Gujarat High Court
Rushabhbhai Gayaprasad Jain vs Rameshbhai Bhimjibhai Koladiya on 9 June, 2022
Author: A. P. Thaker
Bench: A. P. Thaker
C/AO/60/2022 JUDGMENT DATED: 09/06/2022
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/APPEAL FROM ORDER NO. 60 of 2022
With
CIVIL APPLICATION (FOR STAY) NO. 1 of 2022
In R/APPEAL FROM ORDER NO. 60 of 2022
FOR APPROVAL AND SIGNATURE: Sd/-
HONOURABLE DR. JUSTICE A. P. THAKER
==========================================================
1 Whether Reporters of Local Papers may be allowed NO
to see the judgment ?
2 To be referred to the Reporter or not ? YES
3 Whether their Lordships wish to see the fair copy NO
of the judgment ?
4 Whether this case involves a substantial question NO
of law as to the interpretation of the Constitution
of India or any order made thereunder ?
==========================================================
RUSHABHBHAI GAYAPRASAD JAIN
Versus
RAMESHBHAI BHIMJIBHAI KOLADIYA
==========================================================
Appearance:
MR SANJAY G UDHWANI(10562) for the Appellant(s) No. 1
for the Respondent(s) No. 1
MR BHAVESH BABARIYA(6788) for the Respondent(s) No. 2
==========================================================
CORAM:HONOURABLE DR. JUSTICE A. P. THAKER
Date : 09/06/2022
ORAL JUDGMENT
1. Being aggrieved and dissatisfied by order dated 26.11.2021 passed by the learned 4th Additional Senior Civil Judge, Ahmedabad (Rural), Mirzapur, rejecting the Page 1 of 27 Downloaded on : Fri Jun 10 21:01:25 IST 2022 C/AO/60/2022 JUDGMENT DATED: 09/06/2022 application of the plaintiff for injunction below Exh.5 in Special Civil Suit No.61 of 2020, the plaintiff has filed this Appeal From Order under Section 104 read with order 43 of the Code of Civil Procedure.
2. The brief facts of the matter are as under:-
2.1 The plaintiff has instituted the aforesaid Special Civil Suit, inter alia, contending that there was agreement of sale of the suit property, revenue Survey No. 655 and 656 between the parties. It is the case of the plaintiff that initially one Banachitti was prepared and price of the land was fixed at more than two crores and the defendants have paid Rs.50 lakhs at the relevant point of time and the remaining amount was not paid. It is also averred that there was subsequent agreement between the parties regarding the payment of amount through Cheques. It is also the case of the plaintiff that though there was a sale consideration of Rs.2,83,80,000/-, at the request of the defendants to execute the sale deed as per the price of Jantri, the sale deed was executed accordingly and at that time the defendants have also entered into separate MoU and agreed to pay the rest of the amount of Rs.2,08,80,000/- and initially they had issued two Cheques. It is also the case of the plaintiff that thereafter the defendants requested not to deposit the cheques and subsequently there was an agreement between the parties and the defendants issued another two cheques by paying Rs.50 lakhs at that time. It is also the case of the Page 2 of 27 Downloaded on : Fri Jun 10 21:01:25 IST 2022 C/AO/60/2022 JUDGMENT DATED: 09/06/2022 plaintiff that possession of the suit lands were handed over to the defendants at the time of execution of the sale deed and the defendants had to pay the remaining amount as per the Banachitti and the MoU entered into the case. According to the plaintiff, as the defendants did not pay the amount agreed between them, the plaintiff issued notice, but, the defendants did not pay the amount of the cheque. It is also the case of the plaintiff that, thus, the defendants are avoiding the payment of the sale consideration to the plaintiff and therefore, there is a charge over the suit property in favour of the plaintiff.
Therefore, the plaintiff filed suit for cancellation of the registered sale deed documents and for declaration and injunction and alternatively for recovery of Rs.2,08,80,000/-. Along with suit, an application for interim injunction is filed for restraining the defendants from creating any third party interest in the suit property in any manner or transferring it to anybody else.
