Delhi High Court
Ashoka Builders & Promoters And Anr. vs Edward Keventer (Successors) P. Ltd And ... on 5 July, 1993
Equivalent citations: 1993(26)DRJ489
JUDGMENT S.C. Jain, J.
(1) The facts giving rise to. these two interim applications are that M/s Ashoka Builders & Promoters and M/s Arenja Enterprises (P) Ltd. (hereinafter referred to as the applicants/plaintiffs) entered into an agreement with M/s Edward Keventer (Successors) P. Ltd. arid M/s Dalmia Promoters & Developers (P) Ltd. (hereinafter referred to as the respondents/defendants) on 22.6. 1989 and a Memorandum of Understanding was duly executed, between the parties. As per this agreement, the defendant contributed the land (25% of 22.95 acres) and the plaintiffs contributed to its development by virtue of their expertise, efforts and goodwill and also other development and construction costs and thus agreeing to retain [out of the constructed superstructure] 63% of the space, while 37% thereof was agreed to be retained by the defendant as the owner. Clause 5 of this agreement specifically mentions that the plaintiffs, who are the co-developers will get the proposed community facilities as mentioned in clause (3) in this Memorandum of Understanding totally removed from the aforesaid Keventers land and that they will also get the land use converted by the L & Do to residential group housing for the entire land belonging to Keventers at 1970 rates of the L& Do by accordingly getting the terms of conversion issued by the L & DO. The co-developers also assured and undertook to obtain the the said two permissions. It was also agreed that conversion of land use by the L Ado to residential group housing at rates other than the 1970 rates shall not constitute a fulfillment of this condition nor shall a partial removal of community facilities constitute a fulfillment of this condition. Time of 4-1/2 months from the date of signing that Memorandum of Understanding was fixed for getting these conditions fulfillled. In case, the co-developers obtained only one of the two permissions, in that case they shall be given a further extension of time of not exceeding two months to obtain the other remaining permission.
(2) Subsequently, two Supplementary Memoranda of Understanding dated 20.11.1989 and 22.11.1989 were also executed and the time was further extended up to 28.2.1990 for securing those two permissions, as stipulated in clause 5 of the Memorandum of Understanding dated 22-6-1989. AsumofRs.2Croreswas deposited by the plaintiffs/ applicants with the defendants as security in terms of the said agreement.
(3) As per the averments made by the applicants/plaintiffs in their application being LA.No. 14124/92 for getting an ad interim injunction order restraining the defendants from alienating, transferring or parting with possession in any manner the property in dispute, or in any manner creating any interest in this property, the applicants/plaintiffs were able to get the orders from the Minister of Urban Development in compliance with clause 5 of 'the Memorandum of Understanding dated22.6.1989. It is further averred that the Minister of Urban Development vide letter dated 1.12.1989 duly apprised in writing to Shri J.P. Aggarwal, Member of Parliament that on his request made in his letter dated 9.11.1989,the request of Edward Keventers had been acceded to. According to the applicants, prior to the signing of the Memorandum of Understanding dated 22.6.1989 the Ministry of Urban Development had taken the decision to initiate proceedings for re-acquisition of entire land in suit for general pool accommodation of the government under the Urban Land Ceiling Act and that fact was duly known to the defendants, who suppressed the same from the plaintiffs. On the contrary, it was represented that the land in suit was free from acquisition proceedings. It was also suppressed by defendants from the appellate authority under the Urban Land (Ceiling & Regulation) Act 1976 had been reopened by the Ministry of Urban Development. It has been further averred that by the issue of the letter by the Minister of Urban Development, the acquisition proceedings came to an end. Group housing was allowed on the entire land at 1970 rates of conversion and the community facilities in the Zonal Plan were,therefore, also finally removed. All that was pending was a letter from the Land & Development Office which would convey the amount of charges at 1970 rates, which were to be paid to the Government. This could not be done because of re-opening/review of the orders obtained under the Urban Land (Ceiling & Regulation) Act, 1976. It has been further averred that the plaintiff obtained the order according to the request made by defendants in 1970, on 20th November, 1989, but the formal letter from the Minister in charge of Urban Development, Government of India, was issued on 1st December, 1989, and a copy of the said letter was communicated to defendants vide plaintiffs' letter dated 6th December, 1989 with the request that follow up action On the lines suggested may be taken and requested them to write a letter immediately to the Land & Development Office for doing the needful. The defendants neither themselves wrote the letter to the Land & Development Office nor gave the plaintiffs the power of attorney enabling them to pursue the matter in spite of repeated requests. The plaintiffs were then constrained to write another letter dated 1st February, 1990 requesting defendants to attend to the follow up action on the lines suggested in their letter dated 6.12.1989 or give the power of attorney to take up the matter with the Land & Development Office to carry out the order made by the Minister in charge, but to no effect. The defendants therein selves have admitted the grant of permission by the Urban Development Ministry at the instance of the plaintiffs but have turned dishonest and claimed repudiation of the agreement enshrined in Memorandum of Understanding dated 22.6.1989 and reap exclusively the fruits of efforts and huge investments made by the plaintiffs. The defendants in fact wanted to wriggle out of the commitments' made by them and the incontestable obligations assumed