Supreme Court of India
Martin Burn Ltd vs R.N Banerjee on 20 September, 1957
prima facie case does not mean a case proved to the hilt but a case which can be said to be established if the evidence which is led in support of the same were believed. While determining whether a prima facie case had been made out the relevant consideration is whether on the evidence led it was possible to arrive at the conclusion in question and not whether that was the only conclusion which could be arrived at on that evidence. It may be that the Tribunal considering this question may itself have arrived at a different conclusion. It has, however, not to substitute its own judgment for the judgment in question. It has only got to consider whether the view taken is a possible view on the evidence on the record.
(The interlocutory remedy is intended to preserve in status quo, the rights of parties which may appear on a prima facie case. The court also, in restraining a defendant from exercising what he considers his legal right but what the plaintiff would like to be prevented, puts into the scales, as a relevant consideration whether the defendant has yet to commence his enterprise or whether he has already been doing so in which latter case considerations somewhat different from those that apply to a case where the defendant is yet to commence his enterprise, are attracted."
At this juncture, however, the decision of the House of Lords in American Cyanamid's case though raised certain eye-brows lately, ought to be considered in slightly more greater detail. Lord Diplock in Cyanamid's case laid down the following guiding principles for the grant of interlocutory injunction: (1) "The plaintiff must first satisfy the Court that there is a serious issue to decide and that if the defendants were not restrained and the plaintiff won the action, damages at common law would be inadequate compensation for the plaintiff's loss.
(2) The Court, once satisfied of these matters will then consider whether the balance of convenience lies in favour of granting injunction or not, that is, whether justice would be best served by an order of injunction.
(3) The Court does not and cannot judge the merits of the parties `s respective cases and that any decision of justice will be taken in a state of uncertainty about the parties' rights."
It would seem to follow therefore, that what should be borne in mind, in addition to what has been phrased in Lord Diplock's speech, is that if there is uncertainty, the Court should be doubly reluctant to issue an injunction, the effect of which is to settle the parties' rights once for all. On a clear analysis of the speech of Lord Diplock, it appears that if damages, recoverable at common law, would be an adequate remedy and the defendant would be in a financial position to pay the same, no interlocutory injunction should normally be granted, howsoever strong the plaintiff's claim appear to be at that stage. Lord Diplock went on to observe further that in the event of there being any doubt, as to the adequacy of the respective remedies and damages available to either party or both, then and in that event, the question of balance of convenience arises and the same will vary from case to case. Similar view has also been expressed by the House of Lords in the case of Dimbleby & Sons Ltd Vs. National Union of journalists.
While exercising the discretion the court applies the following tests - (i) whether the plaintiff has a prima facie case;
(ii) whether the balance of convenience is in favour of the plaintiff; and (iii) whether the plaintiff would suffer an irreparable injury if his prayer for interlocutory injunction is disallowed. The decision whether or not to grant an interlocutory injunction has to be taken at a time when the existence of the legal right assailed by the plaintiff and its alleged violation are both contested and uncertain and remain uncertain till they are established at the trial on evidence. Relief by way of interlocutory injunction is granted to mitigate the risk of injustice to the plaintiff during the period before that uncertainty could be resolved. The object of the interlocutory injunction is to protect the plaintiff against injury by violation of his right for which he could not be adequately compensated in damages recoverable in the action if the uncertainty were resolved in his favour at the trial. The need for such protection, has, however, to be weighed against the corresponding need of the defendant to be protected against injury resulting from his having been prevented from exercising his own legal rights for which he could not be adequately compensated. The court must weigh one need against another and determine where the "balance of convenience" lies. (see: Wander Ltd. Vs. Antox India (P) Ltd, (1990 (supp) SCC at pp.731-32.) In order to protect the defendant while granting an interlocutory injunction in his favour the court can require the plaintiff to furnish an undertaking so that the defendant can be adequately compensated if the uncertainty were resolved in his favour at the trial".)
Supreme Court of India
Colgate Palmolive (India) Ltd vs Hindustan Lever Ltd on 18 August, 1999
We, however, think it fit to note herein below certain specific considerations in the matter of grant of interlocutory injunction, the basic being-non-expression of opinion as to the merits of the matter by the Court, since the issue of grant of injunction usually, is at the earliest possible stage so far as the time frame is concerned. The other considerations which ought to weigh with the Court hearing the application or petition for the grant of injunctions are as below:- (i) Extent of damages being an adequate remedy;
(ii) Protect the plaintiff's interest for violation of his rights though however having regard to the injury that may be suffered by the defendants by reason therefor; (iii) The court while dealing with the matter ought not to ignore the factum of strength of one party's case being stronger than the others; (iv) No fixed rules or notions ought to be had in the matter of grant of injunction but on the facts and circumstances of each case - the relief being kept flexible;
(v) The issue is to be looked from the point of view as to whether on refusal of the injunction the plaintiff would suffer irreparable loss and injury keeping in view the strength of the parties case; (vi) Balance of convenience or inconvenience ought to be considered as an important requirement even if there is a serious question or prima facie case in support of the grant; (vii) Whether the grant or refusal of injunction will adversly affect the interest of general public which can or cannot be compensated otherwise.
Supreme Court of India
M/S Gujarat Bottling Co.Ltd. & Ors vs The Coca Cola Co. & Ors on 4 August, 1995
UNder order 39 of the Code of Civil Procedure, jurisdiction of the Court to interfere with an order of interlocutory or temporary injuction is purely equitable and, therefore, the Court, on being approached, will, apart from other considerations, also look to the conduct of the party invoking the jurisdiction of the Court, and may refuse to interfere unless his conduct was free from blame. Since the relief is wholly equitable in nature, the party invoking the jurisdictionb of the court has to show that he himselff was not at fault and that he himself was not responsible for bringing about the state of things complained of and that he was not unfair or inequitable in his dealings with the partyh against whom he was seeking relief. His conduct should be fair and honest. These considerations will arise not only in respect of the person who seeks an order of injuction under order 39 Rule 1 or Rule 2 of the Code of Civil Procedure, but also in respect of the party approaching the Court for vacating the ad-interim or temporary injuction order already granted in the pending suit or proceedings.
Analysing the conduct of the GBC in the light of the above principles, it will be seen that GBC, who was a party to the 1993 Agreement, has not acted in conformity with the terns set out in the said agreement. It was itself, Prima facie, resposible for the breach of the agreement, as would be evidenmt from the facts set out earlier. neither the consent of Coca Cola was obtained for transfer of shares of GBC not Coca Cola informed of the names of persons to whom the shares were proposed to be transferred. coca Cola, therefore, had the right to terminate the agreement but it did not do so. On the contrary, GBC itself issued the notice for terminating the agreements by giving three months notice It is contended by Shri nariman And, in our opinion, rightly, that the GBC, having itself acted in violation of the terms of agreement and ahaving breached the contract, cannot legally claim that the order or injuction be vocated particularly as th GBC itself is primarily reponsible for having brought about the state of things complained of by it. Since GBC has acted in an unfair and inequitable m,anner in its dealings with Coca Cola, there was hardly and any occasion to vacant the injuction order and the order passed by the Bombay High Court cannot be interferred with not even on the ground of closure of factory, as the party responsible, prima facie, for breach of contract cannot be permitted to raise this grievance.
Supreme Court of India
Manohar Lal Chopra vs Rai Bahadur Rao Raja Seth Hiralal on 16 November, 1961
"We are of opinion that the latter view is correct and that the Courts have inherent jurisdiction to issue temporary injunctions in circumstances which are not covered by the provisions of O.XXXIX, Code of Civil Procedure. There is no such expression in s. 94 which expressly prohibits the issue of a temporary injunction in circumstances not covered by O. XXXIX or by any rules made under the Code. It is well-settled that the provisions of the Code are not exhaustive for the simple reason that the Legislature is incapable of contemplating all the possible circumstances which may arise in future litigation and consequently for providing the procedure for them. The effect of the expression 'if it is so prescribed' is only this that when the rules prescribe the circumstances in which the temporary injunction can be issued, ordinarily the Court is not to use its inherent powers to make the necessary orders in the interests of justice, but is merely to see whether the circumstances of the case bring it within the prescribed rule. if the provisions of s. 94 were not there in the Code, the Court could still issue temporary injunctions, but it could do that in the exercise of its inherent jurisdiction. No party has a right to insist on the Court's exercising that jurisdiction and the Court exercises its inherent jurisdiction only when it considers it absolutely necessary for the ends of justice to do so. it is in the incidence of the exercise of the power of the Court to issue temporary injunction that the provisions of s. 94 of the Code have their effect and not in taking away the right of the Court to exercise its inherent powers."
Rajendraprasad R. Singh vs The Municipal Corpn. Of Gr. Bombay ... on 24 January, 2003
7. Rule 1 or Rule 2 of Order 39 are repository of the power to grant injunction. An order of injunction is always passed under Rule 1 or Rule 2 Order 39 save and except rare orders passed under Section 151 of the Code of Civil Procedure. Rule 1 and Rule 2 of Order 39 do not use the words "interim or ad interim". These are the words coined by the lawyers and the courts merely to indicate the stage at which orders are passed. Interim order usually remains in force for whole of the period of the suit unless varied under Rule 4 or set aside in appeal. Ad interim order operates only till the hearing of the application for injunction. Usually, ad interim order is passed ex parte though it can also be passed when otherwise is present. It is possible that in a given case at the time of institution of a suit, the plaintiff does not make an application for an order of interim injunction as he feels no necessity in which case only summons of the suit is issued to the defendant. During the pendency of the suit, a contingency may arise requiring the plaintiff to apply for an injunction. When such an application is made and when the defendant is present and seeks time to file reply, the court may pass ad interim order of injunction pending reply of the defendant. In some cases, even after the reply is filed by the defendants the court may grant ad interim order of injunction if it does not have time to hear the matter and feels that it is necessary to grant injunction pending hearing to protect the plaintiff pending hearing of the application. Thus, ad interim order of injunction may be ex parte or may be passed even in the presence of the defendants. There is no qualitative difference between an interim and ad interim order except about the period for which they operate and the stage at which they are passed. If so the order refusing an ad interim injunction is as much appealable as an order refusing an interim injunction.
8. Rule 3 of Order 39 mandates issuance of a notice by the court to the opposite party before passing of an injunction to prevent injustice that may be caused to the opposite side by gnat of an order of injunction without giving it an opportunity of being heard. However, the refusal to grant an exparte order or postponing of the grant until the notice is served on the opposite side itself can cause an injustice to the plaintiff in some cases. For example where the plaintiff alleges that the defendant is likely to dispossess him on the very day and the Court is prima facie satisfied about the truth of the allegation and about the plaintiff's right to insist upon a notice to be served on the opposite side before grant of any order may defeat, the very purpose of the suit. In order to prevent such a situation, proviso to Rule 3 of Order 39 empowers the court to grant an injunction ex parte injunction before giving a notice to the other side if the court is satisfied that the object of granting of an injunction would be defeated by delay and the court records reasons for such an opinion. A further safeguard is introduced requiring the person claiming ex parte injunction to send to the opposite party by registered post immediately after the order of injunction, a copy of the injunction application together with the affidavit in support of the injunction application, copy of the plaint and copies of documents on which he relies. These are procedural safeguards. Rule 3 only prescribes the procedure for grant of an injunction and is not the repository of the power to grant injunction. Rule 3 would be superfluous and would not exist without Rules 1 and 2 of Order 39. The order, be it of a grant or of postponing the grant untill service of notice is essentially passed in exercise of the powers under Rule 1 or 2 of Order 39.
Supreme Court of India
Dalpat Kumar And Anr. vs Prahlad Singh And Ors. on 16 December, 1991
Order 39, Rule 1(c) provides that temporary injunction may be granted where, in any suit, it is proved by the affidavit or otherwise, that the defendant threatens to dispossess the plaintiff or otherwise cause injury to the plaintiff in relation to any property in dispute in the suit, the court may by order grant a temporary injunction to restrain such act or make such other order for the purpose of staying and preventing... or dispossession of the plaintiff or otherwise causing injury to the plaintiff in relation to any property in dispute in the suit as the court thinks fit until the disposal of the suit or until further orders. Pursuant to the recommendation of the Law Commission clause(c) was brought on statute by Section 88(i)(c) of the Amending Act 104 of 1966 with effect from February 1, 1977. Earlier thereto there was no express power except the inherent power under Section 151, C.P.C. to grant ad interim injunction against dispossession. Rule 1 primarily concerns with the preservation of the property in dispute till legal rights are adjudicated. Injunction is a judicial process by which a party is required to do or to refrain from doing any particular act. It is in the nature of preventive relief to a litigant to prevent future possible injury. In other words, the court in exercise of the power of granting ad interim injunction is to preserve the subject matter of the suit in the status quo for the time being. It is settled law that the grant of injunction is a discretionary relief. The exercise thereof is subject to the court satisfying that (1) there is a serious disputed question to be tried in the suit and that an act, on the facts before the court, there is probability of his being entitled to the relief asked for by the plaintiff/defendant; (2) the court's interference is necessary to protect the party from the species of injury. In other words, irreparable injury or damage would ensue before the legal right would be established at trial; and (3) that the comparative hardship or mischief or inconvenience which is likely to occur from withholding the injunction will be greater than that would be likely to arise from granting it.
