Citation Codes

Equivalent Citations

citation codes

Case Number

F.M.A.T No. 169 of 2005 with CAN Nos. 923 and 5508 of 2005

Advocates

Debal Banerjee
Saptansu Basu and Ms. B. Mondal
Hirak Mitra
S. Ghosh and U. K.Sarkar

Judges

Bhaskar Bhattacharya
Arun Kumar Bhattacharya, JJ.

Acts

provisions contained in Order 39, Rule 1(a) of the Code
Order 39, Rules 1 and 2 of the Code of Civil Procedure
Industrial Companies (Special Provisions) Act, 1985
provisions contained in Section 136 of the Code
Order 17, Rule 2 of the Code of Civil Procedure
Order 38, Rule 5 of the Code of Civil Procedure,
Order 39, Rule 4 of Code of Civil Procedure
Section 141 of the Code of Civil Procedure
Order 39, Rule 1 sub-rule (a) of the Code
Order 39, Rules 1 and 2 of the Code,
Order 39, Rule 1(b) of the Code.
Order 38, Rule 5 of the Code
Order 39, Rule 1 of the Code.
Order 17, Rule 2 of the Code
Section 151 of the Code.30.
Order 9, Rule 8 of the Code
provisions of Order 39
Order 39, Rules 1

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Smart Summary

Structured Summary of the Opinion (Bhaskar Bhattacharya, J.)

Factual and Procedural Background

The respondent (plaintiff below) filed Title Suit No. 34 of 2003 against the appellant (defendant No.1) seeking declaration that the respondent's claim for refund of an advance of Rs. 4,20,41,622/- was a secured claim, asserting secured creditor status, and seeking recovery of a total sum of Rs. 5,27,62,236/- (including interest). The respondent also sought a permanent injunction restraining the appellant from transferring, selling, alienating or encumbering properties listed in schedule 'B' of the plaint.

The respondent applied under Order 39, Rules 1 and 2 of the Code of Civil Procedure for a temporary injunction restraining the appellant from alienating the schedule 'B' properties. The trial court granted an ad interim injunction and later, after notice and hearing (on a date when the respondent was not present but had an affidavit on record), maintained the interim injunction. The appellant sought variation under Order 39, Rule 4 which was refused. The appellant earlier filed a first miscellaneous appeal before a Division Bench of this Court; the Division Bench directed the trial Judge to dispose of the injunction application within a specified period but otherwise refused to interfere with the interim order. Dissatisfied with the trial court's final order maintaining injunction, the appellant filed the present first miscellaneous appeal challenging the order dated 30th September, 2004.

Legal Issues Presented

Whether the trial court was competent to dispose of the application for temporary injunction on merits notwithstanding absence of the plaintiff or the plaintiff's advocate on the fixed date (i.e., whether the affidavit on record could be treated as evidence permitting disposal).
Whether a court can restrain a defendant from transferring property situated beyond the territorial limits of the court's jurisdiction by granting injunction or attachment before judgment.
Whether an injunction restraining transfer of defendant's property can be granted where the plaintiff has not established fraud or intention to defraud (i.e., whether the court can invoke inherent powers under Section 151 of the Code or Order 39 to grant such relief absent fraudulent intention or the prerequisites of Order 38).

Arguments of the Parties

Appellant's Arguments (Mr. Banerjee)

On the date fixed for hearing the plaintiff (respondent) was absent; since the defendant (appellant) was present and opposed the application, the trial judge should have dismissed the injunction application for default — Order 9, Rule 8 principles should apply (by virtue of Section 141 of the Code).
The trial judge erred in restraining the appellant from transferring properties situated beyond the territorial limit of the Court; such restraint effectively amounts to attachment before judgment which the Court cannot order in respect of out-of-state properties.
There is no allegation or proof of fraudulent intention on the appellant's part to transfer properties to defeat the plaintiff's claim; absent such fraudulent intention, Order 38 (attachment before judgment) does not permit attachment and the court cannot achieve indirectly by injunction what Order 38 does not permit.

