Full Judgment Text
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 4005 OF 2011
(Arising out of Special Leave Petition (C) No. 26974 of 2010)
Purshottam Vishandas Raheja and another …Appellants
Versus
Shrichand Vishandas Raheja (D) through Lrs. and others …Respondents
J U D G M E N T
Gokhale J .
Leave granted.
2. This appeal by special leave by original Defendants Nos. 1
and 2 seeks to challenge the Judgment and Order dated 12.8.2010
passed by a Division Bench of the Bombay High Court allowing the
Appeal No. 550/2009 against the order of a Single Judge dated
9.9.2009 in Notice of Motion No. 1787/2009 in Suit No. 1266/2009
filed by Respondent No. 1 (since deceased). The learned Single Judge
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had granted a limited relief to Respondent No. 1 (original plaintiff)
whereas by the Order passed by the Division Bench the Notice of
Motion taken up by the original Plaintiff had been made absolute in
terms of prayers (a), (b) and (c), and thereby granting full interim
relief which was sought by Respondent No. 1 herein.
3. In view of the demise of Respondent No. 1, the heirs of
Respondent No. 1 have come on record of the appeal. Their case is
that the interim relief as was sought, though in the nature of
mandatory relief, was necessary in the facts and circumstances of the
case. As against that, the submission on behalf of the Appellants is
that the learned Single Judge had exercised his discretion
appropriately and there was no reason for the Division Bench to
interfere therein. The Appellants also contend that the prayers in the
Notice of Motion are the principal prayers in the plaint and, therefore,
it amounts to granting a decree at the interlocutory stage which was
not justified in the present case.
4. The question for determination, therefore, is as to
whether, in the facts and circumstances of the case, the mandatory
order as passed by the Division Bench was justified, or whether the
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learned Single Judge having exercised his discretion appropriately, the
Division Bench erred in interfering therein?
5. The facts leading to this appeal are as follows:
Respondent No.1 (the original Plaintiff) is the elder brother
of Petitioner No.1 (Defendant No.1 in the Suit). Petitioner No.2 is the
son of Petitioner No.1. The dispute between them is about the rights to
a property which is being developed and is situated at Cadastral
Survey No. 764, Mazgaon Division in Mumbai. The case of Respondent
No.1 is that he is the exclusive owner of that property whereas the
Appellants very much dispute the same. It is the case of Respondent
No.1 that by Conveyance Deed dated 27.3.1981 as rectified by
Rectification Deed dated 11.9.1986, he had purchased the property
from the original owners and necessary property entries are in his
name. It is his case that he has taken steps to develop that property
under the Development Control Rules by removing one old bungalow
and several chawls situated thereon. Two buildings have already been
put up on that property and the third one now named as ‘Siddhagiri’ is
under construction.
6. It is his further case that since 1999, he has not been
keeping well, and therefore, he executed three Powers of Attorney
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from time to time. The first one was executed on 8.8.2000 in favour of
his wife and Appellant No.1 which was for performing various acts and
deeds on his behalf as his Constituted Attorneys in furtherance of this
project. He executed second Power of Attorney on 21.9.2005 again in
favour of his wife and Appellant No.1 as well as Appellant No.2 which
is also in the similar fashion as the first one. The third Power of
Attorney was executed on 24.10.2000 which is a specific power in
favour of Appellant No.1 for giving evidence on behalf of the
Respondent No.1. It was his further case that though there was one
Joint Account with Appellant No.1 in Indian Bank since 1993, one more
Joint Account was opened on 10.10.2001, this time in HSBC Bank
which was particularly for carrying the transactions relating to the
property and developments thereon. It was his case that all amounts
deposited in that account belong to him. He opened one more Joint
Account on 1.2.2008 in the State Bank of India with the Appellant
which was stated to be opened for payment of taxes etc. relating to
the property.
