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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