Holding

The Supreme Court held that the High Court's interim orders restraining alienation and construction were invalid as they failed to satisfy the mandatory principles for injunctions, and the earlier order based on Section 52 of the Transfer of Property Act should stand.

Summary

The appellants, owners of agricultural land, entered into an agreement in 1980 for a cooperative housing project that later failed, leading the respondent Maruti Corp. to sue for specific performance in 1999. While the Gujarat High Court admitted the appeal and initially ordered that any dealing with the property would be subject to the appeal's outcome, it later issued two interim injunctions on 22 April 2008 and 7 May 2008 restraining alienation of the land and prohibiting construction, despite 280 plots having already been sold and construction commenced. The Supreme Court examined whether the High Court had applied the three mandatory principles for granting injunctions under Order XXXIX Rules 1‑2 CPC, considered the effect of Section 52 of the Transfer of Property Act (lis pendens), the conduct of the parties, and the rights of third‑party transferees. It held that the later injunctions were unsustainable because the High Court failed to assess prima facie case, balance of convenience, irreparable loss, and the parties’ conduct, and that the earlier order based on lis pendens should remain. Consequently, the Court set aside the 22 April and 7 May orders and upheld the 29 February order, disposing of the appeals in favour of the appellants.

Issues considered

The appropriateness of granting interim injunctions under Order XXXIX Rules 1‑2 CPC without applying the required principles of prima facie case, balance of convenience, and irreparable loss.
Whether Section 52 of the Transfer of Property Act (lis pendens) bars alienation of the disputed land during pendency of the appeal.
The impact of the respondent's 19‑year delay in instituting suit on its entitlement to injunctive relief.
The validity of an injunction affecting third‑party transferees who were not parties to the proceedings.

Legislation cited

Code of Civil Procedure, 1908s. Order XXXIX Rule 1, s. Order XXXIX Rule 2
Land Ceiling Act, 1976s. Section 20
Transfer of Property Act, 1882s. Section 52
Urban Land (Ceiling & Regulation) Act, 1976

Subjects

interim injunctionlis pendensspecific performancethird‑party rightsbalance of convenienceirreparable lossequityTransfer of Property ActCivil Procedure Code

Judgment

(2009] 5 S.C.R. 527

KISHORSINH RATANSINH JADEJA A
v.
MARUTI CORP. & ORS.
(Civil Appeal Nos. 2186-2187 of 2009)

! APRIL 6, 2009
B
[ALTAMAS KABIR AND CYRIAC JOSEPH, JJ.]

CODE OF CIVIL PROCEDURE, 1908:

Or.39 rr 1 and 2 - Interim injunction - Grant of - c
Principles to be considered - High Court in an appeal arising
out of a suit for specific performance of contract directing that
any alienation of property would be subject to decision of
appeal - By subsequent interim orders staying sale of plots
;.
and restraining the purchasers from raising any construction D
on the suit land - Held: The earlier order having been passed
. on principle of /is pendens, as enshrined in s.52 of Transfer
of Property Act, and transferees having obtained plots when
there was no injunction against owners, the subsequent orders
are not sustainable - The subsequent cryptic orders were
E
passed in great haste without giving the owners an opportunity
of hearing and without giving any reason for passing the same
- Orders were passed ignoring the basic principles required
to be considered while passing an order under Or.39 rr. 1 and
I 2 - Besides, High Court did not take into consideration that
the suit was filed after a long silence of 19 years - The F
subsequent interim orders in question passed by High Court
set aside - High Court would decide the appeal expeditiously
- Transfer of Property Act, 1882 - s.52 - Equity.

In the instant appeals, it was contended for the G
appellant and other joint owners of the suit land, as also
' for the transferees that in the first appeal, the High Court-
having passed an interim order dated 29.2.2008 to the
effect that if the properties in question were dealt with in
527 H
528 SUPREME COURT REPORTS [2009] 5 S.C.R.

