Madras High Court
A.M. Krishnamurthy vs Sokab Products Private Limited By Its ... on 8 December, 1995
Equivalent citations: (1996)1MLJ218, 1996 A I H C 5368, (1996) 1 MAD LJ 218 (1996) 2 CIVLJ 327, (1996) 2 CIVLJ 327
ORDER S.S. Subramani, J.
1. This revision is by the defendant in O.S. No. 278 of 1994, on the file of District Munsif's Court, Tindivanam.
2. The suit filed by the respondents herein as plaintiffs is one for permanent injunction restraining the defendant, petitioner herein, from interfering with the plaintiffs' peaceful possession and enjoyment of the suit properties either by themselves or by their representatives or successors-intitle or by anyone claiming through him till 19.10.2002; for costs of suit; and for other reliefs.
3. Along with the suit, the plaintiffs filed I.A. No. 1004 of 1994 for an interim injunction. The material averments in the affidavit filed in support of the said petition are, that the first plaintiff is a private limited company incorporated under Companies Act 1956. Its Certificate of Incorporation is No. 18-17521 of 1989, on the file of Registrar of Companies, Tamil Nadu, and the same was registered on 9.6.1989. The main objects to be pursued by the plaintiffs are said to be many, and, according to the plaintiffs, the foremost object was to have quarry operations by acquiring lights over lands which contain deposits of granite. The business of the company is buying, selling and exporting granites by quarrying the same. It is said that the defendant is the absolute owner of the suit properties, and he approached the plaintiffs with an offer of lease for the purposes of exploiting those lands. Pursuant to the same, exploitation rights have been given to the first plaintiff-company represented by the second plaintiff in respect of the suit lands by duly executed document dated 20.10.1992. By the said arrangement, the plaintiffs are entitled to exploit granite deposits in the suit lands for a period often years from 20.10.1992, with an option to renew the same. An advance of Rs. 7 lakhs was paid and the same is identified in the document dated 20.10.1992 also. In view of the exploitation of the deposits by the plaintiffs, Rs. 10,000 per cubic metre has to be paid to the defendant whenever granite is quarried by 1st plaintiff. It is said that possession of the suit lands was also vested with the plaintiffs by the arrangement dated 20.10.1992, and the plaintiffs took possession of the lands and commenced several activities of quarrying the suit lands. It is said that the plaintiffs, respondents herein, by exploiting the quarry have further settled by way of supply of granite worth Rs. 4,90,000 to one Swastik Enterprises, Madras to whom the defendant, through his proprietory concern, had financial commitments to pay the same. It is also said that the defendant received from plaintiffs Rs. 20 lakhs. It is further said that subsequent to taking possession, the plaintiffs had their overseas commitments, and the contract of purchase has been entered into with foreign buyers for the export of black granite from suit lands. It is stated that the documents produced along with the plaint will show that the plaintiff has acted on the agreement. It is said that the respondents (plaintiffs) have also paid sales-tax to the Government and statutory authorities for movement of blocks from the quarry to the Harbour. The petitioner also gave Letters of Authority to plaintiffs under his trade concern name 'Meena Granite Industries' of which he is the proprietor, authorising the plaintiffs to act and represent the defendant before public authorities as well as in respect of various activities concerning the exploitation of granites by plaintiffs, respondents herein. It is said that persons inimically disposed towards the plaintiffs, have approached the defendant to act contrary to the trade interest of the plaintiffs, and, as a result of that, the defendant, petitioner herein, has completely changed his attitude and is creating various disturbances to the plaintiffs in the smooth exploitation of suit lands. It is further stated that the petitioner herein has started acting against the interest of the respondents herein from 11.4.1994 by joining hands with trade competitors, contrary to the written commitments made by him. As per arrangement dated 20.10.1992, the respondents herein are entitled to exploit the deposits till 19.10.2002. The respondents, apprehending dispossession by force at the hands of the petitioner herein, filed the injunction petition.
4. A counter-affidavit has been filed by the petitioner herein (defendant) wherein he dispute the rights of the plaintiffs to get an injunction. It is said that a document was executed on 20.10.1992, but the same was only for the purpose of getting a loan from Bank, and it was never intended to take effect. It is not an enforceable contract. It is also said that there was no necessity or occasion to give possession of the suit lands to the respondents. The petitioner herein asserts that he continues to be in possession, and he is doing business in granites. It is further averred that the statement that he has received a sum of Rs. 7,00,000 on the date of the agreement by way of advance, is also not correct. The petitioner also denies the allegation by the respondents that they have supplied granites to various countries and that they have settled transaction with Swastik Enterprises. The receipt of nearly Rs. 20 lakhs is also disputed by the petitioner. It is also said that all the documents produced along with the plaint will show that only the defendant is in possession of the suit lands. According to the petitioner herein, the documents do not reveal that he (defendant) has authorised the plaintiffs (respondents herein) to represent him before the Collector and other officials. According to the petitioner, he is still in possession of the suit properties. He disputes the pecuniary jurisdiction of this Court and also the maintainability of the suit as it stands. According to the petitioner herein, the respondents (plaintiffs) have no prima facie case and, therefore, injunction should not be granted.
