Summary
The Court set aside a Bombay High Court order that had restored an interim injunction restraining the owner of a 22,000 sq ft Mumbai property from dispossessing a person claiming tenancy rights over 550 sq ft under a family settlement. The claimant had no prima facie case while his tenancy claim remained pending, and the balance of convenience and irreparable injury favoured the owner whose redevelopment was stalled; to balance equities the owner was directed to reserve one unit of about 550 sq ft in the developed property as security.
Issues
- Whether the High Court was justified in restoring an interim injunction in favour of Respondent No. 1 during the pendency of his suit for declaration of tenancy rights before the Small Causes Court.
Held
- Before granting an interim injunction the Court must be satisfied of three prerequisites: a prima facie case showing a reasonable probability of success at trial, balance of convenience in favour of the relief, and irreparable injury not adequately compensable in damages if the injunction is refused. Only when all three are cumulatively fulfilled ought an interim injunction to be granted. (¶ 15)
- The High Court erred in granting the injunction. The appellant is incontrovertibly the absolute owner of the property, the disputed area is a mere fraction of it, and he has already contracted to redevelop it; the restraint significantly circumscribed his legal right to derive commercial benefit from his property. (¶ 16)
- Respondent No. 1 failed to establish a prima facie case since his claimed tenancy rights are pending adjudication and his claim to rights and partnership through a family settlement agreement requires scrutiny at trial. The balance of convenience decidedly favoured the appellant, the disputed area being only 550 sq ft out of 22,000 sq ft and a leave and licence agreement for 2,200 sq ft built-up area already having been executed; the appellant would suffer irreparable injury through financial loss and breach of contractual obligations, whereas Respondent No. 1's alleged rights over 550 sq ft could be adequately safeguarded. (¶¶ 17, 18)
- To balance equities, the appellant was directed to keep one unit of about 550 sq ft reserved in the developed property as security to protect Respondent No. 1's alleged rights should his suit succeed. No opinion was expressed on the merits of the tenancy dispute, which the Small Causes Court is to decide expeditiously and uninfluenced by the observations made. (¶¶ 19, 20)
Result
Appeal allowed. The High Court's order dated 30.07.2024 restoring the interim injunction was set aside. The appellant was directed to reserve one unit of about 550 sq ft in the developed property as security for Respondent No. 1's alleged rights in case R.A.D. Suit No. 519/2023 is decided in his favour; the Small Causes Court is to decide that suit expeditiously in accordance with law.