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ORDINARY ORIGINAL CIVIL JURISDICTION
INTERIM APPLICATION NO.4794 OF 2022
IN
COMMERCIAL SUIT NO.344 OF 2015
Vivek Madhavlal Pittie … Applicant
In the matter between:
Manas Shelters Pvt. Ltd. … Plaintiff
Vs.
Vivek Madhavlal Pittie and others … Defendants
IN
INTERIM APPLICATION NO.4794 OF 2022
IN
IN
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Mr. Zal Andhyarujina, Senior Advocate a/w. Mr. Naushad Engineer, Mr. Hursh
Meghani, Ms. Shreya Jha, Mr. Abhay Jadeja and Mr. Arun Unnikrishnan i/b.
Jadeja & Satiya for Applicant / Defendant No.1A.
Mr. Rajendra V. Pai, Senior Advocate a/w. Mr. Aloukik R. Pai, Mr. A. R. Pai, Ms.Ashesha Chhedo, Mr. Shanmukh Puranik, Ms. Prajakta Shringarpure, Mr.Saharsh Sakhare, Mr. Varad Jadhav and Ms. Priyanka Rammurthy i/b. Bina R.
Pai for Plaintiff.
Mr. Prashant Chavan i/b. N. Thakkar for Defendant No.4.
Mr. Vishwajeet Sawant, Senior Advocate a/w. Mr. Prabhakar M. Jadhav for
JUDGMENT
2. Defendant No.1A claims that even after obtaining the aforesaid interim injunction on the basis that the termination of the development agreement by the original defendant No.1 was prima facie unsustainable, as also on the basis that the plaintiff was ready and willing to perform its part under the development agreement, not a single step was taken in furtherance of such alleged readiness and willingness. Reliance is placed on events that have occurred subsequent to 15.06.2015 with documents in support thereof, to claim that this Court ought to exercise power under Order XXXIX, Rule 4 of the C.P.C. to vacate the interim injunction.
3. The plaintiff has opposed the said contentions of defendant No.1A and it is alleged that the development work came to a standstill because of multifarious litigations and proceedings initiated by the defendant No.1A. It is alleged that the defendant No.1A was instrumental in the Maharashtra Housing and Area Development Authority (MHADA) not entertaining applications filed on behalf of the plaintiff to take forward the development work. It was submitted that all the grounds raised in the present application are unsustainable, particularly because an earlier application for vacating the interim injunction met with failure.
4. In order to consider the rival submissions, it would be appropriate to refer to the relevant sequence of events, leading up to filing of the present application.
5. The original defendant No.1 had filed Suit No.224 of 1961 against other members of his family for partition of the ancestral properties. On 21.07.1967, the original defendant No.1 was appointed as Receiver in the aforesaid suit bearing Suit No.224 of 1961 with all powers for management of the suit property. In the course of management of the said suit property including the property, which is the subject matter of the present suit, no objection certificate (NOC) was obtained from MHADA with Floor Space Index (FSI) of 2.5. In that light, the original defendant No.1, as the Receiver submitted a report on 27.03.2002 in the aforesaid suit seeking permission to redevelop the suit property and such permission was granted by an order dated 10.04.2002.
6. On 21.05.2002, the original defendant No.1 executed a Memorandum of Understanding (MoU) with Nitin Karambelkar, who according to the defendant No.1A, essentially owns and controls the plaintiff company. A power of attorney dated 22.05.2002 was executed by the original defendant No.1 in favour of the said Nitin Karambelkar for undertaking activities in respect of redevelopment of the property. On 16.12.2003, a development agreement was executed between the original defendant No.1 and the plaintiff, with the time period for completion of redevelopment being stipulated in the agreement. Thereafter, supplementary agreement, as also a further agreement of the same date came to be executed between the parties.
7. On 08.12.2006, the Municipal Corporation of Greater Mumbai (MCGM) issued an Intimation of Disapproval (IOD) for carrying out the development work. In the course of redevelopment of the property, by 23.07.2007, the plaintiff completed construction of transit camp for tenants at the site and entered into tripartite agreements dated 19.11.2007 with the tenants. The last tenant vacated the old structure existing on the suit property by 15.07.2009. The commencement certificate was issued on 27.11.2009 in favour of the plaintiff. On 18.03.2011, a revised NOC was issued by MHADA, stipulating that the construction would have to be completed within 30 months. It is the case of defendant No.1A that even at the aforesaid stage, the plaintiff failed to perform its obligations and construction was completed only up to the plinth level, almost after 10 years of execution of the development agreement. On this basis, on 16.07.2013, the original defendant No.1 issued notice terminating the development agreement as well as the power of attorney and other documents executed in that context. It was the case of the original defendant No.1 that he had lost faith and confidence in the plaintiff as it had failed to carry out any development on the site.
