Makers Devt.Services P.Ltd vs M. Visvesvaraya Indusl.Res.& Dev.Cen

Makers Development Services Pvt. Ltd. .... Appellant (s)

Versus

M. Visvesvaraya Industrial Research and

Development Centre .... Respondent(s)

WITH

CIVIL APPEAL NO. 9710 OF 2011

(Arising out of SLP (C) No. 25972 of 2011)

J U D G M E N T

P. Sathasivam, J.

1) Leave granted in both the Special Leave Petitions. Both

these appeals were heard together as they arose out of the

same set of facts and common questions of law were involved.

2) SLP (C) No. 22276 of 2011 has been filed by the Makers

Development Services Pvt. Ltd. against the order dated

28.06.2011 passed by the Division Bench of the Bombay High

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Court in Appeal No. 280 of 2008 challenging the order dated

25.04.2008 passed by the learned Single Judge in Notice of

Motion No. 3499 of 2007 in Suit No. 2618 of 2007 declining

the reliefs claimed in prayer clauses (a) to (f) pending final

disposal of the Suit and SLP (C) No. 25972 of 2011 has been

filed by M. Visvesvaraya Industrial Research and Development

Centre against the same order in Appeal No. 289 of 2008 in

Notice of Motion No. 3499 of 2007 in Suit No. 2618 of 2007

granting relief in terms of prayer clause (g).

3) Brief facts:

a) Makers Development Services Pvt. Ltd.-the appellant

herein (Original Plaintiff) is a Company registered under the

Companies Act, 1956 engaged in the business of development,

building, including the construction and management of

hotels and developments pertaining to other hospitality

services and management of properties. M. Visvesvaraya

Industrial Research and Development Centre-the respondent

herein (Original Defendant) is a Company incorporated under

the Companies Act, 1956 and is engaged, inter alia, in

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promoting, establishing, conducting and undertaking scientific

research.

b) The Government of Maharashtra, by Resolutions dated

16.10.1970 and 18.11.1974, had granted lease of certain plots

of land to the defendant-Company at Backbay Reclamation,

Cuffe Parade, Mumbai, who was entitled and authorized to

enter into transactions with third parties in respect of the said

land. A portion of that land admeasuring 13,326 sq. mts.

which forms a part of the larger land held by the defendant-

Company is the subject-matter of the present case.

c) An agreement dated 10.11.1980 was entered into

between the parties for construction of a composite hotel

complex consisting of a Hotel Building, a Convention Centre

and an Exhibition Centre on the Suit Land (Tower No.2) and

the plaintiff would be granted lease of Hotel (exclusive of the

Convention and Exhibition Centre) for 60 years with an option

of renewal of lease. This agreement came to be modified from

time to time.

3 d) Pursuant to the Agreement, the respondent put the

appellant in possession of the Suit Land on 16.07.1990, which

continues to remain with the appellant till date.

e) Since the appellant could not complete the work and due

to disputes and differences, the respondent, on 31.07.2007,

affixed a notice on the premises notifying all concerned

including the appellant to move out of the property and

instructed its security persons not to permit the appellant to

enter upon the said property.

f) On 04.08.2007, the appellant filed a suit for injunction

before the City Civil Court, Mumbai seeking interim and final

reliefs restraining the respondent from taking any illegal steps.

By order dated 06.08.2007, the learned Judge held that till the

substantive suit is filed by the appellant, the impugned notice

dated 31.07.2007 will not be acted upon by the defendants

upto and inclusive of 17.09.2007.

g) On 10.09.2007, the appellant moved a Notice of Motion

No. 3499 of 2007 in a Suit being No. 2618 of 2007 before the

learned Single Judge of the Bombay High Court for a decree of

specific performance, inter alia, praying for a permanent

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injunction restraining the respondent from dispossessing the

appellant. By ad-interim order dated 14.09.2007, the

assurance given in the City Civil Court was directed to be

observed and the respondent was directed not to create any

third party rights pending the Notice of Motion. During the

pendency of the suit, by letter dated 19.11.2007, the

respondent terminated the said Agreement. The learned single

Judge, after referring the documents and affidavits on record,

rejected prayer clauses (a) to (f) of the Notice of Motion and

granted limited interim relief with regard to prayer clause (g) in

favour of the appellant.

h) Aggrieved by the order of the learned single Judge, the

appellant preferred an appeal being Appeal No. 280 of 2008

before the Division Bench of the High Court. With regard to

the limited relief granted by the learned single Judge, the

respondent also filed an appeal being Appeal No. 289 of 2008

before the Division Bench of the High Court.

i) The Division Bench, by a common judgment, upheld the

order of the learned single Judge and dismissed both the

appeals. Challenging the order of the Division Bench of the

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High Court, the appellant and the respondent filed separate

special leave petitions before this Court.