A any way, the same would be subject to the decision in
the appeal, there was no bar to alienation of the property;
that in the circumstances, 280 plots were sold and the
purchasers started constructions on their respective
plots; that the High Court, therefore, erred in passing the
B subsequent orders, namely, order dated 22.4.2008 and
7.5.2008 and restraining the owners from selling the land
as also stalling the constructions, without giving an
opportunity of hearing.

Disposing of the appeals, the Court
c
HELD:1.1. It is well established, that while passing an
interim order of injunction under Or. 39 rr. 1 and 2 CPC,
the Court is required to consider three basic principles,
namely, (i) prima facie case; (ii) balance of convenience
D and inconvenience; and (iii) irreparable loss and injury.
None of these principles have been considered by the
High Court while passing the second and third interim
orders dated 22nd April, 2008 and 7th May, 2008, nor has
the High Court taken into account the long silence on the
E part of respondent No.1-Corporation in filing a suit after
19 years. [Para 22] [541-B-E]

1.2. Having passed an order on 29th February, 2008,
based on the principle of lis pendens as enshrined in s.52
of the Transfer of Property Act, 1882, the Division Bench
F of the High Court in its order dated 22nd April, 2008,
observed that when the first appeal was admitted and the
matterin dispute as regards the property in question was
sub-judice, the properties in question should not be sold
and passed an order which was contrary to the initial
G order dated 29.2.2008. [Para 21] [540-H; 541-A-B]

1.3. Again the order dated 7th May, 2008, directing '
that no construction be raised on the lands in dispute,
which has bearing on the 280 transferees who were in
KISHORSINH RATANSINH JADEJA v. MARUTI CORP. & 529
ORS.

the process of raising their constructions having A
~
!
obtained the plots at a point of time when no injunction
' against land owners was in force, was passed in great
haste without even giving the owners of the lands an
opportunity of contesting the application. In fact, the
.) application was disposed of by a cryptic order which B
does not even contain any reason for passing the same.
The order was passed without even taking into
consideration that the transferees would be adversely
affected by such an order. [Para 18 and 19] [540-B-F]

Manda/i Ranganna & others vs. T. Ramachandra (2008)
c
11 sec 1, referred to.

1.4. While passing the interim order dated 7th May,
2008, the High Court ought to have considered the effect
.,, which its order would have on the 280 transferees to D
whom some portions of the land had already been sold
and who had commenced construction thereupon,
particularly when they were not even parties in the
appeal, nor were they heard before they were injuncted
from continuing with the construction work. Such an E
order affecting third party rights in their absence, as they
were not parties to the proceedings, cannot be sustained
having further regard to the manner in which the said
order was passed. [Para 23] [541-E-G]
J
F
2.1. As far as the lands which the appellant and the
""" other joint owners have been restrained from alienating
by the second order dated 22nd April, 2008, are
concerned, in the event the order of 22nd April, 2008, is
·~
set aside, respondent No.1 can be compensated in terms
of money and no irreparable loss and injury will be G
caused to it on account thereof. On the other hand, if the
owners of the property remain restrained from
developing the same, it is they, who will suffer severe
prejudice, as they will be deprived of the benefit of the
H
530 SUPREME COURT REPORTS (2009] 5 S.C.R.

A user of their land during the said period. The balance of
convenience and inconvenience is against grant of such f'
injunction. The success of the suit for specific '
performance filed by respondent No.1 depends to a large
extent on tenuous proof of genuineness of the agreement
B sought to be enforced after 19 years, despite the finding i •
of the trial court that the suit was not barred by limitation.
[Para 24) [542-C-F]

2.2. The question of conduct of respondent No.1 also
becomes relevant, inasmuch as, having slept over its
C rights for more than 19 years, it will be inequitable on its
prayer to restrain the owners of the property from dealing
with the same, having particular regard to the fact that a
large portion of the land has already been conveyed to
as many as 280 purchasers who are in the process of
D erecting constructions thereupon. [Para 25) (542-G-H;
543-A]