8. Aggrieved by the said termination notices, the plaintiff filed chamber summons in the aforementioned suit bearing Suit No.224 of
1961. By an order dated 26.09.2014, this Court disposed of the chamber summons giving certain directions and also observing that the plaintiff may file a civil suit. Consequently, in October 2014, the plaintiff filed the instant suit. Along with the suit, the plaintiff filed notice of motion for interim injunctions. By order dated 15.06.2015, a learned Single Judge of this Court allowed the notice of motion in terms of prayer clauses (a) and (c). It was found that the plaintiff had made out a prima facie case as regards illegal termination of the development agreement. It was also found that the plaintiff was ready and willing to perform his part of the contract. Findings were also rendered in favour of the plaintiff on the aspect of grave and irreparable loss as also balance of convenience.
9. As a consequence of the notice of motion being allowed, during the pendency of the suit, the original defendant No.1 and his representatives were directed not to act upon the notice of termination dated 16.07.2013 and not to obstruct in any manner the continuation of the redevelopment project. The original defendant No.1 was also restrained from transferring or alienating in any manner the suit premises or creating any charge thereon. The original defendant No.1 filed an appeal to challenge the said order dated 15.06.2015 passed by this Court. Subsequently, the Division Bench of this Court permitted the original defendant No.1 to withdraw the appeal with liberty to file a notice of motion under Order XXXIX, Rule 4 of the C.P.C. for seeking recall / modification of the said order. But, the said notice of motion was also dismissed on 14.03.2017. The original defendant No.1 filed two appeals, one challenging the order dated 15.06.2015 and the other challenging the order dated 14.03.2017. Both the appeals were dismissed, against which special leave petitions were filed before the Supreme Court. Both the special leave petitions were dismissed by the Supreme Court. Subsequently, the applicant filed review petitions before the Division Bench of this Court challenging the dismissal of the appeals. The said review petitions are still pending.
10. In the meanwhile, the original defendant No.1 filed written statement in the year 2016 along with counter-claim in the instant suit.
11. In the present application, the applicant has referred to various events that took place after the order dated 15.06.2015 was passed granting interim injunction in favour of the plaintiff. Reference is made to the notices issued by the MCGM demanding taxes. It is the case of the applicant that the taxes ought to have been paid by the plaintiff as it was in-charge of the development project, particularly in the light of the interim injunction granted in its favour. According to the applicant, despite the interim injunction, the plaintiff did not take any steps to undertake the redevelopment work. It was specifically submitted that other than addressing only five letters to the MHADA, no further action was undertaken. Reliance was also placed on a complaint dated 15.10.2019 filed by one of the flat purchasers in the project on the ground that the plaintiff had not taken any steps in the matter. A report was filed by the police after investigation before the competent magistrate in respect of the said complaint. According to the applicant, the said document further supports the case for vacating the interim injunction. The applicant has specifically stated that the finances of the plaintiff are in absolute shambles and it does not have the wherewithal to take forward and complete the project. After filing of the application, a further subsequent event was brought to the notice of this Court that the MHADA had issued notice for acquisition of the property due to the fact that no development activity had been undertaken. It is a matter of record that the plaintiff has filed a writ petition before this Court, wherein the Division Bench has granted interim stay of the said notice.
12. The plaintiff has filed reply affidavit opposing the contentions raised on behalf of the applicant. It is submitted in the reply that no grounds have been made out for exercising power under Order XXXIX, Rule 4 of the C.P.C. It is specifically submitted that the applicant is responsible for the delay in progress of the development work and that therefore, the party at fault cannot be allowed to take advantage of its own wrong. It has been emphasized that till date, the plaintiff has taken care of the interests of the tenants who were in the structure that existed on the property, thereby demonstrating the bona fide of the plaintiff.
13. In the light of the material on record, Mr. Zal Andhyarujina, learned senior counsel appearing for the applicant submitted that in the present case, after obtaining interim injunction on 15.06.2015, the plaintiff has virtually done nothing towards completion of the development project. By referring to various clauses of the development agreement, it was submitted that specific timelines were provided therein, which have been completely ignored and violated by the plaintiff, despite the protection of the interim injunction order passed by this Court. It was submitted that in such circumstances, particularly when a period of about nine years has already elapsed after the interim injunction was granted, sufficient grounds have been made out for vacating the order of injunction. The learned senior counsel for the applicant submitted that after the interim injunction was granted on 15.06.2015, over the aforesaid period of about nine years, all that the plaintiff did was to address five letters to MHADA to make a show of pursuing the said authority for granting necessary clearances in respect of the development agreement. Two letters were addressed in the year 2016, two in 2019 and one letter in December, 2022. No effort worthy of mention was made by the plaintiff in order to complete the development project. It was submitted that the plaintiff could not claim that since the applicant did not co-operate for enhancement of FSI, the development work was hampered, for the reason that NOC for 2.[5] FSI was all along available and yet, the plaintiff did not take any steps for construction. The stage of construction admittedly has remained at the same level of plinth, as it was, when the interim injunction was granted on 15.06.2015.
