1. Perpetual lease for hotel business — Alleged violation of lease conditions regarding prior permission — Suit for vacation and injunction. (Para 2 )
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1997 Supreme(SC) 702
1997(4) Supreme 645
Supreme Court of India
(From Delhi High Court)
K. Ramaswamy and D.P. Wadhwa, JJ.
Dinesh Mathur -Appellant
versus
O.P. Arora & Ors. -Respondents
Civil Appeal No. 3004 of 1997
(Arising out of SLP (C) No. 27750 of 1995)
Decided on 11-4-1997
Counsel for the Parties :
For the Appellant : M.P. Jha, Advocate.
For the Respondents : Gopal Subramaniam, Sr. Advocate, A.K. Mahajan, S.P. Mehta, Shashi Bhushan and Pramod Dayal, Advocates.
IMPORTANT POINT
Granting injunction is a matter of discretion and balance of convenience and irremediable injury are triable issues, required to be examined and found positively.
Headnote:Injunction-Granting injunction is a matter of discretionary power-Balance of convenience and irremediable injury are triable issues, required to be examined and found positively-Ever since 1937 appellant using premises for running a hotel business-Suit filed in 1991 for the first time alleging that appellant had violated conditions of lease-Order granting ad-interim injunction-Not sustainable-Balance of convenience does not lie in issuing ad-interim injunction-Appellant cannot be compensated if he ultimately succeeds in suit for prohibiting running of business.
Held : Granting injunction is a matter of discretionary. Balance of convenience and irremediable injury are triable issues and are required to be examined and found positively. All are apparently lacking. Since the appellant has been running the business right from 1937, balance of convenience does not lie in issuing the ad-interim injunction and he cannot be adequately compensated if ultimately succeeds in the suit for prohibiting the running of the business which he acquired a goodwill for using the premises from long 60 years. Under the circumstances, the courts below have committed gross error of law in granting injunction. (Para 3)
Legal Category Hierarchy
Table of Contents
2. Appellant's non-compliance with lease covenants and failure to obey ex-parte injunction orders. (Para 3 )
3. Balance of convenience and irremediable injury are triable issues; long-term business operation and goodwill outweigh the need for an ad-interim injunction. (Para 3 )
4. Ad-interim injunctions are discretionary and require positive findings on balance of convenience and irremediable injury, especially where long-term business goodwill is involved. (Para 3 )
5. Appeal allowed — Ad-interim injunction dissolved — Trial Court directed to dispose of the suit expeditiously. (Para 4 )
6. What factors determine the grant of an ad-interim injunction?
The grant of an injunction is discretionary and requires a positive examination of triable issues, specifically the balance of convenience and the potential for irremediable injury. (Para 3 )
7. Does the non-compliance with an ex-parte injunction automatically justify the grant of an ad-interim injunction?
No. While non-compliance with an injunction may be a violation, the remedy for such conduct is different and does not necessarily shift the balance of convenience in favor of granting an injunction. (Para 3 )
8. How does long-term business operation and goodwill affect the balance of convenience in injunction proceedings?
Where a party has operated a business for a long period and acquired significant goodwill, the balance of convenience typically does not lie in granting an injunction that prohibits the business, as the party cannot be adequately compensated if they ultimately succeed. (Para 3 )
ORDER
Leave granted. We have heard counsel on both sides. This appeal, by special leave, arises from the judgment of the High Court of Delhi, dated December 7, 1995 made in C.R. No. 974/90.
2. It is not necessary to narrate all the details for the purpose of disposal of this appeal. Suffice it to state that the respondent had a perpetual lease in 1937 and ever since he has been using the premises for running a hotel. The respondent filed a suit in 1991 for the first time alleging that the appellant had violated clause 7(2) of the conditions of lease as he has been obtained the prior permission of the Commissioner. Ad-interim injunction was granted. When he sought for vacation, it was not ordered. On appeal, it was confirmed and revision was dismissed. Thus this appeal, by special leave.
3. It is an indisputable fact that ever since 1937 the appellant has been using the premises for commercial purpose, viz., running a hotel business. It is not a case where the balance of convenience would lie if prohibition on running the hotel on the basis of the lease is granted to him. Whether the appellant has violated the conditions of the lease is a matter to be gone into in the suit itself. We decline to go into the merits though Shri Gopal Subramaniam, learned senior counsel, sought to impress upon us the non-compliance of the covenants of the lease. He also brought to our notice the conduct on the part of the appellant in not obeying the ex-parte order of injunction granted on December 2, 1991 till September 24, 1994. It may be that he did not obey the injunction but remedy is different. On that ground, it cannot be said that balance of convenience lies in grant of injunction in favour of the respondent. Granting injunction is a matter of discretionary. Balance of convenience and irremediable injury are triable issues and are required to be examined and found positively. All are apparently lacking. Since the appellant has been running the business right from 1937, balance of convenience does not lie in issuing the ad-interim injunction and he cannot be adequately compensated if ultimately succeeds in the suit for prohibiting the running of the business which he acquired a goodwill for using the premises form long 60 years. Under the circumstances, the courts below have committed gross error of law in granting injunction.
4. The appeal is accordingly allowed. Ad interim injunction stands dissolved. The trial Court is directed to dispose of the suit as expeditiously as possible. No costs.
Appeal accordingly allowed.
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