3. An application for an order which would have far
and wide reaching consequences was sought to be
E disposed of by the Division Bench on the very next day
without giving an opportunity of controverting the
allegations made therein even to those who were parties
in the suit, though it had been brought to the notice of
the Bench that conveyances had been executed in favour
F of 280 purchasers. This is not a case where the appellant
and the other co-owners had violated any restraint order
passed by the High Court in transferring the plots in
question to the said 280 transferees. The said transfers
were effected at a point of time when there was no
G injunction or restraint order against the appellant and the
other owners of the property and as far as the said
transfers are concerned, the only order that could have
been passed on the said application is the order which
was passed at the first instance on 29th January, 2008,
H based on the principles of s.52 of the Transfer of Property
KISHORSINH RATANSINH JADEJA v. MARUTI CORP. & 531
ORS.

Act, 1882. The restraint order on the transferees must, A
., therefore, be held to be bad and liable to be set aside .
1 [Para 23) (541-G-H; 542-A-B]

4. The orders dated 22nd April, 2008 and 7th May,
2008, passed by the Division Bench of the High Court in
) B
F.A.No.853 of 2008 and C.A. Nos.2405 and 5618 of 2008
are set aside and the initial order dated 29th February,
2008 is maintained. The High Court would dispose of the
appeals pending before it at an early date. [Para 27] (543-
B-C]
c
Case Law Reference:

(2000) 11 sec 1 referred to Para 12

CIVIL APPELLATE JURISDICTION : Civil Appeal No.
t 2186-2187 of 2009. D

From the Judgment & Order dated 22.04.2008 of the High
Court of Gujarat at Ahemdabad in Civil Application No.181 of
1982.

Mukul Rohtgi, T. Mahipal, Kavin Gulati, Rashmi Singh, E
Avnish Pandey and Vimal M. Patel for the Appellant.

Arun Jaitley, Soli J. Sorabjee, Ranjit Kumar, Huzefa
Ahmadi, Rajesh Dave, Ejaz Maqbool, Tauna Singh,
' j Oardhuman Gohil, Manik Karanjawala, Ruby Singh Ahuja, M.R. F
-r Shamshad, Mukesh Verma and Yash Pal Dhingra for the
Respondents.

The Judgment of the Court was delivered by

ALTAMAS KABIR, J. 1. Leave granted. G

2. The appellant and the Respondent Nos.2 to 7 are
owners of agricultural land in Survey No.36 measuring 32 acres
and 38 gunthas situated in Village Nanamauva, Taluka & District
Rajkot (hereinafter referred to as the 'suit land'). On 19th March, H
532 SUPREME COURT REPORTS [2009] 5 S.C.R.

A 1980, the appellant and the other joint owners of the suit land
entered into an Agreement with Tirupati Cooperative Housing ,..
Society - a proposed Cooperative Housing society - for
development of the said land upon obtaining necessary
permission under Section 20 of the Urban Land (Ceiling &
'
B Regulation) Act, 1976 (hereinafter referred to as the 'Land
Ceiling Act, 1976') for exemption and for construction of houses
for the weaker sections. The application made by the proposed
Society on 29th April, 1988, under Section 20 of the Land
Ceiling Act, 1976, was rejected and according to the appellant
C and other joint owners, on the failure of the proposed Society
to get such permission, the Agreement could not be performed
and, therefore, by Public Notice dated 24th April, 1988, the
Agreement was declared to have been cancelled.

3. A legal notice was received from one Sharad N.
D Acharya, Advocate, denying that the Agreement had been
cancelled, as indicated in the Public Notice. Despite
cancellation of the Agreement, the Respondent No. 1 called
upon the appellant to give effect to the Agreement dated 19th
March, 1980, executed with the said respondent for
E development of the said land. The Respondent No.1 thereupon
filed Special Civil Suit No.299 of 1999 on 29th November,
1999, before the Civil Court at Rajkot against the appellant,
inter a/ia, praying for a declaration that the Respondent No.1
was in possession of the suit land and for a decree for specific
F performance of the said Agreement. In the alternative, for a
decree for refund of the earnest money of Rs.1,81,000/- and
for damages amounting to Rs.16,30,670/-with interest@12%
per annum. The Respondent No.1 also filed an application for
interim injunction to restrain the appellant from entering into the
G said land and disturbing the possession of the Respondent
No.1 and to further restrain the appellant from alienating the
land to any third party. The Civil Court at Rajkot dismissed the
said application by its order dated 29th April, 2002, against
which the Respondent No.1 filed appeal from Order No.372/
H
}
KISHORSINH RATANSINH JADEJA v. MARUTI CORP. & 533
ORS. [ALTAMAS KABIR, J.]

