Appellate Jurisdiction under Order 43 of CPC against Grant or Non-Grant of Interim Injunction

An injunction is an order of court which may be in the nature of a preventive or a mandatory relief, directing the Defendant to either restrain from performing a certain act or compel the Defendant to perform a certain act so as to prevent an irreparable injury from being caused to the Plaintiff. In India, injunctions are governed by the Specific Relief Act, 1963, more particularly, by Chapter VII and VIII of the said Act. For a detailed discussion on the law on injunctions applicable in India, refer here. An injunction is a discretionary relief granted to the Plaintiff and cannot be demanded as a matter of right¹. The discretionary relief of interim injunction is granted on the touchstone of three fundamental tests² which the Court needs to apply to the facts and circumstances of the case presented before it, viz.-

A Prima Facie case, which necessitates that as per the material placed on record, the Plaintiff is likely to succeed in the final determination of the case.
Balance of convenience, such that the prejudice likely to be caused to the Plaintiff due to rejection of the interim relief will be higher than the inconvenience that the Defendant may face if the relief is so granted; and
Irreparable injury, which means that if the relief is not granted, the Plaintiff will face irreversible injury that cannot be compensated in monetary terms.

It is only upon satisfaction of the aforesaid factors, a court may grant an interim injunction in favour of the Plaintiff.

Appeal against an Interim order of Injunction

A temporary injunction is governed by Order 39 of the Civil Procedure Code, 1908 [“CPC”] which entitles the Plaintiff to move an application seeking a preventive relief against the Defendant. The injunction so passed in favour of the Plaintiff operates only for a particular period of time and is subject to the final adjudication of the dispute. A party dissatisfied by an order passed under Order 39, i.e. whether allowing the application for injunction or dismissing it, has the option of preferring an appeal Under Order 43 of the CPC. Order 43 of the CPC inter alia provides that an appeal would lie against an order made under Rule 1, 2, 2A, 4 and 10 of Order 39 of the CPC.

The jurisprudence on the law governing the scope of Appellate jurisdiction against grant or non-grant of an Interim order of Injunction emanates from a judgment rendered by the Supreme Court in Wander Ltd. vs Antox India Pvt. Ltd³. The Trial Court passed in interim order of injunction which was challenged and set aside by the High Court. In Appeal before the Supreme Court, the court laid down the following scope of Appellate jurisdiction under Order 43 of CPC-

The appellate court will not interfere with the exercise of discretion of the court of the 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 injunction.
The appellate court will not reassess the material and seek to reach a conclusion different from the one reached by the court below.
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.

In Printers (Mysore) vs Pothan Joseph⁴ the Supreme Court further observed that ignoring relevant facts is also a ground for interfering with the discretion exercised by the trial court.

In Ramakant Ambalal Choksi vs Harish Ambalal Choksi & Ors.⁵ the Supreme Court, after going through the conspectus of the law laid down by the earlier judgments, observed that the appellate court, while deciding an appeal against a discretionary order granting an interim injunction, has to-

Examine whether the discretion has been properly exercised, i.e. examine whether discretion exercised is not arbitrary, capricious or contrary to the principles of law.
Appellate court may in a given case have to adjudicate on facts even in such discretionary orders.

However, the court observed that with passage of time, the scope of interference with an interim injunction passed by the trial court has been made more stringent. The emphasis is now more on perversity than a mere error of fact or law in the order granting injunction pending the final adjudication of the suit.

In Mohd. Mehtab Khan vs Khushnuma Ibrahim Khan⁶, the Supreme Court emphasised that merely because the view taken by the Appellate Court is a possible view, however, that must not form the basis of setting aside the decision arrived at by the Trial Court in exercise of its powers under Order 39 of the CPC. The basis for substituting the view of the Trial Court should be malafides, capriciousness, arbitrariness or perversity in the order of the Trial Court. In Neon Laboratories Ltd. vs Medical Technology Ltd.⁷, the Supreme Court observed that the Appellate Court must not whimsically interfere in the exercise of discretion by a subordinate court unless such exercise is palpably perverse. The Court explicated that perversity can pertain to the understanding of law or the appreciation of pleadings or evidence. Therefore, the Court opined that in order to interfere with an order granting or declining to grant a temporary injunction, perversity has to be demonstrated in the finding of the court.

In Ramakant Ambalal (supra) the Trial Court had granted an interim order of injunction which was challenged in Appeal before the High Court under Order 43 of CPC. The High Court allowed the Appeal vacating the order of injunction granted by the Trial Court, in favour of the Plaintiffs. In Appeal before the Supreme Court, the court observed that the High Court fell in error in setting aside the order of injunction passed by the Trial Court as the High Court did not confine itself to the parameters of examination of an order passed under 39 of CPC by the Trial Court, as laid down in Wander Ltd. (supra). The court observed that the High Court’s basis for setting aside the order by Trial Court was the existence of pending litigations between the parties and the alleged misuse of the political power by the Plaintiffs. The High Court failed to give any finding as to how the order passed by the Trial Court, granting injunction in favour of the Plaintiff, suffers from the infirmity of arbitrariness, capriciousness, or malafides. The Supreme Court emphasised upon the principles laid down in Wander Ltd. (supra) and reiterated that the Appellate Court should not assume unlimited jurisdiction and confine its powers within the contours laid down in the said case.

Court must not hold Mini Trial in Temporary Injunction matters and in appellate jurisdiction under Order 43

Recently, the Supreme Court in the matter of Shruti Manav Sharma & Anr. vs Sunanina Singh & Ors.⁸ deprecated the recent trend of Courts undertaking an in depth enquiry at the stage of adjudicating order 39 Application seeking injunctions. The Supreme Court observed that the Courts are unnecessarily carrying out a detailed exercise, running into pages of close analysis of rival documents, weighing the probable outcome of issues of title, etc. leading to lengthy orders. The Supreme Court deprecated the aforesaid approach and emphasised that the interlocutory stage is not the occasion to resolve conflicts of evidence on affidavit or to decide difficult questions of law. The Court categorically observed that the scope of examination under Order 39 and equally of an appeal against an order made on such application, is confined to the limited and threshold question whether the Plaintiff has shown a serious dispute meriting investigation at trial, it does not extend to an examination of the final effect, probative value or ultimate merits of the documents annexed to the pleadings, which is the trial court’s task, to be undertaken after evidence and not before. The Supreme Court reiterated the standard of appellate interference in the appellate stage under Order 43 viz. the appellate court does not ordinarily substitute its own discretion for that of the court of first instance, save where the discretion has been exercised arbitrarily, capriciously or perversely, or in ignorance of the settled principles governing the grant of refusal of such relief. In the aforesaid case, the Appellate court travelled beyond the test laid down in Wander ltd. (supra) and set aside the order passed by the Ld. Single Judge by carrying out an in depth analysis of the case and conducting a mini trial, which the Supreme Court highly deprecated and cautioned the courts to not carry mini trial at the interlocutory stage.

Conclusion

An Appellate Court, while adjudicating an appeal under Order 43 of the CPC, arising out of an Order passed by the Trial Court under Order 39 of the CPC, granting or refusing to grant interim injunction, must be circumspect of the following factors-

The Appellate Court can only interfere with an order passed by the Trial Court under Order 39, if the order reflects arbitrariness, capriciousness or suffers from perversity.
Perversity has to be demonstrated in the findings of the Trial Court. Inadequacy of Evidence or a different reading of evidence is not perversity⁹.
Merely because the view taken by the Appellate Court is also a possible view, should not form the basis for setting aside the Order passed by the Trial Court.

By Daksh Pandit