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Case Number
Attorney(S)
  • Aniruddha Chatterjee
  • Amarta Ghosh
  • Rituparna De
  • Ashoke Banerjee
  • Saptangshu Bose
  • P.K. Srivastava
  • Debnath Ghosh
  • Miss Swapna Mitter
Judges
  • Bhaskar Bhattacharya
  • Tapan Kumar Dutt, JJ.
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Citation Codes
Equivalent Citations
citation codes
Case Number
Attorney(S)
  • Aniruddha Chatterjee
  • Amarta Ghosh
  • Rituparna De
  • Ashoke Banerjee
  • Saptangshu Bose
  • P.K. Srivastava
  • Debnath Ghosh
  • Miss Swapna Mitter
Judges
  • Bhaskar Bhattacharya
  • Tapan Kumar Dutt, JJ.
Acts
See more information ...
Smart Summary

Summary of Opinion: First Miscellaneous Appeal (Order No. 2 dated 15th January, 2009)

Factual and Procedural Background

This appeal was filed by the defendants (now appellants) against Order No. 2 dated 15 January 2009 of the learned Judge, Eighth Bench, City Civil Court at Calcutta. The trial court had granted an ad interim injunction restraining the appellants from giving effect to a notice dated 7 January 2009 until 16 February 2009 and had issued a notice to show cause why the plaintiff's prayer for temporary injunction should not be granted.

Instead of complying with the show-cause direction or filing an application under Order 39, Rule 4 of the Code of Civil Procedure, the defendants preferred the present appeal. The appellants' counsel accepted, for the limited purpose of the appeal, the truth of the averments in the plaint and the application for injunction, but contended that even if those averments were true the trial court erred in granting the ad interim injunction. The plaint sought a declaration that the notice dated 7 January 2009 was null and void and permanent injunction preventing the defendants from giving effect to that notice. The notice alleged that the purported agreement between the parties was forged and threatened civil and criminal proceedings unless the document was withdrawn.

The respondent (plaintiff) opposed the contention and submitted that arbitration proceedings had already been invoked and that questions of forgery in relation to an agreement containing an arbitration clause should be referred to the arbitrator under Section 16 of the Arbitration and Conciliation Act. The trial court's injunction, therefore, was sought to be supported on grounds that the dispute fell to be adjudicated in arbitration and that the Specific Relief Act was not exhaustive.

Legal Issues Presented

  1. Whether, assuming all averments in the plaint and in the application for injunction are taken to be true, the learned Trial Judge was justified in granting an ad interim injunction restraining the appellants from giving effect to the notice dated 7 January 2009, where such injunction effectively restrained the appellants from initiating any civil proceeding or criminal prosecution against the respondent.

Arguments of the Parties

Appellants' Arguments (as presented by Mr. Chatterjee)

  • For the limited purpose of the appeal, the appellants accepted the statements in the plaint and injunction application as true and did not seek to litigate their defence on merits at this stage.
  • They contended that the ad interim injunction restraining them from giving effect to the notice (which threatened civil and criminal proceedings for alleged forgery) effectively restrained them from initiating civil suits or criminal prosecutions.
  • The appellants relied upon Section 41 of the Specific Relief Act to submit that an injunction restraining a person from initiating criminal proceedings or even filing a civil suit in a Court not subordinate to the injuncting Court is prohibited.
  • Thus, they argued the trial court erred in granting the injunction as the law did not permit such an injunction on the face of the plaint.

Respondent's Arguments (as presented by Mr. Banerjee)

  • The respondent submitted that arbitration proceedings pursuant to the agreement had already been initiated and that the appellants had appeared before the arbitrator; therefore, questions of forgery in relation to the agreement should be decided by the arbitrator under Section 16 of the Arbitration and Conciliation Act.
  • The respondent argued that Section 41 of the Specific Relief Act is not exhaustive and that, in a fit case, a Court can restrain a party from initiating civil proceedings even in a Court of coordinate jurisdiction if filing of such a suit is prohibited by law.
  • The respondent relied upon several Supreme Court decisions in support of the proposition that the civil court should be restrained in the present circumstances (the opinion lists multiple authorities relied upon by Mr. Banerjee).

