Civil Appeal No 7348 of 1983
Appeal by Special leave from the judgment and order dated the 19th March 1982 of the Bombay High Court in Appeal No 527 of 1981 in notice of motion No 115681 in Suit No 150881
Sankar Ghose Miss Radha Rangaswamy and Rangaswamy for the Appellant
AK Sen R C Nag Rameshwar Nath and A K Sil for the Respondents
The Judgment of the Court was delivered by DESAI J
First respondent United Industrial Bank Limited  Bank for short  having its registered office at 7 Red Cross Place Calcutta filed Suit No 1508 of 1981 on the original side of the Bombay High Court against the appellant The Cotton Corporation of India Limited  Corporation  for short and one Tapan Kumar Ghosh who at the relevant time was the Chief Branch Manager of the Worli Branch of the Bank and defendant No 3 Bradbury Mills Limited an existing Company within the meaning of the carrying on business at Maulana Azad Road Jacob Circle Bombay praying for a declaration that the acceptance and or co acceptance of the bill of exchange andor hundies listed in Exhibit K  by second defendant Tapan Kumar Ghosh for and on behalf of the Bank was null and void and not binding on the Bank and calling upon the Corporation to deliver up to the Court the disputed bills of exchange andor hundies for the purpose of cancellation and for a direction cancelling the same
In this suit the Bank took out a notice of motion No 1156 of 1981 seeking to restrain by an interim injunction the Corporation from enforcing any claim whatever in any form or from relying on or giving effect to the bills of exchange or hundies involved in the dispute for the purpose of any suit or other proceedings including winding up proceedings under the andor the Banking Regulation Act 1949 against the Bank
Notice of motion also included a prayer for an interim injunction restraining 967 the defendants in any manner whatsoever either endorsing or negotiating or transferring the said bills of exchange or hundies and for appointment of a receiver to take custody of the bills of exchange and hundies listed in Exh K 
An ex parte ad interim injunction was granted as prayed for
When the notice of motion came up for hearing the learned judge made the following order  
Chagla confines prayer a only to the filing of winding up petition by Defendant No 1 and 3
He presses prayer b in full
Notice of motion as against the Defendant No 1 dismissed
The Notice of Motion made absolute in terms of prayer a in so far winding up is concerned as against the defendant No 3 so far as prayer b is concerned the bills are in the possession of the Ist Defendants and there is no question of other defendants negotiating the same
Notice of Motion dismissed as regards prayer b also against Defendants 2 and 3  The Bank having been dissatisfied with the rejection of the Notice of Motion against the Corporation preferred Appeal from an order No 527 of 1981
A Division Bench of the Bombay High Court allowed the appeal and issued interim injunction restraining the Corporation from presenting a winding up petition the order being in the same terms as made against the 3rd defendant by the learned Single judge
The correctness and validity of this order is impugned in this appeal
As the suit is pending awaiting adjudication on merits every attempt would be made by us to avoid any expression of opinion on the merits of the suit
The few facts which we propose to set out are for the purpose of understanding and appreciating the contention only the correctness or otherwise of the allegation of facts being immaterial for the present purpose
The Corporation is engaged in the business of purchasing and selling cotton to textile mills in India
The policy of the Corporation appears to be to sell cotton against cash payment but in some cases to accommodate the textile mills the sale is effected on credit against acceptance of usance bills co accepted by the bankers of the textile mills guaranteeing payment on due dates
3rd defendant Bradbury 968 Mills Limited is alleged to have purchased cotton of the aggregate value of Rs 4575000 and in payment of the price issued 16 usance bills
The 3rd defedant by its letter dated May 21 1981 had informed the Corporation that the Bank has given an undertaking to Government of Maharashtra to monitor the cash flow of the 3rd defendant and hence it had to operate account with that Bank only and it requested the Corporation to accept usance bills co accepted by the Bank
The Corporation asserts that the Bank through defendant No 2 its Chief Branch Manager at Worli co accepted the 16 usance bills and according to the Corporation the acceptance was evidenced by four letters issued by the Bank
When the usance bills matured and became due for payment the Bank of Baroda on behalf of the Corporation called upon the Bank to make the payment of the amounts covered by the various usance bills
Simultaneously the 3rd defendant was asked to direct its bankers the plaintiff bank in this case to discharge the usance bills and make the necessary payment
The Solicitors of the Bank informed the Corporation that they were awaiting instruction from the head office of the Bank at Calcutta
Thereafter the Solicitors of the Corporation served a notice dated August 5 1981 on the Bank calling upon it to make the payment under the usance bills co accepted by the Bank within 4 days from the receipt of the notice
Soon thereafter the Bank filed a suit against the Corporation and 2 others as stated hereinbefore
The main contention of the Bank in the suit is that the Chief Branch Manager defendant No 2 had not the requisite authority to co accept the bills on behalf of the Bank and therefore the Bank had incurred no liability under the usance bills
There is some allegation of fraud but it is not relevant for the present purpose
The suit is pending on the Original Side of the Bombay High Court
A very narrow question which we propose to examine in this appeal is  Whether in view of the provision contained in Sec
41b of the  Act  for short the Court will have jurisdiction to grant an injunction restraining any person from instituting any proceeding in a court not subordinate to that from which the injunction is sought  The contention may be elaborated thus  Can a person be restrained by an injunction of the Court from instituting any proceeding which such person is otherwise entitled to institute in a court not subordinate to that from which the injunction is sought In the facts of the present case the narrow question is whether the Corporation can be restrained by an injunction of the court from presenting a winding up petition against the Bank  The High Court 969 seems to hold that the Court has such powers in view of the provisions contained in 039 of the Code of Civil Procedure read with Sec
