Case Note & Summary
The Supreme Court of India granted leave in civil appeals arising from special leave petitions challenging a Division Bench judgment of the Delhi High Court dated 20.03.2026, which had set aside a temporary injunction granted by a Single Judge. The dispute concerned the nature of interlocutory jurisdiction and the limits of appellate interference with judicial discretion in granting temporary injunctions under Order XLIII Rule 1(r) of the Code of Civil Procedure, 1908. The original plaintiff, an elderly widow, had filed suit CS (OS) No.589 of 2021 on 21.10.2021 alleging that her granddaughter and others, taking advantage of her old age, had fraudulently procured execution of gift deeds and LLP transfer agreements between 19.12.2018 and 06.06.2019, thereby transferring her shareholding and capital in family-owned entities. She sought declaration that the transfers were null and void, permanent and mandatory injunctions, and restoration of shareholding and LLP interests. Along with the plaint, she filed an application under Order XXXIX Rules 1 and 2 of the Code seeking interim injunction. By ad interim order dated 12.11.2021, the Single Judge directed status quo. After hearing both parties, the Single Judge by order dated 29.07.2022 found a prima facie case: under the Will dated 26.03.2004, the original plaintiff had only a limited beneficial interest which had not matured into absolute interest under Section 14 of the Hindu Succession Act, 1956; the transfers were procured by undue influence; the defendant companies and LLPs were alter egos of defendant Nos. 4 and 9; and various properties were being disposed of. The balance of convenience favoured preservation of the estate. Accordingly, the Single Judge restrained creation of third-party interests in properties owned by defendant Nos. 13 to 17 and restrained defendant Nos. 4 and 9 from alienating specified properties, while allowing defendant No. 13 to sell plots in Madhuban Colony, Rajpura. Aggrieved defendants preferred appeals under Order XLIII Rule 1(r) of the Code. During pendency of appeals, the original plaintiff died on 09.01.2025 and her legal representatives were substituted. The Division Bench by final judgment dated 20.03.2026 allowed the appeals and set aside the injunction. The legal representatives and other family members then approached the Supreme Court. The Supreme Court framed the issue whether the Division Bench was justified in substituting its own view for that of the Single Judge despite settled principles governing appellate review of discretionary orders. The provided excerpt ends before the Supreme Court's final decision.
Headnote
A) Civil Procedure - Interlocutory Jurisdiction - Appellate Review of Discretionary Orders - Code of Civil Procedure, 1908, Order XLIII Rule 1(r) - Appeals challenged High Court's reversal of Single Judge's temporary injunction - Court examined whether appellate bench could substitute its own view absent perversity or arbitrary exercise of discretion - Held that settled principles limit interference with discretionary orders (Paras 2-3). B) Civil Procedure - Temporary Injunction - Prima Facie Case and Balance of Convenience - Code of Civil Procedure, 1908, Order XXXIX Rules 1 and 2 - Single Judge found prima facie case of undue influence and limited interest under Will read with Section 14 of Hindu Succession Act, 1956 - Balance of convenience favoured preservation of properties pending final adjudication - Held that injunction restraining alienation was necessary to protect subject matter of suit (Paras 9-11). C) Hindu Law - Succession - Limited Beneficial Interest under Will - Hindu Succession Act, 1956, Section 14 - Original plaintiff did not acquire absolute right to testator's estate under Will dated 26.03.2004 but only limited beneficial interest - Such interest had not matured into absolute interest under Section 14 of the Act - Held that transfers of shareholding and LLP interests by original plaintiff could not in law have been validly effected (Para 10(i)). D) Equity - Undue Influence - Fraudulent Procurement of Transfers - Transfer of shareholding and LLP interests by elderly widow allegedly procured by family members taking advantage of her old age - Single Judge found transfers were procured by undue influence - Held that defendant Nos. 4 and 9 were restrained from exercising rights founded on such transfers (Paras 8, 10(iv)). E) Company Law - Lifting of Corporate Veil - Alter Ego and Quasi-Partnership - Defendant companies and LLPs held to be alter egos of defendant Nos. 4 and 9 and partook of nature of quasi-partnerships - Single Judge directed preservation of assets of those entities to prevent dissipation - Held that no third-party interest should be created in properties owned by defendant Nos. 13 to 17 pending final adjudication (Paras 10(v), 11).
Issue of Consideration
Whether the Division Bench of the High Court, while exercising jurisdiction under Order XLIII Rule 1(r) of the Code of Civil Procedure, 1908, was justified in substituting its own view for that of the learned Single Judge notwithstanding settled principles governing appellate review of discretionary orders granting temporary injunctions.
Law Points
- Interlocutory jurisdiction
- Appellate review of discretionary orders
- Temporary injunction
- Prima facie case
- Balance of convenience
- Undue influence
- Limited beneficial interest under Will
- Section 14 Hindu Succession Act
- Alter ego of companies
- Quasi-partnership
- Preservation of property pending suit.