Respondent's Arguments (Mr. Mitra)

Although the plaintiff or its counsel was not present on the hearing date, the affidavit in support of the injunction was on record having supported the earlier ad interim injunction; the trial judge could dispose of the application on the basis of that affidavit — Order 17, Rule 2 principles apply.
There is no legal prohibition on a court restraining a defendant from transferring property situated beyond its territorial limit; reliance was placed on Moolji Jaitha and Co. v. The Khandesh Spinning and Weaving Mills Co. Ltd. (AIR 1950 FC 83) to support this contention.
Even if the plaintiff could not make out a case for attachment before judgment under Order 38, the court may grant injunction under Order 39 (Order 39, Rule 1(a)) if a strong prima facie case exists, or under Section 151 (inherent powers) to prevent defeat of realization of dues where the defendant is a non-functioning company; reliance placed on Manoharlal v. Sett Hiralal (AIR 1962 SC 527) for inherent power principles.
Also relied upon Films Rover International Ltd. v. Canon Film Sales Ltd. ((1986) 3 All ER 772) for the general balancing test comparing the injustice of granting versus refusing injunction.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Moolji Jaitha and Co. v. The Khandesh Spinning and Weaving Mills Co. Ltd., AIR 1950 FC 83	Invoked by respondent to support the proposition that there is no legal prohibition on restraining transfer of property situated beyond the territorial limit of the Court.	The decision was mentioned by respondent's counsel in support of his contention. The Court noted the submission but, in its territorial-limit analysis, relied chiefly on the subsequent Division Bench decision in Balai Kumar Sarkar v. Bimal Chandra Sarkar for the controlling principle.
Balai Kumar Sarkar v. Bimal Chandra Sarkar, AIR 1978 Cal 340	Held that a court can, by taking aid of Order 38, Rule 5 CPC, attach property situated beyond the territorial limit of the Court, subject to Section 136 CPC and by sending the order to the appropriate court for implementation.	The Court relied on this Division Bench decision to hold that a court dealing with an attachment-before-judgment application is competent to pass an order of attachment in respect of property beyond its territorial limits, subject to the procedure in Section 136 CPC; this supported the view that territorial location does not, per se, bar restraining transfer in an appropriate case.
Manoharlal v. Sett Hiralal, AIR 1962 SC 527	Recognized that courts possess inherent powers (Section 151 CPC) to grant injunctions not specifically provided by Order 39, where necessary to do complete justice.	The Court accepted the proposition that inherent power exists but emphasized that such power cannot be used to grant relief when a specific provision (Order 39) otherwise restricts grant of injunction; thus Manoharlal's principle was accepted but applied subject to statutory limits.
Films Rover International Ltd. v. Canon Film Sales Ltd., (1986) 3 All ER 772 (Chancery Division)	Expresses the balancing-test approach: compare injustice to defendant if plaintiff gets injunction but loses at trial, versus injustice to plaintiff if injunction refused but plaintiff succeeds at trial.	The Court agreed with the general balancing principle but observed that where a statute (Order 39) specifies circumstances for grant of injunction, the legislature intended that refusal in cases outside statutory scope would not cause injustice warranting injunction; accordingly the balancing test could not override the statutory restrictions in Order 39.

Court's Reasoning and Analysis

The Court addressed the issues in sequence.

