The applicants in all these O.As as well as miscellaneous applications in all the suits are the plaintiffs in the main suits.
2.They have filed the suits for the reliefs that the sale certificate No.1716/07, dated 3.1.1997 issued by the Debt Recovery Tribunal-I, Chennai under an interim DRC No.187/01, dated 9.12.2001 as null and void and not binding on the plaintiffs and the plaintiffs' properties described in the schedule set out in the B schedule to the plaint. They also sought for a permanent injunction to restrain M/s.J.D.A. Consultancy Services Pvt. Limited represented by its Managing Director (auction purchaser) from acting upon the sale certificate referred to above.
3.The brief facts necessary for the disposal of these cases are as follows:
The schedule property refers to certain vacant lands in Survey No.174/4 in Okkiam Thoraipakkam Village and the proposed layout is named as Rajiv Garden coming within the registration certificate of Chennai South, the Sub Registrar Officer of Neelankarai. Pending the suits, the plaintiffs sought for the relief of an interim stay of the operation of the sale certificate and also an interim injunction restraining the contesting defendants from acting upon the sale certificate including dealing with the schedule property. This Court granted an ex-parte interim injunction and ordered notice in all these matters.
4.On notice, the counsel for the Indian Bank Mr.Jayesh B.Dolia for M/s.Aiyer & Dolia appeared and also filed a counter affidavit, opposing the grant of extension of interim relief. In view of the fact that all the original applications as well as the applications arose out of the same set of facts, they were heard together and a common order is passed.
5.It is the case of the applicants/plaintiffs that the original owners of the suit schedule properties (they were made as defendants in all the suits) were owning the lands to an extent of 12.03 acres at Okkiam Thoraipakkam Village. On 12.5.1992, the original owners executed a power of attorney in favour of M/s.Palaniappa Estates represented by its Proprietor Mr.PL.Sundaram for the purpose of developing the land and also raised funds by deposit of title deeds for the purpose of constructing houses, flats and apartments. The said power agent was doing real estate business. For the purpose of developing the lands, the power holder approached a finance company by name Asian Capital Consolidated Fund, represented by its Proprietor Mr.Manohar Prasad (defendant in the suit). A memorandum of understanding (MOU) was entered into on 17.2.1992 between the power holder and the said company. They had agreed to provide Rs.50 lakhs on deposit of documents of title with them. An initial payment of Rs.20 lakhs was paid to the power holder, but the said financial company failed to keep their commitment in paying the balance amount, which was agreed to be paid on or before 31.3.1992 and 30.06.1992. In view of the breach of the agreement, the power holder could not complete his business venture. An amount of Rs.20 lakhs, which was received, was used for the purpose of construction and sale promotion, but because of the default of payment, the project could no be completed.
6.In the meanwhile, the power holder completed a part of the project and started selling the lands and buildings to several persons. He also undertook the construction of residential houses on a work contract basis. It was claimed that out of the entire extent of 12.03 acres, during the course of development, 4 acres went for road and other common areas, such as Parks. The remaining lands were sold to various parties (including the plaintiffs), who also put up buildings on the land to the extent owned by them. It was claimed that the power holder had entered into an agreement with the land owners only for the purpose of developing the property. The power holder also stated that the land owners gave oral permission for signing the Memorandum of compromise, dated 17.2.1992 with the financial company. In the meanwhile, the said financier informed that they are taking loan facilities from the Indian Bank (contesting defendant) and the land owners will have to sign certain documents for depositing their title deeds. The power holder signed the deposit register of the Indian Bank and also deposited the documents of title with the Indian Bank.
7.The power holder filed a suit in C.S.No.376 of 2000 before this Court for a declaration that the memorandum of understanding, dated 17.2.1992 was not enforceable and for a consequential relief of permanent injunction from initiating any action on the basis of the said MOU. During the course of the said proceedings, a compromise was reached between the power holder and the finance company. It was claimed that the finance company had agreed to receive Rs.43 lakhs as full and final settlement.
