Gujarat High Court
Kerry Ingredients India Pvt. Ltd vs Mr. Navanath Ambre on 4 April, 2025
NEUTRAL CITATION
C/AO/30/2025 JUDGMENT DATED: 04/04/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/APPEAL FROM ORDER NO. 30 of 2025
With
CIVIL APPLICATION (FOR STAY) NO. 1 of 2025
In R/APPEAL FROM ORDER NO. 30 of 2025
With
R/APPEAL FROM ORDER NO. 48 of 2025
With
CIVIL APPLICATION (FOR STAY) NO. 1 of 2025
In R/APPEAL FROM ORDER NO. 48 of 2025
With
R/SPECIAL CIVIL APPLICATION NO. 3631 of 2025
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE MAULIK J.SHELAT
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Approved for Reporting Yes No
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KERRY INGREDIENTS INDIA PVT. LTD.
Versus
MR. NAVANATH AMBRE & ORS.
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Appearance:
Mr. Mihir Thakore, Sr. Counsel assisted by
Mr. Anand Mehta, learned advocate with
Ms. Amrita Dubey, learned advocate
for Singhi & Co for the Appellant(s) No. 1
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CORAM:HONOURABLE MR. JUSTICE MAULIK J.SHELAT
Date : 04/04/2025
ORAL JUDGMENT
1. The facts of all these matters are common, albeit orders impugned are different but arising out of Special Civil Page 1 of 46 Uploaded by SALIM(HC01108) on Fri Apr 04 2025 Downloaded on : Mon Apr 07 22:27:44 IST 2025 NEUTRAL CITATION C/AO/30/2025 JUDGMENT DATED: 04/04/2025 undefined Suit No. 38 of 2005 filed by appellant-plaintiff/petitioner before Senior Civil Judge, Vadodara. So, in view of the above, all these matters were heard together and decided together by way of this common judgment.
2. The appellant- petitioner happens to be a plaintiff of Special Civil Suit No. 38 of 2005 filed and pending before 19 th Additional Senior Civil Judge, Vadodara. The respondents herein are original defendants. The parties will referred as per the original position in the suit.
3. The plaintiff has filed injunction application below Exh. 5 and prayed for an ex-parte interim injunction which was refused by the trial Court vide its order dated 24.02.2025, thereby, only show cause notice was issued to the defendants.
4. The plaintiff has also filed an application for appointment of Court Commissioner below Exh.6, appointment of receiver below Exh.7 and application for disclosure below Exh.8. All these applications came to be heard and decided by the trial Court by way of common order dated 11.03.2025 whereby, the trial Court has rejected all these applications with liberty to file a fresh, if required, after due service of summons/ notice upon defendants.
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5. The plaintiff appears to have filed an application dated 03.03.2025 below Exh. 12 thereby, requested the trial Court to stay the order dated 24.02.2025 issuing urgent show cause notice and or summons to defendants in Special Civil Suit No. 38 of 2025. After considering request of plaintiff, trial Court vide its order dated 10.03.2025 accepted such application, thereby, order of issuance of summons and notice below Exh. 1 and 5 is stayed for a period of 30 days.
6. In light of the aforesaid facts and having not able to secure ex-parte ad-interim injunction as well as ex-parte appointment of Receiver, Court Commissioner and disclosure, were turned down by the trial Court, plaintiff has preferred the present appeals as well as writ application respectively.
7. The Appeals from Orders are filed under Order 43 rule 1 (r) & (s) of CPC, challenging the impugned orders passed by the trial Court. Appeal from Order No. 30 of 2025 is filed against the impugned order dated 24.02.2025 whereby, the trial Court has refused to grant ex-parte interim injunction. Appeal from Order No. 48 of 2025 is filed against common order dated 11.03.2025 whereby, the trial Court has refused to ex-parte appoint receiver, thereby, rejected such Page 3 of 46 Uploaded by SALIM(HC01108) on Fri Apr 04 2025 Downloaded on : Mon Apr 07 22:27:44 IST 2025 NEUTRAL CITATION C/AO/30/2025 JUDGMENT DATED: 04/04/2025 undefined application filed below Exh.7. Whereas, writ application is filed against common order dated 11.03.2025 whereby, the trial Court has refused to ex-parte appoint Court Commissioner and disclosure to be made by the defendants, thereby, rejected such application filed below Exh.6 & 8 respectively.
The short facts of the case appears to be as under.
8.1. The defendant Nos. 1 & 2 are ex-employees of plaintiff, who joined plaintiff as Research and Development Executive and Quality Assurance Executive on 30.05.2014 and 20.03.2014 respectively. The appointment of defendant Nos. 1 & 2 were on certain terms and conditions of employment which are stipulated in their respective appointment letters. As per the terms of employment, defendant Nos. 1 & 2 have agreed to term of confidentiality and secrecy as well as there was restriction of employment after termination which are clearly spelt out from Clause 11 and 12. Likewise, clause 9 would cast certain obligation upon them upon termination and Clause 10 refers to conflict of duty.
8.2 The defendant Nos. 1 & 2 have resigned from employment of plaintiff by tendering their resignation on 01.06.2022 and 29.09.2022 respectively whereby, their term Page 4 of 46 Uploaded by SALIM(HC01108) on Fri Apr 04 2025 Downloaded on : Mon Apr 07 22:27:44 IST 2025 NEUTRAL CITATION C/AO/30/2025 JUDGMENT DATED: 04/04/2025 undefined of employment with plaintiff got over on 26.08.2022 and 30.09.2022 respectively. It appears that plaintiff without any protest/concern have accepted such resignation.
8.3 The plaintiff has alleged that wife of defendant No.2 who is joined as defendant No.7 in the suit, started Ansh Pharma Ingredients LLP on 26.10.2021. The said firm is also joined as defendant No.5 in suit. The defendant No. 7 has also submitted an application Form TM-A before Trade Mark Authority on 15.11.2021 wherein, Mobile No. and e-mail of defendant No.2 has been mentioned. It has been further alleged that during the employment of defendant No.2 with plaintiff, wife of defendant No.2 has started aforesaid firm (defendant No.5). The plaintiff has further alleged that as per LinkedIn page of defendant No.2, he is associated with defendant No.5 as a Quality Assurance Director since January, 2023 which is clear violation of his service agreement executed with plaintiff. According to plaintiff, few emails exchanged between defendant No.1 & 2 revealed that sensitive information/client list/formula of manufacturing process of plaintiff etc. sent by them to their private emails. Nonetheless, no incriminating material qua defendant No.1 has been either alleged or submitted by plaintiff with suit in supporting its allegation except email.
Page 5 of 46 Uploaded by SALIM(HC01108) on Fri Apr 04 2025 Downloaded on : Mon Apr 07 22:27:44 IST 2025 NEUTRAL CITATION C/AO/30/2025 JUDGMENT DATED: 04/04/2025 undefined 8.4 The plaintiff has carried out forensic investigation by
hiring private agency and after getting report from such agency in January, 2025, having found that defendant Nos. 1 & 2 have divulged sensitive information of plaintiff company in regards to its products, client list, process of making such product etc. to other defendants then, plaintiff has chosen to file suit against defendants on 24.02.2025 seeking various reliefs. The plaintiff has requested the trial Court to grant ex-parte orders as prayed in its various applications filed Exh.5 to 8. As according to the plaintiff, once notice of the suit / applications will be served upon defendants, they will destroyed all necessary material / evidence in their possession, which are sensitive information of plaintiff.
8.5 Such prayers made by the plaintiff in its aforesaid impugned applications are not accepted by the trial Court thereby, it has been refused by reasoned orders. Being aggrieved and dissatisfied with such orders, the plaintiff has preferred the present Appeals and writ application respectively.
Submission of the appellant-petitioner- plaintiff
9. Learned senior counsel Mr. Mihir Thakore assisted by learned advocate Mr. Anand Mehta with learned advocate Page 6 of 46 Uploaded by SALIM(HC01108) on Fri Apr 04 2025 Downloaded on : Mon Apr 07 22:27:44 IST 2025 NEUTRAL CITATION C/AO/30/2025 JUDGMENT DATED: 04/04/2025 undefined Ms. Amrita Dubey for Singhi & Co. for the plaintiff would submit that the trial Court has committed serious error of law by refusing to grant ex-parte ad-interim injunction as well as committed serious error by not appointing receiver and Court Commissioner as prayed for by the plaintiff.
9.1 Learned senior counsel Mr. Thakore for the plaintiff would further submit that the trial Court has failed to appreciate terms of employment of defendant No.1 & 2, effect of confidentiality of agreement and obligations of defendant No.1 & 2 post their termination of employment.
9.2 Learned senior counsel Mr. Thakore for the plaintiff would further submit that the trial Court has committed serious error by ignoring voluminous documentary evidence which would prove that defendant No.1 & 2 during their employment have misused their position, thereby, obtained sensitive information of plaintiff and divulged such information in favour of private defendants, which were in clear violation of terms of their employment.