37 of the or in exercise of the inherent powers of the Court under Sec 151 of the Code of Civil procedure
This position is seriously contested by the appellant in this appeal
The reliefs which the Bank as plaintiff is seeking in the suit filed by it are a declaration that Bank is not liable to honour and discharge the usance bills co accepted in its name by its Chief Branch Manager defendant 2 as envisaged by Sec 34 and a further relief that the disputed bills of exchange and hundies be delivered to the Court for cancellation and be cancelled as envisaged by Sec 31
It is in this suit that the Bank has obtained an interim injunction restraining the Corporation from presenting a winding up petition against the Bank
of the Act bears the heading Preventive Relief  and fasciculus of sections therein included provide for injunctions generally
36 provides that preventive relief is granted at the discretion of the Court by injunction temporary or perpetual
37 specifies the nature and character of temporary and perpetual injunctions
Temporary injunctions are such as are to continue until a specified time or until the further order of the Court and they may be granted at any stage of a suit and are regulated by the Code of Civil Procedure 1908
Permanent injunctions can only be granted by the decree made at the hearing and upon merits of the suit and thereby defendant in the suit is perpetually enjoined from assertion of a right or from commission of an act which would be contrary to the rights of the plaintiffs
Section 38 sets out situations in which the court can grant a perpetual injunction to the plaintiff to prevent the breach of an obligation existing in its favour whether expressly or by implication
38 is thus an enabling section which confers power on the court to grant perpetual injunction in situations and circumstances therein enumerated
41 caters to the opposite situation
It provides that an injunction cannot be granted in the situation and circumstances therein set out
The Corporation relies on Sec
41 b in support of its contention that the court had no jurisdiction to grant temporary injunction because perpetual injunction could not have been granted by the Court in terms in which temporary or interim injunction was sought
41 b reads as under  41
An injunction cannot be granted  970 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      The predecessor of Sec
41 b Sec
56 b of the of 1887 repealed by 1963 Act read as under  56
Injunction cannot be granted  a     b to stay proceeding in a Court not subordinate to that from which the injunction is sought A glance at the two provisions the existing and the repealed would reveal the legislative response to judicial interpretation
Under Sec
56 b of the repealed Act the Court was precluded by its injunction to grant stay of proceeding in a court not subordinate to that from which the injunction was sought
In other words the Court could stay by its injunction a proceeding in a court subordinate to the court granting injunction
The injunction granting stay of proceeding was directed to the Court and the Court has to be the Court subordinate to the one granting the injunction
This is postulated on the well recognised principle that the superior court can regulate proceedings in a court subordinate to it
It is implicit in this assumption and the language used in Sec
56 b that the court could not grant injunction under Sec
56 b of the repealed Act to stay proceeding in a court superior in hierarchy to the Court from which injunction is sought
But by judicial interpretation a consensus was reached that as injunction acts in personum while the Court by its injunction cannot stay proceedings in a Court of superior jurisdiction it could certainly by an injunction restrain a party before it from further prosecuting the proceeding in other courts may be superior or inferior in the hierarchy of courts
To some extent this approach not only effectively circumvented the provision contained in Sec
56 of the repealed Act but denuded it of its content
The Legislature took notice of this judicial interpretation and materially altered the 971 language of the succeeding provision enacted in Sec
41 b replacing Sec
56 b of the repealed Act while enacting of 1963
The Legislature manifestly expressed its mind by enacting Sec
41 b in such clear and unambiguous language that an injunction cannot be granted to restrain any person the language takes care of injunction acting in personum from instituting or prosecuting any proceeding in a court not subordinate to that from which injunction is sought
41b denies to the court the jurisdiction to grant an injunction restraining any person from instituting or prosecuting any proceeding in a court which is not subordinate to the court from which the injunction is sought
In other words the court can still grant an injunction restraining a person from instituting or prosecuting any proceeding in a court which is subordinate to the court from which the injunction is sought
As a necessary corollary it would follow that the court is precluded from granting an injunction restraining any person from instituting or prosecuting any proceeding in a court of co ordinate or surerior jurisdiction
This change in language deliberately adopted by the Legislature after taking note of judicial vacillation has to be given full effect
It is therefore necessary to unravel the underlying intendment of the provision contained in Sec 41 b
It must at once be conceded that Sec
41 deals with perpetual injunction and it may as well be conceded that it has nothing to do with interim or temporary injunction which as provided by Sec
37 are dealt with by the Code of Civil Procedure
To begin with it can be said without fear of contradiction that anyone having a right that is a legally protected interest complains of its infringement and seeks relief through court must have an unhindered uninterrupted access to law courts
The expression court  here is used in its widest amplitude comprehending every forum where relief can be obtained in accordance with law
Access to justice must not be hampered even at the hands of judiciary
Power to grant injunction vests in the court unless the Legislature confers specifically such power on some other forum
