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TMI Blog2009 (4) TMI 984X X X X Extracts X X X X X X X X Extracts X X X X ..... according to the appellant and other joint owners, on the failure of the proposed Society to get such permission, the Agreement could not be performed and, therefore, by Public Notice dated 24th April, 1988, the Agreement was declared to have been cancelled. 3. A legal notice was received from one Sharad N. Acharya, Advocate, denying that the Agreement had been cancelled, as indicated in the Public Notice. Despite cancellation of the Agreement, the Respondent No.1 called upon the appellant to give effect to the Agreement dated 19th March, 1980, executed with the said respondent for development of the said land. The Respondent No.1 thereupon filed Special Civil Suit No.299 of 1999 on 29th November, 1999, before the Civil Court at Rajkot against the appellant, inter alia, praying for a declaration that the Respondent No.1 was in possession of the suit land and for a decree for specific performance of the said Agreement. In the alternative, for a decree for refund of the earnest money of Rs. 1,81,000/- and for damages amounting to Rs. 16,30,670/- with interest @12% per annum. The Respondent No.1 also filed an application for interim injunction to restrain the appellant from entering ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unsel for the applicant submits that inspite of the directions of this court issued vide orders dated 29.02.2008 and 22.04.2008, the constructions are being raised in the disputed land. Learned counsel Mr. Pahwa, the respondent No.2 submits that the constructions were raised about 6 months back, and part of the property was already sold. To avoid further complications and multiplicity of litigations, we order that no construction be raised on the disputed land. In spite of our direction, if further construction is raised, the applicant will be at liberty to approach the concerned police authority, and the concerned police authority is also directed to take immediate steps to stop the construction on the disputed land. Civil application stands disposed of." 6. Appearing for the appellants, Mr. Mukul Rohtagi, submitted that the Respondent No.1, Maruti Corporation (plaintiff in the suit), came to be registered as a partnership firm on 21st June, 1989, but has sought specific performance of an agreement alleged to have been entered into with the appellant on 19th March, 1980, executed on a Non- judicial stamp paper dated 17th March, 1990. Mr. Rohtagi urged that it was obvious that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n exemption under Section 20 of the said Act was no longer required. 9. Mr. Ranjit Kumar submitted that initially when the First Appeal of the Respondent No.1 was admitted in the Gujarat High Court, an order was also passed in Civil Application No.2405 of 2008 to the effect that if the property in question was dealt with in any way the same would be subject to the decision in the appeal. Learned counsel urged that since in its order the High Court had embodied the principles of Section 52 of the Transfer of Property Act, 1882 and there was no bar to the alienation of the property, as many as 280 plots had been sold to different purchasers by way of registered sale deeds and they had started construction on the plots which they had acquired presumably after obtaining necessary development permission sanctioned by the Rajkot Municipal Corporation. It was submitted that up to such point there could be no objection with regard to the orders passed in the First Appeal. Thereafter, when the interim order was modified on 22nd April, 2008, on the same application and the owners of the property were restrained from selling the same, the said modification, though not called for, was still c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty exclusively would not be entitled to an order of injunction. The Court should not interfere only because the property is a very valuable one. Grant or refusal of injunction has serious consequences depending upon the nature thereof and in dealing with such matters the Court must make all endeavours to protect the interest of the parties. 13. Mr. Ranjit Kumar submitted that having filed the suit for enforcement of its purported rights under the Agreement of 1980 in the year 1999 and having allowed the owners of the property to deal with the same and certain rights having been created in favour of third parties when there was no restraint orders of the Courts, the High Court erred in granting such an interim order with such drastic consequences without even giving the persons, who were to be adversely affected by the order, an opportunity of being heard. 14. Opposing the submissions made on behalf of the appellant and the Respondent Nos.2 to 7, Mr. Soli J. Sorabjee, learned senior counsel, submitted that it was necessary to clear the impression that had been given that the Respondent No.1-Maruti Corporation came into existence only on 21st June, 1989. He submitted that, on the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d consequently when exemption under Section 20 of the Land Ceiling Act, 1976, was not granted to the proposed Cooperative Society, the Respondent No.1 filed a separate suit for specific performance of the agreement which had been entered into with the Maruti Corporation and the payments made by Tirupati Cooperative Housing Society were shown to be the payments which had been made by Maruti Corporation. Mr. Ahmadi also submitted that Maruti Corporation could not apply for exemption under Section 20 of the Land Ceiling Act, 1976, and as a consequence it filed the suit for specific performance only after the said Act was repealed, thereby doing away with the necessity of obtaining exemption under Section 20 thereof. Mr. Ahmadi also contended that unless the appellant and the other joint owners of the property and their transferees were suitably restrained from dealing with the properties during the pendency of the two appeals before the first Appellate Court, the appeals would be rendered infructuous as it would become impossible once the constructions had come up, to revert back to the position when the plots were still undeveloped. 18. On a careful consideration of the submissions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vals by the Respondent No.1 Corporation. 21. The reasoning provided in the interim order dated 22nd April, 2008, is, to say the least, legally untenable. Having passed an order earlier on 29th February, 2008, based on the principle of lis pendens, the Division Bench of the High Court in its second order dated 22nd April, 2008, observed that when the First Appeal was admitted and the matter in dispute as regards the property in question was sub-judice, the properties in question should not be sold and passed an order which was contrary to the initial order which was made in keeping with Section 52 of the Transfer of Property Act. 22. It is well established, that while passing an interim order of injunction under Order XXXIX Rules 1 and 2 CPC, the Court is required to consider three basic principles, namely, (i) prima facie case; (ii) balance of convenience and inconvenience; and (iii) irreparable loss and injury. None of the said principles have been considered by the High Court while passing the second and third interim orders dated 22nd April, 2008 and 7th May, 2008, nor has the High Court taken into account the long silence on the part of the Respondent No.1 Corporatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d inconvenience is against grant of such injunction. The success of the suit for specific performance filed by the Respondent No.1 depends to a large extent on tenuous proof of genuineness of the agreement sought to be enforced after 19 years, despite the finding of the Trial Court that the suit was not barred by limitation. 25. The question of conduct of the Respondent No.1 also becomes relevant, inasmuch as, having slept over its rights for more than 19 years, it will be inequitable on its prayer to restrain the owners of the property from dealing with the same, having particular regard to the fact that a large portion of the land has already been conveyed to as many as 280 purchasers who are in the process of erecting constructions thereupon. 26. We are, therefore, unable to sustain the interim orders passed by the Division Bench of the Gujarat High Court on 22nd April, 2008 and 7th May, 2008 in the appeals pending before it. 27. We, accordingly, set aside the orders dated 22nd April, 2008 and 7th May, 2008, passed by the Division Bench of the Gujarat High Court in F.A.No.853 of 2008 and C.A. Nos.2405 and 5618 of 2008 and maintain the initial order dated 29th February, 2008. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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