RAMAKANT AMBALAL CHOKSIversusHARISH AMBALAL CHOKSI & OTHERS

         [2024] 11 S.C.R. 1343 : 2024 INSC 913

               Ramakant Ambalal Choksi
                           v.
             Harish Ambalal Choksi & Others
                (Civil Appeal No. 13001 of 2024)
                        22 November 2024
        [J.B. Pardiwala and R. Mahadevan, JJ.]


                     Issue for Consideration
Whether the High Court was justified in allowing the appeal filed
by the defendants-respondents holding that no case for grant
of interim injunction was made out and thus, vacating the order
granting injunction in favour of the plaintiffs-appellants.

                             Headnotes†
Code of Civil Procedure, 1908 – Order 43, 39 – Appeals from
Orders – Appellate jurisdiction u/Or.43 – Scope:
Held: Appellate court in an appeal from an interlocutory order
granting or declining to grant interim injunction is only required
to adjudicate the validity of such order applying the well settled
principles governing the scope of jurisdiction of appellate court
under Order 43 – Appellate court should not assume unlimited
jurisdiction and should guide its powers within the contours laid
down in the Wander case – On facts, the High Court overstepped
its appellate jurisdiction under Order 43 of the CPC and substituted
its own view for the one taken by the trial court without giving any
categorical finding as to why the order of the trial court could be
said to suffer from any perversity, capriciousness, arbitrariness,
malafides or having been passed in ignorance of the settled
principles governing the grant of injunction under Order 39 – High
Court ought to have limited itself to adjudicating the correctness of
the order of the trial court on the settled principles of law and should
not have taken into consideration any other extraneous matters,
more particularly when the suit was pending for adjudication on
merits before the trial court – Impugned order passed by the High
Court set aside. [Paras 32, 39, 48]

Transfer of Property Act, 1882 – s.52 – Doctrine of lis pendens –
Code of Civil Procedure, 1908 – Order 39, Rule 1 – Grant of
interim injunction restraining pendente lite transfers:
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    Held: Doctrine of lis pendens in Section 52 takes care of all
    pendente lite transfers; but it may not always be good enough to
    take fullest care of the plaintiffs interest vis-a-vis such a transfer –
    Rule 1 of Order 39 provides for interim injunction restraining the
    alienation or sale of the suit property and, if the doctrine of lis
    pendens in Section 52 was regarded to have provided all the
    panacea against pendente lite transfers, the Legislature would
    not have provided in Rule 1 for interim injunction restraining the
    transfer of suit property – Rule 1 of Order 39 clearly demonstrates
    that notwithstanding the Rule of lis pendens in Section 52, there
    can be occasion for the grant of injunction restraining pendente
    lite transfers in a fit and proper case – On facts, with regard to the
    nature of dispute between the parties and the materials on record,
    the property should not change hands any further – Defendants
    to maintain status quo as regards the suit property as on date
    and shall not create any further encumbrances over the same in
    any manner – Any further transfer of the suit property pending
    the final disposal of the suit shall be subject to lis pendens under
    Section 52 irrespective of the fact whether such lis pendens has
    been duly registered by the plaintiffs with the competent authority
    or not. [Paras 45, 47, 49, 50]

    Code of Civil Procedure, 1908 – Order 39 – Temporary
    injunctions and interlocutory orders – Grant of temporary
    injunctions – Principles governing – Explained. [Paras 33, 34]

    Words and Phrases – “Perverse’ – Meaning, definition –
    Discussed. [Paras 35, 36, 37]

                              Case Law Cited
    Wander Ltd. v. Antox India P. Ltd. (1990) Supp. SCC 727 – relied on.
    Printers (Mysore) v. Pothan Joseph [1960] 3 SCR 713 : (1960) SCC
    Online SC 62; Neon Laboratories Ltd. v. Medical Technologies Ltd.
    [2015] 10 SCR 684 : (2016) 2 SCC 672; Mohd. Mehtab Khan v.
    Khushnuma Ibrahim Khan [2013] 3 SCR 359 : (2013) 9 SCC 221;
    Shyam Sel & Power Ltd. v. Shyam Steel Industries Ltd. [2022]
    3 SCR 1173 : (2023) 1 SCC 634; Monsanto Technology LLC v.
    Nuziveedu Seeds Ltd. [2019] 1 SCR 145 : (2019) 3 SCC 381;
    Anand Prasad Agarwal v. Tarkeshwar Prasad (2001) 5 SCC 568;
    Dalpat Kumar v. Prahlad Singh [1991] Supp. 3 SCR 472 : (1992)
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     Ramakant Ambalal Choksi v. Harish Ambalal Choksi & Others


     1 SCC 719; Damodar Lal v. Sohan Devi and others [2016] 1 SCR
     607 : (2016) 3 SCC 78) – referred to.
     Sm. Muktakesi Dawn and Ors. v. Haripada Mazumdar and Anr.
     AIR 1988 Cal 25; Promotha Nath Roy v. Jagannath Kisore Lal
     Singh Deo (1912) 17 Cal LJ 427 – referred to.
     Charles Osenton & Co v Johnston 1942 A.C. 130; Evans v. Bartlam
     1937 A.C. 473; Hadley v. London Bank of Scotland (1865) 3 De GJ
     & S 63; Moffett v. Gough (1878) 1 LR 1r 331; Godfrey v. Godfrey
     106 NW 814 – referred to.

                       Books and Periodicals Cited
     Dr. S. C. Banerji’s Tagore Law Lectures on Specific Relief (2nd
     Edition, page 592); Fry’s Treatise on Specific Performance (6th
     Edition).

                                List of Acts

     Code of Civil Procedure, 1908; Transfer of Property Act, 1882.