5. An additional counter-affidavit has also been filed by the defendant, stating that the document dated 20.10.1992 which is the basis of the suit, cannot be enforced in a Court of Law, since it is an unregistered document. According to the defendant, the plaintiffs are not entitled to rely on that document for any purpose. It is also said that under Section 23 of the Contract Act, the court is not competent to take into consideration the terms of the agreement. It is said that it violates the provisions of Rule 33 of Tamil Nadu Minor Mineral Concession Rules, 1959.
6. The trial court, as per order dated 17.8.1994, dismissed the injunction application.
7. The trial court was of the view that the respondents have not proved a prima facie case, and the balance of convenience is also in favour of the petitioner herein. The trial court also took the view that the agreement cannot be enforced since it is opposed to the statutory provisions under Tamil Nadu Minor Mineral Concession Rules. Finally, it has also stated that there is a contractual liability, and, even if the plaintiffs are put to any loss, the same can be compensated in damages. It has also said that the very execution of the document is against statutory provisions. Taking the above view, the trial court dismissed the injunction application.
8. The respondents (plaintiffs) filed C.M.A. No. 161 of 1994. The defendant (petitioner herein) who was the respondent in the said appeal, filed C.M.P. No. 34 of 1995 in that appeal seeking permission to adduce additional evidence.
9. The lower appellate court, as per judgment dated 15.9.1995, allowed the appeal and granted an order of injunction. The lower appellate court was of the view that the agreement dated 20.10.1992 is a lawful agreement whereby possession had passed, and the suit which is only for injunction, in the opinion of the learned appellate Judge, can be maintained. The learned Judge was also of the view that the agreement in question does not violate the provisions of Tamil Nadu Minor Mineral Concession Rules, and that the same is not void. The learned appellate Judge was also of the view that Rule 23 of the Tamil Nadu Minor and Mineral Concession Rules enables registered holder and lessee to jointly work the mines, and, when the respondent (defendant) had permitted the plaintiffs to represent him before the authorities, on that basis, the plaintiffs can take the licence and work in the quarry. The lower appellate court said that till a licence is obtained, the contract cannot be enforced against the Government. As between the parties to the agreement, the agreement was held to be valid. It prima facie took the view that possession was handed over to the plaintiffs and the defendant had also received amounts in consideration of the same. On the above view, it held that the plaintiffs have proved a prima facie case, and accordingly granted temporary injunction till the disposal of the suit.
10. It is against the said judgment of the lower appellate court, this revision is filed.
11. Learned Senior Counsel for the petitioner put forward a contention that the agreement dated 20.10.1992 cannot be considered for any purpose, and the finding rendered by the lower appellate court regarding possession is against the materials placed before court. Learned Senior Counsel also argued that the document dated 20.10.1992 cannot be enforced in a Court of Law, since the same is not registered. He further argued that if the agreement dated 20.10. 1992 is enforced, the same will be against Section 23 of the Contract Act and also against public policy. He also argued that when the trial court has exercised its discretion in refusing injunction, the lower appellate court, under normal circumstances, should not reverse the same, unless patent illegality is shown in such exercise of discretion by the trial court. Learned Senior Counsel also argued that since the suit is based on a contract, injunction suit is not the proper remedy, and the suit should have been one for specific performance of the agreement. It is also said that injunction should not have been granted under Section 41 of the Specific Relief Act. Learned Senior Counsel also attacked the judgment of the lower appellate court on the ground that it has not considered the aspects of balance of convenience and irreparable loss or injury, which are the necessary ingredients that have to be considered before granting injunction.
12. According to the learned Senior Counsel for the respondents (plaintiffs), this being a revision, this Court may not interfere with the conclusion reached by the lower appellate court. He wanted the revision to be dismissed with costs of the respondents.
13. As stated earlier, the only one point that has to be considered in this revision is, whether the judgment of the lower appellate court is liable to be interfered with, in exercise of revisional jurisdiction.
14. The document executed between the petitioner and the respondents herein is marked for reference as Ex. P-28. It is in Tamil. Even at the time when the document was produced in court, an objection was taken by the petitioner herein that the same cannot be admitted in evidence, since it is not properly stamped, nor registered. The trial court permitted the marking of the document subject to payment of stamp duty, finding that there is an agreement. The question whether the document requires registration or not, and whether the same can be considered for any collateral purpose, was not considered by the trial court.
15. I will first deal with the nature of the document executed between the parties, for, that creates a legal relationship which is sought to be enforced through court. It says that the properties which are described in the Schedule belong to the second executant, and since they are covered by rocks, they could not be cultivated by him. It further says that in the properties described, black granites are situated, and the first executant may excavate the black granites, cut them and make use of the same, either for himself or for the purpose of his business. It is further said that for the said purpose of enabling the first party to excavate granites from the property, the document is executed. Further down, it is said that the period of agreement will be initially for ten years, and, on the expiry of the ten years, the first executant will have right of renewal. Still further down, it is said that the first executant may take possession of the property, excavate the granites, and in consideration of the same, Rs. 7 lakhs have been paid. It further says that for every one sq. metre of excavated granites, the first executant shall pay Rs. 10,000 to the second executant. On receipt of the amount, the second executant shall permit the first executant to remove the excavated granites through the passage mentioned in the document, either through motor vehicles or by coolies. It says that on the basis of the said document, the first executant was being put in possession of the properties. It also says that the first party is bound to see that no damage is caused to the property of the second party. It also says that the first executant may move the Government for getting necessary licence, for which the second party has signed and authorised the first party to do so. It is seen that a letter of authorisation has also been given by the petitioner herein authorising the respondents (plaintiffs) to appear on his behalf for the purpose of obtaining mining lease in respect of the properties in question, from the authorities concerned. On 10.9.1993, another letter of authorisation has been given by the petitioner authorising the second plaintiff (second respondent) to appear on behalf of the petitioner before the Collector, in the matter of quarrying operations in the property in question.