5. Therefore, the burden is on the plaintiff by evidence aliunde by affidavit or otherwise that there is "a prima facie case" in his favour which needs adjudication at the trial. The existence of the prima facie right and infraction of the enjoyment of his property or the right is a condition for the grant of temporary injunction. Prima facie case is not to be confused with prima facie title which has to be established, on evidence at the trial. Only prima facie case is a substantial question raised, bona fide, which needs investigation and a decision on merits. Satisfaction that there is a prima facie case by itself is not sufficient to grant injunction. The Court further has to satisfy that non-interference by the Court would result in "irreparable injury" to the party seeking relief and that there is no other remedy available to the party except one to grant injunction and he needs protection from the consequences of apprehended injury or dispossession. Irreparable injury, however, does not mean that there must be no physical possibility of repairing the injury, but means only that the injury must be a material one, namely one that cannot be adequately compensated by way of damages. The third condition also is that "the balance of convenience" must be in favour of granting injunction. The Court while granting or refusing to grant injunction should exercise sound judicial discretion to find the amount of substantial mischief or injury which is likely to be caused to the parties, if the injunction is refused and compare it with incovenience that it is likely to be caused to the other side if the injunction is granted. If on weighing competing possibilities or probabilities of likelihood of injury and if the Court considers that pending the suit, the subject-matter should be maintained in status quo, an injunction would be issued. Thus the Court has to exercise its sound judicial discretion in granting or refusing the relief of ad interim injunction pending the suit.
6. Undoubtedly, in a suit seeking to set aside the decree, the subject-matter in the earlier suit, though became final, the Court would in an appropriate case grant ad interim injunction when the party seeks to set aside the decree on the ground of fraud pleaded in the suit or for want of jurisdiction in the Court which passed the decree. But the Court would be circumspect before granting the injunction and look to the conduct of the party, the probable injuries to either party and whether the plaintiff could be adequately compensated if injunction is refused.
DIFFERENCE BETWEEN STAY AN INJUNCTION Stay Order
An order of stay indicates stoppage, arrest or suspension of judicial proceedings. Among various other uses, an order of stay is primarily passed against execution (putting the decree into practice) of a decree (an adjudication determining the rights of the parties). A stay is made against execution of a decree to enable the judgment-debtor (the one against the interests of whom the decree has been passed) to appeal to an appellate court against such a decree (Order 21, Rule 26; Order 41, Rule 5 the CPC, 1908). Such an order prohibits commencement of any proceeding for execution of the said decree.
An order of stay of proceedings may also be made against a sale (Order 21, Rule 59), in a suit against a corporation (Order 30), in a suit involving a minor (Order 32), interpleader suits (Order 35), summary suits (Order 37), in case of reference to a High Court (Order 46). An order of stay of proceedings is available to the Civil Courts by virtue of their inherent power under Section 151 (?) as well as to the Supreme Court and the High Courts.
Injunction Order
An injunction is an order of the court compelling a person to do or not to carry out a particular action. They are of various types:
Temporary (Order 39 of the Code of Civil Procedure, 1908) and Permanent (Section 38-42 of the Specific Relief Act, 1963): The former is granted during the pendency of the suit based on various factors (preservation of status quo, balance of convenience, a prima facie case, irreparable injury, etc.) while the latter permanently prohibits or mandates a person to do certain actions.
Preventive (ones that restrain actions) and mandatory (ones that compel actions).
Ad-interim (ones granted during pendency of application and operative till its disposal) and interim (ones that are granted at disposal of application and operative till disposal of the suit).
Difference
As has become clear from the above, an injunction is applicable against a person while an order of stay operates against a court. An injunction operates as soon as it is issued but a stay order operates only when it is communicated to the court to which it is issued (Mulraj v. Murti Raghonathji Maharaj, 1967). Proceedings taken in contravention of a stay order are void ab initio while those against an injunction are not null and void but subject to punishment
Supreme Court of India
M/S Best Sellers Retail(I)P.Ltd vs M/S Aditya Birla Nuvo Ltd.& Ors on 8 May, 2012
In fact, the application for temporary injunction of respondent no.1 before the trial court is under the provisions of Order 39 Rules 1 and 2 read with Section 151 of the CPC. It has been held by this Court in Kishoresinh Ratansinh Jadeja v. Maruti Corporation & Ors. (supra) that it is well established that while passing an interim order of injunction under Order 39 Rules 1 and 2 CPC, the Court is required to consider (i) whether there is a prima facie case in favour of the plaintiff; (ii) whether the balance of convenience is in favour of passing the order of injunction; and (iii) whether the plaintiff will suffer irreparable injury if an order of injunction would not be passed as prayed for. Hence, we only have to consider whether these well-settled principles relating to grant of temporary injunction have been kept in mind by the trial court and the High Court.
Yet, the settled principle of law is that even where prima facie case is in favour of the plaintiff, the Court will refuse temporary injunction if the injury suffered by the plaintiff on account of refusal of temporary injunction was not irreparable. In Dalpat Kumar & Anr. v. Prahlad Singh & Ors. [(1992) 1 SCC 719] this Court held:
“Satisfaction that there is a prima facie case by itself is not sufficient to grant injunction. The Court further has to satisfy that non-interference by the Court would result in “irreparable injury” to the party seeking relief and that there is no other remedy available to the party except one to grant injunction and he needs protection from the consequences of apprehended injury or dispossession. Irreparable injury, however, does not mean that there must be no physical possibility of repairing the injury, but means only that the injury must be a material one, namely, one that cannot be adequately compensated by way of damages.”
EX PARTE INJUNCTION:
Supreme Court of India
Morgan Stanley Mutual Fund vs Kartick Das on 20 May, 1994
Q. 4: What are the guiding principles in relation to the grant of an ad interim injunction in such areas of the functioning of the capital market and public issues of the corporate sector and whether certain 'venue restriction clauses' would require to be evolved.judicially as has been done in cases such as Sanchaita case I etc. ?
36. As a principle, ex parte injunction could be granted only under exceptional circumstances. The factors which should weigh with the court in the grant of ex parte injunction are-
(a) whether irreparable or serious mischief will ensue to the plaintiff;
(b) whether the refusal of ex parte injunction would involve greater injustice than the grant of it would involve;
(c) the court will also consider the time at which the plaintiff first had notice of the act complained so that the making of improper order against a party in his absence is prevented;
(d) the court will consider whether the plaintiff had acquiesced for sometime and in such circumstances it will not grant ex parte injunction;
(e) the court would expect a party applying for ex parte injunction to show utmost good faith in making the application.
(f) even if granted, the ex parte injunction would be for a limited period of time.
(g) General principles like prima facie case balance of convenience and irreparable loss would also be considered by the court.
In United Commercial Bank v. Batik of India, ApesxCourt observed:"No injunction could be granted under Order 39, Rules 1 and 2 of the Code unless the plaintiffs establish that they had a prima facie case, meaning thereby that there was a bona fide contention between the parties or a serious question to be tried. The question that must necessarily arise is whether in the facts and circumstances of the case, there is a prima facie case and, if so, as between whom? In view of the legal principles applicable, it is difficult for us to say on tile material on record that the plaintiffs have a prima facie case. It cannot be disputed that if the suit were to be brought by the Bank of India, the High Court would not have granted any injunction as it was bound by the terms of the contract. What could not be done directly cannot be achieved indirectly in a suit brought by the plaintiffs. Shiv Kumar Chadha v. Municipal Corpn. of Delhi, it is stated as under:"... the court shall 'record the reasons' why an ex parte order of injunction was being passed in the facts and circumstances of a particular case. In this background, the requirement for recording the reasons for grant of ex parte injunction, cannot be held to be a mere formality. This requirement is consistent with the principle, that a party to a suit, who is being restrained from exercising a right which such party claims to exercise either under a statute or under the common law, must be informed why instead of following the requirement of Rule '1 r/w rule 3, the procedure prescribed under the proviso has been followed. The party which invokes the Jurisdiction of the court for grant of an order of restrain against a party, without affording an opportunity to him of being heard, must satisfy the court about the gravity of the situation and court has to consider briefly these factors in the ex parte order. We are quite conscious of the fact that there are other statutes which contain similar provisions requiring the court or the authority concerned to record reasons before exercising power vested in them. In respect of some of such provisions it has been held that they are required to be complied with but non-compliance therewith will not vitiate the order so passed. But same cannot be said in respect of the proviso to Rule 3 of Order 39. The Parliament has prescribed a particular procedure for passing of an order of injunction without notice to the other side, under exceptional circumstances. Such ex parte orders have far-reaching effect, as such a condition has been imposed that court must record reasons before passing such order. If it is held that the compliance with the proviso aforesaid is optional and no t obligatory, then the introduction of the proviso by the Parliament shall be a futile exercise and that part of Rule 3 will be a surplusage for all practical purposes. Proviso to Rule 3 of Order 39 of the Code, attracts the principle, that if a statute requires a thing to be done in a particular manner, it should be done in that manner or not all.
As such whenever a court considers it necessary in the facts and circumstances of a particular case to pass an order of injunction without notice to other side, it must record the reasons for doing so and should take into consideration, while passing an order of injunction, all relevant factors, including as to how the object of granting injunction itself shall be defeated if an ex parte order is not passed."
Temporary mandatory injunctions :
Dorab Cawasji Warden vs. Coomi Sorab Warden 1990 (2) SCC 117 wherein this Court held :-
"The Relief of interlocutory mandatory injunctions are granted generally to preserve or restore the status- quo of the last non-contested status which preceded the pending controversy until the final hearing when full relief may be granted or to compel the undoing of those acts that have been illegally done or the restoration of that which was wrongfully taken from the party complaining. But since the granting of such an injunction to a party who fails or would fail to establish his right at the trial may cause great injustice or irreparable harm to the party against whom it was granted or alternatively not granting of it to a party who succeeds or would succeed may equally cause great injustice or irreparable harm".(requires strict proof)
"The relief of interlocutory mandatory injunction are thus granted generally to preserve or restore the status quo of the last non-contested status which preceded the pending controversy until the final hearing when full relief may be granted or to compel the undoing of those acts that have been illegally done or the restoration of that which was wrongfully taken from the party complaining. But since the granting of such an injunction to a party who fails or would fail to establish his right at the trial may cause great injustice or irreparable harm to the party against whom it was granted or alternatively not granting of it to a party who succeeds or would succeed may equally cause great injustice or irreparable harm, courts have evolved certain guidelines. Generally stated these guidelines are :
(1) The plaintiff has a strong case for trial. That is, it shall be of a higher standard than a prima facie case that is normally required for a prohibitory injunction.
(2) It is necessary to prevent irreparable or serious injury which normally cannot be compensated in terms of money.
(3) The balance of convenience is in favour of the one seeking such relief.
Supreme Court of India
Mohd Mehtab Khan & Ors vs Khushnuma Ibrahim Khan & Ors on 24 January, 2013
here is yet another dimension to the issues arising in the present appeal. The interim relief granted to the plaintiffs by the Appellate Bench of the High Court in the present case is a mandatory direction to handover possession to the plaintiffs. Grant of mandatory interim relief requires the highest degree of satisfaction of the Court; much higher than a case involving grant of prohibitory injunction. It is, indeed, a rare power, the governing principles whereof would hardly require a reiteration inasmuch as the same which had been evolved by this Court in Dorab Cawasji Warden vs. Coomi Sorab Warden and Others[2] has come to be firmly embedded in our jurisprudence. Paras 16 and 17 of the judgment in Dorab Cawasji Warden (supra), extracted below, may be usefully remembered in this regard:
“16. The relief of interlocutory mandatory injunctions are thus granted generally to preserve or restore the status quo of the last non-contested status which preceded the pending controversy until the final hearing when full relief may be granted or to compel the undoing of those acts that have been illegally done or the restoration of that which was wrongfully taken from the party complaining. But since the granting of such an injunction to a party who fails or would fail to establish his right at the trial may cause great injustice or irreparable harm to the party against whom it was granted or alternatively not granting of it to a party who succeeds or would succeed may equally cause great injustice or irreparable harm, courts have evolved certain guidelines. Generally stated these guidelines are:
(1) The plaintiff has a strong case for trial. That is, it shall be of a higher standard than a prima facie case that is normally required for a prohibitory injunction. (2) It is necessary to prevent irreparable or serious injury which normally cannot be compensated in terms of money.
