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2024 DIGILAW 2214 (GUJ)

Pankaj Krishnadev Mashruwala v. Aswinkumar Natvarlal Jadav

2024-12-17

DIVYESH A.JOSHI

body2024
JUDGMENT : 1. With the consent of learned advocates for the parties and considering the issue involved in the matter, the present Appeal from Order is taken up for final disposal. 2. By filing present Appeal from Order under Section 104 and Order 43, Rule 1 of the Code of Civil Procedure, 1908 (hereinafter referred to as “the CPC” for short), the appellant has challenged the validity and legality of the order dated 19.10.2024 passed below application for notice of motion, Exhs.6 & 7 by the learned Chamber Judge, Court No.14, City Civil Court, Ahmedabad in Civil Suit No.328/2024, whereby the application preferred by the original plaintiff came to be allowed. 3. Heard learned advocate, Mr. D.K. Puj for the appellants and learned advocate, Mr. Vivek Bhamare for the respondent. 4. Learned advocate, Mr. Puj submitted that the appellants herein are the original defendants in the suit being Civil Suit No.328/2024 preferring by the respondent herein, who are original plaintiff. He submitted that the suit was filed for the recovery of the amount of Rs.16,20,000/- from the original defendants. He referred to the facts of the case as mentioned in the plaint and submitted that it is the specific case of the original plaintiff that one advertisement was published in the newspaper for the post of Consultant-cum-Accountant and in pursuant to the said advertisement, the original plaintiff approached the original defendants and, thereafter, he was appointed on the said post and started job from 01.04.2023 and also worked there during the period between 01.04.2023 to 30.07.2023. He submitted that within a period of one week, he was convinced by the partners of the partnership firm that if he will invest amount in their business, in that event, he will earn huge volume of amount, therefore, the original plaintiff had given Rs.15,00,000/- in two installments and, thereafter, he was directed to work in the firm but he was not paid salary of two months, therefore, the original plaintiff had issued notice through his advocate but despite receipt of the notice, the original defendants had not paid the amount of salary as well as amount advanced from him, as a result of which, the original plaintiff has filed aforesaid suit and along with the suit, an application for notice of motion, Exhs.6 & 7 came to be filed, which came to be allowed granting injunction in favour of the original plaintiff, against which, the present Appeal from Order has been preferred. 5. Learned advocate submitted that it is an admitted position of fact that the appellants are the partners of partnership firm, which came into existence in the year 1996 and the said firm has been carrying out business since last more than 28 years and turnover of the said partnership firm is more than Rs.25.00 crores per annum. He submitted that admittedly at the time of institution of the suit, the original plaintiff has come with a specific case that there was no document executed between the original plaintiff and the original defendants and xerox copy of the share certificate, allotment letter as well as possession letter of the property were given to him as a security. He submitted that in fact, the original defendants have not made signature upon the said document. He submitted that in fact, for the purchase of the plant, it was decided to pay rs.50,00,000/-, out of which, Rs.15,00,000/- were paid but remaining amount has not been paid and, thereafter, the original plaintiff had made issues and with absolute false and frivolous story, suit has been filed. He submitted that for the purpose of seeking injunction from the court concerned, the party has to come with a specific case that the original defendants are intending to sale and/ or alienate the suit property and thereby trying to create third party rights. He submitted that for the purpose of seeking injunction from the court concerned, the party has to come with a specific case that the original defendants are intending to sale and/ or alienate the suit property and thereby trying to create third party rights. He referred to the cause of action mentioned in the plaint as well as the reliefs prayed for in the plaint and submitted that nowhere in the entire plaint, it is pleaded by the original plaintiff that the original defendants are trying to create third party rights and try to defraud the rights of the original plaintiff by selling the said property to third person. He submitted that in fact, for the purpose of deciding the interim application, the Hon’ble Court has to consider three important essential ingredients i.e. prima facie case, balance of convenience and irreparable loss in the plaint of the suit and admittedly the suit is filed for the purpose of recovery of the amount, therefore at the end of day, if the suit would be allowed, in that event, the original plaintiff is entitled to recover the amount paid by him as well as salary of two months, therefore, by no stretch of imagination, it can be said that if the injunction would not be granted, in that event, the original plaintiff has to suffer from irreparable loss. He submitted that at the time of preferring