Now access to court in search of justice according to law is the right of a person who complains of infringement of his legally protected interest and a fortiori therefor no other court can by its action impede access to justice
This principle is deducible from the Constitution which seeks to set up a society governed by rule of law
As a corrolary it must yield to another principle that the superior court can injunct a person by restraining him from instituting or 972 prosecuting a proceeding before a subordinate court
Save this specific carving out of the area where access to justice may be impeded by an injunction of the court the Legislature desired that the courts ordinarily should not impede access to justice through court
This appears to us to be the equitable principle underlying sec
41 b
Accordingly it must receive such interpretation as would advance the intendment and thwart the mischief it was enacted to suppress and to keep the path of access to justice through court unobstructed
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 there of 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 sec
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 973 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
Mr Sen learned counsel for the respondent Bank contended that sec
41 b is not at all attracted because it deals with perpetual injunction and the temporary or interim injunction is regulated by the Code of Civil Procedure specially so provided in Sec
37 of the Act
Expression injunction  in sec
41 b is not qualified by an adjective and therefore it would comprehend both interim and perpetual injunction
It is however true that Sec
37 specifically provides that temporary injunctions which have to continue until a specified time or until further order of the court are regulated by the Code of Civil Procedure
But if a dichotomy is introduced by confining Sec 41 to perpetual injunction only and Sec
37 read with O 39 of the Code of Civil Procedure being confined to temporary injunction an unnecessary grey area will develop
It is indisputable that temporary injunction is granted during the pendency of the proceeding so that while granting final relief the court is not faced with a situation that the relief becomes infructuous or that during the pendency of the proceeding an unfair advantage is not taken by the party in default or against whom temporary injunction is sought
But power to grant temporary injunction was conferred in aid or as auxiliary to the final relief that may be granted
It the final relief cannot be granted in terms as prayed for temporary relief in the same terms can hardly if ever be granted
In The State of Orissa vs Madan Gopal Rungta1 a Constitution Bench of this Court clearly spelt out the contours within which interim relief can be granted
The Court said that an interim relief can be granted only in aid of and as ancillary to the main relief which may be available to the party on final determination of his rights in a suit or proceedings
If this be the purpose to achieve which power to grant temporary relief is conferred it is inconceivable that where the final relief cannot be granted in the terms sought for because the statute bars granting such a relief ipso facto the 974 temporary relief of the same nature cannot be granted
To illustrate this point let us take the relief which the Bank seeks in its suit
The prayer is that the Corporation be restrained by an injunction of the Court from presenting a winding up petition under the or under the Banking Regulation Act 1949
In other words the Bank seeks to restrain the Corporation by an injunction of the court from instituting a proceeding for winding up of the Bank
There is a clear bar in Sec
41 b against granting this relief
The Court has no jurisdiction to grant a perpetual injunction restraining a person from instituting a proceeding in a court not subordinate to it as a relief ipso facto temporary relief cannot be granted in the same terms
The interim relief can obviously be not granted also because the object behind granting interim relief is to maintain status quo ante so that the final relief can be appropriately moulded without the party s position being altered during the pendency of the proceedings
Mr Sen however urged that even though the Legislature has materially altered the language of the corresponding provision in sec
56b of 1877 Act while enacting Sec
41b yet the change in language would have no impact on the view of law taken by the courts while interpreting sec
56b of the repealed Act
Proceeding along this line Mr Sen urged that under sec
56b of the 1877 Act even though injunction could not be granted to stay proceedings in a court not subordinate to that from which injunction is sought the Court by an interpretative process spelt out a power to grant injunction in personum against a party from instituting a proceeding
It is true that giving a literal meaning to the provision contained in sec
56b which denied the power to the Court to grant injunction to stay proceedings in a court not subordinate to that from which injunction is sought the court demarcated the unoccupied area by holding that even if the court cannot grant injunction to stay the proceeding it can certainly injunct a party from instituting or prosecuting a proceeding in a court not subordinate to that from which the injunction was sought
But it is this very interpretation which attracted the attention of the Legislature and it respondent by specific change in language to nullify the interpretation so that it becomes crystal clear 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 was sought
The 975 power to grant injunction in personum was thus legislatively curtailed
Legislative response to court s interpretation has to be noticed and in our opinion the alteration in the language provides the legislative response to the judicial interpretation and cannot be wished away but must be given effect
Mr Sen however urged that the was founded on English equity jurisprudence and therefore it was permissible to refer to English law on the subject wherever the Act did not deal specifically with any topic
See Hungerford Investment Trust Limited vs Haridas Mundhra  Ors 1 It was further submitted that 1963 Act is equally based on the experience derived from the working of the 1877 Act and the English equity jurisprudence and therefore where light is shed by decisions in England the same must illumine our path
Where provisions are in pari materia between the English Act and the Indian Act and where local conditions do not materially differ from the conditions in UK one may keeping in view the conditions in our country look at the view taken by the English courts and if consistent with our jurisprudence our social conditions our chalked out path in which the law must move one can profitably take help of the decision