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Cotton Corporation of India Limited v. United Industrial Bank Limited (AIR 1983 SC 1272) Illustration and exposition of Section 41 of the Specific Relief Act (bar on granting injunctions restraining proceedings in other courts) and reasoning on why Section 41(b) prevents granting injunctions restraining proceedings in coordinate or superior Courts in India. The court relied on and quoted Cotton Corporation to hold that Section 41(b) creates a statutory bar which must be respected and that ordinarily a preventive relief by way of prohibitory injunction cannot be granted to restrain instituting or prosecuting proceedings in a Court of coordinate or superior jurisdiction.
Oil and Natural Gas Commission v. Western Company of North America (AIR 1987 SC 674) Whether Section 41(b) applies to proceedings in foreign Courts and observations on the applicability of Section 41(b) to foreign litigation. The court considered the decision and observed that ONGC holds Section 41(b) is attracted to suits in Indian courts of coordinate or higher jurisdiction; ONGC's discussion on foreign courts was noted but the court found ONGC inapplicable here because the present case did not involve foreign forum litigation.
Tractorroexport, Moscow v. Tarapore and Company ((1970) 3 SCR 53 : AIR 1971 SC 1) Authority where the Court restrained a party from proceeding with arbitration proceedings in a foreign country. Referenced within the ONGC discussion as an example of restraining foreign arbitration; court noted it is not relevant to the present facts (no foreign forum involved).
Hungerford Investment Trust Ltd. (In voluntary Liquidation) v. Haridas Mundhra (AIR 1972 SC 1826) Proposition that the Specific Relief Act is not exhaustive of the entire branch of the law of specific relief. The court accepted that the Act may not be exhaustive but relied on the observation that where the Act creates a bar (such as Section 41), that bar is binding and cannot be surmounted merely because the Act is not exhaustive.
Modi Entertainment Network v. W.S.G Cricket Pte. Ltd. (AIR 2003 SC 1177) A case involving grant of injunction to restrain proceedings in a foreign Court. The court held this decision was not applicable because the present case did not concern proceedings in a foreign Court and Section 41(b) concerns proceedings in Indian courts of coordinate or higher jurisdiction.
S.B.P. & Co. v. Patel Engineering Ltd. (AIR 2006 SC 450) Relied upon by respondent to argue that issues of forgery as to an agreement containing an arbitration clause should be decided by an arbitrator rather than by a civil court. The court held that even assuming the proposition advanced from SBP were applicable, Section 41 creates a bar to granting an injunction restraining institution of civil or criminal proceedings; therefore SBP did not help respondent to overcome the statutory bar in Section 41(b) and (d).
Shree Subhlaxmi Fabrics (P) Ltd. v. Chand Mal Baradia (AIR 2005 SC 2161) One of the authorities dealing with disputes involving arbitration clauses and whether such disputes should be decided by arbitrators/civil courts. The court treated this decision as consequential in deciding questions about the bar in Section 41 but stated that it did not go into whether civil courts alone decide such disputes because that question was irrelevant to the present decision, which turned solely on Section 41(b) and (d).
Vigil Marine Services v. Cochin Shipyards Ltd. (2004 (13) SCC 465) Authority relevant to disputes about arbitration clauses and jurisdiction to decide related issues. The court observed the decision was among those cited by respondent on the wider issue of arbitration-related jurisdiction but found them not helpful to overcome the statutory bar created by Section 41 for the purposes of setting aside the impugned injunction.
Hythro Power Corporation Ltd. v. Delhi Transco Ltd. (AIR 2003 SC 4219) Authority concerning arbitration-related jurisdiction and related procedural questions. The court noted it as one of the cases cited by respondent but declined to treat it as overcoming the bar in Section 41; the court did not decide the broader arbitration-jurisdiction question as it was unnecessary.
Aurohil Global Commodities Ltd. v. Maharashtra S.T.C. Ltd. (AIR 2007 SC 2706) Authority relevant to arbitration and jurisdictional questions cited by respondent. Treated as one of several decisions on arbitration-related questions; court found it did not aid respondent in overcoming Section 41's bar and did not decide the larger arbitration point.
Adhunik Steel Ltd. v. Orissa Manganese & Minerals (P) Ltd. (AIR 2007 SC 2563) Another decision cited on issues arising from arbitration clauses and forum of adjudication. The court regarded this decision as consequential to questions about Section 41 but held it was not necessary to decide the broader issue; it did not assist respondent in upholding the impugned injunction given Section 41(b) and (d).

