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No Injunction Orders Against Third Parties Claiming Title In A Property, Without Hearing Them: Hon’ble SC [READ JUDGEMENT]

In the case of Acqua Borewell Pvt. Ltd. v. Swayam Prabha & Ors, the Hon’ble Supreme Court decided that injunction orders affecting suit property cannot be issued without impleading or hearing third parties who are directly impacted

By: Hemani Khadai

The Karnataka High Court, in its common judgment/order, granted an injunction against alienation to the extent of 1/7th share in the suit property without giving third parties (appellants) an opportunity to be heard as they had right, title, or interest in the property by way of development agreements and/or otherwise. This judgment was set aside by a bench of the Hon’ble Supreme Court consisting of Justice M.R. Shah and Justice B.V. Nagarathna. 

As per the facts of the case, the plaintiffs and defendants sought a declaration on their entitlement to their mother’s property, i.e., 1/7th share, and prayed for a decree for partition & separate possession. 

Round 1

Subsequently, another application was filed for seeking an ex-parte ad-interim injunction on the property. Initially, the trial court granted an ex-parte injunction restraining the defendants in the suit from alienating, creating any charge or third party interest upon the properties in the suit. 

Later, the trial court denied the interim injunction application and declined to grant an interim injunction in favor of the plaintiffs, citing the fact that certain of the suit schedule properties are clearly owned by firms/trusts/companies that have not been made parties to the suit.

Round 2

Aggrieved by the order passed by the trial Court refusing to grant an injunction, the plaintiffs further filed distinguished appeals before the High Court. The High Court partly allowed the said appeals and modified the order passed by the trial Court in the interim injunction application and directed to issue restraint order till the final disposal of the case. 

The High Court also clarified that any activity such as construction, improvements, whether fresh or modification conducted over the schedule properties, will be at the risk of the acting party and, in the end, shall not be entitled to claim equity.

Round 3 (Present Appeal by third parties)

The third parties to the suit preferred the present appeals due to dissatisfaction with the High Court’s impugned joint judgment/order granting an injunction to the extent of 1/7th share in the total plaint schedule properties.

The Third parties, on the basis of development agreements and/or otherwise, claimed to have a right, title, or interest in some of the properties on which an injunction was obtained. As a result, they are directly affected by the High Court’s temporary injunction. They were not constituted as parties to the complaint, and the injunction was granted without hearing them w.r.t. the properties in which they are claiming right, title, title, or interest.

The Third Parties submitted that “the learned trial Court specifically observed while refusing to grant an injunction that some of the properties are standing in the name of the firms/trusts/companies and admittedly the said entities have not been made parties to the suit. Despite the above, the High Court has granted injunction with respect to properties in which the appellants claim right, title or interest, without impleading the appellants and without giving them an opportunity of being heard.”

The Hon’ble Supreme Court Observed, “before granting any injunction with respect to the properties in which the appellants herein (proposed defendants) are claiming right, title or interest on the basis of the development agreements or otherwise they ought to have been given an opportunity of being heard.”

The Court remarked that some properties are clearly owned by firms/trusts/companies that have not been made parties to the litigation.

Eventually, the impugned common judgment/ order passed by the High Court granting injunction with respect to 1/7th share in the total plaint schedule properties was held unsustainable, quashed, and set aside as ; 

  1. It was passed without giving an opportunity of being heard to the third parties; 
  2. It was passed without impleading the third parties as party defendants in the suit by the learned trial Court.

The Court held that the judgment had been passed without giving an opportunity of being heard to the appellants and without impleading them as party-defendants in the suit by the learned trial Court. Hence, it is unsustainable and deserves to be quashed and set aside. 

For the reasons stated above, the Supreme Court allowed all these appeals.

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