Interim reliefs

The note analyses the concept of interim relief,

the tests for claiming interim reliefs and examples
of interim reliefs.

Interim/interlocutory orders are those orders

which are passed by a court during the pendency
of a suit or proceeding. Interim orders do not
determine with finality the substantive rights and
liabilities of the parties in respect to the subject
matter of the suit or proceeding. Interim orders
are necessary to deal with and protect the rights
of the parties in the interval between the
commencement of the proceedings and final
adjudication. They enable the court to grant such
relief or pass such order as may be necessary,
just, or equitable. Hence, interim proceedings
play a crucial role in the conduct of litigation
between the parties. Further, considering the
extensive time taken in final disposal of a suit or
legal proceeding in India, interim reliefs are of
significant importance.

Interim reliefs, accordingly, also play a crucial role

in settlement discussions between litigating par-
ties. Injunctions, security deposit, and attachment
of property are popular forms of interim reliefs
which are prayed for.

A temporary/interim/interlocutory injunction
restrains a party temporarily from doing the
specified act and is granted until the disposal of
the suit or until further orders of the court. It is
regulated by the provisions of Order XXXIX of the
CPC and may be granted at any stage of the suit.

TESTS[1]

The grant of an interim injunction during the

pendency of legal proceedings is a matter
requiring the exercise of discretion of the court.
While exercising discretion the court applies the
following tests:

i. whether the plaintiff has a prima facie case;

ii. whether the balance of convenience is in favor

of the plaintiff; and

iii. whether the plaintiff would suffer an

irreparable injury if his request for interim
injunction is disallowed

Prima facie case

The applicant must make out a prima facie case in

support of the right claimed by him and should be
able to show to the court that there is a bona fide
dispute raised by the applicant. He should also
establish that there is a strong case for trial which
needs investigation and that upon a decision
based on merits, and the facts of the case, there
is a probability of the applicant being entitled to
the relief claimed by him. While determining
whether a prima facie case had been made out,
the relevant consideration is whether the basis of
the evidence presented would make it possible
for the Court to arrive at the conclusion pro-
posed by the applicant. It is not necessary to
establish that such conclusion would be the only
conclusion which could be arrived at on the basis
of the presented evidence. [Martin Burn Ltd. v.
Banerjee, AIR 1958 SC 79]

Irreparable injury

The applicant must further assure the court that

he will suffer irreparable injury if the interim relief
as requested is not granted, and that there is no
other remedy open to him by which he can be
protected from the consequences of
apprehended injury. Irreparable injury does not
mean that there must be no physical possibility of
repairing the injury, but that the injury must be a
material one, and one that cannot be adequately
compensated for in damages [Begg, Dunlop &
Co. v. Satish Chandra Chatterjee, AIR 1920 Cal
276]. The principle was elaborated in the
celebrated judgment of American Cyanamid Co.
v. Ethicon Ltd (1975) 1 All ER 504.

“The governing principle is that, the court should

first consider whether, if the plaintiff were to
succeed at the trial in establishing his right to a
permanent injunction, he would be adequately
compensated by an award of damages for the
loss he would have sustained as a result of the
defendant continuing to do what was sought to
be enjoined between the time of the application
and the time of the trial. If damages in the
measure recoverable at common law would be
adequate remedy and the defendant would be in
financial position to pay them, no interlocutory
injunction should normally be granted, however
strong the plaintiff’s claim appeared to be at that
stage. If, on the other hand, damages would not
provide an adequate remedy for the plaintiff in
the event of his succeeding at the trial, the court
should then consider whether, on the contrary
hypothesis that the defendant were to succeed at
the trial in establishing his right to do that which
was sought to be enjoined, he would be
adequately compensated under the plaintiffs
undertaking as to damages for the loss he would
have sustained by being prevented from doing so
between the time of the application and the time
of the trial. If damages in the measure
recoverable under such an undertaking would be
an adequate remedy and the plaintiff would be in
a financial position to pay them, there would be
no reason upon this ground to refuse an
interlocutory injunction.”

The court must compare the amount of mischief

done or threatened to the plaintiff and weigh the
same against that inflicted by the injunction upon
the defendant. [Nani Bala Saha v. Garu Bala Saha,
AIR 1979 Cal 308]

In order to determine the same, the court may

look into factors such as: [Gujarat Bottling Co.
Ltd. & Ors. v. Coca Cola Co. & Ors. (1995) 5 SCC
545]

· Whether it could cause greater inconvenience to

the plaintiff if the injunction was not granted.

