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2007 DIGILAW 88 (CAL)

ASVIN N. SHAH v. MERLIN PROJECTS LIMITED

2007-02-14

SAILENDRA PRASAD TALUKDAR

body2007
( 1 ) THE controversy raised in the instant application under Article 227 of the Constitution relates to the property comprising of 80 cottahs of land, more or less, being part of premises No. 69, Prince Baktiar Shah Road. P. S. Tollygunge, Kolkata-700033. ( 2 ) OPPOSITE Party, as plaintiff, filed a suit being Title Suit No. 126 of 2005 before the learned 3rd Court of Civil Judge (Jr. Division), Alipore, 24-Parganas (South) for declaration and permanent injunction. ( 3 ) THE plaintiff claimed in the suit that the defendant No. 8 projecting himself as representative of all the defendants approached one, Sri chandan Chatterjee, a Real Estate Broker, to find out a suitable buyer for sale of the suit property, as referred to earlier. ( 4 ) THE said broker for and on behalf of the defendants forwarded a letter of offer on 12. 09. 2004 to the plaintiff. The plaintiff having shown interest, the broker arranged site inspection through defendant No. 2. ( 5 ) THE offer letter contained the following basic terms: - Price of the property would be Rs. 6,50,000/- per cottah and the area is 78 cottahs. It belongs to the Shah family represented by jitendra Vrijlal Shah, defendant No. 8. The property was to be sold free from all encumbrances, charges, lis pendents whatsoever. Vacant possession was to be delivered. Brokerage charge of 2% on the sale value was to be paid. ( 6 ) AFTER inspection, the plaintiff gave a counter offer on 20. 09. 2004 wherein price was proposed to be Rs. 4,00,000/- per cottah; payment was to be made against registration of the sale deed. Advance payment of rs. 5,00,000/- was to be made at the time of execution of the agreement for sale. Brokerage at the rate of 1 % of the total sale value was proposed. ( 7 ) THEREAFTER, problems relating to existence of two sheds on the property and others including increasing the price of the property to the range of Rs. 5,00,000/-to Rs. 6,00,000/- per cottah were raised through the broker. ( 8 ) ON receipt of such letter from the said broker, the plaintiff gave the final offer for purchase of the property by increasing the price to rs. 5,50,000/- per cottah and also paid a sum of Rs. 1,00,000/- through the Real Estate Broker. 5,00,000/-to Rs. 6,00,000/- per cottah were raised through the broker. ( 8 ) ON receipt of such letter from the said broker, the plaintiff gave the final offer for purchase of the property by increasing the price to rs. 5,50,000/- per cottah and also paid a sum of Rs. 1,00,000/- through the Real Estate Broker. ( 9 ) THE plaintiff made it clear that it would be the responsibility of the defendants/owners to deliver vacant possession of the entire property including the shed, then in occupation of M/s. Voltamp Transformer company. The balance payment was proposed to be made at the time of registration if vacant possession is delivered with clearance certificate. Plaintiff also agreed to pay a further advance of Rs,50,00,000/- subject to getting part possession and by depositing the original title deeds with the common Advocate of the parties, Mr. N. N. Chakraborty. ( 10 ) THE defendant accepted the counter offer and forwarded the xerox copies of the sale deeds through the broker on 15. 10. 2004. The plaintiff got the property surveyed by the Architect, Raj Kumar Agarwal, who prepared a plan which was forwarded to the plaintiff. Various other follow up actions were taken by the plaintiff including obtaining legal opinion. ( 11 ) THIS was followed by holding of a joint meeting of the parties in the chamber of an Advocate who had been described as "shantuda" in the copy of the minutes of the meeting regarding premises No. 69, Prince baktiar Shah Road, Tollygunge, Kolkata-700033, held on 24. 12. 2004. ( 12 ) IN the said suit, the plaintiff made an application under Order 39 rules 1 and 2 read with Section 151 of the Civil Procedure Code before the learned Court. Learned Court rejected the prayer for interim injunction. ( 13 ) BEING aggrieved by such order of rejection the plaintiff, as appellant, preferred an appeal being Miscellaneous Appeal No. 299 of 2005 before the learned District Judge at Alipore, 24-Parganas (South ). ( 14 ) AN application for injunction was filed by the plaintiff/opposite party in the said appeal. Learned District Judge passed an ex-parte interim order of injunction with a direction for service of copies upon the Opposite parties/respondents. On receipt of such copies, the present petitioners/ defendants filed written objection. The said Miscellaneous Appeal was, thereafter, transferred to the learned 9th Court of Additional District Judge, alipore. Learned District Judge passed an ex-parte interim order of injunction with a direction for service of copies upon the Opposite parties/respondents. On receipt of such copies, the present petitioners/ defendants filed written objection. The said Miscellaneous Appeal was, thereafter, transferred to the learned 9th Court of Additional District Judge, alipore. The learned Court by order dated 19. 07. 