MAKERS DEVELOPMENT SERVICES PVT. LTD.versusM. VISVESVARAYA INDUSTRIAL RESEARCH AND DEVELOPMENT CENTRE

               [2011] 13 (ADDL.) S.C.R. 109


    MAKERS DEVELOPMENT SERVICES PVT. LTD.                         A
                               v.
   M. ViSVESVARAYA INDUSTRIAL RESEARCH AND
                 DEVELOPMENT CENTRE
              (Civil Appeal No. 9709 of 2011)
                                                                   B
                   NOVEMBER 14, 2011.

  [P. SATHASIVAM AND JASTI CHELAMESWAR, JJ.]

    Code of Civil Procedure, 1908:
                                                                  c
    Or.39, rr. 1 and 2 - Temporary injunction - Grant of -
Basic principles to be considered - Explained.

    0. 39 - rr. 1 and 2 - Prayer for temporary injunction -
Agreement between the parties stated to have been entered
into for construction of a hotel and for grant of its lease - After D
construction was raised upto 80' dispute between parties - Suit
for mandatory injunction - Temporary injunction restraining
the defendant from obstructing the construction etc. prayed -
Single Judge and Division Bench of High Court granting
limited interim order restraining the defendant from in any E
manner selling, transferring or creating third party interests in
the suit property - HELD: The single Judge was fully justified
in granting the limited relief - The Division Bench was also
fully justified in confirming the said limited order - As rightly
obseNed by the single Judge as well as Division Bench, if F
other reliefs were granted and the plaintiff was allowed to
proceed with the construction on the suit land, in the event of
dismissal of suit, the defendant cannot use the land in a
different manner with the structure without undertaking an
enormous exercise of demolishing the same.                          G

     On 4.8.2007, the appellant in C.A. No. 9709 of 2011
filed a suit in the City Civil Court for injunction against the
respondent. The case of the plaintiff-appellant was that
                               109                                 H
    110    SUPREME COURT REPORTS [2011] 13 (ADDL.) S.C.R.


A on 10.11.1980 and agreement was entered into between
   the parties for construction of a composite hotel complex
   and for granting the plaintiff would be granted lease of
   the Hotel (exclusive of the Convention and Exhibition
   Centre) in favour of the plaintif-appellant for 60 years with
B an option of renewal of lease. Pursuant to the agreement,
   the respondent put the appellant in possession of the suit
   land on 16.07.1990. Since the appellant could not
   complete the work due to disputes and differences, the
   respondent, on 31.07.2007, affixed a notice on the
c premises notifying all concerned including the appellant
   to move out of the property and instructed its security
   persons not to permit the appellant to enter upon the said
   property. By order dated 06.08.2007, the trial court held
   that till the substantive suit was filed by the appellant, the
0 impugned notice dated 31.07.2007 would not be acted
   upon by ~he defendants up to and inclusive of
   17.09.2007. On 10.09.2007, the appellant moved a Notice
   of Motion No. 3499 of 2007 in a Ssuit bearing No. 2618 of
  2007 before the Single Judge of the High Court for a
E decree of specific performance, inter alia, praying for a
   permanent injunction restraining the respondent from
  dispossessing the appellant. By ad-interim order dated
   14.09.2007, the assurance given in the City Civil Court
  was directed to be observed and the respondent was
  directed not to create any third party rights pending the
F Notice of Motion. During the pendency of the suit, by
  letter dated 19.11.2007, the respondent terminated the
  said Agreement. The single Judge, rejected prayers
  mentioned in clauses (a) to (f) of the Notice of Motion and
  granted limited interim relief in favour of the appellant with
G regard to prayer clause (g), namely, pending the hearing
  and final disposal of the suit, the defendant-respondent
  would not, in any manner, sell, transfer or create any third
  party rights or interests in the suit property. The appeals
  filed by the parties were dismissed by the Division Bench
H of the High Court.
 MAKERS DEV SERVICES PVT. LTD. v. M. VISVESVARAYA       111
       INDUS. RESEARCH AND DEV. CENTRE
     In the instant appeals filed by the parties, the          A
questions for consideration before the Court were: (i)
"whether the appellant/plaintiff has made out a case for
grant of injunction in its entirety, i.e. prayer clauses (a)
to (g)" and (ii) "whether learned the single Judge as well
as the Division Bench of the High Court committed an           B
error in granting limited relief in respect of clause (g)".

