REPORTABLE        

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 9709   OF 2011 (Arising out of SLP (C) No. 22276 of 2011

Makers Development Services Pvt. Ltd.       .... Appellant (s)

Versus

M. Visvesvaraya Industrial Research and Development Centre               .... Respondent(s)

WITH

CIVIL APPEAL NO. 9710   OF 2011 (Arising out of SLP (C) No. 25972 of 2011)

J U D G M E N T  

P. Sathasivam, J.

1) Leave granted in both the Special Leave Petitions.  Both  

these appeals were heard together as they arose out of  the  

same set of facts and common questions of law were involved.  

2) SLP (C) No. 22276 of 2011 has been filed by the Makers  

Development  Services  Pvt.  Ltd.  against  the  order  dated  

28.06.2011 passed by the Division Bench of the Bombay High  

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Court in Appeal No. 280 of 2008 challenging the order dated  

25.04.2008 passed by the learned Single Judge in Notice of  

Motion No. 3499 of 2007 in Suit No. 2618 of 2007 declining  

the  reliefs  claimed in prayer clauses  (a)  to  (f)  pending final  

disposal of the Suit and SLP (C) No. 25972 of 2011 has been  

filed by M. Visvesvaraya Industrial Research and Development  

Centre against the same order in Appeal No. 289 of 2008 in  

Notice of Motion No. 3499 of 2007 in Suit No. 2618 of 2007  

granting relief in terms of prayer clause (g).  

3) Brief facts:

a) Makers  Development  Services  Pvt.  Ltd.-the  appellant  

herein (Original Plaintiff) is a Company registered under the  

Companies Act, 1956 engaged in the business of development,  

building,  including  the  construction  and  management  of  

hotels  and  developments  pertaining  to  other  hospitality  

services  and  management  of  properties.   M.  Visvesvaraya  

Industrial  Research and Development Centre-the respondent  

herein (Original Defendant) is a Company incorporated under  

the  Companies  Act,  1956  and  is  engaged,  inter  alia,  in  

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promoting, establishing, conducting and undertaking scientific  

research.   

b) The Government of  Maharashtra,  by Resolutions dated  

16.10.1970 and 18.11.1974, had granted lease of certain plots  

of  land to the defendant-Company at Backbay Reclamation,  

Cuffe  Parade,  Mumbai,  who was entitled  and authorized to  

enter into transactions with third parties in respect of the said  

land.   A  portion of  that  land admeasuring  13,326 sq.  mts.  

which forms a part of the larger land held by the defendant-

Company is the subject-matter of the present case.   

c) An  agreement  dated  10.11.1980  was  entered  into  

between  the  parties  for  construction  of  a  composite  hotel  

complex consisting of a Hotel Building, a Convention Centre  

and an Exhibition Centre on the Suit Land (Tower No.2) and  

the plaintiff would be granted lease of Hotel (exclusive of the  

Convention and Exhibition Centre) for 60 years with an option  

of renewal of lease.  This agreement came to be modified from  

time to time.

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d) Pursuant  to  the  Agreement,  the  respondent  put  the  

appellant in possession of the Suit Land on 16.07.1990, which  

continues to remain with the appellant till date.   

e) Since the appellant could not complete the work and due  

to disputes and differences, the respondent,  on 31.07.2007,  

affixed  a  notice  on  the  premises  notifying  all  concerned  

including  the  appellant  to  move  out  of  the  property  and  

instructed its security persons not to permit the appellant to  

enter upon the said property.   

f) On 04.08.2007, the appellant filed a suit for injunction  

before the City Civil Court, Mumbai seeking interim and final  

reliefs restraining the respondent from taking any illegal steps.  

By order dated 06.08.2007, the learned Judge held that till the  

substantive suit is filed by the appellant, the impugned notice  

dated 31.07.2007 will  not be acted upon by the defendants  

upto and inclusive of 17.09.2007.   

g) On 10.09.2007, the appellant moved a Notice of Motion  

No. 3499 of 2007 in a Suit being No. 2618 of 2007 before the  

learned Single Judge of the Bombay High Court for a decree of  

specific  performance,  inter  alia,  praying  for  a  permanent  

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injunction restraining the respondent from dispossessing the  

appellant.   By  ad-interim order  dated  14.09.2007,  the  

assurance  given in  the  City  Civil  Court  was  directed  to  be  

observed and the respondent was directed not to create any  

third party rights pending the Notice of Motion.  During the  

pendency  of  the  suit,  by  letter  dated  19.11.2007,  the  

respondent terminated the said Agreement.  The learned single  

Judge, after referring the documents and affidavits on record,  

rejected prayer clauses (a) to (f)  of the Notice of Motion and  

granted limited interim relief with regard to prayer clause (g) in  

favour of the appellant.

h) Aggrieved by the order of the learned single Judge, the  

appellant preferred an appeal being Appeal No. 280 of 2008  

before the Division Bench of the High Court.  With regard to  

the  limited  relief  granted  by  the  learned  single  Judge,  the  

respondent also filed an appeal being Appeal No. 289 of 2008  

before the Division Bench of the High Court.   

i) The Division Bench, by a common judgment, upheld the  

order  of  the  learned  single  Judge  and  dismissed  both  the  

appeals.  Challenging the order of the Division Bench of the  

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High Court, the appellant and the respondent filed separate  

special leave petitions before this Court.           

