Thursday 1 December 2016

Whether court can grant injunction against person who is not party to suit ?

There is no privity of contract between the
plaintiff and the Limited Liability Partnership which is the owner of the suit
property. Of course, the defendants are some of the partners of the said Limited
Liability Partnership firm. Plaint does not disclose that those defendants were
authorised by the said Limited Liability Partnership firm to enter into any
transaction relating to the suit property as agents of the said Limited LiabilityPartnership. No case of fraud has been made out against the defendants for
attracting the other provisions of the Limited Liability Partnership Act, 2008,
such as Section 30 etc.
Thus, on reading the pleadings of the plaintiff as a whole, it appears to us
that there is no privity of contract between the plaintiff and the owner of the said
property viz., the Limited Liability Partnership firm. As such, we hold that even if
the ad interim order of injunction which was passed by the learned Trial Judge is
not disturbed by us, still then the Limited Liability Partnership firm cannot be
held to be bound by the said injunction order. The said Limited Liability
Partnership firm is not even made a party to the suit.
Section 3 of the Limited Liability Partnership Act, 2008 says that a limited
liability partnership is a body corporate formed and incorporated under the said
Act and is a legal entity separate from that of the partners. Section 14 of the said
Act provides that on registration, a limited liability partnership shall, by its
name, be capable of suing and being sued. The title deed which is annexed to the
injunction application shows that the Limited Liability Partnership firm is a
registered partnership firm. As such, we have no hesitation to hold that the said
Limited Liability Partnership firm is a separate entity which is a body corporate
and is capable of being sued in its own name. The said Limited Liability
Partnership firm has not been impleaded as a party in this proceeding. No relief
has been claimed against the said Limited Liability Partnership firm.
Since we are of the prima facie view that there is no privity of contract
between the plaintiff and the owner of the suit property viz., the Limited Liability
Partnership firm, we hold that the ad interim relief by way of injunction which is
prayed for by the plaintiff cannot be granted in the instant case for the simple
reason that even if such ad interim order of injunction is maintained, still then,
the Limited Liability Partnership firm, which is not a party in the said proceeding,cannot be restrained from dealing with the said property by virtue of such
interim order passed by the learned Trial Court.
IN THE HIGH COURT AT CALCUTTA
 CIVIL APPELLATE JURISDICTION
APPELLATE SIDE
Present:
The Hon’ble Justice Jyotirmay Bhattacharya
AND
The Hon’ble Justice Ishan Chandra Das
 F.M.A.T. 481 of 2016
 with
 CAN 4980 of 2016
 Rajesh Baid & Anr.
 v
 Mohammad Ibrahim

Judgement On : 20-07-2016.
Citation:AIR 2016 Cal 344

Jyotirmay Bhattacharya, J. : This first miscellaneous appeal is directed
against an order being No.2 dated 26th April, 2016 passed by the learned Judgein-Charge,
12th Bench, City Civil Court at Calcutta in Title Suit No. 491 of 2016
at the instance of the defendants/appellants.
By the impugned order, the learned Trial Judge was pleased to pass an ad
interim order of injunction restraining the defendants from selling, transferring,
mortgaging, encumbering, dealing with and/or parting with possession of the
suit premises to any person, save and except in compliance of the terms of theagreement for sale dated 5th February, 2016 executed by and between the parties
till 25th May, 2016. The said ad interim order of injunction was further extended
by the learned Trial Judge and the said order is still in force. Such an ad interim
order of injunction was passed by the learned Trial Judge in a suit for declaration
and injunction filed by the plaintiff/respondent.
The plaintiff claims that he entered into an agreement for sale with the
defendants for purchasing the suit property for a consideration of
Rs.8,00,00,000/- (Rupees eight crore only). He further claims that he has paid a
sum of Rs.51,00,000/- (Rupees fifty one lakh only) by cash to the defendants
towards earnest money. Such agreement for sale was entered into between the
parties on 5th February, 2016. Time for completion of the said agreement was
fixed in the said contract. It is provided therein that the said transaction should
be completed within six months from the date of entering into such agreement.
There is also a provision for extension by one month for completion of the said
transaction.
Since during subsistence of the said agreement for sale, the defendants
were trying to sell the suit property to the stranger purchaser, the plaintiff filed
the said suit seeking declaration about the validity and/or legality of the said
agreement for sale entered into between the parties on 5th February, 2016. He
has also prayed for injunction for restraining the defendants from selling,
transferring, mortgaging, encumbering, dealing with and/or parting with
possession of the suit property till the disposal of the suit. An ad interim
injunction was also prayed for in the said application for injunction in similar
term.
