Concept of Interim Orders under CPC

Introduction:

“This belongs to me” “No! This belongs to me” A dispute was going on between two persons. Party A was asking Party B to abandon the premises and stop construction activities because that property is their ancestral property and after the death of their father it should belong to them. Likewise, Party B was declaring that the property had been sold to him by the father of Mr A so he has ownership of that property and he will not stop construction activities. Since the dispute was unresolvable by mere discussion or meeting so party A filed the case in the court. The court to protect both the parties from incurring any loss passed an order to stop construction activities on the disputed property with an immediate effect. This order has been passed to protect parties from any irreparable loss till the final judgment will be passed by the court. In the language of the law, this order is known as an interim order.

What is Interim Order?

The word “interim” according to the dictionary means “for the time being”, “in the meantime”, “meanwhile”, “temporary”, “provisional’, “not final”, “intervening”. When the word is used as an adjective, it means “temporary” or “provisional” and when it is used as a noun it means “intervening”.[1] Supplementarily, according to Section 2 (14) of the Civil Procedure Code, 1908 the word “order” refers to the formal expression of any decision (not a decree) of a civil court. Collectively, the words “interim order” means temporary order passed by the court to maintain the “status quo” during the pendency of the suit and to ensure that, during the course of the proceedings, no harm should be caused to the interest of the parties involved in the suit and, before the final hearing, the subject matter of the suit shall not become abortive or a fait accompli. The legal maxim “Actus curiae neminem gravabit” best explains the reason why the court passes such orders.  The meaning of this maxim is that “any act of the court should not be biased to anyone.”

Classification of Interim Orders

An interim order may be classified into two categories depending upon the nature of the direction issued by the court.

1. Directive Order– The courts issue a directive order to instruct either party to act in a specific way until the trial ends or a further order is issued. If not continuing the action would harm the other party then the courts can issue a directive interim order.
2. Restraining Order– The courts issue a restraining order to prevent any of the parties from acting in a specific way while the civil lawsuit is pending. The courts issue these orders to prevent any party from being harmed because the other party may have continued acting upon the issue involved in the suit.

When an Interim Order can be Passed?

The main motive of passing an interim order is to safeguard the plaintiff from irrecoverable losses. If later, the uncertainty of the matter in the suit is resolved in favour of the plaintiff then it should not happen that the plaintiff will not get sufficient compensation in the lawsuit because of that irreparable loss. So, interim orders are passed by the court but these orders are passed only on the basis of the primary findings if prima facie court feels that an interim order should be passed then a court can pass it but one should not forget that these orders are tentative.[2]

The granting of interim order depends on the scope and nature of the facts and circumstances of each case because it is impossible to provide a single formula for the calculation of the same. In certain situations where the defendant can use the property involved in the dispute in such a way that the situation becomes irreparable, these temporary reliefs should be granted by the court.[3] Three basic principles have been laid down by courts based on which interim orders can be granted viz.

1. There should be a prima facie case in favour of the party who is seeking the interim order,
2. The balance of convenience should lie with the party who is requesting the interim order,
3. If the interim order will not be passed by the court then the party will have to face irreparable damage or loss and also it will be troublesome to ascertain the loss in terms of money.[4]

It is the responsibility of the court to strike a balance between the two extreme positions. On the one hand, if the interim order is rejected, will the petition itself become fruitless and on the other hand, if the interim order is granted, then the other party may suffer huge losses and hardships, considering that the losses suffered by the affected party, in this case, are irreparable.[5] So, various other conditions have also been laid down which courts can weigh while deciding petitions demanding grant of interim relief-