2006 set aside the order of the learned Trial Court and passed an order of interim injunction restraining the present petitioners thereby from transferring, alienating, encumbering and/or entering into an agreement in any form with any other person till the disposal of the application for temporary injunction. ( 15 ) THE present application under Article 227 is directed against such order granting interim injunction as made by the learned Transferee court in Miscellaneous Appeal. ( 16 ) MR. Ashok Banerjee, learned Counsel for the petitioners, submitted that in absence of a concluded contract and when the suit was not for specific contract, the suit itself is not maintainable and consequently, no order of injunction could be passed thereby causing irreparable loss and injury to the petitioners/defendants. ( 17 ) MR. Banerjee submitted that the order under challenge thus suffers from material irregularity and jurisdictional error. It was emphatically claimed that the present petitioners did not engage any agent in respect of alleged transfer of the property being premises No. 69 Prince Baktiar shah Road. Referring to the various provisions of the Indian Contract Act it was contended that not an iota of material could be produced before the learned Court which could even remotely suggest that the present petitioners engaged any broker or that they entered into any sort of understanding or any manner of agreement with the Opposite Party in respect of alleged transfer of the aforesaid property. Mr. Banerjee then mentioned that the present petitioner apprehended that the Opposite Party with the help of undesirable of elements is trying to grab the precious property worth crores of rupees. ( 18 ) IT seemed to be the categorical stand of the petitioners that there had been no occasion for them to engage anybody, not the speak of the real Estate Broker, Sn Chandan Chatterjee, over transfer of the premises under reference. ( 18 ) IT seemed to be the categorical stand of the petitioners that there had been no occasion for them to engage anybody, not the speak of the real Estate Broker, Sn Chandan Chatterjee, over transfer of the premises under reference. He even went a step further while mentioning that it is open for the Opposite Party to claim relief in the way of damage and/or in accordance with law by taking appropriate measure against the said sri Chatterjee. It was also submitted on behalf of the petitioners that the suit under reference was filed on the basis of illusory cause of action and there could be no justification for the learned Court to grant relief in the way of interim injunction. Referring to the principles for granting interim injunction, it was contended on behalf of the petitioner that the opposite party could not make out any case which could indicate that such discretionary relief could be granted in it's favour. ( 19 ) MANY other issues were also raised on behalf of the petitioners. It was strongly contended that there is no material to indicate that in absence of an order of interim injunction, the opposite party/plaintiff would have suffered any loss or injury of irreparable nature nor the balance of convenience and inconvenience tilts in favour of the O. P. owner. ( 20 ) ON the other hand, Mr. Saktinath Mukherji, learned Counsel appearing for the Opposite Party/plaintiff, submitted that the Miscellaneous appeal under reference was directed against an order refusing to grant interim injunction. He submitted that the learned Trial Court did not have any opportunity to deal with the merits, as "show-cause" has not yet been filed before the learned Court. ( 21 ) AFTER hearing learned Counsel for both the parties and having regard to the materials available on record, it appears that the learned trial Court did not find any sufficient reason so as to pass an order of interim injunction in response to the application under Order 39 Rules 1 and 2 read with Section 151 of the Civil Procedure Code. But in connection with the Miscellaneous appeal, which was directed against such order refusing to grant interim injunction, the learned Appellate Court initially, granted an interim order which was subsequently given concrete shape. But in connection with the Miscellaneous appeal, which was directed against such order refusing to grant interim injunction, the learned Appellate Court initially, granted an interim order which was subsequently given concrete shape. On perusal of the impugned order it is found that the learned Appellate court was swayed to a considerabl'e extent by the claim of the Opposite party/plaintiff that the present petitioners by refusing to recognise the kind of understanding they had with plaintiff acted in a manner which was clearly a departure from their earlier stand. Learned Appellate Court referred to the copies of various documents including correspondences which appear to have inspired the learned Appellate Court so as to hold that there is a strong prima facie case in favour of the O. P. /plaintiff. ( 22 ) MR. Banerjee, as learned Counsel for the present petitioners attempted to strike the impugned judgment and order at its root while emphatically submitting that there is no document worth mentioning indicating that the present petitioners/plaintiffs ever engaged