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2013 DIGILAW 640 (AP)

Mantri Developers Pvt. Ltd. , Bangalore v. B. Venkateshwar Rao

2013-08-08

L.NARASIMHA REDDY, S.V.BHATT

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JUDGMENT : L. Narasimha Reddy, J. 1. The plaintiff in OS No.824 of 2011 on the file of the III Additional District & Sessions Judge (Fast Track Court), Ranga Reddy District filed this appeal under Order XLIII Rule 1 C.P.C., feeling aggrieved by the dismissal of IA No.3353 of 2001, filed under Order XXXIX Rules 1 and 2 C.P.C., through order, dated 26.2.2013. 2. The appellant is a private limited company, operating in the field of development and construction. Respondents 1 to 12 are said to be the joint owners of an extent of about Acs.21.00 of land in Survey No.37/2 of Gopanpally Village, Serilingampally Mandal, Ranga Reddy District. The appellant states that it has negotiated with respondents 1 and 11 for development of their land and in the process, a Memorandum of Understanding (MOU) was entered, into on 20.1.2011. According to the said MOU, a joint development agreement would be brought into existence, defining the rights and obligations of the parties. 3. With this background, the appellant prayed for the relief of perpetual injunction to restrain the respondents or anybody claiming through then from entering into any sort of contract of development, or such other nature in respect of the suit schedule property, till the dispute between them are fully resolved as per the MOU dated 20.1.2011. It has also filed IA No.753 of 2001 under Order XXXIX Rules 1 and 2 C.P.C., almost on the same lines, prayed for in the suit. The contents for the plaint were repeated in the affidavit filed in support of the application. 4. The application was opposed by the respondents, raising several objections. The various events that have taken place between the parties, ever since the MOU was entered into, were narrated in detail. It was also pleaded that the appellant themselves expressed doubt about the title in respect of the property, and at no point of time, they have evinced any interest. Another contention was that the MOU itself had expired on 4.4.2011 and whatever relations that existed between the parties on the basis of MOU, have ceased to survive. Objection was also raised as to the very maintainability of the suit. 5. Separate counter-affidavits were filed by respondents 1 to 8, 9 and 10 and 11, 12 and 13. 6. The trial Court dismissed the I.A., through order dated 26.2.2013. 7. Objection was also raised as to the very maintainability of the suit. 5. Separate counter-affidavits were filed by respondents 1 to 8, 9 and 10 and 11, 12 and 13. 6. The trial Court dismissed the I.A., through order dated 26.2.2013. 7. Sri B. Venkatrama Rao, learned Counsel for the appellant submits that the MOU has created mutual rights and obligations as between the parties and the purpose of filing of the suit was only to ensure that the respondents do not violate their obligations. He contends that such a suit is very much within the ambit of Section 38 of the Specific Relief Act. Learned Counsel further submits that the proposed joint development agreement would have the effect of defining the rights of the parties finally, and the MOU is almost in the form of agreement of sale, vis-à-vis a sale deed. He submits that even after the MOU, considerable correspondence had ensued and that the balance of convenience is an favour of granting temporary injunction. 8. Sri E. Ajay Reddy, learned Counsel for the contesting respondents, on the other hand, submits that the suit itself is not maintainable since the appellant did not possess rights of any kind whatever, vis-à-vis the property. He contends that even if the joint development agreement contemplated under the MOU was to be treated as a final document, comparable to a sale deed, the only remedy open to the appellant was to file a suit for specific performance, and not a suit of the nature presented before the trial Court. He further submits that the MOU stood terminated by afflux of time, and there was no concluded contract or a firm commitment by a party, towards the other. 9. The nature of the suit filed by the appellant herein has been broadly indicated at the threshold itself. An interlocutory application under Order 39 Rules 1 and 2 C.P.C., almost for the similar relief was filed. Though the main relief claimed in the suit and the one, claimed in the I.A resemble each other, it cannot be said that there is any prohibition in that behalf. In a given case, the nature of interim relief may appear to be similar to the one, claimed in the suit. A suit for perpetual injunction can be cited as an example in this behalf. 10. Serious objection is raised to the very maintainability of the suit. In a given case, the nature of interim relief may appear to be similar to the one, claimed in the suit. A suit for perpetual injunction can be cited as an example in this behalf. 10. Serious objection is raised to the very maintainability of the suit. The contention is that the relief of perpetual injunction is not in relation to any interference with the suit schedule property and being the one, only to restrain the respondents from entering into the MOU or other arrangements with the third parties can be claimed independently in a suit. Accordingly, the reliefs of this nature are claimed in interlocutory applications, pending the suit for declaration of title. 