Karnataka High Court
Bank Of Baroda vs Dr Bavaguthu Raghuram Shetty on 26 June, 2020
Author: B.Veerappa
Bench: B.Veerappa
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 26TH DAY OF JUNE, 2020
PRESENT
THE HON'BLE MR. JUSTICE B. VEERAPPA
AND
THE HON'BLE MR. JUSTICE M.I. ARUN
COMMERCIAL APPEAL NO.19/2020
BETWEEN:
BANK OF BARODA
A BANKING COMPANY ESTABLISHED
UNDER THE UNDER THE BANKING COMPANIES
(ACQUISTION AND TRASNFER OF
UNDERTAKINGS) ACT, 1970 HAVING ITS
HEAD OFFICE AT:
BARODA BHAVAN, R. C. DUTT ROAD,
ALKAPURI,
BARODA - 390007.
CORPORATE OFFICE AT:
BARODA CORPORATE CENTRE
PLOT NO C-26, BLOCK G,
BANDRA KURLA COMPLEX
BANDRA (EAST), MUMBAI - 400051.
REPRESENTED BY ITS DULY
CONSTITUTED ATTORNEY AND
ASSISTANT GENERAL MANAGER
LEGAL MR. TRIPATHI SUDHAKAR BHAI
2
SON OF SHRI B.G. BHAI TRIPATHI
AGE ABOUT 42 YEARS.
...PETITIONER
(BY SRI UDAY HOLLA, SENIOR COUNSEL FOR
SRI DHARMENDRA CHATUR, ADVOCATE)
AND:
1. DR. BAVAGUTHU RAGHURAM SHETTY,
(ALSO KNOWN AS DR. B. R. SHETTY)
SON OF LATE SHRI SHAMBHU SHETTY
AGED ABOUT 77 YEARS
2. DR. CHANDRAKUMARI RAGHURAM SHETTY
WIFE OF DR. BAVAGUTHU RAGHURAM SHETTY
AGED ABOUT 70 YEARS
BOTH ARE PERMANENTLY RESIDING AT
NO. 63, ARTILLERY ROAD,
ULSOOR,
BENGALURU - 560008.
ALSO AT:
WHITE HOUSE
NEXT TO MANJUNATHA PETROL BUNK,
KINNIMULKI,
UDUPI - 576101.
AND AT
NEXT TO BHARATH BEEDI WORKS H. O.,
KADRI ROAD
MANGALURU- 575002.
...RESPONDENTS
(BY SRI K.SHASHIKIRAN SHETTY, SENIOR COUNSEL FOR
SRI SANDEEP LAHIRI, ADVOCATE FOR R1 & R2)
******
3
THIS COMMERCIAL APPEAL IS FILED UNDER
SECTION 13(1A) OF THE COMMERCIAL COURTS ACT, 2015
READ WITH ORDER XLIII RULE 1(r) AND SECTION 104 OF
THE CODE OF CIVIL PROCEDURE, 1908 PRAYING TO
ALLOW I.A. No.1 (ANNEXURE B) IN FILED IN
C.COM.O.S.No.1/2020 PENDING BEFORE THE XV
ADDITIONAL CITY CIVIL AND SESSIONS JUDGE,
BENGALURU (CCH-3, CLOSURE PERIOD JUDGE,
CLOSURE COURT) BY PASSING AN ORDER OF
TEMPORARY INJUNCTION RESTRAINING RESPONDENT
No.1, HIS AGENTS, OR ANY PERSON ACTING UNDER OR
THROUGH HIM, FROM, IN ANY MANNER WHATSOEVER,
DIRECTLY OR INDIRECTLY, ALIENATING, SELLING,
TRANSFERRING, ENCUMBERING, DISSIPATING,
MORTGAGING, PLEDGING, CREATING IN LIEN, CREATING
ANY THIRD-PARTY RIGHTS OR OTHERWISE DEALING
WITH ANY OF HIS ASSETS OR PROPERTIES, MOVABLE OR
IMMOVABLE, TANGIBLE OR INTANGIBLE, AND
CONSEQUENTLY, TO MODIFY THE COMMON ORDER
DATED 16.05.2020 (ANNEXURE C) PASSED IN C.COM.O.S.