3. The defendants have resisted the suit as well as interim injunction application by filing composite reply at Exh.9. The defendants have admitted the execution of Banachitti as well as the execution of the sale deed in favour of them and that they are being in possession of the suit land and also issuance of cheques to the plaintiff by them. However, they have contended that as per the agreement between the parties, it was the duty of the plaintiff to get the title clearance of the land from the Page 3 of 27 Downloaded on : Fri Jun 10 21:01:25 IST 2022 C/AO/60/2022 JUDGMENT DATED: 09/06/2022 respective authority and as the plaintiff has failed to do so, he is not entitled to the outstanding amount as alleged. It is also contended that as per the Banachitti there was a condition of payment of consideration in installments and that too after title clearance is got by the plaintiff. The defendants have also submitted that as the plaintiff has not fulfilled his obligation of getting title clearance, the plaintiff was directed not to deposit the cheques and yet the plaintiff has deposited the cheques and due to that it has returned as unpaid. The defendants have shown their willingness to deposit the entire amount before the Court. The defendants submitted that the plaintiff has not a prima facie case against him as the defendants are owner of the property and are in possession of the property and therefore, no injunction needs to be granted against the defendants and the plaintiff could be compensated in terms of money. The defendants have also raised contention that they have also filed suit against the plaintiff.
4. It appears from the record the after hearing both the sides and considering the pleadings of the parties and various documentary evidence produced by both the sides, the learned Trial Court has ultimately rejected the application of interim injunction on the ground that the plaintiff can be compensated in terms of money as well as on the ground that the plaintiff has not come with clean hands. This order of the learned Trial Court has been Page 4 of 27 Downloaded on : Fri Jun 10 21:01:25 IST 2022 C/AO/60/2022 JUDGMENT DATED: 09/06/2022 challenged by the plaintiff-appellant on various grounds as set out in the memo appeal.
5. Heard learned counsel Ms. Megha Jani assisted by learned advocate Mr. Sanjay G. Udhwani, for the appellant-plaintiff and learned counsel Mr. D.K.Dave assisted by learned advocate Mr. Bhavesh Babariya, for the respondent-defendant caveator at length. Perused the material placed on record and the decisions cited at Bar.
6. Learned counsel Ms. Megha Jani, for the plaintiff has vehemently submitted the same facts which are narrated hereinabove and has submitted that there was no suppression of any facts by the plaintiff as the other proceedings including filing of Criminal Complaints were done during the pendency of the suit and when the suit was filed, no such proceedings were initiated. She has also submitted that the Trial Court has committed error of facts and law, overlooking the admission on the part of the defendants that they are ready to deposit the agreed amount in the Court. According to her submission, these facts support the case of the plaintiff that the plaintiff is unpaid seller of the property. She has also submitted that since the plaintiff is an unpaid seller of the property, in view of the provisions of the Transfer of Property Act, 1882, charge over the property of the rights of the plaintiff needs to be created. She has also submitted that if no injunction is granted in favour of the plaintiff then Page 5 of 27 Downloaded on : Fri Jun 10 21:01:25 IST 2022 C/AO/60/2022 JUDGMENT DATED: 09/06/2022 the defendants by virtue of being in possession on the basis of the registered sale deed, would transfer the property to third party and then, in that event, if, ultimately decree is passed in favour of the plaintiff, he would not be able to enforce it against the defendants and there would be multiplicity of litigation.
6.1 Learned counsel Ms. Megha Jani for the plaintiff has also submitted that the proceedings under RTS are not binding upon the Civil Court and rather, observations of the Civil Court would be binding upon the revenue authorities. She has also submitted that the revenue authorities has no right to decide the title of the property. She has also contended that the learned Trial Judge has erred in applying the principles of compensation being adequate relief to the facts of this case as the suit of the plaintiff is for cancellation of the subject sale deed and therefore, if sale deed is cancelled then, there would be no proprietary rights available to the defendants. According to her submissions, the principles of compensation being adequate relief primarily applies to suits for specific performance.
6.2 Learned counsel Ms. Megha Jani for the plaintiff, while referring to the averments made in the pleadings of the parties along with documentary evidence which have been produced by way of Paperbooks, she has submitted that all the three ingredients of granting interim Page 6 of 27 Downloaded on : Fri Jun 10 21:01:25 IST 2022 C/AO/60/2022 JUDGMENT DATED: 09/06/2022 injunction are in favour of the plaintiff and therefore, the learned Trial Court ought to have granted the interim injunction application. She has also submitted that when the plaintiff suit is primarily pertains to the cancellation of sale deed, in other words, it is claim over the land in question, merely asking of an alternative relief of monetary consideration cannot be a ground to reject the interim injunction application. She has also submitted that the learned Trial Court has committed serious error of facts and law in passing the impugned order and therefore, this Court needs to interfere in the matter and allow the present Appeal from Order by setting aside the impugned order of the learned Trial Court.
