# Ramakant Ambalal Choksi v. Harish Ambalal Choksi & Others

- **Citation:** 2024 INSC 913
- **Court:** Supreme Court of India
- **Decided:** 2024-11-22
- **Case number:** Civil Appeal No. 13001 of 2024
- **Bench:** J.B. Pardiwala, R. Mahadevan
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/ramakant-ambalal-choksi-v-harish-ambalal-choksi-others-37688
- **Pages:** 23

## Headnote

Whether the High Court was justified in allowing the appeal filed
by the defendants-respondents holding that no case for grant
of interim injunction was made out and thus, vacating the order
granting injunction in favour of the plaintiffs-appellants.
Headnotes†
Code of Civil Procedure, 1908 - Order 43, 39 - Appeals from
Orders - Appellate jurisdiction u/Or.43 - Scope:
Held: Appellate court in an appeal from an interlocutory order
granting or declining to grant interim injunction is only required
to adjudicate the validity of such order applying the well settled
principles governing the scope of jurisdiction of appellate court
under Order 43 - Appellate court should not assume unlimited
jurisdiction and should guide its powers within the contours laid
down in the Wander case - On facts, the High Court overstepped
its appellate jurisdiction under Order 43 of the CPC and substituted
its own view for the one taken by the trial court without giving any
categorical finding as to why the order of the trial court could be
said to suffer from any perversity, capriciousness, arbitrariness,
malafides or having been passed in ignorance of the settled
principles governing the grant of injunction under Order 39 - High
Court ought to have limited itself to adjudicating the correctness of
the order of the trial court on the settled principles of law and should
not have taken into consideration any other extraneous matters,
more particularly when the suit was pending for adjudication on
merits before the trial court - Impugned order passed by the High
Court set aside. [Paras 32, 39, 48]
Transfer of Property Act, 1882 - s.52 - Doctrine of lis pendens -
Code of Civil Procedure, 1908 - Order 39, Rule 1 - Grant of
interim injunction restraining pendente lite transfers:
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Held: Doctrine of lis pendens in Section 52 takes care of all
pendente lite transfers; but it may not always be good enough to
take fullest care of the plaintiffs interest vis-a-vis such a transfer -
Rule 1 of Order 39 provides for interim injunction restraining the
alienation or sale of the suit property and, if the doctrine of lis
pendens in Section 52 was regarded to have provided all the
panacea against pendente lite transfers, the Legislature would
not have provided in Rule 1 for interim injunction restraining the
transfer of suit property - Rule 1 of Order 39 clearly demonstrates
that notwithstanding the Rule of lis pendens in Section 52, there
can be occasion for the grant of injunction restraining pendente
lite transfers in a fit and proper case - On facts, with regard to the
nature of dispute between the parties and the materials on record,
the property should not change hands any further - Defendants
to maintain status quo as regards the suit property as on date
and shall not create any further encumbrances over the same in
any manner - Any further transfer of the suit property pending
the final disposal of the suit shall be subject to lis pendens under
Section 52 irrespective of the fact whether such lis pendens has
been duly registered by the plaintiffs with the competent authority
or not. [Paras 45, 47, 49, 50]
Code of Civil Procedure, 1908 - Order 39 - Temporary
injunctions and interlocutory orders - Grant of temporary
injunctions - Principles governing - Explained. [Paras 33, 34]
Words and Phrases - "Perverse' - Meaning, definition -
Discussed. [Paras 35, 36, 37]

## Text

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[2024] 11 S.C.R. 1343 : 2024 INSC 913
Ramakant Ambalal Choksi
v.
Harish Ambalal Choksi & Others
(Civil Appeal No. 13001 of 2024)
22 November 2024
[J.B. Pardiwala and R. Mahadevan, JJ.]
Issue for Consideration
Whether the High Court was justified in allowing the appeal filed
by the defendants-respondents holding that no case for grant
of interim injunction was made out and thus, vacating the order
granting injunction in favour of the plaintiffs-appellants.