11. The relief of perpetual injunction in a suit can be claimed, mostly when there is no dispute, at least from the point of view of the plaintiff, as to the existence of title or right, vis-à-vis the property. Though Section 38 of the Specific Relief Act does not indicate in so many terms, if one takes into account sub-section (2) thereof, certain important aspects become clear. The provision reads: “Sec.38. Perpetual injunction when granted.--- (1) Subject to the other provisions contained in or referred to by this chapter, a perpetual injunction may be granted to the plaintiff to prevent the breach of an obligation existing in his favour, whether expressly or by implication. (2) When any such obligation arises from contract, the Court shall be guided by the rules and provisions contained in Chapter II. (3) When the defendant invades or threatens to invade the plaintiff’s rights to, or enjoyment of, property, the Court may grant a perpetual injunction in the following cases, namely: (a) where the defendant is trustee of the property for the plaintiff; (b) where there exists no standard for ascertaining the actual damage caused, or likely to be caused, by the invasion; (c) where the invasion is such that compensation in money would not afford adequate relief; (d) where the injunction is necessary to prevent a multiplicity of judicial proceedings.” 12. The very purpose of filing a suit by invoking this section is to ensure that the defendant does not commit breach of his obligation towards the plaintiff. This presupposes the existence of corresponding rights to the plaintiff, such as when he gets the right vis-a’-vis the property through inheritance or under a sale deed, or through other modes of transfer. The very purpose of filing a suit by invoking this section is to ensure that the defendant does not commit breach of his obligation towards the plaintiff. This presupposes the existence of corresponding rights to the plaintiff, such as when he gets the right vis-a’-vis the property through inheritance or under a sale deed, or through other modes of transfer. Sub-section (2) mandates that if an obligation arises from a contract, recourse must be had to Chapter II, meaning thereby, that it is only by filing a suit for specific performance, that the plaintiff can enforce his rights. This discussion is undertaken only to see prima facie, whether the claim made in the suit is so clear, and unambiguous as to persuade the Court to examine the interlocutory application. 13. We make it clear that the question as to whether the suit in the present form can be maintained, needs to be considered independently at a future stage of the suit, and we have not expressed any final opinion on that. 14. The occasion to grant temporary injunction arises only when a prima facie case is made out, and it is shown that the balance of convenience is in favour of granting the relief. Two aspects become relevant at this stage: The first is the relief of temporary injunction to restrain the defendant in a suit from alienating the suit schedule property, or from entering into contract with others, can be considered only when the suit for specific performance is filed. Secondly, the relief of temporary injunction to restrain the defendant in a suit for interfering with the possession can be claimed in a suit for injunction, in which the plaintiff has already acquired valid title. In the instant case, the appellant did not claim any right or title over the land in question, nor did it file a suit for specific performance. 15. Placing reliance upon the judgment of this Court in WP No.25686 of 2011, dated 10.7.2012, learned Counsel submits that the MOU can be treated as an agreement of sale, if the development agreement is equated with the sale deed. 15. Placing reliance upon the judgment of this Court in WP No.25686 of 2011, dated 10.7.2012, learned Counsel submits that the MOU can be treated as an agreement of sale, if the development agreement is equated with the sale deed. In the said judgment, this Court expressed the view that a development agreement, which is signed by both the parties and registered, cannot be cancelled unilaterally by one of the parties and the nature of rights that flow under it are comparable to those, under a sale deed. The relevant paragraph reads: “In a way, the transaction on hand stands on a higher footing than the one of a sale deed. In a transaction of sale, the deed is executed by the vendor, though with the knowledge of purchaser. He only signs the documents. The development agreement is executed by both the parties. If the cancellation of sale is required to be done with the participation of the vendor and purchaser, the requirement becomes much more essential as regards cancellation of transaction, which is brought into existence, through a document executed by both the parties.” 16. This Court would have certainly extended that comparison to the instant case, had the appellant filed the suit for specific performance. 17. Though reliance is placed upon the judgment of the Allahabad High Court in Deep Chandra v. Ruknuddaula Shamsher Jang Nawab Mohammad Sajjad Ali Khan and others, AIR 1951 All. 93 (FB), we are of the view that it has no application to the facts of the case. The trial Court has taken correct view of the matter and we do not propose to take any different view. 18. The appeal is accordingly dismissed. We direct that the trial Court shall proceed to decide the suit uninfluenced by any of the observations made by it, in the order under appeal, or the observations made us, in this order. 19. The miscellaneous petitions filed in this appeal shall also stand disposed of. There shall be no order as to costs.