16. The case that is put forward by the respondents herein is that on the basis of Ex. P-28 agreement between the parties, possession passed to them, and, therefore, they are entitled to continue in possession for the entire term of ten years, and the defendant (petitioner herein) should be restrained from interfering with their possession.
17. In the plaint, the respondents have only stated that Ex. P-28 is an arrangement whereby they are entitled to exploit the granite deposits from the suit lands and that they are entitled to be in possession till 19.10.2002. What is the impact of the said document is the first question to be considered.
18. Learned Senior Counsel for the respondents, relying on the decision reported in Shri Shri Tarakeshwar Sio Thakur Jiu v. Bar Dass Dey and Co. and Ors. , argued that the transaction between the parties is a lease, and the possession handed over as per the said document amounts to a transfer of land, given for enjoyment. Learned Counsel relied on paragraphs 29 to 35 of the judgment of the Supreme Court (cited) and wanted this Court to hold that the said document is a lease, and that a mining lease need not be in strict compliance with a 'lease' as defined under the Transfer of Property Act. Paragraphs 29 to 35 of the judgment of the Supreme Court read thus:
It is important to bear in mind that the term "lease" occurring in the definition of "mining lease" given in Section 3(c) of Act 67 of 1957 does not appear to have been used in the narrow technical sense in which it is defined in Section 105 of the Transfer of Property Act. But, as rightly pointed out by a Bench of the Calcutta High Court in Fala Krishta Pal v. Jagannath Marwari A.I.R. 1932 Cal. 775 : I.L.R. 59 Cal. 1314, a settlement of the character of a mining lease is everywhere in India regarded as 'lease'. A mining lease, therefore, may not meticulously and strictly satisfy in all cases, all the characteristics of a 'lease' as defined in the Transfer of Property Act. Nevertheless, in the legally accepted sense, it has always been regarded as a lease in this Country. In Fala Krishta Pal v. Jagannath Marwari A.I.R. 1932 Cal. 775 : I.L.R. 59 Cal. 1314, Mukerji, J., speaking for the Bench, held that a coal mining settlement may be regarded as satisfying the requirements of Section 105 and treated as a lease because under such settlement some portion, however small, of the surface has to be used for carrying on the mining operation and taking the coal out.
Be that as it may, in the instant case, as shall be presently discussed, the transaction evidenced by Ex. I, not only falls within the definition of a "mining lease" under Act 67 of 1957, but also partakes of all the essential characteristics of a 'lease' defined in Section 105 of the Transfer of Property Act.
Section 105, Transfer of Property Act, defines a 'lease' of immovable property as-
a transfer of a right to enjoy such property, made for a certain time, express or implied, or in perpetuity, in consideration of a price paid or promised, or of money, a share of crops, service or any other thing of value, to be rendered periodically or on specified occasions to the transferor by the transferee, who accepts the transfer on such terms.
In the second paragraph of the section, it is expressly stated that the price so paid in consideration of the transfer is called "the premium, and the money, share, service, or other thing to be so rendered, is called the rent" The definition of "immovable property" given in Section 3, para. 1 of that Act is in the negative, and is not exhaustive. Therefore, the definition given in Section 3(26) of the General Clauses Act (X of 1987) will apply to the expression used in this Act, except as modified by the definition in the first clause of Section 3. According to the definition given in Section 3(6) of the General Clauses Act, "immovable property" shall include land, benefits to arise out of land, and things attached to the earth, or permanently fastened to anything attached to the earth". In short, the expression 'immovable property' comprehends all that would be real property according to English Law and possibly more See (1873) 1 I.A. 34 (P.C.). Thus, every interest in immovable property, or a benefit arising out of land, will be "immovable property" for the purpose of Section 105, Transfer of Property Act.
A right to carry on mining operations in land to extract a specified mineral and to remove and appropriate that mineral, is a 'right to enjoy immovable property' within the meaning of Section 105; more so, when as in the instant case it is coupled with a right to be in its exclusive has possession for a specified period. The 'right to enjoy immovable property' spoken of in Section 105, means the right to enjoy the property in the manner in which that property can be enjoyed. If the subject-matter of the lease is mineral land or a sand-mine, as in the case before us, it can only be enjoyed and occupied by the lessee by working it, as indicated in Section 108, Transfer of Property Act, which, regulates the rights and liabilities of lessors and lessees of immovable property.