the interim application, essential ingredients as provided under Order 39, Rule 1 of the CPC are required to be satisfied and if the Hon’ble Court would go through the contents of the application, in that event, it would be found out that nowhere in the suit, it is claimed that the original defendants have ever tried to defraud the original plaintiff by selling the said property and/or the original defendants intend to sell the said property and would try to create third party rights, therefore, foundation of the suit itself is lacking from essential ingredients, which would attract the essential ingredients. He submitted that it is required to be seen that as per the claim of the original plaintiff, the partners of the partnership firm had entered into transaction with the original plaintiff, whereas the said property is in the name of the original defendant no.1 in his individual capacity, therefore, even the proceedings cannot be initiated against the property of one of the partners registered in his individual capacity. He, therefore, submitted that the view adopted by the learned Judge while passing impugned order is erroneous and is against the settled proposition of law. 6. Learned advocate has placed reliance upon following decisions, (1) the decision of the Hon’ble Supreme Court in case of Best Sellers Retail (India) Pvt. Ltd. Vs. Aditya Birla Nuvo Ltd. & Ors., reported in (2012) 6 SCC 792 ; (2) the decision of this Hon’ble Court in case of Rohitbhai Harkishandas Chadarwala Vs. Sanjaybhai Geesabhai Parekh, reported in 2023 JX (Guj) 971; 7. Referring to the aforesaid decisions, the learned advocate submitted that the Hon’ble Supreme Court has observed that “Yet, the settled principle of law is that even where prima facie case is in favour of the plaintiff, the Court will refuse temporary injunction if the injury suffered by the plaintiff on account of refusal of temporary injunction was not irreparable.” He, therefore, submitted that the plaintiff has to contend that the original defendants intent to dispose of the suit property but here in the present case on hand, the plaintiff has failed to plead the said fact in the suit and thus, there is no prima facie case as well as other basic essential ingredients for the grant of interim injunction are missing, therefore, the impugned judgment and order granting injunction in favour of the original plaintiff is required to be quashed and set aside. 8. Per contra, learned advocate, Mr. Vivek Bhamare, who appears on caveat for the respondents herein, has opposed the present Appeal from Order with vehemence. He submitted that admittedly, at the time of filing of the written statement as well as while preferring the present Appeal from Order, they have not denied the factual aspects about receiving the money of Rs.15,00,000/-. Per contra, learned advocate, Mr. Vivek Bhamare, who appears on caveat for the respondents herein, has opposed the present Appeal from Order with vehemence. He submitted that admittedly, at the time of filing of the written statement as well as while preferring the present Appeal from Order, they have not denied the factual aspects about receiving the money of Rs.15,00,000/-. He further submitted that if the original defendants would deposit the amount subject to final outcome of the suit, in that event, the original plaintiff is ready and willing to proceed with the suit proceedings and try to see to it that the suit would be disposed of as expeditiously as possible but if the injunction granted by the learned Judge would be lifted, in that event, there are all possible chances that the documents given to them as security would be misused and by selling the suit property, they will create third party rights and in future, if the original plaintiff would get success in his plaint and obtain decree in his favour, in that event, it would be practically impossible on his part to execute the document and to recover the said amount in the execution proceedings. 9. Learned advocate submitted that after giving appointment to the original plaintiff, intentionally the appointment order has not been given despite the fact that it was demanded but by assigning one pretext or other, they had avoided to the same and, thereafter also, despite the original plaintiff had worked for two months, salary had not been paid to him and during interregnum period, he was lured to invest by entering into the firm as one of the partners and pursuant thereto, the original plaintiff had paid amount through cheque and RTGS and the said fact has not been denied by the original defendants in their reply to the notice as also while submitting written statement and in the present appeal and thus, after considering the facts of the case, the learned Judge has given specific finding that basic and essential ingredients to grant interim injunction are found in favour of the original plaintiff and passed impugned order, which may not be interfered with. 10. Learned advocate, at this stage, has placed reliance upon the decision of the Hon’ble Delhi High Court in case of M/s. Woodpeckers India Pvt. Ltd. Vs. 10. Learned advocate, at this stage, has placed reliance upon the decision of the Hon’ble Delhi High Court in case of M/s. Woodpeckers India Pvt. Ltd. Vs. Raj Arora, delivered in CS (COMM) – 330 of 2021 dated 11.10.2021 as well as the decision of the Hon’ble Calcutta High Court in case of Harleen Jairath Vs. Prabha Surana & Anr., delivered in G.A. - 2100 of 2019 dated 20.09.2019 and submitted that as per the ratio laid down in the aforesaid decisions, when the balance of convenience is tilted in favour of the original plaintiff, no interference is required. He further submitted that as stated above, if the original defendants may be directed to deposit the amount and suit may be directed to be expedited, in that event, the original plaintiff is ready and wiling to cooperate in early disposal of the suit. It is, therefore, urged that no interference is required in the present appeal and same may be dismissed. 