ORDER
B.K. Behera, J.
1. The question for consideration before me is as to whether this Court should stay the operation of the impugned order of ad interim injunction passed by the learned Subordinate Judge, Sambalpur, in Miscellaneous Case No. 45 of 1982 arising out of Title Suit No. 37 of 1982 instituted by the respondents against the appellants in his court injuncting the appellants from giving effect to the resolutions dated 23-4-1980, 15-5-1980 and 30-5-1980 of the State Government in the Department of Forest, Fisheries and Animal Husbandry and the letter dated 7-5-1982 of the appellant No. 4 addressed to the respondent No. 2 debarring the respondent No. 2 from collecting sal seeds from out of the areas of the Similipahar Forest Development Corporation Limited and further informing that the collection and disposal of sal seeds by it from 1-10-1981 would be confined to the jurisdiction of the present Karanjia Division only, and from interfering in any manner with the exclusive right of the respondent No. 2 to collect and appropriate sal seeds from the areas described in the schedule to the application and supply the same to the respondent No. 1 for utilisation in its industry and from impeding in any manner the ingress or egress of the men and trucks/vehicles of the respondent No. 2 into and out of the scheduled areas or transport thereof from/out of scheduled areas and from refusing to issue necessary permits for the said purpose. In the schedule of the order had been included the entire forests of Karanjia and Baripada Forest Division including the areas/forests alloted/attempted to be allotted to Similipahar Forest Development Corporation Limited.
2. The respondent No. 2 had been granted lease by the State Government in respect of twelve forest divisions including the Baripada and Karanjia Divisions for the purpose of collection of sal seeds from which oil is extracted and used for manufacture of some commodities. The leases in question had been renewed from time to time in favour of that company. On 8-1-1979, the State Government passed a policy resolution in regard to exploitation of minor forest produce including the sal seeds. Subsequent to this policy decision of the State Government, the application of the respondent No. 2 for renewal was considered and it was granted lease for a period of ten years on the conditions laid down in the policy decision as well as on the terms and conditions of the lease executed between the parties. This lease was to continue until the year 1989.
On 22-4-1980, the respondent No. 2 was informed in a letter from the Divisional Forest Officer, Baripada, to the effect that the Similipahar Forest Development Authority had come into existence since February, 1980 and therefore, the respondent No. 2 was to abide by Clause 17 (v) of the Agreement and no collection should be made in the Similipahar Reserved Forest (Annexure 17 to the plaint). Thereafter, as per Annexure 18 to the plaint, the Managing Director of the Similipahar Forest Development Corporation Limited, which is a Government of Orissa Undertaking, invited sealed tenders from interested parties for purchase of sal seeds for the year 1980 from the Project area. The respondent No. 2 unsuccessfully challenged the legality of the aforesaid letter dated 22-4-1980 from the Divisional Forest Officer, Baripada, in the Calcutta High Court, before a learned single Judge and the writ application was dismissed on 19-5-1980. Against the order
of the learned single Judge, the respondent No. 2 moved a Division Bench of the Calcutta High Court in P.H.A.T. No. 1445 of 1980 and the appeal was dismissed as per Annexure A to the memorandum of appeal presented in this Court, The respondent No. 2 then moved a petition in the Supreme Court for grant of Special Leave to Appeal in S.L.P. No. 5515 of 1980 against the -judgment of the Calcutta High Court, but it was withdrawn. The respondent No. 1 then filed a writ application in this Court (O.J.C. No. 954 of 1980).
In the meantime, the respondent No. 1 made a representation to the State Government for reconsideration of the decision with respect to the lease of sal seeds in the Similipahar Forest Development area and on consideration of the representation, it was decided that the areas would be given to the respondent No. 2 for collection of sal seeds for a period of one year only, i.e., 1981. Pursuant to this order, the respondent No. 2 was permitted to collect sal seeds for the year 1981.
3. The respondents have now instituted Title Suit No. 37 of 1982 in the court of the learned Subordinate Judge, Sambalpur and have prayed for ad interim order of injunction against the appellants injuncting them from giving effect to the Government resolutions and the letter of the Divisional Forest Officer dated 7-5-1982 referred to above. The suit was instituted on 12-5-1982. The application for ad interim injunction was filed on 14-5-1982. On the same day, the impugned order was passed which the State Government could know on 17-5-1982 having received notice thereof from the court of the learned Subordinate Judge. 15-5-1982 was the last working day for the subordinate civil courts in this State and the summer vacation commenced on and from the 16th May. 1982. The last working day, i.e., the 15th May, 1982, was ordinarily to be observed as a clearance day by the court. Because of this difficulty and as the order of injunction had been passed only one day prior to the day when the civil courts were to be closed, the copy of the impugned order could not be obtained by the appellants, After obtaining an order of ad interim injunction in their favour, the petitioners in O.J.C. No. 954 of 1980 have now put in a memorandum in this Court on 17-5-1982 stating thus :
“The petitioners amongst others have already filed T. S. No. 37/1982 and Misc, Case No. 45/1982 in the Court of the learned Subordinate Judge, Sambalpur in respect of the subject matter of this Writ Petition as well as subsequent orders/actions of the opposite parties. The petitioners, therefore, do not propose to continue with this Writ Petition any longer, and accordingly seek leave of this Hon’ble Court to withdraw the same.