7. Per contra, learned counsel Mr. D.K.Dave, for the defendant- caveator has vehemently supported the impugned order passed by the learned Trial Court. He has submitted that all the three ingredients of granting interim injunction are not in favour of the plaintiff. He has also submitted that the prayer of injunction is misconceived. He has submitted that there is no any ingredients for cancellation of sale deed and therefore, the suit could be considered as only for recovery of consideration of sale transaction and therefore, when the suit is for monetary transaction, no interim injunction restraining the owner of the property could be passed. He has also submitted that the sale deed was executed in the year 2018 and the suit has been filed after more than two Page 7 of 27 Downloaded on : Fri Jun 10 21:01:25 IST 2022 C/AO/60/2022 JUDGMENT DATED: 09/06/2022 years in the year 2020 and thus, there is a delay and therefore, on this count also no interim relief could be granted in favour of the plaintiff. He has also submitted that in view of the conditions averred in the Banachitti, title clearance was to be obtained by the plaintiff, but, the plaintiff failed to do so. He has submitted that the ownership of the land has already been passed in favour of the defendant by way of registered sale deed. According to him, even at the time of execution of the sale deed, the plaintiff has accepted before the revenue authorities that entire sale consideration has been paid. While referring the MoU, he has submitted that the contingencies reflected therein has not been happened. He has submitted that Non-Agricultural permission is a sine qua non for the sale transaction. He has submitted that the public notice has been objected by the plaintiff and the plaintiff has not yet given title clearance to the defendant in respect of the suit land.
7.1 Learned counsel Mr. Dave also submitted that the defendants have also filed Special Civil Suit No. 147 of 2021 against the plaintiff for necessary direction to the plaintiff for getting the title clearance in favour of the defendants and in alternative declaring that the plaintiff herein is not entitled to recover Rs.2,08,80,000/-. He has also submitted that N.A. proceedings has already been started. He has submitted that the defendants have already paid 50% of the amount to the plaintiff. He has Page 8 of 27 Downloaded on : Fri Jun 10 21:01:25 IST 2022 C/AO/60/2022 JUDGMENT DATED: 09/06/2022 submitted that the photographs herein have been produced only with the intention to show the condition of the plots. He has submitted that the learned Trial Court has not committed any error of facts and law in rejecting the interim injunction application of the plaintiff. He has submitted that this Court has limited jurisdiction to interfere with the said discretionary order of the learned Trial Court. He has prayed to dismiss the present Appeal from Order and has relied upon the following decisions:-
1. Mahadeo Savlaram Shelke Vs. Pune Municipal Corporation reported in 1995 (3) SCC 33.
2. Bhupendra Steel Vs. Krishna Export reported in 1999 (1) GCD 416.
8. In rejoinder learned counsel Ms. Megha Jani, for the plaintiff-appellant has submitted that certain material which has been filed in the Paperbook by the defendants were not produced before the Trial Court and others are already filed by the plaintiff in his paperbook. She has submitted that since the sale deed has already been executed, the Banakhat would not govern the case. She has submitted that there was no delay as the plaintiff was awaiting for consideration on the basis of the oral communication made by the defendants. She has also submitted that considering that the defendants have also filed suit against the plaintiff for the same sale Page 9 of 27 Downloaded on : Fri Jun 10 21:01:25 IST 2022 C/AO/60/2022 JUDGMENT DATED: 09/06/2022 transaction based upon the same sale deed and admitting that he has to pay Rs.2,08,80,000/-, considering the provisions of Section 55 of the Transfer of Property Act, 1882, charge needs to be created upon the property and thereby to restrain the defendants from creating any third party rights or transferring it in any manner to anybody else. The learned counsel has prayed to allow the present appeal.
9. At this juncture, it is worthwhile to refer to the decisions relied upon by the learned counsel Mr. Dave for the defendant- caveator. In the case of Mahadeo Savlaram Shelke Vs. Pune Municipal Corporation (supra), the Hon'ble Apex Court has observed as under:
"8. In Dalpat Kumar v. Prahlad Singh, 1992(1) SCC 719, 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 be 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:
"The existence of 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 Page 10 of 27 Downloaded on : Fri Jun 10 21:01:25 IST 2022 C/AO/60/2022 JUDGMENT DATED: 09/06/2022 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 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. The court has to exercise its sound judicial discretion in granting or refusing the relief of ad interim injunction pending the suit."
9. It is settled law that no injunction could be granted against the true owner at the instance of persons in unlawful possession. It is true that the appellants placed reliance in their plaint on resolutions passed by the municipality on 11.11.72 and 29.11.72. A reading of those resolutions would prima facie show that possession would be taken where the acquisition proceedings have become final and land acquisition proceedings would not he pursued where award has not been made as on the date of the resolutions. In this case since the acquisition proceedings have become final, then necessarily Page 11 of 27 Downloaded on : Fri Jun 10 21:01:25 IST 2022 C/AO/60/2022 JUDGMENT DATED: 09/06/2022 possession has to be taken by the Corporation for the public purpose for which the acquisition was made. In that context the question arises whether the appellants can seek reliance on two resolutions. They furnish no prima facie right or title to the appellants to have perpetual injunction restraining the Corporation from taking possession of the building. The orders of eviction were passed by due process of law and had become final. Thereafter no right was created in favour of the appellants to remain in possession. Their possession in unlawful and that therefore, they cannot seek any injunction against the rightful owner for evicting them. There is thus neither balance of convenience nor irreparable injury would be caused to the appellants.
