IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 19/12/2006 CORAM THE HONOURABLE MR. JUSTICE P.K. MISRA AND THE HONOURABLE MR. JUSTICE M. JAICHANDREN O.S.A. No.319 of 2001 1. Sakthi Durga Builders and Developers, Rep. by its Managing Partner, No.26, Hunters Road, Vepery, Chennai 600 007. 2. R.S. Krishnan, Managing Partner, Sakthi Durga Builders and Developers, B 29, Anna Nagar East, Chennai 600 102. 3. M.N. Krishnan, Partner, Sakthi Durga Builders and Developers, No.2, Easwaradass Lala Street, Triplicane, Chennai 600 005. .. Appellants Vs. P.S. Raman, No.1, Thiruvengada Nagar, Ambattur, Chennai 600 053. .. Respondent Appeal filed under Order 36 Rule 12 of the O.S. Rules r/w. Clause 15 of the Letters Patent against the order of the learned single Judge dated 23.8.2001 in Appln. No.1066 of 2001 in C.S.No.839 of 1999. For Appellants : Mr.R. Parthasarathy For Respondent : Mr.P. Jayaraman, SC for Mr.S. Saravanan J U D G M E N T
P.K. MISRA, J
The defendants have filed this appeal against the order dated 23.8.2001 passed by the learned single Judge in Application No.1066 of 2001 arising out of C.S.No.839 of 1999, whereunder the learned single Judge has passed an order of interim mandatory injunction directing the defendants to handover two flats to the plaintiff.
2. The plaintiffs case in brief is as follows :
Plaintiff is the owner of the land bearing site No.72 in Thiruvengada Nagar, Ambattur. Second defendant, who is a relation to the plaintiffs wife, and third defendant are the partners of the first defendant company, which is a builder and developer concern. Defendants 2 and 3 approached the plaintiff in order to develop 5625 sq.ft. of the plaintiffs plot. The defendants offered to dismantle the shed and compound wall and return the materials to the plaintiff. Even though the plaintiff had some doubt regarding the contents of Memorandum of Understanding drafted by the defendants, in good faith, the plaintiff had signed in the Memorandum of Understanding on 20.2.1994. As per such Memorandum of Understanding, the plaintiff was required to handover possession of 5625 sq.ft out of 10,450 sq.ft plot to the defendants for the purpose of constructing 7 flats (ground floor plus 2 floors). The documents in original are also required to be handed over for the purpose of obtaining permission and sanction. The Memorandum of Understanding further provided that the defendants would pay the plaintiff a sum of Rs.1,50,000/- and would handover 1650 sq.ft (2 flats) of constructed area in the ground floor and first floor, the estimated cost of both the flats being Rs.8.25 lakhs. The plaintiff was given to understand that the Memorandum of Understanding was a mere formality required for obtaining necessary building sanction. It was agreed between the parties that the defendants would pay a sum of Rs.2,50,000/- as security deposit. However, such clause was not mentioned in the Memorandum of Understanding as the defendants indicated that tax problem may arise. The plaintiff had executed a general power of attorney dated 8.6.1994, which was registered as Document No.602 of 1994 in the Sub-Registrars Office at Ambattur. The plaintiff had handed over the site measuring 5625 sq.ft along with the compound wall and the defendants had agreed to dismantle the factory shed and the compound wall and return the materials. As per the agreement, the defendants had paid a sum of Rs.2,50,000/- by two cheques. The Defendants had also issued another cheque for Rs.1,00,000/- in favour of Tamil Nadu Industrial Investment Corporation on behalf of the plaintiff against a loan taken by the plaintiff. Such Rs.1,00,000/- was to be adjusted towards a sum of Rs.1,50,000/- payable to the plaintiff under the Memorandum of Understanding and a sum of Rs.2,50,000/- was to be retained by the plaintiff as security deposit. The second defendant had represented that in order to account for such money, a document in the nature of promissory note should be executed, which would be destroyed after the accounts were settled. The plaintiff believing such representation had signed blank promissory notes. The cheque for Rs.1,00,000/- given by the defendants to the Tamil Nadu Industrial Investment Corporation was returned due to insufficient