8.In the meanwhile, the finance company which is part of a group companies borrowed heavy amounts from the Indian Bank. Due to default in repayment, the Indian Bank filed proceedings before the DRT, being OA No.375 of 1997, on 14.6.1997. In that O.A., the land owners were also cited as respondents 14 to 29. The finance company was cited as 42nd respondent. The claim of the Indian Bank was to the tune of Rs.59.35 crores and it was claimed that the finance company had created a mortgage with the Indian Bank by the deposit of title deeds. During the proceedings, the land owners were represented by their power holder Mr.P.L.Sundaram. The land owners also signed the memorandum of compromise for the settlement of claims between the Indian Bank and the finance company and their group. The MOU provided that the mortgagor will pay a sum of Rs.48.75 crores as against the total due of 124.47 crores standing as on 30.6.2000. They paid Rs.5 crores as first instalment and undertook to pay another Rs.5 Crores on the date of filing of the compromise memo. The MOU was filed before the DRT on 5.12.2000 and it was taken up for consideration on 8.8.2001. The DRT after recording the compromise, passed an order on certain terms and conditions.
9.But, since the compromise terms were not fulfilled, the land owners were set ex-parte and the applications were ordered. On 27.1.2006, a sale notice was issued. The land owners filed applications in I.A.Nos.30 and 32 of 2006 for setting aside the order of the DRT, dated 16.3.1998. When those applications were also dismissed by the DRT, against which an appeal was filed before the DRAT. On the appeal, the DRAT passed an order that auction will be stayed if the land owners as a condition precedent pay Rs.3.25 crores. The auction sale was fixed on 29.11.2006. At that stage, the applicant moved this court in W.P.No.46531 of 2006 and it was admitted on 29.01.2006. An interim order was granted permitting the auction to take place but its confirmation was not to be done without prior permission of this court. On 5.12.2006, the said writ petition was disposed of, by stating that the interim order granted by this court will continue till a final decision is taken by the DRAT. The DRAT was directed to dispose of M.A.No.204 of 2006 on or before 31.12.2006. The said appeals in M.A.Nos.204 and 207 of 2006 were finally dismissed by the DRAT on 29.12.2006. Again, one of the land owner (Adimoolam) filed a writ petition being W.P.No.556 of 2007. That writ petition was dismissed by a Division Bench on 17.4.2007.
10.In the meanwhile, in the auction sale, M/s.J.D.A. Consultancy Services Pvt. Limited (defendant in the suit) paid the entire sale consideration of Rs.23.05 crores. The finance company was holding negotiations with the Indian Bank and an one time settlement of Rs.123 Crores as on 31.12.2000 was arrived at. A full satisfaction memo was filed by the bank before the DRT on 9.4.2007. the DRT, finally, passed an order recording the satisfaction memo and disposed of the OA as settled out of court. It was stated that since the amount has been paid by the borrower, there was no necessity to proceed with the sale. The amount of Rs.23.05 crores deposited by the auction purchaser was kept in a 'no lien account' and the Recovery Officer of the Bank was not allowed to adjust the same towards dues. Since a total sum of Rs.157 crores were paid towards full and final settlement, no amount was due and payable to the Bank and the amount paid by the auction purchaser was to be repaid. Once again, the Recovery Officer without waiting for the order in the writ petition, proceeded to confirm the auction and returned the original sale deeds.
11.An appeal was filed before the DRAT being appeal No.7 of 2007 but the said appeal was dismissed on 19.7.2007 without considering these issues. The appeal in M.A.No.124 of 2007 filed before the DRAT was also dismissed, by an order, dated 31.12.2007. It was at this stage, the order of the DRT in M.A.No.124 of 2007 in DRC No.187 of 2001 in O.A.No.375 of 1997 came to be challenged by the original land owners before this Court in two writ petitions, being W.P.Nos.570 and 2656 of 2008. These two writ petitions came to be heard by a Division Bench of this court and they were finally disposed of by a common order, dated 10.7.2008.