14. It was further indicated that the recalcitrance of the plaintiff was evident from the fact that the project was not even got registered by the plaintiff before the Real Estate Regulation Authority (RERA), perhaps for the reason that all such projects registered with RERA have to abide by specific timelines. Thereupon, the learned senior counsel for the applicant emphasized upon the lack of finances available with the plaintiff to undertake the development project. Specific reference was made to the director’s report of the plaintiff dated 01.09.2017 along with auditor’s report, which indicated that absolutely no finances have been available with the plaintiff over all these years, due to which, it has not been able to take any step towards construction and completion of the development work. It was also submitted that the plaintiff ought to have discharged the burden of taxes demanded by the MCGM as it was incharge of the development project. This further indicated the unwillingness on the part of the plaintiff to take any step for taking the development work forward. It was further submitted that merely because the applicant had taken resort to remedies available to challenge the interim injunction order dated 15.06.2015, it could not be said that the development work was hampered. There was no interim stay of the order passed in favour of the plaintiff and also nothing to indicate that mere pendency of the appeals or even the review petitions that are pending even today, have, in any manner, obstructed the plaintiff from carrying out development work.
15. On this basis, it was emphasized that the plaintiff was required to show continued readiness and willingness during the pendency of the suit and even after the order dated 15.06.2015 was passed by this Court, which the plaintiff has miserably failed to demonstrate, thereby indicating that the instant application deserves to be allowed. According to the learned senior counsel appearing for the applicant, the subsequent events placed before this Court along with the supporting documents justify exercise of power under Order XXXIX, Rule 4 of the C.P.C. for vacating the aforesaid order of interim injunction. He relied upon the judgement of the Supreme Court in the case of N. P. Thirugnanam Vs. Dr. R. Jagan Mohan Rao and others, (1995) 5 SCC 115.
16. On the other hand, Mr. Pai, learned senior counsel appearing for the plaintiff submitted that there is no substance in the present application, primarily for the reason that the applicant and his predecessor are responsible for the development work having been stalled in the present case. It was submitted that the litigations filed and pursued by the original defendant No.1 and now the present applicant, have resulted in the concerned authorities, particularly MHADA, not entertaining any of the applications or communications of the plaintiff for facilitating development work. It was submitted that the applicant cannot be permitted on the one hand to obstruct the development work by multifarious activities and then on the other hand, to claim that the interim injunction granted by this Court on 15.06.2015 deserves to be vacated.
17. The learned senior counsel addressed this Court on each of the grounds raised on behalf of the applicant. At the outset, he submitted that the ground raised on behalf of the applicant regarding failure of the plaintiff to pay the property tax demanded by the MCGM, is absolutely without any substance. In that regard, reference was made to the clauses of the development agreement to state that the liability of paying property tax, under the development agreement, is on the applicant, and therefore, the said ground is without any substance.
18. He further submitted that MHADA did not give NOC to the plaintiff to carry out development activities, for which the plaintiff cannot be blamed. According to the plaintiff, the original defendant No.1 and now, the applicant is squarely to blame for refusal of MHADA to issue NOC and hence, they cannot be permitted to take advantage of their own activities of obstruction to claim that the interim injunction ought to be vacated. He submitted that the request for increase in FSI was pending with MHADA and in that context also, the development work was stalled. Much emphasis was placed on the efforts being taken by the plaintiff for ensuring availability of alternative accommodation for the tenants, thereby indicating the willingness of the plaintiff to carry out development work. The burden of transit accommodation, being borne by the plaintiff, indicates its continued willingness.
19. It was submitted that the barrage of appeals filed by the original defendant No.1, which failed up to the Supreme Court and thereafter filing of review applications that are still pending, shows that the original defendant No.1 and now, the applicant is hellbent upon keeping the plaintiff mired in litigations and then to claim that no construction or development activity has been undertaken. Specific reference was made to the earlier application filed under Order XXXIX, Rule 4 of the C.P.C., which was dismissed and it was claimed that the said order would operate as res judicata in the present proceedings, particularly for the reason that no subsequent event of any significance was brought to the notice of this Court, while pressing for relief in the instant application.
20. As regards the alleged lack of finances of the plaintiff, it was submitted that the plaintiff had completed another project in the year 2013 and the financial setback suffered by the plaintiff was on account of the activities of the original defendant No.1 and now, the applicant. It was emphasized that the original defendant No.1 was throughout aware about the finances of the plaintiff as he had executed the MOU with open eyes and that, in any case, the documents placed on record on behalf of the plaintiff along with the additional affidavit demonstrated that the sister concerns of the plaintiff indeed have strong finances. It was submitted that even this aspect of the matter would have to be decided in the trial.