Headnotes†
Code of Civil Procedure, 1908 - Order 43, 39 - Appeals from
Orders - Appellate jurisdiction u/Or.43 - Scope:
Held: Appellate court in an appeal from an interlocutory order
granting or declining to grant interim injunction is only required
to adjudicate the validity of such order applying the well settled
principles governing the scope of jurisdiction of appellate court
under Order 43 - Appellate court should not assume unlimited
jurisdiction and should guide its powers within the contours laid
down in the Wander case - On facts, the High Court overstepped
its appellate jurisdiction under Order 43 of the CPC and substituted
its own view for the one taken by the trial court without giving any
categorical finding as to why the order of the trial court could be
said to suffer from any perversity, capriciousness, arbitrariness,
malafides or having been passed in ignorance of the settled
principles governing the grant of injunction under Order 39 - High
Court ought to have limited itself to adjudicating the correctness of
the order of the trial court on the settled principles of law and should
not have taken into consideration any other extraneous matters,
more particularly when the suit was pending for adjudication on
merits before the trial court - Impugned order passed by the High
Court set aside. [Paras 32, 39, 48]
Transfer of Property Act, 1882 - s.52 - Doctrine of lis pendens -
Code of Civil Procedure, 1908 - Order 39, Rule 1 - Grant of
interim injunction restraining pendente lite transfers:
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Held: Doctrine of lis pendens in Section 52 takes care of all
pendente lite transfers; but it may not always be good enough to
take fullest care of the plaintiffs interest vis-a-vis such a transfer -
Rule 1 of Order 39 provides for interim injunction restraining the
alienation or sale of the suit property and, if the doctrine of lis
pendens in Section 52 was regarded to have provided all the
panacea against pendente lite transfers, the Legislature would
not have provided in Rule 1 for interim injunction restraining the
transfer of suit property - Rule 1 of Order 39 clearly demonstrates
that notwithstanding the Rule of lis pendens in Section 52, there
can be occasion for the grant of injunction restraining pendente
lite transfers in a fit and proper case - On facts, with regard to the
nature of dispute between the parties and the materials on record,
the property should not change hands any further - Defendants
to maintain status quo as regards the suit property as on date
and shall not create any further encumbrances over the same in
any manner - Any further transfer of the suit property pending
the final disposal of the suit shall be subject to lis pendens under
Section 52 irrespective of the fact whether such lis pendens has
been duly registered by the plaintiffs with the competent authority
or not. [Paras 45, 47, 49, 50]
Code of Civil Procedure, 1908 - Order 39 - Temporary
injunctions and interlocutory orders - Grant of temporary
injunctions - Principles governing - Explained. [Paras 33, 34]
Words and Phrases - "Perverse' - Meaning, definition -
Discussed. [Paras 35, 36, 37]
Case Law Cited
Wander Ltd. v. Antox India P. Ltd. (1990) Supp. SCC 727 - relied on.
Printers (Mysore) v. Pothan Joseph [1960] 3 SCR 713 : (1960) SCC
Online SC 62; Neon Laboratories Ltd. v. Medical Technologies Ltd.
[2015] 10 SCR 684 : (2016) 2 SCC 672; Mohd. Mehtab Khan v.
Khushnuma Ibrahim Khan [2013] 3 SCR 359 : (2013) 9 SCC 221;
Shyam Sel & Power Ltd. v. Shyam Steel Industries Ltd. [2022]
3 SCR 1173 : (2023) 1 SCC 634; Monsanto Technology LLC v.
Nuziveedu Seeds Ltd. [2019] 1 SCR 145 : (2019) 3 SCC 381;
Anand Prasad Agarwal v. Tarkeshwar Prasad (2001) 5 SCC 568;
Dalpat Kumar v. Prahlad Singh [1991] Supp. 3 SCR 472 : (1992)
[2024] 11 S.C.R.
1345
Ramakant Ambalal Choksi v. Harish Ambalal Choksi & Others
1 SCC 719; Damodar Lal v. Sohan Devi and others [2016] 1 SCR
607 : (2016) 3 SCC 78) - referred to.
Sm. Muktakesi Dawn and Ors. v. Haripada Mazumdar and Anr.
AIR 1988 Cal 25; Promotha Nath Roy v. Jagannath Kisore Lal
Singh Deo (1912) 17 Cal LJ 427 - referred to.
Charles Osenton & Co v Johnston 1942 A.C. 130; Evans v. Bartlam
1937 A.C. 473; Hadley v. London Bank of Scotland (1865) 3 De GJ
& S 63; Moffett v. Gough (1878) 1 LR 1r 331; Godfrey v. Godfrey
106 NW 814 - referred to.
Books and Periodicals Cited
Dr. S. C. Banerji's Tagore Law Lectures on Specific Relief (2nd
Edition, page 592); Fry's Treatise on Specific Performance (6th
Edition).
List of Acts
Code of Civil Procedure, 1908; Transfer of Property Act, 1882.
