Holding

The Supreme Court held that a prima facie case exists and, on the balance of convenience, an interim injunction restraining alienation or alteration of the suit property must be granted pending the trial for specific performance.

Summary

Julien Educational Trust, which runs a school, sought to purchase adjacent land owned by eight co‑sharers for expansion. An oral agreement was reached, draft deeds were prepared and approved by most sellers, but execution was delayed and the sellers later attempted to sell the land to third parties. The Trust filed a suit for specific performance and an application for an interim injunction under Order 39 of the CPC to restrain any alienation or alteration of the property. The trial court refused the injunction, the High Court set aside the trial court’s order, rendering the suit ineffective, and the Trust appealed. The Supreme Court held that a prima facie case existed, that the question of whether a concluded contract existed was for trial, and that the balance of convenience and the risk of irreparable loss favored granting an injunction. Accordingly, the appeals were allowed, the High Court order was set aside, and the respondents were restrained from alienating or altering the property until the suit is decided, with directions for the trial court to dispose of the suit within a year.

Issues considered

Whether the appellant has established a prima facie case for specific performance of an oral agreement for sale of immovable property.
Whether an interim injunction under Order 39 Rules 1 and 2 of the CPC can be granted to restrain alienation, encumbrance or change of character of the suit property pending trial.
Whether the balance of convenience and the possibility of irreparable loss favor the grant of such interim relief.
Whether the existence of a concluded contract is a question of fact to be tried and how that impacts the grant of interim injunction.

Legislation cited

Code of Civil Procedure, 1908s. Order 39 Rules 1 and 2, s. Section 151
Code of Criminal Procedure, 1973s. Section 144(2)

Subjects

specific performanceinterim injunctionbalance of convenienceoral contractsale of immovable propertystatus quoCPC Order 39property lawschool expansionprima facie case

Judgment

[2009] 15 S.C.R. 1260

A M/S. JULIEN EDUCATIONAL TRUST
v.
SOURENDRA KUMAR ROY & ORS.
(Civil appeal No. 8081-8082 of 2009)

DECEMBER 02, 2009
B
[ALTAMAS KABIR AND CYRIAC JOSEPH, JJ.]
Code of Civil Procedure, 1908:

Or.-39, rr. 1and2 r/w s.151- Suit for specific perfonnance ,
C of contract - Prayer for interim injunction - Rejected by trial
court - Appeal before High Court - Meanwhile suit property
sold - Purchasers also implead as defendants and interim
injunction granted by trial court - High Court setting aside
interim injunction - HELD: From the materials on record a
prima facie case has been made out by the appellant Trust
D as to the agreement for sale, which has to go to trial - Whether _..
there was a concluded contract or not between the appellant
Trust and respondent nos. 1 to 8 is a matter of evidence and
can only be gone into during the trial of suit - As regards
balance of convenience, since the principal object of the
E appellant Trust to acquire the suit property was to extend its
school unit, if the suit property is allowed to be commercially
exploited by raising multi-storeyed structures thereupon, the
entire object of the suit filed by the appellant Trust wfl/ be
rendered meaningless and the purpose for which the suit had ' '
F been filed would be completely defeated - Accordingly, order
of High Court is set aside and it is directed that the
respondents shall not alienate or encumber the suit prorc:rty
or change the nature and character thereof till the c:isposal
of the suit for specific performance filed by the apr:,1ant Trust
G - Having regard to the peculiar facts of the case, trial court
would dispose of the suit as early as possible - Interim
injunction.

CIVIL APPELLATE JURISDICTION : Civil Appeal Nos.
H 1260
JULIEN EDUCATIONAL TRUST v. SOURENDRA 1261
KUMAR ROY & ORS.
8081-8082 of 2009. A

From the Judgment & Order dated 15.5.2008 of the High
Court of at Calcutta in F.M.A.T. No. 127 of 2008 with CAN No.
1002 of 2008.

