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High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE K.K. SASIDHARAN
Indiabulls Finance Services Limited & Another
Versus
M/s. Jubilee Plots and Housing Private Limited rep.by its Managing Director & Others
C.R.P.(PD).No.1681 of 2009 & M.P.No.1 of 2009
Decided on: 13-07-2009
Injunction - Loan Dispute - Order 39 Rule 3 - The court discussed the provisions of Order 39 Rule 3 of the Code of Civil Procedure and emphasized the necessity to record reasons for granting an ex parte injunction. The court highlighted the factors to be considered before granting an order of temporary injunction, including the prima facie case, balance of convenience, and irreparable injury. The judgment also referenced legal principles from various Supreme Court cases, emphasizing the importance of recording reasons and the need for clarity in the order.
Fact of the Case:
The respondents filed a suit seeking a permanent injunction to restrain the revision petitioners from dealing with or presenting the cheques and promissory notes issued by the respondents until the petitioners exhaust their rights against the secured properties. The court granted an ex parte injunction, which was subsequently extended, leading to the filing of a civil revision petition by the respondents.
Finding of the Court:
The court found that the trial Judge failed to consider the fundamental principles governing the grant of injunction and passed a mechanical order without examining the merits of the case pleaded in the plaint. The court concluded that the order of ex parte injunction was liable to be set aside and the matter needed to be considered afresh by the trial Judge.
Issues: The issues revolved around the grant of an ex parte injunction, the necessity to record reasons for granting injunctions, and the failure of the trial Judge to consider the merits of the case before granting the injunction.
Ratio Decidendi: The court emphasized the importance of recording reasons for granting injunctions, the need to consider the prima facie case, balance of convenience, and irreparable injury before granting an order of temporary injunction, and the duty of the trial court to examine the merits of the case pleaded in the plaint before granting an interim injunction.
Final Decision: The civil revision petition was allowed, the order of ex parte injunction was set aside, and the matter was remitted to the trial Judge for fresh consideration.
This civil revision petition is directed against the order dated 6. 2009 in I.A.No.8567 of 2009 in O.S.No.4553 of 2009 on the file of the learned XV Assistant City Civil Judge, Chennai, whereby and whereunder an order of ex parte injunction was granted against the revision petitioners restraining them from dealing with or presenting the cheques and promissory notes issued by the respondents till the petitioners exhaust their rights against the secured properties.
Suit Relief:-
2. The suit in O.S.No.4553 of 2009 was instituted by the respondents/plaintiffs against the revision petitioners/defendants with the following prayer:-
"(i) For a permanent injunction restraining the defendants from in any manner dealing with or presenting the cheques issued by the plaintiffs morefully described in the 1st schedule hereunder till the defendants exhaust its rights against the secured properties.
(ii) For a permanent injunction restraining the defendants from in any manner dealing with the promissory notes of the plaintiffs till th defendants exhaust its rights against the secured properties.
(iii) Permit the plaintiffs to sell the 2nd schedule mentioned properties and deposit the sale proceeds int he court.
(iv) Cost of the suit."
BACKGROUND FACTS:-
3. In the plaint in O.S.No.4553 of 2009 it was the contention of the respondents that initially they have taken a loan of Rs. 15 crores from the revision petitioners agreeing to pay interest at 21% per annum. The loan was disbursed during February, 2007. The respondents have executed a promissory note with a letter of continuity, deed of mortgage which includes deed of indemnity and deed of power of attorney and a deed of guarantee. They have also issued post dated cheques for payment of monthly interest as well as for monthly instalments of the loan amount. Subsequently they have taken a further sum of Rs.21,75,00,000/-as loan during September, 2007 agreeing to pay interest at 29% per annum. In order to secure the said loan, the respondents have again executed a promissory note, mortgage deed and deed of guarantee. They have also issued a cheque for the entire loan amount as well as thirty numbers of post dated cheques towards equal monthly instalments and one post dated cheque for monthly interest.
4. During June, 2008, the respondents have taken a third loan for a sum of Rs.30 crores and immovable property worth Rs.150 crores was given as security for sanctioning the said loan. Necessary mortgage was executed in respect of the third loan also. The respondents have also issued post dated cheques towards EMI and undated cheque for the entire loan amount.
5. While the matter stood thus, the revision petitioners as per their letter dated 10. 2008 increased the rate of interest unilaterally from 25% to 26.5% and from 26.5% to 28% with effect from 10. 2008. The interest was further enhanced from 28% to 29% without their consent. The revision petitioners have issued the statement of accounts wherein it was mentioned that the rate of interest charged was 33%. However there was no positive action taken by the revision petitioners to reduce the interest rate. The interest demanded by the revision petitioners was found to be usurious. In view of the financial crisis, the respondents defaulted in paying the two equal monthly instalments. The revision petitioners have been harassing the respondents by threatening that they would present the undated cheques and make them to pay more than what was actually liable.
6. On 5. 2009 the officers of the revision petitioners came to the office of the first respondent and created a big scene as if the respondents are worth nothing and demanded cheque for a sum of Rs.50 lakhs. To avoid unpleasant atmosphere in the office, the first respondent was constrained to hand over a cheque for a sum of Rs.50 lakhs on 15. 2009. In such circumstances, for the purpose of avoiding multiplicity of proceedings and further litigation, the respondents were advised to
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