10. In Woodroffe's Law Relating to Injunctions, Second revised and enlarged edition, 1992, at page 56 in para 30.01, it is stated that "an injunction will only be granted to prevent the breach of an obligation (that is a duty enforceable by law) existing in favour of the applicant who must have a personal interest in the matter. In the first place, therefore, an interference by injunction is founded on the existence of a legal right, an applicant must be able to show a fair prima fade case in support of the title which he asserts".
At page 80 in para 33.02, it is further stated that "if the court be of opinion that looking to these principles the case is not one for which an injunction is a fitting remedy, it has a discretion to grant damages in lieu of an injunction. The grounds upon which this discretion to grant damages in lieu of an injunction should be exercised, have been subject of discussion in several reported Indian cases".
At page 83, is stated that "the court has jurisdiction to grant an injunction in those cases where pecuniary compensation would not afford adequate relief. The expression "adequate relief is not defined, but it is probably used to mean - such a compensation as would, though not in specie, in effect place the Page 12 of 27 Downloaded on : Fri Jun 10 21:01:25 IST 2022 C/AO/60/2022 JUDGMENT DATED: 09/06/2022 plaintiffs in the same position in which they stood before. The determination of the question whether relief by injunction or by damages shall be granted depends upon the circumstances of each case.
11. In "Law of Injunctions" by L.C. Goyle, at page 64, it is stated that "an application for temporary injunction is in the nature of a quia time action. Plaintiff must, therefore, prove that there is an imminent danger of a substantial kind or that the apprehended injury, if it does come, will be irreparable. The word "imminent" is used in the sense that the circumstances are such that the remedy sought is not premature. The degree of probability of future injury is not an absolute standard : what is aimed at is justice between the parties, having regard to all the relevant circumstances".
At page 116, it is also stated that "in a suit for perpetual or mandatory injunction, in addition to, or in substitution for, the plaintiff can claim damages. The court will award such damages if it thinks fit to do so. But no relief for damages will be granted, if the plaintiff has not claimed such relief in the suit."
12. In "Modern Law Review", Vol 44, 1981 Edition, at page 214, R.A. Buckley stated that "a plaintiff may still be deprived of an injunction in such a case on general equitable principles under which factors such as the public interest may, in an appropriate case, be relevant. It is of interest to note, in this connection, that it has not always been regarded as altogether beyond doubt whether a plaintiff who does thus fail to substantiate a claim for equitable relief could be awarded damages". In "The Law Quarterly Review" Vol 109, at page 432 (at p. 446), A.A.S. Zuckerman under Title "Mareva Injunctions and Security for Judgment in a Framework of Interlocutory Remedies" stated that "if the plaintiff is likely of suffer irreparable or uncompensable damage, no interlocutory injunction will be granted, then, provided that the plaintiff would be able to compensate the defendant _for any unwarranted restraint on Page 13 of 27 Downloaded on : Fri Jun 10 21:01:25 IST 2022 C/AO/60/2022 JUDGMENT DATED: 09/06/2022 the defendant's right pending trial, the balance would tilt in favour of restraining the defendant pending trial. Where both sides are exposed to irreparable injury ending trial, the courts have to strike a just balance".
At page 447, it is stated that the court considering an application for an interlocutory injunction has four factors to consider : first, whether the plaintiff would suffer irreparable harm if the injunction is denied; secondly, whether this harm outweighs any irreparable harm that the defendant would suffer from an injunction; thirdly, the parties' relative prospects of success on the merits; fourthly, any public interest involved in the decision. The central objective of interlocutory injunctions should therefore be seen as reducing the risk that rights will be irreparably harmed during the inevitable delay of litigation".
13. In "Injunctions" by David Bean, 1st Edn, at page 22, it is stated that "if the plaintiff obtains an interlocutory injunction, but subsequently the case goes to trial and he fails to obtain a perpetual order, the defendant will meanwhile have been restrained unjustly and will be entitled to damages for any loss he has sustained. The practice has therefore grown up, in almost every case where interlocutory injunction is to be granted, of requiring the plaintiff to undertake to pay any damages subsequently found due to the defendant as compensation if the injunction cannot be justified at trial. The undertaking may be required of the plaintiff in appropriate cases in that behalf. In "Joyce on Injunctions" Vol. 1 in paragraph 177 at page 293, it is stated "Upon a final judgment dissolving an injunction, a right of action upon the injunction bond immediately follows, unless the judgment is superseded. A right to damages on dissolution of the injunction would arise at the determination of the suit at law".