4. After hearing the learned counsel for both the sides, I had, on the 21st May, 1982, passed an interim order of stay and called for the record for hearing on the question of stay of the impugned order till the disposal of the appeal.
The learned Advocate-General, appearing on behalf of the appellants, has taken a number of legal and factual grounds and has contended that the impugned order could not legally be passed against the appellants. According to Mr. K. Mohanty, the learned counsel for the respondents, however, the impugned order had legally and duly been passed by the learned Subordinate Judge after hearing the respondents and the learned Government pleader for the appellants who had conceded for the grant of ad interim injunction and in view of the facts and circumstances of the case and the urgency of the matter, the learned Subordinate Judge was legally correct in passing the impugned order which could not be called in question.
5. The learned Subordinate Judge. while passing order No. 3 dated 14-5-1982, had recorded thus:
“3. The learned Advocate appearing on behalf of the plaintiff are present and the Government pleader on behalf of the State-defendants is also present. Heard the matter on the question of ad interim injunction.
4. The learned Government pleader submitted that he has got no objection if the ad interim injunction is granted, but he should be given a chance to file an objection till the next date, Put up later on for further orders.”
The learned Subordinate Judge then proceeded to pass and record the impugned order and just before the operative part was recorded, the learned Sub-ordinate Judge stated thus:
“9. As stated above a copy of the petition was served on the Government
pleader Sri S. Debata of Sambalpur District and as required under Section 80(2), C.P.C. at the time of hearing of the petition the Government pleader Mr. Debata was present and he was also asked whether he has any reason to object in the ex parte ad interim injunction. The learned Government pleader submitted that ad interim injunction may be issued, but the right of the Government to file objection may be preserved. So, the State Government may file an objection and contest the misc. case before injunction is made absolute.
10. After perusing the plaint, the relevant documents in favour of the petitioners and going through the petition it is necessary that an ad interim injunction be issued against the defendants in the manner as prayed by them…..”
The learned Subordinate Judge then directed issue of notices to the appellants to show cause by 9-7-1982 as to why the ad interim injunction passed against them should not be made absolute.
6. A serious dispute has arisen as to whether in fact, the learned Government pleader could appear and had appeared on behalf of all the appellants and had conceded for passing of an ad interim order of injunction. The learned Government pleader has sworn an affidavit in this Court enclosing a copy of his letter addressed to the District Judge, Sambalpur, making allegations against the conduct of the learned Subordinate Judge and according to him, he has not made any such submissions and his verbal prayer for an adjournment had been rejected. In either case, the matter is very grave. If the learned Government pleader had not made such a concession, the learned Subordinate Judge had no justification to record that he had so conceded. If, on the other hand, a concession had. in fact, been made, it must be taken that the learned Government pleader has now made false statements in the affidavit filed in this Court. This matter need not be gone into at this stage as the Subordinate Judge is not before this Court and no comment should be made against him without asking him to give his comments on the affidavit put in by the learned Government pleader in this Court. As has been laid down by the Supreme Court in the case of Bank of Bihar v. Mahabir Lal (196?) 33 Com Cas 783; (AIR 1964 SC
377), where a statement appears in the judgment of a court that a particular thing happened or did not happen before it, it ought not ordinarily be permitted to be challenged by a party unless, of course, both the parties to the litigation agree that the statement is wrong, or the court itself admits that the statement is erroneous. Similar is the principle laid down in the case of Rama Santra v. Rani Soudamini Manjari Devi, (1962) 28 Cut LT (Notes) 114. The learned Advocate-General has invited my attention to the observations made by Lord Denning M. R. in the case of H. Clark (Doncaster) Ltd. v. Wilkinson, (1965) 2 WLR 751, and has contended that a concession made by a solicitor having no ostensible or apparent authority is not binding on the party. In the instant case, it would not be necessary, in my view, to go into this question as on a perusal of the part of the order extracted above, it would be seen that although the concession said to have been made by the learned Government pleader had been referred to, it had not, in terms, been relied on while passing the order in favour of the respondents. That apart, as rightly submitted by the learned Advocate-General, the learned Government pleader could appear for the appellant No. 1 (State of Orissa), but had no authority to appear for other public officers and the Similipahar Forest Development Corporation Limited. As per the Orissa High Court amendment, by addition of a new rule as Rule 9 to Order 27 of the Code of Civil Procedure :
“In every case in which the Government pleader appears for the Government as a party on its own accounts or for the Government as undertaking, the provision of Rule 8 (1), the defence of a suit against an officer of a Government, he shall in lieu of Vakalatnama, file a memorandum of unstamped paper signed by him and stating on whose behalf he appears.”
