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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
A.P. THAKER, J.
Hamirbhai Bhimshibhai Nandaniya – Appellant
Versus
Mansukhbhai Karamshibhai Sanghani – Respondent
R/Appeal From Order No. 112 of 2022 With Civil Application (For Stay) No. 1 of 2022
Decided on : 30-06-2022
Civil Procedure Code, 1908 - Section 104 read with Order 43 Rule 1(r) - Civil Suit - Suit for specific performance of contract and permanent injunction - Application for interim injunction - Appellant is original plaintiff whereas the respondents are original defendants before Trial Court. For brevity and convenience, parties are referred to in this order as per character assigned to them before Trial Court i.e. plaintiff and defendant - Impugned order that learned Trial Court has even not bothered to refer to conditions mentioned in all these documents and has simply passed impugned order and has misdirected itself. Trial Court ought to have considered facts that suit is for specific performance of contract and defendant has pocketed huge amount and even has accepted that plaintiff has right over the property. Thus impugned order of trial Court is clearly arbitrary and perverse and needs to be interfered with by this Court. (Para 15)
Finding of the court:
On perusal of agreement to sale it clearly transpires that they have put their signature in token of receipt of cash amount from plaintiff at relevant point of time and even in second agreement they have accepted receipt of more than Rs.8,00,00,000/- from plaintiff - It is necessary that defendant does not create any third party interest in suit property. If no restraining order is passed in favour of the plaintiff then defendant might create third party interest on property which may lead to multiplicity of proceedings and plaintiff would be put to much inconvenience whereas, if defendant is restrained from doing so, no prejudice is likely to be caused to him and if ultimately suit of plaintiff fails, then defendant could be awarded damages in terms of money - Merely, because, on facts, appellate Court would have concluded differently from that of Court below, that would not, by itself, provide justification for Appellate Court to interfere. To justify interference, the Appellate would have to demonstrate that discretion has been formal to have been exercised arbitrarily or capriciously or perversely or where Court had ignored settled principles of law regulating grant or refusal of interlocutory injunction. As appeal against exercise of discretion is an appeal on principle. Impugned order of trial Court is clearly arbitrary and perverse and needs to be interfered with by this Court.
Result: Appeal allowed.
Based on the provided legal document, the key legal principles and considerations are as follows:
Discretionary Orders and Appellate Interference: The appellate court’s power to interfere with the trial court’s exercise of discretion in granting or refusing interim relief such as injunctions is limited. Interference is justified only if the trial court’s exercise of discretion is found to be arbitrary, capricious, perverse, or if it has ignored settled legal principles governing such orders (!) .
Principles Governing Interim Injunctions: An application for interim injunction requires the court to assess three main factors: the existence of a prima facie case, the balance of convenience, and the likelihood of irreparable injury. Even if a prima facie case exists, the court must consider whether the balance of convenience favors granting the injunction and whether damages would be an adequate remedy. The court’s discretion should not be exercised merely based on differing opinions but must adhere to these principles (!) (!) .
Evidence of Contractual and Possessory Rights: The evidence indicating the existence of an agreement to sell, receipt of consideration, and possession is crucial. The courts emphasize the importance of documentary proof of payments, signatures acknowledging receipt, and conduct of the parties consistent with the existence of a sale agreement and possession. If the defendant has accepted consideration and admitted rights over the property, this supports the case for interim relief to prevent third-party interests or transfer of the property during the pendency of the suit (!) (!) (!) .
Validity of Agreements and Payment Evidence: The validity of agreements, whether registered or unregistered, and the proof of consideration (cash or cheque) are significant. Discrepancies or lack of documentary evidence regarding payments, especially large cash transactions, weaken the claim of possession or contractual rights. The burden of proof lies on the party asserting the payment or possession, and failure to produce reliable evidence can lead to rejection of the claim for interim relief (!) (!) (!) .
Conduct of the Parties: The conduct of the defendant, such as not canceling subsequent agreements or not denying receipt of consideration, and the acknowledgment of rights over the property, are relevant. Such conduct can influence the court’s view on the likelihood of irreparable harm and the necessity of maintaining status quo pending trial (!) (!) .