7. It is the case of Respondent No.1 that from time to time
Appellant No. 1 surreptitiously withdrew amounts that were lying with
the HSBC bank totalling to One Crore Forty Lakhs and invested in Birla
Sun Life Mutual Funds. The Appellant No. 1 had suggested this
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investment to him which he had declined, and thereafter unilaterally
this account was shifted. On Respondent No.1’s protest, the
investments in mutual funds were redeemed and substantial amount
came back into the account. However, an amount of about Rs. 6.9
lakhs was lost as it could not be redeemed. In view of this
development, he lost confidence in his brother and therefore served a
notice dated on 2.3.2009 on the Appellants, revoking all the three
Powers of Attorney. He called upon both the Appellants to desist from
acting on the basis of these Powers of Attorney. He called upon them
further to return the title deeds of the property, and render the
accounts, and informed them that he had appointed one Yogesh
Jadhav as the Project Manager and asked the Appellants to acquaint
him with various contractors as also the position of work and balance
of payment to be made. He lastly called upon the Appellants not to
operate the account with Indian Bank as well as with the HSBC bank
and return all the bank papers.
8. Appellant No.1 thereafter wrote to the Manager of the
Indian Bank on 24.4.2009 pointing out that the account with their
bank was initially in the joint names of his father and himself and
subsequently on the demise of his father; the first Respondent had
been joined into that account. According to the first Appellant, he
alone was entitled to operate the account and removal of an amount of
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Rs. 65,500/- from that account by the first Respondent was illegal. He
asked the bankers to ignore first Respondent’s earlier letter dated
9.3.2009 addressed to the bank. This was followed by a detailed reply
by the first Appellant to the first Respondent dated 12.5.2009 wherein
it was specifically pleaded that the Powers of Attorney were executed
for valid consideration and the same were coupled with interest in the
concerned property. Thereafter, he pointed out that although the
property stood in the name of first Respondent, as per the family
settlement which took place on 30.1.1992, two flats on the 15th floor
of “Arihant Tower” (first building developed) together with terrace, one
shop, one room and six chawls together with land appurtenant thereto
and interest therein were allotted to him and his father. He specifically
pleaded that the Powers of Attorney were executed to enable him and
his son to develop those properties. He pointed out that Respondent
No.1 was the legal heir to the extent of only one fifth share of his
father’s fifty percent (50%) share at the time of his demise, i.e. ten
percent (10%) only.
9. Thereafter, it was specifically pleaded that after the demise
of their father in the year 1994, the first Appellant started work on the
property to get the No-Objection Certificate from the government
authorities, spent good amount and time on the construction, provided
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initially temporary accommodation, and thereafter permanent
accommodation to the occupants of the shops and chawls, developed
the property by spending crores of rupees. He, inter alia, coordinated
with the architects, took steps to obtain permissions and No-Objection
Certificates (NOCs) from the Housing Board and the Municipal
authorities and attended court matters. He further pointed out that
since Respondent No.1 had failed to effect the necessary transfers of
various properties, discussions took place with the assistance of
lawyers for an understanding, and in spite of that he was making a
dishonest claim on the property knowing fully well what had come to
his share, viz. only ten percent (10%) of the property. He further
pointed out that he had a larger counter-claim running into crores of
rupees against Respondent No.1, and that the entire property was in
his exclusive possession for several years and there was no question of
appointing anyone else as Project Manager. With respect to the bank
account, he specifically pointed out that the bank account was being
operated by him in his own independent right and the Respondent
could not order him to refrain from operating the said account.