. 2000 before the Gujarat High Court, which was ultimately A
withdrawn with a direction for expeditious disposal of the suit
• within a period of 10 months. The suit was thereafter taken up
for trial by the Civil Court at Rajkot, and by judgment and order
dated 23rd November, 2007, while rejecting the prayer for
specific performance, the Trial Court directed refund of the B
earnest money.

4. The Respondent No.1, thereafter, filed an appeal on
15th February, 2008, being First Appeal No.853/2008, along
with an application, being Civil Application No.2405/2008, inter
alia, to restrain the respondents therein from transferring or
c
alienating the land in question to any third party till the disposal
of the appeal. Since the appellant was on caveat before the
High Court, after hearing the parties, the Division Bench of the
{
Gujarat High Court admitted the appeal but did not grant any
stay, as prayed for, and only directed that if the property in D
question was dealt with in any way, that would be subject to the
decision of the appeal.

5. Although, the Respondent No.1 failed to obtain any
order of injunction in the appeal, he issued a Public Notice E
through his learned Advocate on 7th March, 2008, asking the
public not to deal with the property. In response thereto, the
appellant also caused a Public Notice to be published on 10th
J March, 2008, clarifying that no injunction order had been
~ passed by the Gujarat High Court. The said fact was brought F
to the notice of the Gujarat High Court by the Respondent No.1
by way of an additional affidavit on the basis whereof, the High
Court passed an order on 22nd April, 2008, directing that the
property in question should not be sold. Thereafter, on 6th May,
2008, a further application for injunction No.5618/2008 was G
filed in the pending First appeal by the Respondent No.1 herein
indicating that constructions were being raised on the land in
question. On the basis of the above, the Division Bench of the
Gujarat High Court, on 7th May, 2008, passed the following
order impugned in these appeals :
H
534 SUPREME COURT REPORTS [2009] 5 S.C.R.

A "By this application, learned counsel for the applicant ,
submits that inspite of the directions of this court issued
vide orders dated 29.02.2008 and 22.04.2008, the
constructions are being raised in the disputed land.
'
Learned counsel Mr. Pahwa, the respondent No.2 submits
B
that the constructions were raised about 6 months back,
and part of the property was already sold.

To avoid further complications and multiplicity of litigations,
we order that no construction be raised on the disputed
c land. In spite of our direction, if further construction is
raised, the applicant will be at liberty to approach the
concerned police authority, and the concerned police
authority is also directed to take immediate steps to stop
the construction on the disputed land.
D
Civil application stands disposed of."

6. Appearing for the appellants, Mr. Mukul Rohtagi,
submitted that the Respondent No.1, Maruti Corporation
(plaintiff in the suit), came to be registered as a partnership firm
E on 21st June, 1989, but has sought specific performance of an
agreement alleged to have been entered into with the appellant
on 19th March, 1980, executed on a Non-judicial stamp paper
dated 17th March, 1990. Mr. Rohtagi urged that it was obvious
that the claim of the Respondent No.1 in the plaint had no valid,
F legal and/or factual foundation, on the basis of which the interim r
orders could have been passed by the High Court. He
submitted that none of the three orders impugned in the appeal
were speaking or reasoned orders. As the orders would
themselves reveal, they were simply reactions to new facts
G brought to the notice of the Court from time to time and orders
were passed on the basis thereof without even giving the
appellant herein or other interested parties a proper opportunity
of meeting the allegations or questioning the same. Mr. Rohtagi
submitted that the several interim orders passed by the Division
H Bench were devoid of any reason and were liable to be set
KISHORSINH RATANSINH JADEJA v. MARUTI CORP. & 535
f ORS. [ALTAMAS KABIR, J.]

