In R/APPEAL FROM ORDER NO.73 of 2022- GUJ HC- Appellate Court can interfere where Court of first instance ignores settled principles of law regulating grant or refusal of interlocutory injunctions: Gujarat HC Justice A.P. Thaker[17-03-2022]

Read Order: CHANDRA DARSHAN DEVELOPERS THROUGH PARTNER v. HIRALAL GOPALBHAI 

LE Correspondent

Ahmedabad, April 1, 2022: Considering the circumscribed power of the Appellate Court in interfering with the discretionary order of the Trial Court, the Gujarat High Court has confirmed the order passed by the Additional Chief Judicial Magistrate restraining the defendants from selling or mortgaging the suit property.The High Court opined that the Appellate Court will not reassess the material and seek to reach a conclusion different from the one reached by the court below if the one reached by the court was reasonably possible on the material.

Being aggrieved with the impugned order passed by the Principal Senior Civil Judge and Additional Chief Judicial Magistrate, Kathor, whereby the defendants had been restrained from selling, transferring, mortgage ng or passing any interest to third party in the suit property, the original defendants (appellants) had preferred this Appeal under Order 43 Rule 1 (r) of Code of Civil Procedure. 

In this case, the plaintiff had preferred the aforesaid suit for cancellation of the sale-deed on the ground of non-payment of consideration as well as for declaration of injunction pertaining to the land in question. According to the plaintiff, a sale-deed was registered between the parties for the land in question for consideration of Rs.11,53,27,800  but he did not receive the entire sale consideration and out of the said sale transaction, Rs. 6 crore had already been returned to the defendants as the defendants had some financial difficulties at the relevant time. 

The plaintiff mainly contended that since the entire consideration amount was not paid, the title in the property had not been passed in favour of the defendants and they had also committed fraud. It was submitted that the defendant was trying to sell out the property to a third party. An application for interim injunction under Order 39 Rule 1 & 2 read with Section 151 of CPC was also moved by the plaintiff.

The Bench of Justice Dr A.P. Thaker was of the opinion that the object of the interlocutory injunctions is to protect the plaintiff against injury by violation of his rights for which he could not adequately be compensated in damages recoverable in the action if the uncertainty were resolved in his favour at the trial. The need for such protection must be weighed against the corresponding need of the defendant to be protected against injury resulting from his having been prevented from exercising his own legal rights for which he could not be adequately compensated. 

“The Court must weigh one need against another and determine where the “balance of convenience lies”. The interlocutory remedy is intended to preserve in status quo, the rights of parties which may appear on a prima facie”, said Justice Parekh.

Talking on the aspect of the Appellate Court’s power, the Bench noted that Appellate Court may not interfere with the exercise of discretion of the Court of first instance and substitute its own discretion except where the discretion has been shown to have been exercised arbitrarily, or capriciously or perversely or where the Court had ignored the settled principles of law regulating grant or refusal of interlocutory injunctions. 

The Bench said, “An appeal against exercise of discretion is said to be an appeal on principle. The Appellate Court will not reassess the material and seek to reach a conclusion different from the one reached by the Court below if the one reached by the court was reasonably possible on the material. The appellate Court would normally not be justified in interfering with the exercise of discretion under appeal solely on the ground that if it had considered the matter at the trial stage it would have come to a contrary conclusion”.

After perusing the facts of the case, the Bench found that all the cheques had been credited in the Account of the plaintiff in the year 2016 and certain cheques had been credited in the year 2018 i.e. after almost 2 years of the execution of the sale deed. 

The Bench noted that as the defendants had asserted that there was another transaction between the parties, then it was for the defendants to show that for which transaction Rs 6 crore had been returned back to it. It also appeared from the record that plaintiff was relying upon one Sauda Chithhi, which was unregistered.

Referring to one MOU entered into between the parties during the pendency of the suit, the Bench held that the defendant had accepted by way of MoU that no full consideration was yet paid and sale deed was executed on the trust and for the convenience of the defendants. So, under such circumstances, the title of the defendant was under the cloud.

Considering the facts of the case and especially the MoU entered into between the parties, Justice Parekh concluded that the view taken by the trial Court couldnot be said to be unreasonable or illegal or arbitrary.Thus, this appeal was dismissed.