Case Note & Summary
The appellant, Lodha Estate Private Limited, challenged an order of injunction passed by the trial court in Special Civil Suit No. 186/2011. The respondents, original plaintiffs, had filed the suit seeking cancellation of an unregistered agreement dated 30/8/2005 and a declaration that the defendants had no right to carry out any development work on the suit properties. The trial court granted an interim injunction restraining the defendants from making any construction on the suit properties and from creating third party interest. The appellant argued that the agreement was valid and that they had a right to develop the property. The High Court, after hearing both sides, upheld the injunction. The court held that the unregistered agreement of sale did not confer any title or right to develop the property. The plaintiffs had a prima facie case, and the balance of convenience was in their favor as the defendant's construction would cause irreparable loss. The court also noted that the defendant could be compensated by damages if ultimately successful. The appeal was dismissed, and the interim injunction was confirmed.
Headnote
A) Property Law - Injunction - Unregistered Agreement of Sale - Prima Facie Case - The court considered whether an unregistered agreement of sale can form the basis for granting an injunction restraining the defendant from constructing on the suit property. Held that an unregistered agreement of sale does not confer title or any right to develop the property, and the plaintiffs have a prima facie case for protection of their possession and rights. (Paras 2-10) B) Specific Relief Act - Section 38 - Injunction Against Construction - Balance of Convenience - The court examined the balance of convenience and irreparable loss. Held that the balance of convenience is in favor of the plaintiffs as the defendant's construction would alter the nature of the property and cause irreparable loss, whereas the defendant can be compensated by damages if ultimately successful. (Paras 11-15) C) Indian Registration Act - Section 17 and 49 - Unregistered Document - Admissibility - The court noted that an unregistered agreement of sale is inadmissible in evidence for certain purposes but can be used for collateral purposes. However, in this case, the agreement being unregistered, the defendant cannot claim any right to develop the property based on it. (Paras 16-20)
Issue of Consideration
Whether the trial court was justified in granting an interim injunction restraining the appellant-defendant from making any construction on the suit properties and from creating third party interest, based on an unregistered agreement of sale.
Final Decision
The appeal was dismissed. The order of injunction passed by the trial court was confirmed.
Law Points
- Specific Relief Act
- 1963
- Section 38
- Section 41(h)
- Transfer of Property Act
- 1882
- Section 54
- Indian Registration Act
- 1908
- Section 17
- Section 49
- prima facie case
- balance of convenience
- irreparable loss
- unregistered agreement of sale
- injunction against construction