10. This led to the first Respondent to file the above
mentioned suit against the appellants. The Indian Bank, Hong Kong &
Shanghai Banking Corporation (HSBC Bank) and the State Bank of
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India were joined as defendants No.3 to 5 respectively. The three
principal prayers in the suit were as follows:
“[a] Defendant Nos. 1 and 2 and their servants and agents
be restrained by a permanent order and injunction of this
Hon’ble Court from in any manner directly or indirectly acting
or holding themselves out as Attorneys or Agents of the
Plaintiff or dealing with any of the properties or businesses of
the Plaintiff, including property bearing Cadastral Survey
No.764 of Mazgaon Division situate at 119, Chinchpokali Cross
Lane, Byculla, Mumbai 400 027 described in Exhibit – A-3
hereto or any premises thereon or under construction thereon
or any part thereof;
[b] Defendant Nos. 1 and 2 and their servants and agents
be restrained by a permanent order and injunction of this
Hon’ble Court from in any manner directly or indirectly
entering upon property bearing Cadastral Survey No.764 of
Mazgaon Division situate at 119, Chinchpokali Cross Lane,
Byculla, Mumbai 400 027 described in Exhibit – A-3 hereto or
any premises thereon or under construction thereon or any
part thereof;
[c] Defendant Nos. 1 and 2 and their servants and agents
be ordered and decreed to deliver to the Plaintiff documents
listed in Exhibit – U hereto and all other documents,
correspondence and records belonging to the Plaintiff in the
possession or power of Defendant No.1 or Defendant No.2.”
The Notice of Motion taken out in the Suit had the following prayers:
“(a) that pending the hearing and final disposal of the Suit,
Defendant Nos. 1and 2 and their servants and agents be
restrained by interim orders and injunctions of this Hon’ble
Court from in any manner, directly or indirectly.
(i)Acting or holding themselves out as Attorneys or
Agents of the Appellant or dealing with any of the
properties or businesses of the Plaintiff, including
property bearing Cadastral Survey No.764 of
Mazgaon Division situate at 119, Chinchpokali Cross
Lane, Byculla, Mumbai 400 027 described in Exhibit
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“A-3” to the Plaint or any premises thereon or
under construction thereon or any part thereof;
(ii) entering upon property bearing Cadastral Survey
No.764 of Mazgaon Division situate at 119,
Chinchpokali Cross Lane, Byculla, Mumbai 400 027
described in Exhibit “A-3” to the Plaint or any
premises thereon or under construction thereon or
any part thereof;
(iii) operating or signing any Cheques on or giving any
instructions relating to or withdrawing any
amounts form Account No. 417627508 in the joint
names of the Plaintiff and Defendant No.1 with
Defendant No. 3.
(iv) operating or signing any Cheques on or giving any
instructions relating to or withdrawing any
amounts from Account No. 002-236586-006 in the
joint names of the Plaintiff and Defendant No.1 with
Defendant No. 4.
(v) operating or signing any Cheques on or giving any
instructions relating to or withdrawing any
amounts from Account No. 20006421901 in the
joint names of the Plaintiff and Defendant No.1 with
Defendant No. 5.
(b) that pending the hearing and final disposal of the Suit,
Defendant Nos.1 and 2 and their servants and agents be directed by
an interim order and injunction of this Hon’ble Court to deliver to the
Plaintiff documents listed in Exhibit “U” to the Plaint and all other
documents, correspondence and records belonging to the Plaintiff in
the possession or power of Defendant No.1 or Defendant No.2
(c) that pending admission, hearing and final disposal of the Suit;
(i) Defendant No.3 and their servants and agents be
restrained by an order and injunction of this Hon’ble Court
from honouring any Cheques signed by Defendant No.1 on
or acting on any instructions given by Defendant No.1
relating to Account No.417627508 with Respondent No. 3
permitting any withdrawal of amounts by Defendant No.1
from Account No.417627508 with Defendant No. 3;
(ii) Defendant No.4 and their servants and agents be
restrained by an order and injunction of this Hon’ble Court
from honouring any Cheques signed by Defendant No.1 on
or acting on any instructions given by Defendant No.1
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relating to Account No.002-236586-006 with Defendant No.
