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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
G.S. Patel, Gauri Godse, JJ.
Future Corporate Resources Pvt. Ltd. & Ors. – Appellants
Versus
Edelweiss Special Opportunities Fund & Ors. – Respondents
Ordinary Original Civil Jurisdiction In Its Commercial Appellate Division Commercial Appeal (L) No. 31212 of 2022 In Interim Application (L) No. 18775 OF 2022 in Commercial Suit No. 164 of 2022 With Interim Application (L) No. 31218 OF 2022, Commercial Appeal (L) No. 31221 of 2022 Interim Application (L) No. 18696 of 2022 in Commercial Suit No. 207 of 2022
Decided On : 13-10-2022
COMMERCIAL SUIT - AD-INTERIM ORDER - INJUNCTION - RECEIVER - MORTGAGE - DELAY - IMPRECISION IN COMPUTING CLAIM - DISPROPORTIONATE ORDER - MODIFICATION OF ORDER - NO EXTENSION OF STAY.
Fact of the Case:
Edelweiss Special Opportunities Fund ('Edelweiss') and Ecap Equities Limited ('Ecap') filed a Commercial Suit against Future Corporate Resources Private Limited ('FCRPL') and obtained an ad-interim order appointing a Receiver for the mortgaged property and restraining FCRPL from disposing of or encumbering the mortgaged property. IDBI Trusteeship Services Limited ('IDBI') also filed a Commercial Suit against Ojas Tradelease & Mall Management Private Limited ('Ojas') and obtained an ad-interim order restraining Ojas from selling, transferring, or encumbering the mortgaged property.
Finding of the Court:
The Court found that the ad-interim order was disproportionate to the cause made out and that the learned Single Judge was not shown the countervailing material to fashion an appropriately proportionate order at the ad-interim stage. The Court also found that there was an unexplained delay on the part of the Plaintiffs and that there was a crucial discord and imprecision in quantifying the debt left unsecured.
Issues: Whether the ad-interim order was disproportionate to the cause made out. Whether there was an unexplained delay on the part of the Plaintiffs. Whether there was a crucial discord and imprecision in quantifying the debt left unsecured.
Ratio Decidendi: The Court held that the ad-interim order was disproportionate to the cause made out because the Plaintiffs had not shown that FCRPL or Ojas had done anything to dispose of their unsecured assets to defeat the claims of Edelweiss, Ecap, and IDBI. The Court also held that there was an unexplained delay on the part of the Plaintiffs in filing their Suits and that there was a crucial discord and imprecision in quantifying the debt left unsecured.
Final Decision: The Court vacated the ad-interim order in the Edelweiss Interim Application and modified the ad-interim order in the IDBI Interim Application to restrain Ojas from disposing of, parting with possession, alienating, or further encumbering the mortgaged property.
JUDGMENT
GS Patel, J. - On 12th September 2022, a learned Single Judge of this Court passed an ad-interim order on two Interim Applications in two separate but interconnected Commercial Suits. The order is undoubtedly an ad-interim one. It says so explicitly and directs the Interim Applications to be placed for final disposal as per their turn.The Defendants in the Suit are in appeal against that ad-interim order.
2. Commercial Suit No. 164 of 2022 is filed by Edelweiss Special Opportunities Fund ('Edelweiss') and by one Edel Land Limited, previously known as Ecap Equities Limited ('Ecap') against Future Corporate Resources Private Limited ('FCRPL'). These two Plaintiffs filed Interim Application (L) No. 18775 of 2022. This is the Edelweiss Suit and the Edelweiss Interim Application. Commercial Suit No. 207 of 2022 is filed by IDBI Trusteeship Services Limited ('IDBI') against Ojas Tradelease & Mall Management Private Limited ('Ojas'). The 2nd Defendant is the Central Bank of India, with which we are not concerned. In this, IDBI filed Interim Application (L) No. 18696 of 2022. This is the IDBI Suit and the IDBI Interim Application.
3. The combined order has two sections, with a separate discussion and operative order in each Interim Application. In the IDBI Interim Application, the operative ad-interim order is to be found in paragraph 13 at pages 28 to 31 in the Appeal paper-book:
''13. Considering the aforesaid discussion, the following order is passed in Interim Application (L) No. 18696 of 2022 in Commercial Suit No. 207 of 2022:-
(i) Pending the hearing and final disposal of Interim Application (L) No. 18696 of 2022, the Court Receiver,
High Court, Bombay is appointed as the Receiver of the mortgaged property more particularly described in Schedule-I to the Indenture of Mortgage dated 7th May 2020 (Exhibit-F-1 to the Plaint). Considering that the mortgaged property is a Mall at Ahmedabad, the Court Receiver shall take possession thereof but not dispossess any party who is found in occupation of any shops/tenements therein by virtue of any license agreement and/or a lease executed in their favour. Any such occupants of the shops/tenements in Mall, shall, from the period October 2022 onwards, pay their respective license fees/rent/compensation directly to the Court Receiver. These occupants shall also furnish their respective Leave and License Agreements/Leases to the Court Receiver, when called upon to do so. If any of the occupants want to surrender their respective shop/tenement, they shall do so only to the Court Receiver. If any shops/tenements are found vacant or closed, the Court Receiver shall take physical possession of the same and put his seal thereon.
For this purpose, the Court Receiver is entitled to break open any locks to ensure that physical possession of the said vacant/closed shop/s or tenement/s is with the Court Receiver. It is made clear that pending the hearing and final disposal of the Interim Application, the Court Receiver shall not sell the mortgaged property except with the consent of IDBI Trustee, OJAS and Central Bank of India.
(ii) In addition to the appointment of the Court Receiver, pending the hearing and final disposal of Interim Application (L) No. 18696 of 2022, there shall also be an order and injunction restraining Defendant No. 1 (OJAS), its servants, agents, officers, assignees and/or any person/s claiming through and/or under them, from directly or indirectly selling, transferring, alienating, encumbering, giving on leave and license, partying with possession, and/or creating any third-party rights, title and/or interest in the mortgaged property, or any part thereof, more particularly described in Schedule-I to the Indenture of Mortgage dated 7th May 2020 (Exhibit-F-1 to the Plaint).''
4. The operative ad-interim order on the Edelweiss Interim Application is in paragraphs 18 to 20 at pa
AI
An ad-interim order should be proportionate to the cause made out and should not be granted if there is an unexplained delay on the part of the Plaintiffs or if there is a crucial discord and impreci....
Judicial discipline requires promptness in delivering judgments; mere delay does not suffice to set aside an order unless it causes demonstrable prejudice.
A plaintiff alleging fraud must establish a prima facie case, balance of convenience, and potential irreparable harm to obtain an ad-interim injunction under the Code of Civil Procedure.
Point of Law : Granting of injunction in case of a money decree - Unless a very strong prima facie case is made out with respect to defendant intending to defraud the plaintiff, no injunction can be ....
In a suit for specific performance, the grant of a temporary injunction is discretionary and depends on the establishment of a strong prima facie case, the balance of convenience, and the conduct of ....
An interlocutory injunction is refused where the alleged harm is purely financial and compensable by damages, the applicant fails to provide a meaningful undertaking as to damages, there is no seriou....
A temporary injunction requires a prima facie case, balance of convenience, and irreparable loss; failure on any component leads to dismissal.
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