Prima Facie Case, Balance Of Convenience, Irreparable Injury, Three Pillars Of Injunction Order: Gujarat High Court

The Plaintiff (Respondent herein) had preferred the suit for cancellation of the sale-deed on the ground of non-payment of consideration and for the declaration of injunction pertaining to the suit property. The consideration worth INR 11,53,27,800, per the Plaintiff, had not been received and cheques worth INR 6 crores were returned to the Defendants. Due to this failure, the title of the property was not passed in favour of the Defendants. There was also a sauda chitthi of 2014 wherein the price of the land was fixed at INR 34 crores but only INR 5.5 crores was paid by the Defendants. Accordingly, the Plaintiff prayed for the remaining consideration and moved an application for interim injunction under Order 39 Rule 1 and 2 read with Section 151 of CPC.

Per contra, the Defendant while accepting the existence of the sale deed, denied the execution of the sauda chitthi. Further, the entire consideration amount was paid to the Plaintiff, the cheques had been encashed and therefore, there was no question of the cancellation of sale deed, particularly under Section 31 of the Specific Relief Act. It was averred that the Plaintiff had mixed other transactions with the instant transaction to extract more money from the Defendant. The Defendant also raised issues of limitation, lack of right and title as reasons for dismissing the plaint. It was also contended that the Defendants had already developed the land which was in the knowledge of the Plaintiff. Further, the trial court had itself stayed its order till one month and therefore, the said order could be set aside on the facts of the case. To bolster this contention, reliance was placed on K.B. Saha and Sons Pvt. Ltd v. Development Consultant Limited, (2008) 8 SCC 564 and other precedents.

The High Court in pronouncing its verdict, relied on Vidyadhar v. Manikrao and Anr, (1999) 3 SCC 573 wherein it was held:

"The Plaintiffs may have other remedies in law for recovery of the balance consideration, but could not be granted the relief of cancellation of the registered Sale Deed."

Taking note of the case in Shanti Kumar Panda v. Shakuntala Devi, the High Court opined:

"At the stage of passing of interlocutory order such as on an application for the grant of ad interim injunction under Rule 1 or 2 of Order 39 of the COP, the competent Court shall have to form its opinion on the availability of a prima facie case, the balance of convenience and the irreparable injury – the three pillars on which rests the foundation of any order of injunction."

Subsequently, the High Court averred that the Appellate Court should not interfere with the exercise of discretion of the Court of First instance unless the discretion has been exercised arbitrarily, capriciously or perversely or where the Court has ignored the settled principles of law regarding interlocutory injunctions.

Keeping in view these settled principles, Justice Thaker observed that there was no dispute that the possession of the land was handed over to the Defendants. The Bench noted that the Plaintiff had mixed transactions together and had returned INR 6 crores after almost 2 years of the execution of sale deed. The sauda chitthi was also unregistered but the Plaintiffs had relied on it. There was also an MoU entered into by the parties in 2020 after filing the suit wherein it was stated that the alleged sale deed was executed upon the trust of the parties and the Defendant had admitted that the consideration was yet to be paid.

Considering these peculiar facts and circumstances, per Justice Thaker, the Trial Court had correctly exercised its discretion and passed the injunction order. Accordingly, the High Court dismissed the Appeal.

Case Title: Chandra Darshan Developers Through Partner Versus Hiralal Gopalbhai

Case No.: C/AO/73/2022