4 permitting any withdrawal of amounts by Defendant No.1
from Account No. 002-236586-006 with Defendant No. 4;
(iii) Defendant No.5 and their servants and agents be
restrained by an order and injunction of this Hon’ble Court
from honouring any Cheques signed by Defendant No.1 on
or acting on any instructions given by Defendant No.1
relating to Account No.20006421901 with Defendant No. 5
permitting any withdrawal of amounts by Respondent No.1
from Account No. 20006421901 with Defendant No. 5;”
11. Respondent No.1 filed affidavit in support containing the
same submissions as above whereas the Appellant filed a reply based
on the letters which have been pointed out above. Thereafter, further
affidavits from both the parties were filed. Two sisters of the two
brothers have filed their joint affidavit in this Motion supporting the
contention raised by Appellants herein that there was a family
settlement on 30.01.1992 and as per the terms of the settlement, the
Byculla property came to Appellant No.1 and their father, and some
other properties were given to Respondent No.1. They also supported
the submission of the Appellants that only on the demise of their
father, the Respondent No.1 can claim ten percent (10%) share in that
property and nothing more.
12. In view of these pleadings when this matter was heard
before the learned Single Judge, he formed an opinion that it was not
possible to hold at that stage whether the documents of powers of
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attorney were merely powers simpliciter given by the owner of the
property, or whether they contained agency coupled with interest as
contended by the Appellants herein. The Appellants had pointed out
that although the property was purchased in the name of Respondent
No.1, almost ninety percent of the amount for the purchase was
contributed by Appellant No. 1. Besides this, the joint account in
Indian Bank was opened way back in the year 1993 and the amount
realized from the sale of the flats was being deposited therein. He was
the person on the spot dealing with that property and only on the
basis of the fact that the document of title stood in the name of the
first Respondent the interim order as sought could not have been
granted. The plea of the Appellants had to be examined particularly
when their sisters were supporting the Appellants with respect to
family settlement which was allegedly arrived at when their father was
alive. Granting of the interim order as prayed would have meant that
the Appellants will be required to withdraw themselves from the
concerned property. They will be restrained from entering into that
property or holding out as the attorneys of Respondent No.1
concerning that property. The Order by the learned Single Judge also
records that with respect to the stage of the construction it was the
counsel for the Appellants who placed the facts before the Court on
instructions that the construction was nearly complete, payments to
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various agencies had been made by the first Appellant and at this
belated stage if any interim order was passed it would not only be
inconvenient to Appellants, but also to the purchasers of the flats and
other third parties.
13. The grant of interim order would mean discontinuance of
the scenario on the spot as it existed at that point of time. Hence, the
prayers restraining the Appellants as attorneys or agents of first
Respondent or restraining them from entering into the property could
not be granted. As far as the prayer for the return of the documents in
possession of the Appellants was concerned, the learned Judge noted
that it was not possible to issue final orders with regard to them. He,
however, recorded that appellants had agreed to forward photocopies
of those documents to Respondent No.1. The learned judge held that
no prima facie case for a mandatory injunction was made out, yet in
paragraph 22 of his order, he granted a limited interim order which
reads as follows:
“ 22. For the aforesaid reasons, it is held that no prima
facie case is made out by the plaintiff and considering that
the development and construction work has progressed to a
substantial extent and only some finishing works are
remaining so also 23 flats have been already sold, interest of
justice would be sub-served if it is directed that the
development and construction work can be completed at site.
The flats can be sold on the basis of the documents executed
but all sale proceeds must be deposited in the concerned
joint bank account alone. The joint bank account would be
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allowed to be operated only to the extent of paying off the
liabilities insofar as the suit property and its development,
which shall include payment to contractors and other agents.
However, such payment shall be made only on production of
necessary proof and it is only thereafter the first defendant
can release the sums from this joint account in favour of the
contractors/agents/third parties. Needless to state that the
payment for the works which have been carried out through
any contractors, sub-contractors, agents would be made only
upon the Architect of the project certifying the said works
and issuing the necessary and relevant certificates to certify
the completion thereof. Apart from paying off these monies,
the bank account shall not be utilized by the first defendant
for any other purposes. The monies received from the sale of
23 flats are stated to be deposited in the said joint account
by the Plaintiff.