by them under the agreement with the plaintiffs, which led the plaintiffs to file a suit for permanent and mandatory injunction being Suit No. 594/ 90 in which I.A.No. 1621/90 was also filed. Initially the defendants Nos.1 and2 through their counsel undertook not to disturb the status quo without prejudice to the rights and contentions of the parties and that on 10.5.1990 the counsel for defendants I and 2 herein made a statement that they will be bound by their statement dated 28.2.1990 till end of July. Thereafter, the parties started negotiating a compromise and tried to find out an amicable solution to the whole disputes. On account of the negotiations for settlement the defendants bound themselves by then-statement madeon28.2.1990 till the end of July,1990 and thereafter the Court discharged the defendants from the said undertaking on the expiry of the aforesaid period and also observed that the plaintiffs would not seek similar relief by another application in the said suit.
(4) It has been further alleged that the defendants are now taking undue advantage and in order to unjustly enrich themselves and to over-reach the issues pending in this Court, have started negotiating and/or have negotiated a deal with Itc Group companies with respect to the said property which is the subject matter of the suit, The plaintiffs came to know about the same when certain property dealers approached the plaintiffs with respect to the same. It has been alleged that the plaintiffs have been given to understand that the defendants are proceeding to hand over actual physical possession of the property in pursuance of the said negotiations/arrangements which they have illegally entered into and/or wanting to reap the fruits of the permissions obtained by the plaintiffs. Admittedly, the plaintiffs obtained permissions for conversion etc, as is apparent from the admissions made by the defendants in their own communications to the appropriate authorities.
(5) It has been further alleged that on the one hand the defendants themselves had claimed that the agreement/memorandum had come to an end, yet they illegally withheld and/or are withholding the sum of Rs. 2 Crores. The retention of the said money by the defendants in itself is sufficient to balance the equities and pass interim orders restraining the defendants from transferring, alienating or parting with possession of the immovable property in question. According to the plaintiffs the said amount is lying with the defendants, though vide an interim order of this Court in a suit filed by the bank for the recovery restraining the defendants not to withdraw the amount lying in their account in Vysya Bank, but the plaintiffs are still deprived of this amount of Rs. 2 crores. On the basis of these allegations supported by the affidavit of Shri Sudhir Gupta, partner of M/s Ashoka Builders & Promoters, an ad interim injunction was passed by this Court on 8.12.1992 ordering maintenance of status as of that date with respect to the land in question and the defendants were restrained from creating any third party interest to the prejudice to the rights of the plaintiffs in the land in question.
(6) Thereafter an application being I.A.No. 2332/93 was filed on behalf of defendant No. 1 under Order 39, Rule 4 read with Section 151 Civil Procedure Code for vacation/recall of the order dated 8.12.1992 granting ex parte stay in I.A. No.14124/92 being the application of the plaintiffs under Order 39, Rules 1&2 CPC. The main objection raised by the learned counsel for the defendants is that the plaintiffs are seeking. specific performance of the . agreement i.e. Memorandum of Understanding dated 22.6.1989. Asperclause7(c)of the said Memorandum of Understanding, in case the plaintiffs are neither able to get the community facilities totally removed nor get the terms issued for conversion by the L & D 0 at the 1970 rates as detailed in clause 5 and within the time period stipulated in clause 6, then this Memorandum of Understanding will stand automatically null/void/rescinded/ cancel led and be of no effect. According to the learned counsel for the defendants, in view of clause 7(c) of this Memorandum of Understanding, this Memorandum of Understanding dated 22.6.1989 has become null, void, ineffective and unenforceable. The suit for specific performance is therefore, not maintainable and the relief of an interim injunction cannot be granted to the plaintiffs. It is also alleged that the suit is barred under the, provisions of Order 2, Rule 2 CPC. According to the learned counsel, the plaintiffs have no prima facie case. The plaintiffs had under the Memorandum of Understanding dated 22.6.1989 represented that the community facilities would be got totally removed from the defendants' land and that they will also get the land use converted by the L & Do to residential group housing for the entire land belonging to the Keventers at 1970 rates of the L & D 0 by accordingly getting the terms of conversion issued by the L ADO. These conditions were to be fulfillled within 4-1/2 months, but they failed to fulfilll these conditions and therefore, they have got no prima facie case for the grant of an interim injunction on the basis of the Memorandum of Understanding dated 22.6.1989. It is also alleged that in the earlier suit for permanent injunction and mandatory injunction the plaintiffs made a statement while withdrawing their application under Order 39, Rules 1 & 2 Cpc, that they would not file any such application in that suit. In view of these facts, the learned counsel for the defendants argued that the plaintiffs have got no prima facie case, the balance of convenience is not in their favor, and they will not suffer any irreparable loss or injury in case the ad interim injunction is not granted. It is also argued that the rights of the plaintiffs are protected on the basis of the doctrine of lis pendens as enunciated in Section 52 of the Transfer of Property Act. This section takes care of all pendente lite transfers of immovable properties. According to the learned counsel, the ex parte interim order already granted in favor of the plaintiffs is liable to be vacated forthwith."
