AMBALAL SARABHAI ENTERPRISE LIMITED versus KS INFRASPACE LLP LIMITED AND ANOTHER

AMBALAL SARABHAI ENTERPRISE LIMITED

KS INFRASPACE LLP LIMITED AND ANOTHER

(Civil Appeal No. 9346 of 2019)

JANUARY 06, 2020

[ASHOK BHUSHAN AND NAVIN SINHA, JJ.]

Injunction:

Interim injunction – suit for specific performance – Allegingthat defendant created third party rights, while the contract for saleof suit lands had stood concluded – Trial court by interim injunctionrestrained the defendants from executing any further documents orto deal with the suit land in any manner – High Court affirmed theorder of injunction – Appeal to Supreme Court – Held: plaintiffseeking temporary injunction in suit for specific performancehas to establish strong prima facie case on the basis of undisputedfacts – Conduct of plaintiff , balance of convenience and irreparableinjury is also very essential to be considered – In the facts of thepresent case, whether there existed concluded contract is matterof trial – The plaintiff had failed to prove that there was concludedcontract and/or an oral contract by inference – Therefore, the grantof injunction in the present case is unsustainable.

Allowing the appeals, the Court

HELD : 1. Chapter VII, Section 36 of the Specific ReliefAct, 1963 provides for grant of preventive relief. Section 37provides that temporary injunction in suit shall be regulated bythe Code of Civil Procedure. The grant of relief in suit for specificperformance is itself discretionary remedy. plaintiff seekingtemporary injunction in suit for specific performance willtherefore have to establish strong prima-facie case on basis ofundisputed facts. The conduct of the plaintiff will also be veryrelevant consideration for purposes of injunction. The discretionat this stage has to be exercised judiciously and not arbitrarily.In matter concerning grant of injunction, apart from the existenceof prima facie case, balance of convenience, irreparable injury,

Athe conduct of the party seeking the equitable relief of injunctionis also very essential to be considered. [Paras 15 and 19][323-H; 324-A-B; 326-A]

2. The negotiations between the plaintiff and the defendantis reflected in approximately 17 e-mails exchanged between themBcommencing from December 2017 to 31.03.2018. The file sizeof the attachment to the mails has varied from 48-50-52-48-57-56 KBs indicating suggestions and corrections from time totime. The WhatsApp messages which are virtual verbalcommunications are matters of evidence with regard to theirmeaning and its contents to be proved during trial by evidence-Cin-chief and cross examination. The e-mails and WhatsAppmessages will have to be read and understood cumulatively todecipher whether there was concluded contract or not. Theuse of the words ‘final draft’ in the e-mail dated 30.03.2018 cannotbe determinative by itself. The e-mail dated 26.02.2018 sent byDthe defendant at 11:46 AM had also used the same phraseology.[Para 17] [324-G-H; 325-A-B]

3. The plaintiff was well aware from the very inception thatthe defendant was negotiating for sale of the lands simultaneouslywith two others. The plaintiff was further aware on 30.03.2018Eitself that the deal with it had virtually fallen through as informedto the escrow agent. The fact that draft MoU christened as‘final-for discussion’ was sent the same day cannot lead to theinference in isolation, of concluded contract. There is noevidence at this stage that the acceptance was communicated tothe defendant before the latter entered into deal with defendantFNo. 2 on 30.03.2018 and executed registered agreement forsale on 31.03.2018. Defendant No. 2 paid Rs.17.69 crores andRs. 2.20 crores towards the income tax dues of the defendantthe same day, as part of the consideration amount. It is onlythereafter the plaintiff purports to have communicated itsGacceptance to the defendant on 31.03.2018 at 01.13 PM. Theprolonged negotiations between the parties reflect that matterswere still at the ‘embryo stage’. [Para 17] [325-C-E]4. The pleadings in the suit acknowledge the awareness ofthe plaintiff of the ongoing negotiations with defendant No. 2.H

