Spencer Plaza Owners & Occupants Welfare Association v. Southern Car Parkings Ltd.

IN THE HIGH COURT OF JUDICATURE AT MADRASDated : 27.07.2009Coram :THE HONOURABLE MR.JUSTICE K.RAVIRAJA PANDIANandTHE HONOURABLE MR.JUSTICE P.P.S.JANARTHANA RAJAOriginal Side Appeals Nos.369 and 370 of 2007Spencer Plaza Owners & Occupants Welfare Association, represented by its President Mr.IbrahimAppellant in both the appealsv.1. Southern Car Parkings Ltd., represented by its authorisedsignatory and Manager -Accounts S.Suresh.Respondent 1 in both the appeals2. Mangal Tirth Estate Ltd., by its Director Vijay Sadrangani, 769 Anna Salai, Chennai 2.3. Plaza Maintenance and ServicesLtd., represented by its Manager Rahmatullah, 769, Anna Salai, Chennai 2.Respondents 2 & 3in OSA No.369/20072. Mritunjaya Property Services Pvt. Ltd., represented by its Authorised Signatory Kesavan, Spencer Plaza, 769 Anna Salai, Chennai 2.Respondent 2 in OSA No.370 of 2007Original Side Appeals under Order 36 Rule 11 of the OriginalSide Rules read with Clause 15 of the Letters Patent against theorder dated 08.08.2007 made in O.A. No.306 of 2007 in C.S. No.228of 2007 and against the order dated 07.09.2007 made in Tr. A.No.5734 of 2007 in C.S. No.228 of 2007. https://hcservices.ecourts.gov.in/hcservices/ For appellant:Mr.V.RaghavachariFor respondent 1:Mr. T.R.Rajagopal, Senior Counsel for M/s.Sampath For respondents2 & 3:Mr.G.Masilamani,Senior Counsel, forMr.V.G.Suresh KumarJUDGMENTThese two appeals are filed by Spencer Plaza Owners &Occupants Welfare Association, the first defendant in the suit inC.S. No.228 of 2007. The appeal in OSA No.369 of 2007 is filedagainst the interim order granted in favour of the plaintiff,Southern Car Parkings Ltd., (the first respondent herein)restraining the defendant (the appellant herein) from interferingwith the peaceful possession and enjoyment of the plaintiff'sbusiness of regulating and collecting car parking fees in respectof vehicles (two wheelers and four wheelers) coming to the SpencerPlaza and parked in the open space in the eastern side of theplaza, i.e., near the Oriental Bank of Commerce and in the northernside of the plaza. The appeal in OSA No.370 of 2007 is filedagainst the order dated 07.09.2007 made in Transfer Applicationdated 5734 of 2007 in C.S. No.228 of 2007 transferring OS No.2962of 2007 from the file of the VII Assistant Judge of the City CivilCourt, Chennai, to be heard along with C.S. No.228 of 2007. Forthe sake of convenience, the parties are referred to as arrayed inthe plaint. 2. The brief facts, as culled out from the pleadings, are asfollows :The plaintiff - Southern Car Parkings Ltd., is a companycarrying on the business of managing the parking of cars, twowheelers and all such vehicles. It was awarded the contract ofregulating the parking of vehicles both – four wheeler and twowheelers coming to Spencer Plaza. The plaintiff was providing carparking maintenance facilities by collecting necessary charges inrespect of the basement portion ever since 01.04.2002 pursuant toan agreement with the second defendant Mangal Tirth Estate Ltd. Inrespect of eastern side and northern side open space area, theplaintiff was awarded the contract pursuant to an agreement dated12.08.2006 from the third defendant – Plaza Maintenance andServices Ltd., for a particular sum. In respect of the groundfloor referred to above, originally the car parking area wasawarded to one Perfect Services. After the contract being awardedto the plaintiff, when the erstwhile contractor Perfect Servicesinterfered with the right of the plaintiff, the plaintiff filed asuit in C.S. No.740 of 2006 and obtained an order of injunction inOA No.786 of 2006. While that being so, i.e., when the contractsgranted in favour of the plaintiff are very much in currency and inexistence, the first defendant, Spencer Plaza Owners & Occupants https://hcservices.ecourts.gov.in/hcservices/ Welfare Association, issued a circular dated 06.03.2007 proposingto collect charges in respect of areas in the Spencer Plaza. Whenthis circular was brought to the notice of the third defendant, whoawarded the contract in favour of the plaintiff and who was incharge of the maintenance of the entire Spencer Plaza consisting ofthree phases, including the car parking area, the third defendantinformed the first defendant that as per the clause contained inthe sale deed executed in favour of the purchaser, the entire carpark space shall always remain under the control and use of thedeveloper, the second defendant. The said clause of control overthe car park area by the developer is in conformity with suchcovenant contained in the development agreement between thedeveloper and the purchaser. In view of the clause contained inthe development agreement as well as in the sale deed, the firstdefendant has no right in any manner whatsoever to interfere withthe right of the plaintiff in maintaining, regulating andcollecting parking charges in