Supreme Court overturns injunction in property dispute: Balkrishna vs. Balkrishna (2019)

Introduction

Date of the Judgment: 6 February 2019
Citation: 2019 INSC 104
Judges: R. Banumathi, J. and R. Subhash Reddy, J.

Can a person obtain a permanent injunction on a property without proving they are actually in possession and paying rent? The Supreme Court of India recently addressed this question, overturning a lower court’s decision. The case revolves around a dispute between a landlord and a person claiming to be a tenant, where the latter sought a permanent injunction to protect their alleged possession of the property. The Supreme Court, in this case, clarified that actual possession and proof of lawful tenancy are crucial for obtaining such an injunction. The judgment was delivered by a two-judge bench comprising Justices R. Banumathi and R. Subhash Reddy, with Justice R. Banumathi authoring the opinion.

Case Background

In 2004, Balkrishna Rambharose Gupta (the first respondent), claiming to be a tenant, filed a suit for a permanent injunction against Balkrishna Dattatraya Galande (the appellant), who was the landlord. The first respondent claimed he had been running an eating house, a pan shop, and doing fabrication work on the premises since 1977, paying a monthly rent of Rs. 55. He alleged that the appellant had tried to obstruct him from carrying out necessary repairs on the premises, which led to the filing of the suit.

The appellant contended that the first respondent only occupied one room until 1991. The appellant further stated that a previous suit (RCS No. 1004/1988) was settled, and the first respondent had handed over possession of the premises to the appellant. The appellant had then entered into a development agreement with the second respondent and was about to start development when the first respondent filed the injunction suit.

Timeline

Course of Proceedings

The trial court initially dismissed the first respondent’s suit, stating that he failed to prove he was running a business on the premises and that there was no proof of tenancy after the disposal of RCS No. 1004/1988. The First Appellate Court reversed this decision, holding that the first respondent had established his possession and that the trial court erred in presuming that the first respondent vacated the premises based on the withdrawal of the previous suit. The High Court upheld the First Appellate Court’s decision, leading to the current appeal before the Supreme Court.

Legal Framework

The core legal provision in this case is Section 38 of the Specific Relief Act, 1963, which deals with the grant of permanent injunctions. It states that a permanent injunction may be granted to prevent the breach of an obligation existing in favor of the applicant. The Supreme Court emphasized that to obtain a permanent injunction under this section, the plaintiff must prove they are in actual possession of the property on the date of filing the suit. The court noted that the purpose of a permanent injunction is to restrain a defendant from disturbing the plaintiff’s possession, but it cannot be granted if the plaintiff does not establish their actual possession.

Arguments

Appellant’s Submissions:

• The appellant argued that the first respondent was not in possession of the suit property after 1991, following a settlement in the previous suit (RCS No. 1004/1988).
• The appellant contended that the first respondent did not pay rent after 1991, which further indicated that he was not in lawful possession.
• The appellant pointed out that the first respondent did not have the necessary licenses or electricity connections to run the businesses he claimed to be operating on the premises.

First Respondent’s Submissions:

• The first respondent claimed that he was a tenant since 1977 and was running an eating house, a pan shop, and doing fabrication work on the premises.
• The first respondent argued that Purshis Ex.-41, which was filed to withdraw the previous suit, did not prove that he had vacated the premises.
• The first respondent stated that he had obtained permission from the Corporation to carry out repairs, which indicated his possession.

Issues Framed by the Supreme Court

The Supreme Court framed the following issue for consideration:

1. Whether the High Court and the First Appellate Court were right in granting a permanent injunction in favor of the first respondent, when the first respondent had neither proven actual possession nor shown to have paid rent from the year 1991, in a suit filed under Section 38 of the Specific Relief Act, 1963.

Treatment of the Issue by the Court

Authorities

The Supreme Court considered the following legal provisions and factual aspects:

• Section 38 of the Specific Relief Act, 1963: The court analyzed this provision to determine the requirements for granting a permanent injunction.
• The court also considered the Commissioner’s report dated 02.11.1988, which showed the poor condition of the suit premises.
• The court also considered the order passed in interlocutory application (Ex.-5) dated 17.10.2005, which referred to the report of the Commission.

Judgment

How each authority was viewed by the Court:

• The Court analysed Section 38 of the Specific Relief Act, 1963 and stated that for grant of permanent injunction, the possession on the date of the suit is a must.
• The Court used the Commissioner’s report dated 02.11.1988 to show that the suit premises was not fit to carry on business.
• The Court used the order passed in interlocutory application (Ex.-5) dated 17.10.2005 to show the condition of the suit premises and that the first respondent was not carrying on any business.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the lack of evidence supporting the first respondent’s claim of actual possession and lawful tenancy. The court emphasized that a permanent injunction cannot be granted without proof of actual possession and that the plaintiff must come to the court with clean hands. The court also noted that the first respondent’s failure to pay rent for over fifteen years and the absence of necessary licenses and electricity connections further weakened his case. The court also considered the fact that the first respondent claimed tenancy over 1000 sq. ft. whereas the tenanted premises was only one room.

Logical Reasoning

Key Takeaways

• A permanent injunction cannot be granted without proof of actual possession on the date of filing the suit.
• Non-payment of rent for an extended period can weaken a claim of lawful possession.
• The absence of necessary licenses and infrastructure to carry out a business can be used to challenge claims of business operation on a property.
• Inferences of possession cannot be drawn from circumstances and the plaintiff has to prove actual possession for grant of permanent injunction.
• The court emphasized that a party seeking an equitable relief must come to the court with clean hands.

Directions

The Supreme Court set aside the High Court’s judgment and dismissed the suit filed by the first respondent.

Development of Law

The ratio decidendi of the case is that a permanent injunction cannot be granted under Section 38 of the Specific Relief Act, 1963 without proving actual possession of the property on the date of filing of the suit. This judgment reinforces the principle that a plaintiff seeking a permanent injunction must establish their lawful possession and cannot rely on mere claims or inferences. This case clarifies that a person must have actual possession on the date of the suit and must have paid rent to claim lawful possession. It also clarifies that a party seeking an equitable relief must come to the court with clean hands.

Conclusion

The Supreme Court’s judgment in Balkrishna Dattatraya Galande vs. Balkrishna Rambharose Gupta and Another overturned the High Court’s decision, emphasizing that a permanent injunction requires proof of actual possession and lawful tenancy. The court held that the first respondent failed to demonstrate actual possession or payment of rent, thus not entitling him to a permanent injunction. This decision reinforces the importance of establishing actual possession and lawful tenancy for seeking equitable relief.