Case Note & Summary
The appellant, Airport Authority of India (AAI), a statutory authority under the Airports Authority of India Act, 1994, filed an appeal against an order of the Bombay Civil Court at Borivali Division, Dindoshi, Mumbai, dismissing its notice of motion seeking a temporary injunction. The respondent no.1, M/s Hotel Leela Ventures Ltd., is a hospitality company that operates 'The Leela' hotel near Mumbai International Airport. AAI had leased two adjacent plots of land to the respondent: one of 18,000 sq. meters (leased in 1994) for constructing a hotel, and another of 11,000 sq. meters (leased on 7 February 1996) for setting up a 150-room hotel. The lease for the 11,000 sq. meters plot was for 30 years from 1 April 1994 to 31 March 2024. It was admitted that the respondent had not constructed any hotel on the 11,000 sq. meters plot but had used its FSI for additional construction on the existing hotel on the 18,000 sq. meters plot. AAI alleged that this constituted a breach of the lease deed and that the respondent was attempting to create third-party rights in its assets and shareholding, which would prejudice AAI's rights. The trial court dismissed the notice of motion, leading to the present appeal. The High Court framed the issues of whether the trial court was justified in refusing the injunction and whether the use of FSI from one plot for construction on another was a breach. The court analyzed the lease deeds and found that the lease for the 11,000 sq. meters plot expressly permitted the lessee to use the FSI for construction on the demised land or any other land held by the lessee. Thus, no breach was established. Regarding the injunction, the court held that the lease deeds did not contain any restriction on the lessee's right to deal with its assets or shares. The court applied the principles of temporary injunction under Order 39 Rules 1 and 2 of the CPC, and Section 41(b) of the Specific Relief Act, 1963, which bars an injunction to restrain a person from doing an act he is not bound to do. The court found that AAI failed to make out a prima facie case, and the balance of convenience was in favor of the respondent, as an injunction would hamper its business operations. The court also noted that any loss to AAI could be compensated by damages. Consequently, the appeal was dismissed, and the trial court's order was upheld.
Headnote
A) Lease Law - Interpretation of Lease Deeds - Breach of Lease Terms - The court examined whether the lessee's use of FSI from one plot (11000 sq. meters) for additional construction on another plot (18000 sq. meters) constituted a breach of the lease deed. The court held that the lease deed for the 11000 sq. meters plot permitted use of FSI for construction on the demised land or any other land held by the lessee, and thus no breach was established. (Paras 2-5) B) Injunction Law - Temporary Injunction - Prima Facie Case - The court considered whether the plaintiff had made out a prima facie case for injunction restraining the lessee from creating third-party rights in its assets or shareholding. The court held that the lease deeds did not contain any restriction on the lessee's right to deal with its assets or shares, and the plaintiff failed to show any breach of lease terms. (Paras 6-10) C) Injunction Law - Balance of Convenience and Irreparable Loss - The court assessed the balance of convenience and irreparable loss. The court held that the balance of convenience was in favor of the lessee, as the injunction would prevent the lessee from raising funds for its business, and the plaintiff could be compensated by damages if ultimately successful. (Paras 11-15) D) Specific Relief Act, 1963 - Section 41(b) - Bar to Injunction - The court noted that under Section 41(b) of the Specific Relief Act, 1963, an injunction cannot be granted to restrain a person from doing an act which he is not bound to do. Since the lease deeds did not prohibit the lessee from creating third-party rights, no injunction could be granted. (Para 16)
Issue of Consideration
Whether the trial court was justified in refusing a temporary injunction restraining the lessee from creating third-party rights in its assets or shareholding, and whether the lessee's use of FSI from one leased plot for construction on another plot constitutes a breach of lease terms.
Final Decision
Appeal dismissed. The impugned order of the trial court refusing temporary injunction is upheld. No order as to costs.
Law Points
- Lease agreement interpretation
- Temporary injunction principles
- Prima facie case
- Balance of convenience
- Irreparable loss
- Specific performance of contract
- Section 41(b) Specific Relief Act
- 1963
- Section 38 Specific Relief Act