12.The Division Bench, by an elaborate order, held that the power holder representing the land owners had actually deposited the documents of title regarding the immovable properties belonging to them on behalf of the second respondent finance company and had created an equitable mortgage in favour of the Bank. The land owners remained ex-parte in the proceedings before the DRT on 16.3.1998 and they have also signed the MOU on 21.11.2000 as one of the respondents consenting for the settlement of dues under the compromise memo entered into between the Indian Bank and the second respondent finance company along with their group concern. It was only when the consenting parties to the compromise memo did not pay the amounts, the recovery certificate was sought to be stayed in the proceedings before the DRT, pursuant to which an attachment of properties was made by the Recovery Officer of the DRT on 2.12.2002. The land owners also waited till the properties were brought under a public auction and filed an interim application for the stay of the auction proceedings before the DRT. When these applications were dismissed, appeals were filed before the DRAT. The DRAT passed a conditional order, which was not complied with by the land owners.
13.It was thereafter, the auction was held and the auction purchaser had participated in the auction and was declared as the highest bidder for the entire extent of land of 12.03 acres. The entire sale consideration was paid by the bidder as per the rule. During that period, no petition was filed before the recovery officer in terms of Rule 61 or as per the rules framed under the second schedule to the Income Tax Act for setting aside the sale within 30 days as prescribed under these Rules. Hence the sale was confirmed on 29.12.2006 and the sale certificate was also issued on 3.1.2007. It was thereafter, the land owners came to this court with a writ petition in W.P.No.556 of 2007.
14.When these proceedings were pending, the Bank has filed a full satisfaction memo before the DRT stating that they have received Rs.157 crores including the amount paid by the auction purchaser. In the light of the full satisfaction memo, their Original Applications were dismissed as settled out of court. Consequently, W.P.No.556 of 2007 was dismissed on 17.4.2007. The further proceedings initiated by the land owners in W.P.No.17613 of 2007 against DRC No.187/2007 was also dismissed as withdrawn. Their further attempt to move the DRAT was also rejected on 31.12.2007. Therefore, the Division Bench held that the sale effected by the Recovery Officer on 29.11.2006 in DRC No.187 of 2007 was perfectly in order and the earlier order passed in W.P.No.556 of 2007 will operate as res judicata. The contention that the borrowers have right to redeem the mortgaged property was accepted. But in this case the borrowers never made any applications in time. It was also found by the Division Bench that the land owners were waging a losing battle only to drag on the recovery proceedings and to frustrate the authorities in realizing the full amount due to the Bank. After recording these findings, the Division Bench dismissed both the writ petitions.
15.As against the said order, some of the applicants/plaintiffs herein moved the Supreme Court, seeking permission to file a SLP against the order of the Division Bench. When the matter came up on 15.09.2008, the Honourable Supreme Court passed the following order in SLP (C) Nos.11906 and 11907 of 2008, which reads as follows:
"The petitioners in these batch of Special Leave Petitions were not parties in the High Court. In the circumstances, we cannot set aside the impugned judgment at the instance of the petitioners. Large number of disputed facts arises for determination. Further it is not open for this Court to examine the documents for the first time in this Court as the petitioners were not parties in the High Court proceedings.
Having said this, we make it clear that it would be open to the petitioners herein to avail of any remedy open to them in law and in that regard it is clarified that observations, if any, made in the impugned judgment, if they impinge any of the rights of the petitioners, such observations will not come in the way of the petitioners moving the Competent Court and that Competent Court will decide the matters uninfluenced by any such observations.
In the light of the above reasoning, Shri Divan, learned senior counsel appearing on behalf of the petitioners seeks permission to withdraw the applications for permission to file Special leave Petitions. Permission granted. The applications are dismissed as withdrawn." (Emphasis added)
16.Subsequently, when an another party, by name M/s.LA Paradise Innovative Decors (P) Ltd. moved the Supreme Court against the very same order, the Supreme Court passed the following order, dated 17.10.2008 which is as follows:
"After passing of the above order on 15th September, 2008, the present special leave petitions are now filed by M/s.LA Paradise Innovative Decors Pvt. Ltd. Learned counsel for the petitioner herein states that the present special leave petitions are squarely covered by our order dated 15th September, 2008.