9.3 Learned senior counsel Mr. Thakore for the plaintiff would further submit that the trial Court has erroneously observed that defendant No.1 & 2 have been resigned from their service in the year 2022 and present suit is filed in the Page 7 of 46 Uploaded by SALIM(HC01108) on Fri Apr 04 2025 Downloaded on : Mon Apr 07 22:27:44 IST 2025 NEUTRAL CITATION C/AO/30/2025 JUDGMENT DATED: 04/04/2025 undefined year 2025, ex-parte injunction can not be granted. It is submitted that when there is an ample materials produced on record before the trial Court which would indicate that defendant No. 1 & 2 have divulged information to third parties during their employment as well as defendant No.2 had joined defendant No.3 company within short span of three months from date of his resignation from plaintiff, a case was made out by the plaintiff to get ex-parte ad-interim injunction against defendants.
9.4 Learned senior counsel Mr. Thakore for the plaintiff would further submit that the trial Court has committed a serious error of law by rejecting applications below Exh. 6 to 8 on premise that suit in question is not a commercial suit and it is filed for recovery of damages and injunction and having not granted ex-parte interim injunction, refused to grant ex-parte reliefs.
9.5 Learned senior counsel Mr. Thakore would further submit that considering the provisions of Commercial Courts Act,2015 (hereinafter referred to as the Act, 2015) more particularly definition of commercial dispute given in Section 2 (1)(c)(xvii), even though intellectual property right of plaintiff is infringed by act of defendants, considering the aforesaid definition, plaintiff would not be in a position to Page 8 of 46 Uploaded by SALIM(HC01108) on Fri Apr 04 2025 Downloaded on : Mon Apr 07 22:27:44 IST 2025 NEUTRAL CITATION C/AO/30/2025 JUDGMENT DATED: 04/04/2025 undefined file suit as per provisions of Act, 2015.
9.6 Learned senior counsel Mr. Thakore would further submit that when the plaintiff has made out strong prima- facie case by submitting cogent and reliable evidence on record, refused to grant reliefs as prayed by the plaintiff in its applications are nothing but giving approval of unauthorized activity undertaken by the defendants.
9.7 Learned senior counsel Mr. Thakore would further submit that the trial Court has erroneously observed that the plaintiff can seek assistance from digital forensic department to ensure that data is not tampered with altered or destroyed during the pendency of the suit. It is submitted that sensitive information of plaintiff stored by the defendants in their systems, laptop, hard-drive offices and factory premises, if not ex-parte secured, it would cause irreparable loss and injury to the plaintiff and would frustrate the purpose of the present suit.
9.8 Learned senior counsel Mr. Thakore would further submit that in an extra ordinary situation, which is emerged from the present case, the trial Court was required to exercise its direction in favour of the plaintiff and to secure such data available in the system of the defendants which Page 9 of 46 Uploaded by SALIM(HC01108) on Fri Apr 04 2025 Downloaded on : Mon Apr 07 22:27:44 IST 2025 NEUTRAL CITATION C/AO/30/2025 JUDGMENT DATED: 04/04/2025 undefined would ultimately facilitate trial Court to decide lis between the parties more effectively.
9.9 Learned senior counsel Mr. Thakore would further submit that when there is a case made out by the plaintiff and its intellectual property right is infringed by the defendants, as per settled legal position of law, reliefs which are prayed in the applications requires to be granted.
9.10. To buttress his argument, learned senior counsel Mr. Thakore would rely upon the following decisions:
(i) Decision of Bombay High Court dated 28.04.2022 in a case of Laxmi Dental Exports Pvt. Ltd. Vs. Yogesh Bagul and others in Interim Application (L) No. 12639 of 2022 in Coms Suit No. 12636 of 2022 .
(ii) Decision of Bombay High Court dated 21.10.2024 in a case of FL Smidth Private Ltd. Vs. Enwiegh India Private Ltd. and others in Interim Application (L) No. 32328 of 2024 in COMM IPR Suit (L) No. 32321 of 2024.
(iii) Decision of Delhi High Court dated 15.07.2024 in a case of HT Process Control Pvt. Ltd. Vs. Ankur Gupta and others recorded on CS (Comm) 560 of 2024.Page 10 of 46 Uploaded by SALIM(HC01108) on Fri Apr 04 2025 Downloaded on : Mon Apr 07 22:27:44 IST 2025
NEUTRAL CITATION C/AO/30/2025 JUDGMENT DATED: 04/04/2025 undefined
(iv) Midas Hygiene Industries (P) Ltd. and others Vs. Sudhir Bhatia and others reported in (2004) 3 SCC 90.
(v) Laxmikant V. Patel Vs. Chetanbhai Shah reported in (2002) 3 SCC 65.
9.11 Making the above submissions, learned senior counsel Mr. Thakore would request this Court to allow the present Appeals / writ application.
9.12 No other and further submissions have been made by the learned senior counsel Mr. Thakore for the plaintiff.
Point for determination.
10. Whether in the facts and circumstances of the case, orders impugned are perverse, erroneous, and arbitrary and or any gross jurisdictional error committed by the trial Court while refusing to grant ex-parte ad-interim injunction as prayed in the application filed below Exh. 5 or rejecting impugned applications filed below Exh. 6 to 8 thereby, refused to ex-parte appoint Receiver, Court Commissioner and ordered for Disclosure?
Page 11 of 46 Uploaded by SALIM(HC01108) on Fri Apr 04 2025 Downloaded on : Mon Apr 07 22:27:44 IST 2025 NEUTRAL CITATION C/AO/30/2025 JUDGMENT DATED: 04/04/2025 undefined ANALYSIS
11. Before adverting to the issue germen in these matters, at the outset, I would like to refer few decisions of the Hon'ble Apex Court, whereby it has defined the scope and ambit of interference of this Court while exercising its appellate jurisdiction be it under Order 43 of CPC and or under Article 227 of the Constitution of India.
11.1 First, I would like to rely upon the decision of the Hon'ble Apex Court in the case of (i) Wonder Ltd. and another V/s. Antox India Pvt. Ltd., reported in (1990) Supp. 1 SCC 727, the Hon'ble Supreme Court in para-9 of the said decision, after considering the scope of Order 43 Rule 1 (r) of the Code in an appeal wherein, the discretionary order passed by the learned trial Court is under challenge, observed as under:-
"9. Usually, the prayer for grant of an interlocutory injunction is at a stage when the existence of the legal right asserted by the plaintiff and its alleged violation are both contested and uncertain and remain uncertain till they are established at the trial on evidence. The court, at this stage, acts on certain well settled principles of administration of this form of interlocutory remedy which is both temporary and discretionary. The object of the interlocutory injunction, it is stated "...is to protect the plaintiff against injury by violation of his rights for which he could not adequately be compensated in damages recoverable in the action if the uncertainty were resolved in his favour at the trial. The need for such protection must be weighed against the corresponding need of the defendant to be protected against injury Page 12 of 46 Uploaded by SALIM(HC01108) on Fri Apr 04 2025 Downloaded on : Mon Apr 07 22:27:44 IST 2025 NEUTRAL CITATION C/AO/30/2025 JUDGMENT DATED: 04/04/2025 undefined resulting from his having been prevented from exercising his own legal rights for which he could not be adequately compensated. The court must weigh one need against another and determine where the "balance of convenience lies".
The interlocutory remedy is intended to preserve in status quo, the rights of parties which may appear on a prima facie. The court also, in restraining a defendant from exercising what he considers his legal right but what the plaintiff would like to be prevented, puts into the scales, as a relevant consideration whether the defendant has yet to commence his enterprise or whether he has already been doing so in which latter case considerations somewhat different from those that apply to a case where the defendant is yet to commence his enterprise, are attracted."
(emphasis supplied) 11.2 Recently in the case of Ramakant Ambalal Choksi V/s Harish Ambalal Choksi reported in 2024 SCC Online SC 3538 also reiterated aforesaid principle, albeit with explaining what amounts to perversity in order having so observed as under which reads as under :-
"27. The principles of law explained by this Court in Wander's (supra) have been reiterated in a number of subsequent decisions of this Court. However, over a period of time the test laid down by this Court as regards the scope of interference has been made more stringent. The emphasis is now more on perversity rather than a mere error of fact or law in the order granting injunction pending the final adjudication of the suit.
28. In Neon Laboratories Ltd. v. Medical Technologies Ltd., (2016) 2 SCC 672this Court held that the Appellate Court should not flimsily, whimsically or lightly interfere in the exercise of discretion by a subordinate court unless such exercise is palpably perverse.
Perversity can pertain to the understanding of law or the appreciation of pleadings or evidence. In other words, the Court took the view that Page 13 of 46 Uploaded by SALIM(HC01108) on Fri Apr 04 2025 Downloaded on : Mon Apr 07 22:27:44 IST 2025 NEUTRAL CITATION C/AO/30/2025 JUDGMENT DATED: 04/04/2025 undefined to interfere against an order granting or declining to grant a temporary injunction, perversity has to be demonstrated in the finding of the trial court.