List of Keywords
Order 43 of Code of Civil Procedure, 1908; Order 39 of Code of
Civil Procedure, 1908; Appellate jurisdiction; Scope of jurisdiction
of appellate court under Order 43 ; Interim injunction; Temporary
injunctions; Appellate court; Appeal from an interlocutory order
granting or declining to grant interim injunction; Interlocutory
orders; Unlimited jurisdiction; Perverse; Perversity; Capriciousness;
Arbitrariness; Malafides; Extraneous matters, Suit pending;
Adjudication on merits; Doctrine of lis pendens; Pendente lite
transfers; Panacea; Interim injunction restraining the transfer of
suit property; Status quo; Suit property; Encumbrances; Transfer
of the suit property pending final disposal of the suit; ad interim
injunction pending the suit; Prima facie case; Irreparable injury;
Balance of convenience.
Case Arising From
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 13001 of 2024
From the Judgment and Order dated 08.12.2022 of the High Court
of Gujarat at Ahmedabad in AFO No. 86 of 2022
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Appearances for Parties
C.U. Singh, Sr. Adv., Chirag M. Shroff, Mrs. Mahima C Shroff,
Anand Thumbayil, Advs. for the Appellant.
Nikhil Goel, Sr. Adv., Ashutosh Ghade, Adithya Koshy Roy,
Ms. Siddhi Gupta, Ms. Naveen Goel, Advs. for the Respondents.
Judgment / Order of the Supreme Court
Order
1.
Leave granted.
2.
This appeal arises from the order passed by the High Court of
Gujarat dated 08.12.2022 in Appeal from Order No. 86/2022 by
which the High Court allowed the miscellaneous appeal filed by the
respondents herein and thereby set aside the order of injunction
which was passed by the trial court below Exhibit-5 in favour of the
appellants herein.
3.
Heard the learned counsel appearing for the parties and also looked
into the materials on record.
SUIT PROCEEDINGS
4.
The appellants herein, who are the original plaintiffs before the
trial court, instituted the Special Civil Suit No. 54 of 2019 for
declaration, cancellation of registered sale deed bearing no. 2863
dated 23.03.2018 and permanent injunction against the respondents
herein, that is, the original defendants. In the said suit, the plaintiffs
filed an application below Exhibit-5 for grant of temporary injunction
under Order 39 Rules 1 and 2 read with Section 151 of the Code of
Civil Procedure, 1908 ("CPC").
5.
For the sake of convenience, the parties are referred to by their
nomenclature in the original suit.
6.
Plaintiff nos. 1 to 3 respectively are real brothers and plaintiff nos. 4
to 6 respectively are their respective wives. Defendant no. 1 is the
real brother of the plaintiff nos. 1 to 3 respectively and defendant
no. 2 is his wife. Defendant nos. 3 and 4 respectively are the sons
of the defendant nos. 1 and 2 respectively, and defendant no. 5 is
the wife of the defendant no. 3.
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7.
In brief, it is the case of the plaintiffs that they purchased the suit
property situated in Sub-Plot No. 1, Navrang Co-operative Housing
Society, Survey No. 549/2, Alkapuri, Vadodara on 19.09.1991 by
way of a registered sale deed bearing no. 13813 in the joint names
of plaintiff nos. 1 to 3 and defendant no. 1. By way of one another
registered sale deed bearing no. 13805 executed on the same date,
the first floor of the suit property was purchased by the plaintiff nos.
4 to 6 and defendant no. 2. Thus, the plaintiffs and defendant nos.
1 and 2 became joint owners of the suit property and their names
were accordingly mutated in the city survey record.
8.
The plaintiffs and defendant nos. 1 and 2 decided to start a jewellery
showroom on the suit property and for the purpose of development
and construction, a power of attorney was executed by the plaintiffs
along with the defendant no. 2 in favour of the defendant no. 1 before
the Executive Magistrate on 06.04.1995. However, after remaining
operational for few years, in November, 2013, the jewellery showroom
constructed on the suit property stopped its operations.
9.
The plaintiff no. 5 received a notice dated 02.01.2019 issued by
the City Survey Officer under Section 135(D) of the Bombay Land
Revenue Code inviting objections if any against the recording of
change of ownership in respect of the suit property. It is the case of
the plaintiffs that upon receiving the said notice, they enquired and
found out that the defendant no. 1, on the strength of the aforesaid
power of attorney, had executed a registered sale deed in favour of
his son, defendant no. 3 in respect of the suit property.
10. Being aggrieved by the aforesaid, the plaintiffs instituted the suit
along with an injunction application below Exhibit-5 seeking the
reliefs as stated above.
11. The plaintiffs, in their application below Exhibit-5 for interim injunction
under Order 39 of the CPC, pointed out the following:
a.
