Yogini Shaileshbhai Bhuta vs Rrahulraj Realtor Pvt Ltd And Director ... on 14 February, 2019

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Gujarat High Court

Yogini Shaileshbhai Bhuta vs Rrahulraj Realtor Pvt Ltd And Director ... on 14 February, 2019

(G.R.UDHWANI, J) CIVIL APPLICATION (FOR STAY) NO. 1 of 2019 The suit was filed being Special Civil Suit No. 203 of 2017 with the Principal Senior Civil Judge, Surat, for specific performance of the contract against defendants No.2 and 3 in respect of the property more particularly described in para 11(1) of the plaint. Application for injunction Exh.5 was moved which was dismissed by the impugned order dated 16.01.2009; the appellant-original plaintiff therefore is before this court.

2. On consideration of the rival submissions, this court Page 1 of 11 Downloaded on : Mon Jun 21 22:54:38 IST 2021 C/AO/41/2019 ORDER would reiterate the purport and meaning of three well-settled principles for grant or refusal of interim injunction being: (1) prima facie case, (2) balance of convenience and (3) irreparable loss which cannot be compensated in terms of money; to the list few more principles like waiver, delay and latches; suppression of material facts etc. can be added.

3. The misconception of law is often noticed in application of the three principles above-referred. More often than not the pros and cons of the success of the party sway the discretion of the court in grant or refusal of an injunction. Is this a correct approach for ascertaining existence of prima facie case. No; in the opinion of this court. The test is: are the serious triable issues raised. Affirmative answer to this question would command the discretion of the court in favour of the party seeking injunction on satisfaction of the other two principles namely balance of convenience and irreparable loss.

4. Once the serious triable issue discern from the pleadings and other materials placed with the court, the court would proceed to examine where does the balance of convenience lie. The court would consider whether the interim relief as an ancillary to sustenance of final relief is necessary. It would compare the hardship for or against grant of interim relief. If the refusal of injunction would result into rendition of final decree mere paper decree in absence of injunction, and if grant of injunction is not likely to cause greater comparative hardship to the party opposing the injunction, it can consider granting an injunction.

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5. The third important principle to be addressed i.e whether refusal of injunction would cause irreparable loss to the injunction seeker, which cannot be compensated in terms of money. Though no straight-jacket formula can be laid compartmentalising the rights; the loss of which can be compensated in terms of money and which cannot be compensated in terms of money, an endeavour can always be made by pointing out illustrations therefor.

6. Under Section 10 of Specific Relief Act, the loss of immovable property is presumed to be non-compensatory, in absence of contrary evidence. Furthermore, the loss of contractual or commercial rights are compensable in terms of money. Loss of fundamental rights, however, cannot be compensated in terms of money. Easementary rights of necessity are such rights as can be enjoyed and not encashed. There may be similar such rights, which if unprotected may not be possibly retrieved, when lost. Those rights, if unprotected, would render relief in the suit irretrievably redundant, if eventually decreed, are the rights which cannot be compensated in terms of money. In short, the court would address such similar circumstances for ascertaining whether irreparable loss would be caused by the loss of rights, the protection of which is sought by injunction. The court should be satisfied on all the three constituents of injunction above- referred simultaneously for grant of injunction. However, being a discretionary relief, the court can refuse the injunction on the principles like waiver, delay, latches, suppression of material facts etc., evenafter recording the satisfaction for the case being made out on the three afore- mentioned constituents of injunction.

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7. In the instant case the plaintiff sued the defendants for specific performance of the contract. It is her case that she paid a sum of Rs.80.00 lakhs for acquiring the properties from the defendants No.1 and 2. Reliance has been placed upon certain receipts to contend that the contract came into being between the parties. One of the receipt evidences the acknowledgment of Rs.80.00 lakhs as an advance payment for Shop No. G-64, 65, 66, 67, 68, 6, 70, 71, 72, 119, 120, 121, 122, 123, 124, 125 and 126 at Rahul Raj Textile City, Dumbhal, Surat, Wing-B vide cheque No. 407065 dated 29.06.2009 drawn on HDFC Bank, Mumbai. The receipt is made valid subject to realisation of cheque. Another receipt acknowledges the part payment against the sale proceeds of two houses on ground floor at Rahul Raj Market, Dumbhal, area 3935 sq.feet. The receipt also confirms the full payment towards sale proceeds of "above" to Galas which has been transformed in small shops and block. It also states that the number is already allotted to "You". It again states that the complete payment is received. Electricity, society maintenance, SMC charges, if any, society deposit, other taxes and parking all are to be paid at the time of sale deed (dastavej). On the left hand side, pan number and address is mentioned. Receipts are acknowledged for Rahul Raj Estates. The aforesaid receipt would prima facie indicate existence of a contract in respect of which certain payments are exchanged.

