The above said rulings, in my opinion are not strictly applicable to the facts of this particular case. Because of the simple reason, it is not that plaintiff comes to the court stating that the defendants have repudiated the Joint Development Agreement and the General Power of Attorney, but it is only stated that they have issued a letter to the plaintiff that they have repudiated but it is not accepted by the plaintiffs with regard to that repudiation, therefore the suit is not filed for specific performance. According to the plaintiffs, for all practical purposes, the Joint Development Agreement and the General Power of Attorney exists for the enforcement of their rights in the said agreement until and unless the court decides the said repudiation is proper and correct. Therefore, the said letter has to be tested during the course of trial, whether such a letter could have been issued by the defendants or legally the said document can be construed as a cancellation or repudiation of Joint Development Agreement and General Power of Attorney, when the said two documents are coupled with the interest of the plaintiff. Therefore, in my opinion, the above said rulings only applicable. It is not the case of the plaintiff that they have accepted the repudiation letter and based their suit on the basis of the repudiation letter alleging the cause of action arose for the purpose of filing the injunction suit on the basis of such letter. Therefore, this particular point has to be thrashed out during the course of full dressed trial.
14. The Trial Court has also observed and expressed its doubt whether the Joint Development Agreement and the General Power of Attorney which are registered documents under which the rights have been created in favour of the plaintiff can be easily set at naught by means of issuing a letter and the court has also expressed that it has to be considered by the court during the course of trial. I do not find any strong reasons to deviate from the observation made by the Trial Court
15. In view of the above said circumstances, in the subsistence of Joint Development Agreement and General Power of Attorney in favour of the plaintiff and that the parties have acted upon those documents and particularly, the plaintiff is allowed to do some improvement on the property and construction activities to be taken up by the plaintiff on the property, the defendant cannot turn back and say that the plaintiff has no right to continue with the said agreements.
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
M.F.A. No. 5708/2016 (CPC)
Decided On: 23.01.2017
C. Vijayakumar and Ors.
Vs.
Cwind-Engure J.V.
Hon'ble Judges/Coram:
K.N. Phaneendra, J.
1. This appeal is preferred calling in question the order dated 8.8.2016 passed in OS No. 5056/2016 on IA Nos. 1 and 2 by the XVII Addl. City Civil and Sessions Judge, Bengaluru, allowing IA No. 1 in favour of the plaintiff (respondent herein) filed under Order 39 Rules 1 & 2 of CPC and dismissing IA No. 2.
2. I have heard the arguments of the learned counsel for the appellants and the respondent at the stage of admission, with consent of the learned counsels appearing on both sides on merits.
3. The plaintiff has filed two applications, under Order 39 Rules 1 & 2 of CPC seeking temporary injunction restraining the defendants from obstructing the construction work carried by the plaintiff in the suit property till the disposal of the suit and IA No. 2 was filed restraining the defendants from interfering with the peaceful possession and enjoyment of the schedule property by the plaintiff. After providing opportunity to both the parties and considering the documents produced by both the parties, the trial court has rejected IA No. 2 and allowed IA No. 1.
4. Before adverting to the rival contentions raised by the appellants' counsel and the respondent's counsel, it is just and necessary to have brief factual matrix of the case:
It is an undisputed fact that the defendants being the owners of the land measuring 1 acre in Survey No. 4/1 of Thanisandra village, K.R. Puram Hobli, have entered into a Joint Development Agreement ('JDA' for short) with the plaintiff which is duly registered on 31.12.2015 and it is the case of the plaintiff that the defendants have also executed a general power of attorney ('GPA' for short) in favour of the plaintiff by delivering possession of the suit schedule property as per the terms and conditions of the Joint Development Agreement. From the date of the agreement, the plaintiff has been in possession and enjoyment of the suit Schedule property. It is an admitted fact that the plaintiff has agreed to pay a sum of Rs. 35 lakhs as good Will to the defendants. The defendants have also agreed to clear all encumbrances in respect of the suit property by getting the name of one Srirangamma removed from the revenue records. With that condition, the plaintiff has taken over the possession of the property and carried on various activities for development of the property by spending more than Rs. 6,30,00,000/-.
5. It is also the case of the plaintiff that they have issued four post dated cheques to the defendant of Rs. 5 lakhs each and requested the defendants to take steps to remove the name of Srirangamma in the encumbrance certificate. The defendants on presenting the cheque found that the said cheques were dishonoured for want of money and subsequently, by virtue of issue of stop payment by the plaintiff. It is contended that the defendants have not complied or fulfilled the conditions as per the agreement, but in utter dismay to the plaintiff, the defendants have issued a notice on 25.4.2016 stating that the plaintiff has not complied with the terms of the agreement and not paid the good will amount, therefore, the plaintiff has no capacity to complete the project as such, the defendants were to cancel the agreement, which virtually made the plaintiff to approach the court for grant of various remedies.
