Holding

An interlocutory mandatory injunction cannot be used to create new rights and the principle of moulding of relief is applicable only at the stage of final relief; therefore, the High Court’s mandatory order was beyond its jurisdiction and is set aside.

Summary

The appellant, a developer, was ordered by the Bombay High Court to hand over eight flats and sixteen parking spaces to the plaintiff under a settlement agreement between the plaintiff and another respondent, even though the appellant had no direct contract with the plaintiff. The appellant challenged the High Court's interlocutory mandatory injunction, arguing that the principle of moulding of relief could not be applied at the interlocutory stage and that the settlement agreement could not bind a party not a signatory. The Supreme Court examined the standards for granting interlocutory mandatory injunctions and the proper stage for invoking moulding of relief. It held that such injunctions are only permissible to restore the status quo and not to create new rights, and that moulding of relief is a tool for final relief, not interim orders. Consequently, the Court found the High Court had exceeded its jurisdiction by imposing a mandatory order on the appellant. The Supreme Court set aside the High Court’s order and revived the earlier ad‑interim order, allowing the appeal.

Issues considered

Whether an interlocutory mandatory injunction can be granted to create new rights at the interim stage.
Whether the principle of moulding of relief may be applied to an interlocutory order.
Whether a settlement agreement between two respondents can be enforced against a third party who is not a party to it.
Whether the High Court exceeded its jurisdiction in directing the appellant to hand over additional flats and parking spaces.

Legislation cited

Arbitration and Conciliation Act, 1996s. 11, s. 17, s. 8, s. 9
Code of Civil Procedure, 1908s. Order XL Rule 1, s. Order XXXIX

Subjects

interlocutory mandatory injunctionprinciple of moulding of reliefjurisdictionsettlement agreementarbitrationspecific performancecivil procedurestatus quoreal estate developmenttripartite agreement

Judgment

50 [2018]REPORTS
SUPREME COURT 10 S.C.R. 50 [2018] 10 S.C.R.

A SAMIR NARAIN BHOJWANI
v.
M/S. AURORA PROPERTIES AND INVESTMENTS AND ANR.
(Civil Appeal No. 7079 of 2018)
B AUGUST 21, 2018
[DIPAK MISRA, CJI, A. M. KHANWILKAR AND
DR. D.Y. CHANDRACHUD, JJ.]
Injunction: Interlocutory mandatory injunction – When can
be granted – Principle of moulding relief – Invocation of – On
C
facts, respondent no.1 appointed as developer for developing the
suit property – Thereafter, under an agreement, respondent no.1
transferred the benefits of development rights in the suit property
to respondent no.2 – Subsequently, execution of development
agreement by respondent no.2 with the appellant whereunder
D appellant would be entitled to 55% of the total area available for
sale buildings and car parking and respondent no.2 retained 45%
of the total area – Dispute during the construction of the building –
Suit for specific performance by respondent no.1 against appellant
and respondent no.2 – Order of mandatory interlocutory
injunction by both the High Court directing the appellant to hand
E
over 8 flats along with 16 parking spaces to respondent no. 1 – On
appeal, held: Interim mandatory injunction can be passed only when
circumstances are clear and prima facie material clearly justify a
finding that status quo has been altered by one of the parties to the
litigation and the interest of justice demanded that status quo ante
F be restored by way of an interim mandatory injunction – On facts,
both High Court erred in invoking the principle of moulding of
relief so also the exercise of power to grant mandatory order at an
interlocutory stage – Mandatory order at interlocutory stage was
in excess of jurisdiction – Such order at an interlocutory stage
cannot be countenanced – High Court was swayed away by the
G
consent agreement between the respondents inter partes to which
the appellant was not a party – Appellant could not be bound by
the arrangement agreed upon between the respondents inter se but
only by the agreement entered with respondent No.2 and at best the
tripartite agreement – Appellant could not be directed to hand over
H
50
SAMIR NARAIN BHOJWANI v. M/S. AURORA PROPERTIES 51
AND INVESTMENTS

8 additional flats and 16 parking spaces to respondent No.1 with A
whom the appellant had no independent agreement in that regard –
Complying with the directions would result in bestowing advantage
on respondent No.2 who failed to discharge its obligation under
the agreement with the appellant – Thus, the order passed by the
High Court is set aside.
B
Principle of moulding relief and interlocutory mandatory
injunction – Difference between – Held: Principle of moulding of
relief can be resorted to at the time of consideration of final relief
in the main suit and not at an interlocutory stage – Interlocutory
mandatory injunction can be granted only to restore the status quo
and not to establish a new set of things differing from the state C
which existed on the date when the suit was instituted.
Allowing the appeal, the Court
HELD: 1.1 The High Court disregarded that the Settlement
Agreement and the Consent Terms have been entered into D
between the respondent No.1/plaintiff and respondent
No.2/defendant No.1 inter partes. That could not be thrust upon
the appellant/defendant No.2 who had executed a separate
agreement with respondent No.2/defendant No.1. The appellant
could be bound only by the agreement dated 10th March, 2003 in
his favour and executed by him. Admittedly, the said agreement E
is the subject matter of arbitration proceedings, inter alia because
respondent No.2 had failed to discharge its obligation thereunder.
The appellant has already parted with the possession of flats to
respondent No.2 in furtherance of agreement dated 10th March,
2003 and respondent No.1/plaintiff could be accommodated only F
against those flats. Asking the appellant to hand over additional
8 flats and 16 parking spaces by way of mandatory order, would
be to superimpose the liability of respondent No.2/defendant No.1
on the appellant for discharging its obligation qua respondent
No.1/plaintiff in relation to the agreement entered between them
and including Settlement Agreement and Consent Terms to which G
the appellant is not a party. [Para 23] [65-B-E]
1.2 That apart, the Single Judge as well as the Division
Bench have committed fundamental error in applying the
principle of moulding of relief which could at best be resorted to
H
52 SUPREME COURT REPORTS [2018] 10 S.C.R.