Sri Chatterjee as a broker in respect of proposed transfer of the case property being premises No. 69, Prince Baktiar Shah Road. ( 23 ) ON behalf of the Opposite Party it was submitted that this Court cannot in revision try other issues arising in the case, even if the parties conceded. In this context, Mr. Mukherjee placed reliance on the decision in the case of Khushro S. Gandhi and Ors. v. N. A. Guzder (dead), reported in AIR 1970 SC 1468 . The factual backdrop of the said case, however, are significantly different from those of the present case. It is also worth mentioning that the Hon'ble Court made the said observation while analysing the scope of Section 115 of the Civil Procedure Code whereas the present application is under Article 227 of the Constitution. Though substantially this Court is required to adjudicate whether the impugned order suffers from any jurisdictional error or not, the similarity cannot lead this Court to observe that the scope of Article 227 of the Constitution is identical to that of revision under Section 115 of the Civil Procedure Code. ( 24 ) MR. Mukherjee then submitted that this Court has no jurisdiction to interfere with the impugned order. Relying upon the decision in the case of the Managing Director (MIG) Hindustan Aeronautics Ltd. , balanagar, Hyderabad andanr. ( 24 ) MR. Mukherjee then submitted that this Court has no jurisdiction to interfere with the impugned order. Relying upon the decision in the case of the Managing Director (MIG) Hindustan Aeronautics Ltd. , balanagar, Hyderabad andanr. v. Ajit Prasad Tarway, Manager (Purchase and stores), Hindustan Aeronautics Ltd. , Balanagar, Hyderabad, reported in air 1973 SC 76 , it was submitted that the order under challenge may be right or wrong; may be in accordance with law or may not be in accordance with law; but one thing is clear that the learned Court had jurisdiction to make that order. ( 25 ) REFERENCE was also made to a Division Bench decision of this court in the case of Sm. Muktakesi Dawn and Ors. v. Haripada Mazumdar and anr. , reported in AIR 1988 Calcutta 25, in support of the contention that there is no justification for a thorough detailed analysis regarding the sufficiency of reasons given by the learned Court while granting injunction. It was observed in the said decision that "if there are materials-on-record to show that there were good reasons to pass an ex parte injunction order, the order cannot be set at naught solely on the ground that the Court, while making the order, did not record the reasons for proceeding ex parte. " ( 26 ) IT was further observed in the said case that "it is true that the doctrine of Us pendens as enunciated in Section 52 of the Transfer of property Act takes care of all pendente lite transfers; but it may not always be good enough to take fullest care of the plaintiffs interest vis-a-vis such a transfer. " ( 27 ) MR. Saktinath Mukherji submitted that unless there is an order of injunction restraining the present petitioner from alienating the property under reference thereby creating a third party interest, this may invite complications and the equity in favour of such third party may intervene to persuade the Court decline, in the exercise of its discretion, the equitable relief of specific performance to the party at the trial and to award damages only in favour of the said party. ( 28 ) THE learned Division Bench in the said case took into consideration the earlier Division Bench decision of this Court in the case of Promotha Nath v. Jagannath, reported in 1913 (17) Cal. ( 28 ) THE learned Division Bench in the said case took into consideration the earlier Division Bench decision of this Court in the case of Promotha Nath v. Jagannath, reported in 1913 (17) Cal. LJ 427, where it was observed that "a Court will in many cases interfere and preserve property in status quo during the pendency of a suit in which the rights to it are to be decided and though the purchaser pendente lite would not gain title, the Court will prevent by injunction the embarrassment that would be caused to the original purchaser in his suit against the vendor. " according to the learned Division Bench, Rule 1 of Order 39 clearly demonstrate that, notwithstanding the rule of Us pendente in Section 52 of the Transfer of Property Act there can be occasion for the grant of injunction restraining pendente lite transfer in a fit and proper case. ( 29 ) ON the other hand, Mr. Ashok Banerjee, as learned Counsel for the petitioner sought to assail the order passed by the learned Appellate court first on the ground that such order on the basis of assumed existence of prima facie case cannot stand a moment's scrutiny. It was submitted that while refusing an ex-parte interim order, no reason is required. But, the learned Appellate Court in seisin of the appeal from refusal of the ex-parte ad interim order is not expected to reverse the trial Court's decision without recording the existence of any of the grounds required to exist before any ex-parte ad interim order without notice is granted. Deriving inspiration from the decision in the case of Morgan Stanley Mutual Fund v. Kartick Das, reported in 1994 (4) SCC 225 , it was contended that