Competence to dispose despite plaintiff's absence:
The Court held that procedural provisions applicable to suits should be followed, mutatis mutandis, in miscellaneous injunction proceedings. Order 39, Rule 1 allows disposal of an injunction application on the basis of affidavits filed by the parties. The Court accepted respondent's submission that the affidavit already filed under Order 17, Rule 2 could be treated as evidence on record. Therefore, the trial judge was competent to consider the affidavit and the defendant's written objections and to decide the application on merit rather than dismiss for default. The Court found no merit in the appellant's contention that the application should have been dismissed for non-appearance of the plaintiff.
Territorial extent of injunctive/attachment relief:
The Court examined past views and relied on the Division Bench decision in Balai Kumar Sarkar which held that a court can attach property situated beyond its territorial limits by taking aid of Order 38, Rule 5, subject to Section 136 CPC (by sending the order to the appropriate court for implementation). The Court concluded that a court dealing with attachment before judgment is competent to pass orders affecting property beyond its territorial limits, and that there is no absolute bar on restraining transfer of such property in an appropriate case.
Whether injunction could be granted absent fraud or attachment-before-judgment prerequisites:
The Court dissected the nature of the suit: essentially a money suit with an additional prayer for declaration of secured-creditor status. It held that the property in schedule 'B' was not the subject-matter of the suit within the meaning of Order 39, Rule 1 merely because the plaintiff sought a consequential permanent injunction. The plaintiff had not alleged or proved that any of the schedule 'B' properties were actually secured for the debt. Consequently, the plaintiff failed to demonstrate a strong prima facie case that the property was the subject-matter or that it had secured rights.

Regarding invocation of inherent powers under Section 151 CPC, the Court acknowledged Manoharlal as authority that inherent powers exist. However, the Court emphasized that inherent powers cannot be used to grant relief where Order 39 specifically restricts grant of injunctions — particularly, Order 39, Rule 1(b) permits restraint only where the defendant intends or threatens to transfer property with a view to defrauding creditors. Because the plaintiff had not alleged or proved fraudulent intention, the statutory condition for granting such an injunction was absent. The Court therefore held that Section 151 could not be used to circumvent the statutory requirement.

The Court also accepted the general balancing principle (Films Rover) but held that where the statute prescribes the circumstances for granting injunction, the legislature must be taken to have decided that refusal of injunction in cases outside those circumstances would not result in injustice warranting judicial intervention.
Conclusion from analysis:
On the whole materials, the Court found that the trial judge erred in granting the injunction: the injunction did not properly fall within Order 39 and could not be supported under Section 151 in the absence of fraud or the statutory preconditions. Accordingly, the injunction was unsustainable.

Holding and Implications

Holding: The Division Bench set aside the order of temporary injunction passed by the learned trial Judge and allowed the appeal by dismissing the application for temporary injunction filed by the plaintiff.

Implications:

Direct effect: The respondent's application for temporary injunction restraining the appellant from transferring or alienating schedule 'B' properties was dismissed; the earlier interim injunction was set aside.
Ancillary consequences: Pending applications became infructuous and were disposed of accordingly. The Court ordered no costs.
On precedent and principle: The Court reiterated that inherent powers under Section 151 cannot be exercised to grant injunctions where the Code (Order 39) expressly prescribes conditions that are not met (notably absence of fraudulent intention). The decision applies the existing authorities rather than establishing a new legal principle; no novel precedent beyond application of cited authorities was announced by the Court in this opinion.

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Fertiliser Corporation Of India Ltd. v. Indian Explosive Ltd.

Bhaskar Bhattacharya, J.:— This first miscellaneous appeal is at the instance of the defendant No. 1 in a suit for declaration and recovery of money and is directed against the order dated 30th September, 2004 passed by the learned Civil Judge, Senior Division, 9th Court, Alipore in Title Suit No. 34 of 2003 thereby disposing of an application under Order 39, Rules 1 and 2 of the Code of Civil Procedure filed by the respondent No. 1 by passing an order restraining the appellant from transferring or alienating schedule ‘B’ property.

2. The respondent No. 1 filed a suit against the petitioner in the 4th Court of the learned Civil Judge, Senior Division, Alipore being Title Suit No. 34 of 2003 thereby praying for declaration that the claim of the respondent No. 1 on account of refund of advance of Rs. 4,20,4,622/- is a secured claim and that the respondent No. 1 is entitled to be treated as a secured creditor of the present appellant and for recovery of a total sum of Rs. 5,27,62,236/- including interest and for permanent injunction restraining the present appellant from transferring, selling, alienating or encumbering the properties mentioned in schedule ‘B’ of the plaint.