No memorandum of appearance has been put in by the learned Government pleader in this suit. As provided in Order 27, Rule 8 of the Civil P. C., where the Government undertakes the defence of a suit against a public officer, the Government pleader, upon being furnished with authority 1o appear and answer the plaint, shall apply to the Court, and upon such application, the Court shall cause a note of his authority to be entered in the register of civil suits. There is no material that the learned Government pleader had authority from the State Government to appear on behalf of the public officers. As has been laid down by the Calcutta High Court in the case of Lutfar Rahaman Laskar Haji Kabadali Naskar v. State of West Bengal, AIR 1954 Cal 455, unless the procedure laid down in Order 27, Rule 8 has been followed, the court is to proceed on the footing that there has been no appearance by the Government pleader on behalf of the public officers and the intimation filed by the Government pleader for appearance on their behalf cannot be accepted. Thus, if the learned Government pleader had authority to appear on behalf of the State Government, he had no authority to appear on behalf of the other appellants and therefore, even assuming that a concession had been made by him, in view of the provisions of Order 27, Rule 8, his appearance on behalf of the public officers was to be ignored by the court and he had no authority to appear for the Similipahar Forest Development Corporation Limited (appellant No. 6).
7. The learned Advocate-General has strenuously urged relying on the provisions of Sections 16, 19 and 20 of the Civil P. C. that the Subordinate Judge, Sambalpur, had no territorial jurisdiction to entertain the suit and the suit could only be instituted in an appropriate court having jurisdiction over the areas where the sal seeds were to be collected. Mr. R. Mohanty, however, has, in this connection, relied on the principles laid down in the cases of S. P. Gantayat v. Principal, Regional Engineering College, Warangal (A. P.), (1977) 2 Cut WR 874, Sohanlal Sukla v. Dila-sukrai, (1964) 30 Cut LT (Notes) 82, Khanchand Pokardas v. Harumal D. Varma, AIR 1965 Bom 109 and State of Maharashtra v. Sarvodaya Industries, AIR 1975 Bom 197, and has submitted that as the letter dated 7-5-1982 conveying the decision of the State Government, referred to above, had been communicated to the respondent No. 2 in its address at Sambalpur and had been received at Sambalpur, the suit could be instituted in the court of the Subordinate Judge at Sambalpur. It would, not in my view, be necessary to go into this important question which is one of facts and law at this stage.
8. Before examining the other contentions raised on behalf of the appellants, it would be better to keep in mind some salient features with regard to the institution of the suit and the moving of an application for ad interim injunction. The suit was instituted on 12-5-1982 and an order was passed by the learned Subordinate Judge on that day to register the suit and put up on 14-5-1982 with office note. On 14-5-1982, the following order was passed which was recorded by the learned Subordinate Judge in his own hand:–
“Seen office note in the suit. The plaintiff has filed all the necessary requisites, necessary in the suit to be filed. Process fees, etc. have been duly filed. Admit the suit and issue summons for settlement of the issues to the defendants, fixing to 9-7-82 for service return.”
It has been stated in paragraph 67 of the plaint that notices dated 12-5-1982 under Section 80 of the Code of Civil Procedure had been despatched through registered post to the Chief Secretary to the Government of Orissa, Bhubaneswar and the Secretary, Forest, Fisheries and Animal Husbandry Department, Government of Orissa, Bhubaneswar. Thus the suit had been instituted before the expiry of two months after the notices were sent. An application for leave to sue and to move the urgent application for injunction was made ready on 12-5-1982. but was filed in the court on 14-5-1982. An application under Order 39, Rules 1 and 2 for ad interim injunction supported by an affidavit dated 14-5-1982 was sworn on that day at 8-05 a.m. as could be seen from the endorsement thereon by the Commissioner of Affidavits, and was filed on the same day. An application under Order 39, Rule 3 of the Civil P. C. for passing of an ex parte order of injunction was also made ready and filed on 14-5-1982. On 13-5-1982, notice was given in writing to the learned Government pleader by the learned Advocate for the respondents that they would move the plaint and petition under Order 39 on the next day, i.e., on the 14th May, 1982. Although it has been mentioned therein that the copies of the plaint, petition under Order 39, Rule 3 and petition under Section 80 had been served, the learned Government pleader had endorsed thus:
“Received copies of the plaint and injunction petition.”
