EFFECTS OF INJUNCTIONS GRANTED ON INSUFFICIENT GROUNDS

GURU GOBIND SINGH INDRAPRASTHA UNIVERSITY

CODE OF CIVIL PROCEDURE

EFFECTS OF INJUNCTIONS GRANTED ON INSUFFICIENT
GROUNDS

SUBMITTED TO: SUBMITTED BY:

DR. RAVINDER KUMAR NISHTHA GANDOTRA

ENROLLMENT ID: 01716503517

BBA LLB, 5th SEMESTER

 EFFECTS OF INJUNCTIONS GRANTED ON INSUFFICIENT GROUNDS

ABSTRACT

An injunction is an equitable remedy in the form of a court order that compels a party to do
or refrain from specific acts. Injunctions are intended to make whole again someone whose
rights have been violated. In Indian legal system the law of injunctions is mainly governed by
Order XXXIX and section 36 and 42 of the Specific relief Act. Section 94(c) of the Civil
Procedure Code also gives supplemental provision for grant of temporary injunction. This
research paper seeks to analyse the nature of the effects injunctions granted on insufficient
grounds have under § 95 of the Civil Procedure Code, 1908. It will be clearly concluded that
S 95 acts in the form of a deterrent preventing suits without a just, probable cause or without
a reasonable ground from being instituted and innocent citizens from being harassed. Further,
it also acts as a deterrent against malicious prosecution, the cases of which are far too many
these days.
 EFFECTS OF INJUNCTIONS GRANTED ON INSUFFICIENT GROUNDS

INTRODUCTION

An injunction is an equitable remedy in the form of a court order that compels a party to do
or refrain from specific acts. It is a court order which restrains one of the parties to a suit in
equity from doing or permitting others who are under his control to do an act which is unjust
to the other party. An injunction clearly forbids a certain type of conduct. It is a remedy that
originated in the English courts of equity. Like other equitable remedies, it has traditionally
been given when a wrong cannot be effectively remedied by an award of money damages. 1

Injunctions are intended to make whole again someone whose rights have been violated.
Nevertheless, while deciding whether to grant an injunction, courts also take into account the
interests of non-parties (that is, the public interest). When deciding whether to give an
injunction, and deciding what its scope should be, courts give special attention to questions of
fairness and good faith. One manifestation of this is that injunctions are subject to equitable
defences, such as laches and unclean hands. Injunctions are given in many different kinds of
cases. They can prohibit future violations of the law, such as trespass to real property,
infringement of a patent etc.2

Taking in to consideration the duration and the stage, they can be classified into:

1. Temporary Injunctions 2. Perpetual Injunctions

Perpetual injunction restrains a party forever from doing the specified act and can be granted
only on merits at the end of the trial after hearing both parties to the suit.3 Otherwise, an
injunction that requires conduct is called a "mandatory injunction." An injunction that
prohibits conduct is called a "prohibitory injunction.”4 Many injunctions are both—that is,
they have both mandatory and prohibitory components, because they require some conduct
and forbid other conduct. When an injunction is given, it can be enforced with equitable
enforcement mechanisms such as contempt. It can also be modified or dissolved (upon a

1
CK Takwani, J, Civil Procedure with Limitation Act, 1963 (7th edn, Eastern Book Company 2016) 343
2
PP Joshi, ‘LAW OF INJUNCTIONS: Temporary Injunction including Ex-parte Injunction, Perpetual
Injunction and Mandatory Injunction’ (2015)
http://mja.gov.in/Site/Upload/GR/Consolidate%20Workshop%20Paper%20Ratnagiri%20Civil-15032015.pdf
accessed 15 March, 2017.
3
S 37(2) Specific Relief Act, 1963.
4
Food Corporation of India v Sukh Deo Prasad (2009) 5 SCC 665.
 EFFECTS OF INJUNCTIONS GRANTED ON INSUFFICIENT GROUNDS

proper motion to the court) if circumstances change in the future. These features of the
injunction allow a court granting one to manage the behaviour of the parties.5

In Indian legal system the law of injunctions is mainly governed by Order XXXIX and
section 36 and 42 of the Specific relief Act. Section 94(c) of the Civil Procedure Code also
gives supplemental provision for grant of temporary injunction. It is also settled that there is
no bar in granting injunction or supplementary orders under Section 151 of the Civil
Procedure Code for compliance of injunction in just cases. The latter provision of inherent
powers increases the scope of civil courts for granting injunctions.

