2006 (2) TMI 703 - HC - Indian Laws

Summary

Issues Involved:
1. Refusal to grant an ad interim order of injunction.
2. Prima facie case for specific performance of contract.
3. Applicability of Section 14(3)(c) of the Specific Relief Act.
4. Validity and revocability of an irrevocable Power-of-Attorney.
5. Balance of convenience and adequacy of damages.

Detailed Analysis:

1. Refusal to Grant an Ad Interim Order of Injunction:
The plaintiffs appealed against the refusal to grant an ad interim order of injunction by the Civil Judge (Senior Division), Alipore. The trial judge had issued a notice to show cause but did not grant the temporary injunction. The plaintiffs sought to restrain the defendants from entering into any fresh agreement with third parties for the development of the suit property.

2. Prima Facie Case for Specific Performance of Contract:
The plaintiffs contended that they had a prima facie case for specific performance of the development agreement. They argued that the trial judge erred in not granting the injunction, citing the significant investments made based on the agreement and the irrevocable Power-of-Attorney granted by the defendants. The plaintiffs claimed that the trial judge misread the materials on record and that the delay in filing the suit should not bar the injunction.

3. Applicability of Section 14(3)(c) of the Specific Relief Act:
The defendants argued that the suit for specific performance by the developer was barred under Section 14(3)(c) of the Specific Relief Act. This section states that certain contracts, including those for construction or execution of work on land, can only be specifically enforced if specific conditions are met. The court found that the plaintiffs, being developers, did not meet the criteria under Section 14(3)(c)(iii), which requires the owner to have handed over possession to the developer. Thus, the plaintiffs lacked a prima facie case for specific performance.

4. Validity and Revocability of an Irrevocable Power-of-Attorney:
The plaintiffs argued that the irrevocable Power-of-Attorney granted by the defendants could not be revoked, and they had invested significant amounts based on this Power-of-Attorney. However, the court held that an irrevocable Power-of-Attorney could be revoked unless it was coupled with an interest in the property. The court found that the Power-of-Attorney was granted solely for the purpose of development and did not create any proprietary interest in the property. Therefore, the revocation of the Power-of-Attorney was valid, and the plaintiffs' claim for permanent injunction based on its revocation was unfounded.

5. Balance of Convenience and Adequacy of Damages:
The court found that the balance of convenience favored refusing the injunction as the plaintiffs had an adequate remedy in the form of damages. The plaintiffs had already claimed damages in the suit, and thus, the refusal to grant the ad interim injunction did not cause irreparable harm. The trial judge's decision to refuse the injunction was upheld as the plaintiffs failed to establish a prima facie case, and the balance of convenience did not support their claim.

Conclusion:
The appeal was dismissed, and the trial judge's refusal to grant an ad interim order of injunction was upheld. The court found no prima facie case for specific performance of the contract as the plaintiffs, being developers, did not meet the criteria under Section 14(3)(c) of the Specific Relief Act. The irrevocable Power-of-Attorney was found to be revocable, and the balance of convenience favored the defendants. The plaintiffs were deemed to have an adequate remedy in the form of damages.