Bhagwandas Auto Finance Ltd. and ors. Vs. Citicorp Finance (India) Limited. - Court Judgment

Excerpt:
- bhaskar bhattacharya, j.1. this first miscellaneous appeal is at the instance of the defendants in a suit for declaration and permanent injunction and is directed against order no. 2 dated 15th january, 2009 passed by the learned judge, eighth bench, city civil court at calcutta, thereby granting an ad interim order of injunction restraining the present appellants from giving effect to the notice dated 7th january. 2009 given by them to the plaintiff till 16th february, 2009 after issuing a notice to show cause why the prayer of the plaintiff for temporary injunction should not be granted.2. the defendants, instead of showing the cause, or filing any application under order 39, rule 4 of the code of civil procedure, have straightway come up with this appeal challenging the grant of ad interim order of injunction3. mr. chatterjee the learned advocate appearing on behalf of the appellants, at the very outset, accepted the position of law that his clients without showing any cause to the notice issued by the learned trial judge having decided to prefer the present appeal, within the limited scope of this appeal, his clients are not entitled to agitate their own defence against the pleading of the plaintiff or the case made out in the application for temporary injunction, mr. chatterjee submits that at this stage, his clients are, for the sake of argument, prepared to accept all the statements contained in the application for injunction and in the plaint to be true and their contention is that even if those allegations are true, the learned trial judge erred in law in granting an ad interim order of injunction restraining his clients from giving effect to the notice issued by them.4. mr. chatterjee, places before us a copy of the plaint showing that the plaintiff in the suit prayed for declaration that the notice dated january 7, 2009 issued by his clients was null and void and for injunction restraining his clients from giving any effect to the said notice. by referring to the said notice, which is annexed to the application for injunction. mr. chatterjee points out that by the said notice, his clients merely alleged that the purported agreement between the parties is a forged document and threatened the plaintiff that his clients would file appropriate civil and criminal proceedings against the plaintiff for creation of such forged document unless the said document was withdrawn. according to mr. chatterjee, by virtue of ad interim order of injunction granted by the learned trial judge, his clients are restrained from even initiating any civil or criminal proceeding against the plaintiff for the alleged forgery. mr. chatterjee contends that an injunction restraining a person from initiating criminal proceeding or even filing civil suit in a court not subordinate to it is prohibited under section 41 of the specific relief act. mr. chatterjee, therefore, submits that on the face of the allegations contained in the plaint, the learned trial judge ought to have held that the prayer for temporary injunction could not be granted as the law did not permit grant of such injunction.5. mr. banerjee, the learned senior advocate appearing on behalf of the respondent, on the other hand, has vehemently opposed the aforesaid, contention of mr. chatterjee and submitted that already his client has resorted to the proceeding of arbitration pursuant to such agreement and the appellants had appeared before arbitrator and, therefore, the question, whether the said agreement is a forged or not, should be decided before the arbitrator and not by any suit. in other words, mr. banerjee contends that a suit challenging the agreement containing an arbitration clause as void is barred by section 16 of the arbitration and conciliation act. accorttinrglo mr. banerjee, section 41 of the specific relief act is not exhaustive and in a fit and proper case, the court can restrain a party, from initiating any civil proceeding even in a court of coordinate jurisdiction if filing of such a suit is prohibited by law. mr. banerjee made elaborate argument in support of his contention that section 16 of the arbitration and conciliation act prohibits filing of separate civil suit for adjudicating the question whether the agreement containing arbitration clause is vitiated by fraud or forgery; in other words, mr. banerjee submits that such question of forgery should be adjudicated before the arbitrator appointed by the parties. mr. banerjee, therefore, prays for dismissal of the appeal on the aforesaid ground.6. in support of such contention, mr. banerjee relies upon the following decisions of the supreme court:1. o.n.g.c. v. western company of north america reported in : 1987 (1) scc 496 : air 1987 sc 674;2. hungerford investment trust ltd. (in voluntary liquidation), appellant v. haridas mundhra and ors. reported in : air 1972 sc 1826;3. modi entertainment network v. w.s.g. cricket pte. ltd. reported in : 2003 (4) scc 341 : air 