This endorsement, strangely enough, had been signed on 13-5-1982 although an earlier pointed out by me, the application for injunction was dated 14-5-1982. There is no endorsement of the learned Government pleader on any of the applications to the effect that he had received copy of the same, apart from the endorsement dated 13-5-1982 in a separate paper referred to above. There is nothing to show that he had received the copy of the application made under Order 39, Rule 3 of the Civil P. C. Apart from the statement recorded by the learned Subordinate Judge in his order dated 14-5-1982 that copy of the application made under Section 80 read with Section 151 of the Civil P. C. had duly been served on the Government pleader, there is no other record to show this and there has been no endorsement of the Government Pleader with regard to the receipt of the copy of this application, without, of course, taking into consideration the affidavit of Sanwarmal Gupta on behalf of the respondents in this appeal. In the affidavit, it has been stated by him that the learned Government pleader, Sambalpur, received copies of the applications under Section 80(2), Order 39, Rules 1 and 2 and Order 39, Rule 3 of the Civil P. C. at about 8-00 a.m. on the 14th May, 1982. The affidavits with regard to the applications under Order 39 had been sworn at 8-05 a.m. and copies of the applications could be served on the learned Government pleader some time thereafter and copies could not be served at about 8-00 a.m. Some corrections had been made in the affidavit with regard to the date of service and as to whether notice was given to the learned Government pleader that the matter would be moved on the same day or the next day. In the absence of any record of the court as to when the applications were served, there is no reason to discard the statement made by the learned Government pleader in his affidavit filed in this Court to this “effect:
“That on 14-5-82 at about 10 a.m. while the deponent was in his office a copy of the plaint and a copy of the application for injunction under Order 39 filed by M/s. Orissa Oil Industries and others were served on him with the oral intimation that the matter of injunction will be taken up by the court at 11 a.m…..”
According to the learned Government pleader by about 11-00 a.m., when he
reached the court, he found that the injunction matter had already been taken up and he further gathered that by the time the application for injunction was served on him, the injunction matter had already been started in the court. This part of his statement in the affidavit is disputed and as earlier indicated by me. need not be gone into at this stage by this Court. As would appear from the statement made by the learned Government pleader, he received a copy of the plaint and a copy of the application for injunction at about 10-00 a.m. on 14-5-1982. It may not be out of place to mention here that the plaint runs 54 pages and the annexures to the plaint run 111 pages. It would not, therefore, be possible on the part of a party or a pleader to effectively get instructions and oppose an application for injunction by studying the case on the same day. As has been laid down in the case of State of Bihar v. Smt. Daulat Kumari, AIR 1969 Patna 25, service of notice on the Government pleader is valid service of notice on the State Government, but in the instant case, although no written application had been made by the learned Government pleader for an adjournment, he could not possibly, placed in the circumstances in which he was, get instructions from the State Government and proceed with the matter and make submissions before the court. As a matter of fact, there is no material to indicate that he had any instructions or authority from the State Government to make submissions in the court on 14-5-1982. Prima facie, there appears to be some force in the contention raised by the learned Advocate-General that having instituted the plaint on 12-5-1982 and without taking any effective steps for moving an application for injunction immediately thereafter, the respondents chose to file and move the application for ad interim injunction with only one day to go before the Summer Vacation and the matter was hurried through and an order of ad interim injunction covering nearly 20 pages in the order-sheet was passed, although the courts were then having morning sittings from 6.30 a.m. to 12.30 p.m. But without obtaining the comments of the learned Subordinate Judge, it would not be appropriate, in my view, to express a final opinion in this regard. Suffice it to say that on the face of it, the appellants had not been given due and adequate notice
regarding the Instillation of the suit and the moving of an application for ad interim injunction and in the circumstances narrated above and without proper authority and instructions. the learned Government Pleader could not have effectively represented the case of the appellants before the court. It would, thus, prima facie appear to me that without reasonable opportunity being afforded to the appellants to show cause, the impugned order had been passed.
9. The suit was instituted without the expiry of two months from the date of the notice under Section 80 of the Civil P. C. An application under Section 80(2) of the Code of Civil Procedure for leave to sue was made ready on 12-5-1982, but not filed until 14-5-1982. The learned Subordinate Judge, after perusal of the office note, admitted the plaint on 14-5-1982 and I have extracted above that part of his order. The office had pointed out in its note on the reverse of page 1 of the plaint:
“A petition praying for permitting the plaintiff to file the suit u/s. 80(2), C.P.C.”
The sentence is not complete. Any way, it may be taken that the office noted that such an application had been filed. If due notice had been taken by the learned Subordinate Judge of this fact, he could not have admitted the plaint without allowing the application made under Section 80(2) of the Code of Civil Procedure on 14-5-1982. As would prima facie appear from the order No. 3 dated 14-5-1982, he took note of this application on that day and had recorded thus:–
“An application under Section 80 read with Section 151 of the Code of Civil Procedure has been filed by the plaintiff-petitioner, copy of which has been duly served on the Government Pleader of Sambalpur district, Mr. S. Debta, It has been prayed that the petition should be allowed permitting the plaintiff to file the suit and move the court for necessary and appropriate directions by way of ad interim orders injunction/status quo. The petitioner states that the plaintiff has filed a suit in this court with a prayer to issue ad interim injunction against the defendants restraining them to prohibit the plaintiff to collect sal seeds from Karanjia and Baripada forest divisions as per the previous agreement.”
