Conditional restraint on mortgagee's power of sale granted despite default, tied to part-payment of admitted debt.

Applicants who had executed the mortgage deed and defaulted in repayment failed to establish a strong prima facie case or balance of convenience for an injunction against enforcement of the mortgagee's power of sale, because the admitted debt remained unpaid and the challenge to mortgage clauses did not displace that liability. The Court nevertheless granted only limited interim protection by restraining sale conditionally, to give time for part-payment of the admitted liability. The restraint would cease automatically if the stipulated deposit was not made within time, after which the mortgagee could proceed under the power of sale.

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Issues: (i) Whether the applicants established a prima facie case and balance of convenience for interim injunction against enforcement of the mortgagee's power of sale. (ii) Whether a conditional interim injunction could be granted despite the applicants' default under the mortgage deed.

Issue (i): Whether the applicants established a prima facie case and balance of convenience for interim injunction against enforcement of the mortgagee's power of sale.

Analysis: The applicants had admittedly executed the mortgage deed and had defaulted in payment of the recurring deposit instalments and interest. The principal amount remained due, and the challenge to certain mortgage clauses as being opposed to public policy did not negate the liability to pay the admitted debt. The surrounding facts showed an attempt to delay repayment, while the respondent was a Nidhi collecting deposits from the public and required to meet obligations to depositors. On these facts, the applicants did not establish a strong prima facie case, and the balance of convenience lay with the respondent.

Conclusion: The applicants failed to establish a prima facie case and the balance of convenience was not in their favour.

Issue (ii): Whether a conditional interim injunction could be granted despite the applicants' default under the mortgage deed.

Analysis: Although the applicants were not entitled to injunction as a matter of right, the Court considered that some limited protection could be given to afford them an opportunity to secure part-payment of the admitted liability. The relief was therefore shaped as a conditional restraint on sale, dependent on deposit of 50% of the principal amount within a fixed time, failing which the restraint would automatically cease and the respondent could proceed under the statutory power of sale.

Conclusion: A conditional interim injunction was granted for six weeks subject to deposit of Rs. 90,00,000 within the stipulated time.

Final Conclusion: The applicants were not found entitled to unconditional interlocutory protection, but the Court granted a limited conditional injunction to preserve the property temporarily while securing part-payment of the admitted debt.

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