The Supreme Court of India ("Supreme Court") recently in the case of Ramkant Amblala Choksi vs. Harish Ambalal Choksi (Civil Appeal No. 13001 OF 2024 (@Special Leave Petition (Civil) No. 252 of 2023 dated November 22, 2024) has held that, unless perverse or arbitrary, interlocutory orders passed by trial court ought not to be vacated by the appellate court.  

Facts of the Case:

The plaintiffs/appellants filed a suit against the defendants/respondents along with an interim injunction application challenging a sale deed executed by the defendant no. 1 with regard to the suit property. It is alleged that the said sale deed was executed without any sale consideration in favour of the son of the defendant no. 1, the defendant no. 3.

The trial court, after hearing both the parties, held that the conditions for grant of injunction in favour of the plaintiffs were satisfied and therefore granted temporary injunction. Also, the trial court directed the defendant no. 3 to maintain status quo in respect of the suit property till disposal of the suit.

Issue arose when the defendants, aggrieved by such order, filed an appeal before the High Court of Gujarat (“High Court”) under Order XLIII Rule 1 read with Section 104 of the Code of Civil Procedure, 1908 (“CPC”) challenging the order of injunction and the High Court allowed such appeal and vacated the order passed by the trial court on the following grounds:-

1. No case of granting interim injunction was made out.
2. By granting injunction, the trail court has virtually allowed the suit.
3. The plaintiffs are intentionally harassing the defendants by filing a plethora of
   proceedings due to the reason of a number of civil and criminal litigations pending between the parties.

Aggrieved by such order of the High Court, the plaintiffs filed the instant Special Leave Petition.

Issues:

What is the scope of appeal against the grant or non-grant of an interim injunction?

Findings:

The Supreme Court, while relying on the judgments in Wander Limited. v. Antox India Private Limited [1990 Supp SCC 727]; Printers (Mysore) v. Pothan Joseph [(1960) SCC Online SC 62]; Charles Osenton & Company v. Johnston [1942 A.C. 130] and Evans v. Bartlam [1937 A.C. 473] held that, an appellate court while deciding an appeal against a discretionary order granting an interim injunction has to examine the two following issues-

1. Whether the discretion has been properly exercised by the trial court i.e. examine whether the discretion exercised is arbitrary, capricious or contrary to the principles of law; and
2. Also, adjudicate on the facts of the case while deciding such discretionary orders.

The Supreme Court observed that over time, the test for scope of interference by an appellate court with a trial court’s interim order has become more stringent and at present the emphasis is more on perversity in the trial court’s order, rather than a mere error of fact or law.

The Supreme Court, by relying on the judgments Neon Laboratories Limited v. Medical Technologies Limited [(2016) 2 SCC 672]; Mohd. Mehtab Khan v. Khushnuma Ibrahim Khan reported in [(2013) 9 SCC 221]; Shyam Sel & Power Limited v. Shyam Steel Industries Limited [(2023) 1 SCC 634]; Monsanto Technology LLC v. Nuziveedu Seeds Limited  [(2019) 3 SCC 381] held that 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 by applying the well settled principles governing the scope of jurisdiction of appellate court under Order XLIII of the CPC. It was also held that the appellate court while deciding an appeal from an interlocutory order should not assume unlimited jurisdiction.

The Supreme Court also discussed the principles of granting temporary injunction as well as the meaning of the expression “Perverse”.

While discussing the meaning of the expression “perverse”, Supreme Court discussed the definition of the word “perverse” in various lexicons. Also, by relying on the judgment of Damodar Lal v. Sohan Devi [(2016) 3 SCC 78)], Supreme Court held that, the safest approach on perversity is the classic approach on the reasonable man’s inference on the facts. Thus, if the conclusion on the facts in evidence made by the trial court is possible, there is no perversity but if not, such finding is perverse. Also, inadequacy of evidence or a different reading of evidence is not perversity.

Finally, the Supreme Court by setting aside the order of the High Court and held that the High Court had overstepped its appellate jurisdiction under Order XLIII 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 have suffered from any perversity, capriciousness, arbitrariness, mala fides or have been passed in ignorance of the settled principles governing the grant of injunction under Order XXXIX of the CPC. It was also held that 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 orders involving the exercise of discretion of the trial court with great caution and mindfulness.

Author’s View:

It is evident from the instant decision of the Supreme Court, that, High Courts must not lightly set aside the decision arrived at by the trial courts in exercise of its discretion and if the appellate jurisdiction is used by any High Court in a casual manner, the same can have a cascading effect, which will only prolong litigation and will counter-serve the interest of justice.

Please find here a copy of the Judgement.

This update has been contributed by Somdutta Bhattacharyya (Partner) and Arti Bhattacharyya (Senior Associate (Designate)).

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