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2019 (7) TMI 1668 - HC - Indian LawsGrant of ad interim temporary injunction - Money decree for an unliquidated sum of damages - Whether the plaintiff is entitled to be secured for such a fraud that has been played on it - HELD THAT:- In various judgements, Supreme Court has held that Section 94 read with Order 39, Rule 1 is not exhaustive and circumstances may be present that are beyond the provisions. In such circumstances, the Courts have held that power may be exercised by the Civil Courts under Section 151 of the Code for the ends of justice and to prevent the abuse of the process of the Court - The MANOHAR LAL CHOPRA VERSUS BAHADUR RAO RAJA SETH HIRALAL [1961 (11) TMI 59 - SUPREME COURT] judgment clearly enunciates the ratio that Civil Courts have the power to fill in the loopholes/ gaps that may be there in the Code for the ends of justice. According to the above judgment, this power is inherent and is not stultified when it comes to delivering justice. In rare and exceptional cases, Civil Courts may grant injunctions with regard to the procedural and substantial rights of the parties in fit cases for the ends of justice. The only exception is that the Civil Courts cannot in the guise of inherent powers available under Section 151 of the Code pass orders that are in conflict and are in contravention to the provisions of the Code. In the present scenario, the petitioner has brought down the threshold required for the subjective satisfaction of this Court required under Rule 1(b) by prima facie proving a case of collusion and fraud by the defendants. Furthermore, the conduct of the defendants as established in the prima facie findings gives further credence to the threat and perception of the petitioner that the defendants shall alienate their property in such a manner that the fruits of the decree shall not be available to the petitioner. It is to be further noted that the claim of the plaintiff is not predicated on a claim of simpliciter damages and losses caused to him but specific sums of money that have been passed on in an illegal and fraudulent manner by the employee to the distributors. The reports of KPMG and BDO are based on a careful audit of the documents in relation to the transactions. Upon such audit, the exact figures of excess credit have been ascertained, and therefore, the claim of the plaintiff is of an ascertained sum of money that has been illegally and fraudulently siphoned off by the employee in favour of the distributors. Ergo, in my view this is a fit case for granting an ad interim injunction against the defendants, in the manner discussed hereinafter, to secure the claim of the plaintiff. Thus, the petitioner has been able to prove a prima facie case of collusion and fraud by the respondents, the conduct of the respondents and the irreparable loss and injury that would be caused to the petitioner, the three tests for grant of ad interim temporary injunction are satisfied in the instant case, and accordingly, distributor no. 1 and distributor no. 2 are restrained from transferring and/or alienating and/or creating any third party interest in the properties. In the commercial world as exists today, the citizens have a right to expect that the judiciary shall come to their rescue at the very first instance when a fraud is committed on them. The law cannot be so narrow minded that it shall wait for umpteen years to give relief to a plaintiff that approaches the court and prima facie proves that fraud has been committed on him. It is a well established principle that fraud unravels all and no man can be allowed to take advantage of such fraud - the High Court has a duty to use its inherent powers, in appropriate cases for the ends of justice, equity and good conscience. Furthermore, in the commercial world of today it is the duty of the High Court to protect the honest businessman against persons who use unscrupulous means to cheat such a businessman. Failure to do so, would amount to eroding the confidence of the citizens in the High Court.
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