Learned Trial Judge while dealing with the plaintiff’s application for ad
interim injunction held that the plaintiff has made out a prima facie case for
going to trial. Learned Trial Judge has also held that the balance of convenience
and inconvenience is also in favour of the plaintiff. Such conclusion was drawnby the learned Trial Judge as the learned Trial Judge found that an agreement
was entered into between the parties and in pursuance of the said agreement, a
sum of Rs.51,00,000/- (Rupees fifty one lakh only) has already been paid in cash
by the plaintiff to the defendants towards earnest money. Learned Trial Judge
also found that time for completion of the said agreement has not yet expired.
Under such circumstances, learned Trial Judge passed the aforesaid ad interim
order of injunction. The legality and/or correctness of the said ad interim order of
injunction is under challenge in this appeal before us.
Let us now test the legality of such impugned order in the facts of the
instant case.
Since we are considering the legality and/or propriety of the ad interim
order of injunction, we will have to restrict ourselves to consider the legality of
such impugned order with reference to the pleadings of the plaintiff made out in
the plaint as well as in the injunction application. At this stage, we cannot
consider the pleadings made out by the defendants in the stay application to
ascertain the legality of the impugned order. As such while considering the
legality of the impugned order, we will confine ourselves to the pleadings made
out by the plaintiff in the plaint as well as in the injunction application.
On reading the plaint as well as the injunction application, we find that the
plaintiff claimed that the defendants are the partners of M/s. Onex Projects LLP
and also the owners of premises No. 43, Zakaria Street, P.S. Jorasanko, Kolkata-
700073 hereinafter referred to as the “suit property”. He further claimed that
relying upon the representation made by the defendants, the plaintiff in good
faith entered into an agreement for sale with the defendants on 5th February,
2016 for purchasing the suit property for a consideration of Rs.8,00,00,000/-
(Rupees eight crore only). He further claimed that he has paid a sum of
Rs.51,00,000/- (Rupees fifty one lakh only) by cash to the defendants towards
earnest money. Plaintiff further claimed that after execution of the saidagreement, the defendants handed over xerox copies of the title deed relating to
the suit property, tax bill etc.
Plaintiff further claimed that on repeated occasion he requested the
defendants to complete the said transaction by executing and registering the sale
deed after receiving the balance consideration amount. He also asserted that a
legal notice was also served upon the defendants requesting them to compete the
said transaction on acceptance of the balance consideration money, but the
defendants did not respond to such request.
Plaintiff further contended that in spite of receiving the earnest money, the
defendants are now taking steps for transferring the suit property to the stranger
purchaser. Hence, he has filed the aforesaid suit.
In the application for injunction, the plaintiff has also annexed the title
deed relating to the suit property. On perusal of the said title deed relating to the
suit property, we find that the defendants are not the owners of the said
property. The title deed annexed to the injunction application shows that Onex
Projects LLP, a registered Limited Liability Partnership, is the owner of the suit
property. The defendants are some of the partners of the said Limited Liability
Partnership.
On reading of the pleadings of the plaintiff made out in the plaint as well as
in the injunction application, we do not find that the plaintiff ever claimed to
have entered into agreement for sale with the Limited Liability Partnership firm
for purchasing the suit property. There is no privity of contract between the
plaintiff and the Limited Liability Partnership which is the owner of the suit
property. Of course, the defendants are some of the partners of the said Limited
Liability Partnership firm. Plaint does not disclose that those defendants were
authorised by the said Limited Liability Partnership firm to enter into any
transaction relating to the suit property as agents of the said Limited LiabilityPartnership. No case of fraud has been made out against the defendants for
attracting the other provisions of the Limited Liability Partnership Act, 2008,
such as Section 30 etc.
Thus, on reading the pleadings of the plaintiff as a whole, it appears to us
that there is no privity of contract between the plaintiff and the owner of the said
property viz., the Limited Liability Partnership firm. As such, we hold that even if
the ad interim order of injunction which was passed by the learned Trial Judge is
not disturbed by us, still then the Limited Liability Partnership firm cannot be
held to be bound by the said injunction order. The said Limited Liability
Partnership firm is not even made a party to the suit.
