Interlocutory Order Passed By Trial Court Can't Be Vacated By Appellate Court Unless Shown To Be Perverse, Arbitrary: Supreme Court

The Supreme Court recently cautioned the Appellate Courts against casually interfering with well-reasoned interlocutory orders passed by the trial courts, stating that the Appellate Court's discretion in vacating the interlocutory order should only be exercised if it is shown that the interlocutory order was arbitrary, capricious, perverse, or contrary to established legal principles. “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.”, the bench comprising Justice J.B. Pardiwala and Justice R. Mahadevan observed. In essence, the court said 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.” The plaintiffs and defendants jointly owned a suit property. The plaintiffs/appellant alleged unauthorized sale of the suit property by Defendant No. 1 (Respondents) to his son (Defendant No. 3) using a 1995 power of attorney without their consent. The trial court granted an interim injunction (Order 39 Rules 1 and 2 of CPC) restraining the defendants from alienating the property pending suit adjudication. However, the High Court allowed the defendants appeal under Order 43 CPC and vacated the injunction order. 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. Following this, an appeal was preferred before the Supreme Court. Setting aside the High Court's order, the Court observed that the High Court committed an error in failing to point out any perversity in the trial court before vacating the interlocutory order. “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.”, the court observed. Upon perusing the High Court's order, the Court noted that the High Court “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.” “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.”, the Court held. The Court directed the respondents to maintain the status quo as regards the suit property as on date and shall not create any further encumbrances over the same in any manner Accordingly, the appeal was allowed. Case Title: RAMAKANT AMBALAL CHOKSI VS HARISH AMBALAL CHOKSI & OTHERSCitation : 2024 LiveLaw (SC) 939Click here to read/download the order

Interlocutory Order Passed By Trial Court Can't Be Vacated By Appellate Court Unless Shown To Be Perverse, Arbitrary: Supreme Court

Yash Mittal

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