varale
See all petitions in allowed
See all petitions in supreme court of India judgments March 2024
See all petitions in 2024 judgments

See all posts in Civil Cases Category
See all allowed petitions in Civil Cases Category
See all Dismissed petitions in Civil Cases Category
See all partially allowed petitions in Civil Cases Category