Section 3 of the Limited Liability Partnership Act, 2008 says that a limited
liability partnership is a body corporate formed and incorporated under the said
Act and is a legal entity separate from that of the partners. Section 14 of the said
Act provides that on registration, a limited liability partnership shall, by its
name, be capable of suing and being sued. The title deed which is annexed to the
injunction application shows that the Limited Liability Partnership firm is a
registered partnership firm. As such, we have no hesitation to hold that the said
Limited Liability Partnership firm is a separate entity which is a body corporate
and is capable of being sued in its own name. The said Limited Liability
Partnership firm has not been impleaded as a party in this proceeding. No relief
has been claimed against the said Limited Liability Partnership firm.
Since we are of the prima facie view that there is no privity of contract
between the plaintiff and the owner of the suit property viz., the Limited Liability
Partnership firm, we hold that the ad interim relief by way of injunction which is
prayed for by the plaintiff cannot be granted in the instant case for the simple
reason that even if such ad interim order of injunction is maintained, still then,
the Limited Liability Partnership firm, which is not a party in the said proceeding,cannot be restrained from dealing with the said property by virtue of such
interim order passed by the learned Trial Court.
That apart, we find that the plaintiff claims that the plaintiff has paid a
sum of Rs.51,00,000/- (Rupees fifty one lakh only) by cash to the defendants by
way of earnest money. No receipt regarding payment of such earnest money is
forthcoming before us. Even the agreement for sale does not contain any
memorandum clause showing payment and acceptance of such earnest money
between the parties. The source of payment of such earnest money has also not
been disclosed before us. Though the plaintiff claimed in the suit that he was
ready and willing to complete the said transaction and, in fact, a legal notice was
also served upon the defendants calling upon them to complete the said
transaction on acceptance of the balance consideration money, but, when we
asked the learned advocate appearing for the plaintiff/respondent to take
instruction from his client as to whether his client is ready to deposit the balance
consideration money in Court, the learned advocate appearing for the
plaintiff/respondent after taking instruction from his client, who is present in
Court, informs us that his client cannot deposit the entire balance consideration
money in Court presently. He, however, submits that his client will be able to
arrange the balance consideration money within the stipulated period fixed in the
contract for completion of the sale.
Since the plaintiff himself averred in the pliant that he is ready with the
money and wanted to complete the said transaction, but now expressed his
inability to deposit the balance consideration money, we are of the view that the
plaintiff is unable to satisfy our conscience about his readiness to complete the
said transaction on payment of the balance consideration money. The legal notice
which was served for calling upon the defendants to complete the said
transaction does not justify the stand which the plaintiff has now taken before us
about his inability to arrange the balance consideration money presently.Considering the facts and circumstances as stated hereinabove, we are of
the view that the plaintiff has failed to make out a strong prima facie case to go
for trial. As such, we feel that this is not a case where any ad interim order of
injunction should be passed.
Even if, we consider the principle of balance of convenience and
inconvenience, we hold that balance of convenience and inconvenience is wholly
against grant of such injunction as we find that there is no privity of contract
between the plaintiff and the real owner of the suit property and the real owner of
the suit property has not entered into contract with the plaintiff either directly or
indirectly. As such, the real owner of the suit property cannot be restrained from
transferring its property.
This is also a case where the plaintiff, in case, ultimately succeeds in the
suit, can get refund of the earnest money provided that he can prove that he paid
the said amount of earnest money to the defendants in pursuance of the said
contract provided however the said contract is ultimately found to be incapable of
being performed specifically. In our view, injunction is not the appropriate relief
where the loss can be compensated by necessary decree.
 We, thus, hold that the impugned order which was passed by the learned
Trial Judge cannot be allowed to be retained on record. The impugned order,
thus, stands set aside. The appeal is, thus, allowed.
We direct the defendants to file affidavit-in-opposition to the plaintiff’s
application for temporary injunction within two weeks from date; reply, if any, be
filed by the plaintiff within a week thereafter.
The learned Trial Judge is requested to dispose of the plaintiff’s application
for temporary injunction as expeditiously as possible, but preferably by the end
of August 2016.Since we have decided the appeal at the stage of ad interim order of
injunction, we make it clear that the learned Trial Judge is absolutely free to
decide the plaintiff’s application for temporary injunction on its own merit
without being influenced by any of the observations made hereinabove which are
made by us only for the purpose of disposal of the appeal which is directed
against an ad interim order of injunction.
Both the appeal and application being CAN 4980 of 2016 thus stand
disposed of.
Urgent photostat certified copy of this order, if applied for, be given to the
parties as expeditiously as possible.
 (JYOTIRMAY BHATTACHARYA, J.)
 ( ISHAN CHANDRA DAS, J. )
dc.
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