TMI Blog2018 (8) TMI 1238X X X X Extracts X X X X X X X X Extracts X X X X ..... atory 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 dated 22nd September, 1999 and including Settlement Agreement dated 4th November, 2016 and Consent Terms dated 25th September, 2017, to which the appellant is not a party. The learned 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. It is well established that an interim mandatory injunction is not a remedy that is easily granted. It is an order that is pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alia passed a mandatory interlocutory injunction directing the appellant to hand over 8 (eight) flats along with 16 (sixteen) car parking spaces under the Settlement Agreement dated 4th November, 2016 and Consent Terms dated 25th September, 2017 between respondent Nos.1 and 2 inter partes . 2. The relevant facts are as follows: Respondent No.1/plaintiff was appointed by one Andheri Kamgar Nagar Cooperative Housing Society Ltd. (for short, the Society ) under a Development Agreement dated 6th October, 1996 as a developer under the Slum Development/ Rehabilitation Scheme to develop the suit property in question, being a plot of land situated at Versova Link Road, Taluka Andheri and bearing Survey No. 139, City Survey No. 1319 (Part) admeasuring 8892 sq. mts. or thereabouts as per Indenture of Lease dated 31st March, 1993 and 9402 sq. mts. as per City Survey Records. One part of the suit property was for constructing tenements free of charge for project-affected persons and the balance property could be used to develop and sell the balance FSI. Respondent No.1 then executed an Agreement for Sub-Development dated 22nd September, 1999 with respondent No.2/defendant No.1, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rehended that the appellant would sell or create third party rights in respect of the said flats. The alleged mortgage deed itself was not produced by respondent No.1 on the ground that it had applied for a copy of the same but was yet to receive it. Respondent No.1 also sought to appoint a Court Receiver to take charge of the premises in the suit property comprising its 22,500 sq. ft. constructed area. An ad-interim, consent order was passed on 3rd December, 2012, in the said Notice of Motion No. 147 of 2013, whereby respondent No. 2 and the appellant agreed to not dispose of or create third party rights in respect of 8 flats in the completed Wings A and B of the building and 4 flats in the under-construction Wing C of the building, totaling 12 flats. 5. The parties filed their respective replies and rejoinders in the suit and notice of motion. The appellant s stance was that he had completed his contractual obligations and offered respondent No.2 its entitlement of 45% area in the constructed buildings but respondent No.2 had failed to take possession of the same. The subsequent delay in construction of Wing C of the building was due to the failure of responden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... suit property, without first providing respondent No.2 with the occupation and possession of its 45% entitlement in the suit property as set out in the said Agreement. Respondent No.2 also submitted that the appellant had deposited a refundable amount of ₹ 4 crore as part of his obligation under the Agreement but that refund of the said deposit was not, in any way, connected with handing over of the respondent No.2 s entitlement of flats. In any event, respondent No.2 had offered to refund the said deposit in exchange for possession of the flats due to it, which the appellant had refused. 8. By an interim order dated 12th October, 2016, the sole arbitrator made prima facie observations that construction of Wing C in the building situated on the suit property had been delayed owing to respondent No.2 s failure to obtain the Commencement Certificate for the same. Further, respondent No.2 had allowed the appellant to construct only 88 flats so far, which worked out to 72% of the total area to be constructed. On that basis, the arbitrator was of the opinion that respondent No.2 could not receive its entire 45% share in the constructed area of 88 flats, which worke ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... operating in that regard. Possession and keys of the remaining 16 flats out of the 28.5 flats had been handed over by the appellant to respondent No.2, for which the appellant s deposit had also been refunded by respondent No.2, as directed by the arbitrator. 12. The Single Judge further opined that even if respondent No.2 was ultimately held liable to compensate the appellant for damages, the same could not be recovered from the said 12 flats as these flats were ultimately and rightfully due to respondent No.1 (original plaintiff) and out of bounds for the appellant. The Single Judge rejected the appellant s argument that since respondent No.1 claimed through respondent No.2, any breach by respondent No.2 would automatically affect the entitlement of respondent No.1 as well. 13. The question as to whether respondent No.2 was obligated to hand over possession of 8 flats to respondent No.1 as per the settlement agreement dated 4th November, 2016 and the Consent Terms dated 25th September, 2017 and whether the appellant had to hand over the keys of the said flats to respondent No.1, were answered by the Single Judge in the affirmative, with the finding that res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th 16 parking spaces, recording that he had moulded the reliefs originally sought by respondent No.1 in the changed circumstances of the case and in order to shorten the litigation and do complete justice. 