10. On a perusal of the orders passed in the order-sheet, it would be clear
that the application made under Section 80(2) of the Civil P. C. had not been allowed by the court. It would, therefore, follow that the suit could not be maintained in law and the urgent order for injunction could not, without the leave of the court, be asked for. As has been laid down in the cases of Sawai Singhai Nirmal Chand v. Union of India, AIR 1966 SC 1068 and Certificate Officer, Berharnpur v. Kasturi Chand Malu, AIR 1970 Orissa 239, notice under Section 80 of the Civil P. C. is a condition precedent for maintainability of a suit even for injunction. It has been laid down in the case of Man-mohan Das v. Madhunagar Powerloom Weavers’ Co-operative Society, (1975) 41 Cut LT 697 that absence of notice under Section 80 touches the root of the matter and affects the jurisdiction of the court unless there is waiver. The point taken by the learned Advocate-General, in this regard, therefore, is well-grounded and unassailable. If the suit had not properly been instituted and therefore, could not lie and as in the instant case, leave to sue had not been allowed for moving the urgent application, no order of ad interim injunction could legally be passed by the court,
11. I have indicated earlier that there is nothing on record to show that the learned Government Pleader had received a copy of the application made under Order 39, Rule 3 of the Civil P. C. This provision reads as follows:
“The Court shall in all cases, except where it appears that the object of granting the injunction would be defeated by the delay, before granting an injunction, direct notice of the application for the same to be given to the opposite party;
Provided that, where it is proposed to grant an injunction without giving notice of the application to the opposite party, the Court shall record the reasons for its opinion that the object of granting the injunction would be defeated by delay, and require the applicant (a) to deliver to the opposite party, or to send to him by registered post, immediately after the order granting the injunction has been made, a copy of the application for injunction together with-
(i) a copy of the affidavit filed in support of the application;
(ii) a copy of the plaint; and
(iii) copies of documents on which the applicant relies, and
(b) to file, on the day on which such injunction is granted or on the day immediately following that day. an affidavit stating that the copies aforesaid have been so delivered or sent.”
It may be stated at the cost of repetition that the Government Pleader could have appeared on behalf of the State Government, but not on behalf of other public officers and the Corporation. There had thus been no due notice of the application to these appellants. No order was passed by the learned Subordinate Judge on the application made under Order 39, Rule 3 of the C. P. C. If it is proposed to grant injunction without giving notice of the application to the opposite party, the court shall record the reasons for its opinion that the object of granting the injunction would be defeated by delay. No such reasons have been recorded by the learned Subordinate Judge in the body of the order. In a recent decision of the Calcutta High Court in the case of Amiya Prasad v. Bejoy Krishna Chakraborty. AIR 1981 Cal 351 it has been laid down that to record the reasons for its opinion that the object of granting the injunction would be defeated by delay is a mandatory provision and if the reasons are not recorded, the order is to be taken as illegal. I would respectfully adopt the views of the learned Judge of the Calcutta High Court. This ground has also been well-taken by the learned Advocate-General.
That apart as provided in Section 80(2) of the C. P. C, the leave of the court for the institution of a suit to obtain an urgent or immediate relief without serving any notice as required by Sub-section (1) is necessary and further, the court shall not grant relief in the suit whether interim or otherwise, except after giving to the Government or public officer, as the case may be, a reasonable opportunity of showing cause in respect of the relief prayed for in the suit. From the facts and circumstances narrated earlier. I am prima facie satisfied that a reasonable opportunity of showing cause had not been given to the Government or the public officers in the instant case. This would again affect the legality of the impugned order. No doubt, as provided in order 39, Rule 4 of the C. P. C. and as laid down in the case of Gurupadayya Nagayya v. Mahadu Arjun
Nidoni, AIR 1976 Kant 66, the aggrieved party could approach the court granting injunction to rescind the order, but in this case, because of the closure of the court owing to Summer Vacation, the appellants could not have moved that court and they did exercise their right of appeal in view of the urgency.
12. It has been a settled principle of law that a party seeking injunction must satisfy the court that he has a prima facie case and that but for an order of injunction, irreparable injury would be caused to him and that the balance of convenience is in his favour. In this connection. Mr. Mohanty, the learned counsel for the respondents, has invited my attention to the principles laid down in American Cyanamid Co. v. Ethicon Ltd. (1975) 1 All ER 504 wherein the following observations have been made:
"The grant of an interlocutory injunction is a remedy that is both temporary and discretionary, XX XX X The use of such expression as 'a probability', 'a prima facie case', or 'a strong prima facie case' in the context of the exercise of a discretionary power to grant an interlocutory injunction leads to confusion as to the object sought to be achieved by this form of temporary relief. The court no doubt must be satisfied that the claim is not frivolous or vexatious; in other words, that triers is a serious question to be tried.
