Category: Interim Relief

ISSUE:

Whether the respondent was entitled to a temporary injunction restraining dispossession from the suit property?

Whether the plea of fraud in obtaining the sale deed justified granting an interim injunction?

RULE:

A temporary injunction requires establishing a prima facie case, irreparable injury, and balance of convenience in favor of the applicant.

Mere allegations of fraud do not justify an injunction unless supported by strong prima facie evidence.

When possession has already been transferred through a court-executed sale deed, damages serve as an adequate remedy, making an injunction unnecessary.

ISSUE:

Whether the Receiver had the authority to create a new tenancy without the leave of the Court?

Whether the lease created in favor of Tata Finlay Ltd. violated the injunction order restraining the Receiver from transferring the property?

RULE:

A Receiver has no inherent power to lease property beyond three years without the Court’s permission. The authority of a Receiver is confined to what is expressly granted by the Court, and any lease beyond three years requires judicial sanction under Chapter 21 Rule 5(a) of the Calcutta High Court Original Side Rules.

A lease is a transfer of an interest in immovable property. If a Receiver, in violation of an injunction, creates a new lease, it constitutes an unlawful transfer and does not bind the rightful owner. An injunction prohibiting "transfer" includes leasing, and any lease created in contravention of such an order is legally invalid.

ISSUE:

Whether the 1994 agreement superseded the existing 1993 agreement?

Whether the 1993 agreement was in restraint of trade under section 27 of the Indian Contract Act, 1872?

RULE:

Section 42 Specific Relief Act, 1963- Where a contract comprises an affirmative agreement to do a certain act, coupled with a negative agreement, express or implied, not to do a certain act, in such a case, if the court is unable to compel specific performance of the affirmative agreement, it will not prevent it from granting an injunction to perform the negative agreement.

ISSUE:

Can appellate courts interfere with interlocutory orders passed by lower courts?

RULE:

Except in cases where it can be demonstrated that the first instance court's discretion was used arbitrarily, capriciously, or perversely, or in cases where the court disregarded well-established legal rules governing the granting or refusing of interlocutory injunctions, the appellate court will not substitute its own discretion for the first instance court's discretion.