Calcutta High Court
Sen Mukherjee And Co. vs Smt. Chhaya Banerjee on 2 December, 1997
Equivalent citations: AIR1998CAL252, AIR 1998 CALCUTTA 252, (1999) 2 CAL HN 234 (1998) 2 ICC 308, (1998) 2 ICC 308
Author: Ruma Pal
Bench: Satyabrata Sinha, Ruma Pal
JUDGMENT Ruma Pal, J.
1. M/s. Santosh Chandra Banerjee & Sons Private Limited (referred to as the company) was heavily indebted to the appellant. The company was under the management of the respondent's husband and father-in-law. In payment of a debt of Rs. 91,917.65, the respondent on 3rd Nov. 1967 agreed to sell Premises No. 24/1, Mandeville Garden (referred to as the premises) to the appellant for a total consideration of Rs. 1 lakh. The premises consists of a two storyed brick built residential house and 7 cottahs, 1 chittacks and 43 sft. of land. The consideration for the sale was to be paid partly by way of adjustment of the debt of Rs. 91,917:65 claimed by the appellant against the company and the balance sum of Rs. 9,908.37 by cheque at the time of execution and registration of the conveyance. However, on the request of the respondent, the amount of Rs. 9,908.37 was also made over by the appellant to the respondent.
2. The respondent having failed to complete the sale, in 1969 the appellant filed a suit with leave under Clause 12 of the Letters Patent for specific performance of the agreement dated 3rd Nov. 1967, a decree for damages amounting to Rs. 15,826.62 and further sums of Rs. 1 lakh from the date of the suit until execution and registration of the conveyance, in the alternative a decree for the refund of a sum of Rs. 1 lakh with interest thereon @ 12 per cent per annum from the respective dates of payment till the date of refund.
3. The respondent filed a written statement denying the plaintiff's claim altogether. According to her she had received no benefit under the agreement and had signed the various letters pertaining to the sale of the premises at the instance of her husband. She claimed that the market price of the premises at the relevant time was Rs. 2.50 lakhs. She also pleaded that the premises was the dwelling house and the only property of the respondent and that she along with her three unmarried daughters would be 6n the streets if forced to sell the property to the appellant. Various other claims were raised which are not necessary to be set out in detail.
4. The appellant called Kasipati Mukherjee, a partner of the appellant and Mr. Achala Nath Ganguly, the appellant's solicitor as witnesses. On the respondent's part she examined herself as a witness. One Samar Banerjee, Engineer and Valuer was also called in support of her case that the premises were grossly undervalued at the time of sale.
Seven issues were framed by the learned single Judge :
"1. Has the Court jurisdiction to try the suit?
2. Is the suit maintainable as framed?
3. Was there any agreement for sale between the parties as alleged in the plaint?
4. Was the alleged agreement an agreement for mortgate by way of conditional sale?
5. Is the plaintiff entitled to get a decree of specific performance of contract?
6. Is the, plaintiff entitled to get the alternative decree for damages?
7. To what other reliefs, if any, is the plaintiff entitled?"
5. By a judgment delivered on 6th December, 1990 the learned Judge decided issues 1,2,3 and 4 in the appellant's favour. However, in exercise of his discretion under Section 20 of the Specific Relief Act, 1963, the learned Judge refused to grant specific performance of the agreement but passed a decree in favour of the plaintiff for a sum of Rs. 1 lakh with interest @ 12% from the date of the filing of the suit till repayment. The appellant was also granted the costs of the suit.
6. This appeal has been preferred from the judgment and decree dated 6th December, 1990. A cross appeal was filed by the respondent. According to the appellant the cross appeal was filed out of time and an application has been made by the appellant for revoking the leave granted to the respondent to file the cross appeal. Nobody appeared on behalf of the respondent at the hearing of the appeal nor was the cross appeal pressed. We accordingly dismiss the cross appeal.
7. The only issue which survives for determination is whether the learned Judge was right in exercising his discretion to refuse specific performance of the agreement.
8. In accepting the respondent's case on the point the learned Judge held :
(a) that the company which was the principal debtor was manned by the respondent's husband and other members of his family and that the respondent "naturally had to help her husband to agree to the bargain to save the business."
(b) that the respondent did not get any personal gain by selling her house save and except Rupees Nine thousand and odd sent to her by cheque and the major portion of sale price was adjusted against the debt of the company.