It is no part of the court’s function at this stage of the litigation to try to resolve conflicts of evidence on affidavit as to facts on which the claims of either party may ultimately depend nor to decide difficult questions of law which call for detailed argument and mature considerations. These are matters to be dealt with at the trial. One of the reasons for the introduction of the practice of requiring an undertaking as to damages on the grant of an interlocutory injunction was that ‘it aided the court in doing that which was its great object, viz. abstaining from expressing any opinion upon the merits of the case until the hearing’ Wakefield v. Duke of Buccleuch. (1865) 12 LT 628. So unless the material available to the court at the hearing of the application for an interlocutory injunction fails to disclose that the plaintiff has any real prospect, of succeeding in his claim for a permanent injunction at the trial, the court should go on to consider whether the balance of convenience lies in favour of granting or refusing the interlocutory relief that is sought.
As to that, 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’s 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 a 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 plaintiff’s undertaking 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 this ground to refuse an interlocutory injunction.
It is where there is doubt as to the adequacy of the respective remedies in damages available to either party or to both, that the question of balance of convenience arises. It would be unwise to attempt even to list all the various matters which may need to be taken into consideration in deciding where the balance lies, let alone to suggest the relative weight to be attached to them. These will vary from case to case.
Where other factors appear to be evenly balanced it is a counsel of prudence to take such measures as are calculated to preserve the status quo. If the defendant is enjoined temporarily from doing something that he has not done before, the only effect of the interlocutory injunction in the event of his succeeding at the trial is to postpone the
late at which he is able to embark on a course of action which he has not previously found it necessary to undertake; whereas to interrupt him in the conduct of an established enterprise would cause much greater inconvenience to him since he would have to start again to establish it in the event of his succeeding at the trial.”
Mr. Mohanty has also invited my attention to the principles laid down in the cases of Brajendra Nath Ghosh v. Smt Kashi Bai, AIR 1946 Patna 177. In the case of Orissa State Commercial Transport Corporation Ltd. v. Satyanarayan Singh, (1974) 40 Cut LT 336, G. K. Misra, C. J., observed:
“The following propositions are to be established in order to invoke the jurisdiction of the Court to get an interlocutory order of injunction under Order 39, Rules 1 and 2, Civil Procedure Code, (i) Plaintiff has a prima facie case, (ii) It interim injunction is refused he will suffer an irreparable injury, (iii) The balance of convenience is in his favour…..
10. In establishing a prima facie case, plaintiff need not establish his title. It would be sufficient for him to show that he has a fair question to raise as to the existence of his right and that till the question is ripe for trial a case is made out for preservation of the property in status quo.
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11. ‘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 success in the suit would not place him in the position in which he was before injunction was refused.
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12. ‘Balance of convenience’ means the comparative mischief or inconvenience to the parties. The inconvenience to the plaintiff if temporary injunction is refused would be balanced and compared with that to the defendant if it is grants ed If the scale of inconvenience leans to the side of the plaintiff, then alone interlocutory injunction should be granted.”
It has been submitted by the learned Advocate-General that judged in the light of the principles laid down with regard to the legal necessities before granting injunction, the materials in the instant case were far short of the mark with regard to any of the three essentials. 13. As to the prima facie case, it has been submitted by the learned Advocate-General that it would depend on an interpretation of Sub-clauses (v) and (vi) of Clause 17 of the Deed of Agreement. The said two sub-clauses may be extracted :
“(v) It is hereby agreed that when the Similipahar Development Authority (Corporation) comes into existence, the portions of Karanjia and Baripada Forest Divisions coming within the jurisdiction of the aforesaid Authority (Corporation) shall automatically be deemed to have been taken out from the existing areas covered by this agreement, but the remaining portions of these two Forest Divisions covered by this agreement shall continue to remain under the licence granted to the company.
(vi) It is further agreed that in the event of the areas indicated at (v) above being taken out of the lease as aforesaid, another area having equivalent potentiality as far as possible will be made available to the Company for collection of sal seeds.”
Mr. Mohanty for the respondents has referred to the principles laid down in the cases of Beli Ram and Brothers v. Chaudri Mohammed Afzal. AIR 1948 PC 168, Nagarathnammal v. D. Veeraraghavan, AIR 1954 Mad 1008 and Krishnan Kumaran v. Mathew J. Mattom, AIR 1957 Ker 119 with regard to the interpretation of the terms of documents and has submitted that Sub-clause (v) is dependent on Sub-clause (vi) and the two sub-clauses must simultaneously be given effect to. In other words, his contention is that unless another area having equivalent potentiality as far as possible is made available to the Company for collection of sal seeds, the areas coming under the jurisdiction of the Similipahar Forest Development Authority (Corporation) as mentioned in Sub-clause (v) cannot be taken out. But as submitted by the learned Advocate-General, it would appear from the wordings of both the sub-clauses that Sub-clause (v) is independent of and not subject to Sub-clause (vi) and the words “shall automatically be deemed to have been taken out from the existing areas covered by this agreement” would show that when the Similipahar Forest Development Authority (Corporation) comes into existence.