funds. The second defendant paid a sum of Rs.75,000/-, thus, the plaintiff had received a sum of Rs.75,000/- against the sum of Rs.1,50,000/- agreed to be paid under the Memorandum of Understanding. The plaintiff could come to know subsequently that the defendants have no necessary infrastructure to complete the project in time, which was delayed from inception. The original title deeds given by the plaintiff for obtaining sanction were misutilised by the defendants by obtaining loan by placing such documents and the plaintiff had initiated criminal proceedings against the defendants. The plaintiff had also cancelled the power of attorney by a deed of cancellation dated 26.3.1996 registered as Document No.280 of 1996 in the Sub-Registrars Office at Ambattur. The defendants were also put on notice regarding such deed of cancellation. The defendants, however, continued with the construction activities and sale of flats without any legal authority whatsoever. The defendants, who had agreed to construct ground floor plus two floors, had constructed an additional floor without the permission and sanction of the plaintiff. The defendants had also constructed an additional flat measuring 725 sq.ft in the ground floor in violation of the Development Control Rules. With a view to mislead the public, the defendants filed O.S.No.5163 of 1997 in the City Civil Court, Madras seeking permanent injunction restraining the plaintiff from revoking the power of attorney and even sought for ad-interim injunction. In such suit filed by the defendants, they have falsely alleged that they had lent money to the tune of Rs.3,92,000/- to the plaintiff and that the plaintiff had executed promissory notes. The defendants after delay of three years completed the construction and even though they did not have valid and subsisting power of attorney, they had sold 10 out of 13 flats. The defendants had committed breach of the Memorandum of Understanding and as on date they have not handed over the plaintiffs share of 1650 sq.ft and proportionate share in the additional flat measuring 725 sq.ft. Since the defendants had no respect for the terms of the agreement and Rule of Law, the plaintiff was forced to file O.S.No.232 of 1998 before the District Munsif, Ambattur, seeking for an injunction restraining the defendants from alienating or encumbering or in any way dealing with the flats and interim applications were also filed. Interim orders were passed by the trial court. As a consequence of the conduct of the defendants, the plaintiff has been put to financial loss on account of the defendants not handing over of 1625 sq.ft constructed area and not compensating the plaintiff in lieu of additional space of 290 sq.ft, loss on account of the defendants not paying Rs.75,000/-, loss on account of the defendants not handing over the materials of dismantled shed and compound wall, loss on account of rental the plaintiff would have earned from two flats from 8.6.1996. On the aforesaid allegations, the suit was filed for the following reliefs :
(a) loss on account of the Defendants not handing over 1,625 sq.ft. of constructed area within the stipulated time i.e. 2 years from the date of handing over the property (20.2.1994) and in not compensating the plaintiff in lieu of the additional space of 290 sq.ft. the plaintiff is entitled in the additional flat constructed.
(b) Loss on account of the Defendants not having paid the amount of Rs.75,000/- as promised on 20.2.1994.
(c) Loss on account of the Defendants not having handed over the material of the dismantled shed and compound wall valued at Rs.30,0000/-.
(d) Loss on account of rental the plaintiff would have earned on the two flats from 8.6.1996 till date of filing the Plaint and at the rate of Rs.5,000/- per month from the date of Plaint till date of handing over of the 2 flats to the plaintiff.
3. During pendency of such suit, the plaintiff filed Appln.No.1066 of 2001 for interim mandatory injunction. In such application, apart from summarising the claim made in the plaint and indicating that the married daughter of the plaintiff was in urgent requirement of accommodation, prayed for issuing an interim direction to the defendants to hand over two flats measuring 1650 sq.ft.