The power of attorney was executed in favour of the defendant
no. 1 only with a view to entrust the day to day conduct of
administrative and procedural functions and not to enable the
defendant no. 1 to sell the suit property. There was no intention
to sell the property as it was purchased only for the purpose of
running a jewellery showroom. It is on the basis of the said power
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of attorney that the necessary permission to put up construction
on the suit property was obtained from the Vadodara Municipal
Corporation in 1995. Upon completion of the construction of
the showroom and start of the business operations in 1997, the
power of attorney became redundant, but was kept preserved
in the office for the sake of record.
b.
In 2012, the defendant no. 1 expressed his inclination to retire
and part ways from the family business, however this was
not accepted by the plaintiff nos. 1 to 3 respectively as they
wanted the family members to live jointly. Subsequently, the
defendant no. 1 stopped paying attention to the family business
and withdrew his share as well as additional amounts from the
family business and created his individual responsibilities. As the
liabilities of the defendant no. 1 increased, the family business
being conducted on the suit property had to be shut down in
November, 2013. However, the business records, documents,
ornaments, stocks, etc. were kept in the showroom. Thereafter,
the plaintiffs along with their sons started their own business.
c.
The defendant no. 1, in collusion with the officials of the office
of the sub-registrar, executed a sale deed of the suit property
without any sale consideration in favour of his son, that is, the
defendant no. 3, illegally relying on the power of attorney of
1995. The other son of the defendant no. 1 and the wife of the
defendant no. 3 stood as the attesting witnesses to the said
sale deed.
d.
As per the recitals in the sale deed, the defendant no. 1 is said
to have sold the suit property to his son for a consideration of
Rs. 1.70 Crore. However, the market value of the suit property
at the time of the execution of the sale deed was more than
Rs 20 Crore. Further, the sale amount of Rs 1.70 Crore has
not been received by the plaintiffs till date.
e.
The corporation taxes to the tune of Rs 4,82,000/- were paid
by the plaintiffs on 20.07.2018, that is, after the execution of
the sale deed on 23.03.2018. The said tax receipts are in the
name of Narayan Jewellers Pvt. Ltd., that is, the family business
corporation.
f.
The plaintiffs had to initiate criminal prosecution against the
defendants for their illegal actions.
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g.
It was apprehended that the defendants may execute third party
agreements in relation to the suit property thereby defeating the
rights of the plaintiffs, leading to a situation wherein the plaintiffs
would not be able to use and enjoy their property and may give
rise to further litigation with respect to the suit property.
h.
Disposal of the suit may take time and therefore injunction was
prayed for during the pendency of the suit.
12. The defendants, in their written statement and reply to the application
for interim injunction below Exhibit-5, took the following stance:
a.
Initially the relations between the plaintiff nos. 1 to 3 and
defendant no. 1 and other family members were cordial, however
differences started arising from the year 2000. The plaintiff
nos. 1-3 used to withdraw huge amounts from the account of
the company, however the defendant no. 1 was not allowed to
withdraw amounts to the same extent.
b.
The defendant no. 1 initially suffered from tuberculosis and
later cancer in the years 2004 and 2007 respectively. Although
there was an internal family arrangement that allowed all the
four brothers to withdraw equal amounts from the business,
yet the arrangement was not honoured by the plaintiffs and in
2013, the amount due was to the tune of Rs 16.50 Crore. Thus,
the defendant no. 1 is entitled to receive this amount from his
brothers or from the company.
c.
As the defendant no. 1 was sick at the time of the closure of the
showroom situated on the suit property in 2013, he could not
visit the showroom and as a result the stock in trade, finished
and semi-finished goods, gold, diamond, platinum, etc. was
taken away by the plaintiffs.
d.
At the time of the closure of the showroom, the plaintiff nos. 1
to 3 handed over the keys of the showroom to the defendant
no. 1 and instructed him to sell the same in the open market
and distribute the consideration equally among the joint owners.
Accordingly, the physical & vacant possession of the suit property
was handed over to the defendant no. 1.
e.
The defendant no. 1 intimated the plaintiff nos. 1 to 3 over a
phone call that he was selling the suit property in favour of the
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defendant no. 2 and also that the sale consideration of Rs 1.70
Crore would be adjusted towards the dues of the defendant no. 1.
f.
The power of attorney is a registered document and was never
cancelled by the plaintiffs, and the said power of attorney was
used with the consent of all the signatories to it.
13. The trial court, after hearing the parties on the application for grant
of temporary injunction, took the view that the conditions for grant
of injunction in favour of the plaintiffs were satisfied and accordingly
allowed the injunction application below Exhibit 5 vide order dated
10.01.2022.