S.K. Mitra, Raja Chatterjee, G.S. Chatterjee for the B
Appellant.

C. Mukund, Pankaj Jain, Ashok Jain, Bijoy K. Jain, Dr.
Kailash Chand, Amit Kasera for the Respondents.

The following Order of the Court was delivered c
ORDER

1. Leave granted.

2. The appellant herein, Julien Educational Trust, claims D
>! to be a benevolent trust created by a registered Deed of Trust
dated 30.07.1970 for the purpose of encouraging education
and other allied activities. It claims to be registered under
Section 12A of the Income Tax Act, 1961, and has its registered
---t office at 35E, Elgin Road, P.S. Bhowanipore, Kolkata-700020. E
The appellant runs a reputed school, known as Julien Day
School, at premises No. 4, Umananda Road and 35E, Elgin
Road, P.S. Bhowanipore, Kolkata-700020, which are two
'). adjacent premises. The respondents are the joint owners of 15
Cottahs 8 Chittaks 29 square feet of land, including a three- F
storied old dilapidated structure and garage and outhouses
constructed thereon, being premises No. 3/1, Heysham Road,
Police Station Bhowanipore, Kolkata.

3. Since the said land was adjacent to the school G
premises, the appellant Trust was interested in purchasing the
same for the purpose of expansion of the school. Pursuant
~ thereto, the appellant Trust entered into negotiations with the
Respondents for purchase of the property, which was orally
accepted by the Respondents joirrtry and serverally and the
H
1262 SUPREM.E COURT REPORTS (2009] 15 (ADDL.) S.C.R.

A parties agreed that the sale transactions would be completed
in the follwing manner:- _..
.~·

"(i) That the defendants will sell ·the suit property and
the plaintiff shall purchase the same on a total
consideration price of Rs. 4, 15,_00,000/- (Rupees·
B Four Crores fifteen Lakh:> only).

(ii) That the defendant No. 1 shall get a sum of Rs.
1,55,00,000/- (Rupees One Crore and fifty five
lakhs) only towards the full and final consideration J.
c price for sale of his undivided 1/3rd share in the suit
property upon execution and registration of the
Deed of Conveyance in respect of his undivided
share in the suit property.

(iii) That the defendant Nos. 2 and 3 shall jointly get a
D sum of Rs. 1,30,00,000/- (Rupees On Crore and )I.
Thirty Lakhs) only towards the full and final
consideration price for sale of their undivided 1/3rd
share in the suit property upon execution and
registration of Deed of Conveyance in respect of
E their undivided share in the suit property.

(iv) That the defendant Nos. 4,5 and 6 shall jointly get
a sum of Rs. 78,00,000/- (Rupees Sevently eight
Lakhs) only towards the full and final consideration "'
F price for sale of their undivided 3/15th share in the
suit property upon execution and registration of
Deed of Conveyance in respect of their undivided
share. in the suit property.

(v) That the defendant Nos. 7 and 8 shall jointly get a
G sum of Rs. 52,00,000/- (Rupees fifty two lakhs) only
towards the full and final consideration price for sale
}-
of their undivided 2/15th share in the suit property 'f-

