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Act of the Court shall prejudice no one


AIR 2010 SC 3676

Para 16: In Ram Krishna Verma & Ors. V/s. State of U.P. & Ors. [JT 1992 (2) SC 545 : AIR 1992 SC 1888] this Court examined the similar issue while placing reliance upon its earlier judgment in Grind lays Bank Limited V/s. Income Tax Officer, Calcutta & Ors. [AIR 1980 SC 656] and held that no person can suffer from the act of the Court and in case an interim order has been passed and petitioner takes advantage thereof and ultimately the petition is found to be without any merit and is dismissed, the interest of justice requires that any undeserved or unfair advantage gained by a party invoking the jurisdiction of the Court must be neutralized.

Para 17: In Mahadeo Savlaram Sheke & Ors. v. Pune Municipal Corporation & Anr. [JT 1995 (2) SC 504 : 1995 (3) SCC 33], this Court observed that while granting the interim relief, the Court in exercise of its discretionary power should also adopt the procedure of calling upon the plaintiff to file a bond to the satisfaction of the Court that in the event of his failing in the suit to obtain the relief asked for in the plaint, he would adequately compensate the defendant for the loss ensued due to the order of injunction granted in favour of the plaintiff. Even otherwise the Court while exercising its equity jurisdiction in granting injunction is also competent to grant adequate compensation to mitigate the damages caused to the defendant by grant of injunction. The pecuniary award of damages is consequential to the adjudication of the dispute and the result therein is incidental to the determination of the case by the Court. The Court can do so in exercise of its inherent jurisdiction in doing ex debito justitiae mitigating the damage suffered by the defendant by the act of the Court in granting injunction restraining the defendant from proceeding with the action complained of in the suit. Such a procedure is necessary as a check on abuse of the process of the Court and adequately compensate the damages or injury suffered by the defendant by act of the Court at the behest of plaintiff.

Para 18: In South Eastern Coalfields Ltd. V/s. State of WI.P. & Ors. [JT 2003 (Suppl.2) SC 443 ; AIR 2003 SC 4482], this Court examined this issue in detail and held that no one shall suffer by an act of the Court The factor attracting applicability of restitution is not the act of the court being wrongful or a mistake or error committed by the court; the test is whether on account of an act of the party persuading the court to pass an order held at the end as not sustainable, has resulted in one party gaining an advantage it would not have otherwise earned, or the other party has suffered an impoverishment which it would not have suffered but for the order of the court and the act of such party. There is nothing wrong in the parties demanding being placed in the same position in which they would have been had the court not intervened by its interim order when at the end of the proceedings the court pronounces its judicial verdict which does not match with and countenance its own interim verdict. The injury if any, caused by the act of the court shall be undone and the gain which the party would have earned unless it was interdicted by the order of the court would be restored to or conferred on the party by suitably commanding the party liable to do so. Any opinion to the contrary would lead to unjust if not disastrous consequences. The Court further held:

".....Litigation may turn into a fruitful industry. Though litigation is not gambling yet there is an element of chance in every litigation. Unscrupulous litigants may feel encouraged to approach the courts, persuading the court to pass interlocutory orders favourable to them by making out a prima facie case when the issues are earlier to be heard and determined on merits and if the concept of restitution is excluded from application to interim orders, then the litigant would stand to' gain by swallowing the benefits yielding out of the interim order even though the battle has been lost at the end. This cannot be countenanced. We are, therefore, of the opinion that the successful party finally held entitled to a relief assessable in terms of money at the end of the litigation, is entitled to be compensated.......".

Para 18.1: Similarly in Karnataka Rare Earth & Anr. V/s. Senior Geologist, Department of Mines & Geology & Anr. [JT 2004 (2) SC 472 : 2004 (2) SCC 783], a similar view has been reiterated by this Court observing that the party who succeeds ultimately is to be placed in the same position in which they would have been if the Court would not have passed an interim order.

Para 19: In Dr. A.R. Sircar V/s. State of U.P. & Ors. [1993 (Suppl. 2) SCC 734], the dispute arose regarding the seniority of direct recruits and promotes on the post of Professor of Medicine in a medical college. The appellant therein faced the selection process for direct appointment along with the respondents who had been working on the said post on ad hoc basis. The appellant was duly selected, however, the private respondents could not succeed. The respondents filed the writ petition before the High Court and precluded the appointment of appellant pursuant to his selection, by obtaining the interim order and on the other hand they got their ad hoc promotion to the post regularized under the rules. The appellant could succeed in obtaining the appointment only after dismissal of the writ petition against him after several years of his selection. This Court held that in addition to the relief under the statutory provisions the appellant was entitled in equity to get the seniority over the respondents as they succeed in precluding his appointment to the post by obtaining an interim order in a case having no merits whatsoever.