the impugned order passed by the learned Appellate Court based only on alleged prima facie case is not tenable. ( 30 ) MR. Banerjee referring to the decision in the case of Supratik ghosh and Anr. v. M/s. Pasari Housing Development Private Limited, reported in 2000 (3) Cal. LT 97 (HC), submitted that an ex-parte ad interim order passed without notice and without recording the existence of the reasons mentioned in Order 39 Rule 3 is without jurisdiction, nullity and cannot be sustained. It was submitted that the impugned order passed by the learned appellate Court in such circumstances cannot be approved. ( 31 ) MR. LT 97 (HC), submitted that an ex-parte ad interim order passed without notice and without recording the existence of the reasons mentioned in Order 39 Rule 3 is without jurisdiction, nullity and cannot be sustained. It was submitted that the impugned order passed by the learned appellate Court in such circumstances cannot be approved. ( 31 ) MR. Banerjee, as learned Counsel for the petitioners, while assailing the order passed by the learned Appellate Court further submitted that in order to obtain any equitable relief such as an ex-parte ad interim order of injunction or any injunction the party seeking such relief must come with clean hands. Inviting attention of the Court to the averments made in the plaint it was submitted that the plaintiff claimed that there is an agreement for sale with the defendants by correspondence but the copies of the documents annexed to the application do not show any agreement between plaintiffs and the defendants. Such annexures go a long way to establish the alleged involvement of one Sri Chandan chatterjee descnbed as the Real Estate Owner. ( 32 ) REFERRING to the decision in the case of Gujarat Bottling Co. Ltd. and Ors. v. Coca Cola Co. and Ors. , reported in 1995 (5) SCC 545 , it was contended on behalf of the petitioner that grant of injunction being essentially a discretionary order, the party seeking such equitable relief must establish proper conduct and should be fair. The principles for granting such discretionary relief are well settled and the same may be reproduced as follows: - (a) petitioner seeking an order of injunction must establish a prima facie case, (b) the balance of convenience and inconvenience must be in his favour; and (c) the petitioner must show that he would suffer an irreparable injury if such prayer for interlocutory injunction is disallowed. ( 33 ) IT is well settled that relief by way of interlocutory injunction is granted to mitigate the risk of injustice to the plaintiff during the period before the uncertainty could be resolved. ( 34 ) THE Apex Court in the case of Gujarat Bottling Co. Ltd. and Ors. ( 33 ) IT is well settled that relief by way of interlocutory injunction is granted to mitigate the risk of injustice to the plaintiff during the period before the uncertainty could be resolved. ( 34 ) THE Apex Court in the case of Gujarat Bottling Co. Ltd. and Ors. , (supra) observed that "the object of the interlocutory injunction is to protect the plaintiff against injury by violation of his right for which he could not be adequately compensated in damages recoverable in the action if the uncertainty were resolved in his favour at the trial. " It must be borne in mind that the Court must weigh one need against another and determine where the "balance of convenience" lies. ( 35 ) MR. Banerjee further referred to the decision in the case of Vipin bhimani and Am. v. Sunanda Das and Anr. , reported in 2006 (2) CHN 396 , while submitting that a suit for specific performance of a development agreement cannot be maintained. ( 36 ) THE facts and circumstances of the said case are distinctly separate from those of the present case. ( 37 ) ON analysis of the facts and circumstances of the present case, in the light of legal position, as discussed earlier, it is first necessary to explore how could the learned Appellate Court discover a prima facie case in favour of the present Opposite Party/appellant. ( 38 ) IT is nobody's case that any sort of agreement was executed between the present petitioners and Opposite Party herein. There is not an iota of material to indicate that Sri Chandan Chatterjee, a Real Estate broker was at all engaged by the present petitioners in connection with the proposed transfer of the property. True, there are copies of various documents including correspondences indicating that said Sri Chatterjee claiming to be acting on behalf of the present petitioners got engaged in the matter of the proposed transfer of the property in favour of the present opposite Party. In the process, copies of the documents of title were reportedly supplied by Sri Chatterjee to the Opposite Party. But, this act by itself cannot inspire confidence of the Court. There is reference to a joint meeting in the Chamber of a learned Advocate and copy of the minutes recorded in the meeting has been annexed. In the process, copies of the documents of title were reportedly supplied by Sri Chatterjee to the Opposite Party. But, this act by itself cannot inspire confidence of the Court. There is reference to a joint meeting in the Chamber of a learned Advocate and copy of the minutes