2003 sc 1177;4. s.b.p. and co. v. patel engineering ltd. and anr. reported in : air 2006 sc 450;5. shree subhalakhsrni fabric (p) ltd. v. chand mal barada reported in : 2005 (10) scc 704 : air 2005 sc 2161;6. vigil marine services v. cochin shipyards ltd. reported in 2004 (13) scc 465;7. hythro power corporation ltd. v. delhi transco ltd. reported in : 2003 (8) scc 35 : air 2003 sc 4219;8. aurohil global commodities ltd. v. maharashtra s.t.c. ltd. reported in : 2007 (7) scc 120 : air 2007 sc 2706;9. adhunik steel ltd. v. orissa manganese and minerals (p) ltd. reported in : 2007 (7) scc 125 : air 2007 sc 2563;7. therefore, the only question that arises for determination in. this appeal is whether even if all the averments contained in the plaint and in the, application for injunction are treated to bentrue, the learned trial judge was justified in granting an ad interim order of injunction restraining the appellants from giving effect to the notice of threat of the suit and of initiation of criminal proceeding thereby virtually restraining them from initiating any civil proceeding or criminal prosecution against the respondent.8. section 41 of the specific relief act, 1963 enumerates certain situations where the court is divested of its authority to grant any order of injunction, be it permanent or is temporary in nature. (see cotton corporation of india limited v. united industrial bank limited and ors. reported in : air 1983 sc 1272. those situations, as mentioned in section 41 are quoted below:41. injunction when refused.--an injunction cannot be granted--(a) to restrain any person from prosecuting a judicial proceeding pending at the institution of the suit in which the injunction is sought, unless such restraint is necessary to prevent a multiplicity of proceedings;(b) to restrain any person from instituting or prosecuting any proceeding in a court not subordinate to that from which the injunction is sought;(c) to restrain any person from applying to any legislative body;(d) to restrain any person from instituting or prosecuting any proceeding in criminal matter;(e) to prevent the breach of a contract the performance of which would not be specifically enforced;(f) to prevent, on the ground of nuisance, an act of which it is not reasonably clear that it will be a nuisance;(g) to prevent a continuing breach in which the plaintiff has acquiesced;(h) when equally efficacious relief can certainly be obtained by any other usual mode of proceeding except in case of breach of trust;(i) when the conduct of the plaintiff or his agents has been such as to disentitle him to the assistance of the court;(j) when the plaintiff has no personal interest in the matter.9. in the case before us, the learned judge, city civil court has granted an ad interim order of injunction restraining the appellants from giving effect to the notice dated january 7, 2009 issued by the appellants threatening prosecution of the respondent with both civil and criminal litigation for the alleged forgery committed by the plaintiff. in substance, by virtue of the order of injunction granted by the learned trial judge, the appellants are restrained from filing a civil suit before the city civil court or before the original side of this court for avoiding the alleged agreement between the parties and at the same time, are also restrained from initiating any criminal prosecution against the respondent. it may not be out of place to mention here that even according to the plaint case, the alleged agreements between the parties were executed in the office of the plaintiff within the territorial jurisdiction of the city civil court at calcutta or within the original side of this court, the plaintiff is also carrying on business within the said jurisdiction and at the same time, the notice dated january 7. 2009 was issued by a lawyer having office within the territorial limit of the above court. therefore, now if the appellants want to file any civil suit against the respondent for avoiding the alleged agreements, such civil litigation should be filed either in the city civil court or in the original side of this court depending upon the valuation of the proceedings. however, in such circumstances, the order impugned has really restrained the appellants from filing a civil suit either in a coordinate jurisdiction or in a superior jurisdiction clearly violating clause (b) of section 41 of the act and at the same time, the said order has infringed clause (d) of the said section by restraining the appellant from initiating a criminal proceedings.10. we find no substance in the contention of mr. banerjee, the learned senior advocate appearing on behalf of the respondent, that section 41 of the specific relief act is not exhaustive and therefore, notwithstanding the said provision, the learned trial judge was competent to grant an order of injunction restraining the appellant from filing a civil suit and initiating criminal proceedings. it is true that the law of specific relief as embodied in the act of 1963 is not exhaustive but the