14. The trial court took the view that the sale deed executed by the
defendant no. 1 in favour of the defendant no. 3 did not bear the
signatures of any of the plaintiffs. Further, the plaintiffs had produced
the sale deed of 1991 by way of which the plaintiffs along with the
defendant nos. 1 and 2 respectively had become joint owners of the
suit property. In view of the aforesaid, the trial court took the view
that the plaintiffs were able to establish a prima facie case that they
have a right title and interest in the suit property. Further, the trial
court held that the facts of the case suggested that the balance of
convenience was in the favour of the plaintiffs and further that if
temporary injunction was not granted, then the plaintiffs may suffer
loss that cannot be compensated in terms of money.
15. In view of the aforesaid, the trial court directed the defendant no. 3
not to deal or transact with anyone in any manner in respect of the
suit property till the disposal of the suit.
APPEAL BEFORE THE HIGH COURT
16. Aggrieved by the order granting injunction in favour of the plaintiffs,
the defendants filed a miscellaneous appeal before the High Court
under Order 43 Rule 1 read with Section 104 of the CPC. The
defendants challenged the order granting injunction inter alia on the
following grounds:
a.
The plaintiffs have failed to make out any prima facie case
as the power of attorney executed in favour of the defendant
no. 1 is not under challenge and thus no presumption can be
drawn against it.
[2024] 11 S.C.R.
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b.
The relief sought in the interim injunction application below
Exhibit-5 is virtually the same as the relief sought in the suit.
c.
No irreparable harm would be caused to the plaintiffs if injunction
is declined as the non-grant of relief can be compensated in
terms of money. The plaintiffs have not been able to establish
any of the necessary conditions required for grant of injunction.
d.
Grant of injunction in favour of the plaintiffs has caused
irreparable harm to the defendant no. 3 as he is unable to
utilize the property that he has purchased by way of a registered
sale deed.
e.
The defendant no. 1 has acquired a right in the suit property
by virtue of a family arrangement and he executed the sale
deed on the strength of the power of attorney only after taking
consent of all the signatories. As per the family arrangement,
an amount of Rs 16.50 Crore is due to the defendant no. 1
from the plaintiffs.
f.
Clause No. 5 of the power of attorney dated 05.04.1995
suggests that the power was given to undertake the procedure
for sale in reference to the Income Tax authority and clause
no. 6 suggests that the defendant no. 1 is empowered to fully
utilize that power.
g.
The defendant no. 3 is a bona fide purchaser of the suit property
for a sale consideration of Rs 1.70 Crore and since the registered
sale deed is not void, there can be no injunction against the
purchaser from enjoying the suit property and the sale in his
favour cannot be said to be null and void.
h.
The defendants, under the threat of being forcibly & illegally
dispossessed from the suit property, preferred Regular Civil Suit
No. 36/2019 before the 10th Additional Chief Judicial Magistrate
& Civil Judge, First Class, Vadodara seeking mandatory
injunction against the plaintiffs, wherein the said Civil Judge
was pleased to restrain the plaintiffs and their agents from
entering into the premises of the suit property till the disposal
of the Regular Civil Suit No. 36/2019.
i.
The modus operandi of the plaintiffs is to ensure that the
defendants are not able to enjoy and utilise the suit property.
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The plaintiffs have raised objections with the electricity company
as regards grant of electricity connection in the suit property.
j.
As part of the family arrangement between the parties, it was
decided between the brothers that the joint business properties
would be partitioned by executing sale deeds in favour of their
respective sons and the sale consideration would be transferred
from the business account to the account of purchasers and
such purchaser shall issue cheques in the names of the four
brother. While transfer of different properties took place as per
this arrangement, no transfer or transaction was done in favour
of the defendant no. 1. When this was taken up by the defendant
no. 1 with his other brothers, they asked him to transfer the suit
property to his son, that is, the defendant no. 3 by exercising
his rights under the power of attorney.
17. In response to the aforesaid contentions of the defendants before
the High Court, the plaintiffs inter alia submitted the following:
a.
The power of attorney was executed in favour of the defendant
no. 1 only for the purpose of obtaining necessary permissions
for development and construction of the suit property and the
power to sell the property was never conferred through the
said power of attorney.
b.
The defendant no.1 executed the sale deed in respect of the
suit property in favour of his son, that is, the defendant no.
3, for a meagre consideration of Rs 1.70 Crore whereas the
market value of the property at the relevant point in time was
more than 17 Crore.
c.