-
...
aside.

7. Mr. Ranjit Kumar, learned senior counsel, who appeared
for the Respondent Nos.2 to 7, who were the joint owners of
A

the property with the appellant, while adopting Mr. Rohtagi's
; submissions, supplemented the same by contending that the
B
original agreement with Tirupati Cooperative Housing Society
stipulated that the said proposed Housing Society would have
to apply to the authorities of the Land Ceiling Act, 1976, under
Section 20 thereof, for exemption and leave to construct on the
vacant land. Learned counsel submitted that such application
had been made by Tirupati Cooperative Housing Society, but
c
the same was rejected and on such rejection, a public
announcement was made discontinuing the agreement
between the owners of the land and the proposed Tirupati
-- ..- I Cooperative Housing Society.
D
8. Mr. Ranjit Kumar urged that the owners of the property
had never entered into any agreement with Maruti Corporation-
,• Respondent No.1 herein, which filed a suit identical to that filed
by Tirupati Cooperative Housing Society, relying on the same
cheques by which Tirupati had advanced certain sums to the E
owners of the property. Mr. Ranjit Kumar also urged that, in any
event, even if the case of the Respondent No.1 is accepted as
correct, for 19 years it had not applied for exemption to develop
j
the land under Section 20 of the Land Ceiling Act, 1976, without
which it was not possible to develop the property. It is only after F
~· the repeal of the Land Ceiling Act, 1976, on 19th March, 1999,
that the Respondent No.1 filed the aforesaid suit seeking
~
enforcement of an agreement alleged to have been entered into
.... between the parties on 19th May, 1980, when exemption under
Section 20 of the said Act was no longer required.
G
~ 9. Mr. Ranjit Kumar submitted that initially when the First
Appeal of the Respondent No.1 was admitted in the Gujarat
High Court, an order was also passed in Civil Application
No.2405 of 2008 to the effect that if the property in question
was dealt with in any way the same would be subject to the H
536 SUPREME COURT REPORTS (2009] 5 S.C.R.
•
A decision in the appeal. Learned counsel urged that since in its
._
order the High Court had embodied the principles of Section
52 of the Transfer of Property Act, 1882 and there was no bar
to the alienation of the property, as many as 280 plots had been
sold to different purchasers by way of registered sale deeds
-
B and they had started construction on the plots which they had '
acquired presumably after obtaining necessary development
permission sanctioned by the Rajkot Municipal Corporation. It
was submitted that up to such point there could be no objection
with regard to the orders passed in the First Appeal. Thereafter,
c when the interim order was modified on 22nd April, 2008, on
the same application and the owners of the property were
restrained from selling the same, the said modification, though
not called for, was still capable of being defended.

10. The real problem was created when on 7th May, 2008,
D on a fresh Civil Application for Injunction No.5618 of 2008 filed
on 6th May, 2008, an order was passed by the Division Bench
which not only had serious consequences for the transferees
' -
~

~
•

but also for the owners of the land who were parties to the suit. '
The order which has been extracted hereinabove directed that
E no construction be raised on the disputed land and if any further
construction was raised, the Respondent No.1 herein would be
at liberty to approach the concerned police authorities who were
directed to take immediate steps to stop the construction on
the disputed land. Mr. Ranjit Kumar emphasised that the cryptic
F manner in which the said application was disposed of by such
a mandatory order, was contrary to all legal principles and even
.,.
;.-

