M/S. JULIEN EDUCATIONAL TRUST v.

SOURENDRA KUMAR ROY & ORS. (Civil appeal No. 8081-8082 of 2009)

DECEMBER 02, 2009 [ALTAMAS KABIR AND CYRIAC JOSEPH, JJ.]

[2009] 15 (ADDL.) S.C.R. 1260

The following Order of the Court was delivered

ORDER

1. Leave granted.

2.  The  appellant  herein,  Julien  Educational  Trust,  claims  to  be  a  

benevolent trust created by a registered Deed of Trust dated 30.07.1970 for  

the purpose of encouraging education and other allied activities. It claims to  

be registered under Section 12A of the Income Tax Act, 1961, and has its  

registered office at 35E, Elgin Road, P.S. Bhowanipore, Kolkata-700020. The  

appellant runs a reputed school, known as Julien Day School, at premises  

No. 4, Umananda Road and 35E, Elgin Road, P.S. Bhowanipore, Kolkata-

700020,  which are  two adjacent  premises.  The  respondents  are  the  joint  

owners of 15 Cottahs 8 Chittaks 29 square feet of land, including a three-

storied  old  dilapidated  structure  and  garage  and  outhouses  constructed  

thereon,  being  premises  No.  3/1,  Heysham  Road,  Police  Station  

Bhowanipore, Kolkata.

3. Since the said land was adjacent to the school premises, the appellant  

Trust was interested in purchasing the same for the purpose of expansion of  

the school.  Pursuant thereto,  the appellant  Trust  entered into negotiations  

with  the  Respondents  for   purchase  of  the  property,  which  was  orally  

accepted by the Respondents jointly and serverally and the parties agreed  

that the sale transactions would be completed in the follwing manner:–

“(i) That the defendants will sell the suit property and the plaintiff shall  

purchase  the  same  on  a  total  consideration  price  of  Rs.  

4,15,00,000/- (Rupees Four Crores fifteen Lakhs only).

(ii) That  the  defendant  No.  1  shall  get  a  sum of  Rs.  1,55,00,000/-  

(Rupees One Crore and fifty five lakhs) only towards the full and  

final consideration price for sale of his undivided 1/3rd share in the  

suit  property  upon  execution  and  registration  of  the  Deed  of  

Conveyance in respect of his undivided share in the suit property.

(iii) That  the  defendant  Nos.  2  and  3  shall  jointly  get  a  sum of  Rs.  

1,30,00,000/- (Rupees On Crore and Thirty Lakhs) only towards the  

full  and final  consideration price for  sale of  their  undivided 1/3rd  

share in the suit property upon execution and registration of Deed of  

Conveyance in respect of their undivided share in the suit property.

(iv) That the defendant Nos. 4,5 and 6 shall  jointly get a sum of Rs.  

78,00,000/- (Rupees Sevently eight Lakhs) only towards the full and  

final consideration price for sale of their undivided 3/15th share in  

the  suit  property  upon  execution  and  registration  of  Deed  of  

Conveyance in respect of their undivided share in the suit property.

(v) That  the  defendant  Nos.  7  and  8  shall  jointly  get  a  sum of  Rs.  

52,00,000/- (Rupees fifty two lakhs) only towards the full and final  

consideration price for sale of their undivided 2/15th share in the  

suit  property  upon  execution  and  registration  of  Deed  of  

Conveyance in respect of their undivided share in suit property.”

4. It appears that on account of an interim order of status-quo passed in a  

First Appeal filed by one of the co-sharers, no written agreement for sale was  

extent where the Respondents made over certified copies of their title deeds  

to the appellant Trust in order to establish their right, title and interest over the  

suit  property.  Thereafter,  in  terms of  the  oral  agreement  which  had been  

finalised between the parties, separate draft Deeds of Conveyance were sent

by the appellant to the respondents in resepect of their undivided shares in  

the suit property for their approval. It also appears that it was the further case  

of the appellant that they had been informed by the respondents jointly and  

severally that when the appellant was ready with the consideration amount,  

appropriate steps would be taken to get the order of  status quo  vacated to  

enable the parties to complete the transaction by executing and registering  

the  several  Deeds  of  Conveyance,  drafts  whereof  had  already  been  

forwarded to the respondents. It is on such account that the order of  status  

quo was vacated by the Court of 8th Civil Judge (Senior Division) at Alipore  

by his order No. 205 dated 7th June, 2006.