(c) that the agreement of sale was a unilateral document. There was no mutuality. There was no signature to the document on the side of the appellant. There was no guarantee that the respondent had any remedy if the appellant committed breach of contract. Therefore, the parties were not placed on equal position. The learned Judge held that even though under Section 20(4) of the Specific Relief Act, 1963, want of mutuality is no ground to refuse specific performance, according to the learned Judge the respondent was definitely at a disadvantage while striking the bargain with the appellant. He found that by that agreement the respondent could not strike a fair deal.
(d) that proper consideration had not been paid and although inadequacy of consideration would not be sufficient to hold the transaction unconscionable it was a circumstance to be taken into consideration in considering whether the contract was fair.
(e) that even though the appellant could not be held guilty for dragging the suit and the delay may be due to other factors but there was no denying that the Court was called upon in 1990 to enforce an agreement entered into in 1967 when the real value was enormous and much more than that stipulated.
(f) that the property is the only dwelling house of the respondent whereas the appellant-firm is in real property business and was interested in acquiring landed property as much as possible.
9. According to the appellant the factors which weighed with the Court were irrelevant and unsubstantiated.
10. Section 20 of the Specific Relief Act, 1963 provides as follows :
"20. Discretion as to decreeing specific performance-
(1) The jurisdiction to decree specific performance is discretionary, and the Court is not bound to grant such relief merely because it is lawful to do so; but the discretion of the Court is not arbitrary but sound and reasonable, guided by judicial principles and capable of correction by a Court of appeal.
(2) The following are cases in which the Court may properly exercise discretion not to decree specific performance-
(a) where the terms of the contract or the conduct of the parties at the time of entering into the contract or the other circumstances under which the contract was entered into are such that the contract, though not voidable, gives the plaintiff an unfair advantage, over the defendant; or
(b) where the performance of the contract would involve some hardship on the defendant which he did not foresee, whereas its non-performance would involve no such hardship on the plaintiff;
(c) where the defendant entered into the contract under circumstances which though not rendering the contract voidable, makes it inequitable to enforce specific performance.
Explanation 1--Mere inadequacy of consideration, or the mere fact that the contract is onerous to the defendant or improvident in its nature, shall not be deemed to constitute an unfair advantage within the meaning of Clause (a) or hardship within the meaning of Clause (b).
Explanation 2. -- The question whether the performance of a contract would involve hardship on the defendant within the meaning of Clause (b) shall, except in cases where the hardship has resulted from any act of the plaintiff subsequent to the contract, be determined with reference to the circumstances existing at the time of the contract.
(3) The court may properly exercise discretion to decree specific performance in any case where the plaintiff has done substantial acts or suffered losses in consequence of a contract capable of specific performance.
(4) The court shall not refuse to any party specific performance of a contract merely on the ground that the contract is not enforceable at the instance of the other party.
11. The relief of specific performance having its roots inequity, the Specific Relief Act, 1963 (referred to as the Act) has preserved the discretion of the Court not to grant the relief even though the agreement is specifically performable in law. The only fetters imposed by the statute on the exercise of the discretion are that the discretion must not be exercised arbitrarily but soundly and reasonably and guided by judicial principles. The phrase "capable of correction by a Court of appeals" has been inserted possibly to indicate the necessity for the trial Court to state the reasons for exercising its discretion in a particular way. The circumstances when specific performance mentioned in the Clauses (a), (b) and (c) of Sub-section (2) of Section 20 are not expressly exhaustive. They indicate the situations in which the Court may properly exercise discretion not to decree specific performance. However, certain considerations have been excluded as relevant factors. These are contained in Explanations 1 and 2 to the Section as well as in Section 20(4). It is to be noticed that each of these exclusions are preceded by the word "mere". The word "mere" in the context means "sole". In other words, any one of those factors by itself would not justify the exercise of discretion against granting specific performance. The factors cumulatively or with other factors may form the basis of a decision not to grant specific performance.
12. It cannot also be said that the reason given by the learned Judge for refusing relief were arbitrary and not guided by judicial principles. In fact in Smt. Ranganayakamma v. N. Govinda Narayan, , a Division Bench of the Karnataka High Court considered situation which is factually somewhat similar to the one before us. In that case the defendant was also a widow and subject-matter of the agreement was her only property. The Court said if the suit were decreed she would be left with nowhere to go. On the other hand, as in this case, the a plaintiff was a businessman with a house and shop of his own and that the Court could find a way out to compensate him for the monetary lost he would suffer by non-enforcement of the agreement.