the areas coming under that Authority would automatically be taken out from the areas covered by the agreement. While the expression “shall automatically be deemed to have been taken out” has been used in Sub-clause (v), Sub-clause (vi) postulates a future act by the use of the expression: “another area having equivalent potentialily as far as possible will be made available to the Company for collection of sal seeds” (the underlining is mine). It may be open to the Company, in the event of Sub-clause (v) coming into operation, to claim specific performance of the contract if another area having equivalent potentiality as far as possible will not be made available to it, as submitted before me on behalf of the appellants, but it would not be reasonable to construe on a perusal of these two sub-clauses that unless the terms of Sub-clause (vi) are satisfied and given effect to, the terms of Sub-clause (v) cannot operate. It is admitted on all hands that the Similipahar Forest Development Authority (Corporation) has come into existence since 1980 and with its coming into existence, Baripada & Karanjia Forest Divisions coming within its jurisdiction have been taken out from the existing areas covered by the agreement. If this be the construction and it prima facie appears to be reasonable and proper to so construe, it may be said that the re spondents have no prima facie case with regard to the areas under the jurisdic-tion of the Similipahar Forest Development Authority (Corporation) for which the suit has been instituted and the injunction had been claimed for and granted. Unfortunately as it might seem, the learned Subordinate Judge did not take care to examine this aspect before passing the Impugned order. This is, of course a tentative view and the construction of the two sub-clauses which would be very material to decide the dispute between the parties is a matter which may more appropriately be gone into in details and determined at the stage of trial.
Relying on the principles laid down in the case of Indian Aluminium Company v. Kerala State Electricity Board, AIR 1975 SC 1967, Mr. Mohanty for the respondents has urged that contractual rights and obligations are sacrosanct and are not to be lightly interfered with. In the instant case, however, for the reasons recorded above, the contention raised on behalf of the appellants seems to be fair and well-based although I would express no final opinion on it at this stage.
14. I would next come to the questions of irreparable injury and balance of convenience. It has been stated in the application for ad interim injunction that the respondent No. 2 has made substantial investments and in pursuance of the assurance for exclusive supply of the sal seeds, the respondent No. 1 has also made substantial investments to the tune of more than rupees two crores in building two extremely sophisticated and well-equipped solvent extraction plants and has entered into several long term agreements/contracts with buyers in India and overseas buyers for supply of substantial quantities of sal seed oil and oil cake and the balance of covenience is in favour of the respondents would suffer from irreparable injury and sustain heavy damages in case they are not allowed to collect sal seeds from the areas in question and it has been submitted before me that if other areas, such as, Puri and Athagarh Divisions, with much less or virtually no potentiality, are given to them in lieu of the areas in question, they would suffer heavily. In support of their case, the respondents have put in the affidavits of Shri San-warmal Gupta, said to be the Secretary and Principal Officer of the respondent No. 1 and of Jadunath Das who is said to be the Resident Representative of the respondent No. 1. Both these persons have also, in their affidavits, made some statements as to what happened in the court of the learned Subordinate Judge on the day the order of injunction was passed. But, as submitted by the learned Advocate-General, it would be noticed from the chart at page 18 of the plaint that the respondents had under them areas with the estimated potentiality of 69,600 metric tons and after the two areas within the jurisdiction of the Development Corporation have been excluded, the respondents are still left with areas with estimated potentiality of 64,000 metric tons. The Chief Conservator of Forests has filed an affidavit in this court and I would quote an extract from the affidavit:–
“6. That the maximum annual requirement of sal seeds of the two factories of M/s. Orissa Oil Industries Ltd. one at Sasan (Dist. Sambalpur) and the other
at Rairangpur (Dist. Mayurbhani) would be 42,000 MT per annum if the factories utilise the maximum capacity which is 70 MT per day. This calculation is based on the particulars submitted by the said M/s. Orissa Oil Industries Ltd. as well as the statistics and data prepared by the Government in the Industries Department while formulating the lease policy for collection of sal seeds for the year 1976-77.
7. That out of the 12 Divisions leased out in favour of M/s. Utkal Contractors and Joinery (P.) Ltd. excluding the area comprised in Similipahar, the estimated potentiality of collection of sal seeds per annum is nearly 64,000 MT. This estimation is based on a sample survey by the departmental authorities in 1975. This fact is admitted in para 28 of the plaint namely that the total potential including Similipahar area is 69,600.
8. That the average annual collection of sal seeds from the portion of Baripada and Karanjia Divisions which comes within the jurisdiction of the S.F.D.C. and which forms the subject matter of dispute in the suit and the injunction as well as in the appeal is 5,167 M.T. taking into consideration the figures of collection during the 5 years ending 1979.
9. That the actual collection of sal seeds from Athagarh and Puri divisions which were offered to M/s. Utkal Contractors and Joinery (P.) Ltd. in accordance with Clause 17 (vi) of the agreement was 2,190 M.T. during the year 1981.