upon execution and registration of Deed of
Conveyance in respect of their undivided share in
H
JULIEN EDUCATIONAL TRUST v. SOURENDRA 1263
KUMAR ROY & ORS.
suit property." A
-1 >
4. It appears that on account of an interim order of status-
quo passed in a First Appeal filed by one of the co-sharers,
no written agreement for sale was extent where tt.e
Respondents made over certified copies of their title deeds to
the appellant Trust in order to establish their right title and B
interest over the suit property. Thereafter, in terms of the oral
agreement which had been finalised between the parties,
separate draft Deeds of Conveyance were sent by the appellant
to the respondents in resepect of their undivided sha'"es in the
" c
suit property for their approval. It also appears that it was the
f~rthei case of the appellant that they had been informed by the
respondents jointly and severally that when the appellant was
ready with the consideration amount, appropriate steps would
be taken to get t~e. order of status quo vacated to enable the
parties to complete the transaction by executing and registering D
l( the several Deeds of Conveyance, drafts whereof had already
.....
(
been forwarded to the respondents. It is on such account that
the order of status quo was vacated by the Court of 8th Civil
Judge (Senior Division) at Alipore by his order No. 205 dated
7th June, 2006. E
5. The appellant also applied to the Inspector General and
Commissioner of Stamp Revenue, West Bengal, on 21st June,
> 2006, for exemption from payment of stamp duty in registering
the Deeds of Conveyance in respect of the suit property.
According to the appellant, the respondent No.1 approved the F
draft Deed of Conveyance sent to him by putting his signatures
thereon, subject to some rectifications made by him in the said
draft. Thereafter, the final Deed of Conveyance in respect of
the share of the Respondent No.1 was engrossed on stamp
paper on 22nd June, 2006, but the said respondent did not G
execute and register the same on the plea that in order to avoid
.J( controversies amongst all the co-sharers, all the deeds of
conveyance should be executed simultaneously. Soon
thereafter, the defendant Nos. 2 to 6 also approved their
H
1264 SUPREME COURT REPORTS [2009] 15 (ADDL.) S.C.R.

A respective draft Deeds of Conveyance which were also
engrossed on stamp paper, but again the same could not be
executed and registered as the respondent Nos. 7 and 8
....
....
delayed giving ·their approval to the draft Coneyance Deeds
sent to them.
B
6. On the other hand, the appellant Trust came to learn in
the second week of January, 2007, that the respondents were
preparing to sell the suit property to third parties. The appellant,
thereupon, filed an application under Section 144 (2) of the
Code of Criminal Procedure before the First Executive
c Magistrate, at Alipore •. being M.P. Case No. 82 of 2007, where :~

an order was passed on 17th January, 2007 directing the
Officer-in-Charge of the Police Station to see that no untoward
incident was perpetrated by the respondents on the suit
premises. In addition to the above, the appellant also filed a
D suit for specific performance, being Title Suit No. 10 of 2007,
in the Court of the 4th Civil Judge (Senior Division) at Alipore, >'
District 24 Parganas (South), West Bengal, inter alia, for the
following reliefs:

E "(a) a Decree of Specific Performance of the Agreement
for sale between the Plaintiff and Defendants and added
Defendants by directing the Defendants and added
Defendants to execute registered Deed of Conveyance in
respect of the suit schedule property. ,,
F (b) a Decree of possession of the suit property."

7. In the said suit, the appellant filed an application under
Order 39 Rules 1 and 2 read with Section 151 of the Code of
Civil Procedure for an order of injunction to restrain the
G defenants/respondent from selling, encumbering and/or
otherwise alienating and/or changing the nature and character
of the suit schedule property during the pendency qf the suit.
An ad-interim order on the said terms was prayed for which )L

was refused by the trial Court. Against such refusal, the
H appellant preferred appeal in the High Court, being FMAT No.
JULIEN EDUCATIONAL TRUST v. SOURENDRA 1265
KUMAR ROY & ORS.
490 of 2007. Initially, on 9th March, 2007, the ffigh Court A
passed an ad-interim order of injunction against the
)
Respondent Nos. 1 to 8. Subsequently, on being informed by
the said respondents that the suit properties had been
transferred to the Respondent Nos. 9 to 11 by registered
Deeds of Conveyance dated 11th December, 2007, and 3rd
B
January, 2008, the Division Bench upon holding that the order
of injunction had become infructuous against the said
respondents, vacated the same.

