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TMI Blog2024 (11) TMI 1172X X X X Extracts X X X X X X X X Extracts X X X X ..... arily, capriciously or perversely or where the Court had ignored the settled principles of law regulating grant or refusal of interlocutory injunctions. An appeal against the exercise of discretion is an appeal on principle. The appellate Court will not reassess the material and seek to reach a conclusion different from the one reached by the Court below solely on the ground that if it had considered the matter at the trial stage it would have come to a contrary conclusion. If the discretion has been exercised by the trial Court reasonably and in judicial manner, the fact that the appellate Court would have taken a different view may not justify interference with the trial Court s exercise of discretion. Any direction to treat the applications under Section 9 as Section 17 applications would involve complications, though it might save paper. Subsequent developments might be difficult to record. Therefore, it would be appropriate to grant the parties leave to file applications under Section 17, which could then be decided without being influenced by this interim arrangement. The above arrangement will operate as an ad-interim arrangement. The parties may file their applications unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Tower D . The principal agreement contains a clause that in the event of any conflict between the terms of the principal agreement and the other two agreements, the principal agreement and the terms therein shall prevail. WMPL executed a power of attorney dated 26 August 2021 favouring M/s. AC to undertake the construction and sell apartments. 7. The construction of Towers A and B was completed by the time the Articles of Agreement dated 19 August 2021 were entered into. Therefore, the Articles of Agreement and the two other agreements provided for constructing the 7th to 20th floors of Towers C and D. 8. Disputes arose between the parties, as a result of which WMPL, by notice dated 16 April 2024, terminated the Articles of Agreement and the other two agreements, alleging several breaches, including clause 11, which provided that M/s. AC shall ensure the average sales price of flats in the 7th to 20th floors of Tower C (except the five flats allottable to WMPL) shall not be less than Rs. 8000/- per sq. ft. saleable area thereof. 9. M/s. WMPL filed Civil Miscellaneous Application No.544 of 2024 and M/s. AC filed Civil Miscellaneous Application No.582 of 2024 under Section 9 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ials had been ignored by the learned District Judge, warranting interference with the impugned order. 14. Mr Kamat referred to the affidavit of Mr Deepesh Dave on the aspect of cash transactions and submitted that the learned District Judge did not even consider such unchallenged material. Similarly, he referred to email correspondence from M/s AC admitting that the project is at a loss even if the apartments are sold at Rs. 8000/- per sq.ft. He submitted that the restraint imposed upon WMPL from issuing public notice is entirely erroneous. 15. Mr Kamat submitted that the interim relief granted favouring M/s AC is vague and affected by overbreadth. He submitted that M/s AC only had the monetary claim, and therefore, no injunction could have been granted favouring M/s AC when recovery of the financial claims was the adequate remedy. He submitted that M/s AC breached the status quo order granted by the learned District Judge and also breached the statement made on its behalf before this Court. In breach of the status quo order and the statement about maintaining the status quo, M/s AC attempted to sell apartments and was never candid to the Court. He submitted that the conduct of M/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, therefore, submitted that the balance of the convenience was against the grant of any interim relief to WMPL and the same was in favour of the grant of interim relief to M/s AC. 22. Mr Godbole submitted particulars about the status of construction and sale agreements for the apartments in Towers C and D . He submitted that such details would establish WMPL has failed to make out any prima facie case and in any event, the balance of convenience is against the grant of any interim relief to WMPL. He submitted that irreparable loss and prejudice will be caused to M/s AC if any restraint is imposed on the construction. 23. Mr Godbole, while denying breach of any of the terms and conditions of the agreement by M/s AC submitted that to ally the apprehensions of WMPL, M/s AC is filing an affidavit cum undertaking that no apartments would be agreed to be sold for the rate below Rs. 9500/-. He submitted that in terms of the agreement, the rate was only Rs. 8000/- per sq.ft. However, such an undertaking is offered since it was WMPL s case that the rate in the area was Rs. 9500/- per sq.ft.. 24. Mr Godbole submitted that the allegations of cash transactions are misconceived, and Deepesh Da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... psis of arguments cannot be abused by including such additional material and, after that, complaining that such material was not considered. 32. In contrast, from the beginning, Mr. Godbole, the learned senior advocate for M/s. AC had offered to file M/s. AC s undertaking to ally the apprehension expressed by the WMPL. Accordingly, leave was granted to M/s. AC to file such an affidavit/undertaking. Anil Reddy, on behalf of M/s. AC has filed an affidavit/undertaking. 33. The scope of interference with discretionary orders of injunction by the appeal Court is quite limited. The appeal Court will not interfere with the exercise of discretion of the Court of first instance and substitute its own discretion except where the discretion is shown to have been exercised arbitrarily, capriciously or perversely or where the Court had ignored the settled principles of law regulating grant or refusal of interlocutory injunctions. An appeal against the exercise of discretion is an appeal on principle. The appellate Court will not reassess the material and seek to reach a conclusion different from the one reached by the Court below solely on the ground that if it had considered the matter at the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authorised to sell apartments and appropriate the proceeds. He submitted that the nomenclature of the agreements is irrelevant. Therefore, specific performance was competent. 