1. The scope of compensation should be sufficient as a remedy.
2. Protect the interests of the plaintiff from infringement of their rights, considering the harm that may be suffered by the defendant as a result of it.
3. In handling these applications, the court should not ignore that one party has stronger factum strength of the case than the other party.
4. While granting injunctions, there should not be any fixed rule or concept, but granting should be based on the facts and circumstances pertaining to each case (the relief should remain flexible).
5. One should consider whether the plaintiff will or will not suffer irreparable losses and injuries if the injunction will be refused, keeping in mind the strength of the litigants.
6. Even if there are serious problems or preliminary evidence to support the grant, the balance between convenience and inconvenience should be considered a principal requisite.
7. Whether the grant or rejection of an injunction will adversely affect the interest of the public which can or cannot be compensated.[6]

The court in Deoraj vs. State of Maharashtra & Ors[7] has said that, only when it is satisfied that the withholding of interim order will prick the court’s conscience and violently violate judicial justice, causing injustices to persist throughout the hearing, and the court will not be able to maintain justice, the court can grant such temporary relief.

Non-Compliance of Interim Order

Everyone must obey the final or interim order passed by the competent court. The party, against whom the order is passed, can take appropriate measures to withdraw or revoke interim order if it believes that the order does not comply with the law. However, he cannot refuse to follow the order. Failure to take seriously the violation of the order passed by the court will have a wide range of harmful effects on the court’s authority to execute such orders.[8] Willful disobedience to the court’s instructions will constitute contempt of the court. If a person does not obey the court’s order then the court can also refuse to hear the person’s opinion.[9]

Interim Order under CPC

Interim orders under CPC may be condensed under-

1. Payment in Court: Order 24

In a suit for debt or damages, it is open to the defendant that he can deposit such sum of money as he considers a satisfaction in full of the plaintiff’s claim at any stage of the proceeding of the matter. If the plaintiff accepts the money when it fully meets its requirements, the court shall record its statement and pronounce its judgment accordingly.[10] On the other hand, if the plaintiff accepts the payment as a satisfactory amount in part of his claim, he has the right to file a lawsuit to recover the balance. However, if it is finally found that the deposit fully meets the requirements of the plaintiff, the plaintiff shall pay all expenses incurred after the deposit.[11]

2. Security for Costs: Order 25

It is pointed out in Order XXV Rule 1 that the court can order the plaintiff to provide security at any stage of the litigation to pay the costs incurred by the defendant. The court can exercise this power at the request of the defendant or can take a suo moto cognizance. However, the court should make this order in the following circumstances:

1. The plaintiff lives outside of India, or there are two or more plaintiffs, and they all live outside of India; and
2. The sole plaintiff or no plaintiff owns sufficient real estate other than litigation property in India.[12]

The purpose of this rule is to provide protection to defendants in some instances, where if the case became successful from the side of the defendant, they may have difficulty in realizing their costs from the plaintiff.[13]

3. Commissions: Order 26

Section 75 to 78 of the CPC deals with the power of the court to issue a commission, which has been further detailed in Order 26 of the Code. The power of the court to issue commissions can be exercised by the court on its discretion. The court establishes complete justice between the parties. The court can exercise this right at the request of the parties involved in the litigation or by a suo moto action. According to Section 75, a court may issue a commission for any of the following purposes:

1. to examine witnesses (Sections 76-78; Order 26 Rules 1-83),
2. to make local investigation (Rules 9 and 10);
3. to adjust accounts (Rules 11 and 12);
4. to make a partition (Rules 13 and 14);
5. to hold investigation (Rule 10-A);
6. to perform a ministerial act (Rule 10-B); or
7. to conduct sale (Rule 10-C)

Evidentiary value of the report

The commissioner’s report will provide preliminary evidence about the facts and data collected by the commissioner. It will constitute important evidence and cannot be rejected unless there are sufficient grounds to do so.[14]

No restriction on the Supreme Court and High Court

The limitations given under section 79 and order 26 concerning the issuance of the commission did not apply to the Supreme Court and High Court in the exercise of their constitutional powers.[15]

4. Arrest before Judgment: Order 38

Generally, the arrest of an accused (as the execution of decree) took place after passing of the decree but in certain exceptional cases, an accused can be arrested before passing of the judgment. The main purpose of this order is to prevent the defendant from making any attempt to defeat or escape from any liability imposed by the court on him and protect the interest of the plaintiff.

