ORDER
K.P. Sivasubramaniam, J.
1. Both the revisions arise out of the judgment in C.M.A.Nos. 5 and 6 of 2000 on the file of the Subordinate Judge, Poonamalee dismissing the order in I.A.Nos. 325 and 326 of 1999 on the file of the District Munsif Tambaram.
2. The plaintiff filed I.A.Nos.325 of 1999 under Order 39, Rule 1, C.P.C, for a temporary injunction to restrain the defendants from interfering with the alleged peaceful possession of the suit property by him pending the suit and the application in I.A.No.326 of 1999 was filed praying for a temporary injunction restraining the defendants from alienating encumbering or registering any document in respect of B schedule properties till the disposal of the application. The trial Court dismissed both the applications. On appeal also, both C.M.A.Nos.5 and 6 of 2000 on the file of Sub-Court, Poonamallee, were dismissed. Hence, the present two revision petitions by the plaintiff.
3. The suit was filed by the plaintiff for a permanent injunction claiming to be in possession and enjoyment of the property. The plaint B schedule property forms part of the plaint A schedule property. The property belongs to defendants 1 to 7. The plaintiff entered into an agreement with each one of them on 14.11.1991 to purchase A schedule items from the respective owners at the rate of Rs. 5,000 per cent. He paid 75 per cent of the sate consideration to the vendors on the date of agreement itself. It was acknowledged by the respective defendants. On the date of the agreement itself, defendants 1 to 7 have placed the plaintiff in possession and enjoyment the entire A schedule property and defendants 1 to 7 had also handed over the documents relating the plaintiff on the date of the agreement; The plaintiff had also taken possession of the properties. The balance of sale consideration was also paid to each one of the defendants who had also executed the necessary documents to evidence the payment for respective sale items. Each one of the defendants have executed the said documents and also receipts after having received full sale consideration. After taking possession of A schedule items, the plaintiff made lot of improvements by removing bushes in the entire A schedule property, levelled. A schedule properties over which there were lot of ups and downs. He had also dumped sand to level A schedule property. The plaintiff surveyed the entire extent and fixed boundary stones. He plotted out into 59 plots. He also laid roads in A schedule property and named the plots in A Schedule as Sri Balaji Nagar Extension. He has also taken initiative to obtain approval of the road from Perungalathur Town Panchayat and had also received the same. He had spent more than Rs.2 lakhs for all the said improvements even in 1991-92 itself. He had taken enormous pain to layout the property and made it fit as housing plots. Defendants 1 to 7 having received the entire sale consideration, are now attending to deviate from the transaction. They cannot go back on the said transaction. They are now planning to convey the plots to third parties and with that intention, the first defendant had also executed a registered sale deed in favour of the ninth defendant. Similarly, a sale deed has been executed in favour of eighth
defendant also. According to the plaintiff, defendants 1 and 2 have absolutely no right to execute any sale deed. Defendants 8 and 9 are not bona fide transferees. They have not verified the documents and have not made any enquiry. Therefore, the plaintiff is entitled to ignore the sale deed executed by defendants 1 and 2. The plaintiff apprehends that defendants 1 to 7 are acting in connivance with other persons to disturb the plaintiffs peaceful possession of the property. Schedule A forms the entire schedule property while the plots and roads which the plaintiff had retained and are remaining unsold are described as B schedule. The plaintiff further submits that he had already entered into an agreement with third parties to sell B schedule properties and if the defendants interfere and create any encumbrance, same will lead to complications. Hence the suit as well as the prayer in the two interlocutory applications as mentioned above.