The plaintiffs have filed a written complaint dated 09.01.2019
against the defendant nos. 1, 3, 4 and 5 respectively for the
offence punishable under Sections 406, 409, 420, 465, 467,
468, 471 and 120 of the IPC respectively in relation to the
execution of the sale deed dated 23.03.2018 and one another
complaint dated 18.01.2019 against defendant nos. 3 and 4
respectively for breaking the lock and forcibly entering the suit
property along with ten other persons.
d.
Injunction was granted by the trial court by way of a wellreasoned order after taking into consideration all the detailed
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facts and contentions of both the parties. The appellate court
should remain slow in substituting its own discretion with the
one exercised by the court of first instance unless the exercise
of discretion by the first court was shown to be malicious,
capricious, perverse or having been exercised in ignorance of
the settled principles of law regulating the grant or refusal of
interlocutory injunctions.
18. The High Court by way of the impugned order, allowed the appeal
filed by the defendants and vacated the order granting injunction
in favour of the plaintiffs. The High Court took the view that with
the grant of injunction, the trial court had virtually allowed the suit,
though no case for grant of interim injunction could be said to have
been made out. The High Court also referred to other pending civil
and criminal litigations between the parties and observed that the
same suggested that the plaintiffs were intentionally harassing the
defendants one way or the other. The relevant observations made
by the High Court are extracted below:
"16. [...] It also emerges from the record that the respondents
seek share from the property which the appellant is entitled
to get as family settlement and they are also creating hurdle
in utilizing the property by restraining electricity company
from granting electricity connection to the appellants. That
the respondents approached the electricity company by
filing application with regard to non-grant of electricity
connection to the appellants and, therefore, the appellants
are not given electricity connection. It emerges from the
record that against inaction on the part of the electricity
company, the appellants preferred Special Civil Application
No.21075 of 2022 before this Court and this Court vide
order dated 19.10.2022 issued notice and it was kept
open for the electricity company to consider the application
preferred by the appellants in the month of February 2022.
In view of the aforesaid facts, it clearly reveals that the
respondents are intentionally harassing the appellants by
one or the other way. It appears that the original plaintiffs
filed the suit for declaration, cancellation of registered sale
deed No.2863 dated 23.03.2018 which was executed by
original defendant no.1 in favour of original defendant no.3
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in connection with the suit property of Sub Plot No.1 of
Navrang Cooperative Housing Society, R. C. Dutt Road,
Alkapuri, Vadodara and permanent injunction against the
original defendants along with the injunction application
at Exhibit 5. Considering the facts and circumstances of
the case, I am of the opinion that by granting interim relief
vide order dated 10.01.2022, the trial court had virtually
allowed the suit, even though none of the circumstances
for consideration for grant of interim relief did ever exist.
In view of the aforesaid facts, in my view, the trial court
has committed an error of facts and law in passing the
impugned order passed below Exhibit 5 and the said
order is erroneous and against the settled principles of
law. The trial court, while granting the interim relief, has
not considered all the relevant aspects and passed the
impugned order.
17. Considering the fact that the plaintiffs filed Special
Criminal Application No.859 of 2019 before this Court
seeking direction for registration of FIR against the
defendants and this Court vide order dated 04.02.2019
directed the police authorities to register the FIR. It appears
that the defendants filed Criminal Misc. Application No.1
of 2019 in Special Criminal Application No.859 of 2019
for recalling of the order dated 04.02.2019, which came to
be rejected by this Court. It reveals that against the order
dated 04.02.2019 passed in Special Criminal Application
No.859 of 2019 and order dated 20.03.2019 passed in
Criminal Misc. Application No.1 of 2019, the defendants
preferred Special Leave to Appeal before the Hon'ble
Supreme Court, which came to be dismissed vide order
dated 24.02.2020.
18. Considering the facts of the case, it appears that the
plaintiffs have tried to see that any how, the defendants -
appellants herein be ruined and surrendered to the demands
of the original plaintiffs. It seems that the original plaintiffs
one after another initiated proceedings against the present
appellants including the civil as well as criminal. It is
relevant tonote here that in criminal proceedings though
"C" summary report came to be filed by the Investigating
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Officer before the concerned Court, the original plaintiffs
by utilizing the political pressure have restrained the
Investigating Officer to submit the "C" summary report
before the concerned Court and/or to withdraw "C" summary
report. It also appears that in earlier round of litigation, the
original plaintiffs reached upto the Hon'ble Supreme Court
as they are running the business and earning the income
from the business. That though the appellants are now out of
business and having crunch of money, the original plaintiffs
are trying to see that the appellants surrender to the original
plaintiffs and even surrender their source of income to the
original plaintiffs. That the plethora of evidence which is
produced before this Court, is never produced before the
trial court and while granting the interim relief in favour of
the original plaintiffs, the trial court has no occasioned to
deal with such documentary evidence which is produced
before this Court. In 2012, the business in the name and
style of "Narayan Jewellery" was closed, however, in 2015,
the plaintiffs have produced certificate of the chartered
accountant wherein the amount disputed in question is
shown as goods in transit. So all these facts are required
to be decided by leading cogent, convincing and sufficient
evidence before the trial court and, therefore, at this stage,
the impugned order passed by the trial court is absolutely
erroneous and against the principles of law. Considering
the aforesaid facts, I am of the opinion that the present
appeal deserves to be allowed and the impugned order
deserves to be quashed and set aside."
