Civil Revision No. 2929 of 2009 (O&M) -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Civil Revision No. 2929 of 2009 Date of decision: 22.10.2009. M/s Rajendras' (India) Ltd. ....Petitioner Versus Adarsh Dewan ....Respondent CORAM: HON'BLE MR. JUSTICE VINOD K. SHARMA Present: - Mr. Rajesh Aggarwal, Advocate, for the petitioner. Mr. Amit Rawal, Advocate, for the respondent. ***** VINOD K. SHARMA, J (ORAL) CM No. 12402-CII of 2009 Allowed. The applicant-petitioner is exempted from filing certified copies of Annexures P-1 to P-14. CR No. 2929 of 2009 The petitioner-company has invoked the jurisdiction of this Court under Article 227 of the Constitution of India for setting aside the order dated 15.1.2009, passed by the learned Courts below, on an application moved by the plaintiff/respondent under Order 39 Rules 1 and 2 of the Code of Civil Procedure, seeking ad interim injunction. The petitioner-company was allotted a cinema site in Sector 12, Faridabad, by HUDA vide allotment letter dated 11.11.1987. However, the possession of the plot was not delivered to the petitioner- company by HUDA. Civil Revision No. 2929 of 2009 (O&M) -2- The plaintiff/respondent filed a suit for specific performance on the plea, that the plaintiff/respondent had entered into an agreement to sell with the defendant on 19.11.2001 with the intervention of property dealer Sh. Rajesh Khurana of M/s Mohan Property, plot No. 2, Sector 21, Faridabad, for a sum of Rs.1.27 crores. It was pleaded that towards part consideration/earnest money, the plaintiff/respondent paid to defendant a sum of Rs.15 lacs and the remaining amount was to be paid by the plaintiff/respondent on completion and clearance of all formalities of transfer of said plot by HUDA. It was also pleaded that at the time of agreement certain documents were given by the petitioner to the mediator i.e. property dealer. Pleaded case of the plaintiff further was, that petitioner paid only 25% of the actual amount, and failed to pay the remaining amount and it was declared a chronic defaulter by the Administrator, HUDA, Faridabad. Against the order of the Administrator, the petitioner filed an appeal by taking a plea that HUDA had failed to develop and hand over the plot in question to the petitioner herein. It was claimed that the plaintiff/respondent was always ready and still ready and willing to perform his part of contract. It was also pleaded that the terms of agreement were not reduced into writing. It was also pleaded case of the plaintiff/respondent that petitioner filed a suit for declaration and injunction in civil Court at Delhi. The suit was contested by taking a plea that the suit was barred under Section 10 of the Code of Civil Procedure, as the suit for declaration and injunction was already filed by the petitioner at Delhi. The plea was also taken, that the plaintiff/respondent had approached the petitioner to book a commercial space in the proposed commercial-cum- Civil Revision No. 2929 of 2009 (O&M) -3- cinema site with an assurance that they would pursue to get plot from HUDA at their own risk and expenses. It was pleaded that a sum of Rs.10,00,000/- (Rupees ten lac only) was paid for commercial space. In support thereof, reliance was placed on the receipt, which reads as under: “Received with thanks from Sh. Adarsh Dewan R/o 1015, Sector-15, Faridabad the sum of Rupees (in words) ten lakhs only by Cheque No. 564561 dated 19/11/2001 drawn on Bank of Maharashtra, Neelam Bata Road, Faridabad of Rs.5,00,000/- & balance by Cheque No. 005700 dated 19/11/2001 drawn on State Bank of Sawashtra, Lodhi Road, New Delhi-110003 of Rs.5,00,000/- on account of Earnest money against Commercial Space at Cinema plot Faridabad as part payment as per the term of Licence/agreement.” The other averments on merits were denied. As already observed above, along with the suit, the plaintiff/respondent filed an application under Order 39 Rules 1 and 2 of the Code of Civil Procedure. The learned trial Court allowed the application, and restrained the petitioner from alienating/transferring the cinema site in any manner till disposal of the suit, but liberty was given to the petitioner to raise construction on the cinema site, subject to reserving of 1000 sq. feet commercial space for the plaintiff. The operative part of the order reads as under: - “As a result of my aforesaid discussion I have come to the conclusion that plaintiff has a prima facie case in his favour because the payment of Rs.10 lacs is not disputed by the defendant and as per version of the defendant, a commercial space measuring 1000 sq. feet was booked by Civil Revision No. 2929 of 2009 (O&M) -4- the plaintiff in the cinema site. So if the defendant succeeds in alienating the cinema site as a whole then definitely the interest of the defendant would be jeopardized. Even if we take the stand of the defendant as correct, then he at the most can raise construction on the cinema site but he cannot be allowed to alienate the cinema site as a whole. So allow the present application and restrain