Court's Reasoning and Analysis

1. Preliminary procedural observation: The court noted that the appellants had not shown cause in response to the trial court's notice and had not filed any application under Order 39, Rule 4, but had chosen to prefer the present appeal. The appellants, however, for the limited purpose of the appeal, accepted the averments in the plaint and injunction application as true and narrowed the sole issue to whether the injunction was legally permissible even on that assumption.

2. Statutory bar relied upon: The court examined Section 41 of the Specific Relief Act, 1963, which enumerates situations where an injunction cannot be granted. The relevant clauses in the facts were Section 41(b) (that an injunction cannot be granted to restrain any person from instituting or prosecuting any proceeding in a Court not subordinate to that from which the injunction is sought) and Section 41(d) (that an injunction cannot be granted to restrain any person from instituting or prosecuting any proceeding in criminal matter).

3. Application of Section 41 to the facts: The court observed that, on the plaint itself, the alleged agreement and the issuance of the notice occurred within the territorial jurisdiction of the City Civil Court at Calcutta (or the original side of the High Court), meaning that if the appellants were to institute proceedings they would do so in the City Civil Court or the original side of the High Court (courts of coordinate or superior jurisdiction). The impugned injunction therefore restrained the appellants from filing civil suits in coordinate or superior courts and also restrained them from initiating criminal prosecution, thereby infringing Section 41(b) and (d).

4. Rejection of respondent's submissions based on non-exhaustiveness of the Act: The court accepted that the Specific Relief Act may not be exhaustive of all specific relief law, but held that where the legislature has created a bar in the Act (as in Section 41), that bar must be respected and cannot be circumvented by invoking the non-exhaustive nature of the Act.

5. Consideration of alternative remedies and procedural mechanisms: The court rejected the respondent's contention that the appellants could be restrained because a suit the appellants might file would be barred by some statute (respondent's example being a hypothetical benami suit), noting that the legislature has provided procedural means (Order VII, Rule 11(d) of the Code of Civil Procedure) to deal with plaints which disclose no cause of action, thereby enabling courts to dismiss such suits without resorting to preventive injunctions.

6. Examination of the authorities relied upon by respondent: The court examined each decision cited by the respondent and concluded that most authorities relied upon related to injunctions restraining foreign proceedings or dealt with different factual contexts. Where the respondent relied on authorities for the proposition that arbitration clauses require arbitrators to decide questions of vitiation by fraud or forgery, the court observed that even if that proposition were accepted, it would not assist in overcoming the statutory bar in Section 41 to granting an injunction restraining institution of suits or criminal proceedings.

7. Conclusion of analysis: For these reasons, the court concluded that the trial court's ad interim injunction was passed in violation of Section 41(b) and (d) of the Specific Relief Act and therefore was not maintainable.

Holding and Implications

Holding: The appeal is allowed; the impugned order granting ad interim injunction is set aside and the application for injunction is rejected on the ground that the order violated Section 41(b) and (d) of the Specific Relief Act, 1963.

Implications and immediate consequences:

  • The ad interim injunction restraining the appellants from giving effect to the notice dated 7 January 2009 has been vacated by this order; accordingly the appellants are no longer restrained by that injunction from initiating civil proceedings in courts of coordinate or superior jurisdiction or from initiating criminal prosecution, subject of course to any other legal bar or procedural rule not dealt with in this opinion.
  • The court expressly limited its decision to the ground of violation of Section 41(b) and (d) of the Specific Relief Act. The opinion states it did not decide the broader question whether the civil court or an arbitrator alone should decide whether an agreement containing an arbitration clause is vitiated by fraud or forgery; that issue was considered irrelevant to the limited ground on which the impugned order was set aside.
  • No order as to costs was made.

Administrative / Miscellaneous Notes from the Opinion

The judgment records that Justice Bhaskar Bhattacharya delivered the principal opinion and that Justice Tapan Kumar Dutt agreed with the result. The final notation in the opinion reads: "Appeal allowed."

Show full summary ...

    Bhagwandas Auto Finance Ltd. & Ors. v. Citicorp Finance (India) Limited.