No.01/2020 PENDING BEFORE THE XV ADDITIONAL CITY
CIVIL AND SESSIONS JUDGE, BENGALURU(CCH-3,
CLOSURE PERIOD JUDGE, CLOSURE COURT) AS
AFORESAID AND ETC.
THIS COMMERCIAL APPEAL HAVING BEEN HEARD
AND RESERVED FOR JUDGMENT IS COMING ON FOR
PRONOUNCEMENT OF JUDGMENT THIS DAY,
B.VEERAPPA, J, DELIVERED THE FOLLOWING:
JUDGMENT
The appellant, who is the plaintiff-Bank has filed a suit for specific performance of the undertaking with Negative Lien and Creation of Mortgage dated 21.4.2020 4 and for permanent injunction restraining the defendants from, in any manner, whatsoever, directly or indirectly, committing any breach of the Letter of Undertaking with Negative Lien and Creation of Mortgage dated 21.4.2020 and to further restrain the defendants, their agents, or any person acting under or through them from alienating, selling, transferring, encumbering, dissipating, mortgaging, pledging, creating a lien, creating any third-party rights or otherwise dealing with any of the assets of properties specified in the plaint schedule and restraining defendant No.1, his agents or any person acting under or through him from, in any manner, whatsoever directly or indirectly committing any breach of the Personal Guarantees dated 28.2.2010, 25.3.2016, 14.9.2017, 23.11.2017, 26.9.2017 and 19.6.2019 and also alienating, selling, transferring, encumbering, dissipating, mortgaging, pledging creating a lien, in favour of any third party otherwise dealing with any of 5 his assets or properties, movable or immovable, tangible or intangible, including without limitation, shares, mutual funds, monies deposited in bank accounts and fixed deposits contending that on the representations and assurances of defendant No.1/respondent No.1, the plaintiff through its branches in India and abroad, had advanced loans to defendant No.1 personally and by companies/entities directly and indirectly, controlled by defendant No.1 under various credit facilities between the years 2010 and 2020 to the tune of INR 2077.44 Crores (Indian Rupees Two Thousand Seventy Seven Crores and Forty Four Lakhs only). According to defendant No.1-respondent No.1 has executed multiple personal and corporate guarantees in favour of the plaintiff-bank. As on 5.5.2020, the 1st defendant and its entities were due and owing totally a sum of INR 1912,52,80,000 (Indian Rupees One Thousand Nine Hundred and Twelve Crores Fifty Two Lakhs Eighty 6 Thousand Only) including interest applied in respective accounts from time to time to the plaintiff.
2. It is the further case of the plaintiff that in the month of March, 2020 the 1st defendant travelled to India and the appellant's Officials met him at Bengaluru and then at Mangaluru. When the officials of the appellant-bank approached him regarding his dire financial position, a meeting was held at the appellant- bank on 18.3.2020. In the said meeting, the 1st defendant-respondent No.1 acknowledged his liability to the plaintiff and agreed to provide an 'all out comfort' and secure his liability by providing several immovable properties situated in the State of Karnataka and pursuant to the said meeting, he executed a letter of Undertaking dated 21.4.2020 with Negative Lien and Creation of Mortgage. He also undertook to handover all original Title Deeds in respect of immoveable properties specified therein and also to create a 7 mortgage thereon. It is also contended that the 2nd respondent, who is the 2nd defendant is the wife of defendant No.1-respondent No.1 and is a medical doctor, who also holds leadership roles in many companies/entities promoted by respondent No.1- defendant No.1 and both are permanent residents of Bengaluru, etc.