(3) The balance of convenience is in favour of the one seeking such relief.
17. Being essentially an equitable relief the grant or refusal of an interlocutory mandatory injunction shall ultimately rest in the sound judicial discretion of the court to be exercised in the light of the facts and circumstances in each case. Though the above guidelines are neither exhaustive nor complete or absolute rules, and there may be exceptional circumstances needing action, applying them as prerequisite for the grant or refusal of such injunctions would be a sound exercise of a judicial discretion.”
Order 39 Rule 3 of the CPC imposes a duty on the court before granting an injunction to issue notice to other party except in a case it appears to the trial court that the object of granting injunction would be defeated by delay and in that situation where it is proposed to grant an injunction without giving notice of the application to the opposite party, the Court shall record the reasons for its opinion that the object of granting injunction would be defeated by delay and would require to comply the application requisites as provided in sub-clauses (a) and (b) of Rule 3 of Order 39 of the CPC, but where an injunction has been granted without giving notice to the opposite party, the Court shall make attempt to decide the application for temporary injunction within thirty days from the date of granting injunction and in case the court is unable to decide within said period, it shall record its reason for not doing so. The legislative mandate of such a direction is contained in Order 39 Rule 3-A of CPC which states as under:-
"3. Before granting injunction, Court to direct notice to opposite party.-The Court shall in all cases, except where it appears that the object of granting the injunction would be defeated by the delay, before granting an injunction, direct notice of the application for the same to be given to the opposite party:
Provided that, where it is proposed to grant an injunction without giving notice of the application to the opposite party, the Court shall record the W.P.(Art.227)No.492/2015 reasons for its opinion that the object of granting injunction would be defeated by delay, and require the applicant-
(a)to deliver to the opposite party, or to send to him by registered post, immediately after the order granting the injunction has been made, a copy of the application for injunction together with-
(i) a copy of the affidavit filed in support of the application;
(ii) a copy of the plaint; and
(iii) copies of documents on which the applicant relies, and
(b) ...... ...... ........"
24. Way back, in the matter of Shiv Kumar Chadha v. Municipal Courporation of Delhi and others , the Supreme Court has cautioned the courts stating that the power to grant injunction is an extra ordinary power vessted in courts have to be more cautious when the said power is being exercised without notice or hearing to the party who is affected by the order so passed and held as under:-
"32. Power to grant injunction is an extraordinary power vested in the court to be exercised taking into consideration the facts and circumstances of a particular case. The courts have to be more cautious when the said power is being exercised without notice or hearing the party who is to be affected by the order so passed. That is why Rule 3 of Order 39 of the Code requires that in all cases the court shall, before grant of an injunction, direct notice of the application to be given to the opposite- party, except where it appears that object of granting injunction itself would be defeated by delay.
By the Civil Procedure Code (Amendment) Act, 1976, a proviso has been added to the said rule 9 saying that "where it is proposed to grant an injunction without giving notice of the application to the opposite-party, the court shall record the reasons for its opinion that the object of granting the injunction would be defeated by delay...".
33. It has come to our notice that in spite of the aforesaid statutory requirement, the courts have been passing orders of injunction before issuance of notices or hearing the parties against whom such orders are to operate without recording the reasons for passing such orders. It is said that if the reasons for grant of injunction are mentioned, a grievance can be made by the other side that court has prejudged the issues involved in the suit. According to us, this is a misconception about the nature and the scope of interim orders. It need not be pointed out that any opinion expressed in connection with an interlocutory application has no bearing and shall not affect any party, at the stage of the final adjudication. Apart from that now in view of the proviso to Rule 3 aforesaid, there is no scope for any argument. When the statute itself requires reasons to be recorded, the court cannot ignore that requirement by saying that if reasons are recorded, it may amount to expressing an opinion in favour of the plaintiff before hearing the defendant."
In the matter of A. Venkatasubbiah Naidu v. S. Chellappan and others, Their Lordships of the Supreme Court while considering the provisions contained in Order 39 Rule 3 of the CPC and held as under:-
"15. What would be the position if a court which passed the order granting interim ex parte injunction did not record reasons thereof did not require the applicant to perform the duties enumerated in clauses (a) and (b) of Rule 3 of Order 39. In our view such an order can be deemed to contain such requirements at least by implication even if they are not stated in so many words. But if a party, in whose favour an order was passed ex parte, fails to comply with the duties which he has to perform as required by the proviso quoted above, he must take the risk. Non-compliance with such requisites on his part cannot be allowed to go without any consequence and to enable him to have only the advantage of it. The consequence of the party (who secured the order) for not complying with the duties he is required to perform is that he cannot be allowed to take advantage of such order if the order is not obeyed by the other party. A disobedient beneficiary of an order cannot be heard to complain against any disobedience alleged against another party."
28. In the aforesaid judgment, Their lordships have also considered the consequence of non-compliance of Order 39 Rule 3-A of CPC and held as under:-
"19. The aforesaid Rule casts a three-pronged protection to the party against whom the ex parte injunction order was passed. First is the legal obligation that the court shall make an endeavour to finally dispose of the application of injunction within the period of thirty days. Second is, the legal obligation that if for any valid reasons the court could not finally dispose of the application within the aforesaid time the court has to record the reasons thereof in writing.
20. What would happen if a court does not do either of the courses? We have to bear in mind that in such a case the court would have bypassed the three protective humps which the legislature has provided for the safety of the person against whom the order was passed without affording him an opportunity to have a say in the matter. First is that the court is obliged to give him notice before passing the order. It is only by way of a very exceptional contingency that the court is empowered to bypass the said protective measure. Second is the statutory obligation cast on the court to pass final orders on the application within the period of thirty days. Here also it is only in very exceptional cases that the court can bypass such a rule in which cases the legislature mandates on the court to have adequate reasons for such bypassing and to record those reasons in writing. If that hump is also bypassed by the court it is difficult to hold that the party affected by the order should necessarily be the sole sufferer.
21. It is the acknowledged position of law that no party can be forced to suffer for the inaction of the court or its omissions to act according to the procedure established by law. Under the normal circumstances the aggrieved party can prefer an appeal only against an order passed under Rules 1, or 10 of Order 39 of the Code in terms of Order 43 Rule 1 of the Code. He cannot approach the appellate or revisional court during the pendency of the application for grant or vacation of temporary injunction. In such circumstances the party which does not get justice due to the inaction of the court in following the mandate of law must have a remedy. So we are of the view that in a case where the mandate of Order 39 Rule 3-A of the Code is flouted, the aggrieved party, shall be entitled to the right of appeal notwithstanding the pendency of the application for grant or vacation of a temporary injunction, against the order remaining in force. In such appeal, if preferred, the appellate court shall be obliged to entertain the appeal and further to take note of the omission of the subordinate court in complying with the provisions of Rule 3-A. In appropriate cases the appellate court, apart from granting or vacating or modifying the order of such injunction, may suggest suitable action against the erring judicial officer, including recommendation to take steps for making adverse entry in his ACRs. Failure to decide the application or vacate the ex parte temporary injunction shall, for the purposes of the appeal, be deemed to be the final order passed on the application for temporary injunction, on the date of expiry of thirty days mentioned in the Rule."
Likewise, recently the Supreme Court in matter of Ramrameshwari Devi and others v. Nirmala Devi and others has held that the court should be cautious and extremely careful while granting ex parte ad-interim injunction and Their Lordships were pleased to hold as under:-
"44. Usually the court should be cautious and extremely careful while granting ex parte ad interim injunctions. The better course for the court is to give a short notice and in some cases even dasti notice, hear both the parties and then pass suitable bipartite orders. Experience reveals that ex parte interim injunction orders in some cases can create havoc and getting them vacated or modified in our existing judicial system is a nightmare. Therefore, as a rule, the court should grant interim injunction or stay order only after hearing the defendants or the respondents and in case the court has to grant ex parte injunction in exceptional cases then while granting injunction it must record in the order that if the suit is eventually dismissed, the plaintiff or the petitioner will have to pay full restitution, actual or realistic costs and mesne profits.
45. If an ex parte injunction order is granted, then in that case an endeavour should be made to dispose of the application for injunction as expeditiously as may be possible, preferably as soon as the defendant appears in the court.
46. It is also a matter of common experience that once an ad interim injunction is granted, the plaintiff or the petitioner would make all efforts to ensure that injunction continues indefinitely. The other appropriate order can be to limit the life of the ex parte injunction or stay order for a week or so because in such cases the usual tendency of unnecessarily prolonging the matters by the plaintiffs or the petitioners after obtaining ex parte injunction orders or stay orders may not find encouragement."
Supreme Court of India
Smt. Rajnibai @ Mannubai vs Smt. Kamla Devi & Ors on 12 January, 1996
In a simple suit for declaratory nature without any consequential relief there cannot be any dispute as regards the property because the dispute is not about the property but to the entitlement of the right sought in respect of the property which itself is directly involved in the suit but not in an Interlocutory order. Consequently, it was held that the grant of interim injunction is beyond the jurisdiction of the Court under Order 39 rule 1 and 2. We are of the view that the view expressed by the High Court is not correct in law. In a suit for declaration of title simpliciter, the Court has power under Order 39, Rules 1 and 2 or even in Section 151 to grant ad interim injunction pending suit. Admittedly, the appellant is in possession of the property. In view of his apprehension that there is a threat to his possession, his only remedy wou1d be whether he will be entitled to the declaration sought for. When he seeks to protect his possession, if he is otherwise entitled according to law, necessarily the Court has to consider whether protection is to be given to him pending the suit. Merely because there is no dispute as regards the corporeal right to the property, it does not necessarily follow that he is not entitled to avail the remedy under Order 39, Rules 1 and 2 CPC. Even otherwise also, it is settled law that under Section 151 CPC, the Court has got inherent power to protect the rights of the parties pending the suit. Under these circumstances, the view expressed by the High Court that application itself is not maintainable is clearly illegal and erroneous. The application under Order 39, Rules 1 and 2 is maintainable.
INJUNCTIONS IN PATENT SUITS (same principles apply) :
Delhi High Court
Natco Pharma Limited vs Bayer Healthcare Llc on 11 July, 2019
This Court would like to preface the discussion by reference to the settled law in relation to the passing of orders of interim injunction. Illustratively, reference may be made to the decision in Wander v. Antox (1990) (Supp) SCC 727 where the legal principles were enunciated as under:
"9. Usually, the prayer for grant of an interlocutory injunction is at a stage when the existence of the legal right asserted by the plaintiff and its alleged violation are both contested and uncertain and remain uncertain till they are established at the trial on evidence. The court, at this stage, acts on certain well settled principles of administration of this form of interlocutory remedy which is both temporary and discretionary. The object of the interlocutory injunction, it is stated "...is to protect the plaintiff against injury by violation of his rights for which he could not adequately be compensated in damages recoverable in the action if the uncertainty were resolved in his favour at the trial. The need for such protection must be weighed against the corresponding need of the defendant to be protected against injury resulting from his having been prevented from exercising his own legal rights for which he could not be adequately compensated. The court must weigh one need against another and determine where the "balance of convenience lies."
The interlocutory remedy is intended to preserve in status quo, the rights of parties which may appear on a prima facie. The court also, in restraining a defendant from exercising what he considers his legal right but what the plaintiff would like to be prevented, puts into the scales, as a relevant consideration whether the defendant has yet to commence his enterprise or whether he has already been doing so in which latter case considerations somewhat different from those that apply to a case where the defendant is yet to commence his enterprise, are attracted."
18. In Dorab Cawasji Warden v. Coomi Sorab Warden (1990) 2 SCC 117, the Supreme Court explained:
"16. The relief of interlocutory mandatory injunctions are thus granted generally to preserve or restore the status quo of the last non-contested status which preceded the pending controversy until the final hearing when full relief may be granted or to compel the undoing of those acts that have been illegally done or the restoration of that which was wrongfully taken from the party complaining. But since the granting of such an injunction to a party who fails or would fail to establish his right at the trial may cause great injustice or irreparable harm to the party against whom it was granted or alternatively not granting of it to a party who succeeds or would succeed may equally cause great injustice or irreparable harm, courts have evolved certain guidelines. Generally stated these guidelines are: (1) The plaintiff has a strong case for trail. That is, it shall be of a higher standard than a prima facie case that is normally required for a prohibitory injunction.
(2) It is necessary to prevent irreparable or serious injury which normally cannot be compensated in terms of money (3) The balance of convenience is in favour of the one seeking such relief.
Being essentially an equitable relief the grant or refusal of an interlocutory mandatory injunction shall ultimately rest in the sound judicial discretion of the Court to be exercised in the light of the facts and circumstances in each case. Though the above guidelines are neither exhaustive or complete or absolute rules, and there may be exceptional circumstances needing action, applying them as prerequisite for the grant or refusal of such injunctions would be a sound exercise of a judicial discretion."