21. A specific submission was made that continued readiness and willingness is necessarily a matter of trial, and therefore, at this stage, the applicant cannot be permitted to raise the said issue for vacating the interim injunction. It was further submitted that allowing the instant application would render the suit infructuous. The learned senior counsel for the plaintiff, in support of his submissions, relied upon the following judgements: a. Arun Bhoomi Corporation and others Vs. Hirabhai Shinwar Jadhav and others, 2021 SCC OnLine Bom 13790; b. Govinda Ramanuja Das Goswmi Vs. Vijiaramaraju and another, 1929 SCC OnLine Mad 399; c. Ravishankar and another Vs. VIIth Additional District Judge, Bhopal, 1994 M.P.L.J. 783; d. Arjun singh Vs. Mohindra Kumar and others, AIR 1964 SC 993; and e. Workmen of Cochin Port Trust Vs. Board of Trustees, (1978) 3 SCC 119.
22. Considering the rival submissions, this Court has to examine as to whether the applicant i.e. defendant No.1A has made out sufficient grounds for exercising power under Order XXXIX, Rule 4 of the C.P.C. to vacate the order of interim injunction dated 15.06.2015. The nature of contentions raised on behalf of the applicant indicates that the proviso to Order XXXIX, Rule 4 of the CPC is invoked, because under the said proviso, an order of injunction can be discharged, varied or set aside, if it is necessitated by change in circumstances. The thrust of the submissions made on behalf of the applicant is that, events that have occurred subsequent to the order dated 15.06.2015 clearly show that the order of interim injunction deserves to be vacated.
23. The contentions raised on behalf of the applicant can be broadly classified into five grounds. Firstly, that the plaintiff failed to take any step to carry out development or construction activity despite the interim injunction granted by this Court; secondly, the subsequent events clearly indicate that even though the plaintiff was able to convince this Court about readiness and willingness when the interim injunction order was passed on 15.06.2015, thereafter, continued readiness and willingness was not at all demonstrated; thirdly, that the finances of the plaintiff are in shambles, indicating there is no wherewithal available with the plaintiff to carry out any construction or development activity; fourthly, that the plaintiff failed to discharge the burden of additional taxes as demanded by the MCGM, thereby indicating its unwillingness to abide by the development agreement; and fifthly, that the plaintiff failed to take necessary steps to pursue the matter with MHADA, due to which, the said authority issued a show cause notice under Section 91-A of the Maharashtra Housing and Area Development Act, 1976 (for short 'MHADA Act') endangering the very property of which development was to be carried out under the protection of the order of interim injunction.
24. As regards the first ground alleging that the plaintiff failed to take any steps towards construction or development after the interim injunction order dated 15.06.2015 was passed, the material on record needs to be appreciated. The applicant has emphasized that even after obtaining the order of interim injunction wherein this Court held that a strong prima facie case was made out by the plaintiff regarding readiness and willingness for performing its part of contract, the stage of construction has remained the same despite the fact that about nine years have passed from the date of the order of interim injunction. At that stage, the construction was only up to the level of plinth and even today, it remains at the same stage. The plaintiff has not been able to demonstrate before this Court that the said claim of the applicant is factually incorrect. In fact, it is not seriously disputed that the stage of construction has remained the same for the past nine years, although it is a different matter that the plaintiff has sought to give its reasons for the said state of affairs. This Court finds that one of the factors taken into consideration by this Court in the order dated 15.06.2015, while holding in favour of the plaintiff, was that, upon the development work continuing and being completed, the applicant would get agreed area and thereby enjoy the benefit of appreciated value of the area coming to his share. On this basis, it was held that the original defendant no.1 will not suffer any prejudice if interim injunction is granted as it would facilitate construction and development activity.
25. This Court finds that the fact that no construction or development activity has taken place after the order dated 15.06.2015 was passed in favour of the plaintiff and the stage of construction has remained the same for the past nine years, is indeed a circumstance and an event subsequent to passing of the order of the interim injunction that this Court must consider while examining the rival claims. The allegations made by the parties against each other as to who is to blame for the said state of affairs will also have to be discussed, but, as a matter of fact, this Court finds that no construction or development activity worth the name has been undertaken by the plaintiff despite the order of interim injunction passed in its favour as far back as on 15.06.2015.
26. This Court finds that the second ground concerning continued readiness and willingness of the plaintiff is intertwined with the first ground and hence it needs to be discussed at this stage. The plaintiff has claimed that in the absence of NOC being granted by MHADA, the construction activity could not be undertaken. It is to be noted that the requirement of appropriate clearances from MHADA concerned enhanced FSI for the said project. But, it cannot be denied by the plaintiff that FSI 2.[5] was always available and yet, the plaintiff did not take any steps for undertaking construction or development activity after having obtained protective order of interim injunction on 15.06.2015. Even with regard to the requirement of pursuing MHADA for clearances, it is brought to the notice of this Court that the plaintiff sent only five letters or communications to the MHADA. These letters were sent on 03.06.2016, 07.06.2016, 27.02.2019, 25.03.2019 and 21.12.2022. The plaintiff has not been able to show any material as to what steps it took to pursue the matter with MHADA, despite the interim injunction order operating in its favour from 15.06.2015.
