Supreme Court Overturns Bombay High Court’s Mandatory Injunction in Property Dispute

The Supreme Court of India, in the case of Samir Narain Bhojwani v. M/s. Aurora Properties and Investments & Anr., overturned the Bombay High Court’s mandatory injunction directing the appellant to hand over possession of flats and parking spaces under an agreement he was not a party to. The judgment, delivered on August 21, 2018, by a bench comprising Chief Justice Dipak Misra, Justice A.M. Khanwilkar, and Justice D.Y. Chandrachud, ruled that the High Court had exceeded its jurisdiction in passing a mandatory order at the interlocutory stage.

Background of the Case

The dispute arose from a series of agreements regarding the development of a property situated at Versova Link Road, Andheri, Mumbai. The following agreements were relevant to the case:

• A Development Agreement (1996) between Andheri Kamgar Nagar Cooperative Housing Society Ltd. and Aurora Properties and Investments (Respondent No.1), appointing the latter as the developer under the Slum Rehabilitation Scheme.
• A Sub-Development Agreement (1999) between Aurora Properties and Respondent No.2, transferring development rights.
• A Development Agreement (2003) between Respondent No.2 and Samir Narain Bhojwani (Appellant), granting the appellant a 55% share in the free-sale area.
• A Tripartite Agreement (2009) among all three parties, modifying the previous arrangements.

Disputes arose when Respondent No.1 alleged that the appellant failed to fulfill obligations and refused to hand over 22,500 sq. ft. of constructed area along with 24 parking spaces. Respondent No.1 filed a Commercial Suit No. 62 of 2013, seeking specific performance and an injunction against creating third-party rights in the property.

Petitioners’ Arguments

The appellant, Samir Narain Bhojwani, argued:

• He had fulfilled his contractual obligations, but Respondent No.2 failed to obtain approvals, delaying construction.
• Respondent No.2’s failure to perform negated its entitlement to 45% of the constructed area, affecting Respondent No.1’s claim.
• He had already delivered possession of 16 flats to Respondent No.2 as per an arbitral award.
• The High Court’s mandatory injunction directing him to hand over additional flats exceeded its jurisdiction.
• The relief granted by the High Court at the interlocutory stage amounted to a final decision, bypassing due process.

Respondents’ Arguments

Aurora Properties and Investments (Respondent No.1) argued:

• It was entitled to possession of 22,500 sq. ft. under the agreements.
• The High Court had correctly directed the appellant to hand over the additional 8 flats and 16 parking spaces.
• The development agreements clearly established its right over the disputed property.
• The appellant was using litigation to unjustly retain possession of property not rightfully his.

Supreme Court’s Observations

The Supreme Court analyzed the case and made key observations:

• The Tripartite Agreement (2009) did not bind the appellant to obligations imposed by agreements between Respondents 1 and 2.
• Granting a mandatory injunction at an interlocutory stage was excessive and legally unsustainable.
• The principle of moulding relief should be applied at the final stage of litigation, not during interim proceedings.
• Respondent No.1’s claim over the additional 8 flats and 16 parking spaces could not be enforced against the appellant.
• The High Court’s reliance on arbitration proceedings was misplaced, as the appellant was not bound by the agreement between Respondents 1 and 2.

Final Judgment

The Supreme Court ruled:

• The Bombay High Court’s mandatory injunction was set aside.
• The previous ad-interim arrangement from December 2012, preventing third-party sales, was reinstated.
• The matter should proceed in the trial court, with no prejudgment based on interim orders.
• The rights and obligations of the parties would be determined based on final adjudication.

Impact of the Judgment

This ruling has significant implications:

• Limited scope for mandatory injunctions: Courts cannot impose final reliefs at interim stages.
• Judicial restraint: Higher courts must ensure due process and not override contractual relationships.
• Property rights enforcement: Developers and builders must ensure clear contractual agreements before seeking specific performance.

Conclusion

The Supreme Court’s decision in Samir Narain Bhojwani v. M/s. Aurora Properties and Investments & Anr. reinforces the principle that interim reliefs should not decide final rights. By overturning the Bombay High Court’s mandatory injunction, the judgment ensures that due process is followed, preventing one party from enforcing obligations not agreed upon by another.

Petitioner Name: Samir Narain Bhojwani.
Respondent Name: M/s. Aurora Properties and Investments & Anr..
Judgment By: Justice Dipak Misra, Justice A.M. Khanwilkar, Justice D.Y. Chandrachud.
Place Of Incident: Mumbai, Maharashtra.
Judgment Date: 21-08-2018.

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