19. The decision in Dorab Cawasji (supra) has been followed by the Supreme Court in its recent judgment in Tek Singh v. Shashi Verma 2019 (3) SCALE 86, in which it clarified that "when a mandatory injunction is granted at the interim stage much more than a mere prima facie case has to be made out."
20. In Shiv Kumar Chadda v. Municipal Corporation of Delhi (1993) 3 SCC 161, reiterating the above principles, the Supreme Court held:
"30....It has been pointed out repeatedly that a party is not entitled to an order of injunction as a matter of right or course. Grant of injunction is within the discretion of the court and such discretion is to be exercised in favour of the plaintiff only if it is proved to the satisfaction of the court that unless the defendant is restrained by an order of injunction, an irreparable loss or damage will be caused to the plaintiff during the pendency of the suit. The purpose of temporary injunction is, thus, to maintain the status quo. The court grants such relief according to the legal principles - ex debito justitiae. Before any such order is passed the court must be satisfied that a strong prima facie case has been made out by the plaintiff including on the question of maintainability of the suit and the balance of convenience is in his favour and refusal of injunction would cause irreparable injury to him."
21. Matters involving alleged infringement of patents constitute a separate species of litigation. A further sub-species would be those concerning pharmaceutical patents. This is because the law concerning them under the Patents Act 1970 and other related legislation has peculiar elements that would have to be kept in view by the Court. Unsurprisingly, therefore, there is a growing volume of Indian case law dealing with the parameters that should weigh with the Court while examining the case of alleged infringement of pharmaceutical patents. While the parameters that have to generally be kept in view in all suits where interim injunctions are sought would apply in such cases as well, they would indubitably involve other parameters which have been discussed in a large number of decisions including the decision that both parties have relied upon, Merck Sharp & Dohme Corporation (supra). A further example, illustratively, is the decisions in Cipla Ltd. v. F.Hoffmann-La Roche Ltd. (2009) 40 PTC 125 (DB). The question of challenge to the validity of pharmaceutical patents has also engaged the attention of the Indian Courts at all levels. The need for the principles that would have to be kept in mind while dealing with those contentions, even at the interim injunction stage, hardly need be emphasised.
Illustratively, reference may be made to Novartis Ag v. Union of India (2013) 6 SCC 1.
22. Dr. Singhvi sought to defend the impugned order in so far as the forming of a view of the existence of a prima facie case in favour of the Plaintiff. According to him the appellate Court as „a Court of substance‟ has to go by an overall reading of the order under appeal and not by the particular wording of it. He referred to paras 12 and 13 of the impugned order and submitted that they reflected that the learned Single Judge had in effect held that the Plaintiff had a prima facie case in its favour. The said paras read as under:
"12. The senior counsel for the defendant draws attention to para no.9 of the plaint, where the plaintiff has disclosed Indian Patent No.IN 215758 also held by it and has contended that the plaintiff, while applying for Indian Patent No.IN 215758 has disclosed what is the subject matter of suit patent being Indian Patent No.IN 240207, and made a claim with respect "REGORAFENIB" but subsequently deleted the same. It is argued that Indian Patent No.IN 240207 is invalid for this reason only, because the plaintiff, after making a disclosure of Indian Patent No.IN 240207 could not have subsequently sought separate patent therefor and was not entitled thereto on account of waiver and acquiescence. It is also contended that there is no inventive step.
13. In my view same would be a ground for invalidity of the patent. The same would also be a ground for defeating the suit and if the suit is defeated, the consequences as provided in the order dated 31stMay, 2019 in Sterlite Technologies Ltd. supra would not apply."
23. The observation of the learned Single in para 14 of the impugned order on the above submission simply reads thus: "The argument of the Defendant is thus not a ground at least till the next date of hearing, for not passing interim orders in terms of Sterlite Technologies Ltd. (supra)" Far from rejecting the submission, the learned Single Judge acknowledges that it would be „a ground for invalidity of the patent‟ and would also be „a ground for defeating the suit‟. However, there is no formation of an opinion of the Plaintiff having made out a prima facie case in its favour for grant of an interim injunction. Even the order in Sterile Technologies Ltd. (supra) incorporated as it were „by reference‟ by the learned Single Judge in the impugned order does not set out any prima facie view. On the contrary, it records in para 9 that „at this stage, it is not possible to form an opinion, even prima facie‟. As regards the other two elements viz., balance of convenience and irreparable hardship, there is no mention of these, even impliedly in the impugned order.
24. Although, there are special features in litigation involving infringement of patents, that still would not obviate the Court dealing with the question of grant of interim injunction to record the three important elements as have been stressed in a large number of decisions of the Supreme Court. While the Court agrees with Dr. Singhvi that it is not necessary that the order granting or refusing interim injunction should expressly state about the above elements but a reading of the order should indicate the forming of an opinion by the Court on the said aspects. A reading of the impugned order does not reflect that the Court has formed such an opinion on the three elements.
25. Again, each case of alleged infringement of patent, particularly a pharmaceutical patent, would turn on its own facts. It is not possible to conceive an „across-the-board‟ blanket approach that would apply to all such cases, where as a matter of routine at the first hearing there would be a grant of injunction in favour of the Plaintiff. The decision in the application of interim injunction has to necessarily indicate the view of the Court on the three elements mentioned herein before and the additional features when it involves a case of alleged infringement of a patent, and in particular, a pharmaceutical patent. It is not the length of the order or its precise wording that matters. It is necessary, however, that the factors mentioned hereinbefore must be discernible from the order which comes to a conclusion one way or the other regarding grant of an interim injunction.
GLOBAL INJUNCTIONS AND GEOBLOCKING :
Delhi High Court
Swami Ramdev & Anr. vs Facebook, Inc. & Ors. on 23 October, 2019
The race between technology and the law could be termed as a hare and tortoise race - As technology gallops, the law tries to keep pace.
92. This Court is of the opinion that any injunction order passed by the Court has to be effective. The removal and disablement has to be complete in respect of the cause over which this Court has jurisdiction. It cannot be limited or partial in nature, so as to render the order of this Court completely toothless. If geo-blocking alone is permitted in respect of the entire content, there cannot be any dispute that the offending information would still reside in the global platforms of the Defendants, and would be accessible from India, not only through VPN and other mechanisms, but also by accessing the international websites of these platforms. It is not unknown that the Canadian, European and American websites of Google, Facebook, You Tube and Twitter can be accessed in India through various technological means. This would thus result in partial disabling and partial removal.
93. Orders of Courts are meant to be implemented fully and effectively. While the Defendant - platforms are raising issues in respect of comity of Courts, conflict of laws and the right of freedom of speech and expression under Article 19(1)(a), what is to be borne in mind is also the rights of privacy, the right of reputation of a citizen, national security, national integrity, threats to sovereignty, etc. The balance is always hard to seek, however, Courts can only endeavour to strike the balance. Ld. counsels for the parties have rightly raised various concerns on both sides. This Court has to implement the statute in its letter and spirit.
94. The interpretation of Section 79 as discussed hereinabove, leads this Court to the conclusion that the disabling and blocking of access has to be from the computer resource, and such resource includes a computer network, i.e., the whole network and not a mere (geographically) limited network. It is not disputed that this resource or network is controlled by the Defendants. When disabling is done by the Platforms on their own, in terms of their policies, the same is global. So, there is no reason as to why court orders ought not to be global. All offending material which has therefore, been uploaded from within India on to the Defendants‟ computer resource or computer network would have to be disabled and blocked on a global basis. Since the unlawful act in case of content uploaded from India is committed from within India, a global injunction shall operate in respect of such content. In case of uploads which take place from outside India, the unlawful act would be the dissemination of such content in India, and thus in those cases the platforms may resort to geo-blocking.
95. Insofar as Google Plus is concerned, considering that it is only a product of Google, the said Defendant is deleted from the array of parties.
96. Under these circumstances, the following directions are issued to the platforms:
i. The Defendants are directed to take down, remove block, restrict/ disable access, on a global basis, to all such videos/ weblinks/URLs in the list annexed to the plaint, which have been uploaded from I.P. addresses within India.
ii. Insofar as the URLs/links in the list annexed to the Plaint which were uploaded from outside India are concerned, the defendants are directed to block access and disable them from being viewed in the Indian domain and ensure that users in India are unable to access the same.
iii. Upon the Plaintiffs discovering that any further URLs contain defamatory/ offending content as discussed in the present order, the Plaintiffs shall notify the platforms, which shall then take down/ block access to the said URLs either on a global basis, or for the India domain, depending on from where the content has been uploaded in terms of (i) and (ii) above.
iv. If the Defendant - platforms, upon receiving notice from the Plaintiffs are of the opinion that the material/ content is not defamatory or violative, they shall intimate the Plaintiffs and the Plaintiffs would seek their remedies in accordance with law.
Whether transfer of property made in violation of injunction order is valid?
Shri Prakash Gobindram Ahuja vs Shri Ganesh Pandharinath Dhonde ... on 4 October, 2016
As against the transfer made pendent lite, the transfer made in violation of injunction order is held to be no transfer in the eyes of the law. The legal position in this respect is well settled that, if any property is alienated in the face of order of interim injunction passed by the Court, such alienation becomes ipso facto illegal and not at all binding on the parties thereto. It confers no right, title or interest on the transferee.
This legal position is very well illustrated in the Division Bench Judgment of this Court in the case of Keshrimal Jivji Shah (supra), to which one of us [Coram : S.C. Dharmadhikari, J.] was a Member.
97. The question raised before the Division Bench in this case was exactly 'as to whether the transfer of an immovable property in contravention of a prohibitory or injunction order of a Court is illegal or void?' It was argued by learned counsel for the petitioner that there is no provision either in CPC or elsewhere which makes transfer of immovable property done in violation of an injunction order or a prohibitory order, null and void. It was contended that the law visits parties acting in violation of orders of Court with serious penalties, in view of the provisions of Order XXXIX Rules 1, 2, 2A of CPC and Bombay Amendment i.e. Rule 11, but it does not render the transaction itself null and void or of no legal effect. It was urged that, once the law does not make such provision, then it is not permissible for the Courts to hold that transfer in favour of petitioners is void. It was further contended by learned counsel for the petitioners in the said case that, the right, title and interest in the immovable property does not come to an end merely because a restraint is placed by Court of law on its alienation or disposal and if this is the legal position, then, there was no impediment in respondent No.2 transferring the said property in favour of petitioners.
98. As against it, learned counsel for the respondent therein has submitted that, a transaction, which is entered into either to defeat the order of Court of law or to violate it, confers no right, title or interest in favour of the transferee. If parties are allowed to claim an advantage from a transaction, which is in violation of an order of Court of law, then, drastic consequences will follow. Entire respect for Rule of law and administration of justice is gone, if, despite prohibitory orders, immovable properties are alienated or disposed of with impunity. Such an approach is contrary to public policy.
99. While dealing with these rival contentions, this Court felt it necessary to refer to the decision of the Hon'ble Supreme Court in the case of Sujit Singh & Ors. Vs. Harbans Singh & Ors., 1995 (6) SCC 50, wherein the Hon'ble Supreme Court was pleased to observe as follows :-
"23. .................. In defiance of the restraint order, the alienation / assignment was made. If we were to let it go as such, it would defeat the ends of justice and the prevalent public policy. When the Court intends a particular state of affairs to exist while it is in seisin of a lis, that state of affairs is not only required to be maintained, but it is presumed to exist till the Court orders otherwise. The Court, in these circumstances has the duty, as also the right to treat the alienation / assignment as having not taken place at all for its purposes. Once that is so, Pritam Singh and his assignees, respondents herein, cannot claim to be impleaded as parties on the basis of assignment.
Therefore, the assignees-respondents could not have been impleaded by the trial Court as parties to the suit, in disobedience of its orders. The principles of lis pendens are altogether on a different footing. We do not propose to examine their involvement presently. All that is emphasized is that the assignees in the present facts and circumstances had no cause to be impleaded as parties to the suit. ................"
100. The Division Bench in this case also referred to the decision in Ramchandra Ganpat Shinde Vs. State of Maharashtra, 1994 (1) Bom.C.R. 460, wherein the Hon'ble Supreme Court, in paragraph Nos.12 and 13, has observed as under :-
"12. Mr. Justice Arthur J. Venderbilt in his "The Change of Law Reforms 1955" at pages 4 and 5, stated that :
............ It is the courts and not in the legislature that our citizens primarily feel the keen, the cutting edge of the law. If they have respect for the work of their courts, their respect for law will survive the short comings of every other branch of the Government; but if they lost their respect for the work of the courts, their respect for the law and order will vanish with it to the great detriment of society."
