Interlocutory injunctions in development disputes: appellate courts will not halt construction on a substantially complete project without strong grounds.
Appellate interference with an interlocutory injunction is limited to cases where the trial court's discretion is arbitrary, capricious, perverse, or contrary to settled principles, and the prima facie case, balance of convenience, and irreparable injury tests must all be met. On that footing, no basis was found to disturb the trial court's order. Because the development project was substantially complete, involved multiple purchasers, and was RERA-registered, the court declined to restrain construction or impose a blanket prohibition on sale activities. It accepted a protective undertaking on minimum sale price, kept the project moving, and left the parties to seek further interim relief before the arbitral tribunal under Section 17.
Issues: (i) Whether the appellate court should interfere with the trial court's discretionary order granting and refusing interim injunctions in a dispute arising out of development agreements. (ii) Whether, on the facts, the parties had made out a case for restraining construction or sale activities, and what interim arrangement should govern the dispute pending arbitration.
Issue (i): Whether the appellate court should interfere with the trial court's discretionary order granting and refusing interim injunctions in a dispute arising out of development agreements.
Analysis: Interference with an interlocutory injunction order is confined to cases where the discretion is shown to be arbitrary, capricious, perverse, or contrary to settled principles. The governing tests of prima facie case, balance of convenience, and irreparable injury must coexist. Even where the enforceability of the underlying agreements is arguable and specific performance of a pure construction arrangement may be disputed, the appellate court does not substitute its own view merely because another conclusion is possible.
Conclusion: No ground was made out to disturb the trial court's exercise of discretion on principle.
Issue (ii): Whether, on the facts, the parties had made out a case for restraining construction or sale activities, and what interim arrangement should govern the dispute pending arbitration.
Analysis: The project was substantially complete, involved multiple purchasers, and was a RERA-registered development where delay would prejudice not only the contracting parties but also third-party allottees. The court accepted that allegations of underpricing and cash dealings warranted a protective condition, but found no basis to halt the construction or to impose a blanket restraint on the respondents. It also held that the appellant could not rely on an unfiled or belated undertaking to seek wider relief, while the respondents' undertaking not to sell below a specified rate could be accepted. The dispute was left to arbitration, with liberty to seek interim relief before the arbitral tribunal under Section 17.
Conclusion: Interim restraint on construction was declined, the respondents were bound by the accepted undertaking on minimum sale price, and the matter was left to be pursued before the arbitral tribunal.
Final Conclusion: The appeals resulted in a modified interim arrangement that preserved the project's progress, protected purchaser interests, and left the parties to pursue interim relief before the arbitrator.
Ratio Decidendi: In interlocutory matters, appellate interference is limited, and where a substantially progressed development project involves third-party purchasers, the court may decline to halt construction even if some prima facie contractual objections exist, while imposing tailored protective conditions and leaving further interim relief to arbitration.
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