It is pointed out by Shri C.A.Sundaram, learned senior counsel appearing on behalf of respondent No.4 herein that the petitioner herein has suppressed the relevant facts in these SLPs. In this connection, it is pointed out that after our Order dated 15.9.2008 (quoted above) the petitioner herein has moved Misc. Application (Unnumbered) before the DRT, Chennai in O.A.No.375/1997 seeking re-opening of the O.A. inter alia on the ground that this Court has given liberty to avail any remedy open to the petitioner. It appears prima facie that an attempt is being made to mislead the Tribunal. Therefore, we wish to clarify that in our order dated 15th September, 2008, when we gave liberty to the petitioner to workout his rights in accordance with law, what we meant is that the petitioner will adopt independent proceedings in accordance with law as they were not parties in the proceedings in which the impugned judgment was delivered. We have never directed the Tribunal to re-open the case. We find from the Miscellaneous Application in O.A.No.375/1997 that the Tribunal is being asked to re-open the original O.A. Constitutes a total abuse of the process of this Court. Moreover, even in these SLPs petitioner has not annexed the Sale Deed under which petitioner has bought the property.
In the circumstances, we issue show cause notice to the petitioner herein M/s.LA Paradise Innovative Decors Pvt. Ltd. why contempt action should not be taken against them for suppressing the material facts from this Court and not putting on record the relevant documents, namely Sale Deed and the Misc. Application before the DRT. It is more unfortunate that the whole attempt seems to be not only to mislead this Court but also the Tribunal.
Office to issue show cause notice returnable on 14th November, 2008 as to why action for perjury and contempt be not taken against Shri G.Srinivasan, Director, LA Paradise Innovative Decors Pvt. Ltd., who shall remain present in Court on 14.11.2008." (Emphasis added)
17.Taking advantage of these observations, the present suits along with the connected applications were filed before this Court with the reliefs set out above.
18.It is the case of the applicants/plaintiffs that they were innocent third party purchasers of the flats in the area known as Rajiv Garden layout. The original power of attorney agent of the land owners (defendant herein) had created mortgage over the properties towards third party loans. That creation of such mortgage over the suit lands by the power agent in respect of the loan availed by a finance company was void and invalid. The applicants' right cannot be interfered with by the creation of such mortgages. It was also contended that the recovery certificate issued was improper and the interim order of the DRT did not provide for the sale of the properties.
19.The rights of the true owners of the properties have been disturbed without due notice to them. It was further stated that the purchase made by the auction purchaser was not binding on the third party purchasers like the plaintiffs. The interim order in DRC No.187/2001 was not preceded by an order under
Section 19(21) of the Recovery of Debts due to Banks and Financial Institutions Act, 1993. The respondent Bank had played a fraud on the DRT. The recovery officer had not inspected the properties and certain properties have been gifted to the local authority for maintaining it as an open space as per the CMDA Regulations and those properties cannot be sold away in an auction. There were several items of properties of the borrower, but only the guarantors' properties have been brought to sale with mala fide intention. Since the applicants/plaintiffs were bona fide purchasers, the sale certificate issued by the DRT must be set aside as prayed for by them.
20.The respondent Bank filed a counter affidavit, dated 13.7.2009. In the counter affidavit, it was stated that the power of attorney holder P.L.Sundaram represented the original owners and he had issued a letter evidencing the mortgage in favour of the bank. Because of that mortgage, the bank had extended further loans treating it as collateral security. The power holder had also signed the memorandum of compromise on 21.7.2000 before the DRT, wherein the mortgage was confirmed and thus, the properties were brought to sale due to default in payments. The properties were brought to sale after giving sufficient opportunities. The sale of the properties was duly advertised in newspapers. The contention that the applicants were bona fide purchasers was not accepted. Any sale in their favour is subject to mortgage of the property created in favour of the Bank. The sale subsequent to the mortgage is hit by
Section 52 of the Transfer of Property Act.