5. The appellant also applied to the Inspector General and Commissioner  

of Stamp Revenue, West Bengal,  on 21st June, 2006, for exemption from  

payment of stamp duty in registering the Deeds of Conveyance in respect of  

the suit property. According to the appellant, the respondent No.1 approved  

the draft Deed of Conveyance sent to him by putting his signatures thereon,  

subject to some rectifications made by him in the said draft. Thereafter, the  

final Deed of Conveyance in respect of the share of the Respondent No.1  

was engrossed on stamp paper on 22nd June, 2006, but the said respondent  

did  not  execute and register  the same on the plea that  in  order  to  avoid  

controversies amongst all the co-sharers, all the deeds of conveyance should  

be executed simultaneously. Soon thereafter, the defendant Nos. 2 to 6 also  

approved  their  respective  draft  Deeds  of  Conveyance  which  were  also  

engrossed on stamp paper, but again the same could not be executed and  

registered as the respondent Nos. 7 and 8 delayed giving their approval to  

the draft Coneyance Deeds sent to them.  

6. On the other hand, the appellant Trust came to learn in the second  

week of January, 2007, that the respondents were preparing to sell the suit  

property to third parties. The appellant, thereupon, filed an application under  

Section 144 (2) of the Code of Criminal Procedure before the First Executive  

Magistrate, at Alipore, being M.P. Case No. 82 of 2007, where an order was

passed on 17th January, 2007 directing the Officer-in-Charge of the Police  

Station to see that no untoward incident was perpetrated by the respondents  

on the suit premises. In addition to the above, the appellant also filed a suit  

for specific performance, being Title Suit No. 10 of 2007, in the Court of the  

4th  Civil  Judge (Senior  Division)  at  Alipore,  District  24  Parganas  (South),  

West Bengal, inter alia, for the following reliefs:

“(a) a Decree of Specific Performance of the Agreement for sale between  

the  Plaintiff  and  Defendants  and  added  Defendants  by  directing  the  

Defendants  and  added  Defendants  to  execute  registered  Deed  of  

Conveyance in respect of the suit schedule property.

(b) a Decree of possession of the suit property.”

7. In the said suit, the appellant filed an application under Order 39 Rules  

1 and 2 read with Section 151 of the Code of Civil Procedure for an order of  

injunction  to  restrain  the  defenants/respondent  from  selling,  encumbering  

and/or otherwise alienating and/or changing the nature and character of the  

suit schedule property during the pendency of the suit. An ad-interim order on  

the said terms was prayed for which was refused by the trial Court. Against  

such refusal, the appellant preferred appeal in the High Court, being FMAT  

No. 490 of 2007. Initially, on 9th March, 2007, the High Court passed an ad-

interim order of injunction against the Respondent  Nos. 1 to 8. Subsequently,  

on being informed by the said respondents that the suit properties had been  

transferred  to  the  Respondent  Nos.  9  to  11  by  registered  Deeds  of  

Conveyance  dated  11th  December,  2007,  and  3rd  January,  2008,  the  

Division  Bench  upon  holding  that  the  order  of  injunction  had  become  

infructuous against the said respondents, vacated the same.