13. Respect for law is one of the cardinal principles for an effective operation of the Constitution, law and the popular Government. The faith of the people is the source and succor to invigorate justice intertwined with the efficacy of law. The principle of justice is ingrained in our conscience and though ours is a nascent democracy which has now taken deep roots in our ethos of adjudication - be it judicial, quasi judicial or administrative as hallmark, the faith of the people in the efficacy of judicial process would be disillusioned, if the parties are permitted to abuse its process and allowed to go scot free. It is but the primary duty and highest responsibility of the Court to correct such orders at the earliest and restore the confidence of the litigant public, in the purity of fountain of justice; remove stains on the efficacy of judicial adjudication and respect for rule of law, lest people would lose faith in the courts and take recourse to extra constitutional remedies which is a death-knell to the rule of law."
101. The Division Bench then also made reference to the case of Satya Brata Biswal Vs. Kalyan Kumar Kisku & Ors., AIR 1994 SC 1837, in which, while outlining the importance of rule of law, administration of justice and the role of courts, the Supreme Court has observed :
"29. Apart from the fact whether A.K. Ghosh had a legal authority to sub-lease or not, it was not open to him to grant a sub-lease in violation of the order. It is no use contending as Mr. Chidambaram, learned counsel for the respondents, does, that there was a bar to such a sub-lease under the terms of the status qua order. It has the effect of violating the preservation of status of the property. This will all the more be so when this was done without the leave of the Court to disturb the state of things as they then stood. It would amount to violation of the order. The principle contained in the maxim : Aactus Curiae Neminem Gravatt" has no application at all to the facts of this case when in violation of status qua order a sub-tenancy has been created. Equally, the contention that even a trespasser cannot be evicted without recourse to law is without merit, because the state of affairs in relation to property as on 15-9-1988 is what the Court is concerned with.
Such an order be circumvented by parties with impunity and expect the Court to confer its blessings. It does not matter that to the contempt proceedings Somani Builders was not a party. It cannot gain an advantage in derogation of the rights of the parties, who were litigating originally. If the right of sub-tenancy is recognized, how is status qua as of 15-9-1988 maintained? Hence, the grant of sub-lease contrary to the order of status-quo is clearly illegal. All actions including the grant of sub-lease are clearly illegal."
102. The Division Bench then expressed its inability to accept the contention of petitioners' counsel that, the decision of the Supreme Court in Sujit Singh's case (supra) should be read as restricted to proceedings under Order XXII Rule 10 CPC and the same cannot be extended to defiance of injunction order issued under Order XXXIX Rule 1 CPC. It was held in paragraph No.26 that;
"26. ................. Once the issue is placed on the pedestal of public policy and the very faith of litigants in Rule of law and administration of justice, then it is not possible to make the distinction or bifurcation suggested by Shri. Naphade. It would mean that consequences of nullifying such transaction not being provided by the statute, it would not lose its legal efficacy even if it is in utter disregard to or in violation of or breach of prohibitory order or order of injunction issued by a Court of law. It would mean that parties can breach and violate Court orders openly and with impunity and neither they nor the beneficiaries suffer any consequences. It is time that we recognize the principle that transfer of immovable property in violation of an order of injunction or prohibition issued by Court of law, confers no right, title or interest in the transferee, as it is no transfer at all. The transferee cannot be allowed to reap advantage or benefit from such transfer merely because he is not party to the proceedings in which order of injunction or other prohibitory direction or restraint came to be issued. It is enough that the transferor is a party and the order was in force. These two conditions being satisfied, the transfer must not be upheld. If this course is not adopted, then the tendency to flout orders of courts which is increasing day by day can never be curbed. The Court exercises its powers on the foundation of respect and regard for its authority by litigating public. People would loose faith and respect completely if the Court does not curb and prevent this tendency. The note of caution of the Supreme Court must be consistently at the back of everybody's mind. Therefore, Shri. Naphade is not right in the distinction which he is trying to make." [Emphasis Supplied]
103. The Division Bench was also pleased to reject the contention of the learned counsel for the petitioners therein that, the order of injunction will bind only the transferor and not the world at large, as ownership rights are neither taken away nor restricted in any manner by order of injunction or other preventing directions. It was held that, "the order of injunction reaches and touches a party to the lis. Hence, when during pendency of an order of injunction, immovable property, which is subject-matter of restraint or injunction, is transferred, there is no choice but to declare the transaction as illegal." [Emphasis Supplied].
104. It was further held that, "an order issuing interlocutory injunction is issued with a view to preserve and protect the status-quo during the pendency of litigation. The true effect of such an order is, therefore, preservation of status-quo prevailing as on the date of issuance of the order. Any alteration in the status qua as prevailing and directed to be maintained by the Court of law is not permissible except with leave or sanction of Court. It is well settled that if courts are not to honour and implement their own orders and encourage party litigants, be they public authorities, to invent methods of their own to short circuit and give a go by to the obligations and liabilities incurred by them under orders of courts, the Rule of law will become casualty in the process - a consequence to be jealously avoided? by all and at any rate by the highest courts in the State."
105. The Court in this case was also pleased to hold that, "the Court cannot allow a party to get away with violation of its prohibitory orders and uphold the transactions contrary to and in violation of its directions on the spacious plea that only way in which the Court can regulate such acts is to visit the guilty party with penalties. It is time that the Courts reach the transaction itself and put an end to purported rights created thereby.
Failing which, it will become possible for the parties to retain fruits and benefits of such acts by suffering penalties. It is well settled that no person can take advantage of his own wrong."
106. Thus, this Court came to the categorical conclusion that a prohibitory order has the effect of placing restriction on powers of disposition and respondent No.2 therein could not have illegally created a sub-lease in favour of the petitioners. In unflinching words, it was held that, "the transfer despite the order of injunction had no legal effect and such transfer was illegal and cannot be recognized. Consequently, transferee gets no valid title nor does he acquire any rights or interests in the immovable property." [Emphasis Supplied].
107. In the case of Satya Brata Biswal Vs. Kalyan Kumar Kisku & Ors.
(supra) relied upon by learned senior counsel for the appellant in this appeal also, the Supreme Court was also pleased to hold that, the granting of sub-lease contrary to the order of status-quo, which was done in the teeth of such order, is clearly illegal and all actions taken, including the grant of sub-lease, are clearly illegal. It was held that, such an order of status-quo, as passed by the Court, cannot be circumvented by parties with impunity and expect the Court to confer its blessings. It does not matter that to the contempt proceedings, sub-lessee was not a party. It cannot gain an advantage in derogation to the rights of the parties, who were litigating originally. [Emphasis Supplied]
108. Thus, it is apparent that, both, "the Principle of Lis Pendens" and "the order of temporary injunction", have not only different objects but the breaches thereof have also different consequences. The transaction made in breach of injunction order is apparently and patently illegal and binds no party, even the purchaser. Whereas, transaction effected during lis pendens does not attract the taint of illegality. It remains legal, valid and binding on the parties, subject to the outcome of the litigation. It also does not entail the consequences of penalty or contempt, as there is no order passed by the Court in Doctrine of Lis Pendens.
109. As a result, from the perspective of litigating parties also, the "Doctrine of Lis Pendens" and "Order of Temporary Injunction" have different effects. The apprehension of action under Section 2A Rule 11 of CPC of attachment of property and the punishment of contempt of courts act as deterrent to the party against whom order of injunction is running.
This deterrent has the further effect of avoiding multiplicity of transactions and procedings. The Doctrine of Lis Pendens does / cannot create such deterrent effect as it does not entail drastic consequence of attachment of property, detention in civil prison, suit being dismissed or defence being struck off, as the case may be, or punishment for contempt of court.
110. Alienation of property lis pendens is merely in the nature of a gamble, which party may willingly enter into without any apprehension of above-said consequences as such party has always the chance of winning the case and thereby retaining the property. The only consequence the party may face, is of loosing that property and nothing more. In that respect also, the transaction will always remain binding between transferor and purchaser. Therefore, alienee can very much receive purchase-price from transferor as such transaction does not suffer from any taint of illegality. As against it, the order of temporary injunction can and does avoid multiplicity and complications by deterring the party at the threshold itself from entering into transactions, which effect Doctrine of Lis Pendens does not have.
111. The learned Single Judge in the case of Prakash Jawale (supra) has considered in detail some of these Judgments, which make appropriate distinction between the principle of lis pendens and the order of interim injunction in the context of the object and effect of both the provisions on the pending litigation and alienation. Learned Single Judge in Prakash Jawale's case has also considered the above-said Judgment of Keshrimal Jivji Shah, rendered in the case of transfer pendent lite, in the teeth of order of interim injunction as illegal and not binding and thereafter held that, "transfer of immovable property in violation of order of injunction confers no right, title and interest on the transferee, as it is no transfer in the eyes of the law and hence it is no transaction at all. It has to be distinguished from the effect of Section 52 of the TP Act, which does not attach any illegality to a transaction which had taken place pendent lite. Thus, the order of prohibitory injunction grants protection, which is not available under Section 52of the TP Act, in the event of a transfer pending the suit." In our own analysis of legal position, we, therefore, find the conclusions drawn by the learned Single Judge in Prakash Jawale's case to be based on sound reasoning and in tune with Apex Court's decisions.
(The transfer made in violence of section 52 of
T.P. Act does not become availed, whereas transfer made in
violation of Temporary injuction is illegal. Alienation against prohibitory order of
court confers no right, title or interest on the transferee as its no
transfer in the eyes of law. Hence effect is that transaction is
illegal Keshrimal Shah ..VS.. Bank of Maharashtra 2004 [3]
Mh L J 893 The same view is taken in T.G.Ashok Kumar..VS..
Govindammal and another 2011[1] All M R 462
&Hardevsingh.VS. Gurmalsingh 2007[2] SCC444.)
Whether Wife can seek injunction to restrain husband from performing second marriage?
Calcutta High Court
Chitra Sengupta vs Dhruba Jyoti Sengupta on 3 April, 1987Equivalent citations: AIR 1988 Cal 98, 92 CWN 5416. As to the prayer of the petitioner-wife for temporary injunction restraining the respondent-husband from marrying again during the pendency of this appeal, We are of the opinion that no such injunction can issue under the provisions of Order 39, Civil P.C., w hich is no doubt applicable to a matrimonial proceeding under the Hindu Marriage Act because of Section 21 of the Act. Rule 1 of Order 39 would not obviously apply as the said Rule would operate only when the question relates to some property in suit or some other property which the defendant is going to dispose of. And Rule 2 would also not apply as the said Rule would be attracted only when the suit or the proceeding itself is for restraining the defendant from committing a breach of contract or other injury of any kind. A matrimonial proceeding not being a proceeding of the nature specified in Clauses (a), (b) or (c) of Rule 1 or in Sub-rule (1) of Rule 2 of Order 39, there should be no doubt that temporary injunction cannot issue under the provisions of Rule 1 or Rule 2 of Order 39 to restrain a spouse from marrying again. But there should also be no doubt, particularly after the decision of the Supreme Court in Manohar Lal v. Seth Hiralal, , that even in a case not covered by the provisions of Order 39 of the Code, a Court can issue temporary injunction in the interest of justice in exercise of its inherent power if a proper case is made out therefor.
17. Now in the case at hand the wife has filed this appeal against the decree of divorce obtained against her by her husband and the only argument advanced by the learned Counsellor the husband-respondent against the prayer for temporary injunction is that since any second marriage by the husband during the pendency of the appeal would obviously be void if the appeal succeeds, an order of temporary injunction would be entirely unnecessary. We are, however, of the view that if the present appeal preferred by the wife succeeds and the impugned decree of divorce is set aside, then any second marriage by the husband during the pendency of the appeal, even though void, would cause great mental agony and much social ignominy to the wife. Then again, even though such second marriage would be void if the appeal succeeds, any issue born out of such marriage would, however, be legitimate under Section 16, Hindu Marriage Act with full right to inherit the husband's properties. We are inclined to think that the mental agony, the social ignominy and the legal wrangle and complication which such marriage would cause to the wife, in case her appeal succeeds, are sufficient to make out a case for an interlocutory injunction restraining such marriage during the pendency of the appeal. We would therefore allow this prayer also made by the wife and would issue an order of temporary injunction restraining the husband-respondent from contracting any marriage during the pendency of this appeal.