· Whether the party seeking injunction could be

adequately compensated by awarding damages
and the defendant would be in a financial position
to pay them.

The decision whether or not to grant an interim

injunction has to be taken at a time when the
existence of the legal right assailed by the plaintiff
and its alleged violation are both contested and
uncertain and remain uncertain till they are
established at the trial, on evidence. Relief by way
of interlocutory injunction is granted to mitigate
the risk of injustice to the plaintiff during the
period before such uncertainty can be resolved.
[Gujarat Bottling Co. Ltd. & Ors. v. Coca Cola Co.
& Ors. (1995) 5 SCC 545.]

Precedents have laid out additional requirements

in certain special cases. For example, injunctions
against disbursement of amounts under bank
guarantees or letters of credit are not granted
unless the applicant also demonstrates fraudulent
conduct of the counterparty and irretrievable
injustice.

Barring a few jurisdictions (such as Mumbai),

applicants are not usually required to provide any
undertaking to the court to compensate the
respondent if it is subsequently determined that
the interim relief was not warranted.

PRIOR NOTICE/SAME-DAY

In most jurisdictions, interim relief can be

obtained without prior notice to the defendant,
even on the same day in urgent cases. However,
some courts and tribunals have rules mandating
prior service of a petition on a counterparty,
which may be waived if it is established that
issuing notice would defeat the relief sought.

If an ex parte order for an interim injunction is

granted, the claimant must dispatch notice of the
order to the defendant within 24 hours, failing
which the order can be summarily vacated.

EXAMPLES OF INTERIM RELIEF[2]

Chart Description automatically generated

Attachment before Judgment

The court, if satisfied that the defendant, with

intent to obstruct, or delay the execution of any
decree that may be passed against it, is about to
abscond, or leave the local limits of the court’s
jurisdiction; or, remove/dispose of the whole, or
any part of its property from the jurisdiction of the
court, it may require the defendant to furnish
security to produce and place at the disposal of
the court when required, the property, or the
value of the same as may be sufficient to satisfy
the decree. In making such an order, the court
may direct conditional attachment of the whole,
or any portion of the property of the defendant. If
the defendant fails to show cause against
attachment, or fails to furnish the security
required, the court may order that property
(sufficient to satisfy any decree which may be
passed in the suit) be attached.

The attachment will not affect rights over assets

or properties which were in existence prior to the
attachment, of persons not parties to the suit (for
example a tenancy).

Injunction

A court may pass orders of temporary injunction

restraining a defendant from taking some action,
where it is satisfied that the property in dispute in
the suit is in danger of waste, damage, alienation,
or that the defendant threatens, or intends to
remove, or dispose of its property with a view to
defraud its creditors.

Status quo Order

Status quo generally refers to the existing state of

affairs, or circumstances. In some respects,
similar to an injunction, a status quo order may be
issued to prevent any of the parties involved in a
suit from taking any action that may alter the
existing state of things. The intent of such an
order is to prevent harm, or preserve the existing
conditions, so that a party's position is not
prejudiced in the interim.

Receiver

A court is empowered to appoint a receiver of any

property when it is just and convenient to do so.
In a mortgagee’s suit for foreclosure, or sale,
where the mortgagee is entitled to enter into
possession on default of payment of the
mortgage money, the mortgagee is prima facie
entitled to the appointment of receiver.

Other Orders

A court may pass such interim orders as may be

necessary to preserve the subject matter of the
dispute or the rights of the parties, for example,
disclosure of assets, furnishing of security, etc.

END OF DOCUMENT

[1] 'Dispute Resolution in India' by Nishith Desai

Associates accessed at
www.nishithdesai.com/fileadmin/user_upload/pdfs/Research%20Papers/Dispute_Resolution_in_India.pdf

[2] 'Dispute Resolution in India - Arbitration

Primer' by Cyril Amarchand Mangaldas accessed
at https://www.cyrilshroff.com/wp-
content/uploads/2020/10/Dispute-Resolution-in-
India-Arbitration-Primer-Handbook-Final-
2020.pdf