(7) It is settled principle of law that temporary injunction can be granted if a case is covered by three principles, (1) on making out a prima facie case; (2) on showing the balance Of convenience in favor of the petitioner and that refusal of injunction would cause greater inconvenience and (3) where on refusal of injunction, he will suffer irreparable loss. Grant of injunction is a matter of discretion and in its exercise the Court has to satisfy itself whether the petitioner has a friable issue. Before invoking the jurisdiction of the Court, the petitioner is bound to show that he has a legal right and that there was an invasion on that right. The extraordinary nature of remedy by injunction calls for a careful application of this guiding principle and it is safe to say that rarely will injunctive relief be granted when it would operate inequitably or to control the real justice of the case. Although this doctrine is well recognised, but it is difficult in governing an all inclusive rule, which would encompass the factual situation in all cases, that is, each case, so far as the application of the doctrines of relative or comparative injury is concerned, rests upon the particular or peculiar circumstances of that case.
(8) Applying the said principle of law in the circumstances of the present case it has to be seen whether the applicants have succeeded in making out a prima-facie case; and showing the balance of convenience in their favor and that they would suffer irreparable injury in case the injunction is not granted. It is apparent from the records, and it has also not been denied, that on account of the efforts of the co-developers i.e. the plaintiffs the conversion of the land use from dairy farming to residential group housing was acceded to by the Ministry of Urban Development and on 20.11.1989 the Minister of Urban Development passed an order converting the land use from dairy farming to the residential group housing. The question of acquisition of the land that had loomed large had also been put to an end to. Though the order for conversion of the land use was passed by the Minister, but certain follow up action was to be taken so that the conversion charges and other terms could be issued by the L & DO. At this stage, it appears that the defendants became dishonest and they claimed repudiation of the agreement enshrined in the Memorandum of Understanding dated 22.6.1989 and reap exclusively the fruits of efforts and huge investments made by the plaintiffs in this regard. It appears from the record that despite the request made by the plaintiffs, even in writing, to take up the follow up action in terms of the letter of the Minister of Urban Development, the defendants did not pay any heed nor the power of attorney was granted in favor of the plaintiffs to pursue the matter. This situation was created on account of this stand taken by the defendants in not taking up the follow up action, as suggested by the plaintiffs in view of the letter of the Minister of Urban Development. From this act of the defendants on prima-facie grounds, it is apparent that there is failure on the part the defendants to perform their part of the obligations as per the Memorandum of Understanding dated 22.6.1989. Whether the agreement, i.e. the Memorandum of Understanding arrived at on 22.6.1989 and the supplementary Memorandum of Understanding have become unenforceable and ineffective is a question which has to be decided at the time of the final decision of the case. At this stage, we have only to see the prima facie nature of the case entitling the grant of interim injunction to the plaintiffs as far as the land in dispute is concerned. Who is at fault? Whether the plaintiffs or the defendants in not performing their part of the obligations under the agreement is also a question which is to be decided at the time of the final disposal of the suit on the basis of the evidence adduced by the parties. On prima facie grounds, it is apparent from record that on account of the efforts made by the plaintiffs/ applicants they have succeeded in getting the land use of this land converted from dairy farming to residential group housing at the 1970 rates and that the danger of acquisition also came to an end on account of the efforts made by the plaintiffs. To show their sincerity the plaintiffs also deposited a sum of Rs.2 crores as security with the defendants which has not yet been refunded, though on a suit filed by the bank the use of that amount by the defendants has been restrained.