13. In Shib Kumar Banerjee v. Rasul Bux, , the defendant had agreed to sell a substantial property to the plaintiff for Rs. 20,000/- in 1950. The entire consideration was paid in cash by the plaintiff. When the agreement was entered into there was communal tension in the area. The Court found that the defendant agreed to sell the property at a time of grave tension under a sense of insecurity of his life and property. The learned Judge also found that the price agreed to was less than the real value. In the circumstances the Court held that it would be inequitable to enforce the agreement of sale. In the present case the learned single Judged took into consideration the fact that the lady had a natural desire to help her husband and father-in-
law at a time when they faced with financial rum and they were beleaguered with creditors. The transaction was in the nature of a distress sale. He has also found that the consideration was inadequate.
14. Similarly in Sukumar Bysack v. Sushil Kanta Banerjee, , the defendant who was a refugee had obtained a loan from the plaintiff as he was in urgent need for maintaining his big family. As security for repayment of the loan the defendant executed an agreement to sell the suit land and his dwelling house thereon for a consideration of Rs. 8,000/- the Division Bench upheld the finding of the trial Court that to enforce performance of the contract of sale would be inequitable because the bargain was not merely unprovident or for inequitable consideration but was definitely unconscionable
15. We are also unable to accept the submission of the appellant that the conclusion arrived at by the learned Judge was not based on the evidence.
16. The first ground was indeed undisputead The evidence of the appellant's witness Kashipati was that the actual transaction was with husband and her father in law (Q-5). That the husband and the father-in-law of the respondent were beleaguered by creditors is clear from the answer of the appellant's witness to Q-6. The learned Judge has, in our view, correctly found that the respondent entered into the transaction to help her husband (Chaya Banerjee Q-10-22). There is also no dispute that more than 90% of the consideration was "paid" by way of adjustment against the dues of the company to the appellant and that the appellant had taken no steps to recover the amount from the company (Kashipati Q- 124A, Q-240-243).
17. There is also evidence that the consideration was inadequate. It is true that Kashipati had given some evidence relating to the value of the premises worth Rs. 80,000/- in 1968 (Q. 45) but that statement was based upon his purchase of a neighbouring property namely 20, Mandeville Gardens at Rs. 1,90,000.00. In cross-examination, however, he admitted that that was a wrong statement and that he had purchased 20, Mandeville Garden for Rs. 3 Lacs and odd (Q-250). On the other hand the Engineer and Valuer Samar Banerjee had submitted a report and has stated in answer to Qs.-17, 18 and 19 that there was a political turmoil going on when the agreement was executed adding, as it were to the distress of the situation to depress the value of real estate. He has based his report on the sales of premises in and around the locality of the premises arid on that basis he arrived at a value of Rs. 28,890.00 per Cottah. Needless to say that the price of land has increased by leaps and bounds over the years and the Court could take judicial notice of the fact at the time of the passing of the decree.
18. Finally the respondent has said in evidence that she lives in the premises and has no other property (Chaya Banerjee Q-34, Q-37) and that she is a widow since 1983 (Q-45) and that her only source of income is the rent she realises from the ground floor of the premises (Q-83). To deprive her of a shelter and source of income in the evening of her life could validly be held by the learned Judge to be inequitable. On the other hand the comparative prejudice of the appellant would be less. That the appellant was purchasing the premises in connection with its Real Estate business has been affirmed by the appellant's witness Kashipati in answer to Q. 109 -- Q-2113.
19. There is sufficient evidence on record for the trial court to have come to the conclusion he did. The appellate court will not generally interfere with the exercise of the trial Courts exercise of discretion save in exceptional cases. The position in law is well settled. We do not find any reason to interfere with the discretion exercised by the trial Court.
20. There is also evidence that the consideration was inadequate. It is true that Kashipati had given some evidence of the sum of Rs. 1 lakh @ 12% per annum from the date of payment as claimed in the plaint. The appeal is accordingly partially allowed by granting interest to the appellant @ 12% per annum from the date of payment on the amount of Rs. 1 lakh till repayment.
21. There will be no order as to costs.
Satyabrata Sinha, J.
22. Al-though I agree with the judgment passed by my learned sister, but I would like to add a few words of mine.
23. The admitted fact of the matter would clearly suggests that the plaintiff-appellant had an upper hand over the defendant. The defendant was merely a guarantor to a loan, which was taken by a company which her husband and father-in-law were managing.