8. Thereafter, the plaint was sought to be amended by
adding the Respondent the Respondent Nos. 9 to 11 as parties c
and a fresh application was made on behalf of the appellant to
restrain the said added respondents from alienating,
encumbering and/or changing the nature and character of the
suit property. Simultaneously, an application was filed by the
added respondents under Order 7 Rule 11 of the Code of Civil D
Procedure, which came to· be dismissed, while the application
of the appellant Trust under Order 39 Rules 1 and 2 CPC was
allowed on contest on 16th January, 2008, against which an
appeal was preferred by the respondents on 15th May, 2008.
In appeal, the High Court set aside the order of injunction E
passed by the Trial Court with the result that the suit for specific.
performance filed by the appellant was rendered practic&lly
infructuous. This appeal has been filed against the order of the
High Court setting aside the order of injunctions passed by the
>
Trial Court. F
9. Appearing for the appellant Turst, Mr. Pradip Kumar
Ghosh, learned Senior Advocate, submitted that Division Bench
of the High Court had erred in holding that the appellant had
failed to prove the existence of a concluded contract which was
capable of being specifically enforced. Mr. Ghosh submitted G
that taking advantage of the order of status quo which had been
passed upon an appeal filed by one of the co-sharers, the
respondents had persuaded the appellant Trust not to insist
upon a written agreement of the terms agreed upon for sale of
H
1266 SUPREME COURT REPORTS [2009] 15 (ADDL.) $.C.R.

A the suit property. However, enough material had been produced
before the Court to establish the case of the appellant that an
oral agreement for sale had been arrived at and finalised
between the parties. Mr. Ghosh urged that pursuant to the
finalisation of the terms and conditions of the sale, draft deeds
B of conveyance were prepared in respect of each co-sharer and
sent by the appellant Trust to the said respondents for approval.
Except for the Respondent Nos. 7 and 8, the other Respondent
Nos. 1 to 6 had duly approved and consented to the draft which
had been sent to them. As a result whereof, the same were
C engrossed on stamp paper for the purose of execution and
registration. Although, the Deed of Conveyance of the
Respondent No.1 was finalised first, he did not execute and
register the same on the plea that the Deeds of Conveyance
of all the co-sharers should be executed and registered
simultaneously. However, because of the failure of the
D Respondent Nos. 7 and 8 to return .the approved drafts, the sale
deeds were not executed. and, on the other hand, the appellant
came to learn that the Respondents were planning to sell the
property to the third parties.

E 10. Mr. Ghosh urged that all the steps that were required
to be taken for the completion of the sale transaction had been
taken by the appellant, but it was because of the avoidence of
the respondents that ultimately the sale deeds were not
executed, although, they had been approved and were ready
F for execution and registration Mr. Ghosh urged that on the basis
of the evidence on record, a prima facia case had been made
out to go to trial and if the nature and character of the suit
properties were allowed to be altered during the pendency of
the suit, the very purpose for which the appellant had filed the
G suit for specifi performance would be rendered nugatory, Mr.
'Ghosh emphasized that unless specific orders were passed to
restrain the respondents, and in particular Respondeent Nos.
9 to 11, from altering the nature and character of the suit
property, including the erection of constructions thereupon, the
H appellant Trust would suffer irreparable loss and injury which,
JULIEN EDUCATIONAL TRUST v. SOURENDRA 1267
KUMAR ROY & ORS.
in this particular case, could not be compensated in terms of A
money.

11. Mr. R.F. Nariman, learned Senior Advocate, who
appeared for the subsequent purchasers and later on
impleaded as Respondent Nos. 9 to 11, submitted that at this
B
stage of the proceedings, in the absence of any evidence of
would not be possible for this Court to arrive at a conclusion,
that a concluded contract had been arrived at between the.
parties, particularly when the case mde out on behalf of the,
appellant that the draft deeds of converyance had been
approved by the respondents, was strongly disputed. Mr. c
Nariman urged that till such time as it was not established that
the handwriting and the signatures on the draft were those of
the respondents, no reliance could be placed on them. Mr.
Nariman urged that had there been any agreement between the·
appellant and the Respondent Nos. 1 to 8, there would have D
~ been evidence of at least some amount being paid by way of
earnest money. In this case, however, there is no evidence that
- even a single farthing was paid by the appellant Trust to the
respondents in pursuance of the proposed agreement for sale.
E
12. Apart from the above, Mr. Nariman also submitted that
even the balance of convenience and inconvenience lay in
favour of the respondents since if an order of injunction was
~
passed, as prayed for by the appellant, the respondents would
not be albe to utilise the land which they had purchsed till the
<' F
disposal of the suit. On the other hand, if ultimately the appellant
succeeded, it could always be compensated in terms of money.