    Dismissing the appeals, the Court

      HELD: 11.1 It is settled law that while passing an
interim order of injunction under 0. 39, rr. 1 and 2 of the c
Code of Civil Procedure, 1908, the court is required to
consider three basic principles, namely, (a) prima facie
case, (b) balance of convenience and inconvenience and
(c) irreparable loss and injury. In addition to these thr~e
basic principles, a court, while granting injunction must D
also take into consideration the conduct of the parties.
It is also established law that the court should not
interfere only because the property is a very valuable
one. Grant or refusal of injunction has serious
consequences depending upon the nature thereof; and E
in dealing with such matters the court must make all
endeavours to protect the interests of the parties. [Para
6] [116-D-F]

     1.2 Inasmuch as the main suit is pendin3, it would
not be proper for this Court to delve into the matter and F
arrive at a categorical finding one way or the other. The
finding of the single Judge about the construction of the
building to the height of 80 ft. on the suit land by the
appellant cannot be ignored. However, whether the
defendant permitted the appellant to enter on the suit G
land and to carry on construction are all matters to be
decided in the main suit. [paras 10 & 11] [119-E-F]

    1.3 What was claimed by the plaintiff was not a mere
prohibitory order but prayed for positive mandatory            H
    112   SUPREME COURT REPORTS [2011] 13 (ADDL.) S.C.R.


A injunction which, as rightly observed by the Division
    Bench, would permit the plaintiff to alter the status quo
    on the suit land on the date of the suit. The single Judge
    as well as the Division Bench on appreciation of entire
   materials rendered the factual finding that the balance of
B convenience is not in favour of granting such mandatory
   interim order as claimed in prayer clauses (a) t-0 (f). As
   rightly observed by the single Judge as well as the
   Division Bench, if other reliefs were granted and the
   appellant was allowed to proceed with the construction
c on the suit land, in the event· of dismissal of the suit, the
   defendant cannot use the land in a different manner with
   the structure without undertaking an enormous exercise
   of demolishing the same. It is relevant to point out that
   though the appellant had stated that it had started
D construction in the year 1996, even after the information
   by the defendant to the appellant in 2002 that the BEST
   had given their 'no objection' for the demolition of
   temporary receiving station and the appellant can
   proceed with the demolition, however, the fact remains,
E the height of the construction was only 80 ft. which
  shows that from the year 2001 to 2007, the appellant had
  not carried on construction and there was no obstruction
  from the side of the defendant. l,n view of all these factual
  aspects and in the light of the stand of the defendant
F disputing the existence of the agreement, as rightly
  observed by the single Judge as well as the Division
  Bench, further permission for construction or ancillary
  works cannot be granted during the pendency of the suit.
  The single Judge was fully justified in granting limited
  relief in respect of prayer clause (g) and in declining the
G other reliefs in clauses (a) to (f). The Division Bench was
  also fully justified in confirming the said limited order.
  Both the parties are directed to cooperate with the court
  for early conclusion of the hearing of Suit No. 2618 of
  2007 pending before the single Judge of the High Court.
H [Para 12] (120-C-H; 121-A]
 MAKE~S DEV. SERVICES PVT. LTD. v. M. VISVESVARAYA           113
          INDUS. RESEARCH AND DEV. CENTRE

    CIVIL APPELLATE JURISDICTION : Civil Appeal No.                  A
9709 of 2011.

