Case Note & Summary
The appellant, M/s. Merces Builders Private Limited, filed an appeal against an order dated 16.4.2016 passed by the learned Senior Civil Judge, Panaji, dismissing its application for temporary injunction in a suit for specific performance. The appellant had entered into a Memorandum of Understanding (MoU) dated 21.5.2011 with the respondents for the purchase of a property that was subject to inventory proceedings. The property was auctioned on 3.1.2012, and the respondents were declared the highest bidders, requiring them to pay owelty money to other family members. The appellant paid a substantial amount under the MoU and sought to restrain the respondents from alienating the property pending the suit. The trial court dismissed the injunction application, holding that the appellant had not made out a prima facie case. The High Court reversed this finding, holding that the MoU was a valid agreement and the appellant had a strong prima facie case. The court also found that the balance of convenience was in favour of the appellant, as the property was likely to be sold to third parties, causing irreparable loss. The court allowed the appeal, set aside the trial court's order, and granted an injunction restraining the respondents from alienating the property until the disposal of the suit.
Headnote
A) Civil Procedure - Temporary Injunction - Order 39 Rules 1 and 2 Code of Civil Procedure, 1908 - Prima Facie Case - The court considered whether the plaintiff had made out a prima facie case for grant of temporary injunction to restrain the defendants from alienating the suit property pending disposal of the suit for specific performance. The court held that the plaintiff had a strong prima facie case based on the Memorandum of Understanding and part payment of consideration. (Paras 3-10)
B) Specific Performance - Memorandum of Understanding - Enforceability - The court examined whether the Memorandum of Understanding dated 21.5.2011 constituted a valid agreement for sale and whether the plaintiff was entitled to specific performance. The court held that the MoU was a binding contract and the plaintiff had performed his part by paying substantial consideration. (Paras 4-8)
C) Injunction - Balance of Convenience - Irreparable Loss - The court assessed the balance of convenience and irreparable loss. It held that the balance of convenience was in favour of the plaintiff as the property was likely to be alienated, causing irreparable loss, whereas the defendants could be compensated by damages if the suit failed. (Paras 9-12)
Issue of Consideration
Whether the trial court erred in dismissing the application for temporary injunction under Order 39 Rules 1 and 2 of the Code of Civil Procedure, 1908, in a suit for specific performance of a Memorandum of Understanding for sale of immovable property.
Final Decision
The appeal is allowed. The order dated 16.4.2016 passed by the learned Senior Civil Judge, Panaji, is set aside. The application for temporary injunction filed by the appellant is allowed, restraining the respondents from alienating the suit property until the disposal of the suit.
Law Points
- Specific performance
- Temporary injunction
- Prima facie case
- Balance of convenience
- Irreparable loss
- Memorandum of understanding
- Suit for specific performance
- Order 39 Rules 1 and 2 CPC
Case Details
2017 LawText (BOM) (05) 67
Appeal from Order No.30 of 2016
Shri Iftikhar Agha for appellant, Shri M.M. Shaikh with Shri V. Parsekar for respondents
M/s. Merces Builders Private Limited
Mr. Shaikh Mohammad Hanif Bepari and Mrs. Anjumara Shaikh Mohammad Hanif Bepari
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Nature of Litigation
Appeal against dismissal of application for temporary injunction in a suit for specific performance of a Memorandum of Understanding for sale of immovable property.
Remedy Sought
The appellant (plaintiff) sought a temporary injunction restraining the respondents (defendants) from alienating the suit property pending disposal of the suit for specific performance.
Filing Reason
The appellant claimed that the respondents were attempting to sell the property to third parties despite having entered into a Memorandum of Understanding with the appellant for its sale.
Previous Decisions
The learned Senior Civil Judge, Panaji, by order dated 16.4.2016, dismissed the appellant's application for temporary injunction.
Issues
Whether the appellant had made out a prima facie case for grant of temporary injunction.
Whether the balance of convenience lay in favour of the appellant.
Whether the appellant would suffer irreparable loss if the injunction was not granted.
Submissions/Arguments
Appellant argued that the property was put to auction on 3.1.2012 in Inventory Proceedings and the respondents were declared highest bidders; a Memorandum of Understanding dated 21.5.2011 was executed between the respondents and the appellant; the appellant had paid substantial consideration and was ready to perform its part; the respondents were attempting to alienate the property, causing irreparable loss.
Respondents argued that the appellant had not made out a prima facie case and that the balance of convenience was not in favour of the appellant.
Ratio Decidendi
The court held that the Memorandum of Understanding dated 21.5.2011 constituted a valid agreement for sale and the appellant had made out a strong prima facie case. The balance of convenience was in favour of the appellant as the property was likely to be alienated, causing irreparable loss, whereas the respondents could be compensated by damages if the suit failed. Therefore, the appellant was entitled to a temporary injunction under Order 39 Rules 1 and 2 CPC.
Judgment Excerpts
This appeal takes an exception to the order dated 16.4.2016 passed by the learned Senior Civil Judge, Panaji whereby he dismissed the application for temporary injunction filed by the plaintiffs who are in appeal against the respondents being the original defendants.
The property in question was put to auction on 3.1.2012 in the Inventory Proceedings whereby the respondents were declared as the highest bidder and the property came to be allotted to them who had to pay owelty money to the other family members.
A Memorandum of Understanding dated 21.5.2011 came to be executed between the respondents and one ...
Procedural History
The appellant filed a suit for specific performance of a Memorandum of Understanding dated 21.5.2011 before the Senior Civil Judge, Panaji, along with an application for temporary injunction under Order 39 Rules 1 and 2 CPC. The trial court dismissed the injunction application on 16.4.2016. The appellant then filed the present appeal before the High Court of Bombay at Goa.
Acts & Sections
- Code of Civil Procedure, 1908: Order 39 Rules 1 and 2