A at the time of consideration of final relief in the main suit and not
at an interlocutory stage. The nature of order passed against the
appellant is undeniably a mandatory order at an interlocutory
stage. There is marked distinction between moulding of relief
and granting mandatory relief at an interlocutory stage. As
regards the latter, that can be granted only to restore the status
B
quo and not to establish a new set of things differing from the
state which existed at the date when the suit was instituted.
[Para 24] [65-F-G]
Dorab Cawasji Warden v. Coomi Sorab Warden and
Others (1990) 2 SCC 117 : [1990] 1 SCR 332 –
C referred to.
Halsbury’s Laws of England 4 th Edn., Volume 24,
para 948 – referred to.
1.3 An interim mandatory injunction is not a remedy that is
D easily granted. It is an order that is passed only in circumstances
which are clear and the prima facie material clearly justify a
finding that the status quo has been altered by one of the parties
to the litigation and the interest of justice demanded that the
status quo ante be restored by way of an interim mandatory
injunction. [Para 26] [67-D]
E
Metro Marins and Another v. Bonus Watch Co. (P) Ltd.
and Others (2004) 7 SCC 478 ; Kishore Kumar Khaitan
and Another v. Praveen Kumar Singh (2006) 3 SCC
312 : [2006] 2 SCR 176 ; Purshottam Vishandas Raheja
and Another v. Shrichand Vishandas Raheja (Dead)
F through LRs. and Others (2011) 6 SCC 73 : [2011] 6
SCR 913 – relied on.
1.4 In the factual scenario in which mandatory order has
been passed against the appellant, is in excess of jurisdiction.
Such a drastic order at an interlocutory stage ought to be
G eschewed. It cannot be countenanced. [Para 27] [67-E-F]
1.5 The invocation of principle of moulding of reliefs so
also the exercise of power to grant mandatory order at an
interlocutory stage, is manifestly wrong. To put it differently, while

H
SAMIR NARAIN BHOJWANI v. M/S. AURORA PROPERTIES 53
AND INVESTMENTS

analysing the merits of the contentions the High Court was swayed A
away by the consent agreement between the respondents inter
partes to which the appellant was not a party. Thus, he could not
be bound by the arrangement agreed upon between the
respondents inter se. The appellant would be bound only by the
agreement entered with respondent No.2 and at best the
B
tripartite agreement. The respondent No.2 having failed to
discharge its obligation under the stated agreement cannot be
permitted to take advantage of its own wrong in reference to the
arrangement agreed upon by it with respondent No.1/plaintiff and
including to defeat the claim of the appellant in the arbitration
proceedings. [Para 29] [67-G-H; 68-A-C] C
1.6 It would have been a different matter if the High Court
were to continue the ad-interim arrangement directed in terms
of order dated 3 rd December, 2012 and as corrected on 17 th
December, 2012, until the final disposal of the suit. However, by
no stretch of imagination, the appellant could be directed to hand D
over 8 additional flats and 16 parking spaces to respondent No.1
with whom the appellant has had no independent agreement in
that regard. The fact that respondent No.1 would get a right in
the suit property in terms of agreement, Settlement Agreement
and Consent Terms with respondent No.2, cannot be the basis to
set up a claim against the appellant and, especially because E
complying with the directions in the impugned order would
result in bestowing advantage on respondent No.2 who has failed
to discharge its obligation under the agreement with the
appellant. [Para 30] [68-D-F]
1.7 The impugned judgment and order passed by the High F
Court is set aside. It is deemed appropriate to revive the
ad-interim order passed by the Single Judge of the High Court in
Notice of Motion and as corrected, which shall operate until the
disposal of the suit or until it is modified by the High Court on
account of subsequent developments, if any, as and when G
occasion arises. [Para 31-32] [68-G-H]
Gaiv Dinshaw Irani and Others v. Tehmtan Irani and
Others (2014) 8 SCC 294 – referred to.

H
54 SUPREME COURT REPORTS [2018] 10 S.C.R.

