Case Note & Summary
The appellant, M/s Rupji Constructions, a partnership firm engaged in construction business, entered into several agreements to sell with various flat purchasers (respondents) for flats in a building to be constructed. The respondents paid certain amounts as earnest money. However, the agreements did not specify the exact area of the flat, the total consideration, or the date of possession. Subsequently, disputes arose, and the respondents filed suits for specific performance of the agreements, seeking interim injunction restraining the builder from creating third party rights over the property. The trial court granted ad-interim injunction in favor of the respondents. The builder appealed against these orders. The High Court, after examining the agreements, held that they were not concluded contracts as essential terms were missing. The court found that the respondents had not made out a prima facie case for injunction, and the balance of convenience was in favor of the builder. The court also noted that the respondents could be compensated in damages. Accordingly, the appeals were allowed, and the interim injunctions were vacated.
Headnote
A) Specific Performance - Concluded Contract - Prima Facie Case - The court examined whether the agreements to sell between the builder and flat purchasers constituted concluded contracts. The court held that since essential terms such as the exact area of the flat, total consideration, and date of possession were not finalized, there was no concluded contract. Consequently, the plaintiffs failed to make out a prima facie case for grant of interim injunction. (Paras 6-10) B) Interim Injunction - Balance of Convenience - Irreparable Loss - The court held that the balance of convenience was in favor of the builder as the plaintiffs had not paid the full consideration and the builder had already constructed the building. The court found that no irreparable loss would be caused to the plaintiffs if injunction was not granted, as they could be compensated in damages. (Paras 11-13) C) Civil Procedure - Appeal from Order - Interference with Discretionary Order - The court reiterated that an appellate court should not interfere with a discretionary order of injunction unless it is perverse or based on wrong principles. However, in this case, the trial court's order was found to be based on a misreading of the evidence and thus liable to be set aside. (Paras 14-16)
Issue of Consideration
Whether the trial court was justified in granting ad-interim injunction restraining the appellant-builder from creating third party rights over the suit property pending disposal of the suits for specific performance of agreement to sell.
Final Decision
The appeals are allowed. The impugned orders granting ad-interim injunction are set aside. The interim applications filed by the respondents for injunction stand dismissed. No order as to costs.
Law Points
- Specific performance
- Agreement to sell
- Concluded contract
- Interim injunction
- Prima facie case
- Balance of convenience
- Irreparable loss
- Section 16(c) Specific Relief Act
- 1963