3. Along with the plaint, the plaintiff also filed an application for temporary injunction restraining defendant No.1-respondent No.1, his agents, or any person acting under or through him, from, in any manner whatsoever, directly or indirectly, alienating, selling, transferring, encumbering, dissipating, mortgaging, pledging, creating a lien in favour of any third party or otherwise dealing with any of his assets or properties moveable or immovable, tangible or intangible, including without limitation, the immovable properties specified in the Schedule to the Letter of 8 Undertaking with Negative Lien and Creation of Mortgage dated 21.4.2020 owned by defendant No.1 (morefully described to the schedule as item Nos.1 to 13 and 16) his shares, mutual funds, monies deposited in bank accounts and fixed deposits reiterating the plaint averments.
4. The trial Court considering the averments made in the application for temporary injunction and the documents produced by the plaintiff-appellant, by the impugned order dated 16.5.2020 granted an exparte temporary injunction restraining defendant No.1 or his agents or any person from directly or indirectly alienating, selling, transferring, encumbering, dissipating, mortgaging, pledging, creating a lien in favour of third partiy or otherwise dealing with the plaint schedule item Nos.1 to 13 and 16 properties and also restrained defendant No.2-respondent No.2, her agents or any person claiming through her or under her 9 from doing any of above acts in respect of plaint schedule item Nos.14 and 15, till the next date of hearing. The plaintiff was also directed to comply with the provisions of Order XXXIX Rule 3 of the Code of Civil Procedure (hereinafter referred to as 'CPC') and issued notice on I.A.Nos.1 and 2 and suit summons were issued to the defendants through e-mail and registered post returnable by 8.6.2020.
5. Hence, the present appeal is filed by the plaintiff only in so far as refusing to grant an exparte order of temporary injunction as sought for in I.A.1 in respect of moveable properties or other properties or assets not shown in the schedule, the shares, mutual funds, monies deposited in bank accounts and fixed deposits of defendant No.1 holding that the same cannot be granted as no details were furnished and no documents were produced and no blanket order can be granted with regard to the same.
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6. The respondents-defendants have filed their detailed statement of objections to the present Commercial Appeal contending that the suit filed by the plaintiff is not maintainable to enforce the specific performance of the Letter of Undertaking with Negative Lien and Creation of Mortgage dated 21.4.2020 and other Personal Guarantees, since it cannot be specifically enforced. Therefore, the relief sought for is either barred by law or outside the scope of jurisdiction and thus the suit itself was not maintainable. Hence, it is contended that the appeal filed is misconceived and not maintainable and is liable to be dismissed in liminie. The respondents have also denied all the averments made in the memorandum of appeal and therefore, sought to dismiss the appeal.
7. We have heard the learned Counsel for the parties to the lis.
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8. Sri Udaya Holla, learned Senior Counsel for the appellant-bank contended that the impugned order passed in so far as refusing to grant prayer as sought for in I.A.I in toto is contrary to law and facts and circumstances of the present case; the Trial Court having been convinced that a case has been made out to grant temporary injunction as prayed for in I.A.1, refused to order the same on the ground that it would be a blanket order; the trial Court ought to have appreciated that as it has the necessary power under the provisions of Order XXXIX Rules 1 and 2 CPC., to grant an order of temporary injunction in the nature sought in I.A.I.
