RAMAKANT AMBALAL CHOKSI versus HARISH AMBALAL CHOKSI & OTHERS
[2024] 11 S.C.R. 1343, Supreme Court of India, 2024
Outcome: Appeal(s) allowed (Granted)
Segment: Facts
[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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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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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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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
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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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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
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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