Injunction: Interlocutory mandatory injunction – When can be granted – Principle of moulding relief – Invocation of – On facts, respondent no.1 appointed as developer for developing the suit property – Thereafter, under an agreement, respondent no.1 transferred the benefits of development rights in the suit property to respondent no.2 – Subsequently, execution of development agreement by respondent no.2 with the appellant whereunder appellant would be entitled to 55% of the total area available for sale buildings and car parking and respondent no.2 retained 45% of the total area – Dispute during the construction of the building – Suit for specific performance by respondent no.1 against appellant and respondent no.2 – Order of mandatory interlocutory injunction by both the High Court directing the appellant to hand over 8 flats along with 16 parking spaces to respondent no. 1 – On appeal, held: Interim mandatory injunction can be passed only when circumstances are clear and prima facie material clearly justify a finding that status quo has been altered by one of the parties to the litigation and the interest of justice demanded that status quo ante be restored by way of an interim mandatory injunction – On facts, both High Court erred in invoking the principle of moulding of relief so also the exercise of power to grant mandatory order at an interlocutory stage – Mandatory order at interlocutory stage was in excess of jurisdiction – Such order at an interlocutory stage cannot be countenanced – High Court was swayed away by the consent agreement between the respondents inter partes to which the appellant was not a party – Appellant could not be bound by the arrangement agreed upon between the respondents inter se but only by the agreement entered with respondent No.2 and at best the tripartite agreement – Appellant could not be directed to hand over
8 additional flats and 16 parking spaces to respondent No.1 with whom the appellant had no independent agreement in that regard – Complying with the directions would result in bestowing advantage on respondent No.2 who failed to discharge its obligation under the agreement with the appellant – Thus, the order passed by the High Court is set aside.
Principle of moulding relief and interlocutory mandatory injunction – Difference between – Held: Principle of moulding of relief can be resorted to at the time of consideration of final relief in the main suit and not at an interlocutory stage – Interlocutory mandatory injunction can be granted only to restore the status quo and not to establish a new set of things differing from the state which existed on the date when the suit was instituted.
Allowing the appeal, the Court
HELD: 1.1 The High Court disregarded that the Settlement Agreement and the Consent Terms have been entered into between the respondent No.1/plaintiff and respondent No.2/defendant No.1 inter partes. That could not be thrust upon the appellant/defendant No.2 who had executed a separate agreement with respondent No.2/defendant No.1. The appellant could be bound only by the agreement dated 10th March, 2003 in his favour and executed by him. Admittedly, the said agreement is the subject matter of arbitration proceedings, inter alia because respondent No.2 had failed to discharge its obligation thereunder. The appellant has already parted with the possession of flats to respondent No.2 in furtherance of agreement dated 10th March, 2003 and respondent No.1/plaintiff could be accommodated only against those flats. Asking the appellant to hand over additional
8 flats and 16 parking spaces by way of mandatory order, would be to superimpose the liability of respondent No.2/defendant No.1 on the appellant for discharging its obligation qua respondent No.1/plaintiff in relation to the agreement entered between them and including Settlement Agreement and Consent Terms to which the appellant is not a party. [Para 23] [65-B-E]
1.2 That apart, the Single Judge as well as the Division Bench have committed fundamental error in applying the principle of moulding of relief which could at best be resorted to at the time of consideration of final relief in the main suit and not at an interlocutory stage. The nature of order passed against the appellant is undeniably a mandatory order at an interlocutory stage. There is marked distinction between moulding of relief and granting mandatory relief at an interlocutory stage. As regards the latter, that can be granted only to restore the status quo and not to establish a new set of things differing from the state which existed at the date when the suit was instituted. [Para 24] [65-F-G]
Dorab Cawasji Warden v. Coomi Sorab Warden and Others (1990) 2 SCC 117 : [1990] 1 SCR 332 –
referred to.
Halsbury’s Laws of England 4 th Edn., Volume 24, para 948 – referred to.
1.3 An interim mandatory injunction is not a remedy that is easily granted. It is an order that is passed only in circumstances which are clear and the prima facie material clearly justify a finding that the status quo has been altered by one of the parties to the litigation and the interest of justice demanded that the status quo ante be restored by way of an interim mandatory injunction. [Para 26] [67-D]
Metro Marins and Another v. Bonus Watch Co. (P) Ltd. and Others (2004) 7 SCC 478 ; Kishore Kumar Khaitan and Another v. Praveen Kumar Singh (2006) 3 SCC
312 : [2006] 2 SCR 176 ; Purshottam Vishandas Raheja and Another v. Shrichand Vishandas Raheja (Dead) through LRs. and Others (2011) 6 SCC 73 : [2011] 6 SCR 913 – relied on.
1.4 In the factual scenario in which mandatory order has been passed against the appellant, is in excess of jurisdiction. Such a drastic order at an interlocutory stage ought to be eschewed. It cannot be countenanced. [Para 27] [67-E-F]
1.5 The invocation of principle of moulding of reliefs so also the exercise of power to grant mandatory order at an interlocutory stage, is manifestly wrong. To put it differently, while analysing the merits of the contentions the High Court was swayed away by the consent agreement between the respondents inter partes to which the appellant was not a party. Thus, he could not be bound by the arrangement agreed upon between the respondents inter se. The appellant would be bound only by the agreement entered with respondent No.2 and at best the tripartite agreement. The respondent No.2 having failed to discharge its obligation under the stated agreement cannot be permitted to take advantage of its own wrong in reference to the arrangement agreed upon by it with respondent No.1/plaintiff and including to defeat the claim of the appellant in the arbitration proceedings. [Para 29] [67-G-H; 68-A-C]
1.6 It would have been a different matter if the High Court were to continue the ad-interim arrangement directed in terms of order dated 3 rd December, 2012 and as corrected on 17 th December, 2012, until the final disposal of the suit. However, by no stretch of imagination, the appellant could be directed to hand over 8 additional flats and 16 parking spaces to respondent No.1 with whom the appellant has had no independent agreement in that regard. The fact that respondent No.1 would get a right in the suit property in terms of agreement, Settlement Agreement and Consent Terms with respondent No.2, cannot be the basis to set up a claim against the appellant and, especially because complying with the directions in the impugned order would result in bestowing advantage on respondent No.2 who has failed to discharge its obligation under the agreement with the appellant. [Para 30] [68-D-F]
1.7 The impugned judgment and order passed by the High Court is set aside. It is deemed appropriate to revive the ad-interim order passed by the Single Judge of the High Court in Notice of Motion and as corrected, which shall operate until the disposal of the suit or until it is modified by the High Court on account of subsequent developments, if any, as and when occasion arises. [Para 31-32] [68-G-H]
Gaiv Dinshaw Irani and Others v. Tehmtan Irani and Others (2014) 8 SCC 294 – referred to.
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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