Calcutta HC Summarises Law Governing Exercise Of Judicial Discretion For Grant Of Interlocutory Injunction Under Order 39 Rules 1 & 2 CPC

"In exercise of such discretion, tests to be applied are i) whether the plaintiff has a prima facie case, ii) whether balance of convenience and inconvenience is tilted in favour of the plaintiff and iii) whether plaintiff would suffer irreparable injury, which cannot be compensated in terms of money, if his prayer for temporary injunction is disallowed."

The bench explained each of the tests in detail. As regards the first test of the plaintiffs making out of a prima facie case in its favour, the Court clarified that such "prima facie case" was not to be confused with "prima facie title". The sole consideration before the Court for determining the existence of a prima facie case in the favour of the plaintiff was whether the the plaintiff raised any substantial question of law which necessitated investigation by the Court and a subsequent decision on merits. The Court held:

"'Prima facie case' is not to be confused with 'prima facie title'. To decide the question as to whether plaintiff has prima facie case in his favour, Court shall first see whether plaintiff has raised any substantial question which needs investigation and decision on merits, i.e., whether he has raised some question to go into the trial. Court may consider probability of his success in the trial and the comparative strength of the cases of the respective parties before it. The Court may also ascertain as to whether the suit shall fail on technical ground but it is not necessary for the plaintiff to prove his case to the hilt and if a fair question is raised for determination, it should be taken that a prima facie case has been established."

With respect to the secondary test of balance of convenience, the Court was required to be convinced that a denial of the relief of temporary injunction to the plaintiff would cause to the plaintiff an inconvenience which would exceed, in all events, any inconvenience which would have been caused to the defendant if the latter was restrained by the Court. It held:

"Plaintiff must establish that his inconvenience, in the event the relief of temporary injunction is denied to him will, in all events, exceed that of the defendant in case he is restrained."

For satisfaction of the third and final test or "irreparable injury', the plaintiff is required to demonstrate before the Court that the denial of interlocutory injunction would cause to the plaintiff an injury so substantial that it cannot be adequately remedied or compensated by damages, noting further that at the stage of deciding an application for temporary injunction under Order 39 Rules 1 & 2 CPC, the Court was not required to go into the merits of the case in detail. The Court held:

"The term 'irreparable injury' means substantial injury which cannot be adequately remedied or compensated by way of damages and the Court shall consider whether protection is necessary from the species of injuries known as 'irreparable' before his legal right can be established. Court shall consider whether the mischief or inconvenience likely to arise from withholding injunction will be greater than which is likely to arise if granted. At this stage of deciding the application for temporary injunction, the Court is not required to go into the merits of the case in detail."

The Court was hearing an appeal against an order of a lower court rejecting an application seeking interim injunctive reliefs under the above provisions. The said application was filed in respect of steps taken by the respondent no. 1 to create third party interest in the premises which formed the subject matter of a suit which was filed by the appellant herein and the instant respondent no. 2 for specific performance of contract against the instant respondent no. 1. The said suit was filed along with the said application under under Order 39 Rules 1 and 2 read with S. 151 CPC. The respondent no. 1 intended to create third party interest in the property by entering into an agreement for sale to sale out the said property in favour of two third parties.

Counsel for the respondent no. 1 contended that the main suit was bound to fail on account of technical defects and further challenged the joinder of a second plaintiff in the said suit proceedings on the basis that there was no privity of contract between the respondent no. 1 and the said second plaintiff. Counsel for the respondent no. 1 further contended that the said agreement of sale entered into between the respondent no. 1 and one of the two third parties was not a concluded contract and unregistered and as such, was not enforceable and could not be relied upon by the Court.

Deeming the impugned order of the lower court as a non-speaking order, the High Court held:

"Upon perusal of the said order passed by the learned Court below, we have no hesitation to hold that the same is a non-speaking one. The need for delivering a reasoned order is a requirement of law which has to be complied with in all orders. The Hon'ble Supreme Court in several judgments has denounced the practice of issuance of non-speaking orders. Any order dehors reason suffers from the vice of non-application of mind. A Court of law while passing any order is duty bound to assign reason. Issuance of a non-speaking order is nothing but deprivation of justice particularly in respect of the party, who has suffered defeat since he has every right to know the reason of his defeat."

Within the factual matrix of the instant case, the Court arrived at the finding that the respondent no. 1 did not specifically raise any issue regarding privity of contract, enforceability of the subsequent agreement of joinder of a second plaintiff in the suit proceedings or as regards acceptability of the unregistered agreement in his written objection.

Without proceeding on to the merits of the plaintiff's case which was to decided at the stage of trial, the Court further held that if the respondent no. 1 was permitted at that stage to create third party interest in the suit property, it would have lead to multiplicity of proceedings and even transfer/alienation of such suit property, which would have ultimately affected the plaintiff's case during trial and even obstruct the enforcement of reliefs which may have been granted by the suit court in favour of the plaintiff during such trial. The Court held:

"Here, it prima facie appears that the respondent no.1 had entered into two agreements to sell out the suit property and now, to enforce the specific performance of contract, the appellant has filed this suit. Admittedly, in both the agreements, the respondent no.1 had put his signatures. So, whether plaintiffs shall be entitled to enforce the specific performance of contract or not is a serious question which needs investigation and decision on merits. Whether suit will fail due to defect of party is also a question required to be decided in trial. So, before taking such decision and before the legal right of the plaintiffs are established in trail, if the respondent no.1 is allowed to create third party interest, the same shall lead to multiplicity of proceeding and even such transfer and/or alienation, if made during pendency of the proceeding, can stand in the way of enforcement of specific performance if in case the Court ultimately comes out with a finding that specific performance is required to be enforced. If third party interest is allowed to be created in the suit property, then mischief, hardship and inconvenience of the plaintiff would be greater than the injuries which the respondent no.1 may suffer if he is restrained from transferring or alienating the suit property during pendency of the suit. The learned court below has committed mistake in not considering this aspect …"

Accordingly, the Court passed an interlocutory order of injunction restraining the respondent no. 1 from creating third party interest in the suit property during pendency of the suit and admitted the instant appeal by setting aside the impugned order of the lower court.

Case: Sourav Sarkar v. Hirak Ranjan Sarkar & Anr., FMA 437 of 2022

Date: 02.11.2022

Citation: 2022 LiveLaw (Cal) 351