Injunction:
Interim injunction – A suit for specific performance – Alleging that defendant created third party rights, while the contract for sale of suit lands had stood concluded – Trial court by interim injunction restrained the defendants from executing any further documents or to deal with the suit land in any manner – High Court affirmed the order of injunction – Appeal to Supreme Court – Held: A plaintiff seeking temporary injunction in a suit for specific performance has to establish a strong prima facie case on the basis of undisputed facts – Conduct of plaintiff , balance of convenience and irreparable injury is also very essential to be considered – In the facts of the present case, whether there existed a concluded contract is a matter of trial – The plaintiff had failed to prove that there was a concluded contract and/or an oral contract by inference – Therefore, the grant of injunction in the present case is unsustainable.
Allowing the appeals, the Court
HELD : 1. Chapter VII, Section 36 of the Specific Relief Act, 1963 provides for grant of preventive relief. Section 37 provides that temporary injunction in a suit shall be regulated by the Code of Civil Procedure. The grant of relief in a suit for specific performance is itself a discretionary remedy. A plaintiff seeking temporary injunction in a suit for specific performance will therefore have to establish a strong prima-facie case on basis of undisputed facts. The conduct of the plaintiff will also be a very relevant consideration for purposes of injunction. The discretion at this stage has to be exercised judiciously and not arbitrarily. In a matter concerning grant of injunction, apart from the existence of a prima facie case, balance of convenience, irreparable injury, the conduct of the party seeking the equitable relief of injunction is also very essential to be considered. [Paras 15 and 19] [323-H; 324-A-B; 326-A]
2. The negotiations between the plaintiff and the defendant is reflected in approximately 17 e-mails exchanged between them commencing from December 2017 to 31.03.2018. The file size of the attachment to the mails has varied from 48-50-52-4857-56 KBs indicating suggestions and corrections from time to time. The WhatsApp messages which are virtual verbal communications are matters of evidence with regard to their meaning and its contents to be proved during trial by evidencein-chief and cross examination. The e-mails and WhatsApp messages will have to be read and understood cumulatively to decipher whether there was a concluded contract or not. The use of the words ‘final draft’ in the e-mail dated 30.03.2018 cannot be determinative by itself. The e-mail dated 26.02.2018 sent by the defendant at 11:46 AM had also used the same phraseology. [Para 17] [324-G-H; 325-A-B]
3. The plaintiff was well aware from the very inception that the defendant was negotiating for sale of the lands simultaneously with two others. The plaintiff was further aware on 30.03.2018 itself that the deal with it had virtually fallen through as informed to the escrow agent. The fact that a draft MoU christened as ‘final-for discussion’ was sent the same day cannot lead to the inference in isolation, of a concluded contract. There is no evidence at this stage that the acceptance was communicated to the defendant before the latter entered into a deal with defendant No. 2 on 30.03.2018 and executed a registered agreement for sale on 31.03.2018. Defendant No. 2 paid Rs.17.69 crores and Rs. 2.20 crores towards the income tax dues of the defendant the same day, as part of the consideration amount. It is only thereafter the plaintiff purports to have communicated its acceptance to the defendant on 31.03.2018 at 01.13 PM. The prolonged negotiations between the parties reflect that matters were still at the ‘embryo stage’. [Para 17] [325-C-E]
4. The pleadings in the suit acknowledge the awareness of the plaintiff of the ongoing negotiations with defendant No. 2. KS INFRASPACE LLP LTD.
