Supreme Court: In a civil appeal challenging the decision of Division Bench of Delhi High Court, the bench of B.R. Gavai* and Vikram Nath, JJ. set aside the judgment and order passed by the High Court stalling an entire project in the area of 115 acres. Further, itdirected the distressed parties to file an undertaking before the Court for not creating any third-party rights with respect to the said properties.

Delving into facts of the matter, two of the respondents invested in a commercial project in 2008 which ran into trouble. Winding up proceedings were filed before Delhi High Court in 2009 against the respondent company after which, the company went into liquidation. A development and management agreement was entered into between the appellant and a consortium of six land-owning companies for exclusive developmental rights over 11 properties,extending to 115 acres of land in a real estate project. The said matter reached the High Court’s Single Bench, Division Bench and the Company Appeal as well. The Division Bench’s decision pertains to confirmation of restraining the transfer, selling or alienating of 11 properties purchased by a consortium of six land-owning companies, which has been challenged in the present appeal.

While dealing with the present matter, the Court refused to go into legal issues raised by the parties, andreiterated that “while passing an order of injunction, the Courts are required to be guided by the principles of prima facie case, balance of convenience and irreparable injury.”

The Court said that the entire project in an area of 115 acres cannot be stalled for the sake of respondents’ claim. The Court viewed that if there was a prima facie case in favour of the respondents, the High Court’s Division Bench could have passed an appropriate order to protect the interests of the respondents rather than stalling the entire project.

The Court held that a blanket order directing maintenance of status quo in respect of all 11 properties measuring 115 acres is not justified. The Court also opined that continuation of such an order will cause irreparable injury since entire development would be stalled, and the same can be protected by restricting the affected parties to not to create any third-party rights in said properties through an undertaking filed before the Court.

Thus, the Court set aside the judgment and order passed by the Division Bench and directed the affected parties to file an undertaking that they shall not create any third-party rights in respect of the properties, subject to further orders to be passed by Single Judge of High Court. The Court requested the Single Judge of High Court to decide the issue regarding final orders of the said properties as expeditiously as possible.

[Developer Group India Pvt. Ltd. v. Surinder Singh Marwah, 2023 SCC OnLine SC 85, decided on 25-01-2023]

*Judgment authored by: Justice B.R. Gavai

Know Thy Judge| Justice B.R. Gavai

Advocates who appeared in this case :

For Appellant: Senior Counsel C.A. Sundaram;

For Respondents: Senior Counsel Atmaram Nadkarni, Senior Counsel Vivek Kohli.

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