procedural law. He submitted that no liberty to deal with the
fresh application filed on 16.5.2008 was even given by the
Division Bench to the respondents in the appeal and on the very
G next day on 7th May, 2008, without even giving any reasons for
passing such an order, it disposed of the same finally to the
severe prejudice of the appellant and the Respondent Nos. 2-
7 herein and the 280 transferees to whom plots had been
conveyed and that too when they were not parties to the appeal.
H
KISHORSINH RATANSINH JADEJA v. MARUTI CORP. & 537
t ORS. [ALTAMAS KABIR, J.]
11. It was also submitted that no thought was even given A
to the principles embodied in Order XXXIX Rules 1 and 2 of
the Code of Civil Procedure before such a drastic order of
injunction was passed by the High Court in the First Appeal.
Mr. Ranjit Kumar submitted that the basic principles for granting
1
injunction involving the making out of a prima facie case, the B
balance of convenience and inconvenience, and irreparable
loss and injury, were not even taken into consideration when
the orders of injunction were passed.

12. In addition to the above, Mr. Ranjit Kumar also referred
to the decision of this Court in Mandali Ranganna & others
c
vs. T. Ramachandra [(2008) 11 SCC 1] wherein an additional
principle was sought to be enunciated relating to grant of
injunction by way of an equitable relief. This Court held that in
addition to the three basic principles, a Court while granting
'<"
injunction must also take into consideration the conduct of the D
parties. It was observed that a person who had kept quiet for
a long time and allowed others to deal with the property
J
exclusively would not oe entitled to an order of injunction. The
Court should not interfere only because the property is a very
valuable one. Grant or refusal of injunction has serious E
consequences depending upon the nature thereof and in
dealing with such matters the Court must make all endeavours
to protect the interest of the parties.

13. Mr. Ranjit Kumar submitted that having filed the suit for F
enforcement of its purported rights under the Agreement of 1980
in the year 1999 and having allowed the owners of the property
to deal with the same and certain rights having been created
in favour of third parties when there was no restraint orders of
the Courts, the High Court erred in granting such an interim G
order with such drastic consequences without even giving the
persons, who were to be adversely affected by the order, an
opportunity of being heard.

14. Opposing the submissions made on behalf of the
appellant and the Respondent Nos.2 to 7, Mr. Soli J. Sorabjee, H
538 SUPREME COURT REPORTS (2009) 5 S.C.R.

A learned senior counset, submitted that it was necessary to clear
the impression that had been given that the Respondent No.1-
Maruti Corporation came into existence only on 21st June, 1989.
He submitted that, on the other hand, the Respondent No.1 was
in existence even in 1980, but as an unregistered partnership,
B and that it became a registered partnership on 21st June, 1989.
Mr. Sorabjee submitted that the question of the existence of
Maruti Corporation or the validity of the agreement executed
between Maruti Corporation and the owners of the property
would have to be considered on evidence and till a decision
c was arrived at in the matter, it was only appropriate that the
status-quo of the property be maintained, particularly when a
large number of transfers are alleged to have been made,
which could make the relief sought for by the Respondent No.1
a mere paper relief, if it ultimately succeeded.
D 15. Mr. Sorabjee also contended that when the application
for a restraint order against construction was sought to be filed
on 6th May, 2008, neither the appellant nor the other
respondents had disclosed the fact that such transactions had
already taken place and that the transferees had started raising
E their construction on the basis of such conveyances.
16. Mr. Sorabjee took pains to point out that while in the
suit all the issues had been decided against the plaintiff, the
issue relating to limitation had, however, been decided in favour
F of the plaintiff and it was held that the suit for specific relief was
not barred by limitation. Mr. Sorabjee submitted that since the
injunction order was in force since 7th May, 2008 and more than
10 months had passed since then, without disturbing the interim
order of stay, the High Court could be requested to dispose of
the First Appeal which is pending before it expeditiously.
G
17. Mr. Huzefa Ahmadi, who appeared for the Respondent
No.1 - Maruti Corporation in Special Leave Petition (Civil) No. ,-
12855 of 2008, while adopting Mr. Sorabjee's submissions,
urged that the Tirupati Cooperative Housing Society had been
H created by Maruti Corporation with a definite object in mind.
KISHORSINH RATANSINH JADEJA v. MARUTI CORP. & 539
• He submitted that the lands in question were agricultural in A
ORS. [AlTAMAS KABIR, J.]