The documents are signed in favour of third parties by
either the plaintiff or plaintiff’s daughter. As far as balance
27 flats are concerned, it would be open to both sides to
negotiate with prospective buyers with necessary intimation
to each of them. It would also be open for the first
defendant to forward the offers for consideration to the
plaintiff and vice versa. All documents in favour of such
purchasers shall be signed by the plaintiff and/or his
daughters Laxmi and Sangita. However, this entire
arrangement is without prejudice to the rights and
contentions of both sides. The plaintiff should furnish details
of all the offers received and agreements which are entered
into by him to the first defendant so as to enable first
defendant to verify the particulars thereof. It is only after
the offers are intimated in writing that the plaintiff can
conclude the transactions and not otherwise.”
14. Being aggrieved by that limited order and seeking full
interim relief, Respondent No. 1 filed an appeal to the Division Bench.
The learned Judges of the Division Bench were impressed by the fact
that the conveyance of the property was in the name of the
Respondent and the flats were being sold in his name. Though the
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learned Judges noted that the explanation given by the Respondent
No.1 about opening of the joint account in the year 1993 was not
satisfactory, they emphasized the fact that in the Powers of Attorney
there was no reference to the family arrangement. They also posed
the question that if the Appellants had developed the property why
there was no reference to those dealings in their tax returns. They,
however, noted the fact that Respondent No.1 had not enough money
to purchase the property in the year 1991 (though he contends that he
had taken the money as loan from Appellant No.1). In view of these
factors, they were persuaded by the fact that the Powers of Attorney
had been revoked and in fact two flats which were supposed to be
given to Appellant No. 1 were sold by the first Respondent in the year
1993. The Division Bench, therefore, was of the view that a strong
prima facie case was made out and an interim order will have to be
granted. Being aggrieved by this order, the present appeal has been
filed.
15. The submission on behalf of the Appellant is that the
totality of circumstances have got to be seen and the factum of family
settlement along with the contribution to the purchase of the property
by Appellant No.1 has to be given due weightage. It was also
submitted on their behalf that the Appellants are the persons on the
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spot and they are developing the property and none of the
Respondents are available there. The flats are undoubtedly sold in the
name of the first Respondent because the property stands in his name.
In any case, it is submitted that the nature of powers under
documents have got to be examined on evidence with respect to the
family settlement and the Appellants cannot be non-suited at the
Motion stage when it was a family dispute and particularly when the
sisters who were parties to the family settlement were supporting the
submission of the Appellant. The Respondent, on the other hand,
submitted that this was a fit case to grant the interim mandatory order
as was granted by the Division Bench. The property belonged to the
Respondent and it is only because he was not well that the Appellants
carried out the development thereon. Now, they are taking advantage
of the situation.
16. We have noted the submissions of both parties. The
question which comes up for our consideration is whether the learned
Single Judge exercised his discretion in such an arbitrary or perverse
manner that the Appellate Court ought to have interfered with it? The
Learned Single Judge has passed a detailed order explaining as to why
he was constrained to grant only the limited interim relief. It was in
the interest of both the parties as well as the flat purchasers. The
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Order passed by the learned Single Judge is also on the basis that
anything beyond the limited protection given at that stage would deny
the opportunity to the Appellants to establish their case at the trial
when it is not in dispute that Appellant No.1 contributed ninety percent
of the purchase money to the property and he took steps all
throughout to develop the property. Undoubtedly, there are many
inconsistencies in the stories that are put up by both the parties, and
an interlocutory stage is not the one where one can reach at a definite
conclusion one way or the other, particularly where the fact situation is
as above and it would result into non-suiting one party.
17. As stated above, the question comes up as to whether the
order passed by the Division Bench was necessary. Mr. Nariman,
learned counsel appearing for the Respondents, relied upon the
Judgment of this Court in Dorab Cawasji Warden v. Coomi Warden
[(1990) 2 SCC 117] in support.