Para 20: In Committee of Management, Arya Nagar Inter College & Anr. V/s. Sree Kumar Tiwari & Anr. [JT 1997 (4) SC 572 : AIR 1997 SC 3071], the services of the respondent therein were terminated, however, he continued to be in service on the basis of interim order passed by the High Court in the writ petition filed by him. During the pendency of the writ petition, the rules for regularization of ad hoc appointees were amended and in pursuance thereof his services also stood regularized. Ultimately, the writ petition filed by the respondent was dismissed. This Court held that his continuity in service and regularization had to be understood as it was subject to the result of writ petition. As the writ petition was dismissed the order of regularising of his services, passed during the pendency of the writ petition, became inoperative.


AIR 2000 SC 3032

Para 12: Learned Senior Counsel for the respondents then contended that an order granting injunction without complying with the requisites envisaged in Rule 3 of Order 39 be void. Rule 3 reads thus :
"The Court shall in cases, except where it appears that the object of granting the injunction would be defeated by the delay, before granting an injunction direct notice of the application for the same to be given to the opposite party:

Provided that, where it is proposed to grant an injunction without giving notice of the application to the opposite party, the Court shall record the reasons for its opinion that the object of granting the injunction would be defeated by delay, and require the applicant -

(a) to deliver to the opposite party, or to send to him by registered post, immediately after the order granting the injunction has been made, a copy of the application for injunction together with -

(i) a copy of the affidavit filed in support of the application;

(ii) a copy of the plaint; and

(iii) copies of documents on which the applicant relies, and

(b) to file, on the day on which such injunction is granted or on the day immediately following that day, an affidavit stating that the copies aforesaid have been so delivered or sent."

Para 13: What would be the position if a Court which passed the order granting interim ex parte injunction did not record reasons thereof or did not require the applicant to perform the duties enumerated in clauses (a) and (b) of Rule 3 of Order 39. In our view such an order can be deemed to contain such requirements at least by implication even if they are not stated in so many words. But if a party, in whose favour an order was passed ex parte, fails to comply with the duties which he has to perform as required by the proviso quoted above, he must take the risk. Non-compliance with such requisites on his part cannot be allowed to go without any consequence and to enable him to have only the advantage of it. The consequence of the party (who secured the order) for not complying with the duties he is required to perform is that he cannot be allowed to take advantage of such order if the order is not obeyed by the other party. A disobedient beneficiary of an order cannot be heard to complain against any disobedience alleged against another party.

Para 14: Learned single Judge stated that the trial Court ought not to have granted ex parte injunction beyond thirty days to be in force. The said observation is based on the language contained in Order 39, Rule 3-A of the Code which reads thus :

"Where an injunction has been granted without giving notice to the opposite-party, the Court shall make an endeavour to finally dispose of the application within thirty days from the date on which the injunction was granted; and where it is unable so to do, it shall record its reasons for such inability."

Para 15: The Rule does not say that the period of the injunction order should be restricted by the Court to thirty days at the first instance, but the Court should pass final order on it within thirty days from the day on which the injunction was granted. Hence, the order does not ipso facto become illegal merely because it has not restricted to a period of thirty days or less.

Para 16: Nonetheless, we have to consider the consequence, if any, on account of the Court failing to pass the final orders within thirty days as enjoined by Rule 3-A.

Para 17: The aforesaid Rule casts a three-pronged protection to the party against whom the ex parte injunction order was passed. First is the legal obligation that the Court shall make an endeavour to finally dispose of the application of injunction within the period of thirty days. Second is, the legal obligation that if for any valid reasons the Court could not finally dispose of the application within the aforesaid time the Court has to record the reasons thereof in writing.

Para 18: What would happen if a Court does not do either of the courses? We have to bear in mind that in such a case the Court would have by-passed the three protective humps which the Legislature has provided for the safety of the person against whom the order was passed without affording him an opportunity to have a say in the matter. First is that the Court is obliged to give him notice before passing the order. It is only by way of a very exceptional contingency that the Court is empowered to by-pass the said protective measure. Second is the statutory obligation cast on the Court to pass final orders on the application within the period of thirty days. Here also it is only in very exceptional cases that the Court can by-pass such a rule in which cases the Legislature mandates on the Court to have adequate reasons for such by- passing and to record those reasons in writing. If that hump is also by-passed by the Court it is difficult to hold that the party affected by the order should necessarily be the sole sufferer.