A Case Law Reference
(2014) 8 SCC 294 referred to Para 22
[1990] 1 SCR 332 referred to Para 24
(2004) 7 SCC 478 relied on Para 26
B [2006] 2 SCR 176 relied on Para 26
[2011] 6 SCR 913 relied on Para 26
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 7079
of 2018.
C From the Judgment and Order dated 09.07.2018 of the High Court
of Judicature at Bombay in Commercial Appeal No. 173 of 2017 in
Notice of Motion No. 147 of 2013 in Commercial Suit No. 62 of 2013.
Mukul Rohatgi, Shyam Divan, Sr. Advs., Parimal Shroff, Mahesh
Agarwal, Rishi Agrawala, Ms. Parul Shukla (for E. C. Agrawala), Satyen
D Vora, Vikas Mehta, Sanmish Gala, Mahendra K. Ghelani, Kunal Vajani,
Pratap Venugopal, Ms. Surekha Raman, Atman Mehta, Ms. Niharika,
Ms. Vaishali Shah, Ms. Kanika Kalaiyarasan (for M/s. K J John And
Co.), Advs. for the appearing parties.
The Judgment of the Court was delivered by
E A.M. KHANWILKAR, J. 1. The captioned appeal challenges
the judgment and order passed by the Division Bench of the Bombay
High Court dated 9th July, 2018 in Commercial Appeal No.173 of 2017,
whereby the Division Bench dismissed the appeal filed by the appellant
and upheld the decision of the learned Single Judge dated 9th October,
F 2017 in Notice of Motion No.147 of 2013, wherein the learned Single
Judge inter alia passed a mandatory interlocutory injunction directing
the appellant to hand over 8 (eight) flats along with 16 (sixteen) car
parking spaces under the Settlement Agreement dated 4th November,
2016 and Consent Terms dated 25th September, 2017 between respondent
Nos.1 and 2 inter partes.
G
2. The relevant facts are as follows: Respondent No.1/plaintiff
was appointed by one Andheri Kamgar Nagar Cooperative Housing
Society Ltd. (for short, ‘the Society’) under a Development
Agreement dated 6th October, 1996 as a developer under the Slum
Development/ Rehabilitation Scheme to develop the suit property in
H
SAMIR NARAIN BHOJWANI v. M/S. AURORA PROPERTIES 55
AND INVESTMENTS [A. M. KHANWILKAR, J.]

question, being a plot of land situated at Versova Link Road, Taluka A
Andheri and bearing Survey No. 139, City Survey No. 1319 (Part)
admeasuring 8892 sq. mts. or thereabouts as per Indenture of Lease
dated 31st March, 1993 and 9402 sq. mts. as per City Survey Records.
One part of the suit property was for constructing tenements free of
charge for project-affected persons and the balance property could be
B
used to develop and sell the balance FSI. Respondent No.1 then
executed an Agreement for Sub-Development dated 22nd September,
1999 with respondent No.2/defendant No.1, transferring the benefits of
development rights in the suit property, with the consent of the
aforementioned Society, to respondent No.2 after keeping aside 15,000
sq. ft. for itself i.e. respondent No.1. C
3. Subsequently, respondent No.2 executed an Agreement for
Development dated 10th March, 2003 with the appellant/defendant No.2,
whereunder the appellant would be entitled to 55% of the total area
available for free sale buildings and car parking in the suit property and
respondent No.2 retained 45% of the total area available for D
construction of free sale buildings and car parking by utilizing FSI which
may be available on the suit property as per the Slum Rehabilitation
Scheme. This agreement was entered into without the consent of
respondent No.1 and hence, all three parties executed a Tripartite
Agreement dated 11th September, 2009, referencing the previous
agreements of 6th October, 1996 and 22nd September, 1999 wherein E
respondent No.1 was entitled to an area of 22,500 sq. ft., an increase
from its earlier agreed upon 15,000 sq. ft., which would be allocated out
of the 45% share due to respondent No. 2
4. Disputes arose during the construction of the building, which
resulted in respondent No.1 filing a Commercial Suit No. 62 of 2013 F
against respondent No.2 and the appellant inter alia seeking
specific performance of the Development Agreement dated 22 nd
September, 1999, read with the Tripartite Agreement dated 11th
September, 2009, including handing over constructed area of 22,500 sq.
ft. in the free sale buildings along with proportionate car parking space, G
in the form of 12 (twelve) flats in Wings ‘A’ and ‘B’ of the building ‘Bay
– View’ constructed on the suit property and 24 (twenty four) car
parking spaces. Respondent No.1 also took out Notice of Motion No.
147 of 2013 for interim reliefs, seeking to restrain respondent No.2 and
the appellant from creating third party rights in the suit property without
H
56 SUPREME COURT REPORTS [2018] 10 S.C.R.

A first handing over possession of the 22,500 sq. ft. constructed area in the
form of flats and parking spaces. Respondent No. 1 alleged that this
interim relief was necessitated by the fact that its advocate had
conducted a search in the sub-registrar’s office and found a mortgage
deed executed by the appellant in favour of a third party with respect to
12 flats and 24 parking spaces in the building ‘Bay–View’ and that it
B
apprehended that the appellant would sell or create third party rights in
respect of the said flats. The alleged mortgage deed itself was not
produced by respondent No.1 on the ground that it had applied for a
copy of the same but was yet to receive it. Respondent No.1 also sought
to appoint a Court Receiver to take charge of the premises in the suit
C property comprising its 22,500 sq. ft. constructed area. An ad-interim,
consent order was passed on 3rd December, 2012, in the said Notice of
Motion No. 147 of 2013, whereby respondent No. 2 and the appellant
agreed to not dispose of or create third party rights in respect of 8 flats
in the completed Wings ‘A’ and ‘B’ of the building and 4 flats in the
under-construction Wing ‘C’ of the building, totaling 12 flats.
D
5. The parties filed their respective replies and rejoinders in the
suit and notice of motion. The appellant’s stance was that he had
completed his contractual obligations and offered respondent No.2 its
entitlement of 45% area in the constructed buildings but respondent No.2
had failed to take possession of the same. The subsequent delay in
E construction of Wing ‘C’ of the building was due to the failure of
respondent No.2 to obtain a Commencement Certificate for Wing ‘C’,
resulting in losses to the appellant. Owing to this breach committed by
respondent No.2, it was no longer entitled to its 45% share in the
constructed area and as a consequence, respondent No.1 was not
F entitled to its 22,500 sq. ft. area which could only be claimed out of the
respondent No.2’s entitlement.
6. The appellant then took out Notice of Motion No. 540 of 2013,
seeking to refer the suit to arbitration under Section 8 of the Arbitration
and Conciliation Act, 1996 (“the Arbitration Act”) and Arbitration
G Application No. 86 of 2013, seeking to appoint an arbitrator under
Section 11 of the Arbitration Act. Both these proceedings were rejected
by the High Court vide its order dated 30th September, 2014 on the ground
that while the Development Agreement of 22 nd September, 1999
between respondent Nos.1 and 2 contained an arbitration clause and
similarly, the Agreement of 10th March, 2003 between the appellant and
H
SAMIR NARAIN BHOJWANI v. M/S. AURORA PROPERTIES 57
AND INVESTMENTS [A. M. KHANWILKAR, J.]

