13 May 2025 Civil Appeals >> Civil & Consumer Law  

The Supreme Court has set aside an order from the Bombay High Court that restrained an appellant from dispossessing Respondent No. 1 or creating third-party interests in a disputed property. The High Court's injunction had significantly stalled the appellant's redevelopment plans for a larger plot of land in Chembur, Mumbai.

The case of Tushar Himatlal Jani v/s Jasbir Singh Vijan & Others., revolves around a 22,000 square feet plot, of which 11,250 square feet were leased in 1972 by the appellant's father to M/s Silver Chem (India) (Respondent No. 2). Upon the father's death, the appellant inherited the property and, in 2008, terminated the lease and filed an eviction suit.

Respondent No. 1, claiming to be a legal heir of a partner in Respondent No. 2, sought to be impleaded in the eviction suit, citing a Family Settlement Agreement that purportedly allocated him 550 square feet within the leased area. While the impleadment was initially allowed by the Small Causes Court, it was later set aside by the Appellate Small Causes Court.

Subsequently, Respondent No. 2 and its partners, along with Respondent No. 1, entered into a Lease and License Agreement with M/s KMG Global without the appellant's consent. Following this, Respondent No. 2 claimed to have surrendered its tenancy rights. The appellant then withdrew his eviction suit and entered into a new leave and license agreement with M/s KMG Global for a different portion of the property.

Respondent No. 1 then filed a new suit before the Small Causes Court, asserting his tenancy rights over 550 square feet based on the Family Settlement Agreement and seeking interim protection from dispossession. The Small Causes Court granted this interim protection, which was later overturned by the Appellate Small Causes Court. However, the High Court, in the impugned order, reinstated the injunction in favor of Respondent No. 1.

The Supreme Court, in its judgment, noted that the core issue of Respondent No. 1's tenancy rights is still pending before the Small Causes Court. The Court emphasized the well-settled principles for granting interim injunctions: prima facie case, balance of convenience, and irreparable injury.

Applying these principles, the Supreme Court found that the High Court erred in granting the injunction. The Court highlighted that the appellant is the absolute owner of the property, and the injunction significantly curtailed his right to develop it, especially since the disputed area of 550 square feet is a minor fraction of the total 22,000 square feet. The Court also observed that Respondent No. 1 had not established a strong prima facie case for his tenancy rights, as this claim requires deeper scrutiny during the trial. The balance of convenience was found to be in favor of the appellant, as the injunction was causing substantial financial losses and impeding contractual obligations.

To balance the equities, the Supreme Court directed the appellant to reserve one unit of approximately 550 square feet in the redeveloped property as security. This is to protect Respondent No. 1's potential rights if the Small Causes Court ultimately rules in his favor. The Supreme Court clarified that its order does not express any opinion on the merits of the ongoing tenancy dispute, and the Small Causes Court should adjudicate the matter expeditiously and without influence from the Supreme Court's observations.