9. The learned Senior Counsel for the appellant would contend that defendant No.1-respondent No.1 has time and again suppressed material facts and particulars regarding the solvency of his business 12 operations from the appellant. If the injunction is not granted by the trial Court as sought for in I.A.I, defendant No.1-respondent No.1 may alienate and dissipate his assets such that the appellant-plaintiff will forever be unable to recover the dues from him. The learned Senior Counsel further contended that the appellant-plaintiff had made out a strong prima facie case which exists in its favour in addition to the irreparable harm and injury that will be caused to it as it is one of India's largest public sector banks and consequently, the balance of convenience also lies in favour of the appellant-plaintiff; the trial Court ought to have granted the injunction as sought for in I.A.I in toto instead of granting exparte temporary injunction only in respect of schedule properties and non- granting injunction in respect of non-schedule properties sought is in utter violation of Order XXXIX Rule 1(b) of CPC. 13
10. The learned Senior Counsel for the appellant further contended that having executed Personal Guarantee dated 23rd November, 2017 by defendant No.1 in favour of the Bank and at clause 3.2 of the Personal Guarantee, he has specifically undertaken that he will not sell, loan, transfer or otherwise dispose off, by one or more transactions or series of transactions (whether related or not), the whole or any substantial part of its undertaking, property, revenues or assets if, in the reasonable opinion of the Bank, as a consequence thereof, the ability of the Guarantor to perform its obligations under this Guarantee would be materially and adversely affected;
11. The learned Senior Counsel would contend that in view of the guarantees executed by defendant No.1, the trial Court ought to have granted injunction in respect of non schedule properties belonging to defendant No.1 to protect the interest of both parties. 14 He also contended that in notice issued by the plaintiff- bank in its minutes dated 18th March, 2020, it is stated that 'during the course of the meeting itself, Shri Shetty has indicated to offer the immovable properties situated at various places viz Assam Tea company; property at Mukka, Suratkal Taluq, Mangalore; Property at B R Meadows, Ajjarkad, Udupi property at Udeshi Development, Bangalore;03 open plots situated near Vijaya Cooperative Society, Vijaya Bank Layout, Bilekahalli, Bangalore, to secure the aggregate exposure of the Group. In response, Shri Murli Ramaswamy suggested that full details/photo copies of the documents of above mentioned properties be handed over to a representative of the Bank to complete required formalities to enable the Bank to create a charge. Therefore, he sought to allow the commercial appeal.
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12. Per contra, Sri Shashikiran Shetty, learned Senior Counsel for the respondents contended that the very Commercial Appeal filed by the appellant against issuance of notice on I.A.I is not maintainable and the question of granting injunction by this Court would not arise. He would further contend that two prayers in one application is not maintainable and against the issuance of notice, the present commercial appeal filed under the provisions of Order XLIII Rule 1(r) r/w Section 104 of CPC is not maintainable and is liable to be dismissed.
13. The learned Senior Counsel would further contend that the very prayer sought in the main suit is not maintainable and rejection of temporary injunction in respect of non suit schedule properties while exercising the power under the provisions of Order XXXIX Rules 1 and 2 is just and proper.
16
14. In support of his contentions, the learned Senior Counsel for the respondents relied upon the following dictums:
i) Gajraj Singh -vs- Ram Kumar
reported in 1993 Madhya
Pradesh Law Journal 52
regarding paragraphs 3 and 5;
ii) Banarsi and Others -vs- Incharge
District Judge and Others
reported in (2005) 2 AWC 1238
(Lucknow Bench) regarding
paragraphs 2, 11 and 18
iii) Wander Ltd. and Another -vs-
Antox India P. Ltd. Reported in
1990 (Supp) SCC 727
particularly paragraphs 1 and 4;
iv) The order of the learned Single
Judge dated 15.6.2020 in MFA
2603/2020
Therefore, he sought to dismiss the commercial appeal. 17
15. In view of the rival contentions urged by the learned Counsel for the parties, the points that arise for our consideration in the present commercial appeal are:
i) Whether the commercial appeal filed by the appellant under Order XLIII Rule 1(r) r/w Section 104 of CPC against the impugned order dated
16.5.2020 in so far as non- granting injunction on I.A.I in respect of the moveable properties not shown in the schedule, the shares, mutual funds, monies deposited in bank accounts and fixed deposited of defendant No.1 is maintainable?
ii) Whether the appellant has made out any prima facie case to grant an exparte temporary injunction as sought for in I.A.I which was refused 18 by the trial Court in the facts and circumstances of the present case?
16. We have given our anxious consideration to the arguments advanced by the learned Senior Counsel for the parties and perused the entire material on record carefully.
