Gujarat High Court Grants Interim Injunction On Immovable Property Based On 'Agreement To Sell'
The Gujarat High Court recently ordered interim injunction on an immovable property and restrained its owner from changing its status during the pendency of the suit, based on an agreement to sell arrived at between the parties.The Bench comprising Justice AP Thaker observed, "So far as the suit based on agreement to sell for specific performance of contract, even if that agreement to sell...
The Gujarat High Court recently ordered interim injunction on an immovable property and restrained its owner from changing its status during the pendency of the suit, based on an agreement to sell arrived at between the parties.
The Bench comprising Justice AP Thaker observed,
"So far as the suit based on agreement to sell for specific performance of contract, even if that agreement to sell is not registered, same can be considered for collateral purpose... If there is contract of agreement to sell and the same is not refused by the defendant and further when legal notice has been issued to the defendant for purpose of that contract, if no injunction is granted in favour of the plaintiff, then, there might be multiplicity of litigation in case defendant transfers the property during the pendency of the litigation."
The Bench further affirmed today that in the case of agreement of sale relating to immovable property, time is not of the essence of the contract unless specifically provided to that effect.
The Court was hearing an appeal from order under Order 43 Rule 1 of CPC. The Appellant herein had filed a suit against the Respondent for specific performance of contract and permanent injunction on the basis of agreement to sell entered into between the parties for certain land for consideration worth INR 3,22,82,432.
The Appellant contested that she had paid INR 51 lakh pursuant to the agreement to sell which was notarised. Further, per the Appellant, there was a condition in the agreement to sell that the Defendant-Respondent had to execute the sale deed after obtaining NA permission and after such permission being obtained, the Plaintiff had to pay 30% of the amount and the remaining, thereafter.
The suit was filed for specific performance of the agreement to sell and prayed for permanent injunction. The Plaintiff also moved an application for interim injunction under Order 39 Rule 1 and 2 of CPC for temporary injunction during the pendency of the civil suit. To bolster the case, the Plaintiff showed her financial capacity for making payment and willingness to deposit the amount. Reliance was placed on Ziyauddin Adbul Hamid Sheikh v. Dinaz Bejan Ankleshwariya 2017 (2) GLH (UJ) 2 to contest that interim relief was to be granted in favour of the Plaintiff to prevent multiplicity of proceedings.
Per contra, the Defendant submitted that he had not received any cash payment from the Plaintiff and had received only INR 5 lakhs from the bank. The Plaintiff had not shown any readiness and willingness to pay the full amount.
The Bench relied on Motilal Jain v. Ramdasi Devi (Smt) and Others, (2000) 6 SCC 420 wherein it was held that an averment of readiness and willingness in the plaint is not a mathematical formula which should only be in specific words. "If the averments in the Plaint as a whole do clearly indicate the readiness and willingness of the plaintiff to fulfill his part of the obligation under the contract which is the subject matter of the suit, the fact that they are differently worded will not militate against the readiness and willingness of the plaintiff in a suit for specific performance of the contract," it said.
Noting these precedents and observing that there was no dispute between the parties regarding the execution of agreement to sell, the High Court said,
"Since the right of property is involved in respect of agreement to sell, it is necessary that nature of the property does not change hand or does not change its status during the pendency of the suit."
The Court further ventured to hold that the Trial Court had not referred to the pleadings of the party and in mechanical and cryptic manner, had passed the impugned order. It was affirmed,
"so far as the suit based on agreement to sell for specific performance of contract, even if that agreement to sell is not registered, same can be considered for collateral purpose. Such agreement to sell can be considered for the purpose of Section 53A of the Transfer of Property Act."
Keeping in view these principles and precedents, the Bench remarked that all three ingredients of granting interim injunction ie prima facie case, irreparable loss and balance of convenience were in favour of the Plaintiff. Accordingly, the Bench allowed the appeal.
Case Title: Gitaben Govindbhai Patel vs Rameshbhai Hirabhai Patel
Case No.: C/AO/35/2021