N. SRINIVASA versus M/S KUTTUKARAN MACHINE TOOLS LTD.

Citation: [2009] 2 S.C.R. 852 · Decided: 18-02-2009 · Supreme Court of India · Bench: TARUN CHATTERJEE · Disposal: Case Partly allowed

Judgment (excerpt)

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.{2009] 2 S.C.R. 852 
N. SRINIVASA 
v. 
MIS KUTTUKARAN MACHINE TOOLS LTD. 
Civil Appeal Nos. 1098 of 2009 
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FEBRUARY 18, 2009 
[TARUN CHATTERJEE AND DALVEER BHANDARI, JJ] 
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•, 
Arbitration and Conciliation Act, 1996/Code of Civil 
Procedure, 1908 : 
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c 
s. 910. 39 rr. 1 and 2 - Agreement for sale of immovable 
property - Sale aeed ·not executed within stipulated time -
Vendor seeking time from the vendee .....; Thereafter, vendor 
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refusing to perform its part of contract - On apprehension of 
. creation of third party interest in disputed property, applications 
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by vendee for injunction and interim injunction from· transfer, 
?lieQation and 'creation bf third party interest - Plf?a of vendor 
that time being essence of the contract, ·it was not bound to 
execute the deed - Grant of interim injunction by trial court -
Denied by High Court - 'on appeal, held: Trial Court rightly 
granted interim injunction - Issues in respect of the contract 
E· were to be decided in arbitration proceedings -
Interim 
_measures were necessary till the conclusion of arbitration 
proceedings in order to prevent irreparable loss and injury to 
vendee ~ In a contract relating to immovable property, time 
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cannot be essence of contract - Direction to the vendee to 
F ' deposit the balance amountin fixed deposit in favour of vendor 
to be kept with the arbitrator - Contract. 
Respondent entered into agreement to sell a plot of 
land with the appellant. Amount towards advance was 
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!;1111 
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G. paid to the respondent at the time of execution of the · 
agreement. Balance amount was to be paid at the time of 
registration of the sale deed. When the appellant came to " 
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know that the respondent was trying to sell off the property -~.,:~ -
to some other party, he approached the responden,t for)~~~;;. 
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852 
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., 
N. SRINIVASAV M/S KUTTUKARAN MACHINE · 
853 
TOOLS LTD. 
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execution of the deed. Respondent refused to perform A · 
its part of the contract until and unless the appellant paid 
the sale consideration higher than as was initially agreed 
upon. 
Appellant filed an application u/s 9 of Arbitration and - · 
Conciliation Act, 1996 for injunction and under 0. 39 r. 1 B 
and 2 r/w s. 151 CPC for temp.orary injunction seeking' 
restraint to the respondent from alienating, altering or 
creating any third party interest in respect-of the property. 
Respondent took the plea that since time was essence of 
the contract and the appellant having failed to perform C 
his part of the obligation of the contract, respondent was 
not bound to execute the sale deed. Trial Court allowed 
the applications on the ground that there were serious 
issues required to be tried before the arbitrator; and that 
the appellant had successfully made out prima facie case o 
for grant of injunction sought by him. Appeal was filed 
before High Court. In the meantime, arbitrator was also 
appointed. High Court set aside the order of trial court 
subject to conditic;>n that the respondent deposited the 
amount received as advance in fixed deposit, till the E .. 
disposal of the dispute before the arbitrator. Hence the 
present appeal. 
Partly allowing the appeal, the Court 
HELD. 1.1 The appellant, in the facts and circums-
tances of the case, had successfully made out a prima F 
facie case for grant of injunction in the manner granted. 
by the· trial court. The respondent has not de.nied the 
agreement for sale. The only ground taken by the 
respondent is that since time was the essence of the 
contract and the appellant had failed to perform his part ·G 
of the contract within the time specified in the said 
agreement for sale, the question of grant of injunction from 
transferring, alienating or creating an1 third party interest 
in respect of the property in dispute would not arise at all. 
[Para 11] [861-8] 
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854 
SUPREME COURT REPORTS 
[2009]2 S.C.R. 
A·· 
1.2 Trial Courtwasjustified in directing the parties to 
maintain status quo in the matter of transferring, alienating 
or creating any third party interest as prima facie it has 
been proved that the respondent was trying to sell the 
property in dispute to a third party, thus alienating the 
B riglitS'ofthe property.in dispute, which would have caused 
frreparable damage to the appellant. [Para 12] [863-D] 
1.3 High Court by vacating the order of status quo 
granted by the trial court, practically, had l

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