Since the arrest of the defendant before passing the judgment in favour of the plaintiff is an extreme action so it should be performed with due care and caution. The court before passing such an order should ensure that if this order will not be passed then there is a real danger of losing the defendant and his property as the defendant can remove them from the jurisdiction of the court.[16] So, the court should always look at Rule 1 before passing any order requiring the arrest of the defendant before judgment. Rule 1 laid down-

Where, at any stage of the litigation, an affidavit or other means is used to satisfy the court that-

1. the defendant intentionally delays the plaintiff or avoids any court procedure, or hinders or delays the execution of any decree that the litigation may take against him,
   • absconded or has left the local limits of the court’s jurisdiction, or
   • is about to abscond or left the local restrictions of the court’s jurisdiction, or
   • has disposed of or removed its property or any part of its property from the local restrictions of the court’s jurisdiction,
2. When there is a reasonable possibility that the defendant will leave India and obstruct or delay the enforcement of any decree passed against the defendant by the court and hinders the interest of the plaintiff. The court can issue an arrest warrant against the defendant, arrest the defendant, and bring him to the court to show the reason why he should not provide a guarantee for his appearance in court[17]. However, if the defendant pays to the officer (executing the warrant) the amount specified in the bond sufficient to satisfy the plaintiff’s claim, he shall not be arrested.[18]

Cases where arrest before judgment is not allowed

An order to arrest the defendant before judgment cannot be obtained in

1. any land or immovable property suit as specified in Article 16 (a) to (d) of the Code, or[19]
2. to convert unsecured debt into secured debt to ensure easy enforcement of laws[20]

Conditions necessary to be fulfilled

There are two conditions about which court should be satisfied before passing this order-

1. The plaintiff’s lawsuit must be in good faith, and the cause of the lawsuit must be ostensibly irrefutable, but the premise is that he must prove the accusation in the plaint,
2. the court must have reason to believe that unless this extraordinary power is exercised there is a real danger that the defendant will remove himself or his property from the scope of the court’s power.[21]

The plaintiff can put an application for arrest at any time after the plaint is presented, even before a summon is served to the defendant.

5. Attachment before Judgment: Order 38, Rule 5- 13

Similar to arrest before judgment, the court in certain conditions may order attachment before judgment. The main purpose of attachment before the judgment is to prevent the defendant from attempting to undermine, execution of the decree against him.

If at any stage of the litigation, the court satisfies through an affidavit or other means that the defendant to prevent or delay the enforcement of an order that may be directed against him,

1. Is about to remove or dispose of the whole or any part of his property. Or
2. Remove all or any part of its property from the local restrictions of the court’s jurisdiction[22]; the court may instruct the defendant within a time determined by the court to provide a bond of the amount specified in the order and sufficient to satisfy the decree and ask the defendant to appear and show the reason why it should not provide a guarantee.[23]

Unless the court directs otherwise, the plaintiff should specify the property which is to be attached with its estimated value.[24] The court can also order all or any part of the property to be directly and conditionally attached. If an attachment order is issued that does not comply with Rule 5(1), the attachment will be invalid.[25]

The court cannot order the attachment or production of any agricultural products owned by agriculturists.[26]

6. Temporary Injunctions: Order 39

An injunction is a remedy issued to a person in the form of a court order that prohibits the person from engaging in or continuing to perform a specific act or ordering him to perform a certain act.[27] The main purpose of granting interim relief is to retain the disputed property until the court determines the legal rights and conflicting requirements of the parties.