This research paper seeks to analyse the nature of the effects injunctions granted on
insufficient grounds have under § 95 of the Civil Procedure Code, 1908.

OBJECT

The primary purpose of granting interim relief is the preservation of property in dispute till
legal rights and conflicting claims of the parties before the court are adjudicated. The court in
the exercise of sound judicial discretion can grant or refuse to grant interim relief. The
underlying object of granting temporary injunction is to preserve status quo at the time of
institution of the proceedings and to prevent any changes in it until the final determination of
the suit. It is in the nature of protective relief granted in favour of a party to prevent future
possible injury.6

In other words, the object of making an order regarding interim relief is to evolve a workable
formula to the extent called for by the demands of the situation, keeping in mind the pros and
cons of the matter and striking a delicate balance between two conflicting interests. The
Court in the exercise of sound judicial discretion can grant or refuse to grant interim relief.7

5
CK Takwani, J, Civil Procedure with Limitation Act, 1963 (7th edn, Eastern Book Company 2016) 345.
6
ITO v MK Mohd Kunhi AIR 1969 SC 430; see also Polins v Gray (1879) 12 Ch D 438.
7
Transmission Corpn of AP Ltd v Lanco Kondapalli Power (P) Ltd (2006) 1 SCC 540.
 EFFECTS OF INJUNCTIONS GRANTED ON INSUFFICIENT GROUNDS

PRINCIPLES ON WHICH TEMPORARY INJUNCTION MAY BE

GRANTED

It provides that when the defendant threatens to dispossess the plaintiff or otherwise cause
injury to the plaintiff in relation to any property in dispute in suit, the Court may grant a
temporary injunction to restrain such an act or make other order for the purpose of preventing
the dispossession of the plaintiff or for the purpose of preventing the causing of injury to the
plaintiff in relation to any property in dispute.

Temporary injunction is a provisional remedy that is invoked to preserve the subject matter in
its existing condition. Its purpose is to prevent dissolution of the plaintiff's rights. The main
reason for use of a temporary injunction is the need for immediate relief.

In Agricultural Produce Market Committee Case8, the Hon’ble Apex Court has held that "a
temporary injunction can be granted only if the person seeking injunction has a concluded
right, capable of being enforced by way of injunction."

The Hon'ble Apex Court through its landmark judgment in Gujarat Bottling Co. Ltd. Case9,
held that the Court needs to follow certain guidelines while considering an application for
grant of temporary injunction, some of which are briefly stated hereunder:

• The applicant seeking relief of temporary injunction shall have to establish a prima facie
case in his favour. For this purpose, the Court will not examine the merits of the case rather
only the basic facts on which it is established that the applicant has a prima facie case to
contest. Thereafter the applicant also has to establish that the allegations / averments made in
the application on which the temporary injunction is sought are plausible.

• The court will also examine the conduct of the applicant and such conduct needs to be
examined even at the stage where the application for setting aside an order under Order
XXXIX Rule 4 of the Code of Civil Procedure, 1908 is filed.

The court has to examine the balance of convenience i.e. the balance of comparative loss
caused to the applicant and the respondent in the case of not passing the order.

8
Agricultural Produce Market Committee v Girdharbhai Ramjibhai Chhaniyara AIR 1997 SC 2674.
9
Gujarat Bottling Co Ltd v Coca Cola Co AIR 1995 SC 2372.
 EFFECTS OF INJUNCTIONS GRANTED ON INSUFFICIENT GROUNDS

• The court will first of all will examine what is the extent of loss that would be caused to the
applicant if the order is not passed and also whether it is reparable by monetary compensation
i.e. by payment of cost. Then it will examine the loss suffered by respondent if the order is
passed and thereupon it has to see which loss will be greater and irreparable. The party who
would suffer greater loss would be said to be having balance of convenience in his favour and
accordingly, the court will pass or refuse to pass the order.