                             List of Keywords

     Order 43 of Code of Civil Procedure, 1908; Order 39 of Code of
     Civil Procedure, 1908; Appellate jurisdiction; Scope of jurisdiction
     of appellate court under Order 43 ; Interim injunction; Temporary
     injunctions; Appellate court; Appeal from an interlocutory order
     granting or declining to grant interim injunction; Interlocutory
     orders; Unlimited jurisdiction; Perverse; Perversity; Capriciousness;
     Arbitrariness; Malafides; Extraneous matters, Suit pending;
     Adjudication on merits; Doctrine of lis pendens; Pendente lite
     transfers; Panacea; Interim injunction restraining the transfer of
     suit property; Status quo; Suit property; Encumbrances; Transfer
     of the suit property pending final disposal of the suit; ad interim
     injunction pending the suit; Prima facie case; Irreparable injury;
     Balance of convenience.

                            Case Arising From

     CIVIL APPELLATE JURISDICTION : Civil Appeal No. 13001 of 2024

     From the Judgment and Order dated 08.12.2022 of the High Court
     of Gujarat at Ahmedabad in AFO No. 86 of 2022
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                         Appearances for Parties

     C.U. Singh, Sr. Adv., Chirag M. Shroff, Mrs. Mahima C Shroff,
     Anand Thumbayil, Advs. for the Appellant.

     Nikhil Goel, Sr. Adv., Ashutosh Ghade, Adithya Koshy Roy,
     Ms. Siddhi Gupta, Ms. Naveen Goel, Advs. for the Respondents.

                Judgment / Order of the Supreme Court

                                   Order

1.   Leave granted.
2.   This appeal arises from the order passed by the High Court of
     Gujarat dated 08.12.2022 in Appeal from Order No. 86/2022 by
     which the High Court allowed the miscellaneous appeal filed by the
     respondents herein and thereby set aside the order of injunction
     which was passed by the trial court below Exhibit-5 in favour of the
     appellants herein.
3.   Heard the learned counsel appearing for the parties and also looked
     into the materials on record.

     SUIT PROCEEDINGS
4.   The appellants herein, who are the original plaintiffs before the
     trial court, instituted the Special Civil Suit No. 54 of 2019 for
     declaration, cancellation of registered sale deed bearing no. 2863
     dated 23.03.2018 and permanent injunction against the respondents
     herein, that is, the original defendants. In the said suit, the plaintiffs
     filed an application below Exhibit-5 for grant of temporary injunction
     under Order 39 Rules 1 and 2 read with Section 151 of the Code of
     Civil Procedure, 1908 (“CPC”).
5.   For the sake of convenience, the parties are referred to by their
     nomenclature in the original suit.
6.   Plaintiff nos. 1 to 3 respectively are real brothers and plaintiff nos. 4
     to 6 respectively are their respective wives. Defendant no. 1 is the
     real brother of the plaintiff nos. 1 to 3 respectively and defendant
     no. 2 is his wife. Defendant nos. 3 and 4 respectively are the sons
     of the defendant nos. 1 and 2 respectively, and defendant no. 5 is
     the wife of the defendant no. 3.
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     Ramakant Ambalal Choksi v. Harish Ambalal Choksi & Others