respondent No.2 also contained an arbitration clause, however, the A
Tripartite Agreement of 11th September, 2009 itself did not contain an
arbitration clause and that a mere reference made in the Tripartite
Agreement to the previous agreements would not make the arbitration
clauses therein part of the Tripartite Agreement. The appellant
challenged that decision right upto this Court in SLP (Civil) No. 2235 of
B
2015, which stood rejected.
7. The appellant also initiated proceedings under Section 9 of the
Arbitration Act against respondent Nos.1 and 2 before the High Court.
The High Court refused to grant any relief in the petition filed under
Section 9 of the Arbitration Act. The appellant then withdrew the
Section 9 proceedings and initiated arbitration solely against respondent C
No. 2 under the Agreement dated 10 th March, 2003. In the said
arbitration proceedings, respondent No.2 filed an application for interim
reliefs under Section 17 of the Arbitration Act inter alia seeking
specific performance of the agreement of 10th March, 2003 including
possession of its entire 45% share of flats in the buildings constructed on D
the suit property. Respondent No.2 contended that the application was
necessitated by the fact that the appellant had violated the terms of the
10th March, 2003 Agreement and had created third-party rights in
respect of his 55% entitlement in the suit property, without first
providing respondent No.2 with the occupation and possession of its
45% entitlement in the suit property as set out in the said Agreement. E
Respondent No.2 also submitted that the appellant had deposited a
refundable amount of Rs.4 crore as part of his obligation under the
Agreement but that refund of the said deposit was not, in any way,
connected with handing over of the respondent No.2’s entitlement of
flats. In any event, respondent No.2 had offered to refund the said F
deposit in exchange for possession of the flats due to it, which the
appellant had refused.
8. By an interim order dated 12 th October, 2016, the sole
arbitrator made prima facie observations that construction of Wing ‘C’
in the building situated on the suit property had been delayed owing to G
respondent No.2’s failure to obtain the Commencement Certificate for
the same. Further, respondent No.2 had allowed the appellant to
construct only 88 flats so far, which worked out to 72% of the total area
to be constructed. On that basis, the arbitrator was of the opinion that
respondent No.2 could not receive its entire 45% share in the constructed
H
58 SUPREME COURT REPORTS [2018] 10 S.C.R.

A area of 88 flats, which worked out to 31.6 flats, but instead, would
receive 72% of its 45% share which worked out to 28.5 flats. From
these 28.5 flats, 12 flats were to be kept aside for respondent No.1 as
directed in the High Court’s ad-interim order dated 3rd December, 2012
and thus, respondent No.2 was entitled to 16.5 flats. Out of 16.5 flats,
the appellant was directed to hand over possession of 16 flats to
B
respondent No. 2, after which respondent No.2 would refund the
deposit given by the appellant in respect of such flats. The remaining
amount of respondent No.2’s entitlement in one flat would be discharged
by both respondent No.2 and the appellant jointly disposing of the said
flat at a mutually agreed price.
C 9. This order was challenged by the appellant, first before the
High Court and having failed there, before this Court in SLP (Civil) No.
35563 of 2016. This Court, vide order dated 14th December, 2016,
refused to set aside the High Court’s decision but recorded that the
observations made by the sole arbitrator and High Court would not
D influence the final outcome of the matter.
10. Reverting to Notice of Motion No.147 of 2013 in the suit filed
by respondent No.1, it was then finally heard and judgment reserved.
Pending the decision, however, respondent Nos. 1 and 2 filed Consent
Terms dated 25th September, 2017 according to which respondent No.2
E agreed to hand over an additional 8 (eight) flats along with 16 (sixteen)
parking spaces to respondent No.1 in full and final settlement of the
Development Agreement of 22nd September, 1999 and the Tripartite
Agreement of 11th September, 2009.
11. The Learned Single Judge vide decision dated 9th October,
F 2017 in Notice of Motion No.147 of 2013, relied upon the interim order
of 12th October, 2016 passed by the sole arbitrator, terming it as an
interim award. The Single Judge was of the opinion that the
apportionment of flats done by the arbitrator had become res judicata.
The arbitrator’s finding, that respondent No.2 was entitled to 28.5 flats,
had attained finality since the appeals to the High Court and this Court
G had been rejected. Further, from these 28.5 flats, 12 flats along with 24
parking spaces formed part of respondent No.2’s entitlement, which, in
turn, belonged to respondent No.1, and had been kept out of the scope
of the arbitration since there was an ad-interim order of the High Court
operating in that regard. Possession and keys of the remaining 16 flats
H out of the 28.5 flats had been handed over by the appellant to
SAMIR NARAIN BHOJWANI v. M/S. AURORA PROPERTIES 59
AND INVESTMENTS [A. M. KHANWILKAR, J.]

