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2000 Supreme(Cal) 527
High Court Of Calcutta
VINOD KUMAR GUPTA, ASHIM KUMAR BANERJEE
SBI HOME FINANCE LTD - Appellant
Versus
PRABIR CHATTERJEE - Respondent
. . Of .
Decided On : 09/29/2000
A court cannot grant an injunction restraining a person from initiating a proceeding in a court not subordinate to it, and any such injunction is void.
Headnote:
INJUNCTION - SPECIFIC RELIEF ACT, 1963 - SECTION 41(B) - ORDER 39 RULES 1 AND 2, CODE OF CIVIL PROCEDURE - EX PARTE AD INTERIM INJUNCTION - COURT'S JURISDICTION - REASONS FOR GRANTING INJUNCTION - APPEALABILITY OF ORDER - ORDER 43 RULE 1(R), CODE OF CIVIL PROCEDURE.
Fact of the Case:
The respondent obtained credit facilities from the appellant for a civil construction project. Despite an agreement between the parties regarding loan repayment, the appellant made a demand and threatened legal proceedings. The respondent filed a suit and obtained an ex parte ad interim injunction restraining the appellant from initiating any proceedings.
Finding of the Court:
The court held that the impugned order granting the injunction was patently illegal and vitiated by the provisions of the Specific Relief Act, 1963, and the principles laid down by the Supreme Court. The court also found that the reasons recorded in the order for granting the injunction were inadequate and did not comply with the guidelines set out by the Supreme Court in the case of Morgan Stanley.
Issues: 1. Whether the court had jurisdiction to grant an injunction restraining the appellant from initiating proceedings. 2. Whether the reasons given in the impugned order were adequate for granting an ex parte ad interim injunction. 3. Whether an appeal lies against an ex parte ad interim injunction granted under Order 39 Rules 1 and 2 of the Code of Civil Procedure.
Ratio Decidendi: 1. Section 41(b) of the Specific Relief Act, 1963, bars any injunction to be passed restraining a party from initiating any proceedings. 2. The court cannot grant an injunction restraining a person from initiating a proceeding in a court not subordinate to it. 3. In appropriate cases, the court can grant a temporary injunction in exercise of its inherent power, but it cannot overlook the statutory provision that prohibits injunctions to restrain initiation of proceedings. 4. The reasons given in the impugned order for granting the injunction were inadequate and did not comply with the guidelines set out by the Supreme Court in the case of Morgan Stanley. 5. An appeal lies against an ex parte ad interim injunction granted under Order 39 Rules 1 and 2 of the Code of Civil Procedure, as Order 43 Rule 1(r) does not restrict the question of maintainability of an appeal in respect of an ad interim order of injunction.
Final Decision: The court allowed the appeal and set aside the impugned order granting the injunction. The court also directed the respondent to pay the appellant's costs.
( 1 ) THE appeal is admitted. This case emanated from an order passed by the learned Seventh Civil Judge (Senior Division), Alipore wherein the learned Judge passed an interim order of injunction overlooking the basic provisions of law as also the well-settled principles settled by the apex Court in granting ad interim order of injunction.
( 2 ) THE facts of this case are briefly stated hereinafter.
( 3 ) THE respondents availed credit facilities from the appellent in respect of a civil construction project, namely 'diamond Tower'. The case of the respondent before the Alipore Court was that an agreement was entered into by and between the parties with regard to repayment of the loan amount. Despite such agreement being entered into by and between the parties, the appellant herein made a demand through its advocates and threatened legal proceedings in case of default.
( 4 ) SIMULTANEOUSLY, with the filing of the suit, the respondent made an application before the learned Judge under Order 39 Rules 1 and 2 of the Code of Civil Procedure and obtained an ex parte ad interim order of injunction restraining the appellant from initiating any proceedings in terms of the said letter of demand. Mr. Basu appearing for the appellant attacked the impugned order on two counts : i. The order is hit by the provisions of section 41 (b) of the SPECIFIC RELIEF ACT, 1963, 1963. II. Reasons, if any, recorded in the said order are not adequate in passing an ad interim order of injunction and that too ex parte.
( 5 ) IN support of his first contention, Mr. Basu has cited AIR 1983 SC 1272 (Cotton Corporation of India v. United Industrial Bank ).
( 6 ) IN support of his second contention Mr. Basu cited the case of Shib Kr. Chadda reported in 1993 (3) SCC 161.
( 7 ) MR. Pradip Ghosh appearing for the respondent contended that the alleged agreement in question was entered into by and between the parties and without cancellation of the said agreement the appellant herein is not entitled to issue any notice of demand or initiated any proceedings.
( 8 ) MR. Ghosh also contended that the impugned order has been passed by the learned Judge after recording reasons. According to Mr. Ghosh the reasons given in the impugned order are adequate in passing an ex parte ad interim order of injunction.
( 9 ) MR. Ghosh lastly contended that the appellant without availing the provisions of Order 39 Rule 4 is not entitled to assail the said order before us.
( 10 ) IN support of his contention Mr. Ghosh cited two decisions reported in AIR 1976 Madras 350 and AIR 1982 Karnataka 105. Mr. Ghosh also cited Supreme Court decision reported in 1999 (2) SCC 377.
( 11 ) SECTION 41 (b) of the SPECIFIC RELIEF ACT, 1963 clearly bars any injunction to be passed restraining a party from initiating any proceedings. The Hon'ble Supreme Court in the Case of Cotton Corporation (supra), inter alia, held that the Court has no jurisdiction to grant an order of injunction restraining a person from initiating a proceeding in the Court not subordinate to it, as a relief, ipso facto temporary relief cannot be granted in the same terms. The Hon'ble Supreme Court also held that in appropriate cases Court can grant temporary injunction in exercise of its inherent power in cases not covered under Order 39 of the CPC. But while exercising its inherent power the Court should not overlook the statutory provision which clearly indicates that injunction to restrain initiation of proceedings cannot be granted. The Hon'ble Supreme Court also observed that it must be remembered that inherent power of the Court cannot be invoked to nullify and/or stultify a statutory provision. Although Mr. Basu appearing for the appellant has argued that the alleged agreement was not acted upon even if we accept the contention of Mr. Ghosh to the extent that the said agreement was a valid one and the notice of demand is bad, the suit is not maintainable. In case the appellant opts for iniitiati