17. The substance of the plaintiff's case is that it has filed suit for specific performance to enforce the Letter of Undertaking with Negative Lien and Creation of Mortgage dated 21.4.2020 executed by defendant No.1- respondent No.1 and for permanent injunction in respect of plaint schedule properties and non-schedule properties as well as for permanent injunction in respect of non-schedule properties as per the undertaking dated 23rd November, 2017 executed by defendant No.1-respondent No.1.
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18. Based on the averments made in the plaint as well as in I.A.I stated supra, the plaintiff-appellant filed an application - I.A.I for temporary injunction under the provisions of Order XXXIX Rules 1 and 2 in respect of the suit schedule properties i.e., item Nos.1 to 13 and 16 and non schedule properties of defendant No.1's share, mutual funds, monies deposited in bank accounts and fixed deposits and the trial Court granted exparte injunction in respect of the suit schedule properties, but refused to grant temporary injunction in respect of non-schedule properties holding that as far as the order of injunction as sought in I.A.I in respect of moveable properties and other properties or assets not shown in the schedule, the shares, mutual funds, monies deposited in the bank accounts and fixed deposits of the 1st defendant-respondent, the same cannot be granted since no details were furnished or documents were produced as the same would lead to a blanket order which cannot be granted with regard to 20 the same. Accordingly, the trial Court directed the plaintiff-appellant to comply with the provisions of Order XXXIX Rule 3 of CPC and issued notice on I.As. I and 2 and suit summons to the defendants returnable by 8.6.2020.
19. Though a contention was raised by the learned Senior Counsel for the respondents that the commercial appeal filed against issuance of notice on I.As.1 and 2 and suit summons is not maintainable, but on careful perusal of the memorandum of appeal it is specifically stated in paragraph-3 that "the appeal is filed as the Appellant is aggrieved by such portion of the common order partly refusing to grant the prayer sought in I.A.No.1". On careful perusal of Order XLIII Rule1(r) of CPC., the appeal lies from the orders under Rules 1, 2 (2A), 4 or 10 of Order XXXIX Rules 1 and 2 of CPC. Therefore, the contention of the learned Senior 21 Counsel for the respondents that the appeal is not maintainable, cannot be accepted.
20. According to the learned Counsel for the plaintiff-appellant, the 1st defendant himself has executed the personal bank guarantee dated 23rd November, 2017 wherein at Clause-3.2, he has stated as under:
"3.2 The Guarantor shall not:
3.2.1 Sell, loan, transfer or otherwise dispose of, by one or more transactions or series of transactions (whether related or not), the whole or any substantial part of its undertaking, property, revenues or assets if, in the reasonable opinion of the Bank, as a consequence thereof, the ability of the Guarantor to perform its obligations 22 under this Guarantee would be materially and adversely affected; or 3.2.2 Enter into any agreement or arrangement to guarantee or, in way or under any condition, assume or become obligated for all or any part of any financial or other obligation or another person.
3.2.3 Incur any mortgage,
charge lien, pledge or
other encumbrance on
any of its property,
revenues or assets now
owned or hereafter.
which is the matter to be adjudicated by the trial Court on merits.
21. In so far as the contention of the learned Senior Counsel for the respondents that two prayers in 23 one application are not maintainable is concerned, we have carefully perused the application filed by the plaintiff under the provisions of Order XXXIX Rules 1 and 2 of CPC. The prayer sought is only one in respect of suit schedule properties both the moveable and immoveable properties including the shares, mutual funds, monies deposited in the bank accounts and fixed deposits of the 1st defendant. Therefore, the said contention has no merit, at this stage, since the same has to be adjudicated by the trial Court while considering the applications-I.A.1 and 2.