29. In Mohd. Mehtab Khan v. Khushnuma Ibrahim Khan,(2013) 9 SCC 221 this Court emphasised on the principles laid down in Wander (supra) and observed that while the view taken by the appellate court may be an equally possible view, the mere possibility of taking such a view must not form the basis for setting aside the decision arrived at by the trial court in exercise of its discretion 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. The relevant observations are extracted below:
"20. In a situation where the learned trial court on a consideration of the respective cases of the parties and the documents laid before it was of the view that the entitlement of the plaintiffs to an order of interim mandatory injunction was in serious doubt, the Appellate Court could not have interfered with the exercise of discretion by the learned Trial Judge unless such exercise was found to be palpably incorrect or untenable. The reasons that weighed with the learned Trial Judge, as already noticed, according to us, do not indicate that the view taken is not a possible view. The Appellate Court, therefore, should not have substituted its views in the matter merely on the ground that in its opinion the facts of the case call for a different conclusion. Such an exercise is not the correct parameter for exercise of jurisdiction while hearing an appeal against a discretionary order. While we must not be understood to have said that the Appellate Court was wrong in its conclusions what is sought to be emphasized is that as long as the view of the trial court was a possible view the Appellate Court should not have interfered with the same following the virtually settled principles of law in this regard as laid down by this Court in Wander Ltd. v.Antox India (P) Ltd."
32. 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 applying the well settled principles governing the scope of jurisdiction of appellate court under Order 43 of the CPC which have been reiterated in various other decisions of this Court. The appellate court should not assume unlimited jurisdiction Page 14 of 46 Uploaded by SALIM(HC01108) on Fri Apr 04 2025 Downloaded on : Mon Apr 07 22:27:44 IST 2025 NEUTRAL CITATION C/AO/30/2025 JUDGMENT DATED: 04/04/2025 undefined and should guide its powers within the contours laid down in the Wander (supra) case.
(Emphasis supplied) 11.3 So far as power of superintendence of High Court under Article 227 of the Constitution of India, the Hon'ble Apex Court in the case of Sameer Suresh Gupta TR PA Holder vs. Rahul Kumar Agarwal, reported in 2013 (9) SCC 374, the relevant observation of the aforesaid judgment reads as under :-
"[6] In our view, the impugned order is liable to be set aside because while deciding the writ petition filed by the respondent the learned Single Judge ignored the limitations of the High Court's jurisdiction under Article 227 of the Constitution. The parameters for exercise of power by the High Court under that Article were considered by the two Judge Bench of this Court in Surya Dev Rai v. Ram Chander Rai and Ors., 2003 6 SCC 675. After considering various facets of the issue, the two Judge Bench culled out the following principles:
(1) Amendment by Act No. 46 of 1999 with effect from 01-07-
2002 in Section 115 of Code of Civil Procedure cannot and does not affect in any manner the jurisdiction of the High Court under Articles 226 and 227 of the Constitution.
(2) Interlocutory orders, passed by the Courts subordinate to the High Court, against which remedy of revision has been excluded by the Code of Civil Procedure Amendment Act No. 46 of 1999 are nevertheless open to challenge in, and continue to be subject to, certiorari and supervisory jurisdiction of the High Court.
(3) Certiorari, under Article 226 of the Constitution, is issued for correcting gross errors of jurisdiction, i.e. when a subordinate Court is found to have acted (i) without jurisdiction - by assuming jurisdiction where there exists none, or (ii) in excess Page 15 of 46 Uploaded by SALIM(HC01108) on Fri Apr 04 2025 Downloaded on : Mon Apr 07 22:27:44 IST 2025 NEUTRAL CITATION C/AO/30/2025 JUDGMENT DATED: 04/04/2025 undefined of its jurisdiction - by overstepping or crossing the limits of jurisdiction, or (iii) acting in flagrant disregard of law or the rules of procedure or acting in violation of principles of natural justice where there is no procedure specified, and thereby occasioning failure of justice.
(4) Supervisory jurisdiction under Article 227 of the Constitution is exercised for keeping the subordinate Courts within the bounds of their jurisdiction. When the subordinate Court has assumed a jurisdiction which it does not have or has failed to exercise a jurisdiction which it does have or the jurisdiction though available is being exercised by the Court in a manner not permitted by law and failure of justice or grave injustice has occasioned thereby, the High Court may step in to exercise its supervisory jurisdiction.
(5) Be it a writ of certiorari or the exercise of supervisory jurisdiction, none is available to correct mere errors of fact or of law unless the following requirements are satisfied: (i) the error is manifest and apparent on the face of the proceedings such as when it is based on clear ignorance or utter disregard of the provisions of law, and (ii) a grave injustice or gross failure of justice has occasioned thereby.
(6) A patent error is an error which is self-evident, i.e. which can be perceived or demonstrated without involving into any lengthy or complicated argument or a long-drawn process of reasoning. Where two inferences are reasonably possible and the subordinate Court has chosen to take one view, the error cannot be called gross or patent.
(7) The power to issue a writ of certiorari and the supervisory jurisdiction are to be exercised sparingly and only in appropriate cases where the judicial conscience of the High Court dictates it to act lest a gross failure of justice or grave injustice should occasion. Care, caution and circumspection need to be exercised, when any of the abovesaid two jurisdictions is sought to be invoked during the pendency of any suit or proceedings in a subordinate Court and the error though calling for correction is yet capable of being corrected at the conclusion of the proceedings in an appeal or revision preferred there against and Page 16 of 46 Uploaded by SALIM(HC01108) on Fri Apr 04 2025 Downloaded on : Mon Apr 07 22:27:44 IST 2025 NEUTRAL CITATION C/AO/30/2025 JUDGMENT DATED: 04/04/2025 undefined entertaining a petition invoking certiorari or supervisory jurisdiction of High Court would obstruct the smooth flow and/or early disposal of the suit or proceedings. The High Court may feel inclined to intervene where the error is such, as, if not corrected at that very moment, may become incapable of correction at a later stage and refusal to intervene would result in travesty of justice or where such refusal itself would result in prolonging of the lis.
(8) The High Court in exercise of certiorari or supervisory jurisdiction will not covert itself into a Court of Appeal and indulge in re-appreciation or evaluation of evidence or correct errors in drawing inferences or correct errors of mere formal or technical character.
(9) In practice, the parameters for exercising jurisdiction to issue a writ of certiorari and those calling for exercise of supervisory jurisdiction are almost similar and the width of jurisdiction exercised by the High Courts in India unlike English Courts has almost obliterated the distinction between the two jurisdictions. While exercising jurisdiction to issue a writ of certiorari the High Court may annul or set aside the act, order or proceedings of the subordinate Courts but cannot substitute its own decision in place thereof. In exercise of supervisory jurisdiction the High Court may not only give suitable directions so as to guide the subordinate Court as to the manner in which it would act or proceed thereafter or afresh, the High Court may in appropriate cases itself make an order in supersession or substitution of the order of the subordinate Court as the Court should have made in the facts and circumstances of the case.
7. The same question was considered by another Bench in Shalini Shyam Shetty v. Rajendra Shankar Patil [(2010) 8 SCC 329 : (2010) 3 SCC (Civ) 338] , and it was held: (SCC pp. 347-49, para 49) "(a) A petition under Article 226 of the Constitution is different from a petition under Article 227. The mode of exercise of power by the High Court under these two articles is also different.
(b) In any event, a petition under Article 227 cannot be called a writ petition. The history of the conferment of writ jurisdiction on Page 17 of 46 Uploaded by SALIM(HC01108) on Fri Apr 04 2025 Downloaded on : Mon Apr 07 22:27:44 IST 2025 NEUTRAL CITATION C/AO/30/2025 JUDGMENT DATED: 04/04/2025 undefined High Courts is substantially different from the history of conferment of the power of superintendence on the High Courts under Article 227 and have been discussed above.
(c) High Courts cannot, at the drop of a hat, in exercise of its power of superintendence under Article 227 of the Constitution, interfere with the orders of tribunals or Courts inferior to it. Nor can it, in exercise of this power, act as a Court of appeal over the orders of the Court or tribunal subordinate to it. In cases where an alternative statutory mode of redressal has been provided, that would also operate as a restrain on the exercise of this power by the High Court.
(d) The parameters of interference by High Courts in exercise of their power of superintendence have been repeatedly laid down by this Court. In this regard the High Court must be guided by the principles laid down by the Constitution Bench of this Court in Waryam Singh [Waryam Singh v. Amarnath, AIR 1954 SC 215] and the principles in Waryam Singh [Waryam Singh v. Amarnath, AIR 1954 SC 215] have been repeatedly followed by subsequent Constitution Benches and various other decisions of this Court.
(e) According to the ratio in Waryam Singh [Waryam Singh v. Amarnath, AIR 1954 SC 215] , followed in subsequent cases, the High Court in exercise of its jurisdiction of superintendence can interfere in order only to keep the tribunals and Courts subordinate to it, 'within the bounds of their authority'.
(f) In order to ensure that law is followed by such tribunals and Courts by exercising jurisdiction which is vested in them and by not declining to exercise the jurisdiction which is vested in them.