4. A counter affidavit was filed in such application by the defendants, where it is denied that the defendants had agreed to pay a sum of Rs.2,50,000/- as interest free security deposit. It has been stated that the plaintiff had delayed the execution of the general power of attorney and refused to sign the application for sanction from the appropriate authority by claiming that the defendants should pay a sum of Rs.1 lakh to Tamil Nadu Industrial Investment Corporation and further demanded payment of Rs.3 lakhs as loan. Subsequently the plaintiff had executed promissory notes in favour of M/s. Shakthi Durga Engineering, which is a sister concern of the first defendant. Such concern has filed several suits against the plaintiff for recovery of Rs.3,92,000/-. In the counter it was claimed that the defendants had not violated any of the terms and on the other hand the plaintiff was violating the terms of the Memorandum of Understanding and the project had been delayed not because of any default on the part of the defendants. It was further denied that the defendants did not have any knowledge about the cancellation of the general power of attorney. Several counter allegations have been made against the plaintiff in such counter and the ex-parte injunction granted by Civil Court, Ambattur against the Sub Registrar has been subsequently vacated. In Appln.No.699 of 1999 filed before the Civil Court, Ambattur, the defendants had given an undertaking that they had no intention to alienate the flats. The plaintiff attempted forcibly to take possession of the flats, but such action was prevented on the intervention of the police. The plaintiff is liable to pay Rs.13 lakhs to M/s. Shakthi Durga Engineering & Builders and the title deeds have been handed over as collateral security as per the understanding for the loan obtained by the plaintiff from the defendants and such title deeds are not be returned till the money is recovered. If the flats were handed over to the plaintiff as demanded, the defendants would not be in a position to recover the dues from the plaintiff.
5. While considering such application for interim order, the learned single Judge has passed an interim mandatory injunction. The reasoning for the order is reflected in paragraph 5, which is quoted in extenso :
5. From the counter as well as the plaint it is seen that admittedly constructions of four flats have already been completed in the year 1997 or 1998, which were before the filing of the present suit. Admittedly, two flats agreed to be handed over to the land owner has not been handed over. Therefore, it appears that the plaintiffs are entitled to get two flats as per the memorandum of understanding. Even though the construction of all the flats were completed even prior to the filing of the suit, much less before 1999, still they were not handed over to the plaintiff-land owners as per the agreement. Therefore, there will be an interim mandatory injunction to hand over the two flats as agreed in the memorandum within a period of 15 days from date of receipt of copy of this order.
Such order is being challenged by the defendants.
6. In the grounds of appeal, it has been contended that the suit is essentially for a mandatory injunction in respect of the property situated outside the Original Side jurisdiction of the Madras High Court and therefore the application for interim mandatory injunction ought to have been rejected on the ground of lack of jurisdiction. The other ground raised is to the effect that before deciding the dispute on merit, the learned single Judge has passed an interim order, which in effect grant the main prayer in the suit itself, which should not have been done.
7. Learned counsel appearing for the respondent / plaintiff has submitted that prima facie it cannot be said at that stage that the suit was not maintainable in the Original Side of the Madras High Court and such question can be decided only at the time of trial. It is further submitted by the learned counsel for the respondent that since even as per the agreement the defendants were to hand over two flats, there is no justification on the part of the defendants to retain possession of such flats and the order passed by the learned single Judge is therefore equitable as well as legal and should not be disturbed. It is further submitted that normally a suit of this nature would take years for being disposed of and therefore the order passed by the learned single Judge, which is in the interest of justice, should not be interfered with.
8. Even though the learned counsel appearing for the appellants has raised serious question regarding the jurisdiction of the Madras High Court in its Original Side to deal with the matter and has cited a Division Bench decision of this Court reported in 2006(1) CTC 270 (THAMIRAPARANI INVESTMENTS PVT. LTD. v. META FILMS PVT. LTD.) in support of the contention that a suit for injunction should be considered as a suit relating to immovable property and therefore the suit would not be maintainable in the Original Side unless the property in question is situate within such limit, we decline to consider such aspect at this stage as, in our opinion, the matter should be left to be decided by the trial court at the time of disposal of the suit. Moreover, in our opinion, the other contention raised by the appellant regarding the vulnerability of the order being acceptable, it is not necessary for us to go into this question.
9. The other question is relating to the propriety of the order passed by the learned single Judge in practically granting the relief to the plaintiff at the threshold while considering an application for issuing interim mandatory injunction.
10. It is no doubt true that in an appropriate case, a Court would be justified in issuing an interim order of mandatory injunction even during pendency of the suit. However, as repeatedly observed by the Supreme Court, such an exceptional order should be passed only if the facts and circumstances justify passing of such order.
