Madanlal v. Masonic Lodge — 1990 DIGILAW 295 (MP)

ORDER R.K. Varma, J. -- 1. This is an appeal filed by the plaintiff against the order dated 20.10.87 passed by the District Judge, Indore in Civil Suit No. 41 of 1986 whereby the appellant-plaintiff application for grant of temporary injunction against the respondent-defendant Masonic Lodge, a registered society, has been rejected. 2. The facts giving rise to this appeal, briefly, stated, are as follows: On 30.3.79, the appellant-plaintiff and the respondent Masonic Lodge entered into an agreement whereby the respondent agreed to grant franchise to the appellant to develop at his own cost the respondent's land appurtenant to its building situated on Bombay-Agra Road, as building colony in consideration of deposit of Rs.25,000/- for grant of the privilege and proposal of purchase of the land after it is developed at Rs.13.50 per sq.ft. The respondent also agreed to execute documents which may be necessary for the appellant to obtain clearance from all the authorities concerned including the urban ceiling authorities for the creation, construction and sale as building colony besides execution of power of attorney to act as constituent attorney in that behalf, in favour of the appellant. 3. It was also stipulated in the agreement that the appellant shall obtain requisite sanction or permission necessary for undertaking the development or for building colony within one year of the date of the said agreement or such further time not exceeding four months as the parties may agree in writing in this behalf. It was further provided that time shall be extended upto four months only if it is found that the appellant is genuinely making efforts and the remaining work could be done within four months. 4. In pursuance of the aforesaid agreement, the respondent issued on 9.7.79 a power of attorney in favour of the appellant for the purposes of developing the land plot in such a way that lodge building as well as multi-storeyed building may be constructed thereon and for taking necessary steps to obtain permission for development of the plot by approaching the Town and Country Planning Authorities, Municipal Corporation and any other Government authority for obtaining no objection certificate (NOC) under the M.P. Urban Ceiling Act. The power of attorney authorised the appellant to sign on behalf of the Masonic Lodge and to appear before any authority on behalf of the lodge and to do all acts and things necessary for getting sanction for development work. It was also recited that the said power of attorney is irrevocable. 5. The appellant received the said power of attorney from the worshipful master of the respondent Masonic Lodge on 9.7.79 whereupon the appellant by letter dated 9.7.79 addressed to the respondent stated that the appellant having received the power of attorney on 9.7.79 he could from only that date approach any Government or Semi-Government department with respect to obtaining the NOC from the authority concerned and made it clear to the respondent that the period of 12 months for obtaining the NOC and other clearances from the Government would be effective from that date viz., 9.7.79. The respondent accepted the appellant's stand and by letter dated 20.1.80 informed the appellant that the Masonic Lodge Committee unanimously agreed that the time for completing the work of development of one year from the date of contract be amended to one year commencing from 9th July, 1979, the date on which the appellant was given power of attorney. 6. Before expiry of one year, the appellant made request for granting extension of four months for getting the NOC from the Competent Authority under Urban Land Ceiling Act. The respondent Masonic Lodge acceded to the request and by their letter dated 2.7.80 addressed to the appellant informed him that the lodge, in the regular meeting held on 28.6.80, had approved the extension of the period of four months for obtaining the NOC from the Competent Authority and reiterated their decision that no further extension would be granted. It was stated that the extension was to be reckoned with reference to the date of power of attorney. 7. The appellant, thereupon, thanked the respondent for having considered their request and for having acted considerately and judiciously vide appellant's letter dated 4.7.80. 8. It appears that the Competent Authority under the Land Ceiling Act, passed the order dated 4.8.80 adversely to the respondent and an appeal had to be preferred on behalf of the respondent against the order. It also appears that the Competent Authority has referred the case to the Government under section 20 of the Urban Land Ceiling Act. 8. It appears that the Competent Authority under the Land Ceiling Act, passed the order dated 4.8.80 adversely to the respondent and an appeal had to be preferred on behalf of the respondent against the order. It also appears that the Competent Authority has referred the case to the Government under section 20 of the Urban Land Ceiling Act. The appellant, in the circumstances, requested the respondent to extend the time till the said appeal and reference are decided and formalities are completed vide appellant's letter dated 24.10.80. 