There would be nothing wrong in referring to the same
But ignoring all the relevant considerations one cannot bodily import English decisions in our system to develop a hybrid legal system and one cannot be so hypnotised by English decisions to overlock legislative changes introduced in Indian Law
With this caution let us refer to one or two decisions relied on by Mr Sen to expand the sweep of the language of Sec
41b so that the court can still injunct a person from instituting a proceeding which the person is otherwise entitled to institute in a court of coordinate or superior jurisdiction in the teeth of express prohibition  enacted in sec
41b
To start with it would be advantageous first to notice Sec
245 of the Supreme Court of Judicature Act of 1873 now reenacted as Supreme Court of Judicature Consolidation Act 1925 which reads as under  No case or proceeding at any time pending in the High Court of Judicature or before the Court of Appeal shall be restrained by prohibition or injunction
 976 It would appear at a glance that an injunction cannot be issued to stay a pending proceeding in the High Court of Judicature or before the Court of Appeal
The section does not refer to initiation or institution of proceeding 
On a grammatical interpretation of the section it would be open to the court to spell out a power to grant injunction to restrain a person from instituting a proceeding because what is barred by the statute is injunction from prosecuting a pending proceeding
Compare this language with Section 41b which specifically provides that an injunction cannot be granted to restrain a person from instituting and prosecuting any proceeding
The relevant provision in our country covers both the situations while in England it covers only one situation
This clear distinction in law has to be kept in view before applying English decisions to which our attention was drawn
And now to the decisions  In Cadiz Waterworks Company vs Barnett1 the court on being satisfied that the Company was solvent and that the debt was bona fide disputed and that the object of the defendant in the case was not the bona fide purpose of honestly compelling the payment of his debt but for the purpose of making an unjust attempt to compel them to submit to an unjust demand restrained the respondent from presenting a petition for winding up the Company in the Court
In reaching this conclusion it was observed that if a winding up petition is presented and advertised it would inflict irreparable injury on the plaintiffs while at the same moment it could not possibly do the defendant slightest good
Let it be definitely made clear that not a whisper was raised challenging the jurisdiction of the Court to grant such an injunction and obviously could not be raised in view of the provision in Supreme Court of Judicature Act of 1873 extracted hereinbefore which did not deny to the Court the power to grant an injunction restraining a person from instituting a proceeding
Similarly in Circle Restaurant Castiglione Company vs Lavery2 the court by its short order restrained defendant Lavery from presenting any petition to wind up the company in respect of any debt then due or alleged to have been due to him on certain conditions
In giving the short order Jessel and followed the decision in Cadiz Waterworks Company
One more decision to which our attention was drawn was the New Travellers  Chambers Ltd vs Messrs Cheese and Green2 in which the defendant was restrained 977 by an injunction of the court from presenting a winding up petition
In the last two mentioned cases also no contention was raised because obviously it could not be raised that the court had no jurisdiction to grant the injunction
In our opinion these decisions are not at all helpful for two reasons  one that the Supreme Court of Judicature Act clearly provided that injunction cannot be granted restraining prosecuting a pending proceeding and the provision was silent on the question of granting an injunction restraining instituting a proceeding and in respect of which the 1963 Act is more specific clear and unambiguous and secondly at no time in all the three decisions the defendant against whom the injunction was sought ever questioned the jurisdiction of the court to issue an injunction restraining it from presenting a winding up petition thereby inviting the court to give a specific ruling on the subject
We are therefore disposed to take no notice of these decisions
However in the course of further investigation on the point we tumbled across Chales Forte Investments Ltd vs Amanda1 The Court of Appeal in that case unanimously held that the presentation of a winding up petition could be restrained by an injunction granted under the inherent jurisdiction of the court to stay proceedings which were vexatious or an abuse of the process of the court for amongst others the principal reason that a winding up petition was not the proper remedy in the circumstances of the particular case
In that case a minority share holder was sought to be restrained by an injunction of the court at the instance of the company from presenting a winding up petition on the ground that it was just and equitable to wind up the company
Pennycuick J declined to grant the interim injunction and the company appealed
The Court of Appeal while reversing the decision held that in the circumstances of the case winding up petition was not a proper remedy and granted the injunction
The power to grant injunction in such circumstances was not shown to be referable to any statutory provision nor was it pointed out that there was any statutory inhibition against granting it and the source of power was traced to the inherent powers of the Court
One more decision we came across and which to some extent deviates from the consistent view taken in all the aforementioned decisions is the one Bryanston Finance Ltd vs De Vries2 While 978 vacating the injunction granted in broad terms the Court of Appeal held that the presentation of a petition in the circumstances discussed in the judgment would not be an abuse on the ground that it could not possibly succeed
In a concurring judgment Sir John Pennycuick observed as under I should like to add that where a company seeks relief of this kind the procedure by way of writ claiming an injunction to restrain presentation of a petition followed immediately by a motion expressed to claim an interlocutory injunction in the same terms appears clumsy and inapposite