27. The only contention raised on behalf of the plaintiff in this regard was that MHADA was not entertaining the requests made by the plaintiff because of the pending litigations and because of obstructionist actions of the original defendant No.1 and the applicant i.e. defendant No.1A. It was specifically contended that the filing of appeals before this Court, special leave petitions before the Supreme Court and thereafter the review petitions, which are pending before the Division Bench of this Court, resulted in a stalemate and no progress could be achieved. This Court is of the opinion that merely because the original defendant No.1, as also the applicant herein, took recourse to the remedies available in law in respect of the order of interim injunction and the order refusing to vacate the interim injunction, it cannot be said that the applicant indulged in obstructionist activities. In any case, it is an admitted position that at no stage was there any interim stay to the order of interim injunction granted on 15.06.2015. Therefore, the plaintiff cannot take the excuse of pending litigations as a factor for not undertaking any activity of construction and development at the site.
28. This Court finds that the material on record does indicate that, while the plaintiff did succeed in convincing this Court on 15.06.2015 that it had made out a prima facie case of readiness and willingness to complete its part of the contract, the plaintiff has not been able to demonstrate continued readiness and willingness on its part. This Court is of the further opinion that if the contention raised on behalf of the plaintiff is accepted that after an order of temporary injunction is passed, the question of continued readiness and willingness in every case must be a matter for trial, it would defeat the ends of justice. The plaintiff, having obtained an order of interim injunction in a suit for specific performance, would then sit tight and do nothing during the pendency of the suit and it would thereupon claim that it is entitled to continuation of such an order of interim injunction till the suit is finally decided. Such a situation cannot be countenanced. In this regard, the learned senior counsel appearing for the applicant has relied upon the judgement of the Supreme Court in the case of N. P. Thirugnanam Vs. Dr. R. Jagan Mohan Rao and others (supra). The Supreme Court in the context of Sections 16(c) and 20 of the Specific Relief Act, 1963, found that the plaintiff is obliged to show continued readiness and willingness for obtaining the relief of specific performance. The plaintiff is required to demonstrate that it was always ready and willing to perform his part of the contract. This would necessarily mean that such readiness and willingness would have to be demonstrated at the prima facie stage when the suit is filed and order of interim injunction is sought; but, it would also require the plaintiff to continue to show such readiness and willingness particularly when it is enjoying the order of interim injunction on prima facie findings in its favour.
29. Although an attempt was made on behalf of the plaintiff to demonstrate that the obstructionist activities of the original defendant No.1 and now, the applicant had stalled the construction and development activity, there is no material on record to support the said contention. This is indeed a relevant subsequent event or change in circumstance that needs to be taken into consideration while deciding the present application.
30. One of the aspects of readiness and willingness on the part of the plaintiff to carry out the development activity concerns the finances and wherewithal of the plaintiff to do so. In this regard, the applicant has relied upon documents placed on record with the application, including director’s reports of the plaintiff for the years 2017 onwards. These documents are part of Exhibit-5, which is a report prepared by chartered accountants engaged by the applicant to review the finances of the plaintiff for the period between 2015-16 to 2020-21. The director’s report and auditor’s report have been analyzed and the review shows that the plaintiff company did not earn any revenue from its operations for the said period and that no business activity was carried out. The plaintiff company was found to have negligible fixed assets and its balance-sheets over the years showed only a few thousand rupees with cash equivalents of such small amounts. The plaintiff company did not incur any expenses towards any work in progress and that, no information was available about the salary expenses of the plaintiff company, thereby indicating that the company did not have employees or manpower of any significance. The material also did not show any project, business or development activity with the plaintiff company, other than the suit project. In fact, the aforesaid documents placed on record show the weak financial condition of the plaintiff company.
31. In response, the plaintiff has relied upon certain documents filed along with additional affidavits sought to be placed on record with Interim Application (L) No.35524 of 2023. It was submitted that even before the original defendant No.1 agreed to enter into the development agreement, he was very much aware about the financial condition of the plaintiff company. It was submitted that no objection was ever raised by the original defendant No.1 or even the present applicant as regards the finances of the company. It was emphasized that the finances of the sister concerns of the plaintiff company can be said to be healthy and therefore, at this stage, the said aspect of finances could not be gone into while examining as to whether the order of interim injunction could be vacated. It was emphasized that a project in Igatpuri was indeed completed by the plaintiff. But, this Court finds that the said project was completed way back in the year 2013. On this basis, it was submitted that all these aspects are necessarily matters of trial, and therefore, the present application cannot be entertained.