(g) Apart from the situations pointed in (e) and (f), High Court can interfere in exercise of its power of superintendence when there has been a patent perversity in the orders of the tribunals and Courts subordinate to it or where there has been a gross and manifest failure of justice or the basic principles of natural justice have been flouted.
(h) In exercise of its power of superintendence High Court Page 18 of 46 Uploaded by SALIM(HC01108) on Fri Apr 04 2025 Downloaded on : Mon Apr 07 22:27:44 IST 2025 NEUTRAL CITATION C/AO/30/2025 JUDGMENT DATED: 04/04/2025 undefined cannot interfere to correct mere errors of law or fact or just because another view than the one taken by the tribunals or Courts subordinate to it, is a possible view. In other words the jurisdiction has to be very sparingly exercised.
(i) The High Court's power of superintendence under Article 227 cannot be curtailed by any statute. It has been declared a part of the basic structure of the Constitution by the Constitution Bench of this Court in L. Chandra Kumar v. Union of India [(1997) 3 SCC 261 : 1997 SCC (L&S) 577] and therefore abridgment by a constitutional amendment is also very doubtful.
(j) It may be true that a statutory amendment of a rather cognate provision, like Section 115 of the Civil Procedure Code by the Civil Procedure Code (Amendment) Act, 1999 does not and cannot cut down the ambit of High Court's power under Article
227. At the same time, it must be remembered that such statutory amendment does not correspondingly expand the High Court's jurisdiction of superintendence under Article 227.
(k) The power is discretionary and has to be exercised on equitable principle. In an appropriate case, the power can be exercised suo motu.
(l) On a proper appreciation of the wide and unfettered power of the High Court under Article 227, it transpires that the main object of this article is to keep strict administrative and judicial control by the High Court on the administration of justice within its territory.
(m) The object of superintendence, both administrative and judicial, is to maintain efficiency, smooth and orderly functioning of the entire machinery of justice in such a way as it does not bring it into any disrepute. The power of interference under this article is to be kept to the minimum to ensure that the wheel of justice does not come to a halt and the fountain of justice remains pure and unpolluted in order to maintain public confidence in the functioning of the tribunals and Courts subordinate to the High Court.
(n) This reserve and exceptional power of judicial intervention is Page 19 of 46 Uploaded by SALIM(HC01108) on Fri Apr 04 2025 Downloaded on : Mon Apr 07 22:27:44 IST 2025 NEUTRAL CITATION C/AO/30/2025 JUDGMENT DATED: 04/04/2025 undefined not to be exercised just for grant of relief in individual cases but should be directed for promotion of public confidence in the administration of justice in the larger public interest whereas Article 226 is meant for protection of individual grievance. Therefore, the power under Article 227 may be unfettered but its exercise is subject to high degree of judicial discipline pointed out above.
(o) An improper and a frequent exercise of this power will be counterproductive and will divest this extraordinary power of its strength and vitality."
(emphasized supplied) 11.4 In a case of Garment Craft v. Prakash Chand Goel, reported in (2022) 4 SCC 181, wherein also the Hon'ble Supreme Court of India held as under:-
"15. Having heard the counsel for the parties, we are clearly of the view that the impugned order [Prakash Chand Goel v. Garment Craft, 2019 SCC OnLine Del 11943] is contrary to law and cannot be sustained for several reasons, but primarily for deviation from the limited jurisdiction exercised by the High Court under Article 227 of the Constitution of India. The High Court exercising supervisory jurisdiction does not act as a Court of first appeal to reappreciate, reweigh the evidence or facts upon which the determination under challenge is based. Supervisory jurisdiction is not to correct every error of fact or even a legal flaw when the final finding is justified or can be supported. The High Court is not to substitute its own decision on facts and conclusion, for that of the inferior Court or tribunal. [Celina Coelho Pereira v. Ulhas Mahabaleshwar Kholkar, (2010) 1 SCC 217 : (2010) 1 SCC (Civ) 69] The jurisdiction exercised is in the nature of correctional jurisdiction to set right grave dereliction of duty or flagrant abuse, violation of fundamental principles of law or justice. The power under Article 227 is exercised sparingly in appropriate cases, like when there is no evidence at all to justify, or the finding is so perverse that no reasonable person can possibly come to such a conclusion that the Page 20 of 46 Uploaded by SALIM(HC01108) on Fri Apr 04 2025 Downloaded on : Mon Apr 07 22:27:44 IST 2025 NEUTRAL CITATION C/AO/30/2025 JUDGMENT DATED: 04/04/2025 undefined Court or tribunal has come to. It is axiomatic that such discretionary relief must be exercised to ensure there is no miscarriage of justice.
16. Explaining the scope of jurisdiction under Article 227, this Court in Estralla Rubber v. Dass Estate (P) Ltd. [Estralla Rubber v. Dass Estate (P) Ltd., (2001) 8 SCC 97] has observed : (SCC pp. 101-102, para 6) "6. The scope and ambit of exercise of power and jurisdiction by a High Court under Article 227 of the Constitution of India is examined and explained in a number of decisions of this Court.
The exercise of power under this article involves a duty on the High Court to keep inferior Courts and tribunals within the bounds of their authority and to see that they do the duty expected or required of them in a legal manner. The High Court is not vested with any unlimited prerogative to correct all kinds of hardship or wrong decisions made within the limits of the jurisdiction of the subordinate Courts or tribunals. Exercise of this power and interfering with the orders of the Courts or tribunals is restricted to cases of serious dereliction of duty and flagrant violation of fundamental principles of law or justice, where if the High Court does not interfere, a grave injustice remains uncorrected. It is also well settled that the High Court while acting under this Article cannot exercise its power as an appellate Court or substitute its own judgment in place of that of the subordinate Court to correct an error, which is not apparent on the face of the record. The High Court can set aside or ignore the findings of facts of an inferior Court or tribunal, if there is no evidence at all to justify or the finding is so perverse, that no reasonable person can possibly come to such a conclusion, which the Court or tribunal has come to." (emphasized supplied) APPEAL FROM ORDER 30 OF 2025 12.0 Now, adverting to the common issue germane in the present Appeals / Writ Application, I would like to first Page 21 of 46 Uploaded by SALIM(HC01108) on Fri Apr 04 2025 Downloaded on : Mon Apr 07 22:27:44 IST 2025 NEUTRAL CITATION C/AO/30/2025 JUDGMENT DATED: 04/04/2025 undefined touch upon impugned order dated 24.02.2025 passed by the trial Court whereby, it has refused to grant ex-parte ad- interim injunction in favour of plaintiff.
12.1 First of all, I would like to refer and rely upon the two decisions of the Hon'ble Apex Court setting out criteria while granting ex-parte injunction and in a case where there is a delay in approaching the Court by plaintiff, such injunction can be granted or not?.
12.2 The Hon'ble Apex Court has laid down principle in regards to granting ex-parte injunction. It is apt to refer and rely upon the Full Bench decision of the Hon'ble Apex in the case of Morgan Stanley Mutual Fund, Arvind Gupta Vs. Kartick Das, Securities and Exchange Board of India reported in (1994) 4 SCC 225, held as under :-
"[36] As a principle, ex parte injunction could be granted only under exceptional circumstances. The factors which should weigh with the court in the grant of ex parte injunction are (A) whether irreparable or serious mischief will ensue to the plaintiff; (B) whether the refusal of ex parte injunction would involve greater injustice than the grant of it would involve;
(C) the court will also consider the time at which the plaintiff first had notice of the act complained so that the making of improper order against a party in his absence is prevented; (D) the court will consider whether the plaintiff had acquiesced for sometime and in such circumstances it will not grant ex parte injunction;
(E) the court would expect a party applying for ex parte injunction to show utmost good faith in making the application.Page 22 of 46 Uploaded by SALIM(HC01108) on Fri Apr 04 2025 Downloaded on : Mon Apr 07 22:27:44 IST 2025
NEUTRAL CITATION C/AO/30/2025 JUDGMENT DATED: 04/04/2025 undefined (F) even if granted, the ex parte injunction would be for a limited period of time.
(G) General principles like prima facie case, balance of convenience and irreparable loss would also be considered by the court."
It has been further observed the very judgment as under
that :-
....As such whenever a court considers it necessary in the facts and circumstances of a particular case to pass an order of injunction without notice to other side, it must record the reasons for doing so and should take into consideration, while passing an order of injunction, all relevant factors, including as to how the object of granting injunction itself shall be defeated if an ex parte order is not passed. "
(Emphasis supplied) 12.3 Likewise, in a case where there is delay in approaching the Court, in the case of Mandali Ranganna Vs. T. Ramachandra reported in (2008) 11 SCC 1, wherein Hon'ble Apex Court held as under, "[21] While considering an application for grant of injunction, the court will not only take into consideration the basic elements in relation thereto, viz., existence of a prima facie case, balance of convenience and irreparable injury, it must also take into consideration the conduct of the parties.
