MANOHAR LAL CHOPRA v. RAI BAHADUR RAO RAJA SETH HIRALAL (1962)

MANOHAR LAL v. SETH HIRALAL Case Summary (1962)

INTRODUCTION

This case deals with the concept of Temporary Injunction and its application. A temporary injunction is a legal remedy that restrains temporarily a party from performing certain act. As per section 94(c) of the Civil Procedure Code, 1908, the court may grant a temporary injunction. 

FACTS OF THE CASE

The appellant and the respondent had a partnership firm in the name of 'Diamond Industries' for working coal mines and manufacture of cement at Indore. Later, the partnership was dissolved by a deed and it was agreed that the appellant will render true accounts of the said business. The appellant was entitled to RS 1 lakh but he could get that amount only after the account of the firm had been rendered, checked and audited. The 2nd proviso of the deed also contained that all disputes and differences shall be decided amicably or in court at Indore and nowhere else. 2 months later the respondent sent a registered letter to the appellant alleging that the account had not been kept properly causing wrongful loss to the firm and wrongful gain to the appellant and required the appellant explain and satisfy the respondent at Indore. The appellant sent a reply and requested the respondent to meet at Asansol within 10 days. Almost 3 years later the appellant instituted a suit in the Court of Sub. Judge, Asansol for the recovery of RS 1lakh with interest. The respondent first tried for arbitration under S.34 but got rejected then he also filed a civil suit in the Court of District judge, Indore. In Asansol Court, the Respondent filed a written statement that the Asansol Court has no jurisdiction to try this suit. Also his application for stay of the suit got rejected by lower Court an confirmed by Calcutta HC. The application for stay by appellant at Indore court also rejected and confirmed by the HC of MP. 

Then the respondent applied under S.151 CPC for restraining the appellant from continuing the proceedings in the suit filed by him in Asansol Court. The ADJ Court issued interim injunction under O.39 R2 CPC to the appellant. This order was appealed in the HC of MP but was dismissed. The appellant appealed before SC by SLP.

ISSUES

1. Whether the Court can can exercise S.151 CPC to grant interim injunction when there are specific provisions are provided in the Code.
2. Whether the Court, in exercise of its inherent jurisdiction, exercised its discretion properly.
3. What are the legal effect of 2nd proviso in the deed of dissolution?

RATIO DECIDENDI

Justice Dayal

Issue 1-

1. S.94(c) does not expressly prohibits the issue of interim injunction in circumstances other than provided in O.39 or any other rule of the Code.
2. If there were no specific provisions regarding injunction order, it can still be passed under S.151 CPC as inherent power of the Court.
3. S.94 does not take away the right of the court to exercise it's inherent power under section 151 CPC.
4. Order 39 CPC does not provide specifically that the temporary injection is not to be used in cases which are not mentioned in those rules.
5. Padamsen v. State of UP (1961) - Inherent powers of the court are in addition to the power specifically conferred on the court by the code.
6. S.151 clearly mentioned that inherent powers are not in anyway controlled by the provisions of the code.

Issue 2

1. The inherent powers are to be exercised in very exceptional circumstances with great care and consideration and to achieve justice.
2. Cohen v. Rothfield- the plaintiff in earlier instituted suit can successfully urge for a restraint order against a subsequent suit instituted by the defendant but he has to prove that no advantage can be gained by the defendant by proceeding with the action. 
3. Hyman v. Helm- Suit vexatious- 
1. Burden of proof lies upon plaintiff that the suit is vexatious
2. Mere multiplicity of action cannot be considered as proof
3. Plaintiff for subsequent suit who seeks to restrain the plaintiff of earlier suit from proceeding cannot be justified on general principles when the previous suit has been instituted in a competent court.
4. Issue of injunction to party indirectly achieves the object which an injunction to the court would have done

Remedy for contingency of two suits-

1. Section 10 provides for stay of suit
2. Respondent can apply for transfer of suit under section 22 of the Code.
3. Section 35 provides compensatory cost for a false or vexatious claims or defences.

Justice Shah- 

1. Agreed with that judgement but, Civil courts generally don't have inherent jurisdiction in cases not covered by rule first and second of order 39 to issue temporary injunction.
2. Only chartered High Court can issue because they are successes of supreme Court.
3. Section 151 cannot be exercised to nullify the other provisions of the code.

Decisions

1. Courts are empowered to grant interim injection under section 151 CPC under it's inherent power.
2. Lower court and high court were in error in issuing temporary injunction 
3. Appeal allowed with costs and set aside the order restraining the appellant from proceeding with the suit at Asansol.