11. Having heard the learned counsel for the respective parties and on perusal of the impugned judgment and order, the issue falls for consideration of this Court is as to whether the impugned judgment and order granting injunction suffers from any error of law which calls for interference in the exercise of appellate jurisdiction? 12. It is found out from the facts of the case as also from the submissions canvassed by learned advocates for the parties that the original defendants herein are the partners of partnership firm and is in the business of more than 25 years and turnover of the said firm is around Rs.25.00 crores per annum. It is found out that one advertisement was published in the newspaper for the post of Cashier-cum-Accountant and pursuant thereto, the original plaintiff had appeared and he was selected for the same post and appointment order was issued. It is found out that one advertisement was published in the newspaper for the post of Cashier-cum-Accountant and pursuant thereto, the original plaintiff had appeared and he was selected for the same post and appointment order was issued. However after his joining, he was asked to invest in the business, in turn, he will get huge returns and accordingly, Rs.15,00,000/- were invested but despite service of two months, he was not paid his salary, which led to issuance of notice through advocate and as there was evasive reply from the original defendants, the aforesaid suit has been filed for the recovery of the amount invested by him as also two months’ salary and along with the said suit, an application for notice of motion was also filed, which was allowed by the learned Judge, against which, present Appeal from Order has been preferred. 13. It is well settled principles of law that in an Appeal against exercise of 'discretion' by the Court of first instance, the power of appellate Court to interfere with the exercise of discretion is restrictive. Merely because on facts, the appellate Court would have concluded differently from that of the learned Civil Court, that would not, by itself, provide justification for appellate Court to interfere. To justify interference, the appellant would have to demonstrate that 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 injunction. An appeal against the exercise of discretion is an appeal on principle. In the case of Wander Ltd. Vs. Antox India P. Ltd., reported in 1990 (Supp1) SCC 727, it has been adumbrated by the Hon’ble Supreme Court that the Appellate Court ought not to "reassess the material and seek to reach a conclusion different from the one reached by the Court below if the one reached by that 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. 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. If the discretion has been exercised by the trial Court reasonably and in a judicial manner, the fact that the Appellate Court would have taken a different view, may not justify interference with the trial Court's exercise of discretion". 14. In view of the above settled principles of law, power of this Court, as an Appellate Court, to interfere with the order passed by the trial Court is very limited and only in exceptional circumstances, the Appellate Court can interfere with the discretionary order passed by the trial Court. The Appellate Court cannot re-evaluate the entire evidence and arrive at a conclusion contrary to the conclusion arrived at by the trial Court. However, in case where the order passed by the trial Court is found to be invalid, illegal, arbitrary, perverse or contrary to the settled principles of law, the Appellate Court has all powers to interfere with the same. Considering the above principles of law, this Court has only to see as to whether the trial Court has committed any error in passing the impugned order. It has also to see whether the main basic principles of law namely, prima-facie case, balance of convenience and irreparable loss are satisfied or not in passing the order. 15. The factors, which are required to be borne in mind while granting or refusing injunction, have been succinctly dealt with by the Hon'ble Supreme Court in a judgment in case of M.Gurudas & Ors. Vs. Rasaranjan & Ors., reported in (2006) 8 SCC 367 in the following manner:- “19. While considering an application for injunction, it is well-settled, the courts would pass an order thereupon having regard to: (i) Prima facie (ii) Balance of convenience (iii) Irreparable injury. 