4) Heard Mr. Shyam Divan, learned senior counsel for the  

appellant  and  Mr.  Mukul  Rohatgi  &  Mr.  Praveen Samdani,  

learned senior counsel for the respondent.

5) The points for consideration in these appeals are:-

a) Whether the appellant/plaintiff has made out a case for  

grant of injunction in its entirety, i.e. prayer clauses (a) to  

(g)?

b) Whether learned single Judge as well as Division Bench  

of the High Court committed an error in granting limited  

relief in respect of clause (g)?

6) It is settled law that while passing an interim order of  

injunction under Order XXXIX Rules 1 and 2 of the Code of  

Civil Procedure, 1908, the Court is required to consider three  

basic  principles,  namely,  a)  prima  facie case,  b)  balance  of  

convenience  and  inconvenience  and  c)  irreparable  loss  and  

injury.   In  addition  to  the  above  mentioned  three  basic  

principles, a court, while granting injunction must also take  

into  consideration  the  conduct  of  the  parties.   It  is  also  

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established  law  that  the  Court  should  not  interfere  only  

because the property is a very valuable one.  Grant or refusal  

of  injunction has serious 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.

7) With the above principles,  let us consider the claim of  

both the parties.

8) The appellant/plaintiff, who filed Suit No. 2618 of 2007  

on the file of original side of the High Court of Bombay prayed  

for  the  following  interim  reliefs  pending  hearing  and  final  

disposal of the said suit:

“(a) That  pending  the  hearing  and  final  disposal  of  the  Suit,  the  Defendant  be  ordered  and  directed  to  do,  sign,  execute,  deliver  and register  all  such acts,  deeds,  matters  writings,  documents,  authorities  papers,  plans,  sanctions  and things as may be necessary to enable  the Plaintiff  to  continue construction on the Suit Land in terms of the Suit  Contract;

(b) That  pending  the  hearing  and  final  disposal  of  the  Suit, the Defendant by itself, its servants and agents or any  person or persons claiming by, from, through or under them  be restrained by an order and injunction of this Court from  dispossessing  the  Plaintiff  or  removing  the  authorized  representatives, employees, staff,  workers and labourers of  the  Plaintiff  and  their  respective  family  member  or  their  belongings  and  articles  or  the  construction  materials,  equipment and other belongings of the Plaintiff from the Suit  Land;

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(c) That  pending  the  hearing  and  final  disposal  of  the  Suit, it be ordered and decreed that the Defendant to allow  the Plaintiff to continue construction on the Suit Land and  unhindered access to the Suit Land and allow ingress to and  egress  from  the  Suit  Land,  by  the  Plaintiff,  its  representatives, employees and contract labour as also for  all  construction  materials  and  equipment  without  in  any  manner, directly or indirectly, obstructing or hindering the  Plaintiff.  

(d) That  pending  the  hearing  and  final  disposal  of  the  Suit, the Defendant by itself, its servants and agents or any  person or persons claiming by, from, though or under them  be restrained by an order and injunction of this Court from  in  any  manner  restraining,  preventing  impending  or  obstructing  implementation  of  the  Suit  Contract  or  construction on the Suit Land or access to and ingress to  and  egress  from  the  Suit  Land,  of  the  Plaintiff  or  its  authorized  representatives,  employees,  workers,  labourers  and their respective family members or preventing, impeding  or  obstructing  construction  material  or  equipment  of  the  Plaintiff  from being brought on to the Suit land or in any  manner,  directly  or  indirectly,  by  any  act  of  omission  or  commission, withholding or causing to be withheld essential  utilities such as power and water supply to the Suit Land for  construction by the Plaintiff;

(e) That  pending  the  hearing  and  final  disposal  of  the  Suit, the Defendant by itself, its servants and agents or any  person or persons claiming by, from, through or under them  be restrained by an order and injunction of this Court from  in any manner,  whether  directly  or  indirectly,  revoking  or  acting on any purported revocation of the Letter of Authority  granted by the Defendant to the Plaintiff or in any manner,  whether  directly  or  indirectly,  hindering,  impeding  or  obstructing construction on the Suit Land in terms of the  Suit Land in terms of the Suit Contract;

(f) That  pending  the  hearing  and  final  disposal  of  the  Suit, the Defendant by itself, its servants and agents or any  person or persons claiming by, from, through or under them  be restrained by an order and injunction of this Court from  in any manner committing unlawful trespass or from in any  manner  intimidating  the  Plaintiff,  its  employees,  workers,  labourers and other agencies appointed by the Plaintiff;

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(g) That  pending  the  hearing  and  final  disposal  of  the  Suit, the Defendant by itself, its servants and agents or any  person or persons claiming by, from, through or under them  be restrained by an order and injunction of this Court from,  in any manner, selling transferring, dealing with, disposing  of, alienating encumbering or creating any third party rights  or interest in, or entering into any agreement or arrangement  with any one else in respect of the Suit Land or any part  thereof;”

