Setback to Wadia in land battle as Supreme Court upholds old Act


April 9, 2015

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In a landmark ruling, the Supreme Court on Wednesday upheld a law made in Maharashtra in 1977, which requires that before courts get into the facts of a case, they should decide on jurisdiction when questions are raised on issues, including that of delay beyond a legally set bar of three years.

The verdict, by a bench of Justices M Y Eqbal and Kurian Joseph, comes on a bunch of appeals against separate orders passed by the Bombay high court in disputes mostly over property development.The court has held that section 9A of the Maharashtra Amendment Act, 1977, is a law by itself and deters litigants from filing suits beyond a three-year limitation. The law was intended to end “frivolous, belated suits“ against the government. The SC was asked to decide on the section’s constitutional validity in 2012. Wednesday’s verdict is a setback to industrialist Nusli Wadia, who had dragged to court Ferani Hotels, a group company of the late real estate baron G L Raheja and now managed by his son Sandeep, over development of vast tracts of land in Malad. Wadia had based his plea on a 2008 cancellation of a 1995 agreement between the two where he was the sole administrator of the land and had given development rights to Ferani in lieu of a 12% return on sale proceeds.

Justice Eqbal, writing the judgment, said section 9A mandates a court to decide its jurisdiction before proceeding with a case and granting interim relief by way of injunction.The term “jurisdiction“ has a wide connotation, the SC said.

The SC did not accept Wadia’s counsel Fali Nariman’s contention that the question of law and facts were to be decided together and only those of law cannot be decided first.

Nariman and Wadia’s solicitor Shrikant Doijode had argued in the HC that the Raheja company had committed fraud and had thus ended the deal disentitling any further development on the land by Raheja. Ferani had denied the fraud allegations and said Wa dia knew since 2000 that all transactions were genuine, thus making his suit timebarred.

The SC accepted the contentions of Ferani’s legal team, including Kapil Sibal, Salman Khurshid, Abhishek Singhvi, Ashwani Kumar and advocate Vivek Vashi that a court’s jurisdiction must mandatorily be decided first before going into the merits of a case. The SC ruling may be challenged in a review, said a lawyer. But if it isn’t, it may mean that Wadia will have to testify and be crossexamined in the HC to prove why his suit against Raheja is not barred by limitation.