[22]. Grant of injunction is an equitable relief. A person who had kept quiet for a long time and allowed another to deal with the properties exclusively, ordinarily would not be entitled to an order of injunction. The court will not interfere only because the property is a very valuable one. We are not however, oblivious of the fact that grant or refusal of injunction has serious consequence depending upon the nature thereof. The courts dealing with such matters must make all endeavours to protect the interest of the parties. For the said purpose, application of mind on the part of the courts is imperative. Contentions Page 23 of 46 Uploaded by SALIM(HC01108) on Fri Apr 04 2025 Downloaded on : Mon Apr 07 22:27:44 IST 2025 NEUTRAL CITATION C/AO/30/2025 JUDGMENT DATED: 04/04/2025 undefined raised by the parties must be determined objectively." (emphasis supplied)
13. Now, keeping the aforesaid principles laid down by the Hon'ble Apex Court, I would like to consider the submissions made by the learned senior counsel Mr. Thakore and to appreciate the facts of the present case.
13.1 It is required to be observed that the trial Court after considering the submission made by the plaintiff noticing the fact that defendant No. 1 & 2 are resigned / terminated from their respective services of plaintiff in the year 2022 (26.08.2022 & 30.09.2022 respectively) found that no exceptional circumstances made out warranting an ex- parte order. So, the trial Court has not granted an ex-parte order.
13.2 It is remain undisputed that defendant No. 1 & 2 were allowed to resign by plaintiff thereby, end their employment with plaintiff on the said dates. The suit is filed in the year 2025. Before that, it appears that plaintiff addressed e-mails dated 17.02.2023 to defendant No. 1 & 2, thereby, informed them about certain breaches committed by them in regards to their respective employment agreement / letter of appointment and informed them that plaintiff has discovered that they have removed confidential Page 24 of 46 Uploaded by SALIM(HC01108) on Fri Apr 04 2025 Downloaded on : Mon Apr 07 22:27:44 IST 2025 NEUTRAL CITATION C/AO/30/2025 JUDGMENT DATED: 04/04/2025 undefined information belonging to plaintiff by forwarding it to their respective private e-mail. The letters attached with aforesaid e-mail do suggest that as part of on-going investigation, plaintiff has discovered aforesaid information. So, plaintiff has called upon defendant No. 1 & 2 to confirm certain facts which were set out at serial No. 1 to 8 in the enclosed letter with said e-mails. It further appears that defendant No. 1 & 2 have responded to the aforesaid e-mail by submitting their reply vide their e-mail dated 24.02.2023 & 21.02.2023 respectively. The explanation given by defendant No. 1 & 2 appears to have been accepted by the plaintiff as there is no further e-mail communications between the parties are made available on record. At least, during course of submission, learned senior counsel Mr. Thakore would not have drawn attention of this Court in this regard.
13.3 It appears that reason best known to plaintiff, after about 1 year and more than 7 months from such response received from defendant No.1 & 2 (24.02.2023 & 21.02.2023), it has engaged forensic agency on 16.10.2024 who has carried out investigation by contacting defendant No. 3 to 6 and allegedly collected the data against the defendants who are allegedly carried out activities affecting interest of plaintiff by using sensitive information as alleged in the plaint. Such forensic investigation report claimed to Page 25 of 46 Uploaded by SALIM(HC01108) on Fri Apr 04 2025 Downloaded on : Mon Apr 07 22:27:44 IST 2025 NEUTRAL CITATION C/AO/30/2025 JUDGMENT DATED: 04/04/2025 undefined have been issued by private agency on 30.01.2025 and then after, plaintiff chooses to file the suit in question on 24.02.2025.
13.4 At this stage, this Court is confined with the issue as to whether an ex-parte order requires to be granted in favour of the plaintiff especially when same is refused by the trial Court. The observation of the trial Court while refusing ex-parte injunction can not said to be perverse, erroneous and or arbitrary as the trial Court has refused ex-parte injunction considering the fact that employment of defendant No. 1 & 2 ended in the year 2022 and no exceptional circumstances made out by the plaintiff on record. If I consider the aforesaid facts and conduct of the plaintiff who was remained silent from February, 2023 when received response from defendant No. 1 & 2 till October, 2024 when engaged forensic investigation agency, it would be delayed action on the part of the plaintiff ultimately approach the Court in February, 2025. In such a situation, a view taken by the trial Court is a possible view which should not be disturbed by this Court in its appellate power under Order 43 R.1 of CPC.
13.5 Learned senior counsel Mr. Mihir Thakore heavily relied upon the decisions in the case of Midas Hygiene Page 26 of 46 Uploaded by SALIM(HC01108) on Fri Apr 04 2025 Downloaded on : Mon Apr 07 22:27:44 IST 2025 NEUTRAL CITATION C/AO/30/2025 JUDGMENT DATED: 04/04/2025 undefined Industries (P) Ltd. (supra) wherein the Hon'ble Apex Court has observed and held as under in Para-5, which reads as under :-
"The law on the subject is well settled. In a cases of infringement either of trademark or of copyright, normally an injunction must follow. Mere delay in bringing action is not sufficient to defeat grant of injunction in such cases. The grant of injunction also becomes necessary if it prima facie appears that adoption of mark was itself dishonest."
(emphasis supplied) So, learned senior counsel Mr. Thakore would contend that delay would not come in the way of the plaintiff to get interim injunction. At the same time, according to learned senior counsel Mr. Thakore that considering the provisions of Commercial Courts Act, 2015 more particularly Section 3 (c) (xvii), suit can not be filed under Act, 2015, so it is filed under common law. If it be so, principle of granting injunction in common law suit requires to be considered.
13.6 As far as, the decision in the case of Midas Hygiene Industries (P) Ltd. (supra) is concern, it would not be ipso-facto apply to the facts of the present case as in the said case before the Apex Court, suit appears to have been filed for the infringement of trademark or its passing off and in that case, the Hon'ble Apex Court has held as above. Whereas, in the present case, suit is not filed for any Page 27 of 46 Uploaded by SALIM(HC01108) on Fri Apr 04 2025 Downloaded on : Mon Apr 07 22:27:44 IST 2025 NEUTRAL CITATION C/AO/30/2025 JUDGMENT DATED: 04/04/2025 undefined infringement of trademark or its passing off. The suit in question is filed as a non-commercial suit under common law. So, principle laid down in the case of Morgan Stanley Mutual Fund, Arvind Gupta (supra) and Mandali Ranganna (supra) would be surely applied.
13.7 At this stage, it is also apposite to refer to the decision of this Court (Hon'ble Mr. Justice H.L. Gokhale, as His Lordships then was) in the case of Veetrag Holding Co. Ltd. vs Gujarat State Textile Corporation Ltd. reported in (1996) 3 GLR 536, more particularly in Para-8, which reads as under :-
"8. Even so, in any case, inasmuch as this contract was terminated on 6th December 1993, it was expected of the appellant to move for specific performance at the earliest, if they were serious about the same. The appellants certainly cannot be non-suited on the ground of limitation inasmuch as their suit is within time. However, when it comes to grant of equitable relief when the suit is filed after such a lapse of time, it cannot be said that the remedy of interim injunction was the necessary remedy and there was no other remedy available to the party concerned in this behalf. Shri Gupta relied upon the Apex Court judgment rendered in Dalpat Kumar and Anr. v. Prahlad Singh and Ors . thereof the Courts are cautioned and required to exercise sound judicial discretion. They are required to find out that no other remedy is available to the party concerned and then as stated by the Honourable Supreme Court (and again relied upon by Shri Gupta) in para 20 of the judgment of the Apex Court rendered in State of Maharashtra v. Digambar; for approaching a Court of equity, the blameworthy conduct of a person approaching a Court of equity, for obtaining discretionary relief disentitles him for grant of such relief. Para 20 of the above judgment reads as under:Page 28 of 46 Uploaded by SALIM(HC01108) on Fri Apr 04 2025 Downloaded on : Mon Apr 07 22:27:44 IST 2025
NEUTRAL CITATION C/AO/30/2025 JUDGMENT DATED: 04/04/2025 undefined Laches or undue delay, the blameworthy conduct of a person in approaching a Court of equity in England for obtaining discretionary relief which disentitled him for grant of such relief was explained succinctly by Sir Barnes Peacock, long ago, in Lindsay Petroleum Co. v. Hurd, thus:
Now the doctrine of laches in Courts of Equity is not an arbitrary or a technical doctrine. Where it would be practically unjust to give a remedy, either because the party has, by his conduct, done that which might fairly be regarded as equivalent to a waiver of it, or where by his conduct and neglect he has, though perhaps not waiving that remedy, yet put the other party in a situation, in which it would not be reasonable to place him if the remedy were afterwards to be asserted, in either of these cases, lapse of time and delay are most material. But in every case, if an argument against relief, which otherwise would be just, is founded upon mere delay, that delay of course not amounting to a bar by any statute or limitations, the validity of that defence must be tried upon principles substantially equitable. Two circumstances, always important in such cases, are, the length of the delay and the nature of the acts done during the interval, which might affect either party and cause a balance of justice or injustice in taking the one course or the other, so far as it relates to the remedy."