bar created by any of the provisions of the act in granting any specific relief cannot be surmounted on the plea that the act is not exhaustive. in the absence of any provision dealing with a particular situation, the court can grant specific relief being guided by the principles of justice, equity and good conscience but the bar of grant of any relief created by the legislature in a statutory provision must be respected.11. mr. banerjee, in this connection, vehemently contended before us, that if the law creates any bar in filing a suit in a civil court, in such situation, a suit is maintainable in advance for restraining the defendant from filing such a barred suit. mr. banerjee by way of illustration contended that if today any suit is intended to be filed for declaration that a transaction is benami in nature in violation of the benami transaction (prohibition) act, 1988, a party, in anticipation, can restrain an intending plaintiff from filing such a suit and in such a suit, can successfully obtain an order of temporary injunction restraining the intending plaintiff from filing such a prohibited suit.12. we are afraid we are not convinced by such submission. the legislature has very much conceived of such a situation and for that reason, enacted the provision of order vii, rule 11(d) of the code of civil procedure enabling the court to nip such type of a suit in the bud by rejection of the plaint without going into the merit. moreover, in the case before us, the cause of action having arisen within the jurisdiction of the district-kolkata, all the civil courts within the said district are either coordinate with or superior to the city civil court, calcutta. in this connection we can appositely answer the submission of mr. banerjee by relying upon the following observations of the supreme court in the case of cotton corporation of india limited : air 1983 sc 1272 (supra):viewed from a slightly different angle, it would appear that the legal system in our country envisages obtaining of redressal of wrong or relief against unjust denial thereof by approaching the court set up for the purpose and invested with power both substantive and procedural to do justice that is to grant relief against invasion or violation of legally protected interests which are jurisprudentially called rights. if a person complaining of invasion or violation of his rights is injuncted from approaching the court set up to grant relief by an action brought by the opposite side against whom he has a claim and which he wanted to enforce through court, he would have, first to defend the action establishing that he has a just claim and he cannot be restrained from approaching the court to obtain relief. a person having a legal right, and complains of its violation or infringement, can approach the court and seek relief. when such person is injuncted from approaching the court, he has to vindicate the right and then when injunction is vacated, he has to, approach the court for relief. in other words, he would have to go through the gamut over again; when defending against a claim of injunction the person vindicates the claim and right to enforce the same. if successful he does not get relief, but a door to court which was bolted in his face is opened. why should he be exposed to multiplicity of proceedings? in order to avoid such a situation the legislature enacted section 41(b) and statutorily provided that an injunction cannot be granted to restrain any person from instituting or prosecuting any proceeding in a court not subordinate to that from which the injunction is sought. ordinarily a preventive relief by way of prohibitory injunction cannot be granted by a court with a view to restraining any person from instituting or prosecuting any proceeding and this is subject to one exception enacted in larger public interest, namely, a superior court can injunct a person from instituting or prosecuting an action in a subordinate court with a view to regulating the proceeding before the subordinate courts. at any rate the court, is precluded by a statutory provision from granting an injunction restraining a person from instituting or prosecuting a proceeding in a court of coordinate jurisdiction or superior jurisdiction. there is an unresolved controversy whether a court can grant an injunction against a person from instituting or prosecuting a proceeding before itself but that is not relevant in the present circumstances and we do not propose to enlarge the area of controversy.13. in view of the aforesaid observations of the apex court there is hardly any necessity of elucidating the answer any further.14. we now propose to deal with the decisions cited by mr. banerjee.15. in the case of oil and natural gas commission v. western co of north america : air 1987 sc 674 (supra), the question was whether the provision of section 41(b) of the act is applicable even in restraining a party from proceeding in a foreign court. in that context, the apex court made the following observations:in cotton corporation's case, the question before the court was whether in the context of section 41(b) of the specific relief act, the court was justified in granting the injunction, the said provision runs thus:41. an injunction cannot be granted;(a)...