Case Note & Summary
The appellant, Vidyut Corporation, filed a suit for recovery of Rs.2,75,27,228 against the respondents based on share market and security transactions. The parties had executed mortgage deeds over various properties to settle defaults. The appellant sought an interim injunction to restrain the respondents from alienating the mortgaged property. The Single Judge rejected the notice of motion, holding that the appellant failed to establish a prima facie case as the plaint lacked averments regarding the date of market price of shares and no document was produced to support the claim. The appellant appealed. The Division Bench noted that the mortgage deeds were admitted and defaults were not disputed. It held that the existence of mortgage deeds and the admitted defaults constituted a prima facie case. The balance of convenience was in favor of maintaining status quo to protect the property pending trial, as irreparable loss would occur if the property was alienated. The court set aside the Single Judge's order and directed status quo in respect of the property described in the order dated 4 December 2006, with liberty to the respondents to apply for modification or vacation. The appeal was allowed.
Headnote
A) Civil Procedure - Interim Injunction - Prima Facie Case - The appellant/plaintiff sought recovery of Rs.2,75,27,228 based on share transactions and had executed mortgage deeds over properties. The Single Judge rejected the injunction for lack of prima facie case. The Division Bench held that the existence of mortgage deeds and admitted defaults established a prima facie case, and balance of convenience favored status quo to protect the property pending trial. (Paras 2-6) B) Contract Law - Mortgage Deed - Enforcement - The parties executed mortgage deeds to settle defaults in share transactions. The court held that such deeds create a right in the property, and interim protection is necessary to prevent alienation pending adjudication of the suit. (Paras 3-5)
Issue of Consideration
Whether the appellant/plaintiff established a prima facie case for interim injunction to protect the mortgaged property pending recovery suit based on share transactions.
Final Decision
Appeal allowed. Order dated 12 October 2006 set aside. Respondents directed to maintain status quo in respect of the property described in the order dated 4 December 2006. Liberty to respondents to apply for modification or vacation.
Law Points
- Prima facie case
- balance of convenience
- irreparable loss
- interim injunction
- mortgage deed
- status quo