11. In (1990) 2 SCC 117 (DORAB CAWASJI WARDEN v. COOMI SORAB WARDEN AND OTHERS), while considering the scope of issuing ad-interim mandatory injunction, after referring to several authorities, it was observed by the Supreme Court:-
16. The relief of interlocutory mandatory injunctions are thus granted generally to preserve or restore the status quo of the last non-contested status which preceded the pending controversy until the final hearing when full relief may be granted or to compel the undoing of those acts that have been illegally done or the restoration of that which was wrongfully taken from the party complaining. But since the granting of such an injunction to a party who fails or would fail to establish his right at the trial may cause great injustice or irreparable harm to the party against whom it was granted or alternatively not granting of it to a party who succeeds or would succeed may equally cause great injustice or irreparable harm, courts have evolved certain guidelines. Generally stated these guidelines are:
(1) The plaintiff has a strong case for trial. That is, it shall be of a higher standard than a prima facie case that is normally required for a prohibitory injunction.
(2) It is necessary to prevent irreparable or serious injury which normally cannot be compensated in terms of money.
(3) The balance of convenience is in favour of the one seeking such relief.
12. Subsequently, such observation was followed by three Judges Bench of the Supreme Court in (2004) 7 SCC 478 (METRO MARINS AND ANOTHER v. BONUS WATCH CO.(P) LTD. AND OTHERS), wherein it was observed :
9. Having considered the arguments of the learned counsel for the parties and having perused the documents produced, we are satisfied that the impugned order of the appellate court cannot be sustained either on facts or in law. As noticed by this Court, in the case of Dorab Cawasji Warden v. Coomi Sorab Warden1 it has held that an interim mandatory injunction can be granted only in exceptional cases coming within the exceptions noticed in the said judgment. In our opinion, the case of the respondent herein does not come under any one of those exceptions and even on facts it is not such a case which calls for the issuance of an interim mandatory injunction directing the possession being handed over to the respondent. As observed by the learned Single Judge the issue whether the plaintiff is entitled to possession is yet to be decided in the trial court and granting of any interim order directing handing over of possession would only mean decreeing the suit even before trial. Once the possession of the appellant either directly or through his agent (caretaker) is admitted then the fact that the appellant is not using the said property for commercial purpose or not using the same for any beneficial purpose or the appellant has to pay huge amount by way of damages in the event of he losing the case or the fact that the litigation between the parties is a luxury litigation are all facts which are irrelevant for changing the status quo in regard to possession during the pendency of the suit.
13. From the aforesaid decisions, it is apparent that before taking the extra-ordinary step of issuing interim mandatory injunction, the Court is required to find out about the existence of a very strong prima facie case in favour of the plaintiff, apart from other aspects regarding irreparable loss and balance of convenience. As observed by the Supreme Court, the tests to be satisfied are to be much stringent while dealing with the application for interim mandatory injunction.
14. In the present case, we have extracted the basic reason given by the learned single Judge. In the order passed by the learned single Judge, there is no reference to the settled principle of law extracted earlier and the order seems to have been passed without much serious discussion in the matter.
15. In the above view of the matter, we are unable to sustain the order passed by the learned single Judge. In normal course, we would have directed the learned single Judge to reconsider the matter by keeping in view the observations made by the Supreme Court in the two decisions cited. However, we find that unless the main questions raised in the suit, including the question of jurisdiction, are decided, it may not be appropriate to pass interim order of mandatory injunction. Since the question of jurisdiction has been raised, it is more appropriate that the main suit itself should be decided by the trial court.
16. The Registry is directed to list C.S.No.839 of 1999 before the appropriate court for hearing on 22.1.2007. Keeping in view the nature of dispute and the urgency involved, we request the learned single Judge to dispose of the suit in accordance with law as expeditiously as possible, preferably by end of July, 2007. 17. Accordingly, the appeal is allowed and the order of the learned single Judge is set aside, subject to the observation made. There would be no order as to costs. dpk To 1. The Sub Asst. Registrar, Judicial Section, High Court, Madras. 2. The Record keeper, V.R. Section, High Court, Madras.