respect of the vehicles coming to theSpencer Plaza. Despite informing the position to the firstdefendant, the first defendant is creating lot of problems and onthat premise the suit in C.S. No.228 of 2007 has come to be filedseeking for the relief of grant of permanent injunction restrainingthe first defendant from interfering with the peaceful possessionand enjoyment of the suit properties, i.e., carrying on thebusiness of regulating and collecting parking fee in respect of twowheelers and four wheelers in the basement of the Spencer Plaza andin the open space on the eastern side of Oriental Bank of Commerceand in the parking space in front of the first phase of the firstfloor bearing No.769, Anna Salai, Chennai. To the same effect, theapplication No.306 of 2007 has been filed for injunction pendingsuit.3. That application was defended by the first defendant,Spencer Plaza Owners & Occupants Welfare Association, that they arethe owners of the Plaza. The second defendant being the builder,has no right whatsoever on the land and building after it isconstructed and sold. It is true that in the sale deed a clausehas been inserted about the maintenance and regulation of theentire mall including the car parking area by the third defendant,who is none other than the second defendant builder, but projectingas a separate entity. After coming into force of the Tamil NaduApartment Ownership Act, 1994, such a clause contained in the saledeed would not bind the first defendant association. The seconddefendant, being an association of Spencer Plaza owners formed asper the requirement of the Tamil Nadu Apartment Ownership Act,1994, it is their obligation to maintain the entire building, suchas open space, common space, electricity, water supply anddrainage, including car park area. 4. It is the stand of the second defendant that as per thedevelopment agreement, the second defendant being the developer, isentitled to 40% of the built up area and the entire basement carparking area and proportionate undivided share in the land. Thesecond defendant is retaining the same and enjoying it as theowner. It is not necessary that the builder's share of the joint https://hcservices.ecourts.gov.in/hcservices/ venture of the present nature has to be sold by the builder. Asper the development agreement and sale deed, the second defendantis entitled to maintain the basement car park. 5. It is the case of the third defendant that pursuant to thedevelopment agreement and clause contained in the sale deed, thepurchasers entered into agreement with the third defendant formaintenance of the entire plaza. The third defendant, pursuant tothe agreement entered into with them, by the purchasers who claimedto be the members of the association, they are maintaining theentire Spencer Plaza consisting of three phases over and above 9000sq. ft., and the car park maintenance has been given in anagreement to the plaintiff, which cannot be faulted by the firstdefendant.6. The learned single Judge, after hearing the argument of theparties, having regard to the nature of the suit filed, which isone for permanent injunction and having found prima facie case infavour of the plaintiff, granted interim relief of injunction asprayed for in the application. In respect of the transferapplication filed by the plaintiff, after hearing the parties, thelearned single Judge observed that the suit in C.S. No.228 of 2005was filed by Southern Car Parkings Ltd., claiming that the right toregulate car park and collect car parking charges in the basementarea was awarded by Mangal Tirth Estate Ltd., to them and the firstdefendant association now sought to interfere with the right and onthat basis the suit came to be filed in May 2007. The applicantin the transfer application claimed that the atrium areaexclusively belongs to Mangal Tirth Estate and the applicant wasgiven a right to carry out the promotional activities in all theatriums and that they have been permitted to doadvertisements/hoarding in the plaza, besides the atrium area. Whenthe first defendant association threatened to interfere with theirright, they filed a suit in O.S. No.2962 of 2007 before the CityCivil Court, Chennai and having regard to the totality of the factsand disputes between the parties, the learned single Judge passedorders transferring O.S. No.2962 of 2007 to be heard along with CS228 of 2007 by this Court.7. We heard the learned counsel on either side and perused thematerials available on record.8. With reference to the order made in Transfer Application,no argument was advanced, rather, it is accepted by the counselappearing for the first defendant/appellant that the order cannotbe disturbed. 