22. It is also not in dispute that the trial Court while considering the application for temporary injunction has granted a portion of the prayer in the application and refused the remaining portion of the prayer in the application on the ground that the plaintiff has not furnished details and no document was produced and a blanket prayer cannot be granted in 24 respect of non-schedule properties. Now it is brought to our notice by the learned Senior Counsel for the parties that the present respondents-defendants have already filed objections to the said applications. It is well settled, that whenever an exparte temporary injunction is granted by the trial Court, the said application has to be decided on merits within a period of 30 days from the date it has granted the temporary injunction as contemplated under Order XXXIX Rule 3A of CPC.
23. The learned Counsel for the respondents has filed objections to the main appeal as well as to the application for temporary injunction in the appeal stating that the plaintiff has filed further two interlocutory applications, when the matter had come up before the trial Court on 9.6.2020, one for extension of the interim order dated 16.5.2020 and another under the provisions of Order XXXIX Rule 2 r/w Sections 94 and 151 of CPC seeking an exparte ad-interim order of 25 temporary injunction for disclosure of assets of defendant No.1 which is not the issue before this Court and it is for the defendants to file objections to the said applications and the trial Court to decide the said applications on merits. Though the learned trial Judge by the order dated 9.6.2020 has extended the interim order till the next date of hearing and posted the matter on 17.6.2020 for filing objections to I.As.V and VI and hearing which are also not the subject matter of the present appeal.
24. It is the bounden duty of the trial Court to dispose of the application for temporary injunction within 30 days where the injunction has been granted without notice to the opposite party and to make an endeavour to finally dispose of the application within 30 days from the date on which the injunction order was granted and where it is unable to do so, it shall record its reasons for such inability as contemplated under 26 Rule 3A of Order XXXIX of CPC. Though the order dated 9.6.2020 has not been challenged, still it is obligatory/mandatory on the part of the learned Judge to decide the applications - I.As.1 and 2 filed by the plaintiff on merits within the time stipulated, since the respondents have already filed objections. The continuation of the interim order on the application filed by the plaintiff is nothing but encouraging the litigants to ride on the Court in violating the Court orders which is impermissible under law.
25. In so far as the contention raised by the learned Senior Counsel for the appellant that non- granting of injunction in respect of non schedule properties is in violation of the provisions of Order XXXIX Rule 1(b) of CPC, the argument is attractive, but the trial Court has not decided the applications - I.As.1 and 2 on merits in its entirety. The trial Court has granted injunction only in respect of schedule properties 27 and refused to grant temporary injunction for non- schedule properties only on the ground of non- production of any documents and particulars. As already stated supra, now the respondents-defendants have filed objections and it is for the trial Court to consider I.As.1 and 2 and pass appropriate orders after hearing both the parties strictly in accordance with law. Therefore, the said contention cannot be accepted at this stage.
26. The learned Senior Counsel for the respondents relied upon Annexure-R1 filed along with objections, the dictum of the Division Bench of Madhya Pradesh High Court in the case of Gajraj Sing and Others -vs- Ram Kumar and Others reported in 1993 MPLJ 52 to contend that no appeal shall lie against an order directing issue of notice to opposite party to show cause against application for temporary injunction under Order XXXIX Rule 3 of CPC. This Court has no 28 quarrel with the said proposition of law declared by the Division Bench. Admittedly, in the present case, what is challenged is only non-granting of injunction in respect of non schedule properties in I.A.1 under Order XXXIX Rules 1 and 2 of CPC. Admittedly the learned Judge has partially granted injunction while considering I.A.I and rejected the remaining portion of the prayer in the said I.A. Therefore, the said judgment has no application to the facts and circumstances of the present case.
27. Another judgment relied upon by the learned Senior Counsel for the respondents is Banarsi and Others -vs- Incharge District Judge and Others reported in 2005(2) AWC 1628 of Allahabad High Court (Lucknow Bench) with regard to Order XXXIX Rule 3 of CPC that the appeal is not maintainable, when notice is issued to the defendants under Order XXXIX Rule 3 of CPC. Admittedly in the present case, the impugned order 29 passed by the trial Court refusing to grant injunction in respect of non-schedule properties while exercising power under the provisions of Order XXXIX Rules 1 and 2 of CPC and not under Order XXXIX Rule 3 of CPC. Therefore, the said judgment has no application to the facts and circumstances of the present case.