nature and could not, therefore, be acquired by any other body
other than a cooperative society. It was on account of such bar
that the Tirupati Cooperative Housing Society was proposed
to be created on grounds of expediency and was yet to be
. registered. He also submitted that the payments made to the
owners by Tirupati Cooperative Housing Society had been
B

made from the account of Maruti Corporation and consequently
when exemption under Section 20 of the Land Ceiling Act,
1976, was not granted to the proposed Cooperative Society,
the Respondent No.1 filed a separate suit for specific c
performance of the agreement which had been entered into with
the Maruti Corporation and the payments made by Tirupati
Cooperative Housing Society were shown to be the payments
which had been made by Maruti Corporation. Mr. Ahmadi also
submitted that Maruti Corporation could not apply for exemption
.!> D
under Section 20 of the Land Ceiling Act, 1976, and as a
consequence it filed the suit for specific performance only after
the said Act was repealed, thereby doing away with the
necessity of obtaining exemption under Section 20 thereof. Mr.
Ahmadi also contended that unless the appellant and the other
E
joint owners of the property and their transferees were suitably
restrained from dealing with the properties during the pendency
of the two appeals before the first Appellate Court, the appeals
would be rendered infructuous as it would become impossible
., once the constructions had come up, to revert back to the
position when the plots were still undeveloped. F

18. On a careful consideration of the submissions made
on the behalf of the respective parties, the scenario which
emerges is that while on the one hand the Respondent No.1 is
strongly in favour of the status quo of the suit lands being G
maintained during the pendency of the suit for specific /

·V performance filed by it, the appellant and the other joint owners
have projected a case of both balance of convenience and
inconvenience and irreparable loss on being restrained from
developing their own property by the Respondent No.1, H
540 SUPREME COURT REPORTS [2009] 5 S.C.R.
•
A purportedly on the basis of a spurious document. Mixed with
the aforesaid issues is the issue of the 280 transferees to whom
plots have been conveyed by the owners and who were
enjoying the same by raising structures which were at different
stages of construction. We are faced with a situation where
B inspite of having obtained the said plots at a point of time when ~

the injunction against the owners was not in force, the
transferees, who were not even parties before the Court, have
been restrained by an interim order of injunction of a mandatory
nature which seriously affects them, but without giving them any
c opportunity of hearing.
19. We have to consider the effect of the third order
passed on 7th May, 2008, on Civil Application for Injunction
No.5618 of 2008 filed of the previous day on 6th May, 2008,
ordering that no construction be raised on the disputed lands
D on the 280 transferees who were in the process of raising their
constructions. As will be apparent from the order itself, the
same was passed in great haste without even giving the owners
of the lands an opportunity of contesting the application. In fact,
the application was disposed of by a cryptic order which does
E not even contain any reason for passing the same. The Division
Bench has merely indicated that to avoid further complications
and multiplicity of litigation, the order was being passed not to
raise constructions on the disputed land, without even taking
into consideration the several transferees who were to be
~
F adversely affected by such an order. Even the appellant herein
and the Respondents No.2 to 7 were not given an opportunity
of filing any affidavit to counter the statements and allegations
made in the application for injunction.

G 20. It is quite obvious that the High Court was completely
oblivious to the facts of the case and passed different orders
at different times on the applications filed at regular intervals -.
by the Respondent No.1 Corporation.

21. The reasoning provided in the interim order dated 22nd
H April, 2008, is, to say the least, legally untenable. Having
l:<ISHORSINH RATANSINH JADEJA v. MARUTI CORP. & 541
ORS. [ALTAMAS KABIR, J.]
r
passed an order earlier on 29th February, 2008, based on the A
principle of lis pendens, the Division Bench of the High Court
in its second order dated 22nd April, 2008, observed that when
the First Appeal was admitted and the matter in dispute as
regards the property in question was sub-judice, the properties
in question should not be sold and passed an order which was 8
" contrary to the initial ordeYwhicn was made in keeping with
Section 52 of the Transfer of Property Act.