3. The case made out by respondent No. 1 may be summed up thus:

(a) By virtue of a tripartite agreement entered into between the plaintiff, the defendant No. 1 and the defendant No. 2, it was agreed that the plaintiff would supply explosives to the defendant No. 2 which they would use in its coal mines and the defendant No. 2, instead of paying direct to the plaintiff for the said explosives, supply coal in lieu thereof of equivalent monetary value to the defendant No. 1 who in its turn would supply to the plaintiff melted ammonium nitrate being the principal raw material of the plaintiff.

(b) By virtue of such tripartite agreement, the defendant No. 1 used to adjust the amount receivable from the plaintiff for the price of the melted ammonium nitrate supplied by it against the amount payable by it to the defendant No. 2 against the coal purchased by defendant No. 1 from defendant No. 2.

(c) Out of the said arrangement, a sum of Rs. 4,20,41,622/- was laying unrecovered and unadjusted from the defendant No. 1 and in spite of specific demand made by the plaintiff the defendant No. 1 failed to pay the said amount.

(d) In the meantime, the defendant No. 1 informed the plaintiff that it was declared as a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1985 and accordingly, was referred to the Board for Industrial and Financial Reconstruction (“BIFR”) under the said Act.

(e) In view of the aforesaid fact, the plaintiff was not only entitled to recover the amount of Rs. 4,20,41,622/- with an interest of Rs. 1,07,20,614/-, amounting to Rs. 5,27,62,236/- in aggregate but was also entitled to a declaration that the plaintiff had become a secured creditor of the defendant No. 1. The plaintiff was, therefore, also entitled to get a decree of permanent injunction restraining the defendant No. 1 from transferring, alienating or encumbering the properties mentioned in schedule ‘B’ to the plaint.

4. On the basis of self-same allegations, the plaintiff/respondent No. 1 came with an application for temporary injunction restraining the defendant No. 1 from transferring, alienating, or encumbering the assets and properties mentioned in schedule ‘B’ till the disposal of the suit.

5. On such application, the learned trial Judge issued notice upon the present appellant to show-cause why the prayer of injunction prayed for by the plaintiff should not be granted and also granted an ad interim order of injunction in favour of the plaintiff-respondent No. 1.

6. The present appellant filed an application under Order 39, Rule 4 of Code of Civil Procedure for variation of the interim order but the learned trial Judge refused to modify such order.

7. Being dissatisfied, the present appellant, in the past, came up before this Court by filing a first miscellaneous appeal before a Division Bench and the said Division Bench disposed of the same by directing the learned Judge to dispose of the injunction application within the specified period. The Division Bench, however, refused to interfere with the order impunged therein.

8. Pursuant to such direction given by this Court, the learned trial Judge fixed the matter for hearing of the main application for temporary injunction. It appears from the record that on the date fixed for hearing none appeared to press the application but the learned trial Judge after hearing the learned advocate for the defendant No. 1.appellant disposed of the said application for temporary injunction by maintaining the earlier order of ad interim injunction.

9. Being dissatisfied, the defendant No. 1 has come up before this Court by filing the present first miscellaneous appeal.

10. Mr. Banerjee, learned senior Advocate appearing on behalf of the appellant, has raised various questions of law in support of this appeal.

11. First, Mr. Banerjee contends that on the date fixed for hearing of the application for temporary injunction, as the plaintiff was not present to press its application but the defendant No. 1 was present to oppose the same, it was the duty of the learned trial Judge to dismiss the application for injunction for default. Mr. Banerjee contends that as the plaintiff was absent, the learned trial Judge could not allow the application for temporary injunction on merit. Mr. Banerjee in this connection submits that the principles of Order 9, Rule 8 of the Code should be applicable by virtue of Section 141 of the Code of Civil Procedure and in such a situation, it was the duty of the learned trial Judge to dismiss the application for injunction as the defendant was very much opposing the prayer of the absent plaintiff.

