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2000 Supreme(Cal) 599
High Court Of Calcutta
S. B. SINHA, PRATAP KUMAR RAY
SUPRATIK GHOSH - Appellant
Versus
PASARI HOUSING DEVELOPMENT (P) LTD. - Respondent
F. M. A. T. 2851 Of 2000
Decided On : 12/01/2000
A.DUTTA, A.N.MUKHERJEE, B.K.CHATTERJI, B.K.JAIN, J.SAHA, NADIRA PATHERIA, S.PAL CHAUDHARY
The Court has the jurisdiction to pass an order directing specific performance of contract. A development agreement is an agreement for transfer of an immovable property and as such the same is specifically enforceable and thus having regard to the explanation appended to Section 2 of the Specific Relief Act; there does not exist any embargo in passing an Award directing specific performance of contract.
Headnote:
ARBITRATION - JURISDICTION - INTERIM INJUNCTION - APPOINTMENT OF ARBITRATOR - SPECIFIC PERFORMANCE OF CONTRACT - DEVELOPMENT AGREEMENT - SECTION 9 OF THE ARBITRATION AND CONCILIATION ACT, 1996: 1. An application for interim injunction under Section 9 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act') can be filed before or during arbitral proceedings or after any time after making arbitral award but before it enforces Section 36, appeal to a Court in relation to the matter specified therein which includes interim injunction or appointment of receiver. 2. While passing an order of interim injunction under Section 9 of the Act, the Court is not required to go into the merit of the claim and counter-claim. 3. The Court has the jurisdiction to pass an order directing specific performance of contract. 4. A development agreement is an agreement for transfer of an immovable property and as such the same is specifically enforceable and thus having regard to the explanation appended to Section 2 of the Specific Relief Act; there does not exist any embargo in passing an Award directing specific performance of contract. 5. In case of disputes and differences between the parties, which might have been referred to the arbitral proceedings, the power under Section 9 of the Act is exercised, inter alia, to keep the property under arbitration intact.
Fact of the Case:
The appellants were the owners of a property in Calcutta. They entered into a development agreement with the plaintiff-respondent for the purpose of constructing a multi-storeyed complex. The appellants terminated the agreement and entered into a fresh development agreement with another party. The plaintiff-respondent filed an application under Section 9 of the Act seeking an injunction restraining the appellants from taking any steps in breach of the development agreement and/or in furtherance of the purported notice of termination. The learned trial Judge allowed the application and the appellants filed an appeal.
Finding of the Court:
The Court held that the learned trial Judge had jurisdiction to pass the impugned order as it was satisfied with regard to the existence of the contention precedent for passing the said order. The Court further held that the letter dated 2nd April, 2000 was a fake and fabricated one as there was no evidence that the same was ever served. The Court also held that the learned trial Judge had erred in directing the defendants to refer the dispute to the arbitration. The Court further held that as no decree for specific performance of contract can be granted in relation to a development agreement having regard to the provision of Sections 10 and 14 of the Specific Relief Act, no interim order which is passed in aid of the final order could be passed by the learned trial Judge. However, the Court held that the plaintiff-respondent was entitled to an injunction as there was a prima facie case, balance of convenience and irreparable injury.
Issues: 1. Whether the learned trial Judge had jurisdiction to pass the impugned order? 2. Whether the letter dated 2nd April, 2000 was a fake and fabricated one? 3. Whether the learned trial Judge had erred in directing the defendants to refer the dispute to the arbitration? 4. Whether a decree for specific performance of contract can be granted in relation to a development agreement? 5. Whether the plaintiff-respondent was entitled to an injunction?
Ratio Decidendi: 1. The Court held that the learned trial Judge had jurisdiction to pass the impugned order as it was satisfied with regard to the existence of the contention precedent for passing the said order. 2. The Court held that the letter dated 2nd April, 2000 was a fake and fabricated one as there was no evidence that the same was ever served. 3. The Court held that the learned trial Judge had erred in directing the defendants to refer the dispute to the arbitration. 4. The Court held that as no decree for specific performance of contract can be granted in relation to a development agreement having regard to the provision of Sections 10 and 14 of the Specific Relief Act, no interim order which is passed in aid of the final order could be passed by the learned trial Judge. 5. The Court held that the plaintiff-respondent was entitled to an injunction as there was a prima facie case, balance of convenience and irreparable injury.