22. It is well established, that· while passing an interim
order of injunction under Order XXXIX Rules 1 and 2 CPC, the
Court is required to consider three basic principles, namely,
c
(i) prima facie case;

(ii) balance of convenience and inconvenience; and
D
~ (iii) irreparable loss and injury.

None of the said principles have been considered by the
High Court while passing the second and third interim orders
dated 22nd April, 2008 and 7th May, 2008, nor has the High
Court taken into account the long silence on the part of the E
Respondent No.1 Corporation in filing a suit after 19 years.

23. In our view, while passing the interim order dated 7th
May, 2008, the High Court ought to have considered the effect
which its order would have on the 280 transferees to whom F
A'
some portions of the land had already been sold and who had
commenced construction thereupon, particularly when they were
not even parties in the appeal, nor were they heard before they
were injuncted from continuing with the construction work. Such
an order affecting third party rights in their absence, as they
G
were not parties to the proceedings, cannot be sustained having
further regard to the manner in which the said order was
;. passed. An application for an order which would have far and
wide reaching consequences was sought to be disposed of by
the Division Bench on the very next day without giving an
opportunity of controverting the allegations made therein even H
542 SUPREME COURT REPORTS [2009] 5 S.C.R.

'
A to those who were parties in the suit, though it had been brought
to the notice of the Court that conveyances had been executed
in favour of 280 purchasers. This is not a case where the
appellant and the other co-owners had violated any restraint
order passed by the Court in transferring the plots in question
B to the said 280 transferees. The said transfers were effected •
at a point of time when there was no injunction or restraint order
against the appellant and the other owners of the property and
as far as the said transfers are concerned, the only order that
could have been passed on the said application is the order
c which was passed at the first instance on 29th January, 2008,
based on the principles of Section 52 of the Transfer of Property
Act, 1882. The restraint order on the transferees must,
therefore, be held to be bad and liable to be set aside.

24. As far as the lands which the appellant and the other
D joint owners have been restrained from alienating by the
second order dated 22nd April, 2008, are concerned, we are
of the view that in the event the order of 22nd April, 2008, is
set aside, the Respondent No.1 can be compensated in terms
of money and no irreparable loss and injury will be caused to it
E on account thereof. On the other hand, if the owners of the
property remain restrained from developing the same, it is they,
who will suffer severe prejudice, as they will be deprived of the
benefit of the user of their land during the said period. The
balance of convenience and inconvenience is against grant of
F such injunction. The success of the suit for specific performance ~

filed by the Respondent No.1 depends to a large extent on
tenuous proof of genuineness of the agreement sought to be
enforced after 19 years, despite the finding of the Trial Court
that the suit was not barred by limitation.
G
25. The question of conduct of the Respondent No.1 also
becomes relevant, inasmuch as, having slept over its rights for
.;
more than 19 years, it will be inequitable on its prayer to
restrain the owners of the property from dealing with the same,
having particular regard to the fact that a large portion of the
H
KISHORSINH RATANSINH JADEJA v. MARUTI CORP. & 543
ORS. [AlTAMAS KABIR, J.]

land has already been conveyed to as many as 280 purchasers A
who are in the process of erecting constructions thereupon.

26. We are, therefore, unable to sustain the interim orders
passed by the Division Bench of the Gujarat High Court on 22nd
April, 2008 and 7th May, 2008 in the appeals pending before B
it.

27. We, accordingly, set aside the orders dated 22nd
April, 2008 and 7th May, 2008, passed by the Division Bench
of the Gujarat High Court in F:A.No.853 of 2008 and C.A.
Nos.2405 and 5618 of 2008 and maintain the initial order C
dated 29th February, 2008. The appeals and the connected
Interlocutory Applications are, accordingly, disposed of.

28. The High Court is requested to dispose of the appeals
• ,~ pending before it at an early date without being influenced by o
any observations made in this judgment.
29. There will be no order as to costs.
R.P. Appeals disposed of.