On Monday. the Delhi High Court imposed a cost of ₹5 lakh on multiplex operator INOX Leisure Ltd for indulging in "judicial adventurism" by filing a suit against PVR Ltd seeking to restrain it from interfering in its existing and future land contracts.

Justice Rajiv Sahai Endlaw dismissed the suit filed by INOX Leisure saying it has no cause of action for the relief claimed against PVR and such claims are barred by law.

The Judge said:

"Axiomatically the suit is dismissed. The plaintiff (INOX) having indulged in judicial adventurism, is also burdened with costs of Rs 5,00,000, payable to the defendant (PVR) within 90 days hereof."

The high court, in its 35-page judgement, noted the case of INOX is that it had binding contracts with the developer/owner of the properties at Amritsar and Juhu in Mumbai and the contracts were breached/broken or are threatened to be breached/broken by the developer/owner of the properties, at the instance of PVR.

The plaintiff has sought to restrain the defendant from doing so and also from doing this with regard to other properties where INOX has existing contracts or may have in future.

PVR opposed the suit saying INOX filed the plaint seeking a blanket order across India without even producing any agreements with respect to specific property and it was an attempt to stifle the defendant's choice as its competitor.

The high court was of the opinion that even if it is believed that INOX is having existing binding contracts and even if PVR is indeed interfering therein or causing breach thereof, the plaintiff is not entitled to restrain the defendant.

"No trial is required in this regard inasmuch as the same is purely a question of law," it said.

While applying the law with respect to contracts, immovable property and specific performance in India, the Court noted that in the present case,

- if according to the Plaintiff, it had a binding lease with the developer/owner of the properties at Amritsar and Mumbai but it had not been put into possession of the property, the remedy was to seek to be put into possession of the property;

- On the contrary, if according to the Plaintiff, it didn't have a binding agreement or a lease but only an agreement to lease, the remedy was to sue for specific performance;

- Further, if according to the Plaintiff, there was only a promise from the developer/owner of the said properties to grant a license and there was a violation, the remedy was to claim damages from them.

Remarking that the plantiff did neither of it, it added that he didn't implead the developer/owner of the properties to the suit, even though they were necessary parties.

The Court said:

“..the plaintiff cannot hide behind the plea of the Court being always entitled to implead any party; the Court once finds the necessary party and in whose absence there can be no adjudication, to have been not impleaded, is not required to do the work of the plaintiff and has no option but to dismiss the suit.”

The Judge reiterated that the grant of injunction claimed by INOX on the premise of PVR's actions comprising a tortious act of interference with contractual relations of the plaintiff, would be in violation of the fundamental right of the defendant, its promoters and directors to carry on trade and business, without any law having been enacted by the State. 

The High Court said the law entitles the plaintiff to seek relief of specific performance against those with whom it has a contractual relationship and with which contractual relationship the defendant is alleged to be interfering. The plaintiff cannot be permitted to expand its remedies beyond that provided for in law.

It remarked:

"..a person who does not have any contractual relationship with his competitor, is not entitled to, in advancement of its own trade and business, not approach the prospective clients, customers and associates approached by the competitor..
..The grant of injunction claimed by the Plaintiff on the premise of the actions of the defendant comprising a tortious act of interference with contractual relations of the Plaintiff, would be in violation of the fundamental right of the Defendant, its promoters and directors to carry on trade and business, without any law having been enacted by the State in this respect in the interest of general public, within the meaning of Article 19 (5) of the Constitution of India." 

The order has been passed by Justice Rajiv Sahai Endlaw on 18-05-2020.

Read Order Here:

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