Ex-Parte Orders Can Have Disastrous Consequences, Should Be Passed Only In Case Of Real Emergency: Madras High Court

The Madras High Court recently emphasized that courts should refrain from passing ex-parte orders in a routine manner and must only pass such orders when there is a real emergency which was shown through the plaint and averments. The bench of Chief Justice KR Shriram and Justice Senthilkumar Ramamoorthy noted that ex-parte orders can have disastrous consequences and could possibly bring a party's business to a halt. The court added that by the time the party is heard and the ex-party order is vacated, the party and its customers may have faced a huge loss. “We only hope that courts exercise restraint while passing such orders. An ex parte order can have disastrous consequences and should be passed only in case of real emergency and there are averments to that effect in the plaint or affidavit and after adverting to those averments. It should not be done in a routine manner as it has been done in this case. By virtue of such ex parte injunction orders, it is possible that a party's business would come to a grinding halt. By the time the party is heard and order is vacated, lot of time would be lost and that would result in great and irreparable loss and hardship not only to the party, but also its customers. The very existence of some parties may be destroyed,” the court said. Pointing to the Supreme Court's direction in the case of Maria Margarida Sequeira Fernandes v. Erasmo Jack De Sequeira, in which the court enunciated the principles relating to granting or refusal of injunction, the High Court highlighted that the courts in the State should always bear the directions in mind and ensure that ex-parte orders are passed only in case of grave emergency. The court also added that while passing ex-parte orders, the courts should also obtain an undertaking from the plaintiff that if the suit is eventually dismissed, the plaintiff would pay the restitution, actual or realistic costs. The high court, thus asked the courts across the state to ensure that an even-handed justice is given to all the parties. “The courts across the State must bear in mind the aforesaid principles enunciated by the Apex Court and ensure that only in case of grave urgency, after considering the principles governing the grant or refusal of injunction and analysing the pleadings and documents on record, such ex parte orders are passed, that too, for a specified period. The court should also take an undertaking from plaintiff that, if the suit is eventually dismissed, plaintiff undertakes to pay restitution, actual or realistic costs. The courts must endeavour to ensure that even-handed justice is given to both the parties,” the court observed. The court was hearing a civil miscellaneous appeal against an ex-parte interim order passed by the Commercial Court, Coimbatore restraining the appellants from manufacturing goods or rendering services using the word “Anugraha”. The original case was filed by the respondents functioning under the name of “Anugraha Valve Castings Limited” alleging that their registered trademark wazs being violated by the appellants. The respondents had argued that the appellants were using the deceptively similar trademark unauthorisedly and were engaged in a similar business. Thus the respondent had sought for a temporary injunction restraining the appellants from selling their products under the mark. The appellants argued that their tradename had been registered and had been in use since 2018. They also produced the GST Registration Certificate, PAN Card, Electricity connection bill, quality approvals, Engineering Export Promotion Council of India (EEPC Certificate) etc which was also issued under the name “Anugraha Castings”. The appellant argued that by way of the interim order, their business has come to a grinding halt and irreparable hardship would be caused to them if the order is not set aside. The court noted that though the impugned ex-parte order was effective only till February 3rd, 2025, it was an extremely harsh order where no case for the ex-parte order had been made out. The court noted that as per the pleadings also, the respondents had issued a caution notice to the appellants in September 2021 and the cause of action arose in June 2024. Thus the opined that there was no necessity to pass the harsh ex-parte order without giving notice to the appellants. The court also noted that the order did not contain any reason compelling urgency to issue the injunction order. The court also noted that the trial court had failed to obtain an undertaking from the respondent to pay restitution, actual or realistic costs, if the suit is dismissed. Thus, the court was inclined to stay the ex-parte injunction order. Counsel for the Petitioner: Mr. G. K. Muthukumar Counsel for the Respondents: Mr. H. Karthik Seshadri Case Title: Anugraha Castings v. Anugraha Valve Castings Limited Citation: 2025 LiveLaw (Mad) 41 ...

Ex-Parte Orders Can Have Disastrous Consequences, Should Be Passed Only In Case Of Real Emergency: Madras High Court

Upasana Sajeev

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