12. Mr. Banerjee next contends that the suit having been filed for recovery of money with a further prayer for declaration that the plaintiff should be declared to be a secured creditor, the learned trial Judge erred in law in restraining his client from transferring its property situated beyond the State of West Bengal. Mr. Banerjee submits that if the properties are situated beyond the territorial limit of Court, the Court cannot in such a case restrain defendant from transferring the property and such an order, in reality, amounts to attachment before judgment.

13. Mr. Banerjee next contends that there being no allegation against his client of fraudulent intention to transfer its properties with the object of defrauding the plaintiff or delaying the execution in the event the suit is decreed justifying attachment before judgment, the learned trial Judge erred in law in virtually passing such an order although Order 38 of the Code does not prescribe for such attachment before judgment in the absence of any fraudulent intention on the part of defendant to defraud the plaintiff. Mr. Banerjee contends that what could not be achieved by invoking Order 38 of the Code, cannot be granted in a roundabout-way by granting injunction restraining his client from transferring its property. Mr. Banerjee, thus, prayed for setting aside the order impugned.

14. Mr. Mitra, the learned senior Advocate appearing for plaintiff-respondent No. 1 has opposed all the aforesaid contentions raised by Mr. Banerjee.

15. As regard the first point raised by Mr. Banerjee, Mr. Mitra contends that in the present case although his client was not present on the date fixed for hearing of the application for temporary injunction, the affidavit in support of the application for temporary injunction was very much on record and on the basis of such affidavit, his client already obtained ad interim order of injunction and as such, the learned trial Judge was entitled to dispose of the application for temporary injunction on the basis of such affidavit and the written objection given by the appellant. Mr. Mitra submits that principles of Order 17, Rule 2 of the Code of Civil Procedure will be applicable in the present case.

16. As regards the second point raised by Mr. Banerjee, Mr. Mitra contends that there is no prohibition in law restraining a defendant from transferring his property even if such property is situated beyond the territorial limit of the Court. Mr. Mitra submits that his client having proved a strong prima facie case to go for trial, the learned trial Judge did not commit any illegality in restraining the defendant No. 1 from transferring its property although such property is situated beyond the territorial limit of the Court. In support of such contention Mr. Mitra relied upon the decision of the Federal Court in the case of Moolji Jaitha and Co. v. The Khandesh Spinning and Weaving Mills Co. Ltd. reported in AIR 1950 FC 83.

17. As regards the last point taken by Mr. Banerjee, Mr. Mitra contends that even if a plaintiff is unable to make out a case of attachment before judgment under Order 38, Rule 5 of the Code of Civil Procedure, such fact cannot stand in the way of the learned trial Judge in passing appropriate of injunction restraining a defendant from transferring his assets if the Court is satisfied that plaintiff has a strong prima facie case and that unless such injunction is granted, the plaintiff will not be able to realise its dues. Mr. Mitra further submits that it is now settled law that even in a case not covered under Order 39, Rules 1 and 2 of the Code, a Court has inherent power to pass other form of injunction for doing complete justice between the parties. In support of such contention Mr. Mitra relied upon the decision of the Supreme Court in the case of Manoharlal v. Sett Hiralal reported in AIR 1962 SC 527.

18. Therefore, the first point that arises for determination in this first miscellaneous appeal is whether the learned trial Judge was competent to dispose of the application for temporary injunction on merit notwithstanding the fact that the plaintiff or his learned advocate was absent on the date of hearing.

10. After hearing the learned Counsel for the parties and after going through the different provisions contained in the Code of Civil Procedure, we find that the procedure provided in the Code with regard to suit should be followed as far as it is practicable in all miscellaneous proceedings. Therefore, the procedure provided in the Code of Civil Procedure with regard to hearing of the suit can be followed mutatis mutandis in the miscellaneous proceeding for injunction. It appears from Order 39, Rule 1 of the Code that injunction application can be disposed of on the basis of affidavit filed by parties. Therefore, for the purpose of disposal of an injunction application, affidavit filed by the plaintiff should be taken to be evidence adduced by it in support of its prayer for injunction. It is rightly pointed out by Mr. Mitra, the learned Counsel appearing on behalf of respondent No. 1 that the principles of Order 17, Rule 2 of the Code should be applicable in the present case and the affidavit already filed by his client should be treated to be evidence already on record. Therefore, instead of dismissing the application for default, the Court was quite competent to look into the affidavit filed by the plaintiff and after considering the objection raised by the defendant, the Court was competent to dispose of the application for temporary injunction on merit. We, therefore, find no merit in the first contention of Mr. Banerjee.