• The court has the power also to ask the party to deposit security for compensation or to give
an undertaking for the payment of the compensation, if ordered.

It is to be understood that relief of temporary injunction cannot be sought for some right
which would arise in future. Similarly, an injunction cannot be obtained to restrain a party
from filing a suit. In Seema Arshad Zaheer Case10, the Hon'ble Supreme Court has indicated
the salient features of prima facie case as under:

"The discretion of the court is exercised to grant a temporary injunction only when the
following requirements are made out by the plaintiff: (i) existence of a prima facie case as
pleaded, necessitating protection of the plaintiff's rights by issue of a temporary injunction;
(ii) when the need for protection of the plaintiff's rights is compared with or weighed against
the need for protection of the defendant's rights or likely infringement of the defendant's
rights, the balance of convenience tilting in favour of the plaintiff; and (iii) clear possibility
of irreparable injury being caused to the plaintiff if the temporary injunction is not granted.
In addition, temporary injunction being an equitable relief, the discretion to grant such relief
will be exercised only when the plaintiff's conduct is free from blame and he approaches the
court with clean hands."

10
Seema Arshad Zaheer & Ors v Municipal Corporation of Greater Mumbai & Ors (2006) 5 Scale 263.
 EFFECTS OF INJUNCTIONS GRANTED ON INSUFFICIENT GROUNDS

However, in Best Sellers Retail India (P) Ltd. Case11, the Hon'ble Supreme Court observed
that prima facie case alone is not sufficient to grant injunction and held that:

"Yet, the settled principle of law is that even where prima facie case is in favour of the
plaintiff, the Court will refuse temporary injunction if the injury suffered by the plaintiff on
account of refusal of temporary injunction was not irreparable."

Order XXXIX Rule 3 of the Code of Civil Procedure, 1908 provides for ex-parte temporary
injunction in the cases of extreme urgency. However, Rule 3 does not stipulate a separate
application for ex-parte injunction rather such an application should be a part of an
application for a bi-parte temporary injunction and in such application an urgency shall be
shown by the applicant so as to warrant the passing of an ex-parte injunction/order. However,
such an order has to be temporary. The essential safeguards in this regard are briefly stated as
under:

• The matter should be urgent and overwhelming.

• The other elements for the grant of temporary injunction order as explained in the Gujarat
Bottling case shall be existing.

• The court shall record reasons for the grant of exparte order.

• It is the duty of the applicant to serve a notice to the other party after the order has been
passed and such notice shall be coupled with a copy of the application, the plaint, the
affidavit and any other document which were filed in support of the application. Upon
serving such notice, the applicant shall on the same day of the order or on the next day file an
affidavit of his having served such a notice.

• Under Order XXXIX Rule 3A of the Code of Civil Procedure, 1908, it is a mandate for the
Court that after passing such an ex-parte order, it shall continue with the bi-parte proceedings
and shall dispose of the application within 30 days. However, the said 30 days period is not
the upper limit for ex-parte orders i.e. the ex-parte order will not get automatically vacated
upon the lapse of 30 days rather it can further be extended beyond 30 days in extreme cases.

11
Best Sellers Retail India (P) Ltd v Aditya Nirla Nuvo Ltd (2012) 6 SCC 792.
 EFFECTS OF INJUNCTIONS GRANTED ON INSUFFICIENT GROUNDS

The Hon'ble Supreme Court in Morgan Stanley Case12, inter alia observed the under
mentioned guidelines for grant of temporary injunction besides others:

• Where irreparable or extremely serious injury will be caused to the applicant, ex-parte order
can be passed;

• The court shall examine the time when the plaintiff got notice of the act complained;

• If the plaintiff has acquiesced to the conduct of the respondent then ex-parte temporary
injunction shall not be passed;

• The applicant shall be acting in utmost good faith; and

• Such an order shall be for a temporary period.

