Recently, the Supreme Court dealt with a matter where the appellants alleged harassment and obstruction of electricity access by the respondents, who had initiated multiple civil and criminal proceedings, including a suit to cancel a sale deed. The trial court’s interim relief favouring the plaintiffs was challenged by the appellants as contrary to legal principles. Allowing the appeal, the Court set aside the High Court’s order, directing the respondents to maintain the status quo on the suit property and barring further encumbrances. Observing the principle of equity, the Court highlighted that interim injunctions may supplement the doctrine of lis pendens to prevent unnecessary complications during litigation.
Brief Facts:
The appellants alleged harassment by the respondents, who obstructed the appellants’ access to electricity by restraining the electricity company from granting a connection. The appellants filed a Special Civil Application seeking redress. Meanwhile, the respondents initiated civil and criminal proceedings, including a suit for cancellation of a sale deed and an injunction related to the suit property.
The trial court granted interim relief in favour of the plaintiffs, which the appellants challenged as erroneous and contrary to settled legal principles. The appellants also highlighted the plaintiffs’ repeated legal actions, including influencing criminal investigations and pursuing appeals up to the Supreme Court. They contended that these actions were intended to coerce them into surrendering their business and assets. The High Court, upon reviewing the evidence, quashed the trial court’s interim relief order and emphasised the need for a proper trial to resolve the disputes.
Observations of the Court:
The Court emphasised the principle of equity, noting that when a party incurs significant expenses to improve or construct on a property, the Court may decline to grant specific performance and instead award damages to the plaintiff. The court highlighted the relevance of Rule 1 of Order 39 of the CPC, which explicitly provides for interim injunctions to restrain the alienation or sale of suit property during litigation. This rule is essential as it supplements the doctrine of lis pendens under Section 52 of the Transfer of Property Act. While the doctrine renders pendente lite transfers ineffective against the outcome of the suit, it does not preclude the need for injunctions to prevent transfers that may cause unnecessary complications or embarrassment to the litigation process.
The Court referenced precedents, including Sm. Muktakesi Dawn v. Haripada Mazumdar (AIR 1988 Cal 25), which acknowledged the necessity of injunctions to preserve property status during litigation. It also cited the decision in Promotha Nath Roy v. Jagannath Kisore Lal Singh Deo [(1912) 17 Cal LJ 427], where it was held that courts often preserve property in its current state during litigation to safeguard the original purchaser’s rights. The Court emphasized that preventing further transfers could avoid unnecessary legal entanglements and protect the interests of the parties involved. The Court observed, “Having regard to the nature of dispute between the parties and the materials on record, the property should not change hands any further”.
The decision of the Court:
The appeal was allowed, setting aside the High Court’s impugned order. The respondents were directed to maintain the status quo concerning the suit property and were restrained from creating any further encumbrances. Any future transfer of the suit property during the litigation would remain subject to lis pendens under Secion 52 of the Transfer of Property Act, irrespective of its registration status. Pending applications were also disposed of.
Case Title: Ramakant Ambalal Choksi v. Harish Ambalal Choksi & Ors.
Case No.: Special Leave Petition (Civil) No. 252 of 2023
Coram: Justice J.B. Pardiwala, Justice R. Mahadevan
Advocate for Petitioner: Adv. Chirag M. Shroff (AOR), Mahima C. Shroff
Advocate for Respondent: Adv. Adithya Koshi Roy, Nikhil Goel
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