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2024 SCC OnLine SC 3538

In the Supreme Court of India

(BEFORE J.B. PARDIWALA AND R. MAHADEVAN, JJ.)

Ramakant Ambalal Choksi … Appellant;

Versus
Harish Ambalal Choksi and Others … Respondent
(s).
Civil Appeal No. 13001 of 2024 (@Special Leave Petition (Civil) No.
252 of 2023
Decided on November 22, 2024
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 Civil Procedure
Code, 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.
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
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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
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
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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.
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
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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
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.
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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.
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
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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. 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 well-
reasoned order after taking into consideration all the detailed 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,
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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 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
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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
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
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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
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 non
-grant of interim injunction was laid down by this Court in Wander Ltd.
v. Antox India P. Ltd., 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, 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, [1942] A.C. 130, after stating the
above, went on to quote Lord Wright's decision in Evans v. Bartlam,
[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.
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., (2016) 2
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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, (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 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., (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
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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.,
(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.
PRINCIPLES GOVERNING GRANT OF TEMPORARY INJUNCTION
33. In the case of Anand Prasad Agarwal v. Tarkeshwar Prasad,
(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
noninterference 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
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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,
(1992) 1 SCC 719.)
MEANING OF THE EXPRESSION “PERVERSE”
35. Any order made in conscious violation of pleading and law is a
perverse order. In Moffett v. Gough, (1878) 1 LR 1r 331, the Court
observed that a perverse verdict may probably be defined as one that is
not only against the weight of evidence but is altogether against the
evidence. In Godfrey v. Godfrey, 106 NW 814, the Court defined
“perverse” as “turned the wrong way”; not right; distorted from the
right; turned away or deviating from what is right, proper, correct, etc.
36. The expression “perverse” has been defined by various
dictionaries in the following manner:
a. Oxford Advanced Learner's Dictionary of Current English, 6th Ed.
Perverse - Showing deliberate determination to behave in a
way that most people think is wrong, unacceptable or
unreasonable.
b. Longman Dictionary of Contemporary English - International
Edition
Perverse - Deliberately departing from what is normal and
reasonable.
c. The New Oxford Dictionary of English - 1998 Edition
Perverse - Law (of a verdict) against the weight of evidence or
the direction of the judge on a point of law.
d. New Webster's Dictionary of the English Language (Deluxe
Encyclopedic Edition)
Perverse - Purposely deviating from accepted or expected
behavior or opinion; wicked or wayward; stubborn; cross or
petulant.
e. Stroud's Judicial Dictionary of Words & Phrases, 4th Ed.
Perverse - A perverse verdict may probably be defined as one
that is not only against the weight of evidence but is altogether
against the evidence.
37. The wrong finding should stem out on a complete misreading of
evidence or it should be based only on conjectures and surmises. Safest
approach on perversity is the classic approach on the reasonable man's
inference on the facts. To him, if the conclusion on the facts in evidence
made by the court below is possible, there is no perversity. If not, the
finding is perverse. Inadequacy of evidence or a different reading of
evidence is not perversity. (See : Damodar Lal v. Sohan Devi, (2016) 3
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SCC 78)
38. Seen in light of the aforesaid settled position of law, we are of
the clear view that in the facts of the present case, 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 of
the CPC.
39. It appears from a reading of the impugned order that what
weighed with the High Court in setting aside the order of the trial court
was the existence of pending litigations between the contesting parties
and the alleged misuse of political power by the plaintiffs in creating
hurdles for the defendants in the exercise of their lawful rights. The
High Court failed to point out any perversity in the order of the trial
court which occasioned it to set aside the grant of injunction. We are of
the view that the 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 is still pending for adjudication
on merits before the trial court.
40. We are informed that after the High Court allowed the appeal
and before this court granted the interim relief the defendants have
transferred the suit property, i.e., during the pendency of the present
appeal.
41. We would like to underscore that although the impugned order
of the High Court is voluminous and runs into more than 55 pages, yet
it regrettably falls short of addressing the pivotal issues raised by the
plaintiffs. While the High Court has observed that the order of the trial
court has virtually decided the suit, in favour of the plaintiffs, a reading
of the impugned order indicates other way round that it is indeed the
order of the High Court which seems to have accepted the entire
defence put forward by the defendants as the gospel truth, without
assigning any cogent reasons for not accepting the prima facie case put
up by the plaintiffs.
42. Instead of subjecting the order of the trial court to the right
degree of appellate scrutiny warranted in appeals against interlocutory
orders, the High Court has made general and overbroad observations
touching upon the malicious intention of the plaintiffs in filing the civil
suit and the application below Exhibit-5 for the grant of temporary
injunction. The failure of the High Court in pointing out any perversity
in the order of the trial court is a glaring reminder of why the High
Courts must exercise their appellate jurisdiction against interlocutory
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orders involving the exercise of discretion of the trial court with great
caution and mindfulness. High Courts must not lightly set aside the
decision arrived at by the trial court in exercise of its discretion unless
the order of the trial court fails to satisfy the parameters as delineated
by us in the preceding paragraphs. The failure to engage with these
crucial aspects renders the High Court's order deficient, detracting from
the objective of rendering substantive and reasoned justice.
43. It is also pertinent to observe that immediately after the High
Court set aside the order of the trial court granting interim injunction,
the defendant no. 3 entered into a transaction which created a third
party right on the suit property. A perusal of the impugned order
indicates that although a specific request was made by the plaintiffs
before the High Court to stay the operation of the impugned order to
enable them to file an appeal before this Court, yet the request was not
accepted. It is beyond our comprehension as to why such urgency was
exhibited by the High Court in vacating the status quo on the suit
property, more so when the suit was still pending before the trial court
and the rights of the parties were yet to be crystallized. The sequence
in which events have transpired in the present case best illustrates how
the exercise of appellate jurisdiction by the High Court in a casual
manner can have a cascading effect, which only prolongs litigation and
counter-serves the interest of justice.
44. We need not say anything as regards the subsequent transfer of
the suit property at this stage for the simple reason that if it has been
transferred pending any proceedings, it is for the court trial court to see
whether the transaction is hit by lis pendens or not. This aspect shall be
looked into by the trial court at the time when the suit is taken up for
final adjudication as regards the rights of the parties.
45. Quite often, in these types of litigations, it is sought to be
argued that an injunction restraining the defendant from transferring
the suit property was absolutely unnecessary as no post-suit transfer
by the defendant can adversely affect the result of the suit because of
the provisions of Section 52 of the T. P. Act whereunder all such
transfers cannot but abide by the result of the suit. It is true that the
doctrine of lis pendens as enunciated in Section 52 of the T. P. Act
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. We may give one appropriate illustration of a suit for specific
performance of contract based on an agreement of sale. In a suit
wherein the plaintiff prays for specific performance and if the defendant
is not restrained from selling the property to a third party and
accordingly a third party purchases the same bona fide for value
without any notice of the pending litigation and spends a huge sum for
the improvement thereof or for construction thereon, the equity in his
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favour may intervene to persuade the Court to decline, in the exercise