20. As regards the second point advanced by Mr. Banerjee, we find that the same is equally devoid of any substance. Although at one point of time this Court was of the view that no interim order of attachment before Judgment can be passed in respect of property situated beyond the territorial limit of the Court, a Division Bench of this Court in the case of Balai Kumar Sarkar v. Bimal Chandra Sarkar reported in AIR 1978 Cal 340 has clearly held that the Court by taking aid of Order 38, Rule 5 of the Code can attach property situated even beyond the territorial limit of the Court, subject however, to the provisions contained in Section 136 of the Code by sending such order to the appropriate Court having territorial jurisdiction for implementation. We, therefore, find that a Court dealing with even an application for attachment before judgment is competent to pass an order of attachment in respect of property situated beyond the territorial limit of the Court. It is needless to mention that if a Court can pass an order of attachment before judgment in respect of property situated beyond the territorial limit of the Court, there is no bar in restraining the defendant against whom the cause of action of a suit has arisen within the territorial limit of the Court from transferring or alienating the property in an appropriate case. We thus find no substance in the second point raised by Mr. Banerjee.

21. As regards the third point raised by Mr. Banerjee, we are prepared to accept his contention that in this case the plaintiff has failed to make out a case of attachment before judgment as provided in Order 38 of the Code and in such a case, no order of attachment of the plaintiffs' property before judgment can be passed. Mr. Mitra, on the other hand, specifically contended that his client never prayed for attachment before judgment knowing fully well that the case does not come within the purview of Order 38. Mr. Mitra, however, had twofold contentions.

22. First, his client having filed a case for declaration that it is a secured creditor of the appellant in respect of schedule ‘B’ property, his client is entitled to get an order of injunction in terms of Order 39, Rule 1 sub-rule (a) of the Code as the appellant is going to alienate the subject matter of the suit.

23. Secondly, assuming for the sake of argument that the case does not come within the purview of Order 39 of the Code, his client is entitled to get an order of injunction under Section 151 of the Code because even if there is no mala fide intention of the plaintiff to transfer the property, the Court cannot lose sight of the fact that the appellant being a non-functioning company, the plaintiff will not be able to realise its dues if the property is transferred by the appellant. Mr. Mitra contends that a Court has right to pass necessary order of injunction to protect the right of a plaintiff if it can satisfy the Court that it has a very good case on merit on the claim of money.

24. We now propose to deal with the submissions of Mr. Mitra.

25. The suit being one for recovery of specific amount of money and for a declaration that the plaintiff is a secured creditor of the appellant, it cannot be legitimately contended that the property of the appellant as mentioned in schedule ‘B’ has become the subject-matter of the suit within the meaning of Order 39, Rule 1 of the Code. The suit is, in our opinion, essentially a money suit with a further prayer of declaration that the plaintiff is a secured creditor of the defendant No. 1, i.e for declaration of the status of the plaintiff. In such a suit, the property of the defendant No. 1 cannot be the subject-matter of the suit merely because the plaintiff has prayed for permanent injunction as a consequential relief restraining the defendant No. 1 from transferring its properties particularly when it is not the case of the plaintiff that the appellant secured any of its property mentioned in schedule ‘B’ for the alleged transaction out of which the money has become due. Therefore, if the property of the appellant is not the subject-matter of the suit, the plaintiff by virtue of the provisions contained in Order 39, Rule 1(a) of the Code cannot get any order of injunction. Even if we assume for the sake of argument that by virtue of the declaration sought for by the plaintiff that it is a secured creditor the property of the defendants has become subject-matter of the suit because of the consequential prayer for permanent injunction, we find that the plaintiff has failed to prove a strong prima facie case in this regard relating to its prayer for such declaration. It is settled law that by getting a mere money decree the plaintiff cannot be a secured creditor unless the dues were really secured in accordance with law. Therefore, even if we assume that the plaintiff will get a money decree in the long run, it cannot be declared as a secured creditor of the defendant No. 1 and consequently, in the absence of a prima facie case, the plaintiff is not entitled to get the order of temporary injunction granted by the trial Court.