     From the Judgment & Order dated 28.06.2011 of the High
Court of Judicature at Bombay in Appeal No. 280 of 2008 in
Notice of Motion No. 3499 of 2007 in Suit No. 2618 of 2007.          B
                                WITH
C.A. No. 9710 of 2011.

    Shyam Divan, F. Pooniwala, Sandeep H. Junarkar, Pratap
Venugopal, Mumtaz Bandurwala, Surekha Raman, Namrata                 C
Sood, Anuj Sarma, K.J. John & Co. for the Appellant.

    Mukul Rohtagi, Praveen Samdani, Ajay Khatla Walia,
Mahesh Agarwal, Radhika Gautam, Pratibha Mehta, E.C.
Agrawala for the Respondent.
                                                                     D
     P. SATHASIVAM, J. 1. Leave granted in both the Special
Leave Petitions. Both these appeals were heard together as
they arose out of the same set of facts and common questions
of law were involved.
                                                                     E
      2. SLP (C) No. 22276 of 2011 has been filed by the
Makers Development Services Pvt. Ltd. against the order
dated 28.06.2011 passed by the Division Bench of the Bombay
High Court in Appeal No. 280 of 2008 challenging the order
dated 25.04.2008 passed by the learned Single Judge in               F
Notice of Motion No. 3499 of 2007 in Suit No. 2618 of 2007
declining the reliefs claimed in prayer clauses (a) to (f) pending
final disposal of the Suit and SLP (C) No. 25972 of 2011 has
been filed by M. Visvesvaraya lndusfrial Research and
Development Centre against the same order in Appeal No. 289          G
of 2008 in Notice of Motion No. 3499 of 2007 in Suit No. 2618
of 2007 granting relief in terms of prayer clause (g).

     3. Brief facts:
     a) Makers Development Services Pvt. Ltd.-the appellant          H
    114    SUPREME COURT REPORTS [2011] 13 (ADDL.) S.C.R


A herein (Original Plaintiff) is a Company registered under the
  Companies Act, 1956 engaged in the business of
  development, building, including the construction and
  management of hotels and developments pertaining to other
  hospitality services and management of properties. M.
3 Visvesvaraya Industrial Research and Development Centre-the
  respondent herein {Original Defendant) is a Company
  incorporated under the Companies Act, 1956 and is engaged,
  inter alia, in promoting, establishing, conducting and
  undertaking scientific research.

        b) The Government of Maharashtra, by Resolutions dated
  1'6.10.1970 and 18.11.1974, had granted lease of certain plots
  of land to the defendant-Company at Backbay Reclamation,
  Cuffe Parade, Mumbai, who was entitled and authorized to
  enter into transactions with third parties in respect of the said
D land. A portion of that land admeasuring 13,326 sq. mts. which
  forms a part of the larger land held by the defendant-Company
  is the subject-matter of the present case.

       c) An agreement dated 10.11.1980 was entered into
E between the parties for construction of a composite hotel
  complex consisting of a Hotel Building, a Convention Centre
  and an Exhibition Centre on the Suit Land (Tower No.2) and
  the plaintiff would be granted lease of Hotel (exclusive of the
  Convention and Exhibition Centre) for 60 years with an option
F of renewal of lease. This agreement came to be modified from
  time to time.

         d) Pursuant to the Agreement, the respondent put the
    appellant in possession of the Suit Land on 16.07 .1990, which
    continues to remain with the appellant till date.
G
        e) Since the appellant could not complete the work and
    due to disputes and differences, the respondent, on
    31.07.2007, affixed a notice on the premises notifying all
    concerned including the appellant to move out of the property
H
 MAKERS DEV. SERVICES PVT. LTD. v. M. VISVESVARAYA 115
INDUS. RESEARCH AND DEV. CENTRE [P. SATHASIVAM, J.]
and instructed its security persons not to permit the appellant      A
to enter upon the said property.