21.It was also stated that the sale has been upheld by the order of the Division Bench. The SLP preferred by the applicants were dismissed by the Supreme Court. When the Supreme Court had given liberty to move a competent court, it was not authorizing this Court to exercise such jurisdiction on its Original Side especially when the suit properties are situated outside the jurisdiction of this Court and the case is in essence a suit for land. No leave has been obtained to file the present suits in terms of Clause 12 of the Letters Patent. It was also stated that some of the aggrieved persons have moved the District Munsif Court at Alandur for similar reliefs. It was also stated that an additional sum of Rs.23.05 crores paid by the auction purchaser was nothing to do with the applicants' claim and the said amount had already been returned to M/s.J.D.A. Consultancy Services Pvt. Ltd. in terms of the order of this court in W.P.No.12434 of 2008. The properties in question were brought to sale on earlier occasions and could not be effected for want of bidders. The sale effected by the recovery officer was in accordance with Schedule II read with
Section 29 of the DRT Act. It was also stated that the applicants have not made out any prima facie case nor balance of convenience was in their favour for the grant of any interim order.
22.In support of the applicants, Mr.P.L.Narayanan, the learned counsel placed reliance upon the Division Bench judgment of this court in S.V.Subramaniam Vs. Cypress Semiconductor Technology India Private Limited reported in 2008 (1) CTC 471. In that case, it was held that
Section 18 of the DRT Act barring jurisdiction of the civil court is not complete and in case if it is contended that the sale certificate issued by the DRT in respect of the property owned by the applicant is null and void. Such a suit is maintainable notwithstanding the bar. It was also stated that if an order before the DRT was obtained by fraud, the same can be a subject matter of challenge in a civil suit.
23.The learned counsel for the applicants also referred to the decision of the Supreme court in Nani Gopal Paul v. T. Prasad Singh reported in (1995) 3 SCC 579 for the purpose of contending that the court will not remain a mute spectator in case of obvious and manifest illegality committed in conducting the court sale even if the application is not filed within a time prescribed.
24.The learned counsel also placed reliance upon the judgment of the Supreme Court in U.Nilan v. Kannayyan reported in (1999) 8 SCC 511 and contended that the sale will not become absolute merely on its confirmation. If an appeal is pending, the sale will become absolute only on disposal of such appeal.
25.He also placed reliance upon the judgment of the Supreme Court in Gajraj Jain Vs. State of Bihar and others reported in 2004 (7) SCC 151 for contending that the State Financial Corporations must get possible price and not merely sell the property only to meet the liability due to the said corporation. If no attempt to secure best price, it may vitiate the said sale.
26.The learned counsel also placed reliance upon the judgment of the Kerala High Court in Nedungadi Bank Ltd. And another Vs. M/s.Ezhimala Agrl. Products and others reported in AIR 2004 KERALA 62 for the purpose of contending that though undervaluation by itself may not be sufficient to infer fraud, however, where there was gross undervaluation coupled with the peculiar circumstances obtaining in the case i.e. one of the purchasers being the son of one of the judgment debtors and another one being a relative of one of the judgment debtors and the enthusiasm exhibited by the judgment debtors in having the sale of their own property confirmed, such facts should be taken due note of as a circumstance indicating fraud.
27.The learned counsel for the applicants also placed reliance upon the judgment of a Division Bench judgment of the Bombay High Court in Dr.Anil Nand Kishore Tibrewala and another Vs. Jammu and Kashmir Bank Ltd. and others reported in I (2007) BC 6 (DB) for the purpose of contending that if a person secured a decree based on a fraudulent document, the jurisdiction of the Civil Court cannot be ousted in terms of the DRT Act.
28.The learned counsel finally placed reliance upon the Division Bench judgment of this Court in Oriental Bank of Commerce V. The Debt Recovery Appellate Tribunal, Chennai and others reported in AIR 2007 MADRAS 304 for the purpose of contending that misdescription of the property will result in material irregularity and the word 'material' does not mean formal or academic and it means real. Where boundaries and dimensions as specified in the document relating to auctioned properties did not conform to the description provided in the schedule to the Debt Recovery Certificate, then the order based on conveyance of title to the successful bidders cannot be accepted and cancelation of sale in such circumstance is proper.
29.However, in the present case, it must be noted that the original land owners raised such issues before the DRT and before this Court, have failed miserably in establishing that either there was fraud or an invalid transaction. The procedure adopted by the Indian Bank was confirmed by the Division Bench and therefore, those findings cannot be disturbed by this court and that too in these applications.