(Emphasis supplied) 13.8 Recently also, Hon'ble Apex Court in the case of Ambalal Sarabhai Enterprise Limited Vs. KS Infraspace LLP Ltd. and another reported in (2020) 5 SCC 410 , wherein held as under :-
"19. In a matter concerning grant of injunction, apart from the existence of a prima facie case, balance of convenience, irreparable injury, the conduct of the party seeking the equitable relief of injunction is also very essential to be considered as observed in Motilal Jain (supra) holding as follows :Page 29 of 46 Uploaded by SALIM(HC01108) on Fri Apr 04 2025 Downloaded on : Mon Apr 07 22:27:44 IST 2025
NEUTRAL CITATION C/AO/30/2025 JUDGMENT DATED: 04/04/2025 undefined "6. The first ground which the High Court took note of is the delay in filing the suit. It may be apt to bear in mind the following aspects of delay which are relevant in a case of specific performance of contract for sale of immovable property:
(i) delay running beyond the period prescribed under the Limitation Act;
(ii) delay in cases where though the suit is within the period of limitation, yet:
(a) due to delay the third parties have acquired rights in the subject matter of the suit;
(b) in the facts and circumstances of the case, delay may give rise to plea of waiver or otherwise it will be inequitable to grant a discretionary relief."
22. In M.P. Mathur vs. DTC, (2006) 13 SCC 706, this Court observed :
"14. The present suit is based on equity...In the present case, the plaintiffs have sought a remedy which is discretionary. They have instituted the suit under Section 34 of the 1963 Act. The discretion which the court has to exercise is a judicial discretion. That discretion has to be exercised on well-settled principles. Therefore, the court has to consider--the nature of obligation in respect of which performance is sought, circumstances under which the decision came to be made, the conduct of the parties and the effect of the court granting the decree. In such cases, the court has to look at the contract. The court has to ascertain whether there exists an element of mutuality in the contract. If there is absence of mutuality the court will not exercise discretion in favour of the plaintiffs. Even if, want of mutuality is regarded as discretionary and not as an absolute bar to specific performance, the court has to consider the entire conduct of the parties in relation to the subject-matter and in case of any disqualifying circumstances the court will not grant the relief prayed for (Snell's Equity, 31st Edn., p.366)...."
23. Wander Ltd. (supra) prescribes a rule of prudence only. Much will Page 30 of 46 Uploaded by SALIM(HC01108) on Fri Apr 04 2025 Downloaded on : Mon Apr 07 22:27:44 IST 2025 NEUTRAL CITATION C/AO/30/2025 JUDGMENT DATED: 04/04/2025 undefined depend on the facts of a case. It fell for consideration again in Gujarat Bottling Co. Ltd. vs. Coca Cola Co., (1995) 5 SCC 545, observing as follows :
"47....Under Order 39 of the Code of Civil Procedure, jurisdiction of the Court to interfere with an order of interlocutory or temporary injunction is purely equitable and, therefore, the Court, on being approached, will, apart from other considerations, also look to the conduct of the party invoking the jurisdiction of the Court, and may refuse to interfere unless his conduct was free from blame. Since the relief is wholly equitable in nature, the party invoking the jurisdiction of the Court has to show that he himself was not at fault and that he himself was not responsible for bringing about the state of things complained of and that he was not unfair or inequitable in his dealings with the party against whom he was seeking relief. His conduct should be fair and honest...."
(emphasis supplied)
14. According to me, when the plaintiff has waited for long time after getting response from defendant No.1 & 2, at this stage, considering the aforesaid peculiar facts and circumstances of the present case, and also considering the principles while granting equitable relief as enumerated in the aforesaid decisions of the Hon'ble Apex Court, it would be not appropriate to grant to such ex-parte relief without hearing defendants.
14.1 Thus, when the suit is not filed as a commercial suit whereby, plaintiff is not alleging any violation of its trademark, considering the aforesaid events taken place prior to filing of the suit and keeping in mind ratio of the Page 31 of 46 Uploaded by SALIM(HC01108) on Fri Apr 04 2025 Downloaded on : Mon Apr 07 22:27:44 IST 2025 NEUTRAL CITATION C/AO/30/2025 JUDGMENT DATED: 04/04/2025 undefined aforesaid decisions of the Hon'ble Apex Court, no error can be found in the impugned order passed by the trial Court. So, in view of ratio of Wonder Ltd. and another (supra), Ramakant Ambalal Choksi (supra), Morgan Stanley Mutul Fund, Arvind Gupta (supra), Mandali Ranganna (supra), Veetrag Holding Co. Ltd. (supra) and Ambalal Sarabhai Enterprise Limited (supra) if apply to the facts of the present case, while exercising its appellate power under Order 43 of CPC, this Court would not like to disturb the view of the trial Court while passing impugned order by substitute its own as this Court would not find impugned order either perverse, erroneous or arbitrary.
14.2 In view of the aforesaid, having not found any merit in Appeal from Order No. 30 of 2025, which requires to be dismissed and it is hereby dismissed.
APPEAL FROM ORDER 48 OF 2025 with SPECIAL CIVIL APPLICATION NO. 3631 OF 2025
15. The present Appeal from Order is filed under Order 43 rule 1 (s) of CPC and Special Civil Application is filed under Article 227 of the Constitution of India against the common impugned order passed by the trial Court, thereby, the trial Court has neither appointed Receiver nor Court Page 32 of 46 Uploaded by SALIM(HC01108) on Fri Apr 04 2025 Downloaded on : Mon Apr 07 22:27:44 IST 2025 NEUTRAL CITATION C/AO/30/2025 JUDGMENT DATED: 04/04/2025 undefined Commissioner nor order for discovery as prayed in the impugned applications respectively by the plaintiff.
15.1 Again, in the present case also, plaintiff has requested the trial Court to appoint receiver ex-parte by contending inter-alia that if the notice will be issued and served upon the respondents- defendants, they will remove all the datas from their system in relation to information pertains to the plaintiff and its product which were allegedly obtained by defendant No.1 and 2 during the course of their employment with plaintiff and supplied to other defendants.
15.2 The trial Court vide its common impugned order has turn down such request but given a liberty to the plaintiff to file fresh application if so required after service of summons upon the defendants.
15.3 The trial Court has assigned few reasons while rejecting prayers of plaintiff, whereby it has been observed that plaintiff is failed to establish strong prima facie case, missing any urgency and none existence of irreparable loss and hardship. It is has been observed that while adjudicating injunction application filed below Exh. 5 when no ex-parte stay has been granted, the relief as prayed in impugned application filed below Exh.7 is out of place, especially when Page 33 of 46 Uploaded by SALIM(HC01108) on Fri Apr 04 2025 Downloaded on : Mon Apr 07 22:27:44 IST 2025 NEUTRAL CITATION C/AO/30/2025 JUDGMENT DATED: 04/04/2025 undefined suit is not filed under Act, 2015. It has been further observed that suit is purely for recovery of damages and heavy burden of proof is on shoulder of plaintiff to prove prima facie case cogent and convincing evidence. It has also been observed that apprehension on the part of the plaintiff is ill founded as it can seek assistance from digital forensic department to ensure that data is not tampered with, altered or destroyed during the pendency of the suit. The trial Court has specifically observed that by granting such relief ex-parte in favour of the plaintiff would indirectly amount to granting interim relief without deciding injunction application on its own merit, which would ultimately frustrate the due process of law, result into prejudicing the rights of the defendants and also in violation of principle of natural justice.
15.4 The aforesaid reasons which are assigned by the trial Court in light of the what is observed herein above, while deciding Appeal from Order No. 30 of 2025 is just and appropriate. As such none of submissions made by learned senior counsel Mr. Thakore appeals to me, to take departure from impugned order as its not passed contrary to law as tried to be canvassed by plaintiff. As regards forming LLP by wife of defendant No.2 and joining of such firm by defendant No.2 in breach of his terms of employment, such aspect can not be gone into at this stage as it is not fathomable that Page 34 of 46 Uploaded by SALIM(HC01108) on Fri Apr 04 2025 Downloaded on : Mon Apr 07 22:27:44 IST 2025 NEUTRAL CITATION C/AO/30/2025 JUDGMENT DATED: 04/04/2025 undefined plaintiff has recently before filing suit gathered such information. It appears from plain reading of plaint, it does not disclosed exact date on which plaintiff came to know about said fact than at this stage, this Court would not like draw any inferences in any one's favour. Further, it appears that there is no material against defendant No.1 to link him with defendant No.3 to 7 in any manner except exchanges of emails by him with defendant No.2 when was in employment.
16. The appointment of receiver is a discretion of the Court when it appears to be just and convenient, Court may order so. The appointment of receiver is regarded as one of the most difficult and embarrassing duties which a Court of equity is called upon to perform. It is a measure whereby, defendant at least temporarily is deprive of his property. Such right requires to be sparingly exercised by the Court when fully convinced. It is serious interference with the rights of defendants when suit is yet to be tried on the merits, unless plaintiff make out the case of suffering irreparable loss which can not be compensated in terms of money and having excellent chance of succeeding in the suit, such power should not be exercised by the Court.