24. Although the doctrine of mutuality as has been rightly submitted My Mr. Roy has no application in India in view of Section 20(4) of the Specific-Relief Act, 1963, the fact that no formal agreement for sale had been entered into by and between the parties is a pointer to the fact that the plaintiff had an unfair advantage over the defendant. The plaintiff did not have to pay the entire amount to the defendant, only a sum of Rs. 9,000/- and odd was paid and the balance amount out of the consideration of Rs. 1,00,000/-was adjusted towards the loan amount. The defendant is a lady. She did not have an independent advice. She admittedly had to act as has been asked of her in a piquant situation by her husband and father-in-law. She is not an educated lady. The offer to sale the properties as contained in a letter even had to be read over and explained to her by her husband. It also bears the signature of a witness. It is doubted as to whether in such a situation she had any occasion to know the extent of her liability. Under law, there cannot be any doubt that the liability of the creditor and the gurantor are co-extensive but in certain situation the gurantor is absolved from his/her liability. Under the provisions of the Indian Contract Act.
25. The plaintiff-appellant was dealing with the real estate. In a similar situation he had purchased the neighbouring house.
26. Even if we ignore the evidence of the valuer, this Court can take judicial notice of the rise of price of real estate in town of Calcutta over the years. Mr. Roy admitted that at the relevant time the Naxalite movement had spread and the valuation of the real estate at the relevant time had gone down. But it is difficult to believe that even at the point of time a property in the heart of a posh area of the town of Calcutta having more 7 cottahs of land and two storeyed standing thereon would fetch value of Rs. 1,00,000/- only. That the sale in question was a distress sale is beyond any doubt.
27. Hardship of the defendant may be one of the ground which may be taken into consideration for exercising its discrection by the Court in refusing to grant a decree for specific performance of contract.
28. Section 20 of the Specific Relief Act embodies a Common law that is grant of a decree for specific performance of a contract is a discretionary one. The Court may, in a given situation, take into consideration subsequent events. Long years have been passed by and the learned trial Judge has taken the said fact into consideration in refusing to exercise its discretion.
In Spry on Equitable Remedies, it is stated:--
"On principle, indeed, Courts of equity must take account of all the circumstances known to exist at the time when an order is sought as well as of circumstances likely to occur subsequently, when they are called upon to decide whether the effect of ordering specific performance will be to cause such great hardship as to account to an injustice. There is no sufficient reason why a cause of hardship should be ignored merely because it did not exist at the time when the material contract was entered into. Certainly the fact that it has occurred subsequently may be a matter of weight, and if it appears that the parties contemplated that events might occur such as have in fact occurred the alleged causes of hardship will usually be of little importance indeed. But this is not to say that they are irrelevant or that sometimes they may not be decisive so as to incline the balance of justice against the grant of relief.
Fortunately, however, this matter does not depend solely on principle, for there may be " found various decisions where events occurring after the date of entry into the agreement in question have been treated as relevant. Furthermore, it will subsequently be seen that any hardship of the defendant, if specific performance were ordered, must be weighed against the inconvenience or hardship which would be caused to the plaintiff if specific performance were refused. And in determining how great any such hardship or incovenience to the plaintiff will be once again events and probable events as known at the date of the hearing are taken into account and there is no arbitrary restriction or limitation to events taking place at the time of entry into the material agreement.
It must not be forgotten that as soon as it is shown that damages and other legal remedies arc inadequate an applicant will be held prima facie entitled to specific performance of a valid and enforceable agreement. Specific performance will not be refused merely because inconvenience or even hardship to the defendant would be caused thereby. But if the hardship suffered by the defendant, if specific enforcement took place, would be so much greater than the detriment which would be suffered by the plaintiff if he were confined to his remedy at law that it would be unreasonable and oppressive to grant relief, specific enforcement will be denied."
29. In the instant case, the defendant evidently would suffer a great loss as the plaintiff itself has claimed interest at the rate of 12% per-annum on the amount of consideration. It was possibly entitled to a lesser rate of interest on the loan amount. He, therefore, by necessary implication accepts the fact that grant of interest at the rate of 12% per annum would be an appropriate relief. Advisedly it had not claimed any other damages to which it was entitled to interms of Section 21 of the Specific Relief Act. Absence of any claim for damages in the plaint as also the other circumstances under which the contract was entered into bears no manner of doubt that grant of the alternative claim of the plaintiff was just.