4. Counter affidavit was filed by the sixth respondent / 5th defendant on behalf of all the respondents. The allegation of the petitioner that he was in possession of the property mentioned in E schedule property was denied. All the respondents are in possession of their respective lands. The alleged agreement deed dated 14.11.1991, was also false and that the signature found in the said agreements were not that of the defendants. The said sale agreements must be forged documents with the intention to grab the entire property. The petitioner has not paid any balance of sale consideration nor have they received the balance of sale consideration. It is true that a power of attorney had been executed but it was only a nominal document and not seriously acted upon. Even the said power of attorney had been subsequently revoked by duly registered the cancellation deeds. It was also intimated to the petitioner. It is true that a layout has been prepared. But ultimately it was not approved. The expenses were borne by all the respondents and there is no basis for the contention that the petitioner had spent Rs.2 lakhs in the year 1991-92. The petitioner was not put in possession of the property, nor have the respondents received the sale consideration. It is the petitioner who has sold the plots to different parties without the consent and knowledge of the defendant. Respondents 1 to 7 are the owners of the property and therefore, they are at liberty to deal with the property. Defendants 8 and 9 are bona fide purchasers. The petitioner is a name lender for his son in law Logaiyan. The respondents and the said Logaiyan were friends and he was employed as a Clerical staff in the office of the Commissioner of Police, Chennai. He offered to help them being a Government employee and he asked the defendants to execute a power of attorney with his name and accordingly it was done. He claimed that he knows the real estate business. But he had cheated the plaintiff. The alleged sale agreement and the acknowledgments are fabricated the documents and none of the defendants had signed those documents. The petitioner is aged about 75 years and he cannot perform the duties enjoined upon him. Defendants on coming to know that the petitioner was committing breach of trust, they had cancelled the power of attorney given to the petitioner. The various respondents cancelled the power of attorney by different dates between 12.5.1998 and 6.6.1998. The cancellation of the power of attorney was intimated to the petitioner orally and in fact defendants 6 and
7 tried to settle the matter. Therefore the petitioner was not entitled to any relief either under the suit or as prayed for in the interlocutory applications.
5. The trial Court held that the power of attorney given in favour of the plaintiff had been validly revoked and therefore, the title of the property vested only with the respondent and the plaintiff were not entitled to any rights and hence cannot maintain the interim prayer. The Appellate Court has also found in favour of the respondents and confirmed the said findings.
6. Mr.S.V. Jayaraman, learned senior counsel for the petitioner/plaintiff contends that both the courts below had deviated from the only relevant question for consideration, namely, as to whether there was a prima facie case in favour of the plaintiff and as to who was in possession of the property. He also took me through the various portions of the pleadings. Exchange of legal notices and evidence which would according to him, clearly establish the factum of actual physical possession by the plaintiff. It is also not the case of the defendants that they had handed over possession of only a part of the property. Apart from the clear recitals in the document in Ex.A.49, dated 16.6.1999, a legal notice had been issued on behalf of defendants themselves which would clearly establish that the possession was with the plaintiff and they were called upon to deliver possession. Both the courts have not rendered any findings as regards the actual physical possession. Nor have the Courts found the plaintiff as a trespasser.
7. Mr. Venkatapathy. learned senior counsel for the respondents contended that there was no valid power of attorney as on date and that the power of attorney at any rate had been cancelled. The suit was also barred by limitation and the plaintiff as on the date cannot pray for specific performance and hence he has no prima facie case. For the same reason, he cannot also rely on Section 53A of the Transfer of Property Act. It is further contended that the power of attorney cannot sue the principal and he cannot have any independent right as against the principal. The power of attorney was a revocable one. He would further submit that a person who had the title was deemed to be in possession. The defendants have clearly denied their signatures. Reliance is also placed on the circumstances that the stamp papers are dated 10.1.1991 and that there was no reference to the sale agreement in the power of attorney. There is also no reference to the sale agreement in the legal notice or the legal opinion which was subsequently tendered in 1993 Ex.B.54. There was also enough documentary evidence to show that the defendants were continuously fighting for and asserting their rights over the property from the beginning. Learned-Senior counsel for the defendants also relied on the judgment of a learned single Judge of this Court in Rukmani Devi Arundale Trust v. S. Easwaran, 1992 (1) L.W. 489, holding that in a suit filed by the owner of the property after terminating the agency, the agent cannot plead that he was in exclusive possession so as to exclude even the owner/principal and that in such a case, no interim injunction can be granted in favour of the agent/plaintiff.
8. Reference is also made to another judgment in Rani Mohanraj v. Rajarathinam, 1998 (II) M.L.J.539 : 1998 (1) L.W.618. In that case, held that
the court must be satisfied about the prima facie case before it grants an order of interim injunction. Learned counsel contends that the prima facie case was fully in favour of the defendants and there was no warrant to interfere with the concurrent decision of the Courts below.