The advance of Rs. 2.16 crores was refunded to the plaintiff inthe evening on 31.03.2018 by RTGS. No effort was made by theplaintiff to again remit the sum by RTGS immediately or the nextday. Only public notice was published on 03.04.2018 refuted bythe defendant on 04.03.2018. The suit was then filed seven monthslater on 01.10.2018. The explanation that the plaintiff waitedhopefully for solution outside litigation as prudent businessmanbefore finally instituting the suit is too lame an excuse to meritany consideration. [Para18] [325-F-G]

5. Defendant No.2, in addition to the dues of the IncomeTax department, had made further payments to the defendant ofRs.25,44,57,769/- by 16.01.2019 aggregating to total paymentof Rs.45,84,71,869/-. The defendants had also proceeded to utilizea sum of Rs.36.20 crores and had therefore materially alteredtheir position evidently by the inaction of the plaintiff to institutethe suit in time and having allowed third party rights to accrue bymaking substantial investments. [Para 20] [326-E-F]

6. In the facts and circumstances of the present case, andthe nature of the materials placed before this Court at this stage,whether there existed concluded contract between the partiesor not, is itself matter for trial to be decided on basis of theevidence that may be led. If the plaintiff contended concludedcontract and/or an oral contract by inference, leaving an executeddocument as mere formality, the onus lay on the plaintiff todemonstrate that the parties were ad-idem having dischargedtheir obligations. The plaintiff failed to show the same on admittedfacts. The draft MoU dated 30.03.2018 in Clause contemplatedpayment of the income tax dues of Rs.18.64 crores as part of theconsideration amount only whereafter the agreement was to besigned relating back to the date 29.03.2008. Had this amountbeen already paid or remitted by the plaintiff, entirely differentconsiderations would have arisen with regard to the requirementfor execution of written agreement remaining mere formality.Thus, the balance of convenience is in favour of the defendantson account of the intervening developments, without furthermore,inter-alia by reason of the plaintiff having waited for seven months

318SUPREME COURT REPORTS

Ato institute the suit. The question of irreparable harm to partycomplaining of breach of contract does not arise if other remediesare available to the party complaining of the breach. The HighCourt has itself observed that from the negotiations between theparties that “some rough weather was being reflected betweenthe plaintiff and the defendant ……….”. The Special Civil JudgeBfailed to address the issue of delay. The High Court noticed thearguments of the defendants with regard to delay in the institutionof the suit but failed to deal with it. Therefore, in the facts andcircumstances of the present case, the grant of injunction to theplaintiff is unsustainable. Resultantly the orders of injunction areCset aside. [Paras 21 and 24] [326-H; 327-A-E; 328-F]

Dalpat Kumar v. Prahlad Singh (1992) 1 SCC 719 :[1991] 3 Suppl. SCR 472 ; Agriculture Produce MarketCommittee, Gondal and Ors. v. Girdharbhai RamjibhaiChhaniyara and Ors. (1997) 5 SCC 468 : [1997] 1DSuppl. SCR 74 ; Motilal Jain v. Ramdasi Devi (Smt.)and Ors. (2000) 6 SCC 420 : [2000] 1 Suppl. SCR 615 ; Mademsetty Satyanarayana v. G. Yelloji Rao andOrs. [1965] 2 SCR 221 ; Mandali Ranganna and Ors.v. T. Ramachandra and Ors. (2008) 11 SCC 1 : [2008]7 SCR 264 ; Brij Mohan and Ors. v. Sugra Begum andEOrs. (1990) 4 SCC 147 : [1990] 3 SCR 413 ; M.P.Mathur v. DTC (2006) 13 SCC 706 : [2006] 9 Suppl.SCR 519 ; Wander Ltd. and another v. Antox India P.Ltd., (1990) Suppl. SCC 727 ; Gujarat Bottling Co. Ltd.v. Coca Cola Co. (1995) 5 SCC 545 : [1995] 2 Suppl.FSCR 514 – relied on.K.S. Vidyanadam & Ors. v. Vairavan, (1997) 3 SCC 1 :[1997] 1 SCR 993 ; Mandali Ranganna and Ors. v. T.Ramachandra and ors. (2008) 11 SCC 1 : [2008]7 SCR 264 ; Mayawanti v. Kaushalya Devi (1990) 3SCC 1 : [1990] 2 SCR 350 ; Moharwal Khewaji Trust(Regd.), Faridkot v. Baldev Dass (2004) 8 SCC 488 ;Aloka Bose v. Parmatma Devi and Ors. (2009) 2 SCC582 : [2008] 17 SCR 822 – referred to.