Para 19: It is the acknowledged position of law that no party can be forced to suffer for the inaction of the Court or its omissions to act according to the procedure established by law. Under the normal circumstances the aggrieved party can prefer an appeal only against an order passed under Rules 1, 2, 2A, 4 or 10 of Order 39 of the Code in terms of Order 43, Rule 1 of the Code. He cannot approach the appellate or revisional Court during the pendency of the application for grant or vacation of temporary injunction. In such circumstances the party who does not get justice due to the inaction of the Court in following the mandate of law must have a remedy. So we are of the view that in a case where the mandate of Order 39, Rule 3-A of the Code is flouted, the aggrieved party, shall be entitled to the right of appeal notwithstanding the pendency of the application for grant or vacation of a temporary injunction, against the order remaining in force. In such appeal, if preferred, the appellate Court shall be obliged to entertain the appeal and further to take note of the omission of the subordinate Court in complying with the provisions of Rule 3-A. In appropriate cases the appellate Court, apart from granting or vacating or modifying the order of such injunction, may suggest suitable action against the erring judicial officer, including recommendation to take steps for making adverse entry in his ACRs. Failure to decide the application or vacate the ex parte temporary injunction shall, for the purposes of the appeal, be deemed to be the final order passed on the application for temporary injunction, on the date of expiry of thirty days mentioned in the Rule.




AIR 2003 SC 4482

Para 26: Section 144 of the Code of Civil Procedure is not the fountain source of restitution; it is rather a statutory recognition of a pre-existing rule of justice, equity and fair play. That is why it is often held that even away from section 144 the court has inherent jurisdiction to order restitution so as to do complete justice between the parties. In Jai Berham v. Kedar Nath Marwari, their Lordships of the Privy Council said: "It is the duty of the court under section 144 of the Civil Procedure Code to place the parties in the position which they would have occupied but for such decree or such part thereof as has been varied or reversed. Nor indeed does this duty or jurisdiction arise merely under the said section. It is inherent in the general jurisdiction of the court to act rightly and fairly according to the circumstances towards all parties involved." Cairns, L.C., said in Rodger V/s. Comptoird 'Escomptede Paris:

"One of the first and highest duties of all courts is to take care that the act of the court does no injury to any of the suitors and when the expression, the act of the court is used, it does not mean merely the act of the primary court, or of any intermediate court of appeal, but the act of the court as a whole from the lowest court which entertains jurisdiction over the matter up to the highest court which finally disposes of the case".

This is also on the principle that a wrong order should not be perpetuated by keeping it alive and respecting it, A.A. Nadar V/s. S.P. Rathinasami. In the exercise of such inherent power the courts have applied the principles of restitution to myriad situations not strictly falling within the terms of section 144.

Para 27: That no one shall suffer by an act of the court is not a rule confined to an erroneous act of the court; the 'act of the court' embraces within its sweep all such acts as to which the court may form an opinion in any legal proceedings that the court would not have so acted had it been correctly apprised of the facts and the law. The factor attracting applicability of restitution is not the act of the court being wrongful or a mistake or error committed by the court; the test is whether on account of an act of the party persuading the court to pass an order held at the end as not sustainable, has resulted in one party gaining an advantage which it would not have otherwise earned, or the other party has suffered an impoverishment which it would not have suffered but for the order of the court and the act of such party. The quantum of restitution, depending on the facts and circumstances of a given case, may take into consideration not only what the party excluded would have made but also what the party under obligation has or might reasonably have made. There is nothing wrong in the parties demanding being placed in the same position in which they would have been had the court not intervened by its interim order when at the end of the proceedings the court pronounces its judicial verdict which does not match with and countenance its own interim verdict. Whenever called upon to adjudicate, the court would act in conjunction with what is the real and substantial justice. The injury, if any, caused by the act of the court shall be undone and the gain which the party would have earned unless it was interdicted by the order of the court would be restored to or conferred on the party by suitably commanding the party liable to do so. Any opinion to the contrary would lead to unjust if not disastrous consequences. Litigation may turn into a fruitful industry. Though litigation is not gambling yet there is an element of chance in every litigation. Unscrupulous litigants may feel encouraged to approach the courts, persuading the court to pass interlocutory orders favourable to them by making out a prima facie case when the issues are yet to be heard and determined on merits and if the concept of restitution is excluded from application to interim orders, then the litigant would stand to gain by swallowing the benefits yielding out of the interim order even though the battle has been lost at the end. This cannot be countenanced. We are, therefore, of the opinion that the successful party finally held entitled to a relief assessable in terms of money at the end of the litigation is entitled to be compensated by award of interest at a suitable reasonable rate for the period for which the interim order of the court withholding the release or money had remained in operation. tracked, the interest is often a normal relief given in restitution. Such interest is not controlled by the provisions of the Interest Act of 1839 or 1978.


Abuse / misuse of discretion by Court

Abuse of – contrary to good order established by usage – improper use of a thing – (1983) 2 Guj LR 1220 at p. (1226).

Abuse of Discretion by Court – Dipulal versus CIT – AIR 1957 Punj 312 : 59 PLR 591. 


Sandeep Jalan

Advocate

Law Referencer: https://www.vakeelkanumber.com/


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