32. Having perused the material on record, this Court finds that the plaintiff company has not been able to dislodge the material placed on record, which demonstrates that the plaintiff company is in a very weak financial condition and that it has virtually no activity at all, much less any potential to carry forward the development work. A very strong case is made out by the applicant on the basis of cogent material on record, demonstrating that the plaintiff company does not have the wherewithal to carry out the development activity and this is one of the major factors why no construction or development work was undertaken by the plaintiff even when it was granted the order of interim injunction as far back as on 15.06.2015. There is nothing to support the charge levelled by the plaintiff company against the applicant that it is due to the original defendant No.1 and subsequently the applicant herein that the finances of the plaintiff company suffered or that the applicant can be blamed in that regard. The plaintiff has to stand on its own legs and it should have been demonstrated before this Court as to the financial wherewithal available with it to carry forward construction and development activities post 15.06.2015, in the light of the protection of the order of interim injunction granted by this Court. The plaintiff company has not been able to support its case and these circumstances, which are subsequent to the order dated 15.06.2015, are required to be taken into consideration while deciding as to whether the prayer of the applicant can be granted. The financial state of affairs of the plaintiff company do not inspire confidence at all and hence, this is a relevant factor with regard to the continued readiness and willingness on the part of the plaintiff. Such an important aspect of the matter cannot be treated lightly by merely submitting that it is necessarily a matter for trial.
33. Much emphasis was placed on behalf of the applicant on the failure of the plaintiff to pay taxes pertaining to demands raised by the MCGM, indicating that this was also a factor and a subsequent development that ought to be taken into consideration by this Court in order to vacate the order of interim injunction. The plaintiff has vehemently denied any such liability, even on a plain reading of the development agreement, thereby submitting that the question regarding liability to pay taxes to the MCGM cannot be raised as a ground for vacating the order of interim injunction. It is further indicated that in any case, if at all, the said aspect can at best be a matter for trial and it cannot be considered at this stage.
34. In order to examine the rival contentions on the said aspect of the matter, this Court has perused the development agreement. Clause 22 thereof is relevant in this context. At this stage, this Court is of the opinion that a bare reading of the said clause does not support the contention of the applicant that the plaintiff was liable to make payments towards demands made by MCGM for additional taxes during the pendency of the present suit, after the order of interim injunction dated 15.06.2015 was passed. It would not be appropriate to render any final opinion at this stage, but the applicant has not been able to make out a prima facie case that as per clause 22 of the development agreement, the plaintiff was necessarily required to make payment of all the taxes demanded by the MCGM in respect of the subject land on and from the date of execution of the development agreement. It is significant that the words in the development agreement in the context of new and / or additional taxes that may be imposed by the MCGM are to the effect “in connection with the redevelopment of the property”. Prima facie, use of the said words gives a different connotation to clause 22 of the development agreement and at this stage, on the face of it, it cannot be said that the plaintiff was liable to pay all the new and additional taxes or demands made by the MCGM. It would also be a matter for further examination as to whether the demands could be said to be new and / or additional taxes or these were liabilities pertaining to an earlier period. Therefore, the said contention raised on behalf of the applicant as a ground for vacating the order of interim injunction cannot be accepted.
35. The next contention raised on behalf of the applicant is that due to the inability of the plaintiff to undertake any development or construction activity, despite the order of interim injunction passed in its favour as far back as on 15.06.2015, MHADA issued notice dated 11.05.2023 in respect of the subject property, threatening its acquisition. The said notice was issued under Section 91-A of the MHADA Act to the applicant / defendant No.1A, wherein it was specifically stated by MHADA that since no development activity or construction activity was undertaken and the development work was completely stalled, despite NOC having been issued by the MHADA, the land deserved to be acquired. According to the applicant, the aforesaid notice is the culmination of the abject failure of the plaintiff in carrying out any development activity, despite the order of interim injunction in its favour, thereby demonstrating the events subsequent to the issuance of the order of interim injunction, justifying exercise of power by the Court under Order XXXIX, Rule 4 of the C.P.C. for vacating the order of interim injunction.
36. In order to respond to the said contention, the plaintiff relied upon the application filed for permission to file additional affidavit along with documents, which was opposed by the applicant / defendant No.1A. While relying upon the application, additional affidavit and the documents filed therewith, the plaintiff submits that the blame squarely lies with the applicant / defendant No.1A for the aforesaid state of affairs. It is submitted that perhaps the notice under Section 91-A of the MHADA Act has been issued in collusion with the applicant, only to facilitate the applicant / defendant No.1A in pressing reliefs in the present application. In any case, according to the plaintiff, Writ Petition
(L) No.15175 of 2023 has been filed by the plaintiff before this Court wherein the defendant No.1A is joined as respondent No.5. The Division Bench of this Court has issued notice and granted stay to the aforementioned notice issued by MHADA under Section 91-A of the said Act.