respondent No.2, for which the appellant’s deposit had also been A
refunded by respondent No.2, as directed by the arbitrator.
12. The Single Judge further opined that even if respondent No.2
was ultimately held liable to compensate the appellant for damages, the
same could not be recovered from the said 12 flats as these flats were
ultimately and rightfully due to respondent No.1 (original plaintiff) and B
out of bounds for the appellant. The Single Judge rejected the appellant’s
argument that since respondent No.1 claimed through respondent No.2,
any breach by respondent No.2 would automatically affect the
entitlement of respondent No.1 as well.
13. The question as to whether respondent No.2 was obligated to C
hand over possession of 8 flats to respondent No.1 as per the settlement
agreement dated 4th November, 2016 and the Consent Terms dated
25th September, 2017 and whether the appellant had to hand over the
keys of the said flats to respondent No.1, were answered by the Single
Judge in the affirmative, with the finding that respondent No.2 was the
rightful owner of the balance 39.6 flats, including the 8 flats, out of the D
88 constructed flats, and that the appellant had no rights over the same.
The point of respondent No.2 being the rightful owner of the 8 flats was
based on the following aspects:
a. Respondent No.2 alone was entitled to develop the suit
property as the letter of intent from the SRA was in favour of E
respondent No.2;
b. The appellant was a contractor who had been given the right
to develop the suit property and his rights flowed from
respondent No. 2;
F
c. Respondent No.2 had retained its right to construct 45% of
the total area available and the appellant had even executed
a Power of Attorney (POA) in favour of respondent no.2
entitling respondent No.2 to execute agreements for sale on
ownership basis, leave and license, etc. for the flats and car
parking spaces in the suit property, including the said 8 flats G
and similarly, respondent No.2 had executed a POA in favour
of the appellant allowing the appellant to dispose of his flats
and car parking spaces which he was entitled to receive as
part of his 55% share. This was even conceded to by the
appellant in the arbitration proceedings and in light of the same,
H
60 SUPREME COURT REPORTS [2018] 10 S.C.R.

A the appellant was estopped from objecting to respondent No.2
handing over 8 flats to respondent No.1;
14. On the issue of the appellant not being the owner of the said
flats, the Single Judge recorded that merely because the appellant had
constructed the said flats and had the keys to the same, he could not be
B said to be the owner of the flats and he could not prevent respondent
No.2 from handing over possession of the 8 flats to respondent No.1.
The appellant merely had derivative rights over the suit property,
flowing from respondent No.1 through respondent No.2, and any
dispute between respondent No.2 and the appellant could not, in any
way, affect the right of respondent No.1 over the suit property. The
C Consent Terms dated 25th September, 2017 between respondent Nos.1
and 2 clearly set out that respondent No.2 was obligated to hand over 8
flats to respondent No.1 and the right of respondent No.1 over the said
flats was paramount to the rights of the other parties.
15. The Single Judge thus directed the appellant, by a mandatory
D order, to hand over keys and possession of the said 8 flats to respondent
No.1 along with 16 parking spaces, recording that he had moulded the
reliefs originally sought by respondent No.1 in the changed circumstances
of the case and in order to shorten the litigation and do complete justice.
16. Aggrieved by the Single Judge’s decision, the appellant
E challenged the said decision before the Division Bench of the High Court
in Commercial Appeal No.173 of 2017. It was urged on behalf of the
appellant that respondent Nos.1 and 2 had entered into the Consent
Terms dated 27th September, 2017 with a view to defeat the appellant’s
claim. Unless respondent No.2 completed its entire obligations with
F respect to the building still under construction in the suit property,
respondent No.1 was not entitled to receive its 8 flats as per the
Consent Terms. The appellant further contended that the handing over
of 8 flats to respondent No.1 was, in effect, a final relief since nothing
further remained in the suit and the interim order of the Single Judge
was in fact a final order and that the confirmation of the arbitral tribunal’s
G order had no effect on the proceedings before the Single Judge. These
arguments were countered by respondent No. 1 which inter alia
submitted that the actual dispute was between the appellant and
respondent No.2 and that it (respondent No.1) was being made to suffer
for such dispute. Respondent No.1 contended that the main
H
SAMIR NARAIN BHOJWANI v. M/S. AURORA PROPERTIES 61
AND INVESTMENTS [A. M. KHANWILKAR, J.]

development agreement had been executed between the Society and A
respondent No.1 and the rights of the other parties flowed through such
agreement. Hence, there was nothing wrong in the Single Judge
moulding reliefs in its favour. Respondent No.2 echoed respondent No.1’s
arguments.
17. The Division Bench by its judgment and order dated 9th July, B
2018, upheld the mandatory direction issued by the Single Judge at an
interlocutory stage and rejected the appeal, holding that the Single Judge
had addressed the various issues in detail and that it was right to mould
the reliefs, even at the interim stage, in light of changed circumstances
in the case. The Division Bench opined that the appellant was not left
remediless in case respondent No.1 failed in the suit, as his remedies C
were kept open.
18. We have heard Mr. Mukul Rohatgi, learned senior counsel
appearing for the appellant, Mr. Shyam Divan, learned senior counsel
appearing for respondent No.1 and Mr. Mahendra K. Ghelani, learned
counsel appearing for respondent No.2. D