7.   In brief, it is the case of the plaintiffs that they purchased the suit
     property situated in Sub-Plot No. 1, Navrang Co-operative Housing
     Society, Survey No. 549/2, Alkapuri, Vadodara on 19.09.1991 by
     way of a registered sale deed bearing no. 13813 in the joint names
     of plaintiff nos. 1 to 3 and defendant no. 1. By way of one another
     registered sale deed bearing no. 13805 executed on the same date,
     the first floor of the suit property was purchased by the plaintiff nos.
     4 to 6 and defendant no. 2. Thus, the plaintiffs and defendant nos.
     1 and 2 became joint owners of the suit property and their names
     were accordingly mutated in the city survey record.
8.   The plaintiffs and defendant nos. 1 and 2 decided to start a jewellery
     showroom on the suit property and for the purpose of development
     and construction, a power of attorney was executed by the plaintiffs
     along with the defendant no. 2 in favour of the defendant no. 1 before
     the Executive Magistrate on 06.04.1995. However, after remaining
     operational for few years, in November, 2013, the jewellery showroom
     constructed on the suit property stopped its operations.
9.   The plaintiff no. 5 received a notice dated 02.01.2019 issued by
     the City Survey Officer under Section 135(D) of the Bombay Land
     Revenue Code inviting objections if any against the recording of
     change of ownership in respect of the suit property. It is the case of
     the plaintiffs that upon receiving the said notice, they enquired and
     found out that the defendant no. 1, on the strength of the aforesaid
     power of attorney, had executed a registered sale deed in favour of
     his son, defendant no. 3 in respect of the suit property.
10. Being aggrieved by the aforesaid, the plaintiffs instituted the suit
    along with an injunction application below Exhibit-5 seeking the
    reliefs as stated above.
11. The plaintiffs, in their application below Exhibit-5 for interim injunction
    under Order 39 of the CPC, pointed out the following:
     a.    The power of attorney was executed in favour of the defendant
           no. 1 only with a view to entrust the day to day conduct of
           administrative and procedural functions and not to enable the
           defendant no. 1 to sell the suit property. There was no intention
           to sell the property as it was purchased only for the purpose of
           running a jewellery showroom. It is on the basis of the said power
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         of attorney that the necessary permission to put up construction
         on the suit property was obtained from the Vadodara Municipal
         Corporation in 1995. Upon completion of the construction of
         the showroom and start of the business operations in 1997, the
         power of attorney became redundant, but was kept preserved
         in the office for the sake of record.
    b.   In 2012, the defendant no. 1 expressed his inclination to retire
         and part ways from the family business, however this was
         not accepted by the plaintiff nos. 1 to 3 respectively as they
         wanted the family members to live jointly. Subsequently, the
         defendant no. 1 stopped paying attention to the family business
         and withdrew his share as well as additional amounts from the
         family business and created his individual responsibilities. As the
         liabilities of the defendant no. 1 increased, the family business
         being conducted on the suit property had to be shut down in
         November, 2013. However, the business records, documents,
         ornaments, stocks, etc. were kept in the showroom. Thereafter,
         the plaintiffs along with their sons started their own business.
    c.   The defendant no. 1, in collusion with the officials of the office
         of the sub-registrar, executed a sale deed of the suit property
         without any sale consideration in favour of his son, that is, the
         defendant no. 3, illegally relying on the power of attorney of
         1995. The other son of the defendant no. 1 and the wife of the
         defendant no. 3 stood as the attesting witnesses to the said
         sale deed.
    d.   As per the recitals in the sale deed, the defendant no. 1 is said
         to have sold the suit property to his son for a consideration of
         Rs. 1.70 Crore. However, the market value of the suit property
         at the time of the execution of the sale deed was more than
         Rs 20 Crore. Further, the sale amount of Rs 1.70 Crore has
         not been received by the plaintiffs till date.
    e.   The corporation taxes to the tune of Rs 4,82,000/- were paid
         by the plaintiffs on 20.07.2018, that is, after the execution of
         the sale deed on 23.03.2018. The said tax receipts are in the
         name of Narayan Jewellers Pvt. Ltd., that is, the family business
         corporation.
    f.   The plaintiffs had to initiate criminal prosecution against the
         defendants for their illegal actions.
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     g.   It was apprehended that the defendants may execute third party
          agreements in relation to the suit property thereby defeating the
          rights of the plaintiffs, leading to a situation wherein the plaintiffs
          would not be able to use and enjoy their property and may give
          rise to further litigation with respect to the suit property.
     h.   Disposal of the suit may take time and therefore injunction was
          prayed for during the pendency of the suit.
12. The defendants, in their written statement and reply to the application
    for interim injunction below Exhibit-5, took the following stance:
     a.   Initially the relations between the plaintiff nos. 1 to 3 and
          defendant no. 1 and other family members were cordial, however
          differences started arising from the year 2000. The plaintiff
          nos. 1-3 used to withdraw huge amounts from the account of
          the company, however the defendant no. 1 was not allowed to
          withdraw amounts to the same extent.
     b.   The defendant no. 1 initially suffered from tuberculosis and
          later cancer in the years 2004 and 2007 respectively. Although
          there was an internal family arrangement that allowed all the
          four brothers to withdraw equal amounts from the business,
          yet the arrangement was not honoured by the plaintiffs and in
          2013, the amount due was to the tune of Rs 16.50 Crore. Thus,
          the defendant no. 1 is entitled to receive this amount from his
          brothers or from the company.
     c.   As the defendant no. 1 was sick at the time of the closure of the
          showroom situated on the suit property in 2013, he could not
          visit the showroom and as a result the stock in trade, finished
          and semi-finished goods, gold, diamond, platinum, etc. was
          taken away by the plaintiffs.
     d.   At the time of the closure of the showroom, the plaintiff nos. 1
          to 3 handed over the keys of the showroom to the defendant
          no. 1 and instructed him to sell the same in the open market
          and distribute the consideration equally among the joint owners.
          Accordingly, the physical & vacant possession of the suit property
          was handed over to the defendant no. 1.
     e.   The defendant no. 1 intimated the plaintiff nos. 1 to 3 over a
          phone call that he was selling the suit property in favour of the
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          defendant no. 2 and also that the sale consideration of Rs 1.70
          Crore would be adjusted towards the dues of the defendant no. 1.
     f.   The power of attorney is a registered document and was never
          cancelled by the plaintiffs, and the said power of attorney was
          used with the consent of all the signatories to it.
13. The trial court, after hearing the parties on the application for grant
    of temporary injunction, took the view that the conditions for grant
    of injunction in favour of the plaintiffs were satisfied and accordingly
    allowed the injunction application below Exhibit 5 vide order dated
    10.01.2022.
14. The trial court took the view that the sale deed executed by the
    defendant no. 1 in favour of the defendant no. 3 did not bear the
    signatures of any of the plaintiffs. Further, the plaintiffs had produced
    the sale deed of 1991 by way of which the plaintiffs along with the
    defendant nos. 1 and 2 respectively had become joint owners of the
    suit property. In view of the aforesaid, the trial court took the view
    that the plaintiffs were able to establish a prima facie case that they
    have a right title and interest in the suit property. Further, the trial
    court held that the facts of the case suggested that the balance of
    convenience was in the favour of the plaintiffs and further that if
    temporary injunction was not granted, then the plaintiffs may suffer
    loss that cannot be compensated in terms of money.
15. In view of the aforesaid, the trial court directed the defendant no. 3
    not to deal or transact with anyone in any manner in respect of the
    suit property till the disposal of the suit.

