SC Critical Of ‘Misadventures’

Source: The Hitavada      Date: 28 Aug 2017 12:11:46


It is, the very essence of the concept of temporary injunction and receivership during pendency of a civil litigation involving any property to prevent its threatened wastage, damage and alienation by any party thereto, to the immeasurable prejudice to the other side or to render the situation irreversible not only to impact upon the ultimate decision but also to render the relief granted, illusory

IN THE judgment of the case – Dev Prakash & Another v. Indra & Others, delivered on May 1, 2017, Justice Arun Mishra and justice Amitava Roy, at the Supreme Court have held that in the facts and circumstances of the case, Rajasthan High Court’s direction for disposal of the suit property by sale in public auction, pending disposal of the appeals was not justified, and the impugned judgment of the HC was not sustainable.


The appellants before the Supreme Court were also the appellants before the Rajasthan High Court against the orders passed by the trial court at Bikaner, on April 25, 2015, granting temporary injunction and appointing a receiver qua the property involved , on interim applications filed by the respondents in their pending suit, had sought refuge of the Apex-Court under Article 136 of the Constitution of India, being aggrieved by the Order directing the sale of the subject-matter of the suit by public auction. However, the HC passed the order keeping the appeals before it pending. The Apex-Court felt disturbed with certain “discomforting” features present in the HC’s Order.


The property involved in the case is the subject matter, amongst others, of the suit in question and the appeals before the HC, all of which were then pending. There is a dispute as to whether this property was an asset of the partnership firm in question .


Prayer for declaration of the title thereto and rendition of accounts, as made by the respondents/plaintiffs is pending scrutiny of the trial court. Not only an order of injunction has been passed by the trial court noticing the nature and extent of the lingering controversy revolving around the suit property. It has also construed it to be expedient to appoint a receiver to keep the same in its custody pending final resolution of the lis in accordance with law.


The impugned order, to start with, has been passed at an interim stage pending disposal of the appeals assailing the order of injunction and appointment of receiver. It does not record any convincing reason for electing the course of disposal of the suit property in this overwhelming background , by public auction. Not only that, this initiative has potential of possible annihilation of the suit property, the purported justification cited that such an auction would facilitate determination and realisation of the current fair market value and that appointment of receiver would unnecessarily put the suit property in disuse, is wholly indefensible.


Noticeably, the HC not only had estimated the value of the suit property at Rs. 2 crores , it had directed amongst others , that the said amount be quoted as minimum reserve price in the auction notice to be issued. It has directed as well that a Committee, as suggested by it, be constituted to conduct the court auction and also to submit a report with regard thereto, to it. Direction thereby has been also issued to the appellants/defendants to hand over the peaceful and vacant possession of the suit premises to the highest bidder /auction purchaser on the completion of the exercise.


In the preponderant factual backdrop, as outlined, the Court has been of the view that not only the reasons endeavoured to be cited in the impugned order in justification of the direction for public auction of the suit property lack in persuasion, those are necessarily speculative and illogical, to say the least. The direction for disposal of the suit property by public auction, in the facts and circumstances of the case, clearly militates against the fundamental precept of preservation of subject matter of any dispute pending adjudication in a court of law, more particularly relatable to a civil litigation, to appropriately decide on the rights of the parties for administering the relief to which they would be entitled eventually on culmination of the adjudication.


As it is, the very essence of the concept of temporary injunction and receivership during pendency of a civil litigation involving any property is to prevent its threatened wastage, damage and alienation by any party thereto, to the immeasurable prejudice to the other side or to render the situation irreversible not only to impact upon the ultimate decision but also to render the relief granted, illusory.


Out of several of its decisions, the Supreme Court has referred to one in the case of Maharawal Khewaji Trust (Regd.) Faridkot v. Baldev Dass- AIR 2005 SC 104, wherein, it has been underlined that unless and until a case of irreparable loss or damage is made out by a party to the suit, the Court should not permit the nature of the property to be changed, which may include alienation or transfer thereof leading to loss or damage been caused to the party, who may ultimately succeed and which would as well lead to multiplicity of proceedings. Judicial discretion has to be disciplined by jurisprudential ethics and can by no means conduct itself as unruly horse.


The course adopted by the HC in this perspective is in a way unprecedented and rather unknown in law. The impugned order seems to be the yield of an unfathomable urge divorced from the bearing of the consequences thereof on the pending adjudication of the proceedings between the parties and is noticeably unusual and unexpected at the level of HC. The follow up steps to execute the order also display a cavalier and committed approach so much so that it goes to the extent off fixing the estimated price of the property to be mentioned in the notice for sale.

 


As it is, none of the parties did suggest the disposal of the suit property by public auction. Neither any exceptional circumstance nor any compelling necessity in the interest of adjudication exists as on date to compel the disposal of the property as directed. This assumes great significance as well in view of the dispute as to whether the same belongs to the partnership firm or not. The impugned order thus not only is per se illegal, being violative of the basic tenets of law, but also seems to be informed with an overzealous disposition rendering the same unmistakably unsustainable. The same is thus, set aside.


As per the Apex-Court, the HC would decide the appeals on their own merits, as expeditiously as possible. The Court has made it clear that its observations are wholly in context of the issue that arose in these proceedings before it and the HC would answer the appeals without being in any way influenced thereby.


The Supreme Court has expressed belief and confidence that all concerned and more particularly those entrusted with the role of administering justice in accordance with law would not indulge in such “misadventures” lest the credibility of the legal process , which is the bedrock of public confidence in the institutional system, stands undermined. The Supreme Court allowed the appeals in terms of the views expressed by it.