Case Note & Summary
The petitioner, M/s. Shyamaraju & Company (India) Pvt. Ltd., filed a writ petition under Article 226 read with Article 227 of the Constitution of India challenging the order dated 13.8.2013 passed by the Additional Civil Judge & JMFC, Hungund, on I.A-III in O.S. No.130/2013. The petitioner was the plaintiff in the suit, which sought a declaration that the termination of contract by order dated 26.04.2012 was null and void, and for a mandatory injunction directing the defendants to permit the plaintiff to continue the contract work. The contract was for a construction project with the City Municipal Council, Hakal, and the Karnataka Urban Infrastructure Development & Finance Corporation (KUIDFC). The trial court rejected the plaintiff's application for temporary injunction under Order 39 Rules 1 and 2 CPC, leading to the present writ petition. The High Court examined the brief facts: the plaintiff had been awarded a contract, but due to alleged poor performance and delays, the contract was terminated. The plaintiff contended that the termination was illegal and that the defendants were attempting to encash bank guarantees. The trial court found that the plaintiff had not made out a prima facie case, as the contract contained arbitration clauses and the plaintiff had an alternative remedy of damages. The balance of convenience was not in favour of the plaintiff, as the work was time-sensitive and the defendants had already appointed a new contractor. The High Court held that the trial court's discretion in refusing the injunction was not perverse or arbitrary, and that the petitioner had not demonstrated any irreparable injury. The writ petition was dismissed, with no order as to costs.
Headnote
A) Civil Procedure - Temporary Injunction - Order 39 Rules 1 and 2 CPC - Prima Facie Case, Balance of Convenience, Irreparable Injury - The petitioner/plaintiff sought temporary injunction to restrain the respondents from encashing bank guarantees and to permit continuation of contract work - The trial court rejected the application holding that the plaintiff failed to make out a prima facie case and that balance of convenience was not in its favour - The High Court upheld the order, noting that the contract was terminated due to poor performance and that the plaintiff had an alternative remedy of damages - Held that the trial court's discretion was not perverse or arbitrary (Paras 1-10).
Issue of Consideration
Whether the trial court was justified in rejecting the application for temporary injunction under Order 39 Rules 1 and 2 CPC in a suit challenging termination of contract and seeking continuation of work.
Final Decision
The High Court dismissed the writ petition, upholding the trial court's order dated 13.8.2013 rejecting the temporary injunction. No order as to costs.
Law Points
- Temporary injunction
- Order 39 Rules 1 and 2 CPC
- prima facie case
- balance of convenience
- irreparable injury
- contract termination
- bank guarantee encashment
Case Details
2014 LawText (KAR) (07) 6
Writ Petition No.81897/2013 (GM-CPC)
Dr. Justice K. Bhakthavatsala
Sri D L Jagadeesh, Sri Rajashekar Gunjalli (for petitioner), Sri N G Rasalkar (for R-1 to 3), Sri K S Patil, HCGP (for R-4)
M/s. Shyamaraju & Company (India) Pvt. Ltd.
The Managing Director, Karnataka Urban Infrastructure Development & Finance Corporation (KUIDFC) and others
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Nature of Litigation
Civil writ petition challenging rejection of temporary injunction in a suit for declaration and injunction regarding contract termination.
Remedy Sought
Petitioner sought to quash the order dated 13.8.2013 rejecting I.A-III for temporary injunction and to grant injunction restraining encashment of bank guarantees and permitting continuation of contract work.
Filing Reason
The trial court rejected the petitioner's application for temporary injunction under Order 39 Rules 1 and 2 CPC.
Previous Decisions
The trial court (Addl. Civil Judge & JMFC, Hungund) passed the order dated 13.8.2013 on I.A-III in O.S. No.130/2013, rejecting the temporary injunction.
Issues
Whether the trial court's order rejecting temporary injunction under Order 39 Rules 1 and 2 CPC was perverse or arbitrary.
Whether the petitioner made out a prima facie case, balance of convenience, and irreparable injury for grant of temporary injunction.
Submissions/Arguments
Petitioner argued that the termination of contract was illegal and that the defendants were attempting to encash bank guarantees without justification.
Respondents contended that the contract was terminated due to poor performance and delays, and that the plaintiff had an alternative remedy of damages.
Ratio Decidendi
The grant of temporary injunction under Order 39 Rules 1 and 2 CPC requires the applicant to establish a prima facie case, balance of convenience in its favour, and irreparable injury. The trial court's discretion in refusing injunction, if not perverse or arbitrary, should not be interfered with in writ jurisdiction.
Judgment Excerpts
The petitioner, who is plaintiff in OS No.130/2013 on the file of Civil Judge at Hungund, is before this Court, challenging the order dated 13.8.2013 passed on I.A-III filed in the above-said Suit, at Annexure-K.
The trial court found that the plaintiff had not made out a prima facie case, as the contract contained arbitration clauses and the plaintiff had an alternative remedy of damages.
Procedural History
The petitioner filed O.S. No.130/2013 before the Addl. Civil Judge & JMFC, Hungund, seeking declaration and injunction. The trial court rejected I.A-III for temporary injunction on 13.8.2013. The petitioner then filed the present writ petition under Article 226 read with Article 227 of the Constitution of India before the High Court of Karnataka, Dharwad Bench, which was heard and reserved for pronouncement on 24.7.2014.
Acts & Sections
- Code of Civil Procedure, 1908 (CPC): Order 39 Rules 1 and 2
- Constitution of India: Article 226, Article 227