19. From the chronology of events, it is indisputable that the present
appeal emanates from an interlocutory order passed by the learned Single
Judge of the High Court on an application under Order XXXIX which, in
turn, has been confirmed by the Division Bench. That interlocutory
order has been passed in the suit filed by respondent No.1 against the E
appellant and respondent No.2 for the following substantive reliefs:
“a) this Hon’ble Court be pleased to declare that the suit agreement
i.e. the said Development Agreement dated 22nd September 1999
(Exhibit “B” to the Plaint), read with the said Agreement dated
11th September 2009 (Exhibit “J” to the plaint), are valid, subsisting F
and binding between the Plaintiff and the Defendants.
b) this Hon’ble Court be pleased to order and decree the specific
performance of the suit agreements dated 22nd September 1999
(Exhibit “B” to the plaint), read with Agreement dated
11th September 2009 (Exhibit “J” to the plaint) including handing G
over to the Plaintiff constructed area of 22500 sq.ft. in the free
sale buildings along with proportionate car parking space in the
form of 12 flats in Wings “A” and “B” of the building “Bay –
View” situated on the property described in Exhibit “A” to the
plaint and 24 car parking spaces.
H
62 SUPREME COURT REPORTS [2018] 10 S.C.R.

A c) In the alternative to prayer clause (b) this Hon’ble Court be
pleased to order, decree and direct the Defendants to refund a
sum of Rs.75,00,000/- together with interest at 18% as set out in
the Particulars of Claim at Exhibit “M” to the plaint;
d) In the alternative to prayer (a) and (b) and in addition to prayer
B (c) above, this Hon’ble Court be pleased order, decree and direct
the Defendants to pay damages of Rs.173,47,53,425/- (Rupees
One Hundred Seventy Three Crores Forty Seven Lacs Fifty Three
Thousand Four Hundred Twenty Five Only) as set out in particulars
of Claim at Exhibit “M” to the plaint.
C e) This Hon’ble Court be pleased to pass an order of Mandatory
and Permanent Injunction against the Defendants, their servants,
agents, assigns and/or any other person acting through or under
them from in any manner directly or indirectly dealing with or
disposing of or alienating or parting with the possession of or
creating third party rights in respect of the premises coming to the
D share of the Defendants in Wings “A” & “B” of the building
“Bay-View” situated on the property described in Exhibit “A” to
the plaint without first delivering to the Plaintiff, the possession of
22500 sq.ft. constructed areas per SRA sanctioned plan with
proportionate car parking space in the form of 12 flats in Wings
E “A” and “B” of the building “Bay –View” situated on the property
described in Exhibit “A” to the plaint and 24 car parking spaces.”
20. During the pendency of the suit for aforementioned reliefs,
respondent No.1/plaintiff filed Notice of Motion No.147/2013 for the
following interim reliefs:
F “(a) Pending the hearing and final disposal of the present suit, this
Hon’ble Court be pleased to injunct the Defendants, servants,
agents, assigns and/or any other persons acting through or under
them from in any manner directly or indirectly dealing with or
disposing of or alienating or parting with the possession of or
G creating third party rights in respect of the premises coming to the
share of the Defendants in Wings “A” & “B” of the building
“Bay-View” situated on the property described in Exhibit “A” to
the Plaint without first delivering to the Plaintiff, the possession of
22500 sq.ft. constructed areas per SRA sanctioned plan with
proportionate car parking space in the form of 12 flats in Wings
H
SAMIR NARAIN BHOJWANI v. M/S. AURORA PROPERTIES 63
AND INVESTMENTS [A. M. KHANWILKAR, J.]

“A” and “B” of the building “Bay-View” situated on the property A
described in Exhibit “A” to the plaint and 24 car parking spaces.
(b) Pending the hearing and final disposal of the present suit, this
Hon’ble Court be pleased to appoint Court Receiver, High Court,
Bombay and/or such other fit and proper person as Receiver of
premises coming to the share of the Defendant No.1 in Wings B
“A” & “B” of the building “Bay-View” situated on the property
described in the Exhibit “A” to the Plaint with all powers under
Order XL Rule 1 of the Code of Civil Procedure Code 1908
including the power to take possession of premises coming to the
share of the Defendant No.1 in Wings “A” and “B” of the building
“Bay-View” situated on the property described in the Exhibit “A” C
to the plaint and hand over to the Plaintiff the possession of
constructed area as per SRA sanctioned plan in the free sale
building in the form of 12 flats in Wings “A” and “B” of the building
“Bay-View” situated on the property described in Exhibit “A” to
the Plaint and 24 car parking spaces. D
(c) ad interim reliefs in terms of prayer (a) & (b).
(d) for costs of the suit;
(e) for such further and other reliefs as this Hon’ble Court may
deem fit and proper in the nature and circumstances of the case.” E
21. Indeed, the learned Single Judge of the High Court granted
ad-interim relief on 3rd December, 2012 during the pendency of the
Notice of Motion. The same reads thus:
“Heard the Learned Senior Advocates appearing for the parties.
The following order is passed by consent without going into the F
merits of the case and keeping all the contentions of the parties
open.
(i) The Defendants shall not sell, dispose of, alienate, encumber,
part with possession and/or create third party rights in respect of
4 flats in Wing “A” and 4 flats in Wing “B” which flats are G
already constructed and occupation certificate is obtained in
respect of the same. The said 8 flats are identified on the
sanctioned plan which is taken on record and marked “X” for
identification.
H
64 SUPREME COURT REPORTS [2018] 10 S.C.R.

