This High Court of Bombay dismissed the appeal against an ad-interim order declining relief. The Court held that given the pending main motion and delay, the Single Judge was justified in the exercise of discretion.
Appeal dismissed; no order as to costs; rights and contentions kept open.
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
APPEAL (LODGING) NO. 267 OF 2013 IN NOTICE OF MOTION (LODGING) NO. 1106 OF 2013 IN SUIT (LODGING) NO. 460 OF 2013
Urban Infrastructure Venture Capital fund & Anr.
..Appellants
vs
Joyce Realtors Pvt.Ltd. & Ors.
..Respondents
Mr.J. Avasia i/b. M/s.Dastur Dadhich & Kalambi for the Appellants.
Mr.P.K. Samdhani, Senior Advocate with Ms.Manorama Mohanty, Mr.Madhukar Gadge with Ms.Kavita Shrivastav i/b. Mr..S.K. Shrivastav for Respondent No.1.
Mr.K.G. Desai i/b. M/s.Kartikey & Associates for the Respondent Nos.2 to 4.
Mr.Chetan Kapadia i/b. Ms.Gayatri Sharma for Respondent No.5.
CORAM : DR.D.Y.CHANDRACHUD, AND S.C. GUPTE, JJ.
10 JULY 2013
P.C. :
The appeal arises from an order of a learned Single Judge dated 31 May 2013 declining ad-interim relief in the Notice of Motion. While declining to grant ad-interim relief, the learned Single Judge directed that the reply to the Motion shall be filed before 6 June 2013 and granted liberty to the parties to apply for expeditious hearing of the Motion.
2 Before dealing with the correctness of the order impugned, we clarify at the outset that this order is confined only to the disposal of the application for ad-interim relief and the hearing of the Motion shall, therefore, proceed uninfluenced by any observation contained in this order.
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3 A Joint Development Agreement was entered into on 24 April 2008 between the First and the Fifth Respondents. The Fifth Respondent is a partnership firm controlled by the Second, Third and Fourth Respondents. The Appellants, who are the Plaintiffs, sought to promote the First Respondent together with the Second, Third and Fourth Respondents. The agreement dated 24 April 2008 was terminated by a notice dated 31 October 2012. An application for ad-interim relief was moved before the learned Single on 31 May 2013. The present action is stated to be a derivative action instituted by the Appellants to protect the interest of the Special Purpose Vehicle namely, the First Respondent, on the ground that the Second, Third and Fourth Respondents who are also shareholders would act contrary to the interest of the joint venture.
4 The Appellants had moved proceedings under Section 9 of the Arbitration and Conciliation Act, 1996 in which an order was passed by the learned Single Judge on 1 November 2012 declining ad-interim relief. It is also a matter of record that thereafter, the Appellants have instituted summary suits under Order 37 of the CPC for the recovery of their dues.
5 The averment in paragraph 9 of the plaint is that the summary suits have been instituted for the recovery of an amount by way of (i) subscription to equity Share Capital; (ii) Subscription moneys for Optionally Fully Convertible Debentures, and (iii) Inter-Corporate Deposits under separate agreements.
6 Two submissions have been urged at the hearing of the appeal; (i) Firstly, that under the Joint Development Agreement, an interest was created in
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favour of the company, (ii) Secondly, that Clause 17.2 of the agreement contemplated that in the event of a breach, the co-developer was entitled to a written notice of ninety days and upon termination to a refund of the security deposit and additional security deposit, if any, paid to the developer. In the present case, it has been submitted that the termination was without notice of ninety days and there has been no refund of the monies paid upon termination.
7 We are not inclined to entertain this appeal which is against an adinterim order particularly, having regard to the fact that the Motion is still pending for consideration before learned Single Judge. There was an undoubted delay in moving the application for ad-interim relief. The termination took place on 31 October 2012. Thereafter, the learned Single Judge on the petition under Section 9 of the Arbitration and Conciliation Act, 1996 declined to grant ad-interim relief on 1 November 2012. The learned Single Judge was moved for an ad-interim order in the suit only on 31 May 2013. The Appellants have sought a refund of the monies due and payable to them and have already instituted proceedings, as stated in paragraph 9 of the plaint, as against the First Respondent.
8 Counsel for the Appellants, however, apprehends that the observation of the Learned Single Judge that the validity of the termination will be considered at the trial of the suit will come in the way of a prima facie evaluation of the legality of the termination at the hearing of the motion. We clarify that this observation of the Learned Single Judge is in an ad-interim order and would not preclude a prima facie evaluation of merits, including the legality of the termination, at the hearing of the motion. All rights and contentions are kept open during the hearing of the motion and thereafter.
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9 In the circumstances, though for the reasons which we have indicated in our order, the learned Single Judge was justified in declining to grant ad-interim relief. There is no merit in the appeal.
10 The Appeal is accordingly dismissed. There shall be no order as to
costs.
11 All the rights and contentions of the parties are kept open.
(S.C. Gupte, J.)
1 issue framed by the court
Whether an appeal against an ad-interim order declining relief in a civil suit in which the main motion is pending shall be entertained.
3 provisions across 3 enactments
Urban Infrastructure Venture Capital fund & Anr.
Joyce Realtors Pvt.Ltd.
D.Y. Chandrachud
S.C. Gupta
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
