Jammu and Kashmir High Court rules lease agreement determinable by nature, denying specific performance and interim relief.
In a significant judgment, the Jammu and Kashmir High Court has dismissed an appeal filed by Hakeem Irfan and others against the Chairman of J&K Bank Ltd., affirming the trial court's decision to deny interim injunction against the termination of a lease agreement. The judgment, delivered by Justice Sanjay Dhar, underscored the determinable nature of lease agreements and reiterated that such contracts cannot be specifically enforced as per the Specific Relief Act, 1963.
The appellants, who leased a commercial property to J&K Bank, sought a declaration of the bank’s actions as illegal and demanded specific performance of the lease contract. They contended that the bank was planning to vacate the premises before the lease expired, causing them financial loss. The lease agreement, originally set for 15 years, included a clause allowing the bank to terminate the lease with one month's notice or by paying one month's rent.
The bank defended its decision, stating it was based on commercial viability and public demand, and argued that the lease agreement explicitly granted them the right to terminate the lease under the specified conditions. The trial court had previously dismissed the appellants' application for interim injunction, stating that the agreement was inherently determinable, thus precluding specific performance.
In affirming the trial court's decision, Justice Dhar emphasized that agreements which include clauses for termination at the discretion of either party are inherently determinable, as per Section 14(d) of the Specific Relief Act. Consequently, interim injunctions or specific performance of such agreements cannot be granted.
The judgment referenced precedents from the Delhi High Court and the Supreme Court, highlighting similar interpretations of determinable agreements. The court noted that the appellants did not challenge the termination clause nor sought its declaration as void in the trial court. Thus, without a prima facie case, interim relief was deemed inappropriate.
This ruling reinforces the principle that lease agreements with termination clauses are inherently determinable, providing clarity on the enforceability of such contracts. The dismissal of the appeal underscores the judiciary's adherence to statutory provisions, ensuring contractual terms are upheld unless legally contested.
Bottom Line:
Lease agreement determinable by its nature cannot be specifically enforced or granted interim injunction under Section 14(d) of the Specific Relief Act, 1963.
Statutory provision(s): Specific Relief Act, 1963 Section 14(d), Transfer of Property Act, 1882 Sections 111(c), 108(q), Civil Procedure Code, 1908 Order 39, Rule 1 and 2.
Hakeem Irfan v. Chairman J&K Bank Ltd., (Jammu And Kashmir)(Srinagar) : Law Finder Doc Id # 2823760