9. The respondent decided not to grant any further extension of time under the agreement dated 30.3.79 and replied by their letter dated 27.10.1980 stating that the Masonic Lodge in the regular meeting held on 25.10.80 had unanimously decided not to grant any further time to the appellant. It was stated in the said letter that when the extention of four months was last granted and communicated to the appellant by letter dated 2.7.80 it was with clear stipulation that no further extention would be granted. 10. On 12.11.80 the respondent by letter of that date addressed to the appellant, informed him that the extended period previously given had expired on 9.11.80 and returned deposit of Rs.25,000/- by a Bank Draft annexed to that letter. 11. It appears that the appellant also addressed a letter on 12.11.80 to the respondent on the question of extention of time. The respondent made a reply dated 1.12.80 wherein it was stated that under the agreement dated 30.3.79, entered into between the appellant and the respondent, time was of the essence of contract. It was stated that the original period under the contract was one year with an option to the appellant to ask for one extension of four months only which also was in the discretion of the respondent Masonic Lodge and that the lodge graciously granted extension to the appellant making it very clear that no further extension would be granted and as such, when the appellant asked for second extension the respondent Masonic Lodge was entitled and justified to refuse the same categorically. It was also stated that if the appellant tried to approach the various authorities, that would not give him any liberty to create a contract for any indefinite period and that was never the intention of the agreement. It was also stated that if the appellant tried to approach the various authorities, that would not give him any liberty to create a contract for any indefinite period and that was never the intention of the agreement. It was further stated in the said letter that the power of attorney was in consequence of the agreement of 30.3.79 and was to be read along with it and as such, when the agreement came to an end the power of attorney automatically ceased to be operative and stood cancelled. It was also stated that in view of the fact that the appellant was harping on the power of attorney, the same was, by that letter, terminated. 12. The appellant-plaintiff then filed a Civil Suit on 10.11.81 in the Court of IVth Additional Judge to the Court of the District Judge, Indore for declaration and injunction. The relief of declaration sought was to the effect that the power of attorney executed in favour of the plaintiff was irrevocable and that the plaintiff was the constituted attorney of the defendant. The relief of injunction sought was to the effect that the defendant be permanently restrained from transferring or alienating in any manner, the land in question or to enter into any contract with third party in respect of the said land. 13. An application for temporary injunction was also filed by the plaintiff along with the plaint and the learned Addl. Judge issued an exparte injunction dated 10.11.81 against the defendant. The defendant took objection that the suit was not maintainable without seeking the relief for specific performance of the contract relied upon by the plaintiff. 14. On 26.11.86 the plaintiff-appellant filed an application seeking amendment of the plaint to add the relief for specific performance of contract and accordingly put valuation of the suit at Rs.9,46,000/-. As a result of the amendment the pecuniary Jurisdiction of the Court was affected and the suit no more remained maintainable in the Court of the Additional Judge to the Court of the District Judge and as such, the plaint along with the application for amendment was returned to the plaintiff for its presentation in proper Court. 15. Accordingly, the instant Civil Suit Ho. 41-A/86 was presented in the Court of District Judge on 29.11.86. 15. Accordingly, the instant Civil Suit Ho. 41-A/86 was presented in the Court of District Judge on 29.11.86. The ex-parte interim injunction, which has been granted by the earlier Court of Additional Judge whose jurisdiction was ousted on account of subsequent amendment as aforesaid lapsed as a consequence. 16. The appellant-plaintiff filed an application for temporary injunction dated 23.1.1987 in the instant suit before the District Judge. After reply to the said application was filed by the defendant, the learned District Judge heard the parties and decided the said application against the plaintiff refusing the grant of temporary injunction by the impugned order. 17. Being aggrieved by the said order, the plaintiff has filed this appeal. 18. Learned counsel for the appellant has submitted that the appellant-plaintiff has a prima facie case for grant of temporary injunction inasmuch as there is a serious question to be tried in the suit as to whether the plaintiff has a legal right to specific performance of the contract of sale of land by the respondent-defendant. In support of his submission, the learned counsel has placed reliance on a Single Bench decision of this Court in Shankarlal Rathore v. State of M.P. and others 1 1978 JLJ 51 ) wherein the relevant observations are as follows:- "Although it is often said that plaintiff must show a prima facie case in support of the right claimed by him in the suit before he can be granted temporary injunction, the real thing to be seen is only that plaintiff's claim is not frivolous or vexatious; in other words that there is a serious question to be tried. Plaintiff is not required to make out a clear legal title but has to satisfy the Court that he has a fair question to raise as to the legal right claimed by him in the suit. It is not the function of the Court at that stage to resolve disputed questions of fact or difficult questions of law which should be left to be decided at the conclusion of the trial." 