Case Note & Summary
The appellant, Villa Realcon LLP, filed an appeal under Section 37 of the Arbitration and Conciliation Act, 1996, challenging an order dated September 4, 2025, passed by the Learned 2nd Joint Civil Judge, Bombay, refusing to grant interim relief in a suit relating to a Development Agreement. The appellant had entered into a Development Agreement with the respondents for development of a property. Disputes arose, and the appellant filed a suit seeking specific performance and an injunction restraining the respondents from interfering with its development rights. The trial court refused to grant interim injunction, holding that the appellant failed to make out a prima facie case, balance of convenience was not in its favor, and no irreparable loss would be caused. The appellant argued that the trial court erred in its assessment and that the balance of convenience was in its favor. The respondents contended that the appellant had not performed its obligations under the agreement and that the agreement was not registered. The High Court, after hearing the parties, held that the scope of an appeal under Section 37 is limited and the appellate court will not interfere with the trial court's discretion unless it is perverse or arbitrary. The court found that the trial court had considered all relevant factors and its decision was not perverse. The appeal was dismissed, and the trial court's order was upheld.
Headnote
A) Arbitration - Interim Relief - Section 37 of the Arbitration and Conciliation Act, 1996 - Scope of Appeal - The appeal under Section 37 against an order refusing interim relief is limited; the appellate court will not interfere unless the trial court's discretion is exercised perversely, arbitrarily, or contrary to settled principles. (Paras 1-10)
B) Civil Procedure - Temporary Injunction - Order 39 Rules 1 and 2 of the Code of Civil Procedure, 1908 - Prima Facie Case, Balance of Convenience, Irreparable Loss - The court must consider three well-established principles: prima facie case, balance of convenience, and irreparable loss. The appellant failed to demonstrate that the balance of convenience was in its favor or that it would suffer irreparable loss if injunction was refused. (Paras 5-10)
C) Arbitration - Development Agreement - Interim Relief - Specific Performance - The appellant sought injunction to restrain respondents from interfering with development rights under a Development Agreement. The trial court found that the agreement was not registered and that the appellant had not performed its obligations. The appellate court upheld the refusal of injunction, noting that the appellant could be compensated in damages. (Paras 1-10)
Issue of Consideration
Whether the trial court's refusal to grant interim relief under Order 39 Rules 1 and 2 CPC was perverse or arbitrary, warranting interference in an appeal under Section 37 of the Arbitration and Conciliation Act, 1996.
Final Decision
The appeal is dismissed. The order dated September 4, 2025, passed by the Learned 2nd Joint Civil Judge, Bombay, refusing interim relief, is upheld. No order as to costs.
Law Points
- Section 37 of the Arbitration and Conciliation Act
- 1996
- Order 39 Rules 1 and 2 of the Code of Civil Procedure
- 1908
- Prima facie case
- Balance of convenience
- Irreparable loss
- Interim relief
- Discretion of trial court
- Scope of appeal under Section 37
Case Details
2025 LawText (BOM) (12) 61
Arbitration Appeal (ST) No. 30899 of 2025
Mr. Vineet Naik, Senior Advocate a/w Mr. Akhilesh Dubey, Mr. Amit Dubey, Mr. Uttam Dubey, Mr. Shubham Sharma, Mr. Alex D'souza i/b Law Counselors, for Appellant. Dr. Virendra Tuljapurkar, Senior Advocate a/w Mr. Onkar Chandurkar, Mr. Nachiket Khaladkar, for Respondent No.1. Mr. Rahul Sinha a/w Mr. Soham Bhalerao and Mr. Harshit Tyagi i/b DSK Legal, for Respondent Nos.3 to 8-CIDCO.
Chandresh Parbat Gothi and 11 Ors.
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Nature of Litigation
Appeal under Section 37 of the Arbitration and Conciliation Act, 1996 against an order refusing interim relief in a suit for specific performance and injunction relating to a Development Agreement.
Remedy Sought
The appellant sought to set aside the trial court's order refusing interim injunction and sought an injunction restraining the respondents from interfering with its development rights under the Development Agreement.
Filing Reason
The appellant was aggrieved by the trial court's refusal to grant interim relief, claiming that the trial court erred in its assessment of prima facie case, balance of convenience, and irreparable loss.
Previous Decisions
The Learned 2nd Joint Civil Judge, Bombay, by order dated September 4, 2025, refused to grant interim relief in the suit.
Issues
Whether the trial court's refusal to grant interim relief under Order 39 Rules 1 and 2 CPC was perverse or arbitrary, warranting interference in an appeal under Section 37 of the Arbitration and Conciliation Act, 1996.
Submissions/Arguments
The appellant argued that the trial court erred in holding that the appellant failed to make out a prima facie case and that the balance of convenience was not in its favor. The appellant contended that it had performed its obligations under the Development Agreement and that the respondents were attempting to dispossess it.
The respondents argued that the appellant had not performed its obligations, the agreement was not registered, and the appellant could be compensated in damages. They submitted that the trial court's discretion was sound and should not be interfered with.
Ratio Decidendi
In an appeal under Section 37 of the Arbitration and Conciliation Act, 1996, against an order refusing interim relief, the appellate court will not interfere with the trial court's discretion unless the discretion is exercised perversely, arbitrarily, or contrary to settled principles of law. The trial court's findings on prima facie case, balance of convenience, and irreparable loss are findings of fact and cannot be lightly disturbed.
Judgment Excerpts
This is an Appeal filed under Section 37 of the Arbitration and Conciliation Act, 1996 (“the Arbitration Act”) impugning an order dated September 4, 2025, by which the Learned 2nd Joint Civil Judge, Bombay, refused to grant interim relief.
The scope of an appeal under Section 37 is limited and the appellate court will not interfere with the trial court's discretion unless it is perverse or arbitrary.
Procedural History
The appellant filed a suit seeking specific performance and injunction. The trial court refused interim relief on September 4, 2025. The appellant filed the present appeal under Section 37 of the Arbitration and Conciliation Act, 1996, challenging that order.
Acts & Sections
- Arbitration and Conciliation Act, 1996: 37
- Code of Civil Procedure, 1908: Order 39 Rules 1, 2
