Violation of a court injunction has legal consequences, rendering the transactions illegal and not binding.

JUDGMENT :

G.S. PATEL J.

1. The Appeal is directed against an order of 5th September 2019 made by the learned single Judge, RI Chagla J on a motion filed by the Original Plaintiff. The Appellants before us were Respondents Nos. 5, 6 and 7 to the motion. They are not parties to the suit. The suit said that Defendant No. 2 had embezzled vast amounts from the Plaintiff. Then, in collusion and connivance, the 3rd Defendant and the 2nd Defendant’s brother-in-law, the 4th Defendant, sought to use those embezzled funds to acquire various properties.

2. The suit makes no claim for the properties. It is a suit for a money decree to recoup the loss, and for compensation.

3. The elaborate and careful judgment of Chagla J sets out in meticulous detail the relevant facts. Not all of these are necessary for our purposes. Before we turn to those facts, we must accept without qualification a threshold submission by Mr Cama that this being an order on an interlocutory application by the trial court, settled law does not permit the appeal court to interfere unless the impugned order is shown to be not reasonably possible or to be capricious, perverse or arbitrary. In this context he cites a judgment dated 23rd June 2022 by a bench of which one of us (GS Patel J) was a member in World Crest Advisors LLP v Catalyst Trusteeship Ltd., 2022 SCC OnLine Bom 1409. In paragraph 1 to 7 we held this:

“1. The original Plaintiff is in appeal against an order of 17th June 2022 of a learned Single Judge of this Court, AK Menon J, declining, in his discretion, to grant ad-interim relief in the Plaintiff’s Interim Application (L) No. 17730 of 2022. The impugned order is a speaking order (notwithstanding that the Plaintiff assails it for insufficiency of reasons). Menon J’s exercise of discretion in refusing relief is important in view of the decision of the Supreme Court in Wander Limited And Another v Antox India Private Limited, 1990 (Supp) SCC 727. In paragraph 14, the Supreme Court said:

“14. The appeals before the Division Bench were against the exercise of discretion by the Single Judge. In 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 the 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: (SCR 721) :

“... These principles are well established, but as has been observed by Viscount Simon in Charles Osention & Co. v. Johnston ‘…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.” (Emphasis added)

3. Wander v Antox was reaffirmed by the Supreme Court in Mohd Mehtab Khan v Khushnuma Ibrahim Khan, (2013) 9 SCC 221. That was a case where a Division Bench of this Court granted interim relief in an ap