8. The question is whether the assertion of the plaintiff buttressed by the above-stated receipts raises a serious triable issue as to whether the transaction in question had Page 4 of 11 Downloaded on : Mon Jun 21 22:54:38 IST 2021 C/AO/41/2019 ORDER taken place between the plaintiff and the defendants No.1 and 2 or not. Needless to say that these facts cannot be ignored at an interim stage and they do require a serious adjudication. However whether or not it was a concluded contract, can only be adjudicated by oral and documentary evidence during trial. Let it be not forgotten that the contract can be a written or oral. It may also happen that part of the contract may be oral and/or part of the contract may be written. All these facts may come to force during evidence.

9. The defendants No.3 to 5 are successors of the title of the suit property. The pleadings would indicate that certain construction was already raised by defendants No.1 and 2 over the suit land and titles then were passed by them to the defendants No.3 to 5 somewhere in the year 2014. The plaint would also show that the rights of the persons who had already booked the properties with defendants No.1 and 2 were put to the notice by defendants No.3 to 5. In the agreement/contract itself the defendants No.1 and 2 had undertaken to refund the booking amounts obtained by them from the aspirants of the properties. The responsibility of defending the litigation was also taken over by defendants No.1 and 2 in the agreement/contract by them with defendants No.3 to 5. These facts would indicate the knowledge with defendants No.3 to 5 as regards existing rights of certain aspirants, in the contract executed between such aspirants and defendants No.1 and 2. With the open eyes they purchased the suit property from defendants No.1 and 2. This again raises a serious triable issue as to whether under the above circumstances the defendants No.3 to 5 are contractually liable to the plaintiff. Reliance is placed by the Page 5 of 11 Downloaded on : Mon Jun 21 22:54:38 IST 2021 C/AO/41/2019 ORDER plaintiff on Section 19(1)(b) of the Specific Relief Act to reiterate her right to proceed against the said defendants in a suit since; with the above-referred knowledge, according to the plaintiff, they are not bonafide purchaser for value without notice. Thus the contentious issue do require a serious determination.

10. The defendants No.1 and 2 had put up some construction, and it is the case of the plaintiff that the property agreed to be conveyed to the appellant-plaintiff was also sought to be constructed. However, according to the defendants No.1 and 2, while the construction was in progress, certain portion of the land under construction were sought to be regulated under Town Planning Scheme and the building permission already granted to the defendants No.1 and 2 was eventually cancelled in 2015. It is the case of the defendants No.1 and 2 that, owing to the cancellation of the permission, the contract between the plaintiff and the said defendants frustrated within the meaning of Section 56 of the Contract Act; which provision contemplates frustration of illegal and/or impossible contract. According to the defendants No.1 and 2, withdrawal of permission brought the situation contemplated under the said provision, and thus, the contract was rendered void. To buttress the said submissions, reliance is placed upon the following decisions:

(1) M.P.HOUSING BOARD v. ANIL KUMAR KHIWANI [ (2005) 10 SCC 796 ].

(2) M/S. BEST SELLERS RETAIL (INDIA) PVT. LTD. v. M/S. ADITYA BIRLA NUVO LTD. [ (2012) 6 SCC 792 ].

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(3) M.D., ARMY WELFARE HOUSING ORGANISATION v. SUMANGAL SERVICES PVT. LTD. [ (2004) 9 SCC 619 ]. (4) HARSHADKUMAR KANTILAL BHALIDWALA AND ANOTHER v.

ISHWARBHAI CHANDUBHAI PATEL AND OTHERS [ 2010(2) GLR 1041 ].

(5) MANDALI RANGANNA v. T. RAMACHANDRA [ (2008) 11 SCC 1 ].

(6) HANSA V. GANDHI v. DEEP SHANKAR ROY AND OTHERS [ (2013) 12 SCC 776 ].

(7) GIAN CHAND AND BROTHERS v. RATTAN LAL @ RATTAN SINGH [ (2013) 2 SCC 606].

(8) SONI LALJI JETHA v. SONI KALIDAS DEVCHAND [ AIR 1967 SC 978].

(9) BAL DOSABAI v. MATHURDAS GOVINDDAS [ (1980) 3 SCC 545 ].

(10) GIAN CHAND v. YORK EXPORTS LIMITED [ (2015) 5 SCC 609 ]. (11) BHARATKUMAR ISHWARLAL MITERANI AND OTHERS v. GIRISHBHAI MANUBHAI AND OTHERS [ 2014 (1) GLH 326 ].

