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IN THE HIGH COURT OF BOMBAY AT GOA
NUTAN D. SARDESSAI, J.
M/s. Shirka Constructions & Another - Appellants
Versus
M/s. Appollo Engineers & Contractors Pvt. Ltd. - Respondents
Appeal from Order No. 6 of 2017
Decided On : 11-04-2018
Civil Procedure Code,1908 - Order XXXIX - Arbitration and Conciliation Act, 1996 - Section 9 - Claim to have acquired the right to carry on the construction - Authorised by Managing Committee - Parties and thereafter respondents entered into Memorandum of Understanding for development construction and sale for purpose of development of suit property with appellants herein- Pursuant to said Memorandum of Understanding (MOU for short) appellants were to give 38 units to respondents and one residential flat for proposed project to be constructed and developed by them and remaining units were to be of appellants- They had started work after an initial period of 15-18 months for settling various issues and sometime owners of property Society questioned appellants as to what capacity they were carrying out construction activity- They had informed Society that development and construction work of proposed project was being carried out on basis of MOU entered into between them and respondents- Society through its Managing Committee had entrusted construction and development of proposed project directly to appellants vide its letter and also executed a Power of Attorney favour appellant giving full and unfettered right to develop suit property –Held, Court found that compensation in terms of money was not remedy available to respondents and that loss suffered by respondents was irreparable- On an examination of matter in all its complexities learned Trial Judge had found that balance of convenience was tilted in favour respondents and opined on conduct of appellants which was highly improper and inappropriate and having kept respondents in complete dark in respect of Power of Attorney executed in their favour order of injunction therefore does not warrant any interference applying principle in Wander Ltd- and another (supra) where Honble Apex Court held that Appellate Court will not interfere with exercise of discretion of Court of first instance and substitute its own discretion except where discretion has been shown to have been exercised arbitrarily or capriciously or perversely or where Court had ignored settled principles of law regulating grant or refusal interlocutory injunctions- An appeal against exercise of discretion is said to be an appeal on principle- Appellate Court will not reassess material and seek to reach a conclusion different from one reached by Court below if one reached by that Court was reasonably possible on material- Appellate Court would normally not be justified in interfering with exercise of discretion under appeal solely on ground that if it had considered matter at trial stage it would have come to a contrary conclusion- If discretion has been exercised by Trial Court reasonably and in a judicial manner fact that Appellate Court would have taken a different view may not justify interference with trial Courts exercise of discretion - Appeal dismissed
1. The appellants who are the original defendants are challenging the impugned order dated 09.01.2017 passed by the Ad-hoc Senior Civil Judge, Margao pursuant to which he allowed the respondents application for injunction and restrained the present appellants through their servants, agents etc. from interfering in the suit property and carrying out further construction therein.
2. Briefly stated, the respondents had entered into an Agreement dated 22.01.2007 with the members of the Society known as Vidya Vikas Co-operative Housing Society Ltd. ('Society' for short) pursuant to which the respondents were to convey to the Society 30 residential flats in the building/s, which were to be erected by them. The Power of Attorney dated 22.01.2007 was also executed by the members of the Society in favour of the respondent No.2. The respondents had entered into an Agreement with M/s. Vrudhi Buildcon Pvt. Ltd. for carrying out the construction and development of the proposed project but which came to be terminated mutually between the parties and thereafter, the respondents entered into the Memorandum of Understanding for development, construction and sale dated 24.10.2009 for the purpose of development of the suit property with the appellants herein. Pursuant to the said Memorandum of Understanding (MOU, for short) the appellants were to give 38 units to the respondents and one residential flat to M/s. Vrudhi Buildcon Pvt. Ltd. for the proposed project to be constructed and developed by them and the remaining units were to be of the appellants. They had started work after an initial period of 15-18 months for settling various issues and sometime in 2010-11 the owners of the property i.e. Society questioned the appellants as to what capacity they were carrying out the construction activity. They had informed the Society that the development and the construction work of the proposed project was being carried out on the basis of the MOU entered into between them and the respondents. The Society through its Managing Committee had entrusted the construction and development of the proposed project directly to the appellants vide its letter dated 09.06.2011 and also executed a Power of Attorney dated 21.07.2011 in favour of the appellant No.2 giving full and unfettered right to develop the suit property.
3. The respondents filed a suit for cancellation of Memorandum of Understanding, injunction and consequential reliefs along with an application for temporary injunction which came to be allowed by the impugned order dated 09.01.2017. The Agreement and the Power of Attorney dated 22.01.2007 executed by the other members of the Society was illegal and in gross violation of the byelaws and they were never authorised by the Managing Committee to do so. The letter dated 09.06.2011 spelling out the Agreement between the Society and the appellants and the Power of Attorney dated 22.01.2007 were valid and legally binding on the parties. The appellants had entered into the Agreement of Sale in respect of 21 units prior to the impugned order being passed by the learned Court and the possession thereof had been handed over to the concerned purchasers. The impugned order was perverse and illegal and passed without the application of mind and was unreasonable and therefore, was liable for interference in this appeal and on such and similar grounds raised in the appeal memo.
4. Heard Shri Nitin N. Sardessai, learned Senior Advocate for the appellants, who referred to the Development Agreement entered into by the Society dated 22.01.2007 with the respondents and who were to deliver the possession to the Society of 30 units by 25.02.2009. There was a subsequent Agreement between the appellants and the respondents on 24.03.2009. The Society had adopted the resolution and authorised the appellants vide the letter dated 09.06.2011 to undertake the construction and which authorisation had not been terminated by the Society till date. No demand was made by
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