20. A finding on 'prima facie case' would be a finding of fact. However, while arriving at such finding of fact, the court not only must arrive at a conclusion that a case for trial has been made out but also other factors requisite for grant of injunction exist. There may be a debate as has been sought to be raised by Dr. However, while arriving at such finding of fact, the court not only must arrive at a conclusion that a case for trial has been made out but also other factors requisite for grant of injunction exist. There may be a debate as has been sought to be raised by Dr. Rajeev Dhawan that the decision of House of Lords in American Cyanamid V/s. Ethicon Ltd. [1975] 1 All ER 504 would have no application in a case of this nature as was opined by this Court in Colgate Palmolive (India) Ltd. V/s. Hindustan Lever Ltd. and S.M. Dyechem Ltd. V/s. Cadbury (India) Ltd., but we are not persuaded to delve thereinto.” 16. Before adverting to the contentions, let me refer the settled principles with regard to grant or refuse of temporary injunction and power and scope of the Appellate Court to interfere with the order of granting/ refusing the interim injunction. Grant of temporary injunction is discretionary and the appellate court will not interfere with the exercise of discretion of court at first instance 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. This aspect has been dealt with by Hon'ble Supreme Court in the case of Esha Ekta Appartments CHS Limited & Ors. Vs. Municipal Corporation of Mumbai & Anr., reported in (2012) 4 SCC 689 . Para 19 & 20 of the said judgment are reproduced below:- "19. We have considered the respective submissions and carefully scrutinized the record. The scope of the appellate Court's power to interfere with an interim order passed by the Court of first instance has been considered by this Court in several cases. In Wander Ltd. vs. Antox India (P) Ltd. 1990 Supp SCC 727, the Court was called upon to consider the correctness of an order of injunction passed by the Division Bench of the High Court which had reversed the order of the learned Single Judge declining the respondent's prayer for interim relief. In Wander Ltd. vs. Antox India (P) Ltd. 1990 Supp SCC 727, the Court was called upon to consider the correctness of an order of injunction passed by the Division Bench of the High Court which had reversed the order of the learned Single Judge declining the respondent's prayer for interim relief. This Court set aside the order of the Division Bench and made the following observations: "In such appeals, the appellate court will 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. An appeal against exercise of discretion is said to be an appeal on principle. 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 that 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. If the discretion has been exercised by the trial court reasonably and in a judicial manner the fact that the appellate court would have taken a different view may not justify interference with the trial court's exercise of discretion." 20. If the discretion has been exercised by the trial court reasonably and in a judicial manner the fact that the appellate court would have taken a different view may not justify interference with the trial court's exercise of discretion." 20. In Skyline Education Institute (India) Pvt. Ltd. vs. S.L. Vaswani, (2010) 2 SCC 142 , the 3-Judge Bench considered a somewhat similar question in the context of the refusal of the trial Court and the High Court to pass an order of temporary injunction, referred to the judgements in Wander Ltd. v. Antox India (p.) Ltd, (supra), N.R.Dongre v. Whirlpool Corpn., (1996) 5 SCC 714 and observed: "The ratio of the abovenoted judgements is that once the court of first instance exercises its discretion to the grant or refuse to grant relief of temporary injunction and the said exercise of discretion is based upon objective consideration of the material placed before the Court and is supported by cogent reasons, the appellate Court will be loath to interfere simply because on a de novo form a different opinion on the issues of prima facie case, balance of convenience, irreparable injury and equity." 17. At this stage, it is relevant to refer to the provisions Order XXXIX Rule 1 and 2 read with Section 151 of the Civil Procedure Code, 1908, which are reproduced as under: "Order XXXIX Rule 1 and Order XXXIX Rule 2 1. At this stage, it is relevant to refer to the provisions Order XXXIX Rule 1 and 2 read with Section 151 of the Civil Procedure Code, 1908, which are reproduced as under: "Order XXXIX Rule 1 and Order XXXIX Rule 2 1. Cases in which temporary injunction may be granted.-- Where in any suit it is proved by affidavit or otherwise— (a) that any property in dispute in a suit is in danger of being wasted, damaged or alienated by any party to the suit, or wrongfully sold in execution of a decree, or (b) that the defendant threatens, or intends, to remove or dispose of his property with a view to [defrauding] his creditors, [(c) that the defendant threatens to dispossess, the plaintiff or otherwise cause injury to the plaintiff in relation to any property in dispute in the suit,] the Court may by order grant a temporary injunction to restrain such act, or make such other order for the purpose of staying and preventing the wasting, damaging, alienation, sale, removal or disposition of the property 1 [or dispossession of the plaintiff, or otherwise causing injury to the plaintiff in relation to any property in dispute in the suit] as the Court thinks fit, until the disposal of the suit or until further orders. 