(b) to restrain any person from instituting or prosecuting any proceeding in a court not subordinate to that from which the injunction is sought;this provision, in our opinion, will be attracted only in a fact-situation where an injunction is sought to restrain a party from instituting or prosecuting any action in a court in india which is either of coordinate jurisdiction or is higher, to the court from which the injunction is sought in the hierarchy of courts in india. there is nothing in cotton corporation's case which supports the proposition that the high court has no jurisdiction to grant aft injunction or a restraint order in exercise of its inherent powers in a situation like the one in the present case. in fact this court had granted such a restraint order in tractorroexport, moscow v. tarapore and co. : (1970) 3 scr 53 : air 1971 sc 1, and had retrained a party from proceeding with an arbitration proceedings in a foreign country, {in moscow).16. as we are not dealing with a case of injunction restraining a party from proceeding with a litigation in a foreign court, the said decision is thus of no avail to the respondent.17. mr. banerjee also relied upon the decision in the case of hungerford investment trust ltd. (in voluntary liquidation) v. haridas mundhra and ors. air 1972 sc 1326 (supra), in support of his contention that the specific relief act, 1963 is not exhaustive. we accept that proposition but we have already pointed our that any bar created by the said act is; binding upon the court and the apex court has also accepted such position as would appear from the following observations at paragraph 21 of the said judgment:although a matter on which the act defines the law it might generally be exhaustive, the act as a whole cannot be considered as exhaustive of the whole branch of the law of specific performance. (emphasis supplied by us)18. we, therefore, find that the afore-said observations rather support the view we propose to take.19. the case of modi entertainment net-work and anr. v. w.s.g. cricket pte. ltd. : air 2003 sc 1177 is one of grant of injunction from proceeding in a foreign court and thus, the provision of section 41(b) is not attracted as pointed out by the supreme court in the case of oil and natural gas commission : air 1987 sc 674 (supra) and, therefore, the principles laid down therein have no application to the facts before us.20. by relying upon the decision of the supreme court in the case of s.b.p. and co. v. patel engineering ltd. and anr. : air 2006 sc 450 (supra), mr. banerjee tried to convince us that the allegation of forgery in the matter of execution of the agreement between parties containing an arbitration clause now should be decided by the arbitrator and not by the civil court and thus, we should restrain the appellant from filing a civil suit. we have already relied upon the observations of the supreme court in the case of cotton corporation of india ltd. : air 1983 sc 1272 (supra), and thus, without going into such controversy, we hold that assuming for the sake of argument, even if a suit is barred, such question should be decided in the suit itself and no injunction can be granted from instituting a suit in violation of section 41(b) of the act. we thus, find that the said decision does not help mr. banerjee in anyway for overcoming the bar created under section 41(b) and (d) of the act. for the selfsame, reason, the decisions cited by mr. banerjee in the cases of vigil services ltd. v. cochin shipyard ltd., adhunik steels ltd. v. orissa manganese and minerals pvt. ltd. : air 2007 sc 2563, aurohill global, commodities ltd. v. m.s.t.c. ltd. : air 2007 sc 2706, shree subhlaxmi fabrics pvt. ltd. v. chand mal baradia and ors. : air 2005 sc 2161 and hythro power corporation ltd. v. delhi transco ltd. : air 2003 sc 4219 (supra), are all consequential1 for deciding the question of bar of section 41 of the act. we, however, make it clear w6 have not gone into the question whether it is for the civil court alone to decide the 'dispute as to whether the agreement between the parties containing the alleged arbitration clause was vitiated by fraud or forgery as discussed in those decisions inasmuch as such question is irrelevant for our purpose when we propose to set aside the order impugned only on the ground of bar created under section 41 of the act.21. we, therefore, find that the decisions cited by mr. banerjee do not support his client in any way in upholding the order impugned.22. we, accordingly, set aside the order impugned and reject the application for injunction only on the ground that the order impugned was passed in violation of the provisions contained in section 41(b) and (d) of the specific relief act, 1963. the appeal is, thus, allowed.23. in the facts arid circumstances, there will be, however, no order as to costs.