19.The Supreme Court, in that case, has approved the decision reported in Fala Krishta Pal v. Jagannath Marwari A.I.R. 1932 Cal. 775 : I.L.R. 59 Cal. 1314 wherein it was held thus:
Where in a mining lease, it is agreed that on payment of royalty, the lessee would be entitled to take out coal, such a settlement may not come under the strict definition of lease, because lease under Section 105 is the transfer of a right to enjoy such property and in mining leases there is no question of enjoyment of the property and what is payable under the settlement is not rent but only the price of the quantity of coal taken. But settlements of this character are everywhere regarded as lease though not falling strictly within the definition of lease. Yet some portion however small of the surface of the earth to be used for carrying on mining operations and taking the coal out and to that extent the transaction may be taken to satisfy the requirements of the definition.
20. In view of the said decisions, I hold that the intention of the parties was to create an interest in praesenti. If so, it has to be considered whether the document can be admitted in evidence.
21. Admittedly the document is not registered. Section 17(d) of the Registration Act says, "leases of immovable property from year to year, or for any term exceeding one year, or reserving a yearly rent" is compulsorily registrable. In this case, admittedly, the document seems to be for a period often years. If that is so, Section 40 bars the consideration of the document for any purpose, and it says, it shall not affect any immovable property comprised therein and it cannot be received as evidence of any transaction affecting such property or conferring any power. It is subject to the Proviso that an unregistered document can be made use of for some collateral purpose.
22. Rustomji on Registration - Fourth Edition (1989) at page 78 has commented on the scope of the said Section, namely, Section 17. The learned author says thus:
An instrument giving rights to take away timber, firewood and coal along with trees is compulsorily registrable. In State v. Ibrahim, it was held that the transfer of right to cut timber trees for three years was not compulsorily registrable as it related to moveable property and not rights arising out of land. A lease of a colliery must bemade by a registered deed under Section 17. In Suraj Bahadur v. Mahadeo , it was held that a partnership deed for extraction of mica registered outside the district of the mica mine must be regarded as unregistered and was, therefore, not admissible in evidence. In Walamji v. Anil Charan, it was held that transfer of standing trees of the value of Rs. 100 or upwards is compulsorily registrable.
23. In Suraj Bahadur v. Mahadeo , the question was whether partnership deed is compulsorily registrable. The partnership was set up for the purpose of extracting mica from mines, and for the purpose of sale of mica extracted from the mines. Learned Judge of the Rajasthan High Court held that the same amounts to dealing with immovable property and also falls within the meaning of the phrase "any other benefit to arise out of land" occurring in Section 2(6) of the Registration Act. The relevant portion of the said decision reads thus:
A partnership set up for the purpose of extraction of mica from mines and for purchasing and selling mica extracted from the mines clearly amounts to dealing with immovable property and falls within the meaning of the phrase "any other benefit to arise out of land" occurring in Section 2(6) and therefore such a partnership business cannot but be held to be a business relating to immovable property. The instrument creating such a partnership creates or declares a right, title or interest in an immovable property, which is of a non-testamentary character and as such falls within Clause (b) of Section 17(1) of the Registration Act and is, therefore, compulsorily registrable.
24. Handing over possession for the purpose of enjoyment is an essential term of the document and the same cannot be treated as collateral. If that be so, the document cannot be admitted for any purpose, and the plaintiffs are not entitled to prove possession de hors the document. In fact, in the plaint, possession is claimed directly from the document itself. Similar question came for consideration in Bajaj Auto Limited v. Behari Lai Kohb . There, the case was whether the tenant is entitled to sub-let. The prohibition contained in the document which was not registered. In that case, the Supreme Court held thus:
A deed purporting to create a lease is inadmissible in evidence in case it is not registered. As such all its terms are inadmissible including the one dealing with landlord's permission to his tenant to sub-let. The question whether a lessee is entitled to create a sub-lease or not is undoubtedly a term of the transaction of lease, and if it is incorporated in the document it cannot be dissociated from the lease and considered separately in isolation.
25. Section 2(6) of the Registration Act reads thus:
2. Definitions: In this Act, unless there is anything repugnant in the subject or context, (1) to (5) xxxx (6) "immovable property" includes lands, buildings, hereditary allowances, rights to ways, lights, ferries, fisheries or any other benefit to arise out of land, and things attached to the earth, or permanently fastened to anything which is attached to the earth, but notwithstanding timber, growing crops nor grass;
In the Rajasthan Suraj Bahadur v. Mahadeo , the learned Judge held that since registration of the document was invalid, it has to be taken as a document unregistered for all purposes, and if so, the document cannot be taken into consideration as creating a right in immovable property. The learned Judge held that extracting mica cannot be considered as a business relating to immovable property. It can only be a transaction in respect of an immovable property, and hence compulsorily registrable.
26. Learned Senior Counsel for the petitioner says that if it is a lease, naturally, the same becomes compulsorily registrable. Being an unregistered document, the very basis of the suit falls to the ground.
27. It is urged that such a contention was taken before the trial court, and the trial court has allowed the document to be marked, treating the same as an agreement, subject to payment of deficit stamp duty. The question whether the document was compulsorily registrable or not, was not considered by any of the courts below. If it is only an agreement of lease, the remedy of the plaintiffs can only be filing a suit for specific performance, and not by filing a suit for injunction. The suit as it stands is only for injunction stating that the plaintiffs obtained possession of the basis of the document dated 20.10.1992. The question whether the document is compulsorily registrable or not is a pure question of law, and to find out a prima facie case, the said argument can be accepted.
28. Alternatively also, we have to consider whether the plaintiffs are entitled to an injunction on the settled principles of law.
