Allowed

P U B Reddy v. Sreepada Real Estate and Developers

Andhra Pradesh HC7 Nov 2019CMA/73/2019

Case brief

AI extract

What is this about?

Civil Miscellaneous Appeal challenging an ad-interim injunction order. The court held the lower court erred by failing to record findings on prima facie case, balance of convenience, and irreparable loss. The injunction order was quashed, and the application remitted for fresh consideration.

What did the court decide?

Appeal allowed; interim injunction order dated 14.11.2018 set aside and application remitted for fresh consideration.

P U B Reddy Vs Sreepada Real Estate and… — Execution and Attachment | Andhra Pradesh HC (2019)

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THE HONOURABLE SRI JUSTICE A.V. SESHA SAI

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AND

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THE HONOURABLE SRI JUSTICE M.GANGA RAO

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CIVIL MISCELLANEOUS APPEAL No.73 of 2019

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JUDGMENT : (per the Hon’ble Sri Justice A.V.Sesha Sai)

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This Civil Miscellaneous Appeal, preferred under Order XLIII, Rule 1 of Code of Civil Procedure, calls in question the order and decree dated 14.11.2018, passed by the Court of the Principal District Judge, Visakhapatnam, in I.A.No.937 of 2018 in C.O.S.No.10 of 2018.

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Defendants 1 to 4 in the above mentioned suit are the appellants in the present appeal. Respondents herein instituted the above mentioned suit against the appellants herein, praying for the following reliefs:

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a) for a decree of specific performance in terms of the Development Agreement dated 30.01.2013;

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b) for alternative relief of recovery of amount of Rs.1,71,36,372/- being the cost of land of 45% share in the developed area in Ac.19.06 cents,

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c) for recovery of an amount of Rs.1,48,64,572/- being the amount invested by the plaintiffs.

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d) for recovery of Rs.4,05,34,839/- being interest @24%p.a. on Rs.3,20,01,189/- from the date of Development Agreement dated 31.01. 2013 till the date of filing of the suit.

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e) for recovery of Rs.16,40,000/- being the cost of Ac.0.41 cents.

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f) for future interest @24% per annum on Rs.3,20,01,189/from the date of suit till the date of realization.

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g) Costs of the suit;

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The respondents/plaintiffs also filed an interlocutory application vide I.A.No.937 of 2018 under the provisions of Order XXXIX Rule 1 and 2 read with 151 of Code of Civil Procedure, praying the Court to grant ad-interim injunction restraining the defendants/petitioners herein, from alienating the suit schedule property.

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Appellant No.1 herein filed a counter, so also, a counter was filed by the appellant No.2/defendant No.2 and said counter of the 2^nd defendant was adopted by the appellants 3 and 4, who are the defendants 3 and 4 in the suit.

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The learned Principal District Judge, by way of an order dated 14.11.2018 granted ad-interim injunction restraining the defendants/appellants herein from alienating the suit schedule property. As stated supra, the present Civil Miscellaneous Appeal challenges the validity and the legal sustainability of the said order of interim injunction granted by the learned Principal District Judge, Visakhapatnam.

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Heard Sri M.R.S.Srinivas, learned counsel for the appellants herein/defendants, apart from perusing the material available on record. Despite service of notice, there is no representation on behalf of the respondents/plaintiffs.

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According to the learned counsel for the appellants, the questioned order is highly erroneous and contrary to the law, and vitiated by the total non-consideration of the material available on record. In elaboration, it is contended by the

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learned counsel that without recording any finding on the necessary ingredients of the Order XXXIX, Rule 1 and 2 of the Code of Civil Procedure, the learned District Judge grossly erred in granting the interim injunction. It is also the submission of the learned counsel that had the contents of the counters filed by the defendants/appellants herein been considered from proper perspective, the order impugned would not have emanated. Eventually, it is submitted by the learned counsel that since the respondents/plaintiffs did not make out any valid case and failed to prove the existence of necessary ingredients of Order XXXIX Rule 1 and 2, the learned Principal District Judge, should have dismissed the application. It is also submission of the learned counsel that the learned District Judge, failed to see that the appellants got the lay out sanctioned, in connection with the suit schedule property and developed area is 30,901 Square yards only and 45% of the same as claimed by the plaintiffs, would come only to an extent of 13,905 square yards, and the said aspect missed the attention of the learned District Judge, while passing the order under challenge.

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In the light of the above submissions made by the learned counsel for the appellants, the following issue emerges for consideration of this Court under Order XLIII, Rule 1 of the Code of Civil Procedure.

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“ Whether the order passed by the learned Principal District Judge, in I.A. No.937 of 2018 is sustainable and

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tenable, and w hether the same warrants any interference of this Court, in exercise of the powers conferred under Order XLIII Rule 1 of the Code of Civil Procedure?”

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It is a well settled and established principle of law that the relief of injunction is a discretionary relief and the same cannot be granted for mere asking unless the party, applying for it, is successful in establishing the existence of 3 mandatory and indispensable ingredients, namely prima facie case, balance of convenience and irreparable loss.

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In the instant case, the appellant No.1/ first defendant filed a counter, so also, a counter by appellant No.2/ defendant No.2, which was adopted by the respondents 3 and 4. The said counters filed before the Court below are filed along with present appeal, as material papers.