14. It would thus be clear that in a suit for perpetual injunction, the court should enquire on affidavit evidence and other material placed before the court to find strong prima facie case Page 14 of 27 Downloaded on : Fri Jun 10 21:01:25 IST 2022 C/AO/60/2022 JUDGMENT DATED: 09/06/2022 and balance of convenience in favour of granting injunction otherwise irreparable damage or damage would ensue to the plaintiff. The court should also find whether the plaintiff would adequately be compensated by damages if injunction is not granted. It is common experience that injunction normally is asked for and granted to prevent the public authorities or the respondents to proceed with execution of or implementing scheme of public utility or granted contracts for execution thereof. Public interest is, therefore, one of the material and relevant considerations in either exercising or refusing to grant ad interim injunction. While exercising the discretionary power, the court sould also adopt the procedure of calling upon the plaintiff to file a bond to the satisfaction of the court that in the event of his failing in the suit to obtain the relief asked for in the plaint, he would adequately compensate the defendant for the loss ensued due to the order of injunction granted in p favour of the plaintiff. Even otherwise the court while exercising its equity jurisdiction in granting injunction has also jurisdiction and power to grant adequate compensation to mitigate the damages caused to the defendant by grant of injunction restraining the defendant to proceed with the execution of the work etc., which is retrained by an order of injunction made by the court. The pecuniary award of damages is consequential to the adjudication of the dispute and the result therein is incidental to the determination of the case by the court. The pecuniary jurisdiction of the court of first instance should not impede nor be a bar to award damages beyond it pecuniary jurisdiction. In this behalf, the grant or refusal of damages is not founded upon the original cause of action but the /consequences of the adjudication by the conduct of the parties, the court gets inherent jurisdiction in doing ex debito justitiae mitigating the damage suffered by the defendant by the act of the court in granting injunction restraining the defendant from proceeding with the action complained of in the suit It is common knowledge that injunction is invariably sought for in laying the suit in a court of Page 15 of 27 Downloaded on : Fri Jun 10 21:01:25 IST 2022 C/AO/60/2022 JUDGMENT DATED: 09/06/2022 lowest pecuniary jurisdiction even when the claims are much larger than the pecuniary jurisdiction of the court of first instance, may be, for diverse reasons. Therefore, the pecuniary jurisdiction is not and should not stand an impediment for the court of first instance in determining damages as the part of the adjudication and pass a decree in that behalf without relegating the parties to a further suit for damages. This procedure would act as a check on abuse of the process of the court and adequately compensate the damages or injury suffered by the defendant by act of court at the behest of the plaintiff."
10. In the case of Bhupendra Steel Vs. Krishna Export (supra), this Court has observed as under:-
"[20] Before dealing with the matter of grant of temporary injunction against the defendant-respondent No. 1 as prayed by the plaintiff-appellant, I consider it to be appropriate to briefly state what are the necessary ingredients which are to be established to the satisfaction of the Court by the party concerned, before exercising its extra ordinary, discretionary and equitable remedy of grant of interlocutory injunction.
[21] Usually, the prayer for grant of interlocutory injunction is at a stage when existence of legal right asserted by the plaintiff and its alleged violation are both contested and uncertain and remain uncertain till they are established at the Trial on evidence. The Court at this stage, acts on certain well settled principles of administration of this form of interlocutory remedy which is both temporary and discretionary. Not only it is an equitable remedy, this remedy intends to preserve in status-quo the rights of the parties which may appear on a prima-facie case.
[22] A party is not entitled to an order of temporary or Page 16 of 27 Downloaded on : Fri Jun 10 21:01:25 IST 2022 C/AO/60/2022 JUDGMENT DATED: 09/06/2022 interlocutory injunction as a matter or fight or course. The grant of temporary or interlocutory injunction is within the discretion of the Court ch is to be exercised in favour of the plaintiff only if it is proved to the satisfaction of the Court which 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 irreparable loss or damage will be caused to the plaintiff during pendency of the suit. Thus, the purpose of temporary injunction is to maintain the status-quo. 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 and the balance of convenience is in his favour and refusal or injunction would cause irreparable injury to him. The Courts should always be willing to extent its hands to protect a citizen who is being wrongfully deprived of his property without any authority in law or without following the procedure which are fundamental and vital in nature, but at the same time, judicial proceeding cannot be used to protect or to perpetuate a wrong committed by a person who approaches the Court. This power of the Court to grant injunction is an extra ordinary power vested in it to be exercised taking into consideration the facts and circumstances of a particular case. (See: Shivkumar Chaddha vs. Municipal Corporation of Delhi 1993 (3) SCC
161).