18. As far as this judgment is concerned, it must be noted that
it was a suit by one joint owner of an undivided family house to
restrain the other joint owners/their heirs from transferring their share
of the house and from parting with possession to a third
party/purchaser and restraining the purchaser from entering into and
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or remaining into possession of the suit property. This was on the
basis of the mandate of Section 44 of the Transfer of Property Act and
particularly its proviso. This Court went into the question as to
whether interlocutory injunction of a mandatory character as against
the prohibitory injunction could be granted? The counsel for the
Respondents pointed out that the mandatory injunctions were
essential to avoid greater risk of injustice being caused as held in
Films Rover International Ltd. v. Cannon Film Sales Ltd . [(1986)
3 All ER 87]. There is no difficulty in accepting that this Court did
accept that test. It, however, laid down the law in that behalf in
paragraphs 16 and 17 as follows:
“ 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.
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(3) The balance of convenience is in favour of the
one seeking such relief.
17. Being essentially an equitably 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.”
19. In Metro Marins and another v. Bonus Watch Co. (P) Ltd.
and others [reported in (2004) 7 SCC 478], the Respondent had filed
a suit for possession contending that the license of the Appellant to the
suit property had expired. The Respondent had prayed for a judgment
on admission and alternatively an injunction directing the Appellant to
immediately hand over vacant and peaceful possession of the suit
property. The learned Single Judge of the Calcutta High Court who
heard the interlocutory application, came to the conclusion that he did
not find any reason to pass such an order in view of the fact that the
suit was still pending and granting of such relief would tantamount to a
decree before trial. The Appellate Bench, however, re-examined the
facts and observed that the litigation to be a luxury litigation directed
the Receiver to put the Respondent/Plaintiff in possession. In the
appeal to this Court, the learned counsel for the Appellants pointed out
that the Appellants were very much in possession of the premises and
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the order passed by the Division Bench was contrary to the law laid
down in Dorab Cawasji Warden (Supra). The counsel for the
Respondents, on the other hand, defended the order of the Division
Bench by contending that the period of license having come to an end,
mandatory injunction passed by the Division Bench was justified. A
Bench of Three Judges of this Court allowed the appeal and explained
the proposition in Dorab Cawasji Warden (Supra) as follows in
paragraph 9:
“ 9. Having considered the arguments of the learned
counsel for the parties and having perused the documents
produced, we are satisfied that the impugned order of the
appellate court cannot be sustained either on facts or in law.
As noticed by this Court, in the case of Dorab Cawasji
Warden v. Coomi Sorab Warden it has held that an interim
mandatory injunction can be granted only in exceptional
cases coming within the exceptions noticed in the said
judgment. In our opinion, the case of the respondent herein
does not come under any one of those exceptions and even
on facts it is not such a case which calls for the issuance of
an interim mandatory injunction directing the possession
being handed over to the respondent.”
20. In Kishore Kumar Khaitan and another vs. Praveen
Kumar Singh [reported in (2006) 3 SCC 312], this Court once again
reiterated the principles with respect to the interim mandatory
injunction in paragraph 6 in the following words:
“ 6. An interim mandatory injunction is not a remedy
that is easily granted. It is an order that is passed only in
circumstances which are clear and the prima facie materials
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clearly justify a finding that the status quo has been altered
by one of the parties to the litigation and the interests of
justice demanded that the status quo ante be restored by
way of an interim mandatory injunction.”
21. In our view, the learned Single Judge has considered all the
relevant aspects of the matter and thereafter passed the limited
interim order whereby documents for sale of the flats will continue to
be signed by the Respondents, though, the monies coming into the
bank account thereafter will be utilized only for the purposes that are
necessary, as stated in paragraph 22 extracted above. The appellants
have not been directed to be removed from the property inasmuch as
they were the people on the spot carrying on the development prior to
filing of the suit. The order sought by the respondents, if granted,
would mean granting all the reliefs and a sort of pre-trial decree
without the opportunity to the Appellants to have their plea examined
with respect to the family arrangement, which plea is supported by
their sisters.