(9) Regarding the contention of the learned counsel for the defendants that the plaintiffs in the earlier suit had made a statement while withdrawing their application for interim relief that they would not file any such application for such type of interim relief afterwards in that suit, it is a well settled principle of law that there cannot be any estoppel against law. The plaintiffs did not file any stay application in the earlier suit for permanent injunction and mandatory injunction, which is still pending. It in this suit for specific performance this application for interim injunction has been filed and the plaintiffs are not estopped from seeking this relief as provided under Order 39 Rules 1 & 2 read with Section 151 CPC. The plaintiffs have to show a prima facie case; that the balance of convenience is in their favor and that they shall suffer irreparable loss or injury in case the interim injunction is not granted.
(10) Regarding the plea of the learned counsel for the defendants that the suit for the specific performance is barred under Order 2, Rule 2 Cpc, vide a separate order passed by this Court the applications moved by the defendants in this behalf have been dismissed and it has been held that this suit for specific performance based on a distinct cause of action is maintainable. At the time of filing of earlier suit for permanent injunction and mandatory injunction the right of action for claiming the specific performance was not available to the plaintiffs as some time was left for fulfillling certain conditions of, the agreement and the time was not mature for claiming the relief of specific performance at that time.
(11) The other plea of the learned counsel for the defendants that the doctrine of lis pendens as enunciated in Section 52 of the Transfer of Property Act' will take care of all pendente lite transfers is also not helpful to the defendants in the present circumstances of the case. While dealing with such a situation, a Division Bench of the Calcutta High Court in Smt. Muktakesi Dawn and Ors vs. Haripada Mazurndar and Another observed "It is true that the doctrine of lis pendens as enunciated in Section 52 of the Transfer of Property Act takes care of all pendente lite transfers; but it may not always be good enough to take fullest care of the plaintiffs interest vis-a-vis such a transfer. Where suit is one for specific performance of sale in respect of the suit property and if the defendant is not restrained from selling the property to a third party and accordingly, a third party purchases the same bonafide for value without notice of the pending limitation and spends a huge sum on the improvement thereof or for construction thereon, the equity in his favor may intervene to persuade the court to decline, in the exercise of its discretion, the equitable relief of specific performance to the plaintiff at the trial and to award damages only in favor of the plaintiff. It must be noted that Rule 1 of Order 39 of the Code clearly provides for interim injunction restraining the alienation or sale of the suit property and if the doctrine of lis pendens as enacted in Section 52 of the Transfer of Property Act was regarded to have provided all the panacea against pendente lite transfers, the Legislature would not have provided in Rule I for interim injunction restraining the transfer of suit property. Rule I of Order 39 clearly demonstrates that, notwithstanding the Rule of lis pendens in section 52 of the Transfer of Property Act, there can be occasion for the grant of injunction restraining pendente lite transfers in a fit and proper case".
(12) In this case specific allegations have been made by the plaintiffs/applicants in their application for interim relief under Order 39, Rules I &2 read with Section 151 Cpc that the defendants taking undue advantage of the order passed by the Minister of Urban Development on account of the efforts and expenses made by the plaintiffs/applicants and in order to unjustly enrich themselves and to over-reach the issues pending before this Court have started negotiations with Itc Group of companies with respect to the said property which is the subject matter of the suit. It has also been specifically alleged that the plaintiffs came to know about the same when certain property dealers approached them with respect to the same. It has also been alleged that they have been given to understand that the defendants are proceeding to hand over actual physical possession of the property in dispute to illegally reap the fruits of the permissions obtained by the plaintiffs. These allegations have not been specifically denied by the defendants/respondent sd. Rather from the communications addressed by the defendants to the various authorities and the plaintiffs it is apparent that it is the plaintiffs who had obtained, the permission for converting the use of this land from dairy farming to residential group housing.
(13) From the facts on record, I am satisfied that the plaintiffs/applicants have got a prima facie case; the balance of convenience is also in their favor; and they shall suffer an irreparable loss or injury in case they are not protected by an ad interim injunction order, but they are only entitled for the interim relief to the extent of the land for which the agreement was entered into between the parties on 22.6.1989 i.e. 25% of the 22.95 acres. Accordingly I modify the orderpassedon8.12.1992totheextentthatstatusquowith respect to the land in question i.e. 25% of the 22.95 acres situated at Block 48, Keventor Lane, Sardar Patel Marg, Chanakyapuri, New Delhi which forms part of the Memorandum of Understanding dated 22.6.1989 is hereby ordered to be maintained and the defendants/respondents are also restrained from creating any third party interest prejudice to the rights of the plaintiffs in the land in question till the disposal of the suit.
(14) Both these applications stand disposed of accordingly.