Introduction
In a significant development concerning enforcement of interim relief and the sanctity of injunctive orders, the Delhi court passed an order on 28 April 2025 in Cont. Cas (C) No. 1744/2024, in the matter of M/s Rhine Power Pvt. Ltd. v. M/s Ramprastha Promoters and Developers Pvt. Ltd. & Ors. The court decisively restrained further alienation of certain flats in Gurugram, which had allegedly been transferred by the respondents in violation of prior judicial directions.
Background of the Case
M/s Rhine Power Pvt. Ltd. had advanced ₹7.33 crores to the respondents, who, by way of five Agreements to Sell dated 27 September 2018, promised to transfer 21 flats in the “PRIMERA” complex in Sector 37-D, Gurugram.
Out of these, two agreements were later cancelled under a buy-back clause. However, 15 flats remained to be transferred. The petitioner alleged that the respondents failed to convey the said flats and had instead started creating third-party rights in violation of an injunction order dated 2 June 2023.
Legal Proceedings & Issues
Upon apprehension of unlawful dispossession, the petitioner approached the court under Section 9 of the Arbitration and Conciliation Act, 1996. An interim order was passed on 2 June 2023, restraining any third-party creation of rights or parting of possession.
Despite this, it was later discovered via affidavits and arbitration proceedings that respondent no.1 had transferred possession of most of the flats after the injunction came into effect. Thus, a contempt petition was filed by the petitioner.
Key Legal Issues
- Whether the transfer of possession and execution of agreements post-injunction constituted wilful disobedience?
- Whether the court could grant interim relief barring further alienation despite the matter being under arbitration?
- Could transactions already executed be reversed or declared void?
Respondents’ Contentions
- The respondents admitted to transferring possession but argued no wilful contempt, claiming procedural ambiguities.
- They relied on arbitral orders acknowledging ongoing proceedings and a ₹3 crore bank guarantee.
- They cited Indus Tower Ltd. v. Quadrant Televentures Ltd. to argue that disputed facts cannot form basis for contempt.
Petitioner’s Arguments
- The petitioner relied heavily on the principle that no party should be allowed to benefit from its own contempt.
- Cited case law included:
- Balwantbhai Somabhai Bhandari v. Hiralal Somabhai Contractor (2023) 17 SCC 545
- Prestige Lights Ltd. v. SBI (2007) 8 SCC 449
- DDA v. Skipper Construction Co. (P) Ltd. (1996) 4 SCC 622
- They submitted that the flats must be protected, and any further transaction be barred to prevent the respondents from enjoying the fruits of unlawful conduct.
Court’s Analysis & Reasoning
Justice Anish Dayal held that the respondents were prima facie in contempt of the injunction dated 2 June 2023. The court noted:
- Agreements were executed after the injunction.
- Possession was parted despite judicial restraint.
- Respondents failed to comply with disclosure directions of the Arbitral Tribunal.
Citing Balwantbhai Somabhai, the court reiterated that:
“Although the transfer may not be void ab initio, courts are empowered to declare such transactions void in contempt proceedings to uphold the majesty of law.”
The court also emphasized that third-party purchasers, even bona fide, have no locus in contempt proceedings and cannot benefit from transactions violative of court orders.
Final Orders
- Interim restraint on any further sale, transfer, or alienation of the 15 disputed flats.
- Sub-Registrar, Kadipur, Gurugram barred from registering any deeds concerning these flats.
- Respondents directed to serve the order on third parties who took possession.
- No coercive action for now — reserved for future adjudication.
FAQs:
1. What was the dispute in the Ramprastha flats case?
The builder transferred flats after a court injunction, leading to a contempt petition to stop further sale and protect buyer rights.
2. Can a court stop property transfers during a dispute?
Yes, if there’s an injunction in place, courts can stop sale or possession transfers to prevent contempt.
3. What happens if property is sold in contempt of a court order?
The court can declare such transfers void to uphold the law and prevent unjust benefit to the violator.
4. Do third-party buyers have protection if they purchase in good faith?
Not if the property is under a court order. Courts have held even bona fide buyers can’t benefit from contemptuous transactions.
5. Is contempt limited to disobeying final orders?
No, disobeying interim or interlocutory orders, such as injunctions, can also be punished as contempt.
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