6. It is further contended by the plaintiff that the plaintiff are always ready and willing to act in accordance with the Joint Development Agreement and in fact the defendants have taken an amount of Rs. 15 lakhs as good will and suddenly demanding more money and started obstructing the construction work interfering with possession of the suit property. Therefore, they filed the suit.
7. The defendants who have entered their appearance particularly, the first defendant has filed the written statement and objections to IA Nos. 1 & 2 and admitted the Joint Development Agreement and the General Power of Attorney dated 31.12.2015. It is the specific defence taken that, the defendants have cancelled the said agreement vide letter dated 25.4.2016. Therefore, the suit is not maintainable without seeking relief of cancellation of the said letter. It is stated that the suit is not maintainable as the plaintiffs have violated the terms and conditions of the Joint Development Agreement as they have not paid the amount in terms of the agreement i.e., the amount of Rs. 20 lakhs which is a non refundable deposit. It is disputed that the said Joint Development Agreement is valid upto 20 years, as the defendants have stated that the said period is unreasonable. It is contended that the cheques issued by the plaintiffs stated to have been dishonoured due to insufficiency of funds. Therefore that itself clarifies that they have no capacity to complete the project. In view of the same, it is submitted that there is no prima facie case in favour of the plaintiff and the suit itself is not maintainable and the balance of convenience lies in favour of the defendants. Therefore, they sought for rejection of the applications.
8. The Trial Court in fact considering the above said rival contentions and after considering the photographs produced before the court and in view of the admission of the parties with regard to entering into the Joint Development Agreement and the General Power of Attorney and also considering the subsequent cancellation letter issued by the defendant has come to the conclusion that the plaintiff has made out a prima facie case. The court observed that when the Joint Development Agreement and the General Power of Attorney are registered, the court has, during the course of trial consider whether the said registered document can be cancelled by means of a simple letter by the defendants and further observed that the defendants have acted in pursuance of the Joint Development Agreement and done considerable work spending lot of money and excavated mud and leveled the spot etc., Therefore, it held that the balance of convenience lies in favour of the plaintiff. Therefore, it granted the order of injunction under Order 39 Rules 1 & 2 of CPC.
9. The learned counsel for the appellant Sri Amar Kumar, submitted that the plaintiff has not filed any suit for specific performance as the agreement between the Joint Development Agreement between the parties is no more in existence as the same has been cancelled by the defendants. Therefore, the suit for mere injunction is not maintainable. Secondly, he contended that the interim relief granted virtually amounts to granting of final relief and the same should not have been granted by the Trial Court. Thirdly, he contends that the plaintiff did not come to the court with clean hands as he has made the payment through cheques in favour of the defendants, but thereafter, issued stop payment and further, it is evident that the cheques have been bounced due to non availability of the funds, there is absolutely no material placed before the court to show that the plaintiffs have spent an amount of Rs. 6 crores in order to draw an inference that they have got balance of convenience in their favour. Therefore, on these grounds, the learned counsel countenance the order of the Trial Court.
10. Per contra, learned counsel for the respondents submitted that the Joint Development Agreement and General Power of Attorney are coupled with the interest of the plaintiff cannot be unilaterally cancelled by means of a letter that they are registered. Therefore, the repudiation of the Joint Development Agreement is legal or not has to be tested during the course of trial. When the Joint Development Agreement and General Power of Attorney are not disputed with regard to their execution, there is no question of filing a suit for specific performance, therefore, the suit for injunction is maintainable. He has also drawn my attention that it is specifically pleaded as to how the plaintiff has spent Rs. 6 crores and also by means of producing the photographs etc., it is shown to the court that the plaintiff has made lot of improvement over the land.
11. The learned counsel Sri Amar Kumar has relied upon a decision of the Bombay High Court, reported in MANU/MH/0217/2012 : 2012(3) ALLMR 21 between Mr. Abdul Wahid v. Sri Manish Hansraj Chandaria, wherein at paragraph 8, has observed that -
"Section 41(e) of the Specific Relief Act, says when the plaintiff seeks injunction so as to prevent breach of contract whose performance cannot be specifically enforced, such an injunction has to be refused. Similarly, when a suit of such a type would have equally efficacious relief available so as to enforce the contracts by taking appropriate remedy, without recourse to it, it would be indeed difficult to explain the discretionary relief of permanent injunction. Clause (h) of Section 41 of the Specific Relief Act would require the court to refuse such a type of prayer in injunction. It is not as if that in a suit to enforce the agreement itself, such a relief is sought. On the other hand, although the plaintiff came to court with the allegation that the other party has repudiated the agreement for sale he has omitted to seek its enforcement and is trying to hold the property obviously without seeking to complete his title by enforcing the agreement for sale. To such a case, the principles underlying Clause (h) of Section 41 of the Specific Relief Act can be extended so as to refuse such an ancillary relief."