19. In such circumstances referred to above, the plaintiffs are here
before this Court with the present appeal. Notice was issued in the
Special Leave Petition (Civil) No. 252/2023 filed by the plaintiffs vide
the order dated 05.01.2023 and parties were directed to maintain
status quo in respect of the suit property during the pendency of the
petition. The status quo has thereafter been extended by subsequent
orders of this Court.
APPELLATE JURISDICTION UNDER ORDER 43 OF THE CPC
20. Order 43 of the CPC specifies the orders against which an appeal
lies. Sub-Rule (r) of Rule 1 of the said order provides that an appeal
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would lie against an order made under Rules 1, 2, 2A, 4 and 10 of
Order 39 of the CPC respectively.
21. The law in relation to the scope of an appeal against grant or nongrant of interim injunction was laid down by this Court in Wander
Ltd. v. Antox India P. Ltd. reported in 1990 Supp SCC 727. Antox
brought an action of passing off against Wander with respect to the
mark Cal-De-Ce. The trial court declined Antox's plea for an interim
injunction, however, on appeal the High Court reversed the findings
of the trial judge. This Court, upon due consideration of the matter,
took notice of two egregious errors said to have been committed
by the High Court:
a.
First, as regards the scope and nature of the appeals before
it and the limitations on the powers of the appellate court to
substitute its own discretion in an appeal preferred against a
discretionary order; and
b.
Secondly, the weakness in ratiocination as to the quality of
Antox's alleged user of the trademark on which the passing
off action is founded.
22. With regards to (a), this Court held thus:
"In such appeals, the appellate court will not interfere
with the exercise of discretion of the court of the first
instance and substitute its own discretion, except where
the discretion has been shown to have been exercised
arbitrarily or capriciously or perversely, or where the court
had ignored the settled principles of law regulating grant
or refusal of interlocutory injunctions ... the appellate
court will not reassess the material and seek to reach a
conclusion different from the one reached by the court
below ... If the discretion has been exercised by the trial
court reasonably and in a judicial manner the fact that
the appellate court would have taken a different view
may not justify interference with the trial court's exercise
of discretion."
23. This Court, while arriving at the above findings, relied on its earlier
judgment in Printers (Mysore) v Pothan Joseph reported in (1960)
SCC Online SC 62 where it was held thus:
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"[...] as has been observed by Viscount Simon LC in
Charles Osenton & Co v Johnston - the law as to reversal
by a court of appeal of an order made by a judge below in
the exercise of his/her discretion is well established, and
any difficulty that arises is due only to the application of
well-settled principles in an individual case."
24. It is pertinent to note that in Printers (supra) this Court had held
that ignoring relevant facts is also a ground for interfering with the
discretion exercised by the trial court. Furthermore, Viscount Simon
LC in Charles Osenton & Co v Johnston reported in 1942 A.C.
130, after stating the above, went on to quote Lord Wright's decision
in Evans v. Bartlam reported in 1937 A.C. 473:
"It is clear that the court of appeal should not interfere
with the discretion of a judge acting within his jurisdiction
unless the court is clearly satisfied that he was wrong. But
the court is not entitled simply to say that if the judge had
jurisdiction and had all the facts before him, the court of
appeal cannot review his order unless he is shown to have
applied a wrong principle. The court must, if necessary,
examine anew the relevant facts and circumstances in
order to exercise a discretion by way of review which may
reverse or vary the order."
25. In Evans (supra) case, Lord Wright made it clear that while
adjudicating upon the discretion exercised by the trial court, the
appellate court is obliged to consider the case put forward by the
appellant in favour of its argument that the trial court exercised its
discretion arbitrarily or incorrectly in the circumstances.
26. What flows from a plain reading of the decisions in Evans (supra)
and Charles Osenton (supra) is that an appellate court, even while
deciding an appeal against a discretionary order granting an interim
injunction, has to:
a.
