August 28, 2018:
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.
The case pertained to Respondent No.1/plaintiff was appointed by one Andheri Kamgar Nagar Cooperative Housing Society Ltd. under a Development Agreement of 1996 as a developer under the Slum Development/ Rehabilitation Scheme to develop the suit property in question, being a plot of land situated at Versova Link Road, Taluka Andheri.
Disputes arose during the construction of the building, which resulted in respondent No.1 filing a Commercial Suit against respondent No.2 and the appellant inter alia seeking specific performance of the Development Agreement. Respondent No. 1 alleged that interim relief was necessitated. The parties filed their respective replies and rejoinders in the suit and notice of motion.
The appellant then took out Notice of Motion seeking to refer the suit to arbitration under Section 8 of the Arbitration and Conciliation Act, 1996 (“the Arbitration Act”) and Arbitration 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.
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.
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.
The arbitrator was of the opinion that respondent No.2 could not receive its entire 45% share in the constructed 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.
The appellant was directed to hand over possession of 16 flats to respondent No. 2, after which respondent No.2 would refund the deposit given by the appellant in respect of such flats.
This order was challenged by the appellant, first before the High Court and having failed there, before this Court in SLP. Apex Court discussed Dorab Cawasji WardenVersus Coomi Sorab Warden and Others, (1990) 2 SCC 117, when SC has had occasion to consider the circumstances warranting grant of interlocutory mandatory injunction.
“16. The relief of interlocutory mandatory injunctions are thus granted generally to preserve or restore the status 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 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 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 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 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 be a sound exercise of a judicial discretion.”
In the light of the above Bench concluded that it has no hesitation to conclude that the High Court committed manifest error and exceeded its jurisdiction in granting interlocutory mandatory injunction against the appellant. The Appeal was accordingly allowed.
SC Judgement on restraint on grant of Interim Mandatory Injunction (Download PDF)
SC Judgement on Restraint on Grant of Interim Mandatory Injunction by Latest Laws Team on Scribd
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