Final Decision: The appeal was allowed in part. The order of the learned trial Judge directing the defendants to refer the dispute to the arbitration was set aside. The plaintiff-respondent was directed to furnish adequate security by way of Bank Guarantee to the extent of Rupees Fifty Lacs before the learned trial Judge.
( 1 ) THE defendants are the appellants in this appeal. They are aggrieved by an order dated 31. 7. 2000 passed by Sri S. K. Bhadra, the learned Additional District Judge, VIIth Court at Alipore in Title Suit No. 132 of 1999, whereby and whereunder an application filed by the plaintiff-respondent herein in exercise of his power conferred upon him under section 9 of the Arbitration and Conciliation Act, 1996 (hereinafter called and referred to for the sake of bravity as "the said Act") was allowed.
( 2 ) THE facts of the matter are as follows :-ON or about 3. 9. 1993, the appellants as owners of the property being premises No. 16a, Gurusaday Road, Calcutta, entered into a development agreemnt for the purpose of constructing a multi-storeyed complex with the plaintiff-respondent. A power of attorney to the Director of the respondent company was also executed by the appellants herein and possession of the said premises was also handedover. Three tenants were and still are occupying a part of the said premises. On the ground of breach of the conditions of the agreement, the said agreement dated 3. 9. 1993 was terminated by the appellants herein, whereafter a fresh development agreement has been entered into by the appellants with Messrs. Rajat Hait Private Limited on 21. 9. 1999. On 22nd September, 1999, an application was filed by the respondent before the learned District Judge at Alipore being Title Suit No. 132 of 1999 in terms of section 9 of the said Act, wherein a prayer for injunction was made which is to the following effect :-"injunction restraining the respondent from taking any steps or further steps in breach of and in derogation of the agreement dated 3rd September, 1993 and/or in furtherance of the purported notice dated 20th September, 1999 and/or in any manner that would amount to interference with the petitioners possession, occupation and user of the said premises and/or transferring and/or disposing of and/or creating any third party interest in the said property". An ex parte interim order of injunction was passed on the said date which was the subject matter of an appeal before this Court marked as F. M. A. T. 4042 of 1999, inter alia, on the ground that the said interim order was passed without assigning sufficient and cogent reason. A Division Bench of this Court allowed the said appeal. The said judgment has since been reported in 2000 (3) CLT 97 (Supratik Ghosh and Anr. v. M/s. Paseri Housing Development Pvt. Ltd.
( 3 ) PURSUANT to or in furtherance of the direction issued by the appeal Court, the matter was heard again by the learned trial Judge and the impugned order was passed. In the meantime, allegedly, the respondent on 4. 2. 2000 referred the dispute to the Hon'ble Justice Susanta Chatterji, a former Judge of this Court, for arbitration. Dispute exists as to whether such appointment was allegedly made or not.
( 4 ) MR. B. K. Chatterjee, learned senior counsel appearing on behalf of the appellants, inter alia, raised the following contentions :- (1) the impugned order has been passed by the learned trial Judge without jurisdiction as it failed to satisfy itself with regard to the existence of the contention precedent for passing the said order; (2) in view of the finding that the letter dated 2. 4. 2000 is a fake and fabricated one as there was no evidence that the same was ever served, the impugned order could not have been passed; (3) Mr. Chatterjee would urge that had the learned trial Judge believed the veracity of the intention of the plaintiffs-respondent, it would not have directed the parties to refer the dispute to the Arbitrator; (4) that part of the impugned order whereby and whereunder the defendants had been directed to refer the dispute to the arbitration is wholly without jurisdiction; (5) as no decree for specific performance of contract can be granted in relation to a development agreement having regard to the provision of sections 10 and 14 of the Specific Relie