    Bhaskar Bhattacharya, J.:— This First Miscellaneous Appeal is at the instance of the defendants in a suit for declaration and permanent injunction and is directed against Order No. 2 dated 15th January, 2009 passed by the learned Judge, Eighth Bench, City Civil Court at Calcutta, thereby granting an ad interim order of injunction restraining the present appellants from giving effect to the notice dated 7th January, 2009 given by them to the plaintiff till 16th February, 2009 after issuing a notice to show cause why the prayer of the plaintiff for temporary injunction should not be granted.

    2. The defendants, instead of showing the cause, or filing any application under Order 39, Rule 4 df the Code of Civil Procedure, have straightway come up with this appeal challenging the grant of ad interim order of injunction.

    3. Mr. Chatterjee, the learned advocate appearing on behalf of the appellants, at the very outset, accepted the position of law that his clients without showing any cause to the notice issued by the learned Trial Judge having decided to prefer the present appeal, within the limited scope of this appeal, his clients are not entitled to agitate their own defence against the pleading of the plaintiff or the case made out in the application for temporary injunction. Mr. Chatterjee submits that at this stage, his clients are, for the sake of argument, prepared to accept all the statements contained in the application for injunction and in the plaint to be true and their contention is that even if those allegations are true, the learned Trial Judge erred in law in granting an ad interim order of injunction restraining his clients from giving effect to the notice issued by them.

    4. Mr. Chatterjee, places before us a copy of the plaint showing that the plaintiff in the suit prayed for declaration that the notice dated January 7, 2009 issued by his clients was null and void and for injunction restraining his clients from giving any effect to the said notice. By referring to the said notice, which is annexed to the application for injunction. Mr. Chatterjee points out that by the said notice, his clients merely alleged that the purported agreement between the parties is a forged document and threatened the plaintiff that his clients would file appropriate civil and criminal proceedings against the plaintiff for creation of such forged document unless the said document was withdrawn. According to Mr. Chatterjee, by virtue of ad interim order of injunction granted by the learned Trial Judge, his clients are restrained from even initiating any civil or criminal proceeding against the plaintiff for the alleged forgery. Mr. Chatterjee contends that an injunction restraining a person from initiating criminal proceeding or even filing civil suit in a Court not subordinate to it is prohibited under section 41 of the Specific Relief Act. Mr. Chatterjee, therefore, submits that on, the face of the allegations contained in the plaint, the learned Trial Judge ought to have held that the prayer for temporary ‘injunction could not be granted as the law did not permit grant of such injunction.

    5. Mr. Banerjee, the learned senior advocate appearing on behalf of the respondent, on the other hand, has vehemently opposed the aforesaid contention of Mr. Chatterjee and submitted that already his client has resorted to the proceeding of arbitration pursuant to such agreement and the appellants had appeared before Arbitrator and, therefore, the question, whether the said agreement is a forged or not, should be decided before the Arbitrator and not by any suit. In other words, Mr. Banerjee contends that a suit challenging the agreement containing an arbitration clause as void is barred by Section 16 of the Arbitration and Conciliation Act. According to Mr. Banerjee, Section 41 of the Specific. Relief Act is not exhaustive and in a fit and proper case, the Court can restrain a party from initiating any civil proceeding even in a Court of coordinate jurisdiction if filing of such a suit is prohibited by law. Mr. Banerjee made elaborate argument in support of his contention that Section 16 of the Arbitration and Conciliation Act prohibits filing of separate civil suit for adjudicating the question whether the agreement containing arbitration clause is vitiated by fraud or forgery; in other words, Mr. Banerjee submits that such question of forgery should be adjudicated before the Arbitrator appointed by the parties. Mr. Banerjee, therefore, prays for dismissal of the appeal on the aforesaid ground.

    6. In support of such contention, Mr. Banerjee relies upon the following decisions of the Supreme Court :

    1. O.N.G.C v. Western Company of North America reported in 1987 (1) SCC 496 : (AIR 1987 SC 674);

    2. Hungerford Investment Trust Ltd. (In voluntary Liquidation), Appellant v. Haridas Mundhra reported in AIR 1972 SC 1826;