18. The application filed by the wife- petitioner is accordingly allowed with cost which is assessed at 30 gold mohurs. Prayer for stay of operation of this order is refused. Patna High Court
Umashankar Prasad Singh vs Smt. Radha Devi And Ors. on 15 September, 1966
This application is directed against an order passed by the learned District Judge, Muzaffarpur, on the 19th February, 1964, in an original (matrimonial) suit instituted by the wife of the present petitioner. She alleged that her husband, who is the petitioner here, was contemplating to marry another lady, who was impleaded as defendant 2 in that suit, in contravention of the Hindu Marriage Act, 1955. The reliefs she sought were that the defendant first party should be permanently injuncted from marrying any other girl, specially the second defendant, whom he was about to marry and that the defendants second party be permanently restrained from marrying the defendant first party. She also impeaded the father and the grand-father of the intended wife of defendant 1 as defendants 3 and 4, and against them also asked for a permanent injunction restraining them from giving defendant 2 in marriage with defendant 1. After filing the suit, she asked for an interim injunction on the lines on which she prayed for a permanent injunction in the suit. Notice of the suit and the application was given to the defendants and defendant 1, the husband, who is the present petitioner before us, raised objections to the effect that the proceeding was not maintainable before the District Judge and that court had no jurisdiction to proceed with the case or to pass any order of injunction--interim or permanent. The questions of jurisdiction and maintainability were taken up by the court for consideration as preliminary issues in the suit and they were held in favour of the plaintiff, who is opposite party 1 in this revision application. Against that, defendant 1 has come with this application to this Court. 4. It is well settled in law that when an act is made punishable under a statute, the only remedy that can be taken in respect of such act is to invoke the provision of law by which the punishment can be inflicted upon the doer. Bigamy has now been made penal by this special Act and that is a matter for the social upliftment. By making it penal, no right is created in any individual. The right to get such act punished is with the entire community. But that right can only arise after such bigamy as committed and not before.
5. A general argument was advanced on behalf of the opposite party to the effect that bigamy was intended to be prohibited by this special Act and, therefore, it was made penal so that no one will indulge in it. It has also been declared void so as not to create any right of any nature in any of the two contracting parties. In that view, learned counsel contended, it would be open to any person, much more to the first married wife, to invoke the jurisdiction of the court and the special law to prevent such illegal act. I am afraid there is no legal basis for such an argument. When a statute creates a special jurisdiction outside, or in addition to the common forum, such jurisdiction has to be worked within the strict ambit of the special statute.
Rights and remedies created under such Act will have to be confined to the provisions under that statute. If any one has got any other right under the common law or any preexisting law, that may or may not be affected by the subsequent special statute, because that will depend upon whether the subsequent special statute overrides either expressly or by implication the pre-existing right under any law. Since the opposite party 1 avowedly came with, in the ambit of the special Act and before the special tribunal created under the Act, she cannot maintain any proceeding unless it is in conformity with any provision under that statute. In that view, the learned District Judge did not have any jurisdiction to maintain the application (or the suit as it was called) by opposite party 1. His findings that the suit was maintainable and he had jurisdiction to decide that cannot be sustained.
6. The result, therefore, is that the rule is made absolute and the order of the court below is set aside. It will, however, be open to opposite party 1 to pursue any other remedy, if she has any, under any law. In view of the circumstances of the present case, there shall not be any order for costs.
(Upon the scheme of the Hindu Marriage Act, 1955, broadly speaking, the reliefs, which can be obtained, are as follows:
(1) Restitution of conjugal rights (Section 9) (2) Judicial separation (Section 10) (3) A decree of divorce (Section 13) and (4) A decree of nullity where the marriage is void (section 11) or where the marriage may be annulled as it is voidable (Section 12).
It is obvious that the petition filed by opposite party 1 does not claim any of the aforesaid reliefs and does not fall in any of the aforesaid categories. The "district court" as defined in section 3 (b) of the Act is a court of exclusive jurisdiction for only mailers falling within the Act. On that simple ground therefore, the petition filed by opposite party 1 was not maintainable; and the learned District Judge had no jurisdiction to either entertain or try the same.)
Allahabad High Court
Km. Kirti Sharma vs Civil Judge, Senior Division And ... on 9 February, 2005
Equivalent citations: AIR 2005 All 197, 2005 (2) AWC 1741
Learned counsel for the petitioner has firstly urged that since Hindu Marriage Act was a special legislation thus provision of Order 39 Rule 1 would not apply and no injunction could be granted to restrain a wife from remarrying. In support of his contention, he has relied upon a decision of the Rajasthan High Court rendered in the case of Smt. Parwati v. Harbindra Singh, (AIR 1980 Rajasthan 249) and the decision of the Patna High Court rendered in the case of T. Modi v. Om Prakash Jaiswal (AIR 1974 Patna 335). In Smt. Parwati's case, supra it was held that Hindu Marriage Act is a special Act and since it does not provide for a suit for injunction, no suit lies. This case was decided prior to the amendment made in the Hindu Marriage Act by Act No. 2 of 1998 with effect from 1-10-1978 whereby Section 6 was omitted. Thus, in my opinion, the ratio would not apply. Even otherwise, Section 5(i) of the Act mandates that marriage may be solemnized between two Hindus subject to the condition that neither has a living spouse. Section 11 declares that a second marriage with the first spouse living would be void. No doubt Hindu Marriage Act is a special Act, but if it is silent on the issue of injunction, the place can be occupied by general legislation especially so to restrain a party from performing a void act.Similarly, the ratio laid down in T. Modi's case (supra) would also not apply.
Madhya Pradesh High Court
Pratiksha vs Pravin on 9 October, 2001
I am of the view that the provisions contained in the Code of Civil Procedure have been by virtue of Section 21 made applicable to different types of petitions under the Act, whether, for example, it be a petition for restitution of conjugal rights under Section 9; or a petition for alimony under Section 25 of the Act; or for a petition for a decree of nullity under Sections 11 and 12 (where the marriage is void or voidable), the Court by virtue of Section 21 is not powerless or precluded to issue temporary injunctions in these proceedings. Perpetual injunctions are granted under Section 38 of the Specific Relief Act, 1963 and the temporary injunctions are granted under the Code of Civil Procedure. Under Sub-section (1) of Section 38 of the Specific Relief Act, 1963, a perpetual injunction may be granted to the plaintiff to prevent the breach of an obligation existing in his favour whether expressly or by implication. The obligation means and includes every duty enforceable by law. The word "obligation" defined under Section 2(a) of the Specific Relief Act, 1963 means and includes every duty enforceable by law. As has been held that the word "obligation" is not used in the Act in a limited or restricted sense thus the conjugal obligations are also not excluded from the scope of preventive injunction. Therefore, injunction can be issued to restrain a Hindu husband or wife from contracting a second marriage during the subsistence of the first. Any kind of breach about legal obligation to affect right of marriage can be covered in the wide importance of the word "obligation" and in the circumstances of the case an injunction can be issued against spouse regarding breach of conjugal or matrimonial obligations and they may be said to be covered within the aforesaid scope of Section 38(1) of the Specific Relief Act under which a perpetual injunction may be granted in favour of the plaintiff to prevent the breach of an obligation existing in his favour, whether expressly or by implication. The Hindu Marriage Act does not expressly create any bar about seeking the preventive relief of injunction in the proceedings filed under the Hindu Marriage Act. Therefore, in a petition filed under the provisions of Hindu Marriage Act as well as a suit filed under Section 9 of the Code of Civil Procedure, the proceedings in both the cases being of civil nature, its cognizance is not expressly or impliedly barred by any provisions under the Hindu Marriage Act and the Court which is taking the cognizance in the matter is primarily a Civil Court which is sufficiently vested with the inherent powers. Therefore, the jurisdiction cannot be treated as excluded.
7. The object of issue of temporary injunction is to prefer status-quo so that the party in whose favour a decision is ultimately given by the Court is not deprived of his benefit. For granting temporary injunction it is not necessary that relief of perpetual injunction must always be asked for. It, therefore, follows that simply because there is no provision under the Act for granting permanent injunction, the Court is powerless to issue temporary injunctions in any other case under the Act. To issue a temporary injunction it is necessary that the case should fall strictly within the provisions of Rules 1 and 2 of Order XXXIX of the Code and under those rules the injunction can only be issued when there is a threat to any property in dispute or the same is in danger or being wasted. Therefore, the element of property is a must in both the cases. Therefore, from the plain reading of the aforesaid provisions it may be clear that strictly injunction may not be granted under Order XXXIX Rules 1 and 2 of the Code in matrimonial disputes covered by the provisions of the Hindu Marriage Act but certainly by virtue of provisions of Section 21 of the Hindu Marriage Act, temporary injunction can be granted in exercise of its inherent powers which are not to be conferred by statute in the Court. This power relate to the procedure to be followed by the Courts in deciding cases before it.
From the aforesaid discussions, it is clear that under inherent powers the Courts hearing petitions regarding conjugal rights and matrimonial obligations can issue injunctions and preventive orders, and in a case the element of property under dispute, the Court can also exercise powers under Order XXXIX Rules 1 and 2 of the Code to prevent misuse and waste of the property.
In view of the aforesaid legal position and under the facts and circumstances of this case, the Trial Court has rightly issued the injunction order exercising the inherent powers under Section 151 of the Code against the appellant and I do not see that any case for interference is made out by the appellant. Thus, this Misc. Appeal is devoid of any substance and merit.
Shrawan Kumar Vs. Nirmala Mauji Lal
Citation: 2013(3) ALJ 651., 2013 6 AWC5728All
1. Heard learned counsel for the petitioner. A very peculiar suit has been filed in the court below by the petitioner.
2. The plaint of the suit which is annexure-1 to the petition reveals that the petitioner, who is plaintiff in the suit alleges that his marriage was agreed to be solemnized with respondent No. 2 but now it appears that she is likely to marry someone else and therefore, a decree of permanent injunction be passed restraining her from marrying any other person except the petitioner.
3. It is against the order of the court in the above suit directing notices to be issued to the other side before considering the matter for grant of interim injunction that the petitioner has invoked the writ jurisdiction of this court.
4. I am quite astonished at the relief which has been claimed in the suit. The suit ex facie appears to be against public policy and as such is impliedly barred by Section 9, C.P.C.
5. Section 26 of the Indian Contract Act, 1872 provides that an agreement to restrain a marriage of any person is void.
6. A thing in respect of which no valid agreement can come into existence cannot be ordered to be done by the order of the court and therefore, the suit claiming such a relief would certainly be barred.
7. Right to marry is an integral part of right to life and liberty and is akin to a fundamental right. A fundamental right of a person cannot be taken away and therefore, also the suit as filed is clearly against the public policy.
8. The suit appears to have been instituted for harassing the respondent or to put some kind of pressure on her family members. It is not designed in good faith.
9. His Lordships of this court in Prem Shanker Tripathi v. The First Additional District judge, Allahabad and others, MANU/UP/0754/1986: 1986 AWC 925: (MANU/UP/0754/1986 : 1986 All LJ 1200) ruled that a suit of frivolous and vexatious nature which scandalizes the administration of justice is clearly against the dictates of the public policy should not be taken cognizance of as it is impliedly barred and the High Court in exercise of suo motu supervisory power can quash the plaint of such a suit.
10. A similar view has been expressed by Division Bench of this court in Gulab Chandra v. The Munsif West, Allahabad and others, MANU/UP/0686/1988: 1988 AWC 537: (MANU/UP/0686/1988 : 1988 All LJ 852) and it has been observed that a litigation which is sham, illusory, collusive or which is inspired by nefarious and vexatious designs should be nipped in the bud and the High court not only has jurisdiction but owes duty to check such litigation in exercise of powers under Article 227 of the Constitution of India by quashing the plaint.
11. The counsel was put to notice to address the court to show how the suit was maintainable but he was unable to give any assistance.
12. In view of above legal position, when the plaint of the suit as is before me on its face is vexatious and nefarious in design, I not only consider it my responsibility to refuse to interfere with the order impugned but at the same time in exercise of my suo motu power under Article 227 of the Constitution of India consider it my obligation to quash the plaint itself.
13. In view of aforesaid facts and circumstances, the plaint of original suit No. 1033 of 2012 Shrawan Kumar alias Pappu v. Nirmala pending in the court of Additional Civil Judge, (Junior Division), Kanpur is quashed. The writ petition is disposed of accordingly.
Plaintiff Can't Seek Specific Performance Of Agreement Against Defendant On A Cause Of Action For Permanent Injunction
Supreme Court of India
Sucha Singh Sodhi (D) Thr.Lrs. vs Baldev Raj Walia on 13 April, 2018
SC, has held that a plaintiff could not claim the relief of specific performance of agreement along with the relief of a permanent injunction in a suit.
In this case, first suit seeking an injunction against the defendant was withdrawn with leave of the court. Later, when a suit for specific performance was filed, the defendant objected to it, invoking Order 2 Rule 2, which states that the relief of specific performance ought to have claimed along with the relief of injunction in the earlier suit, which was withdrawn. The Trial Court and the High Court found favour with the defendant on this contention.
On appeal filed by the plaintiff, , found that such a relief of specific performance could not have claimed along with the suit for injunction, for the following reasons:
The cause of action to claim a relief of permanent injunction and the cause of action to claim a relief of specific performance of agreement are independent and one cannot include the other and vice versa. In other words, a plaintiff cannot claim a relief of specific performance of agreement against the defendant on a cause of action on which he has claimed a relief of permanent injunction.