In occurs to me that it should be possible to devise some more apt form of procedure for instance an originating motion in the Companies Court
 One more decision which we would like to refer is the one in Stonegate Securities Ltd vs Gregory1 In that case an injunction was granted restraining a creditor from presenting a winding up petition on the ground that he was at best a contingent creditor and the company had sought an injunction to restrain the creditor from presenting a petition on any other basis than as the contingent creditor
For the same reasons for which we could not persuade ourselves to accept the earlier decisions as being helpful these decisions would not be of any assistance
And it may be clarified that the reliance placed by Mr Sen on foot note 7 8 and 9 in by Buckley Fourteenth Edition page 524 and Palmer s Company Prededents Seventeenth Edition at page 45 would not take his case further because these notes are based on the aforementioned decisions
Canvassing for the contrary view Mr Ghosh learned counsel for the appellant referred to Udyog Mandir vs Ms Contessa Knit Wear and Ors2 wherein the late Vaidya J set aside an interim injunction granted by the judge of Small Causes Court restraining a defendant in a suit before him from proceeding with the Arbitration case initiated under the Maharashtra Co operative Societies Act
The learned judge held that the Arbitrator functioning under the Maharashtra Co operative Societies Act is not a court subordinate 979 to the Small Causes Court and in that case sec
41 b would deny jurisdiction to the court to grant an injunction because a court cannot even do temporarily what it has been prohibited by law to do finally or perpetually
Though it is not made clear the learned judge was not impressed the contention that sec
41 b deals with perpetual injunction and the grant or refusal of temporary injunction is governed by Order 39 Code of Civil Procedure and there is well recognised dichotomy between the two
The learned judge appeared to be of the opinion that where the final relief cannot be granted temporary relief in aid can as well not be granted because that would also be contrary to the provision of Sec
41 b
This view was reiterated by the same learned judge in Krishnadevi P Gupta and Anr
vs Banwarilal Hanumanprasad Tibrewala and Ors1 He also took note of the fact that the Chief justice of the same High Court had affirmed the view in another proceeding before him
Therefore as far as Bombay High Court is concerned there appeared to be a near unanimous view that the court had no jurisdiction to grant interim injunction restraining a person from instituting any proceeding in a Court not subordinate to that from which the injunction is sought in view of the provision contained in Sec
41 b of the Act
Surprisingly the Division Bench of the Bombay High Court against whose decision the present appeal is heard did not even choose to refer or to over rule any of these decisions and proceeded to dispose of the contention in respect of provision contained in Sec
41 b in the following terms the meaning of which we find difficult to unravel
Says the Court  Our attention was also drawn to the provisions contained in the and in particular to sec
41 thereof
It appears to us that in an appropriate case particularly in a suit where cancellation of certain negotiable instruments had been sought it would be open to the Court to restrain further action being taken on the said negotiable instrument particularly the action of the limited type which is sought to be restrained in the instant case viz winding up proceedings
The position may be different if a total bar was sought which perhaps may not be granted Mr Sen learned counsel for the respondent Bank however contended that even if the respondent Bank is not entitled to injunc 980 tion temporary or perpetual under sec
41 b or under 039 of the Code of Civil Procedure yet the court had inherent power to grant injunction and therefore this Court should not interfere with the decision of the High Court at this stage
Reliance was placed on Manohar Lal Chopra vs Rai Bahadur Rao Raja Seth Hiralal1 Raghubar Dayal J speaking for the majority in terms held that the court has inherent power to issue temporary injunction in cases which were not covered by the provisions of 039 of the Code of Civil Procedure
Shah J in his dissenting judgment took the contrary view and relied upon Padam Sen vs State of U P1 In view of the majority decision it must be conceded that the court can in appropriate cases grant temporary injunction in exercise of its inherent power in cases not covered by 039 CPC But while exercising this inherent power the court should not overlook the statutory provision which clearly indicates that injunction to restrain initiation of proceeding cannot be granted
41 b is one such provision
And it must be remembered that inherent power of the court cannot be invoked to nullify or stultify a statutory provision
We have meticulously gone through the appellate judgment and we find not the slightest reference to the invocation of the inherent power of the court in granting the order of injunction now under challenge
Not only that but the court has not held that the contention of the Corporation is frivolous or untenable or the claim is malafide
This becomes clear from the observation of the court that the order passed by it is not founded on the merits of the Bank s case or lack of merit in any claim which the Corporation may have against the plaintiff Bank and it would be open to the Corporation to file a regular suit or summary suit against plaintiff Bank in which appropriate orders would be passed by the court seized of the matter as and when the occasion arises for the same
We find it very difficult to appreciate this approach of the Court because the Court has not rejected even at the stage of the consideration of prima facie case or on balance of conviction that the claim of the Corporation is frivolous or untenable or not prima facie substantiated
On the contrary the Court leaves open to the Corporation to file a suit if it is so advised
The High Court only restrains the Corporation from presenting a winding up petition
We again see no justification for this dichotomy introduced by the Court in respect of various proceedings which were open to the Corporation to be taken against the Bank leaving some 981 open and some restrained by injunction
Neither in statute law nor in enquity we find any justification for this dichotomy