9. Learned counsel representing defendants 8 and 9 (subsequent purchasers from defendants 1 to 7) after endorsing the submissions of learned senior counsel for the other respondents, contends that defendants 8 and 9 are bonafide purchasers and that they have been put in possession of the property. Hence their possession cannot be interfered with.
10. In reply, Mr. S.V. Jayaraman learned senior counsel, relies on the judgment of this Court in Vijay Lalchand Huf v. K.M. Lulla Huf., 1995 T.L.N.J. 152. In that case, the Division Bench held that a person who had been put in possession pursuant to an agreement can claim relief either as a plaintiff or as defendant under Section 53A of the Transfer of Property Act and it will be available to him as a shield against any interference by the defendant. When the plaintiff had proved possession of the property is entitled to an order of interim injunction.
11. Further, reference was made to the judgment of the Supreme Court in Ashwinkumar K. Patel v. Upendra J. Patel, . In that case, it was held that even if the agreement for sale may not be valid for any reason plaintiffs possession irrespective of title had to be treated as permissive possession and the grant of interim injunction granted pending the suit was upheld by the Supreme Court.
12. Learned senior counsel further contends that even apart from the rights under the agreement of sale under Section 53A of the Transfer of Property Act, the nature of the obligations between the parties would disclose that even if the plaintiff was only an agent. It was an agency coupled with interest and thus covered by Section 202 of the Contract Act. There was sufficient time to file the suit for specific performance and there was no question of any bar of limitation.
13. In his further submission, learned senior counsel for the respondents drew my attention to Clause 4 of the sale agreement which stipulates that the purchaser shall pay the balance sale consideration on or before the expiry of nine months thereafter. Hence, the limitation was bound to be calculated from the completion of the said period of nine months. He would further contend that if the title had been really transferred in favour of the plaintiff, then there was no need or obligation on the part of the defendants to take steps before the authorities.
14. I have considered the submissions of both sides. The principles behind the grant of interim injunction during the pendency of the proceedings before the court are well known namely,
(i)prima facie case; (ii)balance of convenience; and (iii) the need to maintain the status quo.
“On all these three ingredients, the earlier view of the courts was that a strong prima facie case should be made out. This was mainly based on the views expressed by the House of Lords in American Cynamid Co. v. Ethicon Ltd.,, 1975 (1) All E.R.504 that the plaintiff should make out a strong prima facie case and that there should be a “triable issue” in favour of the plaintiff. This was followed by the Indian Courts also. But in Gujarat Bottling Company Ltd. v. Coca Cola Co. , the Supreme Court sounded a different note and held as follows:
“The decision whether or not to grant an interlocutory injunction has to be taken at a time when the existence of the legal right assailed by the plaintiff and its alleged violation are both contested and uncertain and remain uncertain till they are established at the trial on evidence. Relief by way of interlocutory injunction is granted to mitigate the risk of injustice to the plaintiff during the period before that uncertainty could be “resolved. The object of the interlocutory injunction is to protect the plaintiff against injury by violation of his right for which he could not be adequately compensated in damages recoverable in the action if the uncertainly were resolved in his favour at the trial.”
It was further held that one of the issues which had to be considered was as to whether the defendants could be adequately compensated for the injury caused by or to be caused by the interim order. The concept of triable issue as visualised in the American Cyanamid case, was held to be rigid and later judgments were inclined to be more liberalistic in the matter of assessment of prima facie case. In England itself in later cases such as Cambridge Nutrition Ltd. v. B.B.C., 1990 (3) All E,R. 523, it was held that the views expressed in American Cynamid supra, case cannot have universal application.
