Interim injunction limits clarified: appeal maintainable, suppression defeats prima facie relief, and criminal proceedings cannot be restrained.

Where an ex parte injunction is not disposed of within the period contemplated by Order XXXIX Rule 3A CPC, the aggrieved party may appeal and the appeal is not barred by limitation. The plaintiff's suppression of material facts and correspondence, including letters describing the cheques as repayment of a short-term loan, justified adverse inference and defeated any prima facie equitable case for continuing interim relief. A civil injunction cannot be used to restrain criminal proceedings arising from dishonoured cheques, and no conditional injunction was warranted without security. The ad interim injunction was vacated and the interlocutory relief set aside.

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Issues: (i) whether the appeal against the ad interim ex parte injunction was maintainable and within limitation despite pendency of the application under Order XXXIX Rule 4 of the Code of Civil Procedure, 1908; (ii) whether the plaintiff had made out a prima facie case for continuance of the ad interim injunction in view of the surrounding correspondence and disclosures; (iii) whether the suit was prima facie barred by Section 41(d) of the Specific Relief Act, 1963 and whether any conditional injunction should nevertheless be granted.

Issue (i): whether the appeal against the ad interim ex parte injunction was maintainable and within limitation despite pendency of the application under Order XXXIX Rule 4 of the Code of Civil Procedure, 1908

Analysis: The statutory scheme of Order XXXIX Rules 3A and 4 recognises that where an ex parte injunction is not finally decided within thirty days, the aggrieved party is not left remediless. The appellate court must entertain the appeal and notice the subordinate court's omission to comply with the mandate of Rule 3A. On the facts, the application under Order XXXIX Rule 4 remained pending beyond thirty days, and the filing of the appeal after it became clear that the application would not be decided immediately was held to be justified and timely.

Conclusion: The appeal was maintainable and not barred by limitation.

Issue (ii): whether the plaintiff had made out a prima facie case for continuance of the ad interim injunction in view of the surrounding correspondence and disclosures

Analysis: The plaint omitted material facts, including the relevant founders' arrangement, prior dishonoured cheques, replacement pay orders, and the covering letters accompanying the cheques in dispute. Those letters described the cheques as repayment towards a short-term loan with interest, which seriously undermined the plea that the cheques were only collateral security. The withheld material warranted an adverse inference, and the record did not support the asserted understanding that the cheques were not meant for encashment. In these circumstances, the requirements of a prima facie case and the equitable basis for interim protection were not satisfied.

Conclusion: The plaintiff failed to establish a prima facie case for continuance of the injunction.

Issue (iii): whether the suit was prima facie barred by Section 41(d) of the Specific Relief Act, 1963 and whether any conditional injunction should nevertheless be granted

Analysis: The suit was, in substance, aimed at preventing the defendants from taking steps that could lead to criminal proceedings on dishonour of cheques. A civil injunction cannot be used to restrain the institution or prosecution of criminal proceedings. The plaintiff also declined to furnish security or other conditional protection for the defendants' interest, leaving no basis for a conditional order. The balance of convenience therefore favoured refusal of interim relief.

Conclusion: The suit was prima facie not maintainable to the extent it sought to restrain criminal proceedings, and no conditional injunction was warranted.

Final Conclusion: The ad interim injunction was vacated, the appeal succeeded, and the consequential interlocutory relief in the suit was set aside with costs.

Ratio Decidendi: Where an ex parte injunction is not disposed of within the period contemplated by Order XXXIX Rule 3A, the aggrieved party may appeal; and interim injunction will not lie where the plaintiff withholds material facts, fails to show a prima facie equitable case, or seeks to use civil process to restrain criminal proceedings arising from dishonoured cheques.

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