Party Name: Ambalal Sarabhai Enterprises Ltd. Versus K S Infraspace LLP limited And Another

Citation: 2020 JC (SC) 1859

Judgment Date: 06/01/2020

Court: Supreme Court of India

Main Category: Civil

Sub Category: Temporary Injunction – Specific Performance of contractJ

udges/Coram: Justice Navin Shah and Justice Ashok Bhushan

Case Note: The Plaintiff has to establish a strong prima facie case on basis of undisputed facts. The conduct of the plaintiff will also be a very relevant consideration for purposes of injunction. The discretion at this stage has to be exercised judiciously and not arbitrarily.

Facts: The Plaintiff filed the two suits for declaration and specific performance against the Defendant sister concerns with regard to a total area of 19,685 square meters of lands situated in Village Wadiwadi, Subhanpura, District Vadodara in Gujarat. The Plaintiff contended that there existed a concluded contract with the Defendants after negotiations for sale of the suit lands for a total sum of

Rs. 31,81,73,076/- and 58,26,86,984/- respectively. The Plaintiff had duly communicated its acceptance of the final draft memorandum of understanding (MoU) dated 30.03.2018. Only the formal execution of contract documents remained as a formality. A sum of Rs. 2.16 crores had also been paid as advance. The Plaintiff was ready and willing with the balance amount. Alternately, it was claimed that there existed a concluded oral contract between the parties. The Defendants had surreptitiously entered into a registered agreement for sale with Defendant No. 2 on 31.03.2018 and thus the suit and prayer for injunction.The Principal Civil Judge by order dated 18.02.2019 held that by inference the terms and conditions for sale stood finalized by the e-mail dated 29.03.2018 and 30.03.2018. A token amount of Rs. 2.16 crores had already been paid and the Plaintiff was ready and willing with the balance amount. Creation of third party rights would lead to further litigation. Thus by an order of temporary injunction the Defendants were restrained from executing any further documents including a sale deed or creating further charge, interest or deal with the suit lands in any manner. The High Court by its order dated 30.08.2019 affirmed the order of injunction holding that the communication of acceptance to the draft MoU sent by e-mail dated 30.03.2018 coupled with the exchange of WhatsApp correspondences between the parties amounted to a concluded contract.

Observation: Satisfaction that there is a prima facie case by itself is not sufficient to grant injunction. The Court further has to satisfy that non-interference by the Court would result in “irreparable injury” to the party seeking relief and that there is no other remedy available to the party except one to grant injunction and he needs protection from the consequences of apprehended injury

or dispossession.

Irreparable injury, however, does not mean that there must be no physical possibility of repairing the injury, but means only that the injury must be a material one, namely one that cannot be adequately compensated by way of damages.

The third condition also is that “the balance of convenience” must be in favour of granting injunction. The Court while granting or refusing to grant injunction should exercise sound judicial discretion to find the amount of substantial mischief or injury which is likely to be caused to the parties, if the injunction is refused and compare it with that which is likely to be caused to the other side if the injunction is granted.

Under Order 39 of the Code of Civil Procedure, jurisdiction of the Court to interfere with an order of interlocutory or temporary injunction is purely equitable and, therefore, the Court, on being approached, will, apart from other considerations, also look to the conduct of the party invoking the jurisdiction of the Court, and may refuse to interfere unless his conduct was free from blame. Since the relief is wholly equitable in nature, the party invoking the jurisdiction of the Court has to show that he himself was not at fault and that he himself was not responsible for bringing about the state of things complained of and that he was not unfair or inequitable in his dealings with the party against whom he was seeking relief. His conduct should be fair and honest.

If on weighing competing possibilities or probabilities of likelihood of injury and if the Court considers that pending the suit, the subject matter should be maintained in status quo, an injunction would be issued. Thus the Court has to exercise its sound judicial discretion in granting or refusing the relief of adinterim injunction pending the suit.

Held:A Plaintiff seeking temporary injunction in a suit for specific performance will therefore have to establish a strong prima facie case on basis of undisputed facts. The conduct of the Plaintiff will also a very relevant consideration for purposes of injunction. The discretion at this stage has to be exercised judiciously and not arbitrarily.

The grant of injunction to the Plaintiff is unsustainable. Resultantly the orders of injunction are set aside. Nothing in the present order shall be deemed or construed as any expression of opinion or observation by us at the final hearing of the suit which naturally will have to be decided on its own merits. The High Court has already given directions to expedite the hearing of the suit and we reiterate the same. The appeals are allowed.

Referred Case laws:·        

• Mandali Ranganna and Ors. v. T. Ramachandra and Ors., 2008 (11) SCC 1.·        
• Mayawanti v. Kaushalya Devi, 1990 (3) SCC 1.·        
• Dalpat Kumar v. Prahlad Singh, (1992) 1 SCC 719.·        
• Motilal Jain v. Ramdasi Devi (Smt.) and Ors., (2000) 6 SCC 420.·        
• Brij Mohan and Ors. v. Sugra Begum and Ors., (1990) 4 SCC 147.·        
• M.P. Mathur v. DTC, (2006) 13 SCC 706.·        
• Gujarat Bottling Co. Ltd. v. Coca Cola Co., (1995) 5 SCC 545.