AMBALAL SARABHAI ENTERPRISE LTD. v.KS INFRASPACE LLP LTD.

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 9346of 2019.

From the Judgment and Order dated 30.08.2019 of the High Courtof Gujarat at Ahmedabad in R/Appeal from Orders No. 73 of 2019.

Kapil Sibal, C.U. Singh, Huzefa Ahmadi, Dr. A.M. Singhvi, DevenParikh, Sr. Advs., Ms. Megha Jani, Ms. Anushree Prashit Kapadia,Raghav Tankha, Ms. Viddusshi, Ms. Garima Bajaj, Raghvendra MohanBajaj, Sanskar Agarwal Nikhil Goel, Rishabh Parikh, Ashutosh Ghade,Ms. Naveen Goel, Dushyant Sarna, L. Nidhiram Sharma, Advs. for theappearing parties.

The Judgment of the Court was delivered by

NAVIN SINHA, J.

1. The present appeals arise from common order dated30.08.2019, passed in three separate miscellaneous appeals filed by theappellants before the High Court affirming an order of injunction. K.S.Infraspace LLP Ltd., respondent no.1, filed Special Civil Suit Nos.322of 2018 and 323 of 2018 before the Court of Principal Civil Judge at

AVadodara against the appellants in Civil Appeal No.9346 of 2019 (AmbalalSarabhai Enterprise) and Civil Appeal No.9347 of 2019 (HaryanaContainers Ltd.) respectively, which are sister concerns. The appellantin Civil Appeal No.9348 of 2019 (Neptune Infraspace Private Ltd.) wasimpleaded as defendant no.2 in the latter suit. The parties shall bereferred to by their respective position in the Civil Suit, for the sake ofBconvenience.

2. The plaintiff filed the two suits for declaration and specificperformance against the defendant sister concerns with regard to totalarea of 19,685 square meters of lands situated in Village Wadiwadi,Subhanpura, District Vadodara in Gujarat. The plaintiff contended thatCthere existed concluded contract with the defendants after negotiationsfor sale of the suit lands for total sum of Rs.31,81,73,076/- and58,26,86,984/- respectively. The plaintiff had duly communicated itsacceptance of the final draft memorandum of understanding (MoU) dated30.03.2018. Only the formal execution of contract documents remainedDas formality. sum of Rs.2.16 crores had also been paid as advance.The plaintiff was ready and willing with the balance amount. Alternately,it was claimed that there existed concluded oral contract between theparties. The Defendants had surreptitiously entered into registeredagreement for sale with defendant no.2 on 31.03.2018 and thus the suitand prayer for injunction.E

3. The Principal Civil Judge by order dated 18.02.2019 held thatby inference the terms and conditions for sale stood finalised by the e-mail dated 29.03.2018 and 30.03.2018. token amount of Rs.2.16 croreshad already been paid and the plaintiff was ready and willing with thebalance amount. Creation of third party rights would lead to furtherFlitigation. Thus by an order of temporary injunction the defendants wererestrained from executing any further documents including sale deedor creating further charge, interest or deal with the suit lands in anymanner.

4. The High Court by its order dated 30.08.2019 affirmed theGorder of injunction holding that the communication of acceptance to thedraft MoU sent by e-mail dated 30.03.2018 coupled with the exchangeof WhatsApp correspondences between the parties amounted to aconcluded contract.