19. It has further been submitted by the learned counsel for the appellant that even though the time stipulated for completing sale of the land had expired, the plaintiff shall still be entitled to specific performance of the contract since in contract for sale of land stipulation as to time, is ordinarily not of essence. It has further been submitted by the learned counsel for the appellant that even though the time stipulated for completing sale of the land had expired, the plaintiff shall still be entitled to specific performance of the contract since in contract for sale of land stipulation as to time, is ordinarily not of essence. Learned counsel has in support of this submission cited a decision of the Supreme Court in Gomathinayagamma Pillai & Ors. v. Palaniswami Nadar ( AIR 1967 SC 868 ). 20. The learned counsel for the respondent-defendant has on the other hand contended that in the instant case the contract for sale clearly shows the intention of parties to make time of the essence as is clear from the terms of the contract as well as the conduct of the parties as evidenced from the correspondence between them referred to in the foregoing paragraphs. 21. According to the learned counsel for the respondent-defendant, the time which was specifically agreed to by the parties for performance of the contract, having expired long ago, the contract has come to an end as had been asserted by the respondent-defendant on the expiry of the agreed time and as such, no legal right for specific performance of the contract survived in favour of the plaintiff. Learned counsel relying on a decision of this Court in Smt. Shanta Bai and Ors. v. James Edward Peters and others ( 1972 JLJ 70 ) has submitted that it is true that in a contract for sale of immovable property, ordinarily time is not of the essence of the contract, but it can be made so by a specific term embodied in the deed itself and such a term would be a contract to the contrary. The contract of sale in the instant suit is asserted to contain such a term making time of the essence of the 90ntract. In the case of Gomathinayagamma Pillai (supra) their Lordships have observed that intention to make time of the essence of the contract may be evidenced by either express stipulations or by circumstances which are sufficiently strong to displace the ordinary presumption that in a contract of sale of land stipulations as to time are not of the essence. 22. In the case of Gomathinayagamma Pillai (supra) their Lordships have observed that intention to make time of the essence of the contract may be evidenced by either express stipulations or by circumstances which are sufficiently strong to displace the ordinary presumption that in a contract of sale of land stipulations as to time are not of the essence. 22. The controversy in the instant case seems to centre round the question whether the time was of essence of the contract, as ascertainable from the stipulations in the contract and the circumstances including the subsequent correspondence and conduct of the parties. 23. To say that the question whether the plaintiff has a legal right to specific performance of the contract or the question whether the time was of the essence of contract and accordingly, the contract has come to an end on expiry of the stipulated time, constitutes a serious question and as such, a prima facie case in favour of the plaintiff without appreciating the merits of the case, would be to ignore the true meaning and content of the expression "prima facie" case. The phrase "prima facie" is used to designate legal evidence that is enough to establish a fact unless refuted. The prima facie case ought to be considered in relation to the available relevant material on record to examine the probability of plaintiff's ultimate success in the suit. The weakness of the plaintiff's case also necessarily falls for consideration in the ambit of prima facie case. The defendant's contention that the time was of the essence of the contract, if it finds support from the material on record, would go to constitute the weakness in the plaintiff's case so as to militate against the prima facie case in favour of the plaintiff. 