recorded in the meeting has been annexed. This also cannot convincingly suggest that the present petitioners as owners of the property were actively involved in a manner which could cast any legal obligation on them. ( 39 ) IT appears that the learned Appellate Court while allowing the appeal and passing an order of interim injunction took into consideration certain other aspects. There is reference to the application filed by the plaintiff seeking amendment and thereby introducing the prayer for specific performance of contract. ( 40 ) AFTER careful consideration of the facts and materials available on record it appears that the learned Appellate Court went a step further beyond its permissible limit. ( 41 ) MR. Saktinath Mukherji referring to an unreported decision of this Court in connection with an appeal from Original Order No. 360 of 1980 with C. R. No. 562 (M) of 1980, submitted that the only question before the learned Appellate Court in the Miscellaneous Appeal was whether the order of the learned Civil Judge (Junior Division) rejecting the prayer of the plaintiff for ad interim order of injunction was proper or not. ( 42 ) IN the light of the discussion made hereinbefore, this Court in response to an application under Article 227 of the Constitution cannot keep its eyes closed nor can it afford to remain a passive on looker if it is found that there had been illegal exercise of jurisdiction by a Court. It is perhaps necessary to mention that in response to an appeal arising out of an order refusing to grant interim injunction, an Appellate Court is certainly not required to invent prima facie case if the same is not manifested from the materials available before the learned trial Court. It is also not for a court to get engaged in an exercise of exploring the truth in a hypothetical manner and taking into consideration "the ifs and might-have-beens". In such circumstances, the present case perhaps demands and deserves intervention by this Court in response to an application under Article 227 of the Constitution. It is also not for a court to get engaged in an exercise of exploring the truth in a hypothetical manner and taking into consideration "the ifs and might-have-beens". In such circumstances, the present case perhaps demands and deserves intervention by this Court in response to an application under Article 227 of the Constitution. ( 43 ) IT is the settled principle of law that a petitioner in order to get an order of interim injunction must show a prima facie case in his favour. It is for the petitioner also to establish that he will suffer irreparable injury if such injunction is not granted. The learned Court is required to consider as to whether the balance of convenience and inconvenience is in favour of the petitioner or not ( 44 ) IT may be pointed out that this Court within the scope and ambit of an application under Article 227 of the Constitution is certainly not called upon right at this stage to adjudicate all those aspects. But, it follows from the discussion that the learned Appellate Court which was approached by the present O. P. /plaintiff being aggrieved by an order of refusal of an interim order of injunction virtually granted relief which certainly causes prejudice to the present petitioners. ( 45 ) IT is also the considered opinion of this Court that interest of justice will be best served if both the parties are directed to appear before the learned Trial Court and get the matter effectively heard. ( 46 ) CONSIDENNG all these aspects the present application is disposed of with the following directions: - The order passed by the learned Appellate Court in miscellaneous Appeal No. 299 of 2000 be set aside. The parties are directed to appear before the learned trial Court positively within a period of two weeks from the date of passing of this order. The present petitioner/defendant be at liberty to file affidavit-in-opposition/written objection to the application for injunction before the learned trial-Court within a period of two weeks thereafter. The present opposite party/plaintiff may file an affidavit-in-reply thereto within a period of one week from the date of filing of the affidavit-in-opposition. ( 47 ) LEARNED Court will thereafter fix a date for hearing of the injunction application filed before it by the opposite party/plaintiff within a period of two weeks. The present opposite party/plaintiff may file an affidavit-in-reply thereto within a period of one week from the date of filing of the affidavit-in-opposition. ( 47 ) LEARNED Court will thereafter fix a date for hearing of the injunction application filed before it by the opposite party/plaintiff within a period of two weeks. Learned Court will dispose of the same by passing order in accordance with law-of course, after giving opportunity of hearing to both parties, ( 48 ) IT is further mentioned that the learned Court while doing so will proceed in accordance with law without being influenced by any observation made either by the learned Appellate Court in connection with hearing of the said Miscellaneous appeal or any observation made by this court hereinbefore. The said Misc. Appeal, being No. 299 of 2005 accordingly stands disposed of.