15. In Colgate Palmolive (India) Ltd. v. Hindustan Lever Ltd., the Supreme Court felt that the judgment in American Cyanamid case was not as rigid as it was generally understood. The Supreme Court endorsed the liberal note sounded in , cited above and expressed that it cannot be proper to introduce an inflexible rule in the matter of prima facie case. It was further stated that otherwise all that a defendant would have to do is to raise a non demurrable dispute as to the relevant facts in his affidavit and he could inform the court to ignore apparent strength of the plaintiffs case. The court went on further to hold that in the matter of grant of interlocutory injunction, the court should not express any opinion on the merits and formulated the following principles as other consideration which the court should bear in mind:
“(i) extent of damages being an adequate remedy;
(ii) protect the plaintiffs interest for violation of his rights though, however, having regard to the injury that may be suffered by the defendants by reason therefor;
(iii) the court while dealing with the matter ought not to ignore the factum of strength of one party’s case being stronger than the other’s;
(iv) no fixed rules or notions ought to be had in the mafter of grant of injunction but on the facts and circumstances of each case the relief being kept flexible;
(v) the issue is to be looked at from the point of view as to whether on refusal of the injunction the plaintiff would suffer irreparable loss and injury keeping in view the strength of the parties’ case;
(vi) balance of convenience or inconvenience ought to be considered as an important requirement even if there is a serious question or prima facie case in support of the grant;
(vii) whether the grant or refusal of injunction will adversely affect the interest of the general public which can or cannot be compensated otherwise.”
Therefore, the principles to be gathered from the above analysis is that in assessing the prima facie case all that is required to be seen is whether there is a reasonable and arguable case for the plaintiff and if so the endeavour on the part of the court should always be to maintain the status quo. In the event of the plaintiff losing his case, the defendant can be adequately compensated. In the background of these principles, in this case, I am inclined to hold that both the courts below completely went off the track, totally ignoring the issues of balance of convenience and status quo. Strangely both . the courts chose not to consider the question of status quo namely as to who was in actual possession of the property, which in my opinion, is the most important issue to be decided while granting or refusing interim injunction. The courts below have thus committed grave material irregularity and wrongfully exercised the jurisdiction. I would deal with the various defects committed by both the courts below and the important issues which they have overlooked.
16. The basic facts which would be sufficient for the disposal of this revision would be that according to the plaintiff, sale agreements had been executed with respective respondents on 14.11.1991 agreeing to convey the property to the plaintiff after receiving an advance amount. On 18.11.1991, the plaintiffs claimed to have paid the entire balance sale consideration and receipts have been issued on 18.11.91 agreeing to execute the sale deeds. The execution of sale agreement and receipts have been issued on 18.11.1991 agreeing to execute the sale deeds. The execution of sale agreement and receipts are denied by the defendants. On 18.11.1991, a power of attorney is executed in favour of the plaintiff by the defendants. It is true that there is no reference to the sale agreement in the power of attorney. Both the courts below did not go into the question as to who was in actual possession and did not also record a finding as to whether the sale agreements and receipts were forged or not. According to the defendants the power of attorney had been cancelled on various dates, during the month of May, 1998. Therefore, only based on the alleged cancellation of the power of attorney, both the courts below had come to the conclusion that the plaintiff had no title, right or interest over the property and therefore, had no right to obtain interim injunction.
17. The approach of the courts below are opposed to the views expressed by the Supreme Court as pointed out above in the judgments reported in Gujarat Bottling Company Ltd. v. Coca Cola Co., A.I.R.1995 S.C.2273 and Colgate Palmolive (India) Ltd. v. Hindustan Lever Ltd., . cited above. There has been absolutely no consideration of
balance of convenience, the status quo of actual possession and as to whether in the event of the defendants succeeding, they could be adequately compensated or not. On the other hand, they erroneously went into the question of title and held against the plaintiff.
18. It is also seen that considering that the defendants disputed their signature in the sale agreements and the receipts, either the court itself should have examined and compared the signatures or called upon the parties to prove or disprove the signatures by proper evidence including expert evidence. That has not been done in this case. Be that as it may. I would proceed to analyse the rights of the plaintiff even by ignoring the sale deeds and receipts which are disputed by the defendants. By adopting the said approach we may examine whether the plaintiff has made out a prima facie case and is entitled to an interim order..