The advance of Rs. 2.16 crores was refunded to the plaintiff in the evening on 31.03.2018 by RTGS. No effort was made by the plaintiff to again remit the sum by RTGS immediately or the next day. Only a public notice was published on 03.04.2018 refuted by the defendant on 04.03.2018. The suit was then filed seven months later on 01.10.2018. The explanation that the plaintiff waited hopefully for a solution outside litigation as a prudent businessman before finally instituting the suit is too lame an excuse to merit any consideration. [Para18] [325-F-G]
5. Defendant No.2, in addition to the dues of the Income Tax department, had made further payments to the defendant of Rs.25,44,57,769/- by 16.01.2019 aggregating to a total payment of Rs.45,84,71,869/-. The defendants had also proceeded to utilize a sum of Rs.36.20 crores and had therefore materially altered their position evidently by the inaction of the plaintiff to institute the suit in time and having allowed third party rights to accrue by making substantial investments. [Para 20] [326-E-F]
6. In the facts and circumstances of the present case, and the nature of the materials placed before this Court at this stage, whether there existed a concluded contract between the parties or not, is itself a matter for trial to be decided on basis of the evidence that may be led. If the plaintiff contended a concluded contract and/or an oral contract by inference, leaving an executed document as a mere formality, the onus lay on the plaintiff to demonstrate that the parties were ad-idem having discharged their obligations. The plaintiff failed to show the same on admitted facts. The draft MoU dated 30.03.2018 in Clause C contemplated payment of the income tax dues of Rs.18.64 crores as part of the consideration amount only whereafter the agreement was to be signed relating back to the date 29.03.2008. Had this amount been already paid or remitted by the plaintiff, entirely different considerations would have arisen with regard to the requirement for execution of a written agreement remaining a mere formality. Thus, the balance of convenience is in favour of the defendants on account of the intervening developments, without furthermore, inter-alia by reason of the plaintiff having waited for seven months to institute the suit. The question of irreparable harm to a party complaining of a breach of contract does not arise if other remedies are available to the party complaining of the breach. The High Court has itself observed that from the negotiations between the parties that “some rough weather was being reflected between the plaintiff and the defendant ……….”. The Special Civil Judge failed to address the issue of delay. The High Court noticed the arguments of the defendants with regard to delay in the institution of the suit but failed to deal with it. Therefore, in the facts and circumstances of the present case, the grant of injunction to the plaintiff is unsustainable. Resultantly the orders of injunction are set aside. [Paras 21 and 24] [326-H; 327-A-E; 328-F] Dalpat Kumar v. Prahlad Singh (1992) 1 SCC 719 : [1991] 3 Suppl. SCR 472 ; Agriculture Produce Market Committee, Gondal and Ors. v. Girdharbhai Ramjibhai Chhaniyara and Ors. (1997) 5 SCC 468 : [1997] 1 Suppl. SCR 74 ; Motilal Jain v. Ramdasi Devi (Smt.) and Ors. (2000) 6 SCC 420 : [2000] 1 Suppl. SCR
615 ; Mademsetty Satyanarayana v. G. Yelloji Rao and Ors. [1965] 2 SCR 221 ; Mandali Ranganna and Ors. v. T. Ramachandra and Ors. (2008) 11 SCC 1 : [2008]
7 SCR 264 ; Brij Mohan and Ors. v. Sugra Begum and Ors. (1990) 4 SCC 147 : [1990] 3 SCR 413 ; M.P. Mathur v. DTC (2006) 13 SCC 706 : [2006] 9 Suppl. SCR 519 ; Wander Ltd. and another v. Antox India P. Ltd., (1990) Suppl. SCC 727 ; Gujarat Bottling Co. Ltd. v. Coca Cola Co. (1995) 5 SCC 545 : [1995] 2 Suppl. SCR 514 – relied on.
K.S. Vidyanadam & Ors. v. Vairavan, (1997) 3 SCC 1 : [1997] 1 SCR 993 ; Mandali Ranganna and Ors. v. T. Ramachandra and ors. (2008) 11 SCC 1 : [2008]
7 SCR 264 ; Mayawanti v. Kaushalya Devi (1990) 3 SCC 1 : [1990] 2 SCR 350 ; Moharwal Khewaji Trust (Regd.), Faridkot v. Baldev Dass (2004) 8 SCC 488 ; Aloka Bose v. Parmatma Devi and Ors. (2009) 2 SCC
582 : [2008] 17 SCR 822 – referred to.
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As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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