the defendant from alienating/transferring the cinema site in any manner till the disposal of the site. Although the defendant is left at liberty to raise construction on the cinema site subject to the condition that in that situation he will reserve 1000 sq. feet commercial space for the plaintiff. No order as to costs.” The petitioner preferred an appeal against the order passed by the learned trial Court. The appeal also stands dismissed. The operative part of the order of the learned appellate Court reads as under: - “Taking into consideration all the above mentioned aspects of the case, in my considered opinion, once it is admitted that there was a deal for the sale of commercial space by the Defendant to the Plaintiff and dispute between the parties is only qua the quantum of such space and the stand of the Defendant, qua this fact, is contrary to the contents of receipt dated 19.11.01, in my considered opinion, the Ld. Trial Court while allowing the application for ad-interim injunction and restraining the Defendant from alienating the commercial site to other party has rightly appreciated the factual position. In view of the law laid down by Hon'ble Apex Court the case 'Meherwal Khewaji Trust', to avoid unnecessary complication and creation of 3rd party interest, in the present suit for specific performance of the contract. It is expedient to preserve the title of the suit property by issuing ad-interim injunction, restrained the Civil Revision No. 2929 of 2009 (O&M) -5- Defendant from alienating the suit property. In my considered opinion neither there is any error of judgment nor wrong appreciation of fact by the Ld. Trial Court, which passed the impugned order. The Plaintiff has got a prima facie case and balance of convenience in his favour and in the event of transfer of suit property by the Defendant to any third party he is likely to suffer irreparable loss. In the given circumstances I am of this considered view that discretion vested in the Ld. Trial Court has rightly been exercised. As a sequel of above mentioned observation I hold that the appeal filed by the Plaintiff is devoid of merits and deserves dismissal. Consequently the appeal is dismissed with costs. The impugned order is hereby affirmed. The Ld. Trial Court file be sent back to the concerned court immediately. The parties are directed to appear before the Ld. Trial Court on 31.1.09. Memo of cost be prepared accordingly. File be consigned to record room after due compliance.” Mr. Rajesh Aggarwal, learned counsel, appearing on behalf of the petitioner, has challenged the order passed by the learned Courts below primarily on the ground, that there was no material before the learned Courts below to form an opinion that any agreement was entered into for sale of entire commercial plot for total sale consideration of Rs.1.27 crore, therefore, there was no prima facie case in favour of the plaintiff/respondent. Learned counsel for the petitioner also contended that the plaintiff/respondent was guilty of suppression of material facts and, therefore, was not entitled to discretionary relief. However, the learned counsel for the petitioner failed to point out any material fact, which could be said to have been suppressed by Civil Revision No. 2929 of 2009 (O&M) -6- the plaintiff/respondent. Learned counsel for the petitioner further contended that the learned Courts below failed to notice that in order to succeed in an application for interim injunction, plaintiff/respondent was required to prima facie prove, that there was a prima facie case in favour of the plaintiff/respondent, that irreparable loss was likely to be caused to the plaintiff, in case, interim injunction was not granted, and further that the balance of convenience was in his favour. However, none of these ingredients was fulfilled, still the learned Courts below had granted injunction, merely on the asking. Mr. Amit Rawal, learned counsel, appearing on behalf of the respondent, however, contended that the order passed by the learned Courts below deserves to be upheld in view of the fact, that there was sufficient material on record by way of letters showing that the parties had entered into agreement for sale of whole of the plot. The learned counsel for the respondent made reference to the letters exchanged between the parties. It was further the contention of the learned counsel for the respondent, that in the allotment letter, there was clear stipulation that no fragmentation of any land or building would be permitted and, therefore, no other conclusion, except the one pleaded in the plaint can be arrived at. Learned counsel for the respondent further contended that it is not open to the vendor to plead defects in his title. In support of this contention, the learned counsel for the respondent placed reliance on the judgment of the Hon'ble Andhra Pradesh High Court in Netyam Venkataramanna and others Vs. Mahankali Narasimhan (died), AIR 1994 Andhra Pradesh 244. Civil Revision No. 2929 of 2009 (O&M) -7- The learned counsel for the respondent