Appellate Court's interference with ad-interim injunctions is restricted to exceptional circumstances causing substantial prejudice or irreparable injury.

Respondent No.1/Exclusive Capital Limited (original plaintiff) instituted a suit seeking a declaration that an Inter-Corporate Loan (ICL) Agreement dated 14.12.2022 and an assignment deed dated 01.02.2024 were void and illegal, and for a permanent injunction to restrain claims under these agreements.

The appellant, Asian Hotels (North) Limited (defendant No.4 in the original suit), had availed credit facilities from a consortium of banks, which were later assigned by IndusInd Bank to Respondent No.1.

Respondent No.1 had received ₹60 crores from Respondent No.2, Clover Media Private Limited, under an Inter-Corporate Deposit arrangement to finance this acquisition.

Subsequently, Respondent No.2 relied on the ICL Agreement and assigned its purported rights to Respondent No.3 via an Assignment Agreement dated 01.02.2024.

Disputes arose over the custody of original security documents held by DBS Bank India Limited (defendant No.5), acting as the security agent.

The learned Single Judge, while issuing notice in the suit on 07.01.2026, passed an ad-interim order directing defendant No.5 to hold the title deeds until the next hearing on 06.04.2026.

The appellant (defendant No.4) challenged this ad-interim order.

Whether an ad-interim order, directing a party already in custody of title deeds to continue holding them, constitutes an appealable injunction requiring detailed reasoning under Order XXXIX Rule 3 of the CPC?

Whether the appellate court should interfere with such an ad-interim order in a pending suit, especially when the final decision on the interim application is yet to be made?

The court primarily applied Order XLIII Rule 1 of the Code of Civil Procedure, 1908, read with Section 13 of the Commercial Courts Act, 2015, which governs appeals against orders.

It considered the principles for granting interlocutory injunctions as laid down in Wander Ltd. & Anr. v. ANTOX India P. Ltd., 1990 SCC OnLine SC 490, reaffirmed in Gujarat Bottling Co. Ltd. v. Coca Cola Co., (1995) 5 SCC 545, particularly concerning prima facie case, balance of convenience, and irreparable injury.

The court also referred to Order XXXIX Rules 1, 2 & 3 of the CPC, which outline procedures for interim injunctions and the requirement for recording reasons.

The standard for appellate interference with interlocutory orders requires a high bar, assessing serious prejudice or irreparable injury to the appellant.

The court distinguished the ad-interim order from a definitive injunction under Order XXXIX Rules 1 & 2, CPC, noting that merely directing defendant No.5 to hold title deeds (which were already in its custody) did not change the existing situation.

The Single Judge's order was not seen as granting a final injunction, but rather maintaining the status quo.

The court found the appellant's grievance regarding lack of detailed reasoning untenable because the stay application had not been finally decided, and detailed reasons are typically required at the stage of final decision on such applications.

It emphasized that an ad-interim injunction cannot be set aside solely for lack of reasons unless it shocks the conscience of the appellate court, which was not the case here.

The court reiterated that interfering with an interlocutory order requires meeting a high bar, specifically demonstrating serious prejudice, substantial prejudice due to non-grant of relief, or the order being based on no material or jurisdictional error.

Since the title deeds were already with defendant No.5, the ad-interim order caused no new prejudice or irreparable injury to the appellant.

The court also noted that the final arguments on the stay application were imminent before the Single Judge.

The court held that the ad-interim order merely maintaining the status quo regarding the custody of title deeds by defendant No.5 did not warrant interference in appellate jurisdiction under Order XLIII Rule 1(r) of the CPC read with Section 13 of the Commercial Courts Act, 2015.

The court clarified that its observations were incidental and should not bind the Single Judge when deciding the application or suit on its merits.

All pending applications were disposed of.