Justice secured by the SC for buyers of apartments

Thursday, 16 August 2012 00:58 - - {{hitsCtrl.values.hits}}

By S.S. Selvanayagam

The Supreme Court dismissed an appeal made by the Superior Palayakat (Pvt.) Ltd against the order of the Commercial High Court granting an Interim Injunction restraining it from placing any person in possession or occupation in the apartments in the building constructed/being constructed on the land to be sold under mortgage bond.

Justice Suresh Chandra with Justices Saleem Marsoof and K. Sripavan agreeing in his judgment affirmed the order of the Commercial High Court.

Phoenix Ventures Ltd. in the Commercial High Court obtained an Interim Injunction against the defendant Superior Palayakat restraining it from placing any party in the mortgaged property.

Phoenix Ventures Ltd had entered into 17 sale and purchase agreement with Superior Palayakat to sell 17 apartments of the Palais Maharaj which was at that time under construction.

The said parties further executed a mortgage bond to secure a sum of Rs. 170 million in the event that the Superior Palayakat breached the said 17 agreements by not delivering the said completed 17 apartments as agreed upon.

Superior Palayakat aggrieved by the said decision of the Commercial High Court made an appeal to the Supreme Court to vacate the said Interim Injunction. It complained to the Supreme Court that the claim of the Phoenix Ventures was only to recover a sum of Rs. 170 million on the said 17 agreements and that the Interim Injunction granted was too wide as it prevented Superior Palayakat from selling all 88 apartments in the proposed condominium building whereas the Phoenix Ventures at most had rights only to 17 apartments.

It also complained that consequently the Phoenix Ventures prevented it from selling the apartments to third parties and settling the Phoenix Ventures sums due on the 17 agreements.

The Supreme Court in its judgment observed that the objective of the Phoenix Ventures to seek an Interim Injunction against the Superior Palayakat was to prevent it from placing or putting into possession of the building third parties which would jeopardise the interest of Phoenix Ventures to recover monies due to it on the said 17 agreements secured by the said mortgage bond.

Court also observed that the Superior Palayakat was under a misapprehension that the Interim Injunction against it prevented it from developing and completing the apartments.

President’s Counsel Romesh de Silva with Geethaka Gunewardena appeared for the Superior Palayakat Kushan De Alwis with Manoj Bandara instructed by Sudath Perera Associates appeared for the Phoenix Ventures.