16.1 At this stage, it is profitable to refer and rely upon
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NEUTRAL CITATION
C/AO/30/2025 JUDGMENT DATED: 04/04/2025
undefined
the decision of Madras High Court in the case of T. Krishnaswamy Chetty Vs. C. Thangavelu Chetty and others reported in 1954 SCC Online Mad 374 : AIR 1955 Mad 430 wherein after considering the various authorities of English Courts including American Courts held as under :-
"17. The five principles which can he described as the "panch sadachar' of our Courts exercising equity jurisdiction in appointing receivers are as follows :
(1) The appointment of a receiver pending a suit is a matter resting in the discretion of the Court. The discretion is not arbitrary or absolute: it is a sound and judicial discretion, taking into account all the circumstances of the case, exercised-for the purpose of permitting the ends of justice, and protecting the rights of all parties interested in the controversy and the subject-matter and based upon the fact that there is no other adequate remedy or means of accomplishing the desired objects of the judicial proceeding : -- 'Mathusri v. Mathusri, 19 Mad 120 (PC) (Z5); -- 'Sivagnanathammal v. Arunachallam Pillai', 21 Mad LJ 821 (Z6); --'Habibullah v. Abtiakallah', AIR 1918 Cal 882 (27);
-- 'Tirath Singh v. Shromani Gurudwara Prabandhak Committee', AIR 1931 Lah 688 (28); --'Ghanasham v. Moraba', 18 Bom 474 (7.9); --'Jagat Tarini Dasi v. Nabagopal Chaki', 34 Cal 305 (Z10); --'Sivaji Raja Sahib v. Aiswariyanandaji', AIR 1915 Mad 926 (Z11); -- 'Prasanno Moyi Devi v. Beni Madbab Rai', 5 All 556 (Z12); -- 'Sidheswari Dabi v. Abhayeswari Dahi', 15 Cal 818 (213);- 'Shromani Gurudwara Prabandhak Committee, Amritsar v. Dharam Das', AIR 1925 Lah 349 (Z14);
-- 'Bhupendra Nath v. Manohar Mukerjee', AIR 1024 Cal 456 (Z15).
(2) The Court should not appoint a receiver except upon proof by the plaintiff that prima facie he has very excellent chance of succeeding in the suit. -- 'Dhumi v. Nawab Sajjad All Khan', AIR 192.3 Uh 623 (Z16); -- 'Firm of Raghubir Singh' Jaswant v. Narinjan Singh', AIR 1923 Lah 48 (217); -- 'Siaram Page 36 of 46 Uploaded by SALIM(HC01108) on Fri Apr 04 2025 Downloaded on : Mon Apr 07 22:27:44 IST 2025 NEUTRAL CITATION C/AO/30/2025 JUDGMENT DATED: 04/04/2025 undefined Das v. Mohabir Das', 27 Cal 279 (Z18); -- 'Mahammad Kasim v. Nagaraja Moopanar', AIR 1928-Mad 813 (Z19); -- 'Banwarilal Chowdhury v. Motilal', AIR 1922 Pat 493 (220). (3) Not only must the plaintiff show a case of adverse and conflicting claims to property, but, he must show some emergency or danger or loss demanding immediate action and of his own right, he must be reasonably clear and free from doubt. The element of danger is an important consideration. A Court will not act on possible danger only; the danger must be great and imminent demanding immediate relief. It has been truly said that a Court will never appoint a receiver merely on the ground that it will do no harm. -- "Manghanmal Tarachand v. .Mikanbai', AIR 1933 Sind 231 (221); -- 'Bidurramji v. Keshoramji', AIR 1939 Oudh 31 (Z22); -- 'Sheoambar Ban v. Mohan Ban', AIR 1941 Oudh 328 (223).
(4) An order appointing a receiver will not be made where it has the effect of depriving a defendant of a 'de facto' possession since that might cause irreparable wrong. If the dispute is as to title only, the Court very reluctantly disturbs possession by receiver, but if the property is exposed to danger and loss and the person in possession has obtained it through, fraud or force the Court will interpose by receiver for the security of the property. It would be different where the property is shown to be 'in medio', that is to say, in the enjoyment of no one, as the Court can hardly do wrong in taking possession: it will then be the common interest of all the parties that the Court should prevent a scramble as no one seems to be in actual lawful enjoyment of the property and no harm can be done to anyone by taking it and preserving it for the benefit of the legitimate who may prove successful. Therefore, even if there is no allegation of waste and mismanagement the fact that the property is more or less 'in medio' is sufficient to vest a Court with jurisdiction to appoint a receiver. -- 'Nilambar Das v. Mabal Behari', AIR 1927 Pat 220 (Z24); --'Alkama Bibi v. Syed Istak Hussain', AIR 1925 Cal 970 (Z25~.); --'Mathuria Debya v. Shibdayal Singh', 14 Cal WN 252 (Z26); -- 'Bhubaneswar Prasad v. Rajeshwar Prasad', AIR 1948 Pat 195 (Z27). Otherwise a receiver should not be appointed in supersession of a bone fide possessor of property in controversy and bona fides have to be presumed until the contrary is established or can be indubitably inferred.
Page 37 of 46 Uploaded by SALIM(HC01108) on Fri Apr 04 2025 Downloaded on : Mon Apr 07 22:27:44 IST 2025 NEUTRAL CITATION C/AO/30/2025 JUDGMENT DATED: 04/04/2025 undefined (5) The Court, on the application of a receiver, looks to the
conduct of the party who makes the application and will usually refuse to interfere unless his conduct has been free from blame. He must come to Court with clean hands and should not have disentitled himself to the equitable relief by laches, delay, acquiescence etc.
18. To sum up as stated in -- 'Crawford V. Ross', 39 Ga 44 (Z28), "The high prerogative act of taking property out of the hands of one and putting it in pound under the order of the Judge ought not to be taken except to prevent manifest wrong imminently impending."
19. In 'Dozier v. Logan', 101 ga 173 (Z29) Atkinson J. said "The appointment of a receiver is recognised as one of the harshest remedies which the law provides for the enforcement of rights and is allowable only in extreme cases and in circumstances where the interest of the creditors is exposed to manifest peril,"
(emphasis supplied) 16.2 The aforesaid decision in the case of T. Krishnaswamy Chetty (supra) has been considered and followed by the Single Judge of this Court in the case of Harishbhai Kantilal Shah Vs. Ismailbhai Dadabhai Patel reported in 2009 (3) GLR 1909, wherein it has held as under :-
"8. The provisions of Order 40 Rule 1 provide for appointment of a Receiver where it appears to the court to be "just and convenient". As the appointment of a Receiver is one of the harshest measures available in law which is resorted to in unavoidable circumstances, it must also be reflected from the record that there are urgent circumstances prevailing, that necessitate the appointment of a Receiver. The discretion vested in the Court must be exercised in Page 38 of 46 Uploaded by SALIM(HC01108) on Fri Apr 04 2025 Downloaded on : Mon Apr 07 22:27:44 IST 2025 NEUTRAL CITATION C/AO/30/2025 JUDGMENT DATED: 04/04/2025 undefined consonance with the provisions of law, where it appears that the appointment of a Receiver is 'just and convenient' and such circumstances should normally be reflected in the order. In other words, the facts and circumstances of the case should justify the appointment of a receiver. In the present case, admittedly the de facto possession is with the respondents,and the petitioner has only a 'paper possession'. The Trail Court has not indicated that the petitioner has a strong prima facie case or that there are urgent and compelling circumstances for appointment of a Receiver. In fact, the said order has not taken into consideration any aspect of the matter and has allowed the application of the petitioner in a routine and casual manner. In the above circumstances, no fault can be found in the order of the Appellate Court below, for setting aside the said order. In this regard, it will be fruitful to refer to S.Saleema Bi v. S.Pyari Begum, (2000) 9 SCC 560,wherein it has been held as under:
"3. We have heard learned counsel and perused the judgment. We find that the defendant is in physical possession of the property in dispute. The receiver can only be appointed when it is just and convenient and also when there is a prima facie case in favour of the plaintiffrespondent and the case calls for taking of urgent measure like appointment of a receiver. The High Court has not gone into these questions while appointing receiver for the property in dispute. We, therefore, find that the appointment of the receiver was not legally justified. We,accordingly, set aside the order of the High Court."
9. While dealing with a similar issue, the Madras High Court in T.Krishnaswamy Chetty V.C.Thangavelu Chetty,AIR 1955 Madras 430 held as under.
"The appointment of a receiver is recognised as one of the harshest remedies which the law provides for the enforcement of rights and is allowable only in extreme cases and in circumstances where the interest of the person seeking the appointment of a receiver is exposed to manifest peril. Therefore, this exceedingly delicate and responsible duty has to be discharged by the Court with the utmost caution and only when the five requirements embodied in the words "just and convenient" in O. 40, R.1 are fulfilled by the facts of the case under consideration. These five requirements are:Page 39 of 46 Uploaded by SALIM(HC01108) on Fri Apr 04 2025 Downloaded on : Mon Apr 07 22:27:44 IST 2025
NEUTRAL CITATION C/AO/30/2025 JUDGMENT DATED: 04/04/2025 undefined (1) The appointment of a receiver pending a suit is a matter resting in the discretion of the Court.