29. The lower appellate court granted injunction on the ground that as per the document dated 20.10.1992, the parties were free to handover possession and take possession and, therefore, the plaintiffs who have obtained lawful possession of the properties, are entitled to enjoy the same for the period provided in the document. The lower appellate court was of the view that the question of possession and the question of extracting granites are different, and one need not be mixed with the other, for the purpose of granting injunction. The lower appellate court was of the view that in case of injunction, possession alone is material. I cannot agree with the said finding of the lower appellate court.
30. If the document is treated as an agreement by which possession passed, the possession is coupled with certain rights and obligations. It cannot be-taken separately. Possession is handed over for the purpose of excavating granites only. The enjoyment of the property which is a necessary ingredient for a lease also relates to the excavation of granites only. There cannot be any question of possession without enjoyment for, possession is a necessary ingredient for a lease. The plaintiffs are not given more possession. Certain obligations also follow on the basis of the document. The petitioner herein is entitled to realise the income whenever granites are excavated. For every sq. metre of granite, the petitioner is entitled to Rs. 10,000 as consideration. There also, there is an obligation on the part of the plaintiffs to remove the granites and to level the property to an extent. These are certain obligations which go along with possession. Possession cannot be treated as independent of these obligations.
31. If possession and enjoyment cannot be separated, the further question that arises for consideration is, whether that enjoyment contemplated under the document could be specifically enforced. Only in cases of contract which can be specifically enforced, injunction also can be granted.
32. Section 41 of the Specific Relief Act deals with cases where an injunction cannot be granted Section 41(e) of the Act says that injunction cannot be granted to prevent breach of a contract, the performance of which cannot be specifically enforced. Section 14 of the said Act deals with cases where specific performance cannot be granted. Section 14(d) of the Act deals with contracts the performance of which involves the performance of a continuous duty which the Court cannot supervise. A reading of Ex. P-28 will show that the petitioner herein is bound to give assistance to the respondents (plaintiffs) for the performance of excavating the granites from the property. The reason described in that clause is, that excavating minor mineral is governed by Mines and Minerals (Regulation and Development) Act, 1957 and the Rules framed thereunder Section 4 of the said Act says that 'No person shall undertake any prospecting or mining operation in any area, except under and in accordance with the terms and conditions of a prospecting licence or, as the case may be, a mining lease, granted under this Act and the rules made thereunder' Section 14 of the Act says that 'The provisions of Section 5 to 13 (inclusive) shall not apply to quarry leases, mining leases or other mineral concessions in respect of minor minerals.' Therefore, the Act makes it clear that Section 4 applies to minor minerals. Under Section 15 of the Act, the State Government is empowered to make Rules in respect of minor minerals.
33. On the basis of the said provision, Rules have been framed in respect of minor minerals known as Tamil Nadu Minor Minerals Concession Rules, 1959. Rules 33 and 34 of the said Rules deal with leasing of quarry rights and how they have to be executed.
34. Rule 33 reads thus:
33. Leasing out of quarrying rights: If the registered holder does not intend to carry on quarrying operations himself but leases out the right to do so to another person, the registered holder and his lessee shall enter into an agreement with the Government binding themselves jointly and severally to accept the conditions and stipulations set out in these rules. The agreement shall be in the form set out in Appendix V to these rules.
35. Rule 34 reads thus:
34. Agreements to be registered: The agreements executed in the forms set out in Appendixes IV and V to these rules are compulsorily registrable under Section 17(1) of the Indian Registration Act, 1908 - the former at the cost of the registered holder and the latter at the cost of the registered holder and his lessee.
36. Rule 10 of Appendix IV says thus:
If the registered holder does not intend to carry on mining operations himself, but intends to leave but the right to do so to another person the registered holder and his lessee shall enter into an agreement with Government binding themselves jointly and severally to accept the conditions and stipulations herein contained which agreement shall be in the form set out in Appendix V to the Tamil Nadu Minor Mineral Concession Rules, 1959.
37. Appendix V deals with Form of Joint Agreement for quarrying and carrying away minor minerals by lessees, and such agreement should be executed in favour of the Government. I have already stated that under Rule 34 (extracted above), the agreement in favour of the Government will have to be registered under Section 17 of the Indian Registration Act. It is joint agreement that is contemplated, and the obligations created are also joint. So long as the lease continues, the obligations as per the agreement also shall continue. Only on the basis of the agreement executed in favour of the Government, mining operations also can be had. Since the petitioner must also be a party to the document in favour of the Government, and the continued compliance of the terms and conditions of the agreement is a condition precedent, the continued supervision of the court is also contemplated if the agreement is to be implemented for the full term. It is, therefore, Section 14(d) of the Specific Relief Act says that contracts the performance of which involves the continuous supervision by court, cannot be specifically enforced. If it cannot be specifically enforced under Section 14(d), naturally there is a bar for granting injunction under Section 41(e) of the Act.