11. The plaintiff would contend that unless doing of a thing and its abstention envisaged in the contract is beyond the reach of a person by the reason of the same having been rendered illegal or impossible, the contract would not frustrate on mere withdrawal of the building permission; that the deliberate non-procurement of alternative building permission; and instead transferring of the land in dispute to some other persons i.e. defendants No. 3, 4 and 5, does not bring about the situation contemplated by Section 56 of the Contract Act. Pausing here for a moment, this issue is a Page 7 of 11 Downloaded on : Mon Jun 21 22:54:38 IST 2021 C/AO/41/2019 ORDER contentious issue, of course, requiring adjudication. In a notice of motion the issue could not have been answered pre- empting the adjudication.

12. The doctrine of frustration contemplated in Section 56 of the Contract Act requires a close scrutiny. The general rule under the Contract Act is that all lawful contracts would be sustained and all illegal contracts would be void. Certain contracts are void and yet others are voidable. Under Section 56 of the Contract Act, the contract which was otherwise legal would be rendered void on its frustration triggered by its illegality or impossibility inducted into it by the resources beyond the control of the parties to the contract. There would be a frustration of a contract on intervention of certain events which are beyond the control of the contracting party, during the subsistence of the legally binding contract. The doctrine of frustration does not admit a discretion with the parties to the contract to frustrate it by their own acts or inaction.

13. In the light of the above principles under Section 56 of the Contract Act, the question as to whether in the facts of the present case, the contract was frustrated by the reason of the factum of withdrawal of the building permission by the local authority in the year 2015 when the defendants No.3 to 5 held the title; particularly when they concededly have obtained building permission afresh on the portion of the land excluding the one hit under the Town Planning Act, is required to be adjudicated. According to the defendants No.3 to 5 the contract got frustrated because earlier building permission was withdrawn by the reason of the proposed reservation of certain portion of the land in question by the Page 8 of 11 Downloaded on : Mon Jun 21 22:54:38 IST 2021 C/AO/41/2019 ORDER local authority. The doctrine of frustration deserves examination in the light of the fact that the defendants No.3 to 5 are not rendered fully helpless since they are able to raise the construction on the very same piece of land; of course, excluding the piece of land hit under the Town Planning Act.

14. All the above-referred contentions give rise to contentious issue requiring adjudication, and therefore, this court is of the opinion that the plaintiff has successfully established prima facie case.

15. The next question is where does the balance of convenience lie. The defendants No.3 to 5 are, as indicated above, the successors of the title of the defendants No.1 and 2 with the knowledge of the plaintiff's right in the agreement between her and defendants No.1 and 2. The defendants No.1 and 2 have collected a huge sum of money i.e. Rs.80.00 lakhs by cheques from the plaintiff. The defendants No.3 to 5 are sought to be proceeded against with the aid of Section 19(1)(b) of the Specific Relief Act. Under the circumstances there are fair chances of the plaintiff to establish the liability of the defendants No.3 to 5 to perform the contract with her. In such an eventuality, refusal of injunction would benefit the defendants retaining the money and letting the equity change by conveyance of a title of the properties to be constructed and/or construction which is in progress to the third party. Furthermore, needless to say that the prices of the immovable properties may not be stable; the possibility of rise in price is more than its reduction. Thus the refusal of injunction may deprive the plaintiff of the property at the agreed price. Whereas if the injunction is granted the defendants can Page 9 of 11 Downloaded on : Mon Jun 21 22:54:38 IST 2021 C/AO/41/2019 ORDER always seek a compensation and/or damages if at all it occurs by the efflux of time or otherwise; during the pendency of the trial.

16. So far as irreparable loss which cannot be compensated in terms of money is concerned, Section 10 of the Specific Relief Act must come to the aid of the plaintiff. The provision raises a presumption of irreparable loss unless rebutted. The material on record is incapable of rebutting the presumption, and therefore, this court is of the opinion that the injunction must follow.

17. So far as issue of delay, latches, acquiescence or waiver is concerned, the plaintiff has also explained in the pleadings as to what made her to wait after making the above payments. This fact, of course, would require an adjudication and cannot be brushed aside at this stage of the proceedings.

18. Prima facie, the trial court was under the misconception of facts and law and committed a serious error as if it was eventually determining the issues in the suit.

19. It is, however, noticed that owing to the demolition of the construction in progress of the shop booked by the plaintiff, it may not be possible to allot to the plaintiff the same property. Interest of justice would therefore require the defendants to keep vacant the property of the same measurement i.e. 4287 sq.ft as indicated in the receipt on the ground floor of the suit property in question. It is clarified that it will be open for the defendants more particularly the defendants No.3, 4 and 5 to continue with the construction and deal with the property Page 10 of 11 Downloaded on : Mon Jun 21 22:54:38 IST 2021 C/AO/41/2019 ORDER except as otherwise indicated hereinabove.

Oral request for stay of this order is refused. Direct service is permitted.

(G.R.UDHWANI, J) syed/ Page 11 of 11 Downloaded on : Mon Jun 21 22:54:38 IST 2021

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Gujarat High Court