[23] Reference to another decision in the case of Gujarat Bottling Co. Ltd. & Ors. vs. Coca-Cola Co. & Ors. reported in 1995(5) SCC 545 may have where the Apex Court has observed; grant of interlocutory injunction during the pendency of legal proceedings is a matter requiring the Page 17 of 27 Downloaded on : Fri Jun 10 21:01:25 IST 2022 C/AO/60/2022 JUDGMENT DATED: 09/06/2022 exercise of discretion of the Court. While exercising the discretion, the Court applies the following tests: (i) whether the plaintiff has a prima-facie case (ii) whether the balance of convenience is in favour of the plaintiff and (iii) whether the plaintiff would suffer an irreparably injury if his prayer for interlocutory injunction is disallowed. The decision whether or not to grant an interlocutory injunction has to be taken at a time when the existence of the legal right asserted by the plaintiff and its alleged violation are both contested and remain uncertain till they are established at the trial on evidence. The relief by way of interlocutory injunction is granted to mitigate the risk of injustice to the plaintiff during the period before that uncertainty could be resolved.
[24] From the case law, the principles which are to be followed by the Courts while dealing with the application filed by the plaintiff for grant of temporary injunction are that the grant of temporary injunction is a discretionary power in equity jurisdiction of the Court. Being a relief in equity it is based on equitable principles. Interim relief can only be granted where the plaintiff has proved to the satisfaction of the Court that he has a strong prima-facie case in his favour. The balance of convenience favours for grant of injunction in his favour and the decline of grant of relief will cause to him irreparable injury which cannot be compensated in terms of money, judicial proceedings cannot be used to protect or to perpetuate a wrong committed by a person who approaches to the Court. Apart from other considerations, the Court has to 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.
Page 18 of 27 Downloaded on : Fri Jun 10 21:01:25 IST 2022 C/AO/60/2022 JUDGMENT DATED: 09/06/2022
[26] In the case of Shivkumar Chaddha vs. Municipal
Corporation of Delhi (Supra), their Lordships of Hon'ble Supreme Court observed that judicial proceedings cannot be used to protect or to perpetuate a wrong committed by a person who approaches the Court. The plaintif-appellant, if we go by his case, in fact and substance, seeks from this Court protection of his illegel activities of exporting of goods to the importer though he is not having exporter-importer code number. In case such injunction, as prayed for, leaving apart the question whether the agreement dated 27 th March, 1998, is forged document or not, is granted in favour of the plaintif-appellant, then it will tantamount to perpetuating a wrong committed by a person who approaches the Court for exercise of its discretionary powers in the equitable jurisdiction. Exercising of discretionary powers in the equitable jurisdiction in such matter by the Court will otherwise encourage the people to act contrary to what the mandate of the statute contemplates. The role of the Courts is to see that citizens of the country do their business and trading as per, what the law of the country provides, permits, regulates and authorises. This Court will not pass an order which gives affirmance to the activities of commercial tradingor business, to the parties who approach to this Court, which if under-taken, are contrary to and under clear prohibition under the statute.
[27] Apart from this, as held by their Lordship of Supreme Court, in the case of Gujarat Bottling Co. Ltd. & Ors. vs. Coca-Cola Co. & Ors. (Supra), the Court, apart from other consideration, also may look into the conduct of the parties invoking the jurisdiction of the Court and may refuse to interfere unless the conductis free from blame. The relief, by grant of interim relief, is wholly equitable in nature and Page 19 of 27 Downloaded on : Fri Jun 10 21:01:25 IST 2022 C/AO/60/2022 JUDGMENT DATED: 09/06/2022 the plaintif-appellant who is invoking this jurisdiction of this Court has to show that he has come up before the Court with clean hands or that he was not unfair.
[30] This question of prima-facie case may also be examined from another aspect. If we go by the broad spectrum of facts on which there is no dispute, the export invoice has been sent by the defendant-respondent No. 1 to the importer and after accepting that export invoice, the firm order had been placed by the importer and in pursuance thereof he has opened a letter of credit as defendant-respondent No. 1 beneficiary therein. In the letter of credit also, it is specifically mentioned that the defendant- respondent No. 1 is beneficial and this letter of credit has been opened in response to and in pursuance of his export invoice dated 7.3.1998 The defendant respondent No.1 has incurred all the expenses for process of software floppies as per the specifications and requirement of importer as well as all other expenses of export of the same to the importer at Dubai. The plaintiff-appellant has admitted that he has not incurred a single pie in the process of these software floppies, and other expenses of export of these goods to the importer at Dubai. It is also admitted fact that the defendant-respondent No. 1 was having the importer- exporter code number as allotted to him by the competent authority under the provisions of the Act, 1992. In the presence of these facts and coupled with the fact that the basis of the suit, the document, alleged agreement dated 27th March, 1998 is surrounded by suspicious circumstances, it cannot be considered to be a fit case where prima-facie it can be taken that the plaintiff-appellant has a prima-facie case in his favour which justified this Court to grant temporary injunction as prayed for in the Page 20 of 27 Downloaded on : Fri Jun 10 21:01:25 IST 2022 C/AO/60/2022 JUDGMENT DATED: 09/06/2022 application ex.5.