     APPEAL BEFORE THE HIGH COURT
16. Aggrieved by the order granting injunction in favour of the plaintiffs,
    the defendants filed a miscellaneous appeal before the High Court
    under Order 43 Rule 1 read with Section 104 of the CPC. The
    defendants challenged the order granting injunction inter alia on the
    following grounds:
     a.   The plaintiffs have failed to make out any prima facie case
          as the power of attorney executed in favour of the defendant
          no. 1 is not under challenge and thus no presumption can be
          drawn against it.
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     b.   The relief sought in the interim injunction application below
          Exhibit-5 is virtually the same as the relief sought in the suit.
     c.   No irreparable harm would be caused to the plaintiffs if injunction
          is declined as the non-grant of relief can be compensated in
          terms of money. The plaintiffs have not been able to establish
          any of the necessary conditions required for grant of injunction.
     d.   Grant of injunction in favour of the plaintiffs has caused
          irreparable harm to the defendant no. 3 as he is unable to
          utilize the property that he has purchased by way of a registered
          sale deed.
     e.   The defendant no. 1 has acquired a right in the suit property
          by virtue of a family arrangement and he executed the sale
          deed on the strength of the power of attorney only after taking
          consent of all the signatories. As per the family arrangement,
          an amount of Rs 16.50 Crore is due to the defendant no. 1
          from the plaintiffs.
     f.   Clause No. 5 of the power of attorney dated 05.04.1995
          suggests that the power was given to undertake the procedure
          for sale in reference to the Income Tax authority and clause
          no. 6 suggests that the defendant no. 1 is empowered to fully
          utilize that power.
     g.   The defendant no. 3 is a bona fide purchaser of the suit property
          for a sale consideration of Rs 1.70 Crore and since the registered
          sale deed is not void, there can be no injunction against the
          purchaser from enjoying the suit property and the sale in his
          favour cannot be said to be null and void.
     h.   The defendants, under the threat of being forcibly & illegally
          dispossessed from the suit property, preferred Regular Civil Suit
          No. 36/2019 before the 10th Additional Chief Judicial Magistrate
          & Civil Judge, First Class, Vadodara seeking mandatory
          injunction against the plaintiffs, wherein the said Civil Judge
          was pleased to restrain the plaintiffs and their agents from
          entering into the premises of the suit property till the disposal
          of the Regular Civil Suit No. 36/2019.
     i.   The modus operandi of the plaintiffs is to ensure that the
          defendants are not able to enjoy and utilise the suit property.
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         The plaintiffs have raised objections with the electricity company
         as regards grant of electricity connection in the suit property.
    j.   As part of the family arrangement between the parties, it was
         decided between the brothers that the joint business properties
         would be partitioned by executing sale deeds in favour of their
         respective sons and the sale consideration would be transferred
         from the business account to the account of purchasers and
         such purchaser shall issue cheques in the names of the four
         brother. While transfer of different properties took place as per
         this arrangement, no transfer or transaction was done in favour
         of the defendant no. 1. When this was taken up by the defendant
         no. 1 with his other brothers, they asked him to transfer the suit
         property to his son, that is, the defendant no. 3 by exercising
         his rights under the power of attorney.
17. In response to the aforesaid contentions of the defendants before
    the High Court, the plaintiffs inter alia submitted the following:
    a.   The power of attorney was executed in favour of the defendant
         no. 1 only for the purpose of obtaining necessary permissions
         for development and construction of the suit property and the
         power to sell the property was never conferred through the
         said power of attorney.
    b.   The defendant no.1 executed the sale deed in respect of the
         suit property in favour of his son, that is, the defendant no.
         3, for a meagre consideration of Rs 1.70 Crore whereas the
         market value of the property at the relevant point in time was
         more than 17 Crore.
    c.   The plaintiffs have filed a written complaint dated 09.01.2019
         against the defendant nos. 1, 3, 4 and 5 respectively for the
         offence punishable under Sections 406, 409, 420, 465, 467,
         468, 471 and 120 of the IPC respectively in relation to the
         execution of the sale deed dated 23.03.2018 and one another
         complaint dated 18.01.2019 against defendant nos. 3 and 4
         respectively for breaking the lock and forcibly entering the suit
         property along with ten other persons.
    d.   Injunction was granted by the trial court by way of a well-
         reasoned order after taking into consideration all the detailed
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     Ramakant Ambalal Choksi v. Harish Ambalal Choksi & Others


          facts and contentions of both the parties. The appellate court
          should remain slow in substituting its own discretion with the
          one exercised by the court of first instance unless the exercise
          of discretion by the first court was shown to be malicious,
          capricious, perverse or having been exercised in ignorance of
          the settled principles of law regulating the grant or refusal of
          interlocutory injunctions.
18. The High Court by way of the impugned order, allowed the appeal
    filed by the defendants and vacated the order granting injunction
    in favour of the plaintiffs. The High Court took the view that with
    the grant of injunction, the trial court had virtually allowed the suit,
    though no case for grant of interim injunction could be said to have
    been made out. The High Court also referred to other pending civil
    and criminal litigations between the parties and observed that the
    same suggested that the plaintiffs were intentionally harassing the
    defendants one way or the other. The relevant observations made
    by the High Court are extracted below:
          “16. [...] It also emerges from the record that the respondents
          seek share from the property which the appellant is entitled
          to get as family settlement and they are also creating hurdle
          in utilizing the property by restraining electricity company
          from granting electricity connection to the appellants. That
          the respondents approached the electricity company by
          filing application with regard to non-grant of electricity
          connection to the appellants and, therefore, the appellants
          are not given electricity connection. It emerges from the
          record that against inaction on the part of the electricity
          company, the appellants preferred Special Civil Application
          No.21075 of 2022 before this Court and this Court vide
          order dated 19.10.2022 issued notice and it was kept
          open for the electricity company to consider the application
          preferred by the appellants in the month of February 2022.
          In view of the aforesaid facts, it clearly reveals that the
          respondents are intentionally harassing the appellants by
          one or the other way. It appears that the original plaintiffs
          filed the suit for declaration, cancellation of registered sale
          deed No.2863 dated 23.03.2018 which was executed by
          original defendant no.1 in favour of original defendant no.3
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        in connection with the suit property of Sub Plot No.1 of
        Navrang Cooperative Housing Society, R. C. Dutt Road,
        Alkapuri, Vadodara and permanent injunction against the
        original defendants along with the injunction application
        at Exhibit 5. Considering the facts and circumstances of
        the case, I am of the opinion that by granting interim relief
        vide order dated 10.01.2022, the trial court had virtually
        allowed the suit, even though none of the circumstances
        for consideration for grant of interim relief did ever exist.
        In view of the aforesaid facts, in my view, the trial court
        has committed an error of facts and law in passing the
        impugned order passed below Exhibit 5 and the said
        order is erroneous and against the settled principles of
        law. The trial court, while granting the interim relief, has
        not considered all the relevant aspects and passed the
        impugned order.
        17. Considering the fact that the plaintiffs filed Special
        Criminal Application No.859 of 2019 before this Court
        seeking direction for registration of FIR against the
        defendants and this Court vide order dated 04.02.2019
        directed the police authorities to register the FIR. It appears
        that the defendants filed Criminal Misc. Application No.1
        of 2019 in Special Criminal Application No.859 of 2019
        for recalling of the order dated 04.02.2019, which came to
        be rejected by this Court. It reveals that against the order
        dated 04.02.2019 passed in Special Criminal Application
        No.859 of 2019 and order dated 20.03.2019 passed in
        Criminal Misc. Application No.1 of 2019, the defendants
        preferred Special Leave to Appeal before the Hon’ble
        Supreme Court, which came to be dismissed vide order
        dated 24.02.2020.
        18. Considering the facts of the case, it appears that the
        plaintiffs have tried to see that any how, the defendants –
        appellants herein be ruined and surrendered to the demands
        of the original plaintiffs. It seems that the original plaintiffs
        one after another initiated proceedings against the present
        appellants including the civil as well as criminal. It is
        relevant tonote here that in criminal proceedings though
        “C” summary report came to be filed by the Investigating
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     Ramakant Ambalal Choksi v. Harish Ambalal Choksi & Others


