Significance of "Irreparable Loss" while granting Injunction

Background

Halsbury defines the Injunction as judicial Process whereby a party is ordered (i) to refrain from doing or (ii) to do particular act or thing.

The law relating to injunction is contained in Specific Relief Act,1963 and Code of Civil Procedure, 1908. The Specific Relief Act, 1963 deals with permanent/ perpetual injunction while Civil Procedure Code deals only with temporary/interim injunctions. Its object of Temporary Injunction is to keep matters in status quo until final disposal of the suit.

Statutory Provisions

Specific Relief Act, 1963

Section 36:  Preventive relief how granted - Preventive relief is granted at the discretion of the court by injunction, temporary or perpetual.

Section 37: Temporary and perpetual injunctions.-

(1) Temporary injunctions are such as are to continue until a specified time, or until the further order of the court, and they may be granted at any stage of a suit, and are regulated by the Code of Civil Procedure, 1908 (5 of 1908 ).

(2) A perpetual injunction can only be granted by the decree made at the hearing and upon the merits of the suit; the defendant is thereby perpetually enjoined from the assertion of a right, or from the commission of an act, which would be contrary to the rights of the plaintiff.

Code of Civil Procedure, 1908 Order XXXIX, (Temporary injunctions)

Rule 1. Cases in which temporary injunction may be granted

Where in any suit it is proved by affidavit or otherwise-

(a) that any property in dispute in a suit is in danger of being wasted, damaged or alienated by any party to the suit, or wrongfully sold in execution of a decree, or

(b) that the defendant threatens, or intends, to remove or dispose of his property with a view to defrauding his creditors,

(c) that the defendant threatens to dispossess, the plaintiff or otherwise cause injury to the plaintiff in relation to any property in dispute in the suit,]

the Court may be order grant a temporary injunction to restrain such act, or make such other order for the purpose of staying and preventing the wasting, damaging, alienation, sale, removal or disposition of the property or dispossession of the plaintiff, or otherwise causing injury to the plaintiff in relation to any property in dispute in the suit] as the Court thinks fit, until the disposal of the suit or until further orders.

Code of Civil Procedure, 1908 Order XXXIX, (Temporary injunctions)

Rule 2. Injunction to restrain repetition or continuance of breach

(1) In any suit for restraining the defendant from committing a breach of contract or other injury of any kind, whether compensation is claimed in the suit or not, the plaintiff may, at any time after the commencement of the suit, and either before or after judgment, apply to the Court for a temporary injunction to restrain the defendant from committing the breach of contract or injury complained, of, or any breach of contract or injury of a like kind arising out of the same contract or relating to the same property or right.

(2) The Court may be order grant such injunction, on such terms as to the duration of the injunction, keeping an account, giving security, or otherwise, as the Court thinks fit.

Specific Relief Act, 1963

Section 41: Injunction when refused

An injunction cannot be granted-

(a) to restrain any person from prosecuting a judicial proceeding pending at the institution of the suit in which the injunction is sought, unless such restraint is necessary to prevent a multiplicity of proceedings;

(b) to restrain any person from instituting or prosecuting any proceeding in a court not subordinate to that from which the injunction is sought;

(c) to restrain any person from applying to any legislative body;

(d) to restrain any person from instituting or prosecuting any proceeding in a criminal matter;

(e) to prevent the breach of a contract the performance of which would not be specifically enforced;

(f) to prevent, on the ground of nuisance, an act of which it is not reasonably clear that it will be a nuisance;

(g) to prevent a continuing breach in which the plaintiff has acquiesced;

(h) when equally efficacious relief can certainly be obtained by any other usual mode of proceeding except in case of breach of trust;

(i) when the conduct of the plaintiff or his agents has been such as to disentitle him to the assistance of the court;

(j) when the plaintiff has no personal interest in the matter.

Judicial Approach

The Orissa High Court observed in “Orissa State Commercial Transport Corporation Ltd. Represented by its Secretary Sri C.B.S. Ramchandra Rao Vs. Sri Satyanarayan Singh and Anr.” (1974) 40 Cut LT 336

"Irreparable injury" means such injury which cannot be adequately remedied by damages. The remedy by damages would be inadequate if the compensation ultimately payable to the plaintiff in case of scusses in the suit would not place him in the position in which he was before injunction was refused.

Hindustan Petroleum Corporation Ltd.Vs. Sri Sriman Narayan and Anr (SC, 2002)

Principles for grant of temporary injunction are well settled that;

(i) Petitioner has to show that he has a prima facie case;

(ii) Balance of convenience lies in his favour and;

(iii) Petitioner will suffer irreparable loss, if injunction is not granted.

The Court observed in Damodar Valley Corporation vs Haripada Das And Ors. on 7 July, 1978, AIR 1978 Cal 489

The principle governing grant of ad interim injunction appears to be as follows :--

(1)…………………………….

 (II)…………………………….

(III) On such satisfaction, the court will consider whether the plaintiff, if he succeeds, would be adequately compensated by an award of damages for the loss if the defendant continued to do what was sought to be injuncted. If damages recoverable in law is an adequate remedy and the defendant is in a financial position to pay them, no interlocutory order should be normally granted, however strong the plaintiff's claim appears to be at that stage.

(IV)……………

In Colgate Palmolive (India) Ltd. Vs. Hindustan Lever Ltd., AIR 1999 SC 3105,

This court observed that the other considerations which ought to weigh with the Court hearing the application or petition for the grant of injunctions are as below :

(i) Extent of damages being an adequate remedy;

(ii) Protect the plaintiff’s interest for violation of his rights though however having regard to the injury that may be suffered by the defendants by reason therefore;

(iii) The court while dealing with the matter ought not to ignore the factum of strength of one party’s case being stronger than the others;

(iv) No fixed rules or notions ought to be had in the matter of grant of injunction but on the facts and circumstances of each case- the relief being kept flexible;

(v) The issue is to be looked from the point of view as to whether on refusal of the injunction the plaintiff would suffer irreparable loss and injury keeping in view the strength of the parties’ case;

(vi) Balance of convenience or inconvenience ought to be considered as an important requirement even if there is a serious question or prima facie case in support of the grant;

(vii) Whether the grant or refusal of injunction will adversely affect the interest of general public which can or cannot be compensated otherwise.

Delhi Municipality  v. Suresh Chandra Jaipuria , AIR 1976 SC 2621, (1976) 4 SCC 719, while dealing with the question of grant of interim or temporary injunction, Their Lordships of the Supreme Court observed:

 "that it also seems that the attention of the learned Judge was not directed towards Section 41(h) of the Specific Relief Act, 1963 which lays down that an injunction, which is a discretionary equitable relief, cannot be granted when an equally efficacious relief is obtainable in any other usual mode or proceeding except in cases of breach of trust."