19. As regards prima facie case, assuming that the plaintiff is no more than a power of attorney, as against the owners, the contention has been raised on behalf of the plaintiff that it is an agency coupled with interest and hence cannot be revoked. The power of attorney had been executed in 1991. On 24.5.1993, the plaintiff hands over all the original parent title deeds, encumbrance certificates, decrees obtained in courts in 1990 and the series of power of attorney to Mr. Senthilnathan, Advocate, for opinion as to whether the defendants have good and marketable title to their respective properties. The advocate after going through the records had also given his opinion that the defendants have good marketable title to the properties. A perusal of the power of attorney shows that it is not a simple authorisation to carry out the work on payment of any remuneration or commission and for negotiating with third parties and to get things done before the various statutory authorities to have the lay out approved. It is something more than that. He is directed to meet all the expenses to carry out the lay out by drafting the plans and to get the approval from the ‘government Departments, to advertise for the sale of the properties and to negotiate with third parties. There is no clause empowering the agent to collect the amounts, spent by him towards various items of expenditure. In fact the power of attorney is allowed to mortgage the property to raise money if needed for developing the properties. It is sufficient to point out that the nature of the power given to the agent shows that he is required to incur huge expenditure and to meet the expenses. He is also given the freedom to mortgage the property. In the plaint the plaintiff has positively asserted that the entire property had to be dumped with sand in order to level the property and that he had surveyed and fixed boundary stones and plotted out 59 plots, laid roads and named the plots as Sri Balaji Nagar Extension. He had also obtained approval for the road from Perungulathur Town Panchayat. Such detailed averments both in the plaint and in the affidavit in support of the petition are denied in the counter in a very causal manner by merely stating that the allegations are denied and expenses were borne by the respondents. If the expenses were borne by the respondents, there is no documentary evidence or receipt to show that they had paid the amounts. If the expenses were to be borne by the defendants themselves, then there was no need for a clause in the power of attorney, directing the agent himself to incur all the expenditure and
if need be to mortgage the property to meet the expenses. Therefore, a prima facie case is made out to show that the agency was not a simple principal agency relationship for remuneration or commission but one coupled with interest as provided under Section 202 of the Indian Contract Act.
20. Even assuming that the agency was revocable, it is very strange that the defendants should plead that the revocation was informed to the plaintiff orally. To prove the same, none of the plaintiffs had deposed any oral evidence. It is hard to believe that the defendants who have taken pains to register a series of documents cancelling the power of attorney had not even bothered to send a letter to the agent. A perusal of the cancellation deed shows that the only reason given for cancellation is as follows:
21. After having found fault with him, it is strange that the defendants did not take sufficient care to send even a letter if not a legal notice. In fact, the reason given in the cancellation deed is contradictory to the facts stated in paragraph 6 of the counter. The fact that the layout was complied with is admitted in the counter and all that the respondents would say is that the expenses were borne by the respondents. It is in this context, the fact whether there was a proper and binding cancellation of the power of attorney assumes significance. Section 208 of the Contract Act specifically requires that the termination of the agency will not take effect so far as the agent is concerned unless it comes to his knowledge. Therefore, in the absence of proof of communication of the cancellation, the plaintiff is not bound by it. Any reliance on any communication after the institution of the suit would be of no value.
22. Therefore, I am inclined to hold that I there are prima facie materials to show that the agency in favour of the plaintiff is one coupled with interest. Even otherwise, there being no materials to show that the cancellation was made known to the plaintiff before the institution of the suit, the plaintiff has sufficient cause of action to proceed against the defendants to prevent them from interfering with his rights. Hence, I am inclined to hold that the plaintiff had made out a prima facie case even ignoring the sale agreements and receipts relied upon by him.
23. In the above mentioned background the judgment of this Court in Rani Mohanraj v. Rajarathinam, 1992 (1) L.W. 489, relied upon by the respondents will have no application. That was a case in which the principal cancelled the agreement/power by his letter dated 4.6.1990 and the agent was called upon to render accounts.
24. It is also significant to note that the owners do nothing between 1991 to 1998 as against the plaintiffs and there is no complaint that the plaintiff has not been discharging his duties as envisaged under the power of attorney. It is for the first time, it is stated that the power of attorney was cancelled and that the plaintiff was informed about the cancellation orally. Learned senior counsel for the respondents had referred to an additional typed set of papers containing certain documents between the years 1992 and 1996.to show that the defendants were exercising control over the property and thus were interacting with the Revenue Authorities. There appears to have been some controversy between the defendants and one Sankar, the original pattadar of land. In none of those proceedings, plaintiff is a party.