..........,
13. Mr. Kalyan Bandopadhyaya, learned Senior Advocate
appearing for the Respondent Nos. 1 to 8, adopted the stand
taken by Mr. Nariman and added that the appellant Trust had .G
shown no interest in purchasing the suit property since at no
point of time had shown their readiness and willingness to
complete the sale transcation. The appellant Trust neither paid
any amount by way of earnest money nor had it ever intended
to do so. As a result, it did not lie in the mouth of the appellant H
1268 SUPREME COURT REPORTS [2009] 15 (ADDL.) S.C.R.

A Trust to seek a decree for specific performance when it had
failed to take any positive steps in that regard.

14. Since the suit for specific performance is pending
before the trial Court, we can consider the materials before us
and the arguments advanced only for the limited purpose of
B
deciding the question of granting interim orders during the
pendency of the suit.

15. We are satisfied from the materials on -record I
that a
prima facie case has been made out by the appellant Trust as
c to the argeement for sale which has to go to trial. Whether there
was a concluded contract, or not between the appellant Trust
and the Responctent Nos. 1 to 8 is a matter of evidence and
can ony be gone into during the trial of the suit. This brings us
to the all important question as to whether the balance of
D convenience and inconvenience lay in favour of the grant of an
interim order of injunction in favour of the appellant Trust and
f.
as to whether the appellant Trust would suffer irreparable loss
and injury, if no such interim order was passed.

16. Although, it has been submitted by Mr. Nariman as well
E
as Mr. Bandopadhyaya that loss, if any, to the appellant Trust
could be compensated in terms of money, the said submission
does not appear to hold good in the instant case. Equally
important is the question of balance of convenience and
.(
inconvenience since the principal object of the appellant Trust
F in wanting to acquire the suit property was to extend its school '>

unit at Kolkata. If the suit property is allowed to be commercially
exploited by raising multi-storyed structures thereupon, the
entire object of the suit filed by the appellant Trust will be
rendered meaningless and the purpose for which the suit been ----
G filed would be completely defeated.

17. In such circumstances, we are of the view that this is
one such case w~re an interim order is required to be passed
to maintain the status quo of the suit for specific performance
H filed by the appellant Trust, but at the same time appropriate
JULIEN EDUCATIONAL TRUST v. SOURENDRA 1269
KUMAR ROY & ORS.
directions should also be given so that the suit is disposed of A
... » · expeditiously. At this stage, it would not be appropriate on our
part to express any further opinion on the merits and demerits
of the suits.

18. Having found a prima facie case in favour of the
8
appellant Trust, it is our view that in the light of the principles of
balance of convenience and inconvE:mience, interim relief
should be granted to the appellant Trust. Accordingly, we allow
the appeals and set aside the order of the High Court and direct
that the respondents shall not alienate or encumber the suit
property or change the nature and character thereof till the C
disposal of the suit for specific performance filed by the
appellant Trust.

19. Having regard to the peculiar facts of the case, we
would also request the Trial Court to dispose of the suit as early D

-
as possible, but positively within one year from the date of
communication of this order. No unnecessary adjournments will
be sought for or granted, so that the suit is disposed of within
the stipulated period.

20. We also make it clear that the observations made in E
this judgment have been made only for the purpose of disposal
of the application for interim orders and should not influence
the Trial Court in deciding the suit.

21. There will be no order as to costs. F

RP. Appeals allowed.