[31] Temporary injunction can be granted by the Court only when the plaintif-appellant satisfies the Court in addition to prima- facie case in his favour, the balance of convenience also favour grant of temporary injunction and refusal to grant the temporary injunction will result in causing irreparable injury to him which cannot be compensated in terms of money."
11. Now, it is well settled principles of law that in an appeal against the exercise of "discretion" by the Court of first instance, the power of Appellate Court to interfere with the exercise of discretion is restrictive. Merely because, on such facts, the Appellate Court would have concluded differently from that of the Court below, that would not, by itself, provide justification for Appellate Court to interfere. To justify interference, the Appellate Court would have to demonstrate that the discretion has been shown to have exercised arbitrarily, or capriciously, or perversely or where the Court had ignored the settled principles of law regulating grant or refusal of interlocutory injunction. An appeal against the exercise of discretion is an appeal on principle. [Vendor Ltd. Ant. V/s Antox India Pvt. Ltd. 1990 (supplement) SCC 727; Skyline Education Institution (India) Pvt. Ltd.; (2010) 2 SCC 142].
12. Having considered the submissions made on behalf of both the sides coupled with the material placed on record and the decisions cited at Bar as referred to Page 21 of 27 Downloaded on : Fri Jun 10 21:01:25 IST 2022 C/AO/60/2022 JUDGMENT DATED: 09/06/2022 hereinabove, it emerges that there is no dispute between the parties that sale transaction has happened between the parties by registered sale deed. It is an admitted fact that the defendants are in possession of the suit land. It also reveals that the RTS proceedings have been started during the pendency of the present suit and the criminal complaints as well as complaint under the Negotiable Instruments Act, 1881, have been filed later on. It also reveals that on the same facts, the defendants have also filed Special Civil Suit against the present plaintiff wherein, the defendants have prayed for relief of directing the plaintiff herein to get title clearance certificate and in alternative if, the plaintiff fails to do so, to declare that the plaintiff is not entitled to sale consideration price of Rs.2,08,80,000/-. It also emerges from the record that in the written statement filed in the present matter, the defendants have admitted the factum of non-payment of sale consideration to the tune of Rs.2,08,80,000/- to the plaintiff. The stand taken by the defendants is that the plaintiff has not complied with the condition in the Banakhat regarding getting title clearance certificate. Thus, the non-payment of the sale transaction as well as the defendants being in possession of the suit property by virtue of registered sale deed are admitted facts. It is also admitted fact that the suit is filed by the present plaintiff for cancellation of the said registered sale deed. It is not a suit for specific performance of an agreement to sell. Thus, considering Page 22 of 27 Downloaded on : Fri Jun 10 21:01:25 IST 2022 C/AO/60/2022 JUDGMENT DATED: 09/06/2022 the pleadings between the parties of the present suit as well as the suit filed by the defendants against the present plaintiff, the status of the plaintiff would be that of unpaid seller of the property. Under these circumstances, so far as the facts of the present case are concerned, it would be governed by the provisions of the Transfer of Property Act, 1882, especially Section 55 thereof. It is worthwhile to reproduce the relevant portion of the Section 55 of the Transfer of Property Act, 1882, which deals with the rights and liabilities of the buyer and seller. In the present case, Sub-section 4 of Section 55 of the Transfer of Property Act is applicable which runs as follows:-
"55. Rights and liabilities of buyer and seller.- In the absence of a contract to the contrary, the buyer and the seller of immoveable property respectively are subject to the liabilities, and have the rights, mentioned in the rules next following, or such of them as are applicable to the property sold:-
(1) X. (2) X. (3) X. (4) The seller is entitled--
(a) to the rents and profits of the property till the ownership thereof passes to the buyer;
(b) where the ownership of the property has passed to the buyer before payment of the whole of the purchase-money, to a charge upon the property in the hands of the buyer, [any transferee Page 23 of 27 Downloaded on : Fri Jun 10 21:01:25 IST 2022 C/AO/60/2022 JUDGMENT DATED: 09/06/2022 without consideration or any transferee with notice of the non-payment], for the amount of the purchase-money, or any part thereof remaining unpaid, and for interest on such amount or part [from the date on which possession has been delivered].