30.Even though the applicants have moved the Supreme Court against the order of the Division Bench, they failed to get leave to file an appeal. The only liberty that was granted to them was to move an appropriate forum in respect of their own rights if any. It is not clear as to how the applicants have chosen this court as an appropriate forum. In any event, it is for a future battle between the applicants and the respondents regarding the propriety of the suits being filed in this Court without a leave under Clause 12 of the Letters Patent.
31.Even the jurisdiction of the DRT in granting relief in such matters were recently answered by the Supreme Court vide its judgment in Authorized Officer, Indian Overseas Bank & Anr. V. M/s.Ashok Saw Mill reported in JT 2009 (9) SC 491. In that case, the Supreme Court has observed in paragraphs 23 and 24 as follows:
"23.The intention of the legislature is, therefore, clear that while the Banks and Financial Institutions have been vested with stringent powers for recovery of their dues, safeguards have also been provided for rectifying any error or wrongful use of such powers by vesting the DRT with authority after conducting an adjudication into the matter to declare any such action invalid and also to restore possession even though possession may have been made over to the transferee. The consequences of the authority vested in DRT under Sub-Section (3) of Section
17 necessarily implies that the DRT is entitled to question the action taken by the secured creditor and the transactions entered into by virtue of Section 13(4) of the Act. The Legislature by including Sub-Section (3) in Section
17 has gone to the extent of vesting the DRT with authority to even set aside a transaction including sale and to restore possession to the borrower in appropriate cases. Resultantly, the submissions advanced by Mr.Gopalan and Mr.Altaf Ahmed that the DRT has no jurisdiction to deal with a post 13(4) situation, cannot be accepted. The dichotomy in the views expressed by the Bombay High Court and the Madras high Court has, in fact, been resolved to some extent in the Mardia Chemicals Ltd.'s case (supra) itself and also by virtue of the amendments effected to
Sections 13 and
17 of the principal Act. The liberty given by the learned Single Judge to the appellants to resist S.A.No.104 of 2007 preferred by the respondents before the DRT on all aspects was duly upheld by the Division Bench of the High Court and there is no reason for this Court to interfere with the same.
24.We are unable to agree with or accept the submissions made on behalf of the appellants that the DRT had no jurisdiction to interfere with the action taken by the secured creditor after the stage contemplated under
Section 13(4) of the Act. On the other hand, the law is otherwise and it contemplates that the action taken by a secured creditor in terms of
Section 13(4) is open to scrutiny and cannot only be set aside but even the status quo ante can be restored by the DRT."
After this ruling, there is no doubt that even the DRT can set aside a sale if the prescribed procedure for sale was not followed or if an order was obtained by fraud. The DRT can also restore the possession under
Section 13 of the SARFAESI Act to the borrower.
32.In so far as the rights of the applicants are concerned, they may not be parties to the proceedings before the various courts. The real land owners, the bank and the auction purchaser have litigated elaborately before the appropriate forums and have failed to establish their rights to retain the lands. The applicants have only a right to get into the shoes of the real owners and continue such litigations. But, while doing so, they do not have any additional right to expand the scope of the litigation. On the contrary, the only possible contention that the applicants can raise may be the plea of being bona fide purchasers of the properties for consideration without being aware of the other proceedings. In such circumstances, the doctrine of pendente lite will arise. Once the Division Bench has held that the properties have been validly mortgaged, any subsequent purchase of the suit properties or a portion of the property will be hit by
Section 52 of the Transfer of Property Act.
33.Even the contention that the applicants were bona fide purchasers of the suit properties cannot stand on an higher pedestal than a court auction purchaser or purchaser in auction. It must be stated that the sale was effected by the Bank in favour of the auction purchaser (R2) and a sale certificate was also issued to him. Amounts have also been deposited and realised by the Bank. These proceedings have been approved by an order of the Division Bench of this Court.