Mr Sen however urged that the presentation of winding up petition coupled with advertisement thereof in newspaper as required by law has certain serious consequences on the status standing financial viability and stability and operational efficiency of the company
Mr Sen further urged that where the debt is bona fide disputed a petition for winding up is not an alternative to the suit to recover the same but may be a pressure tactic to obtain an unfair advantage and therefore despite the provision contained in sec
41b the court must spell out a power in appropriate cases to injunct a person from filing a winding up petition
Most of the decisions in England hereinabove discussed a length have been influenced by this aspect
This approach however clearly overlooks various statutory safeguards against admission advertising and publication of winding up petitions
433 of the sets out circumstances in which a company may be wound up by the Court one such being where the company is unable to pay its debts
Sec 434 sets out the circumstances and situations in which a company may be deemed to be unable to pay its debts
Such a deeming fiction would arise where a notice is served upon the company making a demand of a debt exceeding Rs 500 then due and requiring the company to pay the same and the company has for a period of 3 weeks neglected to pay the sum or to secure or compound for it to the reasonable satisfaction of the creditor
Rule 95 of the Companies Court Rules 1959 provides that the petition for winding up a company shall be presented in the Registry
Then comes Rule 96 which is very material
It provides that upon the filing of the petition it shall be posted before the Judge in Chambers for admission of the petition and fixing a date for the hearing thereof and for the directions as to the advertisements to be published and the persons if any upon whom copies of the petition are to be served
The Judge may if he thinks fit direct notice to be given to the Company before giving directions as to the advertisement of the petition
It would appear at a glance that the petition has to come up in Chambers before the company Judge and not in open Court and the Rule confers a discretionary power on the judge not to give any directions at that stage but merely issue a notice to the company before giving directions
If upon receipt of such notice the company appears and satisfies the judge that the debt is bona fide disputed or the presentation of the petition is mala fide actuated by an ulterior 982 motive or abuse of the process of the Court certainly the judge may decline to admit the petition and may direct the party presenting winding up petition to prove its claim by a suit or any other manner
It is undoubtedly true that winding up petition is not a recognised mode for recovery of debt and if the company is shown to be solvent and the debt is bona fide disputed the Court generally is reluctant to admit the petition
Therefore the power is conferred on the judge before whom the petition comes up for admission to issue pre admission notice to the company so that the company is not taken unaware and may appear and point out to the judge that the petitioner is actuated by an ulterior motive and presentation of the petition is a device to pressurise the company to submit to an unjust claim
This is a sufficient safeguard against mala fide action and the company would not suffer any consequences as apprehended and the company can as well appear and ask for stay of further proceeding till the petitioner creditor proves his debt by a regular suit
This is the jurisdiction of the Company Court and it cannot be restrained from exercising the same by some other court restraining the creditor from presenting a winding up petition
There is sufficient built in safeguard in the provisions of the and the Rules framed thereunder which would save the company from any adverse consequences if a petitioner actuated by an ulterior motive presents the petition
This was taken notice of by this Court in National Conduits P Ltd vs section section Arora1 wherein this Court set aside the order of the High Court of Delhi was of the opinion that once a petition for winding up is admitted to the file the Court is bound to fourth with advertise the petition
This Court held that the High Court was in error in holding that a petition for winding up must be advertised even before the application filed by the company for staying the proceeding for the ends of justice or to prevent abuse of the process of the court
This court held that the view taken by the High Court that the court must as soon the petition is admitted advertise the petition is contrary to the plain terms of Rule 96 and such a view if accepted would make the court an instrument in possible cases of harassment and even of blackmail for once a petition is advertised the business of the company is bound to suffer serious loss and injury
This legal position effectively answers the apprehension voiced by Mr Sen and even entertained by the High Court as also it can be said with confidence that this must be the procedure Pennycuick J was in search of when in Bryanston 983 Finance Ltd case he said that it should be possible to devise some more apt form of procedure than to injunct a person from initiating the proceeding
In fact the Kerala High Court in George vs The Athimattam Rubber Co Ltd Thodupuzha2 went to the extent of showing that when a pre admission notice is issued to the company under Rule 96 it would be open to the company to appear and ask for stay of proceedings or even revoke the admission on the ground that the petitioner was not acting bona fide in filing the petition and in the facts before the Kerala High Court it allowed the application of the company and the winding up petition was dismissed
We are therefore not disposed to accept the contention of Mr Sen that the power to grant injunction restraining one from presenting a winding up petition must either be spelt out for the protection of the company or as held by decisions herein above quoted kept intact and should not be tinkered with to save the company from being harassed by persons actuated by ill will towards the company from presenting the petition
Turning to the facts of this case let it be recalled that the learned Single Judge had declined to grant any temporary injunction against the present appellant the Corporation and in our opinion rightly
The Appellate Bench interfered with the order for the reasons which are far from convincing and it overlooked the provision contained in sec