    3. Modi Entertainment Network v. W.S.G Cricket Pte. Ltd. reported in 2003 (4) SCC 341 : AIR 2003 SC 1177;

    4. S.B.P and Co. v. Patel Engineering Ltd. reported in AIR 2006 SC 450;

    5. Shree Subhalakhsmi Fabric (P) Ltd. v. Chand Mal Barada reported in 2005 (10) SCC 704 : AIR 2005 SC 2161;

    6. Vigil Marine Services v. Cochin Shipyards Ltd., reported in 2004 (13) SCC 465;

    7. Hythro Power Corporation Ltd. v. Delhi Transco Ltd.. reported in 2003 (8) SCC 35 : AIR 2003 SC 4219;

    8. Aurohil Global Commodities Ltd. v. Maharashtra S.T.C Ltd. reported in 2007 (7) SCC 120 : AIR 2007 SC 2706;

    9. Adhunik Steel Ltd. v. Orissa Manganese and Minerals (P) Ltd. reported in 2007 (7) SCC 125 : AIR 2007 SC 2563;

    7. Therefore, the only question that arises for determination in this appeal is whether even if all the averments contained in the plaint and in the application for injunction are treated to be true, the learned Trial Judge was justified in granting an ad interim order of injunction restraining the appellants frorn ‘giving effect to the notice of threat of the suit and of initiation of criminal proceeding thereby virtually restraining them from initiating any civil proceeding or criminal prosecution against the respondent.

    8. section 41 of the Specific Relief Act, 1963 enumerates certain situations where the Court is divested of its authority to grant any order of injunction, be it permanent or is temporary in nature. (See Cotton Corporation of India Limited v. United Industrial Bank Limited reported in AIR 1983 SC 1272. Those situations, as mentioned in Section 41 are quoted below :

    “41. Injunction when refused.— An injunction cannot be granted —

    (a) to restrain any person from prosecuting a judicial proceeding pending at the institution of the suit in which the injunction is sought, unless such restraint is necessary to prevent a multiplicity of proceedings;

    (b) to restrain any person from instituting or prosecuting any proceeding in a Court not subordinate to that from which the injunction is sought;

    (c) to restrain any person from applying to any legislative body;

    (d) to restrain any person from instituting or prosecuting any proceeding in criminal matter;

    (e) to prevent the breach of a contract the performance of which would not be specifically enforced;

    (f) to prevent, on the ground of nuisance, an act of which it is not reasonably clear that it will be a nuisance;

    (g) to prevent a continuing breach in which the plaintiff has acquiesced;

    (h) when equally efficacious relief can certainly be obtained by any other usual mode of proceeding except in case of breach of trust;

    (i) when the conduct of the plaintiff or his agents has been such as to disentitle him to the assistance of the Court;

    (j) when the plaintiff has no personal interest in the matter.”

    9. In the case before us, the learned Judge, City Civil Court has granted an ad interim order of injunction restraining the appellants from giving effect to the notice dated January 7, 2009 issued by the appellants threatening prosecution of the respondent with both civil and criminal litigation for the alleged forgery committed by the plaintiff. In substance, by virtue of the order of injunction granted by the learned Trial Judge, the appellants are restrained from filing a civil suit before the City Civil Court or before the original side of this Court for avoiding the alleged agreement between the parties and at the same time, are also restrained from initiating any criminal prosecution against the respondent. It may not be out of place to mention here that even according to the plaint case, the alleged agreements between the parties were executed in the office of the plaintiff within the territorial jurisdiction of the City Civil Court at Calcutta or within the original side of this Court, the plaintiff is also carrying on business within the said jurisdiction and at the same time, the notice dated January 7, 2009 was issued by a lawyer having office within the territorial limit of the above Court. Therefore, now if the appellants want to file any civil suit against the respondent for avoiding the alleged agreements, such civil litigation should be filed either in the City Civil Court or in the original side of this Court depending upon the valuation of the proceedings. However, in such circumstances, the order impugned has really restrained the appellants from filing a civil suit either in a coordinate jurisdiction or in a superior jurisdiction clearly violating clause (b) of Section 41 of the Act and at the same time, the said order has infringed clause (d) of the said section by restraining the appellant from initiating a criminal proceedings.

    10. We find no substance in the contention of Mr. Banerjee, the learned senior advocate appearing on behalf of the respondent, that section 41 of the Specific Relief Act is not exhaustive and therefore, notwithstanding the said provision, the learned Trial Judge was competent to grant an order of injunction restraining the appellant from filing a civil suit and initiating criminal proceedings. It is true that the law of specific relief as embodied in the Act of 1963 is not exhaustive but the bar created by any of the provisions of the Act in granting any specific relief cannot be surmounted on the plea that the Act is not exhaustive. In the absence of any provision dealing with a particular situation, the Court can grant specific relief being guided by the principles of justice, equity and good conscience but the bar of grant of any relief created by the legislature in a statutory provision must be respected.

