AMBALAL SARABHAI ENTERPRISE LIMITED versus KS INFRASPACE LLP LIMITED AND ANOTHER

Citation: [2020] 1 S.C.R. 315 · Decided: 06-01-2020 · Supreme Court of India · Bench: ASHOK BHUSHAN · Disposal: Appeal(s) allowed

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Judgment (excerpt)

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AMBALAL SARABHAI ENTERPRISE LIMITED
v.
KS INFRASPACE LLP LIMITED AND ANOTHER
(Civil Appeal No. 9346 of 2019)
JANUARY 06, 2020
[ASHOK BHUSHAN AND NAVIN SINHA, JJ.]
Injunction:
Interim injunction – A suit for specific performance – Alleging
that defendant created third party rights, while the contract for sale
of suit lands had stood concluded – Trial court by interim injunction
restrained the defendants from executing any further documents or
to deal with the suit land in any manner – High Court affirmed the
order of injunction – Appeal to Supreme Court – Held: A plaintiff
seeking temporary injunction in a suit for specific performance
has to establish a strong prima facie case on the basis of undisputed
facts – Conduct of plaintiff , balance of convenience and irreparable
injury is also very essential to be considered – In the facts of the
present case, whether there existed a concluded contract is a matter
of trial – The plaintiff had failed to prove that there was a concluded
contract and/or an oral contract by inference – Therefore, the grant
of injunction in the present case is unsustainable.
Allowing the appeals, the Court
HELD : 1. Chapter VII, Section 36 of the Specific Relief
Act, 1963  provides for grant of preventive relief. Section 37
provides that temporary injunction in a suit shall be regulated by
the Code of Civil Procedure. The grant of relief in a suit for specific
performance is itself a discretionary remedy. A plaintiff seeking
temporary injunction in a suit for specific performance will
therefore have to establish a strong prima-facie case on basis of
undisputed facts. The conduct of the plaintiff will also be a very
relevant consideration for purposes of injunction. The discretion
at this stage has to be exercised judiciously and not arbitrarily.
In a matter concerning grant of injunction, apart from the existence
of a prima facie case, balance of convenience, irreparable injury,
   [2020] 1 S.C.R. 315
315
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SUPREME COURT REPORTS
[2020] 1 S.C.R.
the conduct of the party seeking the equitable relief of injunction
is also very essential to be considered. [Paras 15 and 19]
[323-H; 324-A-B; 326-A]
2. The negotiations between the plaintiff and the defendant
is reflected in approximately 17 e-mails exchanged between them
commencing from December 2017 to 31.03.2018. The file size
of the attachment to the mails has varied from 48-50-52-48-
57-56 KBs indicating suggestions and corrections from time to
time. The WhatsApp messages which are virtual verbal
communications are matters of evidence with regard to their
meaning and its contents to be proved during trial by evidence-
in-chief and cross examination. The e-mails and WhatsApp
messages will have to be read and understood cumulatively to
decipher whether there was a concluded contract or not. The
use of the words ‘final draft’ in the e-mail dated 30.03.2018 cannot
be determinative by itself. The e-mail dated 26.02.2018 sent by
the defendant at 11:46 AM had also used the same phraseology.
[Para 17] [324-G-H; 325-A-B]
3. The plaintiff was well aware from the very inception that
the defendant was negotiating for sale of the lands simultaneously
with two others.  The plaintiff was further aware on 30.03.2018
itself that the deal with it had virtually fallen through as informed
to the escrow agent.  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. There is no
evidence at this stage that the acceptance was communicated to
the defendant before the latter entered into a deal with defendant
No. 2 on 30.03.2018 and executed a registered agreement for
sale on 31.03.2018. Defendant No. 2 paid Rs.17.69 crores and
Rs. 2.20 crores towards the income tax dues of the defendant
the same day, as part of the consideration amount. It is only
thereafter the plaintiff purports to have communicated its
acceptance to the defendant on 31.03.2018 at 01.13 PM. The
prolonged negotiations between the parties reflect that matters
were still at the ‘embryo stage’. [Para 17] [325-C-E]
4. The pleadings in the suit acknowledge the awareness of
the plaintiff of the ongoing negotiations with defendant No. 2.
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The advance of Rs. 2.16 crores was refunded to the plaintiff in
the evening on 31.03.2018 by RTGS.  No effort was made by the
plaintiff to again remit the sum by RTGS immediately or the next
day. Only a public notice was publ

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