Types of Injunction

Injunctions can be classified into various types-

A permanent injunction will forever restrict a party from performing a specified act, and a ruling can only be granted on the merits of the case after the hearing of both parties is over. On the other hand, a temporary injunction restricts the parties temporarily from not performing specified actions and can only be approved before the litigation or until a further court order is dealt with.[28]

Injunctions will be preventive if they prevent, prohibit or restrict someone from doing something; or mandatory when they force or order someone to do something.

An ad interim injunction order is granted without a final decision on the injunction order and remains effective until the application is processed. Usually, an interim injunction is granted while finally deciding the main application and the injunction will continue until the litigation is dealt with.

When a Temporary Injunction may be Passed?

The temporary injunction may be granted by the court in the following cases-

1. If any property in dispute in the litigation is in danger of being wasted, damaged, or transferred by either party in the litigation, or is in danger of being wrongly sold as a result of the execution of the law[29]; or
2. The defendant threatens or intends to remove or dispose of his property to defraud his creditors[30] or
3. The defendant threatens to dispose of the plaintiff or otherwise harm the plaintiff with respect to any property disputed in the lawsuit[31], or
4. The defendant is about to breach the contract or any other form of injury[32]; or
5. The court considers that it is in the interest of justice.[33]

Conditions needed to be fulfilled

Before issuing an injunction, the court must be satisfied with the following conditions which are also known as three pillars on which the foundation of the order of injunction rests[34]:

• Does the plaintiff have prima facie evidence?
• If the court does not accept the prayer of the temporary injunction, will the plaintiff suffer irreparable harm?
• Does the balance of inconvenience benefit the plaintiff?

7. Interlocutory Orders: Order 39

Rule 6 of Order 39 authorizes the court to order, in certain conditions, the sale and purchase of perishable goods. Rule 7 empowers courts to authorize any person to enter into any land or building owned by any party for sampling, observation, or experimentation for detention, preservation, or inspection of the property which is the subject matter of the suit. Rule 8 requires courts, before making such an order, to notify the other party, unless it appears that the purpose of making such an order will be defeated due to delay. If the land involved in the suit is liable to pay the government revenue, and the party that owns the land neglects to pay the income, any other party in the litigation claiming an interest in the land can immediately pay for the property and get possession of that property after paying the income. The court may award in the decree the amount so paid and interest on it to be paid against the defaulter.[35] If one party admits that he holds the money as a trustee for another party, then the court can order him to deposit the money in the court.[36]

8. Receiver: Order 40

A receiver is an independent person appointed by the court between the parties to the litigation. He can accept the funds or property in the litigation, whenever it is believed by the court that it is unreasonable for either of the party to hold property or funds. The main object behind appointing a receiver is to preserve, protect, and manage the property of the suit and safeguard the interests of both litigants involved in litigation, in the course of the pendency of the litigation.

When the court can appoint a receiver?

1. It is at the discretion of the court to appoint a receiver.
2. Appointment of a receiver is a protective relief and the purpose is to preserve the disputed property before the determination of the rights of the litigants by the judiciary.
3. A receiver will not be allotted lest the plaintiff’s prima facie evidence proves that he is likely to succeed in the lawsuit.
4. This is one of the most severe remedies provided by the law for the enforcement of rights, so it should not be taken lightly. Since it deprives the other party of ownership of the property before the announcement of final judgment, it should only be used to prevent obvious errors or harm. The courts will never appoint receivers solely because it will not cause any harm.
5. Generally, in situations that may cause the defendant to suffer irreparable losses, if there is a receiver order that will deprive the defendant of the defendant’s de facto property, then the court may not pass an order to appoint a receiver.
6. If no one has the right of enjoyment of the property and it is also proved with the help of adequate pieces of evidence then it will be in the common interest of all the litigants to appoint a receiver.
7. The court is required to make sure that the party approaching court for the appointment of the receiver should come with no malafide intentions.

Powers of Receiver

The court may grant any of the following power to the receiver-

1. File a lawsuit and defend it;
2. Realize, manage, protect, preserve and improve property;
3. Collect, use and dispose of profits and rents;
4. Executing documents; or
5. These powers that it considers appropriate.