Preservation of Property Rights: The courts recognize the importance of protecting the property from transfer or creation of third-party interests during the pendency of the suit, especially when substantial consideration has been paid and contractual rights are admitted. Such protection prevents multiplicity of proceedings and potential irreparable loss (!) (!) .
Final Disposition: If the appellate court finds that the trial court’s order is based on an erroneous exercise of discretion and that the applicant has demonstrated a prima facie case, a higher court may set aside the order and grant interim relief to preserve the rights of the applicant until the final disposal of the suit (!) (!) (!) .
In summary, the legal framework emphasizes careful evaluation of evidence, adherence to principles governing interim relief, and restraint in appellate interference unless the trial court’s exercise of discretion is clearly flawed. Protecting contractual rights, possession, and preventing third-party interests are central to such interim orders.
JUDGMENT :
1. The present Appeal From Order has been preferred by the original plaintiff under Section 104 read with Order 43 Rule 1(r) of the Code of Civil Procedure against the order dated 27.05.2022 passed by the learned 4th Additional Senior Civil Judge, Jamnagar below exhibit 5 in Special Civil Suit No.19 of 2021, whereby the Trial Court has rejected the application for interim injunction filed by the appellant, the original plaintiff has preferred this Appeal From Order.
2. The appellant is original plaintiff whereas the respondents are original defendants before the Trial Court. For the brevity and convenience, the parties are referred to in this order as per the character assigned to them before the Trial Court i.e. plaintiff and defendant.
3. The brief facts giving rise to the present suit by the plaintiff for specific performance of contract and permanent injunction are as under:
3.1. That the land situated in Village Vibhapar of Jamnagar District, bearing Revenue Survey no.2 paiki admeasuring hectares RA 0-44-52, which is known as ‘Pandardu’ and land of Revenue Survey No.12/1 paiki 1 admeasuring hectares RA squaremeters 2-37-74 known as ‘Limdavadu’ are the suit land for which there was an agreement to sale executed between the parties on 17.06.2015 for an amount of Rs.85,00,000/- per vigha in all Rs.14,82,18,750/-. That at the time of executing the agreement to sale, an amount of Rs.56,35,700/- was paid by the plaintiff as an earnest money to the defendants. Thereafter, time and again on various dates through cash and cheque various amount were paid by the plaintiff to the defendants, which came to be acknowledged by the defendants on the original copy of agreement to sale dated 17.06.2015 itself. The defendants have acknowledged receipt of Rs.8,40,10,700/-.
3.2. As per the terms of agreement to sale, the stipulation for payment was to the effect that 20% of the total consideration was to be paid before 17.03.2016, whereas 55% of the consideration was to be paid within 5 years from the date when the land is converted for agriculture purposes and the remaining amount of 25% was to be paid in terms of the effect that another land of the plaintiff be given to the defendants.
3.3. Further, under the said agreement to sale, it was agreed that remaining 25% of the consideration was to be paid in form of property at the market rate and the defendant had to execute the sale deed in favour of the plaintiff. That the land was to be converted into non agricultural use by the plaintiff and upon receipt of the 25% consideration, possession of the land was to be handed over by the defendant to the plaintiff, which was duly handed over to the plaintiff.
3.4. According to the plaintiff, it got the land converted into non agriculture purpose and 25% of the consideration was paid to the defendant and the defendant has handed over the possession to the plaintiff thereof.
3.5. That there was certain dispute with regard to the right of way with the adjoining land owner which was required to be resolved by the defendants and the defendants were bound to provide the right of way. That the understanding was reached between the defendants and the neighbour with regard to the right of way on 19.05.2016, as per the documents produced at mark 3/4 in the suit. That the defendants were bound to carry out measurement of the land and verification was to be done by the parties and if any deficit in the area is found, then, it was to be deducted in calculating the consideration. It is alleged by the plaintiff that the original agreement dated 17.06.2015 was with the defendant and the plaintiff was having xerox copy only.
3.6. According to the plaintiff, when the neighbours were in the process of converting their portion of land into non agriculture land, the defendants had submitted their objection dated 26.10.2016 to the Jamnagar Mahanagarpalika stating and admitting that the plaintiff herein has vested right over the property and also averred that the plai
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