41 b and effect thereof
Taking the most favourable view of the decision of the Appellate Bench and assuming that the Bench had in its mind the inherent power of the court to grant injunction despite statutory inhibition and consistent with the view taken by the courts in England it had then in order to do justice between the parties first reach an affirmative finding that the winding up petition as and when presented by the Corporation the creditor would be frivolous and would constitute an abuse of the process of the court or a device to pressurise the Bank to submit to an unjust and dishonest claim
It must also reach an affirmative conclusion that the debtor Bank is sufficiently solvent to satisfy the claim as and when established
It has also to record an affirmative finding that the Corporation the creditor is not seeking bona fide to present a petition for winding up but is actuated by an ulterior motive in presenting the petition
Decisions in New Travellers  Chambers Ltd Chales Forte Investments Ltd and Bryanston Finance Ltd supra would require these findings to be recorded before an interim injunction can be granted
The decision of the Appellate Bench is 984 conspicuously silent on these relevant points and for this additional reason also the appeal must succeed
The appeal is accordingly allowed and the order of the Appellate Bench is set aside and the one made by the learned Single Judge Modi J is restored with costs
HLC Appeal allowed


Summary:
A Branch Manager of the respondent Bank co accepted 16 usance bills of the aggregate value of over Rs 45 lakhs relating to purchases of cotton made by a textile mill from the appellant Corporation
When the usance bills matured the Corporation called upon the Bank to make payment
The Bank filed a suit against the Corporation praying inter alia for a declaration that the co acceptance of the usance bills by its Branch Manager was null and void as he did not have the requisite authority to co accept the bills on behalf of the Bank and also for an interim injunction restraining the Corporation from presenting a winding up petition under the 
The prayer for injunction was turned down by a Single Judge of the High Court but the same was granted by a Division Bench which heard the appeal against the order of the Single Judge
The narrow question examined in this appeal was
Whether in view of the provision contained in section 41b of the  the court will have jurisdiction to grant an injunction restraining any person from instituting any proceeding in a court not subordinate to that from which the injunction is sought  Allowing the appeal  HELD From the language used in section 56b of the Specific Relief Act 1887 which was the predecessor provision of section 41b of the 1963 Act it was clear that the court could not stay a proceeding in a court superior in hierarchy to the court from which injunction was sought but by a process of judicial interpretation a consensus had been reached that a court could by an injunction restrain a party before it from further prosecuting the proceeding in other courts superior or inferior
To some extent this approach had not only effectively circumvented the provision contained in section 56b of the repealed Act but also denuded it of its content
The legislature took notice of this judicial interpretation and materially altered the language of the succeeding provision
It manifestly expressed its mind by enacting section 41b in such clear and unambiguous language that an injunction cannot be granted to restrain any person the language takes care of injunction acting in personum from instituting or prosecuting any proceeding in a Court not subordinate to that from which injunction is sought
This change in language deliberately adopted by the legislature has to be given full effect
970 F H 971 A B D 963 i Anyone having a right that is a legally protected interest complains of its infringement and seeks relief through Court must have an unhindered uninterrupted access to law courts
Access to court in search of justice according to law is the right of a person who complains of infringement of his legally protected interest and a fortiori therefore no other court can by its action impede access to justice
This principle is deducible from the Constitution which seeks to set up a society governed by rule of law
As a corollary it must yield to another principle that a superior court can injunct a person by restraining him from instituting or prosecuting a proceeding before a subordinate court
Save this specific carving out of the area where access to justice may be impeded by an injunction of the court the legislature desired that courts ordinarily should not impede access to justice through court
This is the equitable principle underlying section 41b
Accordingly it must receive such interpretation as would advance the intendment and thwart the mischief it was enacted to suppress and to keep the path of access to justice through court unobstructed
971 F H 972 A B ii The legal system in our country envisages obtaining redressal of a wrong or relief against unjust denial thereof by approaching the court set up for the purpose
If a person complaining of invasion 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 to first defend that action and vindicate his right and thereafter when the injunction is vacated he has to approach the court for relief
In order to avoid such multiplicity of proceedings the legislature enacted section 41b and statutorily provided that an injunction cannot be granted by a court with a view to restraining any person from instituting or prosecuting any proceeding in a court not subordinate to that from which the injunction is sought
972 C F G iii The contention that section 41 b is not attracted because it deals only with perpetual injunction cannot be accepted
The expression injunction  in section 41b is not qualified by an adjective and therefore it would comprehend both interim and perpetual injunction
It is true that section 37 specifically provides that temporary injunctions which have to continue until a specified time or until further order of the court are regulated by the Code of Civil Procedure
But if a dichotomy is introduced by confining section 41 to perpetual injunction only and section 37 read with o 39 CPC being confined to temporary injunction an unnecessary grey area will develop
It is indisputable that temporary injunction is granted during the pendency of the proceeding so that while granting final relief the Court is not faced with a situation that the relief becomes infructuous or that during the pendency of the proceeding an unfair advantage is taken by the party in default or against whom temporary injunction is sought