A (ii) The Defendants shall also not sell, dispose of, alienate,
encumber, part with possession and/or create third party rights in
respect of 4 flats in Wing “C”, the construction of which is in
progress. The said four flats are identified on the plan tendered in
Court and marked “X”.
B (iii) It is clarified that the above 12 flats pertain to 45 per cent
share in flats of Defendant No.1 as per the agreements entered
into by and between Defendant Nos.1 and 2. The Defendant No.2
has informed the Court that Defendant No.2 will be contending
that Defendant No.1 is not entitled to their 45 per cent share in
the flats so constructed on the ground that Defendant No.1 has
C allegedly not complied with their obligations under the Agreements.
(iv) The Defendants shall also not sell, dispose of, alienate,
encumber, part with possession and/or create third party rights in
respect of the proportionate car parking spaces in respect of the
above 12 flats also identified on the plan marked “X”.
D
2. Place the above Notice of Motion along with Notice of Motion
(L) NO.3338 of 2012 taken out by Defendant No.2 under
Section 8 of the Arbitration and Conciliation Act, 1996 for hearing
and final disposal on 15th January, 2013.”

E The aforementioned order was corrected on 17th December, 2012
in the following terms:
“This application is for speaking to the minutes of the order dated
3rd December, 2012.
2. In clause (i), 4 flats in Wing “A” and 4 flats in Wing “B” be
F read as 5 flats in Wing “A” and 3 flats in Wing “B”.
Application is accordingly disposed of.”
22. The said ad-interim arrangement continued during the
pendency of Notice of Motion. However, while finally disposing of the
Notice of Motion No. 147/2013, the learned Single Judge of the High
G Court vide judgment and order dated 9th October, 2017 passed a
mandatory order directing the appellant to hand over 8 flats and 16
parking spaces to respondent No.1/plaintiff. For passing such
mandatory order the learned Single Judge placed reliance on the
decision of this Court in Gaiv Dinshaw Irani and Others Versus
H
SAMIR NARAIN BHOJWANI v. M/S. AURORA PROPERTIES 65
AND INVESTMENTS [A. M. KHANWILKAR, J.]

Tehmtan Irani and Others1, holding that the Courts ought to mould the A
relief in accordance with the changed circumstances for trying the
litigation or to do complete justice. The view so taken by the learned
Single Judge commended to the Division Bench.
23. What has, however, been glossed over by the High Court is
that the Settlement Agreement dated 4th November, 2016 and the B
Consent Terms dated 29th September, 2017 have been entered into
between the respondent No.1/plaintiff and respondent No.2/defendant
No.1 inter partes. That could not be thrust upon the appellant/
defendant No.2 who had executed a separate agreement with
respondent No.2/defendant No.1. The appellant could be bound only by
the agreement dated 10 March, 2003 in his favour and executed by him. C
Admittedly, the said agreement is the subject matter of arbitration
proceedings, inter alia because respondent No.2 had failed to discharge
its obligation thereunder. The appellant has already parted with the
possession of flats to respondent No.2 in furtherance of agreement dated
10th March, 2003 and respondent No.1/plaintiff could be accommodated D
only against those flats. Asking the appellant to hand over additional 8
flats and 16 parking spaces by way of mandatory order, would be to
superimpose the liability of respondent No.2/defendant No.1 on the
appellant for discharging its obligation qua respondent No.1/plaintiff in
relation to the agreement entered between them dated 22 nd September,
1999 and including Settlement Agreement dated 4th November, 2016 E
and Consent Terms dated 25th September, 2017, to which the appellant
is not a party.
24. That apart, the learned Single Judge as well as the Division
Bench have committed fundamental error in applying the principle of
moulding of relief which could at best be resorted to at the time of F
consideration of final relief in the main suit and not at an interlocutory
stage. The nature of order passed against the appellant is undeniably a
mandatory order at an interlocutory stage. There is marked distinction
between moulding of relief and granting mandatory relief at an
interlocutory stage. As regards the latter, that can be granted only to G
restore the status quo and not to establish a new set of things differing
from the state which existed at the date when the suit was instituted.
This Court in Dorab Cawasji Warden Versus Coomi Sorab Warden
and Others, 2 has had occasion to consider the circumstances
1
(2014) 8 SCC 294
2
(1990) 2 SCC 117 H
66 SUPREME COURT REPORTS [2018] 10 S.C.R.