25. It is also seen that as against the positive assertion of the plaintiff that the document of title were handed over to him at the time of the agreement itself, there is no specific denial by the respondents. Yet, the appellate court had chosen to record a finding that the document had not been handed over to the plaintiff.
26. Coming to the question of possession, recitals in the power of attorney dated 18.11.1991 are enough to suggest that the plaintiff had been put in possession and had control over the properties. In fact pursuant to the same, admittedly, the plaintiff had also taken up the lay out work. The crucial aspect which amounts to a clear admission by the respondents is the notice by the advocate for respondents Ex.P.49 dated 16.6.1999. The damaging feature is that this notice was issued not only after the filing of the suit, but also after their own counter dated 7.6.1999. In the notice it is stated that the plaintiff was liable to “hand over possession” to his clients. No better material is required to support of the case of the plaintiff being in possession of the property on the date of the suit. It is an admission and no further evidence is required. For reasons best known to themselves, both the courts below even though they had mentioned about Ex.A49, while narrating the mutual contentions have avoided any reference to the same and have not rendered any finding as regards possession. In my opinion, the issue of possession as on the date of the suit is the most important and vital fact to be considered in order to arrive at the balance of convenience and maintenance of status quo. It is not the case of the respondents that the plaintiff was a trespasser; nor is there a finding by the courts to the said effect. It is rather unfortunate and regrettable that both the courts should have totally ignored the most vital aspect which should be taken note of in the matter of grant of interlocutory relief. Possession as on the date of the suit is the most important feature in deciding the balance of convenience vide judgment of this court in Vijay Lalchand Huf v. KM. Lulla Huf. 1995 T.L.N.J.152. In Ashwinkumar K. Patel v. Upendra J. Patel, 1991 (I) C.T.C.710, it was held that even in a case where the agreement of sale was found to be defective and may not be valid, yet the possession being permissive at the inception the plaintiff would be entitled to the grant interim injunction during the Pendency of the suit.
27. Therefore, I am inclined to hold that the plaintiff had made out a prima facie case and balance of convenience and therefore, is entitled to maintain status quo and the approach of the courts below is not only perverse, but also opposed to accepted rules of grant of interim orders and amounts to erroneous exercise of jurisdiction.
28. As far as the question of limitation which was raised by learned senior counsel for the respondents, is conceited, in view, of the contested facts, it would be a matter of evidence in order to decide when the respondents actually repudiated the claims of the plaintiff. That is an issue which cannot be decided at the interlocutory stage.
29. It is true that the plaintiff also requires to furnish lot of explanation as to why there was delay in completing the transaction. But all those issues will have to be gone into the suit.
30. As far as I.A.No. 326 of 1999 is concerned seeking to restrain the defendants from alienating the property I fail to understand how the said petition could have been rejected. It is settled proposition of law that any transaction pendents lite would be invalid in law and therefore, in order to avoid multiplicity of proceedings and the rights of innocent third parties being involved, it is always advisable to grant such orders or at least to require the concerned parties to give an undertaking that they will not alienate or encumber the property. No such undertakings had been insisted by the courts below from the defendants when the courts have decided to reject the interlocutory relief as prayed for by the plaintiff.
31. As far as respondents 8 and 9 are concerned, being purchasers from the defendants, they cannot have any better case or claim than their own vendors. They cannot be heard to resist the interim order to which the plaintiff is otherwise entitled to. It is precisely to avoid any such future transaction and involvement of third parties, it is incumbent on the court to have allowed I.A.No. 326 of 1999.
32. In the result, both the revision petitions are allowed. Considering that there appears to be the involvement of rights of several parties, the trial Court is directed to take up the suit itself and to dispose of the same within a period of four months from the date of receipt of copy of this order. The defendants are directed to file their written statement without any delay. It is also made clear that the suit will not be in any manner be influenced by any of the observations contained in this judgment which have been made only in the context of prima facie case and the entitlement of the plaintiff for the interlocutory relief. No costs. Consequently, connected CM.Ps. are closed as unnecessary.