    11. Mr. Banerjee, in this connection, vehemently contended before us, that if the law creates any bar in filing a suit in a civil Court, in such situation, a suit is maintainable in advance for restraining the defendant from filing such a barred suit. Mr. Banerjee by way of illustration contended that if today any suit is intended to be filed for declaration that a transaction is benami in nature in violation of the Benami Transaction (Prohibition) Act, 1988, a party, in anticipation, can restrain an intending plaintiff from filing such a suit and in such a suit, can successfully obtain an order of temporary injunction restraining the intending plaintiff from filing such a prohibited suit.

    12. We are afraid we are not convinced by such submission. The legislature has very much conceived of such a situation and for that reason, enacted the provision of Order VII, Rule 11(d) of the Code of Civil Procedure enabling the Court to nip such type of a suit in the bud by rejection of the plaint without going into the merit. Moreover, in the case before us, the cause of action having arisen within the jurisdiction of the District-Kolkata, all the civil Courts within the said district are either coordinate with or superior to the City Civil Court, Calcutta. In this connection we can appositely answer the submission of Mr. Banerjee by relying upon the following observations of the Supreme Court in the case of Cotton Corporation of India Limited, (AIR 1983 SC 1272) (supra) :

    “Viewed from a slightly different angle, it would appear that the legal system in our country envisages obtaining, of redressal of wrong or relief against unjust denial thereof by approaching the Court set up for the purpose and invested with power both substantive and procedural to do justice that is to grant relief against invasion or violation of legally protected interests which are ju-risprudentially called rights: If a person complaining of invasion or violation of his rights is injuncted from approaching the Court set up to grant relief by an action brought by the opposite side against whom he has a claim and which he wanted to enforce through Court, he wouldhave, first to defend the action establishing that he has a just claim and he cannot be restrained from approaching the Court to obtain relief. A person having a legal right, and complains of its violation or infringement, can approach the Court and seek relief. When such person is injuncted from approaching the Court, he has to vindicate the right and then when injunction is vacated, he has to approach the Court for relief. In other words, he would have to go through the gamut over again; when defending against a claim of injunction the person vindicates the claim and right to enforce the same. If successful he does not get relief, but a door to Court which was bolted in his face is opened. Why should he be exposed to multiplicity of proceedings? In order to avoid such a situation the Legislature enacted Section 41(b) and statutorily provided that an injunction cannot be granted to restrain any person from instituting or prosecuting any proceeding in a Court not subordinate to that from which the injunction is sought. Ordinarily a preventive relief by way of prohibitory injunction cannot be granted by a Court with a view to restraining any person from instituting or prosecuting any proceeding and this is subject to one exception enacted in larger public interest, namely, a superior Court can injunct a person from instituting or prosecuting an action in a subordinate Court with a view to regulating the proceeding before the subordinate Courts. At any rate the Court, is precluded by a statutory provision from granting an injunction restraining a person from instituting or prosecuting a proceeding in a Court of coordinate jurisdiction or superior jurisdiction. There is an unresolved controversy whether a Court can grant an injunction against a person from instituting or prosecuting a proceeding before itself but that is not relevant in the present circumstances and we do not propose to enlarge the area of controversy.”

    13. In view of the aforesaid observations of the Apex Court there is hardly any necessity of elucidating the answer any further.

    14. We now propose to deal with the decisions cited by Mr. Banerjee.

    15. In the case of Oil and Natural Gas Commission v. Western Company of North America, (AIR 1987 SC 674) (supra), the question was whether the provision of Section 41(b) of the Act is applicable even in restraining a party from proceeding in a foreign Court. In that context, the Apex Court made the following observations :

    “In Cotton Corporation's case, the question before the ‘Court was whether in the context of Section 41(b) of the Specific Relief Act, the Court was justified in granting the injunction. The said provision runs thus :

    “41. An injunction cannot be granted :—

    (a)…………………………..

    (b) to restrain any person from instituting or prosecuting any proceeding in a Court not subordinate to that from which the injunction is sought;

    …………………………..