39. The position regarding the prima facie case is arguable. These aspects of interest in immovable property or specific performance need to be examined threadbare in the arbitration proceedings. Even if WMPL s contention about the prima facie case is accepted, still aspects of the balance of convenience and irreparable loss cannot be ignored. The impugned order considers these aspects, and there is no perversity in the approach or the reasoning. 40. Now, even if we were to hold that the Articles of Agreement are prima facie development or construction agreements based upon which M/s. AC was allowed to sell the apartments to recover the costs of constructing by Towers A , B , C and D ; still, we see no reasonable grounds to interfere with the impugned orders on the aspect of irreparable loss and prejudice and balance of convenience. 41. The decision in Sushil Kumar Agarwal (supra) mainly turns on its own facts. For the principles laid down therein to apply, at least a case that this matter involves similar fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ks of Towers A and B. 46. Tower D will comprise 20 floors and 80 apartments. Registered agreements have been entered into for 58 apartments, And allotments have been made for 17 apartments, though registered agreements have yet to be executed. About 5 apartments remain Unsold. Construction of Tower D is complete, and NOCs from the context of Fire Safety, Lift, Water STP, Garden, etc., have already been received. 47. The record shows that agreements have been entered into with purchasers. This project is a RERA-registered project, and there are strict rules and regulations regarding its completion within the time schedule. There are also restrictions about spending the percentage of amounts received from purchasers on actual construction. 48. At this stage, therefore, if the construction on the 7th to 20th floors of Tower C or the finishing works or the balance works on Tower D is halted, severe prejudice will be occasioned not only to M/s. AC but also the prospective purchasers. M/s. AC s entire investment towards constructing Towers A and B would also be put in grave jeopardy. More than anything else, the interest of the purchasers would suffer. M/s. AC would also face penalties a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... However, taking advantage of the fact that such a statement was not recorded, alienation was attempted. Mr. Kamat submitted that this breach was admitted, and this Court then made an order not restraining further alienation and maintaining the status quo. 54. Regarding the breach of the recorded statement made before this Court, it is true that an attempt was made. Mr. Godbole did not defend such attempt but explained that this was due to miscommunication. Immediate amends were offerd and made. 55. Mr. Godbole, however, submitted that M/s. AC did not breach the status quo order granted by the District Court on 20 April 2024. He pointed out that this status quo order was vacated, and, in any event, the cheque was never encashed but returned. He submitted that such arguments, outside the records and made to create prejudice, should not be accepted. 56. Though something could be said about the attempt to breach the unrecorded statement in this Court, no case of any breach of the District Court s status quo order is prima facie made out. WMPL did not file any application before the District Court alleging breach. At least none was pointed out to us. Therefore, based on this circumstanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not to sell balance 5 flats in Tower D and balance 63 flats in Tower C in the scheme Rajgruhi Residency further at less than Rs. 9,500/- (Rupees Nine Thousand Five Hundred Only) per Sq.ft on saleable area on rera carpet basis viz rera carpet area + 35% as defined in Articles of Agreement dated 19/08/2021. b. The Respondent No.1 undertakes to continue to sale the units not be below the rate of Rs. 9500/- (Rupees Nine Thousand Five Hundred Only) per Sq.ft on saleable area on rera carpet basis viz rera carpet area + 35% as defined in Articles of Agreement dated 19/08/2021 and inform the Appellant about the rate of selling of units and give him 30 days' notice to make any further offer and is obligated to conclude the transaction at such higher rate and in favour of the purchaser nominated by the Respondent or bring any fresh Purchaser for more than the rate provided by the Respondent No.1. The parties hereby agree that such offer and/or counteroffer shall not be below the rate of Rs. 9500/- per sq. ft. (Rupees Nine Thousand Five Hundred Only) on saleable area on rera carpet basis viz rera carpet area + 35% as defined in Articles of Agreement dated 19/08/2021. c. Both the Appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is sustained. 67. The learned counsel for the parties proposed that the interim arrangement could operate until the arbitrator enters on reference and decides the issue of interim relief. Mr. Kamat submitted that the arrangement that this Court s orders could be treated as ad-interim relief and the applications under Section 9 could then be treated as applications under Section 17 before the Arbitral Tribunal. The Arbitral Tribunal could then dispose of these applications and decide on the interim relief that could operate pending the disposal of the arbitration proceedings. 68. Mr. Godbole submitted that there could be no objection to this Court s order operating as an ad-interim arrangement. He, however, submitted that there are subsequent developments and therefore, the parties could be given liberty to file applications under Section 17 before the Arbitral Tribunal. The Arbitral Tribunal could then decide such applications without being influenced by the ad-interim arrangement that could be made by this Court. 69. Any direction to treat the applications under Section 9 as Section 17 applications would involve complications, though it might save paper. Subsequent developments m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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