5. We have heard learned senior counsel Shri Kapil Sibal, ShriC.U. Singh and Shri Huzefa Ahmadi, appearing on behalf of defendantnos. 1 and 2, who are the appellants before us. Shri Sibal, making thelead arguments on behalf of the defendant sister concerns submittedthat they had decided to sell the lands in view of financial stringency andtheir inability to meet financial commitments inter-alia leading toattachment of immovable properties by the Income Tax Department fordues of Rs.48,74,45,929/- apart from other statutory liabilities, employeerelated liabilities and business liabilities. The negotiations with the plaintiffdid not attain finality but remained at the stage of discussions only. Thewavering conduct of the plaintiff to meet the Income Tax liability of thedefendants as part of the consideration amount to facilitate sale by liftingof the attachment, left the defendants with no other choice but to negotiateafresh with defendant no.2. The contention that execution of theagreement remained formality was disputed. This is evident from thealternative contention in the suit that there existed an oral contract.

6. The plaintiff’s response of acceptance to the final draft MoUdated 30.03.2018 was belated. The plaintiff was well aware all alongthat the defendants were negotiating with two others also apart from it.The plaintiff knew before 30.03.2018 that the deal with it was not comingthrough and that the defendant was going ahead with another. The dealwith defendant no.2 was finalised by execution of registered agreementfor sale on 31.03.2018 after defendant no.2 had cleared the Income Taxdues of the sister concerns on 30.03.2018 to the extent of Rs.17.69crores and Rs.2.20 crores respectively enabling lifting of the attachmentorders for the lands by the Income Tax department on 26.04.2018 followedby further payments by defendant no.2 aggregating Rs.45.84 crores till16.01.2019. sum of Rs. 36.20 crores, from the sale proceeds hasalready been utilized by the defendants towards payment of otherstatutory liabilities and employee related liabilities etc. It was therefore abona fide action. The plaintiff’s e-mail of acceptance of the draft MoUdated 30.03.2018 as claimed, was not sent by it on 31.03.2018 at 07.43AM but was received by the defendant on 31.03.2018 at 01.13 PM.

7. Despite the full awareness and knowledge as far back as30.03.2018 and refund through RTGS of Rs.2.16 crores on 31.03.2018itself, the plaintiff published public notice only on 03.04.2018 advisingall concerned not to deal with the property which was duly replied andrefuted by another public notice dated 04.04.2018 published by the

Adefendants. The cause of action in the suit is based on the email dated30.03.2018 coupled with the public notice dated 03.04.2018.Acknowledging the refund also on 31.03.2018, it admits the signing of aregistered agreement for sale with defendant no.2 on 31.03.2018 butdoes not make even whisper of suggestion why the suit was filedmore than 7 months later. In commercial dealings with high stake mattersBdelay is vital. This specific objection on behalf of the defendant takenbefore the High Court relying on K.S. Vidyanadam & ors. vs. Vairavan,1997 (3) SCC 1, has been noticed at paragraph 37 of the judgment butdoes not find any consideration.

8. Reliance was also placed on Mandali Ranganna and ors. vs.CT. Ramachandra and ors., 2008 (11) SCC 1 to submit that the grant ofthe injunction was contrary to the basic principles governing injunctionmore so in suit for specific performance relying on Mayawanti vs.Kaushalya Devi, 1990 (3) SCC 1.

9. Shri Huzefa Ahmadi, learned senior counsel appearing on behalfDof defendant no.2, submitted that it was bona fide purchaser for value.The plaintiff was well aware of the simultaneous negotiations with it.The defendant no.2 had made substantial payments on 30.03.2018 onlyafter obtaining written confirmation from the defendant dated26.03.2018 that it had not signed any other agreement or received paymentEfrom another with regard to the subject lands. The registered agreementfor sale dated 31.03.2018 was followed by delivery of possession muchprior to the institution of the suit. specific objection with regard todelay was taken in the reply to the injunction application which was notconsidered.F10. Dr. A.M. Singhvi, learned senior counsel appearing on behalfof the plaintiff, submitted that his clients at no stage had declined to meetthe Income Tax liabilities of the defendant sister concerns, as part of theconsideration amount. The negotiations were widespread over time bothby WhatsApp messages and exchange of e-mails. These collectivelyhave correctly been interpreted to hold prima facie case in favour ofGthe plaintiff. The terms and conditions of payment, were all finalizedwhich prima facie reflect the existence of concluded contract. Thefact that the e-mail dated 30.03.2018 referred to the enclosure as draftMoU cannot be decisive as it has to be understood on cumulativeassessment of facts. In any event, the plaintiff had communicated its

acceptance without delay and also protested the refund of the advanceof Rs.2.16 crores the same day followed by public notice.

