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2023 Supreme(Online)(Bom) 2725
HIGH COURT OF BOMBAY
SANDEEP V. MARNE, J
M/s. Nanded City Development and Construction Company Ltd. – Appellant
Versus
Laxman Eknath Dedge and Ors. – Respondent
APPEAL FROM ORDER NO. 1103 OF 2022 | SPECIAL CIVIL SUIT NO. 1245 OF 2021
For the Appellants/Petitioners: Mr. G.S. Godbole, Ms. Shruti Tulpule
For the Respondents: Mr. Surel Shah, Mr. Shailesh D. Chavan
In joint development agreements, shareholders cannot withdraw without significant grounds, which affects their right to seek injunctions against the developers.
Headnote:(A) Maharashtra Regional and Town Planning Act, 1966 - Joint Development Agreement - Temporary injunction granted and refused regarding possession and development of property. Court held that shareholders in joint ventures cannot easily withdraw and injunction against a developer was unfounded when shareholders enjoyed benefits from the agreement. (Paras 24, 26)
(B) Injunction - Principles of grant - Court established that the balance of convenience and irreparable injury favored the Plaintiff. The Defendants have not shown a prima facie case for injunction to restrain the Plaintiff from development activities. (Paras 20, 22)
Facts of the case:
The Appellant sought to challenge the Trial Court’s rejection of its request for a temporary injunction against Defendants who obstructed their possession of land under a Joint Development Agreement for a large township project. The Defendants claimed to continue possession, leading to the legally complex situation. (Paras 2, 3, 4)
Findings of Court:
The Court set aside the Trial Court’s order allowing Defendants’ application for injunction, establishing that the Plaintiff's rights under the Joint Development Agreement were substantial. (Paras 24, 26)
Issues: Whether the Defendants can walk out of the Joint Development Agreement and whether temporary injunction should be granted. (Paras 13, 16)
Ratio Decidendi: The agreement's nature necessitated that the Defendants could not simply withdraw their participation without significant grounds for dishonor. Thus, the Plaintiff was entitled to protect its possession and development activities as per the agreement. (Paras 14, 25)
Result: Appeal allowed.
| Table of Content |
|---|
| 1. challenging temporary injunctions on possession issues. (Para 2 , 4) |
| 2. arguments from both parties regarding entitlement and possession. (Para 5 , 6) |
| 3. considerations of collective rights of landowners in joint ventures. (Para 8 , 13 , 19) |
| 4. standards for granting injunctions and judicial discretion. (Para 20 , 22) |
| 5. final decision reversing previous injunction orders. (Para 24 , 25) |
JUDGMENT :
- Admit. With the consent of the learned counsels appearing for parties, the appeal is taken up for hearing.
2. This Appeal is fled challenging order dated 3 October 2022 passed by the 11th Joint Civil Judge Senior Division, Pune rejecting Appellant-Plaintiff’s application at Exibit-5 for grant of temporary injunction and allowing application fled by the Respondents-Defendants at Exhibit-34 granting temporary injunction in favour of the Defendants by restraining Plaintiff from obstructing Defendants’ possession of the suit property.
3. The Appellant-Plaintiff is carrying out a phasewise development of large land parcel admeasuring 274.6977 hectares in Village-Nanded and 4.5847 hectares in Village- Khadakwasla, Taluka-Haveli, District-Pune in pursuance of Notifcation dated 23 January 2008 issued by the State Government under the provisions of Maharashtra Regional and Town Planning Act, 1966 for development of township named “Nanded City”. A joint Development Agreement dated 20 April 2011 came to be executed with the Respondents- Defendants in respect of land admeasuring 2100 sq.mtrs (21 Ares) at Survey No.57, Hissa No.3A (Part) and Survey No.57, Hissa No.5(Part)at Village-Nanded. A Power of Attorney dated 20 April 2011 is also executed by the Defendants in Plaintiff’s favour empowering it to do various acts and deeds for development of the suit property. Under the Agreement, the consideration payable to the Defendants is proportionate to their land holdings covered by the Project. Their land holding in the total project which is 0.08%. Commensurate to their land holding, the Defendants are entitled to receive monetary consideration in the form of 30% sale proceeds from built up area and 60% sale proceeds from lay out plots. It appears that in pursuance of the Development Agreement, so far Plaintiff has allotted to the Defendants, four fats and one shop (additional area of the shop being purchased by one of the Defendants). According to Plaintiffs as on 10 May 2021, the Defendants were entitled to receive total amount of Rs.1,40,98,452.69/- corresponding to their 0.08% proft share whereas they were granted proft to the tune of Rs.3,30,64.945.72/- in the form of constructed fats and shops and payments made. It appears that the Defendants desired allotment of a developed plot admeasuring 3 Ares/5 Ares and Plaintiff expressed inability to allot the same. This has apparently caused disputes between the Plaintiff and the Defendants.
4. Plaintiff has instituted Special Civil Suit No. 1245/2021 in the Court of Civil Judge Senior Division against the Defendants for specifc performance of Joint Development Agreement dated 20 April 2011 and also for seeking a permanent injunction from obstructing the Plaintiffs from development of the suit property. In its suit, the Plaintiff fled application at Exhibit-5 for grant of temporary injunction to restrain the Defendants from obstructing development of the suit property or disturbing possession of the Plaintiff over the suit property as well as for restraining the Defendants from creating third party rights in the suit property. In addition to defending the suit fled by Plaintiff, the Defendants have instituted a counterclaim for cancellation of Joint Development Agreement dated 20 April 2011 and for restraining the Plaintiff from disturbing Defendants’ possession over the suit property. In their counterclaim, the Defendants fled application at Exhibit-34 seeking temporary injunction against Plaintiff from disturbing Defendants’ possession over the suit property. The Trial Court has proceed