30. In S.G. Banerjee's Specific Relief Act.
10th Edn. at pages 357, it is stated :--
"It is almost universally recognised that specific performance of a contract should not be granted, if in the circumstances of a case, it is inequitable to do so. The clause follows and gives statutory recognition to the universal rule. It enacts that where the defendant enters into the Contract under circumstances, which, though they do not render the contract voidable, yet make it inequitable to enforce specific performance, the Court may properly exercise discretion not to decree specific performance. What would or would not be inequitable would depend upon the facts and circumstances of the each case."
31. In Om Prakash v. Amarjit Singh reported in 1988 Suppl SCC 780, the law is stated in the following terms:
"This is a suit for specific performance on an agreement to sell. The grant of relief is discretionary. The Court after consideration of all relevant circumstances must be persuaded to exercise its equitable and discretionary jurisdiction in favour of specific enforcement. The jurisdiction is subject to all the conditions to which all discretionary jurisdictions are subject. There are certain personal bars to relief. Respondent 1, who was the plaintiff in the suit, did not enter the box and tender evidence. The subject-matter of the suit is a small piece of property of 68 sq. yds. and is said to be the only worldly goods of the appellant."
32. It is a settled principles of law that the provisions of Section 20 of the Specific Relief Act is not exhaustive. The same has to be considered and read with the Section 14 thereof. It is further well settled that the plaintiff does not have an absolute right to obtain a decree for specific performance of contract.
33. In Yohannan v. Harikrishnan Nair , it is stated :
"The cases in which the Court may properly exercise discretion not to decree specific performance has been enumerated in Sub-section (2). They are (a) where the terms of the contract or the conduct of the parties at the time of entering into the contract or the other circumstances under which the contract was entered into are such that the contract, though not avoidable, gives the plaintiff an unfair advantage over the defendant, or (b) where the performance of the contract would involve some hardship on the defendant which he did not foresee, whereas its non-performance would involve no such hardship on the plaintiff, (c) where the defendant entered into the contract under circumstances which though not rendering the contract voidable, makes it inequitable to enforce specific performance."
34. The discretion of the Court in the matter, thus is not confined within the four corners of Section 20 of the Act.
35. In Dr. S.C. Banerjee's Specific Relief Act, 10th Edn. at page 326 the law is stated in the following terms :--
"The discretion is guided by judicial principles. The expression means that discretion is not to be arbitrarily exercised, but must be based on sound, reasonable and judicial principles, that is, the discretion must not be dependant upon the mere pleasure of the Judge but must be sound and reasonably guided by judicial principles. The Court must grant or withhold relief according to the circumstances of each particular case, when the general rules and principles do not furnish an exact measure of justice between the parties."
36. In granting or withholding the relief, the Court should take the following circumstances, conditions and incidents into consideration :
(1) The contract must be certain, unambiguous and upon a valuable consideration;
(2) The contract must be perfectly fair in all its parts;
(3) The contract must be free from any fraud misrepresentation, imposition or mistake;
(4) The contract must not impose an unconscionable or hard bargain;
(5) The performance of the contract must not impose any hardship on the defendant, such as he could not foresee;
(6) The contract must be capable, of specific execution through a decree of the Court,"
37. This aspect of the matter has also been taken into consideration by a learned single Judge of the Madras High Court in A. Palaniswamy v. A. Palaniswami reported in 1974 (4)-ICC 199.
38. It is also Well settled that the appeal Court would be slow to interfere with the impugned judgment: Reference in this connection may be made to Hatijuddi (Hattjuddin) alias Bangu v:
The Emperor and Hriday Kanta Koyal v. Jogesh Chandra Mandal , Serajuddin & Co. v. Michael Goldodetz .
39. The appeal Court does not interfere with the judgment of the trial Court only because il is not right but when it is clearly wrong. Even in regular suits, the appeal courts are loathe to interfere with the findings of fact arrived at by the trial Court on the basis of oral evidence. See Ratanlal Nahata v. Nandita Bose reported in 1997 (1)CHN 392.