16. Aggrieved by the Single Judge s decision, the appellant challenged the said decision before the Division Bench of the High Court in Commercial Appeal No.173 of 2017. It was urged on behalf of the appellant that respondent Nos.1 and 2 had entered into the Consent Terms dated 27th September, 2017 with a view to defeat the appellant s claim. Unless respondent No.2 completed its entire obligations with respect to the building still under construction in the suit property, respondent No.1 was not entitled to receive its 8 flats as per the Consent Terms. The appellant further contended that the handing over of 8 flats to respondent No.1 was, in effect, a final relief since nothing further remained in the suit and the interim order of the Single Judge was in fact a final order and that the confirmation of the arbitral tribunal s order had no effect on the proceedings before the Single Judge. These arguments were countered by respondent No. 1 which inter alia submitted t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of 12 flats in Wings A and B of the building Bay View situated on the property described in Exhibit A to the plaint and 24 car parking spaces. c) In the alternative to prayer clause (b) this Hon ble Court be pleased to order, decree and direct the Defendants to refund a sum of ₹ 75,00,000/- together with interest at 18% as set out in the Particulars of Claim at Exhibit M to the plaint; d) In the alternative to prayer (a) and (b) and in addition to prayer (c) above, this Hon ble Court be pleased order, decree and direct the Defendants to pay damages of ₹ 173,47,53,425/- (Rupees One Hundred Seventy Three Crores Forty Seven Lacs Fifty Three Thousand Four Hundred Twenty Five Only) as set out in particulars of Claim at Exhibit M to the plaint. e) This Hon ble Court be pleased to pass an order of Mandatory and Permanent Injunction against the Defendants, their servants, agents, assigns and/or any other person acting through or under them from in any manner directly or indirectly dealing with or disposing of or alienating or parting with the possession of or creating third party rights in respect of the premises coming to the share of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spaces. (c) ad interim reliefs in terms of prayer (a) (b). (d) for costs of the suit; (e) for such further and other reliefs as this Hon ble Court may deem fit and proper in the nature and circumstances of the case. 21. Indeed, the learned Single Judge of the High Court granted ad-interim relief on 3rd December, 2012 during the pendency of the Notice of Motion. The same reads thus: Heard the Learned Senior Advocates appearing for the parties. The following order is passed by consent without going into the merits of the case and keeping all the contentions of the parties open. (i) The Defendants shall not sell, dispose of, alienate, encumber, part with possession and/or create third party rights in respect of 4 flats in Wing A and 4 flats in Wing B which flats are already constructed and occupation certificate is obtained in respect of the same. The said 8 flats are identified on the sanctioned plan which is taken on record and marked X for identification. (ii) The Defendants shall also not sell, dispose of, alienate, encumber, part with possession and/or create third party rights in respect of 4 flats in Win ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... September, 2017 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 10 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 dated 22nd September, 1999 and including Settlement Agreement dated 4th November, 2016 and Consent Terms dated 25th September, 2017, to which the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll ultimately rest in the sound judicial discretion of the court to be exercised in the light of the facts and circumstances in each case. Though the above guidelines are neither exhaustive nor complete or absolute rules, and there may be exceptional circumstances needing action, applying them as prerequisite for the grant or refusal of such injunctions would be a sound exercise of a judicial discretion. (emphasis supplied) 25. The Court, amongst others, rested its exposition on the dictum in Halsbury s Laws of England, 4th edition, Volume 24, paragraph 948, which reads thus: A mandatory injunction can be granted on an interlocutory application as well as at the hearing, but, in the absence of special circumstances, it will not normally be granted. However, if the case is clear and one which the court thinks ought to be decided at once, or if the act done is a simple and summary one which can be easily remedied, or if the defendant attempts to steal a march on the plaintiff, such as where, on receipt of notice that an injunction is about to be applied for, the defendant hurries on the work in respect of which complaint is made so that when he receives n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitted 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. 30. It would have been a different matter if the High Court were to continue the ad-interim arrangement directed in terms of order dated 3rd December, 2012 and as corrected on 17th 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 dated 22nd September, 1999, Settlement Agreement dated 4th November, 2016 and Consent Terms dated 25th September, 2017 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 dated 10th March, 2003 with the appellant. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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