38. Fry on Specific Performance - 6th Edition (1985) says (at page 46) that specific performance will be refused in regard to contracts for the working of quarries, and coal mines, or involving the performance of continuous acts or duties. The learned author also deals with contracts which are indivisible in character wherein injunction could be refused. At page 388 of the same book, the learned author says thus in paragraph 833:
The principle that the court will not partially enforce contracts is illustrated by many other cases. Thus, where there was a partnership contract for an absolute term of years, leaving undefined the amount of capital and the manner in which it was to be provided, this being a contract which in its entirety the courts could not enforce, the court refused to enforce it in part, by refusing the representatives of a deceased partner a decree for the dissolution of the partnership and the sale of the partnership property. In another case the court refused to separate the parts of an award which were capable of specific performance from those which were not. And again, where the contract was that the landlord of a residential flat should employ a porter, who should do certain specified work for the benefit of the tenant, that was held to be one indivisible contract, and the court declined to interfere by injunction to compel performance of part of it.
39. In S.C. Banerjee's, Law of Specific Relief - Ninth Edition (1992), at pages 201 and 202, the learned author says thus:
The clause enacts that a contract, the performance of which involves the performance of a continuous duty which the court cannot supervise, cannot be specifically enforced. Thus, a contract which involves the necessity of the performance of duties continued over a long period of time, which the court cannot supervise, cannot be specifically enforced. A court can order the doing of something which has to be done once for all, so that it can see to its being done. But it will not decree specific performance of a contract, the execution of which would require, more or less, permanent supervision by the court, if it cannot make it. If the court were to make, what purported to be a final order for specific performance in such cases, such order would not be the end of litigation, but, on the contrary, its fruitful and continuous source. The test should be one of reasonableness and practicability.
Where a charge is created for maintenance on certain property and its rent, and a person interferes with the realisation of rent, asserting his own right to the rent of the property, the charge being for a long period involving the performance of a continuous duty, an injunction restraining interference cannot be granted as it involves the performance of a continuous duty which the court cannot supervise.
40. In G.C.V. Subba Rao on Law of Specific Relief - Third Edition (1989), at page 429, the learned author has considered the same question comparing the English Law. The learned author has extracted an English decision regarding the grant of injunction and specific performance. The relevant passage reads thus:
Contract involving performance of continuous doty - (Section 14, Clause, (d), old Section 21, Clause (g) - (A) Analogous English Law-
In Ryan v. Mutual Tontine Westminster Chambers Association the lessor of certain premises agreed to provide the tenants a resident porter who was to look after the building and be in constant attendance in the building to clean the stairs and passages, receive for and deliver to the tenants letters, messages, etc. The lessors appointed a porter who was away for four hours every day acting as a cook in a neighbouring building. The tenants brought the suit for specific performance of the lessor's contract. It was held that a decree for specific performance could not be granted for two reasons. In the first place that part of the agreement which provided for the appointment by the lessors of a porter, was not divisible from so much of it as provided for the various duties of the porter and as such a contract would require the constant supervision of the court during the existence of the lease, it was susceptible of specific enforcement. Secondly, damages were a sufficient compensation for the breach.
41. I have already stated that Ex. P-28 has been executed only for a sole purpose, i.e., the respondents herein shall enjoy the property by excavating the granite. It is for that purpose, the same has been given. The same cannot be separated. We cannot consider possession alone as was done by the lower appellate court. If the same cannot be separated and the same is interlinked with enjoyment by excavating granite, which cannot be specifically enforced, the plaintiffs will not have a right to get injunction.
42. If we consider Ex. P-28 only as an agreement, the Order of the lower appellate court treating it as an agreement and collecting stamp duty for the same, as I have already said, the remedy of the plaintiffs is only to sue for specific performance of the agreement. If injunction is granted, the defendant will be prevented from entering into the property, and at the same time, the plaintiffs will continue to be in the property, without the right to excavate granite.
43. Learned Senior Counsel for the respondents submitted that in all mining leases, first there must be document of lease, and then only the question of getting licence from the Government will arise. Learned Senior Counsel wanted me to read Rule 10 of Appendix IV and V in that angle. I agree with the learned Senior Counsel that there must be a lease. But we may have to consider that by lease itself, the executee is not getting right. Even if possession is handed over, that is only for the purpose enjoined under the Act. That purpose cannot be separated from possession. So, that contention of the learned Senior Counsel has to fail.
44. The trial court, after taking into consideration the various Rules framed under the Mines and Minerals (Regulation and Development) Act, 1957, the plaintiffs have no case that the balance of convenience is also in their favour. In the decision of the lower appellate court, I do not find that the question of balance of convenience or irreparable injury has been considered. A prima facie case alone is not sufficient for the grant of injunction.
45. The Supreme Court in Shiv Kumar Chadha v. Municipal Corporation of Delhi , has considered this point and held thus:
A party is not entitled to an order of injunction as a matter of right or course. Grant of injunction is within the discretion of the court and such discretion is to be exercised in favour of the plaintiff only if it is proved to the satisfaction of the court that unless the defendant is restrained by an order of injunction, an irreparable loss or damage will be caused to the plaintiff during the pendency of the suit. The purpose of temporary injunction is, thus, to maintain the status quo. The court grants such relief according to the legal principles: ex debito justitiae. Before any such order is passed the court must be satisfied that a strong prima facie case has been made out by the plaintiff including on the question of maintainability of the suit and the balance of convenience is in his favour and refusal of injunction would cause irreparable injury to him...