12
Morgan Stanley Mutual Fund v Kartick Das (1994) 4 SCC 225.
 EFFECTS OF INJUNCTIONS GRANTED ON INSUFFICIENT GROUNDS

SECTION 95 CIVIL PROCEDURE CODE

Section 95 of the Civil procedure Code deals with what this research paper deals in principle
with, the “effects of injunctions granted on insufficient grounds.”

95. Compensation for obtaining arrest, attachment or injunction on insufficient grounds.

Where, in any suit in which an arrest or attachment has been effected or a temporary
injunction granted under the last preceding section,-

(a) it appears to the Court that such arrest, attachment or injunction was applied for on
insufficient grounds, or

(b) the suit of the plaintiff fails and it appears to the Court that there was no reasonable or
probable grounds for instituting the same, the defendant may apply to the Court, and the
Court may, upon such application, award against the plaintiff by its order such amount,[not
exceeding fifty thousand rupees], as it deems a reasonable compensation to the defendant for
the [expense or injury (including injury to reputation) caused to him];

Provided that a Court shall not award, under this section, an amount exceeding the limits of
its pecuniary jurisdiction.

(2) An order determining any such application shall bar any suit for compensation in respect
of such arrest, attachment or injunction.

It is clear from the plain reading of the above section that in an instance where the court finds
that the injunction has been sought on insufficient grounds or where the suit instituted by the
plaintiff has failed and the court comes to the conclusion that there was no reasonable ground
for instituting the same, the defendant may apply for compensation to be paid to him by the
plaintiff (including compensation for damage to his reputation).

However, the plain text of the section hasn’t meant a plainer jurisprudence. There have been
certain controversies regarding the interpretation of § 95.
 EFFECTS OF INJUNCTIONS GRANTED ON INSUFFICIENT GROUNDS

1. S. 95 ONLY PROVIDES FOR AN ALTERNATIVE REMEDY.

This point came up before the consideration of the Hon’ble Supreme court in the case of
Bank of India v Lakshimani Dass and Ors.13

FACTS:

Shital Chandra Das and Karmadhar Das filed Title Suit No. 77/59 in the Court of Subordinate
Judge at Alipore against Madhuri Choudhary, daughter-in-law of the original lessee of a
godown bearing No. 103/ IB Raja Dipendra Street, Calcutta. The sub-tenants Brij Kishore
Bhagat, Nawal Kishore Bhagat and Durga Devi Bhagat were also impleaded in the said suit
as defendants. The said suit was decreed on September 30,1963 against all the defendants,
including Brij Kishore Bhagat, Nawal Kishore Bhagat and Durga Devi Bhagat. The plaintiffs
in that suit levied execution in Case No. 18/63 in which warrant for delivery of possession of
the disputed premises was issued. In the disputed godown there were racks on which oil seeds
were stacked. Inasmuch as the said oil seeds could not be immediately removed, the plaintiffs
therein obtained delivery of possession of the godown along with oil seeds stacked in several
bags. The said oil seeds were kept in the custody of Sitaram Roy, an officer of the plaintiffs
by the process-server of the Court. Thereafter the Bank of India, defendant No. 1 in the suit,
filed an application under Order XXI Rule 101 of the Civil Procedure Code (CPC) claiming
that the Bank was in possession of the godown as a pledgee of the goods from an alleged
partnership firm, namely, M/s, Bansidhar Baijnath and Brij Kishore Bhagat, Durga Devi
Bhagat and Nawal Kishore Bhagat, who are stated to be the partners of the said firm, M/s.
Bansidhar Baijnath, the firm, also filed an application under Order XXI Rules 100 and 101,
CPC claiming to be in possession of the godown on the date of the delivery of the possession.