37. This Court finds that no opinion can be expressed in respect of the merits of the challenge raised on behalf of the plaintiff against the said notice issued by MHADA under Section 91-A of the MHADA Act, as it is subject matter of the aforesaid writ petition. Nonetheless, the fact that such a notice has been issued by MHADA does indicate that absence of any development or construction activity on the subject land, has resulted in such an adverse notice being issued. Such a notice indicates that absolutely no construction or development work has taken place on the subject land after the order of interim injunction dated 15.06.2015 was passed in favour of the plaintiff. The circumstances after the issuance of the order of interim injunction have reached a stage where MHADA has thought it appropriate to exercise statutory power to acquire the land on the ground of absence of development or construction activity. The period from 15.06.2015 till date, which is about 9 years, forms a major chunk of the period taken into consideration by MHADA while issuing such a notice threatening acquisition of the very land. This Court finds the issuance of such a notice as a relevant circumstance and a subsequent event that can be taken into consideration, while entertaining the prayer of the applicant / defendant No.1A for vacating the order of interim injunction.
38. Although the plaintiff has raised hue and cry about the applicant and his predecessor being solely responsible for the development / construction being stalled on the subject land, cogent material has not been placed on record by the plaintiff to support the said assertion. On the other hand, this Court has gathered an impression that after the order of interim injunction was obtained by the plaintiff, virtually, no steps were taken to undertake construction or development activity. The plaintiff has not been able to demonstrate what steps it took to remedy or avert the alleged tactics adopted by the applicant and its predecessor for stalling the development and construction activity. Nothing prevented the plaintiff from undertaking construction and development at least for the FSI of 2.5, which was always available in respect of the subject land. The pendency of the alleged dispute and necessity for increase in FSI has been used as an excuse by the plaintiff before this Court to claim that the development or construction work could not be undertaken. Therefore, this Court finds substance in the contentions raised on behalf of the applicant.
39. The plaintiff has placed reliance on the judgement of this Court in the case of Arun Bhoomi Corporation and others Vs. Hirabhai Shinwar Jadhav and others (supra). The said judgement considers the factors to be taken into consideration by the Court while exercising power under Order XXXIX, Rule 4 of the C.P.C. A perusal of the said judgement shows that the same, in fact, inures to the benefit of the applicant. This Court has laid down in the said judgement that the principle concerning discharging an order of injunction under Order XXXIX, Rule 4 of the C.P.C. necessarily relates to change in circumstances or undue hardship being caused to the applicant. It is specifically laid down that, undue hardship contemplated under Order XXXIX, Rule 4 of the C.P.C., is inconvenience caused to the applicant on account of operation of the order of temporary injunction. This Court is of the opinion that the factors noticed hereinabove, not only show the change in circumstances that justify exercise of power under Order XXXIX, Rule 4 of the C.P.C., but they also demonstrate that the applicant is suffering from undue hardship on account of operation of the order of temporary injunction. The development or construction work has not progressed one bit after the order of interim injunction was passed and the applicant is shackled with the plaintiff as the developer, who does not appear to have the wherewithal to undertake the activity of development as it has failed to do so for the past almost nine years, despite protection of the order of interim injunction. Thus, reliance placed on the said judgement cannot take the case of the plaintiff any further.
40. The plaintiff has placed reliance on the judgement of the Madras High Court in the case of Govinda Ramanuja Das Goswmi Vs. Vijiaramaraju and another (supra). The said judgement lays down a proposition that an order of interim injunction passed after hearing parties is as much binding on the Court as on the parties and that, it cannot be reopened except on presentation of some new matter, which was not available when the original order was passed. This Court is of the opinion that in the present application, the applicant has been able to place on record sufficient new matter or material, post the order of interim injunction passed on 15.06.2015 while pressing for the relief of vacating the order of interim injunction. Thus, the said judgement is also not applicable to the facts of the present case.
41. The reliance placed on behalf of the plaintiff on the judgement of the Madhya Pradesh High Court, in the case of Ravishankar and another Vs. VIIth Additional District Judge, Bhopal (supra), is also misplaced for the reason that the said judgement lays down the proposition that the pleas that could or that might or ought to have been raised prior to the passing of the order of interim injunction cannot be raised in an application filed under Order XXXIX, Rule 4 of the C.P.C. This Court is of the opinion that in the present case, events subsequent to the order dated 15.06.2015 have been highlighted, including the financial condition of the plaintiff after the order of interim injunction was passed, and therefore, the said judgement is of no help to the plaintiff.