      f) On 04.08.2007, the appellant filed a suit for injunction
before the City. Civil Court, Mumbai seeking interim and final
reliefs restraining the respondent from taking any illegal steps.    B
By order dated 06.08.2007, the learned Judge held that till the
substantive suit is filed by the appellant, the impugned notice
dated 31.07.2007 will not be acted upon by the defendants upto
and inclusive of 17.09.2007.

     g) On 10. 09. 2007, the appellant moved a Notice of             C
Motion No. 3499 of 2007 in a Suit being No. 2618 of 2007
before the learned Single Judge of the Bombay High Court
for a decree of specific performance, inter alia, praying for a
permanent injunction restraining the respondent from
dispossessing the appellant. By ad-interim order dated               D
14.09.2007, the assurance given in the City Civil Court was
directed to be observed and the respondent was directed not
to create any third party rights pending the Notice of Motion.
During the pendency of the suit, by letter dated 19.11.2007,
the respondent terminated the said Agreement. The learned            E
single Judge, after referring the documents and affidavits on
record, rejected prayer clauses (a) to (f) of the Notice of Motion
and granted limited interim relief with regard to prayer clause
(g) in favour of the appellant.

     h) Aggrieved by the order of the learned single Judge, the      F
appellant preferred an appeal being Appeal No. 280 of 2008
before the Division Bench of the High Court. With regard to the
limited relief granted by the learned single Judge, the
respondent also filed an appeal being Appeal No. 289 of 2008
before the Division Bench of the High Court.                         G

    i) The Division Bench, by a common judgment, upheld the
order of the learned single Judge and dismissed both the
appeals. Challenging the order of the Division Bench of the
                                                                     H
     116     SUPREME COURT REPORTS [2011] 13 (ADDL.) S.C.R.


A High Court, the appellant and the respondent filed separate
  special leave petitions before this Court.

       4. Heard Mr. Shyam Divan, learned senior counsel for the
  appellant and Mr. Mukul Rohatgi & Mr. Praveen Samdani,
B learned senior counsel for the respondent.

           5. The points for consideration in these appeals are:-

            a)   Whether the appellant/plaintiff has made out a case
                 for grant of injunction in its entirety, i.e. prayer
c                clauses (a) to (g)?

            b)   Whether learned single Judge as well as Division
                 Bench of the High Court committed an error in
                 granting limited relief in respect of clause (g)?

D       6. It is settled law that while passing an interim order of
  injunction under Order XXXIX Rules 1 and 2 of the Code of Civil
  Procedure, 1908, the Court is required to consider three basic
  principles, namely, a) prima facie case, b) balance of
  convenience and inconvenience and c) irreparable loss and
E injury. In addition to the above mentioned three basic principles,
  a court, while granting injunction must also take into
  consideration the conduct of the parties. It is also established
  law that the Court should not interfere only because the property
  is a very valuable one. Grant or refusal of injunction has serious
F consequences depending upon the nature thereof and in
  dealing with such matters the court must make all endeavours
  to protect the interest of the parties.

        7. With the above principles, let us consider the claim of
    both the parties.
G
         8. The appellant/plaintiff, who filed Suit No. 2618 of 2007
    on the file of original side of the High Court of Bombay prayed
    for the following interim reliefs pending hearing and final
    disposal of the said suit:
H
 MAKERS DEV SERVICES PVT. LTD. v. M. VISVESVARAYA 117
INDUS. RESEARCH AND DEV. CENTRE [P. SATHASIVAM, J.]
   "(a) That pending the hearing and final disposal of the Suit,   A
   the Defendant be ordered and directed to do, sign,
   execute, deliver and register all such acts, deeds, matters
   writings, documents, authorities papers, plans, sanctions
   and things as may be necessary to enable the Plaintiff to
   continue construction on the Suit Land in terms of the Suit     B
   Contract;

   (b) That pending the hearing and final disposal of the Suit,
   the Defendant by itself, its servants and agents or any
   person or persons claiming by, from, through or under them C
   be restrained by an order and injunction of this Court from
   dispossessing the Plaintiff or removing the authorized
   representatives, employees, staff, workers and labourers
   of the Plaintiff and their respective family member or their
   belongings and articles or the construction materials,
   equipment and other belongings of the Plaintiff from the D
   Suit Land;