22. The test to be applied to assess the correctness of the
order of the learned Single Judge would be whether the order is so
arbitrary, capricious or perverse that it should be interfered at an
interlocutory stage in an intra-Court appeal. In Wander Ltd. and
another vs. Antox India P.Ltd . [reported in 1990 (Supp) SCC 727],
a bench of Three Judges of this Court has laid down the law in this
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respect which has been consistently followed. In that matter,
Appellant No.1 being the registered proprietor of a Trade Mark had
entered into an agreement with the Respondent permitting it to
manufacture certain pharmaceutical product. On the basis of that
arrangement, the respondent applied for the requisite license from the
authorities concerned. In view the dispute between the parties, the
Appellant called upon the Respondent to stop manufacturing the
particular product, and entered into an arrangement with another
company. The Respondent filed a suit and sought a temporary
injunction to restrain the Appellant and its new nominee-company
from manufacturing the products concerned. This was on the basis of
continued user in respect of the Trade Mark of the product by the
Respondent. It was contended that user was in his own right. A
learned Single Judge of the High Court declined to grant the interim
injunction which was granted in appeal by the Appellate Bench of
Madras High Court. This Court, in its judgment, held that the
Appellate Bench had erred firstly, in misdirecting with respect to the
nature of its powers in appeal and secondly, in basing its judgment on
the alleged user of the Trade Mark. A bench of Three Judge of this
Court laid down the law in this behalf in paragraph 14 of the judgment
which is as follows:
“ 14. The appeals before the Division Bench were
against the exercise of discretion by the Single Judge. In
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such appeals, the appellate court will not interfere with the
exercise of discretion of the court of 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. An appeal against exercise of discretion is said
to be an appeal on principle. Appellate court will not
reassess the material and seek to reach a conclusion different
from the one reached by the court below if the one reached
by that court was reasonably possible on the material. The
appellate court would normally not be justified in interfering
with the exercise of discretion under appeal solely on the
ground that if it had considered the matter at the trial stage
it would have come to a contrary conclusion. 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. After referring to these
principles Gajendragadkar, J. in Printers (Mysore) Private Ltd.
v. Pothan Joseph. (1960) 3 SCR 713
….These principles are well established, but as has
been observed by Viscount Simon in Charles Osenton & Co.
v. Jhanaton’… the law as to the reversal by a court of appeal
of an order made by a judge below in the exercise of his
discretion is well established, and any difficulty that arises is
due only to the application of well settled principles in an
individual case’.
The appellate judgment does not seem to defer to this
principle.”
It is to be noted that the proposition laid down has been
consistently followed thereafter.
23. For the reasons stated above, in our view, the present
case, is not one where mandatory interim injunction, as sought by the
Respondents was justified. The learned Single Judge had passed a
reasoned order, and, in no way, it could be said that he had exercised
2
the discretion in an arbitrary, capricious or perverse manner, or had
ignored the settled principles of law regarding grant or refusal of
interlocutory injunction. There was no reason for the Appellate Bench
to interfere and set aside that order.
24. This appeal is, therefore, allowed. The order passed by the
Division Bench is set aside and that of the learned Single Judge is
restored. We make it clear that we have not made any observations
on the merits of the rival claims of the Appellants as well as the
Respondents. We have confined ourselves only with respect to the
question as to what should be the interlocutory arrangement in the
facts and circumstances of the present case. In our view, the order
passed by the learned Single Judge was well reasoned and justified in
that context.
In the facts of the case, the parties will bear their own costs.
………………………………..J.
[ P.Sathasivam ]
………………………………..J.
[ H.L. Gokhale ]
New Delhi
May 6, 2011.