4) Heard Mr. Shyam Divan, learned senior counsel for the

appellant and Mr. Mukul Rohatgi & Mr. Praveen Samdani,

learned senior counsel for the respondent.

5) The points for consideration in these appeals are:-

a) Whether the appellant/plaintiff has made out a case for

grant of injunction in its entirety, i.e. prayer clauses (a) to

(g)?

b) Whether learned single Judge as well as Division Bench

of the High Court committed an error in granting limited

relief in respect of clause (g)?

6) It is settled law that while passing an interim order of

injunction under Order XXXIX Rules 1 and 2 of the Code of

Civil Procedure, 1908, the Court is required to consider three

basic principles, namely, a) prima facie case, b) balance of

convenience and inconvenience and c) irreparable loss and

injury. In addition to the above mentioned three basic

principles, a court, while granting injunction must also take

into consideration the conduct of the parties. It is also

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established law that 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.

7) With the above principles, let us consider the claim of

both the parties.

8) The appellant/plaintiff, who filed Suit No. 2618 of 2007

on the file of original side of the High Court of Bombay prayed

for the following interim reliefs pending hearing and final

disposal of the said suit:

"(a) That pending the hearing and final disposal of the

Suit, the Defendant be ordered and directed to do, sign,

execute, deliver and register all such acts, deeds, matters

writings, documents, authorities papers, plans, sanctions

and things as may be necessary to enable the Plaintiff to

continue construction on the Suit Land in terms of the Suit

Contract;

(b) That pending the hearing and final disposal of the

Suit, the Defendant by itself, its servants and agents or any

person or persons claiming by, from, through or under them

be restrained by an order and injunction of this Court from

dispossessing the Plaintiff or removing the authorized

representatives, employees, staff, workers and labourers of

the Plaintiff and their respective family member or their

belongings and articles or the construction materials,

equipment and other belongings of the Plaintiff from the Suit

Land;

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(c) That pending the hearing and final disposal of the

Suit, it be ordered and decreed that the Defendant to allow

the Plaintiff to continue construction on the Suit Land and

unhindered access to the Suit Land and allow ingress to and

egress from the Suit Land, by the Plaintiff, its

representatives, employees and contract labour as also for

all construction materials and equipment without in any

manner, directly or indirectly, obstructing or hindering the

Plaintiff.

(d) That pending the hearing and final disposal of the

Suit, the Defendant by itself, its servants and agents or any

person or persons claiming by, from, though or under them

be restrained by an order and injunction of this Court from

in any manner restraining, preventing impending or

obstructing implementation of the Suit Contract or

construction on the Suit Land or access to and ingress to

and egress from the Suit Land, of the Plaintiff or its

authorized representatives, employees, workers, labourers

and their respective family members or preventing, impeding

or obstructing construction material or equipment of the

Plaintiff from being brought on to the Suit land or in any

manner, directly or indirectly, by any act of omission or

commission, withholding or causing to be withheld essential

utilities such as power and water supply to the Suit Land for

construction by the Plaintiff;

(e) That pending the hearing and final disposal of the

Suit, the Defendant by itself, its servants and agents or any

person or persons claiming by, from, through or under them

be restrained by an order and injunction of this Court from

in any manner, whether directly or indirectly, revoking or

acting on any purported revocation of the Letter of Authority

granted by the Defendant to the Plaintiff or in any manner,

whether directly or indirectly, hindering, impeding or

obstructing construction on the Suit Land in terms of the

Suit Land in terms of the Suit Contract;

(f) That pending the hearing and final disposal of the

Suit, the Defendant by itself, its servants and agents or any

person or persons claiming by, from, through or under them

be restrained by an order and injunction of this Court from

in any manner committing unlawful trespass or from in any

manner intimidating the Plaintiff, its employees, workers,

labourers and other agencies appointed by the Plaintiff;

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(g) That pending the hearing and final disposal of the

Suit, the Defendant by itself, its servants and agents or any

person or persons claiming by, from, through or under them

be restrained by an order and injunction of this Court from,

in any manner, selling transferring, dealing with, disposing

of, alienating encumbering or creating any third party rights

or interest in, or entering into any agreement or arrangement

with any one else in respect of the Suit Land or any part

thereof;"

