N. Govindarajulu Nayudu vs Imperial Bank of India

Curgenven, J.—This application was filed for the stay of further proceedings in pursuance of an ex parte decree passed in O. S. No. 84 of

1930 on the file of the Sub-Court of Vellore pending disposal of an appeal against an order refusing to set that ex parte decree aside. When the

stay application came up for the issue of ex parte orders, I understand that it was held by the learned Judge who disposed of it, following Bhagwat

Rajkoer v. Sheo Golam Sahu [1904]31Cal.1081 and some cases of this Court, that this Court has no power in proceedings of this nature to stay

execution of a decree Under Order 41, Rule 5. Accordingly the application was converted into one for an injunction to restrain the respondent

from executing the decree, and the question has been raised before me whether an application of this kind will lie. So far as a Court which is

restricted to the terms of the CPC is concerned, it has been held by Phillips, J., in Varadacharyulu v. Narasimhacharyulu AIR 1926 Mad. 268,

which I had occasion to follow in Ayyamperumal Nadar and Others Vs. Muthuswami Pillai, , that if an injunction cannot be passed under the

provisions of Order 39, Rule 1 or Rule 2, it is not permissible to seek the power u/s 151 of the Code in order to justify such an order. It has

however been argued now that a High Court is not restricted to the terms of the Code, but possesses an equitable power, otherwise derived, to

control the proceedings in other Courts. There can bo no doubt that in England a power of this character exists and a discussion of the nature of it

will be found in Ellerman Lines Ltd. v. Read [1928] 2 K.B. 144. In that case the question arose as to whether a British subject could be restrained

from enforcing a foreign judgment, in execution, and the Court of appeal answered the question in the affirmative, the principle upon which the

matter was decided being clearly explained in the judgment of Atkin, L.J., namely, that the Court in granting injunctions does not seek to assume

jurisdiction over the foreign Court or arrogate to itself some superiority which entitles it to dictate to the foreign Court, or that it seeks to criticize

the foreign Court or its procedure:

The English Court has regard to the personal attitude of the person who has obtained the foreign judgment. If the English Court finds that a person

subject to its jurisdiction has committed a breach of covenant, or has acted in breach of some fiduciary duty or has in any way violated the

principles of equity and conscience, and that it would be inequitable on his part to seek to enforce a judgment obtained in breach of such

obligations, it will restrain him, not by issuing an edict to the foreign Court, but by saying that ho is in conscience bound not to enforce that

judgment.

I do not propose to go so far as the learned Judges who decided Ganga Singh v. Pirthichand Lal AIR 1922 Pat. 34, and who appear to have

based their decision as to the power of a Court (not necessarily a High Court) to issue an injunction in certain circumstances purely upon English

precedents and without any reference to the terms of the Code of Civil Procedure. But there is authority for the view that the High Courts, over

and above the powers which they enjoy under that Code, possess an equitable jurisdiction derived from the old Supreme Court to issue an

injunction in appropriate cases. This is the basis of the decision in Kn. Pr. Periakaruppan Chettiar Vs. R.M.S.R.M. Ramaswami Chettiar and

Another, where Ramesam and Devadoss, JJ. held that the Chartered High Courts have such a power following Rash Behary Dey v. Bhowani

Churn Bhose [1907] 34 Cal. 97 and Mungle Chand v. Gopal Ram [1907] 34 Cal. 101. In the former of these two decisions Woodroffe, J., who

certainly is a high authority on questions of procedure, gave it as his opinion that a High Court had and has, independently of the Civil Procedure

Code, power to make an order of the nature sought, and he answered in the negative the question whether there was anything in the CPC which

took away that power. That case was decided under the old Code, but I do not think that there is anything either in Section 151 or any other

provision of the new Code which would deprive a High Court of powers derived independently of it. Another case M.E. Singaravelu Mudali and

Another Vs. Balasubramania Mudali and Others, , decided by Ramesam, J., has been cited to me as an authority in favour of the existence of the

power, but I observe that he was able to bring the injunction within the terms of Rule 2, Order 39, so that the remaining observations in the learned

Judge''s judgment are, I think, merely obiter, though, as I understand them, he was of opinion that a power exists apart from the terms of that rule.

It appears to me however that Kn. Pr. Periakaruppan Chettiar Vs. R.M.S.R.M. Ramaswami Chettiar and Another, , is sufficient authority for the

general proposition that this Court is not bound by the terms of the Code in issuing injunctions in appropriate cases. It appears to me that a case of

the present description is eminently appropriate for the exercise of such a power. We have two proceedings going on at the same time, one the

execution of the decree and the other a proceeding which may eventuate in the decree being set aside. It is quite clear that these two proceedings,

if allowed to go on independently, may lead to incompatible and perhaps unfortunate consequences. I think accordingly that, in general, there is

justification for a Court exercising the power to restrain the holder of the decree against which such proceedings are pending from exercising it.

On the merits I have perused the order of the learned Subordinate Judge refusing to set aside the decree and it appears to me, without in any

way expressing any definite opinion, that the appeal has some prospects of success. The decree is a large one for a sum of Rs. 12,000 and it is

admitted that about Rs. 9,000 has been paid. The petitioner admits that he asks for a stay not because he distrusts the stability of the decree-

holder but because ho finds difficulty under the existing economic conditions in raising the balance. I think in the circumstances that there are

sufficient grounds for granting his request on the basis of his furnishing security and I accordingly order that an injunction do issue to the decree-

holder not to execute the decree until the disposal of the Civil Miscellaneous Appeal provided that the judgment-debtor gives security within six

weeks from the date of the receipt of this order to the satisfaction of the Subordinate Judge of North Arcot for the outstanding amount of the

decree and that he further undertakes to pay interest at the rate of 8 per cent, in the event of the money being found due, for the period during

which the injunction is in force. Failing compliance with these directions the injunction will terminate and the petition will stand dismissed with costs.