Telangana HC Dismisses Property Purchaser's Appeal, Says Act Done In 'Wilful Disobedience' Of Injunction Order Is Liable To Be Reversed

While hearing a matter concerning a property dispute, the Telangana High Court reiterated that an act which is done in violation of an injunction order is invalid and should be undone by the court putting back the parties in the same position as they were before such an order was passed. 

In reiterating so, the High Court dismissed an appeal filed against a decree for specific performance, and held that the appellant purchased the property in the teeth of the trial court's injunction order which disentitled the party from pursuing any further reliefs. 

A division bench of Justice Moushumi Bhattacharya and Justice Nagesh Bheemapaka in its order said,"The issue of maintainability of A.S.No.32 of 2016 is grounded on whether the transactions in favour of the defendant No.2/appellant, being in violation of the order of injunction dated 23.12.2008, could have legal sanctity. We are of the view that the defendant No.2/appellant purchased the property in the teeth of the injunction order and hence is disentitled from pursuing further remedies against the impugned judgment". 

The bench referred to the Supreme Court's decision in Balwantbhai Somabai Bhandari v. Hiralal SomabhaiContractor (deceased) rep. By L.Rs. (2023) where the apex court had "specifically considered" whether the contemptuous transactions are void. The bench noted that the Supreme Court in Balwantbhai, relied on its 1996 decision in Delhi Development Authority v. Skipper Construction Co. (P) Ltd where it was held that the "legal consequence of an act done in breach of or in violation of an order of injunction should be undone and the parties should be put back to the same position as they were in immediately prior to the order of injunction". 

Notably, the bench also referred to a 1985 decision delivered by the Chancery Division in Clarke v. Chadburn where it had said that an act done in wilful disobedience of an injunction or Court order is an illegal and invalid act which could not effect any change in the rights and liabilities of others. 

Background

On March 22, 2006, an Agreement of Sale was executed between the plaintiffs (respondent Nos. 1 and 2 before the high court) and the original property owner (defendant No. 1). The plaintiffs subsequently filed a suit for specific performance.

During the pendency of this suit, in December 2008, the trial court granted an interim injunction restraining the defendant No. 1 from alienating or creating any interest in the suit property in favour of any third party.

Despite this injunction, the defendant No. 1 sold the property to the appellant (defendant No. 2) through two registered Sale Deeds in January and August of 2011. Upon learning of this transaction, the plaintiffs-respondents sought to implead the appellant purchaser as a party, which was allowed in 2014.

The trial court ultimately decreed the suit for specific performance on September 18, 2015, based on the consent of all parties (including the purchaser). The appellant/purchaser, then filed the present appeal challenging the final decree.

The respondent/plaintiffs argued that the appeal was not maintainable on two grounds. They first contended that the appellant was a purchaser 'pendente lite' (pending litigation) who had acquired the property in violation of the injunction order. Secondly, they said that the decree was passed with the consent of all parties, including the appellant.

The appellant, on the other hand, contended that the order was not a consent decree and that as a bona fide purchaser, they had the right to challenge the decree.

Findings

The Court in its judgement observed that the trial court's order clearly recorded the consent of both plaintiffs and defendants to decree the suit on certain terms. As such, it fell under the purview of Section 96(3) of the Code of Civil Procedure, which bars appeals against consent decrees.

"The specific recording in the order mentions both parties and not only the respondent Nos.1 and 2/plaintiffs. We accordingly hold that the order dated 18.09.2015 was a consent order recording the consent of both the plaintiffs as well as the defendants and that the appellant/defendant No.2 cannot contend otherwise," the court held. 

The bench further said that the appellant had not questioned the correctness of the consent recorded by the Trial Court in the Grounds of Appeal. 

The court further said that otherwise as well statement made by a counsel before a court which has been "recorded in a judgment/order" cannot be challenged before a different forum. "Judicial decorum does not permit enquiry into what transpired between counsel in proceedings before another Court," the bench added referring to settled judgments. 

Noting that the appeal falls within the bar of Section 96(3) CPC, the high court said, "There is little doubt that the impugned order is a consent order recording the consent not only of the plaintiffs but also of the defendants. The appellant/defendant No.2 falls foul of all the legal propositions as also the law pronounced by the Supreme Court". 

Holding that the appeal is not maintainable, the bench went on to dismiss the same.

Case no.: AS 32 of 2016

Sr. Counsel A. Venkatesh represented the appellant

And Sr. Counsel V. Ravinder Rao for respondent

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