The said decision was followed in Mahadio Savlaram Shelke v. Pune Municipal Corporation and Anr. (1995) S.C.C. 33. In paragraph 8, gave importance to the balance of convenience, and also held that irreparable loss is also equally important as prima facie case and said that the court will have to find whether the plaintiffs can be adequately compensated if injunction is refused. Their Lordships held in paragraph 8 thus:
In Dalpat Kumar v. Prahlad Singh a Bench of two Judges (in which K. Ramaswamy, J. was a member) of this Court held that the phrases "prima facie case", "balance of convenience" and "irreparable loss" are not rhetoric phrases for incantation but words of width and elasticity, intended to meet myriad situations presented by men's ingenuity in given facts and circumstances and should always he hedged with sound exercise of judicial discretion to meet the ends of justice. The court would be circumspect before granting the injunction and look to the conduct of the party, the probable injury to either party and whether the plaintiff could be adequately compensated if injunction is refused. The court further held: (S.C.C. p.721, para.5) The existence of the prima facie right and infraction of the enjoyment of his property or the right is a condition for the grant of temporary injunction prima facie case is not to be confused with prima facie title which has to be established, on evidence at the trial. Only prima facie case is a substantial question raised, bona fide, which needs investigation and a decision on merits. 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. 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 ad-interim injunction pending the suit.
Their Lordships said that injunction cannot be claimed as of right and the matter is purely discretion of court.
46. In a recent decision of our High Court reported in Champalal Jain and Anr. v. Thattikunda Rajamannar Trust by its Secretary and Ors. , the entire point has been considered in detail. The power of the appellate court in interfering with the discretion exercised by the trial court. Paragraphs 18 to 22 of the said decision are relevant for the purpose of this case. They read thus:
While dealing with the powers of the appellate court, to interfere with the exercise of the discretion of the trial court, it was held in Uttar Pradesh Co-operative Federation Limited v. Sunder Brothers, Delhi thus:
Where the discretion vested in the court under Section 34 has been exercised by the lower court, the appellate court would be slow to interfere with the exercise of their discretion, In dealing with the matter raised before it at the appellate stage, the appellate court would normally not be justified in interfering with the exercise of the discretion under appeal solely on the ground that if it had considered the matter at the trial stage, it may come to a contrary conclusion. If the discretion has been exercised by the trial court reasonably and in a judicial manner the fact that the appellate court would have taken a different view may not justify such interference with the trial court's exercise of discretion. If it appears to the appellate court that in exercising its discretion trial court has acted unreasonably or capriciously or has ignored relevant facts, then it would be open to the appellate court to interfere with the trial court's exercise of discretion.
It was a case under Section 34 of the Arbitration Act. But it applies to all cases where discretionary orders are passed.
In Firm Ishardass Devichand and Anr. v. R.B. Parkashchand and Anr. A.I.R. 1969 S.C. 338, their Lordships refused to interfere with the discretion exercised by the trial court on the ground that the trial court has not exercised its power capriciously or arbitrarily.
In Mysore State Road Transport Corporation v. Mirja Khasim Ali Beg and Anr. A.I.R. 1969 S.C. 747, in paragraph 18 (at page 755), it was stated thus:
This takes us to second limb of the fourth contention raised on behalf of the appellants. While it is true that the relief of declaration is discretionary, it is well-settled that it is only if the discretion is not exercised by the lower court in the spirit of the statute or fairly or honestly or according to the rules of reason and justice, that the order passed by the lower court can be reversed by the superior court. Reference in this connection may usefully be made to a decision of the Privy Council in Charles Osenton and Co. v. Johnton 1942 A.C. 130, where the legal position was succinctly stated as follows:
There remains the question whether, assuming that in the circumstances of this case Tucker, J. had jurisdiction to make the order of reference, his conclusion must stand on the ground that it was reached in the exercise of his discretion and that the exercise of such discretion should not be interfered with an appeal. So the respondent contends while the appellants urge that even if the discretion to make the order existed, it was wrongly exercised in view of the gravity of the charges made against them of the impossibility of appeal from an official referee's finding of fact, and in view of the practicability of the case being tried before a Judge, without a jury. The law as to the reversal by a court of appeal of an order made by the Judge below in the exercise of his discretion is well established, and any difficulty that arises is due only to the application of well settled principles in any individual case. The appellate tribunal is not at liberty merely to substitute its own exercise of discretion for the discretion already exercised by the judge. In other worcis, appellate authorities ought not to reverse the order merely because they would themselves have exercised the original discretion had it attached to them, in a different way. But if the appellate tribunal reaches the clear conclusion that there has been a wrongful exercise of discretion in that no weight or no sufficient weight has been given to relevant consideration such as those urged before us by the appellant, then the reversal of the order on appeal may be justified. This matter was elaborately discussed in the decision of this House in Evans v. Bartlam 1937 A.C. 473, where the proposition was stated by my noble and learned friend Lord Wright, as follows: It is clear that the Court of Appeal should not interfere with the discretion of a Judge acting within his jurisdiction unless the court is clearly satisfied that he was wrong. But the court is not entitled simply to say that if the judge had jurisdiction and had all the facts before him the court of appeal cannot review his order unless he is shown to have applied wrong principle. The court must if necessary examine a new the relevant facts and circumstances in order to exercise a discretion by way of review which may reverse or vary the order. Otherwise, in interlocutory matters, the judge might be regarded as independent of supervision. Yet an interlocutory order of the Judge, may often be of decisive importance on the final issue of the case and one which requires a careful examination by the Court of Appeal. Thus in Gardner v. Jay (1885) 29 Ch. D. 50, Bowen, J. in discussing the discretion of the Judge as regards mode of trial says: "That discretion, like other judicial discretion must be exercised according to common sense and according to justice and if there is a miscarriage in the exercise of it, it will be reviewed.