(2) The Court should not appoint a receiver except upon proof by the plaintiff that prima face he has a very excellent chance of succeeding in the suit.
(3) Not only must the plaintiff show a case of adverse and conflicting claims to property, but, he must show some emergency or danger or loss demanding immediate action and of his own right he must be reasonably clear and free from doubt. The element of danger is an important consideration.
(4) An order appointing a receiver will not be made where it has the effect of depriving a defendant of a 'de facto' possession since that might cause irreparable wrong. It would be different where the property is shown to be 'in medio', that is to say,in the enjoyment of no one.
And (5) The Court,on the application made for the appointment of a receiver, looks to the conduct of the party who makes the application and will usually refuse to interfere unless his conduct has been free from blame."
(emphasis supplied) 16.3 After taking into account ratio of the aforesaid decisions, if applied to the facts of the present case, plaintiff has failed to make out strong prima facie case as well as failed to show an eminent danger or irreparable loss caused to it, if Receiver is not appointed ex-parte. Nonetheless, the trial Court has correctly observed in its impugned order that after observing principle of natural justice, plaintiff can move an appropriate application for appointment of Receiver by Page 40 of 46 Uploaded by SALIM(HC01108) on Fri Apr 04 2025 Downloaded on : Mon Apr 07 22:27:44 IST 2025 NEUTRAL CITATION C/AO/30/2025 JUDGMENT DATED: 04/04/2025 undefined making out an appropriate case for such appointment.
16.4 Thus, at this stage, when this Court having comes to the conclusion that plaintiff having waited for long time after getting response from defendant No.1 & 2 as observed herein above, it would not be appropriate to grant relief in favour of the plaintiff as prayed in the impugned application filed below Exh.7.
17. Likewise, seeking an appointment of Court Commissioner without allowing defendant to object such request is also meet with similar fate as done while answering to decide impugned application filed below Exh.7 whereby not appointed Receiver. As such, plaintiff has availed the service of forensic expert and according to the plaintiff, it has having report of forensic expert which substantiate its case made out in the plaint, albeit, such report is in sealed cover yet not be a part of record of suit. If it be so, at this stage, request made by the plaintiff that too ex-parte appointment of Court Commissioner is not only uncalled for but again it would be in violation of principle of natural justice. It is true that in exceptional circumstances, the Court may exercise its discretion by ex-parte appointing Court Commissioner, in the suit in case where the Court deems a local investigation to be requisite or proper for the Page 41 of 46 Uploaded by SALIM(HC01108) on Fri Apr 04 2025 Downloaded on : Mon Apr 07 22:27:44 IST 2025 NEUTRAL CITATION C/AO/30/2025 JUDGMENT DATED: 04/04/2025 undefined purpose of elucidating any matter in dispute. Nonetheless, when the plaintiff himself has appointed forensic expert who has alleged to have visited factory premises of defendants and obtained necessary information, evidence and other materials, there was no reason for the plaintiff to ask for appointment of Court Commissioner at a very initial stage of suit, especially asking for such relief ex-parte. So, on both these counts, prayers made in impugned application filed below Ex.6 failed.
17.1 So far as decisions of Delhi and Bombay High Courts referred by the learned senior counsel Mr. Thakore is concerned, it is true that in peculiar facts and circumstances of those cases, the Court has appointed ex-parte Receiver/ Court Commissioner as the case may be. It appears from the bare reading of those cases, no issue regarding delay in approaching Court was ever raised and or occasion to be considered by the Court. Although such decisions are not binding to this Court but facts are not similar to the case on hand, thereby, not followed.
17.2 At this stage, it would be profitable to refer and rely upon the decision of Single Judge of this Court in the case of Deny @ Dineshbhai Amarshi Ajmera Thro. PoA Ketan Chhabildas Vs. Khutejabibi D/o Ahmad Mohammad Page 42 of 46 Uploaded by SALIM(HC01108) on Fri Apr 04 2025 Downloaded on : Mon Apr 07 22:27:44 IST 2025 NEUTRAL CITATION C/AO/30/2025 JUDGMENT DATED: 04/04/2025 undefined Fajal W/o. Imamkhan Husainkhan reported in 2013 (0) AI JEL-HC 230413 wherein observed and held as under :-
"11. A perusal of the provisions of Order 26 Rule 9 of the Code would go to show that the Court is empowered to order a local investigation for the purpose of elucidating any matter in dispute. Such power can be exercised suo motu or on an application made by any of the parties to a suit. The present is not a case where the Court has exercised the power under Order 26 Rule 9 suo motu. The exercise of this power has been invoked by respondent No.1 by filing the application at Ex.6. It has been asserted by the learned advocate for the petitioners that no notice was issued to the petitioners before deciding the application at Ex.6. The petitioners were deprived of the opportunity to raise objections and get an opportunity of hearing. Learned counsel for respondent No.1 could not dispute this position. Thus, it is clear that the order has been passed without issuing notice to the petitioners or affording them an opportunity of hearing. As such, it can be said to be an exparte order as far as the petitioners are concerned, though for no default in appearance on their side.
13. Though the Trial Court is empowered to issue a Commission suo motu, in the present case, suo motu power has not been exercised. The impugned order has been passed at the behest of respondent No.1, one of the parties to the litigation. Under such circumstances, when the Trial Court was deciding an application filed by one of the parties, it would have been more appropriate and conducive for the proper administration of justice if the petitioners/ defendants would have been granted an opportunity of hearing and of ventilating their objections to the application. However, this course of action has not been adopted by the Trial Court, which has straightaway passed the impugned order without notice to the petitioners. What was the Page 43 of 46 Uploaded by SALIM(HC01108) on Fri Apr 04 2025 Downloaded on : Mon Apr 07 22:27:44 IST 2025 NEUTRAL CITATION C/AO/30/2025 JUDGMENT DATED: 04/04/2025 undefined necessity of such a course of action is not discernible. However, it has resulted in deprivation of the right of hearing and raising objections to the application on the part of the petitioners.
14. As the impugned order has been passed without granting an opportunity of hearing to the petitioners, it is in violation of the principles of natural justice. As per the settled principles of law, such an order cannot be permitted to stand."
(emphasised supplied)
18. Similarly, considering the reasons which are assigned by the trial Court as well as facts which are referred herein above and at this stage, when the Courts do not find any merit in the claim of plaintiff to grant ex-parte reliefs as prayed for, it would not be appropriate to even grant impugned application filed below Exh.8 asking for ex-parte relief of disclosures from defendants.
19. Thus, in view of the aforesaid facts and circumstances of the case, and considering the ratio of Deny @ Dineshbhai (supra), as well as Sameer Suresh Gupta TR PA Holder (supra) and Garment Craft (supra), I am of the view that no procedural irregularity or illegality and or jurisdictional error committed by the trial Court while rejecting the impugned application filed below Exh.6 & 8 respectively.
Page 44 of 46 Uploaded by SALIM(HC01108) on Fri Apr 04 2025 Downloaded on : Mon Apr 07 22:27:44 IST 2025 NEUTRAL CITATION C/AO/30/2025 JUDGMENT DATED: 04/04/2025 undefined Conclusion
20. In view of the aforesaid discussion, observation and reasons, I am of the view there is neither any error much less any gross error of law and or any jurisdictional error committed by the trial Court while passing the impugned orders nor orders impugned are perverse, erroneous and or arbitrary. So, at this stage, no interference requires at hands of this Court.
21. Thus, in view of the aforesaid and considering the peculiar facts and circumstances of the present case and the ratio laid down by the Hon'ble Apex Court and this Court in the above cited / referred decisions, both these Appeals as well as writ application are found merit less requires to be dismissed, are hereby dismissed. No order as to costs.
22. Consequently, all civil applications would not survive and disposed of accordingly.
23. It is made clear that any of the observations / reasons herein above made is observed to decide the appeals/ writ application and it would not come in the way of the parties to the suit in future proceedings as all these observations are made only to deny an ex-parte reliefs in favour of Page 45 of 46 Uploaded by SALIM(HC01108) on Fri Apr 04 2025 Downloaded on : Mon Apr 07 22:27:44 IST 2025 NEUTRAL CITATION C/AO/30/2025 JUDGMENT DATED: 04/04/2025 undefined plaintiff. In a case where, after service of summons of the suit on defendants, if plaintiff will file appropriate applications seeking appropriate reliefs, the trial Court shall decide such applications after observing principle of natural justice and decide it in accordance with law without being influenced by any of the observations so made either by trial Court in the orders impugned in these matters or made herein above by this Court in the present order.
(MAULIK J.SHELAT,J) SALIM/ Page 46 of 46 Uploaded by SALIM(HC01108) on Fri Apr 04 2025 Downloaded on : Mon Apr 07 22:27:44 IST 2025