12. In another ruling reported in MANU/PH/0041/1991 : AIR 1991 PUNJAB AND HARYANA 194 between Jasmer Singh and Others v. Kanwaljit Singh and another, it has held that-
"Discretionary order passed by lower courts, interference permissible when Court arrived at some conclusion by misreading certain document. The Relief sought for restraining vendors from alienating suit property, plaintiff vendee having efficacious remedy by way of suit for specific performance, suit for permanent injunction not maintainable."
13. The above said rulings, in my opinion are not strictly applicable to the facts of this particular case. Because of the simple reason, it is not that plaintiff comes to the court stating that the defendants have repudiated the Joint Development Agreement and the General Power of Attorney, but it is only stated that they have issued a letter to the plaintiff that they have repudiated but it is not accepted by the plaintiffs with regard to that repudiation, therefore the suit is not filed for specific performance. According to the plaintiffs, for all practical purposes, the Joint Development Agreement and the General Power of Attorney exists for the enforcement of their rights in the said agreement until and unless the court decides the said repudiation is proper and correct. Therefore, the said letter has to be tested during the course of trial, whether such a letter could have been issued by the defendants or legally the said document can be construed as a cancellation or repudiation of Joint Development Agreement and General Power of Attorney, when the said two documents are coupled with the interest of the plaintiff. Therefore, in my opinion, the above said rulings only applicable. It is not the case of the plaintiff that they have accepted the repudiation letter and based their suit on the basis of the repudiation letter alleging the cause of action arose for the purpose of filing the injunction suit on the basis of such letter. Therefore, this particular point has to be thrashed out during the course of full dressed trial.
14. The Trial Court has also observed and expressed its doubt whether the Joint Development Agreement and the General Power of Attorney which are registered documents under which the rights have been created in favour of the plaintiff can be easily set at naught by means of issuing a letter and the court has also expressed that it has to be considered by the court during the course of trial. I do not find any strong reasons to deviate from the observation made by the Trial Court
15. In view of the above said circumstances, in the subsistence of Joint Development Agreement and General Power of Attorney in favour of the plaintiff and that the parties have acted upon those documents and particularly, the plaintiff is allowed to do some improvement on the property and construction activities to be taken up by the plaintiff on the property, the defendant cannot turn back and say that the plaintiff has no right to continue with the said agreements.
16. It is also seen from the records as rightly observed by the learned Trial Judge that this payment of Rs. 35 lakhs as 'good will' is nowhere contemplated under the agreement between the parties either in the Joint Development Agreement or General Power of Attorney. Therefore, it cannot be called as a consideration amount sofar as the said agreements are concerned. Hence, the non-payment of the said amount by the plaintiff to the defendants is not so sufficient to draw an inference at this stage without there being any evidence that, the plaintiff is incapable of completing the project. Again, this is a fact that has to be established by means of giving cogent and convincing evidence during the trial.
17. In view of the above said discussion, it is clear that the plaintiff has made out accrual of the right under the Joint Development Agreement and General Power of Attorney and he is entitled for the protection of his rights acquired under the said documents at the hands of the court. Further, added to the above, it is clear from the agreement that the plaintiff has to complete the project within two years. If the defendants are allowed to put hurdles for the completion of the project, then the plaintiff would suffer irreparable inconvenience. Under the above said circumstance, the Trial Court has rightly held that the plaintiff has made out a prima facie case for grant of injunction.
18. On perusal of the materials on record, the plaintiff has produced several photographs as adverted to by the Trial Court and it has categorically made an observation that the plaintiff has demolished existing tank, leveled the land, dug the land for foundation and built the drain along with the barricade to the property, excavated the mud etc., which also discloses that though not they have specifically shown any material that they have spent Rs. 6 crores and odd, nevertheless, they have spent some huge amount for the purpose of doing all the above said acts.
19. It is pleaded in fact by the plaintiff in their plaint at paragraph 8 in a vivid manner as to what work they have done and how much amount they have spent. Considering the said plea which requires to be proved during the course of the trial, the Trial Court has rightly come to the conclusion that the balance of convenience also lies in favour of the plaintiff.
Under the above said circumstance, I do not find any strong reasons to come to the conclusion that the Trial Court has exercised its discretion in a wrong manner so as to interfere with the said order. Hence, the appeal is devoid of merit and the same is liable to be dismissed and accordingly, dismissed.
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