10. That the aforesaid data and figures would conclusively establish that the submission of the plaintiffs-respondents that the two factories will be starved if the area covered within the jurisdiction of the S.F.D.C. is not given to it is wholly baseless. The data further reveal that the offered area namely Athagarh and Puri Divisions would come within the concept of area of equivalent potentiality as far as possible within the ambit of Clause 17 (vi) of the Agreement,”
15. The Managing Director of the Similipahar Forest Development Corporation has also put in an affidavit in support of the case of the appellants in this Court. According to him, steps have been taken by the Corporation for the construction of all-weather roads so that the maximum collection of sal seeds
would be made and the Corporation has so far spent about Rs. 40 lakhs for the development of the infra-structure. He has further staled thus:
“5. That in case where private parties are granted licence to collect sal seeds they do not have any obligation to construct roads and develop infra-structure in the area as is being done by Simili-pahar Forest Development Corporation. Normally, such licensee organise collection of sal seeds through agents in the area. But the S.F.D.C. has separate organisation of its own for collection of sal seeds directly from Adivasis on payment of fair wages. The State Government have fixed the minimum wages for collection of sal seeds at the rate of 90 paise per Kg. The deponent understands that the plaintiff No. 1 has offered 60 paise per Kg, while S.F.D.C, pays at the rate of 90 paise per Kg.
6. That there are five other solvent extraction units in the State which also require sal seeds as their raw materials. Pending establishment of Solvent Extraction Plants by the S.F.D.C. the sal seeds collected may be utilised to meet the short-fall requirement of other existing solvent extracting units in the State as far as possible.”
16. The Deputy Secretary to the Government of Orissa in the Department of Forest, Fisheries and Animal Husbandry has also sworn an affidavit and has stated that the respondent No. 1, in letter No. S.15/524/79-80 dated 26-7-1979 addressed to the Secretary to the Government of Orissa, Forest Department, had stated that its collection of 48.00 metric tons of sal seeds had exceeded its capacity of 42,000 metric tons and it had requested the State Government for orders for transporting 10,000 tons of sal seeds kernels for processing outside the State. Although in the chart at page 18 of the plaint, the collection had been shown to be much less than the actual potentiality of the areas, it would appear from this letter, a copy of which has been enclosed to the affidavit filed in this Court, that in the year 1979, there has been excess collection which could not be processed inside the State and for this, permission of the State Government had been sought for processing 10,000 tons of sal seeds kernels outside the State,
17. All this would show that the averments made by the respondents that
but for an imminent order of injunction, irreparable injury would be caused to the respondents could not prima facie be accepted and as a Government of Orissa Undertaking has already undertaken the operations in the areas which were previously with the respondent No. 2 as per the Agreement, but had been carved out of the areas by virtue of Sub-clause (v) of Clause 17 of the Agreement on coming into existence of the Corporation, it could not be said that the balance of convenience in the instant case was in favour of the respondents.
18. True, the facts pleaded in these affidavits by both the sides in this Court were not placed before the learned Subordinate Judge and there was hardly any time for it, but the learned Subordinate Judge did not properly take into consideration, important aspects, such as, the foundation for the apprehension of irreparable injury as pleaded by the respondents and the balance of convenience in favour of either of the two sides and after merely recording the case of the respondents mentioned in the plaint, the learned Subordinate Judge passed the impugned order which, prima facie, would appear not to be a reasonable and reasoned one. Besides, mandatory provisions of law causing prejudice to the appellants had been infringed and I have already referred to these aspects,
19. At the stage of hearing this matter, Mr. Mohanty for the respondents has moved an application under Order 40. Rule 1 read with Section 151 of the Civil P. C. for the appointment of a receiver and has, in the alternative, submitted that the respondent No. 2 Company may be appointed to be the receiver for collection, treatment, custody and safe storage of the sal seeds in question. In this connection, Mr. Mohanty has placed reliance on the principles laid down in Ravi Lakshmaiah v. Nagamothu Lakshmi, AIR 1971 Andh Pra 380 and his contention is that the words “make such other order” occurring in Order 39, Rule 1 of the Civil P. C. include a power to appoint a receiver and such an appointment can be made in an application for injunction even suo motu if the circumstances and facts justify it. This application has been resisted by the learned Advocate-General and it has been submitted that the respondent No. 2, in view of the facts and circumstances of the case, is not to be appointed receiver and as the Government of Orissa Undertaking has already taken up the operations this year, no receiver should be appointed. In view of what has been stated by me in the body of this order, it would not be just, reasonable and equitable to appoint a receiver and the application is rejected.
20. For the reasons aforesaid, I am of the view that it would be legal and equitable, reasonable and proper to stay the operation of the impugned order as prayed for. I would, therefore, make absolute my order staying operation of the order of injunction passed by the learned Subordinate Judge on 14-5-1982 and do hereby order that there shall be stay of the order of injunction appealed against till the disposal of this appeal.
21. Before I close, I would like to make it clear that I have dealt with some of the matters in details as lengthy arguments have been advanced at the Bar raising a number of legal and factual contentions and I have made the observations only for the purpose of disposing of the application for stay of the impugned order. My observations should not, in any manner affect the merits of the suit or influence the mind of the court in seisin of the suit.