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A perusal of the said counters demonstrates, in vivid and clear terms, that the appellants herein/defendants stated various aspects in elaborate manner including the maintainability of suit before the Commercial Courts and the validity of the development agreement, dated 30.01.2013 and also binding nature of the same on the defendants 2 to 4. A reading of the order passed by the learned Principal District Judge, which is impugned in the present appeal, reveals that the Court below, though discussed elaborately with regard to commercial disputes and the entertainability of the suit, did not touch the other aspects raised by the defendants in their

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counters. It is also very much clear from a reading of the impugned order that the learned Judge did not make any endeavour to consider the aspect of existence of the mandatory ingredients of Order XXXIX Rule 1 and 2 and did not record any findings with regard to the necessary ingredients of Order XXXIX Rule 1 and 2 namely prima facie case, balance of convenience and irreparable loss.

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In this context, it is appropriate to refer to the judgment of Hon’ble Apex Court in Dalapat Kumar Vs. Prahlad Singh¹ . While dealing with the provisions of Order XXXIX Rule 1 and 2 of CPC, the Hon’ble Apex Court at paragraphs 5 and 6, held as under:

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“ Therefore, the burden is on the plaintiff by evidence aliunde by affidavit or otherwise that there is “a prima facie case” in his favour which needs adjudication at the trial. The existence of the prima facie right and infraction of the enjoyment of his property or the right is a condition for the grant of temporary injunction. Prima facie case is not to be confused with prima facie title which has to be established on evidence at the trial. Only prima facie case is a substantial question raised, bona fide, which needs investigation and a decision on merits. Satisfaction that there is a prima facie case by itself is not sufficient to grant injunction. The Court further has to satisfy that noninterference by the Court would result in “irreparable injury” to the party seeking relief and that there is no other remedy available to the party except one to grant injunction and he needs protection from the consequences of apprehended injury or dispossession. Irreparable injury, however, does not mean that there must be no physical possibility of

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1 1993 AIR (SC) 276

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repairing the injury, but means only that the injury must be a material one, namely one that cannot be adequately compensated by way of damages. The third condition also is that “the balance of refusing to grant injunction should exercise sound judicial discretion to fined the amount fo substantial mischief or injury, which is likely to be caused to the parties, if the injunction is refused and compare it with that it is likely to be caused to the other side of the injunction is granted. If on weighting competing possibilities or the subject-matter should be maintained in status quo, an injunction would be issued. Thus the court has to exercise its sound judicial discretion in granting or refusing the relief of ad interim injunction pending the suit

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6. Undoubtedly in a suit seeking to set adie the decree, the subject matter in the earlier suit, though became final, the Court would in an appropriate case grant ad-interim injunction when the party seeks to set aside the decree on the ground of fraud pleaded in the suit or for want of jurisdiction in the Court which passed the decree. But the Court would be circumspect before granting the injunction and look to the conduct of the party, the probable injuries to either party and whether the plaintiff could be adequately compensated if injunction is refused. This case demonstrates (we are not expressing any opinion on the plea of fraud or their relative merits in the case or the validity of the decree impugned), suffice to state that the conduct of the respondent militates against the bona fides. At present there is a sale deed executed by the Court in favour of the first appellant. If ultimately the respondent succeeds at the trial, they can be adequately compensated by awarding damages for use and occupation from the date of dispossession till date of restitution. Repeatedly the Civil Court and the High Court refused injunction pending proceedings. For any acts of damage, if attempted to make, to the property, or done, appropriate direction could be taken in the suit. If any alienation is made it would be subject to doctrine of lis pendence under S.52 of the Transfer of

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Property Act. The High Court without adverting to any of these material circumstances held that balance of convenience lies in favour of granting injunction with the following observations, “keeping in mind the history, various facts which have been brought to my notice, and looking to the balance of convenience and irreparable loss, I think it will be in the interest of justice to allow these appeals and grant temporary injunction that the appellants may not be disposed from the suit property”. The phrases “prima facie case”; “balance of convenience” and “irreparable loss” are not rhetoric phrases for incantation, but words of width and elasticity, to meet myriad situations presented by man’s ingenuity in given facts and circumstances, but always hedged with sound exercise of judicial discretion to meet the ends of justice. The facts are eloquent and speak for themselves. It is well nigh impossible to find from facts prima facie case and balance of convenience. The respondents can be adequately compensated on their success.”

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In the instant case, as observed supra, the learned District Judge, did not record any reasons, much less valid reasons, for granting of interim injunction order. Therefore, this Court has absolutely no scintilla of hesitation to hold that the order passed by the learned District Judge, which is impugned in the present appeal cannot stand for judicial scrutiny.

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Therefore, for the above reasons, appeal is allowed, setting aside the order dated 14.11.2018 passed by the Principal District Judge, Visakhapatnam in I.A.No.937 of 2018 in O.S.No.10 of 2018, and consequently I.A.No.937 of 2018 is remitted for fresh consideration, to the Court below

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for passing appropriate orders, after giving opportunity to all the stake holders. There shall be no order as to costs of the appeal.

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Consequently, Miscellaneous Petitions, if any, pending shall stand closed.

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__________________ A.V.SESHA SAI, J

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__________________ M.GANGA RAO, J

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Date: 07.11.2019 PNR

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