28. It is well settled that against any order passed by the trial Court issuing notice to the defendants under Order XXXIX Rule 3 CPC without considering the application for temporary injunction, no appeal lies under Order XLIII Rule (1)(r) CPC. Admittedly, in the present case, as stated supra, the trial Court has passed an order under the provisions of Order XXXIX Rules 1 and 2 CPC on I.A.I, but not has passed any order under the provisions of Order XXXIX Rule 3 of CPC. Therefore, the said judgment has no application to the facts and circumstances of the present case. The 30 order of the learned Single Judge is not binding and it has only a persuasive value.
29. In so far as the judgment relied upon by the learned Senior Counsel for the respondents-defendants in the case of Wander Ltd. And Another -vs- Antox India P. Ltd reported in 1990(Supp) SCC 727 is concerned, it was a case where the Hon'ble Supreme Court while considering the civil appeals filed by the defendants on merits against Civil Suit No.1220/1998 on the original side of the High Court of Madras has assailed the order dated 19th January, 1990 of the Division Bench of the High Court and reversed the order dated March 2nd, 1989 of the learned Single Judge trying the suit, an injunction restraining appellants from passing of their medicinal produce 'Cal-De-Ce' as that of the respondent-plaintiff. The respondent claimed to have acquired a right in that trademark by continuous user. The temporary injunction was refused by the learned 31 Single Judge. But in the appeals preferred against the refusal, the Division Bench granted the temporary injunction and under those circumstances, the Hon'ble Supreme Court has held that the appeals before the Division Bench were against exercise of discretion by the Single Judge, and 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. The Appellate Court would normally not be justified in interfering 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 a contrary conclusion. We have no quarrel with the law laid down by the Hon'ble Supreme Court which is a well established principle. Admittedly, 32 in the present case, the trial Court has not passed any orders on merits of the suit or even on the application filed under the provisions of Order XXXIX Rules 1 and 2 of CPC on merits and it is only an order of exparte temporary injunction granted in respect of the suit schedule properties and has refused to grant in respect of non schedule properties as sought for while considering I.A.I under Order XXXIX Rules 1 and 2 CPC. Therefore, the said judgment has no application to the facts and circumstances of the present case.
30. The learned Counsel for the respondents though relied upon an unreported judgment of the learned Single Judge of this Court in the case of Mrs. Jacqueline Pinto -vs- Field Services and Inter Cultural Learning India and Another in Miscellaneous First Appeal No.2603/2020 D.D. 15th June, 2020 though it had persuasive value, still the learned Single Judge while considering the application for temporary injunction held that the trial Court was of the opinion 33 that there was no case for granting exparte order of injunction and therefore, ordered for issuance of emergent notice to the defendants on the application filed under Order XXXIX Rules 1 and 2 CPC and under those circumstances, it was held that the appeal was not maintainable. As already held, by issuing notice or suit summons to the defendants under Order XXXIX Rule 3 of CPC, no appeal lies under Order XLIII Rule 1(r) r/w Section 104 of CPC. Therefore, the said judgment has no relevance to the facts and circumstances of the present case.
31. If we consider the provisions contained in Order XXXIX Rule 1 of CPC as a whole which is the source of grant of temporary injunction, then it appears to us that though passing of an order of temporary injunction in respect of non-suit property is not permissible under Order XXXIX Rule 1(a) and (c) of CPC, but the Court's power to pass temporary 34 injunction in respect of any property which is not the subject matter in dispute, is recognized under Order XXXIX Rule 1(b) of CPC and such power can be exercised only when the Court finds in a suit for realization of money, the defendant intends to transfer his properties to defraud his creditors. Our view is fortified by the judgment of the Division Bench of the Calcutta High Court in the case of Santosh Promoters Pvt. Ltd and Others -vs- Intrasoft Technoligies Ltd. Reported in 2016 SCC OnLine Cal.8268.