42. It is interesting to note that this Court had relied upon the said judgement on the last occasion, in the year 2017, when the applicant had invoked Order XXXIX Rule 4 of the CPC. Reliance was placed on the said full bench judgement of the Madhya Pradesh High Court in the case of Ravishankar and another Vs. VIIth Additional District Judge, Bhopal (supra), as follows: “8. This principle was further affirmed by the Full Bench of Madhya Pradesh High Court in the case of Ravishankar vs. VIIth Additional District Judge. The following observations of the Madhya Pradesh High Court may be noted: “Whenever a prayer is made under Order 39, Rule 4, Civil Procedure Code, the Court has to pose itself with a question whether there is a change in the circumstances or whether the order of the Court is causing undue hardship to a party? The later part of the question, needless to say, would involve consideration of only such factors causing undue hardship as have come in existence after passing of the order of the Court or which factors would be a consequence of the order of the Court itself. So is the case with the change in the circumstances. Exercising its jurisdiction under Rule 4 abovesaid, the Court may with advantage draw upon the principles revolving around Explanation IV to Section 11 of the Civil Procedure Code and ask itself whether the pleas raised in the application under Rule 4 might and ought to have been raised prior to the passing of the order? If the answer be ‘yes’, the Court may reject the application. If the answer be in the negative, the Court may very well entertain the application and dispose of the same on merits.”
9. Applying these principles to the case in hand, it is, to my mind, quite clear that the Applicant (Defendant No. 1) has failed to make out a case under Order 39 Rule 4 of the Code.”
43. This Court is of the opinion that the said principle operated against the applicant due to the facts existing at that point in time. But, after passage of about seven years and the facts brought to the notice of this Court, the same principle must operate against the plaintiff. As noted hereinabove, the applicant has been able to establish his case that the change in circumstances justifies exercise of power under Order XXXIX Rule 4 of the CPC. In fact, this Court finds that the continued operation of the order of interim injunction is causing undue hardship to the applicant. Hence, the application deserves to be granted.
44. The plaintiff has further relied upon the judgement of the Supreme Court in the cases of Arjun singh Vs. Mohindra Kumar and others (supra) as also Workmen of Cochin Port Trust Vs. Board of Trustees (supra) on the ground that the principles res judicata and constructive res judicata apply to the applications at subsequent stage in the same proceedings. There can be no quarrel with the said proposition. But, the question of res judicata, in the present case, does not arise, simply for the reason that the applicant has based its claim for vacating the order of interim injunction on events and circumstances that have occurred after the order of interim injunction was passed and that they have caused and are continuing to cause hardship to the applicant.
45. Thus, the position of law relied upon by the learned senior counsel appearing for the plaintiff does not take the case of the plaintiff any further, while opposing the contentions raised on behalf of the applicant / defendant No.1A.
46. It was sought to be indicated at one stage on behalf of the plaintiff that if the present application is allowed, it would virtually render the suit infructuous as the decree of specific performance can never be granted by the Court in such circumstances. This Court is of the opinion that in the present suit, the plaintiff has also claimed amounts towards damages, and therefore, to that extent, the said contention cannot be accepted. Even otherwise, if the contention raised on behalf of the plaintiff is to be accepted then in all suits filed for grant of decree of specific performance, once an order of interim injunction is obtained by the plaintiff by convincing the Court, at that stage, about its prima facie case regarding readiness and willingness, post such order being passed, the plaintiff need not do anything in furtherance of such readiness and willingness and yet oppose the plea for vacating the order of interim injunction by claiming that eventually a decree of specific performance will not be granted if such order of interim injunction is vacated. Such an extreme and broad proposition, sought to be urged on behalf of the plaintiff, cannot be accepted.
47. In view of the above, this Court is convinced that sufficient ground is made out by the applicant for this Court to exercise power under Order XXXIX, Rule 4 of the C.P.C. to vacate the order of interim injunction. Accordingly, the application is allowed in terms of prayer clause (a), which reads as follows: - “(a) this Hon'ble Court be pleased to pass an order recalling and / or vacating the order dated 15 June 2015 passed by this Hon'ble Court in Notice of Motion (L) No.2370 of 2014 in Suit No.586 of 2015;”
48. In the light of the above, Interim Application (L) No.35524 of 2023 in Interim Application No.4794 of 2022 also stands disposed of.
49. As regards Interim Application (L) No.898 of 2023, Interim Application (L) No.34188 of 2023 and Interim Application (L) No.15824 of 2023, the said applications have no concern with the issue decided in the present order. In any case, the said applications were not heard and the learned counsel for the parties did not address any contentions with regard to the said applications. Hence, the said applications shall be listed for consideration in due course.
50. Upon the judgment and order being pronounced, the learned counsel appearing for the plaintiff prays for stay of the order, on the basis that the order of interim injunction has continued for a period of about 9 years. The prayer made on behalf of the plaintiff is vehemently opposed by the applicant i.e. defendant No.1A.
51. This Court has given detailed reasons in the judgment and order and a finding is rendered that the plaintiff virtually took no steps after the interim injunction order was passed on 15.06.2015, to undertake development / construction work. The protection given by this Court was not utilized for these years and therefore, no ground is made out for granting stay of the order. The prayer for stay is rejected. (MANISH PITALE, J.) Minal Parab SANDIP PARAB