11. The hurried manner in which the defendants proceeded tofinalise the deal on 30.03.2018 itself, manifests the desire of the defendantsto cause harm to the plaintiff. Defendant no.2 cannot claim to be bonafide purchaser as it was all along aware of the negotiations taking placebetween the plaintiff and the defendant sister concerns and that it wasat very advanced stage.

12. Dr. Singhvi framed the question, whether concurrent findingsof the Special Civil Judge and the High Court by two detailed wellconsidered orders were such as to warrant interference so as to dissipatethe substratum of the suit. In support of his submissions, Dr. Singhvirelied on Wander Ltd. and another vs. Antox India P. Ltd., 1990 Suppl.SCC 727, Brij Mohan and others vs. Sugra Begum and ors., (1990)4 SCC 147, Motilal Jain vs. Ramdasi Devi (Smt.) and ors., (2000) 6SCC 420, Moharwal Khewaji Trust (Regd.), Faridkot vs. BaldevDass, (2004) 8 SCC 488, and Aloka Bose vs. Parmatma Devi andors., (2009) 2 SCC 582.

13. On the aspect of the delay in institution of the suit, relying onMademsetty Satyanarayana vs. G. Yelloji Rao and ors., 1965 (2)SCR 221, it was submitted that the delay did not induce the defendant todo anything further than that already done earlier, to their prejudice. Inany event the plaintiff is ready and willing to pay to the defendant no.2the amount of the Income Tax dues paid by it and proceed with thecontract with the defendant sister concerns.

14. We have been addressed by the counsel for the parties atlength, as also have been taken through the several WhatsApp messagesand e-mails exchanged. We have also considered the respectivesubmissions. Litigation at the initial stage of injunction, where the claimsof the parties are still at nebulous stage, has stalled the progress of thesuit. We are of the considered opinion that at this stage we ought torefrain from returning findings of facts or express any opinion on themerits of the suit, except to the extent necessary for purposes of thepresent order, so as not to prejudice either party in the suit.15. Chapter VII, Section 36 of the Specific Relief Act, 1963(hereinafter referred to as ‘the Act’) provides for grant of preventive

Arelief. Section 37 provides that temporary injunction in suit shall beregulated by the Code of Civil Procedure. The grant of relief in suit forspecific performance is itself discretionary remedy. plaintiff seekingtemporary injunction in suit for specific performance will thereforehave to establish strong prima-facie case on basis of undisputed facts.The conduct of the plaintiff will also be very relevant consideration forBpurposes of injunction. The discretion at this stage has to be exercisedjudiciously and not arbitrarily.

16. The cardinal principles for grant of temporary injunction wereconsidered in Dalpat Kumar vs. Prahlad Singh, (1992) 1 SCC 719,observing as follows :C

“5…Satisfaction that there is prima facie case by itself is notsufficient to grant injunction. The Court further has to satisfy thatnon-interference by the Court would result in “irreparable injury”to the party seeking relief and that there is no other remedyavailable to the party except one to grant injunction and he needsDprotection from the consequences of apprehended injury ordispossession. Irreparable injury, however, does not mean thatthere must be no physical possibility of repairing the injury, butmeans only that the injury must be material one, namely onethat cannot be adequately compensated by way of damages. TheEthird condition also is that “the balance of convenience” must bein favour of granting injunction. The Court while granting orrefusing to grant injunction should exercise sound judicial discretionto find the amount of substantial mischief or injury which is likelyto be caused to the parties, if the injunction is refused and compareit with that which is likely to be caused to the other side if theFinjunction is granted. If on weighing competing possibilities orprobabilities of likelihood of injury and if the Court considers thatpending the suit, the subject matter should be maintained in statusquo, an injunction would be issued. Thus the Court has to exerciseits sound judicial discretion in granting or refusing the relief of adGinterim injunction pending the suit.”