A warranting grant of interlocutory mandatory injunction. In paragraphs
16 & 17, after analysing the legal precedents on the point as noticed in
paragraphs 11-15, the Court went on to observe as follows:
“16. The relief of interlocutory mandatory injunctions are
thus granted generally to preserve or restore the status
B 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
C 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
D 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
E which normally cannot be compensated in terms of money.
(3) The balance of convenience is in favour of the one seeking
such relief.
17. Being essentially an equitable relief the grant or refusal of an
F interlocutory mandatory injunction shall ultimately rest in the sound
judicial discretion of the court to be exercised in the light of the
facts and circumstances in each case. Though the above guidelines
are neither exhaustive nor complete or absolute rules, and there
may be exceptional circumstances needing action, applying them
as prerequisite for the grant or refusal of such injunctions would
G be a sound exercise of a judicial discretion.”
(emphasis supplied)
25. The Court, amongst others, rested its exposition on the
dictum in Halsbury’s Laws of England, 4 th edition, Volume 24,
paragraph 948, which reads thus:
H
SAMIR NARAIN BHOJWANI v. M/S. AURORA PROPERTIES 67
AND INVESTMENTS [A. M. KHANWILKAR, J.]

“A mandatory injunction can be granted on an interlocutory A
application as well as at the hearing, but, in the absence of special
circumstances, it will not normally be granted. However, if the
case is clear and one which the court thinks ought to be decided
at once, or if the act done is a simple and summary one which can
be easily remedied, or if the defendant attempts to steal a march
B
on the plaintiff, such as where, on receipt of notice that an injunction
is about to be applied for, the defendant hurries on the work in
respect of which complaint is made so that when he receives
notice of an interim injunction it is completed, a mandatory
injunction will be granted on an interlocutory application.”
26. The principle expounded in this decision has been C
consistently followed by this Court. It is well established that an interim
mandatory injunction is not a remedy that is easily granted. It is an order
that is passed only in circumstances which are clear and the prima
facie material clearly justify a finding that the status quo has been
altered by one of the parties to the litigation and the interests of justice D
demanded that the status quo ante be restored by way of an interim
mandatory injunction. (See Metro Marins and Another Versus Bonus
Watch Co. (P) Ltd. and Others3 , Kishore Kumar Khaitan and
Another Versus Praveen Kumar Singh4 and Purshottam Vishandas
Raheja and Another Versus Shrichand Vishandas Raheja (Dead)
through LRS. and Others5) E

27. In the factual scenario in which mandatory order has been
passed against the appellant, in our opinion, is in excess of jurisdiction.
Such a drastic order at an interlocutory stage ought to be eschewed. It
cannot be countenanced.
F
28. Reverting to the decision in Gaiv Dinshaw Irani, (supra),
relied upon by the High Court, the Court moulded the relief in favour of
the party to the proceedings to do substantial justice whilst finally
disposing of the proceedings and did not do so at an interlocutory stage.
In other words, reliance placed on the principle of moulding of relief is
inapposite to the fact situation of the present case. G
29. Resultantly, the invocation of principle of moulding of reliefs
so also the exercise of power to grant mandatory order at an
3
(2004) 7 SCC 478
4
(2006) 3 SCC 312
5
(2011) 6 SCC 73 H
68 SUPREME COURT REPORTS [2018] 10 S.C.R.

A interlocutory stage, is manifestly wrong. To put it differently, while
analysing the merits of the contentions the High Court was swayed away
by the consent agreement between the respondents inter partes to which
the appellant was not a party. Thus, he could not be bound by the
arrangement agreed upon between the respondents inter se. The
appellant would be bound only by the agreement entered with
B
respondent No.2 dated 10th March, 2003 and at best the tripartite
agreement dated 11th September, 2009. The respondent No.2 having
failed to discharge its obligation under the stated agreement dated
10th March, 2003, cannot be permitted to take advantage of its own
wrong in reference to the arrangement agreed upon by it with
C respondent No.1/plaintiff and including to defeat the claim of the
appellant in the arbitration proceedings.
30. It would have been a different matter if the High Court were
to continue the ad-interim arrangement directed in terms of order dated
3rd December, 2012 and as corrected on 17th December, 2012, until the
D final disposal of the suit. However, by no stretch of imagination, the
appellant could be directed to hand over 8 additional flats and 16 parking
spaces to respondent No.1 with whom the appellant has had no
independent agreement in that regard. The fact that respondent No.1
would get a right in the suit property in terms of agreement dated
22nd September, 1999, Settlement Agreement dated 4th November, 2016
E and Consent Terms dated 25th September, 2017 with respondent No.2,
cannot be the basis to set up a claim against the appellant and, especially
because complying with the directions in the impugned order would
result in bestowing advantage on respondent No.2 who has failed to
discharge its obligation under the agreement dated 10th March, 2003
F with the appellant.
31. In view of the above, we have no hesitation to conclude that
the High Court committed manifest error and exceeded its jurisdiction
in granting interlocutory mandatory injunction against the appellant.
32. Accordingly, the impugned judgment and order passed by the
G High Court deserves to be set aside but while doing so, we deem it
appropriate to revive the ad-interim order passed by the Single Judge of
the High Court on 3rd December, 2012 in Notice of Motion No.147/2013
and as corrected on 17th December, 2012, which shall operate until the
disposal of the suit or until it is modified by the High Court on account of
H subsequent developments, if any, as and when occasion arises.
SAMIR NARAIN BHOJWANI v. M/S. AURORA PROPERTIES 69
AND INVESTMENTS [A. M. KHANWILKAR, J.]

33. While parting, we make it clear that the observations made in A
this judgment are only for considering the matter in issue under
consideration and shall not influence the substantive proceedings
pending between the parties. The same be decided on its own merits.
34. The appeal is allowed in the aforementioned terms. No costs.
B
Nidhi Jain Appeal allowed.

C

D

E

F

G

H