    (Emphasis added)

    This provision, in our opinion, will be attracted only in a fact-situation where an injunction is sought to restrain a party from instituting or prosecuting any action in a Court in India which is either of coordinate jurisdiction or is higher to the Court from which the injunction is sought in the hierarchy of Courts in India. There is nothing in Cotton Corporation's case which supports the proposition that the High Court has no jurisdiction to grant an injunction or a restraint order in exercise of its inherent powers in a situation like the one in the present case. In fact this Court had granted such a restraint order in Tractorroexport, Moscow v. Tarapore and Company, (1970) 3 SCR 53 : (AIR 1971 SC 1), and had retrained a party from proceeding with an arbitration proceedings in a foreign country (in Moscow).”

    16. As we are not dealing with a case of injunction restraining a party from proceeding with a litigation in a foreign Court, the said decision is thus of no avail to the respondent.

    17. Mr. Banerjee also relied upon the decision in the case of Hungerford investment Trust Ltd. (In voluntary liquidation) v. Haridas Mundhra, (AIR 1972 SC 1826) (supra), in support of his contention that the Specific Relief Act, 1963 is not exhaustive. We accept that proposition but we have already pointed out that any bar created by the said Act is binding upon the Court and the Apex Court has also accepted such position as would appear from the following observations at paragraph 21 of the said judgment :

    “Although a matter on which the Act defines the law it might generally be exhaustive, the Act as a whole cannot be considered as exhaustive of the whole branch of the law of specific performance.”

    (Emphasis supplied by us)

    18. We, therefore, find that the aforesaid observations rather support the view we propose to take.

    19. The case of Modi Entertainment Network v. W.S.G Cricket Pte. Ltd., (AIR 2003 SC 1177) is one of grant of injunction from proceeding in a foreign Court and thus, the provision of Section 41 (b) is not attracted as pointed out by the Supreme Court in the case of Oil and Natural Gas Commission, (AIR 1987 SC 674) (supra) and, therefore, the principles laid down therein have no application to the facts before us.

    20. By relying upon the decision of the Supreme Court in the case of S.B.P and Co. v. Patel Engineering Ltd., (AIR 2006 SC 450) (supra), Mr. Banerjee tried to convince us that the allegation of forgery in the matter of execution of the agreement between parties containing an arbitration clause now should be decided by the Arbitrator and not by the Civil Court and thus, we should restrain the appellant from filing a civil suit. We have already relied upon the observations of the Supreme Court in the case of Cotton Corporation of India Ltd., (AIR 1983 SC 1272) (supra), and thus, without going into such controversy, we hold that assuming for the sake of argument, even if a suit is barred, such question should be decided in the suit itself and no injunction can be granted from instituting a suit in violation of Section 41(b) of the Act. We, thus, find that the said decision does not help Mr. Banerjee in anyway for overcoming the bar created under Section 41 (b) and (d) of the Act. For the selfsame reason, the decisions cited by Mr. Banerjee in the cases of Vigil Services Ltd. v. Cochin Shipyard Ltd., Adhunik Steels Ltd. v. Orissa Manganese and Minerals Pvt. Ltd., (AIR 2007 SC 2563), Aurohill Global Commodities Ltd. v. M.S.T.C Ltd., (AIR 2007 SC 2706), Shree Subhlaxmi Fabrics Pvt. Ltd. v. Chand Mal Baradia, (AIR 2005 SC 2161) and Hythro Power Corporation Ltd. v. Delhi Transco Ltd.., (AIR 2003 SC 4219) (supra), are all consequential for deciding the question of bar of Section 41 of the Act. We, however, make it clear we have not gone into the question whether it is for the Civil Court alone to decide the dispute as to whether the agreement between the parties containing the alleged arbitration clause was vitiated by fraud or forgery as discussed in those decisions inasmuch as such question is irrelevant for our purpose when we propose to set aside the order impugned only on the ground of bar created under Section 41 of the Act.

    21. We, therefore, find that the decisions cited by Mr. Banerjee do not support his client in any way in upholding the order impugned.

    22. We, accordingly, set aside the order impugned and reject the application for injunction only on the ground that the order impugned was passed in violation of the provisions contained in Section 41(b) and (d) of the Specific Relief Act, 1963. The appeal is, thus, allowed.

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

    Tapan Kumar Dutt, J.:—

    24. I agree.

    Appeal allowed.

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    Comments

    Bhagwandas Auto Finance Ltd. & Ors. v. Citicorp Finance (India) Limited.
    (Apr 22, 2009)