2. Injunction to restrain repetition or continuance of breach.-- (1) In any suit for restraining the defendant from committing a breach of contract or other injury of any kind, whether compensation is claimed in the suit or not, the plaintiff may, at any time after the commencement of the suit, and either before or after judgment, apply to the Court for a temporary injunction to restrain the defendant from committing the breach of contract or injury complained of, or any breach of contract or injury of a like kind arising out of the same contract or relating to the same property or right. (2) The Court may by order grant such injunction, on such terms as to the duration of the injunction, keeping an account, giving security, or otherwise, as the Court thinks fit. SECTION 151 OF THE CIVIL PROCEDURE CODE: 151. (2) The Court may by order grant such injunction, on such terms as to the duration of the injunction, keeping an account, giving security, or otherwise, as the Court thinks fit. SECTION 151 OF THE CIVIL PROCEDURE CODE: 151. Saving of inherent powers of Court.-- Nothing in this Code shall be deemed to limit or otherwise affect the inherent power of the Court to make such orders as may be necessary for the ends of justice or to prevent abuse of the process of the Court." 18. Thus in view of the proposition of law enunciated in the aforesaid decisions of the Hon’ble Supreme Court as well as considering the facts of the case on hand, it is found out that the appellants, who are original defendants have proved that there is no prima facie case, balance of convenience in favour of the original plaintiff and irreparable loss caused to the original plaintiffs. Over and above that, I have considered the findings given and conclusion arrived at by the learned Judge while passing impugned order, which clearly goes on to show that no irreparable loss would be caused to the original plaintiff if the injunction as prayed is not granted. Over and above that the dispute pertains to purchase the plant and machinery, for which, the original plaintiff has paid amount and if the original plaintiff succeeds in the suit, in that event, an order of recovery can be passed by the learned Judge. Therefore considering overall circumstances, the present appeal deserves to be allowed. 19. Reverting back to the facts of the present case and findings of the trial Court, it appears that the learned trial Court while granting injunction observed that the original plaintiff was working in the firm of the original defendants and there was monetary transaction between the parties, therefore, there is prima facie case in favour of the original plaintiff. It is, however, required to be noted that there is no dispute about working of the original plaintiff in the firm of the original defendants nor there is dispute about any monetary transaction but merely because of making such averment in the plaint, that does not mean that the original plaintiff has made out prima facie case in his favour. It is, however, required to be noted that there is no dispute about working of the original plaintiff in the firm of the original defendants nor there is dispute about any monetary transaction but merely because of making such averment in the plaint, that does not mean that the original plaintiff has made out prima facie case in his favour. On the contrary, it was the original plaintiff, who had shown interest to purchase the original defendants’ Sulphur 90% granule and Sulphur + Zinc Plant, the price of which was fixed at Rs.50,00,000/- and in connection with the same, an amount of Rs.15,00,000/- were given by the original plaintiff to the original defendants but while filing suit, incorrect statements have been made without any supporting documents. Further, the aforesaid fact has been pointed out by the original defendants while submitting reply to the notice of motion as well as written statement to the plaint but it has not been properly considered by the learned Judge concerned. Over and above that, if the facts of the present case as discussed above, are examined carefully, in that event, it would be found out that the original plaintiff has failed to prove prima facie case, balance of convenience as also irreparable loss caused to him, which would entitle him to grant injunction in his favour. Therefore considering the above facts of the case, the present Appeal from Order deserves to be allowed. 20. In the result, present Appeal from Order succeeds and is hereby allowed. The impugned order dated 19.10.2024 passed below application for notice of motion, Exhs.6 & 7 by the learned Chamber Judge, Court No.14, City Civil Court, Ahmedabad in Civil Suit No.328/2024is hereby quashed and set aside. The learned Judge concerned shall proceed with the suit in accordance with law after providing ample opportunity to both the parties without being influenced by the observations made by this Court in the present order and decide the plaint as early as possible. 21. In view of above order passed in main Appeal From Order, connected application stands disposed of accordingly.