Case Note & Summary
The Supreme Court of India heard appeals against a common order of the Gujarat High Court affirming a temporary injunction granted by the trial court in suits for specific performance of contracts for sale of land. The plaintiff, KS Infraspace LLP Ltd., filed two suits against defendant sister concerns (Ambalal Sarabhai Enterprise Ltd. and Haryana Containers Ltd.) for specific performance of alleged concluded contracts for sale of 19,685 square meters of land in Vadodara, Gujarat, for a total consideration of Rs.31,81,73,076 and Rs.58,26,86,984 respectively. The plaintiff claimed that after negotiations, it had accepted the final draft Memorandum of Understanding (MoU) dated 30.03.2018 via email, and had paid an advance of Rs.2.16 crores. The plaintiff alleged that the defendants surreptitiously entered into a registered agreement for sale with Neptune Infraspace Private Ltd. (defendant no.2) on 31.03.2018. The trial court granted a temporary injunction restraining the defendants from creating third party rights over the suit lands, which was affirmed by the High Court. The defendants appealed to the Supreme Court, contending that no concluded contract existed, the plaintiff's acceptance was belated, and the plaintiff was aware of simultaneous negotiations with others. They also argued that the plaintiff delayed filing the suit by over 7 months after the cause of action arose. The Supreme Court held that for grant of temporary injunction in a suit for specific performance, the plaintiff must establish a strong prima facie case based on undisputed facts, irreparable injury, and balance of convenience. The court noted that the plaintiff's conduct, including the delay in filing the suit, was relevant. The court found that the plaintiff had not made out a strong prima facie case of a concluded contract, as the email dated 30.03.2018 referred to a 'draft MoU' and the plaintiff itself alternatively pleaded an oral contract. The court also observed that the plaintiff's delay of over 7 months in filing the suit after the cause of action arose was unexplained and vital in commercial dealings. The Supreme Court set aside the orders of the High Court and the trial court granting temporary injunction, and directed the trial court to expedite the disposal of the suit without being influenced by the observations made in the judgment.
Headnote
A) Specific Relief Act - Temporary Injunction - Prima Facie Case - For grant of temporary injunction in a suit for specific performance, the plaintiff must establish a strong prima facie case based on undisputed facts, irreparable injury, and balance of convenience in its favour. The conduct of the plaintiff is a relevant consideration. (Paras 15-16) B) Specific Relief Act - Delay in Filing Suit - Relevance - Delay in filing the suit for specific performance is a vital factor, especially in commercial dealings with high stakes. The plaintiff's unexplained delay of over 7 months in filing the suit after the cause of action arose weighs against grant of injunction. (Paras 7, 13) C) Code of Civil Procedure, 1908 - Order 39 Rules 1 and 2 - Temporary Injunction - Appellate Interference - The appellate court can interfere with the grant of temporary injunction if the discretion has been exercised arbitrarily or capriciously, or if the findings are perverse. (Para 12) D) Specific Relief Act, 1963 - Section 36, 37 - Preventive Relief - Temporary injunctions are regulated by CPC and are discretionary. The plaintiff must satisfy the court that non-interference would cause irreparable injury and no other remedy is available. (Paras 15-16)
Issue of Consideration
Whether the High Court was justified in affirming the temporary injunction granted by the trial court in a suit for specific performance of contract for sale of land, and whether the plaintiff had established a strong prima facie case of concluded contract.
Final Decision
The Supreme Court allowed the appeals, set aside the orders of the High Court and the trial court granting temporary injunction, and directed the trial court to expedite the disposal of the suit without being influenced by the observations made in the judgment.
Law Points
- Temporary injunction in suit for specific performance requires strong prima facie case
- irreparable injury
- and balance of convenience
- delay in filing suit is relevant
- conduct of plaintiff is material
- appellate court can interfere if discretion exercised arbitrarily
