High Court Oversteps in Dismissing Suit at Interim Stage, Supreme Court Intervenes.


08 May 2025 Civil Appeals >> Civil & Consumer Law   |   Civil Suits >> Civil & Consumer Law   |   Property Law >> Personal Law  

In a significant ruling of Mahendra Magruram Gupta & Another v/s Rajdai Shaw & Others, the Supreme Court of India recently overturned a High Court order that had effectively dismissed a civil suit while hearing an appeal against an interim injunction. The apex court emphasized that a High Court, when dealing with an interim application, cannot adjudicate on the merits of the entire suit or direct its transfer to another pending case.

The case involved a dispute over a tenanted property, with the appellants (descendants of Mr. Magruram Chotanki Gupta) claiming rights based on two notarized agreements: one from 1990 by Mr. Deepnarayan Chotanki Gupta (predecessor of respondent no. 1) transferring his rights to Mr. Magruram, and another from 1998 by Mr. Deepnarayan's widow, Smt. Antadevi, relinquishing her rights to appellant no. 1.

 
 

The appellants had filed a suit seeking a declaration of the validity of these agreements and a permanent injunction to prevent their dispossession from the property. Their prayer for a temporary injunction was initially dismissed by the Trial Court. When the appellants appealed this decision to the High Court, the High Court, in an unexpected turn, not only addressed the interim relief but also virtually dismissed significant portions of the original suit.

High Court's Contradictory Findings:

The High Court's order presented several inconsistencies and legally unsustainable conclusions. Initially, it acknowledged the respondent's (defendant no. 1's) submission that he would not interfere with the appellants' possession without a court order or decree from his own suit for possession. Based on this, the High Court stated that the appellants' possession would be protected.

However, immediately following this concession, the High Court made a non sequitur observation, concluding that prayers (c), (d), and (e) of the appellants' suit—which sought permanent injunctions against dispossession, disturbance of possession, and creation of third-party interests—had become "infructuous" due to the respondent's statement. This conclusion was baffling, as a commitment not to interfere without a decree hardly renders a prayer for permanent injunction "infructuous."

Further, the High Court went on to declare that the notarized agreements of 1990 and 1998, central to the appellants' claim for declaratory relief under prayers (a) and (b), "cannot be taken on record as they are unregistered" and fall within the "mischief of Section 49 of the Registration Act, 1908." Consequently, the High Court opined that "No decree or order in that behalf can be granted" and that the suit "would require the Court to dismiss it with regard to the reliefs under prayers (a) & (b)."

Supreme Court's Strong Rebuke:

The Supreme Court sharply criticized the High Court's approach. It highlighted that there was no occasion for the High Court to delve into the legality, validity, or admissibility of the documents at the stage of deciding an application for interim relief. These were matters to be properly considered during the full trial of the suit.

The apex court observed that while the High Court correctly reversed the Trial Court's decision and granted an injunction (albeit based on the respondent's concession), its subsequent actions of dismissing substantive prayers (a) and (b) of the appellants' suit and directing that other prayers (c), (d), and (e) be considered in the respondent's separate suit for possession were "completely illegal and unsustainable in law."

Outcome:

The Supreme Court allowed the appeals, setting aside the High Court's judgment and order. It restored the appellants' original suit (Civil Suit (L) No. 2217 of 2012) to its original number before the Bombay City Civil Court. Crucially, the Supreme Court also issued a direction restraining the respondents-defendants from dispossessing the appellants pending the disposal of their suit.

The Supreme Court clarified that its decision does not express any opinion on the merits of the matter, leaving the substantive issues to be decided by the Trial Court. This ruling serves as a vital reminder of the scope and limitations of judicial intervention at interim stages, underscoring that courts must not prematurely adjudicate on the entirety of a suit while only addressing a plea for interim relief.


Section 49, Registration Act - 1908  

Registration Act, 1908