26. As regards the other branch of the argument that the Court can by exercising power under Section 151 of the Code grant injunction in a case not covered under Order 39, we do not for a moment dispute the aforesaid proposition of law in view of the decision of the Supreme Court in case of Manoharlal (AIR 1962 SC 527) (supra). But by taking aid of the said decision, a Court cannot grant injunction in a situation where Order 39 virtually prohibits grant of such injunction. We find that in a situation like the present one, a Court can restrain a defendant from transferring his property only if the defendant intends or threatens to transfer the property “with a view to defrauding his creditors” as provided in Order 39, Rule 1(b) of the Code. It necessarily follows that if the defendant has no intention to defraud a creditor, the Court cannot grant such injunction. In the case before us, the plaintiff has not alleged that the appellant has any such intention. Therefore, the plaintiff wants an injunction against the appellant in terms of Order 39, Rule 1(b) of the Code notwithstanding the fact that it has failed to prove the essential condition thereof but for which the Court cannot grant such injunction. It is now a settled law that what is specifically barred under the Code cannot be granted by taking aid of Section 151. In the case of Manoharlal (supra), the Supreme Court pointed out that the provisions of Order 39 are not exhaustive as the legislature cannot conceive of all possible situations and the nature of injunction necessitated by the circumstances of the case. In the case before us, the legislature, however, had in its mind the situation where a debtor should be restrained from transferring its property and in its wisdom decided to incorporate the expression mentioned above restricting the power of the Court to grant such injunction only to the cases where an element of fraud in the mind of the debtor is present.

27. Mr. Mitra lastly relied upon a decision of the Chancery Division in the case of Films Rover International Ltd. v. Canon Film Sales Ltd. reported in (1986) 3 All ER 772 in support of his contention that the real test for grant of temporary injunction is whether injustice to the defendant if the plaintiff is granted injunction but failing at the trial outweighs injustice to the plaintiff if injunction refused but the plaintiffs succeeds at the trial. We agree with the aforesaid general proposition of law but when a statute has specified the circumstances in which injunction should be granted, it should be presumed that the legislature thought that refusal of injunction in the circumstances not covered by the statute would not cause injustice to an applicant.

28. We, thus, find that in the facts of the present case there is no scope of grant of injunction even by invoking inherent power of the Court in the absence of any fraudulent intention and the trial Court also did not grant such injunction by exercising inherent power. The trial Court it appears granted injunction by allowing the application under Order 39, Rules 1 and 2 of the Code.

29. On considering the entire materials on records we find that the learned trial Judge erred in law in granting the injunction which did not come within the purview of Order 39 of the Code and at the same time grant of such temporary injunction cannot be supported even under Section 151 of the Code.

30. We, therefore, set aside the order of temporary injunction passed by the learned trial Judge and allow the appeal by dismissing the application for temporary injunction filed by the plaintiff. In view of disposal of the appeal itself the pending applications have become infructuous and those are disposed of accordingly.

31. In the facts and circumstances, there will be, however, no order as to costs.

Arun Kumar Bhattacharya, J.:— 32. I agree.

Order accordingly.

Fertiliser Corporation Of India Ltd. v. Indian Explosive Ltd.

Structured Summary of the Opinion (Bhaskar Bhattacharya, J.)

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Appellant's Arguments (Mr. Banerjee)

Respondent's Arguments (Mr. Mitra)

Table of Precedents Cited

Court's Reasoning and Analysis

Holding and Implications

Fertiliser Corporation Of India Ltd. v. Indian Explosive Ltd.

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