In Wander Limited v. Antex India (P) Limited 1990 S.C.C. (Supp.) 727 at 733-735, while dealing with a case under Copyright Act, their Lordships of the Apex Court held thus:
The appellate court will not interfere with the exercise of discretion of the court of first instance and substitute its own discretion except where the discretion has been shown to have been exercised arbitrarily, or capriciously or perversely or where the court had ignored the settled principles of law regulating grant or refusal of interlocutory injunctions. An appeal against exercise of discretion is said to be an appeal on principle. Appellate court will not reassess the material and seek to reach a conclusion different from the one reached by the court below solely on the ground that if it had considered the matter at the trial stage it would have come to a contrary conclusion. If the discretion has been exercised by the trial court reasonably and in a judicial manner the fact that the appellate court would have taken a different view may not justify interference with the trial court's exercise of discretion.
This Court had occasion to consider the powers of the appellate court while interfering with the discretionary orders of the trial Judge. In Proctor and Gamble Co. v. Christian Holden (India) Private Limited (1989)1 L. W. 54, a Division Bench of this Court to which one among us (Srinivasan, J.) was a party said thus:
The principles governing the circumstances in which the appellate court can interfere with a discretionary order of the trial court granting or refusing injunction were laid down by Lord Diplock in Hadmer Productions Limited v. Hamilton, and the other members of the House agreed with him. They were reiterated by him in Gordon Cottage Limited v. Milk Marketing Board. The following passage, in the later judgment is relevant: In an expedited appeal by the company against the Judge's refusal to grant an interlocutory injunction, the Court of Appeal 1982 Q.B. 1114 delivered an extempore judgment on May 18, 1982, shortly the publication in the Weekly Law Reports (1988) 2 W.L.R. 322 of the decision of this House in Hadmer Productions Limited v. Hamilton, in which this House took occasion at page 220, to point out that in appeal from the Judge's grant or refusal of an interlocutory injunction, an appellate court, including your Lordships' House, must defer to the Judge's exercise of his discretion and must not interfere with it merely upon the ground that the members of the appellate court would have exercised the discretion differently. The function of an appellate court is initially that of review only. It is entitled to exercise an original discretion of its own only when it has come to the conclusion that the Judge's exercise of his discretion was based on some misunderstanding of the law or of the evidence before him, or upon an inference that particular facts existed or did not exist, which although it was one that might legitimately have been drawn upon the evidence, that was before the Judge, can be demonstrated to be wrong by further evidence that has become available by the time of the appeal or upon the ground that there has been a change of circumstances, after the judge made his order that would have justified his according to an application to vary it. Since reasons given by Judges for granting or refusing interlocutory injunctions may sometimes be sketchy, there may also be occasional cases. Where even though may no erroneous assumption of law or fact can be identified the judge's decision to grant or refuse the injunction is so abhorrent that as it must be set aside upon the ground that no reasonable Judge regardful of his duty to act judicially could have reached it. It is only if and after the appellate court had reached the conclusion that the Judge's exercise of his discretionment he set aside for one or other of these reasons, that it becomes entitled to exercise an original discretion of its own.
47. I have already stated that the trial court exercised its discretion in refusing the injunction. The lower appellate court did not enter a finding that the decision arrived by the trial court is capricious or illegal, or that the refusal of injunction was against any of the settled principles of law. It re-appreciated the entire facts and came to the conclusion that the plaintiffs are entitled to injunction. Unless there is a finding that the decision of the trial court is wrong, the discretion exercised by it should not be interfered with.
48. In case injunction is refused, plaintiffs have got other remedies open. The loss that may be sustained by them, can be compensated in costs and damages. The same can be ascertained and valued on the materials available. Unless the plaintiffs prove that they will be put to irreparable injury if injunction is not granted, they are not entitled to get an injunction order as prayed for by them. This principle was not considered by the lower appellate court. Balance of convenience is also to be considered alone with the aspect of 'irreparable injury'. Both the aspects, namely, balance of convenience and irreparable injury go together. I do not think any irreparable injury would be caused to the plaintiffs if injunction is refused. Likewise, the balance of convenience is also not in favour of the plaintiffs for getting an injunction order. The lower appellate court has passed the order without taking into consideration the legal principles enunciated under Sections 14 and 41 of the Specific Relief Act read with Order 39, Rules 1 and 2 of the Code of Civil Procedure. It interpreted the agreement, and assumed that the plaintiffs are entitled to get an order of injunction as a matter of right. The said approach has caused material injustice.
49. Whether any payment has been made pursuant to the agreement and whether Ex. P-28 has been executed with intent to implement it or only for the purpose of creating an evidence for taking a bank loan, are all matters to be considered during trial.
50. In the result, the civil revision petition is allowed. The judgment of the lower appellate court is set aside. The injunction application filed by the plaintiffs before the trial court is dismissed. The order of the trial court refusing injunction is restored no costs.