Karnataka HC Lets Developer Continue Construction On Disputed Property, But Bars Equity Claim If Plaintiff Wins

The plaintiff brought O.S. No. 3648/2014 seeking a declaration of ownership over the suit properties, declarations that specified sale deeds were null and void, and a permanent injunction.

In 2019, the trial court found that the plaintiff had not established a prima facie case and that the defendants had produced documents supporting their claimed rights and construction on the properties, but directed the parties to maintain status quo.

Defendant No. 16, Sri Krishna Homes, appealed that order and separately appealed the 2025 rejection of its application under Order 39 Rule 4 CPC to modify the status-quo order and permit interior work on the building.

Under the principles governing interim injunctions, the applicant must establish a prima facie case, balance of convenience, and likely irreparable injury; where a prima facie case is not established, the remaining considerations do not independently justify an injunction.

An order of status quo should specify what status is to be preserved—such as possession or the nature of the property—because an unqualified direction may create ambiguity and injustice.

Interlocutory orders preserving the status quo may be varied on proof of new facts or circumstances.

The appeals were brought under Order 43 Rule 1(r) read with Section 104 CPC; the modification application was under Order 39 Rule 4 read with Section 151 CPC.

The High Court held that the trial court’s status-quo direction was unsustainable because the trial court had found that the plaintiff had not made out a prima facie case, while also noting documents supporting the defendants’ claimed rights and construction on the property; moreover, the order did not specify the status to be preserved.

As to I.A. No. 3, the trial court had rejected modification solely for want of changed circumstances, without adequately considering the documents concerning the construction, the property’s use, the suit’s prolonged pendency, and the asserted loan-interest burden.

The Court therefore found error in both orders, while leaving the underlying title and disputed facts for trial.

The orders dated 27 May 2019 on I.A. Nos. 2 and 5 and 22 March 2025 on I.A. No. 3 were set aside, and the status-quo order was vacated.

Defendant No. 16 was permitted to proceed with construction, but any construction remains subject to the outcome of the suit; if the plaintiff succeeds, defendant No. 16 may not claim equity on the basis of that construction.

The Court expressed no opinion on title and kept all parties’ contentions open.