9) Among the above prayers for interim reliefs, the learned

single Judge granted relief only in respect of prayer clause (g)

that too with a condition, namely, except the words "dealing

with". The learned single Judge on satisfying himself and after

thorough scrutiny of the materials placed rejected the relief

insofar as prayer clauses (a) to (f), which resulted in filing of

above two appeals by the appellant and the defendant. It is

the claim of the appellant/plaintiff that on the basis of the

contract between the parties, the learned single Judge and the

Division Bench should have granted an order permitting the

appellant to carry on further construction especially when

construction of about 80 ft. had already been raised by the

appellant on the suit land. On the other hand, it is the case of

the defendant that there is no existing agreement between the

parties and the only point is that the parties have agreed to

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enter into an agreement and, therefore, the learned single

Judge as well as the Division bench were not justified even in

granting interim order in terms of prayer (g).

10) Inasmuch as the main suit is pending, it would not be

proper for this Court to delve into the matter and arrive at a

categorical finding one way or other. Accordingly, we have to

find out whether there is prima facie case and `balance of

convenience' in terms of principles mentioned above.

11) The finding of the learned single Judge about the

construction of the building to the height of 80 ft. on the suit

land by the appellant cannot be ignored. However, whether

the defendant permitted the appellant to enter on the suit land

and to carry on construction are all matters to be decided in

the main suit. The limited relief granted in clause (g) by the

learned single Judge is quite understandable, otherwise, it

could be possible for the defendant to deal with the suit land

with third parties or encumber it before the final disposal of

the suit. However, as rightly observed by the learned single

Judge as well as Division Bench, if other reliefs which we have

already extracted above are granted, in the event of dismissal

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of a suit, undoubtedly, it would create enormous difficulties

for the defendant using the plot or land freely and without any

difficulty. In other words, if the appellant was allowed to

proceed with the construction on the suit land, in the event of

dismissal of suit, the defendant cannot use the land in a

different manner with the structure without undertaking an

enormous exercise of demolishing the same. Further, what

was claimed by the plaintiff was not a mere prohibitory order

but prayed for positive mandatory injunction which, as rightly

observed by the Division Bench, would permit the plaintiff to

alter the status quo on the suit land on the date of the suit.

12) The learned single Judge as well as Division Bench on

appreciation of entire materials rendered the factual finding

that the balance of convenience is not in favour of granting

such mandatory interim order as claimed in prayer clauses (a)

to (f). It is relevant to point out that though the appellant had

stated that it had started construction in the year 1996, even

after the information by the defendant to the appellant in 2002

that the BEST had given their `no objection' for the demolition

of temporary receiving station and the appellant can proceed

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with the demolition, however, the fact remains, the height of

the construction was only 80 ft. which shows that from the

year 2001 to 2007, the appellant had not carried on

construction and there was no obstruction from the side of the

defendant. In view of all these factual aspects and in the light

of the stand of the defendant disputing the existence of the

agreement, as rightly observed by the learned single Judge as

well as Division Bench, further permission for construction or

ancillary works cannot be granted during the pendency of the

suit. We are satisfied that the learned single Judge was fully

justified in granting limited relief in respect of prayer clause (g)

and declined the other reliefs in clauses (a) to (f). The Division

Bench was also fully justified in confirming the said limited

order. Though learned senior counsel for the respondent has

prayed for certain directions such as execution of a mortgage

deed etc., for the same reasons mentioned above, we are not

inclined to grant such relief as claimed. As observed earlier, at

this stage, it is not desirable to go into all the details and

render a specific finding which would undoubtedly affect the

claim of both the parties in the main suit. On the other hand,

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we are in entire agreement with the prima facie conclusion

arrived at by the learned single Judge and the Division Bench.

13) Inasmuch as, as early as on 25.04.2008, the learned

single Judge directed hearing of the suit be expedited, taking

note of various other aspects/impediments highlighted by both

the parties including construction of a protection/security wall

on the sea side, we request the learned single Judge of the

High Court to dispose of the suit being No. 2618 of 2007 as

early as possible preferably within a period of nine months

from the date of the receipt of the copy of this judgment. We

also direct both the parties to cooperate with the court for

early conclusion of the hearing as directed above.

14) In the light of the above discussion and reasonings, we

find no merit in both the appeals, consequently, they are

dismissed with no order as to costs.

...................

..............................J.

(P. SATHASIVAM)

...............................................J.

(JASTI CHELAMESWAR)

NEW DELHI;

1 NOVEMBER 14, 2011.

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