Plaintiff Seeking Temporary Injunction In Specific Performance Suit Has To Show Strong Prima Facie Case On Undisputed Facts : SC [Read Judgment]

The Supreme Court has observed that strong prima facie case on undisputed facts is necessary for getting the relief of temporary injunction in a suit for specific performance of contract. This is because of the fact that specific performance by itself is a discretionary remedy, explained a bench comprising Justices Ashok Bhushan and Navin Sinha.

The bench also said that the conduct of parties is also a relevant consideration for interim injunction, in addition to the factors of prima facie case, balance of convenience and irreperable injury.

"Chapter VII, Section 36 of the Specific Relief Act, 1963 (hereinafter referred to as 'the Act') provides for grant of preventive relief. Section 37 provides that temporary injunction in a suit shall be regulated by the Code of Civil Procedure. The grant of relief in a suit for specific performance is itself a discretionary remedy. A plaintiff seeking temporary injunction in a suit for specific performance will therefore have to establish a strong prima­facie case on basis of undisputed facts. The conduct of the plaintiff will also be a very relevant consideration for purposes of injunction. The discretion at this stage has to be exercised judiciously and not arbitrarily", observed the bench.

The Court was hearing an appeal filed by defendants in a specific performance suit against the interim order passed by the trial court (and affirmed by High Court) restraining them from executing sale deed or any other documents creating charge with respect to the property.

The defendants contended that there was no concluded contract for sale, and that the agreement was only in the negotiation stage. When the talks fell out, the advance amount was also refunded to the plaintiff, submitted the defendants.

The plaintiff sought to sustain the order by arguing that there was a concluded contract between the parties. The emails and whatsapp messages between parties were referred for that purpose. It was further submitted that the defendants acted in haste to execute a sale deed with a third party even during the subsistence of the agreement with the plaintiff.

The Supreme Court observed that the existence of a concluded contract was itself a matter of dispute. 

"The WhatsApp messages which are virtual verbal communications are matters of evidence with regard to their meaning and its contents to be proved during trial by evidence­in­chief and cross examination. The e­mails and WhatsApp messages will have to be read and understood cumulatively to decipher whether there was a concluded contract or not".

That being so, there was no justification for a temporary order in favour of the plaintiff, the SC observed.

"The prolonged negotiations between the parties reflect that matters were still at the 'embryo stage' as observed in Agriculture Produce Market Committee, Gondal and ors. vs. Girdharbhai Ramjibhai Chhaniyara and ors., (1997) 5 SCC 468. The plaintiff at this stage has failed to establish that there was a mutuality between the parties much less that they were adidem." 

The Court also noted that the suit was filed seven months after the defendants had refunded the advance. The explanation that the plaintiff waited hopefully for a solution outside litigation as a prudent businessman before finally instituting the suit is too lame an excuse to merit any consideration, the SC said.

In this backdrop, the SC observed :

"We are therefore of the considered opinion that in the facts and circumstances of the present case, and the nature of the materials placed before us at this stage, whether there existed a concluded contract between the parties or not, is itself a matter for trial to be decided on basis of the evidence that may be led. If the plaintiff contended a concluded contract and/or an oral contract by inference, leaving an executed document as a mere formality, the onus lay on the plaintiff to demonstrate that the parties were adidem having discharged their obligations as observed in Brij Mohan (supra)".

Based on these findings, the appeals were allowed, setting aside the orders of injunction.

Case details
Title : Ambalal Sarabhai Enterprise Ltd vs KS Infraspace LLP and another & Haryana Containers Ltd vs KS Infraspace LLP and another
Case No : Civil Appeals No 9346, 9347, 9348-49 of 2019
Coram : Justices Ashok Bhushan & Navin Sinha
Appearances : Senior Advocates Kapil Sibal & Huzefa Ahmadi (For appellants) and Senior Advocate Dr Abhishek Manu Singhvi (for respondents)

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