          Officer before the concerned Court, the original plaintiffs
          by utilizing the political pressure have restrained the
          Investigating Officer to submit the “C” summary report
          before the concerned Court and/or to withdraw “C” summary
          report. It also appears that in earlier round of litigation, the
          original plaintiffs reached upto the Hon’ble Supreme Court
          as they are running the business and earning the income
          from the business. That though the appellants are now out of
          business and having crunch of money, the original plaintiffs
          are trying to see that the appellants surrender to the original
          plaintiffs and even surrender their source of income to the
          original plaintiffs. That the plethora of evidence which is
          produced before this Court, is never produced before the
          trial court and while granting the interim relief in favour of
          the original plaintiffs, the trial court has no occasioned to
          deal with such documentary evidence which is produced
          before this Court. In 2012, the business in the name and
          style of “Narayan Jewellery” was closed, however, in 2015,
          the plaintiffs have produced certificate of the chartered
          accountant wherein the amount disputed in question is
          shown as goods in transit. So all these facts are required
          to be decided by leading cogent, convincing and sufficient
          evidence before the trial court and, therefore, at this stage,
          the impugned order passed by the trial court is absolutely
          erroneous and against the principles of law. Considering
          the aforesaid facts, I am of the opinion that the present
          appeal deserves to be allowed and the impugned order
          deserves to be quashed and set aside.”
19. In such circumstances referred to above, the plaintiffs are here
    before this Court with the present appeal. Notice was issued in the
    Special Leave Petition (Civil) No. 252/2023 filed by the plaintiffs vide
    the order dated 05.01.2023 and parties were directed to maintain
    status quo in respect of the suit property during the pendency of the
    petition. The status quo has thereafter been extended by subsequent
    orders of this Court.