Liability of Receiver

If the receiver fails to give in to the account or is unable to pay the outstanding amount, or due to deliberate breach of contract or negligence caused damage to the goods then the court may instruct the seizure and sale of any of his property, and make up any money due to him.

Conclusion

This article has discussed in detail interim orders, various important questions relating to interim orders have been answered in this article for example, what are interim orders, types of the interim order, when courts can pass interim orders, what will happen if interim order will not be complied by the person against whom it is passed and what is the scope of interim orders under CPC. It could be said that interim orders play a very vital role in smoothly conducting litigation proceedings as they help in dealing and protecting the rights of the litigants in the period between the commencement of proceedings and pronouncement of final judgment. To preserve, protect and spread justice in society courts require this power of passing interim orders because with the help of it they would be able to avert the defendant from escaping liability which could be imposed on him by the court at the time of final adjudication of the matter.

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References:

[1] C.K. THAKKER & M.C. THAKKER, CIVIL PROCEDURE WITH LIMITATION ACT, 1963 554 (8ed. 2017)

[2] Anand Prasad Agarwalla vs. Tarkeshwar Prasad & Ors. AIR 2001 SC 2367

[3] M. Gurudas & Ors. Vs. Rasaranjan & Ors. AIR 2006 SC 3275

[4] S.M. Dyechem Ltd. Vs. M/s. Cadbury (India) Ltd., AIR 2000 SC 2114

[5] Bombay Dyeing & Manufacturing Co. Ltd. vs. Bombay Environmental Action Group & Ors. (2005) 5 SCC 61

[6] Colgate Palmolive (India) Ltd. Vs. Hindustan Lever Ltd., AIR 1999 SC 3105

[7] AIR 2004 SC 1975

[8] Surya Vadanan v. State of T.N. (2015) 3 SCC (Civ) 94

[9] Prestige Lights Ltd. v. SBI, (2007) 8 SCC 449

[10] Dinesh Textiles v. State Bank of Bikaner & Jaipur, AIR 1999 Raj 162

[11] State Bank of Bikaner & Jaipur v. Abdul Wahid, AIR 2003 Raj 61

[12] Or. 25 R. 1

[13] Vinod Seth v. Devinder Bajaj, (2010) 8 SCC 1

[14] Roy & Co. v. Nani Bala, AIR 1979 Cal 50

[15] C.K. THAKKER & M.C. THAKKER, CIVIL PROCEDURE WITH LIMITATION ACT, 1963 561 (8ed. 2017)

[16] Raman Tech. & Process Engg. Co. v. Solanki Traders, (2008) 2 SCC 302.

[17] Or. 38 R. 1.

[18] Proviso to R. 1

[19] R. 1

[20] Goutiers v. Roberts, (1870) 13 Suth WR 278

[21] Seth Chand Mull v. Purushottamdoss, AIR 1926 Mad 584; Probode Chunder v. M. Dowey, ILR (1887) 14 Cal 695; Vareed Jacob v. Sosamma Greevarghese, AIR 2004 SC 3992; V. Balakrishnan v. J.M. Gowrieshan, AIR 2001 Mad 20

[22] N. Pappammal v. L. Chidambaram, AIR 1984 Mad 70

[23] R. 6(1)

[24] R. 5(2)

[25] R. 5(4)

[26] R. 12

[27] Food Corporation of India v. Sukh Deo Prasad, (2009) 5 SCC 665

[28] S. 37(2), Specific Relief Act, 1963

[29] Or. 39 R. 1(a)

[30] R. 1(b)

[31] R. 1(c)

[32] R. 2(1)

[33] Cotton Corpn. of India Ltd. v. United Industrial Bank Ltd, (1983) 4 SCC 625.

[34] Dalpat Kumar v. Prahlad Singh, (1992) 1 SCC 719

[35] R. 9

[36] R. 10