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2020 (5) TMI 712 - HC - Indian Laws


Issues Involved:
1. Permanent injunction to restrain the defendant from inducing breach/termination of agreements.
2. Permanent injunction to restrain the defendant from entering agreements with third parties.
3. Recovery of nominal damages.
4. Maintainability of the suit based on tortious interference with contractual relations.
5. Specific performance of agreements.
6. Non-joinder of necessary parties.
7. Applicability of Section 27 of the Indian Contract Act.
8. Public policy and competition law considerations.

Detailed Analysis:

1. Permanent Injunction to Restrain the Defendant from Inducing Breach/Termination of Agreements:
The plaintiff sought a permanent injunction to prevent the defendant from inducing breaches or terminations of agreements between the plaintiff and third parties concerning non-functional properties. The plaintiff alleged that the defendant, a competitor, interfered with its agreements, particularly regarding properties in Amritsar and Juhu, Mumbai. The court questioned the enforceability of such an injunction, suggesting that if the agreements were specifically enforceable, the plaintiff's remedy would be to seek specific performance against the other party to the agreement. If not, neither the defendant nor the other party's right to enter into agreements could be curtailed merely by the plaintiff's entering into agreements.

2. Permanent Injunction to Restrain the Defendant from Entering Agreements with Third Parties:
The plaintiff also sought to prevent the defendant from entering into any agreements with third parties concerning properties where the plaintiff had executed agreements but had not commenced operations. The court highlighted that competition could not be curtailed merely by the plaintiff's agreements and that the remedy lay in specific performance if the agreements were enforceable.

3. Recovery of Nominal Damages:
The plaintiff claimed nominal damages of ?2,25,00,000/-. The court noted that if the plaintiff had no enforceable right, the question of recovering damages would not arise. The court also pointed out that the plaintiff had accepted the refund of the security deposit for the Amritsar property without any demur, indicating acceptance of the termination of the agreement.

4. Maintainability of the Suit Based on Tortious Interference with Contractual Relations:
The court examined the plaintiff's claim of tortious interference, referencing various judgments. It noted that while inducement to breach a contract is recognized as a tort, the plaintiff's case involved seeking an injunction against a third party (the defendant) rather than the party to the agreement. The court found that the plaintiff's reliance on tortious interference was not sufficient to maintain the suit, especially when the agreements in question were not specifically enforceable or binding.

5. Specific Performance of Agreements:
The court emphasized that the plaintiff's remedy, if it had binding agreements, lay in seeking specific performance against the developer/owner of the properties. The court noted that specific performance could be claimed not only against the agreement seller/lessor but also against any other person claiming under them by a title arising subsequently to the contract.

6. Non-joinder of Necessary Parties:
The court highlighted the absence of the developer/owner of the properties in the suit, making it impossible to determine whether the plaintiff had binding agreements or whether the developer/owner was in breach. The court stated that these parties were necessary for adjudication, and the plaintiff's failure to implead them warranted dismissal of the suit.

7. Applicability of Section 27 of the Indian Contract Act:
The court discussed the relevance of Section 27, which makes agreements in restraint of trade void. It held that the plaintiff could not seek to enforce a restraint on the defendant's trade through tortious interference claims, as this would contradict the public policy embodied in Section 27.

8. Public Policy and Competition Law Considerations:
The court noted that granting the injunction sought by the plaintiff would violate public policy by stifling competition and creating a monopoly. It emphasized that the law entitles the plaintiff to specific performance or damages but not to expand its remedies to restrain competition. The court also pointed out that the relief sought would prejudice property owners by limiting their options to deal with their properties.

Conclusion:
The court dismissed the suit, finding that the plaintiff had no cause of action for the relief claimed against the defendant and that the relief sought was barred by law. The plaintiff was also ordered to pay costs of ?5,00,000/- to the defendant.

 

 

 

 

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