17. The negotiations between the plaintiff and the defendant isreflected in approximately 17 e-mails exchanged between themcommencing from December 2017 to 31.03.2018. The file size of theattachment to the mails has varied from 48-50-52-48-57-56 KBs

indicating suggestions and corrections from time to time. The WhatsAppmessages which are virtual verbal communications are matters ofevidence with regard to their meaning and its contents to be provedduring trial by evidence-in-chief and cross examination. The e-mails andWhatsApp messages will have to be read and understood cumulativelyto decipher whether there was concluded contract or not. The use ofthe words ‘final draft’ in the e-mail dated 30.03.2018 cannot bedeterminative by itself. The e-mail dated 26.02.2018 sent by the defendantat 11:46 AM had also used the same phraseology. The plaintiff was wellaware from the very inception that the defendant was negotiating forsale of the lands simultaneously with two others. The plaintiff was furtheraware on 30.03.2018 itself that the deal with it had virtually fallen throughas informed to the escrow agent. The fact that draft MoU christenedas ‘final-for discussion’ was sent the same day cannot lead to theinference in isolation, of concluded contract. There is no evidence atthis stage that the acceptance was communicated to the defendant beforethe latter entered into deal with defendant no.2 on 30.03.2018 andexecuted registered agreement for sale on 31.03.2018. Defendant no.2paid Rs.17.69 crores and Rs.2.20 crores towards the income tax duesof the defendant the same day, as part of the consideration amount. It isonly thereafter the plaintiff purports to have communicated its acceptanceto the defendant on 31.03.2018 at 01.13 PM. The prolonged negotiationsbetween the parties reflect that matters were still at the ‘embryo stage’as observed in Agriculture Produce Market Committee, Gondaland ors. vs. Girdharbhai Ramjibhai Chhaniyara and ors., (1997) 5SCC 468. The plaintiff at this stage has failed to establish that there wasa mutuality between the parties much less that they were ad-idem.

18. The pleadings in the suit acknowledge the awareness of theplaintiff of the ongoing negotiations with defendant no.2. The advanceof Rs.2.16 crores was refunded to the plaintiff in the evening on31.03.2018 by RTGS. No effort was made by the plaintiff to again remitthe sum by RTGS immediately or the next day. Only public notice waspublished on 03.04.2018 refuted by the defendant on 04.03.2018. Thesuit was then filed seven months later on 01.10.2018. The explanationthat the plaintiff waited hopefully for solution outside litigation as aprudent businessman before finally instituting the suit is too lame anexcuse to merit any consideration.

A19. In matter concerning grant of injunction, apart from theexistence of prima facie case, balance of convenience, irreparableinjury, the conduct of the party seeking the equitable relief of injunctionis also very essential to be considered as observed in Motilal Jain(supra) holding as follows :

B“6. The first ground which the High Court took note of is thedelay in filing the suit. It may be apt to bear in mind the followingaspects of delay which are relevant in case of specificperformance of contract for sale of immovable property:

(i) delay running beyond the period prescribed under the LimitationCAct;(ii) delay in cases where though the suit is within the period oflimitation, yet:

(a) due to delay the third parties have acquired rights in the subject-matter of the suit;D(b) in the facts and circumstances of the case, delay may giverise to plea of waiver or otherwise it will be inequitable to grant adiscretionary relief.”

20. The defendant no.2, in addition to the dues of the Income Taxdepartment as aforesaid, made further payments to the defendant ofERs.25,44,57,769/- by 16.01.2019 aggregating to total payment ofRs.45,84,71,869/-. The defendants had also proceeded to utilize sumof Rs.36.20 crores also and had therefore materially altered their positionevidently by the inaction of the plaintiff to institute the suit in time andhaving allowed third party rights to accrue by making substantialFinvestments. In Madamsetty (supra) it was observed :

“12…..It is not possible or desirable to lay down the circumstancesunder which court can exercise its discretion against the plaintiff.But they must be such that the representation by conduct or neglectof the plaintiff is directly responsible in inducing the defendant toGchange his position to his prejudice or such as to bring about asituation when it would be inequitable to give him such relief.”