     APPELLATE JURISDICTION UNDER ORDER 43 OF THE CPC
20. Order 43 of the CPC specifies the orders against which an appeal
    lies. Sub-Rule (r) of Rule 1 of the said order provides that an appeal
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     would lie against an order made under Rules 1, 2, 2A, 4 and 10 of
     Order 39 of the CPC respectively.
21. The law in relation to the scope of an appeal against grant or non-
    grant of interim injunction was laid down by this Court in Wander
    Ltd. v. Antox India P. Ltd. reported in 1990 Supp SCC 727. Antox
    brought an action of passing off against Wander with respect to the
    mark Cal-De-Ce. The trial court declined Antox’s plea for an interim
    injunction, however, on appeal the High Court reversed the findings
    of the trial judge. This Court, upon due consideration of the matter,
    took notice of two egregious errors said to have been committed
    by the High Court:
     a.   First, as regards the scope and nature of the appeals before
          it and the limitations on the powers of the appellate court to
          substitute its own discretion in an appeal preferred against a
          discretionary order; and
     b.   Secondly, the weakness in ratiocination as to the quality of
          Antox’s alleged user of the trademark on which the passing
          off action is founded.
22. With regards to (a), this Court held thus:
          “In such appeals, the appellate court will not interfere
          with the exercise of discretion of the court of the 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 appellate
          court will not reassess the material and seek to reach a
          conclusion different from the one reached by the court
          below … 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.”
23. This Court, while arriving at the above findings, relied on its earlier
    judgment in Printers (Mysore) v Pothan Joseph reported in (1960)
    SCC Online SC 62 where it was held thus:
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          “[...] as has been observed by Viscount Simon LC in
          Charles Osenton & Co v Johnston – the law as to reversal
          by a court of appeal of an order made by a judge below in
          the exercise of his/her discretion is well established, and
          any difficulty that arises is due only to the application of
          well-settled principles in an individual case.”
24. It is pertinent to note that in Printers (supra) this Court had held
    that ignoring relevant facts is also a ground for interfering with the
    discretion exercised by the trial court. Furthermore, Viscount Simon
    LC in Charles Osenton & Co v Johnston reported in 1942 A.C.
    130, after stating the above, went on to quote Lord Wright’s decision
    in Evans v. Bartlam reported in 1937 A.C. 473:
          “It is clear that the court of appeal should not interfere
          with the discretion of a judge acting within his jurisdiction
          unless the court is clearly satisfied that he was wrong. But
          the court is not entitled simply to say that if the judge had
          jurisdiction and had all the facts before him, the court of
          appeal cannot review his order unless he is shown to have
          applied a wrong principle. The court must, if necessary,
          examine anew the relevant facts and circumstances in
          order to exercise a discretion by way of review which may
          reverse or vary the order.”
25. In Evans (supra) case, Lord Wright made it clear that while
    adjudicating upon the discretion exercised by the trial court, the
    appellate court is obliged to consider the case put forward by the
    appellant in favour of its argument that the trial court exercised its
    discretion arbitrarily or incorrectly in the circumstances.
26. What flows from a plain reading of the decisions in Evans (supra)
    and Charles Osenton (supra) is that an appellate court, even while
    deciding an appeal against a discretionary order granting an interim
    injunction, has to:
     a.   Examine whether the discretion has been properly exercised,
          i.e. examine whether the discretion exercised is not arbitrary,
          capricious or contrary to the principles of law; and
     b.   In addition to the above, an appellate court may in a given case
          have to adjudicate on facts even in such discretionary orders.
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27. The principles of law explained by this Court in Wander’s (supra)
    have been reiterated in a number of subsequent decisions of this
    Court. However, over a period of time the test laid down by this
    Court as regards the scope of interference has been made more
    stringent. The emphasis is now more on perversity rather than a
    mere error of fact or law in the order granting injunction pending the
    final adjudication of the suit.
28. In Neon Laboratories Ltd. v. Medical Technologies Ltd. reported
    in (2016) 2 SCC 672 this Court held that the Appellate Court should
    not flimsily, whimsically or lightly interfere in the exercise of discretion
    by a subordinate court unless such exercise is palpably perverse.
    Perversity can pertain to the understanding of law or the appreciation
    of pleadings or evidence. In other words, the Court took the view
    that to interfere against an order granting or declining to grant a
    temporary injunction, perversity has to be demonstrated in the finding
    of the trial court.
29. In Mohd. Mehtab Khan v. Khushnuma Ibrahim Khan reported in
    (2013) 9 SCC 221 this Court emphasised on the principles laid down
    in Wander (supra) and observed that while the view taken by the
    appellate court may be an equally possible view, the mere possibility
    of taking such a view must not form the basis for setting aside the
    decision arrived at by the trial court in exercise of its discretion
    under Order 39 of the CPC. The basis for substituting the view of
    the trial court should be malafides, capriciousness, arbitrariness or
    perversity in the order of the trial court. The relevant observations
    are extracted below:
           “20. In a situation where the learned trial court on a
           consideration of the respective cases of the parties and
           the documents laid before it was of the view that the
           entitlement of the plaintiffs to an order of interim mandatory
           injunction was in serious doubt, the Appellate Court could
           not have interfered with the exercise of discretion by the
           learned Trial Judge unless such exercise was found to
           be palpably incorrect or untenable. The reasons that
           weighed with the learned Trial Judge, as already noticed,
           according to us, do not indicate that the view taken is not
           a possible view. The Appellate Court, therefore, should
[2024] 11 S.C.R.                                                          1359

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           not have substituted its views in the matter merely on the
           ground that in its opinion the facts of the case call for a
           different conclusion. Such an exercise is not the correct
           parameter for exercise of jurisdiction while hearing an
           appeal against a discretionary order. While we must not
           be understood to have said that the Appellate Court was
           wrong in its conclusions what is sought to be emphasized
           is that as long as the view of the trial court was a possible
           view the Appellate Court should not have interfered with
           the same following the virtually settled principles of law
           in this regard as laid down by this Court in Wander Ltd.
           v. Antox India (P) Ltd.”
                                                   (Emphasis supplied)

