The full bench of the Bombay High Court, comprising Chief Justice Alok Aradhe, Justice M.S. Karnik, and Justice Shyam C. Chandak, has settled a conflict over whether an order refusing an interlocutory injunction constitutes a discretionary order or a prima facie adjudication.

A Division Bench of the Bombay High Court noticed irreconcilable conflicts of views expressed by Division Benches of this Court in Colgate Palmolive Company And Another Vs. Anchor Health And Beauty Care Pvt. Ltd.,2005(1) Mh.L.J. 613 and Parksons Cartamundi Pvt. Ltd. Vs. Suresh Kumar Jasraj Burad., 2012 SCC OnLine Bom 438 as well as Goldmines Telefilms Pvt. Ltd. Vs. Reliance Big Entertainment Pvt. Ltd. And Ors.,Appeal (L) No.458/2014 in NM/452/2014 in Suit/194/2014 dt.24.09.2014

In the Colgate case, the Court held that an order passed on an application for temporary injunction remains a discretionary order, even if the trial court finds no prima facie case. The exercise of discretion is not nullified simply because the judge makes a determination on the merits of the prima facie claim. In contrast, the decisions in Parksons and Goldmines took a divergent view, holding that an order on a temporary injunction application amounts to a prima facie adjudication of the parties' rights and not merely an exercise of judicial discretion.

Thus, by an order dated 15th December 2014, it referred the matter for consideration by a larger Bench on the following:

(i) Whether order passed on an application for temporary injunction is prima facie adjudication and not an exercise of discretion

(ii) Scope of appeal from an order of the trial court on an application of injunction.

Such reference to a larger bench arises out of a trademark dispute. The Appellants, producers of spirits and liquors, including Scotch whiskey and vodka, claimed ownership of marks such as Mansion House and Savoy Club, which they alleged had been misappropriated by the Respondent. The Appellants had initially granted a license in 1983 to the Respondent to use their trademarks but alleged later that the Respondent sought to deceptively register the same marks in India, amounting to dishonest and mala fide conduct. When the trial court declined to grant a temporary injunction to restrain the use of the marks, the matter reached the Appellate court.

At the outset, the larger bench delved into the origin of injunction through statutory framework and common law doctrines and then eventually analyzed the essential elements while granting an injunction laid in “trinity test” —namely, the existence of a prima facie case, the balance of convenience, and the risk of irreparable injury.

The bench primarily referred to American Cynamid Co. And Ethicon Ltd.1975, ALL ER 504, for the dealing with scope and ambit of expression ‘prima facie case’ and for the meaning of expression ‘prima facie case’ the bench referred to the Supreme Court decision in Dalpat Kumar And Anr Vs. Prahlad Singh And Ors.,1992(1) SCC 719 which held that the court should be satisfied that there is a bona fide substantial question raised which needs investigation and decision on merits.

In regard to balance of convenience, the court observed that, in determining whether to grant an injunction, it must consider two key aspects. Firstly, it must assess whether the plaintiff would suffer injury through a violation of their rights—injury that could not be adequately remedied through damages if the eventual outcome of the case were in the plaintiff’s favour. Secondly, the Court must also consider whether the defendant might face harm by being restrained from exercising their legal rights—harm that would not be adequately compensated even if the uncertainty were later resolved in the defendant’s favour at trial.

The Court concluded that it must determine whether, in the absence of a temporary injunction, the applicant would suffer irreparable harm. Noting that the grant of ad-interim injunction is discretionary, it stated, “A party is not entitled to an order of injunction as a matter of right. The grant of interlocutory injunction is a remedy which is discretionary in nature. However, such a discretion has to be exercised on the touchstone of trinity test viz. prima facie case, balance of convenience and irreparable injury.”

Thus, ultimately the court determined The Colgate case lays down the correct legal position, affirming that an order on a temporary injunction remains a discretionary one, even if the trial court declines relief on the ground that no prima facie case has been established.

“The Division Bench decision of this Court in COLGATE PALMOLIVE COMPANY (SUPRA) sets out the correct principle of law. An order of temporary injunction does not cease to be a discretionary order merely because the learned motion Judge did not find any prima facie case and refused to grant interim restraint order. It correctly holds that in the matter of temporary injunction, the Court does not adjudicate on the subject matter or any part of it on merits and considers the application for temporary injunction in the light of well-known principles and exercises its discretion weighing all relevant consideration without any expression of opinion on merits of the matter.”

Equally critical was the Court’s interpretation of the appellate court’s jurisdiction in such matters. The bench observed that "The scope and ambit of an appeal from an order passed by the trial Judge has already been delineated by the Supreme Court in WANDER LTD. (SUPRA), SHYAM SEL AND POWER LIMITED (SUPRA) and RAMAKANT AMBALAL CHOKSI (SUPRA). In view of aforesaid enunciation of law by Supreme Court, it is evident that the appellate court will not interfere with exercise of discretion of Court of first instance and substitute its own discretion except where the discretion has been shown to have been exercised arbitrarily or capriciously or perversely or where the Court had ignored the settled principles of law regulating grant or refusal of interlocutory injunctions”

Accordingly, the conflict of views was settled.

Case Title: UTO Nederland B. V. & Anr. vs. Tilaknagar Industries Ltd.,NMA/740/2013

Advocates for Appellants: Ms. L. M. Jenkins a/w. Mr. Siddhant Dalvi i/b Laxmi Maria Jenkins

Advocates for Proposed Appellant in IA/2979/2024: Mr. Ashish Kamat, Senior Advocate a/w. Mr. Karl Tamboly and Mr. Priyank Kapadia i/b Yashvi Panchal

Advocates for Respondent in APP/66/2012: Mr. Ravi Kadam, Senior Advocate and Mr. Venkatesh Dhond, Senior Advocate a/w. Mr. H. W. Kane, Mr. Rohan Kelkar, Mr. Rohan Kadam, Mr. Manvendra Kane, Mr. Ashutosh Kane, Ms. Vedangi Soman and Mr. I. K. Paranjape i/b Mr. H. W. Kane