40. There is no dispute that an order of specific performance is a discretionary one. In an appeal against such an order, the appellate Court generally does not interfere with the discretion exercised by the trial Judge unless it appears that while exercising such discretion the learned trial Judge has wrongly applied the principles for grant of such discretion or unless it is established that such discretion has been unreasonably or capriciously used. In this connection reference may be made to the decision of Supreme Court in Uttar Pradesh Co-operative Federation Ltd. v. Sunder Bros. Delhi . In that decision Supreme Court was dealing with an appeal against an order granting stay in exercise of power under Section 34 of the Arbitration Act, which is undoubtedly a discretionary power. While discussing the scope of the said appeal the Apex Court held that where the discretion vested in the. Court has been exercised by the lower court, the appellate Court would be slow to interfere with the exercise of its discretion. In dealing with the matter raised before it at the appellate stage, the appellate Court would not be justified in interfering with the discretion under appeal solely on the ground that if it had considered the matter at the trial stage it might have come to a contrary conclusion. If the discretion has been exercised by the trial Court reasonably and in a judicial, manner the fact that the appellate Court could have taken a different view may not justify such interference with the trial Court's exercise of discretion. If it appears to the appellate Court that in exercise of its discretion the trial Court had acted unreasonably or capriciously or has ignored the relevant fact, then it would be open to the appellate Court to interfere with the trial Court's exercise of discretion.
41. In Punit Beriwala v. Suva Sanyal , I, speaking for the Division Bench, noticed :--
"In Gujarat Steel Tubes Ltd. v. Gujarat Steel Tubes Mazdoor Sabha the Apex Court has inter alia, stated law in the following terms:--
"While the remedy under Art. 226 is extraordinary and is of Anglo Saxon vintage, it is not a carbon copy of English processes. Article 226 is a sparing surgery but the lancet operates where injustice suppurates. While traditional restraints like availability of alternative remedy hold back the Court, and judicial power should not ordinarily rush in where the other two branches fear, to tread, judicial daring is not daunted where glaring injustice demands even affirmative action. The wide words of Art. 226, are designed for service of the lowly numbers in their grievances if the subject belongs to the Court's province and the remedy is appropriate to the judicial process. There is a native hue about Art. 226 without being anaglophilic or anglophoibic in attitude. Viewed from this jurisprudential perspective, we have to be cautious both in not overstepping as if Art. 226 were as large as an appeal and not failing to intervene where a grave error has crept in. Moreover, we sit here in appeal over the High Court's judgment. And an appellate power inter feres not when the order appealed is not right but only when it is clearly wrong. The difference is real though fine."
42. The same principles have also been reiterated in Wander Limited v. Antox India (P) Ltd. reported in 1990 (2) Mad LJ 1 (SC) wherein the law has been laid down in the following terms :--
"The appeals before the Division Bench were against the exercise of discretion by the single Judge. In such appeals, the appellate. Court will not interfere with the exercise of discretion of the Court of 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 injunctions. An appeal against exercise of discretion is said to be an appeal on principle. Appellate Court will not reassess the material and seek to reach a conclusion different from the one reached by the Court below if the one reached by the Court was resonably possible on the material. The appellate Court would normally not be justified in interefering with the exercise of discretion under appeal solely on the ground that if it had considered the matter at the trial stage it would have come to contrary conclusion. 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."
43. In Rangamma v. Krishnappa reported in 1968 (1) Mys LJ 552, the then Mysore High Court while considering the power of the appellate Court in interfering with an order of injunction held :--
"Before adverting to the contention advanced by Sri B.V. Deshpande, the learned Counsel appearing on behalf of the appellant, in support of the appeal, it is relevant to refer to some of the principles to be borne in mind while dealing with matters relating to grant or refusal of temporary injunctions and the relevant considerations that should be taken into account in dealing with such questions in appeals preferred against said orders relating to grant of temporary injunctions.
44. In a decision of this Court in Lakshminarasimhiah v. Yalakki Gowda reported in (1965) Mys LJ 370 : (AIR 1965 Mys 310), the relevant principles have been extracted and set out in the head-note to that case. It is sufficient to set out the head-note, which runs thus at page 311 (of AIR):--
"An appeal lies from the order of a trial Judge granting or refusing to grant an interim injunction but what the Court of appeal has to consider is simply whether or not the Judge who dealt with the matter has properly exercised the discretion which he undoubtedly possesses. The appellate Judge is not to approach the case as if he were the trial Judge. The granting or refusing of injunction is a matter resting in the sound discretion with the trial Court and consequently no injunction will be granted whenever it will operate oppressively, or inequitably or contrary to the real justice of the case. Besides, there are certain equitable principle also which govern the Courts in granting or withholding of the relief of injunction. One of the main considerations is the fairness or good conduct of the party invoking the aid of the Court. The Court denies the relief to a suit or who is himself guilty of misconduct in respect of the matter in controversy, The wrong conduct of the plaintiff in the particular matter or transaction with respect to which he seeks injunction relief precludes him from obtaining such relief. Injunction will not be granted in aid of possession secured by stratagem or trick."