The cause of action to claim temporary/permanent injunction against the defendants from interfering in plaintiff's possession over the suit premises accrues when defendant No.1 threatens the plaintiff to dispossess him from the suit premises or otherwise cause injury to the plaintiff in relation to the suit premises. It is governed by Order 39 Rule 1 (c) of the Code which deals with the grant of an injunction. The limitation to file such suit is three years from the date of obstruction caused by the defendant to the plaintiff (See – Part VII Articles 85, 86 and 87 of the Limitation Act). On the other hand, the cause of action to file a suit for claiming specific performance of agreement arises from the date fixed for the performance or when no such date is fixed when the plaintiff has noticed that performance is refused by the defendant. The limitation to file such suit is three years from such date (See – Part II Article 54 of the Limitation Act).
When both the reliefs/claims namely, (1) Permanent Injunction and (2) Specific Performance of Agreement are not identical, when the causes of action to sue are separate, when the factual ingredients necessary to constitute the respective causes of action for both the reliefs/claims are different and lastly, when both the reliefs/claims are governed by separate articles of the Limitation Act, then, in our opinion, it is not possible to claim both the reliefs together on one cause of action.
Another issue raised before the apex court was that, in the absence of any permission/liberty granted by the trial court to the plaintiff at the time of withdrawing the previous suit filed for permanent injunction, the plaintiff was entitled to file the suit for specific performance of agreement against the defendants in relation to the suit property. The bench said: "In our view, the Court was entitled to take into consideration the statement made by the original plaintiff (Sucha Singh) for withdrawing the suit and filing it afresh and his statement could be made a part of the order for granting permission to withdraw the civil suit and file a fresh suit." Supreme Court of India
Ambalal Sarabhai Enterprise ... vs Ks Infraspace Llp Limited on 6 January, 2020
The Supreme Court has observed that strong prima facie case on undisputed facts is necessary for getting the relief of temporary injunction in a suit for specific performance of contract. This is because of the fact that specific performance by itself is a discretionary remedy, explained a bench comprising Justices Ashok Bhushan and Navin Sinha.
The bench also said that the conduct of parties is also a relevant consideration for interim injunction, in addition to the factors of prima facie case, balance of convenience and irreperable injury.
"Chapter VII, Section 36 of the Specific Relief Act, 1963 (hereinafter referred to as 'the Act') provides for grant of preventive relief. Section 37 provides that temporary injunction in a suit shall be regulated by the Code of Civil Procedure. The grant of relief in a suit for specific performance is itself a discretionary remedy. A plaintiff seeking temporary injunction in a suit for specific performance will therefore have to establish a strong primafacie case on basis of undisputed facts. The conduct of the plaintiff will also be a very relevant consideration for purposes of injunction. The discretion at this stage has to be exercised judiciously and not arbitrarily", observed the bench.
The Court was hearing an appeal filed by defendants in a specific performance suit against the interim order passed by the trial court (and affirmed by High Court) restraining them from executing sale deed or any other documents creating charge with respect to the property.
The defendants contended that there was no concluded contract for sale, and that the agreement was only in the negotiation stage. When the talks fell out, the advance amount was also refunded to the plaintiff, submitted the defendants.
The plaintiff sought to sustain the order by arguing that there was a concluded contract between the parties. The emails and whatsapp messages between parties were referred for that purpose. It was further submitted that the defendants acted in haste to execute a sale deed with a third party even during the subsistence of the agreement with the plaintiff.
The Supreme Court observed that the existence of a concluded contract was itself a matter of dispute.
"The WhatsApp messages which are virtual verbal communications are matters of evidence with regard to their meaning and its contents to be proved during trial by evidenceinchief and cross examination. The emails and WhatsApp messages will have to be read and understood cumulatively to decipher whether there was a concluded contract or not".
That being so, there was no justification for a temporary order in favour of the plaintiff, the SC observed.
"The prolonged negotiations between the parties reflect that matters were still at the 'embryo stage' as observed in Agriculture Produce Market Committee, Gondal and ors. vs. Girdharbhai Ramjibhai Chhaniyara and ors., (1997) 5 SCC 468. The plaintiff at this stage has failed to establish that there was a mutuality between the parties much less that they were adidem."
The Court also noted that the suit was filed seven months after the defendants had refunded the advance. The explanation that the plaintiff waited hopefully for a solution outside litigation as a prudent businessman before finally instituting the suit is too lame an excuse to merit any consideration, the SC said.
In this backdrop, the SC observed :
"We are therefore of the considered opinion that in the facts and circumstances of the present case, and the nature of the materials placed before us at this stage, whether there existed a concluded contract between the parties or not, is itself a matter for trial to be decided on basis of the evidence that may be led. If the plaintiff contended a concluded contract and/or an oral contract by inference, leaving an executed document as a mere formality, the onus lay on the plaintiff to demonstrate that the parties were adidem having discharged their obligations as observed in Brij Mohan (supra)".
Based on these findings, the appeals were allowed, setting aside the orders of injunction. " We are therefore of the considered opinion that in the facts and circumstances of the present case, and the nature of the materials placed before us at this stage, whether there existed a concluded contract between the parties or not, is itself a matter for trial to be decided on basis of the evidence that may be led. If the plaintiff contended a concluded contract and/or an oral contract by inference, leaving an executed document as a mere formality, the onus lay on the plaintiff to demonstrate that the parties were ad idem having discharged their obligations as observed in Brij Mohan (supra). The plaintiff failed to do show the same on admitted facts. The draft MoU dated 30.03.2018 in Clause C contemplated payment of the income tax dues of Rs.18.64 crores as part of the consideration amount only whereafter the agreement was to be signed relating back to the date 29.03.2008. Had this amount been already paid or remitted by the plaintiff, entirely different considerations would have arisen with regard to the requirement for execution of a written agreement remaining a mere formality. Needless to state the balance of convenience is in favour of the defendants on account of the intervening developments, without furthermore, interalia by reason of the plaintiff having waited for seven months to institute the suit. The question of irreparable harm to a party complaining of a breach of contract does not arise if other remedies are available to the party complaining of the breach. The High Court has itself observed that from the negotiations between the parties that “some rough weather was being reflected between the plaintiff and the defendant ……….”. The Special Civil Judge failed to address the issue of delay. The High Court noticed the arguments of the defendants with regard to delay in the institution of the suit but failed to deal with it.
22. In M.P. Mathur vs. DTC, (2006) 13 SCC 706, this Court observed :
“14. The present suit is based on equity…In the present case, the plaintiffs have sought a remedy which is discretionary. They have instituted the suit under Section 34 of the 1963 Act. The discretion which the court has to exercise is a judicial discretion. That discretion has to be exercised on wellsettled principles. Therefore, the court has to consider—the nature of obligation in respect of which performance is sought, circumstances under which the decision came to be made, the conduct of the parties and the effect of the court granting the decree. In such cases, the court has to look at the contract. The court has to ascertain whether there exists an element of mutuality in the contract. If there is absence of mutuality the court will not exercise discretion in favour of the plaintiffs. Even if, want of mutuality is regarded as discretionary and not as an absolute bar to specific performance, the court has to consider the entire conduct of the parties in relation to the subjectmatter and in case of any disqualifying circumstances the court will not grant the relief prayed for (Snell’s Equity, 31st Edn., p.
366)….”
23. Wander Ltd. (supra) prescribes a rule of prudence only. Much will depend on the facts of a case. It fell for consideration again in Gujarat Bottling Co. Ltd. vs. Coca Cola Co., (1995) 5 SCC 545, observing as follows :
“47….Under Order 39 of the Code of Civil Procedure, jurisdiction of the Court to interfere with an order of interlocutory or temporary injunction is purely equitable and, therefore, the Court, on being approached, will, apart from other considerations, also look to the conduct of the party invoking the jurisdiction of the Court, and may refuse to interfere unless his conduct was free from blame. Since the relief is wholly equitable in nature, the party invoking the jurisdiction of the Court has to show that he himself was not at fault and that he himself was not responsible for bringing about the state of things complained of and that he was not unfair or inequitable in his dealings with the party against whom he was seeking relief. His conduct should be fair and honest….”
24. The aforesaid discussion leaves us satisfied to conclude that in the facts and circumstances of the present case, the grant of injunction to the plaintiff is unsustainable."
Supreme Court of India
Jharkhand State Housing Board vs Shri Didar Singh on 9 October, 2018
The Supreme Court has reiterated that a suit for bare injunction would not be maintainable when a defendant could successfully raise cloud over the title of the Plaintiff.
Challenge
The Jharkhand State Housing Board had approached the Apex Court assailing the High court and Trial court judgment that had decreed a suit for permanent injunction filed by one Didar Singh for the reason that a notice dated 4.1.1992 asking the plaintiff to quit and give vacant possession of the suit land was issued hence a threat to dispossess from the suit land without any right and title over the same arose. The board contended that the suit is not maintainable without seeking the relief of declaration of title as the suit schedule property was recorded in the revenue records in the name of the defendant. It was also contended that, without seeking right, title, possession and correction of entries in record of right, plaintiff cannot maintain the suit for injunction. The High court, while rejecting its appeal, had observed that as the plaintiff is in possession of the property, he can protect his possession against any interference and it is not necessary to prove his title to the property.
Held:
The Bench observed that in each and every case where the defendant disputes the title of the plaintiff it is not necessary that in all those cases plaintiff has to seek the relief of declaration.
A suit for mere injunction does not lie only when the defendant raises a genuine dispute with regard to title and when he raises a cloud over the title of the plaintiff, then necessarily in those circumstances, plaintiff cannot maintain a suit for bare injunction.
Likewise, in the present case, the Bench observed that the Appellant by relying upon the land acquisition proceedings initiated for the land in dispute and the possession certificate could successfully raise cloud over the title of the plaintiff and in those circumstances plaintiff ought to have sought for the relief of declaration and the suit for injunction simplicitor could not have been entertained.
Supreme Court: Court can entertain counter-claim for possession in suit for injunction:
Supreme Court of India
Gurbachan Singh vs Bhag Singh & Ors on 24 November, 1995
Order 8 Rule 6(A)(1) of the C.P.C., 1908 as amended in 1976 reads thus:
"A defendant in a suit may, in addition to his right of pleading a set-off under Rule 6, set up by way of counter-claim against the claim of the plaintiffs, any right or claim in respect of a cause of action accruing to the defendant against the plaintiff either before or after the filing of the suit but before the defendant has delivered his defence or before the time limited for delivering his defence has expired, whether such counter-claim is in the nature of a claim for damages or not:-
Provided that such counter-claim shall not exceed the pecuniary limits of the jurisdiction of the Court."
It is true that Rule 6A(a) was introduced by Amendment Act of 1976. Preceding the amendment, it was settled law that except in a money claim, counter claim or set off cannot be set up in other suits. The Law Commission of India had recommended, to avoid multiplicity of the proceedings, right to the defendants to raise the plea of set off in addition to a counter claim in Rule 6 in the same suit irrespective of the fact whether the cause of action for counter claim or set off had accrued to defendant either before or after the filing of the suit. The limitation was that the counter claim or set off must be pleaded by way of defence in the written statement before the defendant filed his written statement or before the time limit for delivering the written statement has expired, whether such counter-claim is in the nature of a claim for damages or not. Further limitation was that the counter-claim should not exceed the pecuniary limits of the jurisdiction of the court. In other words, by laying the counter claim pecuniary jurisdiction of the court cannot be divested and the power to try the suit already entertained cannot be taken away by accepting the counter claim beyond its pecuniary jurisdiction.. Thus considered, we hold that in a suit for injunction, the counter-claim for possession also could be entertained, by operation of Order 8 Rule 6 (A)(1) of CPC.
When defendant is not entitled to claim temporary injunction without filing counter claim?
IN THE HIGH COURT OF KARNATAKA
Decided On: 05.09.2014
Shakunthalamma Vs. Kanthamma
The Division Bench, relying on the judgment of the Apex Court in Manoharlal Chopra's case (cited supra), held that the defendant can maintain an application under Order XXXIX, Rule 1 and 2 for an injunction against the plaintiff by making a distinction between a suit for partition and separate possession and a suit for bare injunction and the judgment in Suganda Bai's case was held to be in conformity with the view taken in Manoharlal Chopra's case. In both the judgments, the difference in the language employed in Rule 1(a) and Rules 1(b) and (c) is not noticed. Therefore, we are of the view that, when the statute prescribes a particular procedure set out in a provision in which the word "cause of action" is conspicuously missing, it is not possible to hold that a defendant can maintain an application for injunction if it is based on the same cause of action as that of the plaintiff or incidental thereto and further that, such an application cannot be maintained if the cause of action for the defendant arises subsequent to the cause of action the plaintiff has pleaded. We do not find any support to such a proposition of law as is laid down in the above two judgments and therefore, we over rule the same.