9. Much was argued as to the right of the owners associationin respect of the open space, common space, car park area and itsobligations to maintain the same with reference to the provisionsof the 1994 Act. But, it is an admitted fact that the Tamil NaduApartment Ownership Act, 1994, came into force on and from04.07.1997, whereas the development agreement for development ofthe plaza and sale deeds executed in favour of the purchasers were https://hcservices.ecourts.gov.in/hcservices/ all well prior to that date, which indisputably contained clausesas to the maintenance of the building and the agreement to beentered into with the third defendant. It is also an undisputedfact that such agreement was entered into with the third defendantfor maintaining the plaza by the purchasers who are stated to bethe members of the owners association. Pursuant to the agreement,the third defendant granted the right to maintain the car parkunder dispute to the plaintiff which is still in currency. In theabove said facts and circumstances of the case, the onlyconsideration for granting the interim relief is whether theplaintiff is having a prima facie case for grant of interim relief.10. It is an indisputable fact that the plaintiff has comeforward with the suit seeking for an injunction against the firstdefendant based on the agreement entered into by it with defendants2 and 3 for the purpose of regulating, maintaining the car parkingarea - one in the basement and in the ground floor area. It isalso not disputed that the agreements are still in existence. 11. The grant of an interlocutory injunction during thependency of legal proceedings is a matter requiring the exercise ofdiscretion of the Court. While exercising the discretion, theCourt has to apply the following tests – (i) whether the plaintiffhas a prima facie case; (ii) whether the balance of convenience isin favour of the plaintiff; and (iii) whether the plaintiff wouldsuffer an irreparable injury if his prayer for interlocutoryinjunction is disallowed. The decision whether or not to grant aninterlocutory injunction has to be taken at a time when theexistence of the legal right assailed by the plaintiff and itsalleged violation are both contested and uncertain and remainuncertain till they are established at the trial on evidence.Relief by way of interlocutory injunction is granted to mitigatethe risk of injustice to the plaintiff during the period beforethat uncertainty could be resolved. The object of theinterlocutory injunction is to protect the plaintiff against injuryby violation of his right for which he could not be adequatelycompensated in damages recoverable in the action if the uncertaintywere resolved in his favour at the trial. The need for suchprotection has, however to be weighed against the correspondingneed of the defendant to be protected against injury resulting fromhis having been prevented from exercising his own legal rights forwhich he could not be adequately compensated. The Court must weighone need against another and determine where the 'balance ofconvenience' lies. In order to protect the defendant whilegranting an interlocutory injunction in his favour the Court canrequire the plaintiff to furnish an undertaking so that thedefendant can be adequately compensated, if the uncertainty wereresolved in his favour at the trial. Under Order 39 of the Codeof Civil Procedure, jurisdiction of the Court to interfere with anorder of interlocutory or temporary injunction is purely equitableand, therefore, the Court, on being approached, will, apart fromother considerations, also look to the conduct of the partyinvoking the jurisdiction of the Court, and may refused to https://hcservices.ecourts.gov.in/hcservices/ interfere unless his conduct was free from blame. Since the reliefis wholly equitable in nature, the party invoking the jurisdictionof the Court, has to show that he himself was not at fault and thathe himself was not responsible for bringing about the state ofthings complained of and that he was not unfair or inequitable inhis dealings with the party against whom he was seeking relief.His conduct should be fair and honest. These considerations willarise not only in respect of the person who seeks an order ofinjunction under Order 39 Rule 1 or 2 of the Code of CivilProcedure, but also in respect of the party approaching the Courtfor vacating the ad interim or temporary injunction order alreadygranted in the pending suit or proceedings. (See Gujarat BottlingCo. Ltd. v. Coca Cola Co., (1995) 5 SCC 545).12. In this case, the suit is for a bare injunction. It is anadmitted fact that as on today, the plaintiffs are regulating thecar parking under the subsisting contract entered into by them.Considering the nature of the relief with reference to the factsnarrated above, we are of the view that the plaintiff has made outa prima facie case and we are also further of the view that inorder to see whether the grant of an interim injunction pendingsuit is correct or not, it is not necessary for us to go into thecorrectness, enforceability or otherwise of the clause contained inthe development agreement and the sale deed, which requires thepurchaser to enter into an agreement with the third defendant forthe purpose of maintenance of the plaza or as to whether suchclause can be validly enforced with reference to the provisionscontained in the Act, particularly when such clause has beenfaithfully obeyed by the first defendant's members by entering intoan agreement with the third defendant. 