Back
2005 Supreme(UK) 58
2005 (1) U.D. 333
HIGH COURT OF UTTARANCHAL
V. S. Sirpurkar,Prafulla C. Pant, JJ
Mukesh Kumar Mittal
vs
U.P. Finance Corporation And Anr.
Appeal From Order No. 310 of 2003
Decided on : 2/3/2005
A person seeking temporary injunction must prove a prima facie case and come with clean hands before the court.
Headnote:
Temporary Injunction - Industrial Unit Purchase Agreement - State Financial Corporation Act, 1951, Transfer of Property Act, 1882, Registration Act, 1908, Indian Stamp Act, 1899 - The court discussed the plaintiff's prima facie case for temporary injunction, possession of the industrial unit, unregistered agreement, and the principle of clean hands. The court found that the plaintiff failed to prove a prima facie case and had not paid the agreed instalments, leading to the refusal of the temporary injunction.
Fact of the Case:
The plaintiff agreed to purchase an industrial unit, made partial payments, but failed to pay the remaining amount. The respondent sought to forfeit the amount paid and cancel the agreement. The plaintiff filed a suit for injunction to prevent the respondents from taking possession of the property and challenged the proceedings under the State Financial Corporation Act, 1951.
Finding of the Court:
The court found that the plaintiff failed to prove a prima facie case for temporary injunction and had not paid the agreed instalments, leading to the refusal of the temporary injunction.
Issues: Prima facie case for temporary injunction, possession of the industrial unit, unregistered agreement, payment of instalments, and clean hands principle.
Ratio Decidendi: The plaintiff must prove a prima facie case, balance of convenience, and irreparable loss for a temporary injunction. A person seeking temporary injunction must come with clean hands before the court.
Final Decision: The appeal was dismissed, and the interim stay order was vacated. The application for recall of the interim stay order was rejected.
Prafulla C. Pant, J.
1. This appeal, filed under Order XLIII, Rule 1 of the Code of Civil Procedure, 1908, is directed against the order dated 8.9.2003 passed by, the then learned Additional District Judge/IInd Fast Tract Court, Udham Singh Nagar, in Civil Suit No. 52 of 2003, whereby prayer for temporary injunction has been refused.
2. Brief facts of the case, giving rise to this appeal, are that the plaintiff agreed on 11.3.2001 to respondent No. 2 in response to his public notice to purchase the industrial unit namely, M/s. Agarwal Products for rupees 45 lakhs for which he made his offer with a draft of Rs. 1,10,000. On 5.7.2001, he paid further rupees 15 lakhs as an advance payment out of the total consideration in response to which, as per agreement, the possession of the industrial unit was handed over to the plaintiff (appellant). Again, on 25.2.2002 plaintiff further paid Rs. 5,96,586 to the respondent No. 2, as such, the total payment made is Rs. 20,96,586. But, he failed to make payment of rest of the amount on 24.4.2003. The respondent No. 2 fired the plaintiff with a notice dated 24.4.2003 to forfeit the amount paid and cancelling the agreement for breach of contract. The plaintiff's case is this that the respondent No. 2 had no right to do so. It is further pleaded in the plaint that no proceedings under Section 29 of State Financial Corporation Act, 1951 can be taken in respect of the property in suit. He further challenged that the agreement executed between the parties is violative of provisions of Transfer of Property Act, 1882, the Registration Act, 1908 and the Indian Stamp Act, 1899. It is further pleaded that the plaintiff invested a sum of Rs. 10,05,000 in repairs of machines of the industrial unit. As such, a suit for injunction was filed before the learned trial court for restraining the respondents from taking possession of the property in suit, and also declaration that the proceedings under Section 29 of the U. P. State Financial Corporation Act, 1951 cannot be done against the plaintiff. It appears that some close relatives of the plaintiff/appellant were the original debtors, and in default of repayment of said debt, the Corporation, proceeding under Section 29 of State Financial Corporation Act, 1951, took possession of the industrial unit, whereupon the plaintiff/appellant struck the deal as aforesaid.
3. An application under Order XXXIX, Rule 1 of the Code of Civil Procedure, 1908 (for brevity hereinafter the Code) was moved for interim injunction restraining the respondents from taking possession of the industrial unit during the pendency of the suit.
4. The defendants/respondents contested the plaintiffs case before the trial court, alleging that the plaintiff/appellant failed to pay the instalments as agreed between them as consideration for sale of the unit and, as such, the plaintiff/appellant has no case for temporary injunction. It is further pleaded on behalf of the defendants/respondents that the Corporation has already taken back the possession of the industrial unit in default in payment of instalments relating to sale consideration, on the part of the plaintiff/appellant.
5. Learned trial court after hearing the parties and going through the record before it, rejected the application under Order XXXIX, Rule 1 of the Code on 8.9.2003, aggrieved by which the present appeal from order, has been filed.
6. We heard learned counsel for the parties and perused the record.
7. It is settled principle of law that a temporary injunction under Order XXXIX, Rule 1 of the Code can be granted only if the plaintiff succeeds in showing :
(i) a prima facie case,
(ii) balance of convenience in his favour, and
(iii) irreparable loss.
Apart from this a person seeking temporary injunction is required to come with clean hands before the Court.
8. The first submission of learned counsel for the appellant is that the plaintiff/appellant was in possession of the industrial unit as per the agreement between the p