At this stage, it would be relevant to refer to a decision of the Supreme Court to which my attention has been invited by Sri R. Chandrasekharan, the learned Counsel appearing for the respondent defendant. In relying on the principles laid down in that decision of the Supreme Court, Sri Chandrasekharan submitted that although the case relates to the exercise of discretion by the Court under the Arbitration Act, the principles governing such exercise of discretion are one and the same in all cases where an appeal is made to reverse the orders that are made by the trial Court. He submits that if the discretion has not been shown to be capricious or arbitrary. The appellate Court is not expected to interfere with the exercise of such discretion, merely because another view may be possible on the basis of the evidentiary material on record.
45. I am of the opinion, that the application of the principles enunciated in the decision extracted hereunder, could be made applicable in all cases where, the appellate Court is called upon to review an order made in the exercise of discretion by the lower Court. The decision in question is in U.P. Co-operative Federation Ltd. v. Sunder Bros. (2) and the relevant passage which occurs at page 253, runs thus :
"It is well established that where the discretion vested in the Court under Section 34 of the Indian Arbitration Act has been exercised by the Lower Court the Appellate Court should be slow to interfere with the exercise of that discretion. In dealing with the matter raised before it at the appellate stage the appellate Court would normally not be justified in interfering with the exercise of the discretion under appeal solely on the ground that if it had considered the matter at the trial stage it may have come to a contrary conclusion. If the discretion has been exercised by the trial Court reasonably and in judicial manner the fact the appellate Court would have taken a different view may not justify interference with the trial Court's exercise of discretion. As is often said, it is ordinarily not open to the appellate Court to substitute its own exercise of discretion for that of the trial Judge, but if it appears to the appellate Court that in exercising its discretion the trial Court has acted unreasonably or capriciously or has ignored relevant facts then it would certainly be open to the appellate Court to interfere with the trial Court's exercise of discretion. This principle is well established, but as has been observed by Viscount Simon, L.C., in Charles Osenton & Co, v. Johnston (1942 AC 130 at p. 138 : "The Law as to the reversal by a Court of appeal or an order made by a Judge below in the exercise of his discretion is well established, and any difficulty that arises is due only to the application of well settled principles in an individual case."
46. In Kamal Chowdhury v. Rajendra Choudhury a Division Bench of the Patna High Court while considering appeal from an order of the trial Court appointing receiver observed at page 371 (of AIR):--
"The opinion of the Court of first instance in these matters was of great weight. It was probably the best tribunal to decide whether it was necessary or expedient, having regard to the circumstances of the case, that a Receiver should be appointed, and a party, who, in appeal, attacked the exercise of that discretion, should show that the discretion had been improperly exercised."
47. In this connection it will be appropriate to mention a case (Durga Das v. Nalin Chandra Nandan) where a Bench consisting of 3 Judges of this Court while dealing with an appeal against an order of temporary injunction and attachment before judgment, which are undoubtedly discretionary in nature, held that if the trial Judge rightly appreciates the fact and applies to those facts the correct principle while exercising such discretion that will be a sound exercise of discretion. (Per Majority, Buckland, Ag. C.J. and Lort William, J.).
48. For the purpose of considering as to whether the plaintiff had an unfair advantage over the defendant, the terms of the contract and conduct of the parties at the time of entering into a contract or other circumstances under which the contract was entered into are required to be taken into consideration and if on such consideration it is found that the contract though not voidable gives the plaintiff an unfair advantage over the defendant then contract will not be enforced.
49. Having gone through the entire matter we are satisfied that the findings arrived at by the learned trial Judge can neither be said to be unsound in law nor can be said to be arbitrary so as to merit interference by this Court.
50. The Court : The appeal is accordingly partially allowed without costs. The decree dated 6th Dec. 1990 is affirmed subject to the modification that interest at 12% per annum will be paid on the sum of Rs. 1 lakh by the respondent to the appellant from the date of payment (sic) till realisation.
51. Let a xerox copy of the Judgment duly signed by the Assistant Registrar of this Court be given to the parties upon their undertaking to apply for certified copy of the Judgment and on payment of usual charges.