34.In respect of the auction purchaser, the Supreme Court in Janatha Textiles and others Vs. Tax Recovery Officer and another reported in (2008) 12 SCC 582 in paragraph 20 of its judgment has held as follows:
"20. Law makes a clear distinction between a stranger who is a bona fide purchaser of the property at an auction-sale and a decree-holder purchaser at a court auction. The strangers to the decree are afforded protection by the court because they are not connected with the decree. Unless the protection is extended to them the court sales would not fetch market value or fair price of the property."
Therefore, this Court cannot, by the grant of any interim order, thwart the process of a completed sale and frustrate the efforts of the bank in realising the amounts due to it.
35.There is no quarrel over the proposition of law set out in the decisions relied on by the learned counsel for the applicants. The only question is whether those decisions have any bearing on the fact situation raised in the present suits. The applicants are raising the very same issues, which have reached their finality. They have not raised pleas regarding any other rights by which their purchases can be safeguarded.
36.The supreme Court vide its judgment in Morgan Stanley Mutual Fund Vs. Kartick Das reported in 1994 (4) SCC 225 in paragraphs 36 and 37 laid guidelines for issuing an order in an application under Order 39 Rule 1 CPC and the same may be reproduced below:
"36.As a principle, ex parte injunction could be granted only under exceptional circumstances. The factors which should weigh with the court in the grant of ex parte injunction are-
(a)whether irreparable or serious mischief will ensue to the plaintiff;
(b)whether the refusal of ex parte injunction would involve greater injustice than the grant of it would involve;
(c)the court will also consider the time at which the plaintiff first had notice of the act complained so that the making of improper order against a party in his absence is prevented;
(d)the court will consider whether the plaintiff had acquiesced for sometime and in such circumstances it will not grant ex parte injunction;
(e)the court would expect a party applying for ex parte injunction to show utmost good faith in making the application.
(f)even if granted, the ex parte injunction would be for a limited period of time.
(g)General principles like prima facie case, balance of convenience and irreparable loss would also be considered by the court.
37.In United Commercial Bank v. Bank of India, this Court observed: (SCC pp.787-88, paras 52-53) "No injunction could be granted under Order 39, Rules 1 and 2 of the Code unless the plaintiffs establish that they had a prima facie case, meaning thereby that there was a bona fide contention between the parties or a serious question to be tried. The question that must necessarily arise is whether in the facts and circumstances of the case, there is a prima facie case and, if so, as between whom? In view of the legal principles applicable, it is difficult for us to say on the material on record that the plaintiffs have a prima facie case. It cannot be disputed that if the suit were to be brought by the Bank of India, the High Court would not have granted any injunction as it was bound by the terms of the contract. What could not be done directly cannot be achieved indirectly in a suit brought by the plaintiffs."
These directives were not kept in mind at the time when the ex parte order was granted by this Court.
37.In the light of the factual matrix and the legal precedents set out above, the applicants have not made out any prima facie case nor the balance of convenience is in their favour for the continuation of the interim order. Hence all these original applications and other applications will stand dismissed. However, there will be no order as to costs.
Index : Yes Internet : Yes vvk K.CHANDRU, J.
vvk PRE DELIVERY ORDER IN O.A.NO.1161 OF 2008 IN C.S.NO.1041 OF 2008, O.A.NO.1171 OF 2008 AND A.NO.5064 OF 2008 IN C.S.NO.1043/2008 O.A.NO.1172 OF 2008 AND A.NO.5068 OF 2008 IN C.S.NO.1044/2008 O.A.NO.1193 OF 2008 AND A.NO.5126 OF 2008 IN C.S.NO.1054/2008 O.A.NO.1267 OF 2008 AND A.NO.5510 OF 2008 IN C.S.NO.1095/2008 O.A.NO.1268 OF 2008 AND A.NO.5511 OF 2008 IN C.S.NO.1096/2008 O.A.NO.1273 OF 2008 AND A.NO.5574 OF 2008 IN C.S.NO.1104/2008 O.A.NO.1279 OF 2008 AND A.NOS.5629 AND 5630 OF 2008 IN C.S.NO.1119 OF 2008 O.A.NO.1281 OF 2008 AND A.NO.5653 OF 2008 IN C.S.NO.1128/2008 17.08.2009