13. As regards the second test of balance of convenience, itcould be seen that as per the agreement between the plaintiff anddefendants 2 and 3, the plaintiff is maintaining the car park byinvesting substantial amount for manpower and other infrastructure.The agreement is also in currency. Whether the agreement islegally sustainable or not is a point in issue to be decided in thesuit. It is also not in dispute that for the past several years,the present state of affairs was followed in respect of maintainingthe car park, the first defendant did not maintain the car park.Even assuming that the first defendant is entitled to maintain, itis going to be given to the third party. The first defendantitself is not going to do the exercise of maintaining the car park,which is a mammoth exercise. Hence, we are of the view that thebalance of convenience is also more in favour of the plaintiff. 14. As far as the third test is concerned, if the injunctionis not granted, having regard to the agreement entered into by theplaintiff and the amount expended by him, definitely that wouldcause prejudice to the plaintiff. Even the interest of thedefendant has also been protected by an order of this Court, which https://hcservices.ecourts.gov.in/hcservices/ directed the plaintiff to deposit the amount collected for the carpark after defraying the expenses, into the bank. There cannot beany prejudice to the defendant in granting the prayer in favour ofthe plaintiff. The right of the first defendant regarding the openspace and parking slot and who is to maintain the same has to beconsidered in the suit. Likewise, the right of the seconddefendant, the promoter who claims 40% of the built up area alongwith undivided share is still with them and he is the owner of thatportion of the property and he can exploit the property as per hisconvenience is also a question to be decided in the suit. So, isthe correctness and validity of the agreement entered into by theowners of the premises of the Spencer Plaza with the thirddefendant for maintenance of the entire premises.15. Much was concentrated by the counsel on behalf of theplaintiff as to the validity of the clause contained in thedevelopment agreement and sale deed vis-a-vis the provisionscontained in the Act. We are conscious of the fact that we cannotenter into the arena of that issue at this stage and anydiscussion, if made on that issue, would definitely have a bearingin the proceedings between the parties before the trial Court.Hence, we refrain from entering into that arena of discussion. Weare equally conscious of the fact that what is tested before us isis the correctness of the order of the learned single Judgegranting interim injunction in favour of the plaintiff with whichwe agree.16. For the foregoing reasons and the discussions made, we areof the view that the appeals deserve to be rejected. The appealsare dismissed. No costs. 27.07.2009 Today, after pronouncing the judgment in these appeals,learned counsel for defendants 2 and 3 submits that this Court, byorder dated 21.04.2008 directed the respondents 1 to 3 collectivelyto deposit the collection from the car park area, which is thesubject matter of the appeals, once in a month to the credit ofOSAs. Nos.369 and 370 of 2007 and also directed to maintain andfile true and proper account for the charges collected and theexpenses incurred. That interim order further directed theRegistrar General of the Madras High Court to redeposit the same inthe Indian Bank, High Court Branch for a period of two months.That order may be vacated. While passing the orders on these appeals, we have taken noteof the earlier direction of this Court dated 21.04.2008 and weregarded that such direction would protect the interest of thefirst defendant in granting the interim order against it. So, thedirection, if at all, could be varied by directing the respondents https://hcservices.ecourts.gov.in/hcservices/ themselves to deposit the collections from the car park area in aseparate interest bearing bank account after defraying the expensesincurred by them for the purpose of maintaining the car park oncein a month. However, the direction given in respect of maintainingand filing true and proper accounts, no variation is made.mfSd/-Asst.Registrar/True Copy/Sub.Asst.RegistrarTo 1. The Sub Assistant Registrar Original side High court, Madras.2. The Section Officer, Accounts Section, High court Madras (for necessary action)+ 1 cc to Mr. V. Raghavachari, Advocate Sr.34475.+ 2 cc to Mr. M.S. Sampath Advocate, SR.32591.+ 1 cc to Mr. V.G. Suresh Kumar SR.35081.Judgment inOSAs Nos.369 and 370 of 2007KA(CO)EU 24.8.2009.