 9) Among the above prayers for interim reliefs, the learned  

single Judge granted relief only in respect of prayer clause (g)  

that too with a condition, namely, except the words “dealing  

with”.  The learned single Judge on satisfying himself and after  

thorough scrutiny of  the materials placed rejected the relief  

insofar as prayer clauses (a) to (f), which resulted in filing of  

above two appeals by the appellant and the defendant.  It is  

the claim of  the appellant/plaintiff  that  on the basis of  the  

contract between the parties, the learned single Judge and the  

Division Bench should have granted an order permitting the  

appellant  to  carry  on  further  construction  especially  when  

construction of about 80 ft.  had already been raised by the  

appellant on the suit land.  On the other hand, it is the case of  

the defendant that there is no existing agreement between the  

parties and the only point is that the parties have agreed to  

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enter  into  an  agreement  and,  therefore,  the  learned  single  

Judge as well as the Division bench were not justified even in  

granting interim order in terms of prayer (g).   

10) Inasmuch as the main suit is pending, it would not be  

proper for this Court to delve into the matter and arrive at a  

categorical finding one way or other.  Accordingly, we have to  

find  out  whether  there  is  prima  facie case  and  ‘balance  of  

convenience’ in terms of principles mentioned above.   

11) The  finding  of  the  learned  single  Judge  about  the  

construction of the building to the height of 80 ft. on the suit  

land by the appellant cannot be ignored.  However, whether  

the defendant permitted the appellant to enter on the suit land  

and to carry on construction are all matters to be decided in  

the main suit.  The limited relief granted in clause (g) by the  

learned  single  Judge  is  quite  understandable,  otherwise,  it  

could be possible for the defendant to deal with the suit land  

with third parties or encumber it before the final disposal of  

the suit.  However, as rightly observed by the learned single  

Judge as well as Division Bench, if other reliefs which we have  

already extracted above are granted, in the event of dismissal  

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of a suit, undoubtedly, it would create enormous difficulties  

for the defendant using the plot or land freely and without any  

difficulty.   In  other  words,  if  the  appellant  was  allowed  to  

proceed with the construction on the suit land, in the event of  

dismissal  of  suit,  the  defendant  cannot  use  the  land  in  a  

different manner with the structure without undertaking an  

enormous exercise of  demolishing the same.  Further,  what  

was claimed by the plaintiff was not a mere prohibitory order  

but prayed for positive mandatory injunction which, as rightly  

observed by the Division Bench, would permit the plaintiff to  

alter the status quo on the suit land on the date of the suit.  

12) The learned single Judge as well as Division Bench on  

appreciation of  entire materials rendered the factual  finding  

that the balance of  convenience is not in favour of granting  

such mandatory interim order as claimed in prayer clauses (a)  

to (f).  It is relevant to point out that though the appellant had  

stated that it had started construction in the year 1996, even  

after the information by the defendant to the appellant in 2002  

that the BEST had given their ‘no objection’ for the demolition  

of temporary receiving station and the appellant can proceed  

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with the demolition, however, the fact remains, the height of  

the construction was only 80 ft. which shows that from the  

year  2001  to  2007,  the  appellant  had  not  carried  on  

construction and there was no obstruction from the side of the  

defendant.  In view of all these factual aspects and in the light  

of the stand of the defendant disputing the existence of the  

agreement, as rightly observed by the learned single Judge as  

well as Division Bench, further permission for construction or  

ancillary works cannot be granted during the pendency of the  

suit.  We are satisfied that the learned single Judge was fully  

justified in granting limited relief in respect of prayer clause (g)  

and declined the other reliefs in clauses (a) to (f).  The Division  

Bench was also fully justified in confirming the said limited  

order.  Though learned senior counsel for the respondent has  

prayed for certain directions such as execution of a mortgage  

deed etc., for the same reasons mentioned above, we are not  

inclined to grant such relief as claimed.  As observed earlier, at  

this  stage,  it  is  not  desirable  to  go into  all  the  details  and  

render a specific finding which would undoubtedly affect the  

claim of both the parties in the main suit.  On the other hand,  

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we are  in  entire  agreement  with the  prima facie conclusion  

arrived at by the learned single Judge and the Division Bench.

13) Inasmuch  as,  as  early  as  on  25.04.2008,  the  learned  

single Judge directed hearing of the suit be expedited, taking  

note of various other aspects/impediments highlighted by both  

the parties including construction of a protection/security wall  

on the sea side, we request the learned single Judge of  the  

High Court to dispose of the suit being No. 2618 of 2007 as  

early as possible  preferably  within a period of  nine  months  

from the date of the receipt of the copy of this judgment.  We  

also  direct  both the  parties  to  cooperate  with  the  court  for  

early conclusion of the hearing as directed above.   

14) In the light of the above discussion and reasonings, we  

find  no  merit  in  both  the  appeals,  consequently,  they  are  

dismissed with no order as to costs.                          

...……………. …………………………J.  

         (P. SATHASIVAM)                                  

 .…....…………………………………J.    (JASTI CHELAMESWAR)  

NEW DELHI;

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NOVEMBER 14, 2011.                     

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