These applications were registered as Miscellaneous Case No. 1/72 and Miscellaneous Case
No. 3/72 in the Court of Subordinate Judge, Alipore. The Subordinate Judge, Alipore, granted
leave to the Bank to remove the said goods. Defendant No. 1-Bank, however, applied for
modification of the order dated June 27, 1972. A revision petition was filed in the High
Court. Before the High Court defendant No. 1 withdrew the petition for removal of the said
goods and the order of the Subordinate Judge passed on June 27, 1972 was set aside. In view
of the indifference by the defendants, the plaintiffs had suffered loss by way of rent and by
not delivering the vacant possession to the Bank by obtaining an order of injunction

13
Bank of India v Lakshimani Dass and Ors (2000) 3 SCC 640.
 EFFECTS OF INJUNCTIONS GRANTED ON INSUFFICIENT GROUNDS

wrongfully and by not removing the goods in spite of the offers made by the plaintiffs and
having kept the goods in spite of the offers made by the plaintiffs, the defendants have
become liable to pay compensation. A separate suit was also filed for ascertaining the mesne
profits and in the suit out of which these proceedings arise, the plaintiffs claimed damages for
wrongfully keeping the said alleged oil seeds from January 15, 1972.

2. Defendant No. 1-Bank, contested the suit. On January 14, 1972 at about 4 p.m. an
employee of the Bank was informed through telephone that padlocks were being broken upon
and certain locks were being placed thereon. The agent of the defendant-Bank went to the
spot to find that the padlocks fixed to the godown had been removed and they had been
replaced by other locks.

The name plates of the defendant also had been removed. The agent of the Bank was
prevented from entering into the godown and making Inspection of the pledged goods. A
report was also made to the police station on January 14, 1972.

3. 12 issues were raised by the trial Court. The trial Court dismissed the suit with costs. The
matter was carried in appeal to the Court of the Additional District Judge, Alipore. The
learned Judge took the view that the plaintiffs could claim damages from the Bank as well as
other defendants for making good the loss sustained by the plaintiffs on account of
occupation of their respective extent of liability. He, therefore, set aside the judgment and
decreed the suit and further made it clear that the assessment of damages had not been made
for the purpose and for that purpose the matter was remanded. The matter was carried in the
second appeal in the High Court. In the High Court the view taken is that no independent title
has been found in favour of M/s. Bansidhar Baijnath and/or its partners, that is, defendants
Nos. 2 to 4, in respect of the said godown by the Courts below and apart from Section 95,
CPC the plaintiffs are entitled to bring an action for recovery of damages for wrongful use
and occupation of the godown by the defendants Nos. 1 to 4.

HELD:

Section 95, CPC provides for a summary remedy to get compensation where a temporary
injunction has been granted if such injunction was applied for on insufficient grounds or there
were no reasonable or probable grounds for instituting the claim for injunction. The
defendant in such a proceeding is simply to present a petition to the court and the court
 EFFECTS OF INJUNCTIONS GRANTED ON INSUFFICIENT GROUNDS

subject to its pecuniary jurisdiction can give compensation up to Rs. 1,000/-. The remedy
under the code is optional and an injured party can file a regular suit against the applicant for
injunction for compensation if he has not already sought relief under the aforesaid provision.
Thus this section is an alternative remedy in cases of wrongful obtainment of an injunction
and it does not in any way interfere with the principles regulating suits for damages for tort of
malicious legal process.

As a general principle where two remedies are available under law one of them should not be
taken as operating in derogation of the other. A regular suit will not be barred by a summary
and a concurrent remedy being also provided therefore, but if a party has elected to pursue
one remedy he is bound by it and cannot on his failing therein proceed under another
provision. A regular suit for compensation is not barred by the omission to proceed under
summary procedure provided under Section 95, CPC, but if an application is made and
disposed of, such disposal would operate as a bar to regular suit whatever may be the result of
the application. There is, however, a difference between conditions necessary for the
maintainability of an application under Section 95, CPC and those necessary to maintain a
suit. The regular suit is based on tort for abusing the process of Court. Under the law of torts
in a suit for compensation for the tort the plaintiff must not only prove want of reasonable or
probable cause of obtaining injunction but also that the defendant was attracted by malice
which is an improper motive.