8.  Thereafter,  the  plaint  was  sought  to  be  amended  by  adding  the  

Respondent the Respondent Nos. 9 to 11 as parties and a fresh application  

was made on behalf of the appellant to restrain the said added respondents  

from alienating, encumbering and/or changing the nature and character of the

suit  property.  Simultaneously,  an  application  was  filed  by  the  added  

respondents under Order 7 Rule 11 of the Code of Civil  Procedure, which  

came to  be  dismissed,  while  the  application  of  the  appellant  Trust  under  

Order 39 Rules 1 and 2 CPC was allowed on contest on 16th January, 2008,  

against  which an appeal  was preferred by the respondents  on 15th  May,  

2008. In appeal, the High Court set aside the order of injunction passed by  

the Trial Court with the result that the suit for specific performance filed by the  

appellant  was rendered practically  infructuous.  This appeal  has been filed  

against  the  order  of  the  High Court  setting  aside the  order  of  injunctions  

passed by the Trial Court.

9. Appearing for the appellant Turst, Mr. Pradip Kumar Ghosh, learned  

Senior Advocate, submitted that Division Bench of the High Court had erred  

in holding that the appellant had failed to prove the existence of a concluded  

contract  which  was  capable  of  being  specifically  enforced.  Mr.  Ghosh  

submitted that taking advantage of the order of  status quo  which had been  

passed upon an appeal filed by one of the co-sharers, the respondents had  

persuaded the appellant Trust not to insist upon a written agreement of the  

terms agreed upon for sale of the suit property. However, enough material  

had been produced before the Court to establish the case of the appellant  

that an oral agreement for sale had been arrived at and finalised between the  

parties. Mr. Ghosh urged that pursuant to the finalisation of the terms and  

conditions of the sale, draft deeds of conveyance were prepared in respect of  

each co-sharer and sent by the appellant Trust to the said respondents for  

approval. Except for the Respondent Nos.7 and 8, the other Respondent Nos.  

1 to 6 had duly approved and consented to the draft which had been sent to  

them. As a result whereof, the same were engrossed on stamp paper for the  

purose of execution and registration. Although, the Deed of Conveyance of  

the Respondent No.1 was finalised first, he did not execute and register the  

same on the plea that the Deeds of Conveyance of all the co-sharers should  

be executed and registered simultaneously. However, because of the failure

of the Respondent Nos.7 and 8 to return the approved drafts, the sale deeds  

were not executed, and, on the other hand, the appellant came to learn that  

the Respondents were planning to sell the property to the third parties.

10. Mr. Ghosh urged that all the steps that were required to be taken for  

the completion of the sale transaction had been taken by the appellant, but it  

was because of the avoidence of the respondents that  ultimately the sale  

deeds were not executed, although, they had been approved and were ready  

for  execution  and  registration  Mr.  Ghosh  urged  that  on  the  basis  of  the  

evidence on record, a prima facia case had been made out to go to trial and if  

the nature and character of the suit  properties were allowed to be altered  

during the pendency of the suit, the very purpose for which the appellant had  

filed the suit for specifi performance would be rendered nugatory. Mr. Ghosh  

emphasized  that  unless  specific  orders  were  passed  to  restrain  the  

respondents, and in particular Respondeent Nos. 9 to 11, from altering the  

nature  and  character  of  the  suit  property,  including  the  erection  of  

constructions thereupon, the appellant Trust would suffer irreparable loss and  

injury which, in this particular case, could not be compensated in terms of  

money.

11. Mr.  R.F. Nariman, learned Senior Advocate,  who appeared for the  

subsequent purchasers and later on impleaded as Respondent Nos. 9 to 11,  

submitted  that  at  this  stage  of  the  proceedings,  in  the  absence  of  any  

evidence of would not be possible for this Court to arrive at a conclusion that  

a concluded contract had been arrived at between the parties,  particularly  

when the case mde out on behalf  of the appellant that the draft  deeds of  

converyance had been approved by the respondents, was strongly disputed.  

Mr.  Nariman  urged  that  till  such  time  as  it  was  not  established  that  the  

handwriting and the signatures on the draft were those of the respondents, no  

reliance could be placed on them. Mr. Nariman urged that had there been any  

agreement  between the appellant  and the Respondent  Nos.  1 to  8,  there  

would have been evidence of at least some amount being paid by way of

earnest money. In this case, however, there is no evidence that even a single  

farthing was paid by the appellant Trust to the respondents in pursuance of  

the proposed agreement for sale.