24. In order to appreciate the rival contentions of the parties, a perusal of the sale agreement which is sought to be enforced in the suit, appears necessary so as to ascertain the true nature and import of the agreement. According to the agreement dated 30.3.79, entered into between the parties, the appellant had proposed to purchase the land after it is developed, at Rs.13.50 per S4.ft. According to the agreement dated 30.3.79, entered into between the parties, the appellant had proposed to purchase the land after it is developed, at Rs.13.50 per S4.ft. The plaintiff agreed to obtain requisite sanction or permission or no objection certificates (NOC) necessary for undertaking the development from the concerned Government and Semi-Government authorities including the Competent Authority under the Urban Land Ceiling Act within one year of the date of the agreement or such further time not exceeding four months as the party may agree in writing in this behalf. It has further been clearly stipulated in the agreement that time shall be extended upto four months only, if it is found that the plaintiff is genuinely making efforts and the remaining work could be done within four months. The plaintiff also agreed to develop the proposed building colony subject to the approval of the competent authorities. The plaintiff agreed to develop the building colony at his own risk as to costs and consequences. In the concluding paragraph of the agreement it is provided that in the event it is found that the requisite NOCs are not obtainable despite genuine efforts of the plaintiff that the defendant shall refund the earnest money of Rs.25,000/- to the plaintiff. 25. As has been stated hereinabove, after the expiry of the stipulated period of one year, the appellant was given the maximum extension of four months as per the term of the agreement, but the appellant failed to obtain the NOC from the competent authority under the Land Ceiling Act, who appears to have passed the order dated 4.8.80 adversely to the respondent and an appeal had to be preferred on behalf of the respondent against that order. It also appears that the competent authority had referred the case to the Government under section 20 of the Urban Land Ceiling Act. The appellant further requested for extension of time till the said appeal and reference are decided but the respondent refused to extend any further time since no further extension was stipulated under the agreement. The respondent refused to create a contract for any indefinite period stating that it was never the intention of the agreement. The respondent also remitted the refund of the earnest money of Rs.25,000/- to the plaintiff as per the stipulation contained in the concluding paragraph of the agreement. 26. The respondent refused to create a contract for any indefinite period stating that it was never the intention of the agreement. The respondent also remitted the refund of the earnest money of Rs.25,000/- to the plaintiff as per the stipulation contained in the concluding paragraph of the agreement. 26. A perusal of the agreement dated 30.3.79 shows that the plaintiff promised to pay that price of land @ Rs.13.50 per sq.ft. and deposited earnest money. The plaintiff was to obtain NOCs and develop the land at his own cost and risk before actually purchasing the land. The plaintiff after instituting a Civil Suit on 10.11.1981 for declaration and injunction in the Court of IVth Additional Judge to the Court, of the District Judge, Indore, obtained an ex-parte temporary injunction which lasted till the plaintiff's plaint was returned for its presentation in proper Court and the plaintiff presented the instant suit in the Court of District Judge on 29.11.86. 27. For all these years since 30.3.79, the date of the agreement till 29.11.86, the date of filing the instant suit, the defendant owner of the land was not left free to deal with the land in 4uestion. It is stated that even now the NOC under the Land Ceiling Act has not been obtained. It is a well known fact which can also be Judicially noticed that there has been a trend of constant rise of prices of land in the city of Indore for more than a decade past i.e. since before the date of agreement. This attending circumstance is relevant for considering the question whether the agreement dated 30.3.79 was capable of being construed as a contract for any indefinite period even though the price of the land was not paid to the defendant owner and the defendant was to remain committed to the initial agreement price of Rs.13.50 per sq.ft. in the fact of the constant escalation of land prices during the past years or whether the parties had agreed to limit the period of contract by stipulating time. It appears unlikely that the defendant was prepared to wait for any length of time for receiving the price as prevailing in the year 1979 @ Rs.13.50 per sq.ft. as agreed initially on 30.3.79. It appears unlikely that the defendant was prepared to wait for any length of time for receiving the price as prevailing in the year 1979 @ Rs.13.50 per sq.ft. as agreed initially on 30.3.79. On the other hand, it appears more likely that the parties intended to stipulate specific time for performance of the contract as is the contention of the learned counsel for the respondent. 28. Having heard learned counsel and having considered the aspects of the case prima facie, I have come to the conclusion that the plaintiff has failed to make out a prima facie case for grant of temporary injunction. The balance of convenience is not in favour of the plaintiff and there is no question of any irreparable loss to him which cannot be compensated by way of damages in case the breach of contract is found to be on the part of the defendant and not the failure on the part of the plaintiff. 29. Consequently, I find that the learned lower Court by refusing the grant of temporary injunction, has not committed any error in its exercise of judicial discretion. 30. In the result, this appeal fails and is hereby dismissed with costs. Counsel's fee Rs.250/- if certified.