Examine whether the discretion has been properly exercised,
i.e. examine whether the discretion exercised is not arbitrary,
capricious or contrary to the principles of law; and
b.
In addition to the above, an appellate court may in a given case
have to adjudicate on facts even in such discretionary orders.
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27. The principles of law explained by this Court in Wander's (supra)
have been reiterated in a number of subsequent decisions of this
Court. However, over a period of time the test laid down by this
Court as regards the scope of interference has been made more
stringent. The emphasis is now more on perversity rather than a
mere error of fact or law in the order granting injunction pending the
final adjudication of the suit.
28. In Neon Laboratories Ltd. v. Medical Technologies Ltd. reported
in (2016) 2 SCC 672 this Court held that the Appellate Court should
not flimsily, whimsically or lightly interfere in the exercise of discretion
by a subordinate court unless such exercise is palpably perverse.
Perversity can pertain to the understanding of law or the appreciation
of pleadings or evidence. In other words, the Court took the view
that to interfere against an order granting or declining to grant a
temporary injunction, perversity has to be demonstrated in the finding
of the trial court.
29. In Mohd. Mehtab Khan v. Khushnuma Ibrahim Khan reported in
(2013) 9 SCC 221 this Court emphasised on the principles laid down
in Wander (supra) and observed that while the view taken by the
appellate court may be an equally possible view, the mere possibility
of taking such a view must not form the basis for setting aside the
decision arrived at by the trial court in exercise of its discretion
under Order 39 of the CPC. The basis for substituting the view of
the trial court should be malafides, capriciousness, arbitrariness or
perversity in the order of the trial court. The relevant observations
are extracted below:
"20. In a situation where the learned trial court on a
consideration of the respective cases of the parties and
the documents laid before it was of the view that the
entitlement of the plaintiffs to an order of interim mandatory
injunction was in serious doubt, the Appellate Court could
not have interfered with the exercise of discretion by the
learned Trial Judge unless such exercise was found to
be palpably incorrect or untenable. The reasons that
weighed with the learned Trial Judge, as already noticed,
according to us, do not indicate that the view taken is not
a possible view. The Appellate Court, therefore, should
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not have substituted its views in the matter merely on the
ground that in its opinion the facts of the case call for a
different conclusion. Such an exercise is not the correct
parameter for exercise of jurisdiction while hearing an
appeal against a discretionary order. While we must not
be understood to have said that the Appellate Court was
wrong in its conclusions what is sought to be emphasized
is that as long as the view of the trial court was a possible
view the Appellate Court should not have interfered with
the same following the virtually settled principles of law
in this regard as laid down by this Court in Wander Ltd.
v. Antox India (P) Ltd."
(Emphasis supplied)
30. This Court in Shyam Sel & Power Ltd. v. Shyam Steel Industries
Ltd. reported in (2023) 1 SCC 634 observed that the hierarchy of the
trial court and the appellate court exists so that the trial court exercises
its discretion upon the settled principles of law. An appellate court,
after the findings of the trial court are recorded, has an advantage
of appreciating the view taken by the trial judge and examining the
correctness or otherwise thereof within the limited area available. It
further observed that if the appellate court itself decides the matters
required to be decided by the trial court, there would be no necessity
to have the hierarchy of courts.
31. This Court in Monsanto Technology LLC v. Nuziveedu Seeds Ltd.
reported in (2019) 3 SCC 381, observed that the appellate court
should not usurp the jurisdiction of the Single Judge to decide as to
whether the tests of prima facie case, balance of convenience and
irreparable injury are made out in the case or not.
32. The appellate court in an appeal from an interlocutory order granting
or declining to grant interim injunction is only required to adjudicate
the validity of such order applying the well settled principles governing
the scope of jurisdiction of appellate court under Order 43 of the
CPC which have been reiterated in various other decisions of this
Court. The appellate court should not assume unlimited jurisdiction
and should guide its powers within the contours laid down in the
Wander (supra) case.
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PRINCIPLES GOVERNING GRANT OF TEMPORARY INJUNCTION
33. In the case of Anand Prasad Agarwal v. Tarkeshwar Prasad
reported in (2001) 5 SCC 568,it was held by this Court that it would
not be appropriate for any court to hold a mini-trial at the stage of
grant of temporary injunction.
34. The burden is on the plaintiff, by evidence aliunde by affidavit or
otherwise, to prove 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 precedent 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 that which
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. (See: Dalpat Kumar v. Prahlad Singh reported in (1992) 1
SCC 719.)
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MEANING OF THE EXPRESSION "PERVERSE"
35. Any order made in conscious violation of pleading and law is a
perverse order. In Moffett v.