INDUSTRIAL INVESTMENT BANK OF INDIA LTD. versus MARSHALS POWER & TELECOM (I) LTD. AND ANR.

Citation: [2006] SUPP. 8 S.C.R. 698 · Decided: 08-11-2006 · Supreme Court of India · Bench: H.K. SEMA · Disposal: Appeal(s) allowed

Judgment (excerpt)

A 
B 
INDUSTRIAL INVESTMENT BANK OF INDIA LTD. 
v. 
MARSHAL'S POWER & TELECOM (I) LTD. AND ANR. 
NOVEMBER 8, 2006 
[H.K. SEMA AND P.K. BALASUBRAMANYAN, JJ.] 
Code of Civil Procedure, I 908-0rder XXXIX Rules I and 2-Jnterim 
Injunction-Contractual transaction-Money advanced to second party and 
C third party secured the loan by hypothecation and charge-Notice by lender 
to the securing party seeking repayment of the amount-Suit by securing 
party against the lender for mandatory injunction and application for interim 
injunction-Claim of lender before Debt Recovery Tribunal-Interim injunction 
granted and execution of any order by Tribunal restrained-Held: In the 
facts and circumstances of the case, the court below could not exercise its 
D discretion to grant any interim injunction-Injunction against enforcement 
of orders of Tribunal also not correct-Such injunctions against the Tribunal 
having jurisdiction to pass such orders cannot normally be granted unless 
it is a case of fraud or the existence of some such vitiating factor is established 
or prima facie made out. 
E 
Appellant-defendant No. 1 issued a notice to respondent No. 1 - plaintiff 
and defendant No. 2, seeking repayment of the amounts advanced by it to 
defendant No. 2, the repayment of which was secured by hypothecation and 
charge created by the plaintiff. Pursuant thereto respondent No. 1 - plaintiff 
filed a suit against defendant Nos. 1 and 2 for mandatory injunction restraining 
F the defendants from interfering with certain capacitor banks systems 
allegedly supplied by the plaintiff and installed at various substations of 
Transmission Corporation of Andhra Pradesh. Plaintiff also filed application 
for interim injunction. 
Trial Court granted interim injunction. In the meanwhile appellant filed 
G its claim for recovery of the amounts due, before Debts Recovery Tribunal. It 
also filed application for va~ating the interim order and the same was vacated 
by Single Judge of High Court. Plaintiffs appeal thereagainst was allowed 
by Division Bench of High Court on the ground that since the suit was filed 
earlier to the claim before Debt Recovery Tribunal, the court was competent 
H 
698 
INDUSTRIAL INVESTMENT BANK OF INDIA LTD.>. MARSHAL'S POWER 1'. lRECOM (I) LTD 
699 
to entertain the suit and granted interim injunction. It permitted• the A 
proceedings before the Tribunal, but restrained the execution of any order 
that might be passed by the Tribunal. Hence the present appeal. 
Allowing the appeal, the Court 
HELD:· I. On the facts and in the circumstances of the case, the court B 
is primafacie satisfied that this is not a fit case for exercise of discretion by 
the court to grant any interim injunction as sought for by the plaintiff. Division 
Bench has not properly adverted to or considered the question whether in the 
nature of the pleadings in the case and the nature of the relief claimed in the 
suit, an order of injunction as the one granted by it should be granted. The 
Division Bench did not ask itself the question whether it was open to it on ~he C 
facts and in the circumstances of the case, to issue an order of injunction 
restraining one of the contracting parties from enforcing as against the ot~er 
contracting party, the obligations arising out of that contract. The Division 
Bench also did not ask itself the question whether the plaintiff had made out 
a prima facie case for the grant of what it called an interim mandatory D 
injunction - though it appears to this court to be a case of prohibitory injunction ,. 
- and whether the balance of convenience is in favour of the grant of an intetjm 
order of injunction. [702-B-FI 
2. Division Bench has clearly acted illegally in purporting to pass an 
interim order of injunction restraining the enforcement of any order that may E 
be passed by the Debts Recovery Tribunal. The Debts Recovery Tribunal is. a 
I 
special forum created by a special enactment for the purpose of enforcement 
of special types of claims arising in favour of financial institutions. Thus, 
competent proceedings are instituted before such a Tribunal by a financial 
institution seeking to enforce its claimed rights. Whatever defences the 
plaintiff herein may have against the claims of the first defendant before the F 
Debts Recovery Trihunal, have to be put forward by the plaintiff before the 
Debts Recovery Trii>unal. The mere fact that the plaintiff chose to rush to the 
I 
Civil Court on receipt of a noti

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