also placed reliance on the judgment of the Hon'ble Supreme Court in Maharwal Khewaji Trust (Regd.), Faridkot Vs. Baldev Dass, 2004(8) Supreme Court Cases 488, to contend that no party can be permitted to change the nature of the property, including alienation or transfer, which may lead to loss or damage being caused to the party, who may ultimately succeed, and would further lead to multiplicity of proceedings, therefore, the order passed is in consonance with the law laid down by the Hon'ble Supreme Court, thus, deserves to be upheld. Learned counsel for the respondent also referred to Section 13 of the Specific Relief Act to contend that the plaintiff/respondent had right to seek specific performance in spite of imperfect title. Section 13 of the Specific Relief Act, reads as under: - “13. Rights of purchaser or lessee against person with no title or imperfect title. (1) Where a person contracts to sell or let certain immovable property having no title or only an imperfect title, the purchaser or lessee (subject to the other provisions of this Chapter), has the following rights, namely:- (a) if the vendor or lessor has subsequently to the contract acquired any interest in the property, the purchaser or lessee may compel him to make good the contract out of such interest; (b) where the concurrence of other persons is necessary for validating the title, and they are bound to concur at the request of the vendor or lessor, the purchaser or lessee may compel him to procure such concurrence, and when a conveyance by other persons is necessary to validate the title and they are bound to convey at the request of the vendor or lessor, the purchaser or lessee may compel him to procure such conveyance; (c) where the vendor professes to sell Civil Revision No. 2929 of 2009 (O&M) -8- unencumbered property, but the property is mortgaged for an amount not exceeding the purchase money and the vendor has in fact only a right to redeem it, the purchaser may compel him to redeem the mortgage and to obtain a valid discharge, and, where necessary, also a conveyance from the mortgagee; (d) where the vendor or lessor sues for specific performance of the contract and the suit is dismissed on the ground of his want of title or imperfect title, the defendant has a right to a return of his deposit, if any, with interest thereon, to his costs of the suit, and to a lien for such deposit, interest and costs on the interest, if any, of the vendor or lessor in the property which is the subject-matter of the contract. (2) The provisions of sub- section (1) shall also apply, as far as may be, to contracts for the sale or hire of movable property. CONTRACTS WHICH CANNOT BE SPECIFICALLY ENFORCED” On consideration, I find force in the contentions raised by the learned counsel for the petitioner. It is not in dispute, as is clear from the pleadings of the parties itself, that so far title of the site has not passed on to the petitioner, therefore, there can be no question of specific performance of the contract at this stage. In view of Section 13 of the Specific Relief Act, the right, if any, shall accrue to the plaintiff/respondent on acquisition of title by the petitioner from HUDA. It cannot, therefore, be said that there was a prima facie case in favour of the plaintiff/respondent. It may also be noticed here, that this is a case where no irreparable loss would be caused to the plaintiff/respondent, in case, injunction was not granted, as any transfer made would be hit by principle of lis pendens, thus, interests of the plaintiff/respondent are duly protected. Once no irreparable loss was likely to be caused by Civil Revision No. 2929 of 2009 (O&M) -9- refusal of injunction, the learned Courts below committed an error in allowing the application moved under Order 39 Rules 1 and 2 of the Code of Civil Procedure. Needless to say here that even receipt produced on record, which was admitted, did not support the case of the plaintiff/respondent, as set up. But in any case, the stand of the respective parties is to be determined after the parties lead their evidence, but for the purpose of an application under Order 39 Rules 1 and 2 of the Code of Civil Procedure, the Court was required to form a prima facie opinion on the pleadings and the material placed on record. The authorities relied upon by the learned counsel for the respondent are not applicable to the facts of the present case, as the plaintiff/respondent has failed to prove prima facie case, nor it was proved that any irreparable loss or injury was likely to be caused to the plaintiff/respondent, in case, injunction was not granted. For the reasons stated above, revision is allowed, the impugned orders are set aside and the application moved by the plaintiff/respondent under Order 39 Rules 1 and 2 of the Code of Civil Procedure is ordered to be dismissed but with no order as to costs. However, nothing stated hereinabove be taken as an expression of opinion on the merits of the controversy between the parties. (Vinod K. Sharma) Judge October 22, 2009 R.S.