Case Note & Summary
The appellant, Associated Bombay Cinemas Private Limited, as landlord, entered into an agreement dated 14 August 1997 with the respondent, Jamni S. Ramchandani, for the lease of a shop in Strand Cinema Building. The agreement stipulated that the tenancy would commence only after the appellant obtained an occupation certificate from the Municipal Corporation. The appellant later decided to sell units on ownership basis and communicated this to the respondent, offering terms for transfer. On 27 February 2004, the appellant terminated the agreement. The respondent filed a suit for specific performance of the agreement and sought interim relief. The learned Single Judge granted an interim injunction restraining the appellant from dispossessing the respondent. The appellant appealed. The High Court held that the agreement was a contingent contract, dependent on the grant of an occupation certificate, which never occurred. Therefore, the agreement could not be specifically enforced. The court set aside the interim injunction, finding that the respondent had no prima facie case and the balance of convenience favored the appellant. The appeal was allowed, and the interim order was vacated.
Headnote
A) Specific Performance - Agreement for Lease - Contingent Contract - The agreement dated 14 August 1997 was a contingent contract for lease, dependent on the grant of an occupation certificate, which never materialized. The court held that such an agreement cannot be specifically enforced as it does not create an immediate lease. (Paras 3-5) B) Interim Injunction - Prima Facie Case - Balance of Convenience - The learned Single Judge erred in granting an interim injunction restraining the appellant from dispossessing the respondent. The respondent failed to establish a prima facie case for specific performance, and the balance of convenience was in favor of the appellant. (Paras 6-8) C) Specific Relief Act, 1963 - Section 14 - Contracts Not Specifically Enforceable - An agreement for lease which is contingent on a future event (occupation certificate) is not specifically enforceable under Section 14 of the Specific Relief Act, 1963. (Para 5)
Issue of Consideration
Whether an agreement for lease contingent upon obtaining an occupation certificate can be specifically enforced and whether an interim injunction can be granted to protect possession under such an agreement.
Final Decision
The appeal is allowed. The order of the learned Single Judge dated 5 October 2009 is set aside. The interim injunction is vacated. No order as to costs.
Law Points
- Specific performance
- Agreement for lease
- Contingent contract
- Interim injunction
- Section 14 Specific Relief Act
- 1963
- Section 41 Specific Relief Act