30. This Court in Shyam Sel & Power Ltd. v. Shyam Steel Industries
    Ltd. reported in (2023) 1 SCC 634 observed that the hierarchy of the
    trial court and the appellate court exists so that the trial court exercises
    its discretion upon the settled principles of law. An appellate court,
    after the findings of the trial court are recorded, has an advantage
    of appreciating the view taken by the trial judge and examining the
    correctness or otherwise thereof within the limited area available. It
    further observed that if the appellate court itself decides the matters
    required to be decided by the trial court, there would be no necessity
    to have the hierarchy of courts.
31. This Court in Monsanto Technology LLC v. Nuziveedu Seeds Ltd.
    reported in (2019) 3 SCC 381, observed that the appellate court
    should not usurp the jurisdiction of the Single Judge to decide as to
    whether the tests of prima facie case, balance of convenience and
    irreparable injury are made out in the case or not.
32. The appellate court in an appeal from an interlocutory order granting
    or declining to grant interim injunction is only required to adjudicate
    the validity of such order applying the well settled principles governing
    the scope of jurisdiction of appellate court under Order 43 of the
    CPC which have been reiterated in various other decisions of this
    Court. The appellate court should not assume unlimited jurisdiction
    and should guide its powers within the contours laid down in the
    Wander (supra) case.
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     PRINCIPLES GOVERNING GRANT OF TEMPORARY INJUNCTION
33. In the case of Anand Prasad Agarwal v. Tarkeshwar Prasad
    reported in (2001) 5 SCC 568,it was held by this Court that it would
    not be appropriate for any court to hold a mini-trial at the stage of
    grant of temporary injunction.
34. The burden is on the plaintiff, by evidence aliunde by affidavit or
    otherwise, to prove that there is “a prima facie case” in his favour
    which needs adjudication at the trial. The existence of the prima facie
    right and infraction of the enjoyment of his property or the right is
    a condition precedent for the grant of temporary injunction. Prima
    facie case is not to be confused with prima facie title which has to
    be established on evidence at the trial. Only prima facie case is a
    substantial question raised, bona fide, which needs investigation
    and a decision on merits. Satisfaction that there is a prima facie
    case by itself is not sufficient to grant injunction. The Court further
    has to satisfy that non-interference by the court would result in
    “irreparable injury” to the party seeking relief and that there is no
    other remedy available to the party except one to grant injunction
    and he needs protection from the consequences of apprehended
    injury or dispossession. Irreparable injury, however, does not mean
    that there must be no physical possibility of repairing the injury, but
    means only that the injury must be a material one, namely one that
    cannot be adequately compensated by way of damages. The third
    condition also is that “the balance of convenience” must be in favour
    of granting injunction. The Court while granting or refusing to grant
    injunction should exercise sound judicial discretion to find the amount
    of substantial mischief or injury which is likely to be caused to the
    parties, if the injunction is refused and compare it with that which
    is likely to be caused to the other side if the injunction is granted. If
    on weighing competing possibilities or probabilities of likelihood of
    injury and if the Court considers that pending the suit, the subject
    matter should be maintained in status quo, an injunction would be
    issued. Thus, the Court has to exercise its sound judicial discretion
    in granting or refusing the relief of ad interim injunction pending the
    suit. (See: Dalpat Kumar v. Prahlad Singh reported in (1992) 1
    SCC 719.)
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     MEANING OF THE EXPRESSION “PERVERSE”
35. Any order made in conscious violation of pleading and law is a
    perverse order. In Moffett v. Gough reported in (1878) 1 LR 1r
    331, the Court observed that a perverse verdict may probably be
    defined as one that is not only against the weight of evidence but
    is altogether against the evidence. In Godfrey v. Godfrey reported
    in 106 NW 814, the Court defined “perverse” as “turned the wrong
    way”; not right; distorted from the right; turned away or deviating
    from what is right, proper, correct, etc.
36. The expression “perverse” has been defined by various dictionaries
    in the following manner:
     a.   Oxford Advanced Learner’s Dictionary of Current English, 6th
          Ed. Perverse - Showing deliberate determination to behave
          in a way that most people think is wrong, unacceptable or
          unreasonable.
     b.   Longman Dictionary of Contemporary English - International
          Edition Perverse - Deliberately departing from what is normal
          and reasonable.
     c.   The New Oxford Dictionary of English - 1998 Edition
          Perverse - Law (of a verdict) against the weight of evidence or
          the direction of the judge on a point of law.
     d.   New Webster’s Dictionary of the English Language (Deluxe
          Encyclopedic Edition)
          Perverse - Purposely deviating from accepted or expected
          behavior or opinion; wicked or wayward; stubborn; cross or
          petulant.
     e.   Stroud’s Judicial Dictionary of Words & Phrases, 4th Ed.
          Perverse - A perverse verdict may probably be defined as one
          that is not only against the weight of evidence but is altogether
          against the evidence.
37. The wrong finding should stem out on a complete misreading of
    evidence or it should be based only on conjectures and surmises.
    Safest approach on perversity is the classic approach on the
    reasonable man’s inference on the facts. To him, if the conclusion on
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     the facts in evidence made by the court below is possible, there is
     no perversity. If not, the finding is perverse. Inadequacy of evidence
     or a different reading of evidence is not perversity. (See: Damodar
     Lal v. Sohan Devi and others reported in (2016) 3 SCC 78)
38. Seen in light of the aforesaid settled position of law, we are of the
    clear view that in the facts of the present case, the High Court
    overstepped its appellate jurisdiction under Order 43 of the CPC
    and substituted its own view for the one taken by the trial court
    without giving any categorical finding as to why the order of the trial
    court could be said to suffer from any perversity, capriciousness,
    arbitrariness, malafides or having been passed in ignorance of the
    settled principles governing the grant of injunction under Order 39
    of the CPC.
39. It appears from a reading of the impugned order that what weighed
    with the High Court in setting aside the order of the trial court was
    the existence of pending litigations between the contesting parties
    and the alleged misuse of political power by the plaintiffs in creating
    hurdles for the defendants in the exercise of their lawful rights. The
    High Court failed to point out any perversity in the order of the trial
    court which occasioned it to set aside the grant of injunction. We
    are of the view that the High Court ought to have limited itself to
    adjudicating the correctness of the order of the trial court on the
    settled principles of law and should not have taken into consideration
    any other extraneous matters, more particularly when the suit is still
    pending for adjudication on merits before the trial court.
40. We are informed that after the High Court allowed the appeal and before
    this court granted the interim relief the defendants have transferred
    the suit property, i.e., during the pendency of the present appeal.
41. We would like to underscore that although the impugned order of the
    High Court is voluminous and runs into more than 55 pages, yet it
    regrettably falls short of addressing the pivotal issues raised by the
    plaintiffs. While the High Court has observed that the order of the
    trial court has virtually decided the suit, in favour of the plaintiffs, a
    reading of the impugned order indicates other way round that it is
    indeed the order of the High Court which seems to have accepted
    the entire defence put forward by the defendants as the gospel truth,
    without assigning any cogent reasons for not accepting the prima
    facie case put up by the plaintiffs.
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     Ramakant Ambalal Choksi v. Harish Ambalal Choksi & Others