12.  Apart  from the  above,  Mr.  Nariman  also  submitted  that  even  the  

balance of convenience and inconvenience lay in favour of the respondents  

since if an order of injunction was passed, as prayed for by the appellant, the  

respondents would not be albe to utilise the land which they had purchsed till  

the  disposal  of  the  suit.  On  the  other  hand,  if  ultimately  the  appellant  

succeeded, it could always be compensated in terms of money.

13. Mr. Kalyan Bandopadhyaya, learned Senior Advocate appearing for  

the Respondent Nos. 1 to 8, adopted the stand taken by Mr. Nariman and  

added that the appellant Trust had shown no interest in purchasing the suit  

property since at no point of time had shown their readiness and willingness  

to complete the sale transcation. The appellant Trust neither paid any amount  

by way of earnest money nor had it ever intended to do so. As a result, it did  

not  lie  in  the  mouth  of  the  appellant  Trust  to  seek  a  decree  for  specific  

performance when it had failed to take any positive steps in that regard.

14.  Since the suit  for  specific  performance is  pending  before  the  trial  

Court, we can consider the materials before us and the arguments advanced  

only for the limited purpose of deciding the question of granting interim orders  

during the pendency of the suit.

15. We are satisfied from the materials on record that a prima facie case  

has been made out by the appellant Trust as to the argeement for sale which  

has to go to trial. Whether there was a concluded contract or not between the  

appellant Trust and the Respondent Nos. 1 to 8 is a matter of evidence and  

can ony be gone into during the trial  of  the suit.  This brings us to the all  

important  question  as  to  whether  the  balance  of  convenience  and  

inconvenience lay in favour of the grant of an interim order of injunction in

favour of the appellant Trust and as to whether the appellant Trust would  

suffer irreparable loss and injury, if no such interim order was passed.

16.  Although,  it  has  been  submitted  by  Mr.  Nariman  as  well  as  Mr.  

Bandopadhyaya  that  loss,  if  any,  to  the  appellant  Trust  could  be  

compensated in terms of money, the said submission does not appear to hold  

good in  the  instant  case.  Equally  important  is  the  question  of  balance of  

convenience and inconvenience since the principal  object  of  the appellant  

Trust in wanting to acquire the suit property was to extend its school unit at  

Kolkata. If the suit property is allowed to be commercially exploited by raising  

multi-storyed structures thereupon, the entire object of the suit filed by the  

appellant Trust will be rendered meaningless and the purpose for which the  

suit been filed would be completely defeated.

17. In such circumstances, we are of the view that this is one such case  

where an interim order is required to be passed to maintain the status quo of  

the suit for specific performance filed by the appellant Trust, but at the same  

time appropriate directions should also be given so that the suit is disposed of  

expeditiously. At this stage, it would not be appropriate on our part to express  

any further opinion on the merits and demerits of the suits.

18. Having found a prima facie case in favour of the appellant Trust, it is  

our  view that  in  the light  of  the principles of  balance of  convenience and  

inconvenience,  interim  relief  should  be  granted  to  the  appellant  Trust.  

Accordingly, we allow the appeals and set aside the order of the High Court  

and  direct  that  the  respondents  shall  not  alienate  or  encumber  the  suit  

property or change the nature and character thereof till the disposal of the suit  

for specific performance filed by the appellant Trust.

19. Having regard to the peculiar facts of the case, we would also request  

the Trial Court to dispose of the suit as early as possible, but positively within  

one  year  from the  date  of  communication  of  this  order.  No  unnecessary

adjournments will  be sought for or granted, so that the suit is disposed of  

within the stipulated period.

20. We also make it clear that the observations made in this judgment  

have been made only for the purpose of disposal of the application for interim  

orders and should not influence the Trial Court in deciding the suit.

21. There will be no order as to costs.