   (c) That pending the hearing and final disposal of the Suit,
   it be ordered and decreed that the Defendant to allow the
   Plaintiff to continue construction on the Suit Land and         E
   unhindered access to the Suit Land and allow ingress to
   and egress from the Suit Land, by the Plaintiff, its
   representatives, employees and contract labour as also for
   all construction materials and equipment without in any
   manner, directly or indirectly, obstructing or hindering the    F
   Plaintiff.
   (d) That pending the hearing and final disposal of the Suit,
   the Defendant by itself, its servants and agents or any
   person or persons claiming by, from, though or under them
   be restrained by an order and injunction of this Court from     G
   in any manner restraining, preventing impending or
   obstructing implementation of the Suit Contract or
   construction on the Suit Land or access to and ingress to
    and egress from the Suit Land, of the Plaintiff or its
    authorized representatives, employees. workers, labourers      H
    118     SUPREME COURT REPORTS [2011] 13 (ADDL.) S.C.R.


A         and their respective family members or preventing,
          impeding or obstructing construction material or equipment
          of the Plaintiff from being brought on to the Suit land or in
          any manner, directly or indirectly, by any act of omission
          or commission, withholding or causing to be withheld
B         essential utilities such as power and water supply to the
          Suit Land for construction by the Plaintiff;

          (e) That pending the hearing and final disposal of the Suit,
          the Defendant by itself, its servants and agents or any
          person or persons claiming by, from, through or under them
c         be restrained by an order and injunction of this Court from
          in any manner, whether directly or indirectly, revoking or
          acting on any purported revocation of the Letter of Authority
          granted by the Defendant to the Plaintiff or in any manner,
          whether directly or indirectly, hindering, impeding or
D         obstructing construction on the Suit Land in terms of the
          Suit Land in terms of the Suit Contract;

          (f) That pending the hearing and final disposal of the Suit,
          the Defendant by itself, its servants and agents or any
E         person or persons claiming by, from, through or under them
          be restrained by an order and injunction of this Court from
          in any manner committing unlawful trespass or from in any
          manner intimidating the Plaintiff, its employees, workers,
          labourers and other agencies appointed by the Plaintiff;
F         (g) That pending the hearing and final disposal of the Suit,
          the Defendant by itself, its servants and agents or any
          person or persons claiming by, from, through or under them
          be restrained by an order and injunction of this Court from,
          in any manner, selling transferring, dealing with, disposing
G         of, alienating encumbering or creating any third party rights
          or interest in, or entering into any agreement or
          arrangement with any one else in respect of the Suit Land
          or any part thereof;"

H         9. Among the above prayers for interim reliefs, the learned
 MAKERS DEV. SERVICES PVT. LTD. v. M. VISVESVARAYA 119
INDUS. RESEARCH AND DEV. CENTRE [P. SATHASIVAM, J.]
single Judge granted relief only in respect of prayer clause (g) A
that too with a condition, namely, except the words "dealing
with". The learned single Judge on satisfying himself and after
thorough scrutiny of the materials placed rejected the relief
insofar as prayer clauses (a) to (f), which resulted in filing of
above two appeals by the appellant and the defendant. It is the B
claim of the appellant/plaintiff that on the basis of the contract
between the parties, the learned single Judge and the Division
Bench should have granted an order permitting the appellant
to carry on further construction especially when construction of
about 80 ft. had already been raised by the appellant on the c
suit land. On the other hand, it is the case of the defendant that
there is no existing agreement between the parties and the only
 point is that the parties have agreed to enter into an agreement
 and, therefore, the learned single Judge as well as the Division
 bench were not justified even in granting interim order in terms D
 of prayer (g).
     10. Inasmuch as the main suit is pending, it would not be
proper for this Court to delve into the matter and arrive at a
categorical finding one way or other. Accordingly, we have to
find out whether there is prima facie case and 'balance of        E
convenience' in terms of principles mentioned above.