But power to grant temporary injunction was conferred in aid of or as auxiliary to the final relief that may be granted
If the final relief cannot be granted in terms as prayed for temporary relief in the same terms can hardly if ever be granted
973 C F State of Orissa vs Madan Gopal Rungta 1952 SCR 28 referred to
964 Udyog Mandir vs Messrs Contessa Knit Wear and Ors
 AIR  and Krishnadevi P Gupta  Anr
vs Banwarilal Hanuman Prasad Tibrewala AIR 1976 Bom
233 approved
In the instant case the Bank seeks to restrain the Corporation by an injunction of the court from instituting a proceeding for winding up of the Bank
There is a clear bar in section 41b against granting this relief
The court has no jurisdiction to grant a perpetual injunction restraining a person from instituting a proceeding in a court not subordinate to it as a relief and therefore ipso facto temporary relief cannot be granted in the same terms
974 B C iv One cannot bodily import English decisions into our system to develop a hybrid legal system and one cannot be so hypnotised by English decisions to overlook legislative changes introduced in Indian Law
Where provisions are in pari materia between the English Act and the Indian Act and where local conditions do not materially differ from the conditions in UK one may keeping in view the conditions in our country look at the view taken by the English Courts and if consistent with our jurisprudence our social conditions and our chalked out path in which the law must move one can profitably take help of the decision
975 D E Cadiz Waterworks Co vs Barnett 1874 75 19 Equity Cases 182 Circle Restaurant Castiglione Co vs Lavery 1881 18 Ch
555 and New Travellers Chambers Ltd vs Messrs Cheese  Green 1894 17 Law Times Reports 171 plea to take notice of declined
Buckley  14th Edn footnotes 7 8 and  and Palmer s Company Precedents  Ed
p 45 plea to take notice of declined
Hungerford Investment Trust Ltd vs Haridas Mundhra  Ors
1972 3 SCR 690 at 701 Chales Forte Investments Ltd vs Amanda  Bryanston Finance Ltd vs De Vries  and Stonegate Securities Ltd vs Gregory  referred to
v The Court can in appropriate cases grant temporary injunction in exercise of its inherent power in cases not covered by O 39 CPC But the inherent power of the Court cannot be invoked to nullify or stultify a statutory provision
While exercising inherent power the court should not overlook the statutory provision in section 41b which clearly indicates that injunction to restrain initiation of proceeding cannot be granted
980 C D Manoharlal Chopra vs Rai Bahadur Rao Raja Seth Hiralal 1962 Supp 1 SCR 450 and Padam Sen vs State of UP   referred to
In the instant case the appellate judgment does not contain the slightest reference to the invocation of the inherent power of the court in granting the order of injunction now under challenge
Not only that but the court has not held that the contention of the Corporation is frivolous or untenable or 965 the claim is mala fide
This becomes clear from the observation of the court that the order passed by it is not founded on the merits of the Bank s case or lack of merit in any claim which the Corporation may have against the plaintiff Bank and it would be open to the Corporation to file a regular suit or summary suit against the plaintiff Bank in which appropriate orders would be passed by the court seized of the matter as and when the occasion arises for the same
980 D F vi The contention that the presentation of winding up petition coupled with advertisement thereof in newspaper as required by law has certain serious consequences on the status standing financial viability stability and operational efficiency of the company and where the debt is bona fide disputed a petition for winding up which is not an alternative to the suit to recover the same may be a pressure tactic to obtain an unfair advantage and therefore the court must despite the provision in section 41b spell out a power in appropriate cases to injunct a person from filing a winding up petition cannot be accepted
This contention overlooks the various statutors safeguards against admission advertising and publication of winding up petitions
There is sufficient built in safeguard in the provisions of the and the Rules framed thereunder which would save the company from any adverse consequences if a petitioner actuated by an ulterior motive presents the petition
According to rule 96 of the Companies Court Rules 1959 a petition for winding up has to come up in chambers before the Company Judge and not in open court and the rule confers a discretionary power on the judge not to give any directions at that stage but merely issue a notice to the company before giving directions
If upon receipt of such notice the company appears and satisfies the judge that the debt is bona fide disputed or the presentation of the petition is mala fide or actuated by an ulterior motive or abuse of the process of the court the Judge may decline to admit the petition and may direct and party presenting the winding up petition to prove its claim by a suit or in any other manner
This is the jurisdiction of the Company Court and it cannot be restrained from exercising the same by some other court restraining the creditor from presenting a winding up petition
981 B H 982 A D National Conduits Pvt Ltd vs section section Arora   referred to
George vs The Athimattam Rubber Co Ltd AIR 1964 Kerala 212 approved
In the instant case even assuming that the Appellate Bench had in its mind the inherent power of the court to grant injunction despite statutory inhibition and consistent with the view taken by the courts in England it had then in order to do justice between the parties first reach an affirmative finding that the winding up petition as and when presented by the Corporation would be frivolous and would constitute an abuse of the process of the court or would be a device to pressurise the Bank to submit to an unjust and dishonest claim
It must also reach an affirmative conclusion that the debtor Bank is sufficiently solvent to satisfy the claim as and when established
It has also 966 to record an affirmative finding that the Corporation is not seeking bona fide to present a petition for winding up but is actuated by an ulterior motive in presenting the petition
However the decision of the Appellate Bench is conspicuously silent on these relevant points
983 E H 984 A