2. APPEAL TO LIE UNDER § 104, CPC.

This position was adjudged by the Madras high court in the case of Narahari Iyer v
Vathinatha Iyer14

HELD:

The mere fact that the defendant was in straitened circumstances, had suffered coercive civil
and revenue processes and had previously made an alienation of some property is not proof
of the fact that the defendant was actually about to dispose of his property and is not
sufficient to enable a Court to order an attachment before judgment.

14
Narahari Iyer v Vathinatha Iyer (1919) 9 LW 69 (Mad)(DB).
 EFFECTS OF INJUNCTIONS GRANTED ON INSUFFICIENT GROUNDS

An order under Sect. 95, Civil Procedure Code, refusing compensation for wrongful
attachment before judgment is appealable under Sect. 104 of the Civil Procedure Code.

3. NO SUIT WOULD LIE UNDER § 95, CPC MERELY ON THE SUGGESTION OF

MALICE. ALSO, LIMITATION WOULD RUN FROM THE GRANTING OF THE
PERPETUAL INJUNCTION.

This position came up for consideration before the Calcutta High Court in the case of Mohini
Mohan Misser and Ors v Surendra Narain Singh and Ors.15

HELD:

No suit lies for damages against a Defendant for maliciously and without reasonable and
probable cause obtaining a perpetual injunction which has been subsequently dissolved on
appeal.

A temporary injunction granted in such a suit is ipso facto dissolved by the Court's decree
granting a perpetual injunction.

In a suit for damages in respect of the temporary injunction limitation would therefore run
from the date when the temporary injunction was dissolved by the decree granting perpetual
injunction.

Per Fletcher, J.— An allegation by the Plaintiff that the Defendants were actuated by malice
and that their suit for perpetual injunction ultimately proved unsuccessful when the decree of
the High Court in their favour was set aside by His Majesty in Council was not a sufficient
allegation of want of reasonable and probable cause.

Want of probable cause is not to be inferred because of mere evidence of malice.

Per Richardson, J.—Sec. 95, C.P.C., seems to contemplate the possibility of a suit being
brought to recover compensation in respect of a temporary injunction applied for on
insufficient grounds or in a suit instituted without reasonable or probable cause.

A party is not liable in damages for procuring an erroneous decision.

15
Mohan Misser and Ors v Surendra Narain Singh and Ors 1914 SCC Online 172.
 EFFECTS OF INJUNCTIONS GRANTED ON INSUFFICIENT GROUNDS

CONCLUSION

In light of the aforesaid discussion, it can be clearly concluded that S 95 acts in the form of a
deterrent preventing suits without a just, probable cause or without a reasonable ground from
being instituted and innocent citizens from being harassed. Further, it also acts as a deterrent
against malicious prosecution, the cases of which are far too many these days.

The wording of S 95 has been such that not many contentious points have been raised relating
to its jurisprudence but the case of Bank of India v Lakshimani Dass16 is of much
importance and relevance as it cleared the long standing question of S 95 acting as a bar
against the institution of another suit for malicious prosecution. What is necessary to
understand is that while another suit being instituted against malicious prosecution may or
may not be under the realm of civil law, S 95 specifically applies in the realm of civil law.

In an era which is dominated by institution of suits that don’t stand up to the scrutiny of even
the first juristic hearing, such deterring sections gain even more importance. While the issue
gets murkier under criminal law, protection of the rights of the innocent and the fair is as
much a prerogative of the judicial system under civil law as much as it is under criminal law.

Further, S 95 acts as an assurance to anybody wrongfully convicted or unnecessarily harassed

about the protection of his/her/ their rights and as the apostles of justice, it is the prerogative
of the judiciary to continue to protect them.

16
Bank of India v Lakshimani Dass and ors (2000) 3 SCC 640.