      11. The finding of the learned single Judge about the
construction of the building to the height of 80 ft. on the suit land
by the appellant cannot be ignored. However, whether the F
defendant permitted the appellant to enter on the suit land and
to carry on construction are all matters to be decided in the
main suit. The limited relief granted in clause (g) by the learned
single Judge is quite understandable, otherwise, it could be
possible for the defendant to deal with the suit land with third G
parties or encumber it before the final disposal of the suit.
 However, as rightly observed by the learned single Judge as
well as Division Bench, if other reliefs which we have already
 extracted above are granted, in the event of dismissal of a suit,
 undoubtedly, it would create enormous difficulties for the H
    120 SUPREME COURT REPORTS [2011] 13 (ADDL.) S.C.R.


A defendant using the plot or land freely and without any difficulty.
  In other words, if the appellant was allowed to proceed with the
  construction on the suit land, in the event of dismissal of suit,
  the defendant cannot use the land in a different manner with
  the structure without undertaking an enormous exercise of
B demolishing the same. Further, what was claimed by the plaintiff
  was not a mere prohibitory order but prayed for positive
  mandatory injunction which, as rightly observed by the Division
  Bench, would permit the plaintiff to alter the status quo on the
  suit land on the date of the suit.
c        12. The learned single Judge as well as Division Bench
  on appreciation of entire materials rendered the factual finding
  that the balance of convenience is not in favour of granting such
  mandatory interim order as claimed in prayer clauses (a) to (f).
D It is relevant to point out that though the appellant had stated
  that it had started construction in the year 1996, even after the
  information by the defendant to the appellant in 2002 that the
  BEST had given their 'no objection' for the demolition of
  temporary receiving station and the appellant can proceed with
  the demolition, however, the fact remains, the height of the
E construction was only 80 ft. which shows that from the year 2001
  to 2007, the appellant had not carried on construction and there
  was no obstruction from the side of the defendant. In view of
  all these factual aspects and in the light of the stand of the
  defendant disputing the existence of the agreement, as rightly
F observed by the learned single Judge as well as Division
  Bench, further permission for construction or ancillary works
  cannot be granted during the pendency of the suit. We are
  satisfied that the learned single Judge was fully justified in
  granting limited relief in respect of prayer clause (g) and
G declined the other reliefs in clauses (a) to (f). The Division
  Bench was also fully justified in confirming the said limited order.
  Though learned senior counsel for the respondent has prayed
  for certain directions such as execution of a mortgage deed
  etc., for the same reasons mentioned above, we are not inclined
H
  MAKERS DEV SERVICES Pvr LTD. v. M. VISVESVARAYA 121
 INDUS. RESEARCH AND DEV. CENTRE [P. SATHASIVAM, J.]
to grant such relief as claimed. As observed earlier, at this        A
stage, it is not desirable to go into all the details and render a
specific finding which would undoubtedly affect the claim of both
the parties in the main suit. On the other hand, we are in entire
agreement with the prima facie conclusion arrived at by the
learned single Judge and the Division Bench.                         B

     13. Inasmuch as, as early as on 25.04.2008, the learned
single Judge directed hearing of the suit be expedited, taking
note of various other aspects/impediments highlighted by both
the parties including construction of a protection/security wall c
on the sea side, we request the learned single Judge of the
High Court to dispose of the suit being No. 2618 of 2007 as
early as possible preferably within a period of nine months from
the date of the receipt of the copy of this judgment. We also .
direct both the parties to cooperate with the court for early
                                                                 0
conclusion of the hearing as directed above.

      14. In the light of the above discussion and reasonings, we
 find no merit in both the appeals, consequently; they are
·dismissed with no order as to costs.
                                                                     E
R.P.                                        Appeals dismissed.