12.1 Thus, the unpaid seller is entitled to have a charge upon the property in the hands of the buyer if the ownership of the property has already been passed in favour of the buyer and for payment of the whole of the purchase money. Admittedly, in the present case, the ownership of the property has already been passed in favour of the defendants and the same is admitted by them, and amount of more than Rs.2 crore is yet to be paid to the plaintiff. Whether, there was a breach on the part of the plaintiff in getting title clearance is a question of fact which needs to be decided on merits. But, the fact remains that though the ownership of the property is passed in favour of the defendants, entire amount of the purchase money has not been paid to the plaintiff. Under these circumstances, under the provisions of Transfer of Property Act, 1882, especially Section 55 (4) (b), plaintiff is entitled to have charge over the property.
13. On perusal of the impugned order of the Trial Court, it clearly transpires that the Trial Court has misread the pleadings of the parties and the documentary evidence on record and has not considered this very basic aspect of Page 24 of 27 Downloaded on : Fri Jun 10 21:01:25 IST 2022 C/AO/60/2022 JUDGMENT DATED: 09/06/2022 the right of the unpaid seller of the immovable property. The Trial Court has merely passed the impugned order on the basis that the plaintiff has not come with clean hands. But as referred to hereinabove, the revenue proceedings and other proceedings were filed during the pendency of the suit and therefore, it cannot be said that the plaintiff has suppressed the material facts. Further, the Trial Court has observed that as the plaintiff has sought for recovery of Rs.2,08,80,000/-, alternatively, he can be compensated in terms of money, but, considering the fact that the status of the plaintiff is as an unpaid seller and under the provisions of the Transfer of Property Act as referred to hereinabove, unpaid seller has a right to have a charge upon the property in the hands of the buyer, merely because the plaintiff has sought for alternative relief of recovery unpaid sale price does not mean that the plaintiff would be compensated in terms of money. Admittedly, the suit is filed for cancellation of the registered sale deed and if no interim injunction is granted preventing the defendants from transferring it to third party or creating any charge over the property, then, if the defendants disposed of the property in favour of the third party or create any charge over the property and finally, the Court comes to the conclusion that the sale deed needs to be cancelled, then in that case, the decree will be only paper decree and otherwise also there would be multiplicity of proceedings as the plaintiff has to either file a separate suit against the said third party or to Page 25 of 27 Downloaded on : Fri Jun 10 21:01:25 IST 2022 C/AO/60/2022 JUDGMENT DATED: 09/06/2022 join them as party in the present suit and to amend the relief. These facts clearly suggest that all the three ingredients for granting interim injunction are in favour of the plaintiff. Further, if the plaintiff fails in a suit, then, the defendants could be compensated in terms of money as they have already filed a separate suit with a prayer to declare that the plaintiff is not entitled to receive the unpaid consideration of Rs.2,08,80,000/-.
14. In view of the aforesaid discussion the impugned order of the Trial Court is not sustainable in the eyes of law. The same deserves to be set aside and interim injunction application filed by the plaintiff-appellant deserves to be granted.
15. In view of the aforesaid discussion, the present Appeal from Order is hereby allowed. The impugned order dated 26.11.2021 passed below Exh.5 in Special Civil Suit No.61/2020 by the learned 4 th Additional Senior Civil Judge, Mirzapur, Ahmedabad (Rural), is hereby quashed and set aside.
16. The application at Exh.5 filed by the appellant- plaintiff before the Trial Court is allowed in terms of Para 9 thereof and the defendants, their servants/representatives or anybody else acting through the defendants are hereby restrained from making any changes in the suit property and also restrained from Page 26 of 27 Downloaded on : Fri Jun 10 21:01:25 IST 2022 C/AO/60/2022 JUDGMENT DATED: 09/06/2022 transferring the said property in favour of any third party by way of sale, mortgage, gift, or in any other manner or creating any encumbrances, charge or any lien in relation of the property, in any manner, in favour of third party.
17. No order as to costs. Direct service is permitted.
18. In view of the order passed in the main matter, Civil Application No.1 of 2022 for stay, does not survive and the same stands disposed of accordingly.
Sd/-
(DR. A. P. THAKER, J) Further Order:
Learned advocate appearing for the respondent seeks to stay the operation of this order. However, considering the observation made by this Court in the aforesaid judgment, prayer is declined.
Sd/-
(DR. A. P. THAKER, J) SLOCK BAROT Page 27 of 27 Downloaded on : Fri Jun 10 21:01:25 IST 2022