32. Though the learned Senior Counsel for the appellant-plaintiff sought for grant of temporary injunction before this Court in respect of non- schedule properties, where the trial Court has refused to issue exparte temporary injunction, it is not feasible to grant temporary injunction before this Court as sought for by the appellant-plaintiff, when the application for temporary injunction on I.As.1 and 2 is still pending. 35 What is refused is only an exparte order of temporary injunction in respect of non-schedule properties. Since the respondents-defendants have already filed objections to the said application, it is for the trial Court to decide the applications-I.As. 1 and 2 on merits as mandated under the provisions of Order XXXIX Rule 3A of CPC. In view of the contentions raised by the learned Senior Counsel for the appellant-plaintiff in the plaint as well as in the applications I.A.1 and 2 and in view the provisions of Rule 1(b) of Order XXXIX of CPC, in the interest of justice it is appropriate to protect the interest of both the parties for a limited period.
33. For the reasons stated above, the first point raised in the present commercial appeal is answered in the affirmative holding that the commercial appeal filed by the appellant under Order XLIII Rule 1(r) r/w Section 104 of CPC against the impugned order dated 16.5.2020 in so far as non granting of injunction on I.As.I in 36 respect of the both moveable and immoveable properties not shown in the schedule i.e, the shares, mutual funds, monies deposited in bank accounts and fixed deposits of defendant No.1 is maintainable.
34. Since the respondents-defendants have filed objections to I.As.1 and 2 before the trial Court, it is appropriate for trial Court to decide the said applications within a period of 30 days from the date of granting exparte temporary injunction as mandated under the provisions of Order XXXIX Rule 3A of CPC. As stated supra, the second point raised in the present commercial appeal is held in the negative holding that the appellant-plaintiff has not made out any prima facie case to interfere with the refusal of grant of temporary injunction in respect of non-schedule properties, i.e., shares, mutual funds, monies deposited in the bank accounts and fixed deposit of defendant No.1 at this stage and it is for the trial Court to consider and pass 37 appropriate orders on merits on the applications in accordance with law.
35. In so far as filing of statement of objections and marking of judgments of this Court and Hon'ble Supreme Court in the commercial appeal as annexures, are unknown to law and question of filing rejoinder also would not arise. The respondents can only defend the order of the trial Court. It is high time for the Registry to raise objections in that regard by directing the litigants to follow the procedure in accordance with law to enhance the majesty of this Court.
36. In view of the above, commercial appeal is disposed off with the following directions:
i) The trial Court is directed to consider I.As.1 and 2 on merits in accordance with law as mandated under the provisions of Order XXXIX Rule 3A of CPC. As the time stipulated 38 therein has already expired, the trial Court shall decide the applications within ten days from the date of receipt of a copy of this judgment and pass appropriate orders strictly on merits and in accordance with law;
ii) In the meanwhile, both the parties are directed to maintain status quo in respect of non schedule properties i.e., shares, mutual funds, monies deposited in the bank accounts and fixed deposit of defendant No.1 in terms of his personal guarantee dated 23rd November, 2017 executed in favour of the plaintiff-appellant-
Bank for a period of 15 days from the date of receipt of a copy of this judgment;
iii) All the contentions urged by both the parties to the lis are left open to be urged before the trial Court and it is for the trial Court to consider 39 and pass appropriate orders on I.As.1 and 2 strictly in accordance with law; and
iv) Any observation made by the trial Court while passing the impugned order and the observations made by this Court while disposing off the present appeal shall not come in the way of the trial Court while considering the applications I.As.1 and 2 filed under the provisions of Order XXXIX Rules 1 and 2 of CPC.
Accordingly, commercial appeal is disposed off.
Sd/-
Judge Sd/-
Judge Nsu/-