Similar view has been expressed in Mandali Ranganna (supra).

21. We are therefore of the considered opinion that in the factsand circumstances of the present case, and the nature of the materialsH

placed before us at this stage, whether there existed concluded contractbetween the parties or not, is itself matter for trial to be decided onbasis of the evidence that may be led. If the plaintiff contended aconcluded contract and/or an oral contract by inference, leaving anexecuted document as mere formality, the onus lay on the plaintiff todemonstrate that the parties were ad-idem having discharged theirobligations as observed in Brij Mohan (supra). The plaintiff failed to doshow the same on admitted facts. The draft MoU dated 30.03.2018 inClause contemplated payment of the income tax dues of Rs.18.64crores as part of the consideration amount only whereafter the agreementwas to be signed relating back to the date 29.03.2008. Had this amountbeen already paid or remitted by the plaintiff, entirely differentconsiderations would have arisen with regard to the requirement forexecution of written agreement remaining mere formality. Needlessto state the balance of convenience is in favour of the defendants onaccount of the intervening developments, without furthermore, inter-alia by reason of the plaintiff having waited for seven months to institutethe suit. The question of irreparable harm to party complaining of abreach of contract does not arise if other remedies are available to theparty complaining of the breach. The High Court has itself observedthat from the negotiations between the parties that “some rough weatherwas being reflected between the plaintiff and the defendant ……….”.The Special Civil Judge failed to address the issue of delay. The HighCourt noticed the arguments of the defendants with regard to delay inthe institution of the suit but failed to deal with it.

22. In M.P. Mathur vs. DTC, (2006) 13 SCC 706, this Courtobserved :

“14. The present suit is based on equity…In the present case, theplaintiffs have sought remedy which is discretionary. They haveinstituted the suit under Section 34 of the 1963 Act. The discretionwhich the court has to exercise is judicial discretion. Thatdiscretion has to be exercised on well-settled principles. Therefore,the court has to consider—the nature of obligation in respect ofwhich performance is sought, circumstances under which thedecision came to be made, the conduct of the parties and theeffect of the court granting the decree. In such cases, the courthas to look at the contract. The court has to ascertain whetherthere exists an element of mutuality in the contract. If there is

Aabsence of mutuality the court will not exercise discretion in favourof the plaintiffs. Even if, want of mutuality is regarded asdiscretionary and not as an absolute bar to specific performance,the court has to consider the entire conduct of the parties in relationto the subject-matter and in case of any disqualifying circumstancesthe court will not grant the relief prayed for (Snell’s Equity, 31stBEdn., p. 366)….”

23. Wander Ltd. (supra) prescribes rule of prudence only. Muchwill depend on the facts of case. It fell for consideration again inGujarat Bottling Co. Ltd. vs. Coca Cola Co., (1995) 5 SCC 545,observing as follows :

“47….Under Order 39 of the Code of Civil Procedure, jurisdictionof the Court to interfere with an order of interlocutory or temporaryinjunction is purely equitable and, therefore, the Court, on beingapproached, will, apart from other considerations, also look to theconduct of the party invoking the jurisdiction of the Court, andDmay refuse to interfere unless his conduct was free from blame.Since the relief is wholly equitable in nature, the party invokingthe jurisdiction of the Court has to show that he himself was notat fault and that he himself was not responsible for bringing aboutthe state of things complained of and that he was not unfair orEinequitable in his dealings with the party against whom he wasseeking relief. His conduct should be fair and honest….”

24. The aforesaid discussion leaves us satisfied to conclude thatin the facts and circumstances of the present case, the grant of injunctionto the plaintiff is unsustainable. Resultantly the orders of injunction areFset aside. Nothing in the present order shall be deemed or construed asany expression of opinion or observation by us at the final hearing of thesuit which naturally will have to be decided on its own merits. The HighCourt has already given directions to expedite the hearing of the suit andwe reiterate the same.G25. The appeals are allowed.

Kalpana K. Tripathy

Appeals allowed.