The question of irreparable harm to a party complaining of a breach of contract does not arise if ot

AMBALAL SARABHAI ENTERPRISE LIMITED V. KS INFRASPACE LLP LIMITED AND ANOTHER, (CIVIL APPEAL NO(s). 9346 OF 2019) WITH HARYANA CONTAINERS LIMITED V. KS INFRASPACE LLP LIMITED (CIVIL APPEAL NO(s). 9347 OF 2019) NEPTUNE INFRASPACE PRIVATE LIMITED V. KS INFRASPACE LLP LTD. AND ANOTHER (CIVIL APPEAL NO(s). 9348­49 OF 2019), ON 6TH JANUARY 2020

The appeal made by the defendants no.1(Ambalal Sarabhai Enterprise and Haryana Containers Limited) and defendant no. 2 (Neptune infraspace Private Limited) in the Supreme Court was allowed by the Justice Ashok Bhushan and Justice Navin Sinha.

There was a contract existing between the defendants no.1 and the plaintiff ( Neptune infraspace private limited) for sale of the suit lands. But the Defendants had underhandedly entered into a registered agreement for sale with defendant no.2. The Principal Civil Judge by order temporary injunction the defendants were restrained from executing any further documents including a sale deed or creating a further charge, interest or deal with the suit lands in any manner. The High Court by its order said that communication of acceptance to the draft MoU sent by e­mail and exchange of WhatsApp correspondences between the parties amounted to a concluded contract.

Learned senior counsel Shri Kapil Sibal, Shri C.U. Singh and Shri Huzefa Ahmadi, appearing on behalf of the appellants, submitted that the consultations made by the plaintiff were not finalized, it was only in the discussion stage. He further said that the plaintiff made wavering conduct just to meet the Income Tax liability of the defendants so that the sale can be facilitated by lifting the suit land from attachment. The execution of the agreement between the defendants was formal which was brought as a dispute. They say that the contract which was accepted by the plaintiff was not done in time and the plaintiff was well known about the fact the defendants are going to sell their land to the defendant no.2. The agreement made with the defendant no.2 was considered as a bonafide action because of the sale agreement which proceeded after the payment of Income-tax due by the defendants.

“Reliance was also placed on Mandali Ranganna and others V. T. Ramachandra and others to submit that the grant of the injunction was contrary to the basic principles governing injunction more so in a suit for specific performance relying on Mayawanti V. Kaushalya Devi.”

The counsel for the defendant no. 2 made a statement that the registered agreement for sale dated which was done by them was followed by delivery of possession much prior to the institution of the suit it also shows that their’s was a bonafide action.

Dr. A.M. Singhvi, learned senior counsel appearing on behalf of the plaintiff submitted that the plaintiff never made a statement that they won’t make consideration amount to pay the Income-tax which was made by the defendant no.2. The whats app messages and the mails which were done by both the parties. If these were taken into account it would be in the favour of the plaintiff. They further say that the actions of the defendant to carry the sale agreement with defendant no.2 was done in a hurried manner to bring harm to their client.

“In support of his submissions, Dr. Singhvi relied on Wander Ltd. and another V. Antox India P.Ltd., Brij Mohan and others V. Sugra Begum and ors., Motilal Jain vs. Ramdasi Devi (Smt.) and ors., Moharwal Khewaji Trust (Regd.), Faridkot vs. Baldev Dass, and Aloka Bose vs. Parmatma Devi and ors”.

In the aspect of delay, the court held that “It was submitted that the delay did not induce the defendant to do anything further than that already done earlier, to their prejudice. In any event, the plaintiff is ready and willing to pay to the defendant no.2 the amount of the Income Tax dues paid by it and proceed with the contract with the defendant sister concerns.”

The counsel made a contention related to the whats app messages and email the court had a view that it cannot be determined by negotiating the said documents that the agreement between the plaintiff and the defendants is finalized.

“The fact that a draft MoU christened as ‘final-­for discussion’ was sent the same day cannot lead to the inference in isolation, of a concluded contract.”

As there is no evidence provided to show that the plaintiff accepted the agreement before the sale agreement carried on with the defendant no.2, therefore, the court held that the plaintiff’s agreement was at the “embryo stage”.

The court observed that the suit was filed 7 months later which was not taken into account by the The Special Civil Judge and The High Court. The Court made an explanation that the plaintiff waited hopefully for a solution outside litigation as a prudent businessman before finally instituting the suit is too lame an excuse to merit any consideration.

The Court stated that;

“Needless to state the balance of convenience is in favour of the defendants on account of the intervening developments, without furthermore, inter­alia by reason of the plaintiff having waited for seven months to institute the suit. The question of irreparable harm to a party complaining of a breach of contract does not arise if other remedies are available to the party complaining of the breach.”

The court allowed the appeal saying that the grant of specific injunction by the Special Civil Judge to the plaintiff was unsustainable and so the orders related to injunction were set aside.

View/ Download the Judgment: AMBALAL SARABHAI ENTERPRISE LIMITED V. KS INFRASPACE LLP LIMITED AND ANOTHER

–  Manusri Ramakrishna

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