of its discretion, the equitable relief of specific performance to the
plaintiff at the trial and to award damages only in favour of the plaintiff.
It must be noted that Rule 1 of Order 39 of the Code clearly provides
for interim injunction restraining the alienation or sale of the suit
property and if the doctrine of lis pendens as enacted in Section 52 of
the T. P. Act 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, in our view, clearly demonstrates that, notwithstanding the
Rule of lis pendens in Section 52 of the T. P. Act, there can be occasion
for the grant of injunction restraining pendente lite transfers in a fit and
proper case. (See : Sm. Muktakesi Dawn v. Haripada Mazumdar, AIR
1988 Cal 25)
46. In the aforesaid context, we may refer to one old decision of the
Calcutta High Court in Promotha Nath Roy v. Jagannath Kisore Lal
Singh Deo, (1912) 17 Cal LJ 427 where it has been observed that a
Court will in many cases interfere and preserve property in status quo
during the pendency of a suit in which the rights to it are to be decided
and though the purchaser pendente lite would not gain title, the Court
will prevent by injunction the embarrassment that would be caused to
the original purchaser in his suit against the vendor. And it has been
ruled there on the authority of Turner, LJ in Hadley v. London Bank of
Scotland, (1865) 3 De GJ & S 63 at 70 that if there is a clear valid
contract for transfer, the Court will not permit the transferor afterwards
to transfer the legal estate to third person, although such third person
would be affected by lis pendens. Mr. Muhkerjee has drawn our
attention to Dr. S.C. Banerji's Tagore Law Lectures on Specific Relief
(2nd Edition, page 592) where the decision in Promotha Nath (supra)
has been approvingly referred to and also to Fry's Treatise on Specific
Performance (6th Edition) where the same rule has been enunciated as
a general principle on the authority of Turner, L.J., in Hadley (supra).
47. Today, all that we say is that having regard to the nature of
dispute between the parties and the materials on record, the property
should not change hands any further.
48. In view of the aforesaid, this appeal succeeds and is hereby
allowed. The impugned order passed by the High Court is set aside.
49. The respondents herein shall maintain status quo as regards the
suit property as on date and shall not create any further encumbrances
over the same in any manner.
50. Any further transfer of the suit property pending the final
disposal of the suit shall be subject to lis pendens under Section 52 of
the T.P. Act irrespective of the fact whether such lis pendens has been
duly registered by the plaintiffs with the competent authority or not.
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51. Pending applications, if any, shall also stand disposed of.

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