The correct legal position as is clear from the statutory provision is as under:
(i) Both the plaintiff and the defendant can maintain an application under Order XXXIX, Rule 1(a) of the Code for the reliefs set out in the said provision;
(ii) Insofar as relief under Order XXXIX, Rule 1(b) and (c) is concerned, such a relief is available only to the plaintiff and the defendant cannot maintain an application for the said reliefs in a suit filed by the plaintiff irrespective of the fact that his right to such relief arises either from the same cause of action or a cause of action that arises subsequent to filing of the suit.
However it is open to the defendant to maintain a separate suit against the plaintiff and seek relief provided under Order 39, Rule 1(b) and (c) of the Code.
(iii) In cases which do not fall under Order XXXIX, Rule 1 of the Code, the Court has the inherent jurisdiction to grant the relief of injunction in its discretion, if it is satisfied that such an order is necessary to meet the ends of justice or to prevent abuse of process of the Court and nothing in this Code shall limit or otherwise affect such inherent power of the Court.
Supreme Court of India
Anathula Sudhakar vs P. Buchi Reddy (Dead) By Lrs
& Ors on 25 March, 2008
The general principles as to when a mere suit for permanent injunction will lie, and when it is necessary to file a suit for declaration and/or possession with injunction as a consequential relief, are well settled. We may refer to them briefly.
11.1) Where a plaintiff is in lawful or peaceful possession of a property and such possession is interfered or threatened by the defendant, a suit for an injunction simpliciter will lie. A person has a right to protect his possession against any person who does not prove a better title by seeking a prohibitory injunction. But a person in wrongful possession is not entitled to an injunction against the rightful owner.
11.2) Where the title of the plaintiff is not disputed, but he is not in possession, his remedy is to file a suit for possession and seek in addition, if necessary, an injunction. A person out of possession, cannot seek the relief of injunction simpliciter, without claiming the relief of possession.
11.3) Where the plaintiff is in possession, but his title to the property is in dispute, or under a cloud, or where the defendant asserts title thereto and there is also a threat of dispossession from defendant, the plaintiff will have to sue for declaration of title and the consequential relief of injunction. Where the title of plaintiff is under a cloud or in dispute and he is not in possession or not able to establish possession, necessarily the plaintiff will have to file a suit for declaration, possession and injunction.
Krushna Kishore Bal vs Sankarsan Samal And Ors. on 28 November, 1973
(Basic principles for grant of injunction in case of easement of light and air)
Even in a case where a person has acquired a right of easement to light and air, an action for damages or injunction is not maintainable unless the injury complained of is material.
The position would be no better in the case of the plaintiffs who have acquired no right of easement but complained of injury on account of the violation of the municipal plan and the rules. Plaintiffs are, therefore, to establish not merely injury to their right to light, air and privacy but material injury.
21. We would sum up our conclusions on the analysis already made
(i) Defendant has constructed his house in contravention of the municipal plan and the rules.
(ii) Mere violation of the municipal plan or rules would not furnish the plaintiff with a cause of action.
(iii) Plaintiffs must prove that defendant's construction in violation of the plan and the rules resulted in an invasion of their right to light, air and privacy causing material injury to them.
(iv) If the plaintiffs establish such a case, defendant has an obligation in favour of the plaintiffs and plaintiffs can enforce their right through Civil Court and not under the provisions of the Act.
(V) Plaintiffs to get a perpetual and mandatory injunction must also prove that pecuniary compensation would not afford adequate. Whether suit for injunction by co-owner for restraining construction is maintainable without claiming partition?
IN THE HIGH COURT OF PUNJAB AND HARYANA
RSA No. 4541 of 2013 (O&M)
Decided On: 01.08.2019
Major Singh Vs. Paramjit Singh
Once in possession, only remedy for the respondent would have been to file a suit for partition other than a simplicitor suit for an injunction, as has been held in Jai Karan Sharma cas'e (supra) by relying upon the judgment rendered in Bachan Singh v. Swarn Singh, (MANU/PH/0368/2000 : 2000 (3) RCR (Civil) 70 : 2000 (2) PLJ 143 : AIR 2001 P & H 112), this Court has laid down the following principles as and when a co-owner, can seek an injunction as against another co-owner and it has been laid down as under:-
"17. On a consideration of the judicial pronouncements on the subject, we are of the opinion that:
(i) A co-owner who is not in possession of any part of the property is not entitled to seek an injunction against another co-owner who has been in exclusive possession of the common property unless any act of the person in possession of the property amounts to ouster, prejudicial or adverse to the interest of co-owner out of possession.
(ii) Mere making of construction or improvement of, in the common property does not amount to ouster.
(iii) If by the act of the co-owner in possession the value or utility of the property is diminished, then a co-owner out of possession can certainly seek an injunction to prevent the diminution of the value and utility of the property.
(iv) If the acts of the co-owner in possession are detrimental to the interest of other co-owners, a co-owner out of possession can seek an injunction to prevent such act which is detrimental to his interest.
In all other cases, the remedy of the co-owner out of possession of the property is to seek partition, but not an injunction restraining the co-owner in possession from doing any act in exercise of his right to every inch of it which he is doing as a co-owner."
7. Once the appellant has been put in exclusive possession of a specific portion by virtue of a sale deed executed by one of the co-owners, any suit for injunction would not lie and the remedy would be to file a suit for partition. Sale of land by a co-sharer of a property which is in his. exclusive possession is subject to adjustment at the time of partition. Raising a construction or improvement in the area purchased by him even though it is common property, it would not be detrimental to the interest of the respondent.
Ashok Bansal and others..Vs..Guru Das and
others 2002 (4) Civil LJ 891
Co-owner who is not in a possession of any part of
the property cannot seek an injunction against another co-owner
unless any act of the person in possession of the property causes
prejudice or is adverse to the interest of the co-owner who is in
possession.
POSITION OF CO SHARErS :
The plaintiff in a suit for partition is entitled to get a
temporary injunction even against his co-sharers to protect his
possession when he is exclusively residing in the suit houses and
carrying on business thereon – I P Bhankanarayana v/s P
Rajeshwar Rao AIR 1991 Ori 92. When a stranger Purchaser
threatens to entered into joint possession with members of the
undivided family temporary injunction should be granted
restraining him from entering into possession even if such an
order amounts to eviction of the stranger purchaser – Ashim
Ranjan Das v/s Bimla Ghosh AIR 1992 Cal 44. When the
purchaser of undivided interest of coparcenary property is in
possession of a portion of a joint property he can compel the non
alienating members not to dispossesses him without recourse of
law. Therefore, the grant of equitable relief to protect his
possession till the filing of the suit for joint partition and a suit for
mandatory injunction is permissible(Maharai v/s Dhansai 1992
MP 220.
INJUNCTIONS ON BANK GUARANTEE WHETHER ALLOWED : The law relating to grant or refusal to grant injunction in the matter of invocation of a Bank Guarantee or a Letter of Credit is now well settled by a plethora of decisions not only of this court but also of the different High Courts in India. In U.P. State Sugar Corporation Vs. Sumac International Ltd. [(1997) 1 SCC 568], this court considered its various earlier decisions. In this decision, the principle that has been laid down clearly on the enforcement of a Bank guarantee or a Letter of Credit is that in respect of a Bank Guarantee or a Letter of Credit which is sought to be encashed by a beneficiary, the bank giving such a guarantee is bound to honour it as per its terms irrespective of any dispute raised by its customer. Accordingly this Court held that the courts should be slow in granting an order of injunction to restrain the realization of such a Bank Guarantee. It has also been held by this court in that decision that the existence of any dispute between the parties to the contract is not a ground to restrain the enforcement of Bank guarantees or Letters of Credit. However this court made two exceptions for grant of an order of injunction to restrain the enforcement of a Bank Guarantee or a Letter of Credit. (i) Fraud committed in the notice of the bank which would vitiate the very foundation of guarantee; (ii) injustice of the kind which would make it impossible for the guarantor to reimburse himself.
11. Except under these circumstances, the courts should not readily issue injunction to restrain the realization of a Bank Guarantee or a Letter of Credit. So far as the first exception is concerned, i.e. of fraud, one has to satisfy the court that the fraud in connection with the Bank Guarantee or Letter of Credit would vitiate the very foundation of such a Bank Guarantee or Letter of Credit. So far as the second exception is concerned, this court has held in that decision that it relates to cases where allowing encashment of an unconditional bank guarantee would result in irretrievable harm or injustice to one of the parties concerned. While dealing with the case of fraud, this court in the case of U.P. Coop. Federation Ltd. Vs. Singh Consultants and Engineers (P) Ltd. (1988) 1 SCC 174 held as follows:
The fraud must be of an egregious nature such as to vitiate the entire underlying transaction. While coming to a conclusion as to what constitutes fraud, this court in the above case quoted with approval the observations of Sir John Donaldson, M.R. in Bolivinter Oil SA V/s. Chase Manhattan Bank (1984) 1 All ER 351 at p. 352 which is as follows, The wholly exceptional case where an injunction may be granted is where it is proved that the bank knows that any demand for payment already made or which may thereafter be made will clearly be fraudulent. But the evidence must be clear both as to the fact of fraud and as to the banks knowledge. It would certainly not normally be sufficient that this rests on the uncorroborated statement of the customer, for irreparable damage can be done to a banks Credit in the relatively brief time which must elapse between the granting of such an injunction and an application by the bank to have it charged. (Emphasis supplied)
12. In Svenska Handelsbanken Vs. Indian Charge Chrome [(1994) 1 SCC 502], it has also been held that a confirmed Bank Guarantee/irrevocable Letter of Credit cannot be interfered with unless there is established fraud or irretrievable injustice involved in the case. In fact, on the question of fraud, this decision approved the observations made by this court in the case of U.P. Coop. Federation Ltd Vs. Singh Consultants and Engineers (P) Ltd. [(1988) 1 SCC 174].
So far as the second exception is concerned, this court in U.P. State Sugar Corporation Vs. Sumac International Ltd. [(1997) 1 SCC as considered herein earlier, at para 14 on page 575 observed as follows :
On the question of irretrievable injury which is the second exception to the rule against granting of injunctions when unconditional bank guarantees are sought to be realized the court said in the above case that the irretrievable injury must be of the kind which was the subject matter of the decision in the Itek Corpn. Case (566 Fed Supp 1210). In that case an exporter in USA entered into an agreement with the Imperial government of Iran and sought an order terminating its liability on stand by letter of credit issued by an American Bank in favour of an Iranian Bank as part of the contract. The relief was sought on account of the situation created after the Iranian revolution when the American Government cancelled the export licences in relation to Iran and the Iranian government had forcibly taken 52 American citizens as hostages. The US Government had blocked all Iranian assets under the jurisdiction of United States and had cancelled the export contract. The court upheld the contention of the exporter that any claim for damages against the purchaser if decreed by the American courts would not be executable in Iran under these circumstances and realization of the bank guarantee/letters of credit would cause irreparable harm to the Plaintiff. This contention was upheld. To avail of this exception, therefore, exceptional circumstances which make it impossible for the guarantor to reimburse himself it he ultimately succeeds, will have to be decisively established. Clearly, a mere apprehension that the other party will not be able to pay, is not enough. In Itek case, there was certainty on this issue. Secondly, there was good reason, in that case for the Court to be prima facie satisfied that the guarantors i.e. the bank and its customer would be found entitled to receive the amount paid under the guarantee. (Emphasis supplied)
Supreme Court of India
Himadri Chemicals Industries Ltd vs Coal Tar Refining Company on 7 August, 2007
From the discussions made hereinabove relating to the principles for grant or refusal to grant of injunction to restrain enforcement of a Bank Guarantee or a Letter of Credit, we find that the following principles should be noted in the matter of injunction to restrain the encashment of a Bank Guarantee or a Letter of Credit :-
(i) While dealing with an application for injunction in the course of commercial dealings, and when an unconditional Bank Guarantee or Letter of Credit is given or accepted, the Beneficiary is entitled to realize such a Bank Guarantee or a Letter of Credit in terms thereof irrespective of any pending disputes relating to the terms of the contract.
(ii) The Bank giving such guarantee is bound to honour it as per its terms irrespective of any dispute raised by its customer.
(iii) The Courts should be slow in granting an order of injunction to restrain the realization of a Bank Guarantee or a Letter of Credit.
(iv) Since a Bank Guarantee or a Letter of Credit is an independent and a separate contract and is absolute in nature, the existence of any dispute between the parties to the contract is not a ground for issuing an order of injunction to restrain enforcement of Bank Guarantees or Letters of Credit.
(v) Fraud of an egregious nature which would vitiate the very foundation of such a Bank Guarantee or Letter of Credit and the beneficiary seeks to take advantage of the situation.
(vi) Allowing encashment of an unconditional Bank Guarantee or a Letter of Credit would result in irretrievable harm or injustice to one of the parties concerned.