42. Instead of subjecting the order of the trial court to the right degree
    of appellate scrutiny warranted in appeals against interlocutory
    orders, the High Court has made general and overbroad observations
    touching upon the malicious intention of the plaintiffs in filing the civil
    suit and the application below Exhibit-5 for the grant of temporary
    injunction. The failure of the High Court in pointing out any perversity
    in the order of the trial court is a glaring reminder of why the High
    Courts must exercise their appellate jurisdiction against interlocutory
    orders involving the exercise of discretion of the trial court with great
    caution and mindfulness. High Courts must not lightly set aside
    the decision arrived at by the trial court in exercise of its discretion
    unless the order of the trial court fails to satisfy the parameters
    as delineated by us in the preceding paragraphs. The failure to
    engage with these crucial aspects renders the High Court’s order
    deficient, detracting from the objective of rendering substantive and
    reasoned justice.
43. It is also pertinent to observe that immediately after the High Court
    set aside the order of the trial court granting interim injunction, the
    defendant no. 3 entered into a transaction which created a third
    party right on the suit property. A perusal of the impugned order
    indicates that although a specific request was made by the plaintiffs
    before the High Court to stay the operation of the impugned order
    to enable them to file an appeal before this Court, yet the request
    was not accepted. It is beyond our comprehension as to why such
    urgency was exhibited by the High Court in vacating the status quo
    on the suit property, more so when the suit was still pending before
    the trial court and the rights of the parties were yet to be crystallized.
    The sequence in which events have transpired in the present case
    best illustrates how the exercise of appellate jurisdiction by the High
    Court in a casual manner can have a cascading effect, which only
    prolongs litigation and counter-serves the interest of justice.
44. We need not say anything as regards the subsequent transfer of the
    suit property at this stage for the simple reason that if it has been
    transferred pending any proceedings, it is for the court trial court to
    see whether the transaction is hit by lis pendens or not. This aspect
    shall be looked into by the trial court at the time when the suit is
    taken up for final adjudication as regards the rights of the parties.
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45. Quite often, in these types of litigations, it is sought to be argued
    that an injunction restraining the defendant from transferring the
    suit property was absolutely unnecessary as no post-suit transfer
    by the defendant can adversely affect the result of the suit because
    of the provisions of Section 52 of the T. P. Act whereunder all such
    transfers cannot but abide by the result of the suit. It is true that the
    doctrine of lis pendens as enunciated in Section 52 of the T. P. Act
    takes care of all pendente lite transfers; but it may not always be
    good enough to take fullest care of the plaintiffs interest vis-a-vis
    such a transfer. We may give one appropriate illustration of a suit for
    specific performance of contract based on an agreement of sale. In
    a suit wherein the plaintiff prays for specific performance and if the
    defendant is not restrained from selling the property to a third party
    and accordingly a third party purchases the same bona fide for value
    without any notice of the pending litigation and spends a huge sum
    for the improvement thereof or for construction thereon, the equity
    in his favour may intervene to persuade the Court to decline, in the
    exercise of its discretion, the equitable relief of specific performance
    to the plaintiff at the trial and to award damages only in favour of
    the plaintiff. It must be noted that Rule 1 of Order 39 of the Code
    clearly provides for interim injunction restraining the alienation or
    sale of the suit property and if the doctrine of lis pendens as enacted
    in Section 52 of the T. P. Act was regarded to have provided all
    the panacea against pendente lite transfers, the Legislature would
    not have provided in Rule 1 for interim! injunction restraining the
    transfer of suit property. Rule 1 of Order 39, in our view, clearly
    demonstrates that, notwithstanding the Rule of lis pendens in
    Section 52 of the T. P. Act, there can be occasion for the grant of
    injunction restraining pendente lite transfers in a fit and proper case.
    (See: Sm. Muktakesi Dawn and Ors. v. Haripada Mazumdar and
    Anr. reported in AIR 1988 Cal 25)
46. In the aforesaid context, we may refer to one old decision of the
    Calcutta High Court in Promotha Nath Roy v. Jagannath Kisore
    Lal Singh Deo reported in (1912) 17 Cal LJ 427 where it has been
    observed that a Court will in many cases interfere and preserve
    property in status quo during the pendency of a suit in which the
    rights to it are to be decided and though the purchaser pendente
    lite would not gain title, the Court will prevent by injunction the
    embarrassment that would be caused to the original purchaser in his
[2024] 11 S.C.R.                                                     1365

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     suit against the vendor. And it has been ruled there on the authority
     of Turner, LJ in Hadley v. London Bank of Scotland, reported in
     (1865) 3 De GJ & S 63 at 70 that if there is a clear valid contract
     for transfer, the Court will not permit the transferor afterwards to
     transfer the legal estate to third person, although such third person
     would be affected by lis pendens. Mr. Muhkerjee has drawn our
     attention to Dr. S. C. Banerji’s Tagore Law Lectures on Specific Relief
     (2nd Edition, page 592) where the decision in Promotha Nath
     (supra) has been approvingly referred to and also to Fry’s Treatise
     on Specific Performance (6th Edition) where the same rule has been
     enunciated as a general principle on the authority of Turner, L.J.,
     in Hadley (supra).
47. Today, all that we say is that having regard to the nature of dispute
    between the parties and the materials on record, the property should
    not change hands any further.
48. In view of the aforesaid, this appeal succeeds and is hereby allowed.
    The impugned order passed by the High Court is set aside.
49. The respondents herein shall maintain status quo as regards the suit
    property as on date and shall not create any further encumbrances
    over the same in any manner.
50. Any further transfer of the suit property pending the final disposal
    of the suit shall be subject to lis pendens under Section 52 of the
    T.P. Act irrespective of the fact whether such lis pendens has been
    duly registered by the plaintiffs with the competent authority or not.
51. Pending applications, if any, shall also stand disposed of.

     Result of the case: Appeal allowed.



     †
         Headnotes prepared by: Divya Pandey